Podcast Summary: "Richard Werner Exposes the Evils of the Fed & the Link Between Banking, War, and the CIA"
Podcast Information:
- Title: The Tucker Carlson Show
- Host: Tucker Carlson Network
- Episode: Richard Werner Exposes the Evils of the Fed & the Link Between Banking, War, and the CIA
- Release Date: July 28, 2025
1. Introduction and Background
In this compelling episode of The Tucker Carlson Show, host Tucker Carlson engages in an in-depth conversation with esteemed economist Richard Werner. The discussion delves into Werner's groundbreaking work on banking systems, particularly his analysis of Japan's prolonged recession and the intricate mechanisms of bank credit creation. The dialogue challenges mainstream economic theories and exposes the concealed powers wielded by central banks.
2. Richard Werner's Early Work in Japan
[00:01] Host (A):
"You're one of the best known economists in the world, most significant. But you have a story that I think that I didn't know..."
Werner recounts his journey in the 1990s as a consultant to the Bank of Japan. Fluent in Japanese and equipped with an academic background from the London School of Economics and Oxford, he embarked on a mission to unravel the perplexing economic stagnation in Japan. His efforts culminated in the publication of "Princes of the Yen," a book that became a bestseller in Japan, surpassing even the popularity of Harry Potter.
[01:25] Guest (B):
"It's a bit of a detective story... the name of the book is Princes of the Yen."
3. The Three Theories of Banking
Werner introduces the audience to three predominant theories of banking:
- Financial Intermediation Theory: Banks act merely as intermediaries, collecting deposits and lending them out without altering the money supply.
- Fractional Reserve Theory: Banks hold a fraction of deposits as reserves and lend out the majority, implicitly creating money through the money multiplier effect.
- Credit Creation Theory: Banks possess the unique ability to create money ex nihilo (out of nothing) by issuing loans, thereby directly influencing the money supply.
[19:35] B:
"But actually if you look into it, you realize there's three theories of banking... the credit creation theory of banking."
Werner emphasizes that mainstream economics predominantly ignores the third theory, relegating banks to mere financial intermediaries, which he argues is fundamentally flawed.
4. Empirical Testing of Banking Theories
Committed to empirically validating these theories, Werner conducted groundbreaking research by collaborating with a cooperative bank. By scrutinizing actual loan transactions, he discovered that:
- Financial Intermediation Theory was invalidated.
- Fractional Reserve Theory was also disproven.
- Credit Creation Theory stood confirmed, revealing that banks indeed create money out of nothing.
[26:36] B:
"Any bank? Any bank, to be clear, not just... that's the whole point."
5. The Role of Central Banks and Quantitative Easing
Werner critiques the prevalent use of Quantitative Easing (QE), a policy he initially proposed, which involves central banks purchasing non-performing assets to stabilize the banking system. He distinguishes between:
- QE1: Central banks buy non-performing assets from banks to cleanse their balance sheets.
- QE2: Central banks purchase performing assets from non-banks to inject liquidity and stimulate credit creation.
Werner argues that mainstream implementations of QE have been flawed, often focusing on performing assets, thereby perpetuating asset bubbles rather than fostering genuine economic growth.
[55:46] B:
"So, what has been happening since the 1980s... through their real estate lending."
6. Historical Examples: Bank of England and Central Banks in Wars
Drawing parallels from history, Werner illustrates how central banks have historically played pivotal roles during wartime economies:
-
Bank of England during WWI:
[127:50] B:
"The act of Parliament establishing the Bank of England... to make war."
Central banks were established to facilitate war financing, effectively wielding immense economic power to support governmental military endeavors. -
Central Bank Actions in Crises:
[130:17] B:
"So you quickly reach that point where your equity is wiped out and you're bust."
During crises, central banks have intervened by purchasing non-performing assets to prevent economic collapse, thereby exercising control over the financial system.
7. Decentralized vs. Centralized Banking Systems
Werner advocates for a decentralized banking system comprising numerous small, local banks that can efficiently allocate credit to diverse sectors and regions. He contrasts this with centralized systems dominated by a few large banks, which tend to channel credit towards unproductive asset purchases, leading to economic instability and concentration of power.
[92:17] Host (A):
"So Germany, but it's reflected in demographic trends. It's reflected exactly. Wealth allocation."
[95:27] B:
"You need a decentralized banking system. But that also gives power, purchasing power and prosperity to the middle class, to local communities."
8. Challenges and Resistance from Mainstream Economics
Werner highlights the inherent resistance from established economic institutions and academia to his theories. Mainstream economics, entrenched in outdated models that overlook bank credit creation, dismiss his findings as conspiratorial or fringe. This institutional inertia has hindered the adoption of more accurate and beneficial economic policies.
[30:45] B:
"It's something that had to be examined further. That's very important... therefore the financial intermediation theory is rejected and the fraction reserve theory is rejected."
9. Future Projections: US Economy and Central Bank Digital Currencies
Looking ahead, Werner warns of impending economic challenges if current policies persist. He predicts a looming global financial crisis driven by unsustainable credit creation practices. Additionally, he criticizes the introduction of Central Bank Digital Currencies (CBDCs), viewing them as tools for further centralizing financial control and undermining the autonomy of local banks.
[142:04] B:
"And so the conclusion is, when you borrow money, the bank just writes the number in your account. And that’s what I could empirically confirm..."
[156:46] B:
"We need to oppose the introduction of CBDCs... because central bankers, they’re human. They’re tempted by the temptations of power."
10. Conclusion and Resources
Richard Werner concludes by urging listeners to advocate for decentralized banking systems to foster sustainable economic growth and empower the middle class. He recommends his publications and platforms for those interested in further exploring his theories:
- Books: Princes of the Yen (available at quantumpublishers.com)
- Reports and Analyses: Accessible via his Substack
- YouTube Channel: Werner Economics
[165:09] B:
"I think the best is to get also my very up to date shorter reports and analyses on particular markets. Just now I finished one on the bond markets is my substack which is rwerner.substack.com..."
Notable Quotes
-
On Banking Theories: [26:36] B:
"Any bank? Any bank, to be clear, not just... that's the whole point." -
On Central Bank Influence: [42:00] B:
"So that explains why economics has made no progress for 200 years... Because there's no banks in there." -
On Quantitative Easing: [52:18] A:
"Yeah, why?"
[52:20] B:
"And I'll explain the mechanism..." -
On Historical Central Bank Actions: [130:19] B:
"Exactly, yeah, yeah, yeah, yeah." -
On Future Economic Policies: [156:46] B:
"We need to oppose the introduction of CBDCs... because central bankers, they’re human."
Final Thoughts
Richard Werner's insights present a paradigm shift in understanding economic dynamics, emphasizing the pivotal role of banks in money creation and the profound impact of centralized financial control. His advocacy for decentralized banking aims to rectify systemic flaws, promote equitable growth, and mitigate the risks of impending financial crises.
For those seeking a deeper comprehension of these concepts, Werner's body of work offers an invaluable resource, challenging conventional economic narratives and proposing actionable solutions for a more prosperous and stable economic future.