Bernard Lietear, EURO architect discusses Bancor protocol and potential of complementary currencies

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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.


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http://letthemconfectsweeterlies.blogspot.com/2018/08/bernard-lietear-euro-architect.html




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


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