Welcome to our Friday mailbag edition!

Every week, we receive fantastic questions from your fellow readers. And every Friday, I answer as many as I can.

Before we get to this week’s mailbag questions, I want to put an event I’m hosting next week on your radar…

It’s called Countdown to Chaos, and it’s happening on Wednesday, June 21 at 8 p.m. ET.

Something critical is about to happen in our economy. The situation is so dire, I couldn’t wait to share what’s about to happen.

You see, the greatest threat to the dollar is not China, Russia, or India.

The greatest threat is coming from inside the U.S. – from within our own borders.

And you might’ve guessed it, from the Federal Reserve…

On July 31, the Fed is set to enact a change to our monetary system.

It will give the financial elites unprecedented power over your money. And it will allow them to track every dollar you spend.

The government could easily identify:

  • Who’s spending dollars…

  • What they’re buying…

  • And who they’re buying from…

In other words, it will be the end of the dollar as we know it.

That’s why I’m revealing all the details about the Fed’s plan – or its “final mandate” on the American people – next Wednesday, June 21 at 8 p.m. ET.

I’ll also share with you one little-known asset you can use to protect your portfolio. It’s an “unprogrammable money” – meaning it can’t be manipulated by the Fed. And it has the potential to make your nest egg go up by as much as 50x.

Reserve your spot for my special event with one click here. It’s free to attend.

Now, back to our weekly mailbag…

Up first today, a question from reader Paul on Glint cards, which I talked about in last week’s mailbag edition, and how they’ll function when the Fed’s CBDC rolls out…

I got a Glint card a couple years ago after it was recommended by the Manward Letter. You are only the second analyst I’ve seen to recommend it. I love the idea, but with the emergence of the soon-to-be-implemented CBDC, I have a couple of serious concerns as to how such cards will continue to function as an access channel to our Swiss stored gold.

  1. The Mastercard Glint used in the USA is provided by Sutton Bank, a tiny, eight-branch, regional agriculture bank in one corner of Ohio (who never answers its phone or returns messages). My growing concern is what happens when the small, regional banks get consolidated and absorbed by the big six banks? Will BofA, Wells Fargo, etc. issue new Glint cards or just cancel them, terminating our access to our stored gold?
  2. Beyond that likely scenario, how might we access and spend our gold once the government’s CBDC takes control of all our financial accounts and gives us just one card to use for all purchases?

I realize I’m asking you to speculate here, but please use your deep knowledge of the banking system to give more in-depth thoughts on this important subject.

– Paul B.

Hi Paul, thank you for your kind words and excellent questions. It sounds like you were ahead of the game by using Glint to buy gold through its Mastercard.

I understand your concerns about your card being issued by a small regional bank. These banks have certainly been under pressure lately. And I don’t believe they are all out of the woods yet.

(That’s why I just released a new special report, The 722 Bank Bombshell: Is YOUR Bank Next to Fail? It details seven banks that are at risk of failure. To access it, simply RSVP for my upcoming briefing with one click here… and then upgrade to VIP.)

But, as we saw, the FDIC got involved with the three recent high-profile bank failures – Silicon Valley Bank, Silvergate, and First Republic. And the Federal Reserve created money to cover depositors and provide liquidity to those banks and the broader banking system.

When JPMorgan Chase bought First Republic, it also assumed its assets. This includes its deposits and credit card customers. If you logged into JPMorgan Chase’s website a day later (which I did to check it out), you saw a message saying First Republic was now part of JPM Chase. That message is still there.

It’s important to remember big banks like JPM Chase, Citigroup, Bank of America, and Wells Fargo regularly take over smaller ones. Bank mergers are common. The banking sector as a whole has been actively consolidating for decades.

Plus, large banks are always looking to buy smaller ones. They do this to expand their footprints, assets, and customer bases. They all want to stay ahead of the competition. And they absolutely want to ensure that business continues as usual for the customers they acquire.

That’s because customers – and their assets – are the holy grail of the acquisition itself.

That means if Sutton Bank fails and gets taken over, its customers would remain untouched.

This is because when a bank fails, the FDIC takes over its operations until a new bank acquires it. That includes its credit card business.

Then, the FDIC places that failing bank with the acquiring bank. And that new bank purchases the failing bank’s credit card portfolio.

So, if JPM Chase took over Sutton Bank, then JPM Chase would become the issuer of new credit cards with Glint. It would manage those accounts instead of Sutton Bank.

But Glint users wouldn’t notice any other difference besides getting that new card and any verification instructions.

Also, Mastercard (and other similar companies) is really a payment network processor. It partners with banks that issue Mastercard cards.

Mastercard processes the card transactions on its network. And Mastercard makes money by charging fees to issuers of its cards, or banks. It’s indifferent to where those fees come from.

That means Mastercard owns the payment system. Which is the highway connecting card users to their transactions. The name of a bank on your Mastercard means the bank is renting the Mastercard payment system for a fee and co-branding your card.

Here’s the bottom line…

If a big bank buys Sutton Bank, users would simply receive a new Mastercard from that bank.

The banks would use Mastercard to transfer the cards between each other. All personal account details remain those of the existing cardholder.

And all of the user’s transaction history would be transferred to the new bank. So would the balance information. The user’s gold would remain where it is that whole time.

Now, to your second question about CBDCs: You’re right. We are in speculative territory here.

If all of our bank accounts are converted to CBDC accounts, they would connect directly to the Fed. I’m afraid that means the Fed would be able to see every transaction on those accounts.

The silver lining is that you could still potentially keep your gold separate. Here’s why…

First, the Fed is not set up to deal directly with card providers such as Mastercard. So actually, your credit card activities could be a step removed from the Fed.

Second, the Fed is set up to deal with digital transactions backed by the U.S. dollar… and in the case you mentioned, potentially a digital dollar.

That means: if Mastercard processes your payments related to gold, they would have no direct connection to the Fed. If you “cash in” your gold, though, that transaction could convert your gold to some amount of CBDCs.

All that said, having physical gold in your possession or in a known vault is still a more direct way to hold your gold than a credit or debit card backed by gold.

Now, we’ve said before that the adoption of CBDCs is inevitable…

And the launch of the digital dollar will happen sooner rather than later.

In fact, in the months ahead, the Fed and financial elites are applying drastic changes to our financial system.

They are about to unleash what I call their “final mandate” on the American people. It will give the Fed unprecedented power by converting bank accounts from failed banks into “Fed Accounts.”

It will also give the Fed the ability, for the first time ever, to track every dollar you spend…

That’s why I’m hosting an emergency briefing next Wednesday, June 21 at 8 p.m. ET. During it, I’ll reveal what the Fed has in store for our money… how we can see more bank panic unfold… and what you can do to protect your dollars.

Reserve your spot with one click here.

To help you make the most of my special briefing, I’ve put together a report called The 722 Bank Bombshell: Is YOUR Bank Next to Fail? In it, I detail the next seven banks that are on the brink of failure.

Now, this level of research is usually reserved for my premium subscribers. But because of how critical this situation is, I’m sharing it with all my readers.

To access it for free, just upgrade to VIP when you sign up for my event instantly here.

Next, Liisa wants to know about payment platforms outside of the current banking system…

With the coming change in our monetary system, which account or platform that is outside the current banking system can we use to receive our social security benefits and pay our house and utility payments and expenses? Also, will the money which is currently invested in certificate of deposits (CDs) be automatically transferred to our FedNow account, or should we cash that in now in the middle of the term?

– Liisa O.

Thanks for writing in, Liisa!

As you know, social security benefits in the United States are typically paid through direct deposit into a bank account or by paper check.

As someone who’s looking for platforms outside the current banking system, you might be tempted to switch to a payment service such as PayPal, Venmo, or Cash App. These can receive direct deposits and be used for bill payments.

But as with so many things in life, there’s a catch…

While these fintech platforms may offer a different user experience, they still operate within the framework of the current banking system. In other words, they are not really “outside” the banking system.

It’s a similar story with prepaid debit cards, which you can use to access your benefits. The Direct Express card, for instance, is a type of prepaid card that is not linked to a traditional bank account. If you receive your benefits on a Direct Express card, you can use this card to pay bills and make purchases, similarly to how you would use a debit card.

But even though it’s not linked to a traditional bank account, the card is issued by Comerica Bank on behalf of the U.S. Department of the Treasury. So, Direct Express operates within the existing banking system, too.

I know that some people choose to have their Social Security benefits loaded onto other types of prepaid debit cards. Green Dot and Netspend come to mind. These cards also allow you to pay bills and make purchases, while providing an alternative to traditional banks.

But anyone who thinks that using these services puts them outside the banking system is gravely mistaken… Green Dot, for instance, is a bank itself. Its prepaid cards are financial products that are regulated by banking laws.

Finally, anyone considering prepaid cards has to be mindful of the high fees that come with them. And they should make sure to read the fine print before deciding if it’s the right choice for them.

Now, onto your second query (about FedNow)…

There’s quite a bit of confusion out there about what FedNow will look like and what it will do. So let me clarify a few key concepts here.

As you may recall from previous essays, the Federal Reserve’s new digital payment system will launch in July. The Fed wants FedNow to be recognizable as a payment method.

It’ll be comparable to PayPal, Venmo, and Zelle. And much like them, FedNow will resemble a payment service, not an investment or savings account.

Yes, FedNow will allow businesses and people to send and receive instant payments 24/7, 365 days of the year. What this means in practice is that when they initiate a payment, such as sending money to a friend or paying a bill, that payment will be processed nearly instantaneously, regardless of the time of day or week.

But, as an ordinary person or business, you won’t directly interact with the FedNow system. Instead, you’ll access its real-time benefits through its financial institutions.

As such, any money you’ve invested in CDs will not automatically transfer to a “FedNow account.” This is simply because such end-user accounts will not exist.

In sum, the launch of FedNow won’t directly affect your CD investments. But it will have dire consequences for your money in other ways…

I’m sharing the full details next Wednesday, June 21 at 8 p.m. ET in an emergency briefing. It’s called Countdown to Chaos. In it, I’ll explain why FedNow will give the government direct control over your money. I’ll also discuss one way you can protect your hard-earned dollars.

To reserve your spot with one click, go here.

As for whether you should cash in your CDs now in the middle of their term… please remember that I can’t give personalized advice. But in general, that’s a decision that depends on things like:

  • Financial goals

  • Terms of your CDs (such as penalties for early withdrawal)

  • Your overall investment strategy

FedNow should not be one of them.

In short, FedNow and CDs are different types of financial services. And it doesn’t look like the FedNow launch will affect your CD investments.

But if you’re a client of a bank (or a member of a credit union) and have specific questions about any of this, I’d recommend reaching out to them directly.

And that’s all for this week’s mailbag. Thanks to everyone who wrote in!

If I didn’t get to your question this week, look out for my response in a future Friday mailbag edition.

I do my best to respond to as many of your questions and comments as I can. Just remember, I can’t give personal investment advice.

And if there are any other topics you’d like me to write about, I’d love to hear from you. You can write me at [email protected].

Happy investing… and have a fantastic weekend!

Regards,

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Nomi Prins
Editor, Inside Wall Street with Nomi Prins