Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Globalists Convene to Plan Central Bank Digital Currencies

Currencies / cryptocurrency May 24, 2022 - 06:23 PM GMT

By: MoneyMetals

Currencies

Central bankers and bureaucrats are seizing on recent turmoil in cryptocurrency markets to push aggressively for central bank digital currencies (CBDCs).

They made their case to other global elites gathered in Davos on Monday for the World Economic Forum’s annual meeting.

Kristalina Georgieva, managing director of the International Monetary Fund, said, “Bitcoin may be called a coin, but it’s not money. It’s not a stable store of value.”



A governor with the Central Bank of France agreed and added, “Cryptocurrencies are not a reliable means of payment. Someone must be responsible for the value, and it must be accepted universally as a means of exchange.”

The solution, they say, is CBDCs. Digital currencies issued by central banks, recognized officially by governments, and circulated into the economy in partnership with large commercial banks would supposedly represent safe, secure, and stable digital money.

Unfortunately, privately issued crypto tokens backed by nothing are indeed fraught with risks. Many cryptocurrencies, including even some branded as “stablecoins,” have proven to be massive failures or outright scams.

The Luna token, which was touted as being pegged to the U.S. dollar via TerraUSD, turned out to be pegged to zero – or close to it. Luna recently crashed by over 99% to wipe out $40 billion in digital fantasy wealth as the supply of the tokens hyperinflated.

Meanwhile, Bitcoin evangelists decry alt-coin shenanigans and insist only Bitcoin can function as a true global decentralized digital currency. But Bitcoin, being rarely used in everyday transactions, is functioning more as a pure speculation – one that is losing value to other currencies including gold so far in 2022.

Anyone who holds Bitcoin or any other crypto via an online exchange should be aware that in addition to price risk, they are assuming enormous counterparty risk.

Several years ago, the then leading exchange Mt. Gox imploded. Hundreds of thousands of Bitcoins were lost or stolen in the Mt. Gox fiasco.

The current leading crypto exchange is Coinbase. It has been beset by deteriorating financials amid the broader tech sector rout. If it were to fail, the assets of customers would be at risk.

Coinbase disclosed in a recent regulatory filing: “Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.”

Would a proposed CBDC, “Fedcoin,” be the solution to such risks?

Not if preserving purchasing power is the goal! A digital dollar issued by the Federal Reserve would make it even easier (and more tempting) for Washington D.C. to grow the supply of dollars at will.

Fedcoin wouldn’t be “a stable store of value” as the IMF describes. Fed Chairman Jerome Powell has even admitted that with inflation at 40-year highs, the central bank is failing to meet its own mandate of price stability.

Neither central bankers nor the issuers of various unbacked digital coins that gyrate wildly are serious about establishing sound money. If they were, they would tie their currencies to something with tangible value that cannot be destroyed – like gold.

Although gold’s near-term value does fluctuate in terms of fiat currencies and other assets, over time it retains its purchasing power. No government-issued currency has gold’s centuries’ long track record of being trusted as the ultimate money. And needless to say, no newfangled cryptocurrency can be guaranteed to hold any value over any period.

Investors should be aware, though, that they can be vulnerable to scams and counterparty risks if they aren’t careful about how they attain exposure to gold and/or silver. If they can’t hold it in physical form, they may not really own it.

There are plenty of paper derivative products tied to precious metals’ prices, including exchange-traded funds, futures, and deceptively marketed unallocated bullion “accounts.” In the event of a financial crisis or bankruptcy by a custodian, these instruments can potentially implode.

The most direct way to own physical bullion is, of course, to take possession of it and store it in a home safe.

It’s certainly a good idea to have immediate access to some gold and silver coins in the event of an emergency.

But bullion holders can attain a higher level of protection against threats such as burglary and natural disaster by also storing some of their precious metals at a highly secure vault such as Money Metals Depository.

Any bullion stored on your behalf at a depository should be held under a bailment-type storage agreement, segregated from the assets of other customers (i.e., not pooled or co-mingled), and fully insured.

Hard money is the real alternative to both digital coin schemes and value-destroying inflation generated by central banks.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2022 Stefan Gleason - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in