Podcast Summary
Central Banking Cabal: Writer Mel Madison warns of a corrupt and centralized banking system's unhealthy alliance with governments, leading to a potential great reset. He advocates for understanding the role of central banks and investing in crypto as disruption is expected.
According to Mel Madison, a writer and former Wall Street asset manager, banks have become too centralized, corrupt, and short-sighted, leading to an unhealthy alliance between governments and banks. He believes this central banking cabal, as he calls it, is leading us towards a great reset. Madison's perspective is based on historical trends and current issues, as explored in his fiction book "Quas." He emphasizes the importance of understanding the role of central banks, like the Bank for International Settlements, and the potential disruption that crypto and blockchain technology can bring to the existing banking system. Ultimately, Madison encourages listeners to prepare and invest in crypto while they can, as the next decade is expected to be bumpy.
Monetary standards debates: Political and geopolitical factors heavily influenced debates over monetary standards like gold vs silver in late 1800s/early 1900s US, with silver's demise due to international financial pressure and China's eventual shift
The debates over monetary standards, such as gold versus silver, in the late 1800s and early 1900s in the United States were heavily influenced by political and geopolitical factors. The discovery of large silver deposits in the western United States led to a debate between silver proponents and gold proponents, with the silverites advocating for a free silver standard. This issue came to a head in 1873 with the Coinage Act of 73, which effectively took silver out of the monetary system due to international financial influence. The monetary decisions throughout history have always been political and exist in a larger geopolitical game theory. China, which had a long connection with silver, was eventually dominated by foreign powers through the use of opium, leading to China's eventual capitulation to a different monetary system. The United States and Europe's dominance in the monetary system has been a recurring theme throughout history, and the average American is starting to wake up to the importance of the monetary system once again.
Chinese Central Bank Controls and Gold Holdings: The PBOC in China has more control over market rates and operates under a more centralized, controlled system compared to the Federal Reserve. China has been increasing its gold holdings and may hold more gold than publicly reported.
The monetary systems and roles of central banks, such as the People's Bank of China, differ significantly from those in the Western world. While the Federal Reserve primarily sets interest rates, the PBOC in China has more control over market rates and operates under a more centralized, controlled system. Additionally, China has been increasing its gold holdings, surpassing other countries in production and potentially holding more gold than publicly reported. Thomas Jefferson, in a letter to John Taylor in the early 1800s, warned about the dangers of banking establishments, specifically their ability to manipulate systems and siphon wealth into government hands. Central banks, like the Bank of England in the late 1600s, have historically formed alliances with sovereigns and governments, allowing them to control elements of society in exchange for special rights and access.
Central Banking and Political Power: Central banking's historical alliance with governments has enabled taxation, control, and covert funding, but also comes with risks of enslavement and wealth concentration in the hands of the elite
The historical relationship between governments and central banks goes back to the medieval period, with the primary purpose being the ability to tax and control. This alliance has persisted throughout history, with the City of London serving as a prime example of this unholy alliance between political power and financial institutions. Central banks provide value through liquidity, credit, and facilitating faster money transfers, but they also have a darker side, acting as a form of enslavement and covert funding for governments. Thomas Jefferson once warned of the dangers of banking establishments, viewing them as more dangerous than standing armies. The monetary system, as we know it, is a fundamental control mechanism of our society, and the history of central banking shows that it has been used to enrich the wealthy elite and fund governments in covert ways. However, it is important to acknowledge that central banks do provide some benefits, making the issue complex and nuanced.
Central Banks Downsides: Critics argue that central banks can perpetuate an unholy alliance between governments and private banks, leading to corruption and loss of individual control, but proponents argue for their role in facilitating lending and payments
While central banks have their uses, such as serving as a lender of last resort during crises and maintaining stability of the treasury market, they also come with potential downsides. Critics argue that they can perpetuate an unholy alliance between governments and private banks, leading to corruption and a loss of individual control. The history of the Federal Reserve and its relationship to commercial banks, as well as the government's requirement for the use of Federal Reserve notes, highlights these concerns. However, proponents argue that central banks provide necessary benefits, such as facilitating lending and payments. A potential solution may lie in private credit markets, which allow people to invest their capital without relying on the fractional reserve banking system. Ultimately, the debate around central banks requires a nuanced understanding of their role in the economy and the potential trade-offs involved.
Devaluation of currency during Great Depression: During the Great Depression, the U.S. government could have eased economic pressures by devaluing the currency, reducing the real value of debts. In today's world, the U.S. Treasury could directly control the money supply, eliminating the need for a central bank and offering benefits like eliminating hidden taxes and creating a free market for money.
During the Great Depression, the U.S. government could have increased the money supply without a central bank by devaluing the currency relative to gold. This would have reduced the real value of debts and alleviated some of the debt and deflationary pressures. In today's world, with no need for people to deposit gold and silver at banks for the government to draw upon, the money supply could be directly controlled by the U.S. Treasury, eliminating the need for a central bank. The primary benefits of this would be the elimination of the government's ability to use devaluation of the currency as a hidden tax and the creation of a free market for money where people can choose what form of money they prefer. However, this would require careful phasing in to avoid collapsing the financial system. Additionally, geopolitically, the ability to print money infinitely could give an advantage in war scenarios to countries with central banks.
Central Bank Absence: Countries without a central bank can print money directly, eliminating intermediaries but face transparency and potential manipulation concerns, requiring reforms for accountability and transparency
The absence of a central bank in a country does not necessarily put it at a disadvantage in geopolitical scenarios requiring massive coordination and infrastructure development. Instead, not having a central bank allows a country to print money directly, eliminating the need for a banking intermediary. However, the control of money in private hands and the secretive nature of global central bank meetings at institutions like the Bank for International Settlements (BIS) raise concerns about transparency and potential manipulation. To mitigate these issues, reforms such as reducing interest on required reserves or changing leverage ratios could be considered. Ultimately, the goal should be to increase transparency and accountability in the financial system.
Uniswap extension, Fuel OS: The Uniswap extension simplifies asset management across Ethereum-based chains while Fuel OS aims to scale Ethereum with features like state sync, minimal execution, parallelization, and cross-chain interoperability. However, concerns have been raised about potential monopolistic control and decentralization issues with central bank cooperation.
The Uniswap extension simplifies the process of managing assets across multiple Ethereum-based chains, allowing users to easily navigate between them without the need for chain switching or token importing. Additionally, Fuel, a new operating system for Ethereum roll-ups, aims to scale the Ethereum ecosystem with features like state synchronization, minimal execution, parallelization, and cross-chain interoperability. However, it's important to note that institutions like the Bank for International Settlements (BIS), often referred to as the "Central Bank for Central Banks," have raised concerns regarding decentralization and potential monopolistic control. The BIS provides a platform for central bank coordination, but some argue that this cooperation can lead to nefarious outcomes. The debate continues on whether the benefits of coordination outweigh the potential risks.
Global Economic Crisis: The current economic system's reliance on debt and fiat money is creating long-term negative consequences such as wealth inequality and unsustainable debt levels, potentially leading to a crisis point with signs of rising debt-to-GDP levels, increasing interest expense, and suppression of longer-term interest rates.
The current global economic system, which is heavily reliant on fiat money and debt, has been perpetuating an inflationary impulse that benefits debtors, primarily corporations and governments, at the expense of savers and creditors. This situation, while providing short-term benefits, has long-term negative consequences such as wealth inequality and unsustainable debt levels. The speaker believes we are approaching a crisis point where these issues will become more apparent and may lead to significant changes, potentially a reset or collapse of the current system. Some signs of this impending crisis include rising debt-to-GDP levels, increasing interest expense, and suppression of longer-term interest rates. These trends, if not addressed, could result in civil unrest and a re-evaluation of the global economic system.
Monetary Shift, Financial Repression: The monetary shift could lead to financial repression, where individuals may lose ownership of securities, causing discomfort to catastrophic consequences.
The world is facing a significant monetary shift, which could lead to prolonged inflation and debasement, or even more severe consequences such as civil unrest and financial repression. Central banks, including the Federal Reserve, are employing mechanisms like yield curve control and quantitative easing to manage the situation. However, these actions could potentially lead to financial repression, where individuals may lose ownership of securities like stocks and bonds in the event of a massive financial collapse. The concept of financial repression was explored in David Rogers Webb's book "The Great Taking," which details how changes to securities laws have shifted ownership from individuals to financial intermediaries. While a major monetary reset is likely, the exact outcome remains uncertain and could range from uncomfortable to catastrophic. It's important for individuals to educate themselves on these issues and consider taking steps to protect their assets.
Securities ownership: Individuals may not truly own their securities due to DTCC's intermediary role, leaving them vulnerable in potential crises. Preparing for instability involves diversifying into non-intermediated assets and advocating for property rights protection.
The DTCC's role as an intermediary in the US economy means that individuals may not truly own their securities as they believe, leaving them vulnerable in potential crises. This issue has been recognized and attempts have been made to amend laws to return ownership to individuals, but opposition from financial institutions and governments has made progress difficult. This situation is similar in Europe and Canada. As individuals, preparing for potential economic instability may involve diversifying investments into assets like real estate, gold, or Bitcoin, which are not intermediated, and holding short-term bonds or T-bills. It's important to note that the long-term sustainability of the capital markets relies on the strong property rights and rule of law systems, which could be undermined by a breach of these systems. However, there are also political motivations that could lead to some individuals or groups welcoming a financial meltdown as an opportunity to fundamentally alter the capitalistic system. Ultimately, the best course of action is to stay informed and make informed decisions about personal finances while advocating for systemic changes to protect property rights and prevent potential crises.
Asset control and liquidity: Consolidating retirement accounts, diversifying into precious metals, Bitcoin, real estate, and cash, knowing how to exit investments quickly, being aware of potential risks, considering taking custody of crypto assets, and implementing a 'barbell strategy' portfolio.
Having control and liquidity over your assets is crucial in uncertain financial markets. The speaker shares his personal experience of consolidating his retirement accounts and diversifying into precious metals, Bitcoin, real estate, and cash. He emphasizes the importance of knowing how to exit stock market investments quickly and being aware of potential risks, such as long-duration bonds and large financial institutions' control over certain assets like Bitcoin through the DTCC. The speaker also encourages individuals to consider taking custody of their own crypto assets for maximum control and security. He mentions his own journey into crypto and the importance of understanding the responsibilities that come with taking custody. Lastly, he introduces the concept of a "barbell strategy" portfolio, which includes short-term treasuries for yield and liquidity, and a completely crypto side for maximum control and potential for high returns.
Crypto-focused portfolio: Some investors prefer a crypto-focused portfolio due to their understanding and comfort level with the technology, believing crypto has the potential to outperform traditional assets, especially in inflationary environments. A simple, focused portfolio consisting mainly of Bitcoin and Ethereum, along with stable coins and other comfortable coins, can be successful.
Some listeners, like the speaker, prefer a crypto-focused portfolio due to their comfort level and understanding of the technology. They believe that crypto, particularly Bitcoin, has the potential to outperform traditional assets like stocks and bonds, especially in an inflationary environment. The speaker shared his personal experience of discovering crypto late and being more successful with a simple, focused crypto portfolio, consisting mainly of Bitcoin and a small amount of Ethereum, stable coins, and some other coins he is comfortable with. He acknowledged that having a deep understanding of the technology and the market is crucial for those considering a diversified crypto portfolio. The speaker also shared his background in real estate investing and how he took advantage of historically low-interest rates to buy properties, which has been a successful investment strategy for him. Overall, the conversation highlights the importance of understanding one's financial goals, risk tolerance, and comfort level when making investment decisions.