Guest Post: “Digital Future”- Just Another Phrase for Keeping Track of the Serfs

Tyler Durden's picture

Submitted by James E. Miller of the Ludwig von Mises Institute of Canada

 “Digital Future”- Just Another Phrase for Keeping Track of the Serfs

Thus one government intervention begets a further government intervention.  Because government has failed in its primary task…politicians ask, in effect, for price and wage fixing; and we are driven toward totalitarian control.

- Henry Hazlitt “What You Should Know About Inflation

Though commenting on the state’s backing of union thuggery, Hazlitt pinpoints one of the essential rules of conduct for public officials.  That is, intervene in private life to appease one wealthy interest group to then create the groundwork for further power grabs with the inevitable disaster which emerges.  Thankfully, blatant usurpation of authority by lawmakers is still frowned upon by many taxpayers.  That’s why, less a case of opportunistic disaster (“you never let a serious crisis go to waste” as lifelong parasite and former ballerina Rahm Emanuel put it), authoritarianism is achieved in small doses.

Can’t be feeding the people too much information on what their money is really being used for, now

At the beginning of April, Canadian Prime Minister Stephen Harper revealed his budget for the fiscal year of 2013.  Contained within the budget, besides the promising feature of axing 12,000 public sector sponges, was the provision where the Royal Mint of Canada is to cease the production of pennies.  The government blames the cost of production for its decision while ignoring the culprit of relentless currency debasement.  As Maple Leaf Metals Exchange founder Chris Horlacher documents:

In the late 1960’s the quarter and dime were ended in the de-facto sense.  Those coins used to be made from 80% or more silver but after the price of silver began to exceed the face value of those coins they were quickly pulled from circulation and replaced by a nickel imposter.  After it became too expensive even to use nickel then the government turned to steel in 1999 in order to continue creating what now amounted to little more than a casino token.

The penny followed a similar trajectory.  It was made from nearly pure copper up until 1996, at which point the government turned to zinc in order to make them.  In only 2 years it could no longer even maintain the zinc penny-standard and has made them out of steel ever since.  Now it’s farewell to even that denomination of currency and for the first time in Canadian history there will no longer be such a thing as 1/100th of a dollar, all transactions will be rounded to the nearest nickel.  Don’t expect that to last very long at this pace.

With the Canadian penny slowly making its way to the dustbin of currency history, the Royal Canadian Mint has its sights set on a new target: tangible, hard money in general.  From the National Post:

Last week, the Mint announced the release of MintChip, a completely digital currency. “Money, as we know it, is fine for today, but tomorrow is a different story,” says an introductory MintChip video. “MintChip is better than cash, since you can use it online.”

MintChip stores value in a physical chip, and transfers money between chips using heavily encrypted “value messages.” The system has no centralized database. “They’re calling it anonymous … their intention is that it’s no more associated with who you are than [traditional] currency,” said Jacqueline Chilton with Glenbrook Partners, a California-based payment consultant.

The trick here is that nothing government does is voluntary.  The forced usage of the Canadian dollar via legal tender laws renders the assertion of “voluntary” laughable.  The Mint claims the chip can be used anonymously but this assurance comes from the institution in cahoots with a central bank that can’t manage a simple metal standard for more than a few decades.  According to the Bank of Canada’s inflation calculator, a basket of goods that cost $100 in 1934 (the year the Bank of Canada was established) costs $1,683.33 today.  That’s a 1,583.33% increase!

Then again, inflation to the benefit of the state and other first receivers of newly printed money was always the objective of the Bank of Canada.  The “lender of last resort” justification was just a euphemism for financing the government’s stranglehold on society.  The banks are guaranteed a liquidity backstop to their risky lending (and subsequent payout of exorbitant executive bonuses) while John Q. Public is squeezed at the gas pump and the grocery store queue.

Central banking has always been about centralized control over what Murray Rothbard referred to as the lifeblood of the economy; the universal medium of exchange known as money.  The real impetus behind the “Mintchip” is not convenience but an insidious desire on the part of the ruling class to assert their dominance over free transactions by forever digitizing their history.  Governments have been waging a war on anonymous business since central banking became the norm.  According to Pace University economist Joseph Salerno, the Federal Reserve has eliminated the issuance of denominations of the paper dollar over $100 since 1945.  As Salerno writes:

This has made large cash transactions extremely inconvenient and has forced the American public to make much greater use than is optimal of electronic-payment methods. Of course, this is precisely the intent of the US government. The purpose of its ongoing breach of long-established laws regarding financial privacy is to make it easier to monitor the economic affairs and abrogate the financial privacy of its citizens, ostensibly to secure their safety from Colombian drug lords, Al Qaeda operatives, and tax cheats and other nefarious white-collar criminals.

Privacy has been sacrificed to ensure fewer transactions go undocumented.  As long as large scale purchases and payments are recorded, the goons at the IRS and tax collection agencies around the world are better able to legally plunder more wealth from the citizenry.  Politicians remain unwilling to let the party come to an end despite economic recession decreasing the amount of tax revenue flowing into their coffers.  Spending money that isn’t theirs is all they know.  Instead of living within their means, they opt for more thievery to keep buying votes.  While the Eurozone crashes and burns due to unsustainable welfare states and lawmakers addicted to profligacy of public funds, both Spain and Italy have put a limit on large cash transactions.  Tax evaders, looking for nothing more than to alleviate the pain of the tax enforcer’s whip, have become the enemy for not ponying up to satisfy the various highway gangs at the local, state, and federal levels of government.

The introduction of the “Mintchip” is really just another extension of the state’s effort to wield supremacy over private affairs.  It is creeping socialism under the guise of efficiency.  But, as anyone familiar with the nature of state understands, government efficiency is an illusion.  As anonymity in free transactions goes, so goes another barrier on further centralized planning.

Lew Rockwell’s rule of thumb follows that anything the government or its apologists in the media claim must be assumed to be an outright lie.  The development of the “Mintchip” for “convenience” is no different.

If the state wanted to save Canadians money, it would relinquish its control over the monetary sphere and put an immediate end to perpetual inflation.  Instead, keeping track of the serfs is the real name of the game.

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GeneMarchbanks's picture

Economics in One Lesson, Muppetz!

This Von Mises addition to ZH is not going mesh well with the re-Feducation.

Vampyroteuthis infernalis's picture

This will result in the following. An alternative currency for black markets. Disabling the chips for use within the black markets. The BOC is just strengthening underground black markets. Maybe that is their goal?

Beam Me Up Scotty's picture

Heavily encrypted my ass.....someone will have the key.  They will figure out a way to steal the money off of your mintchip while you are standing on the sidewalk.  I can't believe people think this stuff is the way to go.

Koffieshop's picture

If someone hacks it, it would just be the cherry on top, but this will fail anyway.
We had something like this pitched to us some time ago here in NL (was called Chipknip). It failed because nobody was using it except in cases where they were forced to use it (like parking garages).

Oh regional Indian's picture

First Sweden, now Canada..... it's not looking good humans. 

Strangely, and this is of course prime predictive programming, the amount of money left on your re-pay mobile phone has always been called currency in India. You always "top-up" your currency.

So now the whole mobile generatiion knows they always have currency in their phone.

Embracing our slavery, sub-humanitchez!

Transhumanism, full bore.



downrodeo's picture

this remiinds me of bitcoin. i don't know from security but those of you more learned than me might find this interesting. if they want digital currency we could potentially give it to them, but lets not let them hold the wheel this time...


its really like everything. competition (usually) creates an environment where the best methods, monopolies breed stagnation. we can't let any one party control everything, be it the Fed or a private bank....  D'oh! /facepalm/


there is only one way that this ends, and that is by putting our energy next to the intent to create motion.



check out the basic framework.

downrodeo's picture

of course... diversification bitchez

MeelionDollerBogus's picture

Vietnam nationalizes all gold production & tries to stop all use of gold as currency - while last year gold as currency was #1!/silverguru22/status/190537797826904064 (David Morgan)

XitSam's picture

It will be cracked in 3 days if not 3 hours. At most, 3 weeks. Criminals and researchers will want to break this one.  Then the government will restrict free speech to "protect" the money. Then the government will need to track all transactions to "ensure" no one takes advantage. Then the IRS, FBI, Secret Service and Homeland Security Investigations will want access to certain transactions to investigate drug dealers (all levels), then access to all transactions to data mine for crimes contrary to Economic Justice. Of course this is wild speculation on my part, this would never happen in America.

Beam Me Up Scotty's picture

Then the health police will see you ate a donut and drank a Mountain Dew this morning and had way more than your fair share of sugar.  And its bad for you too, which will cost the state money.  Off to the re-education camp for you!!

FlyPaper's picture

ORI - Yes, first Sweden.  In 1998 a Kronor was about $.24 cents.  Today its about 13.5 cents.  1/100th of 13.5 cents is so small that it cannot be represented by a fiat coin (which was a tiny plug of aluminum about the size of a pencil eraser).   

Even at 24 cents, a 1/100th coin is of virtually no value.   

The point: it makes perfect sense to eliminate a coin like this.  

Now the Canadians, whose penny is worth about 6x the Swedish "penny" find that the penny is too small to bother with.  I actually agree.  We have "Fiated" our currency to the point where coinage is basically valueless in both Canada and the US.  I'd rather not receive pennies in change.  But I'm also not a business; and pennies do, in fact, add up.





BarberKen19's picture

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Gully Foyle's picture

Id fight Gandhi

Read some Stross or Vinges Rainbows End.

Either way Digital money is the future, get used to it.

Remember the credit card commercial with the guy, kind of a hipster dipshit, wandering through the grocery and just waving his hand in the air as he walks out? Purchase made, no muss no fuss. That set the tone.

I have no real issue with this. The Genpop will be happy and feel safe.

The underbelly will have ways around it and ways to capitalize from it. Big deal.

For those bitching about the loss of privacy, that's inherent with the rise of technology.

What you should fear is  You Have Got To Believe Me software and marketing. Also the potential for technological infection from Memes which literally control your mind.

You want to be safe from the future, give up all your technology and live in the wilderness never coming in contact with anyone.

The next fifty years will scare the shit out of people.

Id fight Gandhi's picture

Well as long as money isn't real at all, perfectly fine with digital so long as I don't have to earn it, pay taxes on it or bills. Just spend.

Saving and earning is for chumps. Just consume

Crisismode's picture

The next FIVE years scare the shit out of me.



Gully Foyle's picture


That's only social shit. Riots and so forth.

Keep your head down, stay away from trouble areas and it will be fine.

It's the nasty promise of technology that scares me.

Once a device or disease is created it needs to be tested.

Imagine some of this shit slipping out like LSD did, or like AIDS.

MeelionDollerBogus's picture

Indeed, lab-on-a-chip & customized diseases evolved by even a back-corner "farmer" can become the new weapon du-jour. It's actually quite funny how many tin-foilers are all about the RFID chips not realizing that DNA-chips will read your serial number right out of you - and you can't remove it. The chip+hand unit are portable of course, but your DNA is YOUR DNA.

MayIMommaDogFace2theBananaPatch's picture

It's actually quite funny how many tin-foilers are all about the RFID chips

Uhh, are you getting that notion from stats at or what?

MeelionDollerBogus's picture

well, literally, microwaving RFID chips with or without tinfoil is being suggested to disable them so... given that almost no one else is mentioning the bio-chips I figured we're down under 0.01 % for alternatives.

fasTTcar's picture

The last five scared the shit out of me.

That is why I became a bullion dealer.

MeelionDollerBogus's picture

I've read Neuromancer, my friend reading over my shoulder's read Rainbow's End too. Doesn't matter.

Digital currency can't be "enforced". You'd need more energy & force to stop barter than is worth the effort. Best to stick to "anonymous" cash units (some digital, not all) to give the illusion of choice. What matters most isn't tracking but inflation. Tracking's for cops. Cops don't run banks. INFLATION is for raping the entire planet. THAT is for banks.

Who's in charge? Banks, not cops, remember?

Gully Foyle's picture


Please, how many fucking people barter now?

More people pay with food stamps than barter. More people pay dope dealers with food stamps than barter with them.

Barter as a trend will only exist on a micro level. There just are not enough people making or growing or creating goods to allow it to v be viable.

Yes there will always be a black market, but it isn't mainstream now is it.

MeelionDollerBogus's picture

Lots of people barter now - I do - and more will. It's a natural consequence to prices being out of whack and/or people actually having goods worth trading. How many people use pawn-shops and flea-markets? Lots. More than you can count. Those same people will happily barter. Check out flea markets, craig's list and kijiji and you'll see barter has no restrictions even culturally much less legally.

The black market will only grow as tyranny does. That's how black markets work. People flat out do not submit and that's before considering the system itself of enforcement collapsing - which it has in history many times before, one of which worth noting is the USSR.

By the way, you can't pay dope dealers in EBT card food stamps which is why they were made. Instead now you can use the EBT to buy goods and barter them to dealers. Which is precisely what happens.

LowProfile's picture

Let's see...

EBT sponge needs dope.  Dealer needs gas for his sweet ride.

So Sponge buys food, which he trades for liquor, which he trades for dope, which Dealer trades for gasoline.

The Circle of Life, Simba!

MayIMommaDogFace2theBananaPatch's picture

We need a new Department of the Federal Government to keep this shit in check!  The Department of Anti-Barter.</sarc>

fxrxexexdxoxmx's picture

Not like the old days. I remember when you could see "rock stars" buying a piece of 5 cent candy with a one dollar food samp bill. Then they would go back through another line and buy another untill they had enough for a hit at the pipe.


LowProfile's picture

I barter ALL. THE. TIME.

Barter is the future Gully, don't fight it.

XitSam's picture

"Digital currency can't be "enforced". You'd need more energy & force to stop barter than is worth the effort."

Oh, sure it can be enforced. This will be the justification for a much bigger police force and fewer rights for the citizens.

MeelionDollerBogus's picture

I'll believe it when I see it. No one can stop me from secretly meeting & using barter, be it coins or toasters, and that's what I mean by enforcement. There's not enough man-power to watch every person and every item to ensure there's no barter deals, nor can every message be decrypted or even intercepted that makes meetings for such arrangements. That's all it takes to beat a digital currency "forced" on the people. The most that can be accomplished is that the government demands its use for taxation.

Unless you devote more than 50% of the population to policing - which is financially unsustainable - you can't even begin to enforce a digital currency using actual force.

XitSam's picture

"Why this citizen never buys a toaster, or food, or tires, never eats out, never buy clothes. Looks like we detected a barterer, guys. Send out IRS SWAT team B-43 and deal with this tax evader harshly. These criminals are destroying the country by avoiding taxes. Caught this one by data mining, so we don't even need to give a cut of the confiscated gold and silver to a neighbor."

MeelionDollerBogus's picture

You'd never know there is such a citizen. Thanks to barter there's no record to trace to even begin to search.

MayIMommaDogFace2theBananaPatch's picture

He's arguing that the ABSENCE of such information would be notable from the perspective of a data-mining-pattern-recognition algo...

The algos can't do the actual enforcement, but certain technologies are advancing in a way that suggests they won't need actual humans to do the enforcement either...

We live in very interesting times.

MeelionDollerBogus's picture

I'm suggesting people evading capture will continue to evade capture. Sure, one or two here & there will be caught but those choosing a lifestyle of freedom, evading a police-state, will find it.

We're the ones inventing the tools, not the government. They can only steal, copy or buy stuff from us, including surveillance technologies.

fxrxexexdxoxmx's picture

We allready got over 50 % of the population not paying taxes. It seems to be working just fine.....

MeelionDollerBogus's picture

50%+ paying taxes & working as cops = I lose

50% not paying taxes & not being cops = I win

sorry if I wasn't clear.

Arnold Ziffel's picture

Hazlett's book, “What You Should Know About Inflation“ is a must read.

Manthong's picture

“inflation to the benefit of the state and other first receivers of newly printed money was always the objective of the Bank of Canada.”

Good thing it’s not like that in the states.

SAT 800's picture

LOL! thanks for the giggle.

TradingJoe's picture

The goons are terrified not knowing how much more money(not theirs) is out there they could get their dirty little fingers on it! pathetic!

morning_glory's picture

Fuck You Bern.... Say what?

exiledbear's picture

Bitcoin. That's all I gotta say.

dwdollar's picture

MintChip is obviously a ploy by the bankstas to counter Bitcoin.

Imagine the bad things about paper and the weaknesses of Bitcoin put together and you have MintChip. Sounds like instant failure.

MeelionDollerBogus's picture

Ya, for sure.

BitCoin is a nice concept but it has no backing. The people mining bitcoins aren't able / willing to back it with something tangible. I could just use pgp / gpg sigs on my own vouchers for gold, car or toasters and other such things in my possession. That would at least have intrinsic value to what is related.

CH1's picture

Dude, BC isn't my ideal, but it works!

That's enough for now.