The Federal Reserve Considers Digital Currency, Bank Accounts for Every American

HOPE, IDAHO – Are you ready to open your bank account at the Fed?

I’ve been waiting for this news…

This week, the president of the Cleveland Fed, Governor Loretta Mester, gave a speech promoting the idea that every American could be given a bank account at the Federal Reserve.

The Fed could then print digital currency and give it directly to Americans, completely bypassing the banking system and the government.

This would be a form of digital currency, so the Fed could track exactly how and where we spend it… and maybe even attach rules to it such as, “You must spend this within 12 months or it vanishes.”

Mester said the Cleveland Fed has been studying digital currencies and working with MIT to experiment with different technologies. The Boston and New York Feds said they’ve been researching and testing digital currencies, too.

More below.

Up Next: The Ultimate Ski Vacation

Greetings from Jeb and Margaret’s Trailer Haven…

My family and I are a family of travel bums. Two and a half years ago, we sold everything and hit the road with nothing but our passports and a suitcase in tow.

Since then, we’ve been on a series of epic, multi-month homeschooling adventures… including an adventure building a school in Africa, an adventure traveling around Eastern Europe by train, a China adventure, and an India adventure…

Our latest adventure is the Ultimate American Road Trip. We’ve spent the last four-and-a-half months traveling around America with a tent trailer, exploring national parks, sleeping in campgrounds, and “heart surfing” with Postcards readers, as Kate calls it.

This adventure is coming to an end next week, and we’re about to begin our next adventure: the Ultimate Ski Vacation.

We’ve rented a house near a ski resort called Grand Targhee for the winter, and I’ve bought early bird season lift tickets for the whole family. We move into our new house on October 1.

I expect the snow to start falling around Thanksgiving. In the meantime, we need to buy as much cold weather clothing as possible. We also need to buy five sets of skis, bindings, and ski boots… all without spending too much money.

Idaho Trailer Haven

I’m writing to you from the shores of Lake Pend Oreille in northern Idaho, where our friends Art, Mandy, and Janice – all Postcards readers – said we could camp for a couple of nights.

It’s beautiful here and we’ve had a great time swimming in the lake and using the community hall to do our schoolwork. Tonight, we all went out to get pizza together. Here we are…

Tomorrow, we hit the road again. First, we’re going to drive up to the Canadian border. They won’t let us cross the border because of COVID-19, but at least we’ll go up there, take a picture, and then turn around.

Then we head to Glacier National Park, where we’re going to camp for a couple of nights in our tent.

It can get cold in Glacier at this time of year and we may even see some snow. Hopefully, the weather stays warm for us. After Glacier, we’ll head south to our new home in Driggs…

The Fed Is Out of Bullets

Going back to our Fed story up top, the central bank is out of bullets.

Interest rates are at zero. There’s nothing more the Fed can do except maybe jawbone the market with some strong language and aggressive speeches, as it did last week. Therefore, the onus for further economic stimulus is now on Congress.

Congress will use the Fed’s money printer to introduce big infrastructure bills, send out checks, give money to small businesses, forgive student loans, etc. Let’s call this “fiscal stimulus presiding over monetary stimulus.”

In other words, the lumps now have control of the printing press. Having a direct method to print money and give it to Americans via an account at the central bank is the logical next step in this process of socializing America’s wealth and prosperity.

This represents the next and final stage of the “great financial experiment.”

It’s also how inflation starts.

Expect the real yield on fixed income investments to start falling and, in many cases, go sharply negative. Expect the velocity of money to start rising. Expect to read about more foreign governments reserving in gold instead of Treasury bonds.

And let’s keep watching the Fed’s balance sheet. It’s the best measure of how aggressive Congress is “printing and spending.”

When will it end? When the currency vigilantes show up… and we get the global synchronized currency devaluation I’ve been calling for in these postcards. But that still seems to be a long way off…

Only One Way Out of the Madness

As regular Postcards readers know, I want nothing to do with this madness. That’s why, in 2018, Kate and I left the financial system. We’re sitting on the sidelines in gold until it’s safe to return to the system.

Now, if you’ve been watching the price of gold, you’ve noticed it’s down nearly 10% from its peak eight weeks ago. Gold has had so many false starts over the last decade that many gold investors – especially gold investors that are new to this space – will either sell too early or try to trade the corrections.

I made this mistake when I first went “all in” in gold in 2002. Rather than simply figuring out what to buy and then holding it for the duration of the bull market, I tried to trade the fluctuations. I ended up missing out on hundreds of thousands of potential gains.

As I’ve said many times in these postcards, “the key is in the sitting.”

We are in a new gold bull market and this time, nothing will shake me off my position, especially not a little correction like we’re seeing now.

– Tom Dyson

P.S. I bet nearly $1 million of my own money on this. My minimum target for gold remains $10,000 an ounce over the next 5-10 years. What’s the best way to play it? I explain in this video…

Like what you’re reading? Send your thoughts to [email protected].

One reader recommends a new book series for the Dyson family… while another reader wonders what to do when it comes time to sell their physical gold… and one is heeding Tom’s advice to buy gold stocks…

Reader question: Hello Tom and family, have you heard of the Uncle Eric book series, by Richard Maybury? The publisher is Bluestocking Press. Excellent source of economics and history lessons for your children and yourself. Enjoy the rest of your stay in the U.S… Arizona is pretty appealing in the winter.

Tom’s response: I know these books well. I own the entire set and I have read all of them. I tried introducing them to the boys earlier this year but I found they weren’t quite ready for them yet. I’d say they’re more appropriate for teenagers. Our kids are still pre-teens.

Reader question: I feel really dumb asking, but when the time comes to turn the gold/silver back into currency (assuming there IS a currency), or stocks or houses, etc., where and/or how do I accomplish that transaction? I have a reliable coin dealer locally – do I unhide my horde and take it to him? An online broker? Online dealer?

Tom’s response: When the time comes, consider your different options and go with whatever will raise the greatest amount of cash. A reliable local coin dealer might be a very valuable asset in the future.

Reader comment: You seem somewhat conflicted, lingering in Idaho and still hoping to cross into Canada while planning to bunker down in the Idaho mountains for the winter months, yet still proclaiming your desire to return to England to care for your mum there.

That would seem to obviate the attempt to enter Canada, whether now or in the spring, and makes me wonder if you’ve thought your plans through. I understand the allure of free travel such as you’ve been doing, and how difficult it can be to call a halt to your adventures.

Just a word of caution, though: A couple years later I saw the movie “Easy Rider.” I came away remarking to myself how the movie was set along the southern states, but that those events could just as well have occurred there in that Idaho panhandle.

If you insist on wintering over, find yourself a temperate valley. The sun is moving away from the Earth in its orbit, sunspot activity is at a minimum, and the Russian model indicates we’re entering a generation or more of colder temperatures. A temperate valley might not be your optimal location this winter. Some are predicting a year without summer within the next few years.

Tom’s response: No conflict. Canada is out. They don’t want us there. But we’ll still drive up to the border crossing anyway. We’re going to spend the winter in Driggs, Idaho. It’s all settled. We’ve even signed a contract to rent a place there. And then in the spring, when the snow starts melting, we’ll head to London to take care of my mother.

Reader comment: Hi Tom and Family, I’m 71, still working as a courier, and am broke. Bad news, I know. I have an old Roth, worth less than I invested, years ago, with TD Ameritrade. I bought a variety of pot stocks when the pot seemed to be opening up for legality and growth. A few doubled and I sold, buying some GE, great until the 737 and COVID! Most have fallen to almost zero.

I had a gold stock which went nowhere for years, then joined with another, which also went nowhere! It bounced up and down until the middle of May, when it actually started to climb! It was probably about then that I started reading Postcards regularly. Tonight, I realized that in the Roth, its gain is 50.71% since purchase! With a lack of income to purchase gold, I finally realized that selling the pot stocks tonight and purchasing more gold stocks tomorrow would be an excellent way to take your advice!

Meanwhile, one reader offers a resource for Tom and his mum in the UK… and others leave kind words for the Dysons…

Reader comment: Really sorry that your mum has Parkinson’s. She may already be a member, but if not, I would recommend she and you become members of Parkinson’s UK. Besides funding research projects, they offer various sorts of support and ideas to help people cope with this terrible condition.

Don’t worry if she is not one to join in with groups. It’s not necessary. However, it is possible that the local group might offer exercise classes, which have proved to be very therapeutic. I am the treasurer (volunteer) of our local group and have seen the benefits to our members. Please get in touch if you need any further information. My best wishes to you and your mum, and hope things aren’t too tough for you.

Reader comment: Welcome to northern Idaho. I’m 30 miles from you. Sorry the smoke is obscuring some of the beautiful mountain vistas. I enjoy your posts and send hugs to you all.

Reader comment: We have crossed paths several times, on the train in China, and when you recently passed through Bozeman (where we live when not in Florida). Sandpoint isn’t far from our secret piece of land we have on the Yaak River. Am reading your post here in Big Sky which, together with locally owned Bridger Bowl outside Bozeman, are my favorites. A lot of different viewpoints are tolerated here in Montana.

Reader comment: Have you ever heard of the radio program “Letter from America”? It started on March 24, 1946 and was written by Alistair Cooke. He kept it up until not long before his death in 2004. The letters were written to the BBC – he was a BBC correspondent who fell in love with America (USA). If you have never heard of him, I suggest you start listening! I’ll leave it at that.

I started to understand what he was talking about when I visited Washington, D.C. and Virginia a few years ago. I have now got the bug and your letters are not helping! Your letters have a similar passion and sensitivity for the real country and people of your… yes, great nation. Well done. Keep up the strength and integrity. Thanks so much.

Reader comment: Your Postcards are great … and your photography is way above average. The photos are worth a thousand words. I wish all of you a warm and happy winter.

Tom’s note: Thank you for your messages! Please keep writing us at [email protected].