The Lord Hannan of Kingscare, aka Dan Hannan, is normally a man of eminently good sense. A leading pro-Brexiter, a defender of British values, he has been a critic of the way the pandemic has been managed and especially how the Chancellor of the Exchequer has been shaking the magic money tree during the pandemic, declaring that ‘Britain is skint’. But now he has come up with the most extraordinary proposal, that Britain should move to an e-currency and, specifically, develop an e-pound. I have read and re-read his article in The Sunday Telegraph of 9 May and the more I read it, the more flabbergasted I become.
One of Hannan’s arguments is the successful development of a state supported digital currency in China. He reckons that in Britain, being a liberal democracy, we could do this without succumbing to the excesses of a communist state like China. I may have had some sympathy with this view in 2019 but now that we are no longer a liberal democracy—and Hannan readily acknowledges the authoritarian nature of the UK government that has developed under cover of the pandemic—I doubt this can be achieved. I work regularly in China and have endured the whole span of the pandemic in the UK and, while we are still some distance apart in the way we control the movement and thinking of our populations, we are converging rapidly. In an interview with Peter Whittle on New Culture Forum of 9 May Peter Hitchens distinguished beautifully between freedoms and rights. Freedoms are assumed but once they are removed—as they have been during the pandemic—they are returned to us by the government as rights. We never regain our freedoms. Having experienced the removal of our freedoms, probably in perpetuity, I think that Lord Hannan may be naïve in thinking we can avoid greater control by the state. He must realise that electronic spending in China is one of the main ways the Chinese government, co-terminus with the Chinese Communist Party, exerts surveillance and restriction of movement on its people is through their e-currency. Many huge shopping malls I have visited have no hard currency facilities and no facilities for card payment, it is all done using mobile phones. I will return to China below.
Most people have no idea what having a currency means. The value of any currency is, essentially, arbitrary. Money only has value once it is used to purchase something: labour, goods, food, property or other services. We are already in the age of electronic purchasing. Most of us are used to it and find it convenient and it has been enforced in some businesses during the pandemic. There are few risks of someone becoming infected with COVID-19 after handling money but there has been pressure in the UK to use credit and debit cards and apps such as Apple Pay. Conspiracy theorists, of course, reckon that this is all part of ‘the plan’ and leading towards the great global economic reset advocated by Davos (the World Economic Forum).
Long before the widespread use of what is, essentially, a virtual currency by means of cards, chips and PINs we had already entered the age of virtual currency. I recall my early days working in the NHS and the pay days when we would queue for our weekly pay envelopes. These contained real cash which went into your wallet and was handed over in pubs and shops for beer and shopping. I doubt this happens anywhere now except on the front drives of houses where owners pay ‘cash in hand’ so that it is cheaper for them and tradesmen can avoid tax. The rest of us, in whatever type of employment, have our pay ‘cheques’ paid directly into our bank. Apart from small sums for church collections and grandchildren’s birthday cards, I doubt that many of us ever see our cash. And the main reason we do not see our cash is simple; it is not real. If everyone went to their banks on the same day and asked to withdraw their money, a great many people would be disappointed. Banks hold your cash so that it can be given to others and they hold others’ cash so that it can be given to you. It is reckoned that only three per cent of the money that banks hold is in cash (I believe in the pre-credit card days that it was ten percent). The rest is just made up by loans and, within some legal limits, banks can lend what they want.
We can have a million pounds in the bank, but we cannot eat it, we can only use it to buy food. The amount of food it can buy is controlled by our government and the Bank of England and these are at the mercy of the tides and storms of the world economy, increasingly so with globalisation. The banks cannot print their own money, that can only be done by the government and, again, this is all smoke and mirrors. If the government wants people to have more money it can supply more to the banks simply by printing and minting it. The more they print, the lower it is worth per unit of currency leading to inflation which is simply a form of indirect taxation with a disproportionate effect on those with less money. Goods, inevitably, become more expensive. Harold Wilson, who famously devalued sterling in 1967, assured the voters that ‘the pound in your pocket’ would not change in value. He was right, it increased prices. Then, to control inflation, Wilson increased interest rates which had the effect of making borrowing more expensive and saving more profitable. The poor are the ones who need to borrow, and they are also the ones without savings. All this is possible because the value of currency is an illusion and the more so because we have a floating currency; it not ‘pegged’ to anything and has not been for decades. Winston Churchill returned us to the gold standard after the First World War in 1925 but we left permanently in 1931. I am not an economist and have no strong or informed views on the gold standard, you cannot eat gold, any more than you can eat pounds sterling. But at least having such a standard puts the brakes on the extent to which a government can print money.
How do the COVID orthodox and the lockdown fanatics think the government is managing to fund the restrictions imposed on us during the pandemic? They are issuing bonds and, straight from the mouth of the Ministry of Truth (aka the BBC):
‘A bond is a promise to make payments to whoever holds it on certain dates. There is a large payment on the final date…. Interest is also paid to whoever owns the bond in the meantime. So it’s basically an interest-paying “IOU”. The buyers of these bonds, or “gilts”, are mainly financial institutions, like pension funds, investment funds, banks and insurance companies.’
And that is how it works; essentially by printing money, albeit not notes and coins. But the money does not actually exist.
There are few restrictions to prevent the government printing money as it is, but with an e-currency it is not even necessary to print bank notes and mint coins. You simply adjust some figures on a computer and, if you are very lucky, some hostile government will not hack your system and start adjusting them for you. And so, we return to China and Lord Hannan’s misplaced optimism. I am sure he realises that the Chinese government, as a result of their e-currency, can do the following:
- trace your spending,
- locate you to within a few metres,
- if your social credit is low, prevent you from travelling first class on trains and flying business class,
- if your social credit has bottomed-out, prevent you from travelling at all…
- and worse.
You may ask what this has to do with the UK and share Hannan’s optimism; if so, look around. In early March 2000 we had freedom of movement, freedom of association and freedom of speech. We also had the freedom to hug our grandchildren. As I write in mid-May 2021, we have none of these freedoms and are likely only to have them returned conditionally. How useful, in the next pandemic, will be the ability to locate us and restrict our movement and purchases remotely through an e-currency? If you think it will not happen, think again. I bet in March 2020 you never expected us to be where we are today; but we are.
I am not sure if Dan Hannan encountered writer’s block and peddled a half-baked idea simply to fill his Sunday Telegraph column or if this is genuinely a new crusade. I cannot find any other evidence that he has brought this up publicly before. I hope he thinks again. An e-currency is bad for the economy, bad for the poor and bad for freedom.
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This post The Magic Money Tree- How plans for a Central Bank Digital Currency will lead to COLLAPSE! first appeared on Wake Up UK and is written by Daniel Mortimer
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Author: Daniel Mortimer
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