Central Bank Digital Currency pilots
The European Central Bank launched the digital euro preparation phase in November 2023, targeting a possible launch in 2027 or 2028. The People's Bank of China's e-CNY has been in pilot use since 2020 and has processed trillions of yuan in transactions. The Bank of England and the Fed have issued research papers on potential central bank digital currencies (CBDCs). The technical architecture of CBDCs allows for programmability — money that can have expiration dates, conditional usage rules, or negative interest rates applied directly to consumer balances. Critics note that CBDCs make every future form of debasement easier to implement than any previous technology has ever allowed.
A CBDC with an expiration date is functionally a negative interest rate applied to cash. A CBDC with a conditional spending rule (e.g., 'cannot be used on luxury goods') is a form of capital control. A CBDC with an automatic inflation adjustment (e.g., balances shrink by 2 percent per year) is debasement as a feature rather than a policy choice. None of these capabilities exist with paper cash or traditional bank deposits.
07 · Stealth Printing
In November 2008, the Federal Reserve launched Quantitative Easing — the purchase of long-dated Treasury and mortgage securities with newly-created reserves. It was, mechanically, money-printing. Politically, it was called 'unconventional monetary policy.' The innovation was not the printing; central banks had been doing that for three centuries. The innovation was that the printing became invisible to most people — the new money entered the financial system through bond purchases rather than fiscal deficits, and its effects showed up in asset prices rather than in consumer goods. Alongside QE, central banks have developed a toolkit of yield-curve control, reverse repo operations, currency swap lines, and measurement adjustments to the inflation indices themselves. The era's thesis: debasement still happens; it's just harder to see.
Read the full era →- Nov 25, 2008Federal Reserve launches QE1
- Sep 21, 2011Operation Twist — maturity manipulation
- Apr 4, 2013Bank of Japan launches QQE
- Jan 29, 2016BOJ introduces Yield Curve Control
- Mar 23, 2020Fed announces 'unlimited' QE for COVID
- 1996 — 2023CPI hedonic adjustments and substitution
- 2018 — presentTurkish lira collapse — rate cuts into inflation
- Sep 23 — Oct 14, 2022UK gilt market crisis