text: While debt in the property sector contributes to construction slowdowns, debt contributes to China’s economic downturn. The latest report from Evergrande shows that the real estate giant has defaulted. The Chinese government is trying to regulate the collapse, not through a bailout, but assistance in what some analysts call an “orderly break up” of the conglomerate. Some credit rating firms are announcing that it is increasingly difficult to have any questions answered without clarification from the company. This is the first time Evergrande has defaulted on dollar debt, with this default amounting to $1.6 billion for interest payments on foreign bonds. (AC: Investors are taking advantage of cheaper lending rates, which significantly increased overnight repo volumes. The PBOC has noticed a significant falloff in demand for credit, and the reduction in the RRR [which has dropped the cost of borrowing] is intended to increase the demand for credit. -T.W.)Kachkari on a central bank digital currencyOn Tuesday, Minneapolis Fed President Neel Kachkari said, “Nobody has articulated to me what the benefit would be of a Federal Reserve digital currency. I can send anybody in this room $5 instantly, via Venmo or PayPal, or Zelle—that’s a digital dollar.” Kachkari also suggested that a “Fedcoin” could lend itself to an invasion of privacy by allowing the Treasury Department to collect taxes directly from accounts holding official digital dollars. This would give the Fed, and by extension, the entire U.S. government, total visibility into how that money moves around, which is nearly impossible to do with cash. Kachkari also thinks the U.S. government’s interest in creating its digital currency stems from the pressure of other central banks making their own digital money, fearing that Chinese digital money could usurp the title of the world’s reserve currency. However, Kachkari stated that “I don’t see the Chinese [central bank digital currency] being a threat to world commerce or the dollar in any way, shape or form as a reserve currency. People use the dollar as a reserve currency because of a lot of other reasons, trust, the rule of law, all these other things, not because they can do it digitally.” (AC: Kachkari makes some valid points regarding the invasion of privacy that a digital dollar could impose on a society that is already bombarded with invasions of privacy from big tech. However, Kachkari’s assumption made about China as the main reason the Fed is creating its digital currency is off-base. The Fed wants to institute a digital currency because of the insight into how money flows throughout the economy and the ability to control things like interest rates more quickly. For example, if the Fed wanted to, they could presumably tax any digital currency held in a bank account to effectively create a negative interest rate. A negative interest rate could disincentivize consumers from keeping cash and encourage them to spend money in the economy. The potential iron grip on the economy that a digital currency would give the Federal Reserve would significantly benefit the government at the expense of everyone’s privacy. – T.W.)Agriculture salaries increase