The Digital Yuan Has Already Shown Itself To Be "Bad" Money
This is going to be so interesting to watch unfold. You’ve got essentially two generations of Chinese who feel enslaved, unappreciated, and watched 24/7, and now they’re going to be paid in what they are likely to regard as money of dubious value. Will they surreptitiously start an underground economy based on the US dollar, or black-market goods? Will it all fall apart in some unpredictable way?
This reminds me of something that happened in the 1980s. Two major players in speculation - I think it was the Hunt brothers - decided they were going to corner the world’s market in silver. They had every detail worked out beautifully, but they were unaware of one cultural change that destroyed their plans. The change was that the Chinese communist party decided that it was okay for peasants to own silver once again, after it had been banned for a couple of decades. Well, for millions of peasants, the family ancestral wedding silver jewelry was the only wealth they had, so when the Revolution came, it was all buried and hidden so that it wouldn’t be confiscated. But once it was legal, everyone dug up their hidden wealth and flooded the world’s silver market, because they would rather have refrigerators and bicycles than ancestral jewelry (and because they figured they better spend it before it became illegal again). So,how will a billion ordinary Chinese citizens upend THIS new economic centralized plan?