Renaissancemen.org

In my article this yesterday, I essentially postulated that it is POSSIBLE they really might burn the stock market to the ground to save the dollar. But then I touched on a concept that I wanted to have as a separate article – in it, I discuss how one reason people think we cannot raise rates is that it would make the government go broke on too much cost of interest on the debt. I then felt that if they can just raise another cool $500b or $1T, then that would cover the costs of interest rates going up. And, I discussed FedCoin. The more I started writing about FedCoin, the more I liked it – IF they could implement it correctly. That’s the problem, ultimately, I believe. But if done right – my country kicks the can down the road for another 100 years and can perhaps heal themselves in the process.

The concept is – IF you want to save the USD, you would need to raise rates, stop QE, and reduce the Fed balance sheet. The traditional thinking is, “it can’t be done”. No, let’s assume they do take a path of this – perhaps a quarter of a point for 3 successive years. The root issues with this:

1. The cost to service the debt will go up to something crazy – someone had said 3% might be $1.5T. I don’t think it’s that high, but let’s just assume debt services costs
2. The debt ceiling would be run up against, as our budget costs would go up – someone pointed this out on my last post comments (not me).

However, people are looking at this as a FIXED COST in a sense with FIXED REVENUES. What I propose below they COULD DO is to gradually raise interest rates over 3 years, introduce FedCoin, move to the US digital dollar, and significantly increase a temporary capital gains taxes for those selling stocks which may either capture a ton of revenue OR dissuade people from selling until the “temporary tax” is removed 4 years later. During a period of stagflation, with rising interest rates, this could help get money into bonds to slow the rate increases.

If you REALLY think about the cost of borrowing to go up, look at your personal finances and leverage. IF your broker allows you to hold stock on margin for a tiny cost, and you can turn that into a 5x, you’d be silly not to at least consider this. IF you see the COSTS of our budget increase, one has to consider the REVENUE would also need to increase to offset these debt interest costs.

Check this out – and how these people consider debt being added. If the GDP is higher than the costs of interest, they are comfortable with adding debt.

So the idea here is that IF they can continue growth they may not care too much about adding debt servicing costs. You and I think of growth with GDP – as in better growth means more jobs and higher tax revenues.

But…what if you have other means of getting tax revenues? The cost of this debt in a sense is GDP growth + alternative income stream.

Looking at FedCoin – why?

People think if we have to pay more to service this debt, it creates too much of a gap and they will default on bonds. You can create that gap by cutting spending or increasing revenue. I felt that increasing revenue via a FedCoin transaction fee is where that money can be found in the couch cushions. In my state, they have a 6% sales tax. I know in some of the countries reading this you have a VAT.

Let me define my definition here of FedCoin – it would be a digital currency that is created by the Treasury just like the dollar is printed now.

FedCoin is a crypto currency on the blockchain. It is a closed system where the owners are able to create and destroy digital currency as they need to in order to control inflation/deflation as needed. With this, I feel that they can do something similar to Kinesis with KVTs and have a transaction fee every time it is used. Maybe 5%?

Currently, once cash is printed it goes out the door and could be sitting in vaults/stockpiles all over the world. Then, this cash can be used to buy just about anything illicit all over the world and the government never gets their cut of those transactions. The problem is this – when this cash is used to exchange for goods or services, the government doesn’t know about a lot of this. Think about the last time a drug dealer filed his taxes, put “drug dealer” as occupation, and then self-filed a tax return showing his income and taxable earnings. I dare you. Or arms dealer. Or pimp.

In our current system here in this country, our federal income taxes come out of our paychecks and withheld by our employers. The come from corporate filings. When we sell something, we are supposed to record our capital gains on it and report it. We have to pay property taxes based on the estimated value of our house (so higher home values then equals higher tax revenues for localities in my state so there is income incentives to let hom prices run higher). We have all kinds of taxes. The poorest rarely pay any taxes here. Something like the poorest 48% here pay little to no taxes. Then you have the uber rich in the top 1% who hire accountants, lawyers, and teams to find LEGAL ways to reduce their tax requirements.

Personally, I think this is the dumbest system ever created. I get money taken from me, then I have to either hire someone to get my money back or let it go? I volunteer my tax records and then I might make a mistake and end up in jail because I was off?

In my country, the 16th amendment started the income tax in 1909. So somehow for 140 years, my country got by without federal income taxes. Interestingly enough, in 1913 the Fed was then created by the Federal Reserve Act. Many people who read this are pretty much against the Fed, and I think there’s a massive Libertarian portion of all of you that don’t want the income tax either.

Well….the good news is…FedCoin fixes this.

The idea here is that every transaction can have a fee. Getting paid by your employer. Buying a coffee. Buying a car. You get the idea – because no physical dollars are used and ONLY FedCoin crypto, the transaction fees are 100% efficient at capturing commerce, and the taxes above are no longer required – IF they have the correct transaction fees set.

Taxing versus transaction fees

My PERSONAL politics are to significantly reduce the size of government by first analyzing all services they do, spin off private companies on some, consolidate others, send others to the state level, and abolish everything else. Only essential services are done by our government then. It’s a fiscal conservative approach, but probably more libertarian. This is a reduction in SPENDING. My liberal friends here believe in bigger government which results in HIGHER SPENDING. With my politics, it leads to lower costs, lower taxes, more freedom to choose where your money goes and stimulates the economy from the consumer. My liberal friends believe the money is best suited to be with the government to determine the best for all people, which then leads to the government needing to spend into the economy to make it move.

No one is right in this equation, as we have a hybrid system here – public schools (which I support) are about the biggest thing you can point to with a socialist aspect here. But then you have rich people not wanting what the government provides, and send their kids to a private school – but they STILL have to pay into the public school system to benefit someone else’s child. So there’s a lot of strife here over whether I should have my money or the government should. This article is not going to settle that debate today – only point it out as the source of our spending in the costs versus income equation.

Furthermore – I have always been a proponent of a flat tax for everyone. Why should how much you make count towards a higher percent you pay in? I think the FedCoin can fix this to my liking. But one thing you have to look at is how cumbersome our tax system here is. My mother was a CPA many years ago and it’s no joke how much they need to know. I have always wanted to find a simpler solution. Well, FedCoin can abolish the IRS overnight. Think about illegals working a job building a house? No problem – they are paid in FedCoin and I get my taxes and I’m happy. My PERSONAL issues with illegal aliens are not necessarily they don’t belong here – it’s that they drain the system without contributing to it. FedCoin fixes this, by the way.

The idea here is that there is no cash anymore. All cash money will have to be turned in over the next 12-24 months and be redeemed for digital dollars in your digital wallet (I’m aware this might take 5-10 years, but bear with me here). Currently, we have people hoarding nickels because the melt value of them is 20% more than the face value. We do not use silver in our coinage anymore, as that became worth more than the face value in the 1960s. Now, we use a lot of worthless base metals to make pennies and nickels and quarters – when most people now actually pay with a bank debit card or credit card. Even some taco stand by the beach may now have a POS system attached to their iPad or iPhone. So there is no GREAT LEAP to go digital. They are simply changing the payment system in the backend. It will STILL be USD. It will just be trapped in a crypto-based system. Unclear how this will work with corporate accounts at this point, but I’ll let that to the MIT guys.

So who actually NEEDS physical cash anymore? Not really anyone. Then think about how people skirt the system with buying illegal things and getting money and income from that. They certainly don’t pay taxes!

The idea here is this – all physical cash money is turned in and your FedCoin account is created – in USD – and is now on the blockchain. Merchants get charged like 3% now by Visa for transactions. That is invisible to you, as it is baked into the price of the goods and services. Now what if there was no longer any federal income taxes or state taxes, or any other kind of taxes? Just transaction fees on FedCoin? Merchants no longer have to pay that 3%.

The trick here is that the friction here of transaction is where the government gets paid. Every single transfer of wealth, the government has their meat paws on. You want to donate $20 to the church dish? $.60 right off the top to the government for their 3%. Perhaps $.20 to the local city/county (1%) and $.20 to the state (1%). These are just examples, not precise measurements. So beancounters may point out it should be 8.69% or something like that. This is not that level of analysis to fine tune how much it should be, only how the mechanism can work.

Now income – your employer pays you and right off the top is the transaction fee of 3% to the feds, 1% to the state, %1 to the city. They have payroll taxes. You no longer have to file federal income taxes. Every time you get paid, the transaction fees take it right off the top. Easy peasy.

Businesses would then pay transaction fees on supplies B2B. Perhaps a B2B transaction might be higher in percent…or lower.

You want to buy a meal out for $100? Same…$3 off the top to Fed, $1 to state, $1 to city. You get the idea? Every single transfer of wealth has the government getting their beak wet with 100% efficiency. Now imagine you wanted to buy massive amounts of illegal drugs. Pete gives Steve $1m. Fed gets $30,000, state gets $10,000 and city gets $10,000. Meaning – no one should care about the LEGALITY of the transaction, ONLY that a transaction occurred.

If we do nothing, the system will collapse on higher spending

Above, I pointed out how we could have a 100% efficient system of collecting revenue for the government. We can abolish taxes. We can abolish the IRS overnight. We can collect revenues from illicit dealings and under-the-table illegal alien income tax. We can collect our fair share from Timmy buying a lego set at a yard sale. So what is the problem? Yikes…

The point here is that currently, I see a spending problem where we are spending more than we take in, which creates yearly deficits which then creates massive debt. The idea here is that you can completely remove all taxes here and replace it with FedCoin transaction fees. My friends across the aisle see a revenue problem, where there are not enough taxes taken from the people to solve everything they want to spend on. In a sense, our tax revenues will be determined upon the success of the FREE MARKET and COMMERCE. This should have nations with more privatization flourishing. Think about the Federal services that are then spun off from a cost center to now a revenue center. Schools may locally become privatized – as revenues come in for the local services, and people critically determine the idea of cost center versus revenue center. More good stuff. So what is the problem?

So no matter who is in charge these days, we keep having more and more deficits. No one seems to be able to win on reducing spending. I post that if a president runs on lower FedCoin transaction percent from 5 to 4, people will vote for him as more money will go into their pockets. So both parties now are spending like drunken sailors and in the current system, without FedCoin – This is what it looks like…

Side note: our democratic republic system is collapsing. I believe the root issue here is government continues to spend more and grow in size and power. What used to be Democrats fighting for more government and Republicans fighting for less government has now switched to both parties fighting for more power in a growing government. This has led to attacks, smears, and tactics that make the KGB blush. I believe the only way to heal my country is a reversal in the size of government. FedCoin will achieve this with transaction fees. Meaning, today you have Democrats saying “debt doesn’t matter, make things ‘free'”. The Republicans just want to lower taxes and reduce interest rates – but not reduce debt/power. So – BOTH PARTIES are running on power grabs and INCREASING budgets. NEITHER PARTY can run on austerity in THIS system or they will lose elections. FedCoin will pay for things based on transaction fees that are equal to all. The promise here is that ALL future elections would be based on reducing transaction fees of FedCoin, thus both democrats and republicans are incentivized to reduce government spending and turn cost centers into revenue centers by privatizing where possible. also, where possible, eliminate agencies to let the states burden these costs. I believe FedCoin transaction fees REPLACING a tax-based system IS the only shot we have to holding on to our Constitution. My country’s debt has gone too far. My governments are TOO BIG. And, with the vaccine mandates on private companies, we have seen a colossal overreach in power that needs to be taken to rubble. FedCoin has that promise – IF done right and IF it replaces our current tax-based system.

In the transaction-based system, you should be able to determine the budget for the year with some level of accuracy give the right economists while continuously driving more and more items to the private sector. You can then set a transaction fee by law.

I’m not going to go too far down this rabbit hole, but the idea here is that with no physical paper cash, only FedCoin – you are able to capture a fee on 100% of the transactions. Lemonade stands, yard sales, coke deals, strippers – it’s all getting captured. This is effectively the most efficient revenue generating scheme in history. Not voluntary. Equal to all. Based on amount you spend, you contribute more. Consider a billionaire buying a $100m yacht. He pays $3m in transaction fees to the feds, $1m to the state, $1m to the city. Consider a waitress with 3 kids struggling to get by who doesn’t spend any money other than necessities – she’s barely paying into the system. The rich guy is then contributing substantially more by buying a ton more.

I think there would then have to be a fee to sell your FedCoin to buy another digital currency. I don’t think governments want it to be easy for you to use you USD wealth to buy stuff in other countries. Meaning, you have a rich guy here who wants to buy a yacht in Italy being sold in digital Euro – there may have to be conversion costs which is pretty much like the FX markets today with relative values to each other. But when converted, the governments still need to get their beaks wet. To me – Kinesis solves this. You can buy Kinesis KAU (gold) in FedCoin (USD), and buy the yacht in grams of gold. The Italian seller can then sell the gold to get digital Euro or keep the gold and sell it in digital Yuan to buy goods for his company. When the gold is bought, a transaction fee happens in FedCoin. When the gold is sold, a transaction fee happens in Euros.

Think about a rich person then who leaves all of his estate to his children. 3/1/1. Beak. Wet. Done. If they cannot afford the 5%, they can sell a portion to cover the costs.

IF this system was put into place, we could raise interest rates because the delta of the excess costs of servicing the debt is passed on in transaction fees. Perhaps WITH this, there’s a “balanced budget” law which then prevents governments from creating deficits in budgets, AND a transaction fee can be raised or lowered, but needed 2/3rds of congress to do so. This would force balanced budgets but also allow flexibility for overwhelming bipartisan support on things like Hurrican disaster recovery.

Side note with Kinesis here – right now, I think there are some concerns governments would outlaw many cryptos that compete with their national digital currencies. In the above, I showed an international use for it, where a Putin could sell oil to get gold. They can then sell that gold for food or the like. Meaning – NO NEED FOR WORLD RESERVE CURRENCY. Gold would be the currency that translates between digital currencies. If I still wanted to buy gold, and hold – you would see that appreciate over time in USD as the amount of FedCoin is borrowed into the system and “printed” into currency. When I bought the gold, 5% fee in crypto. When I sold the gold, 5% fee. If gold appreciates 20x in 10 years, there’s no capital gains taxes. It’s so simple. So one would STILL want to hold gold/silver due to the international recognition of these as currencies/strategic resources. I feel a Kinesis down the road could then sell things like oil. KOIL. Warehouses of oil. This also could essentially be a global currency like a gold. My point is that a Kinesis can COMPLEMENT national digital currencies and NOT be a direct threat to them. I am unsure IF we will ever see a POS with KAU and buying in grams of gold at a merchant. However, the international implications of using gold grams as an international currency is most definitely there – as national digital currencies simply replace paper currencies.

In a sense, it is sort of like a levy/tariff as well. Imagine you are a company in California buying goods in China to sell at your store. Imagine you buy gold grams in KAU to then send to a digital wallet in China. 5% transaction fees. You get your goods shipped to you. The Chinese store can hold the grams of gold, or sell and convert to digital yuan and pay 5% transaction fees there. When I sell at the store front, it’s in USD and there’s a 5% transaction fee on all goods sold. No income taxes.

The problems with FedCoin – there are many

Now imagine Steve buys a joint from Pete using FedCoin. The government sees the TRANSACTION FEE, but not what it was for. The feds start watching Pete, and can then go back and see the transactions he had with everyone. Going back years on the blockchain, you could have Steve charged for potentially buying drugs years earlier. The simple solution? Don’t break the law. However, our society has a lot of gray areas. Where most here frown upon “the white stuff”, most also don’t give a shit about pot. Both are illegal. Will people be punished for these transactions? With no documentation of what the transaction is for, can it be proven that it was a drug deal?

I’d also like you to consider how people can harvest this information to learn about you. Consider if I contributed money to Trump’s campaign. Imagine a scenario where someone can see the list of donors to this campaign down the to the precise FedCoin dollar amount? Lists of who you support….if you buy guns from Bob’s guns. If you buy ammo. How much dollars you spent in guns and ammo. Now imagine the year is 2028, and a hard socialist wins – and decides to target trump supporters and send storm troopers to their houses to take their guns and ammo? Imagine if your employer was a die hard socialist and your name appeared on a list of trump supporters?

Imagine a scenario where the government mandates a vaccine that you do not want. They can then “turn off” your wallet, and in doing so, shut you down from society. You would have to comply with mandates – and while appeals could take years, you can’t go broke for years. It would force compliance and introduce power that the people would not allow.

Now imagine a social credit score or the like, where you say mean things about the president, and get a strike on Facebook. Your wallet is turned off for 1 day. Imagine you were a radical of sorts and were arrested at a protest – and authorities then decided that your wallet should not work more than 1 mile from your house. Imagine you are not allowed to buy airline tickets with fedcoin, or leave the country? What if you are accused of a crime? They can give you bail, and set your wallet to not work more than 1 mile from your house.

Think about privacy implications with things like pornography, buying sex toys, buying sexy stuff for your spouse. Someone can perhaps put all of your transactions on the internet to show WHO you did business with, and for how much. Where Pete buying a joint from Steve isn’t a big deal for $10 or something – you could just say, “I lent a friend $10”. But if your transaction log has “Freddie’s porn palace” and transactions amounting to thousands of dollars – this is a significant breach of privacy. Remember – today your banks have this information. The FBI COULD get this information from your debit/credit cards – WITH A WARRANT. Meaning, the government does not have unfettered access to this, and you trust the banks will try and protect your privacy.

Then wonder how my 94 year old grandmother fits into this system. For her, she’s issued a card from the government with a chip on it. Looks just like a debit card from a bank. She has an account (wallet) number that people can send her money. But this starts getting complicated for much older people who are not great with computers – which then leads to significant amount of wealth stolen from elderly and less educated individuals. The thing is, if the Feds know where the FedCoin came from, they can track who stole it.

Which then begs – how do thieves steal money in a FedCoin system? While cyber crimes are significant, if the US government runs this system, they can see all transactions. A lot of crime sort of disappears overnight. There is no cash to steal from a bank. In fact, banks might no longer exist. Can’t rob a liquor store for cash as there is no cash. If you break into someone’s house to steal FedCoin, they would need a PIN from the card holder to make it work. And if that person died or reported the theft, well, you know who took the money and they are arrested. So there’s virtually no way to hide a crime with USD because we can see clearly who the recipient is.

Think about all of the crime in this country with illicit drugs and money laundering? IF cash is going away in 2 years, think about all of the criminals who may convert cash to gold or silver, perhaps on the blockchain? Sales at a nail salon will be in FedCoin – and not cash. Meaning – lots of criminal syndicates may go under overnight – OR – we simply get our transaction fees. These people are now known to us and if you are making a million a year, perhaps the Feds want to know why? Think about illegal aliens that cannot get paid unless they get a digital FedCoin wallet. They could not send money overseas – and instead may have to buy something like gold on Kinesis to send to someone.

Loans could also be directly from the Fed and simply deduct automatically from your wallet. Why the need to pay 27% to discover when I can borrow from the Fed at 7%? Credit will more or less evolve, as you will have the ability to then borrow based on scores – and deductions would come out automatically. The worries then would be a social credit system then tied to your ability to borrow or use your money.

Overall, I think it’s wise to fear government abuse of the currency to an authoritarian level. And I think it’s wise to develop proper checks and balances with judicial oversight of these kinds of tools. This currency is some next level shit on the good side, but many of us have been told about all of the bad sides of this. I would also want to ensure that there’s a privacy agency under the DHS, which is founded to ensure privacy is adhered to, and all transactions/fees should be cleared through this branch, so in a sense they can ensure senders/recipients of FedCoin can remain anonymous to the government – AND this agency is charged with investigating all law enforcement malfeasance of privacy. This branch would also have the ability to block presidential executive orders via direct supreme court challenges to ensure any executive order does not infringe upon the privacy of the citizens.

IF this agency is created, WITH a heavy libertarian leaning – and RUN by a libertarian appointee by the Libertarian national committee – it could ensure a neutral leaning to the agency which does not favor any Republican or Democrat and solely focuses on the mission of privacy, and not political gamesmanship.

ONLY IF this type of agency with these powers are created will you ever get a buy in from myself.

Debt going away?

I can imagine a day coming up where there is a form of a debt jubilee – with FedCoin being front and center the means for this. People take all of their debt and can then consolidate it all for x% from the Fed. Imagine – cars, houses, credit cards – all then consolidated for stupid low interest rates – IF you then close your accounts. The Fed can create this money in seconds, and weight your risk of non-payment. Imagine you are paying $5000 per month in debt right now, and you can then consolidate it all for a 20 year loan directly from the Fed at 2.99% and reduce your payments to $2000 per month? The Fed holds that note on you, but any time you get paid, their beak gets wet and they withhold your next payment. Any inheritance, this comes off the top. Any wages are garnished directly to pay into this loan. But, you just freed up $3000 more per month to spend, and think about how many transaction fees that starts to generate as you are spending into the economy. See – in a system like this, you may have no one using Discover or Visa anymore. They may be outlawed – in a sense – due to how they end up crippling US consumers with high cost debt. The Fed can just blip up numbers on a screen – no dollars need to be printed. I believe the big banks are essentially the shareholders of the Fed. So you could have these very large banks working behind the scenes hired BY the fed to do a lot of this work. A JPM/Citibank could essentially buy up Discover/AMEX etc overnight to consolidate credit types of facilities.

Conclusion

I think that so many people just think, “The Fed is trapped” – but very little amount of people think about how many ways they can wiggle out of it. Very few understand the implications of how a FedCoin COULD benefit society in a lot of ways, and less understand the dangers of how evil it could be if not properly implemented with privacy.

I think with a rollout of a FedCoin inside of 5 years, the Fed may have to reverse course like many are predicting in the short term, but as a FedCoin is implemented, my guess is it would be much easier then to roll into a system over 5 years where the IRS is abolished, taxes are abolished, and we move towards a system of reduced government footprint due to moving things from a cost center to a revenue center.

I’m aware this isn’t coming next week, or even next year. But if idiots like me can spend a few brain cells with the math involved to then determine how this can work, it can be rolled out to the public in several phases:

1. Set up digital wallets – they will probably try one more round of stimmies of some sort if a recession is here and migrate everyone from the account they setup on a card to a digital FedCoin wallet. No need to enroll – they already have the accounts setup for you. You still see USD. No accounting changes needed at this point as everything is still in place with USD.
2. Establish Privacy Commerce Agency to be where all transactions fall under. Perhaps they report under Treasury. Establish Privacy Enforcement Agency under DHS to ensure privacy is not being breached, and where found, jail/prison can be implemented.
3. Launch national campaign with advertisements, web casts, town halls, and talk about the benefits of FedCoin and address anxieties of FedCoin.
4. Get FedCoin running through paying their workforce/contractors of many millions of people. This pilot system over a year should help them develop the framework for the larger pieces coming.
5. Announce 2 years left with cash/change, and after that, none will be legal tender. All physical cash will be converted to FedCoin USD. European countries have been doing this for some time. New currencies have the old paper currencies being worthless.
6. Gradually reduce taxes while increasing FedCoin transaction fees.
7. Pass balanced budget amendments to the Constitution. To meet shortfalls, transaction fees can be increased to meet expenses. Meaning, if a Hurricane wipes out Florida, a temporary .25% transaction fee on everyone can help pay for that disaster for a month.
8. Start campaigning in reducing transaction fees by privatizing areas of the Federal government. This will reduce federal costs while increasing revenue centers.
9. Show how gold can be used easy with 3rd party international companies crypto monetary companies like Kinesis, LODE, and cache to facilitate private international transactions where the buyers and sellers have different national currencies. An ounce in Kinesis is equal to an ounce in CACHE. But these companies would compete like Visa/Mastercard and have different features. Maybe Kinesis has brand recognition and is trusted. Maybe ABC company comes along and has much lower transaction fees. Maybe CACHE sets up a rewards system by giving you rewards in gold for so many transactions.
10. Elimination of a “world reserve currency” allows for pure competition among all nations. Today, the world reserve currency holder (US) has an advantage to buy things from others, but are disadvantaged due to high cost of domestic production. Countries would thus be on a more level playing field.