For those of us on the outside, there's a tendency to think that major projects just consist of an “announcement” followed a few months, or sometimes years, later by the completed project.
Because we're not part of the development team, we can't really visualize what goes on behind closed doors.
But sometimes we can catch just the merest glimpse of the back groundwork.
In looking at this month's meeting calendar for Federal Reserve chairman Jerome Powell, I think we may have just that kind of opportunity.
The project that I'm speaking about is the Digital Dollar Project. The move from a physical currency to a virtual one.
Now on March 9th of this year, President Biden issued an Executive Order on:
Ensuring [The] Responsible Development of Digital Assets.
The order essentially gave the go-ahead for all of the agencies and affiliates of the US government to pursue the digital dollar.
And, as I say, while we on the outside may not think that much is happening. You can bet that's most definitely not the case. I'm very sure that teams have been assembled, copious meetings scheduled and entire sections of the US Treasury and related bureaus are working overtime to bring about the digitizing of the dollar.
And we can see some of that action in Fed Chairman Powell's schedule. Now before we get into the specifics, one quick point. No one, but no one goes directly into the Chairman's office just to shoot the breeze. Each of his meetings is carefully arranged and scripted. So that each leads to an explicit goal.
So that step by step, a project as big and important as this can actually be achieved. Generally, staff has worked for days or weeks arranging the meeting, and the agenda within the meeting.
Just the week before last, Powell had a four meeting sequence, that was particularly interesting to me. And looks like it was centered around the digital dollar.
Acting as the facilitator appears to be Paul Ryan, the former speaker of the House.
On Tuesday the 10th of May Ryan and Powell speak for half an hour. This is just the sort of thing, you do before an important meeting. If I'm right Ryan was making sure that he understood all of the issues the Chairman may have. So that the next day's meeting would be positive and productive.
The very next day Ryan and Brian Armstrong, meet Powell in his office. Brian Armstrong is the founder and CEO of Coin Base Global, the nation's largest Cryptocurrency exchange.
And the developer of the “Stable Coin.” A Cryptocurrency that converts one-on-one into a dollar. This bears a striking resemblance to what the projected digital dollar would be like.
This is exactly the sort of meeting one would expect of our central bank and our leading Crypto company if you were actively pursuing a digital dollar.
The very next morning, Jerome Powell meets with Chris Giancarlo, former head of the CFTC, and now the founder of a not-for-profit called the Digital Dollar Project.
This meeting was, no doubt, planned in advance to follow up on what Armstrong and Coin Base were proposing or discussing. Powell would want an objective third party to discuss the representations of the day before.
"Is this right?" "Does this sound good to you?" And Giancarlo was likely placed in the advisor's seat.
What likely was NOT planned was the virtual meeting again with Giancarlo, the next day Thursday. I say this because it was scheduled so shortly after their last meeting.
It was also scheduled at the end of the day. A time that is often left open for any emergencies. And it lasted one full hour. The original meeting between these two lasted only half an hour.
Something probably came up, between their meeting on Wednesday and this meeting on late Thursday afternoon. Something that Powell felt might derail this part of the project.
Better to work it out now, while things can easily be set right.
It's just how these major projects work. Progress slowly going forward. With seeming agreement, then a crisis. The resolution, and the next steps forward.
For anyone who has been involved in this sort of thing, it's as obvious as can be.
And it tells me, that these people are serious. That the President's directive is being followed. And that, at some point, we will have a digital currency, with the Federal Reserve as the central point of control.
What it also tells me, is what we should expect for any project of this scope and magnitude. This will not be easy. We should expect some hick-ups along the way together with possible delays.
But bottom line: this country is heading full speed toward a Digital Dollar.
Will yesterday's rally be a one-day affair? That's the question this morning. And, unfortunately, it sure looks that way a couple of hours before markets open in New York.
Equity futures have been down all night.
In economic news this morning, the focus turns to the Purchasing Managers. These people are the first step in the manufacturing process. They buy the raw materials and components that factories will assemble for the finished products that you and I consume.
And since the Pandemic, these are the people who have been on the “hot seat.” The ones at the very start of all the supply chain issues.
For instance: they're the ones who are ordering the semiconductors for the auto markers from overseas suppliers. And have come up short.
Or the appliances from Asia, which are stuck on a container ship anchored off the port of Shanghai.
In short Purchasing Managers are at the very heart of this global economic crisis that we're in right now.
Purchasing managers want and need more. It's reflected in all the numbers we've seen so far this morning. From Japan to France and Germany, even Great Britain. All of the Purchasing Managers Indexes are solidly positive.
Indicating that there is tremendous pent-up demand at the wholesale level of this global economy.
This is all a positive upbeat indicator.
But lookout. Should we ever see the Purchasing Managers Indexes begin to fall. That would be the ultimate sign of Demand Destruction.
In just a couple of hours, the US will report on our purchasing managers, and like the rest of the major economies, it too is expected to be solidly positive.
Headlining today's economic reports will be the latest on New Home Sales. The Street is looking for lower numbers here, and these higher mortgage rates are really beginning to cut into Real Estate Growth.
The Street's looking for an annual rate of about ¾ million new home sales. Back to the level, we were at last November.
Any lower New Home Sales would not be well received on Wall Street. And might be another excuse, as if we needed one, to head even lower in the market.
On the earnings calendar for today, are some more specialty retailers. Leading off will be: Best Buy, then Auto Zone, Ralph Loren, and Urban Outfitters. And speaking of new home sales, the country's leading up-scale developer, Toll Brothers will report later this afternoon.
Have a Great Day!