Yeah, its crypto. Ok, nobody knows anything about crypto and this is supposedly being pushed as how we will buy groceries and gas?
Oh, and we have to do this because china is doing it and we must beat them to the punch.
Sounds like sketchy way to push something on the American public that they are not ready for?

Discuss.

My concerns about CBDC (central bank digital currency) are the same as everyone else. But additionally I have concern that there is a plan in place to effectively write off the national debt by replacing the physical dollar with a digital alternative. There is also a proposal floating around to revalue the gold reserve in Ft. Knox to a high number, like $15,000 or more per ounce. That would instantly put trillions more on the positive side of the federal balance sheet, against which to either issue more debt or back a replacement currency.

Without any doubt, fixing the national debt will require substantial pain. Governments love to devalue their currency or replace it in order to erase debt. Doing so imposes immediate severe consequences to the population, erasing wealth and/or causing huge inflation.

Spreading the pain out over time in concert with a real fiscally responsible government would be my preference. But I think Trump knows the second part is unlikely. He may prefer to rip off the band-aid and force the fix. Were I in charge, that would be my style, too, tbh. But I am retired living on saved dollars, so I am on the losing end of a government currency failure.

quote:

There is also a proposal floating around to revalue the gold reserve in Ft. Knox to a high number, like $15,000 or more per ounce.

Who proposed that? Link?
As long as gold is freely traded the market sets its value.

It's the FLOCK of the currency system by a government, while it will reduce the costs of handling and moving paper and metal coins around, basically eliminating the mints, it will provide tracking of everyones bank accounts, purchases, end cash spending and increase the tax revenue of the Feds and States.

of course we're pretty close to that now with everyone paying by Apple pay or tap to pay...

quote:

Originally posted by Pipe Smoker:

Who proposed that? Link?
As long as gold is freely traded the market sets its value.

Various non-government sources are talking about it. Some as a proposal and some warning about the trap. While no government official has come out publicly, the discussion suggests it is being at least whispered about in various government offices. If the government suddenly declared a $25k per ounce price, it would immediately be a devaluation of the dollar. It would cause the balance sheet to show trillions more "value" in dollars.

There are many in government who would jump at the chance to print dollars to stimulate the economy, while touting a reduction in federal debt. There are others who would see it as a way to set a new Digital Dollar backed by the gold.

It's all speculation, yes.

There is no imaginable scenario where 100% digital currency benefits you or I.

quote:

Originally posted by Fly-Sig:

quote:

Originally posted by Pipe Smoker:

Who proposed that? Link?
As long as gold is freely traded the market sets its value.

Various non-government sources are talking about it. Some as a proposal and some warning about the trap. While no government official has come out publicly, the discussion suggests it is being at least whispered about in various government offices. If the government suddenly declared a $25k per ounce price, it would immediately be a devaluation of the dollar.

If the USG were to be dumb enough to start unilaterally paying $25K of USD for any ounce of gold offered to them, and to print money as needed to be able to buy indefinitely at $25K until that became the market price, then, yes, they could cause a market price of $25K/oz (and buy a LOT of gold for Fort Knox), but there'd be so much new USD floating around that it'd probably look like 1923 Germany. People who held currency, or bank accounts in dollars would be bankrupted, as would owners of bonds denominated in dollars.

Neither good economics nor good politics.

quote:

Originally posted by joel9507:

If the USG were to be dumb enough to start unilaterally paying $25K of USD for any ounce of gold offered to them, and to print money as needed to be able to buy indefinitely at $25K until that became the market price, then, yes, they could cause a market price of $25K/oz (and buy a LOT of gold for Fort Knox), but there'd be so much new USD floating around that it'd probably look like 1923 Germany. People who held currency, or bank accounts in dollars would be bankrupted, as would owners of bonds denominated in dollars.

Neither good economics nor good politics.

I believe the proposal is the reverse. The government won't be buying gold, they'd be selling it. Not that too many buyers would show up right away. What it does is put a really big number onto the government's balance sheet as an asset. They can borrow against it, which means creating new dollars out of thin air. They then spend it, under the claim that it is all backed by gold. It would, though, fuel massive inflation. And that is a tool they love, too. So they get to inflate away the debt and get to spend a bunch to buy votes.

And in combination with a new CBDC, they could pin it to whatever number they like. Effectively it would be introducing a replacement currency or a parallel currency with a lower value per unit. e.g. Gold is currently at about $4400 USD per ounce. The government could introduce a New Digital Dollar and say they will issue 10 New Dollars for every USD, perhaps exchanging it with banks to get it out there. Anyhow, that would then peg gold at $44,000 New Dollars even without a revaluation of gold beyond today's price. If they pegged the New Digital Dollar to gold at a price of 150,000 NDD (New Digital Dollar) they would not only start disconnecting from the USD but they would also create a massive devaluation of the existing debt.

Plenty of governments have done this sort of thing only with physical currency as the replacement. Revalue/devalue, inflate away the old debt or just renounce the old debt, and start fresh. But those governments fail in short order because of the financial chaos they unleash.

Nobody, not even the US government, can just dictate an arbitrarily high price for a globally traded commodity like gold.

It's the market that sets the price.

I could pull a number out of thin air and try to claim that my clapped out 1996 Ford Fiesta is worth $1M, and offer it for sale at $1M. But nobody would believe that, or accept that as the actual market value, so nobody would buy it. Nor would any bank allow me to take out a $1M loan with it as collateral, no matter what imaginary value I'm claiming.

Whoever is spinning that government $25K gold story is just spewing internet horseshit, either to drive fear/outrage/engagement to profit from clicks/likes/views, or else they are heavily invested in gold and/or actively trying to sell you gold or gold-related investments and trying to drive sales or drive up gold demand/value with this "I swear it's about to go to the moon so buy in now while you can" fairy tale, a scheme as old as time.

Guys, this topic is not about Gold.

I admit I did not read the 630 pages.

In essence, the feds attempt to control crypto.

They want to regulate crypto and put it under the SEC and CFTC.

They also want to regulate intermediaries.

Overrules state-level securities laws to create single national standards.

This bill treats crypto as just another commodity.

My feeling is that eventually they will try to control point-to-point transfers.

I also think this is the first step in a digital currency.

They need a bunch of dems to approve. Does not look like it is going to pass.

quote:

Originally posted by RogueJSK:
Nobody, not even the US government, can just dictate an arbitrarily high price for a globally traded commodity like gold.

It's the market that sets the price.

I could pull a number out of thin air and try to claim that my clapped out 1996 Ford Fiesta is worth $1M, and offer it for sale at $1M. But nobody would believe that, or accept that as the actual market value, so nobody would buy it. Nor would any bank allow me to take out a $1M loan with it as collateral, no matter what imaginary value I'm claiming.

You're missing one super power that the government has. They can print money, but you cannot. But more relevant is that yes, someone would offer you a $1M loan at the right interest rate, and for the government that rate is currently around 5%. Since they can print the money to make the interest payments, with no need to prove the ability to pay off the principal in 30 years, people are lining up to loan money to the federal government.

Revaluing gold would be a complete scam to facilitate even more federal spending. It is an accounting trick or fraud really. The real kicker is if they use a CBDC as a tool to transition away from the USD. They can value the CBDC any way they want.

Looks like it is NOT going to pass

quote:

Originally posted by old rugged cross:
Guys, this topic is not about Gold.

Gold, for as long as humans have dug it out of the ground and admired its' shiny properties, has been a store of value. It has held its' value when currencies have failed, all of them, throughout time.

Crypto claims to be a store of value. It's not shiny and it only exists on a computer. Whether or not it is a store of value depends completely upon whether or not someone else will accept it in exchange for goods or services.

What gold and crypto have in common is that they are not issued or created by government.
At least, not yet. Government has attempted to "fix" the price of gold and control it. Government will attempt to create a crypto currency and control it.

1. I proposed minting $1 billion dollar coins in platinum times 40,000 pieces + and use seinorage - value over cost of minting - to cover debt.

2. Bitcoin- no one has yet explained to me why it has any value whatsoever! Nothing of value underlying, no guarantor of value and no rational theory to support it!

3. Just for fun, print new Orange $100 bills, exchanged freely in USA BUT not from cartels, enemy states or terrorist organizations-the planeload to Iran would be worthless! Quick couple of trillion to the Treasury for unexchanged bills.

quote:

Originally posted by tleddy:
1. I proposed minting $1 billion dollar coins in platinum times 40,000 pieces + and use seinorage - value over cost of minting - to cover debt.

You're not the first to propose such an idea.
As a practical matter, how would that work?

Bonds are sold in $1,000 increments and pay interest. They can be re-sold on the open market at any time before maturity. People (and other governments) buy them because they are considered stable and liquid.

Not many people, or even governments, are buying/selling in $1 billion dollar increments.
So, who would accept the coin in exchange for $1 billion dollars of Treausury bonds?

And... if a government, say Japan, did have $1 billion dollars in bonds maturing, would you FORCE them to take a coin?
Does the coin pay interest? None of the coins in my poker jar pay interest.
Wouldn't you effectively be cancelling the debt?

And, if you cancel the debt (default) who would ever buy treasury bonds again?
So, you wouldn't be able to borrow.

Perhaps I should have used the phrase “Just fo fun” earlier… that said, your cogent arguments against seniorage are true and appreciated!

If you could explain Bitcoin (generic), that would be great! I truly do not understand the concept!!

There’s a lot of various talk about trying to get crypto based stuff, because it’s wildly cheaper than credit cards.

CCs are an 60+? Year old system.

Banks are terrified of digital currency, because it would be the end of much of their profits.

Right now, they get to charge wild processing fees, relative to what they charge large companies, because it’s a very restrained industry.

Digital currency, done well, would mean excellent security, limited need for banking, and make it almost impossible to control currency.

Now, does the “market” want that…. Yes. The market includes drugs and that’s a major economic pressure.

And the taker class has become excessive and the market wants them gone too.