"The End of Banking and Money as We Know It"
by Dan Denning
"The German military strategist Carl von Clausewitz famously said that “war is the continuation of politics by other means.” But when it comes to money – public money issued by the government versus private money made by nature and issued by God (gold) or secured by cryptography and limited in supply (bitcoin) – politics has become the continuation of war by other means.
The United States has all but declared war on sound money… and your financial privacy. I say “all but declared” because as we know, Congress has shirked its Constitutional obligation to declare war for decades. It does so only rhetorically, and only against ideas or concepts, like “terror,” “poverty”, or “drugs.”
But the government has ended the war in Afghanistan (on terror) only so it can focus more fully on its war here in the United States… on you. It’s an all-out war on your freedom of speech, your freedom of movement, your right to privacy, and on private money itself.
President Biden has proposed to create a new army of (over 80,000) IRS investigators to close the “tax gap” – Washington D.C.’s term for the difference between what Americans owe in taxes and what they are actually paying. The proposal – buried in a report put out earlier this year by the Treasury Department – would require that any inflow or outflow of more than $600 into any of your financial accounts during the year be automatically (and electronically) reported to the IRS by the financial account provider through which the money flowed.
Evidently, this was a bridge too far, even for some Democrats in Congress. Last month, they announced plans to set a threshold higher than $600. Responding to claims that the $600 level would “weaponize” the IRS against ordinary Americans, and lead to abuse and misuse, they assured critics they are only after real tax cheats.
But note that they didn’t reject outright the idea of total financial surveillance. They agree with that principle. They’re only arguing now, it would seem, over the size of the transaction at which reporting is compulsory. And as you know, whatever size transaction they determine now could be revised later (and lower).
New Currency Czar: What you’re seeing is an all-out counterattack by the state against sound money and financial privacy. Enter Saule Omarova, the academic Joe Biden nominated last week to head the Office of the Comptroller of the Currency (OCC). She’s the biggest threat to a fully centralized (and weaponized) national money system since the introduction of the greenback to finance the Civil War.
Officially, Omarova is a Ukrainian immigrant and academic from Cornell. Unofficially, she’s a monetary Marxist revolutionary, with ambitions to “end banking as we know it” and completely centralize the creation of money and allocation of capital and credit in the economy. She’s yet another in the long line of public officials and academics who want to “transform” America as we know it.
In Omarova’s case, she wants to remove all retail banking accounts to the Federal Reserve. Then, with that money as a deposit base, she wants to radically expand on the government’s ability to borrow even more money, to be invested by a National Infrastructure Authority.
Here are some of her most dangerous ideas in her own words, from a paper written last year: "Massive inflows of deposit money [formerly in retail banks] would create both new pressures on, and new opportunities for, the Fed to channel resources to productive use in the nation’s economy. By not addressing, or even acknowledging, these potentially game-changing implications of FedAccounts for system-wide credit allocation, the current debate overlooks the full transformative potential of this reform. It also precludes a deeper discussion of how FedAccounts could affect the structure and operation of the U.S. financial system. Glossing over these consequences obscures potentially significant policy choices involved in the process.
My new working paper seeks to shift the debate by confronting these fundamental questions. The paper advocates a comprehensive reform of the structure and systemic function of the Fed’s balance sheet as the basis for redesigning the core architecture of modern finance. It offers a blueprint for transforming the Fed’s balance sheet into what it calls the People’s Ledger: the ultimate public platform for generating, modulating, and allocating sovereign credit and money in a democratic economy.
The Fed would invest in securities issued by existing and newly-created public instrumentalities for the purposes of financing large-scale public infrastructure projects. One such new public instrumentality is the National Investment Authority (NIA), a development-finance institution proposed elsewhere. As proposed, the NIA would act directly in financial markets as a lender, guarantor, securitizer, and venture capitalist with a broad mandate to mobilize, amplify, and direct public and private capital to where it’s needed most.
Accordingly, by purchasing NIA-issued bonds, the Fed would be investing in the long-term development of the nation’s economic capacity. In effect, it would be offsetting the dramatic increase in its own liabilities by dramatically augmenting the flow of credit into the coordinated nationwide construction of public infrastructure that enables and facilitates structurally balanced, socially inclusive and sustainable economic growth."
This paper, called "The People’s Ledger: How to Democratize Money and Finance the Economy," goes beyond anything the Chicago Plan envisioned in 1933.
It’s a complete centralization of the nation’s financial resources. And it puts private wealth in the service of financing “investing” decisions made by “deciders” in Washington, D.C. Their investment goals are things like “equity,” “inclusivity,” and “sustainability.”
The big battle in this war is who gets to say what money is. This is why you’re seeing what looks like a coordinated pushback by the U.S. Securities and Exchange Commission (SEC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) on cryptocurrencies, stable coins, and digital assets.
Cryptocurrencies and gold aren’t legal tender, by law (except certain minted coins). But they are still a threat to the government’s monopoly on money, and all the control that enables them to exert over you. The crux of the matter is that Washington wants to replace a centralized and inflationary banking system run by Wall Street (which owns the Federal Reserve) with a centralized inflationary banking system run by the insiders in the D.C. swamp.
As corrupt and dangerous to your wealth as the current system (run by Wall Street) is, one run by the D.C. elite, who redefine money as central bank digital currency and then demand total financial surveillance of your life, is not an improvement. It’s as bad as, if not worse than, anything the Chinese Communist Party (CCP) might have in mind. In fact, it’s probably exactly what the CCP has in mind. But don’t expect the radicals who support that plan here to be that transparent."
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