Central bank digital currencies could reshape the financial system, potentially replacing traditional banking models.
This quote comes from Benoît Cœuré, Head of the Innovation Hub at the Bank for International Settlements (BIS).
If we read between the lines here, we can surmise the real purpose for the central bank digital currency (CBDC) push. We can also understand why the New York banks broke ranks with the globalist power structure. We talked about this in depth yesterday.
To make sense of the macroeconomic environment we find ourselves in, we have to understand the factions at work. And right now there are two big players.
On one hand there’s what I call the globalist power structure. On the other is the New York banking faction.
The globalist faction controls most prominent multinational organizations in the western world. These include the United Nations (U.N.), the European Central Bank (ECB), the World Economic Forum (WEF), and the BIS… to name just a few.
Plus, the globalist structure has its tentacles running throughout the U.S. political system. Joe Biden, Janet Yellen, and much of the national Democratic Party owe their allegiance to this faction. As do some high-level members of the national Republican Party.
The New York banking faction of course controls the major New York banks. JP Morgan CEO Jamie Dimon appears to be the mouthpiece for this faction right now.
The Federal Reserve (the Fed) under Jerome Powell’s chairmanship has allied itself with the New York banking interests as well. Powell himself is deeply connected on Wall Street.
As we discussed yesterday, understanding this split is critical.
Many analysts kept saying the Fed would “pivot” last year and stop raising rates. But that’s because they assumed the Fed would do the bidding of the Biden administration. The administration, like the entire globalist faction, did not want higher interest rates.
And to be fair, that wasn’t a bad assumption. It’s backed by history. Previous Fed Chairs Ben Bernanke and Janet Yellen fully supported the globalist power structure.
But Powell’s Fed does not. And Mr. Cœuré’s quote above gives us insight into why.
We talked about the “Great Reset” agenda yesterday. It’s a plot to replace what’s left of the legacy capitalist system with what the globalists call “stakeholder capitalism”.
This may sound like a friendlier version of capitalism on the surface. But it all comes down to a key question. Who are the stakeholders?
Well, it’s them. In their vision, globalist organizations control everything.
And a big pillar of that plan is to make their organizations the ultimate arbiter of everything when it comes to money and credit. That necessarily means the commercial banks need to be toned down or eliminated completely.
That’s what retail central bank digital currencies are all about.
With retail CBDCs, digital wallets would replace our bank accounts. And those digital wallets would be controlled by either the central bank or the Treasury. That would give those entities full control over our money and our transactions.
Now, many people out there are pushing back against this. And rightfully so.
They point out that this arrangement would enable something akin to modern serfdom. The controllers could freeze our wallets and stop our transactions if they don’t like what we’re doing or saying.
There’s merit to that concern. But the real goal for CBDCs is even more devious. It’s to usurp control over the engine of finance entirely. Mr. Cœuré alluded to that when he talked about replacing traditional banking models.
This is why the Fed and the New York banking interests broke rank. I’ll explain…
As I write, there’s about $12.1 trillion in loans outstanding within the U.S. banking system. The bulk of these are real estate loans and commercial loans.
So the commercial banks control a huge amount of capital. They decided who received these $12.1 trillion in loans… and who didn’t.
And this allows the banks to determine what gets financed and what doesn’t. There’s an immense amount of power in this.
For example, should we finance small-module nuclear reactors… or acres upon acres of windmills and solar farms?
Should we finance small local farms… or push all agriculture into a few multinational corporations?
The ability to aggregate and allocate capital is critical to modern civilization. Those who control the engines of finance have an outsized ability to shape our world.
And here’s the thing – there’s fierce competition among the commercial banks. This ensures that each bank strives to make good credit decisions. Most of the time, anyway.
The better their loans perform, the more money, power, and influence they accumulate. So the banks want to finance promising companies and projects.
And that’s what this is all about.
The globalist power structure wants to completely restructure our society. But their pet projects just aren’t economical.
15-minute cities… 100% ESG energy production… 100% electric vehicles – none of these things are going to happen within the current system.
And that’s because these projects can’t support themselves financially. We would have to reallocate critical resources on an enormous level… but our standard of living would drop dramatically.
The banks won’t go for that.
They aren’t going to finance these projects to the extreme because they know the loans will go bad. And it’s a highly competitive environment. No bank wants its loans to go bad. Because that would mean it loses power, prestige, and wealth to those banks who didn’t make bad loans.
I believe this is the true purpose behind the CBDC push. It’s about putting the infrastructure in place to dismantle the banking system. It’s right there in Cœuré’s quote.
They want to make the CBDC issuer the only arbiter of credit in our society. This would eliminate all competition in the financing realm. Only then could the globalist faction bring their uneconomic pet projects to fruition.
This is why the Fed went all-out on its rate-hiking campaign last year. Even though everyone screamed at them to stop.
It was never about fighting inflation. It’s all about fending off the globalist faction.
Tomorrow we’ll examine some breadcrumbs that make this dynamic even more clear. Stay tuned…
-Joe Withrow
P.S. As I mentioned, understanding what’s happening on the macroeconomic stage is critical if we want to make our own finances as bulletproof as possible.
That’s why we’re taking a high-level look at the macro view this week… but we only have space to hit the highlights.
For those who would like to take a deeper dive into what’s happening on the macro stage, we’re tracking all the major developments each month within our investment membership The Phoenician League.
The key is, we use this understanding to inform our investment decisions. It’s not about the politics of it all. It’s about how we can craft a superior wealth strategy that will help us achieve financial independence, even as the Age of Paper Wealth fades away into the dustbin of history.
If you’re interested in learning more about what we’re doing at The Phoenician League, please sign up for our wait list right here:
The Phoenician League Wait List
We’ll be opening our doors to new members soon.