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I was Wrong About CBDCs: Here’s Why I Changed My Mind


Central bank digital currencies (CBDCs) have been a hot topic in the financial world lately, with many experts discussing their potential impact on the economy.

In a recent video, financial expert George Gammon discusses his previous beliefs about CBDCs and shares a new perspective.

Gammon begins by clarifying what a CBDC really is. He explains that it is not a new currency but rather a consolidated ledger system. He used the example of a euro and a dollar, explaining that they are really just numbers on a ledger.

Gammon then addresses his previous beliefs about CBDCs, saying that he had been wrong about them all along.

He had believed that to have a CBDC, deposits would have to be moved to the Federal Reserve's balance sheet. However, he now realizes that this is not necessarily the case.

Gammon then discusses the fact that it is almost impossible to find out who owns the Federal Reserve.

He explains that the top eight stockholders of the New York Fed in 1983, in order from largest to smallest, were Citibank, Chase Manhattan, Morgan, Guaranty Trust, Chemical Bank, Manufacturers Hanover Trust, Bankers Trust Company, National Bank of North America, and Bank of New York.

These banks owned about 63% of the New York Fed's outstanding stock.

The JP Morgan-building in New York city
The JP Morgan-building in New York city

Gammon then fast-forwards to the present day, pointing out that JP Morgan is now the largest bank in the US and most likely owns the majority of the Fed.

He goes on to discuss JP Morgan's recent acquisition of First Republic, which was the biggest US bank failure since 2008.

Gammon explains that the Federal Deposit Insurance Corporation (FDIC) agreed to absorb most of the losses from the acquisition. This means that JP Morgan is effectively borrowing all of the money from the taxpayers.

Gammon points out that JP Morgan is also booking a one-time gain of $2.6 billion and expects to spend $2 billion on integrated costs.

Furthermore, the acquisition will add over $500 million of profit annually to JP Morgan.

Gammon then makes the point that if there were only two banks in the US, the Fed, and JP Morgan, JP Morgan would effectively own 100% of the shares of the Fed.

He compares this to Gosbank, which was the official bank of the USSR from 1922 to 1991.

Gosbank USSR
Gosbank USSR

Gammon explains that all individuals, businesses, and entities in Russia had an account with Gosbank, which allowed the bank to monitor all the transactions that were occurring daily in the economy.

Gosbank could issue credit and interest rates to those with the best social score or the most favor with the government.

Gammon concludes by stating that CBDCs are nothing new and that all the concerns that people have about them were already present in Russia in 1922.

He argues that you don't need a digital currency. All you need is everything on one ledger, which could be the Fed or JP Morgan.

Gammon also makes the point that if there is only one bank, there is no need for assets because there is no one to transfer the liabilities to.

In conclusion, George Gammon provides a new perspective on CBDCs and explains that they are not as new as people may think.

He also highlights the potential dangers of having a consolidated ledger system, which can allow the government or a bank to monitor every transaction in the economy and issue credit and interest rates to those who have the most favor with them.