Once again, don't say you haven't been warned (for months now) about how central banks want to use CBDC to control your spending, as the European Central Bank looks to get ready to start rolling out the digital Euro towards the end of this year, along with fines for using your own money as cash over €1000.
The Bank of England is mid-consultation on the proposed CBD£ that has been tagged the Britcoin. You can add your thoughts here.
The coming recession/depression will be instrumental in helping to see out the current FIAT Ponzi scheme that has already collapsed in reality but is being propped up by measures such as counterfeiting, the real term for quantitative easing. The current FIAT Ponzi scheme has to be replaced by something, and there’s no getting away from it that a digital system is logical and rather inevitable, I think. FIAT collapses are happening with ever shortening gaps and the public won’t wear another collapse as happened in 2008/9 without a major distraction and something to blame it on, not least because bail out was legally replaced by bail in whereby savers’ money is used to prop up the scandalous banking practices if they are going to collapse. This means another FIAT system isn’t practical.
In essence, there’s nothing wrong with a digital system, and you could argue that to some degree we have already adopted elements of it since the introduction of credit and debit cards, online banking, and banking apps. However, unlike the proposed CBDC system, current transactions remain largely anonymous and untracked. There is a big settling up of all transactions together at the end of each day depending on the nett flow of money to the various different banks. With the CBDC, each transaction will occur separately in real time and will be trackable on an individual basis. As usual it’s not necessarily the tech that is at fault, but how it can potentially be used that creates the danger and the issue. As I’ve said in my blogs from day 1, its all about slowly, slowly, catchee monkey, and before you know it, we will be in full Social Scoring however many years down the road. I suspect it won’t be double digits.
History teaches us that when a system can be abused by the “authorities” it is only a matter of time before it is, and once your freedoms are removed, they aren’t returned. Income Tax was introduced to pay for WW1 but never removed although under Common Law we have the right to the fruits of our labour. I’m not saying that certain things that keep the country going for society as a whole don’t need to be paid for, but if the will existed it has always been possible to find another way. I don’t see why business taxes can’t cover all our bills by ensuring there are no tax havens or avoidance if you trade in the UK. It would be very simple to introduce IMO.
Once the announcement of the FIAT collapse happens at the time they choose, it will usher in the CBDCs. To begin with they will no doubt look rather innocuous until they start restricting your freedoms on the back of your carbon footprint or whatever else they choose. It’s a slippery slope.
If you don’t think the collapse is coming, ignore Peter Schiff who foretold the last collapse of 2008/9 before anybody else at your peril. In his video from a few days ago he singles out the UK as one of countries whose Government and the Bank of England have been guilty of not taking the necessary measures to stop the big dip. Given the expertise of those who are in charge of our financial institutions and policies they must know that printing money causes inflation and long term problems. It’s not rocket science to understand that. The ONLY conclusion must be that it’s being done deliberately.
Bear in mind too that Warren Buffet is supposedly staying cash rich at present, and recently cashed in a huge shareholding in Taiwan Semiconductors to minimise his exposure to the threat that China might use the USA’s lack of ammunition (because so much has been sent to Ukraine) to march into Taiwan who they have never stopped claiming is part of China. NATO war with Russia and China at the same time doesn’t bear thinking about, but if they’re looking for a big blame for FIAT collapse it wouldn’t come much bigger than that.
OK, so you recognise that FIAT is collapsing and there’s going to be a catastrophic economic Depression of the likes most people have never seen before. What do you do? I’m no financial advisor and my opinion below shouldn’t be taken as financial advice. It is up to you to do your own due diligence and determine what strategy might be best for you and get professional advice if necessary. Nobody knows for certain what’s ahead so I’m taking the view that spreading my eggs between different baskets makes sense to me. I’d rather hold onto one basket (hopefully more!) out of a number than put all my eggs in one basket and risk everything on one outcome. That doesn’t mean to say all my baskets won’t drop either, but at least I’ll have tried. On the positive side, we should remember that not everybody lost everything in the last Depression in the 1930s either. Some people will have kept head above water, and others will have profited nicely from their actions too. It’s doable, so don’t despair.
The obvious financial baskets are paper cash, shares, money in the bank, bonds, cryptocurrency or hard assets such as bullion, property, anything perceived as “valuable”. I haven’t anywhere near enough money to spread between all of the above, and no doubt there are other options that haven’t occurred to me.
Peter Schiff recommended gold, silver and bullion mining shares in his video depending on the level of speculation you are willing to risk. He seemed to be saying that it might be a case of which asset has the lowest drop in order to hang onto as much as you can, rather than which ones will go to the proverbial financial moon! That was my take, but I might be wrong.
There are some people who are worried that we are heading towards full food shortages and system collapse. It might happen but such extremes rarely do. It would mean that anything online or requiring electricity isn’t going to be available or only intermittently. Hard cash would seem to be the only real option here it seems to me. Having physical gold sounds like a good idea in theory, but is rather impractical I think if you want to buy food at a fraction of a coin or ingot. I’ll have to barter treatments for food I think if it comes to that!
So, assuming there isn’t going to be a complete societal collapse and we’re just trying to keep some money off the “system” there are other viable options. Putting money into cryptocurrency isn’t as easy now as it used to be as banks often block the necessary transfers to the cryptocurrency exchanges. There are many coins, altcoins and NFTs etc with varying degrees of speculation. Cryptocurrency is also very volatile and thus rather unpredictable. Although decentralised and thus less open for users to be monitored and used for Social Scoring, we also don’t know what legislation might be introduced by Governments that might try to force exchanges to reveal their ledgers. Bitcoin is largely considered by cryptocurrency experts such as Simon Dixon to be a store of wealth that will accumulate over time, rather than something that should be traded on a regular basis trying to catch the bull runs and miss the bear runs. Nobody will get it right all the time however good you think you are. Lots of people don’t like cryptocurrency because it isn’t seen as a tangible asset and many people have had their fingers burned trying to predict the unpredictable markets in the past too.
With a possible/probable Depression on the horizon, you would need to be an expert in order to know which shares to buy or hold, and even Warren Buffet isn’t sure at the moment. If Bonds pay less interest than the current rate of inflation, then your buying power is going down and your money will still be in the system when you cash it in. I imagine that once the CBDC is in place then diversifying outside of it may be tricky.
If we follow the advice of Peter Schiff and others because he’s not the only “expert” saying the same thing, then gold and silver or other valuables you may have additional specialist knowledge about would seem to be a viable option. The question then arises how best to do it. If I take gold as the example there are various online bullion dealers you can buy from. Prices are variable but in the same ballpark and there may be variable charges for storing your bullion if you choose not to get it sent to you and hold the physical asset which itself has its own obvious risk. I have bought a small amount through Bullionvault who store it for me too, but you make up your own mind based on prices etc. Make sure they’re genuine and actually hold what you’re buying. I bet there are a number of scammers who have set up in the current climate.
As with the doomsday scenario, I’m not sure of the advantage in physically having gold/silver bullion, other than it proves it exists. Make sure you buy from a proven reputable source like Bullionvault so you know it exists even if it's in storage for you. Paper silver exists too - so it's virtual and potentially worthless. The problem with holding physical bullion is the question of how it could be used practically in local shops for small purchases? It would be relatively easy to take it with you if you decide to emigrate provided there isn't some law enacted to seize privately held bullion as happened with gold in the past.
Another option that I have recently discovered is a USA -based company who offer bullion and collectable coins at dealer prices for small investors. They can hold it or send it to you. They have been going since 2016 with their mission to provide an opportunity for the smaller investor who maybe doesn’t have lots of knowledge within this arena to benefit from precious metals. It is a members-only company which initially put me off on the basis "Why should I pay to enable me to buy something I can buy from Bullionvault without paying a joining fee?". I concluded that it is justifiable based on the following 2 aspects.
1. Sound Money Wallet
They have a Sound Money Wallet (SMW) app that enables members to buy as much or as little gold and/or silver bullion as they want that sits in their SMW. If you only want to add $10 that’s fine, and you can put a bit by as you can afford it over time and slowly build up your off-grid stash. IF your chosen bullion (gold and/or silver) goes up in value, then so does the value of your SMW. Likewise, the value can drop too, although at the moment this would be in the opposite direction to what the experts are saying.
30.06.2023 Update: The USA financial authorities have now stopped the use of the SMW for transfers between 7k Metals associates which from my perspective was the whole point of having the SMW. 7k Metals are now linking your bullion account to a credit card instead but this only means that the bullion is a store of wealth. Transactions would still be on grid and potentially subject to real time monitoring any social scoring controls. Back to the drawing board on this one
2. Collectable Coins
I know nothing/nada/zilch about Numismatics – the fancy name for collecting coins! The idea of this never crossed my mind before because I have no real interest or knowledge from a collector’s perspective, BUT… it makes sense to me that if people want to store some wealth in gold/silver, then buying collectable coins of high quality and from limited mint runs not only has the potential to go up in value as a result of the bullion metal value increasing, but also has the potential to increase in value simply through the desirability of the design. Although I wouldn’t classify myself as having any collector’s interest in this at all, it adds another potential rise in value aspect that may even rise much more than the bullion weight value. This increase may still occur even if the bullion price doesn’t rise, or may offset a bullion value drop, simply through the desirability of others to want to complete their collection. My lack of knowledge however doesn’t stop me taking advantage of this strategy because the company has their own experts who only offer coins and collectables of limited mint runs to the membership that they consider to have collectable potential. They are also minting their own collections which creates a niche collectorship.
As I said before, I’m no financial expert, and I’m just trying to anticipate and find a way through what I suspect is coming down the track if those with much more expertise than me, who are predicting it, turn out to be correct.
If you would like to check this out, please visit the following webpage and watch the videos in order. If you think membership would suit you then get back to me (using my email) to answer any questions you might have, and to help you join.
You can buy bullion and coins as a guest at premium on the price, join just as a member to take advantage of buying without the premium added, and the SMW or you can take it further and earn some commission on referrals. It’s entirely up to you how you take it forward. Without the full functionality now of the SMW I will stick to BullionVault I think for the time being.