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Bernard Leitaer, co-architect of the EURO currency speaks in Amsterdam on May 3rd, 2017 about the breakthrough of the Bancor protocol, how monetary systems work like flow networks and the role of complementary currencies in stabilizing the world economy and meeting the U.N. global sustainability objectives.
TRANSCRIPT
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Bernard Lietear, EURO architect discusses Bancor protocol and potential of complementary currencies
Bernard Leitaer, co-architect of the EURO currency speaks in Amsterdam on May 3rd, 2017 about the breakthrough of the Bancor protocol, how monetary systems work like flow networks and the role of complementary currencies in stabilizing the world economy and meeting the U.N. global sustainability objectives.
Transcript.
00:00
[Music]
00:08
[Applause]
00:09
[Music]
00:13
so I needed to read it three times the
00:18
white paper and actually I suggest that
00:21
document that’s available log is I
00:23
suggest that you read it because what it
00:27
is saying is actually a breakthrough for
00:35
example the issue of bid and ask which
00:38
is were asked earlier this appears
00:42
because it’s the benefit of the
00:46
intermediary and in this system you
00:50
don’t have an intermediary
00:51
it’s the contract so that’s one
00:53
additional advantage that you didn’t
00:55
mention so I’m just mentioning that as
00:57
part of the background from the previous
01:00
conversation so let me start with
01:08
statement from Lincoln moon when I hurt
01:15
his that statement in 2015 my reaction
01:23
is well yes he’s right but we don’t have
01:29
much of a chance to do something about
01:32
it I’ve changed my mind
01:38
in other words that would be the vision
01:42
that my first reaction so here’s my plan
01:45
for my presentation I’m going to first
01:50
going to give you context a UN context
01:53
and second point is what this today
02:00
system look like the familiar
02:03
conventional money system which is
02:05
basically being in state for about three
02:08
hundred years
02:09
okay fundamentally unchanged and in some
02:14
respects you can find back its origins
02:17
5000 years ago and Sumer which at the
02:22
beginning of writing and that’s what
02:28
we’re putting in question so it’s kind
02:30
of big to understand why I am claiming
02:38
that the current system is obsolete you
02:41
need to go to the physics of complex
02:45
flow networks an economy is a complex
02:49
flow network in which money circulates
02:53
you know the GDP is the sum of all the
02:56
transactions using that particular
02:57
currency so just like ax a and natural
03:02
ecosystem is a complex flow network in
03:04
which biomass circulates or your immune
03:08
system is a complex flow network in
03:10
which information circulates or this
03:13
electrical distribution system is a
03:15
complex loner in which electrons
03:18
circulate right at that level of
03:20
generality that we’re talking and at
03:23
that level of generality we can learn
03:25
something about the conditions of
03:27
stability on the structural nature and
03:29
that is what actually I’m enjoying
03:32
proving that the current system is
03:35
obsoleted my next topic is what are we
03:41
going with the kind of tools that we now
03:44
have and I’ll have a very brief
03:47
conclusion so here is the context that
03:51
in happening in the UN in the year 2000
03:56
they decided that there would be
04:00
Millennium Development Goals he probably
04:02
heard of them there were eight of them
04:05
and there they identified the first one
04:07
being eradicate property has reduced
04:11
child mortality is an example and you
04:14
know improve maternal health nice things
04:17
motherhood and apple pie
04:20
they were proposed by actually the
04:23
administration of the UN in New York
04:25
there was no further contact with the
04:28
people
04:29
however they were very successful
04:32
actually for example poverty the poverty
04:37
has dropped by 50% the extreme level of
04:41
poverty one and a half percent now but
04:43
600 million sorry 800 million Chinese
04:47
are gone out of poverty you know which
04:50
is unprecedented historically okay I
04:53
mean at that scale and that’s beat so
04:58
when they they have to progress here you
05:02
can see them that’s not it’s not
05:03
important but I mean making progress
05:05
substantially on the Millennium Goals so
05:08
they had then decided well what do we do
05:10
next
05:11
and that was 2015 and it did it
05:14
something differently they actually
05:17
asked the people I made surveys around
05:21
the world from normal people okay not
05:26
the government ie you know farmers women
05:31
whatever normal whatever people and they
05:36
came up with of course a more complex
05:39
situation they now have 17 objectives
05:44
okay again it’s not going to all of them
05:48
but these goals have been the first time
05:50
have actually been tested on the
05:53
population of the planet and after
05:57
having been tested they were approved by
05:59
all governments officially in 2015 that
06:02
this objectives for 2030
06:05
okay now the problem nobody asked how
06:11
much this would cost okay and that’s why
06:14
I had a strong doubt back in 2030 that
06:20
distinguishes the pipe dream
06:22
so here you have actually an analysis of
06:25
the cost of the target –top’ this
06:29
little squiggly line and here you have
06:32
all the funds in blue that the
06:36
government’s have a remedy new capacity
06:38
as taxation capacity and the red disc or
06:44
the brown bits or all the eight with the
06:48
national rate
06:49
so these are the optimistic numbers okay
06:53
because the eight actually there is
06:55
about half of the eight that been
06:57
promised by developing countries of the
06:58
third world have never been paid so the
07:00
last 25 years
07:01
so probably parts of this will also go
07:05
there same way particularly with the
07:07
current vote in Washington first okay
07:12
now the thing that’s missing is well to
07:18
be they have been a number of estimates
07:20
the lowest point is four trillion
07:22
dollars per year okay now you might say
07:26
in a lot you know four trillion dollars
07:28
by a couple of things
07:30
however when you compare that to the
07:33
world VDP actually you have 75 G for
07:37
that is like five percent I mean you
07:39
know something theoretically thinkable
07:42
now here is the shadow economy shadow
07:47
economy is what governments don’t know
07:49
about drug prostitution wholly legal
07:54
things that’s you know substantial
07:58
amount and this is the entropic sector
08:01
the topic sector is the things that are
08:04
part of the GDP but actually should be
08:08
subtracted the the worse the air is the
08:14
more that people get sick and go to the
08:15
hospital and they’re going to spend
08:17
money and that’s considered good GDP mom
08:21
when the Exxon Valdez loses its oil to
08:25
huge benefit for the GDP don’t ask the
08:28
opinion of the people who are there okay
08:31
so in other words it’s the bad stuff
08:34
that is a consequence of out of control
08:38
or errors or other things that we’re
08:41
dealing with so so again for four
08:47
trillion dollars actually smoke compared
08:50
to these things but when you start
08:52
talking with real numbers trying to
08:54
extract four trillion dollars of this
08:55
the world economy now is not going to be
08:57
trivial to do nice things like reducing
09:00
poverty okay
09:03
now today’s system that’s the issue how
09:08
do we find four trillion dollars and M
09:10
conservatives okay it is assumed that
09:13
the governments of the developed world
09:15
pay all their promised aid and that the
09:18
revenue of all the countries are fine
09:20
let’s say between four and ten trillion
09:23
that’s the scale we’re talking about
09:25
it’s not billions of dollars VD it’s on
09:27
trillions thousands billions so you know
09:30
still a lot of change all right how does
09:37
this the same see today’s system look
09:38
like well here is a short image we have
09:44
one hundred and eighteen quote unquote
09:46
national currencies in fact they are not
09:50
national they’re not more national than
09:53
they Federal Express okay they’re
09:59
created by banquette you presume you
10:02
know that so all our money or
10:04
conventional are actually dead but
10:06
thanks that of individuals that of
10:09
corporations are there of government
10:11
that’s how money is created for the last
10:13
300 years who doubt about that because
10:16
some textbooks of economics don’t tell
10:18
you that in fact the Bank of England
10:24
published a in 2014 for the first time
10:30
from a central bank near point how money
10:33
is really created modern times and the
10:35
answer is true banks private banks okay
10:39
to that
10:41
okay now how does that work what is the
10:45
relationship between the government and
10:47
this financial sector and to understand
10:51
that the best analysis has been gone by
10:54
Ferguson Niall Ferguson is Scottish guy
10:59
he calls it the square of power and it
11:04
involves four key institutions he
11:07
developed that model and that’s actually
11:11
how things work on the government side
11:14
you have Parliament and you have the tax
11:18
bureaucracy is it the two institutions
11:21
that are controlled by government or a
11:24
government that control government if
11:26
you want them it’s part of the
11:27
government on the financial sector you
11:30
have two pieces central bank some of the
11:34
most important or five of them they’re
11:36
actually still privately owned by banks
11:38
okay and there’s always have a huge
11:42
influence okay through the boards and
11:45
other stuff okay so financial sector so
11:49
the central bank and the national debt
11:51
obviously okay now how this play of
11:57
citizens all of us in this story well we
12:00
have actually two things we can elect
12:03
once in a while we can vote and we are
12:07
supposed to pay taxes that’s our
12:09
interaction with this okay now let’s
12:14
look at what happened in Greece you may
12:21
remember the episode and not have to go
12:23
ahead will be there presume you’ve all
12:24
heard about it the financial sector
12:27
actually controls the bank in the
12:29
Central Bank and the central bank was a
12:31
European one let me stir show before
12:33
talking for okay and they basically put
12:38
the squeeze on national debt you know
12:41
now national debt what is the problem
12:45
they had a problem with it brought back
12:47
to bureaucracy that bureaucracy was not
12:50
working well so boof back to Parliament
12:55
the elections don’t matter that’s not
12:58
this global set and he is corrected
13:00
that’s why okay so that’s the result for
13:06
the case of Greece okay now in fact what
13:13
we’re dealing with is a pipeline a
13:15
pipeline model very simple you have
13:19
commercial banks that are creating the
13:22
real economy in the entropic sector out
13:25
of control or out of control of these
13:27
things actually had a shadow economy
13:29
that we talked about and out of this
13:31
stuff’s supposed to be going the social
13:34
this already sustainable development
13:36
goals the four to ten trillion that’s
13:39
missing it’s not going to be obvious but
13:44
that’s basically the pipeline the money
13:47
becomes available after taxes through
13:49
the system okay now an image replaces
13:54
lots of words you may have noticed that
14:01
something is funny once in a while by
14:06
the way one of the reasons is this graph
14:09
the little bottom part here is the real
14:12
economy this is the foreign exchange
14:14
market the volume of foreign exchange
14:17
transactions which are every three years
14:19
evaluated by the very Bank of
14:21
International Settlements for a
14:22
particular day the trillions of dollars
14:25
we are talking about here okay that’s
14:29
birthday understand this is a daily
14:33
volume now yearly volume so it’s the
14:42
tail is wagging the dog would be nice
14:44
way of putting it yes yes yes they look
14:53
I am perfectly happy to have half of it
14:55
I keep it and half of it is still enough
14:59
to move the dog if when you have 95
15:04
percent tail and five percent dog
15:07
when the tail moves my suspicion to
15:10
thought will not stay in the same place
15:12
okay and we can agree that’s not five
15:15
but 95% for fine with double counting
15:19
and all that stuff I did I agree there’s
15:21
some double counting but that’s okay
15:25
the other bits of this pipeline is the
15:29
debt
15:31
here is the debt of several countries
15:35
kind of the US France and no basically
15:39
we are getting 200 percent of GDP okay
15:46
and it is going to go up dramatically
15:49
according to the Bank of International
15:50
Settlements with the aging of society
15:54
okay that by itself the aging of society
15:58
in a study that has been done then would
16:00
bring most of those countries to two
16:03
hundred two hundred and sixty percent
16:04
now let me tell you in three point two
16:07
thousand thirty five that’s not far away
16:10
okay now something happened before we
16:16
arrived at two hundred fifty percent
16:18
okay in other words it will not lie this
16:22
is not going to happen now what have our
16:27
central banks don’t quantitative easing
16:30
the line in the bottom here is what
16:34
banks have passed on from the
16:37
quantitative easing to the real economy
16:40
the answer is they okay in the last two
16:47
three years again sometimes we were
16:49
happening in the US but fundamentally I
16:53
mean the bottom six lines or the
16:55
qualitative it is already the volume of
17:00
that that was issued by banks to the
17:04
sector productive sector while in tipple
17:09
lines you have the quantitative easing
17:10
so there is no connection so
17:14
all quantitive easing has been a sure
17:16
out it’s not working
17:18
fun
17:23
okay well bigger the statistics I can’t
17:26
find them alright fine
17:28
if you want to do better and perfectly I
17:31
would love to hear about it
17:32
okay I have not been able to find the
17:35
statistics for formatting update we know
17:40
the quantitative easing now today or we
17:42
don’t know the other part okay
17:46
now ultimately what that would mean for
17:49
governments is a tax increase of very
17:54
substantial nation but to face what
17:57
we’re dealing with even though they can
17:59
borrow more you’re going to have to have
18:01
the tax increase which is going not to
18:04
be terribly healthy now even when all
18:08
these things aren’t happening a number
18:11
of cases have been failing this is the
18:15
sovereign debt Falls full or partial and
18:19
the size of the scale the circle is the
18:22
volume of the transactions as you can
18:25
see for example Greece you had an 80%
18:30
haircut okay in other words in order to
18:35
be able to keep the system going they
18:39
had to have actually reduced the
18:41
quantity that the government will have
18:43
to pay back
18:44
but even that was not enough that’s
18:45
where we still are so in other words
18:51
this is an update from my working back
18:54
in 2013 on the number of crisis that
18:57
have been going on basically in the 1970
19:02
1970 and 2010 they have been 490 step 25
19:08
big crisis on the world in the world
19:11
that means 10 per year on the average so
19:16
the 2007-2008 was the biggest act big
19:20
ever in history
19:21
but you know kind of in the media it’s
19:24
presented as if it’s the only one you
19:26
talk about
19:27
is Right singular 10 per year over 40
19:36
so the system is structurally unstable
19:40
it is my claim you have a different time
19:44
state for your banking crisis here we
19:47
have actually the monetary crisis and
19:50
sovereign debt crisis with Greece we
19:53
going bad we have to have a new one okay
19:56
now why is this happening
20:02
usually the textbooks and economic sort
20:05
of studies in this field they all take
20:08
one particular case they would say all
20:11
right the back debt crisis the bank
20:14
crisis is one of them and that’s
20:17
completely nothing to do with the say
20:23
sovereign crisis okay
20:26
in fact they’re tied together the fact
20:30
that you had a banking crisis in Ireland
20:33
and the government needed to save the
20:36
banks and pushed its debt above the
20:41
ceiling or anybody that everybody
20:43
thought before so these things connected
20:45
and it’s systemic analysis need to look
20:48
at the entire system and that’s what
20:50
we’re doing when we’re dealing with
20:53
complex or networks in Complexo networks
20:56
is the entire system we’re not looking
20:58
at the different variations of the
21:00
crisis it’s a little bit like to give
21:03
you an image I will classify when you
21:08
have a flu I classify verse one disease
21:10
you have fever and another disease then
21:13
you have aching joints and the third one
21:16
is you have a runny nose so we have
21:18
three categories of diseases and we
21:21
analyze them separately without looking
21:24
at what hangs them together which is
21:27
lava flow all right now
21:33
next topic I’m going to have to
21:40
challenge a paradigm and usually I
21:45
believe this crap has been used to do
21:47
that okay so you’re probably less free
21:50
to be shocked than most environments
21:53
with a question parallax
21:57
however the Western idea since Aristotle
22:04
Tong 2,300 years we’re looking at cause
22:09
and effect to explain it and of course
22:12
at the chain of cause and effect means
22:15
that you need to have a primordial
22:17
course right you’d have a cause of a
22:20
cause of a causal because and then
22:21
that’s why you need things like a cloud
22:25
or ela or all our monad or logos or in
22:29
science a Big Bang we need this to play
22:33
reality okay now is that the only way
22:38
the answer is no there’s another way
22:42
which is much older than Aristotle its
22:45
origin seems to be in shamanism in
22:48
Siberia back in prehistoric times
22:52
probably four or five thousand BC the
22:56
first running of Chinese right stuff
22:59
happens in 2700 BC and they were ready
23:02
familiar with the concept that is Ethan
23:06
Taoism though wisdom is not the origin
23:09
of this idea just like Euclid is not the
23:12
origin of symmetry weakly systematized
23:16
make the classic presentation of
23:19
geometry but there was a lot of stuff
23:22
that the Egyptians knew in the case of
23:25
our field of knowledge now in eastern
23:28
Taoism well I’m taking thou ISM as the
23:32
the most the classic form of this
23:35
shamanic insight which is prehistoric
23:40
all living systems according to
23:44
this worldview emerge from a union
23:49
interaction ie at the origin in our case
23:54
here at the origin you needed to have
23:57
something a creator or something a Big
24:01
Bang we know at the origin you had the
24:06
void in both cases but either the void
24:09
comes polarity yet yeah and the dance of
24:15
yin-yang continuously is what creates
24:19
reality it’s a very different world view
24:24
the interesting part my work with the
24:26
language has demonstrated from a
24:29
scientific perspective in Western
24:31
science that that way of looking at the
24:34
world is actually the one that applies
24:35
to all living systems including
24:39
ecosystems ok and including money by
24:43
doing the money system all our flow
24:46
networks so this is a classic statement
24:53
of two Chinese be the motion of yin and
24:56
yang generates all things in nature we
24:58
look at that as a naive pre-scientific
25:02
kind of romantic view but it’s now and
25:08
here are some examples of the
25:10
association between yin and yang let’s
25:12
not go into it night and day
25:14
cold and hot earth and sky Moon and Sun
25:17
it’s Antoinetta most of the things not
25:19
relevant or be talking about however
25:22
here if some roses are relevant for what
25:26
we are talking about ie the economy on
25:30
the young coherence the best place to
25:33
start is at the bottom with the
25:36
transcendent God that limit appear right
25:40
and in that worldview central authority
25:47
is the way to do things
25:49
hierarchy works wait what
25:51
as everything that we do bigger is
25:54
better
25:55
technology dominates peak experience
25:57
having doing efficiency competition the
26:00
inside everything is divine the divine
26:05
is everywhere and mutual trust is the
26:09
way to organize reality egalitarian
26:12
works best small is beautiful all the
26:15
kind of stuff that we know right that we
26:17
heard about in sustainability and that
26:19
we don’t have by the way this is missing
26:27
for a very simple reason or money system
26:31
or money is all young is an extreme
26:35
young construct its issue hierarchical
26:39
control mechanism it’s about having its
26:45
well all these things here every feature
26:49
about it is yes now what was the work
26:57
with Varna which that have been home
27:00
last eight years well has been in his
27:05
entire life he’s one of the founders of
27:07
quantitative ecology quantitative
27:12
ecology is a domain for example to be
27:15
concrete
27:15
he has gone to many different ecosystems
27:19
in the world natural ecosystems and he
27:22
spent his life measuring in grams per
27:25
square meter per year what happens with
27:29
biomass in every one of these different
27:34
ecosystems and there a huge variety of
27:38
them right
27:40
so one thing they have in common all
27:44
these thousands of ecosystems natural
27:46
ecosystems is they are sustainable right
27:51
they prove that they are sustainable
27:54
otherwise they wouldn’t be there simple
27:57
to that right the question that we
28:01
raised was what else do they have in
28:03
common and we were lucky I mean it could
28:07
be 500,000 things that they have in
28:09
common know they have two key variables
28:13
that were in specific ranges and the two
28:17
variables were structural variables
28:19
diversity and interconnectivity these
28:23
are characteristics of the network that
28:28
we’re dealing with in other words what
28:31
flows in the network does not affect the
28:35
capacity for sustainability or
28:39
durability of the complex flow Network
28:42
and that is the reason that we are
28:47
having it can apply what we learn from
28:53
natural ecosystems in the economy they
28:58
are both natural sorry they’re both
29:02
complex flow networks which have
29:05
diversity and connectivity and what
29:08
happens with interconnectivity and
29:10
diversity because they are structural it
29:13
applies to both of them now to to
29:20
complex flow networks with the same
29:22
structure will behave the same way in
29:26
other words when there are unstable they
29:29
will be unstable
29:30
whatever flows through it and that is
29:35
the examples here it applies across the
29:39
board now
29:44
what I’m saying is not an analogy or a
29:49
metaphor they well money is like what
29:54
happens in an economy what happens with
29:59
biomass in the natural ecosystem that’s
30:02
not what we’re talking about it’s much
30:04
more fundamental
30:05
what did mutant discover it is covered
30:11
not an analogy between an apple and the
30:14
woman he invented he discovered the
30:18
universal law that applies to the mass
30:22
of any object including the Apple in the
30:24
moon that was a breakthrough
30:28
okay Bob Alana which discovered a
30:35
universal law that applies to the
30:37
structure of any complex flow Network
30:39
independently what’s in it and it is
30:43
saying we’re dealing with systemic
30:45
biomimicry so by the way it happens also
30:53
an electricity you may have heard of the
30:55
big blackouts that are happening that’s
30:58
happened in America the worst one here
31:00
most of it will also happen in other
31:03
countries in Thailand how whole country
31:04
has gone under that in India about
31:07
quarter of the country have gone so same
31:09
thing it’s the same mistake they are
31:14
pushing efficiency too far and making it
31:18
streamlined not having enough diversity
31:21
anymore and the whole thing becomes
31:23
brittle now the driver behind in
31:31
involves work is entropy now the entire
31:37
field of economics
31:38
whether it’s Marxist capital ignores
31:43
entropy
31:44
I repeat ignores entropy it is the most
31:49
universal law in the universe
31:53
the origin of gravity so it’s more
31:58
fundamental than gravity okay so we’re
32:02
talking of thing in North that’s
32:04
overlooked here’s how it works here you
32:14
have sustainability and here you have
32:17
two key variables that are emerging from
32:22
the network one of them is efficiency
32:24
which is also a way of streamlining when
32:27
you streamline things to get more
32:29
efficient and resilience you have the
32:32
diverse and interconnections and these
32:34
two things are fighting each other okay
32:37
the more resilient you have things the
32:40
less efficient will be the less the more
32:43
efficient they are there were
32:45
efficiencies measured as the quantity of
32:49
whatever flows through the system per
32:52
unit of time the GDP per year for
32:55
economy or the total throughput in a
32:59
natural ecosystem to do two examples now
33:03
there is we’re lucky we’ve been lucky in
33:05
one in several ways first of all there
33:08
were only two variables right that were
33:11
relevant not five or ten we’re going to
33:14
discuss a few what flows in the system
33:16
is not a bank not a matter and there is
33:20
actually one optimum you could have a
33:22
server with 350 Optima okay know one of
33:26
them and when you have the optimum there
33:30
when you go on that side it’s dropping
33:34
in sustainability through excess young
33:37
and it will lead to collapse the kind of
33:41
stuff we mean familiar in monetary
33:42
systems and when you go on this side you
33:48
have two resilient you know too much
33:52
diversity internet connection it gets
33:54
stagnation there two ways for a complex
33:57
flow network to die collapse and
34:01
stagnation and
34:03
one is SS young and the other one is
34:05
excessive and to been connecting with a
34:08
Chinese system all natural ecosystems
34:12
fall there at 97 98 percent of optimum
34:18
all natural ecosystems fall between that
34:22
very narrow range now that’s called the
34:28
window of viability the benefit system
34:31
the financial system is there and after
34:36
the crash what do we do there is
34:39
actually today more concentration less
34:42
diversity in the banking system before
34:45
the crash because we’re saving the
34:47
biggest ones and they have the small
34:49
ones because that’s the way to save the
34:52
system deuce further your diversity in
35:00
order when you are dealing with the
35:01
crisis now happens when you have a crash
35:04
and the financial crash you end up here
35:09
you go from here to there
35:12
in other words suddenly you have too
35:15
much diversity to take an economic
35:18
example you have survival barter
35:21
survival barter means what basically
35:24
everything becomes money my shoes my
35:27
jacket my tie they’re ever they’re
35:31
available for exchange so that’s what
35:34
happens now what happens in a natural
35:37
ecosystem I imagine that I drop a bomb
35:40
on an atomic bomb over a forest
35:43
somewhere you come back 20 30 years
35:48
later you’re going to have a new forest
35:50
may not be the same but you’re going to
35:53
have a new ecosystem that has emerged
35:54
how did that happen so it happened here
35:58
and actually climbs up here it reduces
36:03
the system’s the Padres the plants and
36:06
animals that are best adapted to the new
36:08
environment then birch and steak over
36:12
and the other ones will disappear
36:16
and you’re going to have less diversity
36:18
until you get back into the window of
36:21
viability what do we do with the money
36:26
system we do this as soon as we can we
36:34
go back to the monopoly because that’s
36:38
the way things are supposed to be
36:40
organized isn’t it a monopoly of a
36:44
single monoculture of a single type of
36:46
currency faith the bank debt so we have
36:50
been doing this little tour 425 times in
36:57
the last 14 years and we’re going to
37:00
have another 426 427 I claim as long as
37:05
we are playing that game it’s
37:09
predictable okay good now that’s what
37:15
the problem was in all times when the
37:20
trains were built they have one track
37:22
they didn’t build two tanks you know
37:26
some things things happen okay and
37:31
that’s what we do today so in a monetary
37:34
or may we keep a single track back to
37:38
the silo so my preference for diversity
37:43
in currency does not come from a strange
37:47
preference that I happen to have there
37:50
is a scientific basis for it and I claim
37:53
we’re going to be paying for it again
37:55
until we learn all right what happens
38:01
with complementary currencies that’s the
38:03
other way of getting back here one of
38:06
the key arguments that economists will
38:08
always use when you talk about multiple
38:10
currencies this is less efficient they
38:13
all right you will go from there to
38:17
there and that is less efficient you
38:21
will have less volume per year it’s not
38:28
streamlined enough
38:29
or optimum use quote-unquote form an
38:32
economic perspective but that’s
38:35
precisely what C is in order to be able
38:37
to get into the window viability and
38:40
that’s what we need to do all right
38:45
now let’s apply what we learned I’m
38:54
proposing to learn something from nature
39:00
in other words we need to go from this
39:03
and these are metaphors okay to this
39:11
okay that is what I’m talking a monetary
39:14
ecosystem is like this and it is less
39:17
efficient really I mean yes it is
39:20
efficient but that will be the price you
39:23
need to pay in order to have resilience
39:26
all right
39:28
let’s return to the context the
39:32
sustainable development goals I’m
39:37
proposing two of them has a target out
39:40
of the 717 end of poverty and stopping
39:50
climate change and I claim that second
39:54
one actually if we don’t do this
39:56
correctly we are not going to be remain
40:00
as a species I also think that there’s
40:04
no real point in going halfway on this
40:05
stuff you know if you’re not doing it
40:10
right okay I mean of course you can do
40:13
it very very very bad but you know we
40:15
really need to get the full package here
40:18
or the full monty is one of the
40:20
expressions somewhere here we’re back to
40:26
the spine light pie pie model remember
40:27
that there’s an elephant
40:32
you can do this create a second circuit
40:42
there is no reason for the government to
40:45
borrow money from banks in order to pay
40:48
for these things it can do it at least
40:53
conceptually from a systemic viewpoint
40:55
it’s doable and you would then have a
41:00
second QE if you went accept that would
41:04
be done by the government it sells for
41:07
all the right sustainable development
41:11
objectives okay and some of the side
41:16
ways would be actually reduce climate
41:20
change we may have less immigration the
41:25
estimate of the OECD is that we are
41:27
going to have in the next decade
41:29
hundreds of millions of people moved
41:31
from Africa to Europe under primate
41:36
change I don’t know whether you realize
41:38
what that means a couple of hundreds of
41:40
millions we have a bit of a problem with
41:42
you know couple of million one what
42:02
okay give me I’m getting there okay we
42:12
are fundamentally trapped and the entire
42:15
field of economics has been trapped
42:16
since the beginning of the field of
42:18
economics from Adam Smith to this day
42:20
with the idea that needs to happen with
42:23
everything we need to do with the single
42:24
currency it’s taken as you know and
42:29
evidence there is actually no
42:32
theoretical economics that has been
42:34
developed that I know of making an
42:37
exception to that right now we are
42:45
assuming or actually pretending that the
42:49
allocation and the distribution of
42:51
wealth is going to be best done that way
42:54
I have very serious doubts whether it be
42:59
a case but that’s another issue here
43:04
some of the problems that we’re having
43:06
with the current system though that’s in
43:08
poverty or everywhere at this point by
43:12
the way I just got the statistics that
43:15
last year in France six hundred farmers
43:18
committed suicide for financial reasons
43:20
in Belgium which is a much more country
43:24
there have been 400 bar farmers
43:26
committing three sizes are two countries
43:28
I happen to have the statistical I don’t
43:30
think it’s much better than no longer in
43:32
Germany conventional money is created to
43:39
private debt banks to serve for their
43:42
own profits that’s why how they create
43:43
money not for the benefit of humanity or
43:46
the benefit of the government for the
43:48
benefit of the economy or the benefit of
43:49
the government okay they’re doing this
43:53
for themselves and of course there’s a
43:57
cost to that all others disabilities
44:00
that is paid by just about everybody
44:03
including the governments okay
44:07
conventional money is created only
44:09
through hierarchical and conditioned
44:11
room to go make a loan you’re going to
44:14
have either put a collateral or other
44:18
good stuff and it runs out of
44:23
communities very quickly with the big
44:26
chains they were sucking the money out
44:29
when you go to the supermarket the money
44:31
is out of the country typically by the
44:34
end of the day ok so that’s the current
44:39
problems that we’re dealing with here
44:43
are some complex things the most
44:47
important in my view is this the power
44:50
of the people becomes greater than the
44:51
pop of the people in power in the
44:55
current context and the blockchain
44:59
environment is one that makes this
45:02
possible
45:06
so you heard about the bunker protocol
45:10
it creates liquidity and it makes it
45:13
possible for an automatic price
45:14
discovery without having a counterparty
45:17
which is a breakthrough fundamentally in
45:21
the entire field we are dealing with for
45:30
the first time a user issued currency
45:34
I’m repeating the word use of issued
45:37
currency we have not known that since
45:44
Sumer ok people were not creating their
45:50
currency and that is what can be done
45:54
with the bunker protocol it’s actually
45:57
use it it’s the user who puts in the
46:01
reserves 1 or 2 or whatever that makes
46:04
it convertible and all the other good
46:05
stuff the money in that context will
46:11
stay in the communities and there’s one
46:14
warning that I’m giving here money
46:18
should be managed as
46:20
moments in other words if you accept the
46:27
currency it’s like breathing air
46:31
everybody is affected by it but you know
46:37
they’re not managing as I comments
46:40
obviously conventional system is not but
46:43
I claim that needs to happen and there
46:46
was not the automatic with the bunker
46:50
protocol okay
46:52
bunker protocol by itself will not
46:54
achieve that because you can’t have high
46:57
risk your Berto it’s like giving a
47:00
machine gun in a kinder and children
47:04
children park okay and not having
47:08
planned for what will happen when
47:12
someone gets shot okay when you’re doing
47:17
this you better get a couple of things
47:19
backing up what you’re doing now we know
47:24
a lot about the comments thanks to this
47:27
lady she got a Nobel Prize she’s the
47:31
only woman who got a Nobel Prize so far
47:34
and she did it for governing the
47:37
comments because one of the stories that
47:38
everybody heard of is the tragedy of the
47:41
Commons right vanity of the couple is an
47:44
article by harmon who actually has no
47:47
evidence at all this is never the way
47:51
people have organized Commons when they
47:53
had the power to do so
47:55
when there were comments they were
47:56
managing it differently and here the
47:59
conditions I’m not going to develop a
48:02
much detail but the fundamental ones is
48:04
basically you are having to have the
48:09
users in charge of the audit or people
48:12
reporting to the users not to the big
48:14
boss you need to have where the
48:19
monitoring system needs to be carried
48:21
all by the users they need to be able to
48:23
change the rules that need it have to
48:27
have a mechanism of democracy I call it
48:29
hyper democracy
48:32
you’s graduated sanctions providing for
48:34
rule violators provide accessible
48:37
low-cost dispute resolutions because
48:39
when you are going to have comments
48:42
there will be disputes in good faith or
48:45
Batsy and you better have a system a
48:48
decentralized court system to deal with
48:51
them and finally you need to better have
48:58
the whole thing together managed
49:01
bottom-up would be the best way and we
49:03
can do this today fact you’re doing this
49:06
all of you right now you are dealing
49:09
with this bottom-up reorganization of
49:13
the economy in every one of your
49:16
activities but I would suggest this is
49:20
needs to be written in both letters and
49:24
what we’re dealing with the money part
49:27
so the smart token in the banker
49:33
protocol it is actually one way of
49:38
making this happen and I claim we can
49:43
create with another form of market which
49:46
turns distribution or they have multiple
49:48
currencies circulating electronically a
49:51
way of reorganizing the economy from
49:54
another way with multiple currencies
49:58
this exists already in Israel it’s
50:04
actually working right now the LED
50:09
market in Israel is the marketplace for
50:11
Israeli moms this has been initiative of
50:16
REI band of it and it has been 207,000
50:22
deals averaged about two thousand six
50:25
thousand videos per month
50:27
15 million checkers it’s one of the more
50:30
successful complementary currency of a
50:32
social nature on the planet so
50:37
here the kind of stuff that is part of
50:41
that process
50:42
in other words giving didn’t offer an
50:47
electronic market where people can pick
50:48
from each other’s users your neighbor
50:52
what they are willing to sell or what
50:56
they would be needing for now to
51:00
conclude this protocol is is providing a
51:09
fundamental paradigm shift it is the
51:12
first time in history that we have user
51:15
issued currency and if we are
51:17
intelligent with it and responsible with
51:20
it ie provide the conditions for having
51:23
it managed as a Commons which we know
51:26
how to do you know for example arugam is
51:33
one of the ways of organizing the legal
51:36
aspects and this Court is attributed
51:38
court justice it’s ready it’s actually
51:43
going in the tokens are going to be its
51:47
own Internet okay I’m going to be
51:50
available in this month on the 17th of
51:54
May now I claim that the bank or
51:58
protocol combined with something like
52:00
Aragon and something like the group
52:03
market that is operational in Israel we
52:07
actually have the Hanseatic League of
52:11
the 21st century and ethically for those
52:17
who may not remember is a process that
52:20
are started in two major waves one of
52:22
them was in the Middle Ages the other
52:24
one was soon as I’m Dean sintering and
52:25
it has this is the part of it the part
52:29
of the world here that we’re in right
52:30
now is part of this that’s when it
52:32
became wealthy you know this street was
52:38
built in the 17th century in the good
52:40
times of this system by the way here
52:45
now there is a lot of history they were
52:50
different it has evolved or this you
52:53
know that actually mean for hundreds of
52:54
years as a Volvo verda system it’s not
52:56
one thing away but what it had in common
52:59
is that the merchants were putting up
53:02
standards of agreement between them that
53:04
international nature that were beyond
53:07
the state because all the states were
53:10
income you know Perot managed a local
53:13
level and didn’t at all an interest on
53:15
making things simple and it had its own
53:18
court system its own justice system okay
53:23
so here is actually a picture from
53:26
Amsterdam from the 17th century here is
53:29
the first seal of Lubec lubic was the
53:34
first country to a city to actually go
53:36
part of the and see ethically back in
53:39
the Middle Ages we are here part of what
53:45
we are surrounded by is actually a
53:47
result from that period of world economy
53:53
and I would say that we have a choice we
53:58
can use the old ways or we can try to go
54:03
for the 21st century I have my own
54:06
preferences I leave you choose
54:08
yourselves thank you very much I think
54:17
that’s the point is that it makes it a
54:19
little equality is that aetherium is
54:22
better but if there is coming a new coin
54:25
crypto currency which is better which
54:27
could be better
54:28
has that electricity so it can expand it
54:31
can flow in the in the process in the
54:34
system just by being in a liquid system
54:39
so if that’s really if you really manage
54:42
to make it liquid then really innovation
54:46
is also liquid that’s what’s going to
54:49
happen then now I mean that’s that it
54:53
makes it the liquidity of a new so if
54:58
you have
54:58
new cryptocurrency and it doesn’t have
55:01
that distribution it doesn’t it it
55:05
doesn’t work it has it’s going slow but
55:08
if it’s liquid it goes really like like
55:12
a liquid flowing process and that makes
55:15
it that makes it I think one of the best
55:19
innovations if you succeed in that and
55:22
that’s why I asked what is the price
55:25
coming with so if there’s a price coming
55:27
with it then that is in the way of being
55:30
liquid suggests you look at the protocol
55:33
white paper because the way it’s being
55:36
made lick it is different from the other
55:38
ones that’s the point the reserve issue
55:40
is actually what makes it convertible
55:42
with liquidity without having a
55:43
counterparty and that’s what’s normally
55:45
not possible that’s what’s new at all
55:50
and that combination is powerful the
55:53
kind of stuff that we’re talking about
55:54
they understood that when you were asked
55:56
to design the euro so to say oh maybe
55:59
I’m really honest tang is wrongly but
56:01
the thinking was that only 20% of the
56:05
trade would go cross boundaries or
56:06
something and so the Euro itself should
56:09
being complimentary and the currencies
56:11
that existed in the country stay there
56:12
and to me this makes a lot of sense
56:15
because my my euros here have a very
56:17
different meaning than if I go to
56:18
Montenegro and spend in there for
56:20
instance so in this thinking kind of the
56:24
idea was that the euro functions so
56:27
similar to the bond core protocol or any
56:29
other protocol that doesn’t exchange
56:31
because it’s I mean maybe you could
56:33
comment on this so in a different
56:36
related to like the bitcoin being sort
56:38
of the lingua franca currency funko and
56:40
then we move through this could you
56:43
comment on this I was involved actually
56:48
was at the Central Bank of Belgium at
56:50
the time of talking
56:55
the late 70s 28:23 and well first of all
57:06
why did I get involved right I mean what
57:12
happened at the time was the big meeting
57:17
between she’s Calais tan and have much
57:20
mitten dreamin where they made a
57:23
declaration that Europe needs a monetary
57:27
zone of monetary stability that’s not
57:29
saying you know we like Apple hood apple
57:33
apple pie and stuff like that I mean
57:34
it’s my motherhood right doesn’t mean
57:37
anything they didn’t talk about currency
57:39
that then she’s gotta stay I went to
57:42
Paris and set to this going to France
57:46
do something clearly European and how
57:50
much MIT went to the Deutsche Bundesbank
57:54
and said do something that doesn’t upset
57:56
the Americans these two ideas are not
57:59
compatible so the Bank of International
58:03
Settlements is set up it exists for
58:07
these kind of issues
58:09
what they do is create a committee the
58:11
acute committee the Arab European
58:15
currency unit committee and they put a
58:17
Belgium in size and Syed and in control
58:21
it and that the chairman was my
58:24
colleague from the foreign department
58:26
and he walked into my office and said
58:28
you know something about systems and
58:29
what the hell do we do so I’ve been
58:33
working on this thing for about three
58:35
years and my proposal was different from
58:40
what has happened I did not want to have
58:44
a common currency as I didn’t want to
58:46
have a single currency and wanted to
58:48
have a common currency okay if all the
58:53
countries in Europe use a single
58:56
currency the euro but everybody has his
58:59
own grantee why not right that was not
59:04
acceptable okay
59:07
and just about the little history I was
59:09
also at that point president of the
59:12
electronic payment system Belgium and
59:13
because of that I was going to Basel
59:15
regularly for meetings there about these
59:18
issues and the president of the Bank of
59:27
International Settlements came to me at
59:30
the cafeteria in Basel and said Bernard
59:33
I read your book on Latin America what
59:36
are you doing in the central banking and
59:38
I answered the honest question I said
59:41
I’m in the central bank because I’ve
59:43
actually worked on predicting that there
59:46
would be a major crash in Latin America
59:48
in the 1980s and I thought that the
59:50
place that it would be structural and
59:53
therefore we would have more of those
59:55
that would be I described it as a 20 the
59:57
first crisis of the 21st century in 1980
60:01
right so because I expected more of
60:05
those okay and I thought that well the
60:11
place to look at these issues would be
60:13
central bank and at the only central
60:15
bank where I have access is it Belgian
60:18
one because you cannot work you can work
60:21
for the foreign for the State Department
60:22
and you in the States as a foreigner but
60:25
you cannot work for the Federal Reserve
60:27
as a foreigner okay so they’re more
60:29
Catholic in the Pope right and central
60:33
bank’s okay trying to be caught of
60:35
national right
60:38
so he said Bernard you don’t understand
60:45
we exist the back of his national
60:47
settlements every central bank in the
60:51
world exists only for one purpose keep
60:55
the system going exactly as is not to
60:58
improve it you’re right
61:00
the system is unstable and if you want
61:03
to do something about it I suggest you
61:07
go to the private sector which is what I
61:10
gave my resignation because everything
61:12
I’ve been trying to do to change the
61:14
system was blocked
61:16
so that’s why I resigned in 83 okay that
61:22
forensic okay thank you
61:26
[Applause]
61:32
[Music]
61:38
[Applause]
61:39
[Music]
61:52
you
