CBDCs

 Central Bank Digital Currency .

 Why are so many central banks exploring issuing Central Bank Digital Currencies, including the central bank's Central Bank, the Bank for International Settlements?

I have been giving this a lot of thought for months and have come to the conclusion that it’s because they are trying to prepare for the end of the fiat dollar reserve standard.

With no obvious successor among the national fiat currencies or trade block currencies such as the Euro, and with insufficient gold available to support a modern global economy on a modern gold standard, I think the CBs are desperate to have some international mechanism in place to keep the global economy functioning once the dollar reserve standard fails.

Since President Biden weaponised the dollar, getting to a CBDC acceptable payments mechanism has taken on extra urgency.

All the more so if, as is highly likely, the US Senate authorises President Biden to appropriate/steal Russian assets held in the USA, but mostly in Belgium and Switzerland. An event likely to happen over the summer of 2024.

With the USA running up an unsustainable new Federal official debt of one trillion fiat dollars every hundred days, (1,000,000,000,000 every 100 days,) most central bankers see a USA dollar reserve crisis approaching fast.

How fast? Probably within five to ten years, but that assumes no new US or global recession or much wider Middle East war. With a new recession, probably three to eight years. With a wider Middle East war, almost immediately if it generates a 1973 type of oil shock or if Israel used a nuke on Iran or if a non-nuclear attack on Iran resulted in a radioactive release in Iran, intentional or not.

Any radioactive release in or near to the Persian Gulf will call into question the safety of Gulf oil and the safety of tankers and crews sailing there, plus the safety of labour unloading tankers from the Gulf in the importing countries.

In a less dramatic, but secondary reason central bankers are searching for a fiat dollar reserve standard replacement, central bankers can already see that the existing global fiat currency regime is now increasingly failing or has actually failed in a growing list of countries from Argentina to Zimbabwe.

Increasingly, the IMF is having to bail-out more and more fiat currencies, but the bail-outs are less and less effective and have become much more frequent.

Argentina, Bangladesh, Congo, Egypt, Ghana, Nigeria, Pakistan, Sri Lanka, Sierra Leone, South Africa, Turkey, Venezuela, Zambia and Zimbabwe are nations with failed and/or failing fiat currencies, but there are probably others.

When the fiat dollar reserve standard fails, the central bankers know that it is vital to keep the global food supply chains working and functioning well. To keep most of the global energy supply chain intact and functioning. To minimise, as far as reasonably possible social disorder, or worse anarchy and chaos, impacting at the least, the global food supply chain. At its worst, Sudan like civil wars breaking out around the world.

One major downside, the CBDCs do bring with them almost total control over our financial use of money, but only if CBDCs get issued to the general public for use in everyday life.  I think that unlikely, at least at the start and for the first few years.  I think for the first few years the CBDCs will only be a central bank to central bank "currency" and then a wider banking sector "currency."

This is my pessimistic view of why we are in a central bank world experimenting with CBDCs, with many central banks now hoarding gold.

So, what do we do?

Although gold is unlikely to be part of the official CBDC solution, if they are prepared to hoard gold, I think it wise to follow their example and take on a little fully paid up, physically secure gold and some silver