July 26, 2023 • 82 mins
Kristen Ragusin has more than 30 years of experience managing over $150M in client assets at Merrill Lynch and Raymond James . On this episode Kristen talks about her new book " The End Of Scarcity" . We touch upon how humanity might be able to fix the perceived scarcity in its near future and challenges that we might face before we get there.
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Speaker 1 (00:01):
Hello friend, welcome to the season three of Biddle
Podcast.
I'm your host, tarun.
Today I have a very interestingguest with me.
Her name is Kristin Raghusanand she has written a book
called End of Scarcity.
(00:23):
We're going to talk and touchupon some of the key themes in
her book this theme around howhumanity might be able to fix
some of the perceived or actualscarcity in its near future and
(00:47):
what kind of resistance orchallenges we might face in
order to get there.
Let's get her perspective onthe entire space in general.
After these messages, one of thebest way to support the show is
to become our monthly Patreonmember.
(01:09):
Now, there are many ways youcan support Biddle Crypto
Podcast Beyond becoming aPatreon member.
The best way to help us grow isalso to share among friends.
Write a review on Apple,spotify or Google Podcast.
Your support will enable us tocontinue putting in the hours.
(01:32):
Keep the show honest andauthentic.
Enjoy listening to my interviewwith Kristin Raghusan.
Today at Biddle Crypto, we havea special guest.
(02:05):
I'm really excited to hear herthoughts.
Our name is Kristin Raghusan.
Kristin, welcome to the show.
Speaker 3 (02:14):
Oh, thank you so much .
It's so nice to be here withyou.
Speaker 1 (02:18):
So, Kristin, I want to start the show with something
about yourself and your journeythat got you here.
Speaker 3 (02:33):
Oh gosh, yeah, it's been a huge part of my life.
I've been a professional moneymanager, wealth manager, for
almost 32 years, 31 years forsure.
I've been interested in money,even at 5 years old.
(02:53):
I can remember.
But this journey in havingprofound insight about how money
is going to change starteddistinctly in 2008.
I would say probably about sixmonths before the big financial
crisis was about to begin.
Speaker 1 (03:12):
So you have a book out called the End of Scarcity.
I mean, that is what got meexcited about this interview.
We met in one of theconferences recently, one of the
big conferences.
I was amazed by the title ofthe book and I was so curious
that I wanted this interview tohappen.
(03:34):
So here we are, against allodds.
Speaker 3 (03:39):
Oh, it's so wonderful , it's so true, even the idea
the end of scarcity.
Sometimes people will say to mewhat does that mean?
What scarcity are you talkingabout?
And I think it's the generalidea that people are living for
the money, instead of moneyactually helping people live and
(04:00):
be alive.
What money was really createdfor?
And I never questioned this inmy earlier years, I think even
as a child I was so fascinatedby money, believe it or not.
My father used to have us earnour allowance.
I would earn a dollar a week,and I had to learn exactly how
(04:24):
the markets worked, how optionsworked, and he taught me about
stocks, and so I thought thatmoney was just this wonderful
thing.
The markets were great, that itwas really part of either the
American dream or something thatwould help people realize the
vision that they wanted.
And so, as I got older and Ifinished college, it should have
(04:47):
been no surprise to me that Istarted working at Merrill Lynch
like three months later one ofthe big investment houses.
But I was surprised.
I thought I would do somethingthat was about empowerment or
freedom, and yet I really feltmaking money, being able to live
(05:07):
your life this way, was thebasis of freedom.
And so I enjoyed my practice, Ienjoyed building it, I enjoyed
working with markets for many,many years and never really
questioned thinking that surelythere was enough money in the
system or the way that moneycame into our society, that it
(05:30):
was there and anybody who couldignite their passion and
contribute in a positive waycould clearly go about and
fulfill the next expression ofthemselves.
That was calling.
And in 2008, I had really thiswatershed moment.
I got lucky around 2007, thesummer before the big crisis,
(05:55):
and I started to see somesignificant dislocations in the
market that were odd enough thatI called the desk in New York
and I said why are these certainprices moving?
Things were just not performingproperly.
And they said, oh gosh, don'tworry about it, we don't have
any credit problems, they'rejust some liquidity problems.
(06:16):
And I thought to myself well,that's ridiculous,
creditworthiness and liquidityare so tightly tied together.
So I was heading to the MiddleEast for three weeks.
I was working on a master'sdegree and I just the closer I
got to the date I think I wasleaving September of 2007.
And I could just see that thiswhole system was about to crater
(06:40):
.
And I got very lucky.
I called up all of the peoplethat we were working for and
took everyone out of the markets, put them into cash unless for
some reason they were reallydependent on being invested and
off.
I went to the Middle East andevery day while I was away the
market went higher.
So, certainly having a lot ofexperience with the markets,
(07:05):
it's something you get used to.
It never really gets better.
But after 21 days of the marketgoing straight up, I just
closed the computer, felt like Ihad done the right thing and
just thought okay, that's aregroup if I need to.
And by the time I got back, westarted to see Bear Stearns and
(07:26):
then Lehman Brothers and thewhole entire system began to
implode and it was reallyheartbreaking.
It was heartbreaking to see alot of the older men that I
worked with, who had been doingthis for 40 years, and just see
everything decimated.
But what really took me wasthat the promises that we had
(07:51):
built our financial system on,or promises that were the basis
of what I was telling clients,really were not kept and some
investments were upheld, someweren't.
There wasn't really a rhyme ora reason to it and it actually
became an existential crisis forme on the level that I was so
(08:13):
disheartened that I knewsomething was wrong in my
worldview.
And my worldview had beenbuilding for a long time, since
I was really five, believing inall of this and loving it, and I
thought, my gosh, I'm missingsomething.
So I said, on the track, as wegot into 2008, I was in a luxury
(08:38):
position of having a lot ofcash on the books or being able
to buy commodities for peopleand help them grow their
accounts as the quantitativeeasing or the money printing
began and I started looking tosee what was it that I was
missing in my worldview thatwould cause a financial collapse
(08:59):
of this level.
And it took me about nine monthsto actually find the answer.
And it went far beyond what webelieved, which was
irresponsible lending or justthe inability of the quality of
the borrower to pay back thedebt and these kinds of things.
(09:20):
I actually found something socurious that it led to the
writing of this book the End ofScarcity, because in fact it was
the root problem as to whyscarcity shows up, or not enough
money and that whole survivalinstinct in every single country
throughout all the ages of time.
(09:42):
And it was this profound that Ithought to myself my goodness,
there has to be a solution forthis.
And sure enough, when I cameupon the solution, I was so
excited that it led to this sortof obsessive writing of the
book and researching.
And lo and behold, we're in awonderful position to change the
(10:05):
world, especially with all thedifferent opportunities that
blockchain truly with digitalassets provide for us today.
Speaker 1 (10:16):
Amazing, amazing.
I'm just absorbing all of that.
So, christian, then what, inyour viewpoint, is going to
bring that abundance, thatending of scarcity?
Either the perception ofscarcity or the actual kind of
(10:40):
fight for resources that mankindhas been a part of since time
immemorial?
Speaker 3 (10:48):
Yes, which are really tightly linked, you know,
because one of the reasons whyit really is so easy to end
scarcity profoundly for humanityis that largely it is an
illusion, and it's an illusionthat we buy into in and out of
the day.
You know, I can see it inmyself, whether it's through
time or all different kinds ofresources, and we sort of
(11:12):
oscillate between feeling secure, feeling insecure, and so this
has certainly been the basis ofhumanity for a very long time,
let's say five, six thousandyears of recorded history.
But the profound point andchange is that we actually can
isolate the root of wherescarcity is produced in society.
(11:36):
And of course we largely wouldbelieve maybe there's a flaw in
human nature, it comes fromgreed, or there's inappropriate
political systems or corruption,you know, or even just bad
economic policy.
And I think these are sort ofthe basic ideas that we all toss
(11:58):
around.
We sort of collectively acceptthat the root of the problem is
in there.
Or if we just get fullyexasperated in terms of how to
find a solution, we say, ah, youknow, humanity ends up being
greedy, or they're just, they'rejust some bad apples where you
know you really can't get beyondthis and none of that is really
true.
(12:18):
All of those are just sort ofsymptoms of a system that is
structured inappropriately, andit's not the political, economic
or even social system that'snot structured correctly.
They again are sort of outshoots or trying to solve the
problems from the realstructural problem, which is how
(12:41):
we create the money unit.
And so money itself, when welook throughout the history of
humanity, has been architectedand designed over and over and
over in a multitude of ways, andwhen there were golden ages on
the planet or thriving throughRenaissance, expanding times of
(13:02):
creativity, the money unit wastypically created properly, or
the predominant way that moneywas coming into the system was
done correctly.
And the big shift is that moneyitself needs to represent our
contributions versus being anobject or a thing that we need
(13:26):
to get in order to give ourcontributions.
And so I do want to back up andsort of just rip the mechanics
apart, really simply about howmoney comes into existence today
, and I think again, mainly webelieve that we have an
understanding, but there arenuances that it is different
(13:46):
than what we really think, andthis is the root of the problem.
So when money is createdincorrectly, it becomes truly
the cancer, it becomes theproblem that creates scarcity.
So today, our money itself iswhat produces scarcity, and it's
quite incredible, because weall think more money would be
(14:08):
better and more money will solvethe problem, and it's.
I'm not saying that we allshouldn't have more money or
that people shouldn't be morewealthy, no, no, it's that the
money unit itself must bedesigned correctly to begin with
.
So that then begs the questionwhat are we using this money
today and how is it createdincorrectly?
Speaker 1 (14:33):
This is mind blowing stuff for me actually, because
recently well, I wouldn't sayrecently, maybe a year ago I was
exposed to some of the writingsof David Graver, the guy who's
known for Occupy Wall Street.
When I looked at his some ofhis books, like Dawn of
(14:56):
Everything, a lot of thingsresonated with me which earlier
I had this misunderstandingabout the guy.
So when I listen to you, thesethings are music to my ears
because it's your approach isvery novel.
Also, like the way you'redescribing like I think you had
a phrase here which I want torecall and repeat is that money
(15:20):
is causing, the way it'sdesigned is causing the problem
is also very interesting rabbithole to go into and I would like
you to expand a little bit moreon that.
Speaker 3 (15:38):
Oh, thank you.
Yes, exactly, and this that isthe root, because when we create
money, especially in a waywhere it produces the scarcity,
we then misaligned the entirefoundation of society, because,
first of all, we decided thatliving together was better.
(15:58):
Now, whether we tend toirritate one another or annoy
each other, still, at the end ofthe day we are, we are in
agreement that living togetheris, is much more rich, is better
and really is the basis ofsurvival.
So it's survival, it's therival, it's the mystery of life.
(16:21):
We cannot separate relationshipfrom the basis of life, and
whether the most mundane to themost intimate, and that whole
idea of living together,understanding ourselves through
any kind of relationship, is, infact, the basis of money.
We designed money together as acommunity, through a social
(16:47):
contract, as a technology.
Money was simply created as atechnology which, low and behold
, now, with the crypto boom orthe onset of Bitcoin, and now
the blockchain revolution anddigital assets were coming back
to us to get the glimpse that,yes, wait a minute, money is a
technology.
(17:07):
And you know, often people willsay, oh, no, money is energy,
or money is power, or money isfreedom.
No, no, no, money is a meretechnology.
We created it in order toassist us in exchanging our
contributions with one another,and so freedom and power and
(17:30):
energy are our contributions.
The divine essence that's wrotethat flows through each and
every human, and every new humanthat's born is adding to the
whole total sum of humanity.
Every town, every family, everycommunity is more valuable than
when a new baby is born,because a new essence and a new
(17:54):
creativity has has shown up onthe scene.
So the basis of wealth is allof these beautiful ideas and the
expression to even our Mondaylabor and the things that we do
for one another.
This is actually the basis ofabundance.
It's the fabric of community.
(18:14):
In relationship we're alwaysexchanging, whether it's
attention and any kinds ofthings, and money was meant to
represent that.
So the problem that we areliving with today, and why we're
so confused and lost, is thatwe have managed to create money
(18:35):
in such a way that it comes intosociety separate from
contribution.
It comes into society separatefrom value that we're producing,
and then it can actually becreated as a scarce commodity.
And when money itself iscreated as a scarce commodity,
quickly, you get sort of youcondition the worst of humanity.
(18:57):
You often destroy competitionbecause instead of competition
being a healthy thing thatignites new creativity, it can
become more of a survival war,like a reality, and then it
often can mute the best ofcreativity and and work to
(19:19):
create conglomerance and kind ofstronghold power in
concentrated forces.
And so today money is createdsolely as a debt, and this is
different than the FederalReserve making the money.
Often we just sort of think thatthe Federal Reserve prints the
money and this is really not thecase.
(19:41):
So that nuance has to be brokenapart, because there's this
profound shift in inconsciousness, we could say, but
really just in perception, aswe start to understand that all
of what we contribute in theworld whether it's you creating
this beautiful podcast and theinteresting and fabulous minds
(20:04):
and and people, what they'recreating are putting together,
or the end of scarcity, mewriting this book no one could
really stop me from doing it.
Even if I had to stay up untilfive in the morning and write
and go to work the next day, thepassion was there.
And so these beautiful thingsplus the mundane things we do,
are just really the abundance oflife flowing through us and
(20:28):
instead the way money is createdtoday in society.
Excuse that perception.
It actually means the rightamount of money is not
circulating and in fact it'sprobably also not circulating
where the bulk of the people whoare contributing real labor or
work is flowing, and it's very,very skewed.
(20:50):
The good news is it's very easyto fix it's.
It's exceedingly easy to tochange the system once we get
the very sober, simplerecognition.
But I think the best place tostart is actually to look at how
money comes into our societytoday and where the era is.
Speaker 1 (21:12):
Thank you so much for that.
So you know, I want to quotethis statement from David Graver
.
Coming back to David Graver, hehad quoted once.
He said we have become acivilization based on work, and
not even productive work, butwork as an end and a meaning in
(21:34):
itself.
So I want to get your reactionon that.
And secondly, something thatyou just mentioned if you can
expand on that as well,regarding the Federal Reserve,
when people view it as printingmoney, isn't that the case?
(22:00):
Like with the fractionalreserve system?
Don't they have this one leverto pull up and down every time
you see inflation, or the tocause an opposite effect of
inflation?
Speaker 3 (22:16):
Yeah, unfortunately, no, I would say that's sort of
mythic.
Years ago, the Fed did actuallycreate a certain amount of
reserves that either helpedexpand or shrink the money
supplier.
It really does not work thatway today.
So there are three fundamentalways in which banking or money
(22:39):
would be created through thebanking system, and one would be
, you know, in intermediate.
The bank would be anintermediary Reserves.
Money could be created so thegovernment could create the
money.
There would be a set stock ofmoney in the economy and when
people went to go borrow thatmoney, it would either be 100%
(23:02):
backed meaning that there was nofractional lending or creation
of money and someone would justbe borrowing someone else's
savings.
Most of the neoclassicaleconomists believe that that's
the reason why they actually didnot see the financial crisis
coming and there was so muchmisleading on that, because they
(23:27):
didn't see that, as money wascreated as a debt, that it was
actually expanding demand.
So most of us believe that, ofcourse, it's fractional reserve
lending, meaning that if adollar is deposited in a bank,
that then the bank can go outand create nine new dollars and
lend a total of you know, 90%,keeping that 10% in reserve.
(23:51):
It really has not worked thatway for a long time and then,
sort of, when we entered theCOVID era in March of 2020,
officially in the United States,we went to 0% reserves in our
banking system.
So, whether it's in Europe, youknow where the rules were much,
(24:11):
much lower in terms of whatpercentage of reserves needed to
be in the system or here in theUnited States, we don't use
that system anymore.
We're using just the creditcreation system, which means
that a bank can lend any, cancreate literally create any
(24:32):
amount of money with no reserves, and what keeps the bank
solvent is the capital to assetsratio.
So a bank still needs to makesure that its assets are solvent
.
What are its assets?
Well, it could be mortgagederivatives, it could be stocks,
it could be different loans,and typically the Bank of
(24:53):
International Settlements inSwitzerland decides that ratio
for the Federal Reserve system,which really includes about 57
different countries or most ofthe western world.
Most of the allies of theUnited States are in the Federal
Reserve or Bank ofInternational Settlements system
(25:13):
, and so when the cap or thecapital to assets ratio number
is set, that's a prettyimportant.
I would say it's even morepowerful than most of the
legislators, and these peopleare obviously not elected.
They're in Switzerland and youknow.
So most of our banks today haveto have $8 in capital per
(25:36):
$1,000 of loans.
So as long as banks arerelatively solvent, they'll
continue lending and lending andlending and lending, which
today is absolutely creating ourmoney supply.
And so it's a very importantstatement to get this that money
is debt.
It's not created as debt, butit is debt.
(26:00):
So if you think of a quarter,there's a head side and a tail
side.
They cannot be separated.
The same thing is true when youlook at any money that you see
whether it's money in aninvestment account, a banking
account, a check, you know, atuition payment to school, a
gift to someone it is a debtthat someone owes to a bank.
(26:25):
And so when we look at thedollars in our accounts, we're
looking at the head side of thequarter, but there also is the
tail side, meaning that thatdollar has an expiry date.
Largely that we can't see,because it must be repaid as a
debt.
And so when someone goes to abank today and they say, okay, I
(26:46):
want a mortgage, I want maybe aloan for college, the bank is
going to create that loan moreor less, and it's created
through double book entry, minus100,000 plus 100,000.
And so the 100,000 is journalentry into someone's account.
Great, it looks like money.
(27:07):
It's really someone's debt.
And they also then are given aschedule, a monthly schedule, to
pay that debt back in someperiod of time at some interest
rate.
And the interest rate doesn'treally create inflation the way
we think we do.
There's an amazing economist,richard Werner, who wrote the
(27:28):
Princes of the Yen and vastlyunderstood this ahead of most
economists, and he even showsthat there's a positive
correlation with interest rates,so that when you raise interest
rates, it actually raises GDP,it actually creates the
inflation that the Fed islooking to end, and when you
(27:49):
lower interest rates, it doesthe opposite.
The problem is just as a quickaside when you go to raise
interest rates to stop inflation, you're more or less saying
you're going to burn the housedown to put out the fire.
So the level of interest rateactually creates the velocity
that someone has to run in orderto pay back the loan.
(28:12):
The higher the interest rate,the faster people have, the more
they have to earn in a shorterperiod of time to pay back that
loan.
So when someone goes and borrows$100,000, they get $100,000,
quote unquote in their accountbut they also get the double
book entry of the minus $100,000.
That as soon as we sign on thepromissory note, that money is
(28:35):
now tapped into existence in theaccount and the clock begins
that that payment, the firstpayment, must be met and repaid.
And so for the vast amount ofpeople in the economic society
borrowing money now, the chaseis on.
They have to get out there,they have to quickly earn the
(28:56):
money to meet the debt paymentor obviously they can lose their
home, any collateral that wasplaced against that loan.
And the more and more loansthat are taken out, we get this
false impression that theeconomy is doing better because
there's more and more moneycirculating.
But there's actually greaterand greater and greater leverage
(29:18):
and more pressure that peoplehave to run to capture the money
.
Now we know that when a debt ispaid that obviously that
portion of the debt is retired.
So if I take out the $100,000and now the 15th of the next
month comes and 1000 of thatprinciple, let's say, is due and
(29:40):
I send in a check for 1500,maybe 500 goes to interest and
1000 goes to the payment, weknow that now I only owe 99,000
because that 1000 paid down thedebt.
But what we're not fullyconscious of is that because,
like the quarter with the headand the tail side, that when
(30:01):
that $1000 is paid against theloan, that $1000 is also
destroyed and no longercirculating in the real economy.
So money itself is not createdas debt, it is debt, and so 97%
(30:23):
of our money supply is createdthrough the commercial banks or
the banking system when peoplego and get loans.
Now the Fed may create reservesand print reserves, but they
have very little impact on thequantity of money that the banks
can create, because if a bankis solvent, if a bank has met
(30:45):
its capital to assets ratio, itcan continue to create as many
loans as it has borrowers, andso borrowers are actually where
our money comes from.
And when the Fed createsreserves, those reserves don't
go into the real system.
They aren't.
They are not dollars, eventhough on the dollars that we're
(31:07):
using it says Federal Reservenotes, but instead those
reserves that the Fed createsreally are just tickets of
solvency for the banks, andreserves are also sort of linked
to check clearing.
But you know, banks borrow fromone another.
The Fed has the window, there'sa lot of liquidity, there's
(31:30):
delay, often 30 days delay interms of how that stuff is
squared.
The main, the real way, thesystem that we're working on
today, is that, like a creditcard, banks are just creating as
much money as borrowers canhandle, and so the reason why
this becomes quite precarious isthat money fundamentally no
(31:55):
longer represents ourcontributions and, as the social
instrument that we created,where our contributions were the
primary thing, that theabundant thing in our society,
as we looked at sort of themagic and the mystery of nature,
the symbiosis of nature and theever expanding talents and sort
(32:19):
of surprises that we get in thewhole sort of journey of our
lives between hard times andgood times, money was supposed
to be an instrument, a tally, atoken of exchange where we said,
ok, here's how I contributedand here's what I withdrew, to
create a foundation of life thatwould be supportive for a
(32:43):
society that was hopefullyevolving.
And now, instead, when moneycomes into existence, primarily
as mortgage debt today, thereare many, many things that
happen.
Number one you get adestruction of investment
capitalism.
We end up really not living ona capitalist system, an
investment capitalist system,but we blame the system, saying
(33:05):
it's a terrible capitalistsystem, when in fact, we're
largely living on a financecapitalism or a corporate system
, and banks, originally, weresupposed to be these beautiful
contributed citizens in societywho would help evaluate a
business that was intending tocreate something for a community
(33:28):
and assess its value and thedemand for those services and
say here yes, you're creditworthy.
We're going to verify this andmake your contribution liquid,
give you a ready as a credit.
We're going to create thiscapital for the good that you're
(33:49):
going to come for.
So the difference between moneybeing created as a credit for
contributions versus a debt andtoday 80% of our money in banks
is created as mortgages somecollege tuition money and maybe
some car loans, but most of itis mortgages.
So we are creating our moneysupply out of a consumer debt
(34:15):
and what happens at that pointand we all can see it in our
lives is the price of housinggoes up exponentially because
the loans are available andbecause the payments are paid
back monthly.
People often say, well,interest rates will go down, the
payments will go down at somepoint, or it's only this
percentage of my income, or if Idon't buy it now, I'm going to
(34:40):
have FOMO, I'm going to miss outand I won't be able to get in
later, and so housing pricestypically continue to rise
despite interest rates going up.
We saw this when Greenspanraised interest rates from 2007.
Oh gosh, actually this was adifferent time, but 17 times
(35:02):
Greenspan raised interest ratesand it did not really stop.
It didn't slow anything down atall because instead it was the
other mechanics.
When money is created asmortgages, the two things that
happen are number one, the priceof housing accelerates Because
you're creating the liquidityfor that consumer debt, that
(35:24):
mortgage.
So if somebody can bid 50,000,they can bid 100,000.
And so we have seen the priceof a home from the 70s, which
used to be three times oneperson's salary, to today, in
the cities or more pricey areas,easily 10 times the salary of a
(35:45):
couple.
And we also have seen collegeeducation which, again in the
70s, was almost free, or freeeven.
I think UCLA tuition used to be$200 or $500 a semester to
being something that now hasreally made a lot of these kids
indentured servants as they comeout.
(36:05):
And so this is how creatingmoney as consumer debt destroys
capitalism, because that moneythat was supposed to be tied to
value is not going to invest inentrepreneurship, in businesses,
to increase the wage earningcapacity and on top of it, it's
making the two tenants of theAmerican dream owning a home,
(36:28):
going to college largelyunaffordable for most people.
Speaker 1 (36:33):
Those are some amazing points.
I just want to keep listeningand not interject you with
questions.
Wow, so okay.
So one thing you had mentionedand I want to come back to is
that the Fed seems to be not thebigger problem.
(36:57):
The bigger problem is thelending that's going on, and I
totally agree with that.
The going a little bit back inhistory, american history, I was
intrigued by the greenbacks.
For those who don't know, wasthese money that was created
(37:18):
during the Civil War from youknow, during the Civil War,
lincoln and his folks decidedwell, if the European banks we
cannot lend, cannot borrow fromthem, we will create our own
money called the greenbacks,which didn't follow the
fractional reserve system thatis today.
(37:40):
One of the reasons they alsowent with their own government
issued currency was because backin the day, those banks in
Europe had one class that youknow whosoever takes the loan
pays the debt of the losing part, the losing side as well.
So that I thought that wasquite interesting and I would
(38:02):
love to know your thoughts onthat.
Like, and possibly going tosome aspects of your book as
well as to how we can reach thatabundance state, the removal of
scale.
I actually like your titlebetter the end of scarcity.
It's not indicating abundance,which you know.
(38:24):
Some of the folks, like PeterDiamantes and others, they talk
about abundance, which you know.
That's a separate topic we cango in deep rabbit hole of.
But what are your thoughts on,say, if there was something that
was backed by the governmentbut not having this fractional
(38:47):
reserve kind of system, wouldthat scale or how things would
have been?
Speaker 3 (38:55):
Yeah, I'll tell you.
When the country was firstcreated, all of the founding
fathers, or the colonists, theywere all highly in debt.
So they left England becausethey were looking for a new
start and gold, being theprimary currency of that time,
was too scarce.
(39:16):
There was not enough in circuitor it was made scarce.
This is the problem, of coursewhen a single commodity is used
as money, it can be made scarce.
We really don't know how scarcediamonds are or gold is or any
of these kinds of things, butnonetheless they were unable to
(39:40):
have enough money flowing inorder to sort of retire that
debt.
But they were able to createenough labor, they were able to
create enough services for oneanother and so, sure enough,
when they started here and whenthey started in New England, we
have a misunderstanding ofcolonial script and we often are
(40:02):
just told it was paper money.
It became inflationary, theycreated too much and that again
the money supply did notrepresent the amount of
productivity that the people had.
And this is really not true.
So many of these colonies werevery careful to make sure that
the quantity of colonial scriptin circulation equaled the
(40:25):
productive capacity of thepeople, and that's the bottom
line secret of all of it, if thegovernment were just to do what
the MMT or say the modernmonetary theory people and to
say, listen, the government'sgoing to go back to creating
money.
Many people have said that whenKeynes actually came out and
(40:45):
talked about the governmentbeing a debtor, that it was
never supposed to be a debt,that the government was just
supposed to create money, thatwhatever, like the monopoly
banker to make sure that therewas $200 when you pass go and
this is actually all originallycorrect thinking, because you're
coming back to that.
Money is a technology that, likethe equal sign in the equation,
(41:08):
facilitates exchanges.
And so if you and I were givena math test with 100 questions
on it and the goal of the testwas to solve as many equations
that could solve, now if 70 ofthem solved, we would simply
create 70 equal signs.
We wouldn't have 52 and wewouldn't have 84.
(41:30):
We also would not have to goand dig up equal signs out of
the backyard before we gotstarted.
So money as a technology isjust supposed to be like an inch
or a pound or a degree or anequal sign.
It's a technology and thefounding fathers understood this
well.
(41:51):
Abraham Lincoln's treasurerunderstood this well when they
created the greenbacks and inEngland they also understood
this very well for 600 yearswhen they used tally sticks as
money and they were able tobreak the stick.
This is actually how we got thestock market Break it into a
(42:12):
stub and a stock, and becausethe stick breaking created a
fingerprint so it couldn't becounterfeited.
And if the people were moreproductive, they broke more
sticks and more money circulatedin society in order to allow
the creativity and the realenterprise to expand.
(42:35):
This brought about so muchenlightened thinking that in
1250, we got the Magna Carta.
The Magna Carta was theprecursor of the Constitution,
which was the product of 500years of intense enlightened
discussion and thinking.
So these people were reallyquite profound in their systems
(42:56):
thinking and how to structurethings, but they understood that
money was simply supposed to bea token of exchange
representing the accurateproductivity.
There would be more money incirculation or less money in
circulation, ebbing and flowing,depending on how productive the
(43:17):
people were.
Now, when Lincoln ran into a bigproblem well, I mean, I'll just
quickly go back to thecolonists.
What really created theRevolutionary War is that
England outlawed the ability tocreate colonial script backed by
their productivity.
That script was actually backedby productive land banks and it
(43:42):
represented farmland.
And you can actually read thisin the old banking documents and
from Britain where they saidthat the money system of the
colonists is a system ofmischiefs.
It's going to put out themonarchs and basically create a
brain drain from Europe to NewAmerica.
(44:04):
So it was systematically ruledout and you also can find it in
some old writings that it infact it was not really religion,
but it was money.
That was the start of theRevolutionary War.
So in young America we hadproperly created money, probably
(44:25):
until about 1812.
And in 1812, sadly, the oldBritish banking system was
reinstalled and the White Housewas burnt down.
There was the War of 1812.
It absolutely was a banker'swar and for most of the 1800s
the war was on.
I would argue that probably allof our wars that we see are
(44:48):
monetary war wars, because theinstability in society is just
when the people are creating themoney supply.
Where it represents thepeople's real productivity.
You have a solid foundation,people are supported, creativity
is supported, corruptionabsolutely dies down and when
(45:12):
you go to a system where moneyis created as a scarce commodity
, you get control.
You get all different kinds ofstratification of society and
you just have a lot ofsurvivor-induced behavior.
So, lincoln, when the Civil Warwas starting and the country was
(45:34):
broke for a host of reasons,largely coming from these
foreign banking systems sort ofthe beginning of the Federal
Reserve system, which is much ofthe early history of the United
States and how those banksagain were really not used to
create finance for productivitybut creating finance for sort of
(45:57):
a control system.
And so when Lincoln neededmoney to arm and prepare for the
Civil War, france and Englandoffered them loans at 24 and 26
percent.
So they knew that it wasfailure already.
And that's when the treasurechase came out with the idea of
(46:20):
saying let's create green backs.
And Lincoln wasn't so keen onit at the beginning, but he
really was left with no choice.
So they started to issue greenbacks and green backs were
simply a dollar backed by thefull faith of the United States
government, and they workedbeautifully for a long, long
time and then, unfortunately,they were still outlawed and we
(46:45):
were really in 1900, the goldstandard law came in and silver
money was largely demonetizedand we went to single commodity
money, which there was a muchgreater depression in 1873,
because the people knew that ifwe didn't have silver money,
there wouldn't be enough tokenscirculating to allow for those
(47:10):
contributions and exchanges tohappen and instead you'd end up
with this sort of scarce,hierarchical, desert like
environment, prone to booms andbusts because the gold coins
would be too scarce and often inthe hands of the wealthy and
not really in the hands ofpeople who were producing or
(47:30):
coming up with also new ideas.
So the story repeats itself overand over and I looked at about
five or 6,000 years of historyand David Graper did some
amazing research, you know justreally, as to the origins of
money as well.
I had the good fortune ofspeaking with him at a
(47:52):
conference in New York Cityyears ago.
Sadly, I think, he passed awaya couple of years ago.
But such a brilliant, such aninsightful man and you know it's
the backstory of all history isthis monetary history?
It's the truth, and it justbecomes very, very simple
because when we begin again toissue money, backed by something
(48:17):
, yes, but really backed by thepromise to deliver goods and
services, boom, we change theworld and we're the first
generation, we're the firstcivilization in the last, you
know, 6,000 years of recordedhistory have who now can do this
on scale and scope, because ofblockchain, that no other people
(48:40):
before us have been able to dowith success and to do it
without counterfeiting but manyour grandparents it, probably.
It really doesn't matter whatcorner we looked in the world,
we're going to find the sameprinciples going on with money.
And in the 1800s, when therewere depressions and all these
(49:03):
instabilities, states issuedscript money backed by
production.
In Massachusetts, the fisheriesand Gloucester, massachusetts
issued script money backed by acertain amount of fish to
deliver.
Leather factories, bootmanufacturers in Lawrence,
massachusetts, issued script bya certain amount of boots to
deliver.
(49:24):
You know, in all the ranchingstates we had it backed by food.
And so we're on the precipice ofhaving this great understanding
, this simple understanding thatmoney is simply supposed to
represent our contributions andthat's how it should come into
existence.
(49:44):
And we still can have somemoney coming into existence for
consumer debt, but probably,when it's done correctly, we
won't need that either.
There'll be other ways to do it.
And so I do believe, around theprecipice of the great money
revolution, that, even thoughthere'll be some instability as
(50:05):
all of these different thingscome to bear, what is standing
on the other side of that tunnelis the opportunity for a
beautiful world that we evenhave a heart, such a level
playing field and an opportunityfor people to really decide how
they want to contribute and howthey want to live that I think
(50:29):
what could be possible for thechildren of the future is
extraordinary.
Speaker 1 (50:34):
Yes indeed.
So, christian, I want to switchgears and ask you which
projects in this space, thiscrypto space, interest you.
You don't have to be explicit,but like what hope do you see
with all these, you know issuearound this industry as well,
(50:59):
what hope or the eventual thingthat's going to help us get
there?
Speaker 3 (51:08):
Yeah, absolutely.
I mean, first of all, you know,just even the concept of
Bitcoin and blockchain isbeautiful the idea that
literally peer-to-peer money canbe verified and created and
traded among great distances andscale and scope.
This was a profound shift inthe consciousness and the belief
(51:30):
of humanity.
And yet, to really feel theeffects Blockchain itself, just
in the fact that we can verify,you know again, I think, in the
next few years, what we're goingto understand, what we're going
to experience and what the vastamount of people won't have to
understand but just willproductively use, for me, the
(51:53):
most important thing that Ithink that the greatest paradigm
shift that we're going to seeis when producers themselves
will begin to issue their owncredit, and I'm seeing inklings
of this in different ways.
Nfts, to some degree, are onthe precipice of this.
You know, it just depends howwe would skew it to look at it.
(52:15):
But when we actually starttaking farmers or ranchers who
begin to issue their owncredit-backed money, the world
is going to change profoundly.
So when we look at thedecentralized finance world, I
think this is critical becausethe access to capital, but also
(52:37):
making sure it's legitimatecapital, is primary, and I think
that that may be challenged insome of the hierarchical, old
sort of old school structureswhere, you know, we'll have all
different kinds of maybe newgatekeeping coming in for
creating loans.
Again, if a loan is createdproperly, it's the lifeline of
(52:59):
humanity because, again, it'srepresenting the new creativity
or the productivity of thepeople that is looking to happen
.
So I would say what I do thinkwe're going to see, which I have
some limited evidence of, but Ithink we're going to see big
corporations begin to issuetheir own money.
And so, just for hypotheticalillustration, if you were to
(53:25):
take something like an Airbnb oran Uber and often these two
companies can have challengingreputations in the sense of
saying, oh gosh, they're feedingoff of their network and people
are sort of left by using themand they can dictate so many
different kinds of things when acertain amount of rides become
(53:47):
backed by Uber money or air, ora certain amount of stays backed
by Airbnb, b&b money or afraction of it, now credit can
be raised so these companies canactually build capital, like
from a crowdfunding or a tokenissue, but it becomes legitimate
because it's backed by acertain amount of verifiable
(54:10):
services to deliver that thereis provable supply of and
provable demand so they couldnot issue more than that demand.
And so right away, we are goingto begin to get sort of this
biosphere of different corporatemoney, or producer credit,
producer money.
(54:30):
And now if Airbnb, as anexample, or Uber, as an example,
or to do this, they would alsobe able to do real profit
sharing or equity sharing,partnering with their producers,
so cars, all their drivers,they could even do an incentive
schedule to say, oh, this amountof rides, you get a car wash or
(54:54):
a tire rotation or new tires ora new car or car insurance paid
for.
So whole different way, justfrom the savings of issuing
their own credit, rather thangoing through the actual
monetary or capital markets,raising bonds.
And likewise Airbnb could dothat, and I think we're going to
(55:17):
see that.
I really believe we'll start tosee that from Amazon, amazon
Coin might actually begin toexpand out to represent a
certain amount of Amazon product.
Well, in essence, what I dothink we're going to see is this
slew of corporate money.
There are some projects outthere that have begun with this
(55:39):
basis and where producersthemselves or businesses
themselves are beginning toissue tokens or backed by a
certain amount of service orproduct to deliver, and Robert
Grant, who's in Orange County.
They're preparing to createtokens backed by a certain
amount of cybersecurity services.
(56:00):
There's the plastic bank inVancouver, who actually pays
different people who live onisland nations to pick up the
plastic in the oceans and paysthem back in currency and could
switch to plastic tokens.
(56:20):
So when money moves from beingbacked by gold or backed by
silver, much like the aggroproduct, the aggro coin, which I
think is very, very interestingI think we're going to begin to
see this incredible revolutionof producer backed money, and
(56:44):
the big thing is that the amountof coin or money that's issued
must be strictly limited to theamount of supply that can be
verifiably delivered, limited bythe real market demand, and it
will circulate as a normalcurrency that people will use
(57:05):
and wallets will simply processand do the fungible transactions
between the coins and then,when it's returned for the
service, the coin will be burntand then the next season new
coin will be issued.
So this is what I believe isthe real digital assets.
(57:29):
It's the real money revolutionthat's coming aside from all
projects and it's sort of thestrictly held how to redesign
money and it's the market drivenstablecoin Rather than a
stablecoin that's tethered tosome type of fiat currency
that's still created fromconsumer debt, that's devoid of
(57:50):
actually being legitimatelyrepresenting contribution.
Instead, these type of producercredits that are issued from
either farmers to,hypothetically, in Amazon.
You now get a real stablecoinwhose whole goal is to stay at
$1 a dollar.
(58:10):
A dollar, because if a producerissued more coin than there was
for demand, the person whoowned it, obviously the coin
would drop less than that parityof a dollar.
Or if they issued too few, theperson who had the coin the coin
would be worth more and theperson would have the
corporations or the producer'sprofit.
(58:32):
So the whole goal would be forthe producer to keep the amount
of coin in circulation at one atparity, because it's simply the
equal sign.
It's not an extractive tool,it's money done correctly.
People don't need to haveactually the value of that money
go higher Because in fact westart to have the basis of the
(58:56):
abundant world, which is comingfrom a functionally correct
creation of money as a token ofexchange.
Speaker 1 (59:05):
You just mentioned companies issuing their own
money.
Wow, I never thought of thatactually, to be honest, in all
my interviews recently.
I mean, then I'm thinkingFrederick Hayek, the Nobel
Laureate economist, who in hisbook the Nationalization of
Money, he kind of argued theexactly the same point, that why
(59:32):
there is a monopolization ofmoney printing, and not perhaps
the same context, but slightlyin a different context, but
still I would say it's quitesimilar.
So any thoughts on that?
Speaker 3 (59:48):
Right, this is what money has always been, and it
has sort of been written out ofthe textbooks or lost in the
idea, especially when you go tosingle commodity money, like
thinking that sound money isgold money.
And it's not that gold money isbad or that it isn't sound,
it's that it's scarce.
And so when I say that moneycannot be scarce, it doesn't
(01:00:11):
mean that it's unlimited.
It means that it should berepresenting the productivity
that's looking to trade.
So it should be exact.
And so who can do that?
Corporations do that,businesses do that.
Who should be issuing our moneysupply?
Should it be banks, who areissuing it off of mortgage debt?
(01:00:33):
That's making life moreunaffordable and the money
system more unstable, because itcreates booms and busts,
because finally there's atipping point where people
cannot run fast enough to paythe monthly payments.
Or should the money supply beissued from the promise to
deliver the goods and servicesthat are the basis of society,
that is, the basis of money?
So, yes, that's exactly how itwas always intended to be.
(01:00:57):
And now we're remembering.
And on top of it, we have thetechnology that no people before
us have had, so we get to do itas efficiently, as beautifully,
as gracefully, as elegantly asever was desired.
I really believe our ancestorsare sitting on the edge of their
seats and just praying andknowing that we can do this.
(01:01:20):
And so all the instability thatwe may see and sort of other
competitions for limiting accessto things you know different
kinds of things that may comeabout perhaps create the squeeze
for the birth canal of theseideas, where we begin to take
the responsibility of our moneysupply and because our money
(01:01:45):
supply represents our labor, andon top of it, at that point you
get the full, you get thedemocratization of the creation
of legitimate money.
So blockchain or a lot of theprojects are certainly when it
was the cryptocurrency sort ofrush of you know, 15, 16, 17.
(01:02:06):
That was still based, in myopinion, more on the old
exploitative speculation, youknow, dotcom bus type of idea of
2000.
I ran into the Bitcoin WhitePaper in 2009 when I was
researching all of this, when Isaw that we were using mortgages
instead of money, that moneyitself really didn't exist, and
(01:02:27):
I thought the White Paper wasfantastic, it was fascinating,
but to me it was not money,because it was something that
was created as stairs.
It was a store of value.
It was possibly some type ofinvestment, some type of
commodity, and so when we switchback to corporate money like
this, or producer money, the youknow reputable farmers or
(01:02:49):
pillars of our communities whowant to do this, we now create
the democratization of our owncapital.
We're able to even createcreditworthiness that we can
verify, and reputation nowmatters again, and you sort of
corporations become goodcitizens, not through
(01:03:09):
legislation, not throughregulation, but through real
market mechanics.
And you know, we don't have toteach people to do this or that
or have somebody's opinion bemore important than someone
else's, or have think tanksdecide things.
Instead, when the money unit iscreated properly and it comes in
and out of existence based onhow we're ebbing and flowing
(01:03:31):
with our productivity, insteadof the artificial booms and
busts, now already the valuesystem starts to come in
alignment with life as peopledetermine themselves.
And the other thing that's goingto happen with this is we're
going to have information oncorporations that sort of blow
the bond market and the stockmarket, you know, to a whole new
(01:03:54):
proportion when we look atcorporate bonds or we look at
these kinds of things.
We have a limited amount ofinformation and or some people
have an opportunity for moreinformation than others.
When we go into a producercredit system, the market will
have so much transparentinformation about what type of
(01:04:15):
products are being created, howmuch demand is there for that,
and that when people createproducts of real demand.
Do we want to know the food?
You know the, the how our foodhas traveled, what's gone into
the food.
We can have true accountabilityon the products that are being
sold, and companies will alwaysbe able to get funding from
(01:04:41):
their customers.
So we don't even have to haveone ideology that's better than
another.
Get a beautiful, free worldthat's based on meritocracy,
egalitarianism beyond what evenwould come from having you know
some technocrat or someone elseto dictate to others, but
(01:05:02):
because, simply, you create themoney properly.
Speaker 1 (01:05:07):
Yeah, my next question would be where do I
sign up for such a place?
Speaker 3 (01:05:12):
It's so fantastic.
Yeah, I know, I do.
I really am encouraging peopleto.
Well, the book has theblueprint for producer credits.
You know the end of scarcityand you know, hopefully much
more will come.
But you know, I do I.
Any type of communities canbegin this, you know, I even
think rewards points and loyaltypoints are are like a shade of
(01:05:37):
it, they're an echo.
And if we could make allrewards points fungible and you
know which American Express didin like 2008, they were doing
there was something called theplenty point system.
I can't remember if that wasAmerican Express, but back in
2008, when people couldn't findwork, american Express said
listen, here's a list ofcharities.
(01:05:58):
If you want to volunteer atthese places, just do a double
check to prove that you did itand then we're going to issue
you X amount of points for thehours that you volunteer.
Now that's a producer credit.
Unfortunately, that program wentaway, but much of this is very,
very easy for us to start toput in place and I do see
(01:06:20):
inklings happening already.
I think Agrocoin is very youknow, very resonant with this
and and certainly thecybersecurity token that's
coming in California andhopefully there will be many,
many more, and I think you know,once people actually start to
see the concept, like oh wait aminute, money is just supposed
(01:06:41):
to represent our productivity,limited by supply and demand,
why you know.
And then on top of it, just tokeep the, that the token itself
should stay at parity at adollar.
A dollar, a dollar.
Now, you know most people.
The market itself willencourage producers of all kinds
to get involved.
Speaker 1 (01:07:02):
Any thoughts around how and maybe people should read
your book about it and I'llhave the link of the book below
in my description Any thoughtsaround like how this can come
about in the current system or,you know, current system of
(01:07:23):
enforcement.
Do you see that as apossibility for, say, the next
decade or something longer?
Speaker 3 (01:07:32):
You know, I do.
I think that communitycurrencies themselves have been
in existence for hundreds ofyears.
You know, we have theBerkshires in Massachusetts, we
had Ithaca dollars, there's theBristol Pound in England, so the
basis of community currencyexists, and when producers in
(01:07:53):
their communities go to dosomething like this, you wonder
what you know.
Of course, this is not a legalor financial you know statement,
but ideologically they're verymuch the same.
So I think that it's verysimple for communities to begin
things like this through theirexchange systems and I think
(01:08:16):
that as we start to seesomething like this really
coming about, the clarity interms of regulation should be
quite simple, because this isnot something you know that
people would be buying forspeculation or these kinds of
things.
But you know, we'll see how allof this unfolds in the next few
(01:08:37):
years and if money itself, ifcapital itself, continues to
become more limited, whetherit's through central bank,
digital currencies or otherkinds of things, the interest to
be able to self issue creditproperly is only going to grow.
So the dialogue is going togrow.
(01:08:59):
And in Canada you have CanadaTire, which is much like Walmart
, and they issue, I think, 100,you know they've issued over 100
million Canada dollar, canadaTire dollars and people will use
it also as a complimentarycurrency.
So there's a lot of basis.
There's a lot of food fordiscussion.
(01:09:22):
I'm hoping to, you know, createa circle on my website is my
name Kristen raggisoncom, whereyou know I have a little sign up
for people just to join acommunity so that we can start
to have more discussions.
And next year, hopefully, I'lllike a cartoon book coming out
(01:09:42):
for kids.
And then there's the audio bookon audible, which can be a lot
easier for people, even though Ifeel like sometimes I need to
just sort of read chapter one.
Chapter one I like to read overand over because it sort of
undoes a lot of theindoctrination.
But I think this is coming backand communities already engage
(01:10:05):
in circles of exchange and somany different kinds of these
basic paradigms.
Now, if we begin to merge itwith technology, we just have so
many opportunities to make adifference and a legacy of
difference for all those who arecoming after.
Speaker 1 (01:10:23):
Thank you so much, christian, on coming on the show
.
I would love you to be back onthe show sometime in the future.
I wish you best for your book,this current book and future,
future ones that are in thepipeline.
Speaker 3 (01:10:40):
Oh, thank you so much .
Speaker 1 (01:10:41):
It's such a pleasure Well wonderful pleasure is all
mine, thank you.
Speaker 3 (01:10:45):
Thank you.
Speaker 1 (01:10:46):
Bye, bye.
You, you, you, you, you, you,you, you, you, you, you, you,
(01:18:09):
you, you, you, you, you, you,you, you, you, you.
Hello friend, welcome to the season three of Biddle
Podcast.
I'm your host, tarun.
Today I have a very interestingguest with me.
Her name is Kristin Raghusanand she has written a book
called End of Scarcity.
(00:23):
We're going to talk and touchupon some of the key themes in
her book this theme around howhumanity might be able to fix
some of the perceived or actualscarcity in its near future and
(00:47):
what kind of resistance orchallenges we might face in
order to get there.
Let's get her perspective onthe entire space in general.
After these messages, one of thebest way to support the show is
to become our monthly Patreonmember.
(01:09):
Now, there are many ways youcan support Biddle Crypto
Podcast Beyond becoming aPatreon member.
The best way to help us grow isalso to share among friends.
Write a review on Apple,spotify or Google Podcast.
Your support will enable us tocontinue putting in the hours.
(01:32):
Keep the show honest andauthentic.
Enjoy listening to my interviewwith Kristin Raghusan.
Today at Biddle Crypto, we havea special guest.
(02:05):
I'm really excited to hear herthoughts.
Our name is Kristin Raghusan.
Kristin, welcome to the show.
Speaker 3 (02:14):
Oh, thank you so much .
It's so nice to be here withyou.
Speaker 1 (02:18):
So, Kristin, I want to start the show with something
about yourself and your journeythat got you here.
Speaker 3 (02:33):
Oh gosh, yeah, it's been a huge part of my life.
I've been a professional moneymanager, wealth manager, for
almost 32 years, 31 years forsure.
I've been interested in money,even at 5 years old.
(02:53):
I can remember.
But this journey in havingprofound insight about how money
is going to change starteddistinctly in 2008.
I would say probably about sixmonths before the big financial
crisis was about to begin.
Speaker 1 (03:12):
So you have a book out called the End of Scarcity.
I mean, that is what got meexcited about this interview.
We met in one of theconferences recently, one of the
big conferences.
I was amazed by the title ofthe book and I was so curious
that I wanted this interview tohappen.
(03:34):
So here we are, against allodds.
Speaker 3 (03:39):
Oh, it's so wonderful , it's so true, even the idea
the end of scarcity.
Sometimes people will say to mewhat does that mean?
What scarcity are you talkingabout?
And I think it's the generalidea that people are living for
the money, instead of moneyactually helping people live and
(04:00):
be alive.
What money was really createdfor?
And I never questioned this inmy earlier years, I think even
as a child I was so fascinatedby money, believe it or not.
My father used to have us earnour allowance.
I would earn a dollar a week,and I had to learn exactly how
(04:24):
the markets worked, how optionsworked, and he taught me about
stocks, and so I thought thatmoney was just this wonderful
thing.
The markets were great, that itwas really part of either the
American dream or something thatwould help people realize the
vision that they wanted.
And so, as I got older and Ifinished college, it should have
(04:47):
been no surprise to me that Istarted working at Merrill Lynch
like three months later one ofthe big investment houses.
But I was surprised.
I thought I would do somethingthat was about empowerment or
freedom, and yet I really feltmaking money, being able to live
(05:07):
your life this way, was thebasis of freedom.
And so I enjoyed my practice, Ienjoyed building it, I enjoyed
working with markets for many,many years and never really
questioned thinking that surelythere was enough money in the
system or the way that moneycame into our society, that it
(05:30):
was there and anybody who couldignite their passion and
contribute in a positive waycould clearly go about and
fulfill the next expression ofthemselves.
That was calling.
And in 2008, I had really thiswatershed moment.
I got lucky around 2007, thesummer before the big crisis,
(05:55):
and I started to see somesignificant dislocations in the
market that were odd enough thatI called the desk in New York
and I said why are these certainprices moving?
Things were just not performingproperly.
And they said, oh gosh, don'tworry about it, we don't have
any credit problems, they'rejust some liquidity problems.
(06:16):
And I thought to myself well,that's ridiculous,
creditworthiness and liquidityare so tightly tied together.
So I was heading to the MiddleEast for three weeks.
I was working on a master'sdegree and I just the closer I
got to the date I think I wasleaving September of 2007.
And I could just see that thiswhole system was about to crater
(06:40):
.
And I got very lucky.
I called up all of the peoplethat we were working for and
took everyone out of the markets, put them into cash unless for
some reason they were reallydependent on being invested and
off.
I went to the Middle East andevery day while I was away the
market went higher.
So, certainly having a lot ofexperience with the markets,
(07:05):
it's something you get used to.
It never really gets better.
But after 21 days of the marketgoing straight up, I just
closed the computer, felt like Ihad done the right thing and
just thought okay, that's aregroup if I need to.
And by the time I got back, westarted to see Bear Stearns and
(07:26):
then Lehman Brothers and thewhole entire system began to
implode and it was reallyheartbreaking.
It was heartbreaking to see alot of the older men that I
worked with, who had been doingthis for 40 years, and just see
everything decimated.
But what really took me wasthat the promises that we had
(07:51):
built our financial system on,or promises that were the basis
of what I was telling clients,really were not kept and some
investments were upheld, someweren't.
There wasn't really a rhyme ora reason to it and it actually
became an existential crisis forme on the level that I was so
(08:13):
disheartened that I knewsomething was wrong in my
worldview.
And my worldview had beenbuilding for a long time, since
I was really five, believing inall of this and loving it, and I
thought, my gosh, I'm missingsomething.
So I said, on the track, as wegot into 2008, I was in a luxury
(08:38):
position of having a lot ofcash on the books or being able
to buy commodities for peopleand help them grow their
accounts as the quantitativeeasing or the money printing
began and I started looking tosee what was it that I was
missing in my worldview thatwould cause a financial collapse
(08:59):
of this level.
And it took me about nine monthsto actually find the answer.
And it went far beyond what webelieved, which was
irresponsible lending or justthe inability of the quality of
the borrower to pay back thedebt and these kinds of things.
(09:20):
I actually found something socurious that it led to the
writing of this book the End ofScarcity, because in fact it was
the root problem as to whyscarcity shows up, or not enough
money and that whole survivalinstinct in every single country
throughout all the ages of time.
(09:42):
And it was this profound that Ithought to myself my goodness,
there has to be a solution forthis.
And sure enough, when I cameupon the solution, I was so
excited that it led to this sortof obsessive writing of the
book and researching.
And lo and behold, we're in awonderful position to change the
(10:05):
world, especially with all thedifferent opportunities that
blockchain truly with digitalassets provide for us today.
Speaker 1 (10:16):
Amazing, amazing.
I'm just absorbing all of that.
So, christian, then what, inyour viewpoint, is going to
bring that abundance, thatending of scarcity?
Either the perception ofscarcity or the actual kind of
(10:40):
fight for resources that mankindhas been a part of since time
immemorial?
Speaker 3 (10:48):
Yes, which are really tightly linked, you know,
because one of the reasons whyit really is so easy to end
scarcity profoundly for humanityis that largely it is an
illusion, and it's an illusionthat we buy into in and out of
the day.
You know, I can see it inmyself, whether it's through
time or all different kinds ofresources, and we sort of
(11:12):
oscillate between feeling secure, feeling insecure, and so this
has certainly been the basis ofhumanity for a very long time,
let's say five, six thousandyears of recorded history.
But the profound point andchange is that we actually can
isolate the root of wherescarcity is produced in society.
(11:36):
And of course we largely wouldbelieve maybe there's a flaw in
human nature, it comes fromgreed, or there's inappropriate
political systems or corruption,you know, or even just bad
economic policy.
And I think these are sort ofthe basic ideas that we all toss
(11:58):
around.
We sort of collectively acceptthat the root of the problem is
in there.
Or if we just get fullyexasperated in terms of how to
find a solution, we say, ah, youknow, humanity ends up being
greedy, or they're just, they'rejust some bad apples where you
know you really can't get beyondthis and none of that is really
true.
(12:18):
All of those are just sort ofsymptoms of a system that is
structured inappropriately, andit's not the political, economic
or even social system that'snot structured correctly.
They again are sort of outshoots or trying to solve the
problems from the realstructural problem, which is how
(12:41):
we create the money unit.
And so money itself, when welook throughout the history of
humanity, has been architectedand designed over and over and
over in a multitude of ways, andwhen there were golden ages on
the planet or thriving throughRenaissance, expanding times of
(13:02):
creativity, the money unit wastypically created properly, or
the predominant way that moneywas coming into the system was
done correctly.
And the big shift is that moneyitself needs to represent our
contributions versus being anobject or a thing that we need
(13:26):
to get in order to give ourcontributions.
And so I do want to back up andsort of just rip the mechanics
apart, really simply about howmoney comes into existence today
, and I think again, mainly webelieve that we have an
understanding, but there arenuances that it is different
(13:46):
than what we really think, andthis is the root of the problem.
So when money is createdincorrectly, it becomes truly
the cancer, it becomes theproblem that creates scarcity.
So today, our money itself iswhat produces scarcity, and it's
quite incredible, because weall think more money would be
(14:08):
better and more money will solvethe problem, and it's.
I'm not saying that we allshouldn't have more money or
that people shouldn't be morewealthy, no, no, it's that the
money unit itself must bedesigned correctly to begin with
.
So that then begs the questionwhat are we using this money
today and how is it createdincorrectly?
Speaker 1 (14:33):
This is mind blowing stuff for me actually, because
recently well, I wouldn't sayrecently, maybe a year ago I was
exposed to some of the writingsof David Graver, the guy who's
known for Occupy Wall Street.
When I looked at his some ofhis books, like Dawn of
(14:56):
Everything, a lot of thingsresonated with me which earlier
I had this misunderstandingabout the guy.
So when I listen to you, thesethings are music to my ears
because it's your approach isvery novel.
Also, like the way you'redescribing like I think you had
a phrase here which I want torecall and repeat is that money
(15:20):
is causing, the way it'sdesigned is causing the problem
is also very interesting rabbithole to go into and I would like
you to expand a little bit moreon that.
Speaker 3 (15:38):
Oh, thank you.
Yes, exactly, and this that isthe root, because when we create
money, especially in a waywhere it produces the scarcity,
we then misaligned the entirefoundation of society, because,
first of all, we decided thatliving together was better.
(15:58):
Now, whether we tend toirritate one another or annoy
each other, still, at the end ofthe day we are, we are in
agreement that living togetheris, is much more rich, is better
and really is the basis ofsurvival.
So it's survival, it's therival, it's the mystery of life.
(16:21):
We cannot separate relationshipfrom the basis of life, and
whether the most mundane to themost intimate, and that whole
idea of living together,understanding ourselves through
any kind of relationship, is, infact, the basis of money.
We designed money together as acommunity, through a social
(16:47):
contract, as a technology.
Money was simply created as atechnology which, low and behold
, now, with the crypto boom orthe onset of Bitcoin, and now
the blockchain revolution anddigital assets were coming back
to us to get the glimpse that,yes, wait a minute, money is a
technology.
(17:07):
And you know, often people willsay, oh, no, money is energy,
or money is power, or money isfreedom.
No, no, no, money is a meretechnology.
We created it in order toassist us in exchanging our
contributions with one another,and so freedom and power and
(17:30):
energy are our contributions.
The divine essence that's wrotethat flows through each and
every human, and every new humanthat's born is adding to the
whole total sum of humanity.
Every town, every family, everycommunity is more valuable than
when a new baby is born,because a new essence and a new
(17:54):
creativity has has shown up onthe scene.
So the basis of wealth is allof these beautiful ideas and the
expression to even our Mondaylabor and the things that we do
for one another.
This is actually the basis ofabundance.
It's the fabric of community.
(18:14):
In relationship we're alwaysexchanging, whether it's
attention and any kinds ofthings, and money was meant to
represent that.
So the problem that we areliving with today, and why we're
so confused and lost, is thatwe have managed to create money
(18:35):
in such a way that it comes intosociety separate from
contribution.
It comes into society separatefrom value that we're producing,
and then it can actually becreated as a scarce commodity.
And when money itself iscreated as a scarce commodity,
quickly, you get sort of youcondition the worst of humanity.
(18:57):
You often destroy competitionbecause instead of competition
being a healthy thing thatignites new creativity, it can
become more of a survival war,like a reality, and then it
often can mute the best ofcreativity and and work to
(19:19):
create conglomerance and kind ofstronghold power in
concentrated forces.
And so today money is createdsolely as a debt, and this is
different than the FederalReserve making the money.
Often we just sort of think thatthe Federal Reserve prints the
money and this is really not thecase.
(19:41):
So that nuance has to be brokenapart, because there's this
profound shift in inconsciousness, we could say, but
really just in perception, aswe start to understand that all
of what we contribute in theworld whether it's you creating
this beautiful podcast and theinteresting and fabulous minds
(20:04):
and and people, what they'recreating are putting together,
or the end of scarcity, mewriting this book no one could
really stop me from doing it.
Even if I had to stay up untilfive in the morning and write
and go to work the next day, thepassion was there.
And so these beautiful thingsplus the mundane things we do,
are just really the abundance oflife flowing through us and
(20:28):
instead the way money is createdtoday in society.
Excuse that perception.
It actually means the rightamount of money is not
circulating and in fact it'sprobably also not circulating
where the bulk of the people whoare contributing real labor or
work is flowing, and it's very,very skewed.
(20:50):
The good news is it's very easyto fix it's.
It's exceedingly easy to tochange the system once we get
the very sober, simplerecognition.
But I think the best place tostart is actually to look at how
money comes into our societytoday and where the era is.
Speaker 1 (21:12):
Thank you so much for that.
So you know, I want to quotethis statement from David Graver
.
Coming back to David Graver, hehad quoted once.
He said we have become acivilization based on work, and
not even productive work, butwork as an end and a meaning in
(21:34):
itself.
So I want to get your reactionon that.
And secondly, something thatyou just mentioned if you can
expand on that as well,regarding the Federal Reserve,
when people view it as printingmoney, isn't that the case?
(22:00):
Like with the fractionalreserve system?
Don't they have this one leverto pull up and down every time
you see inflation, or the tocause an opposite effect of
inflation?
Speaker 3 (22:16):
Yeah, unfortunately, no, I would say that's sort of
mythic.
Years ago, the Fed did actuallycreate a certain amount of
reserves that either helpedexpand or shrink the money
supplier.
It really does not work thatway today.
So there are three fundamentalways in which banking or money
(22:39):
would be created through thebanking system, and one would be
, you know, in intermediate.
The bank would be anintermediary Reserves.
Money could be created so thegovernment could create the
money.
There would be a set stock ofmoney in the economy and when
people went to go borrow thatmoney, it would either be 100%
(23:02):
backed meaning that there was nofractional lending or creation
of money and someone would justbe borrowing someone else's
savings.
Most of the neoclassicaleconomists believe that that's
the reason why they actually didnot see the financial crisis
coming and there was so muchmisleading on that, because they
(23:27):
didn't see that, as money wascreated as a debt, that it was
actually expanding demand.
So most of us believe that, ofcourse, it's fractional reserve
lending, meaning that if adollar is deposited in a bank,
that then the bank can go outand create nine new dollars and
lend a total of you know, 90%,keeping that 10% in reserve.
(23:51):
It really has not worked thatway for a long time and then,
sort of, when we entered theCOVID era in March of 2020,
officially in the United States,we went to 0% reserves in our
banking system.
So, whether it's in Europe, youknow where the rules were much,
(24:11):
much lower in terms of whatpercentage of reserves needed to
be in the system or here in theUnited States, we don't use
that system anymore.
We're using just the creditcreation system, which means
that a bank can lend any, cancreate literally create any
(24:32):
amount of money with no reserves, and what keeps the bank
solvent is the capital to assetsratio.
So a bank still needs to makesure that its assets are solvent
.
What are its assets?
Well, it could be mortgagederivatives, it could be stocks,
it could be different loans,and typically the Bank of
(24:53):
International Settlements inSwitzerland decides that ratio
for the Federal Reserve system,which really includes about 57
different countries or most ofthe western world.
Most of the allies of theUnited States are in the Federal
Reserve or Bank ofInternational Settlements system
(25:13):
, and so when the cap or thecapital to assets ratio number
is set, that's a prettyimportant.
I would say it's even morepowerful than most of the
legislators, and these peopleare obviously not elected.
They're in Switzerland and youknow.
So most of our banks today haveto have $8 in capital per
(25:36):
$1,000 of loans.
So as long as banks arerelatively solvent, they'll
continue lending and lending andlending and lending, which
today is absolutely creating ourmoney supply.
And so it's a very importantstatement to get this that money
is debt.
It's not created as debt, butit is debt.
(26:00):
So if you think of a quarter,there's a head side and a tail
side.
They cannot be separated.
The same thing is true when youlook at any money that you see
whether it's money in aninvestment account, a banking
account, a check, you know, atuition payment to school, a
gift to someone it is a debtthat someone owes to a bank.
(26:25):
And so when we look at thedollars in our accounts, we're
looking at the head side of thequarter, but there also is the
tail side, meaning that thatdollar has an expiry date.
Largely that we can't see,because it must be repaid as a
debt.
And so when someone goes to abank today and they say, okay, I
(26:46):
want a mortgage, I want maybe aloan for college, the bank is
going to create that loan moreor less, and it's created
through double book entry, minus100,000 plus 100,000.
And so the 100,000 is journalentry into someone's account.
Great, it looks like money.
(27:07):
It's really someone's debt.
And they also then are given aschedule, a monthly schedule, to
pay that debt back in someperiod of time at some interest
rate.
And the interest rate doesn'treally create inflation the way
we think we do.
There's an amazing economist,richard Werner, who wrote the
(27:28):
Princes of the Yen and vastlyunderstood this ahead of most
economists, and he even showsthat there's a positive
correlation with interest rates,so that when you raise interest
rates, it actually raises GDP,it actually creates the
inflation that the Fed islooking to end, and when you
(27:49):
lower interest rates, it doesthe opposite.
The problem is just as a quickaside when you go to raise
interest rates to stop inflation, you're more or less saying
you're going to burn the housedown to put out the fire.
So the level of interest rateactually creates the velocity
that someone has to run in orderto pay back the loan.
(28:12):
The higher the interest rate,the faster people have, the more
they have to earn in a shorterperiod of time to pay back that
loan.
So when someone goes and borrows$100,000, they get $100,000,
quote unquote in their accountbut they also get the double
book entry of the minus $100,000.
That as soon as we sign on thepromissory note, that money is
(28:35):
now tapped into existence in theaccount and the clock begins
that that payment, the firstpayment, must be met and repaid.
And so for the vast amount ofpeople in the economic society
borrowing money now, the chaseis on.
They have to get out there,they have to quickly earn the
(28:56):
money to meet the debt paymentor obviously they can lose their
home, any collateral that wasplaced against that loan.
And the more and more loansthat are taken out, we get this
false impression that theeconomy is doing better because
there's more and more moneycirculating.
But there's actually greaterand greater and greater leverage
(29:18):
and more pressure that peoplehave to run to capture the money
.
Now we know that when a debt ispaid that obviously that
portion of the debt is retired.
So if I take out the $100,000and now the 15th of the next
month comes and 1000 of thatprinciple, let's say, is due and
(29:40):
I send in a check for 1500,maybe 500 goes to interest and
1000 goes to the payment, weknow that now I only owe 99,000
because that 1000 paid down thedebt.
But what we're not fullyconscious of is that because,
like the quarter with the headand the tail side, that when
(30:01):
that $1000 is paid against theloan, that $1000 is also
destroyed and no longercirculating in the real economy.
So money itself is not createdas debt, it is debt, and so 97%
(30:23):
of our money supply is createdthrough the commercial banks or
the banking system when peoplego and get loans.
Now the Fed may create reservesand print reserves, but they
have very little impact on thequantity of money that the banks
can create, because if a bankis solvent, if a bank has met
(30:45):
its capital to assets ratio, itcan continue to create as many
loans as it has borrowers, andso borrowers are actually where
our money comes from.
And when the Fed createsreserves, those reserves don't
go into the real system.
They aren't.
They are not dollars, eventhough on the dollars that we're
(31:07):
using it says Federal Reservenotes, but instead those
reserves that the Fed createsreally are just tickets of
solvency for the banks, andreserves are also sort of linked
to check clearing.
But you know, banks borrow fromone another.
The Fed has the window, there'sa lot of liquidity, there's
(31:30):
delay, often 30 days delay interms of how that stuff is
squared.
The main, the real way, thesystem that we're working on
today, is that, like a creditcard, banks are just creating as
much money as borrowers canhandle, and so the reason why
this becomes quite precarious isthat money fundamentally no
(31:55):
longer represents ourcontributions and, as the social
instrument that we created,where our contributions were the
primary thing, that theabundant thing in our society,
as we looked at sort of themagic and the mystery of nature,
the symbiosis of nature and theever expanding talents and sort
(32:19):
of surprises that we get in thewhole sort of journey of our
lives between hard times andgood times, money was supposed
to be an instrument, a tally, atoken of exchange where we said,
ok, here's how I contributedand here's what I withdrew, to
create a foundation of life thatwould be supportive for a
(32:43):
society that was hopefullyevolving.
And now, instead, when moneycomes into existence, primarily
as mortgage debt today, thereare many, many things that
happen.
Number one you get adestruction of investment
capitalism.
We end up really not living ona capitalist system, an
investment capitalist system,but we blame the system, saying
(33:05):
it's a terrible capitalistsystem, when in fact, we're
largely living on a financecapitalism or a corporate system
, and banks, originally, weresupposed to be these beautiful
contributed citizens in societywho would help evaluate a
business that was intending tocreate something for a community
(33:28):
and assess its value and thedemand for those services and
say here yes, you're creditworthy.
We're going to verify this andmake your contribution liquid,
give you a ready as a credit.
We're going to create thiscapital for the good that you're
(33:49):
going to come for.
So the difference between moneybeing created as a credit for
contributions versus a debt andtoday 80% of our money in banks
is created as mortgages somecollege tuition money and maybe
some car loans, but most of itis mortgages.
So we are creating our moneysupply out of a consumer debt
(34:15):
and what happens at that pointand we all can see it in our
lives is the price of housinggoes up exponentially because
the loans are available andbecause the payments are paid
back monthly.
People often say, well,interest rates will go down, the
payments will go down at somepoint, or it's only this
percentage of my income, or if Idon't buy it now, I'm going to
(34:40):
have FOMO, I'm going to miss outand I won't be able to get in
later, and so housing pricestypically continue to rise
despite interest rates going up.
We saw this when Greenspanraised interest rates from 2007.
Oh gosh, actually this was adifferent time, but 17 times
(35:02):
Greenspan raised interest ratesand it did not really stop.
It didn't slow anything down atall because instead it was the
other mechanics.
When money is created asmortgages, the two things that
happen are number one, the priceof housing accelerates Because
you're creating the liquidityfor that consumer debt, that
(35:24):
mortgage.
So if somebody can bid 50,000,they can bid 100,000.
And so we have seen the priceof a home from the 70s, which
used to be three times oneperson's salary, to today, in
the cities or more pricey areas,easily 10 times the salary of a
(35:45):
couple.
And we also have seen collegeeducation which, again in the
70s, was almost free, or freeeven.
I think UCLA tuition used to be$200 or $500 a semester to
being something that now hasreally made a lot of these kids
indentured servants as they comeout.
(36:05):
And so this is how creatingmoney as consumer debt destroys
capitalism, because that moneythat was supposed to be tied to
value is not going to invest inentrepreneurship, in businesses,
to increase the wage earningcapacity and on top of it, it's
making the two tenants of theAmerican dream owning a home,
(36:28):
going to college largelyunaffordable for most people.
Speaker 1 (36:33):
Those are some amazing points.
I just want to keep listeningand not interject you with
questions.
Wow, so okay.
So one thing you had mentionedand I want to come back to is
that the Fed seems to be not thebigger problem.
(36:57):
The bigger problem is thelending that's going on, and I
totally agree with that.
The going a little bit back inhistory, american history, I was
intrigued by the greenbacks.
For those who don't know, wasthese money that was created
(37:18):
during the Civil War from youknow, during the Civil War,
lincoln and his folks decidedwell, if the European banks we
cannot lend, cannot borrow fromthem, we will create our own
money called the greenbacks,which didn't follow the
fractional reserve system thatis today.
(37:40):
One of the reasons they alsowent with their own government
issued currency was because backin the day, those banks in
Europe had one class that youknow whosoever takes the loan
pays the debt of the losing part, the losing side as well.
So that I thought that wasquite interesting and I would
(38:02):
love to know your thoughts onthat.
Like, and possibly going tosome aspects of your book as
well as to how we can reach thatabundance state, the removal of
scale.
I actually like your titlebetter the end of scarcity.
It's not indicating abundance,which you know.
(38:24):
Some of the folks, like PeterDiamantes and others, they talk
about abundance, which you know.
That's a separate topic we cango in deep rabbit hole of.
But what are your thoughts on,say, if there was something that
was backed by the governmentbut not having this fractional
(38:47):
reserve kind of system, wouldthat scale or how things would
have been?
Speaker 3 (38:55):
Yeah, I'll tell you.
When the country was firstcreated, all of the founding
fathers, or the colonists, theywere all highly in debt.
So they left England becausethey were looking for a new
start and gold, being theprimary currency of that time,
was too scarce.
(39:16):
There was not enough in circuitor it was made scarce.
This is the problem, of coursewhen a single commodity is used
as money, it can be made scarce.
We really don't know how scarcediamonds are or gold is or any
of these kinds of things, butnonetheless they were unable to
(39:40):
have enough money flowing inorder to sort of retire that
debt.
But they were able to createenough labor, they were able to
create enough services for oneanother and so, sure enough,
when they started here and whenthey started in New England, we
have a misunderstanding ofcolonial script and we often are
(40:02):
just told it was paper money.
It became inflationary, theycreated too much and that again
the money supply did notrepresent the amount of
productivity that the people had.
And this is really not true.
So many of these colonies werevery careful to make sure that
the quantity of colonial scriptin circulation equaled the
(40:25):
productive capacity of thepeople, and that's the bottom
line secret of all of it, if thegovernment were just to do what
the MMT or say the modernmonetary theory people and to
say, listen, the government'sgoing to go back to creating
money.
Many people have said that whenKeynes actually came out and
(40:45):
talked about the governmentbeing a debtor, that it was
never supposed to be a debt,that the government was just
supposed to create money, thatwhatever, like the monopoly
banker to make sure that therewas $200 when you pass go and
this is actually all originallycorrect thinking, because you're
coming back to that.
Money is a technology that, likethe equal sign in the equation,
(41:08):
facilitates exchanges.
And so if you and I were givena math test with 100 questions
on it and the goal of the testwas to solve as many equations
that could solve, now if 70 ofthem solved, we would simply
create 70 equal signs.
We wouldn't have 52 and wewouldn't have 84.
(41:30):
We also would not have to goand dig up equal signs out of
the backyard before we gotstarted.
So money as a technology isjust supposed to be like an inch
or a pound or a degree or anequal sign.
It's a technology and thefounding fathers understood this
well.
(41:51):
Abraham Lincoln's treasurerunderstood this well when they
created the greenbacks and inEngland they also understood
this very well for 600 yearswhen they used tally sticks as
money and they were able tobreak the stick.
This is actually how we got thestock market Break it into a
(42:12):
stub and a stock, and becausethe stick breaking created a
fingerprint so it couldn't becounterfeited.
And if the people were moreproductive, they broke more
sticks and more money circulatedin society in order to allow
the creativity and the realenterprise to expand.
(42:35):
This brought about so muchenlightened thinking that in
1250, we got the Magna Carta.
The Magna Carta was theprecursor of the Constitution,
which was the product of 500years of intense enlightened
discussion and thinking.
So these people were reallyquite profound in their systems
(42:56):
thinking and how to structurethings, but they understood that
money was simply supposed to bea token of exchange
representing the accurateproductivity.
There would be more money incirculation or less money in
circulation, ebbing and flowing,depending on how productive the
(43:17):
people were.
Now, when Lincoln ran into a bigproblem well, I mean, I'll just
quickly go back to thecolonists.
What really created theRevolutionary War is that
England outlawed the ability tocreate colonial script backed by
their productivity.
That script was actually backedby productive land banks and it
(43:42):
represented farmland.
And you can actually read thisin the old banking documents and
from Britain where they saidthat the money system of the
colonists is a system ofmischiefs.
It's going to put out themonarchs and basically create a
brain drain from Europe to NewAmerica.
(44:04):
So it was systematically ruledout and you also can find it in
some old writings that it infact it was not really religion,
but it was money.
That was the start of theRevolutionary War.
So in young America we hadproperly created money, probably
(44:25):
until about 1812.
And in 1812, sadly, the oldBritish banking system was
reinstalled and the White Housewas burnt down.
There was the War of 1812.
It absolutely was a banker'swar and for most of the 1800s
the war was on.
I would argue that probably allof our wars that we see are
(44:48):
monetary war wars, because theinstability in society is just
when the people are creating themoney supply.
Where it represents thepeople's real productivity.
You have a solid foundation,people are supported, creativity
is supported, corruptionabsolutely dies down and when
(45:12):
you go to a system where moneyis created as a scarce commodity
, you get control.
You get all different kinds ofstratification of society and
you just have a lot ofsurvivor-induced behavior.
So, lincoln, when the Civil Warwas starting and the country was
(45:34):
broke for a host of reasons,largely coming from these
foreign banking systems sort ofthe beginning of the Federal
Reserve system, which is much ofthe early history of the United
States and how those banksagain were really not used to
create finance for productivitybut creating finance for sort of
(45:57):
a control system.
And so when Lincoln neededmoney to arm and prepare for the
Civil War, france and Englandoffered them loans at 24 and 26
percent.
So they knew that it wasfailure already.
And that's when the treasurechase came out with the idea of
(46:20):
saying let's create green backs.
And Lincoln wasn't so keen onit at the beginning, but he
really was left with no choice.
So they started to issue greenbacks and green backs were
simply a dollar backed by thefull faith of the United States
government, and they workedbeautifully for a long, long
time and then, unfortunately,they were still outlawed and we
(46:45):
were really in 1900, the goldstandard law came in and silver
money was largely demonetizedand we went to single commodity
money, which there was a muchgreater depression in 1873,
because the people knew that ifwe didn't have silver money,
there wouldn't be enough tokenscirculating to allow for those
(47:10):
contributions and exchanges tohappen and instead you'd end up
with this sort of scarce,hierarchical, desert like
environment, prone to booms andbusts because the gold coins
would be too scarce and often inthe hands of the wealthy and
not really in the hands ofpeople who were producing or
(47:30):
coming up with also new ideas.
So the story repeats itself overand over and I looked at about
five or 6,000 years of historyand David Graper did some
amazing research, you know justreally, as to the origins of
money as well.
I had the good fortune ofspeaking with him at a
(47:52):
conference in New York Cityyears ago.
Sadly, I think, he passed awaya couple of years ago.
But such a brilliant, such aninsightful man and you know it's
the backstory of all history isthis monetary history?
It's the truth, and it justbecomes very, very simple
because when we begin again toissue money, backed by something
(48:17):
, yes, but really backed by thepromise to deliver goods and
services, boom, we change theworld and we're the first
generation, we're the firstcivilization in the last, you
know, 6,000 years of recordedhistory have who now can do this
on scale and scope, because ofblockchain, that no other people
(48:40):
before us have been able to dowith success and to do it
without counterfeiting but manyour grandparents it, probably.
It really doesn't matter whatcorner we looked in the world,
we're going to find the sameprinciples going on with money.
And in the 1800s, when therewere depressions and all these
(49:03):
instabilities, states issuedscript money backed by
production.
In Massachusetts, the fisheriesand Gloucester, massachusetts
issued script money backed by acertain amount of fish to
deliver.
Leather factories, bootmanufacturers in Lawrence,
massachusetts, issued script bya certain amount of boots to
deliver.
(49:24):
You know, in all the ranchingstates we had it backed by food.
And so we're on the precipice ofhaving this great understanding
, this simple understanding thatmoney is simply supposed to
represent our contributions andthat's how it should come into
existence.
(49:44):
And we still can have somemoney coming into existence for
consumer debt, but probably,when it's done correctly, we
won't need that either.
There'll be other ways to do it.
And so I do believe, around theprecipice of the great money
revolution, that, even thoughthere'll be some instability as
(50:05):
all of these different thingscome to bear, what is standing
on the other side of that tunnelis the opportunity for a
beautiful world that we evenhave a heart, such a level
playing field and an opportunityfor people to really decide how
they want to contribute and howthey want to live that I think
(50:29):
what could be possible for thechildren of the future is
extraordinary.
Speaker 1 (50:34):
Yes indeed.
So, christian, I want to switchgears and ask you which
projects in this space, thiscrypto space, interest you.
You don't have to be explicit,but like what hope do you see
with all these, you know issuearound this industry as well,
(50:59):
what hope or the eventual thingthat's going to help us get
there?
Speaker 3 (51:08):
Yeah, absolutely.
I mean, first of all, you know,just even the concept of
Bitcoin and blockchain isbeautiful the idea that
literally peer-to-peer money canbe verified and created and
traded among great distances andscale and scope.
This was a profound shift inthe consciousness and the belief
(51:30):
of humanity.
And yet, to really feel theeffects Blockchain itself, just
in the fact that we can verify,you know again, I think, in the
next few years, what we're goingto understand, what we're going
to experience and what the vastamount of people won't have to
understand but just willproductively use, for me, the
(51:53):
most important thing that Ithink that the greatest paradigm
shift that we're going to seeis when producers themselves
will begin to issue their owncredit, and I'm seeing inklings
of this in different ways.
Nfts, to some degree, are onthe precipice of this.
You know, it just depends howwe would skew it to look at it.
(52:15):
But when we actually starttaking farmers or ranchers who
begin to issue their owncredit-backed money, the world
is going to change profoundly.
So when we look at thedecentralized finance world, I
think this is critical becausethe access to capital, but also
(52:37):
making sure it's legitimatecapital, is primary, and I think
that that may be challenged insome of the hierarchical, old
sort of old school structureswhere, you know, we'll have all
different kinds of maybe newgatekeeping coming in for
creating loans.
Again, if a loan is createdproperly, it's the lifeline of
(52:59):
humanity because, again, it'srepresenting the new creativity
or the productivity of thepeople that is looking to happen
.
So I would say what I do thinkwe're going to see, which I have
some limited evidence of, but Ithink we're going to see big
corporations begin to issuetheir own money.
And so, just for hypotheticalillustration, if you were to
(53:25):
take something like an Airbnb oran Uber and often these two
companies can have challengingreputations in the sense of
saying, oh gosh, they're feedingoff of their network and people
are sort of left by using themand they can dictate so many
different kinds of things when acertain amount of rides become
(53:47):
backed by Uber money or air, ora certain amount of stays backed
by Airbnb, b&b money or afraction of it, now credit can
be raised so these companies canactually build capital, like
from a crowdfunding or a tokenissue, but it becomes legitimate
because it's backed by acertain amount of verifiable
(54:10):
services to deliver that thereis provable supply of and
provable demand so they couldnot issue more than that demand.
And so right away, we are goingto begin to get sort of this
biosphere of different corporatemoney, or producer credit,
producer money.
(54:30):
And now if Airbnb, as anexample, or Uber, as an example,
or to do this, they would alsobe able to do real profit
sharing or equity sharing,partnering with their producers,
so cars, all their drivers,they could even do an incentive
schedule to say, oh, this amountof rides, you get a car wash or
(54:54):
a tire rotation or new tires ora new car or car insurance paid
for.
So whole different way, justfrom the savings of issuing
their own credit, rather thangoing through the actual
monetary or capital markets,raising bonds.
And likewise Airbnb could dothat, and I think we're going to
(55:17):
see that.
I really believe we'll start tosee that from Amazon, amazon
Coin might actually begin toexpand out to represent a
certain amount of Amazon product.
Well, in essence, what I dothink we're going to see is this
slew of corporate money.
There are some projects outthere that have begun with this
(55:39):
basis and where producersthemselves or businesses
themselves are beginning toissue tokens or backed by a
certain amount of service orproduct to deliver, and Robert
Grant, who's in Orange County.
They're preparing to createtokens backed by a certain
amount of cybersecurity services.
(56:00):
There's the plastic bank inVancouver, who actually pays
different people who live onisland nations to pick up the
plastic in the oceans and paysthem back in currency and could
switch to plastic tokens.
(56:20):
So when money moves from beingbacked by gold or backed by
silver, much like the aggroproduct, the aggro coin, which I
think is very, very interestingI think we're going to begin to
see this incredible revolutionof producer backed money, and
(56:44):
the big thing is that the amountof coin or money that's issued
must be strictly limited to theamount of supply that can be
verifiably delivered, limited bythe real market demand, and it
will circulate as a normalcurrency that people will use
(57:05):
and wallets will simply processand do the fungible transactions
between the coins and then,when it's returned for the
service, the coin will be burntand then the next season new
coin will be issued.
So this is what I believe isthe real digital assets.
(57:29):
It's the real money revolutionthat's coming aside from all
projects and it's sort of thestrictly held how to redesign
money and it's the market drivenstablecoin Rather than a
stablecoin that's tethered tosome type of fiat currency
that's still created fromconsumer debt, that's devoid of
(57:50):
actually being legitimatelyrepresenting contribution.
Instead, these type of producercredits that are issued from
either farmers to,hypothetically, in Amazon.
You now get a real stablecoinwhose whole goal is to stay at
$1 a dollar.
(58:10):
A dollar, because if a producerissued more coin than there was
for demand, the person whoowned it, obviously the coin
would drop less than that parityof a dollar.
Or if they issued too few, theperson who had the coin the coin
would be worth more and theperson would have the
corporations or the producer'sprofit.
(58:32):
So the whole goal would be forthe producer to keep the amount
of coin in circulation at one atparity, because it's simply the
equal sign.
It's not an extractive tool,it's money done correctly.
People don't need to haveactually the value of that money
go higher Because in fact westart to have the basis of the
(58:56):
abundant world, which is comingfrom a functionally correct
creation of money as a token ofexchange.
Speaker 1 (59:05):
You just mentioned companies issuing their own
money.
Wow, I never thought of thatactually, to be honest, in all
my interviews recently.
I mean, then I'm thinkingFrederick Hayek, the Nobel
Laureate economist, who in hisbook the Nationalization of
Money, he kind of argued theexactly the same point, that why
(59:32):
there is a monopolization ofmoney printing, and not perhaps
the same context, but slightlyin a different context, but
still I would say it's quitesimilar.
So any thoughts on that?
Speaker 3 (59:48):
Right, this is what money has always been, and it
has sort of been written out ofthe textbooks or lost in the
idea, especially when you go tosingle commodity money, like
thinking that sound money isgold money.
And it's not that gold money isbad or that it isn't sound,
it's that it's scarce.
And so when I say that moneycannot be scarce, it doesn't
(01:00:11):
mean that it's unlimited.
It means that it should berepresenting the productivity
that's looking to trade.
So it should be exact.
And so who can do that?
Corporations do that,businesses do that.
Who should be issuing our moneysupply?
Should it be banks, who areissuing it off of mortgage debt?
(01:00:33):
That's making life moreunaffordable and the money
system more unstable, because itcreates booms and busts,
because finally there's atipping point where people
cannot run fast enough to paythe monthly payments.
Or should the money supply beissued from the promise to
deliver the goods and servicesthat are the basis of society,
that is, the basis of money?
So, yes, that's exactly how itwas always intended to be.
(01:00:57):
And now we're remembering.
And on top of it, we have thetechnology that no people before
us have had, so we get to do itas efficiently, as beautifully,
as gracefully, as elegantly asever was desired.
I really believe our ancestorsare sitting on the edge of their
seats and just praying andknowing that we can do this.
(01:01:20):
And so all the instability thatwe may see and sort of other
competitions for limiting accessto things you know different
kinds of things that may comeabout perhaps create the squeeze
for the birth canal of theseideas, where we begin to take
the responsibility of our moneysupply and because our money
(01:01:45):
supply represents our labor, andon top of it, at that point you
get the full, you get thedemocratization of the creation
of legitimate money.
So blockchain or a lot of theprojects are certainly when it
was the cryptocurrency sort ofrush of you know, 15, 16, 17.
(01:02:06):
That was still based, in myopinion, more on the old
exploitative speculation, youknow, dotcom bus type of idea of
2000.
I ran into the Bitcoin WhitePaper in 2009 when I was
researching all of this, when Isaw that we were using mortgages
instead of money, that moneyitself really didn't exist, and
(01:02:27):
I thought the White Paper wasfantastic, it was fascinating,
but to me it was not money,because it was something that
was created as stairs.
It was a store of value.
It was possibly some type ofinvestment, some type of
commodity, and so when we switchback to corporate money like
this, or producer money, the youknow reputable farmers or
(01:02:49):
pillars of our communities whowant to do this, we now create
the democratization of our owncapital.
We're able to even createcreditworthiness that we can
verify, and reputation nowmatters again, and you sort of
corporations become goodcitizens, not through
(01:03:09):
legislation, not throughregulation, but through real
market mechanics.
And you know, we don't have toteach people to do this or that
or have somebody's opinion bemore important than someone
else's, or have think tanksdecide things.
Instead, when the money unit iscreated properly and it comes in
and out of existence based onhow we're ebbing and flowing
(01:03:31):
with our productivity, insteadof the artificial booms and
busts, now already the valuesystem starts to come in
alignment with life as peopledetermine themselves.
And the other thing that's goingto happen with this is we're
going to have information oncorporations that sort of blow
the bond market and the stockmarket, you know, to a whole new
(01:03:54):
proportion when we look atcorporate bonds or we look at
these kinds of things.
We have a limited amount ofinformation and or some people
have an opportunity for moreinformation than others.
When we go into a producercredit system, the market will
have so much transparentinformation about what type of
(01:04:15):
products are being created, howmuch demand is there for that,
and that when people createproducts of real demand.
Do we want to know the food?
You know the, the how our foodhas traveled, what's gone into
the food.
We can have true accountabilityon the products that are being
sold, and companies will alwaysbe able to get funding from
(01:04:41):
their customers.
So we don't even have to haveone ideology that's better than
another.
Get a beautiful, free worldthat's based on meritocracy,
egalitarianism beyond what evenwould come from having you know
some technocrat or someone elseto dictate to others, but
(01:05:02):
because, simply, you create themoney properly.
Speaker 1 (01:05:07):
Yeah, my next question would be where do I
sign up for such a place?
Speaker 3 (01:05:12):
It's so fantastic.
Yeah, I know, I do.
I really am encouraging peopleto.
Well, the book has theblueprint for producer credits.
You know the end of scarcityand you know, hopefully much
more will come.
But you know, I do I.
Any type of communities canbegin this, you know, I even
think rewards points and loyaltypoints are are like a shade of
(01:05:37):
it, they're an echo.
And if we could make allrewards points fungible and you
know which American Express didin like 2008, they were doing
there was something called theplenty point system.
I can't remember if that wasAmerican Express, but back in
2008, when people couldn't findwork, american Express said
listen, here's a list ofcharities.
(01:05:58):
If you want to volunteer atthese places, just do a double
check to prove that you did itand then we're going to issue
you X amount of points for thehours that you volunteer.
Now that's a producer credit.
Unfortunately, that program wentaway, but much of this is very,
very easy for us to start toput in place and I do see
(01:06:20):
inklings happening already.
I think Agrocoin is very youknow, very resonant with this
and and certainly thecybersecurity token that's
coming in California andhopefully there will be many,
many more, and I think you know,once people actually start to
see the concept, like oh wait aminute, money is just supposed
(01:06:41):
to represent our productivity,limited by supply and demand,
why you know.
And then on top of it, just tokeep the, that the token itself
should stay at parity at adollar.
A dollar, a dollar.
Now, you know most people.
The market itself willencourage producers of all kinds
to get involved.
Speaker 1 (01:07:02):
Any thoughts around how and maybe people should read
your book about it and I'llhave the link of the book below
in my description Any thoughtsaround like how this can come
about in the current system or,you know, current system of
(01:07:23):
enforcement.
Do you see that as apossibility for, say, the next
decade or something longer?
Speaker 3 (01:07:32):
You know, I do.
I think that communitycurrencies themselves have been
in existence for hundreds ofyears.
You know, we have theBerkshires in Massachusetts, we
had Ithaca dollars, there's theBristol Pound in England, so the
basis of community currencyexists, and when producers in
(01:07:53):
their communities go to dosomething like this, you wonder
what you know.
Of course, this is not a legalor financial you know statement,
but ideologically they're verymuch the same.
So I think that it's verysimple for communities to begin
things like this through theirexchange systems and I think
(01:08:16):
that as we start to seesomething like this really
coming about, the clarity interms of regulation should be
quite simple, because this isnot something you know that
people would be buying forspeculation or these kinds of
things.
But you know, we'll see how allof this unfolds in the next few
(01:08:37):
years and if money itself, ifcapital itself, continues to
become more limited, whetherit's through central bank,
digital currencies or otherkinds of things, the interest to
be able to self issue creditproperly is only going to grow.
So the dialogue is going togrow.
(01:08:59):
And in Canada you have CanadaTire, which is much like Walmart
, and they issue, I think, 100,you know they've issued over 100
million Canada dollar, canadaTire dollars and people will use
it also as a complimentarycurrency.
So there's a lot of basis.
There's a lot of food fordiscussion.
(01:09:22):
I'm hoping to, you know, createa circle on my website is my
name Kristen raggisoncom, whereyou know I have a little sign up
for people just to join acommunity so that we can start
to have more discussions.
And next year, hopefully, I'lllike a cartoon book coming out
(01:09:42):
for kids.
And then there's the audio bookon audible, which can be a lot
easier for people, even though Ifeel like sometimes I need to
just sort of read chapter one.
Chapter one I like to read overand over because it sort of
undoes a lot of theindoctrination.
But I think this is coming backand communities already engage
(01:10:05):
in circles of exchange and somany different kinds of these
basic paradigms.
Now, if we begin to merge itwith technology, we just have so
many opportunities to make adifference and a legacy of
difference for all those who arecoming after.
Speaker 1 (01:10:23):
Thank you so much, christian, on coming on the show
.
I would love you to be back onthe show sometime in the future.
I wish you best for your book,this current book and future,
future ones that are in thepipeline.
Speaker 3 (01:10:40):
Oh, thank you so much .
Speaker 1 (01:10:41):
It's such a pleasure Well wonderful pleasure is all
mine, thank you.
Speaker 3 (01:10:45):
Thank you.
Speaker 1 (01:10:46):
Bye, bye.
You, you, you, you, you, you,you, you, you, you, you, you,
(01:18:09):
you, you, you, you, you, you,you, you, you, you.
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