Quote:BRAZIL’S CENTRAL BANK DIGITAL CURRENCY CODE HAS SOME INTRIGUING...

July 17, 2023 / Joseph P. Farrell

But beyond the entertainment there were some stories of far meatier content and consequence this week, and one of them we need to address right up front, because it's a kind of "we told you so" moment.

Brazil’s CBDC pilot code reveals ability to freeze and reduce funds

Ever since the emergence of so-called digital "Crypto-'currencies'", I along with many others including our friend and colleague Catherine Austin Fitts have been warning that crypto-currencies, especially if they become the basis of central bank digital currencies, are (1) not secure, since no cyber system ever really is, and (2) not currencies at all, but corporate coupons (at best), whose value can be manipulated at will by the programmer, and (3) not only whose value can be manipulated, but can be completely turned off or on, or made subject to a "time limit" (spend it or lose it), thus making it impossible to accumulate wealth for yourself or your children and grandchildren. They are, to be blunt but completely honest about it, merely a means of social control and engineering. As far as the so-called security of cyrpto-currencies goes, I need only remind the reader of the initial claims for blockchains and distributed ledgers. At last (!) we were assured, there is something entirely safe and entirely out of the hands of the central banksters.

...until the stories of hacked cryptos finally emerged.

Well, Brazil's central bank has revealed the code for its proposed central bank digital currency, and guess what?

Quote:Blockchain developer Pedro Magalhães claims that he has successfully reverse-engineered the source code of Brazil’s pilot central bank digital currency (CBDC). He revealed the existence of functions that empower a central authority to freeze funds or reduce balances.

While concerns over such capabilities have been raised, the developer argues that there could be certain situations where these functions might prove beneficial.

On July 6, the Banco Central do Brazil published the source code of the digital Brazilian real pilot project on the GitHub portal, emphasizing that it was solely intended for testing purposes and subject to potential modifications.

Pedro Magalhães, a noted blockchain developer and founder of tech consulting firm Iora Labs, announced later that he had successfully “reverse-engineered” the open-source code, exposing various functions. These included freezing and unfreezing accounts, adjusting balances, transferring currency between addresses, and generating or eliminating digital real from specific addresses.

Magalhães pointed out that the code lacked explicit specifications regarding the circumstances under which the tokens could be frozen and, more crucially, who possesses the authority to execute such actions.

The blockchain dev expressed concerns about an institution unilaterally freezing a user’s balance, highlighting the stark contrast between executing decentralized finance operations and granting an institution the power to freeze funds.

So there it is folks, our warnings are no longer mere speculation or hypothesis, they are a beta-test reality.
And they're a sure  and certain one-way ticket to a serfdom and slavery far more total and all-encompassing than anything yet seen in human history, one with all the ham-fisted grace and compassion of the tax man and the high-pitched precision of a dentist's drill, for you'll note that the capabilities as listed could be narrowly tailored to an individual, or broadened to incorporate whole (uncooperative) regions and their populations.  And neither Ms. Fitts nor I are the only ones trying to sound a warning:



Leo Hohmann


In this context it is worth mentioning that Brazil is, of course, a "BRICS" nation, one of the original "big four" of the loose cooperative economic alliance of Brazil, Russia, India, and China, and now, South Africa and many others. Most of the Big BRICS Four have already concluded various bilateral currency agreements allowing them to buy each other's commodities and clear their transactions in each other's currencies, bypassing the dollar completely.

Bear this little bit of news in mind, when you read this Wednesday's blog about the upcoming BRICS summit in August...

In the meantime, I repeat my oft-repeated warnings: any genuine currency is always, first, foremost, and finally, a physical medium of exchange, even blips on a bank's computer ledger are, because they are subject to that all important rule of convertibility: the blips can be traded for a piece of paper which in turn can be used to conduct transactions. Even better if that piece of paper can be converted into a tangible amount of silver or gold, and if that silver or gold can be used to conduct transactions. Any functional monetary system has, as one of its salient features, redundancy and convertability between different forms of money.  A cashless system of digital "currency" is none of these things. It's a title deed to you...

Quote:THE AUGUST BRICS SUMMIT: A GOLD-BACKED CURRENCY? OR JUST A FANCY

July 19, 2023 / Joseph P. Farrell

Just this last Monday, you'll recall, I blogged about Brazil's Central Bank's Digital Currency code, which apparently had a few key "features", features that I and others have been trying to warn about for some time(see Monday's blog, "Brazil's Central Bank Digital Currency Code has some Intriguing "Features").

But that code is being rolled out in the context of the upcoming BRICS summit just next month, for which Russia made an announcement which, if you were watching only the American or the West's propatainment "media", you'd learn absolutely nothing, because they simply somehow "forgot" to mention it. It's an announcement with huge financial and geopolitical significance (our thanks to E.G. for spotting and sharing this version of that story):

The bell tolls for fiat

Note these important statements from the beginning of the article:

Quote:The importance of Russia’s announcement that a new gold-backed trade currency is on the BRICS meeting agenda for August 22—24 in Johannesburg seems to have gone completely over everyone’s heads, with mainstream media not even reporting it. 

This is a mistake. China and Russia know that if they are to succeed in removing the dollar from their sphere of influence, they have to come up with a better alternative. They also know they have to consolidate their trade partners into a formidable bloc, so plans are afoot to consolidate BRICS, the Shanghai Cooperation Organisation, and the Eurasian Economic Union along with those nations who wish to join in. It will be a super-group embracing most of Asia (including the Middle East), Africa, and Latin America.

The groundwork for the new currency has been laid by Sergei Glazyev and is considerably more advanced than generally realised.

This article explains why Russia and China are now prepared to fully back Glazyev’s expanded project. For Russia, it is also now imperative to destabilise the dollar as a deliberate escalation of the financial war against America and NATO. China’s priority is no longer to protect her export trade, but to ensure that her African and Latin American suppliers are not destabilised by higher dollar interest rates.

Additionally, the article contains a very helpful detailed historical review of how we came to this point. For our purposes here, I want to focus on these statements:

Quote:Since the western alliance’s sanctions, the signals coming out of Moscow have been clear: Sergei Glazyev, who is Putin’s point-man for macroeconomic policy has been waving the gold flag since then in plain sight. As a board member of the Eurasian Economic Union Commission (EAEU) since 2019, he was tasked by Putin to design a trade settlement currency for the EAEU. The initial statement through a news agency in Bishkek in early March 2022 reported that it was to be based on the currencies of the member states and a basket of undefined commodities. According to Glazyev, his brief was to create a Eurasian monetary and financial system to the exclusion of foreign currencies, particularly the dollar and euro.
 
The intention was also to remove exchange controls for cross- border settlements within the Eurasian membership, replacing the dollar as the commonly used settlement medium between them. A week later, in an article for Goldmoney[ii] I concluded that as stated the new currency would not work, and the only logical solution was to do away with the currency basket proposal and use gold backing solely to represent commodities. That way, it would be easy for other nations in the Shanghai Cooperation Organisation (SCO) to join in, which was the ultimate objective from the outset.

In July 2022, Glazyev was behind a move to beef up the Moscow gold exchange, the official line being that having been sanctioned from the London market Russian miners needed a more effective local market. But working in conjunction with the Shanghai Gold Exchange this was an important signal about the way Galzyev’s monetary thinking was developing. Confirmation came on 27 December last year, when he wrote an article for Vedomosti, a Moscow business paper, describing why the rouble needed to return to a gold standard. That article was co-written by his deputy on the EAEU committee designing the new trade currency and was a thinly veiled indication of the committee’s view. 

Therefore, you did not have to be particularly astute to discern the trail of clues presented to us. We could assume with justification that gold was intended to be the sheet-anchor for this new currency probably from the outset, but some political hoops had to be jumped through to convince the EAEU member states that it was the solution. 

The impracticality of basing a new trade currency on anything else other than gold had been established. It now turns out that this project is almost certainly a Trojan horse for something far larger. It was obvious that other members of the Shanghai Cooperation Organisation should be able to join in, and now it turns out that the invitation is being extended to members of the BRICS club as well. But that’s not all. The entire membership of the SCO, its dialog partners, and associate members will be attending the BRICS conference in Johannesburg on 22—24 August. I am assuming that the original list of 36 nations, which according to most recent reports has expanded to 41, includes the members of the EAEU who were not on the original list — at the time of writing this is yet to be confirmed.

That being the case, the BRICS currency project is not a cold start and not something to be planned for a distant future. The groundwork has already been prepared by Glazyev and the structure can be rapidly assembled once the necessary resolution is adopted. It is even possible that the necessary institution(s) exist waiting to be deployed.  (Emphasis added)

You can bet your bottom dollar (if anyone will accept it) that the institutional infrastructure has already been planned out, for the very simple reason that neither Mr. Putin nor Mr. Glazyev are anyone's fools. The United States weaponized the dollar and the entire western financial system, and Russia and the rest of the BRICS nations have replied by creating an entirely new financial structure.

So how does all of this fit in with Monday's story about Brazil's central bank digital currency?

Very simply, it means that the BRICS nations are at a crossroads, and how they choose and what safeguards they build into that gold-backed system will determine whether or not their proposed currency is a real alternative to the weaponized dollar, or merely another version of financial servitude. If they erect a system where there is a real physical medium of exchange that consists of bearer-on-demand certificates of deposit  that are genuinely convertible by anyone, nation-state or individual, into real physical gold upon demand, and if gold itself can be used directly to make purchases and clear transactions, then the system will be robust and, over some time will with either gradual or sudden swiftness replace the dollar.  But if it is just another scheme to get everyone on board with a "digital 'currency'" that purports to be gold-backed without such convertibility and physical medium of exchange, it's just another Potemkin village with the yellow luster of gold as the lure. The latter may indeed be the ultimate goal, but even in that case, there will have to be a transition period where such convertibility is used to generate the trust in the final, cashless - and ultimately goldless - system. Indeed, a "gold-backed" central bank digital "currency" is just another way for central banks to put their fingers on the assaying scales.  In short, my warning here is exactly the same as my warning about those American states that are also talking about the idea of "gold-backed" crypto-"currencies":  without a real bearer-on-demand physical medium of exchange, and without real convertibility or the ability to use physical bullion in transactions, it's all talk. Fancy talk, to be sure, but still just talk.

We'll see what Mssrs. Glazyev, Lavrov, and Putin have in mind.  I for one think it would be hazardous in the extreme to underestimate him. If I can see the problems with gold-backed crypto, he can too, and he may have some surprises in store to be revealed at that summit.  At this juncture, my caveats notwithstanding, it would be foolhardy hubris and incompetence on the order of a Bai Den Dzho to bet against him.

Quote:THE BRICS’ NATIONS’ STRANGE BEIJING DECLARATION FROM LAST

July 24, 2023 / Joseph P. Farrell

So today's high octane speculation is really not my own.

With that, here's the article:

XIV BRICS Summit Beijing Declaration [Chinese gov link in English]

The declaration for the most part is, as one can tell from reading it, the usual and most-self-congratulatory boilerplate that such declarations coming out of international conferences tend to be. There are, however, a couple of intriguing "linguistic ambiguities" that make one wonder. The first of these (not pointed out by our anonymous article contributor) is the unusual language concerning the United Nations organization:

Quote:5. We reiterate our commitment to multilateralism through upholding  international law, including the purposes and principles enshrined in  the Charter of the United Nations as its indispensable cornerstone, and  to the central role of the United Nations in an international system in  which sovereign states cooperate to maintain peace and security, advance  sustainable development, ensure the promotion and protection of  democracy, human rights and fundamental freedoms for all, and promoting  cooperation based on the spirit of mutual respect, justice and equality.

6. Recalling the BRICS Joint Statement on Strengthening and Reforming the Multilateral System adopted by our Foreign Ministers in 2021 and the principles outlined therein, we agree that the task of strengthening and reforming multilateral system encompasses the following:

• Making instruments of global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least developed countries, especially in Africa, in global decision-making processes and structures and make it better attuned to contemporary realities;
  

Translation: no way in hell we're going to allow the United Nations organization to transmute into a global government and give up our national sovereignty, and any view of using it to impose the old Western imperialism on Africa in a new guise is not acceptable. This is hightlighted by the later statement that the BRICS nations agree that the UN Security Council has the sole authority to level sanctions... take that, USA...

Beyond the usual double-talk of such boilerplate, however, there are a number of very peculiar parts of this document that relate to space. Consider the following paragraphs (and I have reversed the order of their appearance):

Quote:58. We welcome the establishment of the BRICS Joint Committee on Space Cooperation in line with the Agreement on Cooperation on BRICS Remote Sensing Satellite Constellation and the convening of the first joint committee meeting. We are satisfied with the formulation of working procedures for data exchange and joint observation of the BRICS Remote Sensing Satellite Constellation and appreciate the commissioning of data sharing and exchange of the constellation. We encourage BRICS space  authorities to continue to effectively utilize the capacity of the Constellation, and to widely promote application with data of the Constellation, aimed at facilitating the sustainable development of BRICS countries.

29. We call for strengthening the system of arms control, disarmament and non-proliferation, including the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction (BTWC) and the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction (CWC), and for preserving their integrity and effectiveness to maintain global stability and international peace and security. We underline the need to comply with and strengthen the BTWC, including by adopting a legally binding Protocol to the Convention that provides for, inter alia, an efficient  verification mechanism. We reassert our support for ensuring the long-term sustainability of outer space activities and prevention of an  arms race in outer space (PAROS) and of its weaponization, including  through negotiations to adopt a relevant legally binding multilateral  instrument. We recognize the value of the updated Draft Treaty on the  Prevention of the Placement of Weapons in Outer Space, the Threat or Use  of Force against Outer Space Objects (PPWT) submitted to the Conference on Disarmament in 2014. We stress that practical Transparency and Confidence-Building Measures (TCBMs), may also contribute to PAROS. (Emphasis added)

Now, as our anonymous contributor put it in the email accompanying the article, notice the reference to the use of force against "Outer Space Objects" and that the Brics nations are against this.  As our anonymous contributor noted, one does not use force against certain types of objects, like sand, or water, or forests, or even, to use another example from the context of the declaration itself, "remote sensing satellite constellations", which could certainly qualify as "objects" against which one might under certain circumstances use force, which, again, the BRICS nations in this declaration are against.

So let's extend our anonymous contributor's high octane speculations: why even mention such a thing? One answer is that, in 2022 when this declaration was made, the USA had already begun its strange media campaign of releasing its films and videos of "objects" in space, films very obviously - if not doctored or made up in a Disney studio - the result of military aircraft  gun camera footage. That idea alone implies military responses - "force" - perhaps being used against these things - or "objects".  A further context to this potential "war in space against 'objects'" is the strange remarks of President Ronald Reagan that Mr. Gorbachev subsequently revealed that Mr. Reagan had made to him. Basically Mr. Reagan's question was, "If ET attacks us, will you help us?" to which Mr. Gorbachev informed us that he had responded to Mr. Reagan's strange inquiry with a resolute affirmative.

So the BRICS declaration of 2022 actually poses a huge change on the part of one of those parties to Mr. Reagan's query, and therefore on the part of the BRICS nations of which it is a part: Russia. If the USA is shooting at someone out there, the BRICS declaration to which Russia is signatory is tantamount to saying "You're on your own..."

So the questions are, what changed, and when did it change, and why? In answer to that question, join me in crawling even further out on the end of the high octane speculation twig, and recall for further potentially relevant context the strange remarks made by Russian leader Dmitri Medvedev a month before the Chelyabinsk meteor incident, calling for an international effort to construct an "asteroid defense system," and his additional statement that if no one joined Russia in the effort, Russia would just have to do so itself. Questioned as to how Russia would defend against asteroids, Mr. Medvedev stated that Russia could perhaps use its many strategic nuclear missiles, and then cryptically mentioned "other means" which were left conveniently unspecified. Or consider Mr. Trump's strange remarks during his administration about needing "another" space force, and his equally strange remarks about other types of weapons beyond nuclear that no one would believe.

In other words, the 2022 BRICS declaration shows us something that, unless you're paying close attention, you might miss: it's showing us a rift among the space powers of the world regarding "objects in space", one side apparently confronting them with force, and the other saying to the first "you're on your own," and kuddos to our anonymous article donor for spotting it. So, again the questions are, what changed, when did it change, and why?

And that, good readers, is not a rhetorical question.  It may, indeed, be the most pressing geopolitical, and perhaps even spatiopolitical, question.