Richard, thanks for doing this.
>> It's a great pleasure and honor to be
here. Um, I think of the claim that we
went to war with Iran because of its
nuclear program as a kind of IQ test.
Anyone who repeats that claim has failed
the test. As as you've pointed out many
times, all wars are engineered. And
we're just having a discussion at
breakfast that I think is worth
recounting for others. Um, so first
world war, one of the most momentous
events in world history, ended Christian
Europe, killed more than 20 million
people, wounded another 20 million, just
really reordered the globe, and then led
to the Second World War. So the United
States joined that war in 1917
toward the end. It had already been
going for 3 years. But one of the main
reasons the US got into that war is
because the sinking of a passenger ship
called the Lucatania off the coast of
Ireland two years before in 1915 in
which 120 odd Americans were killed was
sunk by a German yubot. And even at the
time there were people who said I don't
think this is this is not quite on the
level. But now 112
years later,
we know a lot more about the sinking of
Lucanian. And I wonder if you wouldn't
just mind recounting what you said to me
this morning at breakfast because it
gives us perspective on the effect of
propaganda in wartime.
>> Right. Um yes. Yes, I mean this the
sinking was clearly um a key factor in
in creating in the media in America
anti-German sentiment quite
successfully.
Um and so yeah, the question is what
happened really? Um the way it's
presented was well there's a passenger
ship with American passengers, you know,
just civilians traveling across the
Atlantic and sunk by a German submarine.
Well, that's like an act of war against
America.
>> Yes. Got to do something about this.
we're going to declare war on on
Germany. Well, that's not that's not a
representation of the facts. What really
happened was there was this British plan
to get America into the war on the
British side against Germany which was
very difficult because uh of course
actually you know ethnically a majority
at the time of Americans were of German
origin. Even German speakers still by
that time was still German was still
widely used as a language in America and
and so to get America into war against
Germany is a bit of a feat you know to
arrange that is it is
>> um so how how did this happen and and
that is a good example of the extent to
which the the plotters that want war go
and it's it's good for people to think
about that because of course ordinary
people don't want war in any country.
Most ordinary people are good people and
that creates this problem that they just
can't imagine that we're dealing today,
you know, as we look at the world with
such dark and evil forces that are
intentionally plotting to create a world
war or get countries to declare war, you
know.
>> Yes.
>> Um so that's why
>> that is true. People cannot even permit
themselves to believe that could be
true.
>> Yeah. Yeah. And and that's where
studying history is important because we
need to know the facts of what happened
in the past to understand the present
and make some predictions about the
future or prepare for what could happen
in the future. And the past teaches us
that there are some evil elements out
there and they're not really um you know
they're not people that are
representative ordinary people. the
majority of people wouldn't
intentionally harm others but we do have
such people out there and often in very
important and powerful positions. So
what happened was step number one uh
Britain did this very officially. It
listed the Lucitania as an auxiliary
um naval military ship and of course the
as you can imagine the German Imperial
Army and Navy went by the book. I mean
that's what one thing Germans are famous
for. Um and of course the British knew
this. So the moment they would list it
on their official list of what are our
ships officially declared to be military
ships um it was on there as an auxiliary
military ship. The Germans would of
course target it. Now when the Germans
then saw this German military, oh well
hang on, isn't this a passenger ship?
Well, you can re uh reuse um you know um
of course passenger ships for warfare.
So that seems to be what they're doing.
But then they realized, oh actually
they're taking passengers in. They plan
to take passengers in in America. And so
partly they sort of half realized well
this could be a part of a bigger plot.
That's not good and we don't want to
sink passengers. On the other hand it
was listed there. So that in in many
ways they had no choice. What they did
then was the German uh military command
they put out and the German embassies
implemented in America. They put out ads
into American newspapers
stating and they, you know, we have
copies of these ads, uh, warning people,
don't board the Lucitania. It is listed
as a military auxiliary ship. It is on
our target list
>> with the German government put ads in
American newspapers telling Americans
not to board the Lucatania because they
might sink it.
>> Exactly. Indeed. Indeed.
>> That's incredible. And and it turns out
that in in some cities, the big
newspapers refused to carry these ads
because they were clearly controlled by
people that had the same views as the
British side in this war and wanted
America to join the war. So the ads
weren't always published uh successfully
everywhere, but quite a few were
published. So that's the situation.
Despite that, there were passengers on
board. No doubt some efforts were made
to make sure certain groups, you know,
you would have some people on there for
sure. Maybe you pay them to board even,
who knows? You know, we don't know these
details. We know the facts that there
were passengers, American passengers on
board, American citizens. And the
Germans had warned, we're going to sink
this. And um it's not quite clear
whether there was actually military
equipment on there. there seemed to be
the indication that there was
because and I you can imagine that the
goal was really to make sure that the
the Germans will sink it. So the best
way then is to actually have military
equipment on there and you know have
some visibility when it's in the dock
and some something is loaded and we do
have some indication that this
happening. Of course later this was
denied. Um but there's also uh you know
various people looking at at the the
sunken wreck. Um and still it's
basically there is a good chance that
there was military ammunition and and
other equipment on there.
Now
so that's one thing. The other thing is
well how would the captain of the ship
handle this? Um as you know as he
crosses with his passengers and
potentially military load and of course
he must have been aware that it's listed
as an auxiliary military ship uh as he
crosses the Atlantic. Well, the British
at that time had actually broken the the
secret code for encryption that the
German military was using, the Enigma
code, and they therefore could read the
messages between um the Yubot submarines
and headquarters and so on, which of
course is another indication that okay,
um you know, this this could not really
have been such a big surprise uh to
Britain. And something like this of
course must have been the reason why the
captain of the ship uh of the Lucitania
was happy to go because you know of
course he has to trust his his admiral t
and his um you know um his country's
leadership. They said no you'll be fine.
We make sure you'll be fine. We we know
where the Ubots are, the Germans are and
we'll we'll we'll guide you on the track
that uh will keep you safe.
So they guided him as it turns out
straight into one of those German
submarines. Um but the captain didn't
know. He was told this is the safe path.
Now where I'm sure he started to become
suspicious was when the order was
suddenly then given in the vicinity or
about to approach the vicinity of a
German submarine to slow down the
engines because that never makes sense.
And there's a good BBC documentary on
this where they didn't hide the facts
and they have the first lord of the
admiral te as the key figure. Who was
that? None other than Winston Churchill.
And they show how he gives the order.
Now instruct the captain to slow down
the engines and even his underlings
saying well sir um you know this sort of
increases the risk. Should we really do
that? This is my order. Give the order.
And that's what they did. They slowed
down the Lucitania. And of course, it
was unavoidable. Then the Yubot, they
saw them. It's on the list. They have to
follow the orders. And they sank it. And
then, of course, the next day you had
all these headlines, you know, these um
you know, the Huns, the butchers had it
again, as the Germans were described in
the British First World War propaganda.
And it it was an important factor in
getting America into war. So, so
basically it was a false flag and that
has been um a key mechanism to start or
you know get countries to join a world
war.
It's not the only incidents but it shows
you the devious nature of the plotters
and that's what we have to be aware of
today in this day and age as we are
unfortunately on the brink of a third
world war. Again, most people think
surely third world nobody wants a world
war. Well, ordinary people don't and I
don't want it and you don't want it. No,
>> but there are people out there who
really doing everything to get there and
a false flag is likely to be the
beginning of this. Um, you know, as we
talk about peace, as we have peace
negotiations, just one vicious and
successful cunning false flag and then
magnified with false information by the
media is unfortunately still enough.
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of I mean 9/11,
the details of which are still
classified for reasons no one will
explain. No one's attempting to
declassify it, which tells you
everything, led to 20 years of war and
the deaths of millions.
>> Yeah. Now, actually on this topic, I
think there is there is the other
important parallel. you know, we we
we've been seeing this this war on Iran
by the US and Israel. And of course, it
has major economic consequences, dire
consequences. This something we can we
can talk about, but also this is another
reason why we should look back at this
era of the first world war and how we
got into this because it was the first
great war. It was, you know, in Britain,
it's still called the great war
where you had full mobilization of
entire countries. You know, previously
you would never mobilize the entire
country.
>> Of course not.
>> Even civilians, even you know,
housewives were mobilized to do factory
work or other support work, uh, hospital
work, all sorts. Um, and and so it was
really the the beginning of this modern
era where you have totalitarian control
unleashed under the cover of a great
war. And of course that's a scenario we
have to be very much aware of as as we
speak you know there's there's uh
preparations for mobilization in Germany
draft um military service um you know
all the rules being revamped and
tightened and the the plan clearly is to
draft more people into the military.
It's official EU policy to have a huge
rearmament drive to get ready for war.
And they talk about dates and that tells
you that I mean they're planning for a
war. I mean that's it's not a secret.
They're saying we're planning for a war
against the great powers Russia. They
don't mention China but of course you
know they're allies um whether not
perhaps not formally in a military way
but de facto allies. China is there. So
and that's that's official EU policy to
have this war 20 um 28 29 2030 other
dates that are being mentioned. we have
to be ready by that time for a world war
um or a war against Russia which would
be a world war.
So, so what's going on here? And I think
that what we've seen this year has been
clearly quite dramatic. First Venezuela
dramatic events
although in a way on the larger scale
sort of you know quickly done somewhat
contained it seems but quite a
remarkable event because before of
course for decades US intervention in
Latin America took the form of covert
operations which always run under the
principle it's a very British principle
of uh plausible deniability Well, we
didn't do that. Oh, this this poor
president get assassinated of this
country. It's nothing to do with us,
right? This is how it's been working for
decades in Latin America. You know, you
can list the countries, just country
after country, regime change operations
by the CIA,
uh, in fairly brutal ways and then
getting regimes into power that are, you
know, essentially puppet regimes run by
the CIA, um, presidents, prime ministers
assassinated and so on. But always, oh,
it wasn't as denied. Although, you know,
we do have um whistleblowers like uh
Fletcher Prrowy and his great book, The
Secret Team, which tells you a lot about
how the CIA became so powerful, totally
out of bounds and out of control, beyond
its legal powers. You know, it's been
active beyond its legal powers for
decades. He he also describes how they
did this very simply. the um um
basically the institution that's
supposed to reign in the CIA. They exist
formally. It's the the committees
um in in the Senate and Congress, you
know, there's committees,
>> the House Intelligence Committees and
Senate intelligence.
>> Exactly. And and that's ultimately
what's supposed to provide these checks
and balances on on the secret services,
including of course the CIA.
But as Fletcher Prrowy explains, you
know, once the law was passed that it's
a criminal to reveal whether somebody
works for the CIA or not and that was
passed and so now it's a secret who's at
the CIA or not. Um and and then also it
was accepted that when you are uh a
congressman, a member of Senate and you
are a member of these committees, you
don't have to disclose that potentially
huge conflict of interest. Obviously,
at that moment, you're in charge of the
country because you make sure, and
that's what the CIA did, that all the
um the committee members who supposed to
oversee the CA are all CIA agents
and then there's no more checks and
balances. You've got the rule by the CA,
and that's seems to be what happens.
Now, the book by Fletcher Prrowy was
unavailable for for 20 years. He wrote
it in the 70s. Who was he? He of course
had worked for the CIA. He was a top guy
at the CIA. At the end, I think his
highest position was uh head of covert
operations at the Joint Chiefs of Staff
in the White House.
He's the one who was sent to Antarctica
when JFK was assassinated because deep
down he was always a good guy and he
wouldn't be involved in assassinating
the presidents and his colleagues knew
that. So he was sent to, you know, far
away as far as he as you as you could.
And when he returned, he quickly found
out, oh, it was the CIA and he started
to be a whistleblower and the book was
then unavailable for decades, but with
the rise of the internet in the '90s,
late '9s, of course, it's now available
again. Um, so um, you know, that that
that shows how how these things work. So
that's the background. But now
Venezuela,
um, what was that? What was that? What
was the point of that?
>> The Well, there's there's several
points, but in terms of the the method,
the the big difference was there's no
plausible deniability. No, actually,
it's official. We're going to officially
move in there and arrange regime change
in a sovereign country. So, in other
words, America is now at the stage where
there's no longer felt to be a need to
deny that America is doing these things
and has been doing these things. Well,
now we doing the we don't need a color
revolution. pretend there was a popular
uprising. We just we want this guy to be
in power or we don't want this guy to be
well, we're going to intervene and do
it.
>> So, no more um reference to the nicities
of international law and and ethical
behavior. Not necessary. So, that's an
important turning point. But of course,
the the other implications are and then
that's where we we move on to Iran and
beyond.
Why Venezuela? Well, it's the biggest um
well, it has the biggest oil resources.
Of course, there's a there's a more
detailed story. I mean, it's it's it's a
particular type of of crude oil, very
heavy one. You need particularly
refineries to do that. Uh it's not a a
cheap and easy process. So, it's not the
>> economically the best oil, but it's the
biggest volume. Okay. So, that is
something.
And by the way, who's been refining most
Venezuelan oil and has built up um a
huge array of refineries is China. And
that is an important indication of where
all this is heading.
So that was step one, Venezuela. Step
two, well, who else is a big oil
producer and source of oil and energy um
for China is Iran.
So now Iran is under attack. War is made
on Iran
and of course we have the the economic
fallout uh that um other countries will
suffer as trade through the straight of
Hormuz is severely limited restricted.
It's not fully 100% embargoed. You know
that ships are getting through but
clearly not the majority. And it has had
an impact and of course it's not just um
oil um but also other things are
delivered you know fertilizer um a lot
of the u middle eastern countries are
the world some of the world's largest
producers of fertilizer
um for the world even for the US you
know delivering to the US to Europe um
to to many countries and of course that
has also been severely the shipping of
those has been restricted that'll have
consequences next year that's not
immediate it's for the next you know
growing season
uh because you know there's stocks and
so on. So uh for this
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feel free to mention us. But do you see
Venezuela and Iran as connected in that
both of those conflicts are aimed at
China?
>> Indeed. Yeah, that's that's that's
exactly it. And and that's where now I
think it's it's good to go back again to
the the runup to the First World War.
What was the situation? It was a
situation where we had one global
hegeimon Britain running the world. Half
the world was formerly part of the
British Empire. Of course, not acquired
through free and open elections, was it?
No. So, military force um at at times
extremely brutal uh colonial suppression
for quite a long time um the greater
part in in in the subcontinent in India
uh run by a for-profit enterprise, the
East India Company. So, you had
colonialism run by a for-profit
enterprise. It's not a good idea. It's
not very nice for people. The estimates
vary of how many million Indians were
killed under this rule by a for-profit
company being in charge of a you know of
of of um you know millions and millions
of people. Um and and actually the the
the ruling elite in the East India
Company always had this view well it's
too many Indians. We don't really need
that many Indians.
Horrible views um out there. Too many
useless eaters. This is where by the way
this whole overpopulation agenda that
I'd like to talk to you about um came
from. It goes back to the East India
Company
uh because Malus who is this famous you
know um economist talking about
overpopulation. Yes,
>> he literally worked for the East India
Company
>> and it's known and there's many quotes
of the East India Company people saying
there's too many people you know we
don't need all these these Indians but
anyway we'll come back to that.
So that's the picture of the world. So
Britain, half the world directly under
British control in a uh colonial regime
that clearly benefit Britain, not the
colonial subjects. Um to the same extent
many suffered and many died that
includes actually of course um you know
one of the first colonies of Britain was
Ireland and you know there's the the
great Irish famine, the potato famine.
Well, did you know that during the
potato famine, Ireland produced potatoes
and exported potatoes? Exported potatoes
to England while Irish people were
starving.
So, it wasn't a lack of potatoes. It was
policies that result in this famine. But
anyway, there were too many Irish
people. We have documents of British
leaders saying that there all these
Irish people. We don't need so many
Irish people. So, this is the
background. Okay. So, Britain in charge
of the world. Now we had this
development earlier on
um of a new economic power and political
power in Europe, Prussia.
Prussia was the first modern high growth
economy
and it was quite breathtaking.
Um it was high growth and prosperity for
the majority of the people. It was
capitalism
but it was capitalism for a kind where
the idea was well we want it to be
sustainable capitalism in the sense that
we don't want to have mass poverty at
the same time. We don't want this
K-shaped economy where the elite is
doing really well but the majority of
the people are not doing well. That's
and I think it's perfectly rational to
say that that's not really a great
system because you're storing up trouble
for the future. Right.
>> Yes. you know, if the majority is
actually not benefiting and it is a, you
know, and you have increasingly
democratic structures,
then at some stage something will
change, right? Yes.
>> Um, so you want to avoid it and they did
it very early on. So the first modern um
u sort of social security legislation
was done in Prussia also. Of course, the
first investment in public schools,
properly public schools and
kindergartens and universities was in
Prussia.
It was a very modern state, highly
successful. The middle class was
thriving. It was merit-based. You could
move up the ladder. Um, if you put in
your energy and your efforts, it will be
rewarded. Very successful economy based
of course also on the system of
decentralization, local decision-m and
especially many small local banks
lending to small firms. Now Prussia then
morphed into um into uh Germany in in
1871.
>> Yes.
>> The unification
>> which is another um or partial
unification because of course many
German states were left out such as
Austria.
>> Yeah.
>> Um
under international um sort of um
influence but also Prussia felt Austria
was a rival and and so on. I mean
there's there that's for another show.
There's there's a lot of interesting
stuff happening there. Um but the
principles were also applied in now
Imperial Germany under essentially
Prussian leadership
and again Imperial Germany was highly
successful.
Um economic growth um just in the the
beginning of the 20th century was very
high. It was a high growth economy again
and people benefited prosperity the
middle class uh it was um quite
impressive. the city's beautiful massive
public investment, railway network,
schools, universities, science, you
know, this is the beginning of science
being German dominated. Um, in the first
half of the 20th century, the majority
of scientific publications were in
German and all the leading research was
was was in these these publications.
That was where things were happening and
other countries were were following were
looking at this model. Now the place
that didn't like that was the hegeimon
of the world Britain that clearly was to
from their viewpoint rivalry a rival
being um built up and growing
and um it is one thing to start to lose
market share because Britain used to be
the number one economic power industrial
revolution and you know mass production
really happened first in Britain and
then spread from there um to other
countries. So Britain was in the
sequence chronology of economic
development was number one but then soon
after Germany came and of course also at
the same time America also rose um as a
emerging economy high growth economy as
well let's not forget that so but of
course America is further away and was
for international documents using
English so I suppose the British felt
less immediately threatened by America
Germany is very
and um the decision was made, we've got
to do something about this. But a key
turning point in this in in really
resolving
the um the British goals uh and and and
and creating this conviction that war
has to be made on Germany was the
following development. So British power
was projected across the globe through
through the seas, the oceans, the navy
because it was a global empire, you
know, from Britain to Australia and and
you know, many parts of the world,
shipping was of course very important
and control of the seas was important
and that was it was in British hands. So
no doubt about that. Nobody could even
come close to um the numbers of ships
and and British naval dominance.
But then something else happened um that
was felt as is a huge threat. Germany
developed this plan in working on the
continent is a continental power and we
have this conflict between a sort of sea
power and the continental power. Now
Germany made plans to I mean it's quite
natural to improve its access to
resources. You know Germany didn't
really have many resources. It has coal
um for the steel industry, you know, it
has it had some input, but it still
needed other raw materials and inputs
from from across the globe. So, how do
you get that? If it's via the seas, then
essentially it's beholden to the
British, can be blackmailed by the
British as actually happened,
demonstrated in 1919. You know, the
first world war in Germany was over in
1918
when the armisters was signed and
Germany I mean German leaders have
always been slightly on the naive side
believing okay that's an armistice
that's that the first world wars ended
Germany wasn't defeated no foreign
troops on German territory
yet and and it it disbanded its army and
its navy right but the British of course
didn't disband their army and navy and
they
staged a naval blockade of Germany.
Suddenly, shipping was entirely cut off.
Uh, as a result, 1 million, it's
estimated around 1 million Germans
starve to death in the famine of 1919,
which was engineered by the British.
Just to illustrate the reality when
you're beholden to a sea power that
controls the seas for your inputs. And
so, on the one hand, Germany had been
aware of that risk and it was working on
alternatives. And on the other hand,
Britain had adopted countermeasures, war
countermeasures. So around
>> a million Germans started to death.
>> Yeah. In 1919. And of course, Britain
continued to fight in in on British
senotars of the first world war often in
the countryside. You see the the first
world war um defined as 1914 to 1919
because you know dead bodies were still
arriving the villages. You couldn't tell
the uh the pastor no right 1918 on the
senado. Well, we were still at you know
our fallen coming you know and then the
villages recording the the deaths in
1919.
So um now this
what what really um changed things was
around 1900 the German plan to improve
its raw material resource access to
avoid these issues that unfortunately
could not be in the end avoided but not
to be beholden. it was trying not to be
uh in a situation where it's blackmailed
by Britain um through the seas namely to
have a continental transport system and
this plan was um developed by um on the
investment side and the engineering side
Seammens major German engineering
company and funded by Deutsche Bank
namely the plan to build the Berlin
Baghdad Bazra railway well here's some
pretty awful statist statistic over 85%
of the so-called grass-fed beef sold in
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delivered to you via Istanbul. Ottoman
Empire was already a um an ally and so
it's quite natural to gain access to um
the Gulf area and oil which was
beginning to be you know clearly an
important resource
and so they started building that
railway the Berlin Baghdad Basra railway
that's when the British colonial and
empire planners decided this really has
to be stopped because had that been
built
in time completed then it would have
rendered essentially the British naval
dominance irrelevant because you can
transport
um energy resources, raw materials, you
can sell your high value added output u
to actually the British Empire, Middle
East or or India um to the rest of the
world. You can ship through your own
railway network without British
interference.
Um so the the British planners decided
this cannot be allowed. This has to be
stopped by all means including war and
it was a key factor in the runup to the
first world war. Of course there were
other factors. Um the German government
became increasingly internationally
critical of British um warfare across
the globe. For example, um you know, in
in in South Africa,
>> yes.
>> Um Britain made war on the farmers, the
German and low country Dutch farmers
that had settled centuries earlier in
South Africa,
>> created the world's first concentration
camps.
>> Indeed. Indeed. That was a British
invention. Um there were three farmer
wars. Farmer Bower in German in Dutch.
Ba ba. Um the three ba wars. the farmer
wars because literally the world's
number one uh military power made war on
farmers to control this country, this
area. Why? Well, it was of strategic
relevance but also oil uh sorry not um
other resources, gold and diamonds were
found there and um London was very keen
to to have those. Um actually
surprisingly the farmers were so well
organized. They won the first farmers
war and the second boa war and then they
had to use Britain had to use their
usual devious techniques um to win the
third one murdering women and children
in concentration camps.
>> Yes. And so and and the Kaiser the
German um leadership criticized the
British intervention and and so Britain
also I mean these are other reasons that
>> what future British prime minister
fought in that war.
>> Yes. Well, Churchill had a had a role
there and writes about it in his I think
he even got captured. He did get
captured
>> and was treated well um enough to to
escape alive which wasn't really true
for for people in the concentration
camps necessarily. So yes now so there
were other factors no doubt but uh it's
clear when you look at the the old
documents that
anti-German sentiments whipped up um as
soon as there were early plans for this
railway. It didn't come from nowhere. It
was discussed already in the 18 um late
1880s 1890s and then became a proper
investment project at the at the end of
the the 19th century and and you know
1900s um onwards and of course the first
world war succeeded in stopping that.
Now also just another point before we
look at what this means for today. What
are the lessons for today?
The first world war itself was of course
quite devastating for Germany um also
for all the other countries involved. Uh
the number of of people killed in the
war I it's just horrendous huge waste of
um yeah of lives and and resources very
very sad. Also Germany then in the
Versail treaty after the starvation of
1919 this is meant to soften up Germany
and then impose the Versail you know um
strange rules on Germany. the Germany
would be taken apart. One quarter of
Germany would be lost and given to other
countries. Lots of Germans, millions of
Germans would now live in new countries
newly created by the British such as
Czechoslovakia and so on.
>> And and so you know this a lot of
hardship followed this.
Despite that they couldn't essentially
change the fact that Germany was still
scientifically leader engineering in
terms of engineering and and u
production was a leader in the world and
was still a rival of of Britain
um because the education system also
hadn't really been destroyed
and so
you know a second round was needed
another world war was needed and for
this interestingly a lot of investment
took place in Germany in the 1920s that
allowed a quick revival and of course
there's other issues how Hitler came to
power. If we have time we should talk
about how did he actually come to power
when you look at money and banking and
central banking you get some interesting
new insights.
So we also had investment in in Germany
particularly by America American
companies ITT, General Motors, Ford and
then also banking Brown Brothers
Haramman where Prescott Scott was uh
from the uh uh sorry Prescott um Bush
from the Bush family was was active
supporting Germany. Um now something
very similar is happening or has been
happening in in recent decades. Of
course the the postc world war global
hegeimon is America. It's taken on that
leadership role from Britain originally
even with its own colonies. I mean there
been American colonies whether
Philippines or other places. Um and it's
adopted the key policies and policy
tools from Britain.
So
which country is the new Germany that is
arrival to America? Well, it's China.
And China has been
um working on ensuring
its uh supply of raw material inputs
in the last particularly in the last 15
years. So in many ways it's a sort of
new strategy but it is very much the
same situation as Germany was in. It it
didn't want to be beholdened to shipping
uh under British control could be
blackmailed. Of course, America is
dominating the seas and China doesn't
want to be beholden to America and that
includes, of course, the straight of
Homus. Uh it also includes the straight
of Malaka where even more Chinese trade
goes through. That's another of these
potential choke points as they call it
where they can choke China. So, China's
been working on alternative routes.
The what is the modern Berlin Baghdad
railway? Well, it is the belt and road
initiative which is the Chinese
president Xi Jinping's
um really landmark
um milestone foreign policy initiative
started um 11 years ago.
On the one hand, it offers an
interesting alternative
to participating countries, many
developing countries to the IMF World
Bank system that I hope we have we have
time to discuss because that system has
been designed to keep developing
countries
from developing to prevent development
and to keep them poor but effective
cheap exporters of raw materials
according to the British colonial model.
It's like the modern version of the
colonial British Empire is this American
dominated IMF World Bank rule and the
above and road initiative on the one
hand is an is alternative that can be
offered to countries and many countries
including in Africa have joined this for
this reason.
>> Can you describe what it is for people
who don't know yes about Bel and Road?
>> Yes. So um
the there's actually many different
names for this. Uh at one stage was
called the the the one belt initiative
then belt and road initiative. Uh
sometimes it's called the silk the
modern silk road the new silk road. It
is about um on the one hand logistics to
ensure stable um effective u supply
routes between China and
um the rest of the world to a large
extent on the continent but not
entirely. There's also shipping belt and
road um across the seas.
Um and it's also a way for China to
switch out of the dollar. So it is
linked to the Nixon shock what happened
there um you know the dollar becoming
the petro dollar in the years afterwards
under Henry Kissinger's um interventions
the petro dollar Saudi Arabia being
essentially made part of the United
States uh only selling dollar uh as I
say oil against the dollar but also
reinvesting 80% of its foreign exchange
reserves in US treasuries
um that petro dollar system is
increasingly being challenged by other
countries and of course by China the
BRICS countries and the Beldon road
initiative is a counterparty to that
um and likewise you know counterparty to
this IMF world bank system which is
really the the continuation of the bread
and wood system which is the dollar
dominant system um so China had this
problem beforehand that you know as as a
successful exporter it's earning foreign
exchange but mostly it's earning dollars
what to do with the dollars and of
course it was investing like at the time
most countries in US treasuries which
suited America fine but China decided
um sort of 15 years ago well we need an
alternative to this we can't keep
investing US treasuries because
and very few people know this when other
countries buy US treasuries
all they're actually getting is a
promise on a promise
because you know treasury is is an IOU
is a promise right
>> but do you know that China doesn't even
get those promises. The US Treasury
issues government bonds, Treasury bonds,
but China doesn't get those.
Why? Well, there's a rule that they're
held by the Federal Reserve Bank of New
York in custody for foreign governments.
So it's a promise on a promise so that
you know China can't go with these
papers and and sell them somewhere
without permission of US entities the
the Federal Reserve. Now some may say
well that's just a technicality that's
not an issue. Well, we've seen that in
reality this can be very very important.
For example, in the so-called Asian
crisis 9798 1997 1998
um which was very much engineered by the
um by the system IMF and and central
banks. It's very much um you know I I
was sent as on an official mission to
Thailand in 1998 on this to analyze this
and advise the Thai government from the
Asian development bank's perspective.
Um based on my analysis I concluded that
it was a plot by the local central bank
in Thailand against the country together
with the IMF. Um it was a situation to
create um you know a boom bust cycle and
then bankrupt Thailand and ask the IMF
to come in and then the IMF asked for
Thai assets to be sold to foreigners.
You know Thailand was doing well until
then. Um and then it had to sell well it
was asked to sell its banks and its
industry to to foreigners very cheaply
while the currency had been devalued.
Right? you know, just looking at the the
big picture outcome, that's that's um
what he was meant to be about. The
mechanism is also quite interesting.
It's the same mechanism they put on onto
Germany in the early 1930s to get Hitler
into power. Um you know, Thailand had a
savings surplus. It had um you know,
successful exports
um and was a reasonably high growth
economy, but it was brought down very
badly.
um in in this uh in this setup and this
started with the central bank. the
central bank saying okay well we'll have
a fixed exchange rate against the dollar
everything's safe never worry about the
exchange rate we can we have foreign
currency reserves we can maintain this
taibart dollar exchange rate and at the
same time as I could show in my work on
this um they uh raised the domestic
interest rate above the dollar interest
rate and allowed companies you know
current account uh open um deregulated
allowed companies to raise money in
dollars. Well, if there's a fixed
exchange rate and the dollar interest
rate is lower than the domestic interest
rate, they're basically the Thai center
was telling Thai companies, "Borrow in
dollars, please," which doesn't make
sense. It's not a good idea. Even
short-term borrowing in dollars was
increased by the central bank in this
setup. Um and then all you need as as
then foreign debt increases and
increased increased all you need is a
bit of a set setback in economic growth
in exports for example foreign exchange
reserve going down a bit international
investors this is not sustainable
building up this uh this debt pile for
no good reason and that's what happens
then of course speculators attacked the
Thai bot um and the central bank
defended the bot which meant it was
selling foreign exchange reserves
selling dollars buying the bot Of
course, the dollar pile went smaller and
smaller until you run out. They defended
the B, they said, until the last dollar
and then what? Well, then the B
collapses and this is what happened. Um,
so it was a crazy strategy. I also found
out that during the same time the
central bank even imposed loan growth
quotas. You know this is the window
guidance central bank um informal
guidance of bank credit which when used
properly is is part of the high growth
system. You can make sure that bank
credit goes to productive business
investment leads to growth. But you can
also use it for bad things as I show in
my book princes of the yen. The Bank of
Japan used this mechanism to force banks
to increase real estate speculative
loans, create a real estate bubble which
you can use to bust the system. And and
so the this credit guidance system was
also used by the Thai central bank to
exacerbate this um this crisis or this
uh impending crisis. And then once the
crisis happened, everyone, oh we need
the IMF to come in. And what did the IMF
demand? Well, you have to restrict
credit creation now. You have to tighten
everything up um and restrict fiscal
policy. Everything has to be restricted.
So recession get a huge recession um
industrial output collapsed by 25%.
The Thai bot now without foreign
exchange reserves just fell and fell.
Thailand became very cheap and the IMF
demands well help you. But there's
conditionality. You have to now sell
your assets to to foreign strategic
partners. I advise them don't do that.
Get out of the IMF program. here's how
you can get back on your feet. Um it
took them maybe two years but then they
took the advice and they ended the IMF
program because it was it was clearly um
a system to take down
>> Yeah. It's a control mechanism
>> to take the Yeah. take the country down.
So
um the belt and road initiative offered
and and continues to offer alternatives
to this fairly
um you know
>> predatory predatory. This is the word I
was looking for. Um, system run via the
IMF and the World Bank and and other
institutions that has not helped
developing countries.
And so many countries saying, well,
let's try that. At the same time, it
offered China the possibility to
diversify its dollar reserves because as
part of this initiative, it would give
money to other countries but um for
particular projects that build up
infrastructure and therefore also helps
these countries. So, China has spent
billions on building really shiny new
roads and highways and bridges and
railway connections, transport, ports,
massive investments in ports. Um and of
course you know all these receiver
countries I've been to some they're very
proud of this and they look really
impressive projects um modern and
helping the country and the countries
can use this for their own economic
development.
Excuse me. And so um it's been
attractive and many countries have
joined
although of course also counter measures
have been started and some countries
were put under pressure to drop out
again. It wasn't popular when Italy
wanted to sign up or Hungary wanted to
sign up with this and they were put
under pressure by the EU and US um
parties as well.
But it's been quite successful and and
so of course a key strategic partner has
always been um Iran as a oil supplier to
China
and we can tell that the war on Iran is
part of the
this counter measure that's um that's
really in operation against China
because in in these bombing campaigns
against Iran what was also bombed were
belt and road infrastructure
uh projects, bridges, um railway
connections and um and other parts of
this um supply structure.
And so, you know, why would America do
that? Well, it is to get in the way of
the the modern Berlin Baghdad railway.
Um so,
>> goes up through Central Asia.
>> Yes, of course. It's it's you know the
the the modern silk road. There's many
many silk roads of course there's one
via Russia further north and further
south there several um and it's the
similar viewpoint I mean there's there's
actually a British theoretician Mckinda
who talked about this heartland theory
that whoever controls Eurasia controls
the world and that's really why Britain
first was very keen to prevent Germany
from collaborating with countries
further east um
>> Ottoman Empire Russia in particular and
also
prevent the the buildup of um transport
infrastructure that of course fosters
closer economic and political
connections and it's the same of course
America has has adopted that strategy um
there's a there's a famous quote by uh
what's his name Stratfor Freriedman um
saying that you know the the key goal in
the 20th century has been to prevent
Germany from collaborating with Russia
Um and America has also pursued that and
very successfully you know Germany is
not collaborating with Russia even
though it would be both countries
interests
>> to put it mildly.
>> Yeah.
>> Exactly. And and likewise in Asia of
course the equivalent that he didn't
mention that but I think I would add
that uh it's been a key goal of America
to prevent Japan and China from
collaborating.
>> Yes.
>> Because if they did you know who needs
America in the Pacific? So, of course,
America has always been telling the
Japanese, "Oh, don't trust the Chinese,
you know, they hate you." And it's been
telling China, "Oh, don't trust the
Japanese. They hate you." And
>> I don't think the Chinese trust the
Japanese for other reasons, too.
>> I think actually the two countries get
along better than people recognize. And
it's not just the Taiwanese population
that is has very favorable memories of
being part of Japan until 1945. And most
Taiwanese people I know speak always
very fondly of Japan. It's also Chinese
youth. They think Japan is a cool, fun
place and quite exciting. Um and of
course there is a whole generation uh
Deng Xiaoing's generation of Chinese
leaders who know the great things Japan
did for China because when he traveled
to Japan to seek the secret of high
economic growth you know when Deng
Xiaoing came to power
>> he asked the Japanese for that and the
Japanese didn't have to tell him but
they did. Not just that, they sent their
key guy who was a high growth 1960s high
growth planner uh to to China and he
came with you know another 11 12 people
top planners and they did the Chinese
high growth system for Deng Xiaoing
together with the uh you know 300 top
Chinese colleagues. So Japan did some
great things for China. China wouldn't
be where it is today without the help of
Japan. And that's you know and of course
people know this on both sides. So I
think the two countries actually get
along better than people realize. It's
just not politically correct to mention
that uh because it's not supposed to be
like this. Yes. So this is really the
context in which we have to see what's
happening with this war on Iran. I think
ultimately the goal is China because
unfortunately
America has or key decision makers let's
say it's not ordinary American people
obviously what we're talking about here
but some key decision makers in America
influential people that influence
American policy have decided that there
should be antagonism between America and
China there's all these you know
military strategic plans and China is in
these military plans described as a key
threat even more important than Russia
which explains some of the um unfriendly
policies towards China in the past
and it is a parallel development because
China you know when you look back at the
British colonial rule and then Germany
rising Germany was identified as the
threat and then measures were taken
including
a world war, a second world war, which
shows you the extent to which these
planners would go, China seems to be the
modern equivalent. It clearly is a
challenge economically to America.
>> But if we only think in economic terms,
it's not really something to worry about
because economics is about embracing
this and competition is fine, is a good
thing. And if you have the right
economic policies, America can really
thrive on working with China as partly
happened in the past. Um, but you see
also there's something sinister going on
because it wasn't really necessary for
America to transfer most of the
manufacturing to China in the first
place. This reminds me of the American
investment in Germany in the 1920s and
30s, right? Of course, massive American
investment has taken place in China and
technology has been transferred to China
when it was needed and helpful. Now, in
many ways, you know, there's not many
areas left where China needs foreign
technology because it's very much ahead
of the game in a lot of them. Not all,
but you know, in quite a lot. But
clearly, that was very important. So,
why did this happen? I think it's the
same reason why it happened in Germany.
you know, you need if you're planning
for world war, you also need to make
sure the opponent is built up first to
have a proper war. Um, and um, that
tells you about the sort of the goals
that are at play here.
>> Do you really think so?
>> It looks like it. I mean, you know, I'm
always reluctant to come to these
conclusions, but, you know, it was a bit
much, wasn't it? the American investment
in China, shifting all this production
to China for short-term profit, you
know, oh, you've got higher margins if
we do it that way. Well, you're losing
all these jobs. You're creating all
these problems for America, for ordinary
people, for the middle class, for the
country, and the for the long term. Why
are you doing this? Well, some people
were aware of this and still were part
of this thrust. Um, and it wasn't slowed
down. So, it, you know, it was
intentional, but it was unnecessary. it
wasn't really necessary to do this. So
there were considerations to make sure
China would be built up. Um
and uh that actually you may be getting
back to what you said at the outset
about you know a small percentage of the
population has goals that are
incomprehensible to normal people
because they're so evil.
Right. And and China is actually an
interesting case study to come to that
conclusion too. If we look at the
earlier phase of Chinese postwar
development when Mao was in charge, yes,
it was more or less a dictatorship. It
was a communist more oralist
dictatorship and Mao took
a very um unpleasant policies clearly
and a lot of people died.
Now there's always this historians view
that oh when people died that was
clearly wasn't intentional.
Um,
but some facts about this are very
disturbing. First of all, let's not
forget that Mao indisputably
was put in power by foreign interests.
That's not even denied.
>> Yeah.
>> Well, what what does Russian mean? I
mean, um, it was certainly
>> Soviet
>> and perhaps Bolevik would would come
closer to it because you see a direct um
lineage there of if you look at the
individuals. Yes.
>> Go back to they go back to the sort of
Bolevik movement.
which you could even call anti-Russian
at some stage. I mean, it was clearly
>> murdered a lot of Russians. So, yeah,
it's fair
>> and and so there is that link. Um, so he
was put in in place by foreign uh
interests on the one hand and at the
same time then you look at the policies
he took and I want to focus I mean there
are many crazy policies like cultural
revolution which in many way ways is
being replayed nowadays. You know, this
this cultural Marxism is is a cultural
revolution where you you mess with
people's heads. It's like a scop.
>> You know, red is not red and black is
not black. You know, you have to
denounce yourself and denounce the facts
and and you know, declare untruths to be
true sort of thing. A man is not a man.
What is a woman? You know, doesn't this
sound familiar?
>> It does.
>> Um that's that that was also a big
operation so-called cultural revolution.
And then we had this great leap forward
which is economically a great leap
backward. And then we had this famine
which is quite a mysterious thing. So I
want to just briefly talk about this
famine and it's relevant for us today
because again ordinary people think oh
we couldn't have leaders who plan
horrible things for us that wouldn't
happen. You know they wouldn't
intentionally do it. They have good
intentions. They don't want they
wouldn't never want to starve 80 million
people to death would they? Well here's
the counter case. Here's a case where 80
million people were starved to death.
It was covered up for a long time and
the numbers the more research been done
have been going up and up and up. We're
around 80 million now. First of all, 2
million, 10 million, 15 million. It got
higher and higher and it seems to be in
this order which is phenomenal. I mean
this is really very very sad and very
tragic. What happened? What is this
famine in China?
It started in a year when there was a
bumper crop.
So good harvest.
Now if you want to engineer a famine is
not the great starting point. And but
because it happened at this point, it
makes clearer that it was an intentional
starvation of a of millions of people
because you had to take a particular
combination of very specific policies to
get this disastrous outcome. And they're
all policies. There's actually no doubt,
no historian says it wasn't policies
that led to this famine. They just all
whether western or Chinese historians
they all say well but sure it was a
mistake they didn't intend this well
when it's such a very specific
combination of highly
unusual policies
which are however are necessary to have
this outcome of a famine then you really
have to wonder you know and it wasn't
under duress they were freely taken so
there is no doubt that it was a
policyinduced outcome is the debate is
was it intentional or not? Well, I I'll
give you some of the ingredients of this
famine. So, if you want to start a
famine when you have bumper crops,
you got to do some things. I mean, um
otherwise there won't be a famine. For
example, what what can you do? Think
about it. What can you do? Um well, we
could we could um actually pass some
laws that round up all the harvest
workers and transport them from the
rural areas to the cities. So, let's do
that. Well, that's what they did. And I
know from growing up in Bavaria, you
know, when the the harvest comes, that's
when the the the the school boys and
school girls and and students getting
asked, "Can you please help the farmers?
This, you know, we've got a big crop. We
need helpers." and you earn some money
per hour, which is nice. Everyone likes
that's that's the harvest time, right?
But if you divert millions of people
forcibly transporting them away from the
rural areas at harvest time or just
around harvest time,
that's certainly something you can do to
disrupt um the the um the delivery of of
of food in that year. So that was taken.
Now it turned out to be not enough
because you know farmers are resourceful
and partly that you know they they had
uh ways to still farm a lot harvest a
lot of the um of the crops. Now um there
is a natural or you know seemingly
natural way you could reduce a harvest
and if you read the Bible
in bad years you know horrible things
happened like swarms of locusts come and
eat up the crops. Yes. Which is
actually, you know, it's clearly not
every year. It's unusual. It's so
unusual that when it happens, you know,
it's recorded for thousands of years
like in the Bible. Wouldn't it be nice
to arrange for that? Well, in in a
bumper crop year, right, if you if your
goal is to have a famine,
of course, that's not so easy to
arrange, right? Is it?
uh particularly at a day and age where
we did not yet have the insect
laboratories where they breed various
forms of genetically modified you know
insects that could do all sorts of evil
stuff you know that that wasn't yet
happening
but also it's unlikely that it would be
um swarm swarms and swarms of locusts
millions of locusts eating the harvest
because in China there was a natural
enemy of the you know giant grasshoppers
the locusts named ly the ordinary um
Asian tree sparrow.
Yes. And and in fact in China is
estimated as there's around 700 million
of them the tree sparrows and they would
you know in the in the development of
the the locusts you know they intervene
at the right point and they eat them and
the lavi and and so on.
Um, so you really if you wanted to have
swans of locas, you would need of I mean
nobody would think this up surely, but
you would need a very specific policy
that would declare the ordinary um Asian
tree sparrow enemy number one that has
to be killed and exterminated.
And of course, that's what Mao did.
And what happened was swarms of locusts
destroyed quite a bit of the harvest.
That's increasingly being studied. And
it's quite clear that such a specific
policy in this chain in this natural,
you know, biological cycle where you
intervene and destroy the enemy of the
locusts as a specific policy that surely
can't be by accident. Now, still it
wasn't quite enough for an 80 million um
famine. So now you need the usual Soviet
style policies which is to um
uh sequester um the harvest. You know
the government moves in Yes.
>> and seizes the harvest and it's taken
from the people and it's not being sold
or some of it is exported abroad
>> to Romania. Exactly. Um and then some
farmers have some storage because
actually farmers always think of next
year's crop. Do you want to keep some to
plant next year? That's before
genetically modified, you know, things
were invented to destroy that natural uh
cycle um of farmers behavior. Um so they
went after those farmer anyone who
stored food was declared um a a bourgeoa
hoarder and and enemy of the people and
was severely punished and of course the
food and the the grain and all the
storage was taken away. So put all this
together and of course on top of that
various communist campaigns um the
famine took place and it was such a
horrible disaster um and and as I said
we're we're around 80 million as an
estimate of people who starved um as a
policy result. So we have to we have to
realize that our leaders don't mind
killing us. In fact they seem quite keen
on killing ordinary people.
Um and and perhaps one more link to
China where we learn these things is you
know um Deng Xiaoing and I I spoke about
him last time we had our discussion how
he introduced the high growth model.
Yes.
>> And Japan helped him as I said and um
and I think that was great and he
realized and the Japanese told him you
need many many banks. You need thousands
of small local banks that lend to small
firms. It's decentralized decision-m you
know you've got five instead of the
Soviet originally started out with one
bank right central bank only. Central
decision-m doesn't work well. The
Prussian principle of high growth which
all these East Asian high growth
economies adopted is decentralization.
The subsidiarity principle decisions on
the local level there they can be made
flexibly as the situation demands and
appropriately. Central planning is not
informed enough can't react quickly
enough and doesn't work and also the
incentive structure is wrong because you
know what's worse what's worse than
being given an order that you know is is
really counterproductive and useless and
you still have to do it. is so
frustrating and that's of course why the
Soviet system failed um and the the
Prussian decentralization work. I mean
there's studies comparing the the German
army with the British army in the first
world war and the German army with the
American army in the second world war
and they conclude the the German army
was always far more efficient and
effective with smaller numbers better
outcome and they found it's because
decision-m was delegated to the lowest
level the officer in the field had the
decision-m power there was always the
the goal is given but how you get there
the officer in the field had to decide.
Of course that meant that you had to
train people better but that's a good
thing if you've got yes better trained
people and they make the decisions
that's the right motivation then people
are also motivated they know that they
make a difference and their decisions
will uh shape things and they can do the
appropriate decisions in the fog of war
things change so quickly central
planning just cannot work likewise that
was then applied in Prussia and in
Germany in the economy through
decentralized decision-m so not one
central bank but thousands of small
banks lending to small firms, credit
creation, money creation in the banking
system for productive investing, for
productive business investment, you get
job creation, growth and prosperity. And
China did that. And so this this is the
uh you know the the Chinese um high
growth system um which Deng Xiaoping
implemented
and the rest is history. 40 years of
high economic growth lifting more people
out of poverty than anywhere in history.
um you know 800 million people lifted
out of tech you know according to the
official definitions lifted out of
poverty this has never happened before
in history in such a short time period
in one generation that's what China
achieved using the Japanese model which
is essentially the German model of high
growth and
um and so I was always surprised that
Dengiaing who was behind this and did
this really well and he's a good manager
very humble person not you know this
narcissistic type that um you know will
take policies that selfish but really
bad for ordinary people. He was not like
so he was a good leader in many ways as
far as I can tell. Um but he he also is
the one who took the one child policy
and we know that that's not that wasn't
a good policy. Also if you think about
it it's a sort of policy that you can
see western decision makers uh western
leaders liking like I mean there's lots
of western leaders in history starting
from Napoleon uh talking about oh if
China you know wakes up and then they
keep growing population growth and China
will take over the world and you get
this western sort of paranoia
you know and to impose a policy that oh
only one child is allowed sounds very
much like a western idea to me that's
always the sense I had like why would a
Chinese leader particularly a high
growth leader the high growth model
means also you want high population
growth population growth is good you
want people to have um children you want
to educate them well because that that's
what leads to growth growth comes from
productivity technology new ideas 100%
of ideas come from people we need people
um of course you know now they're trying
to replace that with AI but um that has
its its severe limitations and risk and
dangers But um so you want more people
normally but Denging
imposed this one child policy. Then I
looked into how did this happen and it
turns out that it was early on when he
was implementing the high growth system
from Japan.
The particular person who was asked who
was invited to China as the key you know
helper with this high growth system was
very able Japanese um economic planner
high growth planner of the 1960s and in
1978 when Denging came to Japan he asked
he was he was told by the Japanese okay
talk to this guy and he he was our man
in the 60s now retired uh he may be able
to help you and so Ping asked him can
you please come to China soon like now.
Um I need you now. 3 days later he was
in China with you know there was 12 uh
including other colleagues that he
brought along. Now who was he? His name
is um Okita family name Saburo Sabro
Okita.
Now by that time he had been recruited
by the club of Rome
into his the club of Rome's executive
committee.
>> What was the club is the club of Rome.
Yeah, that is a very good question. What
actually is the Club of Rome? Well, it's
also an institution that, you know, this
really big turning point 1971, that's
when the Club of Rome um entered the
world stage, so to speak.
>> That's the year the US defaulted on its
gold obligations.
>> Yes. With its report
um the limits to growth,
this allegedly limits the growth. And of
course, haven't we heard this before? I
mean this the whole degrowth movement
climate change all sorts growth is bad
and we need to limit that limits the
growth we've reached the limits of
growth this has basically been the the
story in the media ever since the club
of Rome came out with this report so the
club of ro
was founded by and it's not really
disputed by Rockefeller supported by
Rockefeller certainly in the early years
that was very clear they met in the
Rockefeller villa in Italy and you know
all that
um and And very early on this executive
committee
um drafted also Mr. Okita from Japan
which is very ironic because he's the
high growth expert. But the Club of
Rome's two main messages were economic
growth is bad and we need to reduce it.
We've reached the limits. We're going to
destroy the planet. Blah blah blah. We
need low growth. And secondly, h too
many people on this planet in fact very
much regurgitating the views of the East
India Company leadership and its hired
economist Malfus Thomas Malfus famous
for his prediction population growth too
high. Um there's not enough food. We're
going to starve. We need to reduce the
you know population growth. Sometimes
what you read is it sounds more like we
need to reduce the population. Of course
that's what they did in India quite
>> yes
>> um clearly by result but to a large
extent intentionally again these policy
decisions famines and other uh taking
people's livelihoods away destroying the
textile industry in India millions of
people
>> RNA shots you know
>> well the mo that's the modern version so
um this is the message of the club of
Rome and the club of Rome drafted this
high growth expert now I think he was
fairly innocent And you know he was at
this stage he was you know uh retired um
and he was called up by this you know
selected selective sort of international
body that has a good reputation to be in
the executive committee and he agrees no
many Japanese people want to be very
international and all this nice famous
people are there backing this so I'll
join I don't think he was really part of
the nefarious activities that are also
going on but is clever from the club
Rome and and it's backers Rockefeller
Foundation uh viewpoint because he's the
high growth guy to get him in the
executive committee of a club that
argues for low growth
of you know low economic growth and low
population growth
really is certainly a way of getting a
handle on the high growth model and
making sure that it can be suppressed in
the future. That's the job of the IMF
and the World Bank for developing
countries not allowed to adopt the high
growth policies. Um and when it comes to
China effectively I think whether an
explicit deal or just an implicit deal
happened namely Deng Xiaoping was
allowed to run the high growth model
also attracted American investment. So
it you know that that was allowed to
happen but there seems to have been a
required payoff and that is to impose
the one child policy. So at least
implement half of the Club of Rome
agenda and the other half well we'll
come to that later sort of thing could
have been the attitude when I looked
into so how did Denza Ping adopt this
one child policy how did it exactly
happen turns out that he took the advice
of a Chinese statistician mathematician
who is who was working for the military
doing complicated ballistic calculations
you know so using mathematics which is
pure logic.
And he did then uh he was asked to do
population growth trajectories. Okay.
And of course they were um scary
and he came to this conclusion we need
to restrict population growth. Now the
key thing is this and I call this the
great deception.
He was using simulations and if you look
at okay what did this military
statistician mathematician what did he
use what sort of approach what sort of
model he used the club of Rome model.
Now why was a Chinese sort of military
related mathematician using the club of
ro model? Of course it was in the west
it was propagated. It could just be by
chance that he just saw the headlines in
some western publications. That's a
leading model. we'll use that but or
maybe other channels to do with
Rockefeller visiting China and and who
knows but we know the result that he
used as a fact the um Club of Rome's
model which entirely simulation and that
is a great deception because you can
make up any simulation of anything and
present it but it's used to convince
people and give the impression that it's
factual and this is used in economics
it's used for growth trajectories. Um
it's used for um population growth
trajectories to show that it's
unsustainable and it's used of course
for climate scenarios and it's used for
declaring pandemics, you know, how the
virus grows. It turns out it's all
simulation, madeup stuff, but I'll I'll
come back to this in a moment um because
that's actually interesting way of um
deceiving people. Fact is, okay, that's
what he used. Club of Rome um model
simulations and Deng Xiaoping declaring,
"Yep, we should listen to this guy. You
know, we have no other choice. We have
to do this." So, it's not really clear
why on earth he came to this conclusion.
Maybe he just fell like many people for
the simulation approach. Or maybe there
are other reasons, but that's a fact.
And so we see that we do have
influential international forces that
are anti-population
growth, potentially anti-population
um and also anti-growth
and and we don't well it's not really
factually based. You know this this um
great deception
started really again in the British
Empire
um in the 19th century. It it's really
the source of of modern economics. This
is how modern economics was was
developed.
It started with the so-called classical
economists in Britain. And the key
figure here is David Ricardo.
Who is he? Well, he's a famous classical
economist. He did the theory of free
trade. You know, the theory of
comparative advantage which concludes
well we should have free trade. It gives
us prosperity. Yes.
And at the same time uh the argument is
well the previous economists the
mercantalists mercantile economists they
were so wrong because they argued well
we may need some trade policy we need
some intervention we need to make sure
that the benefits from trade are
properly equally distributed that's what
the mercantalist said and ever since
David Ricardo
uh this is claimed to have been
disproven
and it's just free trade is best also to
unilateral free trade and that's exactly
what the IMF and the World Bank are
preaching and enforcing in their
policies on developing countries you
know the conditionality you get money
carrot but here's the stick you have to
adopt these in these policies free trade
policies allow foreign investment
deregulate liberalize privatiz which
effectively means these countries are
stuck in a low value added activity
exporting commodities they're not
allowed to build up their own industries
move up the value added ladder and
they're not allowed to prevent
foreigners from buying up their
industries cheaply. Now, empirically,
this model is is been proven wrong many
times over. Uh actually, Preish and
Singer showed already a long time ago
that commodities exporters have
declining terms of trade. Yes. Now, what
does that mean? Terms of trade is is u
is simply the um export price divided by
the import price. It's basically the
relative price you get for what you're
selling compared to what you have to
buy, what you're importing, right? And
and what they've shown is that if you're
exporting commodities
and if you're focusing on that, that
means all your high valued goods,
manufacturing goods are imported, right?
And that's the position developing
countries in. But if you are in this
position, what happens over time and
they looked at around almost half a
century um actually more than half a
century. You could show that the terms
of trade must deteriorate which means
you will ever get less for your exports
in relative terms and you have to pay
ever more for your imports and therefore
you're getting poorer and you're not
getting the benefit from from trade.
That's what the IMF and the World Bank
are locking developing countries in
through their policy regime. And it's
not a coincidence and even David Ricardo
knew this very well. The trick was this.
How did he prove that you know free
trade is the best and intervention is
always bad. Well, he didn't actually
prove it. All he did is he presented
some nice mathematics. Now, mathematics
is logic and the logic is correct.
And here's the trick. Here's the great
deception. We like logic. Men like
logic. People like logic.
Logic is convincing to us and so
convincing that we forget one small but
fundamental issue. Logic is not truth.
Well, hang on. Why is that? Well, if
it's logical, it must be true. No,
there's there's a difference. Logic can
only ever tell us about theoretical
possibilities,
but never
tell us about what is true and what is
not true. That's an empirical question.
Logic is not empirical. It's not
evidence based.
>> No.
>> Whether something is true or not,
whether something happened or not,
>> it's always evidence- based. You have to
check the evidence. That's the inductive
approach. Whereas logic is mathematics.
You know, mathematics is logic. Um and
and it usually is used um consist
correctly consistently. Therefore,
you've got consistent logic. That's why
it's so convincing. But the conclusion
doesn't tell you that you should do
this.
Well, it's not perfectly predictive.
It's not predictive at all. And also, it
may not describe the world. It may not
describe reality because it depends on
the assumptions that you've used to
build this model. And that's where they
exactly cheat you.
>> So, the assumptions in Ricardo's model
are highly specific and unrealistic.
That's how economics has worked ever
since. In fact, it's called Ricardo's
vice.
So modern economics and you know
historians of economic thought agree on
this. Modern economics essentially in
was invented by David Ricardo.
It's called the Ricardian vice which is
to um make such assumptions
that you will come to the conclusions
that you desire.
>> Right?
>> And and so it's of course not
scientific. It's not scientific at at
all. It is a way of deceiving people
and you don't point out that this is
only a scenario. It's a simulation that
could be true on some planet.
>> But we are not saying anything about
whether this actually applies to this or
not. And so in
>> sophistry really.
>> Yes, it is. Um but but also you could
say it's rhetoric or it's marketing
because you're trying to convince people
of something that you've concluded you
want to do. Exactly. And you provide the
expos justification and it's it is
impressive. Oh wow, so much clever
mathematics. This is a real clever
scientist. Well, it must be true.
Whatever he's saying, this is
essentially how economics has been
working. And now David Ricardo doesn't
point out that his conclusion depends
crucially
on on the terms of trade on what is that
post trade price. What is the relative
price of things? He has nothing on that.
He just leaves that out. But that's the
crucial factor. And the problem is that
developing countries have a
deteriorating terms of trade if they
follow his advice. So he's essentially
David Ricard essentially proven what
everyone already knew that trade can
potentially be beneficial for everyone
because we create benefits through
trade. That's not in doubt. The
mercantalists knew that. I wonder why
they're called mercantalists. Mercantile
merchant trade. They favor trade. They
said, "Let's trade. This is where
prosperity comes from, from trade."
That's what the mercantalists said. So
why are they so wrong? Well, they're not
wrong. They were not wrong. They
actually were a step further than
Ricardo. They talked about the
distribution of those benefits from
trade. They said trade can be
beneficial. There will be benefits. But
who's getting those benefits?
>> Well, exactly.
>> How is that distributed? That depends on
the terms of trade, which is what
Ricardo totally and on purpose left out.
>> I think I'm starting to understand how
the world works. and and this deception
has been used consistently in economics
but has been used in other disciplines
you know so so this is how they persuade
this is how the club of Rome operated so
their model of oh there's too much
growth and growth is bad and we need to
suppress growth is based on the same
approach assumptions it's a simulation
it's not truth and it's turned out to be
wrong you know we're more than halfway
through their 100year forecast and we're
you know they've been proven incorrect
>> not where they said we'd Yeah, exactly.
Um, it's true for the population growth
scenarios. We don't have too much
population growth. That's quite clear if
you look at the facts. So, it's been
disproven there because it's just been
simulations. And it's been true for the
pandemic simulations. It's been true for
the climate simulation, which also just
simulations. And just recently we hear
that oh you know the the IPCC's is is
admitting and and people at the UN
admitting well these were extreme
scenarios and and yes they're
implausible um you know it's
increasingly being a bit because that's
what it was just always an extreme
>> too late for the German economy
>> a simulation yes of course well people
need to be aware that policy makers when
they impose bad policies they use this
clever sophistry of um simulation ations
the deductive approach is presented as
very logical and it is logical but logic
is not truth that's the key point truth
is based on evidence and facts and very
often you can quickly debunk all of
these models so I mean given that and I
mean part of what you're saying is it is
hard to project into the future it's
just hard to know because of the number
of variables but I'm going to ask you do
it anyway so given everything you've
just said your understanding of what
this conflict with Iran is really about,
what the conflict with Venezuela is
really about. It's really about China
and the contest for global hijgemony
between the United States and China. Um,
and that is likely to flower into a
world war. I think it's hard to imagine
the United States wins in any conclusive
way given that it's a smaller country,
population, economy, smaller,
less technologically advanced in some
ways than China. So
what happens then? So let's just jump
right ahead. So let's say there's some
kind of conflict. Hopefully it's limited
in scale but whatever it is. But China
remains after that. All the systems that
you're talking about which have been in
place for hundreds of years. First under
the British, now under us, the
Americans,
they're replaced by what? What?
What are the systems that govern the
world when China's in charge?
>> Well, exactly. You've said it already.
systems that govern the world.
>> Yes. Not countries.
>> Exactly. So it that's what it seems to
be about to um to entrench a new system,
a more effective system from the
viewpoint of the central planners to
govern the world.
>> Exactly.
>> Because these crises, whether it's
economic,
>> you feel that it's very obvious, right?
>> Yeah. Exactly. And clearly wars have
always been used. you know, you shake up
the old structure, you've got your ready
new structure that you want to
implement. Yes. And that's what it seems
to be about. Now, that structure as in
past, you know, of wars um
includes, of course, as a core pillar,
the international monetary system.
There's no doubt about that. Yes. The
monetary system, you know, first world
war, the result of the first world war
was the creation of the League of
Nations.
>> Yes.
Um and the League of Nations had
particular views.
The problem was America never joined the
League of Nations because America was
still you know a bit more sort of you
know representatives of elected
representatives would represent what
their constituents wanted and people
didn't want it why you know and in fact
the first world would just prove the
point that it's not a great idea to get
involved in these international
conflicts right
>> so uh America didn't join the League of
Nations and that was another reason why
another round was considered necessary
and so towards the end of the Second
World War, the United Nations were
created. In fact, did you know the
United What is the United Nations? It's
the renamed Allied uh countries. They
simply renamed them.
>> Security Council. Yeah.
>> Um um you know, so the Second World War
Allied countries were renamed United
Nations. Sounds nicer, which is why
Germany, you know, and and Japan are
still enemy countries in the in the
United Nations charter.
and they created in 44 uh the bread and
wood system based on the dollar. So it
was a clear transfer
uh from the the British Empire as an as
a dominant force to America. Um there
was a bit of a internal battle between
America and Britain. Kanes was
negotiator for Britain. Um you know he
was already director of the Bank of
England shareholder and the Bank of
England. Um he died um unfortunately
sort of uh sort of at the time of these
negotiations. Anyway, one way or
another, America won the argument, it
seems, and it was the dollar that um was
going to be used in the system. Um and
and of course, this the Bretonwoods
conference, you know, in in New
Hampshire in the uh what was it the
Washington Hotel in in New Hampshire in
Breton Woods is meant to be a global
conference of all the representative. It
was basically Britain and America and
their colonial subjects being
represented by somebody but they had to
say whatever Britain and America wanted
to say. So it wasn't the world. The
Soviet Union was there but then quickly
after that dropped out and thought no we
don't want to be part of this. China was
represented by some people that you know
America was supporting in China who
later of course were not really in power
and had nothing to do with China really
but they went to Formosa.
>> Yes. For instance. Um that's right. So
um it was really America and Britain um
calling the shots and deciding things
and it was very much about the monetary
system and the structure United Nations
and the organizations I'm of World Bank
to run the world. So
that's also I think what this is about
and I think you see if the goal just for
sake of argument is to have a one world
government a proper one world government
that controls the world
um and I don't think it's a good idea by
the way just want to make that clear
okay um because thank you doctor because
decentralization is the best we have
already too much centralization and this
is going to be quite a nightmare,
totalitarian nightmare unfortunately.
But there are people power- hungry, you
know, psychopaths who want more power
and, you know, over time in history, we
see their footsteps. Um, and that's
clearly where, you know, that's at least
one um red thread going through history
that forces are being aimed at this for
one reason or another. So I think as a
working hypothesis we can put it on the
table that there's people some people
out there who want to create a one world
government. Um and if that's the goal
you know you know what what your
obstacle is. I think it's it's just like
with the League of Nations. It's America
from their viewpoint. I mean I'm not
saying America is the obstacle uh or is
is you know America is bad if it's
opposing this. I think that's a good
thing. America should oppose this. But
from their viewpoint America is an
obstacle. So America has to be taken
down. the dollar has to be taken down.
Now, a lot of the people fighting for
this may be in the American government.
Who knows? You know, I'm, you know, it
doesn't mean they are necessarily
outside America.
>> That's right.
>> But there are people who are working
seem to be working for this goal. At
least that's the evidence we get when we
use the evidence-based approach, not
simulations and scenarios. And you know,
where would the capital of this world
government be, do you think?
>> Oh, that's a good question. clearly a
political question and there will be
debates but perhaps they already have a
preferred location. Um so I yeah I don't
want to be drawn into speculation
because of course from my viewpoint it
doesn't actually matter
but once we see it I think it will tell
us a lot. Uh but it doesn't really
matter for this argument. So maybe maybe
>> Yeah, I wouldn't speculate either. I
would just think you know logic suggests
it would not be east or west but in the
middle.
>> Yes, that could be that could be.
>> Yeah. um that that would be an argument
because of course if it's like the
United Nations again you see and always
they move it you see first world war
league of nations after first world war
was in Geneva Switzerland you know some
arguments for that it's sort of
international territory but Europe well
then United Nations because America
didn't join so you needed to be in
America United Nations uh of course
Rockefeller gave the land
>> um and helped a lot in building up the
UN uh institutions was very much
involved you know
>> so you know we see the Rockefellers
there Rockefeller foundation quite
active. Um but if you move to the next
step and you realize just by logic that
America is now the obstacle because why
would America subordinate itself to an
outside body?
>> Exactly.
>> Why would America uh give up the the
dollar dominance?
>> No.
>> And actually, you know, have an
international currency that is not the
dollar which would be necessary for this
new one world government.
So America becomes the obstacle. Uh so
then you can't have it in America,
right? Um or to to make it clear that
America is no longer the dominant force.
It's now a new thing. It's a world
government that is different which you
would want to use to motivate other
people right outside America. So then it
would be in America and then where could
it be? And so then yeah um a few things
a few places come to mind. But also how
do you go about this? And what we learn
from history is it's always the same
mechanisms. Um warfare is an important
one at least for big changes.
There are many changes you can do
without war and that is through economic
you could say economic war but economic
cycles boom bust cycles long deep
recessions downturns they shake up
society high inflation it's also part of
that is also economic warfare on the
people shakes up society like high
inflation in Germany in the 1920s
clearly was uh one way to get Hitler
into power is the beginning um and by
the way we may not have time to to go
there but um you know the the person who
was put in charge um sort of at the peak
of this high inflation
became head of the German central bank
in Vimmore
>> yes
Shak was his name he was appointed by um
by foreigners not by Germans so there's
no doubt about that because
um the
they call themselves now Victor Victoria
victorious powers of the first world war
although it was an armistice allegedly
um but they decided that no we we are
going to occupy Germany Germany then
became occupied by foreign um troops you
know the rhin African troops
>> y yes yes indeed indeed and yeah it
wasn't too pleasant but um and and so
also its central bank was taken under
foreign control formally there was a new
central bank act and it stated that half
of the board members have to be
foreigners they couldn't be German and
in total because also the president was
effectively appointed by the foreigners
which foreigners are we talking about
was mainly in practice it's not really
in dispute it was the uh the JP Morgan
le reparations committee because the
story was that during the first world
war Britain funded its war effort by
borrowing money from JP Morgan that was
already the first step of transferring
power from Britain to America
>> yes
>> um and because you didn't have to do
that. There were alternatives, but
Britain chose, it seems, you know, chose
to do this. Um, and so, um,
JP Morgan then was the one that money
was owed to by Britain. It was it was
more than 10% of American GDP. It was
not a small sum. And therefore, after
the first world war, Britain had to do
what JP Morgan was recommending really.
and JP Morgan was thinking well Britain
is not going to really repay this money
uh we better get it from Germany and so
the reparation committee was all about
Germany paying Britain to pay JP Mong so
really it was from Germany to JP Morgan
and
>> um this started to become entrenched in
if you look at the German central banks
the first step was this this new law um
that made the German central bank
totally independent from government and
from any um democratic assemblies in
Germany. The rice bank was made
unaccountable to anyone. It was the the
most independent central bank in the
world while also at the same time being
100% privately owned. By the way, Rice
Bank was privately owned. So um and this
rice bank then as soon as the uh the ink
had dried on this new uh statutory
independence
but of course dependence on JP Morgan's
wishes, the reparations committee was
appointing these foreigners. You see um
the hyperinflation started in Germany
and they then put Yamash in power um at
the helm of the um rice bank and it was
the same who then um took the steps I
mean we need another session on um on
the details but he took the steps that
brought Hitler into power
um and even approached the Nazi party
and said well you guys have some
interesting ideas but you I have a
really good economic program. I'll give
you how to get out of the great
depression that he helped to export to
Germany through his policies at the rice
bank. So that's how the plot thickens.
And then of course when Hitler was
appointed on strong recommendation from
Helmasht who was highly respected by
that time because he was he was actually
known as dictator the the the the
monetary and credit dictator because he
he he decided over life and death of
German companies in the 1920s when the
rice bank said no then the company
wouldn't get credit from the banks and
would be finished. Um so this guy
recommended Hitler and then he was
appointed even though he didn't have the
absolute majority in parliament. He was
appointed chancellor and then
immediately appointed as head of the
central bank again who then very quickly
did the right policies sort of early
versions of my QE quantitative easing to
rev up the German economy and so by 1936
so only after 3 years you know Germany
was also in the great depression you
have to understand I mean there was
large scale unemployment 20 25%
unemployment
>> and then Shashak who had created those
policies that created this and exported
the great depression from America to
Germany
knew how to get out of it quickly and
adopted these policies. So Germany by
1936
um just when when Kanes in Britain was
publishing his analysis of you know what
could be behind this great depression
and what could be done to get out of it
which is his recommendation fiscal
policy well shocked had already led
Germany to full employment and shortage
of labor that's how the economy was
booming in 1936 and it wasn't through
fiscal policy as often said oh that was
military spending oh no no German
military spending only picked up much
later um it was monetary policy credit
creation for productive business
investment in many industries, high
technology industries. That's what led
Germany out of that bank credit creation
and Shak knew that because he was also
known as the the credit magicians, the
wizard of credit creation.
>> So it turns out there was just one lever
in the German economy and it was
monetary policy and when you cranked it
in one direction, people thrived. When
you cranked in the other direction, they
starve to death.
>> That's right. But it's always the same
everywhere. It's not just Germany. It's
always bank credit. That's what shows
you what's going. That's why they're
hiding it. That's why even today in
leading economics textbooks, there are
no banks. There's no bank credit
creation. Central banks still use their
equilibrium models, dynamic stoastic
equilibrium models, general equilibrium
models where
>> there's no banks, there's no need for
banks. Well, this is what David Ricardo
started. I mean his in his fake
economics, this based on this um you
know all these assumptions, this aimatic
hypothetical very logical and therefore
convincing economics, there are no
banks. There's no bank credit question.
Who was Who was David Ricardo? Well, he
was a banker. He just retired at the age
of 42.
>> Was he British?
>> He was British. He made a fortune in the
city working with um um well, working
with a very rich banking dynasty, making
a fortune so that he's known as the
second richest person in Britain.
>> Banking dynasty.
>> Well, exactly. And and why second
richest? Who was the richest? Well, that
was Rothschild's
and that's where he was most likely
making his money because he was in the
bond market in 1815. Rothschild made a a
fortune in the bond market through
inside knowledge um of what's going on.
If you fund wars, you know, you know,
slightly earlier what's going to happen.
That episode is quite well documented,
but Ricardo was a bond trader. He was
likely one of those who as agents bought
the bonds when they were at the rock
bottom. and you could get them for I
don't know um 20 pennies in the pound um
for Rodri without people realizing you
know Ro is actually buying them very
cheaply and then owned the entire
national debt and then could say to the
Bank of England well actually your
assets are mostly the bonds um I'm the
biggest bond owner I'm buying the chairs
the shares cheaply um and could dictate
anything to the government or the royal
house uh it seems um but this David
Ricardo having made his fortune
then retired at the age of 42
and built himself a nice little country
house u princess royal princess anne
lives in it today so you know it's
probably quite impressive I think 700
acres of land and anyway so you know he
was seriously um wealthy what did he do
with the rest of his time he decided to
create modern economics which is based
on assumptions this hypothetical aimatic
deductive
simulation. Now you can make any
assumption in logic why not but when
certain assumptions become compulsory
>> like you have to assume right
>> perfect information complete markets
rational agents and all that stuff you
know
>> then it's an ideology that's the
definition of an ideology that's
religion at that point that's what
economics becomes and the trick is this
that once you have these assumptions
then you can show that in equilibrium
demand equals supply prices move to give
us equilibrium it's prices that dominate
never look at quantities
and this is what's being pushed. I mean
modern economics is equilibrium
economics and the the um the irony is
there is no equilibrium that's made up
because this scenario is so
hypothetical.
What is the probability of having
equilibrium? You need at least eight
assumptions to hold at the same time but
each assumption has a probability of
probably less than 1% of being true. But
let's say for the sake of argument each
assumption like perfect information,
complete markets, you know, zero
transaction cost. If each assumption had
a probability of being more likely to be
true than not 50 more than 50%, 55%.
Okay, but you've got eight of these
assumptions. They all need to be true at
the same time to get equilibrium.
What is the probability of getting
equilibrium when each assumption is more
likely to be true than not 55%. Well,
it's 0.55%
to the power of 8. You need all of them
to hold at the same time. Conditional
probability. So while they love to use
logic and math, that's the calculation
they don't reveals it as a lie.
>> Exactly. Because what is the result?
Even if each is is, you know, is more
likely to be true than not with 55%
probability, the joint probability is
less than 1%. But of course, each
assumption has a probability closer to
zero, less than 1%, I would So, in other
words, when Americans say,
non-economists say, "This doesn't look
like a free market economy to me,"
>> they're right. Of course, there is not
even equilibrium. It doesn't exist.
>> It's so unlikely to ever be true that we
know for sure there's no equilibrium any
market, but central banks are using
general equilibrium models. That means
equilibrium, not just in one market, but
in all markets at the same time. That's
even less likely. That's like the
probability 0.0000 whatever percent. So
the real power is with the governors of
the central bank.
Exactly. But also what you're hiding
with this equilibria economics is the
power of the is is actually power. You
could say power e economists would say
well let's not talk about power. We're
about economics. We don't power doesn't
enter the equation. Why? Because it's
equilibrium economics. Prices move. You
get this outcome. You're unemployed. I'm
sorry. That's the markets. There's no
power. But the moment you realize that
actually all markets are rationed then
the so-called short side principle
applies which is whichever quantity of
demand or supply is smaller determines
the outcome and has power to pick and
choose with who to trade. That's the
power that we realize is there all the
time and that's the reality of markets.
So that means people um the short side
whatever that may be in any market has
power that's totally ignored by
economists. So this is why equilibrium
this this deductive equilibrium approach
this deception is so useful. You never
think of looking for the power players
the power holders. Of course when it
comes to money um is the equilibrium
demand and supply is it equal? Well, no,
because the demand for money is
essentially infinite. And of course, the
short side is the supply of money. So,
whoever supplies money has power to pick
and choose who to give it to, how much
to give it to, for what purposes. Now,
who is creating the money? That is the
banks. And of course that's why we need
many small banks, local banks because
then you're giving this power which is
then power over the whole economy really
because it's the power over money
creation and and availability of money
purging power. You give it back to the
people to the local areas and that's why
the central planners have been setting
out on a campaign to destroy small
banks, local banks. And so the in the
background is this deception that is
equilibrium when actually all markets
are rationed and there's power players.
It's the short side and when it comes to
money, it's the supplies of money. But
it's really the big banks and the
central banks that have usurped that.
That's why we need to decentralize and
have many small banks. There is actually
a person at the Federal Reserve now
who's vice chair of supervision um
Mickey Bowman. She is an advocate of
small banks and local banks. So there is
hope. I mean she should be the next um
really um chair of the board of
governors of the Federal Reserve system.
But of course we have somebody else
starting in the in the interim. But
hopefully she will still be there and
continue to fight for small banks. We
need some other changes to make it
easier to create new banks. That should
be deregulated. There was an era in
America of high growth when you could
very easily set up a bank. Well, why
don't we have that? You know, it's
virtually impossible to set up a bank.
>> Well, they suddenly make it very hard.
So, um, it doesn't sound like the
political environment that we're in,
which is clearly accelerating, we're
moving towards something, its outlines
are not clear, but we're moving at high
speed. It doesn't sound like we're
moving toward decentralization of
anything,
right? The the trend is continues to be
centralization. They're reducing the
number of banks. The ECB has overseen
the disappearance of 6,000 banks in
Europe. That's very sad. Um, they
continue to drop their numbers also in
America. That needs to be reversed
because that as the number of banks goes
down, there's less economic growth.
There's less prosperity for the middle
class. It is really a war on the middle
class if you destroy the small banks.
But that continues to take place. And
it's even official ECB policy. Of
course, the background to that is that
the ECB um is the revived rice bank.
I've I've told you about how powerful
this foreign controlled rice bank was.
So once Germany um was defeated in the
Second World War, postwar Germany
thinkers there were given some leeway to
think about okay how to do the the
monetary system the central bank and
they concluded well the problem was the
central bank was too powerful.
It's no good being privately owned. So
it should be stateowned. But more
importantly, it should be made
accountable to democratic assemblies to
parliament which the rice bank was not
uh due to the controlled by the
reparations committee which was later by
the way renamed the BIS bank for
international settlement. That is the
continuation effectively of the JP
Morgan reparations committee. you see um
but um the Bundesbank was then um made
accountable to parliament and its
independence was reduced. That's the big
insight and as a result we had a very
successful central bank in Germany that
throughout the existence of an
independent Bundes Bank independent from
um the government but dependent on
parliament and laws were made for it by
parliament that for example it also
needs to look at growth and and
employment you know you can't have huge
unemployment it's no good having low
inflation but a huge recession right so
that was the law it performed very well
>> so it made other central banks look bad.
It also never created these asset
bubbles because if you allow banks or
encourage banks to to lend for asset
purchases, you get because it's money
creation. You get asset bubbles which
lead to banking crisis and that's the
system played in many countries
certainly in England boom bust cycles
all the time but many countries um the
central banks have been playing this
game which then can be used to rearrange
ownership and all sorts of things as a
world bank report pointed out about the
Asian crisis. Oh, the Asian crisis is a
window of opportunity to rearrange
ownership. Oh, interesting. That's World
Bank report. Um, so the the Bundes Bank
was a good central bank, probably one of
the best in history, I would say. And it
because it made other central banks look
bad. Its days were unfortunately
numbered. Germany allowed itself to give
up the Bundesbang and give up its
currency, the Demar. Now the Demar had
become the European currency. So what
was marketed?
>> I remember
>> that. That's right. It was by market
forces and voluntary decisions. Other
countries decided to peg themselves to
demark. Yeah. Voluntarily that nobody
was forced to do that.
>> And so what really was was marketed as
the introduction of the European
currency, the euro was actually the
destruction of the European currency,
the demar,
>> and also the destruction of this good
central bank. Now really the destruction
of Germany itself. That's right. That's
when it started and I was a fierce
opponent in the 1990s but it was like a
taboo to to say oh giving up the demog
is a bad thing um in in public debates.
I was chief economist of a British
investment bank and so invited to
various events in Germany also and other
German bank Deutsche Bank chief
economists were there and I would say
well we we can't give up the demark
there's no good economic rationale and
silence and some would say oh they
wouldn't engage on on that point because
it's true they would then say oh but
there's a good political rational
there's a moral rational
>> and moral I want to hear that one
because that is an even worse argument
but
>> no but that's you you know when a
society's collapsing when every argument
becomes a moral moral argument.
>> That's right. So then fighting Russia,
so we're good. Okay.
>> So then they introduced they abolished
the European currency, the demog, and
they introduced the euro with its own
central bank, the ECB. Now they marketed
this as, oh, the ECB will be like the
bun bank, it's going to be in Frankfurt.
It's going to be the same as independent
as the bunes. Well, hang on. The the
lesson from the rice bank and the bunes
was to make the central bank less
independent.
Turns out, as I show actually my book,
Princes of the Yen, um,
quantumpublishers.com is the place to
get it. Amazon is not really the place
to get it. Um, it was a book that was
impossible to get it. It's like $500 on
eBay, but you've reissued it. Yes.
Quantum.com. So, there's a chapter here
on on this. The ECB is the revived rice
bank. It was modeled on the um on the
worst central bank in history, which is
of course why I predicted that the ECB
was likely to create bank credit driven
asset bubbles, banking crisis and big
recessions in the Euro zone. And that's
exactly what they did. Ireland,
Portugal, Spain, Greece.
>> Well, and not just in the Euro zone, but
in the United States. So here's my
here's my last question. I am going to
ask you to predict and project. So go
out on a limb. But um you know the
United States has been experiencing I
think what's fair to call an asset
bubble. Certainly you see it in real
estate markets but not just real estate
um cryptocurrency etc.
What happens to assets in the United
States as this war progresses and as the
global system changes?
Well, um I in principle of course in in
real estate markets we have we have a we
have big cycles. Um they're slowm moving
and the cycles are function of in real
estate of interest rates and the
quantity of credit for more importantly
uh for uh real estate transactions.
um assets are somewhat overpriced I dare
say uh in the US
but particularly when you look at stock
markets it doesn't necessarily mean
there will be an immediate crash but I
do think we are heading uh towards a
crisis
and again you know if you look at at the
big game that's being played then it's
quite clear this this has to happen if
the working hypothesis is that there are
forces out there that want to dethrone
America.
>> Yes.
>> And they may be active in America even
these forces.
>> No question about it.
>> Um and that means also dethroning the
dollar.
>> Um and that would explain why China
actually had been strengthened with
American investment in the past because
you're building up this this opponent
that can help take down America. Um if
you make sure America stays aggressive
and and and adopts anti-China policies,
you know, which also seems to be
happening to some extent. So then
what are the scenarios and what's the
way well as we said whenever you have
these big wars they lead to currency
system changes the global financial
system changes so we moved from first
the British pound which was on and off
the gold standard then we moved to the
Bretonwoods dollar standard which was a
gold standard
and but of course gold standard you know
some people think oh that means it's one
to1 to gold and you can't create money.
No, that never happened. Such a gold
standard never exists. It's always been
bank credit creation and that's how the
real game is played. But it's some kind
of limit because as soon as you know
turns out America was creating too much
too many dollars buying up assets in
Europe, the French were not yet part of
NATO, therefore not part of the command
structure. It was the French that uh
called out American
>> like our gold, please.
>> And they said, "Okay, you're printing
all these dollars and you're buying us
up. Um what we can do is we can change
these dollars now into gold. We want to
see gold." Um so that's you know um but
so then we moved from the 71 Nixon shock
US default on its international gold
obligations.
Then we move to the petro dollar which
of course is very closely intertwined to
actions in the Middle East and all the
wars in the Middle East. Oil was only
allowed to be sold against the US
dollar. Anyone who did otherwise whether
it's in uh Iraq Saddam Hussein or in
Libya Gaddafi that was a big no no and
led to severe consequences warfare and
you get killed for that.
>> You get killed for it. Exactly. Um so
what's next? Because also when the last
uh you know when the Nixon shock
happened and we moved from the gold
dollar to the petro dollar there was
also inflation. You inflation is a good
camouflage that you know it sort of
makes it easier to rearrange the
monetary system. It was entirely
monetary inflation by the way not uh
energydriven. It was the central banks
creating a lot of money but we had the
same in 2020 with the co scop money
creation by central banks. No economic
rationale for this. whatsoever. It was
clear 18 months later we get inflation
as a result that's what happened. So it
looks like we're and and you know now we
could be um it looks like we're heading
into the second run of inflation. still
early stage is not entirely clear but
that would be my guess without having
yet the necessary data
but I think there will be a second uh
bout of inflation and but we already had
the first bout and and it indicates that
we are in this phase of running up
towards the next rearrangement of the
monetary system what is it going to be
well that seems to be increasingly clear
it's going to be digital
based on digital identity and I think we
therefore should oppose digital ID on
all fronts. We're humans. We're not
digits, you know. We have digits, 10
digits, okay? But, you know, we should
not subject ourselves to um to this
regime where if you don't provide the
right digital ID credentials, you're not
accepted as a human and you don't have
the human rights in reality. I mean,
that's and you know, dehumanizing. We
should reject it just on that principle,
but there's many other reasons why we
should reject it. It is the beginning of
this control regime of a digital
currency. Now digital currency as such
is not a a bad thing because for half a
century we've been using bank digital
currency BDC we could call it
>> because the banking system been digital
and and most money is created by banks.
It's digital money. We have been using
decentralized bank digital money and
actually has worked quite well and the
banks have never sold our personal
transactions data to anyone. So actually
we should lord the banks because the new
regime is all about
you know our information about our
transactions being sold freely.
>> The government is now Facebook and and
and yes being used to manipulate us
whether it's in elections or you know to
sell products and and services that we
don't really need. So
>> it's going to be a digital currency.
>> It is marketed as CBDC
central bank digital currency. I call it
central bank digital control.
because that's what it is. It's not
really a currency. It's it's more
control as um um as Katherine Austin
Fitz always points out quite correctly.
Um and so because we've been using BDC,
bank digital currency, what is the
difference? It's the central. They tell
us justification Christine Lagard that
oh we need this because there's Bitcoin.
We need digital central bank currency
now as well. Well, the digital is not
the new aspect. we have digital money.
It's the central aspect that this is
about because and particularly if
there's there's now another bout of
inflation and in some countries with a
boom bust cycles being arranged such
that in Germany we are heading we're in
a property bust. Now there was the
bubble arranged by the ECB from 2009 to
2022.
Now property prices are steadily
declining putting banks slowly under
more and more pressure. They were forced
to do this by the ECB. It's the same
game. It's the Bank of Japan's game, you
know, in Japan. And so banking crisis of
course is ideal and inflation to launch
your CBDC.
That's for Europe. In other countries,
there may be slightly other ration
uh justifications for introducing it.
But a crisis one way or another is
always good. A war of course is even
better because then it's just wartime uh
direct dictats. You can't do anything.
It's war time. You have to accept
whatever you're told.
um and as a wartime measure. Of course,
that's the ultimate, you know, if
everything else fails, then definitely
wartime measures will be used to
introduce uh these these measures. So,
we're heading towards digital control
systems where we have no more control
over over our liquid assets.
It will be um of course programmable,
permission based. So only what the
central planners allow you to use your
your money for at what time and place
and location will be permitted. And if
you're in the wrong place, it's not
going to work. And if you're buying the
wrong book title, it's not going to
work. And so on. I mean, there's no
limit to how much you can fine-tune and
control. Oh, they don't have so much
power. They can't control, you know,
millions of people. Well, this is what
the drive to build all these hundreds,
in fact, thousands of data centers is
about. It is an organizational challenge
to micromanage the world's population
through the new um financial world
order. Yes, but they're working on
solving that AI is really about that. If
AI was about helping us to be more
productive, the principle of
decentralization would be applied
because any human organization and any
use and any anything where humans are
involved if you introduce the principle
of decentralization subsidiarity it will
be more productive no doubt more
efficient more productive that's been
demonstrated in many contexts. I
mentioned the the warfare military but
and businesses and so on. It's true for
everything but that's not what they're
doing. They're creating highly
centralized structures which proves that
it's not about actual productivity. It's
about control controlling us. That's why
they need these huge resources. Then you
can control inflation easily because
people can't buy when the central banks
don't allow you to buy. So then prices
are can't be driven up.
>> Um and also you control movement of
people. You can't buy a ticket. you
can't go here and there because your
money won't work outside a certain zone
whether it's 15minute prison zone or
whatever it may be.
It is the totalitarian dictator's dream
come true. And that is the scary thing.
Most people are still not aware that we
are so close to the scariest most
dystopian system where we're giving so
much control and power into the hands of
ever fewer people over our lives. and
billions of people.
Again, if everyone is good, like the
majority of people, and the controllers,
the elites, the central planners are
good, it's not an issue. But that's not
what human history um teaches us. And
human nature we know is different. Most
people actually once they're given a lot
of power that comes with temptations of
power and most can't handle those
temptations and they give in and then
that's when power gets abused. That's
why Lord Actton um a British uh
political
observer and advisor to prime ministers
concluded
power corrupts.
Most people get corrupted by power. They
can't handle power and absolute power
corrupts absolutely. We are talking
about absolute power in the hands of
central planners if we allow the central
bank digital currency to be imposed. And
um and the central planners um will have
this absolute power including you know
of course they have already monetary
power but they will have the tools
um to deploy this in every detail to
micromanage us. That is a new dimension
of power and effectively includes fiscal
policy because ultimately everything
becomes controlled by the central bank.
So now you could still say well we have
some politicians they meet for
parliamentary votes and they decide
budgets. Well all that will become
obsolete because everything will be
controlled by the central bank. This is
what the politicians don't realize that
the central bank digital currency is the
first step by the central planners the
monetary central planners to take over
everything.
So the dangers are just so manifold that
it's it's quite clear that we have to
stop this. So um I mean this is really
the big scenario and that's where we see
forces pushing as internationally power
gets ever more centralized despite this
being the biggest lesson of the 20th
century that it's not a good idea to
constantly have more power in the hands
of few and fewer people. that's actually
being accelerated in the 21st century
on on the basis of lies about the 20th
century.
>> Indeed. Indeed. Yeah. Richard, thank you
and I hope this won't be your last trip
here. It' be a pleasure. It's a pleasure
to be here and I hope I can come again.
I mean, there's literally anytime I'm
I'll be thinking about this for the next
month. Fantastic. Thanks very much.