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Will metal price increases speed the arrival of a Fed-backed digital currency?
jmlanzaf
Posts: 31,946 ✭✭✭✭✭
The Fed has been working on a digital currency:
https://nypost.com/2021/08/20/fed-actively-working-on-us-digital-currency-official-says/
Given the increase in copper and nickel costs and given a probable shortage in nickel if Russian nickel is boycotted, doesn't this strengthen the case for a digital currency?
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I think it'll happen one way or another whether we want it or not. The government (any government) wants control over people's money. So I think the question is whether it will happen more quickly or not and how will they secure it to prevent various abuses. I suspect when the day arrives there will be a limited time to redeem actual cash before it becomes non legal tender.
TurtleCat Gold Dollars
Good question.
Conditions are ripe.
I think that's true. But I'm wondering about a more immediate need. Russia is 20% of the nickel production. At one point last night, nickel prices were up ONE HUNDRED PERCENT over yesterday's close. I'm wondering about a WW II type of conversion to conserve and/or recycle industrial metals like copper and nickel out of coinage.
If nothing else, maybe a composition change on coinage.
Its existence is the abuse.
That's one possible interpretation.
Possible? Did you notice what happened in Canada regarding bank accounts and access to such recently?
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just for the sake of being able to fully follow this thread. are you talking about digital assets being abuse? and what happened in canada? t.i.a.
That's one possible interpretation.> @MasonG said:
But that's kind of the point. Almost all money is already digital and almost all transactions are already digital. Unless you are one of the poor who have no bank accounts, you likely have 5% or less of your assets in cash.
Look at what they did to Russia from long distance even though there are still paper roubles floating around. I'm not sure going fully digital changes much of anything other than increasing efficiency and convenience.
Canada invoked their emergency powers in response to the trucker protest and then seized the bank accounts of people involved in the protest.
gotcha. thanks
so in this context, does protest mean protest or does it mean what most protestors across the globe over the past couple years seem to think it means, which is, protest at first, riot later? i understand your point seems to be about how easily digital assets can be frozen by the man, justly or unjustly. i could say/ask more, not even combative but this is JUST the kinda thread to get locked/banned members. so thanks for getting me part of the way there for understanding.
I'm not going to get more political by trying to characterize it further. Here's a link:
https://www.nbcnews.com/news/world/justin-trudeau-invokes-emergency-powers-quell-trucker-protests-canada-rcna16213
And, yes, the fear of those who oppose digital currency is partly fear of what "the man" could/would do with it. My point, based on Canada and Russia, is that they already have that power over 95+% of our assets.
No, CBDC's are still just a central bank pipe dream. Will still be a while before you have someone else in full control of what goes on with YOUR money.
Give Me Liberty or Give Me Debt
No. Besides, metals are historically underpriced, given costs of mining and refinement.
Will metal price increases speed the arrival of a Fed-backed digital currency?
Yes...
Perhaps the mint will stop their silly prohibition on the melting of coinage as metal scrap. There's so much nickel out there that could easily be redeemed. Also, while political suicide, there's official recognition of inflation. Just kill the cent and 5 cent entirely. Redeem them all at face, or even a bit over, and problem solved.
TurtleCat Gold Dollars
At the moment this is just a temporary blip, however it is difficult to know how long these sanctions will remain in place and continue to keep the prices up. As this is just temporary it should have no effect on if or when a fed back digital currency might happen. But, it is a great opportunity for those who want more IRS control of the people's money to attempt a takeover.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Whatever the outcome, warrants the question - how safe would it be?
https://www.bbc.com/news/technology-60661763
https://www.pcgs.com/setregistry/u-s-coins/quarters/PCGS-2020-quarter-quest/album/247091
No doubt there will be a digital currency at some point. That being said, it will be many, many years before common coinage/cash is replaced. Cheers, RickO
I just added up the mintages of all Jefferson nickels from 1938 to 2020 (excluding the war nickels). The total is 65 billion.
They weigh 5 grams each and are 25% nickel, so they contain 1.25 grams nickel. That makes 81.2 billion grams of nickel. There are one million grams in a metric ton. That means all the Jefferson nickels contain 81,229 metric tons of nickel.
Russia's Norilsk Nickel produced 62,736 tons just in the 4th quarter of 2021 according to S&P Global Market Intelligence, citing trade data firm Panjiva. Melting all the Jeffersons ever minted would be equal to only 4 months of Russian nickel production, just from Norilsk mine.
However, Indonesia is number one in nickel production by far, and this is what they just announced:
The country is set to add 393,000 tons to 400,000 tons of nickel in metal output capacity this year, bringing the total to as much as 1.4 million tons, according to Coordinating Minister for Investment and Maritime Affairs Luhut Panjaitan. Next year, Indonesia will add another 500,000 tons of annual production capacity. “We’re confident that with this additional capacity, there’s more than enough to offset any lost supply from Russia or other places,” Panjaitan said in a Wednesday interview in Jakarta.
So based on what Indonesia says, there is no good reason for nickel prices to stay this high at all. Melting all the nickels is also an insignificant source of supply in the big picture.
To stay on topic, Indonesia opposes crypto, but it will issue its own Central Bank Digital Currency in Rupiah this year to "fight" ownership of other cryptos.
Countries and Central Banks like control, so the Fed will likely pursue a digital currency for similar reasons, and recent events may speed it up.
National Commemorative Medals of the U.S. Mint:
https://www.pcgs.com/setregistry/u-s-coins/medals-tokens/national-commemorative-medals-united-states-mint-1940-present/alltimeset/195526
I have Long been an advocate of a Federal Reserve Digital Currency.
This is a step towards that goal…
FACT SHEET: President Biden to Sign Executive Order on Ensuring Responsible Innovation in Digital Assets
March 09, 2022
• Statements and Releases
Outlines First Whole-of-Government Strategy to Protect Consumers, Financial Stability, National Security, and Address Climate Risks
Digital assets, including cryptocurrencies, have seen explosive growth in recent years, surpassing a $3 trillion market cap last November and up from $14 billion just five years prior. Surveys suggest that around 16 percent of adult Americans – approximately 40 million people – have invested in, traded, or used cryptocurrencies. Over 100 countries are exploring or piloting Central Bank Digital Currencies (CBDCs), a digital form of a country’s sovereign currency.
The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk. The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate. And, it must play a leading role in international engagement and global governance of digital assets consistent with democratic values and U.S. global competitiveness.
That is why today, President Biden will sign an Executive Order outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology. The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
Specifically, the Executive Order calls for measures to:
Protect U.S. Consumers, Investors, and Businesses by directing the Department of the Treasury and other agency partners to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth. The Order also encourages regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.
Protect U.S. and Global Financial Stability and Mitigate Systemic Risk by encouraging the Financial Stability Oversight Council to identify and mitigate economy-wide (i.e., systemic) financial risks posed by digital assets and to develop appropriate policy recommendations to address any regulatory gaps.
Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets by directing an unprecedented focus of coordinated action across all relevant U.S. Government agencies to mitigate these risks. It also directs agencies to work with our allies and partners to ensure international frameworks, capabilities, and partnerships are aligned and responsive to risks.
Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System by directing the Department of Commerce to work across the U.S. Government in establishing a framework to drive U.S. competitiveness and leadership in, and leveraging of digital asset technologies. This framework will serve as a foundation for agencies and integrate this as a priority into their policy, research and development, and operational approaches to digital assets.
Promote Equitable Access to Safe and Affordable Financial Services by affirming the critical need for safe, affordable, and accessible financial services as a U.S. national interest that must inform our approach to digital asset innovation, including disparate impact risk. Such safe access is especially important for communities that have long had insufficient access to financial services. The Secretary of the Treasury, working with all relevant agencies, will produce a report on the future of money and payment systems, to include implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future.
Support Technological Advances and Ensure Responsible Development and Use of Digital Assets by directing the U.S. Government to take concrete steps to study and support technological advances in the responsible development, design, and implementation of digital asset systems while prioritizing privacy, security, combating illicit exploitation, and reducing negative climate impacts.
Explore a U.S. Central Bank Digital Currency (CBDC) by placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest. The Order directs the U.S. Government to assess the technological infrastructure and capacity needs for a potential U.S. CBDC in a manner that protects Americans’ interests. The Order also encourages the Federal Reserve to continue its research, development, and assessment efforts for a U.S. CBDC, including development of a plan for broader U.S. Government action in support of their work. This effort prioritizes U.S. participation in multi-country experimentation, and ensures U.S. leadership internationally to promote CBDC development that is consistent with U.S. priorities and democratic values.
The Administration will continue work across agencies and with Congress to establish policies that guard against risks and guide responsible innovation, with our allies and partners to develop aligned international capabilities that respond to national security risks, and with the private sector to study and support technological advances in digital assets.
How 'bout that ?
24 hour chart.
Flatline in metal
Give ya a nickel for your two cents worth.
Trading suspension in place at the moment.
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My Adolph A. Weinman signature
I already pay all my bills with my bank's billpay, use Zelle to move funds to family, get my pay in an electronic transfer, buy on Amazon and use my debit card. No sure how this would effect me. Doubt the Fed's digital currency will fluctuate like Bitcoin, etc, and if pegged to the dollar, is not much different unless I'm missing something.
I agree. Others do not.
It really wasn't about melting nickels. It was about losing 5 cents on every new nickel made.
Wonder what the think tanks are recommending?
It's not about the transactions you make today, it's more about giving more control over money to the central banks and government. Look at Canada freezing assets of protesters, whether you are against it or not, it puts a lot of power in the government. When the party in power doesn't agree with something they can limit your funds. Imagine if they limited your ability to spend funds based on your vaccinated status, is that ok? If you are OK with all that, what about when they decide to limit funds for one gender or race to promote "equality". What about when they turn interest rates negative to monetize the debt like they did in Japan. They will also have insight into every transaction. Support gun ownership, what happens when someone in office bans purchases of firearms using the central currency, they don't have to ban guns, or gun sales, but can prevent you from transactions. What about when they pick and choose what foods you can buy, what cars, what energy you consume.
Whole you may think this is far fetched is not really different from some of the governments actions in the last two years and it can all be fine by adding a few lines of code. Don't think this post is political. I dislike both parties, I don't want any government having that kind of control over the currency.
The US mint has been losing money producing cents and nickels for years. If it was only economics, they would have stopped or changed composition long ago. Getting a majority of our politicians to agree and vote to revise or eliminate them seems to be issue. People do not like change...or do they?
National Commemorative Medals of the U.S. Mint:
https://www.pcgs.com/setregistry/u-s-coins/medals-tokens/national-commemorative-medals-united-states-mint-1940-present/alltimeset/195526
I generally agree. The problem is getting worse with the metals surge, however.
They could effectively do this now. What % of your assets are stuffed in a mattress? And what is the form of your mattress stuffing? The government could, if they wanted, effectively make your dollars or gold or euros unexchangeable now.
I agree, they have already done that when they confiscated gold, they could do it now.
Diversification is the best I can do, I own property, equities (domestic and international), crypto in offline storage, ammo which is good as currency, physical gold/silver in my "mattress", but also a large garden and chickens just in case. The difference is with a central digital currency they could add a line of code based on executive order and overnight destroy progress ability to transact on items they do not approve of. Today, they can't control cash in that way. They could make a law, pass it, but that requires support through government and supreme court approval. With a digital currency they could effectively bypass the law whenever we have another outbreak of some virus, or whenever political parties change.
If you really understand the power you are giving to the government with a change like this, and you look at everything governments have done in history, it should raise some concern.
They can not prevent me from bartering with eggs, ammo, gold or other assets. They can make me a criminal for it if they want, but how would they effectively enforce that on a broad scale. I have had 5 speeding tickets in my life, but I've sped more than 5 times, it's not practical to enforce in a nation or size.
" The difference is with a central digital currency they could add a line of code based on executive order and overnight destroy progress ability to transact on items they do not approve of. Today, they can't control cash in that way. They could make a law, pass it, but that requires support through government and supreme court approval. With a digital currency they could effectively bypass the law whenever we have another outbreak of some virus, or whenever political parties change.
If you really understand the power you are giving to the government with a change like this, and you look at everything governments have done in history, it should raise some concern."
Definitely a concern. If any law is passed establishing a US crypto, be wary how it is worded and what is being enacted. If the President is able to use executive order to affect usage, or any other entity such as the Fed... look out. If Congress is bypassed, then the crypto could very easily be used as a political or cultural weapon.
Hope I am right in my belief that physical cash will still be needed and in use for some time yet. Likely cryto and cash/dollars will exist together for some time.
In answer to the original question: yes it will probably be put it on the table to be looked at, as recent Executive Order shows.
The Federal Govt bureaucracy always makes them a day late and a dollar short - they're trying to do something but it will turn into a cluster. I seriously doubt the Fed will take away the banking powers of banks to hold our accounts and balances. What they might try and do is allow digital currency balances to be pegged to the inflation rate, so it grows with inflation. But that is what interest rates were supposed to do and they screwed that up big time.
Pennies and nickels have been irrelevant for a very long time so using them as an excuse to implement untraceable money is very transparent. There is a profitable way to take care of metals prices.
The fact that government isn't enforcing laws against counterfeiting money is very very important.
Interesting read from CNBC today:
Bitcoin and other cryptocurrencies fell on Thursday as some of the initial excitement around U.S. President Joe Biden’s executive order on digital assets faded.
Bitcoin was last down more than 6% at $39,195.17, according to Coin Metrics.
On Wednesday, bitcoin rose to as much as $42,577 after starting the day trading at around $38,744.
Other cryptocurrencies such as ether and XRP were also trading lower.
Wednesday’s spike came as optimism around Biden’s executive order on cryptocurrencies mounted. The order focuses on six key areas: consumer protection, financial stability, illicit activity, U.S. competitiveness in the industry, financial inclusion and responsible innovation.
Some high-profile cryptocurrency industry players praised the U.S. government’s move. Cameron Winklevoss, co-founder of the Gemini cryptocurrency exchange, called it a “watershed moment.”
But not everyone was convinced.
“The executive order is, more than anything, defensive. The main goals of the EO are to protect the US’ financial position globally, make sure US regulations (both federal and global) are not circumvented using crypto, make sure crypto investors and users are protected legally, and that crypto as an industry is regulated in general,” said Guy Gotslak, co-founder of cryptocurrency investment platform My Digital Money.
“These are not bad; we all want the same thing. We want to protect investors, especially the small ones. But the EO does not direct the government to take proactive steps to nurture the growth of technology.”
Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, said the executive order was “overall more positive or neutral.”
“Hence while the market reacted positively to the statement, momentum wasn’t strong enough to surpass resistance” at $42,000, he said.
“What we can see is that Bitcoin is broadly range bound, unable to make a strong move on either side, coupled with ongoing uncertainty about Ukraine,” Ayyar added.
Sounds like the EO is not driving the Fed to create a competitive digital currency but more regulatory.
It's dystopian. I'd love to see the days of silver dimes, quarters and halves.
Do you understand that the stated goal of Central Bank Digital Currencies (CDBCs) is to completely replace cash and commercial bank accouts? When implemented ALL of your money will be in an account controlled by your central bank and whoever controls them. Access to YOUR money can be blocked if the account controller(s) has ANY desire to freeze/limit your available funds for ANY reason..
Creating to much carbon emissions with your gas purchases? Limit your buys art the gas station.
A need to stimulate overall spending? Pay a negative interest rate (a monthly fee) on your only source of savings.
It may well become a new form of cancel culture for those that do not toe the line.
I for one prefer the privacy of cash and how, when and where I spend it. I do not desire for it to possibly become an "allowance" controlled by someone else. CBDCs would be fine with me it they were optional. Unfortunately, the plan is to make them the ONLY way to store and access YOUR money.
Here's a good example of what happens when someone else controls access to YOUR money..
Give Me Liberty or Give Me Debt
I like having and using cash especially at coin shows. With digital currency what’s to prevent somebody to access who, where, how you spent your money. Then they are going to hose you with a transaction fee. Let alone find find some way block or steal it. This could also be requested as evidence in a divorce case like text messages are. I would be open to currency redesign and the addition of higher demonizations like a $200 bill for starters.
Cash is the most liquid thing there is and provides financial privacy. I can’t imagine anyone where the elevator goes to the top wanting (or allowing) to throw this right away. Furthermore in a major world war the digital thingy could easily go kaput.
Well China is on the way to adoption. So that will be the first major economy to adopt.
Of course they are an autocratic dictatorship with no checks and balances so will not be relevant to our situation.
Will be interesting though with regard to banking, consumer security and tech challenges.
If the Fed stopped printing dollars and the Mint stopped producing coin, it would take a year at most to convert. The real problem is the Gov't then has control of your money, not you. If they don't want you to buy from GC, as it's supporting real money, they can turn your currency off. Biggest threat to Freedom we have ever seen.
bob
You might want to look a little more closely at our situation. Just a thought.
Wow I hope you are trying to be funny. Otherwise you know not of what you speak.
@AUandAG ... If... and that is a big IF... The citizenry allowed that to happen, yes, a year is possible. However, I think this country is a long, long way from accepting the elimination of cash. Cheers, RickO
if they do they do if not oh well not my issue as i don't control the world or the people in it i worry about what i can control not about what i can't
https://photos.google.com/album/AF1QipNDYygpVqRggzFwSgk_IQv6N5QQyFz-lpgw6laR
Physical Dollars are currency,
Create a Specie to transact with the word "One Dollar" on it breaks rules, its a counterfeit, a forgery, and illegal (see Norfed dollars)
In the future maybe
Central Bank Digital Dollars are currency
Using something else to transact with (Open Source Digital currency, Precious Metals, etc.) breaks rules and is illegal
Not too far of a stretch...
So I don't like the idea of a centralized digital currency and prefer the freedom to transact in what ever way you choose.
It's all about what the people want...
Yes Ricko I hope it’s a long way for USA going to cash elimination if ever.
Would it be a mark of the beast chip inside your hand? Can see a cop or Safety (political) Officer pulling somebody over / stopping them on sidewalk - “Let me see your hand please.”