Joe Brown argues that central bank digital currencies will ultimately fail because centralized control can't account for billions of individual economic decisions. He predicts the collapse will trigger a shift to alternatives like Bitcoin and gold, and recommends acquiring assets outside the official system: physical precious metals, real estate, farmland, and energy.
You talk about controlling the economy. That is the end result of this. Because you don't have to be like, you know, the Soviet Union where you have to have all of these planning boards and agencies who have had the experts in all these different fields. If you can control the money, then you can control the entire flow of resources in the entire economy. Because you have every single transaction that you can stop, you can reverse, you can cause, you, you can censor, you can gather all that data and try to make educated decisions using machine learning and artificial intelligence. But at the end of the day, and this is where the light at the end of the tunnel comes in, it is doomed to fail. Because every person is not even an artificial intelligence. Every person is a real intelligence. And every person makes economic decisions predicting the future based off of all the knowledge they have about their needs and their wants that are subjective to in nature. Needs and wants and value are not objective, they are subjective. And so the best artificial intelligence in the world cannot replace the decentralized compounding effects of the decision makers of hundreds of millions of economic decisions based on subjective values and wants. It's not possible. So the only result is complete economic failure, in which case it gets subverted and replaced by a better money. And, and at the end of the day, money is a winner take all commodity. That's why for thousands of years there was a gold standard somewhere in the world. Straight for thousands of years, until 1971. It's because it's a winner take all game. And a CBDC will not be the winner that takes all. It will be doomed to fail and a different money will win out in the end.
Oh, so really, you don't think they have the power to force that upon us?
They will. But once it epically starts to fail, it's not going to last long is what I'm saying. It will last some amount of time, but it will not last long.
Why do you think that?
Because it can't. When people realize, hey, this is destroying it, everything, this is preventing me from doing what I need to do at the, at the most, if it's the most tyrannical possible, black markets emerge and people start using alternative forms of money, they start selling their services and their goods and their time for Bitcoin or for gold or for another paper currency or whatever it is, something that serves their needs better. Because the CBDC will, will not be doing that. So ultimately it will be destined to collapse. Just like every fiat currency that is abused throughout history has collapsed, the way it collapses is ultimately the People start using black market or parallel market currencies and it ultimately then gets replaced and then finally the government has to succumb because nobody will take the, the their money anymore.
Right. But what they always do is they make those currencies illegal. They say you trade it going to jail. And the other thing they do is, you know, I remember one of my former employees lived in Burma, Myanma. He was there as a child when the communists came in and took over. And he said the first thing they did is they demonetized the higher value bills. So the higher currency units. They demonetized them so that if you stashed a bunch of, you know, hundred dollar bills away, in our vernacular, they would just be worthless. They'd be totally worthless. They'd be like in the Weimar Republic, they'd be good for, you know, fire kindling. Right. And that's like the first thing they did, which was interesting. So they can make it very difficult. And what they always do, they always engineer these things just so people have just enough to where they're comfortable enough and apathetic enough not to rise up. You know that, that's the reality of what usually happens in these cases, right?
Yeah, it is. The caveat there is that they still have to have some sort of purchasing power and able to do that because at the end of the day, their power comes from paying people to go do their, and force their, their wishes. And so if it gets to the point where most people will not accept it anymore because it is, it's not serving their needs well, then they lose that purchasing power. So if you can't pay your military, you can't pay your tax collectors, you can't pay whoever it is you need to pay in order to enforce everything. And everybody starts using things on the black market. Well, there becomes a difference between passing a law and enforcing a law at that point. And ultimately it does collapse. It might take some time, but it never lasts. Fore.
Yeah, that's, that's, that's true. Well, Joe, what do we do about that? What are some of the action steps based on your worldview on everything. Anything and everything. It doesn't have to be just central bank digital currencies, you know, could, could be anything. Yeah, just, you know, what's going on now.
Yeah, absolutely. And I think number one is get purchasing power outside the system. I don't care if you think that Bitcoin is going to zero if there's any chance that it might not go to zero. That's a payment platform that cannot Be, you know, it can be made illegal, but if you have it and you want to use it, you can use it. Even if it is illegal, it can't be stopped, number one. So that's something just an asset just to have in your back pocket. Gold as well. Physical gold, physical silver. You can go to somebody down the street and say, here's a silver coin, give me some beans. Like, unless the government knows about it, they can't, they can't stop it. So having purchasing power outside the system is essential, but also having assets that survive and thrive throughout hard times is essential as well. So that's scarce assets, that's physical assets rather than digital assets. And things that people will continue to need and buy regardless of how hard life gets. One of those things is absolutely real estate. People always need a place to live and always will, always have, always will. And having exposure to things like farmland as well, and food production is. Those have. And energy production absolutely have huge upsides.
Right now, you know, and I've always liked the idea of farmland. The problem is the yields are so bad. I mean, they're just, you know, the yields are boring, beyond, beyond comprehension. I can't find farmland that is the least bit, you know, exciting in terms of return on investment. And I've looked, believe me. You know, one of our clients finances farmland. He's probably listening right now. And yeah, you know, it's just the yields just aren't there, you know, But, Yeah, well, I guess it's good enough for Bill Gates, but.
Exactly, yeah, he's got a different agenda. Yeah, right. Yeah. When you look at the Weimar Republic in Germany, the people who got rich were the farmers, because they were the only ones who had the means to continue producing things that people would have to buy no matter what. And they were able to pay off their mortgages and they were able to get rich despite the hyperinflation. And so that's one of those assets that might be boring most of the time. And then when people actually need it, that's where the money flows.
