The Five Major Events of Year

In this episode, Germinal G. Van presents the concept of the full-reserve banking system as well as its mechanisms, advantages and disadvantages.

The main concept about the full-reserve banking system is that it is a system where banks are required to hold deposits in reserve, meaning they cannot lend out nay of the money deposited by their customers. This is in contrast to the fractional-reserve banking system, which is the currenct system used in most countries, where banks can lend out a portion of their deposits while keeping a fraction in reserve.

The full-reserve banking system presents a number of advantages such making depositors' money safe, and stabilizing the financial system; but also contains some drawbacks such as limited credit availability and the inability of central banks to monitor the money supply. Germinal G. Van sees these drawbacks, however, as advantages because they enhance a prudent approach to banking and show that central banking is not a necessity to maintain economic stability.

In this episode, Germinal holds a conversation with Gabriel Carrier, a professional mathematician on Markets, Bitcoin ETFs, and Central Banking. Gabriel gave his expert opinion on where he sees the economy going, the problem with central banking, and how Bitcoin could impact our lives in the future. 

Gabriel's email is: contact@praxeologos.com

Fractional-Reserve Banking is a banking system in which a most of depositors' money is lent to borrowers, and a fraction of that money is kept in reserve (10%). This process leads to money creation and banks make their money from the interest income they generate from the loans they grant to borrowers.

Fractional-Reserve Banking is inherently an inflationary system because it relies on credit expansion through the expansion of the money supply. This expansion of credit then creates inflation, increase debt (the national debt and consumer debt), and exposes banks to bank runs, which in turn, weakens the financial system.

Fractional-Reserve Banking exacerbates wealth inequality because commercial banks are far more lenient with upper-class depositors than with lower-social-class depositors. Since banks make money through interest payments on loans, they supply loans with higher interest rates and harsher terms to lower-social-class borrowers than to upper-class borrowers. As a result, banks make money off lower social classes while the upper class continues to lives off loans at cheaper interest rates.  

In this episode, Louis & Germinal recap the major events that shaped America and the world from Musk's acquisition of Twitter that impacted free speech, to the War in Israel and the threat of China on Taiwan.

The major topics addressed were:

1) The Potential Death of American Democracy

2) Musk's ownership of twitter on Free Speech

3) The Rise of Antisemitism

4) Inflation, Interest Rates & the U.S. Economy

5) The War in Ukraine, the Threat of China on Taiwan, and Potential World War III

In this episode, Germinal argues that inflation is not a necessary condition to stimulate economic growth because the growth of an economy is not based on an increase in the price of goods and services but on an increase in their quantity. Inflation is the result of a mismatch between price and quantity engineered by governments and central banks.

Germinal argues that central banks approach economic growth the wrong way, as they try to stimulate aggregate demand by expansionary monetary policy while economic growth should be stimulated from the supply-side, because demand affects prices but not quantity while supply affects quantity and quantity affects prices since the total quantity of goods and services are what affect prices, and not the other way around.

Germinal maintained that inflation, rather than being an asset to economic growth as central bankers want to make people believe, is a hindrance to growth because in addition to reducing the purchasing power of consumers, it also generated the uneven distirbution of wealth through the Cantillon Effect.

In this episode, we touched-base on all the scenarios and political intricacies of the Republican Primaries. We discussed Tim Scott's recent campaign's suspension; the conflict of vision of Nikki Haley who holds a neoconservative vision for America against that of Vivek Ramaswamy who holds the vision of patriotism and isolationism for America. We've also discussion the decline of Ron DeSantis as he is becoming his own shadow, which could impede his presidential ambitions for the future, and we also discussed whether the issue of abortion alone, would suffice for the Democratic Party to win the 2024 election and retain power. 

In this episode Louis & Germinal discuss a series of events and hypotheses. They discuss whether or not Saudi Arabia could one day become a superpower. Saudi Arabia is known to be an oil-rich country but it recently started to diversify its revenue streams by massively investing in sports. However, the likelihood that Saudi Arabia becomes a superpower rivaling the United States is small because it still relies on the United States for many commercial agreements.

Moreover, Louis & Germinal discussed the decline of the Chinese economy, which is mainly attributed to the failure of the one-child policy and central-planning policies; as well as the rise of Gavin Newsom, who recently visited China, and tries to position himself as the frontrunner of the Democratic Party since President Biden is becoming more and more of a liability. 

In this episode, Louis and Germinal talk about current events; on the vacate speakership where Republicans has trouble finding a replacement for Kevin McCarthy; on the ongoing conflict between Israel and Hamas; and on SBF, Ponzi scheme and whether or not the crypto market ought to be regulated.

John D. Rockefeller is known to be first billionaire in the world. By the time of his death in 1937, his worth north was over $1 billion, which equated 1.5% of total U.S. GDP.

Rockefeller's ability to accumulate so much wealth lies on three factors. First, the fact that he lives in an economic system that promote free enterprise, competition, and private ownership of the means of production (capitalism); second the fact he was a business owner, which enabled him to increase his equity, to have cash-flow, and to reduce his tax liability; and three, the fact that he was a very frugal man.

Rockefeller was the owner of Standard Oil Company, an oil company that ended up controlling 90% of the entire American oil market. Rockefeller financial success was based on the application of vertical and horizontal integrations, which allowed him to expand and consoldiate his oil company into a business empire.

Rockefeller was an enigmatic figure. On the one hand, he was a ruthless businessman and on the other hand, his philanthropic work improved the lives of millions of Americans, which made him look like a saint.

In this episode, Germinal & Louis address the issue of whether business leaders are effective political leaders.

Louis argues that Business Leaders are not good politicians because they lack the ideological component that make differentiates politicians from business leaders when it comes to make political decisions. The ideological component is what makes politicians committed to implement policies that are aligned with their beliefs. Moreover, Louis stated that since it counterproductive for government to produce surpluses, Business leaders won't be able to implement laws that will make government more active in providing services to the people. 

Germinal, on the other hand, argued that Business leaders are fit to be effective political leaders because their profit-motive mindset will drive them to producing surpluses rather than maintaining deficits. And producing surplus enable to reduce the size and role of government in the economy.