Expelling a russian official for breaking the rules of diplomacy. To go to a to one of the morning here thats a wrap on kevin though it r t h q but with full roundup and now its time for me in the table smalling have a great tuesday. Kaiser this is kaiser report some of her solution thats right we talk about problems all year and then summer time we come up with all solutions that say were being joined by banker turned bitcoin entrepreneur simon dixon of banks the future long term friend of this show and as wave a bit of an introduction is book banks of the future came out roughly 10 years ago it actually predicted a major crisis in 2020 its almost clairvoyant and how that accurate that prediction was simon has also recently gone on record that he believes a Central Banks will go directly to people and bypass the banks with their money printing thats now being discussed in the highest circles of backing this is an amazing prediction that was made basically by simon hes the 1st hes the best investment banker in bed calling encrypt oh so really a seminal character in the whole industry simon i want to get started 1st of all welcome thanks for having me no one gives an introduction like kaiser report thanks max well its well deserved now the front page of the economist magazine says free money in one month the United States printed more money than it had in 200 years how much longer can this money printer go burb before the whole thing collapses well thats the debate this going to be had right now so you all of a sudden as i say we talked about this in 2010 sheet of money is ruined so you might as well have the governments critics as much of it as a lawyer and going to a competing money supply came along right because and so now youve got these 3 different forms of competing money coming along youve caught more mud and money everywhere by the governments just crazy craig. All the money youve got the middle system which is what weve had for the last decades which is fractional reserve banking where the banks creative privately yes like a hybrid. Caps and this free market stroke crony capitalist regulated environment which drives everyone into debt and then you go private money the next question is do we have deflation or do we have inflation and thats really dependent upon who craves the money of the faustus re so money has been destroyed as well these businesses before and that that consumers default on their debts and so the governments have to try and create money out of fausta rates and if they do successfully creates another fausta rates the number of the full then you could end up with asset price deflation and Consumer Price inflation which seems to be the trend that were heading towards with all this modern monetary theory that consequence of all that money printing and as you mentioned theyre having to print faster and faster is the creation of the can tell you now are classed those who are benefiting from the 0 percent the free money from the fed those who are closest to the fed versus those furthest away from the fed and many of them are of course out protesting and rioting in the streets across the world at the moment do you see that as a causal and the relationship there is it correlated and how do you think this can tell you in our class might react to the collapse of this system yes so when money creation is created by a private bank as debt and government crave less and less money which is the money that they create is cash in coins you get 1. 00 of the consequences of the one of the biggest rich poor divide which is what weve experienced which is youre pushing consumers into debt in order to save the economy so they say one ever increasing levels of debt in order to try and get. United to beat. Inflation now trying to speculate on real estate which is driving them greater and greater into dats as their mortgage repayment doesnt cover their income im so each and every month you know months and months ago and grace are in that and yet the you know the closeness of the cheap money you know the consumers of boring on credit cards and payday loans and paying extortionate Interest Rates as youve always covered but those of the richest and wealthiest and control the most awesome. Can actually get access to this very cheap credit and they can use it for asset price in inflation so companies will use it to store prices and the the the you know you end up with this rich poor divide where the moneys being used to prop up the riches assets and the consumers and the other class are deeper and deeper into that and so you just end up with this creates history just rushing of wealth that weve had to see ever since occupy wall street theres been a lot of activism and protests on the straight kind of focused on banks and banks became a subject of a lot of protests do you think the lever see a time when all those protests around the world we call the global insurrection against banker occupation but do you think theyre rallying cry from the street from some point will be to stop printing right i mean this is the opposite of what we have today because people particularly on the left side of the political equation are demanding more printing more subsidies sharing quote sharing the wealth but thats the problem is theyre printing too much do you think theyll ever the penny will ever drop that theyll ever figure out that the problem is please stop printing no i dont think so because the people that are protesting in the streets right now are talking about the inequality and the nazi focusing you know. The inequality is a symptom but the problem is systemic and release the people rioting in the streets to come to the realisation that actually too much Government Printing whenever one sauce can put more businesses are asking for more consumers are often more we need to somehow pay our mortgage we need now you pay all rands you shut down all businesses we call on to anything so its quite right that they should be all skin for more when the governments telling them that they call and have their lives but they dont necessarily realize is that the back can be the cause of the problem and the destruction of the system now if necessary deep in debt so i guess that they really can benefit from that debts that they have to repay the in cheaper in the future or even the debt do you believe so i think that now be crying more and more money printing the destruction of the system really reaches the point where the debt is so great that the rich need to be concerned. And thats really what i think were going to see nats and i think were actually going to see protesting in the streets again Central Banks are about to let them go boss the government should give them the bailouts they wont necessarily be able to bail in and send the bankers i think are going to be protesting in the streets when the central Bank Actually brings all this money and salter in Retail Banking direct to consumer has 3 financial needs and is what i think so i see in that sense you know thats kind of a genius point really and it gets in keeping with what were saying here at member going back to occupy wall street the bankers upstairs in the on the Office Towers on wall street were throwing money out the went out you know thinking theyre immune from whats happening with all this to tear money printing that youve described and then as you point out now read a point where the Central Banks if they go direct to the to the people using Financial Technology caught crypto currency is exactly a token from the central bank there go. No i put these banks out of business now h. S. B. C. Stock just had a new all time low you know and what is big banks like that in 2008 could go belly up you know we saw lehmann go belly up bear stearns went on their Northern Rock in the u. K. Went under started the whole stampede of 2008 we could see a just b. C. Or Deutsche Bank go under our huge avalanche and what youre saying is no bail and this time no bailouts were just going to cut you off completely and were going to have backers in a 3 piece suits doing on the street joining the global insurrection against central Bank Occupation i think that could very well happen lets talk about the u. S. Dollar for a 2nd you know it is the it is the World Reserve currency and theres a lot going on here a lot of question marks surrounding this your thoughts and when i think what we see what were going to see next it isnt 944 style Bretton Woods agreement monetary renegotiation and so i think that obviously the u. S. Will get a seat at the table as they did in the previous monetary negotiations and theyre going to obviously try and you know keep the strength of the dollar until the dollar is not worth anything then it is still the strongest currency out in terms of money id rather have dollars and then its no so the moment so you know the facts that 70 percent of all. Over you know debts and transactions are all u. S. Dollars and 50 percent of transactions actually happen in u. S. Dollars means that everyone says youve got an incentive to keep it alive theyre exploiting a lot of their inflation through the peoples bank of china to china who obviously have monetary controls. Lending a lot of money to the u. S. And they have to swap in all those u. S. Dollars that they receive the chinese yuan leading that they have to print a lot of money and theyre trying to figure out where theyre putting it but really i. I think the seat at the table of all these large super currencies and countries is going to be how much gold they have and so thats essentially why you know the countries with the largest gold to g. D. P. Ratios are the ones that going to have a seat at the table as germany for europe thats russia thats china who we dont fully know how much a goal but we know theyve been accumulates more than a saying and us as well this race to the bottom as you point out in the world of fractional banking world apprentice money to try to export your way g. D. P. Growth has created this perverse incentive system where countries are trying to out print each other and goal is that having a goal is awful goaltending new all time highs in every major current currency including now the u. S. Dollar you know against this backdrop we saw the insanity of negative Interest Rates and that up until recently was considered a financial and possibility thats never appear of any financial textbook in history and we also saw negative Energy Prices as well but putting that aside for a 2nd and negative Interest Rates even in the business down many many years and how does that fit into your model when negative Interest Rates are just a way of discouraging savings for the p. F. You know for those that dont have access to the q. E. Money you know those that have access to the q. B. Money can be on the right side of negative Interest Rates and those that dont have access essentially are simply saying save any of your money we want you to spend it we want you to be broken we want you to boree we need more money in the system we need you to borrow more money and so please dont have a pension please dont have a retirement and please dont save were going to penalize all of that and the smart strategy for anyone in this economy is take on as much stats and hope for a debt you believe because thats where everythings headed say you know negative Interest Rates are just. A signal to the wode policing say we dont want you to good point. All right well were going to continue this discussion after the break simon dixon back to the future the bank the platform and the book head again to its 2nd decade and a must read dont go away more with simon after the break. The world is driven by a dream shaped by phone person and those with. No dairy thinks. We dare to ask. Join me every thursday on the alex simon show and ill be speaking to guest of the world of politics sports business im show business ill see you then. Room welcome back to report Summer Solutions are back to stacy right on cue the storm clouds of the dead a bit of a for a boating as we talk to simon dixon about the media future banks Central Banks and the currents a bit coy and what people can expect now simon getting back to our discussion one of the head a couple points here that. Get your thoughts on Paul Tudor Jones very Famous Hedge Fund manager ive been following them for decades hes put 100000000 dollars into Bitcoin Futures contracts he says bitcoin is the fastest horse in the race this is obviously now institutional money pouring into because maybe just for the audience explain because i hear a lot of people saying well those are big point futures contracts they dont count but simon what are your thoughts i think we are headed in the same direction as gold where there are going to be paper versions of big corning but you have to remember and were going to see jury in this Great Depression a 2020 there is a difference between gold and paper gold were already starting to see the absolute scarcity the reason were reaching new time highs is because people want their physical gold people want their gold close to them and the smart people are getting their gold close to them and so all these paper contracts where theres not enough gold to actually back all of these paper contracts creates a scarcity in the underlying assets i think were going through a similar situation in. The big trend right now is defiance and you know the sort of on chain yielding products and Financial Products but really the centralized Financial Companies or the building on top of solutions theyre building paper contracts theyre building you know these different types of contracts but they eventually lead to a scarcity of the underlying assets because if you dont own the private key then it is not your big. Coyness the old mantra not your keys not your coins and remember we have all of these derivatives and Financial Institutions and now weve got banks custody in coins you know they can end up owning them just like fear money they can end up spending them just like you have money and they can end up creating paper and represent asians all for them but they are not the underlying and fortunately theres a big chain where you can actually see unlike gold how much because there is how many more there are to be created and the exact Monetary Policy which creates the scarcity hardass form of money but the world has ever seen that can be deduced these bands really dont confuse that sort of futures contract when it comes to investors and they tend to use these paper versions because they dont want to actually store the underlying because theyre just trying to get exposure and i think thats just going to drive a lot more people into the paper version which eventually leads to a scramble for the underlying assets once those once you actually need it which is where were headed at the moment of course the United States j. P. Morgan bank is being prosecuted under rico for their manipulation using future is and paper gold to manipulate the gold and silver market so that would be interesting in light of what you said in the 1st half in terms of these bankers i just really want to see jamie diamond like stormed Grand Central right next to j. P. Morgans headquarters and just like start to start some sort of riot for the bankers and you know in case for the audience just so you know we are in North Carolina which is Hurricane Alley so you could hear a real live hurricane coming through right now as we speak i know simon this is probably your 1st hurricane you may have experienced ever. It is ok well lets talk further about these these futures contracts and the whole derivatives space because other than this notion of an e. M. P. Or the whole internet going down one thing we always hear from naysayers is that bankers are going to take over this and theyre going to manipulate it like gold and silver and that this is that thus a reason why one should not own bitcoin do you agree with that how do you respond to that argument and the way i would respond to that market argument rather is the same for every Single Market so i used to be a market maker on the London Stock Exchange and my full time job was to manipulate the price of stocks and shares up and down so if somebody was putting out a tip on the news or in a magazine back then it was investors chronicle words and stuff like that then we used to push the prices up push him down try and create some activity and create some liquidity but eventually the long term fundamentals for mel and were starting to see that with gold at the moment as well the reason that gold is it more time is because through all the manipulations for whatever all the accusations are you constantly manipulation unfortunately the short term but the long term you know the fundamentals apply weve already seen big manipulated shorts on many occasions you know c. E. C. These joined normal orders going into the exchanges that make people dump the price short. And people start speculating on who sent and selling them and some of the you know earlier this year about 50 really early addresses in big corning was sent to an exchange these are all designed so manipulation so you can get that in every Single Market but really as an investor focus on the long term fundamentals unless you want to trade and split pay in some of these insider manipulation games lets go back to the sovereign layer here you know the crisis genius protocol of staff. Of game theory and it seems to go higher and higher up the ladder and now at the sovereign level where the question is what state or group of states will start getting into buying or acquiring or mining because it is a way to add to their Strategic Reserves and different sovereigns are now trading their own sovereign Digital Currencies people trying to figure out how that fits into the big quaint space that japan is going to introduce the digital yen chinas thinking about a coin except. And so a couple of questions so when japan appears to introduce a digital yen. You know what do you think about a National Crypto currency in the 2nd part that question is the pushback you hear from people is that well what have countries outlaw because and that there is another thought to this that actually of those just saying theres more likely that countries will want to get into Competitive Bidding to add to their Strategic Reserves and acquire bitcoin thats the flip side of that argument but how do you come down simon on this sovereign digital crypto coin now in the pickle in space and hows that going to play out the things current see is going to be 100 percent digital very soon or is the years in some countries. The interesting thing that people confuse is people often think. That you know the Central Bank Digital currency is the same thing as what weve already goltz because the money is already digital and theres a war on cash and cash is virtually disappeared anyway and there is i see a major major difference its who creates the central bank Digital Currencies and how theyre crazy so when a country actually creates a Central Bank Digital currency. Into the economy and theyre going to have to figure out their models i personally think the way theyre going to issue it is as a result olds and i when people would see access to money as a individual universal credit will be income. And theyre also going to issue it in proportion. Into banks go embossed so people dont lose. So if you have some money in a bank you can just get some Central Bank Digital currency in the bank and go bust hence the banks writing in the story. So i think the but its not backed by debt as well as another interesting point so it actually is a deal leveraging a fat when Central Banks issue these Digital Currencies versus the Digital Currency those created by the private bank with regards to bitcoin gives people an oct out in the nexus because when Central Banks and governments create the digits Digital Currency is going to be all full effects on your privacy or freedom your ability to spend your money as you choose is going to be intersected with compulsory vaccines is going to be intersected with your ability to get on a plane in the future and the anti Money Laundering regimes and automated Tax Collections are going to be all intertwined and were just going to have more and more into connection with the Central Bank Digital currency so thats where bitcoin really comes in and then people lost well will they ban it we already have seen use cases weve seen that china and exchanges and it push the price from 3000. 00 arts of the 20000. 00. Overseas part of that was a speculative bubble correctives and now were starting to stabilize a bit more so i think wed be very naive to think that governments wouldnt try and ban bitcoin when they start to realise and it becomes a political power play and we already saw that you know with the with the gold in the pasta when it came to the monitor renegotiation when to many people were hoarding and they wanted to increase the velocity of money they banned gold and just simply made it illegal in america but at the same time there was a 2 tiered market a market for converting at the central bank and a market for other countries so what i think youll start to see is car countries where there. Arent seas are being destroyed right now that are experiencing hyperinflation or deaths you know overindebtedness like were seeing in countries like lebanon i think theyre going to have an opportunity to achieve coin and then announce it as one of the reserves on mass and for banks so fortunately the Competitive Forces i think will make it where if one country makes it illegal another country will see that as an opportunity and well start to see this Country Central Bank level where the last central bank then announces theyre going to hold some of their reserves in big going as well as golden dollars and currency actually become the biggest losers and so i think were going to start to see as a Political Tool by Central Banks because it can be used by anybody lets talk about any be it buddy because we talk about Summer Solutions here and were talking about a renaissance like a moment of rebirth so if youre saying that all these banks the j. P. Morgans Goldman Sachs h. S. B. C. Deutsche bank b. M. P. Pare about that they all go away they disappear or they collapse. Is of course your own bank so what happens in a post banking post the out world like how much entrepreneurship a flourishing of like fraud free or certainly reduced fraud and vironment like what happens i dont think were going to see a post fear i think fear will survive and it would just be in a different format since the fear that youre going to see is going to have less freedom less over and see less privacy and lots of really horrible features built into it. And if banks go boss this is not the the banks go away as the banks have a choice of 5 or adjusting to the Central Bank Digital currency they dont get a super subsidy they are no longer too big to fail because the central bank can just let them fail and theres a way of you know auction off all the deaths and replacing money with a Central Bank Digital currency. So it actually drives banks to be more honest and if they dont. When theyre not too big when then when theyre not too big to fail they have to compete with Financial Technology companies will be building in this fear. Now all of those these different players that come along and theyre all competing there is you know this exit opportunity which is that you can pay on them the form of money which is to just use gas and cant be manipulated so i think that youre still going to see fraud i think youre going to see fraud where companies building on top of bitcoin like we have in the last all of these things dont necessarily go away but they look like a new form and the most important thing is the Competitive Forces users having the choice of where to where to play where to be use your fear money not because you have to but because its convenient for certain use cases but dont put your savings in there and i think thats what were going to see were going to see every single Financial Products rebuilt in a decentralized way and in a more centralized way with 2 forces competing and consumers having more choice finance is going to get more complicated. Going to continue but the beauty of this is that youve got more choice and you do have a hard sell more money and you dont need to rely on your go simon dixon great stuff that a should add to your bio. Term futurist you know you really do qualify as a futurist you have predicted so many things have come true thanks for being on kaiser report Summer Solutions pleasure thanks for having me but thats going to do it for this edition of kaiser report with max as they say i want to thank our guest again simon dixon of bank of the future go to catch us on twitter its kaiser report its a lifetime. Movie. Shows seem wrong but old old just dont hold. Any new belief yet to shape out this day to come to educate and engage with equals betrayal. When so many find themselves worlds apart. Choose to look for common ground. That. Can. Do no harm and shattered by digital. In this episode we explore the ignorance and greed that led to our Current Crisis one of the 1st. Medicine is do no harm. Said that poverty is was the 1st to say this and what that means is that the cure for any medical problem shouldnt be worse than the disease that youre trying to treat a big chunk of america is in chronic pain and pain meds back pain pain arthritis events real and it affects peoples lives and they would like a way to live their lives to take care of their families without being a misnamed what the brain is trained as a different brains than their brain thats not in play
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