Governments Will Always Try to Control Your Money: Pippa Malmgren - Bitsonline

Governments Will Always Try to Control Your Money: Pippa Malmgren

Dr. Pippa Malmgren, the best selling author of Signals and renowned trend spotter, has recently turned her focus to blockchain. She posits that the technology will enable governments to destroy the black market and bring about the “re-denomination of your entire life”.

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The economic policy analyst and former advisor to President Obama doesn’t shy away from the future as she sees it. While most Bitcoin supporters see the wider adoption of blockchain technology largely as a positive, Dr. Malmgren sees a more dystopian future where governments of the world use the technology to corral citizens into a re-denominated, trackable monetary system.

Upon inception, cash would be involuntarily exchanged for a nationalized digital currency, giving authorities the ability “to tax transactions at the exact moment they occur”.

“We too will wake up one morning to find that we no longer use “cash”. Instead, we’ll all have electronic money and blockchain. Yes, we already know that this is the name of the new system of money and accounting.”

Suite of Surveillance Technologies

Combined with “ubiquitous CCTV”, facial recognition, RFID chips and the data given out by IoT appliances, governments will have a “constant, real time record of your activities”. This would make any kind of black market transaction harder to hide, contrary to popular opinion.

A ‘private blockchain’ would enable governments to discover sources of funds, potentially block payments arbitrarily and most importantly, provide a much needed boost in tax receipts.

Malmgren: Governments Face Massive Debt and Unfunded Liabilities

Pippa Malmgren
Dr. Pippa Malmgren

Governments around the world are struggling under massive debt loads and increasingly unfunded liabilities. Malmgren sees these latter shortcomings, a by-product of the financial crisis and the promises made to the Boomer generation, as providing the catalyst for the re-denomination of the current money and accounting system — something last seen back in 18th Century England.

At the time the British were faced with unpayable war debts and so came up with what Malmgren calls a “clever idea”: they decided the convert the wealth of the population, accounted for by the use of “tally sticks”, into a new form of money called “cash”.

Tally sticks were used as a kind of physical ledger where the borrower kept the “short end of the stick” and the lender kept the longer part as “stock”. The system had been developed by King Henry in 1100 and lasted until 1783, when it was phased out.

The population did not welcome the change into cash however, so eventually the British simply confiscated tally sticks and burnt them in a ceremonial fire that famously ended up burning down the British Parliament.

Previous Moves to Abolish Gold, Cash Savings

Many question if this could be repeated today, such is the reliance on cash by the world’s unbanked population. Most people remember that FDR notoriously confiscated gold holdings in 1933, while Malmgren cites the more recent example of India, where Prime Minister Modi last year declared all 500 and 1000 rupee notes illegal almost overnight.

The disruption was severe but after a few weeks the situation in India had calmed down. Malmgren sees this as an example that governments will learn from — that 1 billion people were taken off cash relatively easily, in a short timeframe. The next instance may be the complete banning of cash in a western democracy, replaced by a blockchain system.

Bitcoin supporters will object and argue that the Bitcoin blockchain is a more trustworthy option than any .gov coin, and that it affords savvy users degrees of privacy. However Malmgren knows no government will risk losing power or control over their currency, be that in the form of Bitcoin or anything else.

This is the way many influential economists see the future of Bitcoin. Author and Bitcoin skeptic James Rickards believes in the ‘blockchain not bitcoin’ meme and he envisions the Bitcoin blockchain being the undoing of many bitcoin holders, Al Capone style, as the IRS begins asking US residents for the public address of any bitcoin holding, under threat of perjury.

It certainly will make for an interesting next few years in the cryptocurrency space. As the total market cap explodes higher, so too does both the influence of major holders and the propensity for governments to enact regulation. If they do, then Bitcoin may face its long awaited final battle — government.

Will the government ever permit a form of money it doesn’t control? Let’s hear your thoughts.


Images via Pixabay, Twitter

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