It’s funny thing but the Satanic Rothschilds of the Black Nobility, of the 10,000 years old Phoenician Empire are not well known as the Architects of the Hell on Earth we have been experiencing for thousands of years…
Just think.. The Satanic Rothschilds own everything!!
They own 100% of all the Central Banks in every country in the World including the Federal Reserve!
The Satanic Rothschilds own 85% of every other bank.
The Satanic Rothschilds own 87% of every Fortune 500 Company.
The Satanic Rothschilds own all the money, everything!!
The Satanic Rothschilds own the Epstein List!
And their Satanic Religious aim is to inculcate everyone into Hell World pervert everyone, and steal everyone’s Soul.
Their aim is HELL WORLD!!
If people do not know that, talk about that, mention it in every one of their videos, articles, books, then they have taken the Ring, bought, blackmailed, possessed.
That is how you know who to trust.
The Satanic Rothschilds own - founded the United Nations so all their World Digital ID’s, Social Control, Censorship, Blacklisting AI Bot Nets, Eat Bugs, Fluoride drinking water, MRNA Vaccines, cyborging you to Demonic AI, the owning of every Politician - Trump, Starmer, Macron, Putin, Xi, Bush, Clinton, Obama, Bidet, - on every side of left and right by blackmail, bought, inculcated them into satanic human sacrifice cults like Bohemian Grove, Aleister Crowley’s OTO, and every CEO of every Fortune 500 Company and Central Bank likewise.
The Satanic Rothschilds founded and own Israel, founded Mossad, own all the Politicians.
With the Phoenician Venetian Empire they founded genocide, slavery and drugs then passed it on to the Dutch East India Company and then took over England when William of Orange took the throne to found the British Empire and it’s East and West India Company and it’s genocide, slavery and Drugs and the Chinese Opium Wars - Mao genocided 100 million people, 200 million people genocided in the 20th century through WAR passing on to the Anglo American Empire! and it’s killing off of 120 million Red Indians, genocided 100’s of millions of people in South America through smallpox and genocided people in every country and took over the World.
Read my 12 volume set on Satanic History of the World, in particular of the above..
AGAINST SATANISM VOLUME 7 - 800 PAGES! The Satanic History of the World Part 3 Published Jan 2020
The 1000 years of Cancer of The Venetian Empire – The Phoenician Empire - Metastases into the Anglo-American Empire. The Suppression of Science.
AGAINST SATANISM VOLUME 8 -The Satanic History of the World Part 4 Published Jan 2020
The Cancer of The Venetian Empire - The Phoenician Empire - Merges with the Satanic Catholic Church
The reputation and good behaviour of hundreds of millions of good Catholics in no way is questioned by highlighting the deliberate actions of a few thousand dedicated Satanists, Baalists and Luciferians who have caused world wars and sacrificed millions to demon gods.
The Roman Cult and associated networks of Sabbatean and secret Satanic organisations since the 14th and 15th Centuries is the only time in the history of civilization whereby a “sacred” religious ceremony was established for the systematic and widespread encouragement of its clergy to Satanically ritualistically abuse children...
Saint Francis of Assisi was the son of the Satanic Phoenician Mega Trillionaire family importing drugs, spices, silver and gold from China and India into Europe banned by the Emperor of Constantinople then conjoined with the Satanic Catholic Pope to share the business under the Fake order of monks - Sea Seclorum, gave secret military and naval technology to King John III of England who created 40 advanced Oaken ships and together they sacked Constantinople in 1204 bringing the loot back to Venice where Saint Francis became the Doge of Venice.
Himmler was Head of the Military Arm of Catholicism, the Jesuits. Hitler was supported by Pope Pius XII. The SS Knights of the Golden Sea Seclorum based on the Jesuit Order were an Order of the Catholic Church.
And Much, Much, More..
https://againstsatanism.com/Sacred-Energy/Against-Satanism-Volume-8/Against-Satanism-8-One-Evil.pdf
So, on to the purpose of this article which shows Professor Werner talking to Tucker Carlson showing how the Satanic Rothschilds use the Central Banks which they own in every country in the World. 100% of all Central Banks including the Fed to create depressions and recessions to order! Just like the Great Depression in the 1930’s USA conditions to start WW2!!
How the Satanic Rothschilds use the Central Banks which they own in every country in the World. 100% of all Central Banks including the Fed use those depressions and recessions to create the conditions to go to WAR against any country as is happening in Europe now as they prepare to go to war against Russia.
Here is my first article in 2024 on Professor Werner FINANCIALISATION and Satanic Phoenician Mega Trillionaire Central Banks? by Professor Richard A. Werner, D.Phil. - Improved and made better by Satchidanand
Do we Need Satanic Phoenician Mega Trillionaire central banks?
THE SATANIC PHOENICIAN MEGA TRILLIONAIRES, THE ROTHSCHILDS, THE ROCKFELLERS, THE BLACK NOBILITY CONTROL BIDEN, PUTIN AND XI - THEY CHOOSE WHICH EMPIRES TO DESTROY AND RAISE UP!
And here is my second Article on Professor Werner talking to Tucker Carlson and showing how he cracked the Science of Economics showing how the Rothschilds so easily created Depressions - but also how this great science he cracked could also solve all the economic problems in the World to create a planet of Richness, love, light and joy!
So Mr Kuroda heard first-hand from me the three most important policies that would swiftly create an economic recovery, as I had repeatedly stated since the mid-1990s, namely:
QE1: Central bank purchases of non-performing assets from banks.
The non-performing loans originate from bank credit creation for unproductive use, namely for asset purchases. These caused the prior asset bubble. As soon as such unsustainable bank credit creation ends, asset prices collapse and banks are left with non-performing loans. But this can be remedied swiftly, if the central bank buys them at face value. This QE1 measure addresses the cause of an incipient banking crisis instantly and without using tax payers’ money, by moving the non-performing loans on the banks’ books to the central bank, where they cannot do any harm. This way banking systems can be rescued instantly, and at zero cost to society. This measure also does not create inflation. In fact, it is entirely impossible to cause inflation this way: No new money is injected into the economy – that is, the non-bank sector, by QE1. This form of QE merely constitutes a transaction within the banking system (namely between the central bank and the banks) that cleans up banks’ balance sheets and turns failing assets into pure liquidity. But money creation takes place only when banks inject money into the non-bank sector, which does not happen here. There is no inflation and no fall in the value of the currency. It proves that banking crises do not have to be costly or drawn-out, resulting in recession and unemployment, except when central banks wish it so. Sadly, the Bank of Japan never implemented QE1, and it was Ben Bernanke in the US who did so in 2008 – causing many people to think that all QE is inflation-free, which is wrong, as we shall see when considering QE2:
QE2: Central bank purchases of performing assets from non-banks.
Given the scale of the problem – in 1994 I estimated that 25% of Japanese bank assets were non-performing (based on the amount of bank credit for real estate transactions since 1995) – it was apparent to me that bank loan officers would not increase bank credit, even after their banks’ balance sheets had been cleaned up by the central bank via QE1. The reason is human nature: They would still suffer from “shell shock” from the enormous amount of non-performing loans they had caused and thus would remain cautious for a while. Hence I devised a method by which the central bank can force banks to create credit. This happens, when the central bank engages in asset purchases from non-banks. Normally, central banks exclusively deal with the banks or the government, but not the non-bank sector. My QE2 proposal of 1995 was that the Bank of Japan should simply purchase land in Tokyo and turn it into public parks and green areas accessible to the public. Tokyo is not a very green city and could do with more recreational green space. I was sure that the real estate market was going to collapse for many years to come without the proposed QE policies. This particular measure of QE2 would achieve several goals simultaneously: As the sellers of the land – mostly firms or individuals other than banks – instruct the central bank to receive payment in their bank accounts, the central bank would instruct their bank to credit their current accounts. Since the instructions came from the central bank, banks be forced to newly create this credit in the seller’s account, thus expanding the money supply. In return, the banks would receive a credit in their account with the central bank (known as ‘reserve accounts’). This QE2 proposal is thus a way for the central bank to force a bank credit expansion, an expansion in the money supply and hence an increase in economic activity. It is ideal in situations of recession, shrinking GDP and deflation. Deploying QE2, one can exit such a depression swiftly and stage a strong recovery.
Later in 2013, Bank of Japan governor Kuroda began implementing QE2, which he came to call “Qualitative and Quantitative Monetary Easing”, or “QQE”, in order to distinguish it from the “Fake QE” policy of his predecessors, implemented from 2001 to 2006.
QE3 (fake QE): The central bank purchases performing assets from banks.
During most of the 1990s, the Bank of Japan argued that my QE proposals were “nonsense” and would not work, or could not be implemented. In the early 2000s the central bank then proceeded to implement standard monetarist high powered money expansion by purchasing government bonds from banks – and then wrongly labelling this “quantitative easing” and shouting: “See! It’s not working”, and then abolishing it in 2006. However, in my original contributions between 1994 and 1997 I had already made clear that standard monetarist high powered money expansion would not work. Also, such monetarist measured did not require a new name – proving that the Bank of Japan was merely trying to discredit my original QE proposals.
Transcription of the video from 1 hour 35 minutes in
Princes of Yen by Werner
On the way he explained how Alan Greenspan cracked the Economic Problem - Qualitative and Quantitative Monetary Easing”, or “QQE” - and wrote about it in Ayn Rand’s book .
“And then I discovered there's a book edited by Ayn Rand.
And he wrote a chapter in it in when he was not yet at the Fed.
And it's about credit creation and how gold is a much better way to run the system.
Because once you give central banks this much power, they will create too much credit.
Basically,
when you read it,
he criticized the Fed for creating the asset bubble of the 70s in the US and then
the Great Depression in the 30s,
which was the Fed's job.
They did that.
And it wasn't an accident.
And of course, the Bank of Japan was doing the same thing in Japan.
So I realized, wow, this is how it works.
He then was offered a job at the Fed, but he was basically told never to talk about this again.”
This allowed Alan Greenspan to be bought by the Rothschilds and made Head of the FED and he never mentioned Qualitative and Quantitative Monetary Easing”, or “QQE” ever again!
The Rothschilds did the same with Ben Bernanke when he grew curious about Qualitative and Quantitative Monetary Easing”, or “QQE” - they bought him by making him Head of the Fed after which he never mentioned Qualitative and Quantitative Monetary Easing”, or “QQE” ever again!
So you think that the Japanese recession was created...
Well, by the Satanic Phoenician Rothschild Bank of Japan, the purpose of all the 100% Rothschild Central Banks is to create depressions and fund War - but with the encouragement of the West in order to slow down.
Yes, the US and particularly the Satanic Phoenician Rothschild Fed.
Yeah, absolutely.
That's what I show in my book Princes of the Yen.
There's no doubt about it.
And there's been no contrary evidence or that anything in my book was incorrect.
So you write this book published only in Japanese, at least.
Yes.
And it,
as I said at the outset,
rockets to the top of the bestseller list in Japan,
beating Harry Potter,
which is amazing.
And then what happens?
Yes, what happened next?
Why haven't I read this book and why is it not on our bestseller list?
Well, yeah.
What happened next was, of course, in Japan, I was constantly being interviewed.
I was by the daily press, by the weekly magazines, by the monthly magazines.
I was given monthly columns.
I was writing for years every month in the Japanese Economist, the Japanese Newsweek.
I was on their television.
In Japanese?
Yeah, it's all in Japanese.
There was some big live shows.
So your Japanese is good enough to explain economics on TV shows.
I wonder how many of our viewers will know what you're saying.
That's impressive.
And so,
but it was all in Japanese,
you know,
so it was,
you know,
in the media,
there was some way you could see there's some pressure being applied,
some high profile live Sunday TV shows,
like canceled on the day.
And then the,
you know,
the senior executives inviting me around,
embarrassed to try to explain.
And, you know, the Japanese love the truth.
So they would, they did tell me the truth.
Well, sorry, you know, we, it wasn't, we had no choice.
You see, our advertisers, you know, the advertising revenue is very important.
And it was one of the,
it was our biggest advertiser and told us Richard Werner can't be on this show.
so you mean a company like toyota canon or something yeah i can't say the name but
a company like that well hang on they have nothing against me i have nothing
against them why would they say that yeah of course it's not them and they also
said that they have nothing against you you know and i'm you know we're all really
sorry about this but you know is their bank saying that that they have to say this
but hang on i don't even criticize the banks because i show that it was the central
well yeah you see that the bank had to say that because the central bank asked to
do so
So that's the chain of command, you know.
And so then I was cancelled in that show or some magazine editions even.
There was one.
It was one of the top weekly magazines I was interviewed in.
You know, it was very proper and formal.
They came with several photographers and recorded.
I checked the script.
You know, everything was a big deal.
And they even then sent me the actual copy of the magazine.
But there was no article of me.
It was like last minute.
They even forgot to take me off the distribution list.
So I called them.
I was like, thanks for sending this, but where's the article?
Where's the interview?
And they explained, well, yeah, we had to kill it because of pressure.
So that happened on the one hand.
But,
you know,
still,
I mean,
I would say more than half of the time,
you know,
my interviews got through.
I thought at the time, wow, that's pretty controlled.
I now realize with hindsight that was pretty open because once I went to the UK,
it was like fully controlled.
And, you know, I did not have this media access anymore.
But it was only in Japanese.
So one day I got a call from a Reuters journalist.
From Reuters, this and this name, British guy on the phone apparently.
And he mentions my book.
Oh, so I thought, oh, that's impressive because it's all in Japanese.
And usually, you know, the foreign journalists, they don't speak Japanese.
So I was quite curious.
And I expected, you know, he wants to interview me on the book.
And then he said, oh, no, no, no, sorry, it's about your book, but it's a personal matter.
Really personal matter?
Yes, I'm calling, it's a private matter.
I want you to help my wife.
Right.
Well, I'm confused.
Can you explain?
Well, you see, her job is to translate your book.
Well, hang on.
This book has been translated.
It's a great translation.
I helped with it.
The publisher, we sat together.
We were really wordsmithing every sentence to make sure it's got the right nuance.
I wrote it in English, yes, but it's a very good translation.
What do you mean her job is to translate my book?
Yes, her job is to translate it back into English.
She's given a very tight deadline.
And,
you know,
if you give us the manuscript,
the original English,
then she's done with her job.
Excuse me, what?
You know, I own all the language rights.
I've sent it to some American publishers.
I'm still waiting for the result.
This is like a pirated translation.
I'm sorry.
I mean, I'd love to help you and your wife, but I can't do this against my own interests.
Right, yeah.
so it's a decline now he did say where she worked and it was one of the major i
don't want to say it i don't want them to get in trouble even after even though
it's years ago but it was one of the major places in japan uh that are more
considered um official where you where you also think well hang on why do they need
to read need to read this in english
Because the Japanese people are quite happy.
If something is in Japanese, they will only read the Japanese.
You know, you've got a choice.
Nobody will say, okay, I'll read the English.
So it was clear there's somebody outside Japan who wants to read this,
but who could use one of the major,
what's considered government institutions,
as a translation bureau.
Okay.
Well,
the puzzle was solved a few months later when somebody came to visit me from
America,
from Washington,
head of one of the think tanks and economists.
I had met him before.
He knows me.
He's doing Japan.
He wanted to...
And so, you know, we met and first thing he says, Richard, great book you wrote in Japan.
Princes of Yen?
Well, hang on, you don't read Japanese?
No, of course not.
No, I don't.
But, you know, the translation is circulating in Washington.
And then, you know, a few months later, I got the call from the U.S.
Embassy.
It was clearly a Japanese lady working there, very polite, as you'd expect, Professor Werner.
We have a request from the US State Department.
There is a senior person from the State Department who wants to arrange a meeting with you.
Well, I guess that's in Washington.
I have no plans to go to Washington at the moment, sorry.
No, he's coming to Tokyo to see you.
So I thought, okay, let's meet in a public place as opposed to a dark alley.
And sure enough, when we met, the main message was, you know, the CIA is watching you.
That was the message.
That was the main message.
It was like there was no quizzing or trying to manipulate me or get me out.
You know, it's just the CIA is watching now what you're doing.
They weren't trying to learn from you.
They were trying to tell you something.
No, no.
Actually,
somebody suggested,
when I told you this story,
that that also was my opportunity to ask for something.
Like,
you know,
be president of one of the Federal Reserve Banks in the US as part of the deal to
stop talking about credit creation.
Actually, it reminds me, I need to...
Finish another story I started, you know, I told you about Keynes moving away from the truth.
I just want to pause and savor this for a moment.
So you publish this book in Japan, in Japanese, explaining the Japanese recession.
And within a few months, you get a visit from the CIA.
Yeah, yeah.
Well,
I spilled the beans on what is the most powerful mechanism for both economic growth
and prosperity or arranging for the boom-bust cycles.
And of course,
this is something that's been happening across the globe in the last years
quite a lot.
And I was mentioning names.
And I did,
okay,
I need to tell you to finish that before we come back to Ben Bernanke and
colleagues.
After that visit, all the US publishers sent back their polite letters turning down my book.
I mean, imagine, this is a book that was the number one bestseller in Japan.
It did have a chapter in it on the US.
There was a link.
I had a chapter on Asia, the Asian crisis, same story.
And I had a chapter on my encounter with Alan Greenspan.
And based on that encounter and some analysis,
I concluded,
and that was in that chapter,
that actually the Federal Reserve is on track,
and Alan Greenspan was still hitting it at the time,
was on track to create...
the biggest asset bubble in history and they will do likely the same as in Japan
and it will be a crisis it will be a bust but because it's America it's going to be
a global financial crisis that was in my book it's published in the original
Japanese in now I then found one publisher that has a I don't want to mention
the name it's a very good name and they have international offices global
Excellent top reputation and their US operation is quite independent,
has editorial independence.
And I sent the whole manuscript to the CEO of their US side and their excellent
distribution in the US.
And then I went to New York and I called him and said, I happen to go through New York.
Can we meet?
Oh, of course.
We met in the Four Seasons.
The first thing he said when he saw me is, Richard, thanks for sending me your book.
I read your book.
It's the best business book I've ever read.
what he said of course we'll publish it so that's how the lunch started and i
thought well this is good this is starting good i better immunize him a little bit
on the what's going to happen next people will approach him and i experienced this
in japan they will say that this is a dangerous book that phrase was used some
particular journalist working at the new york times but probably also rather you
know in the mockingbird style perhaps working for some of the agencies
They did some sort of activism against my book because I wanted a book launch on
the Japanese book for the foreigners and foreign journalists in Japan at the
Foreign Correspondence Club.
And the head of the Foreign Correspondence Club told me that these US journalists
were really trying to block that anyway.
So I told him, you know, they will say this is dangerous.
And he was just laughing it off.
You know, nobody can stop me.
I have total editorial independence.
And this is a brilliant book.
It was best-selling Japan.
Are you kidding me?
Of course we'll publish this.
So two weeks later, I was back in Tokyo.
Email from this guy.
Dear Richard, it's great to meet you in New York.
I love your book.
Unfortunately, we can't publish it.
I guess he also got a visit from the CIA people.
Was it ever published in the US?
Yes.
So then I was getting, to be honest, a little bit frustrated because I wanted the message out.
It was already more than a year that I couldn't find a publisher for a book that's a bestseller.
So then I thought, okay, what is it that in the US they're particularly upset about?
And I concluded it must be that chapter with Alan Greenspan.
And I need to now tell you the background of that and what happened when I met Alan Greenspan.
You see,
my first article,
after I published this paper in Japan for the Development Bank of Japan,
solving the puzzle of capital flows,
was credit creation was the answer.
And it's still the only paper to explain Japanese capital flows.
With credit creation for asset purchases explains capital flows and also this huge
outflow and the collapse.
It's published and it takes years with these academic journals.
Published in
Land prices in the Japanese asset bubble and...
and capital flows.
And so that I'd sent to The Economist at the time because I'd also taken the next
step because I realized this is so powerful.
I can't explain capital flows, but I realized with this I can explain almost everything.
I can explain Japanese GDP growth and that worked.
I can explain the ups and downs of the business cycle.
I'm now expecting a credit crunch and a banking crisis.
So,
because I linked it into a macro model,
there is one very simple macro model that links money and the economy which is
quite famous throughout modern economics in the last three,
four hundred years actually,
the so-called quantity equation,
MV equals PY.
PY is prices times,
for some reason they use Y for real GDP,
real income,
because the I had been used for investment by Keynes already,
then they used Y for income,
real income.
times prices is nominal gps really we're saying money m times a constant velocity
equals nominal gdp that's what it says so there's a direct link between money
supply and gdp but the relationship broke down because velocity wasn't constant and
it was all over the place and that's when monetarism failed in the s and people
thought it's not working but what i realized was that that equation is wrong it's a
special case
And because it's basically wrong on two counts.
Number one is it assumes that all money creation is used for GDP transactions.
But what about credit creation, money creation used for asset purchases?
Yeah.
Which, of course, since the s has ballooned.
And that explains the velocity decline, you see.
That explains it.
So I realized we have to have two equations.
One is the money going into GDP, the real economy, and money going into asset markets.
And I did that and it worked.
Well, how could I do that?
Milton Friedman himself at one stage said, oh, I wish we could divide money into its use.
Well,
we can if we understand the money creation process,
which is credit creation,
the credit data you can disaggregate.
Credit for the real economy, credit for asset purchase.
And that's what I did.
So I call it the quantity theory of disaggregated credit.
It's really the general quantity theory because it turns out the ancient MV equals
PY is a special case.
I've got the general case,
which is credit as money and divided into the two flows,
money for the real economy,
money for asset prices.
Anyway, so that's what I did at the time.
I sent this to The Economist.
They wrote a brilliant write-up, a whole page on my work.
This was the economics editor at the time.
And because this is pre-internet,
Now, anyone who wants to read this, it was in the public domain.
I presented this at various conferences,
Economic Royal Society Economic Conference and an Asia-Pacific conference.
Anyway, but people had to write to me.
Who wrote to me?
It was the Bank of England, Rothschilds, J.P.
Morgan.
And, oh, the Fed.
Now,
they were like,
there was a fax,
there was a phone call at Oxford where I was in the Institute of Economic
Statistics.
And it was like urgent.
Everyone's telling me, the Fed, senior people from the Fed, they need the paper.
We need it yesterday.
So...
Okay, and I sent it to all of them.
I never heard back from anyone,
but they were all clearly curious about us because,
you know,
in the write-up,
the keywords credit creation were mentioned and,
you know,
my whole approach was mentioned.
And the author,
who's a good economist,
Clive Crook,
you know,
he wrote,
you will hear more about this.
Or perhaps he expected it to spread faster.
He perhaps underestimated the resistance against the truth spilling out.
He may be at some other media.
I think he's still writing maybe for Forbes.
I can't remember.
Yeah.
Anyway, so there was this write-up, I sent it out, and then the Fed had wanted to see it.
So later,
when I was,
actually also thanks to that write-up,
I got job offers from various investment banks to be their chief economist in
Tokyo.
I was interviewing with Goldman Sachs,
had an offer from Swiss Bank Corporation to be head of research,
and then Jardine Fleming offered me that job as chief economist.
Which I thought, that's not bad, you know, for my young age of, what was it, 25 years old.
So I took that,
went to Tokyo,
because they gave me the leeway to implement my credit creation model.
And so I quickly rose to being one of the top economists in the various surveys,
Institutional Investor Survey,
Greenwich Survey,
a top three economist on Japan,
because my forecast worked.
If you use credit creation,
it works,
you know,
you can forecast what's happening,
what's going to happen.
And...
So these firms send you around the world,
you sing and dance for the institutional investors,
you're on the sell side presenting and you get some really tough questions.
It's a good way to get feedback and get critiques of your theories and models.
So they've been pretty much tested against a lot of resistance.
And of course, you go to places where there's money.
So New York, Boston was also part of the itinerary as you're going around the world.
But I managed to arrange an afternoon in Washington.
And then I went to see the Fed and the senior economist who at the time wanted the paper.
We had a good meeting.
And so I asked him at the end.
So, you know, who was that senior board member you had mentioned wanted to read my paper?
Oh, that was Alan, of course.
Oh, okay.
Alan Greenspan - Head of the Fed.
Great.
So it made my day.
And then another two years later, there was the annual, you know, biannual meeting of the IMF.
And the World Bank is outside Washington.
It's somewhere in the world.
And it happened to be in Hong Kong.
And my investment bank, the Asian headquarters, was in Hong Kong.
So they had a big dinner with all the big cheese people there.
And I managed to get myself to come over from Tokyo and there was Alan Greenspan,
usually crowds around him and all the top guys,
you know,
finance ministers,
central bank governors,
everyone there.
And at one moment, crowds had receded.
Okay,
my chance,
I'll go and talk to Alan Greenspan,
introduce myself and I'd prepared this chat up line.
which I then immediately used may I excuse me may I introduce myself my name is
Richard Werner I believe you've read some of my research of course you'd expect
this is four years later you'd expect him to say your research like what was that
about tell me more which is sort of what I was expecting you know what he said
Richard Werner credit creation the paper on Japan
Yeah, I read it twice.
In The Economist and then the actual paper.
It's like four years later.
And I'm like, would you venture to comment on my paper?
Next surprise.
You know what he says?
Can't remember.
turns around and walks away it's just proven that he remembers every single detail
of this but he clearly didn't want to talk to me so that was that was kind of scary
and so when i got back to tokyo we had the system called reuters uh you know
it's all sort of pre-internet or very early stages so
I looked up Greenspan's publications, his speeches, anything written, anything uttered by him.
Because, you know, he said it, Richard Werner, credit creation, the key words.
So,
you know,
when and how and how often has he used credit creation in his...
And,
you know,
he was central bank chairman of the Board of Governors for,
what,
years,
so...
You know, he's been prolific in his utterings and speeches and publications.
You know how many times he's used credit creation?
I did this keyword search.
Zero.
Never.
Now,
of course,
I knew through this encounter that he knew extremely well why this is so important,
so powerful.
He knew this very well.
That was very clear.
But he was playing ball.
This is a taboo.
He's never used it.
And I thought, ah, that can't be.
There must be something.
I kept searching.
And then I discovered there's a book edited by Ayn Rand.
And he wrote a chapter in it in when he was not yet at the Fed.
And it's about credit creation and how gold is a much better way to run the system.
Because once you give central banks this much power, they will create too much credit.
Basically,
when you read it,
he criticized the Fed for creating the asset bubble of the 70s in the US and then
the Great Depression in the 30s,
which was the Fed's job.
They did that.
And it wasn't an accident.
And of course, the Bank of Japan was doing the same thing in Japan.
So I realized, wow, this is how it works.
He then was offered a job at the Fed, but he was basically told never to talk about this again.
And the same is true.
Now back to Ben Bernanke.
He started to work on credit when he wrote about the Great Depression.
And,
you know,
there's some papers,
but he hadn't discovered the credit creation aspect,
like banks create money out of nothing.
He'd never written about that.
But, you know, he's more and more writing like, oh, we need to look more at credit and banks.
Why do we drop out banks?
We need to understand what's happening there.
That sort of thing.
You know, that was his work.
Until
This is already after my first paper was out.
And I think the Fed decided we need a counter argument now.
And there was this paper by Bernanke with a headline, credit creation and the macroeconomy.
Wow.
That's like, wow, this is what I'm talking about.
So I read it.
And you know what he says?
Oh,
credit creation is the financial intermediation of banks gathering deposits and
then lending them out.
He's defined it a way.
There was no credit creation.
And then he also writes,
oh,
I used to write a lot about bank credit,
but it's not so important.
Mea culpa, even in a footnote.
I was wrong writing about bank credit.
It's not so important.
And where was this thing published?
Federal Reserve.
Federal Reserve publication.
That's where his career started.
And his career then took off and it became...
chairman of the board of governors of the fed but he would never talk about it now
when he did use the knowledge was when he copied my quantitative easing and i must
mention this because of course you know i said earlier once you create this asset
bubble you get a banking crisis but it doesn't need to be a -year recession it
doesn't need to be a -year recession as a result it doesn't even need to be a
one-year recession and
You can have an immediate recovery and you can get rid of the non-performing assets
in the banking system just like that at zero cost to society.
So whenever they say,
oh,
we need to use fiscal money,
we need to have national debt now based on bailing out the banks and now we need
austerity,
all the ordinary people need to tighten their belts now.
This is all a lie.
We don't need any of that.
It's just an accounting problem.
And the central bank has the tools to legally just change the accounting such that
there's no more problem.
Namely, and this is my original proposal.
So I published this in the Nikkei, Nihon Kese Shimbun, the main...
Financial newspaper daily,
highly respected,
big article,
nd September
headline,
we can have a recovery and high growth through quantitative easing,
which was my proposal.
I explained bank credit creation.
So the first thing is, you know, we have to boost bank credit creation for the real economy.
And here's how to do it.
And I have basically, there's three things the government could do.
And so,
you know,
simplistically calling it just QEis the first thing,
QE
second type,
and then the third measure.
QEis for the central bank,
when you have a bus banking system with all these non-performing loans,
the central bank can just buy them up.
Of course, at face value, as if they were still valued at at par.
And the banks clearly will be very happy about this.
Their balance sheet will be very strong.
They will be more liquid than ever in their whole history.
You've solved the banking crisis.
There's no more banking crisis.
Now, you could say, well, hang on, aren't we just shifting the problem to the central bank?
Well, no, because the central bank doesn't have to mark the market.
You can just forget about these holdings.
But hang on, isn't the central bank now creating money?
Aren't we paying for this through inflation and a weaker currency?
No, because it doesn't create money.
Because money creation is when the banking system creates credit and injects it
into a non-banking system.
But this is a transaction within the banking system between the banks and the central bank.
The central bank buying non-forming assets from banks, it doesn't create money at all.
It just cleans up the bank balance sheets at zero cost to society.
There's no need to use tax money.
Then why not do that?
Exactly.
Well, whenever, now listen to this, whenever the central banks...
don't want a banking crisis to turn into a major thing and recession that's when
they do it i'll give you two examples august the united kingdom of great
britain and ireland declared war on germany and her allies which meant
austro-hungarian empire ottoman empire yeah okay so that's how the first world war
started britain declared war just like with the second world war
The trouble was,
I think the next day,
the Treasury,
the Bank of England and the government got visitors from the British banks.
And they said,
maybe clutching some balance sheets and documents,
sorry,
you've declared war,
we're bust.
Well, how did that happen?
The British banks were bust.
Not all of them, but quite a lot of them.
Well, London was the number one financial center for everything.
So even for bills of trade,
bills of exchange and financial settlement between Ottoman Empire and Hungary,
often it would go through London.
London was the place.
And of course, often also pound denominated.
That was the most liquid international currency, you know.
And because now all these countries,
these are major countries,
Germany,
Ottoman,
Austria-Hungary,
they're now considered enemy country.
All the paper held by British banks were deemed non-performing.
Because irredeemable enemy... Of course, how do you get the money?
Exactly.
So,
and it was large enough for the banks to be bust because capital is not high in
banking,
% or less.
So you quickly reach that point where your equity is wiped out and you bust.
Now,
because Britain had just declared war on all these countries,
was it a good moment to have a prolonged banking crisis,
recession,
economic depression?
No.
So this was a situation where the central bankers did not want this to turn into a big thing.
And so what did they do?
MyQE won.
The Bank of England just bought those up at face value.
They had also another policy where the Treasury issued paper money,
actually,
because they felt we need to somehow protect the credibility.
So we'll have this measure as well.
So people look at the Treasury.
They don't look at the Bank of England buying these assets at face value.
But anyway, that was the key thing.
Second example.
And so, yeah, the problem is gone.
No banking crisis.
May I ask you,
since you brought up the First World War and we're on the cusp of a war right now,
potentially a global war,
what is the view of war by the banks?
Like, what do the banks think of it?
You've described the banks as the single greatest control mechanism of human
behavior in a society,
I think.
Particularly the central banks,
because they have the...
The bigger the bank,
the more the power,
but their power extends beyond just their relations with other banks.
Yes.
Their power determines a lot of what happens in your country.
And they're not under the control of voters, right?
So it's an extra democratic institution,
which happens to be the most powerful,
which is like crazy.
I'd love to know how that happened.
But how do they feel about war?
Well, central banking and warfare are very closely linked.
As I said,
the modern major bank,
the first modern major bank and central bank was the Bank of England,
of course.
And in the very act law, act of parliament, the law founding it,
It says this institution and mechanism,
because they didn't want resistance,
they don't mention Bank of England.
What we're doing here is establishing the Bank of England.
They kept that secret.
We're doing a mechanism,
a new mechanism by these investors to raise and lend a lot of money to the
government,
namely by establishing a company.
We'll be allowed to establish a company.
That's the Bank of England.
In order for what?
In order to wage war.
It was in order to make war.
So they're closely linked.
And of course, if you look at its founding documents, it says that.
Exactly.
The Act of Parliament establishing the Bank of England, it said the purpose is to make war.
Do you know why the Federal Reserve was established there and there was a rush to
establish it for ?
The year the First World War started.
Exactly.
Destroyed Europe.
And again, it was done with subterfuge.
I mean, you know, gathering everyone on the rd of December, when nobody was there.
And then also introducing income tax.
That's also the Bank of England.
It was established together in the same act that
calling for establishing new taxes.
Why?
Because when you have these central banks,
privately owned central banks established,
it's basically this trick where these entrepreneurs persuade the government,
oh,
you don't want to make,
you know,
you don't want to issue money,
we'll issue money for you.
what that's what they're essentially saying without being so direct about it but
that's what they want to persuade governments to give up the power to create money
themselves we'll do it for you and we'll lend you the money and henceforth well how
do we get our money back well we love to lend to the government because you can
raise taxes and that's why taxes were introduced the federal income tax didn't
exist before the creation of the fed it's also great you couldn't have one without
the other
Well, whenever central banks created, they introduced new taxes, one way or another, yes.
The central bank of the United States, the Fed, was created right before the war.
I mean, right before the war, three months before the war.
What was the role of the central banks during that war,
the most important war in the last thousand years?
Yeah, well, it was...
It was really at the pinnacle of the war economy.
There's no doubt about that.
It's very clear.
And the same is true, of course, for the other side.
And now from the US and Germany were at war, which is very sad.
A lot of Americans of German descent and Germans didn't really want to be at war
with Germany,
but that's what happened.
So we've got these two countries at war.
Sad.
Soldiers dying in the trenches.
Yeah.
And their economies organized as war economies at the pinnacle of the war economies
are the central banks.
So who were the key players in the German central bank,
the Reichsbank,
which is % privately owned?
Was somebody called Max Warburg or Max Warburg, you might say in English?
And who was at the pinnacle,
in fact,
was a founder of the Federal Reserve,
and who was the key person there?
It was somebody called Paul Warburg, his brother.
But of course, the soldiers have to kill each other, and these two countries are at war.
Wait, wait, wait.
The head of the German Central Bank and the head of the American Central Bank were
run by brothers during a war between the U.S.
and Germany?
Yes.
Now, I have to qualify.
They weren't the formal governors, but they were the key people.
Did anyone notice this?
Well, some people did.
I mean...
I mean, with Paul Warburg, it was obvious because until he was a German citizen.
He'd only just come over for that purpose to set up the Fed.
And he was speaking, I mean, half German, basically, when he spoke English.
So, you know, it wasn't, I mean, if you were looking for some details, you'd quickly find this.
How did the brothers do during the war?
Were they destroyed?
Were their fortunes taken away?
Oh, no, no, no.
Of course, Max Warburg stayed in power at the Reichsbank.
He was the one who signed off on Hitler's proposed head of the central bank, even in the s.
It was also Max Warburg still.
They were those, I can't believe brothers were at those banks.
Yes.
And of course, I don't want to just, you know, pinpoint the Warburg family.
But, you know, I mean, there's other families and there's many families.
There's JP Morgan,
you know,
and there are various backgrounds and,
you know,
ethnic backgrounds and whatever.
But the principle is we do have… That it's an inside game.
Well,
yeah,
bankers,
particularly those that are close to central banks and maybe are private owners of
these central banks.
And the Reichsbank was % privately owned.
And,
you know,
when I mentioned Keynes,
you know,
when he became a director,
he must have been an owner of this privately owned central bank because they have
these rules.
If you're a leading person,
well,
you must be a leading shareholder,
you know,
that's how it works.
So,
now I just want to give you the other example to prove this point that you don't
need to have a crisis and a recession even when the banks are bust.
Because the second key example is Japan.
Even Japan.
So the Bank of Japan knew very well how to get out of these problems because in
it was much worse.
The banks were % bust.
They were lending to the government East Asian greater prosperity bonds,
basically war bonds of a country just defeated.
You could trade them in the flea market for almost nothing.
And secondly,
forced ammunition loans to the military industry,
most of which was also bankrupt or was not even in Japan any longer.
The country of Japan shrank a lot after
The whole of Manchuria no longer under Japanese influence.
Taiwan and Korea were intrinsic parts of Japan until for half a century.
Philippines, Vietnam.
Of course, these were added during the Second World War.
But Korea and Taiwan were already for years part of Japan.
In
Exactly.
So these banks were bust because all these loans had no value.
It's like % non-performing loans.
What do you do?
Is a good moment to have a big banking crisis and long recession?
No, because they had bigger problems.
You know,
most cities were devastated by these incendiary bombs and the carpet bombing of
civilians,
also like in Germany.
So then you don't want a banking crisis and recession.
What do you do?
Well,
you don't need to have one the central bank buys the non-performing assets face
value and the problem is solved and that's what they did so you can't tell me the
bank of japan didn't know what to do that's qenow i was quite convinced that even
if in you know say uh i proposed this in even if at that time the bank of
japan were to buy all these non-performing assets most people at the time were
still saying oh it's not so big a problem these non-performing assets richard
verner always talking about
I was quite clear that they would rise to % of all bank assets as non-performing
because you just look in the s,
what was the real estate lending?
How much did it increase?
And you got the numbers.
And that turned out to be a very correct estimate.
So I was convinced that even if the Bank of China just wiped that clean by buying
it up at face value,
you would still not get a recovery in bank credit.
But you need that for an economic recovery because the loan office is a shell shock.
They see what happened.
And you know, it's human nature.
And even if you get bailed out, you're not going to immediately increase lending.
So I came up with this proposal on how the central bank can force banks to increase credit.
which we can call QE
So QEis the central bank buys non-performing assets from banks.
QEis the central bank buys performing assets from non-banks.
And I gave the example in my report at the time for investors.
I wrote,
well,
the central bank needs just to buy real estate in Tokyo,
because all this is going to turn into non-performing assets,
dud loans,
and the real estate is the collateral.
The central bank should buy it up,
the loans,
the real estate,
therefore coming with it,
and turn it into parks.
Because we don't have enough park space in central Tokyo.
It's not such a green city as it could be.
And that is a very simple thing to do, which improves quality of life.
But also it creates money.
It forces banks to create credit.
Why is that?
It's because normally, let's say here's a property owner.
They don't have an account with the central bank.
So when the central bank buys their land...
They will tell the central bank, well, please pay me.
Okay, what's your bank account number?
Okay, they give the central bank their bank account number.
What happens next on the balance sheet is the central bank instructs the bank to
pay this client of the bank.
And because this is between the central bank and the bank, this is unusual, right?
The bank gets reserves from the central bank on the asset side.
And it must now credit the account of this customer with those deposits,
which is deposit creation.
That is the credit creation, as we discussed earlier.
That's how the central bank can always force banks to push up bank credit.
And then you get a massive, within six months, you get a massive economic recovery.
There's just no way around that because Japan was in deflation.
Yeah.
The economy is shrinking, credit was shrinking, negative credit growth.
It was really bad for many, many years.
And so this proposal would have solved the problem.
I actually contacted in Greece later after the European sovereign debt crisis and
Greek credit creation was negative.
Same game always.
Spain,
credit creation negative,
huge recession,
vast youth unemployment,
% youth unemployment.
Dying population.
Yes.
The human cost of this is intense.
The human cost.
And, you know, the young generation, basically their future wiped out, you know.
No job prospect.
So I went to Greece to speak to the Treasury and...
Because even when the central bank is not playing ball and the ECB was clearly
trying to create this problem,
it was not trying to help,
there's something the government can do.
That's the third form of QE without the central bank.
Treasury QE, which is again something we have to look at in the US.
I think there'll be Treasury QE as well.
This is where,
you know,
if you look at the bond markets with this crisis,
the bond yields jumped in Greece,
you know,
double digit,
%,
%.
Spain approaching %, which was quite crisis level.
Ireland, double digit, %.
Why would they even issue bonds?
And I told all these, don't issue bonds.
What is the interest rate borrowing from banks in your country?
Oh, it's only %.
Yeah.
And when you borrow from banks, unlike the bond market, you're creating credit directly.
But you're in a shrinking economy.
Credit creation is shrinking.
That's the solution.
That's the third way you can reflate the economy.
Now, they all refused to do it.
Not because it wasn't possible.
It was legal.
I checked with an expert on ECB law.
It's perfectly legal.
They could have done it.
That's where the political power comes in.
They were essentially scared into not trying these policies.
The Bank of Japan for years said, oh no, we can't do this QEQE
We can't do it.
It's like, no, no, no.
Well, came March they all suddenly could do it.
And that's the next surprise.
So what happened actually in March was the Federal Reserve implemented QE
And I should also add in so actually Bernanke, you know, he implemented my QE
He made actually a speech at that time in January saying,
well,
I'm not doing what the Bank of Japan had done because they used my expression QE,
but they were faking it.
They were just buying performing assets from banks, which doesn't really do anything.
You have to buy non-performing assets from banks or performing assets from non-banks.
That works.
But Bank of Japan didn't do that.
But Bernanke did in
That's why the US recovered first from the global financial crisis,
even though it started in the US.
It's because he borrowed my proposal of purchasing the non-performing assets from banks.
He didn't credit me.
No, in this country is a bank bailout.
Yes, but who pays for it?
You see, it shouldn't be the taxpayer.
It should be those who messed up.
That's the Federal Reserve.
So they should pay for it, and they did.
So that was fair.
To tackle the moral hazard problem.
Those who messed up have to pay up.
Which is one of the main problems in the United States.
So the last area I want to get, I mean, we could go on forever.
This is like you've totally overturned my primitive understanding of economics.
Thank you.
You're most welcome.
Given your record of prescience in assessing where economies are going,
you look at the United States,
what's your -year projection for the U.S.?
?
Well, it depends on so many factors.
Actually, before we come to that, can I just tie together some loose ends we have?
I hope you will.
Very, very brief.
So on Greenspan,
the reason why I talk about Bernanke and Greenspan is because we were saying
Princess of the Yen,
the publisher's turning down the book.
It wasn't published in English.
and you see i'd concluded at the time how did i get this published uh by a you know
good u.s publisher it's probably that chapter where i write about alan greenspan my
encounter but credit creation he said the words so he knows great creation are his
chapter um and i concluded he's doing the same thing as the bank of japan that's
why he doesn't talk about it secret so it's going to be a global financial crisis
that was my prediction it's probably that chapter so i took it out
it's the last chapter send it to the next publisher an academic publisher that they
also had some books on Asia I thought they could be interested they immediately
accepted it
And it was published without that chapter.
Later, that publisher was bought up by a British publisher.
I wrote to them, the new owner, I want my copyright back.
Oh yeah, of course.
They thought it's just some academic book.
Okay, fine.
Got it back.
So I've now republished it with quantumpublishers.com, including the long lost last chapter.
So it's back in there and one can get it.
That was on that one.
On Deng Xiaoping,
so once he found out the secret,
the elixir of high economic growth,
he went back to China and what did he do?
He founded thousands of banks,
small banks,
local banks,
regional banks,
provincial banks,
village banks,
savings banks.
thousands is almost as many now in china as in america almost banks and
economic growth took off and of course their job was to lend to small firms and the
logic is very clear if you compare the soviet system that he had previously with
one bank
That's maybe,
let's say there's five people at the board making the decision how much money to
create and who to give it to.
Well,
the Japanese must have laughed at that and told him,
look,
why don't you have banks,
which is what we have now,
almost in China,
banks with branches each.
with loan officers each branch lending to small firms checking millions
literally of loan applicants checking them kicking the tires does it make sense can
this be repaid you know then you have more than five million decision makers if you
do the calculation
These loan officers is more than five million deciding how to create and allocate
this money and who to give it to.
And it will be used for productive purposes, business investment.
So which system is better?
Those five guys at the central bank trying to do this for million people or the
five million loan officers?
And of course, I think Deng Xiaoping was smart enough to realize, okay, this is a no-brainer.
We'll have these banks.
And economic growth took off.
China delivered double-digit economic growth for four decades.
You know,
when you have % growth,
then every four and a half years you double national income.
And that tells you we can all have prosperity.
All we need is for bank credit creation to be mainly used for productive business
investment and can be done and has been done.
All the high growth economies are shown.
We can have it in the US.
We can have it in any European country.
We can have it in any developing country.
A lot of our credit creation has gone to asset purchases.
Exactly.
And boy, does it show.
Exactly.
Whether it's counted as inflation or not, it is inflationary.
I mean, things are more expensive.
Well, asset inflation and then derivative from that, you get all sorts of other prices going up.
So, given that, where does the U.S.
stand right now?
Exactly.
Exactly.
And it's good to contrast this to what is possible,
because the fact is every country in the world can have high,
sustainable,
equitable economic growth without crisis and without inflation.
And wouldn't any politician want to deliver that?
You'd think.
And I think they would actually like to deliver it, but they realize the steps...
to achieve that are just not allowed and they quickly reach the limits of their
power and they get whispered in the ear.
Which steps are not allowed and why?
Well, to create many small banks.
You know,
our research on the US shows that even the small banks as they merge,
as they do naturally,
as they do under central bank pressure to merge and the number of banks goes down
as it has in the US.
Dramatically.
Yeah.
Thousands have disappeared already.
So then banks stop lending to the smallest firms.
As they get bigger,
they lend only to the bigger firms,
and you already get less economic growth.
And secondly,
even the smallest banks,
as they merge,
they reduce their lending to the smallest companies.
So we constantly need to create new banks,
actually,
just to stay at the same level of having money going to the small firms,
and the small firms are the productive job creators.
Give $to a large firm is not going to create jobs.
Give it to a small firm, there'll be three, four new jobs.
Exactly.
And that's what people need to understand.
So we need a decentralized banking system.
But that also gives power,
purchasing power and prosperity to the middle class,
to local communities.
And that's what the central planners don't like.
No.
And so it is actually a war against the middle class that's happening.
Because it means autonomy.
I mean,
a country with a strong middle class is an independent-minded country because
you've got self-reliant people in it.
Exactly.
A country that's rich and poor, very easy to control.
Exactly.
That's the Latin American model.
Exactly.
And sadly, that seems to be where we're heading.
So with this background, back to your question.
If you look at,
you know,
long-term historical charts,
it's very sad how economic growth has been declining in the post-war era.
In the US,
most European countries,
now we're being told,
oh,
that's because of demography and,
you know,
aging societies.
Climate change.
Exactly.
Climate change and the need, in fact, to lower growth because of the limits of growth.
I quickly want to address that point because,
you know,
there are many people out there who seriously,
you know,
they have good intentions and they think,
well,
hang on,
Richard's talking about trying to have higher growth,
but isn't that a bad thing?
Isn't growth bad?
Aren't we destroying the environment?
Well, hang on.
I am all for protecting environment.
I love nature.
I think you love nature.
And we want to protect the environment.
Yes, but...
economic growth is not the problem absolutely not it's not the enemy of the
environment of nature no and the quickest way to explain why is to actually to
analyze what is economic growth well ask a physicist who studies physics what is
economic growth and they'll say well i don't know it in physics there is no growth
what are you talking about
You see, it's nothing tangible and therefore there is no limit to economic growth.
In physics, there's no growth.
You can only transform energy from one state to another.
Matter is neither created nor destroyed.
Exactly.
So what is this economic growth and where does it come from?
Well, it's a statistical illusion created by statisticians.
Now, I looked into the history of this.
sure enough you hit on the same you know you find the same answers so when did this
start the way we calculate national income and gdp when it used to be gnps gmp and
national income what's the history of that where did it start you know it started
just before the creation of the bank of england why because the bankers were going
to lend to england and they wanted to figure out what is the ability to pay of
these people in england
We need some statisticians to measure this.
And that's what national income accounting was created for.
To assess the creditworthiness of the borrower?
It's the ability to service national debt.
And that explains the other puzzle.
And actually, again, tying together a loose end here.
You know,
I told you that when we talked about how the interest theory is the main
propaganda,
you know,
lower rates lead to higher growth,
higher rates lead to lower growth.
Well, and I told you, there's zero studies showing that.
There's no empirical evidence whatsoever for that.
And so I did the first empirical study on that.
It's published, again, open access, you can look it up.
It's called Reconsidering Monetary Policy and then something, Interest Rates and Growth.
And we know what we found.
It's together with a very good statistician from Korea.
And it's state-of-the-art econometrics.
You've got to do this properly.
And it took years to get this published because everyone hated this.
What we found is that the relationship between interest rates and economic growth
is the opposite of what they tell us.
In two dimensions, it's the opposite.
The correlation is supposed to be inverse negative.
Yes, of course.
Low rates, high growth.
No one questions that.
And the causation is supposed to be from interest rates to growth.
Yes, interest rates are supposed to affect growth, of course.
Well, we found that both are not true, and it's the opposite.
The correlation is positive,
and the causation,
as far as statistics can prove it,
you know,
Granger causality,
statistical causality,
is from growth to interest rates.
So instead of the official story, low rates lead to high growth, the real true narrative is,
The hone, the real truth, as the Japanese would say, is high growth leads to high rates.
Low growth leads to low rates.
It's the other way around.
Hmm.
That's the true story.
And now,
actually,
what we also found is,
and I found this much earlier already,
that long-term interest rate,
-year government bond yields,
they follow GDP.
I mean, sometimes coincidental, of course, but they don't lead GDP, okay?
And it's roughly always the same.
And I'm always puzzled about that.
Why is -year government bond yields usually similar to nominal GDP growth?
Which,
of course,
was therefore also why I was forecasting when I was forecasting inflation for
-
you know,
a huge bond market crash because rates will have to come up with such high nominal
GDP growth due to inflation.
But why is it that bond yields usually very nicely track,
in the US,
very nicely track GDP growth?
Why?
And you see, it's the same answer.
It's because what is GDP?
It was created by the bankers
to gauge the ability to service national debt.
So think in those terms.
Now, you've created GDP to figure out how much can they pay.
Then what is the interest rate you're going to charge?
Well, you want to charge the maximum without blowing up the system.
What is that?
Well, it is the same as the economic growth rate.
Because that is the income generation.
If you charge too much, it becomes a debt trap.
Your debt spirals out of control.
And I'll mention that in a moment.
And if you charge too little,
that means below growth,
you're leaving money on the table,
which they don't want to do.
So that explains it, you see.
To address the debt trap for a second.
Well,
when interest rates are higher than the economic growth rate,
which is your economic growth,
national income growth,
is the ability to service and repay the debt.
But if the debt rises faster, then you can never get out of it.
Right.
And it compounds.
It will spiral out of... That's what they did to developing countries.
That's the IMF World Bank system to exploit developing countries.
Because what the IMF and World Bank have done over the last years is tell them,
based on this economics,
which is true and very scientific,
axiomatic,
deductive,
made up equilibrium stuff,
there's no equilibrium.
That's heresy, by the way, to suggest there's no equilibrium, but it's just ordinary...
you need a food taster um and so they're told well you need to deregulate
liberalize privatize um you want growth well you need savings sorry oh you don't
have enough savings well will you you need to get you need to borrow foreign
savings the world bank is willing to lend you some the imf will they're claiming
that the loans they're delivering from the west are the product of western savings
yes
Exactly.
Exactly.
And so there's a moral cast to all of this.
You certainly see it here.
Just blaming fat working class people at Walmart for all of America's problems.
Yeah.
Yeah.
Yeah.
I mean,
there is a sense in which they turn the culpability,
the moral responsibility onto the victims of the scam.
Yeah.
It's your fault.
Exactly.
Exactly.
And so these countries have been encouraged to borrow from abroad when it's a scam
because who are the foreign lenders getting the money from?
They created out of nothing.
The foreign banks created out of nothing, which is something.
But the argument is we virtuous people have just saved a lot of money.
Well, we know the savings rate is pretty low in the US, if not negative.
But yes, still, that's the argument they use.
So it's a trick because developing countries can have their own banking system
based on many small local banks.
They will have growth and prosperity and you don't need foreign money.
Because actually, foreign money never enters the borrowing country.
So it's always a trick.
It's one of the rules of banking.
You know,
let's say there's a developing country,
let's say South Africa,
and they're told,
oh,
we need money.
We don't have enough savings.
We need the savings from abroad.
Okay, we'll take a loan from Barclays in London for half a billion pounds.
Okay, they tell us that's what we need.
Okay, well, where does Barclays get this half a billion pounds worth of money from?
It creates it out of nothing, credit creation through the banks.
Okay.
Now the South African Finance Ministry says,
well,
actually,
we want to use this money in South Africa.
So Barclays, send over the money.
Oh, you mean you want South African rand?
Yeah, yeah, sure.
Well, we can arrange for that.
There'll be some costs, you know, and FX and whatever fees, but we're happy to do it.
So what happens next is Barclays calls around South African banks and
One of them may be a subsidiary of Barclays,
it doesn't matter,
but South African authorized licensed South African banks,
you see.
Why?
Because they're the ones that have their accounts in South African Rand.
Barclays can't create South African Rand.
And they will ask for a quote.
We want to sell, pound and buy South African Rand.
What happens next?
The South African bank will create that money out of nothing.
Which is something South African banks could have done without the round trip
abroad,
which indebts the country.
And usually, debt for equity swap or you can't pay your debt.
Well, we own you now.
We own your assets.
That's exactly right.
And that's been the trick.
So it's been a terrible system to keep growth low,
prevent countries from developing and even industrialized countries.
We're also victims here.
It's not as if the rich countries are exploiting the poor.
That's not exactly true because we're also being exploited in the rich countries
and the middle class is being exploited and is being drained of wealth.
We could have prosperity and abundance.
This is what people need to realize.
Everywhere in the world we can have peace and abundance.
But we must address the financial system, the banking system.
And the best system is when you decentralize the power.
As Lord Acton said a long time ago in Britain, power corrupts.
And absolute power corrupts absolutely.
When you are this powerful central planner, central banker...
Power creates temptations.
And human nature tells us, and history tells us, most people can't handle these temptations.
And that's when you get the abuse.
And in the end, it's all about maximizing that power for the central forces.
And of course,
so what we need to do is create many small local banks,
also in the US,
in every country in the world.
We should create state banks,
state sovereign banks,
as they have in North Dakota,
because there's only one state-owned sovereign bank,
in the United States, in North Dakota.
As a result, because that basically protects the local chartered banks.
So they're not so dependent on the Federal Reserve or on the FDIC and therefore
they can make sure that these banks
stay in business and thrive and therefore the economy and the small firms will
thrive and therefore job creation will thrive.
We need more of that,
particularly in this day and age where the central planners want to do the
opposite.
They don't want these many small banks.
They want to force them to merge.
And the biggest club they're wielding now to get rid of the small banks is actually
the introduction of central bank digital currencies.
And since you asked about the next years ahead,
we have to talk about it because that's definitely top of their agenda to introduce
central bank digital currencies.
Now, what is that?
How does that fit in?
Well, first of all, again, it's marketed in a very devious way.
They're telling us, oh, it's the digital aspect that's new.
We used to have cash paper that's old fashioned.
Now we need digital central bank money.
Well, hang on.
We've been using digital money for many decades.
And there's no problem, really.
It works.
Yeah,
maybe some fees could be lower,
but for that we need more competition,
not less competition.
So what's the problem?
What's actually new?
You know, we've been using BDC, bank digital currency, for half a century, almost.
Yeah.
So that's not new.
What is new about CBDC?
Well, it's the C, central, the centralization.
It's about centralizing things.
Central banks are about to break this old contract,
this deal between the banks and the central bank.
The deal was central banks are supposed to be specialized to stand behind the
banks,
back them up when needed,
but not replace the banks.
And that's also why we need now state-level sovereign banks,
because they will stand behind the banks in their state.
And the Federal Reserve has failed in standing behind banks and doesn't back banks.
Even Silicon Valley Bank,
you know,
they only injected liquidity after it was bust and changed ownership.
And that's kind of funny, isn't it?
And the FedNow system meant that more money left the Silicon Valley Bank in one day
than ever before in history from any bank.
Giving a blood transfusion to a corpse.
Well, yeah, exactly.
It was afterwards.
So CBDC is the central bank's opening accounts for the general public at the central bank.
Which means that you just need to create the next banking crisis and the central
banks are very good at doing that.
And all the money will leave the banks.
The banking system will shut down and it will all be in the central bank.
And we have, hey presto, we've gone backwards.
China moved from the Soviet monobanking system to thousands of small local banks and thrived.
doubling national income every four and a half years for years,
becoming the most powerful economic power in such a short time,
actually,
faster than Germany,
America before in history,
and lifting more people out of poverty than anywhere else before in history.
But we are moving in the opposite direction.
Our central planners in Europe,
in Brussels and at the ECB,
they are killing banks and they want to now introduce CBDCs,
which means they want to move to central planning.
And the same as any country in the US.
At the moment, the Fed is saying, fortunately, no, we're not going to do this.
But of course, they're studying it and they're preparing for it.
So when the time is right, I'm sure they wheel it out because central bankers, they're human.
They're tempted by the temptations of power.
They already have so much power.
De facto, no accountability.
I mean, when are central banks held to account for their actions?
No, you can't audit them.
You can't.
Really know what they're doing.
And they think just giving a speech in parliament or some committee were being
questioned,
you know,
that's good enough.
That's accountability.
No.
It's like you wanted to have % inflation.
Now we have % inflation.
Shouldn't you lose your job?
Oh, no, that never happens.
I don't think it's ever happened.
Exactly.
So we need to oppose the introduction of CBDCs.
And of course it's not just that what I mentioned.
It's much worse because it's a programmable control tool.
Of course.
And the programmability is really scary.
Instant compliance.
And they have said this,
you know,
central bankers have said this,
that they can then write the rules and they have the technology to enforce those
rules.
And that's what's going to happen with CBDC.
So it's not really money, it's potential money.
You have to apply, may I please use it to buy XYZ?
Oh,
sorry,
you know,
your carbon footprint has been used up or whatever the excuse may be,
you're outside the -minute city.
Or you criticize the central bank.
Or you've been a critic criticizing central banks.
Very sinister.
So final question.
If people have made it this far into this remarkable interview and want to learn
more about this topic,
so much has been written about central banking,
so little of it bears any resemblance to what you just said.
You're thinking about it in a very different way.
It sounds to me like a much more accurate way.
Where do people go to learn more on this topic?
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.
It's my Substack, which is rwerner.substack.com.
And there's a small monthly fee of, I think, $or something like that.
And otherwise get my book Princess of the Yen.
Also I have a Princess of the Yen at Quantumpublishers.com.
That's where you get it cheaply.
On Amazon sometimes they have horrendous prices.
Or in many countries it's not available, strangely.
And otherwise I'm sort of growing my YouTube channel Werner Economics.
How many languages do you speak?
Well,
fluently and able to give lectures and presentations is three only,
so German,
English and Japanese.
I can partly get by in French and I did Latin in school and my Chinese is very
passive and only,
you know,
the writing from Japanese,
the Chinese characters which you use in Japanese.
But you can write in Japanese.
Yes, yes, yeah.
Although it's time consuming, you know, but yeah.
Interesting.
Well, I love those Chinese characters.
There's lots of truth and information in there because they're like messages from
years ago,
how people thought and how they lived.
It's all in the Chinese characters.
Professor, I can't thank you enough for this.
I hope you'll come back.
I'd love to.
Thank you very much.
Thanks for having me.
Thank you very much.
So it turns out that YouTube is suppressing this show.
On one level, that's not surprising.
That's what they do.
But on another level, it's shocking.
With everything that's going on in the world right now,
all the change taking place in our economy and our politics,
with the wars on the cusp of fighting right now,
Google has decided you should have less information rather than more.
And that is totally wrong.
It's immoral.
What can you do about it?
Well, we could whine about it.
That's a waste of time.
We're not in charge of Google.
Or we could find a way around it,
a way that you could actually get information that is true,
not intentionally deceptive.
The way to do that on YouTube, we think, is to subscribe to our channel.
Subscribe.
Hit the little bell icon to be notified when we upload and share this video.
That way, you'll have a much higher chance of hearing actual news and information.
So we hope that you'll do that.
In conclusion how amazing it is, that the same leaders of the elite of the world, who have the power to excite wars for their own benefits, can also break and consign to obscurity, those formerly important national leaders who oppose their grand designs, particularly their plans to establish a New World Order operation inside a World structure of a single One World Government dictatorship. Unless a counter force can be erected to oppose these plans, the world could very well be plunged into the darkness of a brutal dictatorship by the year 2025.
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