Blake Lovewell on currency and energy//

I’m going to bring in Blake Lovewell, who is a contributor at 21st Century Wire. He normally comments on financial affairs but also covers geopolitics.

Blake, how are you doing?

Blake Lovewell: Hey. Yeah. I’m doing well. Thanks. Yeah.

Patrick Henningsen: And, Blake, so you’re you’re paying it you do you do you do cover the keep an eye on a lot of the geopolitical things going on in the world as well. Yeah. Yeah. Are you surprised that this is kind of flaring up in the Middle East right now?

Blake Lovewell: I’m not at all surprised given that I’d say we’re entering a period of frozen conflict in the Ukraine. There seems to be little movement in either direction in terms of territorial gains and losses. There seems to be little change in terms of either side’s narrative. I think it benefits both NATO even though they’re losing, and it benefits Putin obviously, to have this war because bellicose sells well to the populace. even if you’re not looking for votes NATO isn’t voted on in any way.

It’s, you know, an imposed military regime tool intents and purposes. but it’s still good for business. You can look at the stocks and shares of BAE Systems, Lockheed Martin, Et Al, and see that, you know, war is good for business there. So they want to continue that thing. But yeah, I was interested to see there was a speech from the boss of mi6, you know, the infamous foreign intelligence services Her Majesty’s government.

He was talking about the Ukraine conflict. You know, spinning everything in every direction. I mean, it’s a real challenge for someone who’s interested in geopolitics to try and decipher what he’s trying to say and what narratives he’s trying to spin. I don’t think one word of truce was said during this whole press conference he gave. At least there was some, you know, railing from the press saying, it looks like Ukraine might be losing and, you know, various questions that weren’t, you know, purely singing from the hymn sheet.

But I was interested to note someone in the comments below because you know, sometimes more interesting than the main feature is the comments below. If they’re allowed in the modern era, it’s you know, that’s where politics and debate really happens. you know, the Guardian infamously turned off their comments on most articles, but they used to have a very popular comment comment is free section where, you know, I I, as a young person interested into politics, would gain a lot of my interesting, you know, points of debate But, yeah, a comment below the mi6 boss was saying that he used to be the ambassador to Turkey. And as such, Did he have an opinion on the frozen Armenian conflict? And so that led me down the Azerbaijan Armenia rabbit hole.

But what struck me there is that Putin in the last month has been playing a peacemaker And so I thought, you know, is there a role for Putin as peacemaker in the Ukraine conflict? I know it sounds crazy because You know, the rest of this press conference with the boss of mi6 was him slagging off Putin, really going to town, saying that, you know, He’s alone and desperate. It’s just him and a few military advisers. He doesn’t have Russia on board. I mean, you know, a quick glance at, you know, any Russian press even though, you know, they’re as controlled as the BBC is controlled by the British state, but still shows that Putin’s popular on the streets.

He’s able to walk on the street. I don’t think you’d have Rishi Sunak shaking hands with anyone outside of a, you know, a heavily sanitized space. So, yeah, yeah, what’s going on in Azerbaijan, it looks like there’s a peace agreement being brokered. I mean, it’s not so much a peace agreement as on the Armenian side, a surrender agreement being signed. But I saw an interesting quote from President Pacinian of Armenia.

He said that certain people in Armenia wanted to constantly live in conflict conditions for, you know, the next 30 years and to do so would be to, you know, be destructive to what is Armenian. So he’s saying there that the people who are still trying to pursue war with Azerbaijan are actually taking the nation down. And he’s, you know, want to speak on that because he was very much undecided of trying to take back Armenian clay and saying that certain areas were right for Armenian soil and, you know, that’s what they lost. And he’s now facing the reality that Azerbaijan’s a lot bigger. They have, you know, they might not only have their own power, but, you know, they’re very backed by the British monarchy and other infamous power players.

So, he’s kind of taking a rapprochement deal. So, what’s your perspective? because I know you’ve got some insight in the area, Patrick.

Patrick Henningsen

Well, this this is a really important geopolitical pivot. And the thing you have to remember about this is both Azerbaijan and Armenia, our former Soviet satellite states. And so during the dissolution of the Soviet Union came, that kind of really all that whole area, look how tightly packed, look at the map play It’s like you’ve got you’ve got Armenia, then you’ve got above it Azerbaijan. You’ve got Turkey to the west.

Then above that, you’ve got Georgia. And that’s a contentious place right there with Salvador and Abkhazia, these Russian breakaway states. And then, you know, look and you’ve got Iran just off to the side there, Azerbaijan. So look at and then Turkey, of course, has got an axe to grind with the Armenians.

 And so, Israel, funny enough, is arming and supporting Azerbaijan. among other people. So, it doesn’t necessarily fall into the typical you know, what the types of states that would be supporting or against.

It’s a bit of a funny one. But Russia, of course, is supporting stability. but they’re also trying to be friendly with both countries.

Blake Lovewell: Yeah. They’re trying to play both sides.

Patrick Henningsen Turkey, definitely taking the Azerbaijani side. Syria may definitely be supporting the Armenians. So, but, you know, here’s another thing I’ll throw in really quickly. Go back to you, Blake, is that — Sure.

You have to remember in the United States, the Armenian lobby is very strong. These are very successful people that include the likes of Kim Kardashian and others Just to give you a little, you know, taste of these are the people that run Los Angeles. They run Southern California. Some of those successful people in America, financially they have enclaves right across the country, are very, very well organized, very vocal, very well-funded, and also skillful lobby the Armenians in America.

So that’s a bit of a difficult one for the United States. They would probably want to support anybody that Russia is not supporting, but in this case, Russia is kind of supporting both. but serious supporting Armenia. So, the US government would prefer to support Azerbaijan as and try to turn them against Russia. So, this is a funny one.

It’s a really funny situation. Totally.

Blake Lovewell: So it runs kind of perpendicular to the traditional lines where you can normally say, you know, let’s say, taking the Ukraine conflicts, you can say that Ukraine, pro Ukraine is the kind of pro EU, pro NATO, Pro Atlantic Council, all of that lot versus Russia, the sort of pivot to Asia, Central Asia, with China and stuff like that, whereas the Azerbaijan Armenia one, it kind of swings both ways.

Like you say, with the different allegiances, and yeah, the Armenian lobby is very big in America, the Kardashians. You know? They’ve got the biggest Instagram followings, which kind of you know, it’s not really geopolitical, but I think that that plays a big part. Each of the Kardashians are in the top 10 Instagram accounts, and I think there’s 5 or 6 of them. I’m not even sure.

I’m not up to date on the ins and outs of their politics. But if they’re soft on the Armenian side, that’s, you know, a potential hornet’s nest you don’t want to be kicking geopolitically. So I think part of the reason this is allowed to settle is because so many people stand to lose from an escalation of the conflict in or, you know, a re-ignition of that which was just a recognition of an age old conflict.

And also, yeah, speaking of old conflicts, these are all Soviet or post-Soviet redrawing of borders, Georgia and south of ETA, as you said, is an infamous case where I think Georgia is probably the most pro US of the of the satellite post-Soviet states by no accident there. I think America really wants that on the road in Central Asia, and it’s very important for them to have that. But there’s so many different currents running. You know, the Nagorno Karabakh region is very high in rare earth metals.

I think it’s actually one of the highest in kilogram outputs of these rare earth metals, which are vital for all of the big tech leaps forward going on around the world in computing. Microchips in AI, in crypto, even in crypto mining.

So, we’ve seen that, you know, Mark Zuckerberg’s been buying up land, which contains lots of rare earth metals, not only that Elon Musk, and he’s various satellite companies, And then you’ve got other Silicon Valley people who can see that that kind of thing are going to be the big battleground We had a massive shortage of, I think, manganese in the last week. So that’s another thread running through this. It’s the resources But, you know, my optimistic outlook says there’s prospects for peace in Ukraine if we can take something from the Armenian-Azerbaijan model.

But, you know, it’s a very precarious situation still, so it’s not exactly a, you know, a perfect case.

Patrick Henningsen Yeah. So, I mean, yeah, it’s good that you highlighted the rare earths. Those are becoming increasingly pivotal. in all these geopolitical flashpoints and conflicts. There’s definitely competition for those kinds of resources.

There’s plenty of oil around the world there’s plenty of, you know, natural gas untapped as well. There’s, you know, there’s enough, I would think, you know, enough uranium to kind of fuel the nuclear demand. Yeah. Although that’s expensive, it’s not cheap. But the rare earth

Blake Lovewell: It’s fairly ubiquitous. That’s uranium. Yeah. But the thing with the rare earths is which I think you sort of pointed out there is they’re totally key to the green revolution or the electric car. the electric car revolution. And that’s a problem because they require a lot, and they’re going to talk about changing the whole fleet over. They’re trying to outlaw combustion engines, sorry, by 2030 in the UK as an example. Ridiculous.

Totally bonkers. but they’re going for it, and they do not have the resources to do it. And this that that’s the reality. That changeover can’t happen. So where are we going with all this?

Patrick Henningsen: So, this is interesting. Turkey is very pro Azerbaijan. So that that looks like a potential kind of long-term simmering kind of thing there. You know, it’s I I look at these things, Blake. you know, the post border drawing of the 1st World War, the Soviet Union, the collapse of the Soviet.

A lot of these problems emanate because of these past empires or past sort of borders and they got really strong. Sykes Pete got of course, in the Middle East is the source of untold number of problems still today.

Blake Lovewell: It’s so interesting as well. I mean, if you can take the human suffering angle out of it for a second, you know, this stuff like Sykes Picot the drawing of borders across them, at least. And, yeah, like you say, it’s always in the aftermath of, like, Empire building, Sykes Picot was, you know, in the end of a few different empires, Ottoman, British, and so on.

But, you know, the Soviet Union was another empire, which was slowly and surely built and accrued massive power and then eventually collapsed in the same way, we could, you know, look at the crystal ball, maybe positive that the American empire it’s different because it’s not a geographic block.

The US has NAFTA, which is kind of like the free trade arrangement, but that’s the closest thing they had to a North American Union I mean, Canada is a real vassal state of Britain and the United States. But then Meg Mexico doesn’t want much too much to do with the United States, and then that forms a bit of a hard border towards Central and South America.

But the American empire, obviously, extends the world over with military bases in, I think, about 80 or 90 percent of the countries in the world. or was it you’re never you’re never far from an American military base wherever you are on earth.

I think the furthest you could get is probably the center of Russia but who knows what’s actually going on? Because, you know, surreptitiously, in the background, they’re all on, you know, part playing from a similar perspective. One interesting thing, yes, you bring up so many points I want to bounce off the EV stuff, yeah, electric vehicles that, you know, I know the fact off the top of my head, there’s not enough cobalt on earth to convert every car in England to electric vehicles.

 So that puts it in that kind of perspective. You know, the electric vehicles Revolution is a boondoggle. It’s a lie. It’s a scam.

But, then I was talking to someone over the weekend in my neighborhood. And, you know, there was a plan put forward for a big block of flats on, you know, cutting down some ancient tree. You know the story. cut down some ancient trees, put up a block of flats, but these flats are going to have electric vehicle charging points and, you know, a communal shared electric vehicle. So, you know, there is that and said as if that’s a good thing.

And I didn’t have the time or inclination to bounce back on that one and say, you know, actually, there’s not enough cobalt to generate it and so on. That’s a quick way to lose friends at a dinner party, I would say. But however, it kind of speaks to the fact that there’s a perception. EV is green. You only have to simply look in for 5 to 10 minutes into the mining of cobalt, into the mining of all of these rare earths to discover.

It’s fundamentally based on child slavery and destruction of nature. You can’t get these rare earths without digging up tons and tons of soil, filtering it through washing it and so on. And the business model, it would be too expensive.

They’re already extremely expensive to mine and produce, but you couldn’t produce them if you had trade unions fighting for the rights of the people working for it. They really do rely on not only indentured slaves, but true slaves, including child slaves, who have no safety and so on.

And I think that if everyone who had an electric vehicle had a big sticker slapped on it that said this is the true cost of your electric vehicle. I think people would be put off. They would be perturbed to have big stickers slapped on their car, but I did see a very successful Russian campaign against parking on pavements that involved that because technically slapping a big sticker is actually just posting a notice. It doesn’t count as property damage. Not that we encourage this sort of thing, but You know, waking people up, it’s very hard because like I said, you don’t want to lose friends over this.

Patrick Henningsen: No. Some people don’t like the truth. Quite frankly, Blake and You know, when you start talking about things that completely undercut the possibility of this utopian trans transition that everybody is sunk all of their hopes and dreams and political capital into you know, that’s like pulling the rug out from under this sort of, you know, utopian wizard of Oz type vision of the future, and people don’t like it. They’re going to push back on it. There’s going to be a visceral reaction against it.

It’s just human nature. People don’t like to be told the truth. You know, this is a good thing actually about humans is that humans prefer to be lied to and this is not necessarily a bad thing. This is a survival and a coping mechanism.

So just, you know, how many times you say, hey. How are you doing today? How’s your day been? Most people are going to smile even with gritted teeth and say, yeah. It’s great.

I’m doing — I’m fine. I’m doing fine. How about you? And you could’ve had the worst day ever, you know, and then you’re still going to grin and bear it. And because if you say anything negative, these other people will get put off and you know, nobody likes a negative answer ever because they’re going to pretend to be positive. Why?

Because we’d love to be lied to and we prefer to be lied to. We prefer some of them. Everything’s going to be fine. The EVs are coming. It’s going to be clean air.

Look. They already have technology catalytic converters. It’s in them reduce pollution by a tremendous amount already even before the EVs. You’ve got hybrid models on cars. But why this obsession to go full ion lithium battery, full electric.

Blake Lovewell: Well, I’ve got one theory I heard recently. I’ve always struggled to find a rational theory behind this dogmatic pursuit of a green revolution, but it was to do with the amount of any the cost per unit of energy. And if you can bring the cost per unit of energy down. Suddenly, all of the equations of our human productivity go through the roof. So, if we have this increasingly technological society.

It’s going to need more energy. Current systems of energy like oil, they’re at a stasis point where you can’t make it much cheaper. And then you’ve obviously got OPEC and all of that stuff. So the elite’s pursuit of green technologies, including, you know, high obsession with electricity is to do with dragging down the cost of electricity or energy at large to try and push more technology and something like that. I mean, it’s an argument I’ve heard.

I don’t hold too much weight in it. I think a lot of the green revolution stuff’s about control. But I’m willing to hear all these different points of view, you know, to try and widen the conversation so we don’t fall into that same war mindset that the Ukraine enthusiasts are all in, you know, where one side dominates all.

Patrick Henningsen No. That’s right. We’ll get into more of that on the other side. I’m here with Blake Lovewell. We are having a deep conversation about the estate of the world.

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Patrick Henningsen

Alright. Welcome back. Welcome back, ladies and gentlemen. Live broadcast. We’re now in number 2.

Actually, in the final segment, the final hour here. I’m pleased to be joined by our most valued contributor, Mister Blake Lovewell, who’s joining us on the live link. And I know Blake we’re getting into energy, rare earth, the electric cars, that whole thing.

 And meanwhile, the oil futures markets are going ballistic. Goldman Sachs’s screaming thing that the demand is out of you know, it’s out of this world coming up so that prices are all they’re up front running all these oil trades. because they know what’s coming because people need energy.

So, the rest of the world, while Europe and the US are trying to get sucked into this green cul de sac, Asia, Africa, and other places are like, no. No. We’re going forward. we’re developing, and we need we need our best bang for the buck in terms of, you know, pounds per square inch on energy production. it’s going to be gas oil coal. Okay? And so oil markets are going nuts.

What does Greta Thunberg have to say about that? She’s probably not happy, blank.

Blake Lovewell: No. I doubt it. Is she still going? I thought we got bored of her.

Patrick Henningsen: We got bored, but she’s still going. She’s there. She’s not going to stop because we’re getting bored. That’s for sure. She’s gonna carry on.

Blake Lovewell: I know Just Stop Oil. Somebody from Just Stop Oil got arrested. They tried to do a big mass protest in Central London, but obviously, because they telegraph their moves about two weeks in advance because they’re kind of useless baby boomers with no operational security. This lady said she got six steps into the road before she was arrested. she claimed she was illegally arrested, but, you know, we’ll let the courts decide.

It was a very funny clip because she was saying that she should be looking after her granddaughter right now or grandson right now, and he’s got no one to look after him except for the granddad. But anyway, that’s beside the point.

Well, maybe it isn’t. Because I feel like Just Stop Oil extinction rebellion lot, they’re still going as well along with Greta. But the ESG movement that was kind of the corporate mirror of that movement has stuttered, and I would say, has come to a halt, a juddering halt.

We mentioned last week that the BlackRock hired someone from Saudi Aramco, the Saudi Oil Corporation to their board signaling a departure from their, you know, almost decade long pursuit of a loss-making enterprise in ESG, the environmental aspect of policy making going under that spearhead of ESG.

And I think most companies now that easy money has dried up and suddenly interest rates are kicking in have realized that lots of these, you know, airy fairy plans go out the window when the realpolitik kicks in. And like you say, oil offers lots of people and places, the best bang for your buck. You can transport it all over the world and then use it where you need it. whereas something like nuclear, which is still a good option that requires 10, 20 years of research, development planning, licensing and so on.

And even then, it’s only available near the nuclear power station or as far as you can run expensive electric cables, whereas with oil you deliver the barrel, you can put that anywhere on earth, and most people have engines that can use oil or its byproducts.

So, there’s still a place for oil. And I think something like 60% of the energy market in the world is still based on oil and by-products, including natural gas. I think actually LNG liquid natural gas is going to be one to watch just as much as oil because it offers the same benefits for it offers some economic benefits too because it can be cheaper to process used in manufacture. I would also keep an eye off for LNG, in particular certain deals are being made amongst these oil producing companies over LNG, and that’s, you know, no mean feat.

Patrick Henningsen

Yeah. So, oil is, like, to energy what cash is to money. It’s portable. It’s storable. You know?

There’s a lot of practical benefits to diesel. Of course, it’s derivative products, gasoline diesel. with diesel running a lot of generators around the world powering countries with diesel generators, actually. So, you can stock it up. You can sort of front load it.

There’s a lot of potential benefits for them. The price comes down, of course, with the amount of people using it. Of course, it is a finite resource, but there are proven reserves that will take us well into the next few centuries, in the meantime, my strategy, Blake, would be to pursue a diverse portfolio of energy.

Continue developing green tech, make it more affordable, and more green, in fact, and also more efficient. Nuke nuclear has a lot of developments in nuclear power.

I don’t think we’ve done enough investment in nuclear the different types of nuclear technologies because there are a lot of options now. The cutting edge of nuclear power is very good. But like you said, you pointed it out when you on your opening gambit Blake, it requires a lot of r and d investment, a lot of setup, Is it not something you can just, like, out of the box, turn a key and go? There’s a lot of infrastructure needed for nuclear power. but it can pay off.

But like you said, there’s limits in terms of distance, but you don’t have that with oil and diesel. And gas. So, it’s again, we’re back to some practical considerations, aren’t we?

Blake Lovewell: Yeah. Yeah. And, yeah, on nuclear, I think that I would I would posit that a country like the UK, which was maybe in the seventy’s eighties, a high you know, one of the best countries in the world at certain things, manufacturing, high technology at the time.

 I think we’ve lost that place, and I think I could posit a similar thing for the US. Though there are pockets of high-tech, know-how, knowledge, I think lots of that, along with all the manufacturing, was exported to China and Asia at large. I know that Taiwan is the chip producer but China produces most of the solar panels as well as battery technologies and so on and so forth.

And then an interesting note when you said that oil is the cash of the global energy market. I was like, yes, but cash is basically less than 1% of, you know, modern economies’ money. Most of that money is digital already. So what’s the equivalent? Well, maybe the equivalent comparison or if oil is cashed, then the lithium batteries that are very high tech, but very expensive to produce are massively inefficient, ineffective, and won’t work for most people.

We deposit. They’re similar to a CBDC, central bank digital currency, which requires huge amounts of technology. It has to be imposed from the top. And in the end, I think in the final reckoning, it won’t be nearly as effective as the basic tool of being money as cash as cash is. The saying goes that if cash were invented today, they’d make it illegal.

I think it’s just an interesting comparison there.

Patrick Henningsen: What where are the Russians with CBD? Are they because everyone’s running pilots? Because my understanding, Blake, is that every country is running a pilot at least because they don’t want to be shut out if this becomes widely adopted. That’s kind of paradox, isn’t it? Whenever there’s a big change over, everybody’s got to have their ore in. But then almost the inertia of that almost makes it inevitability.

This is the horrifying thing about the globalized system. of economics. But what have you heard about Russia?

Blake Lovewell: Well, Russia today no. Sorry. Yesterday, 24th Putin signed the CBDC bill into law. It’s dubbed the CBDC bill.

I don’t know the exact Russian term of it, but it had already passed through the lower and upper houses of the legislature and then goes to Putin to be signed off as monarch similar to how in the UK the monarch signs off on all legislation.

But it’s kind of written up, drawn up and made beforehand in the lower houses of the legislature. But yeah. He signed this bill into law, which basically creates the legal framework for the digital ruble. That being the digital ruble is a means of cashless payment, purely digital money.

And furthermore, Russia’s central bank will be the main entity responsible for the digital ruble’s infrastructure and for the safety of the stored assets.

So here, we see Russia implementing a CBDC, but it does look like Russia the Russian Central Bank will be in charge of most aspects of it. This is a slight variance from other CBD projects. Do jump in if you want to. any point. But

Patrick Henningsen: Well, yeah. It is quick. I mean, got a few minutes left. And here’s one question I wanted to ask you and I know you might not know the answers because not many people do. I’ve brought it up on some big forums, on web three forums on Twitter, and it’s hard to get a straight answer on this. Like, so what’s the value proposition on CBD’s total digital currency? But what about the amount in circulation? How is the value established? That’s the hard part.

And I’m going to say this because Central banks, let’s face it, Blake. They don’t have a good record with quantitative easing, you know, with, like, throttling the printing press.

They don’t do it. So that’s my question. And I know we have a debt based, you know, fractionaries or debt based monetary system. in the US, in the UK, and others. But is CBDC fundamentally different?

Are they creating currency when they issue debt? Like, that part, I haven’t heard, and I know you might want to look into this, Blake, because that would be fascinating.

Blake Lovewell: I’ve got bits and bobs. It’s kind of a bit of a double barreled question. The one is the value proposition and one is, like, the inherent value of a CBDC. For example, how would it be priced in dollars, or how would you decide on the value of it as it changes day to day?

There’s so much to be said on this. On the value proposition, if we’re going to try and make an Iron man case for the CBDC, it would be that you’d have to be pro state regulation of the economy to make this argument. But you could say that, say, hurricane Katrina happens You could have, you know, fed bucks delivered directly to victims depending on the GPS of their phone or you know, historical accounts of where they live in Louisiana or in, you know, various regional things.

You could say this money only goes to people who are earning below $30,000 a year. So, they only go to the you know, you could make a very precise air drop of aid. And so, this is an argument that is made for CBDCs.

And then you can always make the same old arguments that they do for any legislation, and that’s, like, preventing terrorism. You know? If you control CBDC currency, you could prevent it off if it’s discovered in a terrorist account, and then they can’t spend it. Whereas if they can use $100 bills, then, you know, they can carry on with their terrorism. But then about the inherent value proposition, well, there are so many different models that I don’t think anyone has decided yet how the value can be decided within the CBD itself.

But I think that  going to be the fundamental problem and the fundamental role for the central banks in a CBDC system is deciding the value. And, it depends how you measure it because, you know, right now, you can measure Bitcoin in dollars, but that Bitcoin is still a Bitcoin, and the dollar value can change and dollars are inflating.

You could price it in gold, but then pricing things in gold depends on how high the demand is for gold and so on. But the supply and demand, you know, free market agreement does not work in a completely controlled environment like a CBDC. So, it’s not controlled by supply and demand. It’s fully controlled by the central controllers.

It’s a super interesting sphere, and, yeah, there’s so much to be said about it, about the inherent value of CBDCs but I don’t think anyone has actually pushed out a CBD c far enough to demonstrate that. You know, Jamaica is probably the earliest to push out a CBDC, retail CBDC, but really that’s kind of just a digitized version of their current currency.

But if we’re looking at Brazil’s proposition, their CBC would be quite different from their currency, and it would be very tightly controlled by the central bank So as yeah. You know, we can’t say exactly right now. And I think there was a third question lingering there.

Patrick Henningsen: Can you remember Well, it was about the debt based, because we have Fiat debt-based currency.

Blake Lovewell: When all of the literature on CBDCs, it says it will be a central bank liability. That is a central bank debt, you know, until it’s not never paid because no central banks ever pay off their liabilities. If they did so, people would evacuate. Their dream is to have a system where everything is within their ringed fence and everything is on the CB DC ledger. There is no physical cash.

There is no physical gold. There is no cryptocurrency or stable coin outside of their control. And when you get to that stage, that’s when they can escape what they call the 0-lower bound. The 0 lower bound is if you create a coin that deflates. If the dollar value is deflating, people will pull their money out of savings in banks and put it into cash or put it into anything they can to get it because right now, it would be burning.

That’s the 0 lower bound if you push interest rates down to 0 or lower than 0. Suddenly, all the money will be pulled out in the system. If everybody’s trapped within their little video game, then they can break the 0-lower bound, and they can enter this period of deflation.

And that means you have total control over the value proposition. And so, yeah, it will be another form of central bank debt, i.e. a central bank liability just like how government bonds when the central bank buys them up to reflow an economy or a central bank writes off a load of debt just like how government bonds when the central bank buys them up to reflow an economy or a central bank writes off a load of debt or a central bank does quantitative easing or something like that.

Those all turn into central bank liabilities. They’re not assets in any way, gold is the only asset debt. But they want to really transform the system.

So, it doesn’t matter that it’s a debt because no one can ever cash that debt in.