Protect & Profit from Fedcoin Threat
February 2023 Letter
“If Bitcoin is really successful, they (the regulators) will kill it..” Billionaire Ray Dalio
…………… and likely replace it with Fedcoin — Deepcaster
Deepcaster has accurately forecast the intensifying inflation and the stagnating economy in recent letters and Alerts. But we also earlier identified four subsectors which will likely provide Investors with Profit and Protection during the Intensifying Stagflation.
And in this Letter we identify one more!! And consider the likelihood of Fedcoin being IMPOSED on us
Deepcaster’s Reliance upon the Real Econ Numbers Gives us a Great Advantage in recommending profitable Trades for our Subscribers It is essential for Investors and Traders Profit and Protection that they also rely on Real Econ Numbers in making their decisions and not on Fake Econ News. But alas there is much Fake Econ News being disseminated by “Official” sources, usually for Political purposes.
For example, REAL Inflation is nowhere near the 8% to 9% these Sources claim it is.!!!! It is much higher! And other crucial data is “Fake” as well.
So log in to Deepcaster.com to see the REAL Inflation number and other Key Econ Data
One recent BUY RECO provides an opportunity to make more than 100% profit in the next few weeks by investing in one of the subsectors
Regarding Key Indicators it is important to recall that in just two months this past Spring Deepcaster Subscribers were able to take 300%,100%, and 350% Profit.
So, log on to Deepcaster.com NOW to see why, today, Opportunity Knocks with the 100% plus profit potential recent Buy Reco and the subsectors likely to profit and protect in the intensifying stagflation.
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–Consider the following from Legacy Research group:
“FedCoin has different motives – power and control. It will also allow the central bank to track, monitor, and record every single transaction you make.
And if it eventually replaces physical cash, it will end the last shred of financial privacy we have left”
The Fed has partnered with nine global financial giants, plus SWIFT, for its pilot program.
These are all heavy hitters…
SWIFT is the secure messaging service that forms the backbone of the international payments system between banks.
And Amazon Web Services – Amazon’s cloud computing division – is helping provide the technology needed to run the program.
Global payments processor Mastercard is on the list, too. So are banks BNY Mellon, Citigroup, Wells Fargo, and HSBC.
Citigroup’s Tony McLaughlin proposed the project last year in a white paper titled “The Regulated Internet of Value.” He’s part of Citi’s Treasury and Trade Solutions (TTS) business and is involved in new methods of payment.
In a nutshell, the Fed wants to know how using digital-dollar tokens on a blockchain can speed up payments.
So, the idea is to use blockchain tech to make settlements between banks through the bank accounts they have at the Fed.
These accounts are known as reserve accounts. Banks use them to settle transactions with each other at the end of the day.
This currently happens through two clunky electronic funds transfer systems – the Clearing House Interbank Payments System (CHIPS) and Fedwire.
Instead, McLaughlin has proposed these funds transfer over a single blockchain network called the Regulated Liability Network – or RLN.
But that’s not where this project will end…
The Fed says its pilot project “could potentially be extended to multi-currency operations and regulated stablecoins.”
A stablecoin is a cryptocurrency that’s pegged to the value of a government-issued currency such as the U.S. dollar.
Usually, this means the stablecoin issuer backs each tokenized dollar with a dollar in a bank account.
At a time when millions of people have lost access to their funds on FTX… the Fed and its banking pals are swooping in and saying, “We’ll take it from here.”
That’s led a lot of folks to question the timing of the CBDC pilot program.
The theory goes that the government held off on regulating crypto because it wanted it to collapse. This would leave people begging for a Fed alternative.
Regulators were certainly asleep at the wheel with FTX. But I don’t buy this narrative.
If you’ve been following my colleagues at Legacy Research, you’ll know the Fed has been planning a digital dollar for years.
But it’s still excellent timing for the Fed to advance its FedCoin ambitions.
People are wary of crypto right now. That means they’ll likely be more open to the idea of a FedCoin – a crypto dollar backed by the U.S. government.
But there many reasons to be concerned about this development.
First, FedCoin would strengthen central banks’ grip over the financial system. That’s because it would be highly centralized.
This would put your income, your assets, and your privacy under the direct control of the state.
FedCoin would also come in handy if Washington decides to send out more stimulus checks.
President Trump had to send out checks in the mail. With FedCoin, the government could simply “airdrop” coins into digital wallet apps.
This is already common practice with existing decentralized cryptocurrencies.
And as this year’s record inflation has taught us, we hardly need to make it easier for the government to distribute newly created cash.
But advocates of this new monetary technology say this could also make it easier to receive your funds if, say, you’re applying for an emergency loan from the government.
It could even support new business models and provide a foundation to jumpstart innovations in the finance sector.
But do these potential benefits outweigh the risks?
Power and Control
I don’t think so…
FedCoin would help strengthen central banks’ power over the financial system.
Yes, they will use a form of blockchain tech. This is the same as most decentralized digital assets, such as bitcoin.
But FedCoin has different motives – power and control. It will also allow the central bank to track, monitor, and record every single transaction you make.
And if it eventually replaces physical cash, it will end the last shred of financial privacy we have left.
Nonetheless, here’s what Tony McLaughlin – the guy I mentioned above who dreamt up RLN – said on the day the Fed’s pilot launched…
- Projects like this that focus on the digitization of central bank money and individual bank deposits could be expanded to take a broader view of the opportunity.
“Broader view of the opportunity”?
This sounds like more financial gobbledygook designed to hide the true nature of the Fed’s playbook.
If you’re skeptical, this could include any number of things to give the banks and government almost unbreakable financial control over your life.
For example, it could program FedCoins so they’re only spendable if the holder of those coins meets certain requirements.
This would allow the government to easily freeze you out of the economic system if it wanted to.
But we still have a way to go before we find out how it will work.
The Fed’s pilot is focused on the wholesale banking segment, as opposed to retail.
The idea is to simplify interbank settlements.
Still, it brings us closer to the rollout of the digital-only dollar and the end of physical cash.
And that digital dollar could be the trigger for more widespread adoption of bitcoin.
Folks may not love the idea of the government being able to collect and monitor all their transactions. And they may also not like the fact that the government can airdrop new Fed Coins into people’s wallets at the push of a button.
Bitcoin, on the other hand, gives you a greater degree of privacy. It’s also impossible to create more bitcoin than the code allows for.
Bitcoin’s new supply is also shrinking over time. That’s in stark contrast to the dollar. Its supply has ballooned over time.
And, with time, as people become more comfortable sending and receiving FedCoin via their digital wallets, it will become easier for them to adopt bitcoin as an alternative.
That said, this still isn’t the time to dive headfirst into bitcoin. With so much uncertainty in the crypto market right now, you’re better off biding your time.
And if you hold bitcoin, my advice is to stay patient and ride out this volatility.”
legacy Research group
In addition to the three Fs we earlier recommended, Investors and Traders need to prepare to profit and Protect from two intensifying forces:
Inflation will not be tamed any time soon and fiat debt-ridden currencies like the $US will continue to lose purchasing power to the intensifying inflation.
One consequence: Energy prices will continue to skyrocket. Natural Gas will be the main winner…..especially when it becomes clear that the Electric grid will not support the demands made on it and even clearer that the stupid Biden actions to destroy U.S. energy independence will simply drive up the prices of essential energy supplies. The US and other developed nations run on fossil fuel energy and like it or not that must be the case for many years.
And finally we think that, Gold may be about to launch strongly up as it finally breaks free of the Fed-led Banking Cartel’s years long Price suppression efforts….. Key Central Banks including China’s are upping their purchases of physical gold and you should consider that also. Re: physical, Coins only… no “bars” or “rounds” which are very illiquid, requiring assays etc.
2023 Forecasts a SHOCKER
January 2023 Letter
Deepcaster has accurately forecast the intensifying inflation and the stagnating economy in recent letters and Alerts. But it has also earlier identified three subsectors which will likely provide Investors with Profit and Protection during the Intensifying Stagflation
Deepcaster’s Reliance upon the Real Econ Numbers Gives us a Great Advantage in recommending profitable Trades for our Subscribers. Just last Spring Subscribers were able to take 300%, 100%, and 350% profit in just two months
It is essential for Investors and Traders Profit and Protection that they also rely on Real Econ Numbers in making their decisions and not on Fake Econ News. But alas there is much Fake Econ News being disseminated by “Official” sources, usually for Political purposes
In this January Letter we provide forecasts for Key Sectors based on Real Econ and Markets News, not Fake News
What is coming SOON in 2023 will be a SHOCKER as you will see when you login to Deepcaster.com and you will be able to prepare to Profit handsomely and Protect
Fortunately, Shadowstats provides the Real Econ, monetary, Inflation, and markets numbers and provides political context
SHADOWSTATS DAILY UPDATE
December 27th to 29th [Updated December 27th, 11:30 p.m. ET]
IN THE NEWS: Suggestive of still-higher inflation ahead, the most-liquid November 2022 “Basic M1” (Currency plus Demand Deposits) money component boosted to a new high, along with systemic flight to liquidity, at a new 52-year peak. Separately, the Fed also boosted the level of the November 2022 Monetary Base, as suggested previously by ShadowStats.
Last week, full-month December 2022 Consumer Sentiment held shy by 40.9% (-40.9%) of ever recovering its Pre-Pandemic Peak. In context of consistently stable monthly reporting, the annual decline in November 2022 Existing-Sales deepened to an extraordinary 35.4% (-35.4%). In context of ridiculously unstable monthly reporting, the annual decline in November New Home Sales deepened to 15.3% (-15.3%). Dominated by plunging Commercial Aircraft Orders, November 2022 Real New Orders for Durable Goods dropped by 2.4% (-2.4%) month-to-month, down by 0.1% (-0.1%) year-to-year. …
O P E N I N G .. H E A D LI N E S -– A sampling of the most recent INFLATION, ECONOMIC, FEDERAL RESERVE (Monetary) and POLITICAL Headlines:
- SHADOWSTATS GENERAL ASSESSMENT: Economic, Monetary, Inflation and Political circumstances all continue to show intensifying systemic instabilities and sharp, meaningful near-term deterioration, with rapidly mounting risk of extremely negative, albeit inflationary, economic and financial market turmoil.
- F E D E R A L .. R E S E R V E – FLASH: December 27th. November 2022 Money Supply — As reported this afternoon by the Federal Reserve Board (FRB), amidst minimal revisions to the headline M2 and its components, the November 2022 level of the most-liquid and most-inflation-driving Money Supply measure “Basic M1” (Currency plus Demand Deposits [checking accounts]), net of all the Savings Account gimmicks the Fed put in when it redefined M1 from 22% of M2, to 91% of M2 (back in 2021), “Basic M1” notched higher in November to 121.5%, from 120.3% in October, down from 121.6% in September and its all-time peak 123.3% in August 2022, against its February 2020 Pre-Pandemic Trough (PPT).
Where the headline, broadest-based M2 was up 38.1% in November, softer than the 38.5% in October and 39.1% in September versus the PPT, the still-broader ShadowStats estimation of the old-line M3, slowed from an upwardly revised 32.9% in September to 32.1% in October, and to 31.8% in November.
- Year-to-year, all the Money Supply measures slowed in November 2022 from October, with “Basic M1” slowing to 8.3% from 9.3% in October, with M2 slowing to 0.0% from 1.3% in October, and the ShadowStats Ongoing M3 slowing to 0.4% from 1.6% in October.
- FLASH: The Inflation hook in this remains that “Basic M1” has gained the equivalent of 23-years-worth of stimulus since the Pandemic Shutdown, with an extraordinary flight to liquidity that has created an inflationary balloon the FOMC neither can happily nor easily pop.
- FLASH: The pattern of slowing growth in the broader Money Measures reflects the ongoing flight to safety and liquidity in the closer-to-cash measures, holding at a new 52-year peak in November 2022, with the Ratio of “Basic M1” (again Cash plus Checking Accounts) to the headline M2 (the official aggregate Money Supply) at a new high of 34.5%, versus an unrevised 34.2% in October and September, and 34.3% in August, then its highest level since November 1970.
- As suggested last month, the more-liquid the Money measure, at present, the faster is the growth and the greater is the upside pressure on inflation. Nothing like the recent creation of Money, the FOMC-fueled growth in “Basic M1” has been seen in modern U.S. Monetary History, and the resulting headline Inflation and recent suppressed reporting in the U.S. CPI calculation, already are pushing historic bounds — intensifying, not softening in the months ahead, as per some recent happy headlines.
- These numbers remain bullish for accelerating Inflation, where the surging Money Supply numbers reflect FOMC Monetary Stimulus in place, net of all Fed “Tapering” and “Balance Sheet Reduction,” all in the context of recent, and continuing extreme Interest Rate hikes.
- FLASH: December 27th. The Fed also boosted the November 2022 Monetary Base in line with ShadowStats estimates–based on weekly reporting through December 1st–of surging Reserve Balances and Currency in Circulation. Currency hit a new record high level. …
- S Y S T E M I C .. R I S K — FEDERAL RESERVE –- (December 27th) November 2022 Money Supply and Monetary Base coverage follows in the MONEY SUPPLY AND MONETARY BASE Section, following the FOMC coverage. …
NOVEMBER 2022 MONEY SUPPLY AND MONETARY BASE – November 2022 Money Supply growth against Pre-Pandemic Trough levels continued at explosive levels, with all major measures somewhat shy of recent peak growth against their February 2020 Pre-Pandemic Troughs, but with annual growth picking up in the most liquid and inflation-threatening “Basic M1” measure (December 27th, Federal Reserve Board – FRB, ShadowStats). Historic Money Supply Tables and Graphs [of year-to-year growth and more-recent growth against the February 2020 Pre-Pandemic Trough (PPT), beginning in March 2021] have been updated through November 2022 on the ALTERNATE DATA TAB (see the Menu Bar above), with more extensive analysis, graphs and coverage in the DAILY UPDATE e-mails and in pending Commentary No. 1461.
Here is how the November 2022 Money Supply numbers shaped up. Against its Pre-Pandemic Trough, ShadowStats “Basic M1” (Currency plus Demand Deposits [83% of the “old” pre-May 2020 M1]) moved higher to 121.5%, from an unrevised 120.3% in October and a notch shy of an unrevised 121.6% in September. At the same time, the Pandemic-distorted and disrupted year-to-year gain for November 2022 “Basic M1” eased to 8.3%, from 9.3% in October.
When the Pandemic hit the U.S. economy and financial system hard in March and April 2020, the Federal Reserve responded with massive expansion of the Money Supply (eventually the equivalent of 23-years-worth of regular “Basic M1” stimulus — Systemic Liquidity). Accordingly, comparative year-to-year change in the various March 2021 to March 2022 Money Supply measures against the heavily spiked year-ago activity tended to be depressed, against what otherwise would be the change versus the February 2020 Pre-Recession or Pre-Pandemic Trough (PPT), effectively the “Base Circumstance,” before the Pandemic emergency liquidity surge. Accordingly, the April 2021 to November 2022 growth rates here generally are shown against that February 2020 PPT, instead of year-to-year. Background definitions and related detailed discussion, historical data and graphs for each of the Money Supply Series were covered in Benchmark Commentary No. 1459, again, with updated and expanded details pending in No. 1461. The Fed will release the headline December 2022 Money Supply and Monetary Base data at 1:00 p.m. ET, January 24, 2023.
For the most-liquid “Basic M1” Money Supply measure in November 2022, dollar levels and growth levels moved higher against the Pre-Pandemic Trough suggestive of mounting, not easing inflation pressures. November 2022 activity versus the February 2020 Pre-Pandemic Trough for the newly redefined (post-May 2020) headline M1 (now including Savings Deposits, at about 92% of M2) was up by a headline 397.0%, down from 402.1% in October, but such continued on a nonsensically inconsistent definitional basis.
Separately, all as measured against Pre-Pandemic Troughs, traditional M2, which was not redefined, was up by 38.1% in November 2022, versus an unrevised 38.5% in October 2022 and 39.1% in September 2022, while the broadest ShadowStats “Ongoing-M3” Estimate was up by 31.8% in November, 32.8% in October and 32.9% in September. The flight of cash to relatively greater liquidity and safety in the narrower Money Supply measures, specifically in in “Basic M1” accelerated in November to its highest level (Basic M1/M2) in 52 years, since November 1970.
(December 27th) NOVEMBER 2022 MONETARY BASE — As estimated by ShadowStats earlier estimates from weekly reporting the November 2022 Monetary Base gained month-to-month but continued shrinking year-to-year, albeit at a slightly slower pace than in October, dominated by still by the Reserve Balances at Federal Reserve Banks component declining at a slightly slower pace, and despite the Currency in Circulation component breaking again to a new historic high (Federal Reserve Board – FRB, ShadowStats). As has been the case since the Monetary Base hit its cycle high in December 2021, those moves have been dominated by parallel and deepening annual declines in Reserve Balances with Federal Reserve Banks, despite a much smaller continuing monthly gains in Currency in Circulation, which hit a record-high level of $2.93 trillion in November 2022, and was up by 0.4% in the month, and by a slowing 3.5% year-to-year, versus 3.7% in October. The November 2022 Monetary Base declined year-to-year by a narrowing 15.3% (-15.3%), but still was 56.9% above its Pre-Pandemic Trough (PPT), but softening. The dominant Reserves component declined year-to-year by a narrowed 25.2% (-25.2%) in November, but still 88.7% above its PPT. Again,
November 2022 Currency in Circulation gained 3.5% year-to-year, versus a 3.7% in October, up by a record 27.5% against its PPT.
The aggregate Monetary Base often moves broadly on a parallel basis with the Money Supply, but it also can vary widely with the Money Supply, tied to the dominance of its movements triggered by Bank Reserves held by Federal Reserve Banks. Unlike the Money Supply at present, even before the onset of “Tapering” and “Balance Sheet Reduction,” the Monetary Base was and is not close to record annual growth levels, previously seen during the 2007-2008 Banking System Collapse of the “Great Recession,” which at the time exploded Reserve Balances (up 5,000 percent year-to-year, but never reversed much in parallel in a post-Crisis movement).
Nonetheless, systemic Turmoil is still evolving, with both the Federal Reserve and U.S. Government continuing to drive uncontrolled U.S. dollar creation, between unconstrained Money Supply growth (irrespective of “Balance Sheet Reduction” and uncontained Deficit Spending, with U.S. Treasury Debt Breaking to a Record $31.3 Trillion (November 17th), pudhing the $31.4 Trillion Debt Ceiling. Again, with the recovery from the Pandemic-driven collapse still flub-a-dubbing, continued extraordinary Monetary and Fiscal Stimulus likely will continue through 2022 and well into 2023, despite Financial-Market huffing and puffing to the contrary, and bi-furcated FOMC happy hype. Indeed, setting up accelerating inflation or hyperinflation, current extreme Monetary and Fiscal stimuli likely will be expanded. Discussions on the inflation threat and re-accelerating money growth are found in Special Hyperinflation Commentary, Issue No. 1438, subsequent missives including particularly No. 1451, No. 1454, No. 1460b and pending No. 1461. …
- .. P O S T I N G S .. [Updated December 27th] –- ShadowStats Commentary No. 1461 will be a Review-Preview of 2020 into 2023, incorporating the latest economic, inflation, monetary (FOMC) and political developments. It will detail how and why current Federal Reserve and Federal Government policies are untenable, exacerbating — not resolving — already unstable, soaring inflation and re-intensifying broad economic weakness, reviewing 2022 and previewing key elements of 2023, all posting in the week ahead. Updated publication information will be advised here. IMPORTANT: Actual Commentary postings always are advised immediately and directly to Subscribers by coincident e-mail, along with a direct link to the posted Commentary and any needed login detail. All posted Commentaries also are available in, or accessible from, the upper left-hand column of this www.shadowstats.com Home Page.
COVERAGE/ PENDING DAILY UPDATE POSTINGS OF ECONOMIC NUMBERS: The Census Bureau will post November 2022 Construction Spending on Tuesday, January 3rd 2023 (10:00 a.m.), followed by the November Trade Deficit on January 5th (8:30 a.m.), with the Bureau of Labor Statistics reporting December Employment and Unemployment on January 6th (8:30 a.m. ET). …
- ALTERNATE DATA TAB [See the Menu Bar above] provides the latest headline numbers and exclusive ShadowStats Alternate Estimates and related Graphs of CPI Inflation [December 13], GDP [December 22], Unemployment [December 2], Money Supply [December 27] and the ShadowStats Financial-Weighted U.S. Dollar [December 10]. Data downloads and the Inflation Calculator are Subscriber only”
Key Points are that Monetary and Debt levels are at all time highs and that this virtually guarantees intensifying
Inflation and perhaps even Hyperinflation, and it will likely be coupled with a Stagnating Economy
In sum, HyperStagflation is likely on the horizon for 2023.!!….as Deepcaster has been forecasting already.
Now lets consider the Technicals which you will see generally support Shadowstats and Deepcaster’s analyses.
Today’s Market Comments:
“Stocks closed lower Wednesday, December 28th. Volume was below its 10 day average. The Dow Industrials lost 365, the S&P 500 ended down 46, the NASDAQ 100 fell 143, and the Russell 2000 dropped 27. Demand Power fell 10, with Supply Pressure up 8, telling us Wednesday’s decline was strong. Nothing changed from our comments and analysis over the weekend.
While it is possible that Micro degree wave 3-down has started, there are also a couple of other short-term scenarios that suggest Micro degree 2-up needs more upside to finish. It is possible that Micro degree 2-up is still finishing a Double Zigzag, with the second Zigzag about to start. See updated chart on page 43.
In the chart on page 44, there is a Converging Trend-line Fan pattern that might be suggesting a top for Micro wave 2 should it be forming a double zigzag pattern. There are 8 trend-lines with at least two touchpoints that all point to one singularity for the top of the Micro wave 2 rally that started December 19th. It suggests this corrective rally leg will top around 33,600 to 33,700 in the Industrials, sometime soon. On December 27th, Futures rose to 33,613, essentially meeting this pattern’s projection.
These Converging Fan patterns have been pretty darned good at identifying trend tops and bottoms since we started finding them back in the summer. So here is another, and we shall soon see if this will also prove prescient or not.
To review, Large degree (Intermediate for the Industrials, Minor for the S&P 500) wave 2topped at the December 13th high. There has been a five-wave decline from the December 13th top in the Industrials, S&P 500, and NASDAQ 100 that bottomed Monday, December 19th, Micro degree wave 1-down. Micro degree 2-up started Monday late in the day, and will continue over the next several days. This rise will be a partial retracement of the recent decline. Once it tops, a powerful Micro degree wave 3-down will follow.
With large degree wave 2 tops identifiable as complete on December 13th, this initial five wave plunge the four days through Monday, December 19th, is confirmation that the next large degree wave 3-down is starting. The Micro degree waves since December 13th are merely baby waves within this new larger wave down that is starting. The Elliott Wave mapping is telling us that this is the beginning of a very big stock market crash that will last deep into 2023.
The initial drop for this new crash has been 2,131 points in four days for the Industrials, and 300 points precisely for the S&P 500.
Stocks will likely drop more than anyone expects in 2023. Typically, wave threes are 1.618 to 2.618 the size of the preceding wave one. In this case, it means, over the coming weeks, based upon the size of the decline from December 13th so far, the Industrials could drop anywhere from another 3,600 to 5,700 points from the top of the next short-term bounce, which will top below the December 13th highs. And this is just a “small” degree Micro wave 3 decline. This “small” degree decline could see the S&P 500 drop 500 to 800 points over the coming weeks using the same 1.618 to 2,618 projection estimates.
But here is the bigger expectation for the full drop during large Intermediate degree wave 3-down that is starting now.
Let’s backup a bit. For the Industrials, Intermediate degree wave 1-down started at 36,952 on January 5th, 2022. It bottomed on June 17th at 29,653. It was a 7,299-point drop. We made a lot of money trading that decline in our Platinum and Silver programs. Corrective Intermediate degree wave 2 just topped on December 13th, 2022 at 34,712. If Intermediate degree wave 3-down is in fact starting now, which the Elliott Wave pattern surely suggests, then applying the typical 1.618 to 2.618 multiples of wave 1 down for Intermediate wave 3-down, we are talking about a decline of 12,262 to 19,110 points for the Industrials in 2023, to lows of 22,229 or even 15,662. A bigtime crash”
And these technicals confirm what Deepcaster has been forecasting for weeks……Dow 15,000!
See our letters and Alerts for forecasts re how to profit and protect