What Happens When All Money is Digital?
Jared Bernstein, the Chief Economist and Economic Policy Advisor to President Joe Biden, recently struggled to explain money and how it works. Bernstein went on record to say, “The US government can’t go bankrupt because we can print our own money.”
When asked why the government needs to borrow money if they can just print it, Bernstein further exposed his ignorance about how money works by saying, “Well, some of the language is just confusing, The government definitely prints is own money. The government definitely prints money and lends that money. It lends that money by selling bonds.”
Then Bernstein asks himself out loud, “Is that what they do?” And proceeds to answer himself by saying, “Yeah, that’s what they do. They sell bonds and then people buy the bonds and lend the money, Yeah.”
Later on, Bernstein laments the “Language and concepts can be unnecessarily confusing.” Then he blatantly admits, “I don’t get it. I don’t know what they’re talking about.” And follows that all up with, “There isn’t anything confusing here, the government clearly prints money and does it all the time. And the government clearly borrows. Otherwise we wouldn’t be having this debt and deficit conversation.”
Nobody is fooled by this gobbledygook. And Grant Cardone predicts that the spending policies of this administration, and the printing of money by our Federal Reserve Bank, has set the stage for a massive market correction where tens of thousands of people will lose their retirement and life savings. Cardone points out historically there have been only 3 other times in the past 100 years where the “yield curve” has been inverted for 500 days. It happened in 1929, 1974 and 2009 and each time it has happened the markets collapsed by more than 50 percent.
Losing 50% of your savings on top of having to deal with inflation, which has reduced the purchasing power of the dollar by over 20% since January 2020, means financial hardship for most Americans whether we are on a digital currency or not.
But there are more players in the game besides the president, his advisors, or the Federal Reserve Bank. Non-profits which accept large donations from non-American citizens and then redirect those funds to select political groups, candidates, and elected officials, frustrate the laws which were designed to prohibit foreigners from interfering in our government, economic policy, and domestic affairs. One such non-profit, Arabella Advisors, rakes in billions from donors worldwide, with no accountability to the American people. The current laws on the books don’t even require these non-profits to publish their donor list let alone where those billions of dollars are spent to sway American policy, here and abroad. Transparency is a buzz word today, but the way these non-profits operate is anything but transparent, except that what they do in secret is transparently not the way America was intended to work.
Digital currency is another area which poses great concerns for those who understand what a highly regulated digital currency would look like. For example, a highly regulated digital currency would allow the regulators to determine and restrict how much someone can keep in their savings account, how much and when someone can purchase groceries, what amount of money someone can spend on entertainment and even locking someone’s account if they don’t follow some required protocol like attending diversity training or keeping up-to-date on what the regulators determine to be standard medical care.
When we discuss these things, some accuse us of being conspiracy theorists, others claim we are being partisan while others label us despicable. Jesus once said, “Every plant my Father has not planted will be up rooted by its roots. Disregard those that are offended. They are blind and if you listen to them you will fall into a pit with them.”
This gives us assurance that whatever is being planned, or ignorantly attempted, by those who believe they run this world and our economy, there is someone bigger and better than they who is really in charge. If we are headed towards another economic crisis, i.e., pit, similar to 1929, 1974, 2009, or even worse, we can and should be learning from people who survived those dark days because it will assist us to prepare for whatever the future has in store for us.
One exemplary person comes to mind. James Cash Penney. Penney owned one of the largest life insurance policies of his time. In 1922 Penney’s life insurance face value was $3 million dollars, which is close to $55 million in 2024 dollars. When the market crashed in 1929, it caused Penney’s stock and net worth to plummet. He was completely upended personally and financially and ended up in a sanitarium.
One day Penney heard the hymn, God Will Take Care of You, being sung in the sanitarium chapel. It made him recall the life insurance policy he had on his life. Borrowing against his life insurance policy cash value, J.C. Penney was able to start over, and soon was back at the helm of his department stores as the acting chairman of the board.
Years later, a young man named Sam, working at one of Penney’s department stores, was instructed by J.C. Penney on how to wrap a Christmas present “with a little twine and a very little paper and still make it look nice.” This young man was so impressed with Penney’s economy he was inspired to open his own store. Today Sam Walton’s stores, Walmart, have surpassed J.C. Penney’s stores in number and sales.
The ability to access capital quickly and easily, by leveraging life insurance cash values, is what kept J.C. Penney from becoming a victim of the crisis we call the Great Depression of 1929. Interestingly, that pit was dug by some of the same thinking, politics, and foreign influences that we are facing today in America. “There is nothing new under the sun. What has been will be again. What has been done will be done again. Look this is something new! But actually, it is old, it was already here long ago before our time.” The problem occurs when we fail to remember what came before and how those before us managed things to survive and thrive.
Historically, thousands of businesses, families and individuals have leveraged their life insurance cash values to pay their mortgage, eliminate debt, pay their taxes, or expand their business, invest, etc. The key to understanding how to prepare for a time when employment becomes a scarcity, taxes are increased because of all the governmental spending, and inflation continues to eat away at the value of the dollar, is this: Those who have well-funded cash values in participating whole life insurance will survive far better than those who don’t. In fact, those who own cash value whole life insurance will most likely thrive in those dark days just like J.C. Penney and thousands of others did, even in the midst of the next great depression.