The Glenn Beck Program - Ep 216 ｜ What You Know About Money Is All Wrong

00:00:00.000 and now a blaze media podcast if i made an offer to you how would you like to never lose your

00:00:08.320 wallet again you don't have to search for your wife's purse uh there's no credit card that you

00:00:14.500 have to worry about because i have this great new digital currency and if you play your cards right

00:00:20.640 you can get it implanted under your skin what's the catch you ask oh i don't know

00:00:27.960 just turning over your free will to the fed but don't worry you get this nifty new thing called

00:00:34.660 online banking wait we already have online banking but on the bright side you can have programmable

00:00:42.260 money and of course the programmers all work for the fed and the government so it's actually a pretty

00:00:49.120 bad idea especially if i've ever read the book of revelation i'm just saying the name sounds a little

00:00:56.140 boring what could possibly be scary about a central bank digital currency well today i have a very

00:01:03.880 credentialed guest it's not just some whack job like me this is the guy who's actually the father

00:01:10.880 of quantitative easing but don't let that fool you that's not the quantitative easing that he suggested

00:01:18.000 he's going to introduce you to the mutant cousin of the creature of jekyll island cbdc hidden underneath

00:01:26.940 layers of lifeless economic jargon that maybe is the scariest dragon you've ever seen but don't worry

00:01:34.360 i brought one of the best trained dragon slayers in the world he is a world-renowned economist graduate

00:01:41.380 of the london school of economics with a doctorate in economics from oxford he's a former senior

00:01:49.220 managing director at bear stearns and the creator of the term quantitative easing we brought him in

00:01:56.500 from germany to talk to you welcome to the podcast richard verner first let me ask you if you're living

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00:03:32.880 thank you for coming in i appreciate it you're welcome it's a pleasure it's a delight thank you for

00:03:51.200 having me you bet um i have been talking about these things for a long time and i've always felt

00:03:56.820 like an outcast um mainly because people in your position that really really know um a

00:04:06.160 just keep talking about well you don't understand the system and i think that's actually a good thing

00:04:12.120 because the system if you just trust the system the system has so many flaws and so many things

00:04:20.020 seem to be going wrong and they come up with a new system to fix it and things are just getting

00:04:26.160 worse and worse and worse and we're listening to the same people over and over and over again

00:04:30.480 and it just keeps getting worse absolutely it's been one of the techniques to say that well these

00:04:36.500 topics you're talking about money and banking and the economy and central banking well you have to

00:04:42.000 leave that to the experts right but that's that's it's completely wrong and false and in fact it's been

00:04:47.820 one of the the mechanisms to to hide the truth but you are one of the experts what happened to you

00:04:55.220 why i mean we'll get to that in a little while first let me ask you a few questions um

00:05:01.000 i i'm so glad that you're here um you are called the father of quantitative easing easing but it's not

00:05:10.260 what we think it is and i want to get to that but i think everything i know may be wrong um so

00:05:17.940 let me just start with inflation inflation is is a real problem in the united states and the rest of

00:05:24.560 the western world my understanding of it is it's too many dollars chasing too few products um and

00:05:32.540 um that is because at times a central bank will make money so cheap everybody will go out and borrow

00:05:40.980 money and so everybody has a lot of money that causes inflation when you have the inflation then

00:05:47.700 you have to bring the interest rate up to try to pull that money back in to destroy it so you can get

00:05:54.700 inflation under control is that correct or all wrong well some parts are true the the beginning

00:06:03.120 certainly where uh you know if too much too much money is chasing a fixed or limited amount of goods

00:06:09.480 and services we will get inflation one has to realize though that that's only one of three

00:06:15.240 possibilities when you have money creation there's three possible scenarios and that's been

00:06:21.480 one of the secrets you're not supposed to be aware of that but before we before i explain these three

00:06:27.620 possibilities and one of them is the you know um money creation chasing consumer goods and and you

00:06:33.640 know therefore consumer price inflation that's one of the three um so it's under particular circumstances

00:06:39.640 but before i need to explain where money comes from because there's a lot of misinformation about that

00:06:48.500 most people think well the money supply comes from the government or from the central bank from the fed

00:06:55.900 which is a reasonable argument because most people would argue well that's what it's supposed to be

00:07:02.080 isn't it i mean that says federal reserve note right at the top yes of course these federal reserve

00:07:07.220 notes the paper money is only around three percent of the money supply which begs the question

00:07:13.800 where do the 97 percent of the money supply come from which is of course digital money which we've

00:07:20.380 been using for many decades they're now trying to tell us and i'm sure we'll come to that yes that

00:07:24.960 oh we need the central banks need to issue central bank digital currency it's a new age but we'll hang

00:07:30.320 on we've been using digital money bank digital money for decades right bdc exactly okay bdc i've never heard

00:07:38.340 that before well they because they want to sell these cbdcs is something new but the new thing is

00:07:44.440 the c the centralization and that's the thing that we don't want and we don't need so it's okay so let's

00:07:49.720 just start with the bcds exactly um the central i mean the the bank digital currency this is where the

00:07:57.780 experts have always told me um glenn we're not going to have weimar situations because we digitize the

00:08:05.560 money we're not physically printing it but i don't care because it's used in the same way right yeah

00:08:12.960 absolutely right it doesn't matter whether it's paper money or digital money you could even argue

00:08:18.180 the more it's become digital money the easier it is to create inflation because transactions are you

00:08:23.340 know can be faster the volume can be massive and you can do more of the uh the sort of speculative

00:08:29.780 transactions uh that create many of the problems so but so let's step back where does the money supply

00:08:36.840 come from the 97 of the money is created not by the government which um doesn't create any money

00:08:45.380 in fact you know being here in dallas um in 1963 uh john f kennedy issued united states notes

00:08:55.760 that was government money and that wasn't an idea that was very popular with some circles

00:09:03.420 and it was the last year of his life since then we have not had governments issuing state money

00:09:09.960 so the money know that about oh yes i've got one of those notes actually really with you um no

00:09:16.820 no yeah um it's in my book never heard of them that's right well um of course by doing that

00:09:24.900 in many ways john f kennedy was doing what most people would would have thought is normal the

00:09:31.380 government is issuing money correct but of course since the creation of the federal reserve system in

00:09:36.620 1913 that's become the essentially monopoly um you know to lend to the government um was meant to be

00:09:47.040 done via the banking system headed by the federal reserve the central bank because if the government

00:09:53.420 issues united states notes then it can create money and doesn't have to pay interest you see so

00:10:00.440 but of course the moment you say okay well the banks the banking system the federal reserve will

00:10:05.900 create money and will lend it to the government at interest who's gaining of course it's it's the

00:10:12.520 financial system and the and the you know smaller number of people uh benefiting from that and you

00:10:17.200 get a transfer from the many um to the few which is why when they create central banks they at the same

00:10:23.540 time always introduce new taxes why how is this interest from the government going to be paid

00:10:29.840 well from the taxpayer so when the fed was created that's um it's the same time when they

00:10:35.700 introduced for the first time the federal income tax and of course if you go so they actually go

00:10:40.320 hand in hand they do they do and we know this from history it's always the same so when one of the the

00:10:46.000 oldest central banks was created the bank of england as 100 privately owned um bank essentially a central

00:10:54.460 bank although it was privately owned um they did this through a law which was about imposing taxes

00:11:02.000 it mentioned and will create this entity they sort of kept that hidden in the law but the the first

00:11:08.840 part the front of the law was mostly about all these new taxes which will be introduced in order to then

00:11:14.420 actually raise the money to pay the interest that the state would then pay to the bank of england you

00:11:21.240 see wow so well we can come back to this so the governments don't create money anymore they've outsourced

00:11:31.200 this and funnily enough though the central banks only create a tiny part of the money supply usually

00:11:39.700 around three four percent and the majority of the money supply is actually created by banks now before the

00:11:47.340 introduction of central banks it was um depending on the country in the time period but it was mainly

00:11:55.080 also the banks that were creating money and in many ways i mean you know there's also advantages of

00:12:01.280 the system because it's decentralized and in the u.s for many decades there's been free banking everyone

00:12:07.480 could set up a bank and if you if you do a good job and you've got good credit your bank notes because

00:12:13.060 all these banks were issuing paper money the bank notes and if somebody borrows they get bank notes

00:12:18.640 you see and that's how money is created um if you do a good job then this bank would would thrive

00:12:25.300 and so it was it was free market competition but the central planners got in on this and they wanted to

00:12:31.900 control this consolidate concentrate um and that's where the central banks came in and of course the

00:12:38.460 federal reserve has overseen the um the closure of many banks yeah um congress when they talked about

00:12:46.800 setting up the federal reserve was quite reluctant so they had to play tricks to actually get it through

00:12:50.800 like they had the the famous vote on the 23rd of december 1913 when everyone had left and it wasn't

00:12:58.020 normally announced it was announced so it was technically correct but nobody had seen the vote and then

00:13:02.800 only the insiders were there and they just you know they passed it but tricks like that um because

00:13:08.500 most congressmen were saying well hang on if we create such a privileged institution you know uh

00:13:14.680 there's many risks and dangers there's too much power but the one argument that convinced you know

00:13:21.300 quite a few of them was well if you have a good bank a solid bank well run but there's a there is a run

00:13:29.400 on the bank now suddenly and it could be entirely just rumors uh panic you know no good reason but it's a

00:13:36.500 solid bank if there's a run even a solid good bank will be in trouble and that's where a central bank

00:13:43.320 can actually be helpful as this lender of last resort to step in provide liquidity so when a bank has lots

00:13:50.560 of assets but in the short term there can be a liquidity squeeze and so that was your asset rich cash poor

00:13:58.100 yes exactly and and so and you know that is one good argument but you see when the fed then uh needed

00:14:05.760 to do this they didn't in the 1930s more than 10 000 american banks were allowed to fail and there was

00:14:14.460 no deposit insurance so ordinary people a lot of farmers and families across the u.s lost their

00:14:21.740 livelihoods all their savings were gone when when the fed sat on his hands didn't provide the liquidity

00:14:27.060 when the run was created on these banks instead those banks that were closer to the fed then took

00:14:33.260 over those banks and so the banking sector consolidated 10 000 small banks disappeared a lot

00:14:39.800 of depositors lost their money and those who'd borrowed money from the banks that went under

00:14:44.580 which is a lot of farmers for the the new fangled farming equipment you know mechanization tractors and

00:14:51.220 so on which they'd the loans had been pushed by the banks in the 1920s well the loans were not forgiven

00:14:58.820 so they still had to repay them and they couldn't the farms were the collateral and then you had thousands

00:15:04.740 and thousands of american farming families losing their farms and becoming destitute even starvation became an issue

00:15:13.700 so this is the really desperate times of the 1930s did the federal reserve help with this help ordinary people

00:15:18.900 no of course not um and just you know wind fast forward to went forward to silicon valley bank

00:15:27.060 um now that's a very um strange story because none of that was necessary

00:15:33.940 um the bank behaved in a very strange way for a bank

00:15:37.940 um but even without going into detail where was the federal reserve there was a run on the bank

00:15:45.140 in fact it was the biggest run ever 41 billion dollars leaving the bank in one day which is the

00:15:51.540 biggest sum from one bank in one day in on record and the bank was actually prevented from closing the

00:15:58.820 gate by the fed because it joined this fed now system as a pilot and what did the fed do it didn't

00:16:04.820 prevent this either and it didn't step in either and so the bank failed um once it was taken over

00:16:11.860 then the fed provided liquidity well that's not exactly what they promised is it that's too late so

00:16:18.580 um just but just back to the basics so the government doesn't create money

00:16:23.380 central banks only create a small amount of money and they wriggled themselves into the game

00:16:29.940 because before they didn't exist i mean banking does perfectly fine without a central bank

00:16:35.220 what the central bankers do though is they consolidate banks they reduce the number of banks so when you

00:16:40.020 say the banks yeah like local banks yeah actually create money do you mean that they're they're either

00:16:50.660 promoting people to come in or people just come in and say hey i want a loan and they're not actually

00:16:56.740 taking the deposits they're getting the money they send out and say i need the central bank to provide

00:17:03.860 this amount of money for me for a loan and then they're paying the central bank the fee for that

00:17:10.580 right but the the central bank would be printing it at request of the banks well these are very valid

00:17:18.420 questions and in fact you have now referred to the three theories of banking you see and the experts

00:17:26.020 the scholars have argued for a whole century i wrote a paper called lost century in economics where i

00:17:32.100 review the three theories of banking and it provides an empirical test and the second paper called can

00:17:38.900 banks individually create money out of nothing the the theories and the evidence you see the three

00:17:45.540 theories of banking are the following the the currently dominant one which you if you study

00:17:50.180 economics business finance um you will learn it's in the textbooks it is in the leading finance journals

00:17:57.140 at central banks promoted most financial journalists use it is the financial intermediation theory and

00:18:03.940 that says banks are simply gathering deposits and then they do their analysis credit risk you know

00:18:09.780 analysis and they lend out the money so they're just an intermediary they're not actually that

00:18:16.660 important and that's why by the way you may be surprised to hear this economists have dropped banks

00:18:22.500 entirely from their economic models they haven't been in there since roughly the 1980s no banks in their

00:18:28.820 models so when the 2000 exactly i mean i mean this is astonishing it's breathtaking so when the 2008 banking

00:18:35.380 crisis happened and banks went under and this had serious ramifications okay when the journalists

00:18:43.140 went as well we need to interview some expert let's let's interview this professor at harvard this professor

00:18:47.620 at mit professor of economics what's your comment all the banks you know failing the honest answer would

00:18:53.620 have been or even economists interviewing economists at the central banks it's the same the answer would have

00:18:59.140 been well sorry i cannot comment at all why sir you're the expert uh surely please comment you know give us

00:19:07.300 your wisdom no i cannot comment uh because our economic models my economic models don't include any banks

00:19:14.420 at all that would have been the honest answer did they admit that did they say no i've never even heard

00:19:19.460 that that is the truth even the models the cutting edge latest um theories and financial models used

00:19:25.940 uh at central banks the so-called dsge dynamic stochastic general equilibrium models include include

00:19:33.140 include absolutely no banks no financial sector many models don't even include money because you see

00:19:39.860 they argue that it doesn't matter because this financial intermediation theory is dominant but you know

00:19:46.260 that's back to do your first what is the what is the theory exactly i mean it's this is like i know

00:19:52.180 it defies common sense it defies common sense the first time i read modern monetary theory i'm like

00:19:57.780 who believes this who believes yes well with yeah these economists have certainly created a

00:20:03.540 a whole confusion of of theories but this this has been the dominant argument in the mainstream

00:20:10.740 theories that banks don't matter we can drop them from models because they're just intermediaries and

00:20:14.820 therefore there shouldn't be banking crises if a banking crisis happens it shouldn't matter

00:20:20.260 because the banks are not so important they're just intermediaries but you see there's there's two

00:20:24.580 other theories and you refer to you refer to um at least one of them the next one is the fractional

00:20:30.900 reserve theory and that's where somehow there's the banks um and there's the central bank also

00:20:36.900 involved it argues that individually each bank is an intermediary taking deposits lending out money but

00:20:44.500 as banks interact including with the central bank there is money creation going on and let's not go

00:20:50.900 into details of this theory um because i'll tell you the empirical test i did of these three theories and

00:20:57.380 and you know let's focus on the one that was empirically proven to be true which is the last one

00:21:03.380 now this one is the the shock the most shocking of the three theories it's the oldest um it was dominant

00:21:09.780 until they came out with this fractional reserve theory around 1920 um so before then so more than

00:21:15.620 100 years ago more you know quite a few scholars were aware of this and it's called the credit creation

00:21:20.420 theory now this one says no banks are not intermediaries they don't just you know gather deposits and

00:21:29.060 lend out money in fact in fact the truth is a bank is not a deposit taking institution that lends money

00:21:38.500 money at all i'll explain that in a moment but this theory says that um what a bank does is it creates

00:21:46.020 money it's not an intermediary it's a creator of a money supply of the money supply and each individual

00:21:51.380 bank has this power even a small local bank you may not notice it may not see it but economically

00:21:57.300 this is what happens and so these three theories they differ in the one question which is when a bank gives out

00:22:05.220 a loan where does the money come from for that loan correct and so the financial intermediation theory

00:22:11.540 says oh it comes from deposits the fractional reserve theory says no there needs to be excess reserves

00:22:16.980 and they can be provided by the central bank that's the one that's what i talked about indeed indeed

00:22:21.300 um and so that's where the money for the loan comes from but the credit creation theory the oldest says

00:22:28.020 um no neither of that the money for the new loan that a bank is providing comes from nowhere it's new

00:22:35.140 created by the bank and empirically i did the test is that because of digitalization no actually

00:22:42.500 because it's digital switching from analog to digital is is a technology but it doesn't change

00:22:48.180 the content and the content is actually a legal process um and at law it's very clear banks don't

00:22:56.180 take deposits and banks don't lend money why at law there's no such thing as a deposit

00:23:02.100 it's very clear in english law where modern banking was created with the bank of england and also that

00:23:07.140 the law legal system came into into play at the same time uh to suit the system um and it turns out that

00:23:15.540 there's no such thing as a bank deposit at law it's simply a loan that you're giving to the bank

00:23:22.260 correct so you're lending money to the bank that's why if they default that deposit doesn't come back to you

00:23:29.060 that's right that's right exactly exactly it's not protected if you put your money into a non-bank

00:23:35.940 institution a stock broker that doesn't have a banking license then when they go under it's

00:23:41.780 troublesome but your money will be safe ultimately may take time you know go through the rigmarole but

00:23:48.660 it's never encumbered because they never owned it but when you lend your money like to a bank it's on

00:23:55.060 their balance sheet they own it um and it's gone of course we have deposit insurance so until that

00:24:00.660 amount it will be replaced by the government by the insurance system but um technically you know

00:24:06.580 what about private banks that are fiduciaries they can't that's not their money well that is a type of

00:24:13.460 business that banks also do the trust business the fiduciary business um and technically that works a

00:24:20.660 bit different but every bank that has a banking license um while some may focus on the trust

00:24:26.820 business and do more of that where um where there is technically you know a different process and we

00:24:32.740 don't get this money creation they also have the power to create money by giving a loan um or by

00:24:40.580 purchasing assets which is the same thing actually because let me just actually finish the explanation

00:24:45.060 um when so banks don't take deposits because there's no such thing as a deposit at law

00:24:50.580 but surely they lend money no they're in the business of purchasing securities

00:24:56.740 such as government bonds but also you see if you take a loan a mortgage that um mortgage document the

00:25:05.940 loan agreement that is a promissory note that you issue now at law the the paper money

00:25:13.620 is also a promissory note of course um and i mean it has particular features i mean i've got one here

00:25:21.380 from uh from that grand old institution the the bank of england and it says i promise to pay

00:25:28.500 the bearer on demand the sum of 50 pounds um so that is at law a bill of exchange of a particular type

00:25:38.340 called promissory note and it's the particular subset called bearer promissory note because you

00:25:44.420 know anyone who holds this can demand the money obviously if you go to the bank of england they'll

00:25:50.100 just say okay fine we'll just turn it into you know 220 pound and 110 pound so they'll issue other

00:25:56.580 promissory notes um but so so banks um are in the business of purchasing securities and the loan

00:26:05.140 contract is also a security it's a promissory note none of the bearer one it's very clearly identified

00:26:11.780 you know um all the parties are named and so on but at law it is a debt instrument and that's what banks

00:26:19.860 do and you say okay interesting a detail but as long as i get the money you know um how does the bank give

00:26:28.660 me the money well the banker will say you'll find it in your account with us if he's careful he or she's

00:26:35.620 careful um if they're a little bit less careful they might say we'll transfer it to your account

00:26:41.460 and that would be incorrect because no money is transferred why because actually what we call bank

00:26:46.980 deposits is simply the bank's liability to us to the public and all the deposits are created

00:26:55.700 at one stage originally through some lending when they purchased the promissory note and then they

00:27:02.660 also had to record their debt because remember it's what we call a deposit is our loan to the bank

00:27:11.140 and their record of what they owe us is what we call deposits so when the bank gives a loan it purchases

00:27:19.620 the loan contract and then the accounts payable liability arising from the loan contract

00:27:25.460 is recorded and this is where banking is still technically slightly illegal as i showed in one

00:27:30.660 of my papers um how do banks create money out of nothing is another paper um because they

00:27:38.260 slightly incorrectly then present this as another type of liability called customer deposit but clearly

00:27:45.940 no customer has deposited it you see wow i think i've learned more about the banking system

00:27:52.980 in the last few minutes and i've learned in my entire life did you back in the 80s i believe it was

00:28:01.220 when japan was i mean everybody thought japan was going to control the world and then it just stopped

00:28:07.620 and folded is this when you because i think you were the guy over in japan that recognized the problem

00:28:14.980 and the possible solution um which hasn't worked out real well but you say they're not doing what you

00:28:21.300 suggested yes um you figured this out that the money wasn't coming from the central bank it wasn't that

00:28:30.020 they were printing about it it was coming from the local banks right yes because of the history of japan

00:28:37.940 being destroyed and needing to be rebuilt yes and of course the the high growth period that japan

00:28:44.660 um enjoyed and experienced you know in the 1950s and 60s double digit economic growth right what what is

00:28:51.940 called by by some you know an economic miracle um and the same system by the way has been um implemented

00:28:58.980 in uh korea uh in taiwan um and then of course from 1978 under the the leader deng siaoping also in china

00:29:09.140 it's the same system that is centered on an understanding of the banking system because

00:29:15.460 if you understand what you can do with a banking system and america has a great banking system

00:29:22.340 and the greatness is that it has thousands of banks a decentralized system many small local banks

00:29:28.180 community banks that is the best system of all and that's what also china realized they used to have

00:29:34.180 one bank a soviet style stalinist economy under mao then deng shaoping came to power and he

00:29:41.460 realized well this is not the best system and he traveled to japan he wanted to find out how did you

00:29:46.340 guys do it i want this high growth we want to have prosperity he was very open about it he said i'm not

00:29:52.660 really an ideological you know ideological person this whole communist stuff you know let's just deliver

00:29:58.420 for the people he said that in speeches literally which is quite radical um yeah it remains revolutionary

00:30:05.060 in the west because our economists are still completely beholden to their ideology and they

00:30:10.420 have not switched to the empirical scientific approach because deng siaoping said let's just

00:30:15.060 do what works what empirically is shown to work and what you guys have done in japan

00:30:19.780 you know they've done in korea and why does it work what's different well it recognizes what banks

00:30:25.540 can do when you run the banking system properly so he came came back from japan in 78 and he created

00:30:33.860 thousands of banks very much like in the us small banks local banks village banks town banks savings

00:30:40.820 banks rural banks agricultural banks provincial banks you know thousands and thousands now china

00:30:45.300 has as many banks as the u.s around 5 000 banks from you know just from just one bank the central bank

00:30:51.220 that's the right direction but in the west in the u.s in europe they're all moving

00:30:55.300 in the opposite direction right under the ecb the european central bank and this is the youngest

00:31:00.260 major central bank already more than 5 000 it's closer to 6 000 banks have now disappeared in these

00:31:06.900 24 years under ecb policies and they make no secret out of it they say we believe europe is overbanked

00:31:14.500 there's too many banks that's you know for example draghi mario draghi when he headed the ecb he said

00:31:20.260 that he comes from goldman sachs and he never had in mind closing down the big banks or goldman sachs

00:31:25.140 did he it's the small local banks that are you know being put under pressure by his policies and

00:31:29.860 they were forced to merge and disappear the way we're headed it looks like we're headed towards

00:31:35.780 what china was one exactly big bank exactly absolutely in fact that process has been accelerated

00:31:44.820 by the central planners at the central banks through a number of policies such as their excessive bank

00:31:52.580 regulation burdening even the small banks with huge amounts of regulation that were designed for

00:32:00.340 very big banks but in europe the small banks have to do the same follow the same regulations have the

00:32:06.100 same very voluminous reporting and they just can't do it you have to hire too many compliance people

00:32:11.540 you know nobody has time for banking anymore they have to give up and secondly there's crazy interest

00:32:16.340 trade policy they introduced you know flattening the yield curve pushing interest zero and driving

00:32:21.460 the banks that do the proper productive business lending out of business leaving the banks that

00:32:27.780 do the speculative lending and that's actually where i come back to i mentioned there's three scenarios

00:32:33.300 and the inflation consumer price inflation is only one scenario now we're clear who creates the money

00:32:38.260 it's created by banks when they give out a loan and but also likewise we should now look at every loan

00:32:46.340 differently because loans they're not just a sort of transaction money moving from a to b no this is new

00:32:53.540 money creation every loan is a new money creation therefore will have consequences so when banks create

00:33:00.900 money for for transactions that don't actually contribute to national income namely purchasing assets that's not part of

00:33:11.780 gdp or national income purchasing ownership rights because you're just changing the owner there's no value

00:33:18.580 added therefore it's not in gdp it's not in national income but this is funded by bank credit in fact the

00:33:24.900 bigger transactions which the big banks want to do and focus on um you know lending to the big private

00:33:31.700 equity funds the hedge funds and the big speculators almost entirely exactly it's almost entirely um

00:33:38.820 bank credit to purchase assets and change the ownership of assets property real estate all the real

00:33:44.900 estate loans and and you know uh speculative loans leverage management buyouts and and company

00:33:52.180 takeovers all that you're just changing ownership but you're creating money so you're creating money

00:33:58.980 pumping it into these asset markets property markets um asset markets what's going to happen with asset

00:34:03.940 prices because it's new money creation you see pump being pumped into asset markets you don't need to

00:34:09.380 study economics to know the answer of course you're pushing up the asset prices and that's always

00:34:14.340 unsustainable but it's a game of musical chairs right everyone makes money so everyone likes this game

00:34:21.220 and the music keeps playing the music is and sometimes the bankers you know have used this

00:34:25.540 phrase you know we're still dancing because they're still playing the music what is that music it's the

00:34:29.700 continuation of bank credit for asset purchases while banks keep doing that as surprises keep rising

00:34:35.860 everyone makes money but the moment the music stops because it's a ponzi scheme it's a ponzi scheme

00:34:41.620 you know while you keep doing it you create new money you're pushing up as surprises even more

00:34:46.340 but the moment it stops the music stops like the game of musical chairs music stops not enough chairs

00:34:52.180 that's the whole point of that you know children's game because then asset prices won't rise anymore but

00:34:57.060 the late coming speculators they're bought at the peak they need further rises to you know to make it

00:35:03.140 work it's not happening anymore so they default you get the first non-performing loans and when the banks

00:35:09.460 get non-performing loans they get risk averse they reduce lending they really reduce lending for asset

00:35:14.660 purchases asset prices are going to really go down and then the whole thing goes into into a

00:35:20.740 deflationary spiral quite quickly and you quickly have a bust banking system that explains why we always

00:35:25.940 have these boom bust cycles and banking crises because from the peak asset prices only need to drop by 15

00:35:32.260 percent and you've got you've wiped out bank equity you see is this why like in the 40s and 50s and

00:35:42.100 and i'm just guessing here just based on the prosperity of america because we weren't selling ideas we weren't

00:35:50.980 selling property rights etc etc we were going to the bank for money to build factories we were building

00:35:59.540 things right is that is that why it was more stable and the growth was real exactly exactly in fact now

00:36:05.460 you've you've put together the three cases so we started with the first one if bank credit is used for

00:36:12.340 just consumption because it's money creation you create more money therefore you create more demand

00:36:17.380 for goods and services but the amount of goods and services is the same therefore you get consumer

00:36:21.380 price inflation that's what we've had um actually in 2020 we we should come back to this when the

00:36:26.820 federal reserve forced the banks to massively increase credit creation um under some excuses

00:36:34.420 to do with some you know talking about viruses and things like that um and as a result um and this

00:36:41.140 there's various other policies making sure this goes into consumption we had to get inflation

00:36:44.660 18 months later as i want you know may 2020 when i saw these figures a huge massive and i i wrote on

00:36:52.260 on twitter well 18 months later we'd like to get significant inflation but that's only one scenario so

00:36:58.420 the second scenario is when bank credit is used for asset purchases you will get asset inflation and

00:37:05.220 that's that's that starts this whole game of asset inflation boom bust cycles and banking crises and

00:37:12.180 then you could have like japan experience they had a huge asset bubble in the 80s

00:37:17.140 that peaked around 89 90 and then credit crunch for 20 years that can go on for 20 years you can also

00:37:25.620 quickly end it and that's where qe comes in if you do this cleverly you can solve the problem before

00:37:31.060 it really starts because it's only a numerical problem in the banking system it's crazy to have

00:37:35.460 any recession any unemployment because of some accounting problem in the banking system you know

00:37:39.460 non-performing loans in the banking system you can quite legally get rid of that um if you're

00:37:44.740 interested we'll come back to that but the third scenario is and this is really the redeeming feature

00:37:50.020 of the banking system and if you do it right that's exactly as you say that's when we have these

00:37:55.220 periods of stable high growth and prosperity it's when banks lend i.e create money for productive

00:38:04.020 business investment in the creation of new goods and services implementing new technologies increasing

00:38:12.100 productivity and then you will get growth without inflation without asset inflation right without

00:38:19.220 consumer price inflation without banking crisis and the best way to do this is to have many many banks

00:38:26.020 because that's a decentralized system and it's been shown in many other disciplines whether it's the

00:38:30.580 military you know decentralized uh uh structure of giving orders or versus a centralized structure you

00:38:38.580 know decentralization is a superior principle when humans are involved because you're giving people a

00:38:45.060 bit more um autonomy um they're more motivated and also people on the ground have better information than

00:38:52.660 the central planner and that's what things are being immediately understood if you think about it you've got a

00:38:58.420 central bank that creates all the money supply like in the stalinist soviet type economies

00:39:04.500 um maybe you've got a committee of five people okay or whatever it's a small number they decide the whole money

00:39:10.580 creation allocation versus what things are being introduced you know you've got 5 000 banks each will have

00:39:18.500 say 50 branches each branch will have another several dozen loan officers lending to literally millions of small

00:39:28.180 firms because with small banks you get the advantage they lend to small firms and that's a very

00:39:34.420 decentralized system locally local banks lending to small local firms and they're checking all these

00:39:40.580 loan applications each one has to be checked there's a lot of work for the bankers but that's their job you

00:39:45.780 know the big banks don't want to do the hard work they want to do big deals with the big speculators they

00:39:51.380 don't lend to small firms anymore but you've got many many small firms small banks lending to small firms then you get

00:39:57.220 the productive business investment the real the loan officers are really going around kicking the tires

00:40:01.700 of these companies and they make the decision of how much money to create and who to give it to which

00:40:08.100 is a very powerful decision it will reshape the economic landscape therefore if you can make sure that banks

00:40:13.700 mainly lend for productive business investment um and the way to do this is to make sure you have

00:40:19.540 many banks particularly local small banks lending to small firms then you will get high growth

00:40:27.220 without inflation without the asset inflation and banking crises um and you get stability also get a

00:40:34.180 more egalitarian system where you know if you work hard you can work your way up be successful that's the

00:40:40.180 american way really correct that's why america has had a strong economy because it's been decentralized all the

00:40:45.540 states and these thousands of banks but of course the fed has worked against that i mean the fed killed

00:40:51.460 more than 10 000 banks who said already in in the 1930s and even in the last 35 years they killed

00:40:57.780 another almost 10 000 banks through their policies and they're proud of this because we're making the

00:41:03.300 banking system more efficient it doesn't make sense in 2008 they told us these banks were too big to fail

00:41:10.420 and we have to stop these huge banks because when they fail they'll take everything down and then all

00:41:15.300 they did was make these banks bigger precisely and and the regulation introduced has only helped the big

00:41:20.500 banks um and in fact they've we've now got a system it's internationally accepted now under the leadership of

00:41:27.380 the um federal reserve and then the bis is the basel bank of central banks and the ecb and you know they they

00:41:36.660 put the system in place where they say oh the big banks um they will be bailed out because they're

00:41:43.700 too big to fail well we'll always bail them out the small banks are well uh they're the ones that we're

00:41:49.540 going to close down literally right when the problems are caused by the big banks but actually they turn

00:41:55.300 this around they use as an excuse to further consolidate the banking system why because it increases their

00:42:01.700 power ultimately their central planners and they want more power and their absolute power will be

00:42:08.660 reached when they've driven out all the small banks out of business they only deal with a small number

00:42:12.820 of big banks and essentially you can consolidate into one bank and you're back in you know with the the

00:42:19.220 soviet style system did you know that the the the marx and lenin's communist manifesto has one of the points

00:42:27.060 is to centralize the monetary system into one bank one central bank that's centrally controlled

00:42:37.540 and of course if you introduce measures such as central bank digital currency you're really

00:42:43.700 accelerating this consolidation process because the difference as we said is the centralization we've

00:42:48.820 been using bdc bank digital currency for decades so what is really new about this is that the central

00:42:54.740 planners having failed because they're really responsible for all the crises we've had it's not

00:42:59.380 the local banks they are not to blame for all this you know each bank doesn't have the information

00:43:05.780 and can't influence other banks it's the central planners they're in charge so whenever we have a

00:43:10.660 banking crisis they're the ones that should be uh called uh to account but each crisis they're given

00:43:16.820 more powers because they always say oh it's because we didn't have enough powers give us more powers right

00:43:21.300 and the politicians do it i mean i've said this already more than uh 20 years ago before the 2008

00:43:26.980 crisis i want well as the next banking crisis is happening um and they will you know inevitably

00:43:36.260 reward the central planners i want that it's the central planners doing it because they create the

00:43:41.220 next asset bubble when it bursts then you get the banking crisis they get more power we've got

00:43:46.420 regulatory moral hazard so the central planners love crisis and they just create more and more

00:43:51.780 and the cbdc you see the central bank digital currency is really so what it is what is it i mean

00:43:58.420 so it's not new we've had digital money the banking system works fine we don't really need it um

00:44:04.820 there's no no need for cbdc's except for the sake of the central planners they wanted to have more power

00:44:10.980 and the the main description of what it is is really the central bank saying to the public

00:44:17.860 you can now open an account with us at the central bank so it's the bank regulator because

00:44:22.580 they're at the same time bank regulators stepping into the arena competing against ordinary banks

00:44:27.540 who's going to win this game when the umpire suddenly says well i'm going to score myself now

00:44:31.780 i'm going to use all my powers to whistle and give red cards and the umpire is going to win the game

00:44:36.740 it's a pretty boring game to be honest right so so let's i've talked about the dangers of cbdc's

00:44:45.060 for a long time most americans still don't really know what it is and i think and i think you do too

00:44:52.180 it's going to come down the pike fast and it's going to come with a crisis and they're going to say

00:44:58.020 look at all of the advantages you got to get into this now um and i think the vast majority of people

00:45:05.940 will go right along with it it's a terrifying end of freedom end of free choice kind of stuff

00:45:14.500 absolutely and you know if you've ever read the book of revelation yeah it is that system or could

00:45:22.180 be used as that system indeed indeed it's it is a totalitarian control tool of historically unprecedented

00:45:32.900 proportions uh giving so much power to the central planners a small number of central planners at the

00:45:40.180 central banks that is so unprecedented even that the famous dictators or infamous dictators of past

00:45:48.100 days past you know could have only dreamt about dreamt they didn't have the technology and as the

00:45:54.100 central planners admit themselves well with the cbdc we can then decide what you can buy where and when

00:46:03.380 and depending on who you are we will have the technology and the power to enforce that literally

00:46:11.300 they've said this it's it's all programmable exactly the programmability and it you don't actually own

00:46:18.740 it because you can't take it out yeah right so you don't own it it's property of the bank um and or the

00:46:26.740 central bank and if they want you to buy something because there's a problem in the economy they want you

00:46:34.420 to buy a certain product they can make it uh advantageous to you to spend that on this product they

00:46:43.220 can even say this amount of money is going away if you don't buy this product you're going to lose

00:46:49.620 this money correct yes indeed of course right um and you won't be able to to actually buy the things

00:46:56.180 you want to buy because and that's where they're working at the same time with ai um to put the system

00:47:03.060 in place where they can literally as you want to pay it be quickly checked who you are where you are

00:47:09.700 what time it is and if it doesn't meet the parameters for example i mean it could be any

00:47:14.180 excuse like this there's too much carbon footprint here or you know you're not you're outside the area

00:47:20.100 that's allowed for you and this is again a carbon footprint excuse or whatever the reason you know

00:47:24.660 um you're not allowed then you you notice oh it doesn't work i can't actually use the money

00:47:29.780 so the money becomes it's not your money as you say it is just conditional money it's permit money and

00:47:35.860 each time essentially you have you're submitting um an application to the central banker please may

00:47:42.580 i now do this transaction and they can make the decision which of course usurps fiscal powers it

00:47:49.300 usurps the power that in the past is only in the hands of elected parliaments and you know yeah

00:47:55.780 elected uh representative assemblies so it's an extraordinary coup d'etat by the central planners

00:48:02.340 to have absolute power and of course they will say oh your privacy is confirmed and and we will not

00:48:07.620 look at what you're doing and these are conspiracy theories exactly and actually there is no reason

00:48:13.540 as some of them like neil kashkari who's the head of one of the federal reserve banks has admitted

00:48:18.820 there's actually no reason for this it's a solution uh without a problem except of course the power the

00:48:25.220 control so i've heard modern modern monetary theory which is basically we can have as much money supply

00:48:35.300 out there as we deem and we don't even have to tax people to get them to raise the money if we're the

00:48:42.980 government and we won't have any problems as long as we have instant information on what is being

00:48:51.300 purchased and sold and so if inflation starts to go up we can just shut the money off and so the

00:48:58.340 price will come back our money off shut our money off right so like in like during covid if you weren't

00:49:06.420 an essential employee you may not be able to buy gas exactly is that right absolutely that's the idea

00:49:12.420 that's the programmability feature um and of course um you know several schools of thought and economics

00:49:20.020 have been pushed in the media very much um as a justification you know provide the argument

00:49:25.780 but of course this mmt has a number of serious flaws there's a number of assumptions which are

00:49:32.020 plain wrong um for instance it always argues that the government equals the central bank is the same

00:49:38.020 thing and that's not true because in many countries the central banks are privately owned the federal

00:49:44.740 reserve banks are all 100 privately owned they don't even know who they are exactly they've not

00:49:51.060 published that and we should insist you know we're going to find out eventually because there's only

00:49:55.860 going to be about eight of them left and then they'll all go into one um the um the the idea that we're

00:50:05.540 printing or borrowing a trillion dollars every 100 days scares the living daylights out of me

00:50:13.300 and you know i said to somebody the other day we should be able to go yeah but we bought this we built

00:50:26.020 this factory we did this i can't point to anything a trillion dollars is a lot of money and i can't point

00:50:35.940 to anything that we have made other than more work and paperwork and more attorney work

00:50:43.700 for everybody yes if if we were borrowing that money and we were actually you know saying we're going

00:50:52.420 to be competitive with taiwan uh for chips right now it it would be like the small bank right yes and

00:51:02.020 that would justify it and you're absolutely right um so that that that is the big um flaw in in in in

00:51:10.260 these policies of outsourcing everything and and de-industrializing because they're doing it to

00:51:15.460 germany now and and other european countries de-industrializing uh very artificial you know

00:51:21.860 pushing out all these uh companies when really that is the value added correct uh that creates jobs and

00:51:29.620 and if you don't have that at home anymore you lose all the know-how with that all the processes

00:51:34.420 which is why the chinese were very happy when when the western companies are you want us to do it

00:51:39.380 we'll do it we'll do it yeah keep coming keep coming um so so when you i mean you were when it was

00:51:47.700 it 2003 you were named global leader of tomorrow by the world economic forum now i know you don't have

00:51:53.780 to apply for that they just kind of name you but the world economic forum everybody says oh they don't

00:52:02.420 have any power they have extraordinary power because of the people that go there it's not they choose

00:52:08.580 to do the things that they're all agreeing to but they're changing everything and they're dismantling the

00:52:16.340 west we we see this yeah struggle as trump versus biden it's not trump versus biden because where's trump

00:52:25.860 and biden in germany in italy in sweden in england we're all arguing over the same things and we're

00:52:34.980 we're arguing over a little stage show but the effects of it are exactly the same in every country that's

00:52:41.220 right right and of course they're moving the puppets in this on the on stage yes and you know

00:52:46.420 when i was there so i was there twice 2003 and 2004 i was supposed to be invited five times but

00:52:52.260 they changed their mind they even scrapped this entire global leader for tomorrow program i asked

00:52:56.420 too many critical questions it turns out then they introduced this young uh young global leader program

00:53:02.980 where they took the ones they wanted and i of course was no longer that's how they did it right

00:53:08.020 right um but when i was there you know i met president clinton i met angela merkel the german

00:53:14.180 well future chance he wasn't chancellor she was a nobody basically but somebody said oh richard you

00:53:19.620 should meet this lady very important okay and there she was um and you know got her card and and had

00:53:27.540 you know did some small talk although i didn't find it very charismatic at all and it's just a mystery

00:53:33.060 how you know these people then become the leaders but you know some people already knew that she was

00:53:38.580 clearly being groomed so these things are happening because if you look into the history of the world

00:53:43.380 economic forum klaus schwab was apparently handpicked by henry kissinger who was um at the time at harvard

00:53:52.180 running a cia funded program and the documents are available so you know it's part of this game plan

00:53:58.900 to move you know the chess pieces on the global stage um and you know that's that's what they're

00:54:05.780 doing of course they have uh enormous real influence it's one of the channels in which these policies

00:54:12.900 are being disseminated and we saw it in 2020 under these covet uh psyop uh policies just how coordinated

00:54:21.300 they were all right because if they were sensible policies you could say oh it's because it's sensible

00:54:24.900 that's why we're all doing it but they were not sensible some of them were the most ridiculous

00:54:29.540 policies but they were just enforced and pushed through and identical nonsense policies in all

00:54:34.900 these countries that was really scary and revealed the concentration of power that is the reality today

00:54:41.060 already so what is the solution to this because 50 000 people worldwide already have

00:54:48.180 a chip implanted under their skin um is it 50 000 already wow i know in sweden it's more than 5 000

00:54:56.260 probably close to 10 000 worldwide worldwide is 50 000 that's what they say yeah yeah the could be true

00:55:01.300 yeah the um uh which is just terrifying um but they're they're moving towards what is it swift

00:55:10.260 just said they're coming out with a central bank digital currency we already have bitcoin you want this

00:55:17.620 bitcoins out there but you say if i'm not mistaken that the history of bitcoin's kind of nefarious too

00:55:26.180 yes i mean it suddenly came out at that time with the uh the so-called global financial crisis

00:55:32.820 um and also at a time when i started to publish about the the truth about money and and the money

00:55:37.700 creation process and that's when um basically plan b was put in place because once the truth is out and

00:55:44.500 people start to realize well banks create money for the uh the sort of small elite that wants to

00:55:51.860 manipulate things the risk is that we ordinary people will use this knowledge and power to make

00:55:59.140 sure that we have local banks community banks and we can actually have a decentralized system

00:56:05.380 with a lot of job creation high growth and prosperity there's no reason why we can't have abundance we can

00:56:11.780 have 10 growth even 15 growth in virtually any country in the world non-stop if you just make

00:56:18.820 sure bank credit creation is given by many small local banks to local firms that implement the new

00:56:25.940 technologies new ideas because the only limit to growth that we actually have is human ingenuity and

00:56:31.940 we haven't we've never really pushed that limit yeah yeah it's not in sight it's not so it's it's so when a

00:56:38.500 offers you a loan or you get a loan um they shouldn't just be looking at can he pay me back exactly it

00:56:48.180 should be is this going to create more wealth and he can pay me back yes right they should be looking

00:56:56.980 for investment opportunities exactly so i i mean the bank regulations put in place by the basle you know

00:57:03.300 bis essentially is the secretariat for these bank international bank regulators have encouraged property

00:57:09.140 lending real estate lending by the banks by essentially giving them a discount on the capital required

00:57:16.740 by the regulations so so banks have gone out and done a whole lot of property lending where that

00:57:21.220 creates these asset inflation boom bust cycles and banking crisis instead that should be totally scrapped

00:57:27.780 we should just have a simple rule which in fact most of the bank regulations you can just scrap

00:57:32.980 just have some basic core i mean they've become so complex totally unnecessary only serves the

00:57:39.300 concentration because small banks can't keep up with this so simplify and essentially one key rule

00:57:46.100 will do that banks are only allowed to lend if the money for the loan is used for activities that

00:57:57.380 contribute to gdp that would take out all the asset um transactions now you may say well hang on but

00:58:04.260 here's a family they want to buy a house an apartment right and of course they need a loan true but

00:58:10.740 actually to be fair they should be using existing money and they should borrow existing money which is

00:58:17.300 what economists have told us is actually happening when that's not true because banks create money right

00:58:23.140 they're not financial intermediaries so how can we do that well we need to establish non-bank housing

00:58:29.540 loan companies and they issue bonds which banks are not allowed to buy and thereby you soak up existing

00:58:36.020 money some of that and you fund the mortgages and you know property loans but banks must be kept out of

00:58:44.100 this because they're very privileged organizations they you know the banks have the power to create money

00:58:50.580 and that must be linked to something productive you're contributing to society because you are

00:58:56.580 creating money and it will have consequences and only when it's contributing by adding value creating

00:59:02.980 goods and services implementing new technologies will there be no negative consequences and also then

00:59:07.860 it will be sustainable because only those loans the productive business loans will generate income

00:59:13.060 streams to service and repay the loan and they become self-liquidating and then there's never been a

00:59:16.900 banking crisis there's never been a banking crisis based on too much bank lending to small firms has

00:59:22.900 there but if you have the property lending and also the obviously the consumer lending as well

00:59:30.580 these other two possibilities they create the problems and so you see that i mean it's very simple

00:59:34.900 and you know you immediately got it got it of course the key regulators they know this so why have they

00:59:40.580 given us regulations which encourage the asset inflation lending the property lending the boom bust cycles

00:59:48.020 and banking crisis and why do they drive out the small banks which do the productive stable lending

00:59:54.740 which gives us prosperity well it reveals as paul samuelson said that that's revealed preference it

01:00:01.860 reveals what they really want they've been wanting to drive down economic growth rates

01:00:06.900 de-industrialize and then create these crises which increase the central planners powers so that's

01:00:14.340 why they've encouraged um you know the property lending and the the asset inflation speculative lending

01:00:20.500 and consumer lending how much longer can this game go on certainly we're you know it is getting

01:00:27.540 long in the tooth it is getting late uh late stage game um but i mean the structures are quite robust

01:00:34.900 despite all that and despite the repeated i mean they're just repeating the same game over and over

01:00:41.060 somebody told me once people don't realize they're in vegas and the house always wins and it's just

01:00:47.220 it's just clearing the table and then you play a new game and they'll clear the table yes yeah yeah so of

01:00:52.260 course there there will be uh you know a new uh details new financial instruments new ways of clearing the

01:00:58.900 table and and starting again but um the game is continuing um i think what's different now is that

01:01:08.820 more people are realizing what's going on and when they pushed these digital ids under the covet pretense

01:01:15.780 a lot of people started to realize because i i was you have a crisis i mean you can't shut down america

01:01:23.380 can you imagine i said this three weeks before i'm looking at china and said and i said on the air

01:01:28.820 can you imagine if they tried to do that to americans well they did it they did it and we all lined up for

01:01:35.780 shocking it is really you know if your dollar goes down and they say you know what we'll give you a

01:01:42.660 dollar twenty right now you just bring your money in you just show it and we'll give you a dollar

01:01:48.180 twenty right now and we'll give you 50 cents later or 30 cents or you take this central bank digital

01:01:55.940 currency and uh all good things are going to happen to you and you know you could even retire you could

01:02:03.300 you you'll have a um uh what do they call it a uh minimum a basic minimum wage yes yeah or people

01:02:11.620 will take that yes or universal basic income yes that's what it is these are basically exactly and i've

01:02:17.380 said this um actually since 2015 16 because suddenly all these billionaires came out and they said

01:02:25.140 oh we need universal basic income yeah now that's an old idea it was actually first formulated in the

01:02:32.340 1920s and it was considered sort of socialist almost communist idea well how come now all the billionaires

01:02:39.620 are endorsing this well because now we have the technology for what well for central bank digital

01:02:46.980 currencies and when you introduce that you need a carrot to get people to take the chip and plant

01:02:54.660 you see one of the central bankers um in europe told me that he's he was shown the prototype it was

01:03:02.660 already ready uh in 2015 2016 that's when i decided okay one has to now speak up more explicitly about this

01:03:10.980 but at the time just like like you mentioned you know people just didn't know what i was talking about

01:03:15.700 and it seemed very strange and and and not really likely to ever happen but that fortunately changed

01:03:23.300 with the kobe operation and i think we mustn't forget that the central bankers are they're not politicians

01:03:30.340 they don't have a thick skin they're very thin-skinned um so i started to give speed to give speeches and and

01:03:37.380 talked about uh this this plan to introduce central bank digital currencies and we must oppose it

01:03:44.020 and and you know i guess some other people too but it must have been enough for them to say okay

01:03:48.660 let's let's first do some other operation let's do the covert operation which has also been long in

01:03:54.180 preparation because then we can push the digital id that's precondition for cbdc's then it's a better

01:04:00.820 position to do it but i think it was a strategic mistake because so many people realized this

01:04:06.660 control and then there's suddenly all the central banks were saying oh now cash is dangerous there

01:04:11.860 could be a virus on this right or something ridiculous story literally in march 2020 they

01:04:17.460 immediately say oh and now we need to really push hard to have digital currency right that's what i love

01:04:22.900 about so obvious bitcoin bitcoin could be used for nefarious purposes well yeah so can cash you know

01:04:30.580 of course it can everything can be used for nefarious purposes and if you think that you're controlling

01:04:38.740 the digital currency it's going to be an end to crime you're out of your mind exactly that's just an

01:04:44.500 excuse it's a very lousy excuse um and so then with with the covet operation more people realized and now

01:04:52.180 when i talk about central bank digital currencies there's so many people who understand yes it's

01:04:56.820 a threat and yes we have to stop it and that's really true so i'm hopeful that we can actually

01:05:02.500 stop it well having somebody with your credentials i think means a lot i mean you know i talk about it

01:05:08.900 and people are like oh it's glenn beck he's crazy but having somebody of your credentials stepping up

01:05:14.820 and saying this is uh a very brave of you um and and gives it new life i hope you're speaking all over

01:05:24.820 the world um thank you yes yes and and i'd be glad to you know continue to talk to you and to your

01:05:31.860 listeners about this and give you updates i would love on this because of course you know we are they

01:05:37.700 are continuing to to roll out this this agenda there's now the the tokenization of assets is

01:05:43.940 already on the agenda in basel just this week again um they're doing a new pilot project linking cvdcs to

01:05:51.220 tokenization and the idea is very obvious they want all assets ultimately to be tokenized i.e digitalized

01:05:58.500 because then they can also be subject to the central planners veto and programmability that's of course the

01:06:06.420 goal but they will sell it as oh it'd be so convenient you know to do real estate transaction

01:06:12.100 because we'll digitalize it and you can just press the button you don't need all the the legal you

01:06:16.500 know oh my gosh going to notaries and all these things we can just make it more efficient well we

01:06:22.420 don't really have a problem with it so is that really so necessary well for the central planners

01:06:27.220 it seems very important because of the power the control let me ask you one more question we're

01:06:33.060 so over time right now but i i can't let you leave without this thank you you said something to me

01:06:40.260 that was um more shocking than what you've just done uh at least to me i mean i my eyes are like

01:06:48.900 wide open it feels like a i have a completely new understanding thank you yeah um but when you sat down

01:06:57.380 right before we started you said do you normally say a prayer before and i'd yes but i didn't expect

01:07:06.580 that question from you um just being who you are you know london school of economics uh you know oxford

01:07:16.340 all credentialed how wit can you just quickly give me a god story here on how that plays a role in your

01:07:24.580 life is that new is that always been well actually it's very closely connected to what we've been

01:07:29.860 discussing i mean i'd always believed in god but i wasn't um until a certain point i wasn't uh probably

01:07:37.540 a what would you call a committed dedicated christian who you know reads the bible goes to church and

01:07:45.140 works for god um that happened at a particular turning point when i was uh you know i was a postgraduate

01:07:52.820 researcher in tokyo and i was given uh well i'd selected the task you know i had to write a

01:07:59.060 research report it was actually my first piece of research i was at the development bank of japan

01:08:03.860 which is a government bank in otimachi in central tokyo in the business district there and they had

01:08:10.100 the research department and i was the first shimomura fellow which is quite an honor shimomura is an

01:08:15.540 interesting character who's um was an expert on the high growth system you see anyway but that's

01:08:22.420 that's they sort of keep that secret you have to discover that yourself um and i chosen the research

01:08:29.380 topic of explaining japanese capital flows which in the 1980s were just buying up the world

01:08:36.420 everything all this japanese money real estate companies you know setting up factories you name it

01:08:42.740 uh columbia pictures uh pebbles beach golf course rockefiller center all sorts australia hawaii you

01:08:50.420 know europe and there was there was a puzzle in economics because nobody could explain these capital

01:08:57.540 flows they were so huge and um so i thought i thought it had to do with these extremely high real

01:09:07.540 estate prices which happened at the same time also the 1980s and and sort of peak in the second half

01:09:12.660 the 80s the property prices in tokyo was in in japan in general but particularly in tokyo were so high

01:09:20.500 that in the center of tokyo if you look at the imperial palace and there's a garden there which is

01:09:25.780 like a public park yeah very nice but it's not that huge that had the same market value of just take

01:09:32.820 the central tokyo market prices as the entire state of california including la san francisco you name

01:09:39.700 it everything in there i remember this coming out which is complete nonsense and honestly you have to

01:09:44.500 that's where and you know i was a graduate student and i thought okay well this is crazy stuff and that

01:09:50.580 of course has to have implications and to me then it seemed sensible from a japanese perspective that

01:09:56.340 if that's the market so-called market value well obviously you want to diversify because this is

01:10:02.900 not the real value but you want to take advantage you know so you want to invest abroad so there had

01:10:07.860 to be a link to those capital flows i thought it's just that's the explanation of course i still need

01:10:13.380 to discover why actually we had this property bubble but um you know you know just it would have been

01:10:20.020 enough just to prove that link between asset prices and capital flows so i went through this is pre-internet

01:10:25.460 through all the libraries and checking all the journals i was in tokyo i only had six months time

01:10:31.220 and the data work my professors at oxford and tokyo university already said oh data work alone will

01:10:36.100 take six months so you better start immediately but i needed to have a framework and then what actually

01:10:41.460 is that link um did lots of interviews speaking to people all the experts says said to me give up

01:10:48.980 richard there's no way you can have this explanation of japanese capital flows no no answer exists

01:10:54.900 impossible then you know time was clock was ticking your time was going by i was under pressure

01:11:01.460 um somebody said oh does the famous uh professor um jeffrey sachs um in the us he wrote on this

01:11:10.020 topic with his phd student and they they did a discussion paper at meaty okay so i went to this

01:11:15.220 ministry of international trade and industry um they're all very friendly and helpful oh yes yeah

01:11:19.460 yeah yeah we had we had uh sak sensei was here and yes he did a study uh here it is great fantastic

01:11:25.940 you know i was just a graduate student so just having his study on this topic and sure enough he

01:11:30.500 was talking about real estate bubble and capital flows there must be a link same idea and if i just

01:11:35.380 have a slight modification that'd be enough for my research institute everyone's happy i don't have to

01:11:39.540 discover the wheel rediscover the others have anything dramatic new but then going through this

01:11:46.740 first you know explained why there should be a link and then conclusion and therefore we conclude there is

01:11:51.620 no link so back to square one it was a big shock um so conclusion was it's been more than three months

01:11:59.140 um and i had not made any progress at all i had nothing to show for and they've been really nice to me

01:12:05.540 give me give me this um you know it's the first jimumura fellow which is really for a young scholar

01:12:10.500 already you know like uh assistant professor associate professor i was you know and and so

01:12:16.100 they give me this big apartment in central tokyo treated me really well and i would have to soon

01:12:21.060 announce my results which were nil so it was pretty bad in in my career which which had been fairly smooth

01:12:28.500 until then this looked like a major disaster in the making so i was a lot of pressure and on a

01:12:34.660 sunday because you know next monday morning go back to otomachi central tokyo the development

01:12:40.260 bank of japan go to your desk your research institute nothing to offer so i had a pretty bad feeling

01:12:48.340 sunday afternoon and i i thought about this rationally okay well all the experts have said is impossible

01:12:57.300 the all the economic models you know and you know economists concluded there is no link

01:13:04.180 there was no explanation so i had an impossible task but i still and with the japanese you see

01:13:11.220 you can't change your topic that would be an easy cop out okay give me a different topic this one is

01:13:16.020 impossible right would have been truthful but was not an option so actually logically the only thing

01:13:22.660 that could help was a miracle right i needed a miracle well how do you do that well we can't do it but god can

01:13:32.340 do that so i i actually laid down on the on the ground and and prayed of course you realize okay i'm in trouble

01:13:42.260 so i'm praying that's the usual stuff isn't it it's not ideal so you you sort of confess okay i haven't

01:13:48.900 been a good boy and i should actually change and i really wanted to have the solution because i had all

01:13:58.660 these plans what i was going to do as a you know if i continue this as researcher scholar i wanted to

01:14:03.140 continue with my doctorate all that was in danger because my professor recommended me for this

01:14:07.300 position all that you know so i thought okay i'm i god please give me this miracle i don't know what it

01:14:16.180 is i don't know what the solution is but i need this miracle i will read the bible i'll go to church and

01:14:23.060 i suppose as an economist you know maybe you need an economist i'll work for you there's much you can

01:14:29.380 do right as a christian economist i thought okay so that's what i offered and well there's there's more

01:14:36.820 details and i i fear we don't have time but i was given some some signs and symbols i'll show you later

01:14:44.180 okay and the conclusion is so next morning i went to my desk at the moment i sat down i had the answer

01:14:52.980 it was literally put into my head and it was of course simple the truth is always simple what the

01:15:00.020 famous professor jeffrey sachs hadn't considered was his argument was this if you um if the japanese

01:15:08.180 want to cash in on this massively overpriced real estate they'd have to sell it but the foreigners

01:15:13.620 weren't buying it because the crazy prices so they were selling it to other japanese and therefore the

01:15:18.660 money was staying in japan therefore there's no link you see but i suddenly immediately instantly

01:15:25.860 realized no the solution is banking they're not selling the real estate they're using as collateral

01:15:34.980 for a loan and when and the next point is though which i also immediately knew i just knew when banks

01:15:43.780 give loans they create new money this is new money creation therefore it's not pushing around existing

01:15:49.860 money is new money creation on the back of this real estate and some of it spills over spills abroad

01:15:57.220 as capital flows so now i knew exactly what i needed what data oh it's bank lending to the real estate sector

01:16:04.020 i there was an assistant give me this data please and you look at capital flows real estate lending

01:16:09.700 perfect match and then it was easy i was i was ahead of schedule as a result because yeah and

01:16:16.820 it's it's the only paper that could explain japanese capital flows perfect match um it's a great chart

01:16:21.940 you should look up the paper and that led you to where you are today exactly because then i realized

01:16:27.860 wow what is this about banks they create money out of nothing well that's tremendously you know

01:16:33.620 momentous information that i mean that's everything that led to everything else to god and and led me

01:16:40.100 to god as well indeed so i suppose you know god took my um my proposal so and that's how i have

01:16:48.180 continued to to work against enormous resistance you know that that continues to drive me out of

01:16:53.300 universities where you know the pressure is is builds if you speak about truthfully about the banking

01:17:00.180 system in the economy because you know you don't fit into the mainstream um fake economics uh which

01:17:07.460 makes them look bad very quickly because it's not based on empirical evidence i work very empirically

01:17:11.940 scientifically um so that's not appreciated as you can imagine and of course then i moved into setting

01:17:20.100 up community banks in the uk and that really um caused a lot of resistance in the uk it's not a

01:17:26.180 supportive environment for setting up community banks oh i know thank you please come back again

01:17:34.500 thank you very much i'd love to

01:17:41.380 just a reminder i'd love you to rate and subscribe to the podcast and pass this on to a friend so it

01:17:47.220 can be discovered by other people

01:18:05.060 you

The Glenn Beck Program - April 06, 2024

Ep 216 ｜ What You Know About Money Is All Wrong ｜ The Glenn Beck Podcast

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