Yesterday, I discussed how new powers for the RBA are coming to control your payments.
It will start with digital wallets and payment platforms, but where will it end?
Well, if history is any guide, we may be in for a repeat of the 1970s. A period that was also defined by inflation and the debasement of money as we knew it.
The only way governments and central bankers kept control was by abolishing the Bretton Woods system. In other words, giving up backing every US dollar with an equal amount of gold.
It was the beginning of the end for unchecked monetary policy.
And I fear now that these new powers given to the RBA could signal a similar paradigm shift. A future where no individual really owns their own money but is simply ‘borrowing’ it from the powers that be.
Take central bank digital currencies (CBDCs), for example.
Compared to cash and card payments, a CBDC gives total control to the central bank.
They can distribute, manipulate, and take it away as they please. And if you think that sounds far-fetched, just have a read about what’s going on in China right now…
Not worth the risk
Now, do I expect Australia to wind up being subjected to such overt control and corruption?
No.
But in many ways, having such dangerous ideas being masked as safety measures is even more worrying. It shows just how deceptive and insidious our own policymakers can be.
It always pays to have a healthy dose of scepticism when it comes to anything government related.
That’s why it simply isn’t worth being ignorant, in my view.
Why risk your wealth and future on the government sticking to their word?
One of the first lessons every investor learns is to diversify.
Why would you not do the same for your wealth if the government is looming to take control of it?
That’s why you should invest in a variety of assets and asset classes. Stocks, gold, property — they’re all great avenues to make money, but those profits won’t matter if you don’t truly own the gains.
This is why cryptocurrencies are so important. Because as much as they’re viewed simply as speculative investments themselves, they represent so much more.
It is their decentralised structure that makes them so powerful. The system is designed to operate like a currency, just without the need for an authoritative figure behind it pulling the strings.
This is the reason why we’ve seen controlling governments, like China, crackdown on crypto. Because if they can’t control it, they must get rid of it lest it threaten their rule.
With that in mind, it has been interesting to see the US regulators crackdown on crypto this week…
Crypto blitz
In the span of less than 24 hours, the US Securities and Exchange Commission (SEC) sued two of the biggest crypto trading platforms. Both Binance and Coinbase are now going to have fight the commission over claims of illegal misconduct.
I won’t get into the details here, but the point of these suits seems to simply be a means to give the SEC greater control over crypto markets. Just like the RBA and digital payment platforms, they can’t stomach the fact that these people are operating outside of their influence.
Here’s the thing though, the SEC isn’t going after crypto directly. They’re targeting crypto exchanges because that will make it harder for people to trade or buy assets like Bitcoin [BTC].
As my colleague Ryan Dinse recently told his subscribers, these actions are cleverly insidious:
‘I don’t think the SEC is trying to kill crypto as some people suppose.
‘Sure, they probably wish it never existed.
‘But I also think they realise they can’t kill it.
‘The real strategy, in my opinion, is to stall adoption. To give the big banks, money managers, and others in their cosy circles of finance time to make their own moves.
‘And ultimately, to put control of crypto in the hands of those they have power over.
‘It’s already happening…’
And he’s right, it is already happening.
Just like with the SEC, these new powers for the RBA are likely just the beginning. We’re entering a new era of financial tyranny, one that’s likely to be more covert than overt.
Which is why, as an investor, you need to have an alternative. You need to hold a portion of your wealth in an asset like bitcoin because it is outside of their reach.
It doesn’t have to be a huge sum, just enough to give you peace of mind.
Because whether you share my cynical outlook or not, the risk is far too great to ignore.
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
PS: Due to the King’s Birthday public holiday, there will be no edition of Money Morning on Monday, 12 June. We will return to our regular publishing schedule on Tuesday, 13 June.
