15th October 2022 > > CBDCs.

tl;dr

Join the fight against CDBCs (Central Bank Digital Currencies).

Market Snap

Market Wrap

Yields marching upwards once more. As interest payments take up an ever-larger share of government expenditure, and taxes inexorably rise cutting both consumer and business expenditure, can someone explain the plan to keep funding public services?

Occasional Series – Sancho Panza Boat Party tonight

There will be no CCC tomorrow for sure.

Curious Cryptos’ Commentary – h/t Milk Road again

Curious Cryptos’ Commentary – Technical analysis (TA)

However sceptical I am about drawing squiggles and lines on a graph, I love a bit of TA when it suits my world view. Take this for instance:

Note that is a log scale on the right.

Nice. Techies are welcome today:

“There’s bullish divergence on every higher timeframe and the DXY has bear divs. USDT.D rejected resistance as well. Tiny brained investors shorting the bottom yet again.”

Curious Cryptos’ Commentary – Central Bank Digital Currencies (CBDCs)

The fight against CBDCs is not over yet (see CCC 9th October 2022 amongst others).

Federal Reserve Governor Christopher Waller has publicly stated his very firm opposition to a dollar CBDC.

Our concerns are that CBDCs threaten a huge impingement on our privacy, and that they facilitate governments to impose their own judgements on the appropriateness or otherwise (in their eyes) of an individual’s lawful behaviour. It is easy to see how that can quickly degenerate into a system of coercion and control.

Which explains why China and Russia are the biggest supporters of CBDCs, though to be fair both the UK and the EU are not far behind.

Christopher’s stance is different to ours. His is a practical take on a couple of different fronts. Firstly, he dismisses the idea that dollar hegemony can be challenged by another country’s sovereign CBDC, and his argument can only be described as persuasive:

“The factors supporting the primacy of the dollar are not technological, but include the ample supply and liquid market for U.S. Treasury securities and other debt and the long-standing stability of the U.S. economy and political system. No other country is fully comparable with the United States on those fronts, and a CBDC would not change that.”

He also argues that CBDCs confer no advantage to addressing fraud and money laundering within the banking system:

“Meaningful efforts are underway at the international level to improve cross-border payments in many ways, with the vast majority of these improvements coming not from CBDCs but improvements to existing payment systems.”

…

Christopher has support in high places.

Federal Reserve Chair Jerome Powell has also kyboshed the idea of a dollar CBDC, at least for the time being, when questioned about the possibility of introducing one:

"We do not see ourselves making that decision for some time."

Clearly “some time” has flex built into it, but we need all the allies we can get in the fight against CBDCs right now.