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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hazek's picture

I'm sorry to burst your bubble but nothing backs gold either.

It's worth comes from it's utility and same goes for Bitcoin. Unless you know something I don't, there is no cheaper way to send money instantly across the world with super low costs and without the need to give up all your personal information, name, address, birth date, even fking dogs name before you're payment is processed AND to top it off it's a new currency that has a built in practically impossible to reverse scarcity.

Just like gold through it's properties attained value, so do bitcoins. Econ 101.

Paul Atreides's picture

The value of gold comes from the thousands of hours and it takes to survey, find, mine and refine the metal. Having a store of that labour combined with its rarity gives it intrinsic value. Obviously you never took Econ 101...

hazek's picture

Are you saying that what you just described aren't the properties of gold? (naturally a rhetorical question)


Btw it takes thousands of hours, years even in some cases, to burn electricity which costs money (labor) on a computer you had to spend money(labor) to buy while it's connected to the internet which also costs money(labor), trying to solve a mathematical puzzle in order to be able to receive new bitcoins as a reward for fiding a solution. Having a store of that labor combined with its rarity and other valuable properties gives it intrinsic value. Obviously you never took Econ 101...

Paul Atreides's picture

I am aware of this, having both a mathematical and IT background I was actually considering setting up a few GPU based bitcoin miners but alas it is not real, it exists as 1's and 0's on a computer pier to pier network. All one has do to is take away electricity and/or the internet (solar flare, war, government clamp down) and bitcoins become useless and without value.

hazek's picture

So does the whole internet industry. If a doomsday scenario is the only thing that destroys Bitcoin, I'm fine with taking that risk for holding part of my wealth denominated in bitcoins.


Btw if you were aware of the labor it took to get new bitcoins, why then would you make a post telling me I'm clueless about econ 101 and spread misinformation about Bitcoin? Are you trolling me?

corxi's picture

I see exactly your point, and I agree with you. The concept of BC is sound. But it's not tangible, I can't hold a bitcoin in my hand (unless you define bitcoin a usb pendrive, I don't). Second, the value stored in every mined bitcoin by made by a GPU, not a human, thus, the value stored in a bitcoin, is nowhere near as valuable. Third, if cash is to disappear (mintchip) in time, describe me jst how you are going to convert your BCs in spendable bucks (to buy everything else BC can't buy, most things...). Never mind solar flares, internet and electricity down and all that....for the above reasons, regrettably, I'm out of BC and into PMs....comments plz....

stacking12321's picture

yes you can hold a physical bitcoin in your hand.


MeelionDollerBogus's picture

I'm expecting the doomsday scenario, loss of power, loss of network, loss of secure transmission, loss of privacy in large regions, black markets everywhere.

For that I'd need barter, food in cans, gold & silver coin.

That's what I'm preparing for. Bitcoins have no value to me in this future and I see no other.

MeelionDollerBogus's picture

I could just as easily pgp-sign a voucher for gold, my own gold, traded on credit from me to get my gold upon return of the receipt.

That would be more secure & more value than bitcoins.

MeelionDollerBogus's picture

Sorry to burst your bubble but all physical commodities have intrinsic value. They have chemical & nuclear properties, electrical & mechanical properties and life depends on most of them, at least modern life now.

Bitcoins have no intrinsic value as I can't make alpha-radiation shielding from it like I can gold, or teeth fillings as I can gold, or coins as I can gold so I can hold my money secure from computer outages or network outages or hackers and set booby-traps for it.

Bitcoin does none of these things.

Scarcity does not induce value: scarcity can multiply existing value of a per-unit basis which gold has & bitcoin does NOT. Gold is backed by physics for all it can do. Bitcoin does nothing.

ECON 101 for YOU, good sir.

I don't need a "cheap way to send money around the world" I need a secure money that stays with me while I want it with me and doesn't magically drop 80% like bitcoin can vs fiat dollars which I also don't want.

hazek's picture

The funny thing about your little rant here is that it's completely irrelevant because guess what, the market disagrees with you and currently values bitcoins and their properties and utility at around 5 bucks a pop. Maybe to you their properties are useless and maybe you don't see their utility but the market does which is all that is ultimately relevant.

MeelionDollerBogus's picture

funny thing is the market fully agrees with me because bitcoin had been valued at 30 a btc and has dropped sharply since then. If you had never tried btc <-> paper conversions & stuck with intrinsic goods of value, this problem would never have materialized.

$5 is a robbery - unless the peak price ever reached was $6. It isn't.

The market for btc is simple: make an exchange, get people to put btc into it, then leave and cash out all the btc SOMEONE ELSE owns (mf global style) at a higher price.

No thank you

ArmchairRevolutionary's picture

This is exactly what I do not like about it. It is a form of ponzi. BitCoin would be awesome if cash were used to buy a wide range of commodities futures to back the BitCoin and the BitCoin value was in fact directly related to the futures. Then you would have a real store of value.

Mercury's picture

Ain't no chips in GOLD.

donsluck's picture

Not yet, but a good idea!

Mercury's picture

Gold is an element and it has a pretty low melting that's not gonna happen.

MeelionDollerBogus's picture

I bet you could fashion a VLSI optical chip into a gold bar.

I bet you could even dope circuit-traces of gold into a gold bar & do something with it.

Not that I'd suggest it since if it wasn't something cool, or if it was something to track me, I'd say "smelting time"

StychoKiller's picture

Au is quite ductile, one good smack with a hammer would do the same damage as smelting.

seek's picture


I am sure there's going to be a market for home remelting kits in the future.

Gully Foyle's picture


Golds value rises as the dollars drops.

Once digital currency is the norm, Gold becomes near worthless. Except as jewelry.

Unless you intend to use your remelting kit, smelting I think, and become a goldsmith.

Spitzer's picture


gold is a store of value. not a medium of exchange

MeelionDollerBogus's picture

a store of value makes a great medium of exchange. A poor store of value only makes a viable (not good) medium of exchange while people are too dumb to figure out it's not a store of value.

Gully Foyle's picture


Gold is only a store of value if two people agree on it.

Just like weed, milk, Apples, fish and Tide are valuable between two people of similar mindset.

You ignored what I said about Gold increasing in value because the dollar is losing value.

Things don't retain value once the society no longer needs them.

Neal Stephenson used the Cowry shell example in his Baroque trilogy.

NotAMathWhiz's picture

I ignored what you said because you're shouting at me

Paul Atreides's picture

But unlike weed, milk, apples, fish and tide gold is an element on the periodic table and unfirom in weight, quality and consistancy. Gold and silver have been honest money since the daw of civilization and as currency they have never collapsed or inflated or devalued at the hest of greedy bankers.

IrritableBowels's picture

You sure Spend a lot of time formulating bullshit words in the form of sentences no one but yourself gives a flying fuck about.
Go away.

Beam Me Up Scotty's picture

Except as with paper money, they can create infinite amounts of digital money.  More infinite amounts of money because they can create it faster than the printing press can create a paper dollar.   In that environment, ANYTHING BUT digital money will hold value.  Toilet paper will be worth more than digital money.  You can bet the farm TPTB will never EVER run out of digital dollars.

MeelionDollerBogus's picture

You find me a world that doesn't need gold, fish, apples, fertile dirt or clean water.

Still looking?

Go on, you can do it. This nonsense world that needs digits more than gold, food & land doesn't exist and won't exist.

MeelionDollerBogus's picture

"in 2011 gold was more widely used than any other currency in Vietnam. The country owns more gold per capita than either India or China; the amount of privately held gold is expected to total 300-500 tonnes."!/silverguru22/status/190537797826904064

"gold is a store of value. not a medium of exchange" - Spitzer

Greenhead's picture

GF, why do you say gold becomes worthless.  Seems to me that digits or pennies are the same.  If we create more digits to fund the fedgov prices will rise.  Prices rising means the value of the digits fall.  Are you suggesting there won't be a way to have an idea of what a digit will be worth?

Gully Foyle's picture


"GF, why do you say gold becomes worthless."

Not worthless but not the inflated madness we see today. You can still make jewelry and use in technology.


"Seems to me that digits or pennies are the same."

Canada stopped making pennies, they told retailers to round out.


Digital currency is designed to crush the competition and remove the profit made by flucuating exchange rates. Like the Euro was designed to balance out EU currencies.

You can't have OWG, if you don't have a stable universal currency.

The other thing digital currency allows is the great reset, call it collapse. Everything starts at zero, well whatever the value of digital is as a unit of exchange.

It's all planned out.


MeelionDollerBogus's picture

That's utter nonsense. As people reject digital currency the gold value will go up as people seek to use it. The only reason gold would go down vs this digital currency is if it secure and has no inflation but we already know it will do none of that. Just look who's issuing the MintChip and give your head a shake before you repeat the nonsense.

Or at least say /sarc or "I'm really MDB in disguise"

Gully Foyle's picture


Sure, gold will be replacing digital currency.

Never happen.

The Genpop will gladly accept digital currency.

It takes a generation for no questions to be asked.

MeelionDollerBogus's picture

Every fiat currency fails. Gold frequently replaces fiat currencies. Digital is no different. Make it secure & free of inflation and people will love it. It isn't so they won't.

It takes all of 5 minutes for no questions to be asked - if nothing looks out of place. with prices rising sharply & without explanation you get questions. Anger. Screams. Riots. No digital cash.

trentusa's picture

oh no MDB wasn't bad enough now he has an imitator. Bad idea bc it isn't funny & nobody liked that original either except the other trolls.

MeelionDollerBogus's picture

Every troll needs another troll.

Lux Fiat's picture

Home EMP kits?  Paper and PMs not affected by that.  Bitcoins, not so much.

Winston Churchill's picture

In the tungsten, in your gold.

Sutton's picture

"And none can buy or sell,except them that have the Mark of the Beast"

donsluck's picture

Forcing barter, eventually.

lakecity55's picture

A red Shield and bar code tattooed on your hand....

Gully Foyle's picture


Small chip under the skin.

More likely your clothing will be wearable pc carrying the chips and codes necessary.

Debugas's picture

mark in the body is necessary to tie your bank account to your body so that you can not lend your money to somebody else and also to track your body

hidingfromhelis's picture

Maybe the large financial institutions can set up a financial shell company where all the digital bits (and title to our bodies) can be traded, exchanged, and securitized.  Record keeping can be done later on an as-needed basis with made up numbers.  Let's call it MintChip Electronic Registration Services (MinCERS), for the sake of argument.  Oh shit...I've been re-hypothecated!

StychoKiller's picture

Gives new meaning to "being liquidated!"

Gully Foyle's picture


Not necessary, unless everyone runs around naked.

Chips in your clothes, or your phone.

MeelionDollerBogus's picture

yesterday's news. By the time you see it roll out it will be DNA-computing platform & non-compliance will render you dead or ill.

CH1's picture

"And none can buy or sell,except them that have the Mark of the Beast"

Yep. Then we'll see which Christians are real and which are not.