Justin’s note: Today, I’m featuring a special preview of the 2018 edition of Surviving Fedcoin—Strategic Investor editor E.B. Tucker and team’s new book. In the excerpt below, E.B. explains why he believes our government could soon issue a state-backed crypto called “Fedcoin.”
Read on to see what E.B. says this could mean for your savings… and why you need to start preparing today.
By E.B. Tucker, editor, Strategic Investor
So many things in life are inevitable.
But are they imminent?
What you’re about to read in this book is a dangerous scenario we believe is on the horizon. And while we may not be able to predict if this scenario will happen in a month, two months, or two years… we are absolutely convinced it will happen.
What’s going on?
Cryptocurrencies, as I’m sure you’ve noticed, have now gone mainstream…
In late 2017, Bitcoin briefly almost topped $20,000 (per coin!)… and as much as $800 billion went into “cryptos.”
Since then, more and more governments around the world have moved to regulate (and even ban) cryptos…
They have gotten simply too big to ignore.
Remember: Every dollar invested in a cryptocurrency is a dollar that doesn’t benefit a money-hungry government.
That’s why countries are banding together to STOP cryptos.
In fact, by the time you read this book, a global ban on cryptocurrencies may already be in place.
Major credit card companies have already banned cryptos from being bought on their cards…
Advertisers on some of the world’s largest websites—including Google and Facebook—now prevent any mention of Bitcoin or cryptocurrencies…
And several high-ranking officials and intellectuals have all warned of the danger of private cryptocurrencies.
What all these global elites agree on, however, is that the only cryptocurrencies allowed to survive are the ones backed by governments.
According to a study by Cambridge University, a full 80% of countries surveyed were either researching or actively developing their own cryptocurrencies.
Venezuela has already raised almost $1 billion for its oil-backed cryptocurrency, the “petro”…
And the Marshall Islands also announced their own state crypto.
This is just the beginning…
Here in America, there’s been serious talk about issuing a state-backed crypto called the “Fedcoin.”
The government, you see, is in real trouble…
Our national debt has now topped $21 trillion…
And interest rates are starting to creep up, which means it will soon cost BILLIONS more to service our debt.
(As then-candidate Donald Trump said back in 2016, “What happens if that interest rate goes up 2, 3, 4 points? We don’t have a country.”)
That’s a big reason why the government has been cracking down on cash purchases… and why this will likely accelerate in the future.
The government can’t afford to let any cash purchase go untaxed.
Each year the “underground economy” costs the IRS $500 billion in lost taxes.
With physical cash on the way out… and a new state crypto like Fedcoin on the way in… all of our savings would essentially be “trapped.”
That way, the government would greatly minimize how much they lose in unreported taxes each year…
On top of that, it would be very easy to implement a nasty new tax, too—like the wealth tax in France, where 1–2% of your net worth gets taxed each year, regardless of whether you have income or not…
Or like the “savings” taxes in many countries around the world.
(These are the bizarre, so-called “negative” interest rates. This is when you pay the bank for lending them money.)
Central planners like having these negative interest rates as an option because they say that’s one sure way to “stimulate” the economy when times get tough… They figure that people would rather use their money on stuff like new cars and houses rather than seeing their money taxed away in a bank.
Fedcoin lets you do this.
An “Added Policy Tool”
Fedcoin, of course, would be nothing more than a type of “Bitcoin” issued by the Federal Reserve.
To understand how this works, let’s have a little refresher on Bitcoin…
Bitcoin surfaced back in 2009.
The idea behind this digital-only currency was to have a new type of money that was safe, had a limited supply (to prevent massive inflation), and was outside government control.
The currency flourished…
From a price of less than $0.01, it rose to over $1,000 per Bitcoin back in 2013, and now trades for around $9,000.
So what does Bitcoin have to do with the Federal Reserve?
Simply this: The technology behind Bitcoin—something called the “blockchain”—can be used to create other digital currencies. That means the Fed could issue its own type of Bitcoin—hence the name “Fedcoin.”
If this sounds far-fetched, consider this… Back in 2014, François R. Velde, senior economist at the Chicago Fed, said the blockchain was an “elegant solution to the problem of creating a digital currency.”
And David Andolfatto, vice president at the St. Louis Fed, actually proposed “Fedcoin” (mentioning that exact name) in 2015. He’s spoken publicly about this multiple times, and says Fedcoin could give the central bank an “added (policy) tool.”
Just imagine the benefits of having a digital-only currency… How can you have a bank run if you can’t withdraw physical money? That’s exactly the point. You can’t! With a digital-only currency, you…
Can’t have bank runs…
Can easily implement negative interest rates if you want to (how will people withdraw their cash?)
Make it easier for the government to tax people at will.
That’s why we believe it’s an absolute lock that we’ll have some kind of “Fedcoin”-like currency in America very soon…
Consider: Over 40 million Americans are on food stamps. Our Social Security program is practically bankrupt. And everybody knows about our out-of-control debt problem.
In fact, David Walker, former comptroller general of the United States from 1998–2008, says taxes need to DOUBLE, otherwise the country will go bankrupt.
America is in dire straits. Right now, as we said, the government loses an estimated $450–$500 billion each year in lost tax revenue because of the “underground” (cash) economy.
So you can see where this is heading… By getting rid of cash and introducing a cashless currency, the government could dramatically increase its tax revenue. This idea of a “cashless” economy is gaining more and more traction. That’s why former Secretary of the Treasury Larry Summers has said it’s time to kill the $100 bill. And several countries around the world have already started outlawing higher-denomination bills (for example, the European Union recently banned their €500 banknotes).
We believe it’s the right of every American to purchase what they choose in total privacy. Not everybody who uses cash is a criminal. But limiting cash is only part of the equation. Some of the features we could see with a new monetary system like Fedcoin are incredibly Orwellian in nature…
Imagine a world where everything you buy (or can’t buy) is controlled by a single card…
A world where any government bureaucrat can instantly look at your entire history of purchases on a single record.
Thanks to blockchain technology, that’s exactly what’s at stake with Fedcoin. If this sounds crazy, just take a look at some of the government controls we’re currently subject to…
With FATCA (the Foreign Account Tax Compliance Act), Americans now need to report all their non-U.S. financial accounts to the Financial Crimes Enforcement Network (FinCEN).
Banks must now send a “currency transaction report” to FinCEN for any withdrawal that exceeds $10,000.
Even if you withdraw less than $10,000, if the bank thinks you’re doing so to avoid reporting, you could be found guilty of “structuring.”
Civil forfeitures: Today, even if you are not even charged with any wrongdoing, law enforcement officials can “legally” seize your assets (in 2014 alone, federal agents seized more than $5 billion—an amount greater than what was lost in every single burglary in America that year).
And that’s to say nothing of other regulations like FBAR, PFIC, “know your customer” rules along with things like “cigarette” and “soda” taxes for anything the state deems dangerous to your health.
I mean, just think about this: There’s already a federal law that says food stamp recipients can’t use their benefits to buy liquor, cigarettes, or any non-food items.
Now, we’re not in favor of the welfare program. But the point is, with Fedcoin you could control everything very easily since, unlike cash, it’s a “programmable” currency. (Fedcoin would likely be administered as a type of debit card… or perhaps as an app on your smartphone… but behind it all, it would run like a big computer program.)
What would this look like?
Well, imagine if 17-year-old “Johnny Junior” tries to buy liquor. His purchase would automatically be denied. No need to look at a driver’s license. Or if “Fred Foodstamp” tries to go to the strip club using his government-issued EBT card—sorry, no dice. What if, all of a sudden, the president decides a certain type of gun shouldn’t be purchased by certain people… or maybe all guns? Well, again, once you get rid of cash and use a perfectly trackable digital currency, it becomes very easy. No costly gun registry needed.
Remember: the government already controls what types of things you can and can’t buy—think drugs, medication, and online gambling… They control where you can buy things—for decades Americans couldn’t travel to Cuba… And they also control when you can buy things—just think of the legal drinking age. Now, I don’t think anyone wants to see a 10-year-old drinking booze… and we’re not here to make a political statement…
But we do believe that for liberty-loving Americans—and those who want to safeguard their savings—certain steps need to be taken in anticipation for what seems like a mere eventuality… a type of digital-only currency. That’s why we wrote this book—to help make sure you are able to protect everything you’ve worked hard for… to be able to purchase the things you want in privacy… and also to come out ahead.
And, even if Fedcoin turns out to be years away, or if by some miracle we never see it… By following the steps in our new book, you’ll be no worse for wear. In fact, you’ll be in a much better position to face any oncoming crisis—like another stock market crash—than 99% of Americans out there.
Editor, Strategic Investor
P.S. You need to position yourself today. And our new 125-page book is the best way to get started—it’s packed with specific ways to prepare for AND profit from this in the years ahead.
Here’s why you can’t delay: on July 21, 2018, a secret meeting will take place that could change America forever.
Leaders from the top 20 countries are meeting to discuss an important change to the money we use…
If you’ve got savings in American dollars, you could now face a new tax.
If you’ve got money invested, some popular investments could now be deemed worthless.
To see exactly what’s going on—and learn how to claim your copy of Surviving Fedcoin today—click here.
Today, a reader responds to Doug’s classic piece on the parallels between the U.S. and Rome…
Doug, this is the absolute best article from you I have ever read. And eye-opening look into history. I’ve never read Gibbons and will do so now. Have you studied the rise and fall of the Austro-Hungarian Empire? Fascinating, though obviously not on the scale of Rome or the U.S.
And a handful of comments on Doug’s recent interview on deploying troops to the border…
Good article. As for the NGOs, my favorite quote: “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.” – C.S. Lewis
I wonder what de Tocqueville would observe of today’s America! I would venture to say that we have already achieved the “democratic” tyranny he feared. The median American citizen today is the perpetual child led around by the benevolent state. We must never lose the thread to our original self-determination, industry, work and personal dignity. We have the right to demand this of our citizens and our immigrants.
In response to Rob in yesterday’s mailbag and also broadly speaking to Doug, I believe that a nation is necessary for cohesion of principles and common goals. Rob stated that a “wall” is necessary along our southern border. I think that is an unattainable pipe dream, as to be effective it would cost billions and take a decade or more. I suggest something much simpler, more effective, and far cheaper; a dual 8′ tall chain link fence with a 100′ wide space between them that is peppered with vibration sensitive land mines. There would be periodic legal entry points of course. Signage on the southern side could be provided in Spanish, Arabic, Chinese (common) and Urdu indicating the danger along with a universally recognized picture of an explosion and limbs flying.
Yes, lives will be lost but such is the fate of lawless, criminal invaders. The cost of patrolling the border could decrease dramatically while drones could be employed for periodically cleaning up what the buzzards missed for their daily lunch. It wouldn’t take long at all to get the point across that this is a sovereign nation that has neither the obligation or resources to take care of just anybody who wishes to take advantage of what is available to those either born here or who have entered the country legally and have been accepted because they have something to offer and is needed.
If you have any questions or suggestions for the Dispatch, send them to us right here.