▣Author: Mi Kung Lao A
Is the money in the account under your name really yours?
seems to be yours, but you have no absolute control... it may be frozen, payment may be stopped, or even confiscated. This is a backdoor under the credit currency .
1
What are foreign exchange reserves?
Many people think of a safe at home or a "pile of money" hidden somewhere, and just take it out for whatever purpose you want. In fact, under the modern sovereign credit currency system, foreign exchange reserves are just a bunch of digital symbols.
This bunch of digital symbols are essentially the debts of foreign central banks or foreign financial institutions (banks/insurance/securities companies, etc.). Most of them exist in the form of deposits or securities (such as bonds). It relies on the central accounting database of each country. ...A certain country has a sum of foreign exchange in its name, but it is "held on behalf of" a foreign financial institution.
It’s better to take Russia’s foreign exchange reserves that were frozen after the Russia-Ukraine conflict as an example.
Russia has a total of more than 630 billion U.S. dollars in foreign exchange reserves (worth more than 630 billion U.S. dollars, not all U.S. dollars, but also other gold/euro/yen/renminbi and other assets), of which 300 billion U.S. dollars are frozen and cannot be used. for international payments. Why is
frozen?
Because these foreign exchange reserves worth 300 billion US dollars are deposited in central banks or financial institutions in Western countries such as Europe and the United States (this is held on behalf of others)...or the deposits of central banks (such as the German central bank ) or the financial departments of these countries and bonds such as treasury bonds/financial bonds issued by financial institutions.
Now Europe and the United States believe that Russia has "invaded" Ukraine , so they impose sanctions... The money or assets belong to Russia, but they are "held on behalf of us" in Europe and the United States. "We in Europe and the United States have the final right of disposal", so they can be frozen After all, your foreign reserves are in my hands.
Why hasn’t Russia’s remaining 300 billion foreign reserves been frozen? Because it is stored in countries such as China/India, and these countries do not impose sanctions on it.
What will be the next step for freezing? Of course it can be confiscated, just find a reason...for example, to "resettlement Ukrainian refugees who emerged due to the Russian invasion". In fact, there is a precedent for this in Afghanistan .
Last year the Taliban entered Kabul without resistance from government forces. The former government officials supported by Europe and the United States fled in a hurry... and they ran away, but the Afghan government still has 7 The foreign exchange reserves of 0 billion US dollars are stored in the Federal Reserve Bank in New York, USA, so President Biden signed an executive order requiring half of it to be used as a source of funds to compensate the "9·11" incident victims. That's it. If it’s gone, it’s gone.
is nominally your asset and is also in your name, but as long as the asset is not in your own hands, it may be used as a "tool of punishment". This leads to a term that we rarely hear - —Assets “not held by oneself”.
If you change the "foreign savings" here to personal "deposits" or "assets" and change "overseas" to "domestic", it is actually the same...the deposits or assets in each of our names are also "not held by ourselves." some.
This is a major feature of the sovereign credit currency system, which was not the case before.
2
In the previous gold and silver standard era (China used a large number of copper coins before the Ming and Qing Dynasties), money was equivalent to currency, equivalent to gold/silver/copper coins...you own, you possess, you use, others, of course, include The government cannot handle it in the background, such as freezing it.
They are bearer assets. The assets are not fixed in whose name they belong, and they belong to whoever holds them.
But the vast majority of assets today are registered assets. Whose name is the deposit, whose name the stocks are, whose name the bonds are, whose name the real estate is, whose name the land is... Behind them There is an information collection center, which may be the central bank's settlement system, the securities registration system, the housing authority system, etc.
The function of currency (money) is now mainly reflected in the medium of exchange...Using money to trade what you want plays the role of an intermediary, while its other two functions are weakening.
Let’s say it has a price scale function, but prices often rise and fall. The price of the same product this month and last month will be different; let’s say it has a storage function, but inflation is a long-term trend. If you save money, its purchasing power will become worse and worse. If you save money, it will be "gone".
can Under the sovereign credit currency system, money has another function...the sanction function.
Your account has a large amount of funds and is suspected of money laundering, so the money has been frozen; big data analysis shows that you are suspected of tax evasion and have been punished, and the money in the account may be withdrawn unwillingly; you have not owed any debts. You are also being sued by creditors, and the money in your account will be given priority to repay debts after a judicial verdict... As long as your money is not fully held by you, you will have the handle to be sanctioned.
Some people will argue, "Then I can take out all the money in cash and keep it at home, right?" The theory is feasible, but in practice it is difficult.
There is a cost to storing cash... It requires space, there is a risk of being stolen and damaged, it is inconvenient to carry, and it is difficult to pay large amounts. It is estimated that real estate companies will not accept 1 million cash payments for buying a house (some large amounts Payment must be transferred, not cash, mainly to prevent money laundering).
Is it okay to store cash for daily consumption? Yes, but there is a loss of purchasing power caused by inflation. As long as there is a slight idea of preserving value, such as buying stocks and bonds, etc., it will enter a central system, leaving a loophole for sanctions.
Moreover, the government can also replace the old currency with new currency through currency reform. For example, 1 new currency is equal to 10,000 old currency to make the stored cash worthless. Venezuela , Zimbabwe , Russia, Turkey , and even It's happened in India.
Then how can we use money better without leaving the possibility of being sanctioned?
3
has the function of a trading medium, can flow freely around the world, is highly homogenized and divisible... The most important thing is that there is no back-end central node, and there is no starting point for being monitored, controlled, and sanctioned, achieving complete "being Hold it yourself”… This is the currency that many people desire.
In fact, the currency almost exists, which is the digital currency represented by Bitcoin.
Some people will argue that Bitcoin is just a string of digital symbols and has no value.
Yes, Bitcoin has no value, but currencies such as the US dollar/euro/pound/yen also have no value. They are essentially a bunch of digital symbols... So why do people still think these currencies are reliable?
is trusted because . When everyone thinks something is valuable and is willing to accept it, it has value.
The biggest difference between Bitcoin and sovereign credit currencies is that it is decentralized, so it cannot be monitored, frozen, or confiscated at will. Therefore, it can be used in international illegal activities such as arms, drugs, and money laundering. Transactions, of course, can also be used to avoid taxes or evade taxes... If you earn dollars/euros, etc., they will always be monitored, so you must pay taxes. But if you earn Bitcoins, how will the tax bureau find out?
As long as you have sovereign credit currencies such as the US dollar/euro, it will always be harvested... Holding cash will be harvested by inflation. If you want to fight inflation by depositing or investing in financial management, it may be harvested by regulation.
What should countries that have to hold foreign currency or individuals that have to hold sovereign credit currencies do?
Spend it efficiently and with value... Money has no value. It only has value after you spend it to get what you need.
Money is the medium of transaction, which reflects the exchange of goods or services, and the lowest level of goods or services is human labor, labor based on certain raw materials (land/energy/minerals, etc.).
Therefore, for the country, it is necessary to use foreign exchange to exchange for the high technology it urgently needs to improve production efficiency and strengthen production capacity. Of course, this includes creating a high-quality citizenry. In addition, foreign exchange can also be used to exchange for the foundation of storage. Materials and supplies, such as petroleum, minerals, rare metals, etc.
For individuals, it is to spend money to improve their labor skills. As long as you have the ability to produce and create, you are not afraid of not making money... This is also the reason why parents pay attention to education. In addition, they should also consume appropriately to experience rich and colorful experiences. This is also one of the goals of life's struggle. Otherwise, what's the point of saving money all your life and not spending it until you die?
Money is flowing, and everyone benefits from the flow.
If you don’t spend money, how can others make money? If others don't make money, how can you spend it? How can you make other people's money? !
Money under credit currency forces you to spend it. This is also the best strategy to avoid being harvested and avoiding major risks.
