The World Economic Forum and Ukraine - Building a Digital Prison

The globalist ruling class as represented by the Davos crowd is at it again.  With the recent kerfuffle in Washington and Europe over the future of Ukraine, we can assure ourselves that the World Economic Forum will be there to pick up the pieces.

Here is an announcement from the WEF on the launching of a "GovTech" centre in Kiev, only the second in the world after the centre in Berlin:

...and more:

This centre will be "part of the World Economic Forum’s Centre for the Fourth Industrial Revolution (C4IR) Network and represents only the second centre globally with a focus on GovTech following the signing of the Global Government Technology Centre Berlin (GGTC Berlin) in January 2024.  Together with GGTC Berlin, GGTC Kyiv will connect national GovTech ecosystems with a global network of experts to promote more efficient, effective and accessible public services." 

If you read down through the press release, you'll find this with my bolds:

"With technological advancements rapidly reshaping industries and societies globally, it is becoming increasingly imperative for nations to harness these innovations. In recent years, Ukraine has emerged as a global leader in GovTech and its experience can inform others in driving digital transformation within the public sector. Its Diia app with over 20 million users and the Diia platform integrate over 100 government services and tens of digital documents, ranging from digital ID cards and driver licences to business registration and social benefits, exemplifying the ways in which digital tools can simplify interactions between citizens and the state."

Or make it easier for the state to track and trace its citizens.

According to an article in Cities Today, Kiev's GovTech centre has now opened:

Here's a quote from the article:

"According to World Economic Forum Managing Director Mirek Dušek, the centre in Ukraine will support WEF’s global efforts to unlock the potential of digital technologies to improve public services and create new opportunities. And it will serve as a catalyst for public-private collaboration, fostering digital technology and innovation at a critical time for Ukraine and Europe.

Key features of the centre will include:

GovTech Observatory: A platform tracking global and national GovTech trends, enabling knowledge sharing and data-driven policy through research, tools, and global partnerships.

Innovation Gateway: A hub for piloting and scaling technologies in Ukraine, showcasing innovation in AI, EdTech, Defence Tech, and more, with global investment support.

FutureGov Education: A training platform for public sector leaders to adopt cutting-edge technologies, fostering experimentation and global collaboration.

The powers that ought not to be will be selling us the concept of "unlocking the potential of digital technologies" to "improve public services and create new opportunities" rather nebulous ideas, don't you think?

In other words, this WEF initiative will be launching point for a digital identity, an essential part of the central bank digital currency ecosystem.  Ukraine will be desperate enough for the jobs that it will go along with this plan by the rulers.  It will be simpler for the technocracy to use Ukraine to implement their plans for a digital prison by taking advantage of a nation whose infrastructure and economy has been completely destroyed, giving them the ability to build a neofeudal state from the ground up.

 

Is Volodymyr Zelenskyy the Problem?

The recent and very public argument between Donald Trump, JD Vance and Vladimir Zelenskyy has drawn the world's attention and has led to a great deal of criticism by the left-leaning, anti-Trump media about how Donald Trump was disrespectful to a leader whose nation is fighting a critical war for the "freedom of the world".  You'd almost think that the media has forgotten this bit of history from June 2022:

Here's a quote from the story as covered by NBC News in October 2022:

"It’s become routine since Russia invaded Ukraine: President Joe Biden and Ukrainian President Volodymyr Zelenskyy speak by phone whenever the U.S. announces a new package of military assistance for Kyiv.

But a phone call between the two leaders in June played out differently from previous ones, according to four people familiar with the call. Biden had barely finished telling Zelenskyy he’d just greenlighted another $1 billion in U.S. military assistance for Ukraine when Zelenskyy started listing all the additional help he needed and wasn’t getting. Biden lost his temper, the people familiar with the call said. The American people were being quite generous, and his administration and the U.S. military were working hard to help Ukraine, he said, raising his voice, and Zelenskyy could show a little more gratitude."

Does this sound familiar in any way?

Here's more from NBC:

"Before the June 15 (2022) phone call, the president’s frustrations with Zelenskyy had been building for weeks, three people familiar with the call said. Biden and some of his top aides felt that the administration was doing as much as it could as quickly as it could but that Zelenskyy continued to focus publicly on only what wasn’t being done."

And, to close:

"After the pushback Zelenskyy got in their June phone call, his team decided to try to defuse tensions, concluding it wasn’t productive to have friction with the U.S. president, according to two sources familiar with the Ukraine government’s view, congressional aides and two European officials.

Zelenskyy responded publicly that day by thanking Biden for the promised assistance.

“I had an important conversation with U.S. President Biden today,” he said in videotaped remarks. “I am grateful for this support. It is especially important for our defense in Donbas.”

Here's the NBC News video which covers the story:

If you take this story into consideration, it would certainly appear that Zelenskyy has bought into his own press, believing that he is a rockstar world leader.  One would have to wonder, however, if he isn't the one with the behavioural problem?  It would seem, at the very least, that Zelenskyy believes that he is entitled to an unending supply of free arms from the United States, a nation that has already supplied him with over $120 billion in military, humanitarian and financial aid.

Isn't it fascinating how the 21st century mainstream media has become just like the media portrayed in George Orwell's 1984 where history is memory holed when it becomes inconvenient to the deep state's narrative, in this case, it's anti-Trump mantra?

Mark Carney and the Semiconductor Industry

At at recent public meeting, Mark Carney, the Liberal Party of Canada leadership heir apparent made the following comment about one aspect of Canada's trading relationship with the United States:

Apparently, in Carney World, Canada is the biggest supplier of semiconductors to the United States.

Let's do a fact check on this comment starting with data from the Observatory of Economic Complexity.  Here is a graphic showing the source nations for U.S. imports of semiconductor devices for 2023:

 

You'll notice that Canada supplies the United States with a massive 0.79 percent of its semiconductor device imports, well below front runners Vietnam at 20.6 percent, Thailand at 17.3 percent, Malaysia at 14.8 percent and Cambodia at 9.69 percent.  In fact, Canada is even behind Mexico which supplies 2.56 percent of American imports of semiconductor devices.

Canada doesn't even rank close to the top of the list when it comes to the manufacturing of semiconductors with Taiwan, South Korea the United States, Japan and China heading the pack when it comes to actually producing semiconductors as shown here:

According to PatentPC, in 2023, the following nations were the highest producers of semiconductors: 

1.) Taiwan - 65 percent

2.) China 16 percent (aiming for 70 percent by 2030)

3.) South Korea - 20 percent

4.) United States - 12 percent

5.) Europe - 9 percent (aiming for 20 percent by 2030)

6.) Japan - 6 percent

India is also positioning itself as a future semiconductor manufacturing nation with government offering incentives to attract foreign chipmakers.

Again, you'll notice that Canada is not even mentioned in the list of the largest semiconductor manufacturing nations but yet it supposedly is the largest supplier of semiconductors to the United States.  Canada does have a semiconductor industry and is home to some of the world's largest semiconductor producers and designers like TSMC, Samsung Electronics, AMD, Qualcomm and Intel, however, the Canadian facilities are branch offices of these major foreign corporations.

So, where did Mark Carney get the idea that Canada is America's largest supplier of semicoducturos?  Who knows?  I would like to see proof of his assertions.  But it certainly would be nice to see the mainstream media fact check his pronouncements once in a while.  I guess that the lesson for all of us is that just because a former two-time central banker says something, doesn't necessarily make it accurate.

Addendum:

Since I posted this item, this announcement was released:

So, it's looking like the United States will be much less reliant on Canada's "massive supply" of semiconductors after all.  See, central bankers don't know everything despite what they would have us believe.

Strengthening the Liberal World Order Through the Energy Revolution

Over the past decade, the world has seen a substantial move toward a new liberal (or Neo-liberal) world order, particularly throughout much of Europe, in Canada under the Trudeau government, the United States under the Biden Administration, New Zealand and Australia in particular.  This strategy has brought about the term "progressive" when it comes to the Neo-liberal self-referencing and the term "far right" when it comes to describing anyone who doesn't subscribe to their "progressive" agenda.  One may well ask where this liberal world order came from given that so many advanced nations seemed to adopt this agenda at roughly the same time.  Here is the answer:

Dating back to April 2016, the World Economic Forum which is "committed to improving the state of the world" released the "Strengthening the Liberal World Order" white paper which was proposed by the Global Agenda Council on the United States and supposedly did not necessarily represent the views of the World Economic Forum despite the fact that the white paper was published under the auspices of the WEF.

In this posting, I will be focussing on how the promoters of the liberal world order intend to use energy, the driver of the global economy, to ensure that their liberal view of the world remains intact. 

The white paper opens by noting that the world order that was created in the aftermath of the Second World War produced "immense benefits" for people across the planet, eliminating much of the world's poverty and emplacing a system of democracy in more than 100 nations.  The authors state that it is thanks to the global efforts of the United States that the liberal world order was created and maintained.  The liberal order states that the rights of the individual are primary and that governments are responsible for protecting these rights and that "(a) democratic government, in particular, offers the best chance for human dignity, justice and freedom." 

Here is a quote from the white paper about the importance of the liberal world order:

"...the authors of this report are confident in their conviction that the liberal world order offers the best hope for meeting human aspirations, both material and spiritual, and for calling forth the very best in people across the world."

 The paper notes that the liberal world order is under threat by both authoritarian governments, anti-liberal fundamentalist movements, shifts in the global economy and changes in the physical environment (i.e. global climate change).  Here is another quote:

"The turmoil and multi-sided conflict in the Middle East; Russia’s invasion and seizure of territory in Ukraine; the pressures on the liberal political and economic order in Europe; China’s growing power and ambition in Asia; the tenuousness of the international consensus on free trade and multilateral economic institutions – all these combine to put this order at risk."

The present liberal world order has been created and lead by the United States, in large part, and the authors believe that strengthening and preserving this order will require a renewed American leadership in the international system:

"The present world order has been forged by many hands and peoples, but the role of the United States in both shaping and defending it has been critical. American military power, the dynamism of the US economy and the great number of close alliances and friendships that the United States enjoys with other powers and peoples have provided the critical architecture in which this liberal world order has flourished. A weakening of America’s commitment or its capabilities, or both, would invariably lead to its collapse."

The authors suggest that there are four "baskets of policies" which are necessary to preserve the liberal world order: 

1.) Strengthening and Adapting the Liberal Economic Order

2.) Strengthening the International Security Order

3.) Taking Advantage of the Energy Revolution

4.) Playing to America’s Strengths in Education, Innovation and Entrepreneurship

As I stated previously, for the purposes of this posting, I am going to focus on only one "basket".  With climate change being a significant part of the current neoliberal mantra, let's look at what the paper has to say about energy and the energy revolution.  The authors believe that there are three ways that the liberal world order can take advantage of the energy revolution, given the transformation of the energy situation in the United States thanks to hydraulic fracturing and the increased use of renewables which has resulted in a reduced dependence on oil:

1.) Help European and Asian allies diversify energy sources, especially in gas by reducing Europe's dependence on Russian natural gas.  This could be accomplished by increasing exports of American LNG (which, of course, will benefit American oil and gas companies).

2.) Leverage US influence, productive capacities and declining energy prices to increase pressure on energy-exporting autocratic nations hostile to the liberal world order including Russia and Iran which are both heavily reliant on hydrocarbon exports for their economic well-being.

3.) Support and hasten the weakening of OPEC and other energy cartels by creating investment environments that support increased production and therefore diversified supplies on the global market and working with other producers to support liberal economic policies

Here's another quote from the white paper:

"America’s energy revolution provides a tremendous opportunity to solidify a liberal international order based on strong alliances with key allies in Europe and Asia, weakening revisionist forces in Russia and elsewhere, and fostering market conditions for the trade in oil and gas. The energy revolution alone will not be sufficient to secure these outcomes, but it provides the United States with a major new advantage in seeking to bring them about."

Keeping in mind that this white paper was released in early 2016, developments in the energy market since then have shown this analysis to be flawed.  Certainly, Russia has had to find other markets for its natural gas since the Ukraine war began in February 2022 and it found a willing market in China.  The final section of the Power of Siberia natural gas pipeline was recently completed and is expected to reach its full annual design capacity of 38 billion cubic metres in 2025, roughly 9 percent of China's consumption as shown here:

China is now on track to become the largest market for Russian natural gas, overtaking Europe.  While the United States has become the primary supplier of LNG to Europe, supplying 45 percent of Europe's LNG needs in 2024, its liberal world order-preserving actions to reduce Europe's reliance on Russian natural gas has worked...at a price.  In fact, if climate change mitigation was even a small part of the goal, that has been another failure.  The carbon footprint of LNG is 28 percent greater than that of coal for shorter cruises and 46 percent higher for longer cruises.  Here are three graphics which explain the issue:

 

We can see from this brief summary of the "Strengthening the Liberal World Order" white paper that the progressives who are trying to promote and preserve the American-led post-World War 2 world order are not necessarily capable of ascertaining the unintended consequences of their agenda.  This is particularly the case for energy markets and climate change; while the solution to preserve the liberal world order by destroying Russia's energy industry may have seemed ironclad, in fact, the result of the actions of the progressives among us merely assisted in creating a new order led by the combination of Russia's energy and China's economic power and has left Europe at the mercy of hydrocarbons that are even more polluting than Russia's natural gas.

A History of Global Mean Surface Temperatures

We keep hearing from the global ruling class and its dupes in the mainstream media that the "earth is boiling" and that atmospheric temperatures are at record highs, a common theme during the summer months in the northern hemisphere.  As a geoscientist, I'm interested in the very long-term trends, looking at global temperatures well before the modern age which is the focus of the vast majority of climate scientists, meteorologists and those climate change evangelists that would have us believe that we are living on the edge of climate disaster.

Let's open with a graphic showing the geological time scale for those of you who are not familiar with the geological record.  This will help you put the information in this posting into context:

With that background, let's look at the subject matter of this posting.  In a paper which appeared in Science in September 2024 entitled "A 485-million-year history of Earth's surface temperature" by Emily J. Judd et al, the authors examined the long-term geological record of global mean surface temperature (GMST) using a combination of proxy data with climate modelling.  In the paper, the authors present PhanDA, a reconstruction of GMST spanning most of the Phanerozoic Eon, the last 539 million years of earth's history.  PhanDA was created using a method that statistically integrated geological data with climate model simulations.  PhanDA's global mean surface temperature shows a strong relationship between temperature and carbon dioxide, suggesting that carbon dioxide exerts dominant control over the climate during the Phanerozoic.  This surprised the authors since they anticipated that solar luminosity would have a greater impact on climate.  They hypothesize that changes in planetary albedo (reflectivity of the earth's surface) and the atmospheric content of other greenhouse gases like methane helped to compensate for the increase in solar luminosity. 

Here's what the study revealed:

1.) the relationship between GMST and carbon dioxide had a relatively constant impact on Earth's climate system sensitivity.  For example, the temperature response to a doubling of carbon dioxide was roughly 8 degrees Celsius no matter whether the climate was warm or cold. 

2.) the Earth's temperature has varied between 11 degrees Celsius and 36 degrees Celsius over the past 485 million years.  This is in line with other temperature estimates from the Cenozoic Era (the last 66 million years of earth's history). 

3.) there was a relationship between global mean surface temperature and the pole-to-equator temperature gradient with larger temperature changes closer to the Earth's polar regions.  Tropical temperatures ranged between 22 degrees Celsius and 42 degrees Celsius.

4.) overall, the earth has spent more time in warmer climate states during the Phanerozoic Era.

To close, here is a graphic showing the global mean surface temperature as estimated using PhanDA for the past 485 million years with the grey shaded areas showing different confidence levels and the black lines showing the average temperature and the orange and red bars showing climate that is warmer and blue and turquoise bars showing climate that is cooler:

What can we learn from this study?  From my perspective, it appears that the earth has spent more of its history with a far warmer climate that today and yet both plant and animal life flourished.  It is the use of graphics like this one which show significant and, one might say alarming, growth in warm temperature anomalies since 1960:

...that can have us believing that we are at a climate crisis point, however, given that the data on the chart only goes back to 1880, we can see now that this is hardly a long-term view of Earth's climate.  

We have to carefully examine the motives behind those who would have us believe that the earth is boiling and that we are living on the cusp of total climate destruction.  What do these individuals have to gain personally from promoting this narrative?  That, to me, is the bottom line.  If they have something to gain either financially or from increasing their control over humanity, then their motives may not be entirely trustworthy.

Mark Carney, CBDCs and the United States Dollar - Dealing with Donald Trump

For some reason or another, Canadians believe that Mark Carney is best suited to negotiate trade issues with Donald Trump.  This is likely due to the non-stop coverage that Canada's left-biased media has deluged Canadians with since Carney entered the race for replacement Liberal leader/Prime Minister in December 2024.  If we look back at comments that Carney made at a speech in 2019 which get no coverage on Canada's mainstream media, it would appear that Carney might well have an uphill battle with President Trump.

On August 23, 2019, Mark Carney in his role as Governor of the Bank of England gave this speech to the Jackson Hole Symposium, an annual gathering of central bankers, finance ministers and other economic experts from around the world:

In this rather mind numbingly boring and very technical speech, he delves into the international monetary and financial system (IMFS), focusing on how the current system challenges monetary policy.  He notes that the world economy is being reordered (thanks to the growing impact of the BRICS nations on the global economy) with the U.S. dollar remaining as important as it was when other currencies were pegged to the U.S. dollar which was pegged to the price of gold ($35 per ounce) at the Bretton Woods meeting in 1944.  This was the case until 1971 when President Richard Nixon announced his New Economic Policy, suspending the conversion of the U.S. dollar into gold.

Carney states that there is a growing "destabilizing asymmetry" at the heart of the IMFS and, with the U.S. dollar's continuing importance to the economy, it is having a significant spillover into trade performance and financial conditions of emerging economies.  This makes it difficult for central bankers to provide the stimulus necessary to achieve their objectives and, as a result, there is a growing risk of a global economic slowdown. To summarize his comments, the near-zero interest rate policies adopted by the central bankers of the United States and other advanced economies made it nearly impossible for them to lower rates further. 

 Here is a quote:

"Today, the combination of heightened economic policy uncertainty, outright protectionism and concerns that further, negative shocks could not be adequately offset because of limited policy space is exacerbating the disinflationary bias in the global economy.

What then must be done? In the short term, central bankers must play the cards they have been dealt as best they can."

He then states that central bankers need to "change the (reserve currency) game" in the new multipolar  international monetary and financial system and that (with my bolds):

"When change comes, it shouldn’t be to swap one currency hegemon for another. Any unipolar system is unsuited to a multi-polar world. We would do well to think through every opportunity, including those presented by new technologies, to create a more balanced and effective system."

Note the use of the words "new technologies".  We will see what those are later in this posting.

Now, let's see what he has to say about the U.S. dollar (again with my bolds):

"The dollar represents the currency of choice for at least half of international trade invoices, around five times greater than the US’s share in world goods imports, and three times its share in world exports.  The resulting stickiness of import prices in dollar terms means exchange rate pass-through for changes in the dollar is high regardless of the country of export and import, while pass-through of non-dominant currencies is negligible. As a result, import prices do not adjust efficiently to reflect changes in relative demand between trading partners, in part because expenditure switching effects are curtailed, and global trade volumes are heavily influenced by the strength of the US dollar....

Huge network effects mean the dollar has remained dominant in the IMFS despite the transformation of the global economy. At the time of the Latin American debt crisis, EMEs made up a little more than one third of global GDP. Since the last Fed tightening cycle, their share of global activity had risen from around 45% to 60%. By 2030, it is projected to rise to around three quarters.

As well as being the dominant currency for the invoicing and settling of international trade, the US dollar is the currency of choice for securities issuance and holdings, and reserves of the official sector. Two-thirds of both global securities issuance and official foreign-exchange reserves are denominated in dollars. The same proportion of EME foreign currency external debt is denominated in dollars and the dollar serves as the monetary anchor in countries accounting for two thirds of global GDP.

Basically, Carney blames the U.S. dollar for the woes in the global economy.    You'll note that he stated that in "changing the game" when it comes to new reserve currencies to replace the U.S. dollar, new technologies must be considered.  What are these new technologies?  Here you go:

"The Bank of England and other regulators have been clear that unlike in social media (and its attempts to create new payment systems like Facebook and Libra/Diem), for which standards and regulations are only now being developed after the technologies have been adopted by billions of users, the terms of engagement for any new systemic private payments system must be in force well in advance of any launch.

As a consequence, it is an open question whether such a new Synthetic Hegemonic Currency (SHC) would be best provided by the public sector, perhaps through a network of central bank digital currencies.

Even if the initial variants of the idea prove wanting, the concept is intriguing. It is worth considering how an SHC in the IMFS could support better global outcomes, given the scale of the challenges of the current IMFS and the risks in transition to a new hegemonic reserve currency like the Renminbi.

An SHC could dampen the domineering influence of the US dollar on global trade."

He also notes that the most likely candidate for a replacement reserve currency is China's Renminbi but that it still has a way to go before it becomes truly a global reserve currency.  This is very noteworthy given that the Trump Administration appears to be viewing China as their "foe of choice".

So, given that Mark Carney believes that the issuance of central bank digital currencies (aka a Synthetic Hegemonic Currency) are necessary to reduce the global reliance on the U.S. dollar as the "hegemonic reserve currency" and that China's Renminbi is the heir apparent in a multi-reserve currency world, I wonder how Donald Trump will view a Prime Minister Carney, particularly given that one of his Executive Orders banned the development and use of a central bank digital currency in the United States and that his core belief is to make America the great sole superpower that it was prior to the rapidly developing multipolar reality of today.

Americans and Their Trust in Doctors and Hospitals

A paper from August 2024 in the Journal of the American Medical Association examined the results of a survey taken of Americans over the period from April 2020 (at the beginning of the COVID pandemic) through to January 31, 2024.  The paper by Dr. Roy Perlis et al attempts to answer the following question:

 

"How did trust in physicians and hospitals change during the COVID-19 pandemic?"

 

The 24 wave survey was conducted among 443,455 unique respondents residing in the United States aged 18 and older and consisted of 582,634 responses.  The mean age of the respondents was 43.3 years with 65 percent being female and 71.1 percent being White.  The study was undertaken to determine whether trust in physicians and hospitals had changed over the course of the pandemic

  

Throughout modern history, physicians have been highly regarded for their trustworthiness with a 2022 survey reporting that American adults had greater trust in physicians and nurses than any other institution or occupation.  A Gallup poll found that in 2019, medical doctors were trusted to be either very highly or highly honest and ethical by 65 percent of Americans (third highest among all professions) and nurses were trusted to be either very highly or highly honest and ethical by 85 percent of Americans (highest among all professions).

 

Let's go back to the study.  The authors of the JAMA study entitled "Trust in Physicians and Hospitals During the COVID-19 Pandemic in a 50-State Survey of US Adults" found the following:

1.) the proportion of adults that reported a lot of trust for hospitals and physicians decreased from 71.5 percent in April 2020 to 40.1 percent in January 2024.  Decreased trust was associated with certain demographics including those aged 25 to 64 years of age, female gender, lower educational level, Black race and living in a rural area.  Surprisingly, self-reported political affiliation did not have a meaningful impact on trust levels.

 

Here is a graphic showing the decline in trust in hospitals and physicians over the nearly four year period by gender, race and ethnicity and age:

 

2.) Higher levels of trust in hospitals and physicians was associated with a greater likelihood of being vaccinated for COVID-19.

 

3.) Higher levels of trust in hospitals and physicians was associated with a greater likelihood of being vaccine boosted for COVID-19.

 

Here is a summary graphic showing the association between various demographic features of respondents and how these demographics either do not favour trust or favour trust:

 

Note the following:

1.) respondents between the ages of 25 and 34 tend to trust hospitals and physicians less than their older counterparts.

 

2.) female respondents tend to trust hospitals and physicians less than their male counterparts.

 

3.) respondents with lower educational levels tend to trust hospitals and physicians less than their more educated counterparts.

 

4.) black respondents tend to trust hospitals and physicians less than other races and ethnicities.

 

5.) rural respondents tend to trust hospitals and physicians less than suburban and urban counterparts.

 

Despite the decreased trust in physicians over the pandemic, other studies have discovered that the general public still found physicians and hospitals to be more trustworthy when it came to receiving health care information than all other United States institutions (i.e. government).

Here is a closing quote with my bolds:

 

"Our results cannot establish causation, but in the context of prior studies documenting associations between physician trust and more positive health outcomes, they raise the possibility that the decrease in trust during the pandemic could have long-lasting public health implications. If so, effective interventions aimed at restoring trust could have benefits, not only for future pandemics, but for health in the US more generally, at least in terms of vaccination. In examining reasons for low trust, financial conflicts of interest, a longstanding area of academic investigation in medicine, remain a major factor associated with mistrust, concerns that may have been amplified during the pandemic."

 

From the results of this study, it would appear that the medical profession has a long way to go to regain the trust of the American public after its shameful behaviour during the COVID-19 pandemic.  A significant and growing proportion of Americans no longer trust the health care system to look after their best interests, suggesting that governments will have their work cut out for them if they hope to get the public to buy into a wide scale vaccination rollout in the future as they did during the SARS-CoV-2 pandemic.

Central Bank Digital Currencies - A Primer on a Cashless Society

In recent weeks, it has become increasingly apparent to me that many people are completely unaware of the concept of a central bank digital currency or CBDC.  In this posting, I will outline the key aspects of CBDC, how it will be implemented and why and will encapsulate all of the things that I have learned about our looming cashless society for your illumination.

  

Let's start by looking at the definition of a CBDC.  

"A CBDC is a form of digital currency issued by a nation's central bank and is equivalent to its physical national fiat currency (i.e the bank notes that are circulated in an economy)."

  

There are two types of CBDCs:

 

1.) Retail CBDCs - these CBDCs will be used by consumers and businesses.  There are two types of retail CBDCs:

 

a.) Account-based retail CBDCs which will require a digital identification to access an account.  These CBDCs could cause disruption in the commercial banking sector and could lead to identifying, tracking and profiling of all end-user's transactions.

 

b.) Token-based retail CBDCs which will be accessible with private keys, public keys or both which will allow an individual to execute transactions anonymously, however, central banks could choose to implement specific identity requirements to access the network, negating anonymity. 

 

2.) Wholesale CBDCS - these CBDCs will be used for transactions by the financial/commercial banking sector.

 

Here is a quote from a study on CBDCs from the European Data Protection Supervisor regarding the definition of a CBDC:

"A CBDC consists of a digital representation of coins and banknotes in the form of digital tokens. It is an electronic file that embodies a specific value with a reference to its owner attached to it. By just changing that reference, the value is transferred and a payment is made. CBDC is usually presented by central banks as a complement to cash, equipped with similar features (notably, having regard to the legal tender status), but adapted to some functional needs and to the ‘digital’ nature referred to above."

 

Some central banks (i.e. the Bank of England) are selling the benefits of a CBDC by stating that while CBDCs will be implemented, bank notes will still remain in circulation (i.e. the payment system will not become entirely digital) however, they give no time frame for the implementation of a fully digital/cashless payments system which is certain to follow.

CBDCs could be administered in one of two main architectural ecosystems:

 

1.) the direct model where the central bank provides a direct service to the end user such as a reloadable card or online digital wallet.

 

2.) the indirect model where commercial banks provide the ledger for retail transactions with the central bank maintaining the wholesale ledger of CBDC transactions with the commercial banks.

 

Under a hybrid model of CBDC administration, commercial banks will provide retail services to its customers and the central bank retains a ledger of retail transactions.  According to the Bank for International Settlements (the central bank for central banks), this is currently the architecture that most central banks are currently considering.

 

Here is a graphic showing the two types of CBDC architecture and the resulting data flow:

 

Some people comment that we already have a digital payments system which consists mainly of debit and credit cards.  While this is true, there is a key difference between CBDCs and the current digital payments system.  CBDCs will be legal tender and must be accepted if offered as payment within the jurisdiction of its issue whereas other electronic means of payment (i.e. credit cards etcetera) can be refused.

 

There are at least two issues that will make the implementation of a CBDC ecosystem difficult:

 

1.) Resilience - the CBDC banking system must be resistant to cyber security threats and must operate when the power grid is unavailable.

 

 2.) Privacy - we will have to trust that central banks and governments will not use CBDCs to track and trace our behaviours.  Here is a quote about CBDC-related privacy from a study done by Payments Canada with my bold:

  

"A CBDC with the same level of privacy as traditional cash is highly unlikely. As with cash, privacy may be limited in the service of public safety priorities around money laundering, terrorist financing, tax evasion and parallel market activities, particularly for large CBDC transactions."

  

One might ask, why do we need CBDCs.  Here are some of the reasons given by central bankers:

 

1.) reinforcement of monetary sovereignty, strategic autonomy and monetary policy implementation

 

2.) creation of a more reliable form of payment than new form of private money by private actors (i.e. Bitcoin etcetera) that bypass the existing bank-based payment systems

 

3.) to stimulate competition and innovation in payments, removing barriers and avoiding closed payment

systems created by platforms (i.e. Meta's proposed Diem)

 

4.) to foster financial inclusion, rendering the process easier for people that currently do not have a bank account 

 

5.) to improve cross-border retail payments

 

6.) reduce or eliminate money laundering, tax evasion, fraud and terrorist financing since  CBDC contain features of identifiability of the end-user and traceability of their transactions

Banking inclusiveness is always part of the sales pitch for CBDCs but you wouldn't be the only person who thinks that central bankers really don't care about the unbanked since, in general, they contribute less to the economy than the banked.

Now, let's look at the downsides to CBDCs:

 

1.) lack of privacy - all transactions can be tracked and traced

 

2.) central banks could limit the amounts of digital currency that could be owned by each person/entity

 

3.) a tiering approach could be used where there are no limits to the amount of digital currency that can be held but that amounts above a certain threshold could receive a negative interest rate which would destroy the value of the individual's savings

 

To me, the most frightening aspect of a CBDC is the potential for a programmable digital currency which is defined as a "CBDC with built-in rules, imposing restrictions on the usage of that money."

 

By implementing a programmable money through a CBDC, a government could do the following:

 

1.) define a positive or negative interest rate to incentivise or disincentive the use of money 

 

2.) limit its use to a certain category of services for example placing limits on purchases of alcohol, tobacco, gasoline, meat or other items that the government deems unnecessary or unhealthy.  This could act as a de facto rationing system which would be particularly compelling during a "climate emergency".

 

3.) set a CBDC expiry date which could be used to incentive spending during economic downturns.

 

4.) CBDCs could be linked to an individual's social credit system by way of a digital identity.  If an individual has views or behaviours that are contrary to what the current government powers believe are acceptable, this could be considered when CBDCs are issued to an individual.  In this case, CBDCs could be used to promote or impede social and political changes. 

 

The development of CBDCs is being undertaken by many nations around the world and implementation is at various stages as shown on this CBDC tracker from the Atlantic Council:

 

 

Effective in September 2024, 134 nations and currency unions representing 98 percent of global GDP are exploring a CBDC with 66 nations currently at an advanced stage of development.  Three nations have launched a full-fledged CBDC with varying results; Nigeria and its e-Naira which launched in October 2021, the Bahamas and its Sand Dollar in October 2020 and Jamaica with its Jamaican Digital Exchange or JAM-DEX in May 2022.

 

Let's close with this commentary about CBDCs from Agustin Carstens, General Manager of the Bank for International Settlements, once again, the central bank for central bankers:

  

That tells you all that you need to know about CBDCs and how they will be used.

It is my belief that the "boiling frog" analogy is most apt when it comes to the issuance of CBDCs.  With the vast majority of the world currently exploring the development of a central bank digital currency, we are slowly but surely being led down the garden path to a cashless society where transactional privacy is non-existent and governments will have the ability to use a heavy-handed approach to curtailing what they believe is unacceptable behaviour by their citizens through the implementation of programmable digital currencies in conjunction with a digital identification program.   All that it will take is some sort of crisis in the world’s financial markets to give the powers that ought-not-to be the excuse that they need to send the sweaty masses down the road to monetary slavery.