Think Forward EP 141 - Banks Will Crumble Like Cookies, But Keep The Coffee Hot with Emmanuel Daniel
October 28, 2025 • 52 mins
Emmanuel Daniel unpacks how digital finance prioritized monetization over true inclusion, then traces a larger shift from markets to networks where information compounds value. We test CBDCs, stablecoins, tokenized deposits, and ask whether debt has become the economy shaping tech, geopolitics, and personal wealth.
• VC‑driven digital finance and unmet inclusion claims
• Personalization versus centralization in money and platforms
• The ice trade analogy for financial inefficiency
• CBDCs stalling, stablecoins rising, tokenized deposits emerging
• China, India, and Africa leapfrogging legacy payments
• DeFi’s network logic versus TradFi’s market logic
• Debt as the economy and digitized sovereign liabilities
• 2035 outlook on tech advantage and investable nations
• History’s cycles informing finance futures
• Personal concerns about growing insularity and cross‑border work
Find Emmanuel’s work at emmanueldaniel.com. Think Forward Podcast: www.thinkforwardshow.com and on YouTube under ThinkForward Show
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Thank you for joining me on this ongoing journey into the future. Until next time, stay curious, and always think forward.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_02 (00:00):
Coming up on today's show.
SPEAKER_01 (00:01):
In digital finance is because the VCs dominate
digital finance, um the the ideawas to onboard millions of users
and then monetize them.
That's digital finance.
So this whole rigmarole aboutinclusive finance, for example,
there, you know, oh, we want tobring finance because it's a
(00:23):
benefit to the masses, to thepeople out there without access
to finance, and that's whythey're poor.
The actual motivation was toonboard them and monetize them.
You know, and for someone likeme, I look at indicators such as
lending rates.
Did they go down for poorpeople?
No, it didn't.
Never, nowhere in the world haslending rates gone down for poor
(00:44):
people as a result of digitalfinance.
Society is moving from um themarkets economy to the network
economy.
SPEAKER_02 (00:54):
Emmanuel?
Yep.
Welcome to the show.
What could um what could we talkabout?
Oh, so many things.
But first, let's start with you.
And who are you?
Where did you come from?
What's your mission?
What's your purpose and you knowyour your calling?
SPEAKER_01 (01:09):
Well, I'm Emmanuel Daniel, I'm the founder of
something called the Asianbanker.
I founded it in 1996 when therewas no publication or platform
covering traditional bankingacross all of the Asian markets.
And the thing about startingsomething, a publishing
(01:29):
business, a consulting businessin Asia is different from Europe
or the US because the momentyour plane takes off, you're in
another country.
So the same distance that you'dfly from New York to Chicago or
even New York to San Francisco,you would have traversed 18
countries in Asia.
And we're culturally verydifferent.
So for me, I I trained as alawyer, but for some reason,
(01:52):
this whole idea of uh getting ona plane and meeting people of
different cultures fascinated meat that point in my life.
I was 32 years old at that time.
And I chose the banking industrybecause I s I said to myself
that, well, unconsciously saidto myself that banking is a
cathedral industry.
A land in any country is rightthere next to big government,
(02:13):
you know, it's like a cathedralin the center of town.
And everyone's got something todo with banking from the time
they're born to the time theydie.
So if you want to understandcountries, uh you know, start
with banking and stitch ittogether from there.
You know, we're now like almost30 years into that business.
Uh we're no longer Asian bankerbecause I have an office in
(02:34):
Dubai, we do business in Africa,we run programs in Silicon
Valley in the US, we we runleadership programs in London.
So we're now called TAP Global.
Um uh it's been a fascinatingride uh at for on two
geopolitical fronts.
Uh in the year 2000, I startedmy office in Beijing, uh, or in
(02:56):
China, actually Shanghai in2000, and then in 2004, we moved
to Beijing, not knowing that uhin 2001 China was going to sign
uh the WTO agreement, uh, andthat was going to open up uh an
incredible uh long run ofeconomic um you know uh progress
(03:19):
never known to man, that uh thata country and a nation and a
civilization can develop soquickly and take advantage of
all the opportunities out thereand become second to none
almost.
And I had a front seat view ofthat development.
I because I covered banking inthe early years in 2000 to 2010,
the Chinese were tellingpublications like us, please
(03:42):
come to China, please teach us,we have a lot to learn from you,
uh, you know, things like that.
And so I got to meet a lot ofthe decision makers, understood
the story.
And in that time, I was alsotraveling to the US.
And I remember a conversation in2003 in Washington, um uh at
that uh that that hotel whereyou know the deep throat met
(04:07):
with um you know with uh with ajournalist and I forget the
names, um the you know, and andI was right.
Woodward and Bernstein.
SPEAKER_02 (04:16):
Woodward and Bernstein.
SPEAKER_01 (04:17):
Wood Woodward and Bernstein met there, right?
Um and uh and I was with asenator and with a lobbyist, and
they were saying to each other,uh, you know, America can afford
the um the Gulf War, the theattack on Iraq.
It cost the US at that time uh abillion dollars a month.
But however, we have graveconcerns about China's financial
(04:40):
situation because you know theythey've got a huge
non-performing loan portfoliothat is going to bust at any
time.
That was 2003.
I remember that conversationvery well because take it 10
years later, and then you seewhat happened.
You know, which country actuallyprogress leaps and bounds,
builds high-speed railway and umyou know, across the country and
(05:00):
all that, and and which countrywent into start you know,
getting into um insurmountabledebt uh in the US today's uh
130% uh debt to GDP ratio, thatkind of thing.
China is, by the way, 300%today, but uh almost all
invested on uh on developmentalassets.
(05:21):
Anyway, so front seat view ofall this, all of all of these
developments um and then umhaving to struggle through
understanding or making a senseof what's true and what's
fiction and what's sustainableand what's going to, if you
project it into the future, it'sgoing to blow up at some point.
(05:43):
And and those are the issues,that th those were the years
that they were my training yearsin that way.
Um and the other thing that Ihad great opportunity was that
because I was the Asian banker,the funny thing is I had I was
standing uh in the front of thequeue whenever it meant meeting
uh American politicians.
My book, for example, uh theforward was written by none
(06:05):
other than Barney Frank, whowrote, uh who was a congressman
at his time, he was the chairmanof the banking subcommittee, uh
co-authored uh the legislationthat still um you know governs
banking in the US and many othercountries, the Dot-Frank Act,
uh, that kind of thing.
And then I can rattle off namesof you know um chairmen of
(06:26):
banks, congressmen.
And the reason is every timethey came to Asia, they needed
someone who they can use as ayou know a post, uh, like uh you
know, get a sense of directionand all that.
So and we always had thatopportunity.
And I would spend three weekswith it with the chairman of uh
Wells Fargo, Dick Kovosovich, atthat time.
I had him all to myself, youknow.
(06:47):
So it's interesting that I maycome from out there, but I work
my well my way back into theglobal ecosystem and and uh have
my own views on how things havedeveloped.
Today, when we look at how theglobal ecosystem is uh
degenerating or rather breakingup into no longer a single
country dominating economics andsecurity, I have a chance of um
(07:12):
assessing the alternatives andhow they are working out.
And I'm working on my secondbook, which has to do more with
geopolitics, building from wherefinance has evolved and what
finance is thinking teaching usabout geopolitics.
And one of the first things thatfinance teaches us about
geopolitics is that very littleabout policy and geopolitical
(07:34):
trends is achieved throughdesign.
And actually, we learned that infinance because, on the one
hand, we like to be able to saythat you know country progressed
because it made all the rightdecisions along the way.
But if you take a country likethe US, it didn't consciously
make a decision to become whatit is today.
It was a result ofopportunities, responding to
(07:56):
opportunities, uh is a result ofsometimes moments of distress,
and crises actually createeconomic trends more than
design, that kind of thing.
So those were the those were theformative elements of the way I
think about geopolitics today.
And I've come to a point wherewhenever someone asks me about
trends about how a country islikely to respond to challenges
(08:20):
or opportunities and all that, Ialways say to them, look under
the hood and look under thefinancial hood and see what it's
made of, and then project fromthere.
You know, and so from you know,that's essentially who I am in
you know my own journey.
SPEAKER_02 (08:34):
So you have uh the latest, we know you're talking
on this next book, but yourlatest book is called The Great
Transition, which it basicallypredicts personalization of
finance.
Now, people have talked aboutthat for a long time.
You know, the personalizedfinance, if you will, and we can
see that to a degree in terms ofhow things are changing the
customer experience on portalsand other types of, but this is
(08:55):
a bit more radical.
So could you explain that forthe you know, the listeners, the
viewers, for the audience, ifyou will?
So can you explain us to theaudience what this looks like?
SPEAKER_01 (09:06):
The technology is taking finance very simply to a
level of personalization wheretwo people who need to transact
with each other can do sodirectly without an
intermediary.
Theoretically, that's whatfinance should eventually
become.
And practically, enough oftechnology is taking us very
close to that.
If you take Bitcoin, uh cryptos,for example, uh the whole idea
(09:29):
is that it's a P2P uh paymentplatform.
It's it's got no legacyinfrastructure the back to make
a transaction happen.
But having said that thepersonalization of finance is
here, I'm actually enraptured bythe whole dynamics of the of the
tension between personalizationand centralization.
(09:51):
In other words, the desire ofinstitutions, traditional
institutions, new institutions,to want to control the
personalization trend, to ownit, to define it, to invest in
it, and to to make all of theutility and technology possible.
The venture capitalists, theregulators, the traditional
(10:11):
institutions, all of that.
So there's a great battleactually taking place today
between personalization andcentralization.
And the conclusion I'm coming totoday, after having written my
book, is that we might comeclose to personalization, but
there's another trendunderlining that, which has
nothing to do with finance initself, but in the way that
(10:33):
human society is predicated, inthat we almost always fall back
on intermediaries to moderateour transactions, our
relationships, all of that.
I I use this example in my bookbecause I do take salsa lessons,
for example, and it justfascinates me that I could go to
any city in the world.
(10:53):
I learned salsa in Singapore andin Beijing, where I have an
office and I spend a lot oftime.
But if I went to Los Angeles, Ican just go onto the dance
floor, pick up anybody, and thatperson would know exactly what
I'm doing.
If I'm doing a cross-body lead,a cross-body lead is the same,
whether it's uh in Singapore, inuh Frankfurt, in Los Angeles.
(11:16):
And there was no committee thatdecided what a cross-body lead
is, you know, and so so thehuman society's ability to hold
together and create trendswithout an intermediary is
profound.
Uh, you know, and and we seethat in other areas in art, in
uh music, and and so on.
And yet we don't see that in inum you know in in finance, uh,
(11:39):
for example.
So so then the question is whatwhat conditions need to exist
for there to be the kind of quidpro quo between people?
And the nice thing about thedance analogy is that dance
keeps evolving, you know, andthen from Salsa you have new
dance forms like Kizomba andZook, and it just keeps going
and nobody dictates the terms,nobody defines the moves, and
(12:03):
yet it becomes universal andglobal without cost almost.
So I I put my finger on that andsay, what is it about humanity
that's able to create trends inthat way?
And yet we need institutions tocreate trends in finance and
economics and so on.
So it's this battle betweencentralization and
personalization that I'mspending a lot of time thinking
(12:25):
about and trying to define theelements that dictate them.
And when you think that way,you're able to look at modern
platforms, for example, ascentralization teams, you know,
social media platforms,technology platforms, and today
you have data centers in AI andso on, that that um the
temptation to centralize and toown the structure is so strong.
(12:49):
Um, you know, and and and thenI'm able to think through a
narrative where what will definethat and and what will
dissipitate that, which whatwill deconstruct that so that
individual humans can takeownership of their own data,
their own relationships, um, youknow, and and their own
transactions.
Um so so that's um that's whatit enables me to do.
SPEAKER_02 (13:12):
So two things.
One is I was a competitor, thisis 20 years ago, 30 years ago.
I was a swing dance uh swingdance.
Uh oh, it's done.
So Lindy, how I agree with youin the kind of pick up anything
as you go if you learn thefundamentals.
One of the speaking ofanalogies, one of the things in
your book I as here living inBoston, I'm originally from the
(13:34):
mid-Atlantic, but the ice tradeanalogy, which I think is
harvesting ice.
So I want you to kind of talkabout that and kind of mapping
that to the future of finance,kind of connecting.
I think it's a really wildthing.
You think about ice and it'sjust yeah, I won't I won't give
it away.
So you can share the audience,may never heard of this.
SPEAKER_01 (13:54):
The cover of my first book has got a block of
ice on it.
And so I used to the ice analogyto say that look, there was a
time when we used to get our icefrom the lakes outside Boston,
right?
And it used to freeze.
So did the Hudson.
That's right.
SPEAKER_02 (14:11):
So did the Delaware.
The Hudson, the Delaware, theyall used to freeze.
SPEAKER_01 (14:15):
Absolutely.
And and from the uh lakes ofBoston, you'd put the ice on
horse-drawn carriages and takeit to New York, and it went as
far away as Cuba.
The ice trade used to be so bigthat there were ships that
carried ice from Boston to Cuba.
Then in uh why how did it notmelt?
SPEAKER_02 (14:32):
How did it not happen?
SPEAKER_01 (14:33):
How did it not melt, you know, and and so much is
lost in that process.
And so I used that analogy toexplain that's what finance is
today.
The dollar that you have in yourpocket would have uh gone
through an entire global bankingsystem, finance system, where it
is subject to interest rates,exchange rates, bank charges,
security costs, and all kinds ofthings before it ends up.
SPEAKER_02 (14:56):
It's like tax it's like taxation telephone.
Play a game of telephone, andit's things completely different
on the other side of the of thecircle, of the talk and same
thing.
The dollar you had ends up beinglike a dime on the other side.
SPEAKER_01 (15:08):
Yeah, that's right.
You know, and economics dictatesthat, right?
So you have inflation on top ofthat.
So um that's how inefficientfinance is today.
Uh, you know, and it's and it'suh owned by the intermediaries.
And you know, when you when whenyou draw that to to the ice
trade, to this day you'll findthe ice merchants' warehouses
(15:30):
somewhere, you know, outside ofBoston.
You go to the Midwest, you'llyou'll you'll suddenly r run
into something that looks like ahuge bond, but it used to be an
ice warehouse.
SPEAKER_02 (15:41):
Yeah, so what we would do here I know in
Baltimore too, like you wouldget a block and it would be
delivered for your ice box.
The here we still actually havea few ice companies that over
time they still serve like theystill make and deliver and
they're still around.
They just do obviously have adifferent you know need or
(16:02):
distribution for that.
You know, and I think it's aboutchange, and like we talk about
in Super Shifts.
Um we talk about, you know, thequick, quick sorry, so so so
kind of ultimately quicktransitions of change that kind
of up upset the system andreform new systems.
(16:22):
You know, you have somecontrarian talk and I wanted to
I wanted to touch on some of thesome of the financial
instruments.
You talked about this about thethe digitization, but like you
think banks are gonna crumble, Ilike the quote, crumb crumble
like cookies, and you also thinkCBDCs, which I think I agree,
(16:43):
which will fail.
Because I think the controllingit's just did just for those
listening, this is differentfrom stable coins.
This is a different kind of umbut yeah, can you you wanna get
your what's your perspective onthat and the resistance, you
know, the political resistance?
SPEAKER_01 (16:59):
Let's keep it the uh uh you know, let's get the
basics right first.
So yeah, go ahead.
Take take the ice trade, and andhow do we get our ice today?
We manufacture it in our iceboxes, in our refrigerators.
It's personalized.
You you you get it when you wantit and how you want it, and you
own the whole process.
What made that happen, you know,in the early days of the
(17:21):
refrigerator, it was uhchlorofluorocarbon CFCs.
So so what I what I try to do islook for the CFC of finance.
You know, what will causefinance to become personalized
that you don't need anintermediary?
And and and there I I'veidentified several elements that
need to be in place for financeto be personalized, carry that
(17:43):
quite well.
We are now in a process wheregovernments, big businesses are
responding to the cryptochallenge.
And as they do that, they theycome up with synthetic
alternatives in the hope ofstill owning that process.
And so, because I get thefundamentals clear in my own
mind what it is that I'm lookingat, whenever I see a trend, so
(18:04):
there was a time when CBDCs werea trend.
And what were C C BDCs?
Central bank digital currencies?
It was central banks andgovernments being really afraid
that they're gonna lose the plotif uh cryptos take over.
Because even today, there's alot more trade taking place
between unbanked people aroundthe world through the use of
(18:25):
stable coins and crypto than isrecognized in the system.
And even as governments andlarge banks, American banks, for
example, will not do dollarclearing for highly stressed
countries like Somalia or youknow um Namibia has some
problems.
I mean, like you just go todifficult countries and and they
(18:47):
are stumped because they cannotparticipate in the global
financial system as it existsright now, and they're finding
the alternatives viable uh at apersonal level.
And then there are global uhinterbank regulators like the
Bank for InternationalSettlements, which issues
warnings that crypto is badbecause the transactors are
(19:08):
anonymous, which is not true,uh, you know, and and uh and
money laundering and all thatneeds to be controlled.
So we we are looking at the plotbeing evolved, and we have now
reached the point where thebankers have realized to
themselves that if central banksissue their own digital
currency, that immediatelydisintermediates the traditional
(19:31):
banks as they are in theexisting system.
It's like if you can send moneydirectly from a central bank to
the end user to central bankdigital currencies, you don't
need us as banks.
And then they stop short intheir tracks on that one and
said, you know what, we can'treally promote CBDCs.
And the US eventually killed itby saying by introducing
(19:52):
legislation saying that CBDCsare bad because uh the state
shouldn't be shouldn't have somuch power and information over
individual transactions.
And then now they've gone to thenext uh possible scenario, which
is to encourage banks to issuetheir own versions of CBDCs
called tokenized deposits.
While stable coins are a veryclear alternative, just sitting
(20:14):
there, the technology hasalready been invented, but the
traditional banks were afraid ofbeing disintermediated as a
result.
So you see, um this there's thisgreat battle between
centralization andpersonalization underway right
now in finance, and it's workingits way through.
Um as the individual gainsincreasingly more ownership over
(20:39):
his transactions and hisrelationships, that will create,
and that's why I wanted to talkto you, Steve, because that's
going to create geopolitical,new geopolitical scenarios and
realities where the state itselfdoesn't have control over its
own people.
Um you know, and then what doeswhat happens to you know the
relationship between states as aresult?
(21:02):
Um you know, and and thesethings get played out, or these
themes get played out subtly.
They they are the subtext ofwhat you read in the newspaper,
that that the state doesn't havecontrol over large swaths of its
population because they're ableto generate their own wealth
between themselves and all ofthat.
So that's uh that's how Ireconstruct geopolitics using
(21:24):
finance as the as the base andunderstanding how finance
actually works.
SPEAKER_02 (21:29):
When you look at the Asian markets, excuse me, you
built Asian Banker.
It's one of the it's one of themost respected financial
intelligence platforms.
I mean it's been you've had itfor many decades.
A lot, you know, we have aglobal audience, but many are
not from like the the the Asianmarkets itself, like when you
look at the US and you look atlike Asia, what do you think
(21:52):
what patterns are you seeing inthe in the mark in the Asian
market that are missing?
Like the changes?
Are they are they different interms of this personal
centralization?
Are they different?
Like what are you seeing?
SPEAKER_01 (22:03):
What's interesting is that uh we've come to a point
where, regardless of wheresomething like Bitcoin was
created, it's actually creatingnew opportunities in markets
that we're not even thinkingabout.
And the interesting thing aboutfinance is the leggards always
are able to leapfrog theincumbents.
(22:24):
So if you take payment systems,for example, in the US, you've
got Visa, MasterCard, uh, andyou've got a domestic payment
infrastructure that has workedfor many years.
It takes a week to clear acheck, um, you know, and and
it's so difficult to dismantlethat legacy infrastructure
because of the number of playersuh who are involved in you know
(22:45):
processing that kind oftransaction.
Then you go to the other side ofthe world and you uh it can be
in Asia.
Today it's actually more Africa.
Asia is as encumbered by legacyinfrastructure as the US now,
some countries in Asia.
But go to a country which hasgot no legacy infrastructure,
and suddenly you see payments, arevolution taking place.
(23:06):
First it was China.
But because China closed itselfto Visa and MasterCard, and and
then it tried to recreate itsown version of Visa Mastercard
called China Union Pay, butwithout even realizing it,
Alipay and WeChat, which werestartup technology platforms,
suddenly dominated the paymentinfrastructure in China hands
(23:28):
down.
When I'm in China, I don't carrya wallet.
A WeChat Pay is sufficient foreverything and it's integrated
into your social ecosystem.
And and the Chinese, when theygo to the US, they cannot
believe why you need a quarterto pay toll gates and you know
stuff like that.
Um and then India.
I wanted that too.
(23:49):
India aced China because China'spayment platform was created at
a time when the Chinesegovernment was still uh getting
a handle on how to regulatethese things.
So the the technology playerswere able to go ahead of time
and and uh build infrastructureand universalize it so that it
became nationwide.
It's it's now incumbent.
(24:10):
Like you cannot run away fromWeChat and Alipay.
The Indian government looked atwhat was happening in China and
said, you know what, we're notgoing to allow any one
technology player to dominateour payment infrastructure.
Uh, and then, of course, the theregulators in China come after
the fact and regulate theseplatforms.
What the Indians did was let'sgive everybody an identity.
(24:31):
And once we've given everyone anidentity, any player can come in
and provide a paymentinfrastructure because uh
there's no question about theidentity of the parties involved
in a transaction.
And so they've come up withanother model which has also
digitized payment in India,which we thought that will never
happen.
And today uh it's got a nationalinfrastructure, but multiple
(24:53):
players compete with each otherand so on.
There, the funny thing is thatyou think that China is more
regulated than India.
Actually, India is moreregulated than China.
The regulators in China learnedtheir craft over a period of
time.
They are well regulated today,uh, but the Indian regulators
inherited their civil servicestructure from the British.
(25:15):
So they've always had it.
They they were always uh uh youknow a heavy hand on uh free
enterprise.
So um so they they've managed toum control uh the the role of
free enterprise in creating newinfrastructures and so on.
And then you go to Africa, wheretoday you have cross-border
payment infrastructure providedby uh IT companies essentially,
(25:38):
uh, and telcos um uh able tomove far ahead.
I've had in the US, I wasattending a conference in Vegas,
and on the third day of theconference, they happened to put
three Africans on the stage, andthey were saying that we don't
understand why the US paymentinfrastructure is so backwards,
and um, you know, we can doinstant payment between
countries like where we are inAfrica.
(25:59):
So the the point there is thatum the the countries with a
clean slate are able to leapfrogthe countries with a huge legacy
infrastructure.
And we're gonna see a lot ofthat.
Even in AI, we we need to thinkabout who's starting with a
clean slate.
The countries which are verydependent on structures like
(26:21):
Google and you know and theexisting digital infrastructure
platforms might actually findthemselves assigned to being
very uh legacy societies whereuh they've never had this need
to go in and do a search,suddenly find themselves
leapfrogging and and gettingproblems solved using platforms,
(26:41):
you know, like going straight tothe answer rather than asking
the question.
So uh uh technology alwaysfavors uh the uh the new the the
new players rather than theincumbents.
And that's what I've learned uhin finance, and I see that uh
you know play being played outagain and again.
SPEAKER_02 (27:00):
Speaking of uh newer technologies, I mean DeFi.
Just kind of keep on thedisruption thing.
So I've worked in with DeFi formany years, been in crypto for a
long digital assets.
Seen a lot of great things itcan do and some nefarious things
it can do, you know, or the thefraud it's open to.
It's not an easy system to learnin terms of the terminology and
(27:23):
the and the workflow.
People have models that youknow, mental models for years,
but it is forcing change, right?
Rather than it's like replacingit.
I you know, you've seen Bitcoinbe adopted into uh ETFs, be
adopted as a corporate part oftheir trust and their balance
sheet.
Right.
We're seeing mass adoption bytraditional finance firms to
(27:46):
allow it to be part of an assetpool now, you know, for a an
part of their portfolio, right?
So when you when we see it likeforce change, what do you see?
I mean you mentioned like youknow independent payments.
I mean, still with Venmo orother PayPal, you still need an
intermediary to make thathappen.
What do you think?
How do you see Trad TradFi andDeFi evolving together?
(28:09):
Oh uh TradFi, okay.
It's always been we always talkabout the conversations of them
over there and them over there.
That's not the reality.
The reality is they're gonnahave to pee, they're gonna have
to coexist or use each other indifferent ways to add value.
So, yeah, that's what I wantedis to do something a little
different than the traditionalkind of conversation that's out
there.
SPEAKER_01 (28:29):
Yeah.
Um, so the way I construct myown response to what you're
saying is this.
What did we learn in digitalfinance?
You know, before we go todecentralized finance.
Yeah.
What we learned you know, whatwe learned in digital finance is
because the VCs dominate digitalfinance, um the idea was to
(28:53):
onboard millions of users andthen monetize them.
That's digital finance.
So this whole rigmarole aboutinclusive finance, for example,
there, you know, oh, we want tobring finance because it's the
benefit to the masses, to thepeople out there without access
to finance, and that's whythey're poor.
The actual motivation was toonboard them and monetize them.
(29:14):
You know, and for someone likeme, I look at indicators such as
lending rates.
Did they go down for poorpeople?
No, it didn't.
Never, nowhere in the world haslending rates gone down for poor
people as a result of digitalfinance.
You know, so the venturecapitalists are need to be
rewarded for building theinfrastructure, and and and
(29:35):
that's digital finance.
Decentralized finance,interestingly, technically there
is no winner or loser.
Uh, the way I describe it in mybook is that society is moving
from the markets economy to thenetworked economy.
In the markets economy, we aretransaction-centric, that is,
willing buyer, willing seller,the transaction is concluded and
(29:56):
the price is settled, andthere's a winner and a loser,
you know.
Depending on how you look at it.
In a network economy, everyoneis a winner.
The more networked you are, themore the asset that you're
holding gains in value.
And the best asset in thenetwork economy is information.
Information is the one assetthat doesn't leave you when you
give it away.
And the funny thing is, you needto give it away to make it more
(30:19):
valuable to yourself, that kindof thing.
So the math and the mechanics ofdigital assets is different from
assets in the in the digital inthe markets economy.
So in digital assets in thenetwork economy is different
from assets in the traditionaleconomy.
(30:40):
And that is why when I listen toWarren Buffett, for example, or
Charlie Munger say that cryptois bad, we don't understand it,
and so on, and it doesn't havean underlying asset.
Absolutely, I understand wherethey're coming from, because
they're coming from the marketseconomy.
That an asset has to have anunderlying value for it to be
(31:01):
able to realize its potentialincrease in value and all that.
Whereas in what they don'tunderstand is that in a network
economy, the mechanics is quitedifferent.
And that's what we're lookingat.
The funny thing about DeFi isthat we've got a lot of
distractions right now, likefutures and derivatives and all
of that.
That all has to do withintermediaries trying to be a
(31:25):
player in an evolving system.
The idea of staking isinteresting because you profit
because you lend to the creationof a new asset.
That in itself is a very pureidea.
It never existed before.
It's valid in itself and isproven to be safe to this
moment, right?
So that's good.
And I think that what thefinancial system is trying to
(31:46):
make sense, both the traditionalplayers and the new ones coming
on stream, is is there any valuein digital assets?
And what constitutes digitalassets?
You know, there's been a lot ofexperiments taking place, and
you know, you you uh digitalassets being created and and
then losing their value and soon.
(32:06):
Uh it's actually the early daysof the network economy being uh
taking shape.
And eventually we will startseeing the digital assets uh
that will make sense and the theones that you know will collapse
by by the wayside.
Uh and even then, because it'sthe information industry, uh
information era that we are weare we are moving towards, you
know, there is such a thing asephemeral assets, meaning assets
(32:29):
that have a value in a period oftime and then they just
dissipate for the next asset,those types of things.
So so the the ground rules of uha decentralized finance economy
are just being laid right now.
Interesting.
SPEAKER_02 (32:42):
Because I'm thinking about DeFi, and it always gets
me back to someone's running theservers, someone's running the
yield server, right?
Someone's someone's store.
So it's not really trulydecentralized.
When I think of decentralized,just hear me out.
I think of somebody with a youknow hard hard wallet and their
ability to almost like I havetwo of them here for those of
(33:04):
you listening, not watching.
I have two like ledger touchwallets, which are really cool.
If I could touch them togetherand do a transaction directly to
them, but still, I meansomebody's on the blockchain's
gonna process that.
So they're gonna get theirtransaction fee.
But the fact that I have toreally transfer this to another
(33:25):
place and then make that work,you know, there's so I think
what really, and that's a deeplyphilosophical idea, what is
decentralized finance, right?
What really is considered DeFi,right?
Is it all these different uniquemechanisms?
To your point, which earlier isthat I think banks will
eventually adopt them.
Because why wouldn't they wantto have yield farms?
Like if they have the securityof data centers and they have
(33:47):
all the liquidity pools, theyields, like they'll they can
continually be a mechanism forthose that maybe want to be
continually it's like going toan ATM.
You have to get, you know,borrow money, like you you you
still have to interact with thesystems.
I think the next couple of yearsare gonna be very telling.
There'll be another wave, andyou mentioned before, yeah.
(34:09):
I personally am not a meme coinfor it.
I don't know how white people domeme coins or do other types of
things.
Um I'm very much wary of fads orother types of uh anything
that's hyped because there's alot of rug pull types of uh
scams out there.
There's a lot of good stuff too.
I've made far more investing incrypto than I ever did just with
(34:29):
traditional I I have traditionalassets, but you know, far more.
And I will continue to do that.
So we you you had mentionedearlier in the show, you know,
there's an upcoming book, andthat's called The Winning
Civilization.
That's travels, you've been toit's 130 countries.
Only done a portion of that uhsize, that's pretty extensive.
(34:53):
So we talked about kind of theimplications of technology and
the trad versus DeFi.
In the future of finance, howdoes you talk a lot about
geopolitics, but beyond the kindof traditional like depressions
or hyperinflation, like how doesgeopolitics really shape the
evolution of a system?
Because we are like in the booklet me let me elaborate in the
(35:15):
book Super Shifts, we talk aboutthis new age of intelligence.
Like there's a previous age, ageof engines, which is the the
industrial revolutionessentially, for 200 years.
And we created traditionalbanking finance, and obviously
that traditional banking goesall the way back to like the
Templars and you know theMedich, like that goes for mil
you know centuries.
(35:36):
But if we look at geopoliticsnow and we have things that can
be decentralized, what is itwhat does it mean for the
evolution of the system itselfin this kind of new age?
What does it mean for us?
SPEAKER_01 (35:49):
Everything you said about DeFi is uh transposable to
AI.
Who owns I mean the just thatwhole phrasing that you you you
went through just now isapplicable to AI and how AI will
evolve, who would own theservice and who would own the
knowledge, uh, you know, and anduh who would be able to profit
(36:12):
from from that.
All of that is the same.
The big thing about you knowdecentralized finance and and
geopolitics is also I've saidthis in my book, and I think I
want to say it againemphatically, that we are now at
entering an economy where debtis the economy.
D E B T.
Debt is the economy.
SPEAKER_02 (36:34):
What do you mean by so what do you yeah, uh what do
you mean by that?
Debt is the economy?
Because we've always had peoplehave always had debt.
There's always been debt, therealways there will be debt.
SPEAKER_01 (36:42):
So, but there's so there's any number of economists
right now saying that, hey, theUS has to, you know, step down
from its debt exposure, it'sjust unsustainable, and that it
will affect the US as a globalsuperpower, all of that.
And so what I'm saying is thatwe are not ever going to step
down from debt.
All major countries in the worldwill continue to issue even more
(37:06):
debt uh to in order to grow.
And that should instruct ouridea about how wealth will be
created in the future.
Today, there was a time whenwealth meant combo compounded
interest that gains on yourlittle deposit account.
We are now way past that.
If you're not invested insecurities, you're not ever
going to fight inflation, you'renot going to generate wealth on
(37:29):
the back of your basic assets.
And then we're going to anotherlevel yet again, which is that
what happens when sovereignstates issue indeterminate debt?
In other words, like, you know,to solve yesterday's problem,
we're going to issue more debt.
Debt to GDP in the US is 130.
Um, debt to GDP for China uhcompound, I mean uh you know,
(37:53):
put together is nearly 300 uhpercent of GDP.
Japan is way over 300%.
The funny thing is, Japan hasbeen um 300% debt to GDP for the
last 20 years, and it's and it'sheld together pretty good.
It's created an ecosystem whereits own people are investors in
(38:14):
its own debt.
It's not even exported to therest of the world like the US
debt is, you know.
So there is a sustainable modelin creating indeterminate debt.
And what did the Japanesegovernment do with the debt that
it created?
It just created uselessinfrastructure around the
country, you know, long tunnelsunder the sea, high-speed
(38:34):
railway, uh, this and that, uh,just to keep the economy
growing.
And over time, it does have animpact.
Like today, uh uh there's adeflationary force underway in
Japan.
The yen can't hold its rates,the population is decreasing, so
the GDP growth can't um growfast enough to deal with the
debt that has been created.
(38:55):
But the US will when looking atthe benchmark for sovereign
debt, the US still has a longway to go.
You know, 130, it can go to 200,it can go to 300, and the US
will look very different than itis today.
For a while, it will be drivenor being it'll be amortized by
the developments taking place intechnology today in the US
(39:18):
because technology will absorball the excess liquidity being
created.
That's exactly what is happeningright now, and that's what's
funding uh technologydevelopments.
So, as debt becomes the economy,the question then comes, becomes
how do we get investors in ourdebt?
How do we get universalinvestors?
In other words, we need todigitize our debt and make it as
(39:41):
palatable to investors fromaround the world.
And we'll promise to be thehardest working nation in the
world to anyone who's holdingour debt.
And so we're looking at a regimeright now where debt is being
digitized and internationalized.
SPEAKER_02 (39:56):
Yeah.
SPEAKER_01 (39:56):
You know, the the US does it very well.
A number of other countries arevery likely to continue doing
that.
So when that happens, we have tostart thinking about the
ordinary person has to startthinking about how your wealth
is going to be created.
Uh, and that's why those who aresuggesting that digital assets,
for example, have an upsidepotential in terms of the
(40:18):
valuations going up on the backof the liquidity being created
from the debt economy today, uh,it makes sense.
You know, so so that's how weneed to be thinking about
personal wealth, geopolitics,and entire financial systems in
the future.
SPEAKER_02 (40:34):
So let's, as this is a show about with futurists and
big thinkers, let's take a lookinto the future.
So let's say the world of 2035.
You pop in there to observe thefinance world, what does it look
like?
SPEAKER_01 (40:48):
The ability to generate debt and and uh export
it uh will become more welldeveloped and more universal.
Countries will take advantage ofthat.
Then it becomes a a question ofbeing an attractive country to
invest in.
Uh and in that regard, uh, youknow, the US still has a lead
(41:10):
because of what's it what it'sdoing in technology today, but
it might lose that lead if it'suh if its edge in technology
starts to taper off and othercountries cap you know catch up
with the US on that.
Now, for that, by the way, I Ilook back in history.
The funny thing about being afuturist is that you you really
(41:31):
need to know your history wellto feel comfortable about trends
that have actually beenhappening before.
That it's not new.
We don't need to fear it becauseum it's the it's human nature.
SPEAKER_02 (41:46):
Um you know the funny thing is this that the
best futurists, the bestfuturists are historians.
Like they understand cycles,they understand pat what's what
we need to do is patterns.
So, what is the thing you'reseeing history?
SPEAKER_01 (41:59):
Well can I just as an aside, by the way, a lot a
lot of what has been happeningin the US has not disturbed me
at all because the way I say itis it's happened before, you
know.
Has a has a president misbehavedbefore, it's happened before.
Has the US got intoindeterminate debt before it has
happened before?
SPEAKER_02 (42:18):
What's different is it's so well documented and so
much easily shared in terms ofevery, you know, and then
there's the media will alwaystry and pipe things.
I mean, we could talk aboutyellow journalism from you know
a hundred years ago, but nowthey can fully the like the like
the transformation or collapsefrom like go every 80 years or
(42:40):
so, like Strauss and Howe.
And look, I don't know if I'llever have Bray Dalio on here,
but I gotta call him out on hisconversations.
He doesn't give them credit.
And like he uses all thesethings, but he doesn't like
Strauss and Howe looked at the80, 90 year cycle, and this
trend we're going through itnow, right at the end of the
winter, and it's gonna getrough.
(43:04):
But it's this but this collapse,transformation, whatever you
would call it, this this fourthturning, the the next is a
spring.
It's a it's a it's a it's abeautiful kind of like new place
to be.
We have to go through it.
And the last one, which wasWorld War II, was you know
somewhat documented, but interms of living memory, that's
what's it very I that's what Ifind is interesting.
(43:24):
Everyone thinks it's unique andnew, but it's just so much more
documented and shared, andpeople are getting it.
And yeah, AI is definitely adifferent animal that kind of
throws in a whole new curve, butyou know, again, or other
transformational technologies.
They mean the atomic bomb, youknow, changed everything.
SPEAKER_01 (43:42):
So anyway, that's so so the thing about what we're
going through right now is thisthat the Industrial Revolution
may have been originated in theUK and several European states,
but the states that the statesthat eventually harnessed it,
scaled it, mastered it, anddominated other economies were
(44:05):
Japan and Germany.
And why?
Because they were well betterorganized to harness technology.
And that's actually what we'reseeing today.
AI may have originated in theUS, but the societies or the
nation states that are going tobe able to harness it very
quickly and scale it are theones that are much more
(44:26):
regimented, much more controlledsocieties where the leadership
has a lot more control overdirection, policy, things like
that.
And that shouldn't surprise us,you know, that it is the
dictatorial states that willactually dominate technology in
the future.
And in fact, when you taketechnology to the next level,
you you talk about if if we weretalking about um interplanetary
(44:49):
travel and so on, you actuallyneed a a lot more organized
society uh than you know aliberal left-leading um society.
A left-leading society uh willnot be able to handle um um you
know scaling and transitions andso on as as much as a
(45:09):
conservative, well organized uhor even militaristic society,
which is what Germany was in itstime.
So so we we we go back tohistory to identify, put our
fingers on what the operatingelements were.
And these are the operatingelements that we are we are
(45:29):
looking at right now.
None of what's happening todayshould surprise us.
The rise of China or the abilityof Russia to survive a war and
still uh you know hold togetheras an economy, as a
well-functioning economy rightnow.
Russia is doing okayeconomically.
Then the question is how farwill they be able to take it?
And uh there are drasticconsequences depending on the
(45:51):
leadership and and what they dowith it.
SPEAKER_02 (45:54):
Well, things don't surprise you, but what keeps you
up at night?
Is there anything like in thefinancial sphere, like the
future finance that kind ofkeeps you up like we're worried
about?
SPEAKER_01 (46:03):
I I've moved away, I've moved to beyond future
finance.
Uh um I because I've personallyfunction in different societies,
I'm in the US four to five timesa year, I'm I'm in China six
times a year, you know, likeevery other month I'm there.
So I'm actually switchingbetween realities.
(46:23):
If the one thing that keeps meup awake is that the
sensibilities that give me theopportunity to build my
business, to to be relevant toour people and so on, if if that
degenerates, then I've got to beconcerned about my own future.
So I'm concerned about a worldwhere um I will not be given the
(46:45):
chance to contribute and and tobe part of um you know
development.
And that kind of reality, we arebordering on it.
Like, you know, countries arebecoming insular, people are
becoming more myopic in terms ofyou know who's important and
not.
I was just in uh um, you know,cut in Central Asia, for
example, and it's veryinteresting that they they are
(47:08):
progressing quite well, um, youknow, in the same way that East
Asian countries like Singapore,Taiwan, Japan have been evolving
in the last 30 years.
So the the idea of nationalismis is growing very, very
obviously.
And the uh and the freedom thatI have to transpose between
(47:28):
realities, between societies,and still be relevant and create
an international business.
So the thing that keeps me awakeat night is the more insular
societies become, the less thatthose of us who transcend
borders will have opportunitiesto to grow businesses that make
sense for everyone.
SPEAKER_02 (47:44):
You can also answer kind of my legacy question I
always ask everybody, you know,how how do you want the work to
be remembered?
Like and you're all kind of, youknow, kind of done, tired with
the world, ready for somebodyelse, you know, to watch watch
it happen.
Like what do you want people tosay about your work in this in
this in this life?
I always like to ask because itit opens up a lot of deep
(48:07):
meaning, you know, and it a lotof reflection.
SPEAKER_01 (48:10):
You know, a few of us will have the opportunity to
to do something, whether it's inthe sciences or in the arts,
that profoundly influences a lotof people.
I still have another 20 years toto have a shot at that.
And sometimes it's uh whatyou've gained over the past 30
years or so that makes the that20 years possible.
(48:30):
But I think that all of us uhwill will need to be satisfied
with the fact that we've madethe difference in one person's
life or uh, you know, a fewpeople's lives around us.
In my case, I've givenemployment to a few hundred
people uh in the time that I'vebeen in business and I've seen
how they've grown.
Um, you know, and and then uh Iwould like to be remembered for
(48:54):
having made a statement or madean observation that helped
humanity figure out a new face.
And that's work in progress atthe moment.
SPEAKER_02 (49:04):
That's great.
That's great.
You mentioned the book is comingout, and I know the Asian
banker.
So, what what's coming up andwhat should people know about,
and where can they find you?
Because I think that's the big,you know, because they want to
learn more about what you'redoing, which is great, wonderful
stuff.
SPEAKER_01 (49:21):
Emmanuel Daniel is Emmanuel Daniel.com is a good
starting point.
In fact, I'm I'm I'm doing morewriting there, and from there,
you'll see that I've beenposting different things on
LinkedIn, on my on my TikTokaccount, and my uh Instagram,
which is a combination ofspeeches that I've given as well
as places that I visit, and Itry to make a point and I post
(49:43):
that so I'm actually usingdifferent media to communicate
different things, but the oneplace that you can find all of
that is my my blog page,emmanualdaniel.com, and that's a
work in progress.
I've been posting articles thatare more geopolitical in nature,
taking stock of differentcountries' responses.
So, India or Africa or theMiddle East, uh, how are they
(50:06):
thinking about their owngeopolitical directions?
The moment I think I've figuredout how to think about them, I I
write something and it's postedon emmanuelDaniel.com.
SPEAKER_02 (50:16):
That's great.
Well, I want to thank you forthe time today.
It's been a wonderfulconversation about finance and
the world and just getting aglobal perspective, which
everyone needs to have.
So thanks again.
And I'm now we're gonna haveRion again soon.
Thanks.
SPEAKER_01 (50:31):
Thanks, Steve.
Thanks, Steve.
SPEAKER_00 (50:32):
Thanks for listening to the Think Forward Podcast.
You can find us on all the majorpodcast platforms under
www.thinkforwardshow.com as wellas on YouTube under ThinkFord
Show.
See you next time.
Coming up on today's show.
SPEAKER_01 (00:01):
In digital finance is because the VCs dominate
digital finance, um the the ideawas to onboard millions of users
and then monetize them.
That's digital finance.
So this whole rigmarole aboutinclusive finance, for example,
there, you know, oh, we want tobring finance because it's a
(00:23):
benefit to the masses, to thepeople out there without access
to finance, and that's whythey're poor.
The actual motivation was toonboard them and monetize them.
You know, and for someone likeme, I look at indicators such as
lending rates.
Did they go down for poorpeople?
No, it didn't.
Never, nowhere in the world haslending rates gone down for poor
(00:44):
people as a result of digitalfinance.
Society is moving from um themarkets economy to the network
economy.
SPEAKER_02 (00:54):
Emmanuel?
Yep.
Welcome to the show.
What could um what could we talkabout?
Oh, so many things.
But first, let's start with you.
And who are you?
Where did you come from?
What's your mission?
What's your purpose and you knowyour your calling?
SPEAKER_01 (01:09):
Well, I'm Emmanuel Daniel, I'm the founder of
something called the Asianbanker.
I founded it in 1996 when therewas no publication or platform
covering traditional bankingacross all of the Asian markets.
And the thing about startingsomething, a publishing
(01:29):
business, a consulting businessin Asia is different from Europe
or the US because the momentyour plane takes off, you're in
another country.
So the same distance that you'dfly from New York to Chicago or
even New York to San Francisco,you would have traversed 18
countries in Asia.
And we're culturally verydifferent.
So for me, I I trained as alawyer, but for some reason,
(01:52):
this whole idea of uh getting ona plane and meeting people of
different cultures fascinated meat that point in my life.
I was 32 years old at that time.
And I chose the banking industrybecause I s I said to myself
that, well, unconsciously saidto myself that banking is a
cathedral industry.
A land in any country is rightthere next to big government,
(02:13):
you know, it's like a cathedralin the center of town.
And everyone's got something todo with banking from the time
they're born to the time theydie.
So if you want to understandcountries, uh you know, start
with banking and stitch ittogether from there.
You know, we're now like almost30 years into that business.
Uh we're no longer Asian bankerbecause I have an office in
(02:34):
Dubai, we do business in Africa,we run programs in Silicon
Valley in the US, we we runleadership programs in London.
So we're now called TAP Global.
Um uh it's been a fascinatingride uh at for on two
geopolitical fronts.
Uh in the year 2000, I startedmy office in Beijing, uh, or in
(02:56):
China, actually Shanghai in2000, and then in 2004, we moved
to Beijing, not knowing that uhin 2001 China was going to sign
uh the WTO agreement, uh, andthat was going to open up uh an
incredible uh long run ofeconomic um you know uh progress
(03:19):
never known to man, that uh thata country and a nation and a
civilization can develop soquickly and take advantage of
all the opportunities out thereand become second to none
almost.
And I had a front seat view ofthat development.
I because I covered banking inthe early years in 2000 to 2010,
the Chinese were tellingpublications like us, please
(03:42):
come to China, please teach us,we have a lot to learn from you,
uh, you know, things like that.
And so I got to meet a lot ofthe decision makers, understood
the story.
And in that time, I was alsotraveling to the US.
And I remember a conversation in2003 in Washington, um uh at
that uh that that hotel whereyou know the deep throat met
(04:07):
with um you know with uh with ajournalist and I forget the
names, um the you know, and andI was right.
Woodward and Bernstein.
SPEAKER_02 (04:16):
Woodward and Bernstein.
SPEAKER_01 (04:17):
Wood Woodward and Bernstein met there, right?
Um and uh and I was with asenator and with a lobbyist, and
they were saying to each other,uh, you know, America can afford
the um the Gulf War, the theattack on Iraq.
It cost the US at that time uh abillion dollars a month.
But however, we have graveconcerns about China's financial
(04:40):
situation because you know theythey've got a huge
non-performing loan portfoliothat is going to bust at any
time.
That was 2003.
I remember that conversationvery well because take it 10
years later, and then you seewhat happened.
You know, which country actuallyprogress leaps and bounds,
builds high-speed railway and umyou know, across the country and
(05:00):
all that, and and which countrywent into start you know,
getting into um insurmountabledebt uh in the US today's uh
130% uh debt to GDP ratio, thatkind of thing.
China is, by the way, 300%today, but uh almost all
invested on uh on developmentalassets.
(05:21):
Anyway, so front seat view ofall this, all of all of these
developments um and then umhaving to struggle through
understanding or making a senseof what's true and what's
fiction and what's sustainableand what's going to, if you
project it into the future, it'sgoing to blow up at some point.
(05:43):
And and those are the issues,that th those were the years
that they were my training yearsin that way.
Um and the other thing that Ihad great opportunity was that
because I was the Asian banker,the funny thing is I had I was
standing uh in the front of thequeue whenever it meant meeting
uh American politicians.
My book, for example, uh theforward was written by none
(06:05):
other than Barney Frank, whowrote, uh who was a congressman
at his time, he was the chairmanof the banking subcommittee, uh
co-authored uh the legislationthat still um you know governs
banking in the US and many othercountries, the Dot-Frank Act,
uh, that kind of thing.
And then I can rattle off namesof you know um chairmen of
(06:26):
banks, congressmen.
And the reason is every timethey came to Asia, they needed
someone who they can use as ayou know a post, uh, like uh you
know, get a sense of directionand all that.
So and we always had thatopportunity.
And I would spend three weekswith it with the chairman of uh
Wells Fargo, Dick Kovosovich, atthat time.
I had him all to myself, youknow.
(06:47):
So it's interesting that I maycome from out there, but I work
my well my way back into theglobal ecosystem and and uh have
my own views on how things havedeveloped.
Today, when we look at how theglobal ecosystem is uh
degenerating or rather breakingup into no longer a single
country dominating economics andsecurity, I have a chance of um
(07:12):
assessing the alternatives andhow they are working out.
And I'm working on my secondbook, which has to do more with
geopolitics, building from wherefinance has evolved and what
finance is thinking teaching usabout geopolitics.
And one of the first things thatfinance teaches us about
geopolitics is that very littleabout policy and geopolitical
(07:34):
trends is achieved throughdesign.
And actually, we learned that infinance because, on the one
hand, we like to be able to saythat you know country progressed
because it made all the rightdecisions along the way.
But if you take a country likethe US, it didn't consciously
make a decision to become whatit is today.
It was a result ofopportunities, responding to
(07:56):
opportunities, uh is a result ofsometimes moments of distress,
and crises actually createeconomic trends more than
design, that kind of thing.
So those were the those were theformative elements of the way I
think about geopolitics today.
And I've come to a point wherewhenever someone asks me about
trends about how a country islikely to respond to challenges
(08:20):
or opportunities and all that, Ialways say to them, look under
the hood and look under thefinancial hood and see what it's
made of, and then project fromthere.
You know, and so from you know,that's essentially who I am in
you know my own journey.
SPEAKER_02 (08:34):
So you have uh the latest, we know you're talking
on this next book, but yourlatest book is called The Great
Transition, which it basicallypredicts personalization of
finance.
Now, people have talked aboutthat for a long time.
You know, the personalizedfinance, if you will, and we can
see that to a degree in terms ofhow things are changing the
customer experience on portalsand other types of, but this is
(08:55):
a bit more radical.
So could you explain that forthe you know, the listeners, the
viewers, for the audience, ifyou will?
So can you explain us to theaudience what this looks like?
SPEAKER_01 (09:06):
The technology is taking finance very simply to a
level of personalization wheretwo people who need to transact
with each other can do sodirectly without an
intermediary.
Theoretically, that's whatfinance should eventually
become.
And practically, enough oftechnology is taking us very
close to that.
If you take Bitcoin, uh cryptos,for example, uh the whole idea
(09:29):
is that it's a P2P uh paymentplatform.
It's it's got no legacyinfrastructure the back to make
a transaction happen.
But having said that thepersonalization of finance is
here, I'm actually enraptured bythe whole dynamics of the of the
tension between personalizationand centralization.
(09:51):
In other words, the desire ofinstitutions, traditional
institutions, new institutions,to want to control the
personalization trend, to ownit, to define it, to invest in
it, and to to make all of theutility and technology possible.
The venture capitalists, theregulators, the traditional
(10:11):
institutions, all of that.
So there's a great battleactually taking place today
between personalization andcentralization.
And the conclusion I'm coming totoday, after having written my
book, is that we might comeclose to personalization, but
there's another trendunderlining that, which has
nothing to do with finance initself, but in the way that
(10:33):
human society is predicated, inthat we almost always fall back
on intermediaries to moderateour transactions, our
relationships, all of that.
I I use this example in my bookbecause I do take salsa lessons,
for example, and it justfascinates me that I could go to
any city in the world.
(10:53):
I learned salsa in Singapore andin Beijing, where I have an
office and I spend a lot oftime.
But if I went to Los Angeles, Ican just go onto the dance
floor, pick up anybody, and thatperson would know exactly what
I'm doing.
If I'm doing a cross-body lead,a cross-body lead is the same,
whether it's uh in Singapore, inuh Frankfurt, in Los Angeles.
(11:16):
And there was no committee thatdecided what a cross-body lead
is, you know, and so so thehuman society's ability to hold
together and create trendswithout an intermediary is
profound.
Uh, you know, and and we seethat in other areas in art, in
uh music, and and so on.
And yet we don't see that in inum you know in in finance, uh,
(11:39):
for example.
So so then the question is whatwhat conditions need to exist
for there to be the kind of quidpro quo between people?
And the nice thing about thedance analogy is that dance
keeps evolving, you know, andthen from Salsa you have new
dance forms like Kizomba andZook, and it just keeps going
and nobody dictates the terms,nobody defines the moves, and
(12:03):
yet it becomes universal andglobal without cost almost.
So I I put my finger on that andsay, what is it about humanity
that's able to create trends inthat way?
And yet we need institutions tocreate trends in finance and
economics and so on.
So it's this battle betweencentralization and
personalization that I'mspending a lot of time thinking
(12:25):
about and trying to define theelements that dictate them.
And when you think that way,you're able to look at modern
platforms, for example, ascentralization teams, you know,
social media platforms,technology platforms, and today
you have data centers in AI andso on, that that um the
temptation to centralize and toown the structure is so strong.
(12:49):
Um, you know, and and and thenI'm able to think through a
narrative where what will definethat and and what will
dissipitate that, which whatwill deconstruct that so that
individual humans can takeownership of their own data,
their own relationships, um, youknow, and and their own
transactions.
Um so so that's um that's whatit enables me to do.
SPEAKER_02 (13:12):
So two things.
One is I was a competitor, thisis 20 years ago, 30 years ago.
I was a swing dance uh swingdance.
Uh oh, it's done.
So Lindy, how I agree with youin the kind of pick up anything
as you go if you learn thefundamentals.
One of the speaking ofanalogies, one of the things in
your book I as here living inBoston, I'm originally from the
(13:34):
mid-Atlantic, but the ice tradeanalogy, which I think is
harvesting ice.
So I want you to kind of talkabout that and kind of mapping
that to the future of finance,kind of connecting.
I think it's a really wildthing.
You think about ice and it'sjust yeah, I won't I won't give
it away.
So you can share the audience,may never heard of this.
SPEAKER_01 (13:54):
The cover of my first book has got a block of
ice on it.
And so I used to the ice analogyto say that look, there was a
time when we used to get our icefrom the lakes outside Boston,
right?
And it used to freeze.
So did the Hudson.
That's right.
SPEAKER_02 (14:11):
So did the Delaware.
The Hudson, the Delaware, theyall used to freeze.
SPEAKER_01 (14:15):
Absolutely.
And and from the uh lakes ofBoston, you'd put the ice on
horse-drawn carriages and takeit to New York, and it went as
far away as Cuba.
The ice trade used to be so bigthat there were ships that
carried ice from Boston to Cuba.
Then in uh why how did it notmelt?
SPEAKER_02 (14:32):
How did it not happen?
SPEAKER_01 (14:33):
How did it not melt, you know, and and so much is
lost in that process.
And so I used that analogy toexplain that's what finance is
today.
The dollar that you have in yourpocket would have uh gone
through an entire global bankingsystem, finance system, where it
is subject to interest rates,exchange rates, bank charges,
security costs, and all kinds ofthings before it ends up.
SPEAKER_02 (14:56):
It's like tax it's like taxation telephone.
Play a game of telephone, andit's things completely different
on the other side of the of thecircle, of the talk and same
thing.
The dollar you had ends up beinglike a dime on the other side.
SPEAKER_01 (15:08):
Yeah, that's right.
You know, and economics dictatesthat, right?
So you have inflation on top ofthat.
So um that's how inefficientfinance is today.
Uh, you know, and it's and it'suh owned by the intermediaries.
And you know, when you when whenyou draw that to to the ice
trade, to this day you'll findthe ice merchants' warehouses
(15:30):
somewhere, you know, outside ofBoston.
You go to the Midwest, you'llyou'll you'll suddenly r run
into something that looks like ahuge bond, but it used to be an
ice warehouse.
SPEAKER_02 (15:41):
Yeah, so what we would do here I know in
Baltimore too, like you wouldget a block and it would be
delivered for your ice box.
The here we still actually havea few ice companies that over
time they still serve like theystill make and deliver and
they're still around.
They just do obviously have adifferent you know need or
(16:02):
distribution for that.
You know, and I think it's aboutchange, and like we talk about
in Super Shifts.
Um we talk about, you know, thequick, quick sorry, so so so
kind of ultimately quicktransitions of change that kind
of up upset the system andreform new systems.
(16:22):
You know, you have somecontrarian talk and I wanted to
I wanted to touch on some of thesome of the financial
instruments.
You talked about this about thethe digitization, but like you
think banks are gonna crumble, Ilike the quote, crumb crumble
like cookies, and you also thinkCBDCs, which I think I agree,
(16:43):
which will fail.
Because I think the controllingit's just did just for those
listening, this is differentfrom stable coins.
This is a different kind of umbut yeah, can you you wanna get
your what's your perspective onthat and the resistance, you
know, the political resistance?
SPEAKER_01 (16:59):
Let's keep it the uh uh you know, let's get the
basics right first.
So yeah, go ahead.
Take take the ice trade, and andhow do we get our ice today?
We manufacture it in our iceboxes, in our refrigerators.
It's personalized.
You you you get it when you wantit and how you want it, and you
own the whole process.
What made that happen, you know,in the early days of the
(17:21):
refrigerator, it was uhchlorofluorocarbon CFCs.
So so what I what I try to do islook for the CFC of finance.
You know, what will causefinance to become personalized
that you don't need anintermediary?
And and and there I I'veidentified several elements that
need to be in place for financeto be personalized, carry that
(17:43):
quite well.
We are now in a process wheregovernments, big businesses are
responding to the cryptochallenge.
And as they do that, they theycome up with synthetic
alternatives in the hope ofstill owning that process.
And so, because I get thefundamentals clear in my own
mind what it is that I'm lookingat, whenever I see a trend, so
(18:04):
there was a time when CBDCs werea trend.
And what were C C BDCs?
Central bank digital currencies?
It was central banks andgovernments being really afraid
that they're gonna lose the plotif uh cryptos take over.
Because even today, there's alot more trade taking place
between unbanked people aroundthe world through the use of
(18:25):
stable coins and crypto than isrecognized in the system.
And even as governments andlarge banks, American banks, for
example, will not do dollarclearing for highly stressed
countries like Somalia or youknow um Namibia has some
problems.
I mean, like you just go todifficult countries and and they
(18:47):
are stumped because they cannotparticipate in the global
financial system as it existsright now, and they're finding
the alternatives viable uh at apersonal level.
And then there are global uhinterbank regulators like the
Bank for InternationalSettlements, which issues
warnings that crypto is badbecause the transactors are
(19:08):
anonymous, which is not true,uh, you know, and and uh and
money laundering and all thatneeds to be controlled.
So we we are looking at the plotbeing evolved, and we have now
reached the point where thebankers have realized to
themselves that if central banksissue their own digital
currency, that immediatelydisintermediates the traditional
(19:31):
banks as they are in theexisting system.
It's like if you can send moneydirectly from a central bank to
the end user to central bankdigital currencies, you don't
need us as banks.
And then they stop short intheir tracks on that one and
said, you know what, we can'treally promote CBDCs.
And the US eventually killed itby saying by introducing
(19:52):
legislation saying that CBDCsare bad because uh the state
shouldn't be shouldn't have somuch power and information over
individual transactions.
And then now they've gone to thenext uh possible scenario, which
is to encourage banks to issuetheir own versions of CBDCs
called tokenized deposits.
While stable coins are a veryclear alternative, just sitting
(20:14):
there, the technology hasalready been invented, but the
traditional banks were afraid ofbeing disintermediated as a
result.
So you see, um this there's thisgreat battle between
centralization andpersonalization underway right
now in finance, and it's workingits way through.
Um as the individual gainsincreasingly more ownership over
(20:39):
his transactions and hisrelationships, that will create,
and that's why I wanted to talkto you, Steve, because that's
going to create geopolitical,new geopolitical scenarios and
realities where the state itselfdoesn't have control over its
own people.
Um you know, and then what doeswhat happens to you know the
relationship between states as aresult?
(21:02):
Um you know, and and thesethings get played out, or these
themes get played out subtly.
They they are the subtext ofwhat you read in the newspaper,
that that the state doesn't havecontrol over large swaths of its
population because they're ableto generate their own wealth
between themselves and all ofthat.
So that's uh that's how Ireconstruct geopolitics using
(21:24):
finance as the as the base andunderstanding how finance
actually works.
SPEAKER_02 (21:29):
When you look at the Asian markets, excuse me, you
built Asian Banker.
It's one of the it's one of themost respected financial
intelligence platforms.
I mean it's been you've had itfor many decades.
A lot, you know, we have aglobal audience, but many are
not from like the the the Asianmarkets itself, like when you
look at the US and you look atlike Asia, what do you think
(21:52):
what patterns are you seeing inthe in the mark in the Asian
market that are missing?
Like the changes?
Are they are they different interms of this personal
centralization?
Are they different?
Like what are you seeing?
SPEAKER_01 (22:03):
What's interesting is that uh we've come to a point
where, regardless of wheresomething like Bitcoin was
created, it's actually creatingnew opportunities in markets
that we're not even thinkingabout.
And the interesting thing aboutfinance is the leggards always
are able to leapfrog theincumbents.
(22:24):
So if you take payment systems,for example, in the US, you've
got Visa, MasterCard, uh, andyou've got a domestic payment
infrastructure that has workedfor many years.
It takes a week to clear acheck, um, you know, and and
it's so difficult to dismantlethat legacy infrastructure
because of the number of playersuh who are involved in you know
(22:45):
processing that kind oftransaction.
Then you go to the other side ofthe world and you uh it can be
in Asia.
Today it's actually more Africa.
Asia is as encumbered by legacyinfrastructure as the US now,
some countries in Asia.
But go to a country which hasgot no legacy infrastructure,
and suddenly you see payments, arevolution taking place.
(23:06):
First it was China.
But because China closed itselfto Visa and MasterCard, and and
then it tried to recreate itsown version of Visa Mastercard
called China Union Pay, butwithout even realizing it,
Alipay and WeChat, which werestartup technology platforms,
suddenly dominated the paymentinfrastructure in China hands
(23:28):
down.
When I'm in China, I don't carrya wallet.
A WeChat Pay is sufficient foreverything and it's integrated
into your social ecosystem.
And and the Chinese, when theygo to the US, they cannot
believe why you need a quarterto pay toll gates and you know
stuff like that.
Um and then India.
I wanted that too.
(23:49):
India aced China because China'spayment platform was created at
a time when the Chinesegovernment was still uh getting
a handle on how to regulatethese things.
So the the technology playerswere able to go ahead of time
and and uh build infrastructureand universalize it so that it
became nationwide.
It's it's now incumbent.
(24:10):
Like you cannot run away fromWeChat and Alipay.
The Indian government looked atwhat was happening in China and
said, you know what, we're notgoing to allow any one
technology player to dominateour payment infrastructure.
Uh, and then, of course, the theregulators in China come after
the fact and regulate theseplatforms.
What the Indians did was let'sgive everybody an identity.
(24:31):
And once we've given everyone anidentity, any player can come in
and provide a paymentinfrastructure because uh
there's no question about theidentity of the parties involved
in a transaction.
And so they've come up withanother model which has also
digitized payment in India,which we thought that will never
happen.
And today uh it's got a nationalinfrastructure, but multiple
(24:53):
players compete with each otherand so on.
There, the funny thing is thatyou think that China is more
regulated than India.
Actually, India is moreregulated than China.
The regulators in China learnedtheir craft over a period of
time.
They are well regulated today,uh, but the Indian regulators
inherited their civil servicestructure from the British.
(25:15):
So they've always had it.
They they were always uh uh youknow a heavy hand on uh free
enterprise.
So um so they they've managed toum control uh the the role of
free enterprise in creating newinfrastructures and so on.
And then you go to Africa, wheretoday you have cross-border
payment infrastructure providedby uh IT companies essentially,
(25:38):
uh, and telcos um uh able tomove far ahead.
I've had in the US, I wasattending a conference in Vegas,
and on the third day of theconference, they happened to put
three Africans on the stage, andthey were saying that we don't
understand why the US paymentinfrastructure is so backwards,
and um, you know, we can doinstant payment between
countries like where we are inAfrica.
(25:59):
So the the point there is thatum the the countries with a
clean slate are able to leapfrogthe countries with a huge legacy
infrastructure.
And we're gonna see a lot ofthat.
Even in AI, we we need to thinkabout who's starting with a
clean slate.
The countries which are verydependent on structures like
(26:21):
Google and you know and theexisting digital infrastructure
platforms might actually findthemselves assigned to being
very uh legacy societies whereuh they've never had this need
to go in and do a search,suddenly find themselves
leapfrogging and and gettingproblems solved using platforms,
(26:41):
you know, like going straight tothe answer rather than asking
the question.
So uh uh technology alwaysfavors uh the uh the new the the
new players rather than theincumbents.
And that's what I've learned uhin finance, and I see that uh
you know play being played outagain and again.
SPEAKER_02 (27:00):
Speaking of uh newer technologies, I mean DeFi.
Just kind of keep on thedisruption thing.
So I've worked in with DeFi formany years, been in crypto for a
long digital assets.
Seen a lot of great things itcan do and some nefarious things
it can do, you know, or the thefraud it's open to.
It's not an easy system to learnin terms of the terminology and
(27:23):
the and the workflow.
People have models that youknow, mental models for years,
but it is forcing change, right?
Rather than it's like replacingit.
I you know, you've seen Bitcoinbe adopted into uh ETFs, be
adopted as a corporate part oftheir trust and their balance
sheet.
Right.
We're seeing mass adoption bytraditional finance firms to
(27:46):
allow it to be part of an assetpool now, you know, for a an
part of their portfolio, right?
So when you when we see it likeforce change, what do you see?
I mean you mentioned like youknow independent payments.
I mean, still with Venmo orother PayPal, you still need an
intermediary to make thathappen.
What do you think?
How do you see Trad TradFi andDeFi evolving together?
(28:09):
Oh uh TradFi, okay.
It's always been we always talkabout the conversations of them
over there and them over there.
That's not the reality.
The reality is they're gonnahave to pee, they're gonna have
to coexist or use each other indifferent ways to add value.
So, yeah, that's what I wantedis to do something a little
different than the traditionalkind of conversation that's out
there.
SPEAKER_01 (28:29):
Yeah.
Um, so the way I construct myown response to what you're
saying is this.
What did we learn in digitalfinance?
You know, before we go todecentralized finance.
Yeah.
What we learned you know, whatwe learned in digital finance is
because the VCs dominate digitalfinance, um the idea was to
(28:53):
onboard millions of users andthen monetize them.
That's digital finance.
So this whole rigmarole aboutinclusive finance, for example,
there, you know, oh, we want tobring finance because it's the
benefit to the masses, to thepeople out there without access
to finance, and that's whythey're poor.
The actual motivation was toonboard them and monetize them.
(29:14):
You know, and for someone likeme, I look at indicators such as
lending rates.
Did they go down for poorpeople?
No, it didn't.
Never, nowhere in the world haslending rates gone down for poor
people as a result of digitalfinance.
You know, so the venturecapitalists are need to be
rewarded for building theinfrastructure, and and and
(29:35):
that's digital finance.
Decentralized finance,interestingly, technically there
is no winner or loser.
Uh, the way I describe it in mybook is that society is moving
from the markets economy to thenetworked economy.
In the markets economy, we aretransaction-centric, that is,
willing buyer, willing seller,the transaction is concluded and
(29:56):
the price is settled, andthere's a winner and a loser,
you know.
Depending on how you look at it.
In a network economy, everyoneis a winner.
The more networked you are, themore the asset that you're
holding gains in value.
And the best asset in thenetwork economy is information.
Information is the one assetthat doesn't leave you when you
give it away.
And the funny thing is, you needto give it away to make it more
(30:19):
valuable to yourself, that kindof thing.
So the math and the mechanics ofdigital assets is different from
assets in the in the digital inthe markets economy.
So in digital assets in thenetwork economy is different
from assets in the traditionaleconomy.
(30:40):
And that is why when I listen toWarren Buffett, for example, or
Charlie Munger say that cryptois bad, we don't understand it,
and so on, and it doesn't havean underlying asset.
Absolutely, I understand wherethey're coming from, because
they're coming from the marketseconomy.
That an asset has to have anunderlying value for it to be
(31:01):
able to realize its potentialincrease in value and all that.
Whereas in what they don'tunderstand is that in a network
economy, the mechanics is quitedifferent.
And that's what we're lookingat.
The funny thing about DeFi isthat we've got a lot of
distractions right now, likefutures and derivatives and all
of that.
That all has to do withintermediaries trying to be a
(31:25):
player in an evolving system.
The idea of staking isinteresting because you profit
because you lend to the creationof a new asset.
That in itself is a very pureidea.
It never existed before.
It's valid in itself and isproven to be safe to this
moment, right?
So that's good.
And I think that what thefinancial system is trying to
(31:46):
make sense, both the traditionalplayers and the new ones coming
on stream, is is there any valuein digital assets?
And what constitutes digitalassets?
You know, there's been a lot ofexperiments taking place, and
you know, you you uh digitalassets being created and and
then losing their value and soon.
(32:06):
Uh it's actually the early daysof the network economy being uh
taking shape.
And eventually we will startseeing the digital assets uh
that will make sense and the theones that you know will collapse
by by the wayside.
Uh and even then, because it'sthe information industry, uh
information era that we are weare we are moving towards, you
know, there is such a thing asephemeral assets, meaning assets
(32:29):
that have a value in a period oftime and then they just
dissipate for the next asset,those types of things.
So so the the ground rules of uha decentralized finance economy
are just being laid right now.
Interesting.
SPEAKER_02 (32:42):
Because I'm thinking about DeFi, and it always gets
me back to someone's running theservers, someone's running the
yield server, right?
Someone's someone's store.
So it's not really trulydecentralized.
When I think of decentralized,just hear me out.
I think of somebody with a youknow hard hard wallet and their
ability to almost like I havetwo of them here for those of
(33:04):
you listening, not watching.
I have two like ledger touchwallets, which are really cool.
If I could touch them togetherand do a transaction directly to
them, but still, I meansomebody's on the blockchain's
gonna process that.
So they're gonna get theirtransaction fee.
But the fact that I have toreally transfer this to another
(33:25):
place and then make that work,you know, there's so I think
what really, and that's a deeplyphilosophical idea, what is
decentralized finance, right?
What really is considered DeFi,right?
Is it all these different uniquemechanisms?
To your point, which earlier isthat I think banks will
eventually adopt them.
Because why wouldn't they wantto have yield farms?
Like if they have the securityof data centers and they have
(33:47):
all the liquidity pools, theyields, like they'll they can
continually be a mechanism forthose that maybe want to be
continually it's like going toan ATM.
You have to get, you know,borrow money, like you you you
still have to interact with thesystems.
I think the next couple of yearsare gonna be very telling.
There'll be another wave, andyou mentioned before, yeah.
(34:09):
I personally am not a meme coinfor it.
I don't know how white people domeme coins or do other types of
things.
Um I'm very much wary of fads orother types of uh anything
that's hyped because there's alot of rug pull types of uh
scams out there.
There's a lot of good stuff too.
I've made far more investing incrypto than I ever did just with
(34:29):
traditional I I have traditionalassets, but you know, far more.
And I will continue to do that.
So we you you had mentionedearlier in the show, you know,
there's an upcoming book, andthat's called The Winning
Civilization.
That's travels, you've been toit's 130 countries.
Only done a portion of that uhsize, that's pretty extensive.
(34:53):
So we talked about kind of theimplications of technology and
the trad versus DeFi.
In the future of finance, howdoes you talk a lot about
geopolitics, but beyond the kindof traditional like depressions
or hyperinflation, like how doesgeopolitics really shape the
evolution of a system?
Because we are like in the booklet me let me elaborate in the
(35:15):
book Super Shifts, we talk aboutthis new age of intelligence.
Like there's a previous age, ageof engines, which is the the
industrial revolutionessentially, for 200 years.
And we created traditionalbanking finance, and obviously
that traditional banking goesall the way back to like the
Templars and you know theMedich, like that goes for mil
you know centuries.
(35:36):
But if we look at geopoliticsnow and we have things that can
be decentralized, what is itwhat does it mean for the
evolution of the system itselfin this kind of new age?
What does it mean for us?
SPEAKER_01 (35:49):
Everything you said about DeFi is uh transposable to
AI.
Who owns I mean the just thatwhole phrasing that you you you
went through just now isapplicable to AI and how AI will
evolve, who would own theservice and who would own the
knowledge, uh, you know, and anduh who would be able to profit
(36:12):
from from that.
All of that is the same.
The big thing about you knowdecentralized finance and and
geopolitics is also I've saidthis in my book, and I think I
want to say it againemphatically, that we are now at
entering an economy where debtis the economy.
D E B T.
Debt is the economy.
SPEAKER_02 (36:34):
What do you mean by so what do you yeah, uh what do
you mean by that?
Debt is the economy?
Because we've always had peoplehave always had debt.
There's always been debt, therealways there will be debt.
SPEAKER_01 (36:42):
So, but there's so there's any number of economists
right now saying that, hey, theUS has to, you know, step down
from its debt exposure, it'sjust unsustainable, and that it
will affect the US as a globalsuperpower, all of that.
And so what I'm saying is thatwe are not ever going to step
down from debt.
All major countries in the worldwill continue to issue even more
(37:06):
debt uh to in order to grow.
And that should instruct ouridea about how wealth will be
created in the future.
Today, there was a time whenwealth meant combo compounded
interest that gains on yourlittle deposit account.
We are now way past that.
If you're not invested insecurities, you're not ever
going to fight inflation, you'renot going to generate wealth on
(37:29):
the back of your basic assets.
And then we're going to anotherlevel yet again, which is that
what happens when sovereignstates issue indeterminate debt?
In other words, like, you know,to solve yesterday's problem,
we're going to issue more debt.
Debt to GDP in the US is 130.
Um, debt to GDP for China uhcompound, I mean uh you know,
(37:53):
put together is nearly 300 uhpercent of GDP.
Japan is way over 300%.
The funny thing is, Japan hasbeen um 300% debt to GDP for the
last 20 years, and it's and it'sheld together pretty good.
It's created an ecosystem whereits own people are investors in
(38:14):
its own debt.
It's not even exported to therest of the world like the US
debt is, you know.
So there is a sustainable modelin creating indeterminate debt.
And what did the Japanesegovernment do with the debt that
it created?
It just created uselessinfrastructure around the
country, you know, long tunnelsunder the sea, high-speed
(38:34):
railway, uh, this and that, uh,just to keep the economy
growing.
And over time, it does have animpact.
Like today, uh uh there's adeflationary force underway in
Japan.
The yen can't hold its rates,the population is decreasing, so
the GDP growth can't um growfast enough to deal with the
debt that has been created.
(38:55):
But the US will when looking atthe benchmark for sovereign
debt, the US still has a longway to go.
You know, 130, it can go to 200,it can go to 300, and the US
will look very different than itis today.
For a while, it will be drivenor being it'll be amortized by
the developments taking place intechnology today in the US
(39:18):
because technology will absorball the excess liquidity being
created.
That's exactly what is happeningright now, and that's what's
funding uh technologydevelopments.
So, as debt becomes the economy,the question then comes, becomes
how do we get investors in ourdebt?
How do we get universalinvestors?
In other words, we need todigitize our debt and make it as
(39:41):
palatable to investors fromaround the world.
And we'll promise to be thehardest working nation in the
world to anyone who's holdingour debt.
And so we're looking at a regimeright now where debt is being
digitized and internationalized.
SPEAKER_02 (39:56):
Yeah.
SPEAKER_01 (39:56):
You know, the the US does it very well.
A number of other countries arevery likely to continue doing
that.
So when that happens, we have tostart thinking about the
ordinary person has to startthinking about how your wealth
is going to be created.
Uh, and that's why those who aresuggesting that digital assets,
for example, have an upsidepotential in terms of the
(40:18):
valuations going up on the backof the liquidity being created
from the debt economy today, uh,it makes sense.
You know, so so that's how weneed to be thinking about
personal wealth, geopolitics,and entire financial systems in
the future.
SPEAKER_02 (40:34):
So let's, as this is a show about with futurists and
big thinkers, let's take a lookinto the future.
So let's say the world of 2035.
You pop in there to observe thefinance world, what does it look
like?
SPEAKER_01 (40:48):
The ability to generate debt and and uh export
it uh will become more welldeveloped and more universal.
Countries will take advantage ofthat.
Then it becomes a a question ofbeing an attractive country to
invest in.
Uh and in that regard, uh, youknow, the US still has a lead
(41:10):
because of what's it what it'sdoing in technology today, but
it might lose that lead if it'suh if its edge in technology
starts to taper off and othercountries cap you know catch up
with the US on that.
Now, for that, by the way, I Ilook back in history.
The funny thing about being afuturist is that you you really
(41:31):
need to know your history wellto feel comfortable about trends
that have actually beenhappening before.
That it's not new.
We don't need to fear it becauseum it's the it's human nature.
SPEAKER_02 (41:46):
Um you know the funny thing is this that the
best futurists, the bestfuturists are historians.
Like they understand cycles,they understand pat what's what
we need to do is patterns.
So, what is the thing you'reseeing history?
SPEAKER_01 (41:59):
Well can I just as an aside, by the way, a lot a
lot of what has been happeningin the US has not disturbed me
at all because the way I say itis it's happened before, you
know.
Has a has a president misbehavedbefore, it's happened before.
Has the US got intoindeterminate debt before it has
happened before?
SPEAKER_02 (42:18):
What's different is it's so well documented and so
much easily shared in terms ofevery, you know, and then
there's the media will alwaystry and pipe things.
I mean, we could talk aboutyellow journalism from you know
a hundred years ago, but nowthey can fully the like the like
the transformation or collapsefrom like go every 80 years or
(42:40):
so, like Strauss and Howe.
And look, I don't know if I'llever have Bray Dalio on here,
but I gotta call him out on hisconversations.
He doesn't give them credit.
And like he uses all thesethings, but he doesn't like
Strauss and Howe looked at the80, 90 year cycle, and this
trend we're going through itnow, right at the end of the
winter, and it's gonna getrough.
(43:04):
But it's this but this collapse,transformation, whatever you
would call it, this this fourthturning, the the next is a
spring.
It's a it's a it's a it's abeautiful kind of like new place
to be.
We have to go through it.
And the last one, which wasWorld War II, was you know
somewhat documented, but interms of living memory, that's
what's it very I that's what Ifind is interesting.
(43:24):
Everyone thinks it's unique andnew, but it's just so much more
documented and shared, andpeople are getting it.
And yeah, AI is definitely adifferent animal that kind of
throws in a whole new curve, butyou know, again, or other
transformational technologies.
They mean the atomic bomb, youknow, changed everything.
SPEAKER_01 (43:42):
So anyway, that's so so the thing about what we're
going through right now is thisthat the Industrial Revolution
may have been originated in theUK and several European states,
but the states that the statesthat eventually harnessed it,
scaled it, mastered it, anddominated other economies were
(44:05):
Japan and Germany.
And why?
Because they were well betterorganized to harness technology.
And that's actually what we'reseeing today.
AI may have originated in theUS, but the societies or the
nation states that are going tobe able to harness it very
quickly and scale it are theones that are much more
(44:26):
regimented, much more controlledsocieties where the leadership
has a lot more control overdirection, policy, things like
that.
And that shouldn't surprise us,you know, that it is the
dictatorial states that willactually dominate technology in
the future.
And in fact, when you taketechnology to the next level,
you you talk about if if we weretalking about um interplanetary
(44:49):
travel and so on, you actuallyneed a a lot more organized
society uh than you know aliberal left-leading um society.
A left-leading society uh willnot be able to handle um um you
know scaling and transitions andso on as as much as a
(45:09):
conservative, well organized uhor even militaristic society,
which is what Germany was in itstime.
So so we we we go back tohistory to identify, put our
fingers on what the operatingelements were.
And these are the operatingelements that we are we are
(45:29):
looking at right now.
None of what's happening todayshould surprise us.
The rise of China or the abilityof Russia to survive a war and
still uh you know hold togetheras an economy, as a
well-functioning economy rightnow.
Russia is doing okayeconomically.
Then the question is how farwill they be able to take it?
And uh there are drasticconsequences depending on the
(45:51):
leadership and and what they dowith it.
SPEAKER_02 (45:54):
Well, things don't surprise you, but what keeps you
up at night?
Is there anything like in thefinancial sphere, like the
future finance that kind ofkeeps you up like we're worried
about?
SPEAKER_01 (46:03):
I I've moved away, I've moved to beyond future
finance.
Uh um I because I've personallyfunction in different societies,
I'm in the US four to five timesa year, I'm I'm in China six
times a year, you know, likeevery other month I'm there.
So I'm actually switchingbetween realities.
(46:23):
If the one thing that keeps meup awake is that the
sensibilities that give me theopportunity to build my
business, to to be relevant toour people and so on, if if that
degenerates, then I've got to beconcerned about my own future.
So I'm concerned about a worldwhere um I will not be given the
(46:45):
chance to contribute and and tobe part of um you know
development.
And that kind of reality, we arebordering on it.
Like, you know, countries arebecoming insular, people are
becoming more myopic in terms ofyou know who's important and
not.
I was just in uh um, you know,cut in Central Asia, for
example, and it's veryinteresting that they they are
(47:08):
progressing quite well, um, youknow, in the same way that East
Asian countries like Singapore,Taiwan, Japan have been evolving
in the last 30 years.
So the the idea of nationalismis is growing very, very
obviously.
And the uh and the freedom thatI have to transpose between
(47:28):
realities, between societies,and still be relevant and create
an international business.
So the thing that keeps me awakeat night is the more insular
societies become, the less thatthose of us who transcend
borders will have opportunitiesto to grow businesses that make
sense for everyone.
SPEAKER_02 (47:44):
You can also answer kind of my legacy question I
always ask everybody, you know,how how do you want the work to
be remembered?
Like and you're all kind of, youknow, kind of done, tired with
the world, ready for somebodyelse, you know, to watch watch
it happen.
Like what do you want people tosay about your work in this in
this in this life?
I always like to ask because itit opens up a lot of deep
(48:07):
meaning, you know, and it a lotof reflection.
SPEAKER_01 (48:10):
You know, a few of us will have the opportunity to
to do something, whether it's inthe sciences or in the arts,
that profoundly influences a lotof people.
I still have another 20 years toto have a shot at that.
And sometimes it's uh whatyou've gained over the past 30
years or so that makes the that20 years possible.
(48:30):
But I think that all of us uhwill will need to be satisfied
with the fact that we've madethe difference in one person's
life or uh, you know, a fewpeople's lives around us.
In my case, I've givenemployment to a few hundred
people uh in the time that I'vebeen in business and I've seen
how they've grown.
Um, you know, and and then uh Iwould like to be remembered for
(48:54):
having made a statement or madean observation that helped
humanity figure out a new face.
And that's work in progress atthe moment.
SPEAKER_02 (49:04):
That's great.
That's great.
You mentioned the book is comingout, and I know the Asian
banker.
So, what what's coming up andwhat should people know about,
and where can they find you?
Because I think that's the big,you know, because they want to
learn more about what you'redoing, which is great, wonderful
stuff.
SPEAKER_01 (49:21):
Emmanuel Daniel is Emmanuel Daniel.com is a good
starting point.
In fact, I'm I'm I'm doing morewriting there, and from there,
you'll see that I've beenposting different things on
LinkedIn, on my on my TikTokaccount, and my uh Instagram,
which is a combination ofspeeches that I've given as well
as places that I visit, and Itry to make a point and I post
(49:43):
that so I'm actually usingdifferent media to communicate
different things, but the oneplace that you can find all of
that is my my blog page,emmanualdaniel.com, and that's a
work in progress.
I've been posting articles thatare more geopolitical in nature,
taking stock of differentcountries' responses.
So, India or Africa or theMiddle East, uh, how are they
(50:06):
thinking about their owngeopolitical directions?
The moment I think I've figuredout how to think about them, I I
write something and it's postedon emmanuelDaniel.com.
SPEAKER_02 (50:16):
That's great.
Well, I want to thank you forthe time today.
It's been a wonderfulconversation about finance and
the world and just getting aglobal perspective, which
everyone needs to have.
So thanks again.
And I'm now we're gonna haveRion again soon.
Thanks.
SPEAKER_01 (50:31):
Thanks, Steve.
Thanks, Steve.
SPEAKER_00 (50:32):
Thanks for listening to the Think Forward Podcast.
You can find us on all the majorpodcast platforms under
www.thinkforwardshow.com as wellas on YouTube under ThinkFord
Show.
See you next time.
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