Conversation With Economist Richard Werner | The Plandemic Was Used To Usher In TOTAL CONTROL
Summary
TLDRIn this enlightening discussion, economist Richard Werner, known for his book 'Princes of the Yen', delves into the shadowy world of central banking and economic control. He explains the mechanics of money creation by banks, the manipulation of economic cycles through credit policies, and the potential dangers of Central Bank Digital Currencies (CBDCs) tied to digital IDs, hinting at a future of unprecedented surveillance and control. Werner also emphasizes the importance of community banks and the need for public awareness to counteract the centralization of power.
Takeaways
- 🏦 The central banks, rather than governments, are the primary entities controlling the world's money supply and economic policies.
- 🤔 The complexity of monetary policy and economics is often intentionally used to obfuscate the truth and keep the public in the dark about banks' activities.
- 📚 Richard Werner, an economist and author of 'Princes of the Yen', has been a vocal critic of central banks' policies and their impact on economic crises.
- 🔄 The repo market bailouts in September 2019 hinted at underlying issues in the banking system that were overshadowed by the subsequent pandemic.
- 💡 Werner's experience in Japan revealed the disconnect between theoretical economic models and real-world practices, particularly in central banking.
- 🌐 The World Economic Forum's Young Global Leaders program has been criticized for molding future leaders who align with their centralized power agenda.
- 💸 The creation of money is primarily done by commercial banks through lending, not by central banks or governments.
- 📈 Bank credit, when used for asset purchases, can lead to asset bubbles, banking crises, and economic recessions, as seen in Japan's economic history.
- 🛑 Central banks have the power to avert economic downturns but may choose not to do so for political reasons or to engineer crises for political change.
- 💹 The push for Central Bank Digital Currencies (CBDCs) is a move towards greater surveillance and control over individuals' financial transactions and activities.
- 🚫 The potential introduction of CBDCs poses a threat to personal freedom and economic sovereignty, enabling the central banks to control and restrict access to money.
Q & A
What is the main topic of discussion in the interview?
-The main topic of the interview is the role of central banks in the global economy, the creation of money, and the potential for central banks to manipulate economic conditions for political ends.
Who is Richard Werner and what is his claim to fame in the field of economics?
-Richard Werner is an internationally renowned economist, known as the author of the bestseller 'Princes of the Yen' and as the father of the monetary policy concept of 'quantitative easing'. He has been at the forefront of warning about incoming economic crises.
What is the 'repo market' mentioned in the transcript?
-The repo market is a part of the financial system where banks and other financial institutions lend money to each other for a short period, often overnight, using securities such as government bonds as collateral.
What does Richard Werner believe about the purposeful creation of economic crises by central banks?
-Richard Werner suggests that central banks, like the Bank of Japan, have purposefully created economic crises, not out of incompetence, but as a means to engineer political and economic changes that favor certain interests.
What is the significance of the 'United States notes' issued by JFK in 1963?
-The United States notes issued by JFK in 1963 were significant because they were a challenge to the Federal Reserve's control over money creation. These notes were issued directly by the US government, bypassing the Federal Reserve, and were the last instance of a government creating its own money.
What is the connection between the World Economic Forum's 'Young Global Leaders' program and the centralization of power?
-The 'Young Global Leaders' program is seen as a mechanism for identifying and grooming individuals who can be molded to fit into a future elite that aligns with the interests of powerful entities. This program has been linked to the rise of various political figures, suggesting a pattern of centralizing influence.
What is the role of banks in creating money, according to Richard Werner's research?
-According to Richard Werner's research, banks effectively create money when they issue loans. This process, known as credit creation, is the primary way new money is introduced into the economy, rather than the common misconception that banks are merely intermediaries for existing deposits.
How does the use of bank credit for asset purchases influence the economy?
-When bank credit is used for asset purchases, such as real estate or financial assets, it can drive up asset prices, creating an artificial asset boom. This can lead to unsustainable economic conditions that may result in a recession or depression when the bubble bursts.
What is the difference between 'financial intermediation theory of banking' and 'credit creation theory'?
-The 'financial intermediation theory of banking' posits that banks act as intermediaries, lending out deposits they have received from customers. In contrast, the 'credit creation theory' suggests that banks create new money when they extend loans, effectively increasing the money supply.
What are the potential implications of Central Bank Digital Currencies (CBDCs) for individual financial freedom and privacy?
-The introduction of CBDCs could potentially allow central banks to exert unprecedented control over economic transactions, including the ability to monitor all financial activity in real-time and to restrict or block certain transactions, thus impacting individual financial freedom and privacy.
Outlines
🏦 Central Banks' Influence and Economic Control
The conversation begins with a discussion on the significant role central banks play in the global economy, suggesting they are the real power behind economic movements. The host expresses difficulty in understanding the complex world of monetary policy and finance, which seems intentionally opaque to keep the public uninformed. The guest, Richard Werner, an economist, is introduced as an expert on the subject, with a background that includes proposing the concept of quantitative easing. The host references the unusual banking activities in September 2019, hinting at a potential financial crisis before the pandemic, and seeks clarity on these events.
📚 The Disconnect Between Economic Theory and Reality
This paragraph delves into Richard Werner's academic and professional journey, starting with his education at the London School of Economics and Oxford University. He expresses dissatisfaction with the disconnect between theoretical economic models and real-world economies, leading him to explore practical economic experiences in Asia, particularly Japan. Werner's time in Japan during the asset bubble peak and his work at Deutsche Bank raised questions about the disparity between stock market levels and land prices, sparking his interest in the real functioning of economies.
🌐 The Alarm on Economic Crises and Central Bank Policies
The discussion continues with Werner's experiences in Japan, where he observed the central bank's role in economic growth and crises. He became the first 'chimamura fellow' at the Japan Development Bank, learning about the country's rapid post-war growth. Werner's research led him to understand the source of Japan's capital flows in the 1980s and the inability of economic theories to explain them. He developed an alternative economic approach, 'scientific economics,' grounded in empirical reality rather than abstract theory, which he implemented in his career as Chief Economist and later in his own firm.
💡 The Importance of Quantitative Tools in Central Banking
Werner emphasizes the importance of quantitative tools over interest rates in central banking, explaining that the latter is a distraction while the former are the key to understanding central bank activities. He shares his insights into the banking crises and his proposal for quantitative easing as a policy to quickly resolve such crises. The conversation hints at a connection between the 2019 repo market issues and the subsequent monetary programs rolled out in 2020, suggesting a deliberate acceleration of certain monetary policies.
🕵️♂️ Uncovering the Manipulation Behind Economic Crises
The conversation takes a turn towards the manipulation behind economic crises, with the host drawing parallels between Werner's findings in 'Princes of the Yen' and current events. They discuss the possibility of manufactured crises for political gain, the consolidation of power through the absorption of community banks, and the impact of the pandemic on economic structures. The host questions the narrative around the necessity of economic shutdowns during the pandemic and the acceleration of business consolidations.
🌐 The Connection Between Economic Policy and Global Power Structures
This paragraph explores the connections between economic policies, global power structures, and the influence of organizations like the World Economic Forum. The host and Werner discuss the forum's 'Young Global Leaders' program, which they suspect is a grooming ground for future leaders who can be molded to serve certain interests. They also touch on the idea of manufactured crises, such as the 2008 economic crash and the pandemic, as opportunities for gaining control and consolidating power.
💼 The Transformation of Economic Systems and the Role of Money
The discussion moves towards the transformation of economic systems and the role of money in centralizing power. Werner explains the shift from community banks to large firms and the implications for economic control. He also addresses the push towards digital currency and its potential impact on personal financial autonomy. The conversation suggests that digital currency could be a tool for further control, eliminating the possibility of a 'run on the banks' and centralizing monetary power.
🔮 The Vision of a Centralized Digital Currency Future
The focus shifts to the potential future of a centralized digital currency system, with Werner expressing concern over the loss of individual financial control. He discusses the implications of such a system for personal freedom and the potential for abuse of power by central banks. The conversation also touches on the historical context of money creation and the shift away from government-issued currency to bank-created money.
🏛️ The Historical Context of Money Creation and Central Bank Policies
Werner provides historical context on money creation, explaining that banks, not governments, are the primary creators of money in modern economies. He discusses the last instance of a government creating its own money in the US under John F. Kennedy and the subsequent shift to banks creating money through lending. The paragraph highlights the lack of public understanding about this process and the implications for economic control.
🛑 The Deliberate Creation of Economic Crises by Central Banks
The conversation delves into the idea that central banks may deliberately create economic crises to achieve political and economic restructuring. Werner shares his research findings on the Bank of Japan's intentional prolongation of the country's recession for political gain. He also discusses the potential for central banks to use their power to manipulate economic cycles for their benefit.
🌍 The Global Impact of Central Bank Policies and the Push for CBDCs
The discussion broadens to the global impact of central bank policies, with Werner highlighting the European Central Bank's role in creating economic crises in Europe. He also addresses the push for Central Bank Digital Currencies (CBDCs) and the potential for these to be used as tools for surveillance and control. The conversation suggests that the ultimate goal of central banks may be to consolidate power and control through digital currencies and identification systems.
🛑 The Central Bank's Intentional Abuse of Power and the Path to CBDCs
Werner discusses the intentional abuse of power by central banks, using their control over money creation to manipulate economies and societies. He outlines the steps taken by central banks to move towards the implementation of CBDCs, including the use of crises to push for digital IDs and the potential consequences of such a system. The conversation highlights the risks of a totalitarian control system through CBDCs and the importance of resistance and awareness.
🏡 The Role of Community Banks and the Fight Against Centralized Power
The final paragraph focuses on the role of community banks as a counterbalance to centralized power. Werner advocates for the establishment and support of local banks to prevent the monopolization of financial power. He also discusses the potential for local, credit-based systems that could operate independently of central bank control, offering a more equitable and democratic financial system.
🤝 Conclusion and Call to Action
The conversation concludes with a call to action for greater awareness and understanding of the financial system, emphasizing the importance of holding central banks accountable. Werner encourages the support of community banks and the promotion of economic policies that benefit local economies and individuals, rather than centralized power structures.
Mindmap
Keywords
💡Central Banks
💡Quantitative Easing
💡Repo Market
💡Economic Crises
💡Monetary Policy
💡Shadowy World of Finance
💡Financial Intermediation
💡Asset Bubble
💡Bank Credit
💡Digital Currency
💡Economic Growth
💡Inflation
💡Community Banks
Highlights
Central banks are key movers and shakers in the economy, with the power to influence economic policy and stability.
The guest, Richard Werner, is an internationally renowned economist who has been instrumental in shaping monetary policy concepts like quantitative easing.
Werner's background includes studying at the London School of Economics and the University of Oxford, and he has practical experience in Japan's financial sector.
The interview discusses the disconnect between theoretical economic models and real-world economic functions, emphasizing the need for empirical, reality-oriented economic approaches.
Werner's experience in Japan during the asset bubble of the late 1980s provided insights into the practical workings of the economy and the role of central banks.
The conversation reveals that banks, not governments or central banks, create the majority of the money supply through lending, challenging common economic theories.
Werner's research found that central banks can manipulate the economy by controlling the amount and direction of bank credit creation, leading to boom and bust cycles.
The interview touches on the role of central banks in economic crises, suggesting that they may intentionally create and prolong recessions for political or structural reform purposes.
Werner's work on 'Princes of the Yen' exposed the manipulation of economic policy in Japan, including the deliberate creation of an asset bubble and subsequent recession.
The discussion highlights the influence of central banks on political leadership, with the World Economic Forum's Young Global Leaders program being a potential avenue for shaping future elites.
Werner warns of the dangers of central banks gaining more power through the introduction of Central Bank Digital Currencies (CBDCs), which could enable unprecedented control over individuals' financial activities.
The interviewee suggests that the push for digital IDs and CBDCs is a strategic move by central banks to establish a totalitarian control system over economies.
Werner argues that the economic crises, including the 2008 financial crisis and the 2020 economic downturn, were influenced by central bank policies and not just market forces.
The conversation points to the importance of community banks and the need to protect them from central bank policies that could lead to their demise.
Werner calls for a return to empirical, scientific economics that is grounded in data and observable facts, rather than abstract theories.
The interview concludes with a call to action for individuals to support and engage with local community banks as a means to resist central bank control.
Transcripts
who really runs the world now I've long
instinctually believed it's the central
banks but I haven't been able to fully
understand how exactly and my hope is
our next guest tonight can do this
Richard Werner is an internationally
renowned Economist who wrote the
bestseller princes of the yen is the
father of the monetary policy concept of
quantitative easing and for decades now
he has been at the Forefront of sounding
the alarm on incoming economic crises
Richard welcome to the show excited to
talk to you
thank you very much and thanks for
having me it's a pleasure
um I I have to say this is going to be
the most difficult interview I think
I've ever done because
um you know monetary policy economics
all of this is over many of our heads
um the language is difficult to
understand and I feel like it's done on
purpose it's done to keep a lot of us in
the dark so that we don't know what the
banks are really doing and what's really
happening in the shadowy world of
Finance so um I've done a lot of I've
done a lot of digging into this I've
done a lot of research into this and I
have to say that when I first became
interested in what the central banks
were doing and what's really going on
was back in September of 2019 right
before the pandemic hit when there was
this strange thing going on with the
banks where they were bailing out the
repo market and they kept doing this
over and over right they were dumping
billions of dollars in the repo market
and something obviously odd was going on
but many of us couldn't figure out what
is this odd thing that's happening it
looked like maybe the bond market was
going to crash or something along those
lines really unclear but then the
pandemic and we all kind of lost track
of that and um
but I I feel like it's all connected and
so I want you to start first of all I
want you to start with giving everyone
your history in the world of Economics
now you're a professor a lot of people
think oh you know you've just been in
Academia this whole time but you haven't
so can you give a quick brief rundown of
your experience
great well let me first say trust your
instinct I think your instinct has been
spot on on the money you know that the
central banks are the key movers and
shakers
um and also the second point you made
about
um you know the September 2019 crisis
which um seems to have been clearly one
of the reasons why they accelerated some
of the monetary programs that we then
saw being rolled out in 2020 but we'll
come to that so yes I think you spot on
uh well my background
um I studied economics at the London
School of Economics
um and then enrolled for the the Masters
and doctoral program at the University
of Oxford I'm originally from Germany
and I thought you know economics was
going to be a bit more practical than
what they taught at these universities
because essentially they they've got
very abstract theoretical models
mathematical models
that have a high degree of precision
within their own models with their own
confines but these these models have
essentially nothing to do with reality
um but also let's come back to that but
basically just to say at this stage that
I just felt what is this what do they
teach me I'm interested in the real
world how economies actually function
and what's going on and
when I graduated from the LSC was in in
the summer of 1989
and I I thought there was a lot going on
in Asia I want to go there I wanted to
go to China Japan
I ended up being in Japan
um doing an internship at Deutsche Bank
um at the peak of what with hindsight
turned out to be the peak of this acid
Bubble at the time as you know in the
late 1980s people did not call it a
bubble
um and to me of course that was very
exciting was going on there
um going through the various departments
at Deutsche Bank
um and and so there were a lot of
questions there why is the stock market
at this extraordinary level the Nikkei
two to five index was around close to 40
000 and at the same time land prices
were just so high overpriced it was
incredible
so much so that a tiny plot of land in
central Tokyo would have the same market
value
and and we're talking about something
fairly small like um you know the
Imperial Palace Garden which is like a a
small park in Central Tokyo would have
the same market value at these market
prices as
all the property of the entire State of
California including Los Angeles San
Francisco everything you know
it's just I'd love to own that crazy
land right exactly so so of course I
thought wow what is going on and then
and so to me the this gap between
economics the theoretical
stuff and reality seemed so huge and of
course I was much more interested in
reality
um and so I sort of took time off from
Oxford
um to go back to Japan went to the
University of Tokyo uh became a graduate
researcher uh learned Japanese a garden
a job at the Memorial Research Institute
learned a lot from the people there met
a lot of people in the financial sector
then
um became the first chimamura fellow at
the Japan Development Bank which is one
of the government development Banks
which is very much involved in the
post-war rapid economic growth which is
the other big puzzle you know how did
Japan manage to have such high growth
double-digit economic growth
what's the secret and basically the
policies they adopted did not follow the
textbooks they did not do what the
economics theorists were telling us
um so another puzzle to solve
um Japanese Capital flows in the 1980s
were basically going everywhere in Asia
in America uh Australia Hawaii buying up
U.S companies Columbia Pictures you know
uh Rockefeller Center and so on
Pebbles Beach Golf Course where was all
this money coming from and why was so
much money coming from Japan again the
theorists couldn't explain it they had
empirical models also that didn't work
it was like puzzle after puzzle
and to me that was a nice challenge I
thought well one needs to find answers
to all these questions
which ultimately I did find
um but just quickly back and just
complete my answer
um
um so I then
um I I also went back to uh to Oxford to
try to finish my degree meanwhile some
of my work was published
I got job offers in Tokyo so my
doctorate was a bit delayed I got it in
the end but
um I also then became Chief Economist at
Charlene Fleming Securities in Tokyo
which was one of the sort of quite
um nimble investment Banks they're quite
strong in Asia
with a flat hierarchy so they gave me a
lot of responsibility early on
um and I could Implement my models and
my Approach which is very much reality
oriented I realized that economists
they were basically using this
theoretical approach which is called the
deductive hypothetical
axiomatic approach so
um they just pose these theories and as
you said at the very beginning
it sort of makes things artificially
complex while at the same time giving
this impression of being scientific but
if you look at the scientific research
disciplines chemistry biology physics I
mean how do they work they use a
different methodology which is the
inductive method also known as the
scientific research method you look at
data you look at facts and any Theory or
model you have has to be developed based
on that data
that's scientific and I realized once
you study methodology economics the way
it's being done in all the leading
universities is not actually scientific
it's more a political ideology to push
certain preconceived ideas they then
work backwards what assumptions do we
need to to be able to sell our frequency
conclusions that the theoretical models
come to well that's totally unscientific
and so
I started what ended up
um being an alternative approach What I
Call Scientific economics where you know
yes you can have theories and models but
they have to be grounded in empirical
reality their facts always drive things
anyway so
um I um I then
um set up my own firm advising
institutional investors having been at
Johnny Fleming very quickly top uh top
three in Economist on Japan and in the
various rankings Greenwich survey
institution investor survey set up my
own firm
um then realize there's such a big gap
in economics we need to
um
to really revolutionize economics by
having this empirically driven realistic
economics actually works and we can
learn a lot from from Asia successful
economies like Japan Korea Taiwan and
then of course
um since then China that as well
um I went back to the UK became
professor of banking but continual work
running a global macro fund uh several
Global microphones actually
um Providence Asset Management then bear
Stearns Asset Management set up their
first macro fund hedge fund outside the
US the best dance Global Alpha fund
um so continue then to do my academic
work while also advising institutional
investors I've been monitoring
um
Central Bank and bank credit Creation in
40 countries
um for many years and that really gives
you so many signals and it's not what
everyone's looking at it's not really
the interest rate that is the key signal
that's part of the smoke screen from
this false economics to keep people busy
with stuff and central banks are able to
distract people's attention it's like
the Magician on stage look here what's
happening while the other hand is doing
the trick you know
um so it's not the price of money the
interest rate that's the key tool I
found out it's the quantitative tools
they're using that are more important
hence also when I proposed a more useful
policy to get out of banking crises
quickly which are called quantitative
easing but enough of that let's let's
um go into
into details okay so
um so you're legit
that's what all of that boils down to
um okay I'm trying to figure out where
to start and I'm going to ask you where
to start because I think that there is a
connection between what you uncovered in
the princes of the Yen and how there
were these anointed people these
anointed men who 30 years prior were
essentially crowned to later run the
country run the banks run and even in
the role of prime minister right they
were like really truly crowned in
advance
there's also the world economic forum
and there's the young global leaders
program which to me seems like a very
parallel similar thing and you actually
yourself were one of the global leaders
for tomorrow it used to be called the
global leaders for tomorrow then they
changed it to the young global leaders
and you actually sounded the alarm on
this and said hey they've changed this
this used to be people they would pluck
up that that were you know smart and and
doing great things in their Industries
and now they're grabbing people that
they seem to be able to mold and direct
and we've even seen Klaus Schwab now
saying things like oh we've infiltrated
cabinets all around the world we've got
people everywhere our young global
leaders are now everywhere and you were
sounding the alarm saying now they're
just getting people they can mold people
that they can direct when it used to be
actually
so the foremost thinking Minds in their
Industries
so I feel like there's some kind of
connection between what happened with
princes of the Yen what was going on in
Japan and the young global leaders I
also feel like there's some sort of a
connection with because what you uncover
in princes of the end is that these
crises are manufactured the Central Bank
in Japan had the option to get out of
the recession they didn't they chose not
to they did it for political reasons
they had a reason why they wanted to
keep Japan in a recession and they were
doing it for their own political gain
right their own political end
and so then I think about how does that
relate to to the 2008 economic crisis
how does that then relate to the
pandemic because another thing that
you've been exposing is that the way
they gain control the way the Central
Bank gains control is through absorbing
Community Banks and essentially closing
down mom and pop shops right like if you
can consolidate everything into the big
firms then you can control the world a
lot easier if you've got a lot of little
mom and pop businesses if you've got a
lot of little Community Banks which are
giving the loans to those little mom and
pop shops then you're not you know it's
a different Dynamic so you so what their
goal is to to consolidate so this makes
me question things like
the 2008 crash and also in particular
the pandemic because one thing that
really at the beginning of the pandemic
when they were closing down the economy
I was I can confidently say in my field
of progress you know I was considered a
progressive political talker don't know
what they consider me now but whatever
it doesn't matter
um I was really the only one that was
actually saying do not shut down the
economy you do that you're screwing over
everybody and a lot of my counterparts
were saying no no no if you open the
economy you're a shield for Wall Street
this is all a game for Wall Street we
want to keep it close and I was saying
oh my God you keep this closed let me
just tell you what's going on over the
decades it used to be back in the early
1900s 80 percent of the businesses were
mom and pop shops slowly over the
decades they've dwindled to to now under
50 percent and when you do that you have
Consolidated power to the big Amazons
you know right you get all these big
companies get it so
the pandemic accelerated this a lot of
shops went under uh during the 2008
crisis a lot of those Community Banks
went under
so can you tell uh so this is where I'm
at with this and I'm thinking all of
this is somehow connected that maybe
they even manufactured the 2008 crisis
that maybe even the pandemic not saying
they necessarily release the virus on
purpose maybe I'm open to that idea but
even if they didn't they took advantage
of the fact that there was this virus
and they were able to then say now is
our chance to for one correct what was
ever going on in that in that September
2019 repo issue we're going to hide that
or correct it fix it
um and on top of it we're going to
consolidate more control and another
thing you've been sounding the alarm on
I know I'm saying a lot here uh but
another thing has been digital currency
they want to move us towards this
digital currency which if the banks and
I want you to get into this what the
banks really do if they really are the
ones that are creating money
in and we used to have run on the banks
right which is what the whole premise of
central banks you don't you need a
central bank that's going to control
things so there's no run on the banks
you end up with these constant crises
over and over
so
well you wouldn't ever have a run on the
bank I would imagine if you moved to
digital currency there's no how could
you possibly you're not going to the
bank saying give me give me my gold they
don't do that anymore now you go and
give me my dollars
okay that could potentially cause a
collapse what happens if if it's digital
they'd be like well your money the
money's on your card don't worry about
it it's right there you've got it in
your wallet so can you connect I mean
where am I do you see where I'm at with
this and can you absolutely absolutely
absolutely that's exactly the all these
uh events all these Trends are connected
and the Common Thread is
that
essentially Human Nature
um particularly when you know I think
ordinary people can't really fathom this
very often because I think most people
are quite well-natured and if they see
somebody trouble they want to help and I
think that's true in in almost all
countries in the world but there is a
small proportion of people that are
either extremely ambitious or
unscrupulous or have actually some kind
of uh problems pathological
um you know problems
um making them somewhat
um Psychopathic whatever the case may be
there is a small proportion of people
that love power
and it's probably true that to some
extent everyone if given power
is tempted to use and abuse power
there's a famous British Statesman Lord
Acton who had seen power at close hand
and how it really changes people
um a lot of people basically can't
handle power it corrupts them they just
want to use and abuse that power and you
know feel the power to enjoy feeling the
power he said
um absolute power well first he said
power corrupts and then he says absolute
power corrupts absolutely so there is
that
tendency that um
not everyone can handle power but
particularly when you get the wrong
people in positions of power which often
happens because they may be seeking
those positions of power
then we we see that power is being
abused and this power and wants more
power they just um you know they're not
happy just with money
they literally want control and that's
really the overarching trend of the 20th
century which unfortunately is
accelerating in the 21st century namely
the concentration of power into the
hands of fewer and fewer people and the
abuse of that power because it is not as
the U.S Constitution demands subject to
checks and balances anymore
um you don't have the separation of the
different powers in our executive
Judiciary and legislative no we what we
do have is an increase in concentration
of power
across the different areas across
countries and into the hands of fewer
and fewer people and of course the way
this is exerted is through money
and that is the common thread in all the
things you've said and that's why I
think we should start to unpack this by
looking at money what it does how it
works and we always have this official
story which is a small screen a smoke
screen Editor to hide reality as you
were saying you know to get people off
the The Real Track and then there's the
reality and then how things are being
manipulated behind the small screen
in order to concentrate power further
and that you can demonstrate you can
show with the data
is what's been happening but let me
quickly just um start perhaps by talking
about the world economic Forum because I
was invited
um to attend in 2003 20 years ago
um January
and they made me Global leader for
tomorrow that's that used to be this uh
the young people's program that they had
at the world economic forum and of
course I mean it was exciting I must say
you know all these people that normally
only see on television you know shook
hands with Bill Clinton the US president
you know you meet all the the current
leaders you meet I mean the top
musicians band leaders were all there
um and and of course you know from all
scenes business people
ministers secretaries of State everyone
was there
so quite exciting but
I just felt because you know they they
had they had a program they had topics
serious topics to discuss
and so I I ask questions
and they were promoting for instance
um genetically modified
foodstuffs
um which I know is is actually quite
dangerous there's all sorts of negative
consequences some of them just never
tested
um but really something that at least
people should know if they buy something
whether it's genetically modified or not
and the seeds usually
um are much less
fertile you know of any genetically
modified organism fertility goes down
and that's of course used by the big
Agro businesses because they want
Farmers to each year buy the grain Anew
from them but of course in traditional
traditionally your Farmers would save
some of the Grain and then you plant it
which is actually a nice sort of
allegory for economic growth you know
you've got you grow rice and you've got
your bag of rice what you eat
that's your consumption but what you
don't eat that you save the grain you
can plant it and the more you save the
more growth you'll have next year but of
course by having genetically modified
stuff it doesn't work you can't plant it
you have to go back so erase that point
and they shut me down and it was clear
that this is a rig this is not a proper
conversation it's not a proper
discussion then the next topic was
something else you know and of course
anything on economics Finance banking I
was just shocked these were very
controlled conversations and after a
while the clearly the moderators after a
few days they've been warned about me
you know don't pick Richard Werner you
know and so I realized they wouldn't
even when I raised my hand that they
would they'd see me but ignore me
um so I realized this is a this is a
fast
in 2004 I then challenged the head of
the ECB in front of everyone who's a big
big event
um plenary session he was on stage and
um the ECP at that time had just
engineered a recession
um in Europe uh particularly Germany
by taking policies that would tighten
credit there was a credit crash 2002
2003 and they kept saying oh that's good
and we need this in order to have
structural reform now that's exactly
what the bank of Japan had done
throughout the 90s they were saying in
public things like oh we like this
recession because
um thanks to the recession companies and
I'll learn a lesson they need to change
and that the politician's done unless we
need to deregulate liberalize privatize
we need all these changes well that's
not the Mandate of a central bank so I
asked the ECB head
in front of everyone where's the Mandate
for the ECB to demand these structural
reforms that you have just demanded here
in front of everyone
and he was quite unprepared I mean it's
a mild challenge really think about it
and quite politely asked you know it
wasn't really aggressive but he wasn't
prepared for it and clearly I mean his
answer was ridiculous but also
um these big wigs there was also Larry
Summers he didn't like some of my
questions you know they all must have
complained about me what then happened
after this January 2004 the second year
when I came
is very soon after all of us global
leaders for tomorrow we're supposed to
be invited for five years in a row we
got an email saying oh sorry the program
has been abolished
no more global leaders but tomorrow
sorry you're also not invited anymore
but then we found out just a few months
later
they just started a new program you
mentioned it you know young global
leaders they named it and they selected
it more carefully to make sure these are
conforming people that can mold into
their future Elite so at the time I mean
that was I met a young or younger Angela
Merkel before she was Chancellor you
know it was quite clear you know they
had the Future Leaders
um among these selected people
um but it was a very controlled event
and you wonder what's really behind this
now what's behind this is of course the
the powers that be it's it's quite clear
it's a membership organization so big
big business pays big money
um and writes the agenda of Davos the
world economic Forum but even big
business is not as powerful as
the those who control money and perhaps
we should talk about that next so
because really
any business industry even
pharmaceutical businesses that we found
out you know since this since 2020
extremely powerful influential but
ultimately
the money power is even more powerful
and so in this hierarchy of power and
that seems to be the key issue so
perhaps we should talk a bit about that
yeah it's interesting though what you're
explaining you know what you were
experiencing starting in 2003 is what
many of us experienced during the
pandemic so we can now relate to this
now that you're talking about it this
well no it's the the conversation is
already directed you're not allowed to
ask these other questions or bring up
these other points or else you know the
narrative has been set and then what I
find really interesting is through this
young global leaders program that
they've installed that they've been able
to actually get a lot of these people in
positions of actual power like you
mentioned Angela Merkel like Justin
Trudeau Jacinda are done we've seen many
of them actually rise up and Lead
Nations what are the chances of that I
mean it's very similar to what you wrote
about in princes of the end which by the
way there's a documentary of this I
watched that last night it's very
fascinating people should take the time
because it is ominous in a lot of ways
how was it that these that these people
in positions of power in Japan were able
to anoint certain people 30 years prior
to them rising up to becoming uh the
Prime Minister even I believe and heads
of banks how were they able to you know
are they psychic well clearly they're
not psychic it's just that things aren't
happening exactly the way we think you
know we're thinking we're living in a
Democratic Society right I mean we're
thinking we vote these people get into
power they run for office that's how it
happens but clearly it must not really
be happening that way if they're being
named young global leaders and then they
literally end up Prime Ministers and
presidents of Nations
I mean it's just it's really interesting
okay so now that we've we've seen that
they've been controlling these
narratives they've been trying to keep
people on the straight and narrow in
their mind and if if not then you get
shunned you get Outcast you go away we
don't want you here anymore so it comes
down to the people that are controlling
the money
so what should we talk about next should
it be the what a bank really is and the
creation of money maybe where that or I
think so many places we could go with
this
[Music]
yes that's true that's true but I think
that's a fundamental one that's very
important one uh where does money come
from
and it turns out that most people's
understanding of where money comes from
and who controls money is actually is
not correct
um most people would think that the
money comes from the government because
that seems to make sense
and the government May delegate some of
that to the central bank but ultimately
you know it's a public function it
should be for the common good for
everyone that should be fairness
um and somehow the government just has
to put the money into circulation well
the fact is the reality is
no government in the whole world is
creating any money
the last major economy where the
government said actually we're going to
create money and they put several
billion dollars in circulation was the
US government under John F Kennedy in
the year 1963.
and it was the last year of his life
when he challenged the Federal Reserve
and then since then no other government
has dared to do that
um and so so if the governments don't
create money
um
who does it now what JFK did in 1963 is
he issued United States notes they look
exactly like the Federal Reserve notes
but same design everything except they
weren't headed Federal Reserve notes
they were headed United States notes
um and they didn't have the FED seals it
was a challenge to the Fed
uh but that's that's basically not
happening anymore it was an attempt
at the moment well or since then what's
been happening is that
we have the central banks
but even the central banks only create a
small amount of the money supply
um basically the paper money
most people don't realize that we have
been using digital money digital
currency for many decades and that's
part of the current you know in this
debated discourse obfuscation they're
saying oh let's introduce Central Bank
digital currency because it's digital
age we need a digital response from
central banks well hang on we've been
using digital currency for a long time
central bank money is only around three
percent of the money supply the paper
money the cash
97 is digital money created by Banks and
we've been using this for decades so we
actually have been using digital
currency for a long time and it works
very well and there's no problem with it
but now central banks will come to that
they're saying hey we need Central Bank
digital currency well why but they want
more power I mean that's quite obvious
the central banks want more power but
before we come to that let's just
understand the the status quo what's
currently happening and what has been
happening uh for the last most of the
last century is that Banks create money
now how do banks create money
essentially a banking license is a
license to create money and put it into
circulation
um and that's also where would you
mention the beginning this obfuscation
comes in economics doesn't tell you that
did you know that when you study
economics
particularly when he studied in on a
more advanced level
um and maybe do a masters in economics
or a doctorate there's no banks all the
economic models economic theories
they leave out Banks there's no banking
in it
and and of course we know what I said
well actually that's a crucial function
you know these are the creators of the
money supply and if you leave those out
people don't really understand how it
works
by coincidence convenient isn't it so
how do banks put money in circuit into
circulation how do banks create money
when a bank gives out a loan a bank loan
the money for the bank loan
doesn't exist yet until you get the
money paid to your account that is the
creation of new money so effectively
Banks don't lend money they create money
and they create it when they do what we
call a bank loan
so the money for bank loan which is the
technical term is Bank Credit Credit
creation that is new money creation that
newly adds to the money supply so the
more Banks do what we call Lending
normally
um the more money is being created and
added to the money supply now of course
even though Banks do this and they
create the majority of the money supply
through lending central banks of course
are very much aware of that now I
produced the first empirical paper uh
empirical test to prove this because
that was controversial and a few years
ago people were saying oh that's a
conspiracy theory what's Professor
Werner saying that Banks create money
what a conspiracy here so I thought well
and for 100 years you know there's been
this debate about
where does money come from and what how
do banks actually work because today if
you look at the latest Finance journals
and finance textbooks they all say oh
banks are just Financial intermediaries
they gather deposits and the money they
lend out is the deposit money they're
lending out
which is not true but you see that's how
they
um they hide the reality of money
created so I did an empirical test I
mean what's the scientific thing to do
can you believe it for a hundred years
economy's been arguing
um oh it's it's the financial
intermediation theory of banking that's
correct
and the few were saying no it's the
Freddy creation Theory that's correct
others were saying it's a fracture
Reserve Theory uh is correct you know
that's a third Theory which is in
between which says that each individual
bank is just an intermediary but somehow
collectively there's money Creation in
the system that one was popular until
the 1960s and then currently I mean
since then we have the current Financial
intermediation Theory dominating which
says no banks don't create money look at
three theories of banking how do we find
out which one is true do a scientific
test and so I did that you need the
corporation of a banker found one that
agreed and let me look inside under the
Bonnet so to speak uh how the money
creation was was
um was actually taking place and I could
empirically establish this is in two
peer-reviewed published um in public
peer-reviewed journals
um published articles that it is the
credit creation Theory the oldest
um which was known until 100 years ago
that Banks create money out of nothing
when they lent now the key is this
because banks are so powerful they
create new money
they actually have a lot of influence
over how the economy is going to be
shaped
currently and in the years ahead because
the decision by Banks of how much money
to create
and then also few to lend this money to
for what type of transactions for what
for what purposes that will reshape the
economic landscape very quickly and
basically there's three scenarios if
banks
create credit
and it's used
for asset purchases property real estate
Financial assets
because Bank credit is money creation
it's like printing money and injecting
it into say the property Market what's
going to happen with property prices you
don't need a PhD yeah figure this out
you're going to push up asset prices
exactly you get asset inflation if you
um have Bank credit going into asset
markets
and that's very bad because that's an
artificial asset boom
which is unsustainable and if you keep
doing this for a few years
the moment the Music Stops and Banks
stop creating credit for asset purchases
our surprises will not go up any further
but then the late coming speculators
will go bust and then the banks have
non-performing loans they will reduce
lending even to the economy you get a
recession a downturn and the banking
prices because
when because essentially the assets are
the collateral for the loans and when
you have this acid bubble usually as the
prices go up 100 200 and from that Peak
um if they only drop by around 10
percent you have a banking crisis
because you wiped out Bank capital and
that's what's happening loans have to be
paid from bank right Equity so that's
what happened in Japan precisely is that
what also happened in 2008
uh yes that's also what happened in 2008
in fact I warned
um in my book princes of the Yen that
from what I found out and and I met Alan
Greenspan who was at the time hitting
the FED that he was on track to do the
same thing
um and as it turned out as his successor
uh in the US and I warned in the last
chapter and princes of the Yen that
um If the Fed keeps on doing that we'll
get the same thing in the US but this
time much bigger and will lead to a
global financial crisis yeah because
that's what happened in 2008 in in
princess of the Yen you say that it was
on purpose that the Central Bank of
Japan did this purposefully why dude
first two questions on that why would
they do it purposefully and secondly if
the same thing happened in 2008 was that
also done purposefully by our central
banks
foreign yes now of course initially when
I researched this in Japan
um I
you know I had very different
um ideas and I certainly didn't expect
that conclusion to emerge from the
research that the central bank would do
this on purpose
so initially just analyzing the events
um
excuse me um
I thought this must be a mistake a
policy mistake but then I could
demonstrate and more and more that
they knew exactly what they were doing
this was true also for the 1990s when
they prolonged the recession
I had many meetings with Central bankers
and I kept asking them
um why don't you reflate the economy
it's not very difficult it's a post
asset bubble banking crisis it's very
easy to get out I had already published
my proposal
on how to get out all you need is for
the central bank to purchase the
non-performing assets from the banks at
face value it's an accounting operation
inside the banking system
Central Bank of the banking system
together I mean the the banks in the
Central Bank are the banking system
and the central bank had just purchased
these non-performing assets you shift
them from the banks to the central bank
that doesn't lead to inflation because
there's no money injection into the
non-bank economy you're just cleaning up
the bank balance sheets problem solved
no taxpayer money used can be done has
been done in history like in Japan in
1945 after the war or when the first
world war broke out in Europe the bank
of England did this because the British
Banks were bust and they thought oh
we've just declared war on Germany and
her allies not a good time to have a
banking crisis let's not have one we're
buying those non-forming assets end of
story no costs because it's just an
accounting transaction
so it could have been done
and I explained this and also other
policies I suggested you can push money
into the economy by purchasing
performing assets from the non-bank
sector I even wrote about how because
Tokyo doesn't have many parks no it's
not a very Green City well and if you've
got a real estate crisis
um coming and a recession happening and
the banks are bust well why doesn't the
bank of Japan purchase the land
in central Tokyo when there's you know
some company going bankrupt and turns it
into Parks Bank of Japan parks
it would inject new money into the
economy and the central bank there's
basically no limit of course they can
quickly end the deflation they can
quickly
um create demand and have a recovery but
they didn't do it so on all these
proposals they kept saying
um making excuses you know for these and
these reasons we're not doing it
but then some Central Bankers took me
aside and said look you know
um particularly you know over dinner
it's all off the Record and they're
talking look of course we know we could
do this of course any Central Bank can
quickly create a recovery we know that I
mean you can even create inflation if
you want to that's coming back to 2020
in the moment
um so but we don't want to what do you
mean you don't want to well this
recession is really what Japan needs
what do you mean the recession is what
Japan needs
well
um they were saying that Japan needed
structural reforms deregulation
liberalization privatization the economy
was too successful America was
complaining there was huge trade
surpluses how can we reduce the trade
surplus make Japan less successful adopt
this economist advice of deregulation
liberalization privatization
and the trade surplus will disappear
domestic demand will grow there'll be
more consumption and and and you know
that's that's much better we need to do
that to help the International Community
Japan needs to fit in just can't be this
successful you know exporter and
focusing only on exports oh wow and so I
still didn't believe it though when they
told me I mean literally several central
banks told me the story I thought that
must be some kind of
crazy explanation of their mistakes and
so I still worked on that basis these
are just mistakes
but then I had other data sources and uh
just analyzing the bank credit data and
then going back to the bubble in the 80s
because that was
you know that was clearly the cause of
the big recession Japan at a 20 year
recession the 90s and 2000s all
recession depression
but all that followed from the bubble
era of the 1980s the late 1980s that's
the cause so why did that happen
and then I analyzed that very carefully
empirically I interviewed people
and I managed to get the relevant data
and the conclusion was that
the banks were doing this lending for
asset purchases
at an extraordinary Pace enormous
amounts of money being given to any
company to purchase real estate that was
what was driving up the real estate
prices to these extraordinary levels I
mentioned you know
um
it was the banks lending so much but why
were they lending so much and I found
that the loan officers in the in the
bank branches they've been given orders
by
the headquarters
to increase lending and the bank
headquarters have been given orders by
the bank of Japan to increase lending
for asset purchases for Real Estate
purchases
and then I asked and interviewed the
central bank people who in the 80s were
in this job giving those
it was called guidance window guidance
of increased Bank lending Now by this
much by that much and there was huge
numbers so ask them why did you give
this guidance and yeah they confirmed we
did give this guidance it was the bank
of Japan telling the banks to increase
lending for asset purchases creating
that for the bubble
so why did you do that well we were told
by our boss
who was at the time in the late 80s Mr
fukui and they told me on and in fact
the bankers already had told me this Mr
fukui is behind this he is
tipped he was he was actually selected
to be the future governor of the bank of
Japan he's therefore known as the prince
everyone knows that he will be future
governor
and
this of course is exactly what happened
just after my book was published princes
of the Yen pointing out that he's the
future Governor then he was actually
appointed to be that governor of the
bank of Japan but why would he do that
now he actually and his boss the you
know the the in this hierarchy of
Princess
um there is a higher ranking Prince his
predecessor together they had this plan
to change the Japanese economic
structure
um to do what America had been demanding
from Japan and the structural
impairments initiative all these
negotiations with America to essentially
deregulate liberalized privaters weaken
the economy reduce exports and increase
domestic demand to increase maybe
imports from America and other countries
that was the goal and they concluded
you can't do this without a crisis we
need to engineer crisis and that's what
the bank of Japan delivered but it was
true it was done by the central Bankers
on purpose and once you're through that
then you realize how much power these
Central Bankers have because they can
control the money created as the banks
and through that you can move the
business cycle up and down and it's
moved by
the quantity of bank credit and also how
the bank credit is used whether it's
used for asset purchases or whether it's
used for GDP transactions for the real
economy
and they have this power and that power
that is an extraordinary power tool
power unfortunately corrupts and they
have been abusing this power to create
boom and bust cycles and and business
Cycles
and as I want that for in my book
already that the easybeam is being
created to be too independent
the ECB
um was given more Powers than any other
Central Bank it was not accountable to
any government it wasn't accountable to
um any Parliament
and it had all these Powers no public
prosecutor can can search the ECB they
can't be arrested for any crime they're
like above the law and I wrote about
um the danger that this pauses and
they're likely to play the same game as
the bank of Japan namely to abuse the
power create Bank credit driven asset
bubbles banking crises and recessions
and these boom and bust Cycles to
engineer political change as soon as the
book was published princess of the End
by the way
um Quantum publishers.com is the place
to get it because
um and Amazon you don't actually get the
um the original version
um as soon as I published the book
princes of the yen
the ECB did just that it created huge
Bank credit driven bubbles in Ireland
Portugal Spain and Greece
um which you know the expanded Bank
credit by 20 30 40 year-on-year Bank
credit growth all going into asset
markets the same principle
and it's very simple
um system basically with this everyone
is is happy that having capital gains
everyone thinks this is going great it's
a huge boom but as soon as the Central
Bank tells the banks to stop this
the asset bubble collapses and the banks
are bust and then the economies are bust
you basically have a huge recession
that's exactly what we had and they
called it the the sovereign debt crisis
in Europe where basically it was Island
political Spain and Greece and some
smaller countries where the ECB had
boosted Bank Credit in the previous
years for asset purchases massively just
like in Japan in the 80s and now
everyone was busting the banking system
was bust and the Central Bank the ECB
had the key to get out of this and they
used this to get political concessions
like you have to hand over your
sovereignty now we need to have control
over fiscal policy has to be all given
to Brussels and you know the EU and the
ECB have to have all the power so they
strengthened all these powers and the
ECB was then given more Powers after the
crisis this is something I'd also warned
about in princes of the end and also my
my other work work that central banks
unfortunately have an incentive to
create crises because after each crisis
they claim oh it's because we don't have
enough powers and they're actually given
more powers and this has happened so
many times and I want about this before
the 2008 crisis
and what happened of course after the
2008 crisis they were all given more
Powers even more powers
and of course that's what now we're in
the next you know this is like getting
Next Level abuse of this power when we
talk about 2020 and and what they really
want to do now with all this power which
gets really scary
it's really interesting because what
I've always said was that the Germans
figured it out finally I mean there was
World War One there was World War II and
they finally figured out that if you
really want to conquer these countries
you've got to do it financially and that
seems to be what has sort of happened in
Europe in a lot of ways when I was in
Italy for a while the Italians even you
know you just talked to them at parties
or something they say oh yeah you know
we're not really in control anymore the
Germans are really kind of in control of
us you know they kind of have this idea
that they're not really that they're
they're bankrupt or they're economically
not doing well and so they feel like but
that's still controlled yeah Kim that's
still part of the smoke screen though I
mean that's of course what the ECB wants
people in Greece and and Italy to think
oh it's the Germans there they're
insisting on this and the ECB is in
Frankfurt well Germany has zero
influence over the ECB the leading
members of the ECB from Germany they
quit and discussed by the abuse of power
at the ECB
um so Germany as a state has no power
exactly who's really behind this well it
goes back to the people that are that
are heading it
um for a long time it was Mario draghi
who was running these policies before
Trisha who had challenged um at Davos
and the people behind them that put them
into this position of power
um and I mean draghi made it an official
ECB policy to reduce the number of banks
in Europe and Germany has the largest
number of banks most of them
are Community Banks small local
Community Banks that lend only to small
and medium-sized Enterprises and that
was the backbone of 200 years of German
economic success well the ECB was
killing that and that was official
policy there's too many banks Germany's
over banked the eurozone's over Bank
under the ecb's reign which is only 23
years more than 5 000 banks have
disappeared in the Eurozone
and that's been their official policy so
Germany has been just like Italy and
Spain suffering from the ecb's policies
actually that's the reality but of
course they like to hide they don't like
to show that it's really the ECB that is
taking these policies
um it's not any more governments
governments you know with the
introduction of the ECB governments gave
up their power
to this International Organization the
ECP is above all these countries it's
not accountable to any country it's not
accountable to any government it's not
accountable to any Democratic assembly
no parliament in Europe
and they have diplomatic passports for
all the European countries the Eurozone
countries the Euro the ECP currency is a
foreign currency so if handed over the
most important power which is monetary
policy to this external organization and
the ECB sure enough as I want
immediately abuse their power to create
boom and bust Cycles but that was just
another major episode so that's Japan
that's what the ECB did
but in a way this is all just really
preliminary
um events
to what happened then in 2020 yeah and
really even here in the United States
when you talk about where the power was
when the power was given away I mean
when you think of fad I mean it's who
controls fed I mean the governments gave
away the ability to make money the
governments gave away uh monetary policy
so it's no longer even in the hands of
the government they they're not we the
people are not in charge of any of this
monetary policy at all it's just made by
people that are not accountable these
private Banks essentially that are you
know it's just that are the heads
in the U.S actually as you say the the
federal reserve banks are privately
owned they're 100 privately owned the
Federal Reserve Banks now they did
establish in Washington what they call
the Board of Governors of the Federal
Reserve System that's in Washington and
that's sort of the political that
um where
there is the
sort of the appearance is given that
this political influence can be exerted
but essentially they only do the
official policy which is mostly interest
rate policy
and some other selected policies but the
real policy is implemented by the
Federal Reserve Bank of New York they do
the day-to-day quantitative policy the
credit creation policy and the
management of the banking system and the
Federal Reserve Bank of New York is 100
privately owned we saw that in the 2008
crisis that some people thought oh JP
Morgan is getting 20 billion here 20
billion there
um to bail out this and buy up that bank
from the Federal Reserve Bank of New
York and uh the director the CEO of JP
Wong is also director of the
Philadelphia Reserve Bank of New York is
that strange
you know because it's privately owned
his own brother was feedback and that's
of course how the show worked but then
but really all that came to ahead in
2020
and now maybe I should as you mention
the other two
ways in which money creation
um affects the economy so one way is
it's a bad way when you create Bank
credit you create money through bank
lending and is used for asset purchase
and we've discussed that you get the uh
acid bubble acid inflation then a
banking crisis that can be used to have
a long recession if you want to 20 years
in Japan
but there's two other possibilities so
Bank credit can also be used
for
consumption now if you create a lot of
bank credit for consumption then well
obviously there's going to be more
spending by definition
right exactly since 2020 that was the
policy in 2020. so if you create and
inject more money for consumption but
you don't have more goods and services
what's going to happen well prices of
consumer goods must shoot up and that's
what they organize from March 2020 but
before we discuss that let me just
mention the third possibility because we
shouldn't forget that actually if run
properly a banking system can be a great
thing and it can deliver what's good for
everyone
that's I mean politicians should really
be made aware of this we can have high
sustainable Equitable non-inflationary
growth
double digit 10 growth in in almost all
countries is possible without inflation
and without crisis and very stable
growth at that
that can be done how do you do it well
you must make sure that bank credit when
Banks lend is not used for asset
purchases and bank credit is not used
for consumption
if you make sure that it mainly goes
into what is the third possibility in
the redeeming feature of banking namely
for business investment in the
production of new goods and services for
the implementation of new technologies
for making things more productive for
adding value
then what you get is because you are
creating more money when you lend but
this is used now productively and now
you therefore will have more goods and
services of higher value you will have
no inflation you also will have
sustainable income streams to service
and repay these loans so you will not
have a banking crisis right and that is
really what you need to do and that's of
course now and I can see
um from you know
um I can read off your face that you you
immediately see that this is what Japan
did this is what Korea did this is what
Taiwan did what China China did in this
high growth phase they essentially used
the window guidance tool where the
central bank
monitors Bank credit on a high level not
detailed Which con you know which
companies getting the money but which
industrial sector and is it for
consumption is it for asset purchases is
it for business investment and they made
sure that bank credit was used mainly
for business investment and that's how
you get 10 growth 15 growth low
inflation and very stable and Equitable
economic growth that's how you can
expand an economy make um small and
medium-sized firms
and also you know the the middle class
uh well off and have a basically what we
consider economic success it can be done
is possible but the central planners
unfortunately are not choosing to do
this they're doing something else right
and that makes sense it makes sense that
job creation would be the thing that
actually sustains the economy doesn't
cause inflation
um it's much a much healthier Society
for sure but they so so question about
that because during the during 2020 they
not only did they give people money
right they gave everybody a bit of money
to try to supposedly sustain themselves
or whatever but they did create those
PPP loans right and they gave those to
businesses in order to maintain jobs now
that sounds a bit different than what
you're talking about because you're
talking about growth loans for growth is
it the same concept if you give loans
for just stick around don't don't kill
jobs don't go anywhere yes
exactly that's not very productive I
mean I mean most people realize that
what happened in 2020 was not very
productive when these loans were given
to companies but actually that's still a
drop in the ocean there was a much
bigger problem
and that was really what what created
this inflation namely
um the central banks adopted
the type of QE I was recommending for
Japan for a deflationary situation with
a bust banking system and money supply
Contracting
my recommendation was Central Bank
should purchase the non-performing
assets from Banks and the Performing
assets from non-banks that where you get
the bank balance sheets cleaned up and
by purchasing assets Central Bank
purchase of assets from non-banks you're
pushing money straight into the economy
that's what they did in March 2020 but
the problem was that bank credit was
already growing at five six percent and
in most countries Banks were doing fine
Bank credit was expanding there was no
deflation
but they were using a tool designed for
a deflationary contractually situation
and they expanded money supply even more
so we had record post world record money
supply expansion and this was done by
the central banks purchasing these
assets they hired the likes of BlackRock
to
um
to do this for them and just go out and
purchase assets
and they used central bank money to fund
this now that is direct money injection
into the economy and it was given to
essentially
um asset owners and a whole lot of rich
people
owners of some big businesses and
financial players made a fortune by this
trillions of money being pumped to the
economy directly from the Central Bank
through this process of purging assets
from non-banks now they did this
globally by the fact that it was so
coordinated it's a very specific policy
you know that is very rarely taken I
recommended it for Japan in in 1994 1995
for 20 years the bank of Japan has said
oh we don't know what you're talking
about this is not possible we can't do
this March 2020 come March 2020 the bank
of Japan knew exactly how to do it and
every other Central Bank in major
Central Bank did it at the same time
and of course that proves that it's not
a coincidence it's not a policy mistake
because it's a very very specific policy
and by coincidence they all took it in
March 2020 so clearly
they knew exactly what they were doing
but that was the policy to create
inflation if you do this you know for
sure you're going to get inflation
that's why I want from
May 2020 onwards when I had the data
they are creating significant inflation
that's going to happen 18 months later
and that's exactly what happened so it
was a central bank policy Choice like by
the way already in the 1970s when most
people think all the 70s that was the
inflationary decade that was due to OPEC
and the oil embargo and all that oil
stuff and the war in the Middle East
but really it's not true already then it
was also the central banks doing this if
you look at the data
why would they do this
what's the point I mean I hear you
you're saying they're trying to create a
crisis because when you when you create
a crisis then you can affect change what
is the change you think they're trying
to do right now to us
yes well actually we have to look at at
the picture the big picture of what has
happened since 2020 and and
on the one hand the central Bankers have
come out since 2020 very quickly already
in March 2020 with some public
statements about what they want to do
and surprise surprise they want to
introduce CBD seeds
so that is clearly one goal
um now in order to introduce Central
Bank digital currencies
what they need is digital IDs
and clearly they've been working
backwards from their goal how can we
introduce cbdc's we need an excuse
and then work backwards what do we need
for that we need digital IDs well again
how do we introduce digital IDs with
another excuse to do that well the
so-called pandemic
delivered a great excuse well at least
they thought I mean it wasn't really
very convincing but somehow they argued
that you needed to be injected with this
experimental substance
and and then somehow you need it in
order to enter a any restaurant or shop
you needed digital ID
confirming that you've been injected
when of course it was very quickly clear
that this was not this injection was not
actually slowing transmission or
preventing illness and had a lot of
risks attached to them so
so the justification wasn't very strong
but they definitely pushed these digital
IDs to back so-called vaccine possible
it's very hard and again in a
coordinated fashion so you see where
this is going
and the goal is actually on the monetary
side that is the the prize that they're
aiming for they're aiming for
cbdcs
connected to digital IDs
and that means we're talking about the
most totalitarian control system in in
in human history
because this is a control tool that not
only gives you as a controller complete
visibility of what everyone is doing
every transaction the money is moving
from where to where you know everything
but the monitoring is only one aspect
and of course you can use that
information for your purposes if you're
a controller the central planner
but actually the these cbdcs are
programmable
and you can use
um tools algorithms
Big Data algorithms which they sell as
as artificial intelligence in order to
have rules about who can buy what for
what purpose at what time and at what
place where and therefore control your
movement and control all your activities
and oh Kim you were critical of central
banks recently oh your cbdc is not
working today is it or you're trying to
buy this book or you can buy another
book but not that one that's a bit too
critical of central banks
so you can you can see this I mean this
in history and also the human history of
dictatorships there's never been such a
powerful control tool as they're about
to introduce and that is the big price
they're aiming for I think
that is
really scary
um
what can we do do you think to prevent
this from happening
are you a proponent of going back to the
gold standard or uh I mean what what
should we be doing to prevent this
because this is very frightening and
you're right it is an it's a total
complete way to control people they can
shut down your bank accounts at any time
we saw them do that with the trucker
Convoy in Canada and we saw that
precisely precisely
so
exactly so we'll definitely use cbdc's
to shut down opposition people want to
demonstrate well we're you know suddenly
they can't buy food
so
um what can we do well you mentioned
gold
um I like gold Going Back to Basics is
always good actually when you go into
the monetary history
the old the ancient monetary systems
were not even based on gold and silver
that came later the oldest are simply
Credit Systems of mutual records of
credit
and you can see this easily being
recreated in any small village you know
you go to this Village Pub
um and you don't have cash with you and
they know you okay we'll write it down
you know that's ultimately that's how it
starts people trade with each other and
they just write it down well you just
need something more visible than that
um there was a very elaborate system in
England for hundreds of years based on
tally sticks
where you you make notches and they
could be
um they could be split in the middle of
wooden sticks and one was kept at the at
a central place
um the the foil and the stock would
circulate because it was a stick comes
from the German word for stick stock
that's where stocks and shares comes
from and then if you have doubts you can
always check whether the two parts of
the tally the split tally match if they
match they tally it tallies and if they
don't you were foiled because the foil
didn't match the stock
and they had a had a big procedure for
basing their whole accounting on this
um where a lot of the financial
Expressions actually come from the
system at the exchequer in England
and there was a big chess board to do
the calculations that's where the word
exchequer comes from and also checks
when you pay with a check and there was
um a role which is actually from Vellum
which is like cow skin
um where you where they took the nodes
uh it was the counter roll comfortable
in French the the Norman spoke French
when they introduced this is where the
word control comes from the audit system
comes from
so we could have a basically um
you know somebody in every village could
have a record of key transactions
and you could have a credit based system
from scratch very very uh simply it
could also be run on an Excel
spreadsheet if you have electricity but
it's probably good to have it on paper
if if electricity gets shut off or
there's a power cut
um and of course you can use gold or
silver as the as the as the measures of
the units of account if you want grams
of gold and silver and so basically you
could go back to a system that's
anchored to gold and silver
and then you kind of credit on top of
that which is just a local record of who
owes what and there's your monetary
system now of course that is in effect
in place when you have a community bank
or you have several small local
Community Banks that only engage or
mainly engage with the local community
which is really my recommendation for
the for the interim we still have a bit
of time because the central planners
have realized they can't force the
cbdc's on us just yet and they've also
it looks like last year they've decided
to take the slow road to cbdc's which is
the so-called wholesale cbdc that's the
Chinese version of cbdc's whereby the
banks are not yet driven out of business
uh retail cbdc's as you mentioned that's
ultimately the Central Bank competing
against the banks
it means the the central bank will offer
an account at the central bank for
everyone
and when they do that then of course as
soon as you have a crisis everyone will
shift their money from the banks to the
central bank and then the banking system
is finished that's ultimately what they
want because you know what what do the
central planners want well they want
centralization of that power
but at the moment the banks create money
they create most of the money so they
ultimately it looks like they want to
compete against the banks that's what
they're saying when they talk about
cbdc's and they will you know they have
the power to drive the banks out of
business if they introduce these retail
cbdcs
but in China where they they had a
Soviet style system with one Central
Bank and no banks
and that seems to be what the central
plans want to reintroduce but in China
they
created thousands of banks only you know
40 years ago in the last 40 years
thousands of banks were created and
that's how China was so successful
because a decentralized system with many
banks creating money and and you know
small Banks lending just small firms
because big Banks don't lend to small
firms that's how you get economic growth
that's how you make sure small firms and
small mum pop shops are doing well if
you've got small local banks that's how
China is successful so China refused to
introduce
the retail cbdc's because that kills the
banks they introduced what is called
wholesale cbdc's where the Central Bank
digital currency can only be obtained
through a bank and therefore the banks
are safe
it looks like they've conceded that and
in Europe and America when they
introduce cbdcs will also be the
wholesale cbdc's which is good news that
means we have a bit of time to establish
more Community Banks and anchor them in
the local community and then we can also
prepare
um
basically put in place systems for
when they want to shut down the
Community Banks and have Central
um you know retail cbdc's then we can
switch to a local system that is using
the the local bank but is linked to gold
and silver as a as a numerator and that
can work very effectively
yeah it seems like the pandemic might
have shown them that we're not quite
that easy to control
yes there is hope there is hope yeah
yeah so that that is I think the hope
there is that we can push back on this
and especially awareness I think the
awareness of the world economic Forum
the great race at what central banks are
doing really just kind of saying we're
on to you right we're on to what you're
trying to do to us that you're trying to
consolidate power control us through
digital IDs control us through digital
money uh get us to the point where you
know yes everything is that's why
they're saying you will own nothing and
you'll be happy because all of that
would be centralized somebody else would
own it we wouldn't uh same thing with
the banks you know no Community Banks
suck them up because it's all
centralized you don't you know none of
that is is for the little guy it's all
for the big players and then they
control all of the rest of us like
puppets it's really
um it's great that we are becoming more
aware that we're talking more about this
and then hopefully by doing that we will
have some Rogue political leaders who
will say we're not falling for it and
we're going to set up some systems to
protect ourselves to isolate our states
or our communities in some way that
seems to be the Hope moving forward
you know and as you mentioned to small
Community Banks and now I'm thinking I
got to go get a small Community Bank I
got to go start banking at a credit
union or something yes you should you
should you should yes and I'm also
working to set up new Community Banks so
if any of your viewers wants to join get
in touch with me
professorwerner.org is a website where
I've got also my work and my scientific
articles there there's also an email to
get in touch or follow me on Twitter
scientific econ or Professor Werner
great well thank you thank you so much
for having this conversation and
enlightening us a bit on this very scary
ominous future that we may be heading
towards
and really just the power of central
banks and what they've been doing and
the fact that we can probably blame most
of the crises we've had on them and what
they've been at you know their their
ultimate goals of trying to control us
it's very scary yes and we need to hold
them to account which which we can and
we should and for that more people need
to understand how the system works yeah
and unfortunately economics is not being
very helpful because they suppress the
reality they suppress the truth but I'm
trying to have this scientific economics
which is empirical database and with
that you can show the facts and and we
can try to hold them to account
because the people are The Sovereign and
it's not the other way around
we got to keep it that way that's for
sure or at least gain it back if we've
already lost it a bit but Richard thank
you so much for being here really nice
chatting with you
thank you it was really good to speak to
you and thanks for having me thank you
very much
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