• Development of Central Bank Digital Currencies, aka, a Digital Dollar, is accelerating around the globe
• The U.S. is motivated to develop a digital dollar to avoid losing economic dominance to China in the cyber age
• Deemed inevitable, a digital dollar can be defended against by moving assets into physical precious metals
  China Claims World’s Largest Gold Vein

Rise of the Digital Dollar

The push toward Central Bank Digital Currencies (CBDCs), aka, a Digital Dollar, is reshaping the global financial landscape at lightning speed. With 134 countries exploring CBDCs—including major powers like China piloting massive programs—this shift is more than a trend; it’s a race. But as the U.S. navigates its role in this new digital economy, critical questions arise: What does a “digital dollar” mean for your financial freedom? And more importantly, how can you protect yourself against the risks?

Where the Digital Dollar is Now

– 134 countries, representing 98% of global GDP are exploring a CBDC. That number was only 35 in 2020.
– 19 G20 countries are in the advanced stages of launching a CBDC
– All original members of the BRICS Alliance (Brazil, Russia, India, China, South Africa) are in pilot phase
– Since Russia invaded Ukraine, the number of cross-border wholesale CBDC projects has doubled
– Project mBridge connects banks in China, Thailand, Saudi Arabia, and others using CBDC
– The Digital yuan(e-CNY) is the largest CBDC pilot in the world. In June 2024, the e-CNY did over $986 billion in transactions, four times the amount done in June 2023
– The digital euro is in pilot for domestic use in Europe and internationally¹

²

How About the U.S.

The U.S. Federal Reserve is participating in a cross-border CBDC project. It’s called Project Agora. It connects the Fed with 6 other major central banks. Along with a large group of private financial firms. Fed Chair Powell told the Bank for International Settlements (BIS) Innovation Summit 2021 that ‘way more than half’ of the Fed’s 12 regional banks had ‘active work’ on CBDC.³

What Exactly is a Digital Dollar

A digital dollar is issued by a central bank and controlled by a government. They are different than cryptocurrencies like bitcoin. Cryptocurrencies are decentralized. Their transactions aren’t monitored by one authority. Instead, blockchain technology is used as an independent ledger.

Why Governments Want a Digital Dollar

There are several reasons for countries to adopt a digital dollar. They are promoted as making money more accessible to those outside of the banking system. CBDC are supposed to increase efficiency in domestic and international trade transactions. Making them cheaper and faster. CBDC could allow governments to implement monetary policy faster and more effectively.

Why the U.S. Wants a Digital Dollar

The U.S. wants a CBDC for all the above reasons. But they have another motivation. The U.S. needs to retain its role as the world’s dominant currency. They want to keep all the financial advantages that gives. Policy makers fear that if the U.S. doesn’t take the lead, it will itself locked out of a new electronic financial system. Its leading role would be replaced by China, who is leading the development of CBDCs. China’s first-mover advantages would allow it to determine the shape of this new economic world order. With itself at top and its CBDC as the new primary means of exchange.

Problems of the Digital Dollar

The digital dollar brings problems along with its solutions. The U.S. could lose the ability to track criminal money flows or enforce sanctions.

A federally issued and controlled dollar could make the private banking system obsolete. Major economic disruptions could result.

The digital dollar also creates greater fears about loss of freedom. Both economic and personal. The Federal Reserve could manipulate their digital dollar to control financial behavior. For example, say they want to stimulate consumer spending to avoid recession. They can put an expiration date on dollars. If they aren’t spent by a certain time, they disappear from your account. Or the Fed can implement negative interest rates to force retirement savers to spend their funds. Cyber money also becomes vulnerable to cyber criminals. Billions could be stolen from the safety behind their screens.

Freedom advocates also fear the control a digital dollar would give. Every transaction would be recorded. There would be no more privacy. And there could be consequences for buying something or supporting a cause the government doesn’t approve of. It would be in their power to block the transaction, fine you, or simply erase your funds from the digital ledger without recourse.

Resistance to the Digital Dollar

President-elect Trump is taking the lead to stopping an American digital dollar. He stated, “As your president, I will never allow the creation of a central bank digital currency.” He continued, ” Such a currency would give the federal government – our federal government – the absolute control over your money. They could take your money, you wouldn’t even know it was gone. This would be a dangerous threat to freedom – and I will stop it from coming to America.”⁴

Legal analysts have stated that the Federal Reserve does not appear to have legal authority to issue a CBDC without congressional authorization. And Fed Chair Powell said he would not issue a digital dollar without Congressional approval.

The House of Representatives already voted to stop the Fed from issuing a digital dollar. House Democrats fought hard to stop the bill. But the bill has not yet been addressed in the Senate. Right now, the Republicans hold a slim majority. A majority that may disappear in two years. Afterwards, Congress would have a free hand to push their digital dollar agenda.
Fearful of the federal government, states are fighting back against a digital dollar. Florida, Missouri, and Tennessee have introduced bills to ban or limit the use of CBDCs.

Conclusion

The global financial system is going digital. The U.S. may ultimately be forced to join the Digital Dollar movement to avoid being shut out of the new economy. Currently, President-elect Trump, Republicans and some states are resisting being dragged into the digital dollar world. But the change may be inevitable. That’s why it is important to do something now to protect your assets. Owning physical precious metals gives you a safe haven asset that is immune from the hazards of the digital dollar. A Gold IRA gives you the means to protect your funds for the long term. To learn more, call us today at 800-462-0071.

Notes:
1. https://www.atlanticcouncil.org/cbdctracker/
2. https://www.atlanticcouncil.org/cbdctracker/
3. https://www.bis.org/press/p240403.htm
4. https://www.globalgovernmentfintech.com/trump-pledges-to-block-potential-us-central-bank-digital-currency/

• China claims to have discovered the largest gold vein in the world.
• The discovery strengthens China’s de-dollarization ambitions.
• Americans can defend against the economic impact of lost U.S. supremacy with physical gold held in a Gold IRA.

China Claims World’s Largest Gold Vein

China has struck gold—literally—and the shockwaves could shake the global economy. China recently announced the discovery of a massive deposit of high-quality gold ore. It is estimated to possess 1,000 tons of gold worth $83 billion. Making it the largest known gold deposit in the world. The discovery has the potential to affect everything from China’s ambitions to your retirement account. ¹

Gold prices surged on the announcement. And the potential new massive supply raised questions about gold’s continuing upswing. Yet, the World Gold Council (WGC) was quick to doubt the find. They say the claim is ‘aspirational’. And much more drilling would be needed to turn this into a reserve. In addition, the WGC says Chinese mineral reporting standards don’t match global frameworks. “Even if proven, such a deposit would take years to bring into production,” they concluded. ²

Impact on Gold Market

Further analysis deflates concerns about oversupply. The global gold market produces 3,600 tons a year. It would see little impact from a mine producing 15 to 30 tons a year (roughly 1% of supply).³

⁴

China is already the world’s largest gold producer but is facing a decline in output. This a problem for them because Chinese gold consumption surpasses their mining capacity.
China’s gold jewelry demand rose 10% last year, while bar and coin investment rose 28%.

To get an idea of the size of the Chinese market, in the last two years, overseas purchases were about equal to a third of the gold held by the U.S. Federal Reserve. To meet demand, they need significant imports from Australia and South Africa. The newly discovered Wangu vein could reverse that trend and extend their reserves.⁵

China’s Gold Ambitions

China’s gold strategy is shrouded in mystery. The People’s Bank of China paused its gold buying spree earlier this year. They bought record-setting amounts of gold for 17 straight months. Now, analysis shows that China has continued buying gold secretly on the London Bullion market through bullion banks. The secret buying exploded after sanctions froze Russia assets in 2022 after the Ukraine invasion.

Analysts theorize that gold plays an essential role in China’s economic and political ambitions. Acquiring gold would fortify an economy in the grips of several financial crises. Greater gold reserves enhance China’s economic leverage and resource security. It also furthers their goal to usurp America’s role of global economic leader. Gold allows them to accelerate de-dollarization. Turning the renmibi into the dominant currency for international trade and foreign reserves.

Gold to Continue to Climb

Up 30% year-to-date, gold prices are spiking. Western investment is only now catching up to the East’s. Demand is driven by inflation fears, global conflicts, national debt concerns, and lowering interest rates. Yet, China’s insatiable demand underpins it all. And experts believe there is still more room to grow due to limited investment options for Chinese.

Managing director of Hong Kong based Precious Metals Insights said, “The weight of money available under these circumstances for an asset like gold… is pretty considerable. There isn’t much alternative in China. With exchange controls and capital controls, you can’t just look at other markets to put your money into.”⁶

Conclusion

China is known for playing the long game – focusing on steady, long-term growth in all aspects of national power. They aim to create a multipolar world where it stands as an equal or superior to the United States. This new gold bonanza feeds into that vision, assuming they can develop it.

Instead of lowering gold prices by opening this new reserve to the world, China may very well keep it for domestic consumption. If their projected demand continues, a perfect storm for gold prices will form. And, with newfound Chinese resource security, an increased threat of de-dollarization along with it.

Americans can protect against the impact of this Chinese lucky strike. They can move into gold and away from dollar denominated assets put at risk by de-dollarization and a more expansive, aggressive China. Call American Hartford Gold today at 800-462-0071 to learn how a Gold IRA can protect your retirement funds.

Notes:
1. https://www.livescience.com/planet-earth/geology/supergiant-gold-deposit-discovered-in-china-is-one-of-the-largest-on-earth-and-is-worth-more-than-usd80-billion
2. https://www.mining.com/chinas-super-giant-gold-discovery-claim-sounds-aspirational-wgc-expert-says/
3. https://www.mining.com/chinas-super-giant-gold-discovery-claim-sounds-aspirational-wgc-expert-says/
4. https://mining.com.au/massive-china-discovery-could-change-global-gold-market/
5. https://fortune.com/2024/04/21/gold-price-outlook-record-high-china-demand-consumers-investors-pboc/
6. https://mining.com.au/massive-china-discovery-could-change-global-gold-market/

• Find peace of mind this holiday season by adding physical gold and silver to your portfolio.
• Gold demand is increasing as numerous factors are increasing economic uncertainty.
• Contact American Hartford Gold today to learn how physical precious metals, especially in a Gold IRA, can safeguard your financial future.

Peace of Mind This Season

As we enter the holiday season, many of us are focused on expressing thanks for the good things in our lives and wishing for peace and happiness in the year ahead. This season reminds us of the value of connection, family, and traditions, even as we continue to face uncertainty in the world around us. As the year draws to a close, it’s an ideal moment to consider ways to safeguard our future, especially our financial security.

One such option that offers peace of mind in uncertain times is adding physical gold and silver to your portfolio. These precious metals have long been seen as a reliable hedge against economic instability, inflation, and other financial risks.

Gold: Symbolic and Practical

Gold is integral to many holiday traditions, especially as a gift. Jewelry makes up about 50% of global gold sales. Gold jewelry is cherished not only for its beauty but also for its enduring value. Yet there is far more to gold than just jewelry; it can be the foundation for a secure financial future.

Gold can play a vital role in building a balanced and diversified retirement portfolio. It offers a level of stability that other assets may not. By diversifying with gold, you can reduce risk and protect your wealth from the unpredictable swings of the stock market.

The importance of gold is no secret. Gold prices have surged more than 70% since 2020. Experts predict it could surpass $3,000 per ounce in the coming year. The past few months, gold has been on a record-breaking streak, recently crossing the $2,700 an ounce mark.¹

Why Gold

And while we hope for a joyous season, it is still plagued by uncertainty. Here are some of the concerns that have institutions and individuals turning to gold for security.

Inflation: After a brief respite, inflation is ticking back up. Cumulative inflation has reached 22% since 2020. Different sectors have experienced varying levels of inflation, with transportation seeing the highest at 34.71%, followed by food and beverages (22.68%) and housing costs (22.64%). ³

With inflationary pressures continuing due to factors like government spending, global conflicts, and supply shortages, gold remains a trusted hedge against inflation. Since it holds intrinsic value, gold typically appreciates when inflation erodes the purchasing power of the dollar.

National Debt: The U.S. national debt has now surpassed $36 trillion, contributing to fears of economic instability. As JPMorgan Chase CEO Jamie Dimon has stated, public debt is “the most predictable crisis” facing the American economy. In this environment, gold is considered a safe-haven asset that can protect your wealth against the devaluation of the dollar caused by rising debt. ⁴

Stock Market Volatility: Many analysts believe stocks are overvalued and that a market correction is imminent. When stocks fall, retirement accounts such as 401(k)s and IRAs are often hit hard. Unlike stocks, gold maintains its value and tends to move in the opposite direction of equities, making it a valuable asset for diversifying your portfolio.

Recession Fears: The possibility of a recession looms large, driven by aggressive interest rate hikes by the Federal Reserve and the economic slowdown that follows. A recession can lead to increased unemployment, stagnating wages, and declining business activity. During these times, gold often performs well as investors seek stability amidst uncertainty.

Economic Risks from Policy Changes: Proposed policies from political leaders like Donald Trump could further exacerbate inflation. His proposed tax cuts and corporate incentives, if implemented, may stimulate short-term economic growth. But they may also increase the national deficit. Additionally, his plans to implement tariffs on goods could push up prices across many sectors. Inflation could rise as a result of both. As prices rise, gold becomes an even more attractive option for protecting your wealth.

In addition, geopolitical risks, including trade wars and potential tariffs, could further strain economies. Creating even more volatility in financial markets. As such, gold is being sought after to hedge against such risks.

Conclusion

As you celebrate this holiday season, we wish you joy, peace, and prosperity in the year ahead. While we’re all focused on the people and traditions that bring us comfort, it’s also a good time to reflect on securing your financial well-being. Give yourself the gift of peace of mind this season—learn more about how gold, especially in a Gold IRA, can help safeguard your future. Call American Hartford Gold today at 800-462-0071.

Notes:
1. https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
2. https://www.gold.org/goldhub/research/gold-mid-year-outlook-2024
3. https://www.in2013dollars.com/us/inflation/2020?amount=52000
4. https://finance.yahoo.com/news/jamie-dimon-believes-u-public-110537564.html