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The Tucker Carlson Show
Economist Exposes How Banks Manufacture Wars, False Flags & Famines to Usher in the New World Order
02:09:02
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- [00:00]
A
Foreign. Richard, thanks for doing this.
- [00:06]
B
It's a great pleasure and honor to be here.
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A
I think of the claim that we went to war with Iran because of its nuclear program as a kind of IQ test. Anyone who repeats that claim has failed the test. As, as you pointed out many times, all wars are engineered. And we're just having a discussion in breakfast that I think is worth recounting for others. So First World War, one of the most momentous events in world history, ended Christian Europe, killed more than 20 million people, wounded another 20 million, just really reordered the globe and then led to the Second World War. So the United States joined that war in 1917. Toward the end, it had already been going for three years. But one of the main reasons the US got into that war is because the sinking of a passenger ship called the Lusitania off the coast of Ireland two years before in, in 1915, in which 120 odd Americans were killed, was sunk by a German U boat. And even at the time there were people who said, I don't think this is, this is not quite on the level. But now, 112 years later, we know a lot more about the sinking of Lusitania. And I wonder if you wouldn't just mind recounting what you said to me this morning at breakfast because it gives us perspective on the effect of propaganda in wartime.
- [01:27]
B
Right, Yes. I mean, the sinking was clearly a key factor in creating in the media in America anti German sentiment quite successfully. And so, yeah, the question is, what happened? Really? The way it's presented was, well, there's a passenger ship with American passengers, just civilians, traveling across the Atlantic and sunk by a German submarine. Well, that's like an act of war against America.
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A
Yes.
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B
Got to do something about this. We're going to declare war on Germany. Well, that's not a representation of the facts. What really happened was there was this British plan to get America into the war on the British side against Germany, which was very difficult because of course, actually, you know, ethnically a majority at the time of Americans were of German origin, even German speakers. Still by that time, German was still widely used as a language in America. And so to get America into war against Germany is a bit of a feat, you know, to arrange that. Yes, it is, it is. So how, how did this happen? And that is a good example of the extent to which the plotters that want war go. And it's good for people to think about that because of course ordinary people don't want war in any country. Most ordinary people are Good people. And that creates this problem that they just can't imagine that we're dealing today as we look at the world with such dark and evil forces that are intentionally plotting to create a world war or get countries to declare war. So that's why that is true.
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A
Not even permit themselves to believe that could be true.
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B
Yeah, yeah. And that's where studying history is important, because we need to know the facts of what happened in the past, to understand the present and make some predictions about the future or prepare for what could happen in the future. And the past teaches us that there are some evil elements out there and they're not really, you know, they're not people that are representative of ordinary people. The majority of people wouldn't intentionally harm others. But we do have such people out there and often in very important and powerful positions. So what happened was step number one, Britain did this very officially. It listed the Lusitania as an auxiliary naval military ship. And of course, as you can imagine, the German Imperial army and Navy went by the book. I mean, that's what one thing Germans are famous for. And of course, the British knew this. So the moment they would list it on their official list of what are our ships officially declared to be military ships, it was on there as an auxiliary military ship. The Germans would, of course, target it. Now, when the Germans then saw this German military. Oh, well, hang on, isn't this a passenger ship? Well, you can re. Reuse, you know, of course, passenger ships for warfare. So that seems to be what they're doing. But then they realized, oh, actually they're taking passengers in. They plan to take passengers in, in America. And so partly they sort of half realized, well, this could be a part of a bigger plot. That's not good, and we don't want to sink passengers. On the other hand, it was listed there so that in many ways they had no choice. What they did then was the German military command, they put out. And the German embassies implemented in America. They put out ads into American newspapers stating. And they, you know, we have copies of these ads warning people, don't board the Lusitania. It is listed as a military auxiliary ship. It is on our target list with
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A
the German government put ads in American newspapers telling Americans not to board the Lusitania because they might sink it.
- [05:36]
B
Exactly. Indeed. Indeed.
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A
That's incredible.
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B
And, and it turns out that in, in some cities, the big newspapers refused to carry these ads because they were clearly controlled by people that had the same views as the British side in this war and wanted America to join the war. So the ads weren't always published successfully everywhere, but quite a few were published. So that's the situation. Despite that there were passengers on board. No doubt some efforts were made to make sure certain groups, you know, you would have some people on there for sure. Maybe you pay them to board even, who knows, you know, we don't know these details. We know the facts that there were passengers, American passengers on board, American citizens. And the Germans had warned, we're going to sink this. And it's not quite clear whether there was actually military equipment on there. There seemed to be the indication that there was because, and you can imagine that the goal was really to make sure that the Germans will sink it. So the best way then is to actually have military equipment on there and, you know, have some visibility when it's in the dock and some something's loaded. And we do have some indication that this is happening. Of course, later this was denied, but there's also, you know, various people looking at the sunken wreck and still it's basically, there is a good chance that there was military ammunition and, and other equipment on there now. So that's one thing. The other thing is, well, how would the captain of the ship handle this as, you know, as he crosses with his passengers and potentially military load. And of course, he must have been aware that it's listed as an auxiliary military ship as he crosses the Atlantic. Well, the British at that time had actually broken the, the secret code for encryption that the German military was using, the Enigma code. And they therefore could read the messages between the U boat submarines and headquarters and so on, which of course is another indication that, okay, you know, this could not really have been such a big surprise to Britain. And something like this, of course, must have been the reason why the captain of the ship of the Lusitania was happy to go because, you know, of course he has to trust his admiralty and his, you know, his country's leadership. They said, no, it'll be fine. We make sure you'll be fine. We know where the U boats are, the Germans are, and we'll will guide you on the track that will keep you safe. So they guided him, as it turns out, straight into one of those German submarines. But the captain didn't know. He was told this is a safe path. Now, where I'm sure he started to become suspicious was when the order was suddenly then given in the vicinity or about to approach the vicinity of a German submarine to slow down the engines. Because that never makes sense. And there's A good BBC documentary on this where they didn't hide the facts. And they have the first Lord of the Admiralty as the key figure. Who was that? None other than Winston Churchill. And they show how he gives the order now instruct the captain to slow down the engines. And even his underlings saying, well, sir, you know, this sort of increases the risk. Should we really do that? Is this my order? Give the order. And that's what they did. They slowed down the Lusitania and of course it was unavoidable. Then the U boat, they saw them, it's on the list. They have to follow the orders and they sank it. And then of course, the next day you had all these headlines, you know, these, you know, the Huns, the butchers added again as the Germans were described in the British First World War propaganda. And it, it was an important factor in getting America into war. So, so was a false flag. And that has been a key mechanism to start or, you know, get countries to join a world war. It's not the only incidence, but it shows you the devious nature of the plotters. And that's what we have to be aware of today in this day and age as we are unfortunately on the brink of a third world war. Again, most people think, surely third world, when nobody wants a world war. Well, ordinary people don't and I don't want it. And you don't want it. No, but there are people out there who really doing everything to get there. And a false flag is likely to be the beginning of this. You know, as we talk about peace, as we have peace negotiations, just one vicious and successful cunning false flag and then magnified with false information by the media is unfortunately still enough.
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A
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- [11:44]
B
Yeah. Now actually, on this topic, I think there is, there is the other important parallel. You know, we, we, we've been seeing this, this war on Iran by the US and Israel. And of course it has major economic consequences, dire consequences. That's something we can talk about. But also this is another reason why we should look back at this era of the First World War and how we got into this. Because it was the first Great War. It was in Britain, it's still called the Great War, where you had full mobilization of entire countries previously. You would never mobilize the entire country, of course, not even civilians, even housewives were mobilized to do fact work or other support work, hospital work, all sorts. And so it was really the beginning of this modern era where you have totalitarian control unleashed under the COVID of a great war. And of course, that's a scenario we have to be very much aware of as we speak. There's preparations for mobilization in Germany, draft military service, all the rules being revamped and tightened. And the plan clearly is to draft more people into the military. It's official EU policy to have a huge rearmament drive to get ready for war. And they talk about dates and that tells you that they're planning for a war. I mean, it's not a secret. They're saying we are planning for a war against the great powers, Russia. They don't mention China, but of course, you know, their allies, whether not, perhaps not formally in a military way, but de facto allies. China is there. So, and that's, that's official EU policy to have this war at 20, 28, 29, 2030, other dates that are being mentioned. We have to be ready by that time for a world war or war against Russia, which would be a world war. So what's going on here? And I think what we've seen this year has been clearly quite dramatic. First Venezuela, dramatic events, although in a way on the larger scale, sort of quickly done, somewhat contained, it seems, but quite a remarkable event because before, of course, for decades, US intervention in Latin America took the form of covert operations which always run under the principle, as a very British principle of plausible deniability. Oh, we didn't do that. Oh, this poor president get assassinated of this country. It's nothing to do with us. Right? This is how it's been working for decades in Latin America. You can list the countries, just country after country regime change operations by the CIA in fairly brutal ways, and then getting regimes into power that are essentially puppet regimes run by the CIA. Presidents, prime ministers assassinated and so on. But always it wasn't us denied. Although we do have whistleblowers like Fletcher Prouty and his great book the Secret Team, which tells you a lot about how the CIA became so powerful, totally out of bounds and out of control beyond its legal powers. You know, it's been active beyond its legal powers for decades. He also describes how they did this very simply. The basically the institution that's supposed to rein in the CIA, they exist formally, it's the committees in the Senate and Congress. You know, there's committees, the House Intelligence
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A
Committees and Senate Intelligence.
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B
Exactly. And that's ultimately was supposed to provide these checks and balances on the secret Services, including of course, the CIA. But as Fletcher Prouty explains, you know, once the law was passed that it's a criminal to reveal whether somebody works for the CIA or not. And that was passed. And so now it's a secret who's at the CIA or not. And then also it was accepted that when you are a congressman, a member of Senate and you are a member of these committees, you don't have to disclose that potentially huge conflict of interest. Obviously at that moment you're in charge of the country because you make sure, and that's what the CIA did, that all the committee members you're supposed to oversee the CIA are all CIA agents. And then there's no more checks and balances. You've got the rule by the CIA and that seems to be what happens now. The book by Fletcher Prouty was unavailable for 20 years. He wrote it in the 70s. Who was he? He of course had worked for the CIA. He was a top guy at the CIA at the end. I think his highest position was head of covert operations at the Joint Chiefs of Staff in the White House. He's the one who was sent to Antarctica when JFK was assassinated. Because deep down he was always a good guy and he wouldn't be involved in assassinating the President and his colleagues knew that. So he was sent to, you know, far away, as far as you could. And when he returned, he quickly found out, oh, it was the CIA. And he started to be a whistleblower and the book was then unavailable for decades. But with the rise of the Internet in the 90s, late 90s, of course, it's now available again. So you know, that, that, that shows how, how these things are. So that's the background. But now Venezuela.
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A
What was that? What was that? What was the point of that?
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B
The. Well, there's, there's several points, but in terms of the, the method, the, the big difference was there's no plausible deniability. No, actually, it's official. We're going to officially move in there and arrange regime change in a sovereign country. So in other words, America is now at the stage where there's no longer felt to be a need to deny that America.
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A
That's right.
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B
Is doing these things and has been doing these things. Well, now we do.
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A
We don't need a color revolution. Pretend there was a popular uprising.
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B
We just, we want this guy to be in power or we don't want this guy to be. Well, we're going to intervene and do it. So no more reference to the niceties of international law and ethical behavior. Not necessary. So that's an important turning point. But of course, the other implications are. And that's where we move on to Iran and beyond. Why Venezuela? Well, it's the biggest. Well, it has the biggest oil resources. Of course, there's a more detailed story. I mean, it's a particular type of crude oil, very heavy one. You need particularly refineries to do that. It's not a cheap and easy process. So it's not the, economically the best oil, but it's the biggest volume. Okay, so that is something. And by the way, who's been refining most Venezuelan oil and has built up a huge array of refineries is China. And that is an important indication of where all this is heading. So that was step one, Venezuela step two. Well, who else is a big oil producer and source of oil and energy for China is Iran. So now Iran is under attack, war is made on Iran, and of course we have the economic fallout that other countries will suffer as trade through the Strait of Hormuz is severely limited, restricted. It's not fully 100% embargoed. You know, ships are getting through, but clearly not the majority. And it has had an impact. And of course, it's not just oil, but also other things are delivered, you know, fertilizer. A lot of the Middle Eastern countries are the world, some of the world's largest producers of fertilizer for the world, even for the U.S. you know, delivering to the U.S. to Europe, to Many countries. And of course that has also been severely. The shipping of those has been restricted. That'll have consequences next year. That's not immediate. It's for the next, you know, growing season because you know the stocks and so on. So for this, the whole point of
- [20:33]
A
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- [21:57]
B
Indeed, yeah, that's exactly it. And that's where now I think it's good to go back again to the run up to the First World War. What was the situation? It was a situation where we had one global hegemon, Britain running the world. Half the world was formerly part of the British Empire. Of course not acquired through free and open elections, was it? No. So military force at times extremely brutal colonial suppression for quite a long time. The greater part in the subcontinent in India, run by a for profit enterprise, the East India Company. So you had colonialism run by a for profit enterprise. It's not a good idea. It's not very nice for people. The estimates vary of how many million Indians were killed under this rule by a for profit company. Being in charge of a You know, of, of, of, you know, millions and millions of people and, and actually the, the, the ruling elite in the East India Company always had this view. Well it's, it's too many Indians. We don't really need that many Indians. Horrible views out there. Too many useless eaters. This is where by the way, this whole overpopulation agenda that I'd like to talk to you about came from. It goes back to the East India Company because Malthus, who is this famous, you know, economist talking about overpopulation.
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A
Yes.
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B
He literally worked for the East India Company. And it's known, and there's many quotes of the East India Company people saying there's too many people, you know, we don't need all these, these Indians. But anyway, we'll come back to it. So, so that's the picture of the world. So the Britain, half the world directly under British control in a colonial regime that clearly benefit Britain, not the colonial subjects to the same extent. Many suffered and many died. That includes actually, of course, one of the first colonies of Britain was Ireland. And there's the great Irish famine, the potato famine. Well, did you know that during the potato famine Ireland produced potatoes and exported potatoes, Exported potatoes to England while Irish people were starving. So it wasn't a lack of potatoes, it was policies that result in this famine. But anyway, there are too many Irish people. We have documents of British leaders saying that there's all these Irish people, we don't need so many Irish people. So this is the background. Okay, so Britain in charge of the world. Now we had this development earlier on of a new economic power and political power in Europe. Prussia. Prussia was the first modern high growth economy and it was quite breathtaking. It was high growth and prosperity for the majority of the people. It was capitalism, but it was capitalism of a kind where the idea was, well, we want it to be sustainable capitalism in the sense that we don't want to have mass poverty. At the same time, we don't want this K shaped economy where the elite is doing really well but the majority of the people are not doing well. And I think it's perfectly rational to say that that's not really a great system because you're storing up trouble for the future, right?
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A
Yes.
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B
You know, if the majority is actually not benefiting and it is, you know, and you have increasingly democratic structures, then at some stage something will change, right?
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A
Yes.
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B
So you want to avoid it. And they did it very early on. So the first modern sort of Social Security legislation was done in Prussia also, of course, the first Investment in public schools, properly public schools and kindergartens and universities was in Prussia. It was a very modern state, highly successful. The middle class was thriving. It was merit based. You could move up the ladder. If you put in your energy and your efforts, you will be rewarded. Very successful economy based of course also on the system of decentralization, local decision making and especially many small local banks lending to small firms. Now Prussia then morphed into Germany in 1871. Yes, the unification, which is another or partial unification because of course many German states were left out, such as Austria. Yeah. Under international sort of influence. But also Prussia felt Austria's arrival and and so on. I mean there's this, that's for another show. There's, there's a lot of interesting stuff happening there. But the principles were also applied in now imperial Germany under essentially Prussian leadership. And again Imperial Germany was highly successful. Economic growth just in the beginning of the 20th century was very high. It was a high growth economy again and people benefited. Prosperity. The middle class, it was quite impressive. The city's beautiful, massive public investment, railway network, schools, universities, science. You know, this is the beginning of science being German dominated. In the first half of the 20th century the majority of scientific publications were in German and all the leading research was in these publications. That was where things were happening and other countries were following, were looking at this model. Now the place that didn't like that was the hegemon of the world, Britain. That clearly was from their viewpoint, rivalry, a rival being built up and growing. And it is one thing to start to lose market share because Britain used to be the number one economic power. Industrial revolution and you know, mass production really happened first in Britain and then spread from there to other countries. So Britain was in the sequence, chronology of economic development was number one. But then soon after Germany came and of course also at the same time America also rose as an emerging economy, high growth economy as well, let's not forget that. But of course America is further away and was for international documents using English. So I suppose the British felt less immediately threatened by America. Germany is very close and the decision was made. We've got to do something about this. But a key turning point in this, in really resolving the British goals and creating this conviction that war has to be made on Germany was the following development. So British power was projected across the globe through the seas, the oceans, the navy, because it was a global empire, you know, from Britain to Australia and, and you know, many parts of the world. Shipping was of course very important and control of the seas was important. And that was, it was in British hands. So no doubt about that. Nobody could even come close to the numbers of ships and, and British naval dominance. But then something else happened that was felt as a huge threat. Germany developed this plan in working on the continent. It's a continental power. And we have this conflict between the sort of sea power and the continental power. Now Germany made plans to, I mean, it's quite natural to improve its access to resources. You know, Germany didn't really have many resources. It has coal for the steel industry, you know, has. It had some input. But it still needed other raw materials and inputs from across the globe. So how do you get that? If it's via the seas, then essentially it's beholden to the British, can be blackmailed by the British, as actually happened, demonstrated in 1919. You know, the First World War in Germany was over in 1918 when the Armistice was signed. And Germany, I mean German leaders have always been slightly on the naive side, believing, okay, that's an armistice, that's that the First World War is ended. Germany wasn't defeated. No foreign troops on German territory yet. And it disbanded its army and its navy. Right. But the British, of course, didn't disband their army and navy and they then staged a naval blockade of Germany. Suddenly, shipping was entirely cut off. As a result, 1 million, it's estimated around 1 million Germans starved to death in the fam of 1919, which was engineered by the British. Just to illustrate the reality, when you're beholden to a sea power that controls the seas for your inputs. And so on the one hand, Germany had been aware of that risk and it was working on alternatives. And on the other hand, Britain had adopted countermeasures. What were the countermeasures?
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A
So around a million Germans starved to death.
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B
Yeah, in 1919. And of course, Britain continued to fight on. British cenotaphs of the First World War. Often in the countryside you see the First World War defined as 1914-1919 because, you know, dead bodies were still arriving the villages. You couldn't tell the pastor. No. Write 1918 on the cenotive. Well, we were still, you know, our fallen coming, you know, and the village is recording the deaths in 1919. So now this. What, what really changed things was around 1900, the German plan to improve its raw material resource access to avoid these issues that unfortunately could not be in the end avoided. But not to be beholden, it was trying not to be in a situation where it's blackmailed by Britain through the seas, namely to have a Continental transport system. And this plan was developed by on the investment side and the engineering side, Siemens major German engineering company and funded by Deutsche bank, namely the plan to build the Berlin, Baghdad, Basra Rayway.
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A
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B
Ottoman Empire was already an ally and so it's quite natural to gain access to the Gulf area and oil which was beginning to be, you know, clearly an important resource. And so they started building that railway, the Berlin, Baghdad, Basra railway. That's when the British colonial and empire planners decided this really has to be stopped. Because had that been built in time, completed then it would have rendered essentially the British naval dominance irrelevant because you can transport energy resources, raw materials, you can sell your high value added output to actually the British Empire, Middle east or India to the rest of the world. You can ship through your own railway network without British interference. So the British planners decided this cannot be allowed. This has to be stopped by all means, including war. And it was a key factor in the run up to the first World War. Of course there were other factors. The German government became increasingly internationally critical of British warfare across the globe. For example, in South Africa, yes, Britain made war on the farmers. The German and low country Dutch farmers that had settled centuries earlier in South
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A
Africa created the world's first concentration camps.
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B
Indeed, indeed. That was a British invention. There were three farmer wars. Farmer Bauer in German in Dutch Boer Bauer. The three Bauer wars. The farmer wars. Because literally the world's number one military power made war on farmers to control this country, this area. Why? Well, it was of strategic relevance, but also oil. Sorry, not other resources. Gold and diamonds were found there and London was very keen to have those. Actually, surprisingly, the farmers were so well organized, they won the first farmers war and the second Boer War and then they had to use. Britain had to use the usual devious techniques to win the third one.
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A
Murdering women and children in concentration camps.
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B
Yes. And so. And the Kaiser, the German leadership criticized the British intervention and so Britain also. I mean these are other reasons that
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A
what future British prime minister fought in that war?
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B
Yes, well, Churchill had a. Had a role there and writes about it in his. I think he even got captured.
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A
He did get captured and was treated
- [36:48]
B
well enough to escape alive, which wasn't really true for people in the concentration camps necessarily. So. Yes. Now, so there were other factors, no doubt, but it's clear when you look at the old documents that anti German sentiments whipped up as soon as there were early plans for this railway, it didn't come from Norway. It was discussed ready in the late 1880s, 1890s and then became a proper investment project at the end of the 19th century and 1900s onwards. And of course the First World War succeeded in stopping that. Now also just another point before we look at what this means for today. What are the lessons for today? The First World War itself was of course quite devastating for Germany also for all the other countries involved. The number of people killed in the war, it's just horrendous, huge waste of lives and resources. Very, very sad. Also Germany then in the Versailles Treaty after the starvation of 1919, this is meant to soften up Germany and then impose the Versailles, you know, strange rules on Germany. Germany would be taken apart. One quarter of Germany would be lost and given to other countries. Lots of Germans, millions of Germans would now live in new countries newly the British such as Czechoslovakia and so on. And, and so, you know, a lot of hardship followed this. Despite that, they couldn't essentially change the fact that Germany was still scientifically leader. Engineering in terms of engineering and, and production was a leader in the world and was still a rival of, of Britain because the education system also hadn't really been destroyed. And so, you know, a second round was needed. Another world war was Needed and for this, interestingly, a lot of investment took place in Germany in the 1920s that allowed a quick revival. And of course there's other issues. How Hitler came to power. If we have time, we should talk about how did he actually come to power. When you look at money and banking and central banking, you get some interesting new insights. So we also had investment in Germany, particularly by America. American companies, itt, General Motors, Ford and then also banking Brown Brothers Harriman, where Prescott Scott was from the. Sorry, Prescott Bush from the Bush family was, was active supporting Germany. Now something very similar is happening or has been happening in recent decades. Of course, the post second World War global hegemon is America. It's taken on that leadership role from Britain originally, even with its own colonies. I mean there'd been American colonies, whether Philippines or other places. And it's adopted the key policies and policy tools from Britain. So which country is the new Germany that is a rival to America? Well, it's China. And China has been working on ensuring its supply of raw material inputs in the last, particularly last 15 years. So in many ways it's a sort of new strategy. But it is very much the same situation as Germany was in. It didn't want to be beholden to shipping under British control, could be blackmailed. Of course, America is dominating the seas and China doesn't want to be beholden to America. And that includes of course, the Strait of Hormuz. It also includes the Strait of Malacca where even more Chinese trade goes through. That's another of these potential choke points, as they call it, where they can choke China. So China's been working on alternative routes. The. What is the modern Berlin Baghdad Railway? Well, it is the Belt and Road Initiative, which is the Chinese President Xi Jinping's really landmark milestone foreign policy initiative started 11 years ago. On the one hand, it offers an interesting alternative to participating countries, many developing countries, to the IMF World bank system that I hope we have time to discuss because that system has been designed to keep developing countries from developing, to prevent development and to keep them poor but effective cheap exporters of raw materials according to the British colonial model. So it's like the modern version of the colonial British Empire is this American dominated IMF World bank rule. And the Belt and Road initiative on the one hand is an, is an alternative that can be offered to countries and many countries, including in Africa have joined this for this reason.
- [41:56]
A
You describe what it is for people who don't know.
- [41:59]
B
Yes.
- [41:59]
A
About Belt and Road.
- [42:00]
B
Yeah. So there's actually many different Names for this at one stage was called the, the One Belt Initiative, then Belt and Road Initiative. Sometimes it's called the Silk, the modern Silk Road, the new Silk Road. It is about, on the one hand, logistics to ensure stable, effective supply routes between China and the rest of the world. To a large extent on the continent, but not entirely. There's also shipping belt and road across the seas. And it's also a way for China to switch out of the dollar. So it is linked to the Nixon shock, what happened there, you know, the dollar becoming the petrol dollar in the years afterwards under Henry Kissinger's interventions, the petrodollar, Saudi Arabia being essentially made part of the United States only selling dollar as they're saying, all against the dollar, but also reinvesting 80% of its foreign exchange reserves in U.S. treasuries. That petrodollar system is increasingly being challenged by other countries and of course by China, the BRICS countries. And the Belt and Road initiative is a counterparty to that and likewise, you know, counterparty this IMF World bank system, which is really the continuation of the Bretton woods system, which is the dollar dominant system. So China had this problem beforehand that you know, as a successful exporter, it's earning foreign exchange, but mostly it's earning dollars, what to do with the dollars? And of course it was investing like at the time Most countries in U.S. treasuries, which suited America fine, but China decided sort of 15 years ago, well we need an alternative to this. We can't keep investing US Treasuries because, and very few people know this, when other countries buy US Treasuries, all they're actually getting is a promise on a promise because treasury is an IOU is a promise. Right, but do you know that China doesn't even get those promises. The U.S. treasury issues government bonds. Treasury bonds, but China doesn't get those. Why? Well, there's a rule that they're held by the Federal Reserve bank of New York in custody for foreign governments. So it's a promise on a promise so that, you know, China can't go with these papers and sell them somewhere without permission of U.S. entities. The federal Reserve. Now some may say, well that's just a technicality, that's not an issue. Well, we've seen that in reality this can be very, very important. For example in the so called Asian crisis 97, 98, 1997, 1998, which was very much engineered by the, by the system, IMF and central banks. It's very much, you know, I was sent on an official mission to Thailand in 1998 on this, to analyze this and advise the Thai government. From the Asian Development Bank's perspective. Based on my analysis, I concluded that it was a plot by the local central bank in Thailand against the country together with the imf. It was a situation to create, you know, a boom, bust cycle and then bankrupt Thailand and ask the IMF to come in. And then the IMF asked for Thai assets to be sold to foreigners. You know, Thailand was doing well until then and then it had to sell, well, it was asked to sell its banks and its industry to foreigners very cheaply while the currency had been devalued. Right. So you know, just looking at the, the big picture outcome, that's, that's what he was meant to be about. The mechanism is also quite interesting because the same mechanism they put on onto Germany in the early 1930s to get Hitler into power, you know, Thailand had a savings surplus. It had, you know, successful exports and was a reasonably high growth economy. But it was brought down very badly in, in this, in this setup. And they started with the central bank, the central bank saying, okay, well we'll have a fixed exchange rate against the dollar. Everything's safe, never worry about the exchange rate. We can, we have foreign currency reserves. We can maintain this Thai baht dollar exchange rate. And at the same time, as I could show in my work on this, they raised the domestic interest rate above the dollar interest rate and allowed companies, you know, current account open, deregulated, allowed companies to raise money in dollars. Well, if there's a fixed exchange rate, the dollar interest rate is lower than the domestic interest rate. They're basically the Thai center banks telling Thai companies, borrow in dollars, please. Which doesn't make sense. It's not a good idea. Even short term borrowing, borrowing in dollars was increased by the central bank in this setup. And then all you need as then foreign debt increases and increased, increased. All you need is a bit of a set setback in the economic growth in exports. For example, foreign exchange reserve going down a bit. International investors, this is not sustainable. Building up this, this debt pile for no good reason. And that's what happens. Then of course, speculators attack the Thai baht and the central bank defended the baht, which meant it was selling foreign exchange reserves, selling dollars, buying the baht. Of course, the dollar pile went smaller and smaller until you run out. They defended the baht, they said, until the last dollar. And then what? Well, then the baht collapses. And this is what happened. So it was a crazy strategy. I Also found out that during the same time the central bank even imposed loan growth quotas. You know, this is the window guidance, central bank informal guidance of bank credit, which when used properly is part of the high growth system. You can make sure that bank credit goes to productive business, investment leads to growth, but you can also use it for bad things. As I show in my book, Princes of the Yen, the Bank of Japan used this mechanism to force banks to increase real estate, speculative loans, create a real estate bubble which you can use to bust the system. And so this credit guidance system was also used by the Thai central bank to exacerbate this crisis or this impending crisis. And then once the crisis happened, everyone, oh, we need the IMF to come in. And what did the IMF demand? Well, you have to restrict credit creation now. You have to tighten everything up and restrict fiscal policy. Everything has to be restricted. So recession, get a huge recession. Industrial output collapsed by 25%. The Thai baht now without foreign exchange reserves just fell and fell. Thailand became very cheap. And the IMF demands, well, will help you, but there's conditionality. You have to now sell your assets to foreign strategic partners. I advise them, don't do that, get out of the RMF program. Here's how you can get back on your feet. It took them maybe two years, but then they took the advice and they ended the IMF program because it was, it was clearly a system to take down. Yeah, it's a control mechanism to take the country. Yeah, take the country down. So the Belt and Road initiative offered and continues to offer alternatives to this fairly, you know, predatory. Predatory. This is the word I was looking for, system run via the IMF and the World bank and other institutions that has not helped developing countries. And so many countries think, well, let's try that. At the same time, it offered China the possibility to diversify its dollar reserves because as part of this initiative it would give money to other countries, but for particular projects that build up infrastructure and therefore also helps these countries. So China has spent billions, billions on building really shiny new roads and highways and bridges and railway connections, transport hs, massive investments in ports. And of course, you know, all these receiver countries have been to some, they're very proud of this and they look really impressive projects, modern and helping the country and the countries can use this for their own economic development. Excuse me. And so it's been attractive and many countries have joined, although of course also countermeasures have been started and some countries were put under pressure to drop out. Again. It wasn't popular when Italy wanted to sign up or Hungary wanted to sign up with this, and they were put under pressure by the EU and US parties as well. But it's been quite successful. And, and so of course a key strategic partner has always been Iran as a oil supplier to China. And we can tell that the war on Iran is part of the, this countermeasure that's really in operation against China because in these bombing campaigns against Iran, what was also bombed were belt and road infrastructure projects, bridges, railway connections, and in other parts of this supply structure. And so, you know, why would America do that? Well, it is to get in the way of the modern Berlin Baghdad Railway.
- [52:07]
A
So it goes up through Central Asia.
- [52:11]
B
Yes, of course, it's, you know, the modern Silk Road. There's many Silk Roads, of course, there's one via Russia further north and further south, several. And it's the similar viewpoint. I mean, there's actually a British theoretician, Mackinder, who talked about this heartland theory that whoever controls Eurasia controls the world. And that's really why Britain first was very keen to prevent Germany from collaborating with countries further east, Ottoman Empire, Russia in particular, and also prevent the, the buildup of transport infrastructure. That of course fosters closer economic and political connections. And it's the same. Of course, America has, has adopted that strategy. There's a, there's a famous quote by what's his name, Stratfor Friedman, saying that, you know, the, the key goal in the 20th century has been to prevent Germany from collaborating with Russia. And America has also pursued that and very successfully. You know, Germany is not collaborating with Russia, even though it would be in both countries interests, to put it mildly. Yeah, exactly. And, and likewise in Asia, of course, the equivalent. He didn't mention that, but I think I would add that it's been a key goal of America to prevent Japan and China from collaborating.
- [53:34]
A
Yes.
- [53:34]
B
Because if they did, you know, who needs America in the Pacific? So of course America has always been telling the Japanese, oh, don't trust the Chinese, you know, they hate you. And it's been telling China, oh, don't trust the Japanese, they hate you.
- [53:46]
A
And I don't think the Chinese trust the Japanese for other reasons too.
- [53:50]
B
I think actually the two countries get along better than people recognize. And it's not just the Taiwanese population that is, has very favorable memories of being part of Japan until 1945. And most Taiwanese people I know speak always very fondly of Japan. It's also Chinese youth. They think Japan is a cool, fun place and quite exciting and of course, there is a whole generation, Deng Xiaoping's generation of Chinese leaders who know the great things Japan did for China. Because when he traveled to Japan to seek the secret of high economic growth, you know, when Deng Xiaoping came to power, he asked the Japanese for that, and the Japanese didn't have to tell him, but they did not just that, they sent their key guy, who was a high growth, 1960s high growth planner to China. And he came with, you know, another 11 or 12 people, top planners, and they did the Chinese high growth system for Deng Xiaoping together with the, you know, 300 top Chinese colleagues. So Japan did some great things for China. China wouldn't be where it is today without the help of Japan. And that's, you know, and of course, people know this on both sides. So I think the two countries actually get along better than people realize. It's just not politically correct to mention that because it's not supposed to be like this.
- [55:18]
A
Yes.
- [55:19]
B
So this is really the context in which we have to see what's happening with this war on Iran. I think ultimately the goal is China, because unfortunately, America has key decision makers. Let's say it's not ordinary American people, obviously, what we're talking about here, but some key decision makers in America, influential people that influence American policy, have decided that there should be antagonism between America and China. There's all these, you know, military strategic plans. And China is, in these military plans described as a key threat, even more important than Russia, which explains some of the unfriendly policies towards China in the past. And it is a parallel development because China, you know, when you look back at the British colonial rule and then Germany rising, Germany was identified as the threat and then measures were taken, including a world war, second World war, which shows you the extent to which these planners would go. China seems to be the modern equivalent. It really is a challenge economically to America. But if we only think in economic terms, it's not really something to worry about because economics is about embracing this and competition is fine. It's a good thing. And if you have the right economic policies, America can really thrive on working with China, as partly happened in the past. But you see also there's something sinister going on because it wasn't really necessary for America to transfer most of the manufacturing to China in the first place. This reminds me of the American investment in Germany in the 1920s and 30s. Right. Of course, massive American investments taking place in China and technology has been transferred to China when it was needed and helpful. Now in Many ways. You know, there's not many areas left where China needs foreign technology because it's very much ahead of the game in a lot of them, not all, but, you know, quite a lot. But clearly that was very important. So why did this happen? I think it's the same reason why it happened in Germany. You know, you need, if you're planning for world war, you also need to make sure the opponent is built up first to have a proper war. And that tells you about the sort of the goals that are at play here.
- [57:51]
A
Do you really think so?
- [57:52]
B
It looks like it. I mean, you know, I'm always reluctant to come to these conclusions, but, you know, it was a bit much, wasn't it, the American investment in China, shifting all this production to China for short term profit. You know, oh, you've got higher margins if we do it that way. Well, you're losing all these jobs and you're creating all these problems for America, for ordinary people, for the middle class, for the country and for the long term. Why are you doing this? Well, some people were aware of this and still were part of this thrust and it wasn't slowed down. So it, you know, it was intentional, but it was unnecessary. It wasn't really necessary to do this. So there were considerations to make sure China would be built up and that.
- [58:36]
A
Actually, you may be getting back to what you said at the outset about, you know, a small percentage of the population has goals that are incomprehensible to normal people because they're so evil.
- [58:48]
B
Right. And, and China is actually an interesting case study to come to that conclusion too. If we look at the earlier phase of Chinese post war development, when Mao was in charge. Yes, it was more or less a dictatorship. It was a communist more or less dictatorship. And Mao took very unpleasant policies, clearly, and a lot of people died. Now there's always this historian's view that, oh, when people died, that was clearly wasn't intentional. But some facts about this are very disturbing. First of all, let's not forget that Mao indisputably was put in power by foreign interests. That's not even tonight. Yeah, well, what does Russian mean? I mean, it was certainly Soviet and perhaps Bolshevik would, would come closer to him because you see a direct lineage there of, if you look at the individuals. Yes, go back to, they go back to the sort of Bolshevik movement which you could even call anti Russian at some stage. I mean, it was clearly they murdered
- [59:56]
A
a lot of Russians. So yeah, it's fair.
- [59:58]
B
And, and so there is that link. So he was put in, in place by foreign interests on the one hand. And at the same time then you look at the policies he took and I want to focus. I mean there are many crazy policies like Cultural Revolution, which in many ways is being replayed nowadays. You know, this, this Cultural Marxism is a cultural revolution where you, you mess with people's heads. It's like a psyop. You know, red is not red and black is not black. You know, you have to denounce yourself and denounce the facts and, and you know, declare untruth to be true sort of thing. A man is not a man. What is a woman? You know, doesn't this sound familiar? It does. That's that that was also big operation, so called Cultural Rouge. And then we had this great leap forward which is economically greatly backward. And then we had this famine, which is quite a mysterious thing. So I want to just briefly talk about this famine and it's relevant for us today because again, ordinary people think, oh, we couldn't have leaders who plan horrible things for us. That wouldn't happen. You know, they wouldn't intentionally do it. They have good intentions. They don't want, they wouldn't never want to starve 80 million people to death, would they? Well, here's the counter case. Here's a case where 80 million people were starved to death. It was covered up for a long time. And the numbers, the more research has been done have been going up and up and up. We're around 80 million now. First of all, it's only 2 million, 10 million, 15 million. It got higher and higher and it seems to be in this order, which is phenomenal. I mean, this is really very, very sad and very tragic. What happened? What is this famine in China? It started in a year when there was a bumper crop. So good harvest now if you want to engineer a famine is not the great starting point. But because it happened at this point, it makes clearer that it was an intentional starvation of millions of people. Because you had to take a particular combination of very specific policies to get this disastrous outcome. And they're all policies. There's actually no doubt, no historian says it wasn't policies that led to this famine. They just all, whether Western or Chinese historians, they all say, well, but sure it was a mistake, they didn't intend this. Well, when it's such a very specific combination of highly unusual policies which are however necessary to have this outcome of a famine, then you really have to wonder, you know, and it wasn't under duress, they were freely taken. So there is no doubt that it was a policy induced outcome. The debate is, was it intentional or not? Well, I'll give you some of the ingredients of this famine. So if you want to start a famine when you have bumper crops, you've got to do some things. I mean, otherwise there won't be a famine, for example. What can you do? Think about it, what can you do? Well, we could, we could actually pass some laws that round up all the harvest workers and transport them from the rural areas to the cities. So let's do that. Well, that's what they did. And I know from growing up in Bavaria, you know, when the harvest comes, that's when the schoolboys and school girls and students getting asked, can you please help the farmers? This, you know, we've got a big crop, we need helpers and you earn some money per hour, which is nice. Everyone, like, that's the harvest time. Right. But if you divert millions of people forcibly transporting them away from the rural areas at harvest time or just around harvest time, that's certainly something you can do to disrupt the delivery of food in that year. So that was taken. Now it turned out to be not enough because farmers are resourceful and partly they had ways to still farm a lot, harvest a lot of the crops. Now there is a natural or, you know, seemingly natural way you could reduce a harvest. And if you read the Bible, in bad years, you know, horrible things happened, like swarms of locusts come and eat up the crops. Yes. Which is actually, you know, clearly not every year. It's unusual. It's so unusual that when it happens, you know, it's recorded for thousands of years like in the Bible, wouldn't it be nice to arrange for that? Well, in a bumper crop year. Right. If your goal is to have a famine, of course that's not so easy to arrange. Right. Is it? Particularly at a day and age where we did not yet have the insect laboratories where they breed various forms of genetically modified insects that could do all sorts of evil stuff, you know, that that wasn't yet happening. But also it's unlikely that it would be swarms and swarms of locusts, millions of locusts eating the harvest. Because in China there was a natural enemy of the, you know, giant grasshoppers, the locusts, namely the ordinary Asian tree sparrow.
- [65:29]
A
Yes.
- [65:31]
B
And, and in fact, in China, it's estimated as there's around 700 million of them, the tree sparrows. And they would, you know, in the, in the development of the, the locusts, you know, they intervene at the right point and they eat them and the larvae and so on. So you really, if you wanted to have swans of locusts, you would need of, I mean, nobody would think this up surely. But you would need a very specific policy that would declare the ordinary Asian tree sparrow enemy number one. That has to be killed and exterminated. And of course that's what Mao did. And what happened was swarms of locusts destroyed quite a bit of the harvest that's increasingly being studied. And it's quite clear that such a specific policy in this chain, in this natural biological cycle where you intervene and destroy the enemy of the locusts as a specific policy, that surely can't be by accident. Now still, it wasn't quite enough for an 80 million famine. So now you need the usual Soviet style policies, which is to sequester the harvest. You know, the government moves in and seizes the harvest and it's taken from the people and is not being sold or some of it is exported abroad to Romania.
- [66:57]
A
Exactly.
- [66:59]
B
And then some farmers have some storage because actually farmers always think of next year's crop. You want to keep some to plant next year. That's before genetically modified. You know, things were invented to destroy that natural cycle of farmers behavior. So they went after those farmers. Anyone who stored food was declared a bourgeois hoarder and enemy of the people and was severely punished. And of course the food and the grain and all the storage was taken away. So put all this together. And of course on top of that various communist campaigns, the famine took place and it was such a horrible disaster. And as I said, we're around 80 million as an estimate of people who starved as a policy result. So we have to realize that our leaders don't mind killing us. In fact, they seem quite keen on killing ordinary people. And perhaps one more link to China where we learn these things is Deng Xiaoping. And I spoke about him last time we had our discussion how he introduced the high growth model of. And Japan helped him, as I said, and, and I think that was great. And he realized, and the Japanese told him, you need many, many banks. You need thousands of small local banks that lend to small firms. It's decentralized decision making. You know, if good 5 instead of the Soviet originally started out with one bank, right? Central bank only central decision making doesn't work well. The Prussian principle of high growth, which all these East Asian high growth economies adopted is decentralization, the subsidiarity principle. Decisions on the local level there they can be made flexibly as the situation demands, and appropriately central planning is not informed enough, can't react quickly enough and doesn't work. And also the incentive structure is wrong. Because you know what's worse? What's worse than being given an order that you know is really counterproductive and useless and you still have to do it. It's so frustrating. And that's of course why the Soviet system failed and the Prussian decentralization work. I mean, there's studies comparing the German army with the British army in the First World War and the German army with the American army in the Second World War. And they conclude the German army was always far more efficient and effective with smaller numbers, better outcome. And they found it's because decision making was delegated to the lowest level. The officer in the field had the decision making power. There was always the goal is given, but how you get there. The officer in the field had to decide. Of course that meant that you had to train people better, but that's a good thing. If you've got better trained people and they make the decisions, that's the right motivation. Then people are also motivated. They know that they make a difference and their decisions will shape things and they can do the appropriate decision. Because in the fog of war, things change so quickly. Central planning just cannot work. Likewise, that was then applied in Prussia and in Germany in the economy through decentralized decision making. So not one central bank, but thousands of small banks lending to small firms, credit creation, money creation in the banking system, for productive invested, for productive business investment, you get job creation, growth and prosperity. And China did that. And so this is the, you know, the Chinese high growth system which Deng Xiaoping implemented. And the rest is history. 40 years of high economic growth lifting more people out of poverty than anywhere in history. 800 million people lifted out of, according to the official definitions, lifted out of poverty. This has never happened before in history in such a short time period, in one generation. That's what China achieved using the Japanese model, which is essentially the German model of high growth. And, and so I was always surprised that Deng Xiaoping, who was behind this and did this really well. And he's a good manager, very humble. He was always a humble person. Not, you know, this narcissistic type that you know, will take policies that selfish but really bad for ordinary people. He was not like this. He was a good leader in many ways, as far as I can tell. But he, he also is the one who took the one child policy. And we know that that wasn't a good policy. Also, if you think about it, it's a Sort of policy that you can see Western decision makers, Western leaders liking. I mean, there's lots of Western leaders in history, starting from Napoleon, talking about, oh, if China wakes up and then they keep growing population growth and China will take over the world. And you get this Western sort of paranoia, you know, and to impose a policy that, oh, only one child is allowed sounds very much like a Western idea to me. That's always the sense I had. Like, why would a Chinese leader, particularly a high growth leader. The high growth model means also you want high population growth. Population growth is good. You want people to have children, you want to educate them well, because that's what leads to growth. Growth comes from productivity, technology, new ideas, 100% of ideas come from people. We need people. Of course, you know, now they're trying to replace that with AI, but that has its, its severe limitations at risk and dangers. But. So you want more people normally, but Deng Xiaoping imposed this one child policy. Then I looked into how did this happen. And it turns out that it was early on when he was implementing the high growth system from Japan. The particular person who was asked was invited to China as the key, you know, helper with this high growth system was very able Japanese economic planner, high growth planner of the 1960s. And in 1978 when Deng Xiaoping came Japan, he asked, he was, he was told by the Chapman, okay, talk to this guy. And he was our man in the 60s, now retired, he may be able to help you. And Deng Xiaoping asked him, can you please come to China soon, like now, I need you now. Three days later he was in China with, you know, there was 12, including other colleagues that he brought along. Now who was he? His name is Okita, family name Saburo. Saburo. Now by that time he had been recruited by the Club of Rome into the Club of Rome's executive committee.
- [73:44]
A
What was the club is the Club of Rome?
- [73:46]
B
Yeah, that is a very good question. What actually is the Club of Rome? Well, it's also an institution that, you know, this really big turning point, 1971, that's when the Club of Rome entered the world stage, so to speak.
- [73:59]
A
That's the year the US defaulted on its gold obligations.
- [74:01]
B
Yes. With its report, the Limits to Growth. This allegedly limits the growth, of course. Haven't we heard this before? I mean this, the whole degrowth movement, climate change, all sorts. Growth is bad and we need to limit that. Limits to growth. We've reached the limits of growth. This has basically been the, the story in the media ever since the Club of Rome came out with this report. So the club of Rome was founded by, and it's not really disputed by Rockefeller, supported by Rockefeller certainly in the early years that was very clear. They met in the Rockefeller villa in Italy and you know all that. And then very early on this executive committee drafted also Mr. Okita from Japan, which is very ironic because he's the high growth expert. But the club of Rome's two main messages were economic growth is bad and we need to reduce it. We've reached the limits, we're going to destroy the planet, blah blah, blah, we need low growth. And secondly, too many people on this planet, in fact very much regurgitating the views of the East India Company leadership and its hired economist Malthus, Thomas Malthus, famous for his prediction population growth is too high, there's not enough food, we're going to starve, we need to reduce the population growth. Sometimes we. What you read is it sounds more like we need to reduce the population. Of course, that's what they did in India. Quite yes, clearly by result, but to a large extent, intentionally again these policy decisions, famines and other taking people's livelihoods away, destroying the textile industry in India,
- [75:45]
A
millions of people, MRNA shots, you know.
- [75:48]
B
Well, the modern, that's the modern version. So this is the message of the Club of Rome. And the Club of Rome drafted this high growth expert. Now I think he was fairly innocent and he was at this stage he was retired and he was called up by this selective international body that has a good reputation to be in the executive committee. And he agrees. No, no, many Japanese people want to be very international and all this nice famous people are there backing this. So I'll join. I don't think he was really part of the nefarious activities that are also going on. But it's clever from the club of Rome and it's backers Rockefeller foundation viewpoint, because he's the high growth guy, to get him in the executive committee of a club that argues for low growth, of low economic growth and low population growth really is certainly a way of getting a handle on the high growth model and making sure that it can be suppressed in the future. That's the job of the IMF and the World bank for developing countries not allowed to adopt the high growth policies. And when it comes to China, effectively, I think whether an explicit deal or just an implicit deal happened, namely Deng Xiaoping was allowed to run the high growth model, also attracted American investment, so that that was allowed to happen. But there seems to have been a required payoff and that is to impose the one child policy. So at least implement half of the Club of Rome agenda and the other half, well, we'll, we'll come to that later sort of thing. Could have been the attitude when I looked into. So how did Deng Xiaoping adopt this one child policy? How did it exactly happen? Turns out that he took the advice of a Chinese statistician mathematician who was working for the military doing complicated ballistic calculations. So using mathematics, which is pure logic, and he did. Then he was asked to do population growth trajectories. And of course they were scary. And he came to this conclusion, we need to restrict population growth. Now the key thing is this, and I call this the great deception. He was using simulations and if you look at, okay, what did this military statistician mathematician, what did he use? What sort of approach, what sort of model? He used the Club of Rome model. Now why was a Chinese sort of military related mathematician using the Club of role model? Of course it was in the west, it was propagated. It could just be by chance that he just saw the headlines in some Western publications. That's a leading model. We'll use that or maybe other channels to do with Rockefeller visiting China and who knows? But we know the result that he used as a fact the cup of Rome's model, which is entirely simulation. And that is a great deception because you can make up any simulation of anything and present it. But it's used to convince people and give the impression that it's factual. And this is used in economics, it's used for growth trajectories, it's used for population growth trajectories to show that it's unsustainable. And it's used of course for climate change scenarios and it's used for declaring pandemics, you know, how the virus grows. It turns out it's all simulation made up stuff. But I'll come back to this in a moment because that's actually interesting way of deceiving people. Fact is, okay, that's what he used. Club of Rome model simulations and Deng Xiaoping declaring, yep, we should listen to this guy, you know, we have no other choice, we have to do this. So it's not really clear why on earth he came to this conclusion. Maybe he just fell like many people for the simulation approach, or maybe there are other reasons, but that's a fact. And so we see that we do have influential international forces that are anti population growth, potentially anti population and also anti growth. And we don't. Well, it's not really factually Based, you know, this great deception started really again in the British empire in the 19th century. It's really the source of modern economics. This is how modern economics was developed. It started with the so called classical economists in Britain. And the key figure is David Ricardo. Who is he? Well, he's a famous classical economist. He did the theory of free trade, you know, the theory of comparative advantage, which concludes, well, we should have free trade, it gives us prosperity.
- [80:57]
A
Yes.
- [80:58]
B
And at the same time the argument is, well, the previous economists, the mercantilists, mercantile economists, they were so wrong because they argued, well, we may need some trade policy, we need some intervention, we need to make sure that the benefits from trade are properly equally distributed. That's what the mercantilist said. And ever since David Ricardo, this is claimed to have been disproven. And it's just free trade is best. Also unilateral free trade. And that's exactly what the IMF and the World bank are preaching and enforcing in their policies on developing countries. You know, their conditionality, you get money carrot. But here's the stick. You have to adopt these in these policies. Free trade policies allow foreign investment, deregulate, liberalize, privatize, which effectively means these countries are stuck in a low value added activity, exporting commodities. They're not allowed to build up their own industries, move up the value added ladder, and they're not allowed to prevent foreigners from buying up their industries cheaply. Now, empirically, this model has been proven wrong many times over. Actually Prabhu and Singer showed already a long time ago that commodities exporters have declining terms of trade.
- [82:15]
A
Yes.
- [82:16]
B
Now what does that mean? Terms of trade is simply the export price divided by the import price. It's basically the relative price you get for what you're selling compared to what you have to buy, what you're importing. Right. And what they've shown is that if you're exporting commodities and if you're focusing on that, that means all your high valued goods, manufacturing goods, are imported. Right. And that's the position developing countries in. But if you are in this position, what happens over time? And they looked at around almost half a century, actually more than half a century, you could show that the terms of trade must deteriorate, which means you will ever get less for your exports in relative terms and you have to pay ever more for your imports and therefore you're getting poorer and you're not getting the benefit from trade. That's what the IMF and the World bank are locking developing countries in through their policy regime. And it's not a coincidence. And even David Ricardo knew this very well. The trick was this. How did he prove that free trade is the best and intervention is always bad? Well, he didn't actually prove it. All he did is he presented some nice mathematics. Now, mathematics is logic and the logic is correct. And here's the trick, here's the great deception. We like logic, men like logic, people like logic. Logic is convincing to us and so convincing that we forget one small but fundamental issue. Logic is not truth. Well, hang on, why is that? Well, if it's logical, it must be true. No, there's a difference. Logic can only ever tell us about theoretical possibilities, but never tell us about what is true and what is not true. That's an empirical question. Logic is not empirical, it's not evidence based. No, whether something is true or not, whether something happened or not is always evidence based. You have to check the evidence. That's the inductive approach. Whereas logic is mathematics. You know, mathematics is logic and it usually is used consistent, correctly, consistently. Therefore you've got consistent logic. That's why it's so convincing. But the conclusion doesn't tell you that you should do this. Well, it's not perfectly predictive, it's not predictive at all. And also it may not describe the world, it may not describe reality, because it depends on the assumptions that you've used to build this model. And that's where they teach you. So the assumptions in Ricardo's model are highly specific and unrealistic. That's how economics has worked ever since, in fact, it's called Ricardo's vice. So modern economics, and you know, historians of economic thought agree on this. Modern economics essentially invent, was invented by David Ricardo. It's called the Ricardian vice, which is to make such assumptions that you will come to the conclusions that you desire. And so it's of course not scientific. It's not scientific at all. It is a way of deceiving people. And you don't point out that this is only a scenario, it's a simulation that could be true on some planet. But we are not saying anything about whether this actually applies to this or not. And so endeavor.
- [85:45]
A
It's sophistry, really.
- [85:47]
B
Yes, it is, but, but also you could say it's rhetoric or it's marketing because you're trying to convince people of something that you've concluded you want to do.
- [85:55]
A
Exactly.
- [85:55]
B
And you provide the ex post justification. And it's, it is impressive. Oh wow. So much clever mathematics. This is a Real clever scientist. Well, it must be true, whatever he's saying. This is essentially how economics has been working. And now David Ricardo doesn't point out that his conclusion depends crucially on the terms of trade, on what is that post trade price? What is the relative price of things? He has nothing on that, he just leaves that out. But that's the crucial factor. And the problem is that developing countries have a deteriorating terms of trade if they follow his advice. So he's essentially David Ricardo, essentially proven what everyone already knew, that trade can potentially be beneficial for everyone because we create benefits through trade. That's not in doubt. The mercantilists knew that. I wonder why they're called mercantilists. Mercantile, merchant trade, they favor trade. They said, let's trade. This is where prosperity comes from, from trade. That's what the mercantilist said. So why are they so wrong? Well, they're not wrong. They were not wrong. They actually were a step further than Ricardo. They talked about the distribution of those benefits from trade. They said trade can be beneficial, there will be benefits. But who's getting those benefits? Well, exactly how is that distributed? That depends on the terms of trade, which is what Ricardo totally and on purpose left out.
- [87:18]
A
I think I'm starting to understand how
- [87:20]
B
the world works and this deception has been used consistently in economics but has been used in other disciplines. So this is how they persuade. This is how the Club of Rome operates. So their model of oh, there's too much growth and growth is bad and we need to suppress growth is based on the same approach, assumptions, it's a simulation, it's not truth and it's turned out to be wrong. You know, we're more than halfway through their 100 year forecast and we're, you know, they've been proven incorrect.
- [87:49]
A
Not where they said we'd be.
- [87:51]
B
Exactly. It's true for the population growth scenarios. We don't have too much population growth. That's quite clear if you look at the facts. So it's been disproven there because it's just been simulations and it's been true for the pandemic simulations. It's been true for the climate simulation which is also just simulations. And just recently we hear that, oh, you know, the IPCC is admitting and people at the UN admitting, well, these were extreme scenarios and yes, they're implausible. You know, it's increasingly being a bit. Because that's what it was, just always
- [88:24]
A
an extreme too late for the German economy.
- [88:26]
B
A simulation, yes, yeah, of course. Well, people need to Be aware that policymakers, when they impose bad policies, they use this clever sophistry of simulations. The deductive approach is presented as very logical, and it is logical. But logic is not truth. That's the key point. Truth is based on evidence and facts. And very often you can quickly debunk all of these models.
- [88:52]
A
So, I mean, given that, and I mean, part of what you're saying is it is hard to project into the future. It's just hard to know because of the number of variables. But I'm going to ask you to do it anyway. So given everything you've just said, your understanding of what this conflict with Iran is really about, what the conflict with Venezuela is really about, it's really about China and the contest for global hegemony between the United States and China. And that is likely to flower into a world war. I think it's hard to imagine the United States wins in any conclusive way, given that it's a smaller country, population, economy smaller, less technologically advanced in some ways, in China. So what happens then? So let's just jump right ahead. So let's say there's some kind of conflict. Hopefully it's limited in scale, but whatever it is. But China remains after that. All the systems that you're talking about, which have been in place for hundreds of years, first into the British, now under us, the Americans, they're replaced by what, what, what are the systems that govern the world when China is in charge?
- [90:02]
B
Well, exactly, you've said it already. Systems that govern the world.
- [90:06]
A
Yes. Not countries.
- [90:08]
B
Exactly. So that's what it seems to be about to. To entrench a new system, a more effective system, from the viewpoint of the central planners, to govern the world.
- [90:20]
A
Exactly.
- [90:21]
B
Because these crises, whether it's economic, you
- [90:23]
A
can feel that it's very obvious, Right?
- [90:25]
B
Yeah, exactly. And clearly wars have always been used. You know, you shake up the old structure, you've got your ready, new structure that you want to implement.
- [90:34]
A
Yes.
- [90:34]
B
And that's what it seems to be about now, that that structure, as in past, you know, of wars, includes, of course, as a core pillar, the International Monetary System. There's no doubt about that. Yes, the monetary system, you know, First World War. The result of the First World War was the creation of the League of Nations.
- [90:56]
A
Yes.
- [90:58]
B
And the League of Nations had particular views. The problem was America never joined the League of Nations. That's right. Because America was still, you know, a bit more sort of, you know, representatives of elected representatives would represent what their constituents wanted and people didn't want it. Why? You know, and in fact, the First World would just prove the point that it's not a great idea to get involved in these international conflicts.
- [91:22]
A
Right.
- [91:23]
B
So America didn't join the League of Nations, and that was another reason why another round was considered necessary. And so towards the end of the Second World War, the United nations were created. In fact, did you know the United. What is the United Nations? It's the renamed Allied countries. They simply renamed Security Council. Yeah, you know, so the Second World War, Allied countries were renamed United Nations. Sounds nicer. Which is why Germany, you know, and, and Japan are still enemy countries in the, in the United Nations Charter. And they created in 44 the Bretton woods system based on the dollar. So it was a clear transfer from the, the British Empire as a dominant force to America. There was a bit of an internal battle between America, Britain. Keynes was negotiated for Britain. You know, he was already director of the bank of England, shareholder in the bank of England. He died unfortunately, sort of, sort of at the time of these negotiations. Anyway, one way or another, America won the argument, it seems, and it was the dollar that was going to be used in the system. And of course, this, the Bretton woods conference in New Hampshire in the, what was it, the Washington Hotel in New Hampshire in Bretton woods is meant to be a global conference of all the representatives. It was basically Britain and America and their colonial subjects being represented by somebody. But they had to say whatever Britain and America wanted to say. So it wasn't the world. The Soviet Union was there, but then quickly after that dropped out and thought, no, we don't want to be part of this. China was represented by some people that, you know, America was supporting in China, who later, of course, were not really in power and had nothing to do with China, really.
- [93:13]
A
No. They went to Formosa.
- [93:15]
B
Yes, for instance. That's right. So it was really America and Britain calling the shots and deciding things. And it was very much about the monetary system and the structure, United nations and the organizations, imf, World bank, to run the world. So that's also, I think, what this is about. And I think you see, if the goal, just for sake of argument, is to have a one world government, a proper one world government that controls the world. And I don't think it's a good idea, by the way. Just want to make that clear. Okay, Because.
- [93:52]
A
Thank you, doctor.
- [93:53]
B
Because decentralization is the best we have already. Too much centralization and this is going to be quite a nightmare. Totalitarian nightmare, unfortunately. But there are people power hungry, you know, psychopaths who want more power. And you know, over time in history we see their footsteps and that's clearly where, you know, that's at least one red thread going through history that forces are being aimed at this for one reason or another. So I think as a working hypothesis we can put it on the table. There's people, some people out there who want to create a one world government. And if that's the goal, you know, you know what, what your obstacle is? I think it's, it's just like with the League of Nations. It's America from their viewpoint. I mean, I'm not saying America is the obstacle or is, is, you know, America is bad. If it's opposing this, I think that's a good thing, America should oppose this. But from their viewpoint, America is an obstacle. So America has to be taken down. The dollar has to be taken down. Now a lot of the people fighting for this may be in the American government. Who knows? You know, I'm not, you know, it doesn't mean they're necessarily outside America.
- [95:02]
A
That's right.
- [95:02]
B
But there are people who are working, seem to be working for this goal. At least that's the evidence we get when we use the evidence based approach, not simulations and scenarios. And you know, where would the capital
- [95:13]
A
of this world government be, do you think?
- [95:16]
B
Oh, that's a good question. Clearly a political question. And there will be debates, but perhaps they already have a preferred location. So I, yeah, I don't want to be drawn into speculation because of course from my viewpoint it doesn't actually matter. But once we see it, I think it will tell us a lot. But it doesn't really matter for this argument. So maybe, maybe.
- [95:38]
A
Yeah, I wouldn't speculate either. I would just think, you know, logic suggests it would not be east or west, but in the middle.
- [95:44]
B
Yes, that could be. That could be, yeah, that, that would be an argument. Because of course, if it's like the United nations again, you see, and always they move it. You see, First World War, League of Nations, after First World War was in Geneva, Switzerland. You know, some arguments for that is sort of international territory. But Europe, well then United nations, because America didn't join, so you needed to be in America. United nations, of course, Rockefeller gave the land and helped a lot in building up the UN institutions, was very much involved, you know, so, you know, we see the Rockefellers there, Rockefeller foundation, quite active. But if you move to the next step and you realize just by logic that America is now the obstacle because why would America subordinate itself to an Outside body.
- [96:30]
A
Exactly.
- [96:30]
B
Why would America give up the. The dollar dominance.
- [96:34]
A
No.
- [96:35]
B
And actually, you know, have an international currency that is not the dollar which would be necessary for this new one world government. So America becomes the obstacle. So then you can't have it in America. Right. Or to, to make it clear that America is no longer the dominant force, it's now a new thing. It's a world government that is different, which you want to use to motivate other people. Right. Outside America. So then it would mean America and then where could it be? And so then, yeah, a few things, a few places come to mind. But also how do you go about this? And what we learn from history is it's always the same mechanisms. Warfare is an important one, at least for big changes. There are many changes you can do without war and that is through economic, you could say economic war, but economic cycles, boom bust cycles, long deep recessions, downturns, they shake up society. High inflation, it's also part of that. It's also economic warfare on the people shakes up society. Like high inflation in Germany in the 1920s clearly was one way to get Hitler into power is the beginning. And by the way, we may not have time to go there but you know, the person who was put in charge sort of at the peak of this high inflation became head of the German central bank, Reichsbank in Weimar. Yes, Hjalmar Schacht was his name. He was appointed by, by foreigners, not by Germans. So there's no doubt about that because the. They call themselves now victor victorious powers of the First World War. Although it was an armistice allegedly, but they decided that no, we, we are going to occupy Germany. Germany then became occupied by foreign troops, you know, the Rhine.
- [98:29]
A
Including African troops.
- [98:30]
B
Yep, yes, indeed, indeed. And yeah, it wasn't too pleasant but, and, and so also its central bank was taken under foreign control. Formerly there was a new central bank act and it stated that half of the board members have to be foreigners. They couldn't be German. And in total, because also the President was effectively appointed by the foreigners. And which foreigners are we talking about? Was mainly in practice. It's not really in dispute. It was the, the JP Morgan led reparations committee because the story was that during the First World War, Britain funded its war effort by borrowing money from JP Morgan that was ready the first step of transferring power from Britain to America.
- [99:13]
A
Yes.
- [99:15]
B
And because he didn't have to do that, there were alternatives, but Britain chose, it seems, you know, chose to do this. And so JP Morgan then was the one that money was owed to by Britain. It was, it was more than 10% of American GDP. So it's not a small sum. And Therefore after the First World War, Britain had to do what J.P. morgan was recommending, really. And J.P. morgan was thinking, well, Britain is not going to really repay this money, we better get it from Germany. And so the reparation committee was all about Germany paying Britain to pay JP Morgan. So really it was from Germany to JP Morgan. And this started to become entrenched in. If you look at the German central banks, the first step was this, this new law that made the German central bank totally independent from government and from any democratic assemblies in Germany. The Reichsbank was made unaccountable to anyone. It was the, the most independent central bank in the world, while also at the same time being 100% privately owned. By the way, R Bank was privately owned. So, and this Reichsbank then as soon as the, the Inca dried on this new statutory independence, but of course, dependence on JP Morgan's wishes, the reparations committee was appointing these foreigners. You see, the hyperinflation started in Germany and they then put Hjalmar Schacht in power at the helm of the Reichsbank. And it was the same Hjalma Schacht who then took the steps, I mean, we need another session on the details, but he took the steps that brought Hitler into power and even approached the Nazi party and said, well, you guys have some interesting ideas, but you don't have a really good economic program. I'll give you how to get out of the Great Depression that he helped to export to Germany through his policies at the Reichsbank. So that's how the plot thickens. And then of course, when Hitler was appointed on strong recommendation from Hjalmar Schacht, who was highly respected by that time because he was actually known as dictator, the monetary and credit dictator, because he decided over life and death of German companies in 1920s. When the Reichsbank said no, then the company wouldn't get credit from the banks and would be finished. So this guy recommended Hitler and then he was appointed, even though he didn't have the absolute majority in parliament, he was appointed Chancellor and then immediately appointed Hjalmaschacht as head of the central bank again, who then very quickly did the right policies, sort of early versions of my QE Quantitative easing to rev up the German economy. And so by 1936, so only after three years, you know, Germany was also in the Great Depression, you have to understand, I mean, There was large scale unemployment, 20, 25% unemployment. And then Chalmer Schacht, who had created those policies that created this and exported the Great Depression from America to Germany, knew how to get out of it quickly and adopted these policies. So Germany, by 1936, just when, when Keynes in Britain was publishing his analysis of, you know, what could be behind this Great Depression and what could be done to get out of it, which is his recommendation, fiscal policy. Well, Schacht had already led Germany to full employment and shortage of labor. That's how the economy was booming in 1936. And it wasn't through fiscal policy, as often said. Oh, that was military spending. Oh, no, no, no. German military spending only picked up much later. It was monetary policy, credit creation for productive business, investment in many industries, high technology industries. That's what led Germany out of that, bank credit creation. And Schacht knew that because he was also known as the credit magicians, the wizard of credit creators.
- [103:08]
A
So it turns out there was just one lever in the German economy and it was monetary policy. And when you cranked it in one direction, people thrived. When you cranked it in the other direction, they starved to death.
- [103:17]
B
That's right. But it's always the same everywhere. It's not just Germany, it's always bank credit. That's what shows you what's going. That's why they're hiding it. That's why even today in leading economics textbooks, there are no banks, there's no bank credit creation. Central banks still use their equilibrium models, dynamic stochastic equilibrium models, general equilibrium models. Where there's no banks, there's no need for banks. Well, this is what David Ricardo started. I mean, in his fake economics, this based on this, you know, all these assumptions, this axiomatic, hypothetical, very logical and therefore convincing economics. There are no banks, there's no bank credit creation. Who was David Ricardo? Well, he was a banker. He just retired at the age of 42.
- [103:59]
A
Was he British?
- [104:01]
B
He was British. He made a fortune in the City working with, well, working with a very rich banking dynasty, making a fortune so that he's known as the second richest person in Britain.
- [104:16]
A
Banking dynasty.
- [104:17]
B
Well, exactly. And why second richest? Who was the richest? Well, that was Rothschilds and that's where he was most likely making his money because he was in the bond market in 1815. Rothschild made a fortune in the bond market through inside knowledge of what's going on. If you fund wars, you know, slightly earlier, what's going to happen? That episode is quite well documented. But Ricardo was a bond Trader. He was likely one of those who, as agents, bought the bonds when they were at the rock bottom and you could get them for, I don't know, 20 pennies in the pound for RO without people realizing, you know, Ross is actually buying them very cheaply and then owned the entire national debt and then could say to the bank of England, well, actually, your assets are mostly bonds. I'm the biggest bond owner. I'm buying the chairs, the shares cheaply and could dictate anything to the government or the royal house, it seems. But this David Ricardo, having made his fortune, then retired at the age of 42 and built himself a nice little country house. Princess Royal, Princess Anne lives in it today. So, you know, it's probably quite impressive. I think 700 acres of land anyway, so, you know, he was seriously wealthy. What did he do with the rest of his time? He decided to create modern economics, which is based on assumptions. This hypothetical axiomatic deductive simulation. Now, you can make any assumption in logic. Why not? But when certain assumptions become compulsory, like you have to assume perfect information, complete markets, rational agents and all that stuff, you know, then it's an ideology. That's the definition of an ideology.
- [106:09]
A
That's a religion at that point.
- [106:10]
B
That's what economics becomes. And the trick is this, that once you have these assumptions, then you can show that in equilibrium, demand equals supply. Prices move to give us equilibrium. It's prices that dominate. Never look at quantities. And this is what's being pushed. I mean, modern economics is equilibrium economics. And the irony is there is no equilibrium that's made up. Because this scenario is so hypothetical. What is the probability of having equilibrium? You need at least eight assumptions to hold at the same time, but each assumption has a probability of probably less than 1% of being true. But let's say for sake of argument, each assumption, like perfect information, complete markets, you know, zero transaction cost. If each assumption had a probability of being more likely to be true than not 50, more than 50%, 55%. Okay, but you've got eight of these assumptions. They all need to be true at the same time to get equilibrium. What is the probability of getting equilibrium when each assumption is more likely to be true than not? 55%. Well, it's 0.55, 55% to the power of eight. You need all of them to hold at the same time, conditional probability. So while they love to use logic and math, that's the calculation they don't want to.
- [107:24]
A
Math reveals it as a lie.
- [107:26]
B
Exactly. Because what is the result? Even if each Is, you know, is more likely to be true than not. With 55% probability, the joint probability is less than 1%. But of course each assumption has a probability closer to zero. Less than 1%, I would say.
- [107:42]
A
So in other words, when Americans say, non economists say this doesn't look like a free market economy to me, they're right, of course.
- [107:50]
B
There is not even equilibrium. It doesn't exist. It's so unlikely to ever be true that we know for sure there's no equilibrium any market. But central banks are using general equilibrium models. That means equilibrium not just in one market, but in all markets at the same time. That's even less likely. That's like the probability 0.000 whatever percent.
- [108:11]
A
So the real power is with the governors at the central bank.
- [108:16]
B
Exactly. But also what you're hiding with this equilibrium economics is the power of the is actually power. You could say power. Economists would say, well, let's not talk about power. We're about economics. We don't. Power doesn't enter the equation. Why? Because it's equilibrium economics. Prices move, you get this outcome, you're unemployed. I'm sorry, that's the markets. There's no power. But the moment you realize that actually all markets are rationed, then the so called short side principle applies, which is whichever quantity of demand or supply is smaller determines the outcome and has power to pick and choose with who to trade. That's the power that we realize is there all the time. And that's the reality of markets. So that means people, the short side, whatever that may be, in any market, has power. That's totally ignored by economists. So this is why equilibrium, this deductive equilibrium approach, this deception is so useful, you never think of looking for the power players, the power holders. And of course, when it comes to money, is the equilibrium demand and supply, is it equal? Well, no, because the demand for money is essentially infinite. And of course the short side is the supply of money. So whoever supplies money has power to pick and choose who to give it to, how much to give it to, for what purposes. Now who is creating the money? That is the banks. And of course that's why we need many small banks, local banks, because then you're giving this power, which is then power over the whole economy really, because it's the power over money. Creation and availability of money, purging power. You give it back to the people, to the local areas. And that's why the central planners have been setting out on a campaign to destroy small banks, local banks in the background. This deception that is equilibrium when actually all markets are rationed and there's power players. It's the short side and when it comes to money, it's the supplies of money. But it's really the big banks and the central banks that have usurped that. That's why we need to decentralize and have many small banks. There is actually a person at the Federal Reserve now who's vice chair of supervision Mickey Bowman. She is an advocate of small banks and local banks. So there is hope. I mean she should be the next really chair of the Board of Governors the Federal Reserve System. But of course we have somebody else starting in the, in the interim. But hopefully she will still be there and continue to fight for small banks. We need some other changes to make it easier to create new banks that should be deregulated. There was an era in America of high growth when you could very easily set up a bank. Well, why don't we have that?
- [110:57]
A
You know, it's virtually impossible to set up a bank.
- [111:00]
B
Well, they certainly make it very hard.
- [111:02]
A
So it doesn't sound like the political environment that we're in which is clearly accelerating. We're moving towards something. Its outlines are not clear but we're moving at high speed. It doesn't sound like we're moving toward decentralization of anything.
- [111:22]
B
Right. The the trends is continues to be centralization. They're reducing the number of banks. The ECB has overseen the disappearance of 6,000 banks in Europe. That's very sad. They continue to drop their numbers also in America that needs to be reversed because that as the number of banks goes down, there's less economic growth, there's less prosperity for the middle class. It is really war on the middle class if you destroy the small banks. But that continues to take place and it's even official ECB policy. Of course the background to that is that the ECB is the revived Reichsbank. I've told you about how powerful this foreign controlled Reichsbank was. So once Germany was defeated in the second World War, post war Germany thinkers there were given some leeway to think about, okay, how to do the monetary system, the central bank. And they concluded well the problem was the central bank was too powerful. It's no good being privately owned so it should be state owned. But more importantly it should be made accountable to democratic assemblies, to parliament which the Reichsbank was not due to the controlled by the Reparation Committee which was later by the way renamed the BIS bank for International Settlement. That is the continuation effectively of the J.P. morgan Reparations Committee, you see. But the Bundesbank was then made accountable to Parliament and its independence was reduced. That's the big insight. And as a result we had a very successful central bank in Germany that throughout the existence of an independent Bundesbank, independent from the government but dependent on parliament and laws were made for it by Parliament that for example, it also needs to look at growth and employment. You can't have huge unemployment, it's no good having low inflation, but a huge recession. So that was the law. It performed very well. So it made other central banks look bad. It also never created these asset bubbles because if you allow banks or encourage banks to, to lend for asset purchases, you get, because it's money creation, you get asset bubbles which lead to banking crises. And that's the system played in many countries. Certainly in England, boom, bust cycles all the time. But many countries the central banks have been playing this game which then can be used to rearrange ownership and all sorts of things. As a World bank report pointed out about the Asian crisis. Oh, the Asian crisis window of opportunity to rearrange ownership. Oh, interesting World bank report. So the Bundesbank was a good central bank, probably one of the best in history, I would say. And because it made other central banks look bad, its days were unfortunately numbered. Germany allowed itself to give up the Bundesbank and give up its currency, the dmarc. Now the DMARC had become the European currency. So what was marketed, I remember, that's right, it was by market forces, involuntary decisions. Other countries decided to peg themselves to the DMARC voluntarily. Nobody was forced to do that. And so what really was marketed as the introduction of the European currency, the Euro, was actually the destruction of the European currency, the dmarc, and also the destruction of this good central bank.
- [114:44]
A
Now, well really the destruction of Germany itself.
- [114:47]
B
That's right. That's when it started. And I was a fierce opponent in the 1990s. But it was like a taboo to say giving up the DMARC is a bad thing. In public debates. I was chief economist of a British investment bank and so invited to various events in Germany also and other German bank, Deutsche bank chief economists were there and I would say well we, we can't give up the demark. There's no good economic rationale and silence. And some would say oh, they wouldn't engage on, on that point because it's true. They would then say oh, but there's a good political rational, there's a moral rational and moral. I want to Hear that one? Because that is an even worse argument.
- [115:22]
A
But no, but that's you. You know when a society is collapsing, when every argument becomes a moral argument.
- [115:28]
B
That's right.
- [115:28]
A
So we're fighting Russia, so we're good. Okay.
- [115:31]
B
So then they introduced, they abolished the European currency, the demark and they introduced the euro with its own central bank, the ecb. Now they marketed this as oh, the ECB will be like the Bundesbank. It's going to be in Frankfurt. It's going to be the same as independent as the Bundesbank. Well, hang on, the, the lesson from the RE bank and the Bundesbank was to make the central bank less independent. Turns out as I show actually my book Princes of the Yen, QuantumPublishers.com is the place to get it. Amazon is not really the place to
- [116:02]
A
get was a book that was impossible to get it. It's like 500 on eBay. But you've reissued it.
- [116:08]
B
Yes. Quantumpublish.com so there's a chapter here on, on this. The ECB is the revived Rice Bank. It was modeled on the, on the worst central bank in history. Which is of course why I predicted that the ECB was likely to create bank credit driven asset bubbles, banking crises and big recessions in the Eurozone. And that's exactly what they did. Ireland, Portugal, Spain, Greece.
- [116:33]
A
Well, and not, not just in the eurozone but in the United States. So here's my, here's my last question. I am going to ask you to predict and project so go out on a limb. But you know the United States has been experiencing, I think what's fair to call an asset bubble. Certainly you see it in real estate markets, but not just real estate, cryptocurrency, etc. What happens to assets in the United States as this war progresses and as the global system changes?
- [117:06]
B
Well, I mean in principle of course in real estate markets we have, we have a, we have big cycles, the slow moving and the cycles are a function of, in real estate, of interest rates and the quantity of credit for. More importantly for real estate transactions, assets are somewhat overpriced I dare say in the US but particularly when you look at stock markets, it doesn't necessarily mean there will be an immediate crash but I do think we are heading towards a crisis. And again, you know, if you look at the big game that's being played then it's quite clear this, this has to happen. If the working hypothesis is that there are forces out there that want to dethrone America.
- [117:56]
A
Yes.
- [117:57]
B
And they may be active In America, even these forces, no question about it. And that means also dethroning the dollar. And that would explain why China actually had been strengthened with American investment in the past. Because you're building up this, this opponent that can help take down America if you make sure America stays aggressive and adopts anti China policies, which also seems to be happening to some extent. So then what are the scenarios and what's the way? Well, as we said, whenever you have these big wars, they lead to currency system changes, the global financial system changes. So we moved from first the British pound, which was on and off the gold standard, then we moved to the Bretton woods dollar standard, which was a gold standard. But of course, gold standard, you know, some people think, oh, that means it's one to one to gold and you can't create money. No, that never happened. Such a gold standard never existed. It's always been bank credit creation and that's how the real game is played. But it's some kind of limit because as soon as, you know, it turns out America is creating too much, too many dollars. Buying up assets in Europe. The French were not yet part of NATO, therefore not part of the command structure. It was the French that called out
- [119:14]
A
America, we'd like our gold, please.
- [119:15]
B
And they said, okay, you're printing all these dollars and you're buying us up. What we can do is we can change these dollars now into gold. We want to see gold. So that's, you know, but so then we moved from the 71 Nixon shock, US default on its international gold obligations. Then we move to the petrodollar, which of course is very closely intertwined to actions in the Middle east and all the wars in the Middle east, oil was only allowed to be sold against the US dollar. Anyone who did otherwise, whether it's in Iraq, Saddam Hussein, or in Libya, Gaddafi. That was a big no, no, and led to severe consequences, warfare and.
- [119:56]
A
Well, you get killed for that.
- [119:57]
B
You get killed for it. Exactly. So what's next? Because also when the last, you know, when the Nixon shock happened and we moved from the gold dollar to the petrodollar, there was also inflation. Inflation is a good camouflage that, you know, it sort of makes it easier to rearrange the monetary system. It was entirely monetary inflation, by the way, not energy driven. It was the central banks creating a lot of money. But we had the same in 2020 with the COVID psyop money creation by central banks. No economic rationale for this whatsoever. It was clear 18 months later we get inflation as a result that's what happened. So it looks like we're and, and you know, now we could be. It looks like we're heading into the second run of inflation. Still early stages, not entirely clear, but we might guess without having yet the necessary data. But I think there will be a second bout of inflation, but we already had the first bout and indicates that we are in this phase of running up towards the next rearrangement of the monetary system. What is it going to be? Well, that seems to be increasingly clear. It's going to be digital based on digital identity. And I think we therefore should oppose digital ID on all fronts. We're humans, we're not digits. You know, we have digits, 10 digits. Okay. But, you know, we should not subject ourselves to, to this regime where if you don't provide the right digital ID credentials, you're not accepted as a human and you don't have the human rights in reality. I mean, that's, you know, dehumanizing. We should reject just on that principle. But there's many other reasons why we should reject it. It is the beginning of this control regime of a D. Digital currency. Now, digital currency as such is not a bad thing because for half a century we've been using bank digital currency, BDC we could call it. Yeah, because the banking system has been digital and most money is created by banks. It's digital money. We have been using decentralized bank digital money and actually has worked quite well. And the banks have never sold our personal transactions data to anyone. So actually we should laud the banks because the new regime is all about, you know, our information about our transactions being sold freely.
- [122:14]
A
The government is now Facebook and, and,
- [122:16]
B
and yes, being used to manipulate us, whether it's in elections or, you know, to sell products and, and services that we don't really need. So it's going to be a digital currency. It is marketed as cbdc Central Bank Digital currency. I call it Central Bank Digital control because that's what it is. It's not really a currency. It's more control, as Catherine Austin Fitz always points out quite correctly. And so because we've been using bdc, bank digital currency. What is the difference? It's the central. They tell us this justification, Christine Lagarde, that we need this because there's Bitcoin. We need digital central bank currency now as well. Well, the digital is not the new aspect. We have digital money. It's the central aspect that this is about because, and particularly if there's, there's, there's now another bout of inflation and in some countries with the boom bust cycles being arranged such that in Germany we are heading when in a property bust. Now there was the bubble arranged by the ECB from 2009 to 2022. Now property prices are steadily declining putting banks slowly under more and more pressure. They were forced to do this by the ecb. It's the same game as bank of Japan's game, you know, in Japan. And so banking crisis of course is ideal and inflation to launch your cbdc, that's for Europe. In other countries there may be slightly other rationales and justifications for introducing it. But a crisis one way or another is always good. A war of course is even better because then it's just wartime direct diktats, you can't do anything, it's wartime. You have to accept whatever you're told. And as a wartime measure of course that's the ultimate, you know, if everything else fails then definitely wartime measures will be used to introduce these, these measures. So we're heading towards digital control systems where we have no more control over, over our liquid assets. It will be of course programmable, permission based. So only what the central planners allow you to use your money for, at what time and place and location will be permitted. And if you're in the wrong place, it's not going to work. And if you're buying the wrong book title, it's not going to work and so on. I mean there's no limit to how much you can fine tune and control. Oh, they don't have so much power. They can't control, you know, millions of people. Well this is what the drive to build all these hundreds, in fact thousands of data centers is about. It is an organizational challenge to micromanage the world's population through the new financial world order. Yes, but they're working on solving that. AI is really about that. If AI was about helping us to be more productive, the principle of decentralization would be applied because any human organization and anything where humans are involved, if you introduce the principle of decentralization, subsidiarity, it will be more productive no doubt. More efficient, More productive. That's been demonstrated in many contexts. I mentioned the warfare, military and businesses and so on. It's true for everything. But that's not what they're doing. They're creating highly centralized structures which proves that it's not about actual productivity, it's about control controlling us. That's why they need these huge resources. Then you can control inflation easily because people can't buy when the central banks don't Allow you to buy, so then prices can't be driven up. And also you control movement of people. You can't buy a ticket, you can't go here and there because your money won't work outside a certain zone, whether it's 15 minute prison zone or whatever it may be. It is the totalitarian dictator's dream come true. And that is the scary thing. Most people are still not aware that we are so close to the scariest, most dystopian system where we're giving so much control and power into the hands of ever fewer people over our lives and billions of people again, if everyone is good, like the majority of people and the controllers, the elites, the central planners are good, it's not an issue. But that's not what human history teaches us. And human nature we know, is different. Most people actually once they're given a lot of power that comes with temptations of power and most can't handle those temptations and they give in. And then that's when power gets abused. That's why Lord Acton, a British political observer and advisor to prime ministers, concluded power corrupts. Most people get corrupted by power. They can't handle power and absolute power corrupts absolutely. We are talking about absolute power in the hands of central planners. If we allow the central bank digital currency to be imposed and the central planners will have this absolute power, including of course, they have ready monetary power, but they will have the tools to deploy this in every detail to micromanage us. That is a new dimension of power and effectively includes fiscal policy because ultimately everything becomes controlled by the central bank. So now you could still say, well, we have some politicians, they meet for parliamentary votes and they decide budgets. Well, all that will become obsolete because everything will be controlled by the central bank. This is what the politicians don't realize, that the central bank digital currency is the first step by the central planners, the monetary central planners, to take over everything. So the dangers are just so manifold that it's, it's quite clear that we have to stop this. So I mean, this is really the big scenario. And that's where we see forces pushing as internationally power gets ever more centralized. Despite this being the biggest lesson of the 20th century, that is not a good idea to constantly have more power in the hands of fewer and fewer people. There's actually being accelerated in the 21st
- [128:37]
A
century on the basis of lies about the 20th century.
- [128:44]
B
Indeed, indeed. Yeah.
- [128:46]
A
Richard, thank you. And I hope this won't be your last trip here.
- [128:49]
B
It'd be a pleasure. It's a pleasure to be here, and I hope I can come again.
- [128:52]
A
I mean this literally, anytime. I'm. I will be thinking about this for the next month.
- [128:55]
B
Fantastic. Thanks very much.