We have no interest in violating the American people’s privacies at the Federal Reserve.
That’s what Neel Kashkari, President of the Minneapolis Federal Reserve Bank, said on May 15 in response to a question about central bank digital currencies (CBDCs).
At this point, he remains “deeply skeptical” of the technology…
And overall, his statements were discouraging.
But that doesn’t change what’s happening in our broader economy…
You see, a transformation of our monetary system is underway.
A group of financial elites is preparing to overhaul the dollar as we know it. As we wrote to you recently, the Fed is set to unleash its new digital payments system called FedNow. And it looks like a precursor to the digital dollar.
That’s why I visited Minneapolis, Minnesota to conduct boots-on-the-ground research.
I wanted to check out the developments in the financial sector and investigate Kashkari’s home base. And I filmed a video just outside the Minneapolis Federal Reserve Bank with more details.
Click the image below to watch it, or scroll down to read the transcript.
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins
P.S. Right now, there’s a lot going on in the media. But staying ahead of news headlines can give you an investing advantage.
That’s why my team and I have been paying close attention to the Fed’s next move.
And we’ve found one asset that can help you become your own banker – and escape a transformation of our monetary system. To learn more, watch this video presentation I put together.
TRANSCRIPT
Hi, everyone. Nomi here and greetings from Minneapolis, Minnesota.
I am here at the Federal Reserve Bank of Minneapolis, not just because of what it does, but because of its outspoken president, Neel Kashkari.
Because what he has to say is critical for the looming overhaul of the United States financial system.
You see, Kashkari speaks his mind on topics that are crucial for you and for your money.
But more on that in just a moment.
First, know that Kashkari is important because he is now a voting member of the [Federal Open Market Committee] FOMC.
That means he can move the needle on Fed monetary policy.
And interest rate policy has been a key focus of investors and the markets since the Fed began hiking rates in March 2022.
So understanding where each voting member stands gives us clues to where the financial system, the markets, and the banking sector are headed.
But there is more to Kashkari than that.
You see, he was a vice president for my former employer, Goldman Sachs, where I worked as a managing director.
Right after I left, he was there.
He focused on mergers and acquisitions. And he was considered a wingman to its then CEO, Hank Paulson.
When President Bush appointed Paulson to be U.S. Treasury secretary in 2006, he asked Kashkari to join him from Goldman in Washington.
At the Treasury, Kashkari led the team that oversaw the bank bailouts during the 2008 financial crisis.
And since then, he has run for political office, worked in the private sector, and landed at the Minneapolis Fed in 2015.
Now, Kashkari has been considered polarizing, especially in the area of cryptocurrency and Bitcoin.
This is a man that said in 2021 that he was more optimistic about crypto and Bitcoin than he was five or six years beforehand. So he’s been plugged into this for a long time.
He’s also data focused and tapped into the financial world. So he is someone that investors and Wall Street insiders follow.
And what he said recently could be key to the future of cash itself.
During a fireside chat with business leaders, he was asked about central bank digital currencies, or CBDCs.
And he said that a CBDC would not be able to offer any advantage that money transfer apps like Venmo or PayPal don’t already do.
He characterized talk of CBDCs as “hand waving word salads.”
And then he shared a Financial Times article on Twitter critical of CBDCs. He questioned what actual problem CBDCs could solve.
He noted that nobody has been able to offer a good answer to that question… And he added that the typical response that he hears is that China is getting involved in CBDCs, so other central banks should, too.
But he also cited potential pitfalls of CBDCs.
For instance, he said that a government like China’s could, in theory, use CBDCs to monitor your financial transactions, impose negative interest rates, or directly tax people’s bank accounts.
So what does this mean for you?
Well, Kashkari and others see no need for overlap between CBDCs and the Fed.
And yet, the Fed is unveiling a system very soon called FedNow, which is an instant payment system that could be the foundation for a complete financial and U.S. dollar overhaul.
FedNow’s technology could be a prerequisite for a digital dollar or a CBDC.
And that’s why paying close attention to the Fed’s next move on this and staying one step ahead of any updates can give you an investing advantage.
We’re going to have much more for you on this in the days and months to come.
So stay tuned.
Happy investing, and I will talk to you soon.