Episode Details

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Something positive for you this Sunday morning - and why we should be grateful for government incompetence

The idea of Central Bank Digital Currencies (CBDCs), money that governments and their planners will be able to programme, rightly fills many of us with an Orwellian sense of dread.

“Did you not have the vaccine? Oh, well then you don’t qualify for the next payment.”

“Have you been saying wrong things on social media? Then you don’t get the good loan rates.”

“We suspect that you might not have paid the right rate of tax, therefore we are deducting what we think you owe and it’s up to you to prove otherwise. You want the money back? Please hold …. Your call is important to us.”

CBDCs allow for almost unimaginable interference in our lives, intrusions on our privacy and liberty, never mind meddling in the economy. Chinese social credit scores would be just the start of it.

When you combine the instincts of, say, the current Labour administration to intervene, together with its incompetence, the ramifications are truly horrifying.

Some say CBDCs are inevitable. Technology is destiny and all that. I’m a bit more optimistic.

Hete’s why.

CBDCs have been piloted in numerous countries and fully implemented in:

* The Bahamas - the "Sand Dollar"

* Nigeria - the "eNaira"

* Jamaica - "JAM-DEX"

* The Eastern Caribbean Currency Union

Nowhere has got them to work. The Bahamas is generally touted as the CBDC success story. My buddy, Dave Skarica, who lives there says, “LOL. I have never seen one person use it.”

Why have they failed? People don’t use them. When they do use them, they don’t work. People prefer the legacy systems they know.

CBDCs are yet another government IT project that is doomed to fail.

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You might say the internet was a government IT project. It was . The U.S. government - via ARPA and later DARPA - provided crucial funding that led to the development of key protocols like TCP/IP. But the Internet succeeded because of the immense infrastructure that millions of people, mostly working in their own self-interest, since built over many decades on top of it.

Our modern system of debt-based fiat money should long since have imploded under the weight of all the abuse and debasement successive governments have heaped upon it. But it has survived, indeed thrived as a medium of exchange, albeit a terrible store of wealth, because of the incredible fintech architecture that has been built on top of it, again by millions of people over many decades mostly acting in their own self-interest. That architecture is probably what