Justin’s note: Imagine not being able to board a plane because you forgot to pay your water bill… or being denied access to a train because you jaywalked.

It sounds like something ripped from the pages of George Orwell’s 1984. But this will soon become reality for people living in China. That’s because the Chinese government is getting ready to roll out a social credit system.

Basically, the Chinese government will soon prevent people from accessing everyday services if they aren’t deemed “good citizens.”

It’s one of the most disturbing things I’ve ever read. Still, most readers won’t care about this. That’s because “this sort of thing could never happen in America!”

Unfortunately, that couldn’t be further from the truth. As you’re about to see, the United States could soon adopt its own social credit system. So be sure to read today’s interview closely…

Justin: Doug, I have a lot of questions I want to ask you today. But can you first tell me what a social credit system is?

Doug: Well, Americans are familiar with credit ratings that they get from companies like Experian. These ratings judge one’s ability to get credit, pay bills and such. 

China is rolling out something similar, but vastly more comprehensive, and on a national scale. They’ll judge much more than your financial capabilities. It rates people based on where they live, what kind of car they drive, what they say or do on social media, their educational background, their political views, their friends. You name it. Social engineers are quite devious about these things.

And it’s fiendishly clever for the Chinese government to do this. A high social score gives a citizen lots of benefits and privileges. A low score penalizes you in many ways. People will start competing to be good little lambs. It gives them complete control over who can do what.

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Justin: How can people defend themselves from this? Is there any way to opt out?

Doug: You could decide to not have an electronic presence, of course. You could disconnect, or go off the grid as they say. But that’s the equivalent of becoming a non-person. You’d be branded as antisocial, suspicious, and a possible enemy of the state. It might bring all sorts of disadvantages, like not being able to get a passport or even a driver’s license.

Justin: Yeah, not being able to board a plane or train due to a bad social credit rating is already terrifying. But I’m wondering how far China’s government will take this.

Doug: Well, I haven’t been to China in several years. So, I’m relying on press reports. But they’re saying that there are already millions of people involved in China’s social credit system, and it’s quite believable. This is happening already—it’s not science fiction.

And neither is it surprising. China’s very computerized; most people now use their smartphones, not credit cards or—god forbid, cash—to pay for things. Just as in the US, where many people Google others to find out about them, so do the Chinese.

This is a computer-driven phenomenon, and therefore advancing at the rate of Moore’s Law. The phenomenon will get much bigger. And not just in China.

It will impact whether people get jobs or promotions. It will quickly find its way into online dating. People with low social credit ratings will be looked upon as deadbeats. Others will disconnect from them, because having a link with someone of low rank will reduce your own rank.

In brief, this is a very big deal. I recommend the episode “Nosedive” on the series Black Mirror, where we see what happens to a woman who gets caught in a downward spiral for her social credit score.

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Justin: Will other countries adopt their own social credit systems?

Doug: I have no doubt that the United States and most other countries will do this. It’s a fantastic tool for controlling the masses—they’ll control each other. Much more effective than having secret police, although every government either has, or will have them. And cheaper, too. If you’re the kind of person that fancies himself as a rugged individual it’s a scary prospect. Most people won’t care, though. They won’t mind living in a Dystopia, as long as it’s reasonably comfortable.

Justin: How could this happen in the States? Will the US government herd people into this system? Or will the average person check themselves into this digital prison?

Doug: Well, I must say that the US government doesn’t have the same control over its people as the Chinese government, although it’s moving in that direction. The TSA will likely subject you to more, or less, screening based on your score. The IRS more, or less, scrutiny of your finances. The same with the police, prosecutors, and what-have-you, right down to your local DMV.

It could take longer for them to roll out something like this. But the US government loves this idea. It’s the best idea since everyone got a Social Security number—for them.

We’re already seeing indications of this. For example, if you have Global Entry, your hassle while traveling is reduced. But they interview you and look at your records before granting it, allowing you to come and go from the US with less aggravation than the average person.

I think Americans will jump into this for the same reason that they opt for frequent flyer programs. They love their smartphones; they practically live on the damn things. Having a high social credit rating will be a prestige thing. It will offer benefits in the way having a high credit rating with Experian helps you secure a lower interest rate on your mortgage—but much, much more so.

This is the wave of the future. Personally, I don’t like it at all. Not because I have something to hide. I’m sympathetic to the Randite motto: “Judge, and prepare to be judged.” But I prefer to determine my own criteria—not have some bureaucrats do it for me. And enforce that on society.

Justin’s note: Stay tuned for Part 2 of our discussion tomorrow, where Doug will explain why things are only going to get worse from here. In the meantime, we urge you to watch this brand-new presentation our team just put together.

It shows why China will soon become the world’s biggest and most important economy. And it could happen faster than most people think. China’s already making its next big move… one that could solidify its global dominance. The good news is there’s still time to turn this into a huge moneymaking opportunity… Learn more right here.

Reader Mailbag

Today, readers respond to Doug’s recent interview on the world’s first government-backed cryptocurrency (here and here):

Agreeing with Doug's crypto comments about Venezuela is easy, and I suspect most readers concur. Though some might see a short-term (very risky!) speculation play, I wouldn't touch it with a 10-foot keyboard.

China is super wise to load up on gold and in the best of all yuan scenarios, a gold-backed yuan crypto would drive any of us speculators into a frenzy—for about a year. Then, as we all cash out at 2,900%—the top—it will tank like January 2018. As for China becoming a 3X… the problem I have with that is captured in one word: communism. If free-market capitalism were allowed to continue, yeah, maybe 5X! But the history of dictatorships tells me they will muck it up long before that ever happens. We have! And we are only semi-socialist!

– Lou

Doug is always right, stupid! The All-Knowing One has the perfect position on everything, except maybe gold price manipulation.

– Burt

The only time gold is worth anything is when you are holding it in your hands…

– Harold

As always, if you have any questions or suggestions for the Dispatch, send them to us right here.