by MN Gordon, All News Pipeline:
Personal and political freedoms are inseparable from economic freedom. To this end, economic freedom is contingent upon an economy that transacts using honest money that’s free from coercion.
Volumes have been written on America’s experience with money of varying veracity. Here we’ll touch on a few key events. Article I, Section 8, of the U.S. Constitution empowers Congress to coin money and regulate its value thereof.
Article I, Section 10, specifies that no state shall make anything but gold and silver coin a tender in payments of debts. The Federal Reserve Act of 1913, passed by the 63rd Congress and signed into law by President Woodrow Wilson on December 23, 1913, established the Federal Reserve System, the central bank of the United States.
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The Federal Reserve Act also delegated the right to issue money from Congress to the Federal Reserve.
In this regard, the current U.S. dollar, a Federal Reserve Note, is illegal money. It is issued by the Federal Reserve – not Congress – in direct violation of the U.S. Constitution. Moreover, when states collect tax dollars that are devoid of gold or silver coin, they violate the Constitution.
Economic freedom has been greatly undermined by Washington over the years. Executive Order 6102 of 1933, for example, forced all American citizens to turn in gold coins and bars. Gold ownership in the United States, with some small limitations, was illegal for the next 40 years.
Economic freedom was again undermined when President Nixon “temporarily” suspended the convertibility of the dollar into gold in 1971. This action removed any remaining protection workers and savers had against their hard-earned dollars being inflated away.
But now, as the year 2022 nears its close, another extremely destructive event approaches…
Proof of Concept Project
Over the last 110 years economic freedom in the United States, as in the world, has been in decline. Through a continuing process of debasement, the Fed has inflated away 96 percent of the dollar’s value.
In other words, today it takes $1 to buy the equivalent of what $0.04 could buy in 1913. This is a downright disgrace.
Yet over this time, the paper dollar did preserve some modicum of economic freedom. Payments in cash provide some level of privacy in what you’re buying and selling. Specifically, the government is unable to readily trace and monitor transactions conducted using cash.
This soon may change…
Have you ever heard of something called the New York Innovation Center? On November 15, the Federal Reserve Bank of New York published a very important press release. Here’s a key excerpt:
“The Federal Reserve Bank of New York today announced that its New York Innovation Center (NYIC) will participate in a proof-of-concept project to explore the feasibility of an interoperable network of central bank wholesale digital money and commercial bank digital money operating on a shared multi-entity distributed ledger.
“This U.S. proof-of-concept project is experimenting with the concept of a regulated liability network. It will test the technical feasibility, legal viability, and business applicability of distributed ledger technology to settle the liabilities of regulated financial institutions through the transfer of central bank liabilities.”
This, without question, marks a significant step in the Fed’s efforts to rollout a Central Bank Digital Currency (CBDC). The project, as we understand it, will inform how the Fed intends to work with actual banks to introduce a digital dollar. This digital dollar would ultimately replace the paper dollar and would eliminate the privacy of cash payments.
Traceable and Programmable
David Haggith, publisher and editor-in-chief of The Great Recession Blog, has been closely covering the rapidly approaching advent of CBDCs and digital dollars for several years. Haggith recently offered the following perspective as to the significance of what’s at stake:
“We’re on the brink of a dramatic change where we’re about to — and I’ll say this boldly — we’re about to abandon the traditional system of money, and accounting, and introduce a new one…. The new accounting is what we call ‘blockchain.’ It means digital. It means having an almost perfect record of every single transaction that happens in the economy, which will give us far greater clarity over what’s going on…. It also raises huge dangers in terms of the balance of power between states and citizens.”
What you must understand is the adoption of a digital dollar by the U.S. government would be one of the greatest expansions of federal power ever made. You also must understand that a digital dollar would be much different than a cryptocurrency like bitcoin, which is decentralized and has limitations on its ultimate quantity.
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