Kristen Ragusin has more than 30 years of experience managing over $150M in client assets at Merrill Lynch and Raymond James . On this episode Kristen talks about her new book " The End Of Scarcity" . We touch upon how humanity might be able to fix the perceived scarcity in its near future and challenges that we might face before we get there.
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Use discount code "BUIDL" to get 10% off!! on your online order.
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Kristen Ragusin has more than 30 years of experience managing over $150M in client assets at Merrill Lynch and Raymond James . On this episode Kristen talks about her new book " The End Of Scarcity" . We touch upon how humanity might be able to fix the perceived scarcity in its near future and challenges that we might face before we get there.
Get Tangem Hardware Wallet:
Use discount code "BUIDL" to get 10% off!! on your online order.
https://go.tangem.com/Tangem_cards
Tangem Wallet a swiss based hardware wallet company . Learn more
Hello friend, welcome to the season three of Biddle Podcast. I'm your host, tarun. Today I have a very interesting guest with me. Her name is Kristin Raghusan and she has written a book called End of Scarcity. We're going to talk and touch upon some of the key themes in her book this theme around how humanity might be able to fix some of the perceived or actual scarcity in its near future and what kind of resistance or challenges we might face in order to get there. Let's get her perspective on the entire space in general.
Speaker 1:After these messages, one of the best way to support the show is to become our monthly Patreon member. Now, there are many ways you can support Biddle Crypto Podcast Beyond becoming a Patreon member. The best way to help us grow is also to share among friends. Write a review on Apple, spotify or Google Podcast. Your support will enable us to continue putting in the hours. Keep the show honest and authentic. Enjoy listening to my interview with Kristin Raghusan. Today at Biddle Crypto, we have a special guest. I'm really excited to hear her thoughts. Our name is Kristin Raghusan. Kristin, welcome to the show.
Speaker 3:Oh, thank you so much. It's so nice to be here with you.
Speaker 1:So, Kristin, I want to start the show with something about yourself and your journey that got you here.
Speaker 3:Oh gosh, yeah, it's been a huge part of my life. I've been a professional money manager, wealth manager, for almost 32 years, 31 years for sure. I've been interested in money, even at 5 years old. I can remember. But this journey in having profound insight about how money is going to change started distinctly in 2008. I would say probably about six months before the big financial crisis was about to begin.
Speaker 1:So you have a book out called the End of Scarcity. I mean, that is what got me excited about this interview. We met in one of the conferences recently, one of the big conferences. I was amazed by the title of the book and I was so curious that I wanted this interview to happen. So here we are, against all odds.
Speaker 3:Oh, it's so wonderful, it's so true, even the idea the end of scarcity. Sometimes people will say to me what does that mean? What scarcity are you talking about? And I think it's the general idea that people are living for the money, instead of money actually helping people live and be alive. What money was really created for? And I never questioned this in my earlier years, I think even as a child I was so fascinated by money, believe it or not.
Speaker 3:My father used to have us earn our allowance. I would earn a dollar a week, and I had to learn exactly how the markets worked, how options worked, and he taught me about stocks, and so I thought that money was just this wonderful thing. The markets were great, that it was really part of either the American dream or something that would help people realize the vision that they wanted. And so, as I got older and I finished college, it should have been no surprise to me that I started working at Merrill Lynch like three months later one of the big investment houses. But I was surprised. I thought I would do something that was about empowerment or freedom, and yet I really felt making money, being able to live your life this way, was the basis of freedom. And so I enjoyed my practice, I enjoyed building it, I enjoyed working with markets for many, many years and never really questioned thinking that surely there was enough money in the system or the way that money came into our society, that it was there and anybody who could ignite their passion and contribute in a positive way could clearly go about and fulfill the next expression of themselves. That was calling.
Speaker 3:And in 2008, I had really this watershed moment. I got lucky around 2007, the summer before the big crisis, and I started to see some significant dislocations in the market that were odd enough that I called the desk in New York and I said why are these certain prices moving? Things were just not performing properly. And they said, oh gosh, don't worry about it, we don't have any credit problems, they're just some liquidity problems. And I thought to myself well, that's ridiculous, creditworthiness and liquidity are so tightly tied together.
Speaker 3:So I was heading to the Middle East for three weeks. I was working on a master's degree and I just the closer I got to the date I think I was leaving September of 2007. And I could just see that this whole system was about to crater. And I got very lucky. I called up all of the people that we were working for and took everyone out of the markets, put them into cash unless for some reason they were really dependent on being invested and off. I went to the Middle East and every day while I was away the market went higher. So, certainly having a lot of experience with the markets, it's something you get used to. It never really gets better. But after 21 days of the market going straight up, I just closed the computer, felt like I had done the right thing and just thought okay, that's a regroup if I need to.
Speaker 3:And by the time I got back, we started to see Bear Stearns and then Lehman Brothers and the whole entire system began to implode and it was really heartbreaking. It was heartbreaking to see a lot of the older men that I worked with, who had been doing this for 40 years, and just see everything decimated. But what really took me was that the promises that we had built our financial system on, or promises that were the basis of what I was telling clients, really were not kept and some investments were upheld, some weren't. There wasn't really a rhyme or a reason to it and it actually became an existential crisis for me on the level that I was so disheartened that I knew something was wrong in my worldview. And my worldview had been building for a long time, since I was really five, believing in all of this and loving it, and I thought, my gosh, I'm missing something.
Speaker 3:So I said, on the track, as we got into 2008, I was in a luxury position of having a lot of cash on the books or being able to buy commodities for people and help them grow their accounts as the quantitative easing or the money printing began and I started looking to see what was it that I was missing in my worldview that would cause a financial collapse of this level.
Speaker 3:And it took me about nine months to actually find the answer. And it went far beyond what we believed, which was irresponsible lending or just the inability of the quality of the borrower to pay back the debt and these kinds of things. I actually found something so curious that it led to the writing of this book the End of Scarcity, because in fact it was the root problem as to why scarcity shows up, or not enough money and that whole survival instinct in every single country throughout all the ages of time. And it was this profound that I thought to myself my goodness, there has to be a solution for this. And sure enough, when I came upon the solution, I was so excited that it led to this sort of obsessive writing of the book and researching. And lo and behold, we're in a wonderful position to change the world, especially with all the different opportunities that blockchain truly with digital assets provide for us today.
Speaker 1:Amazing, amazing. I'm just absorbing all of that. So, christian, then what, in your viewpoint, is going to bring that abundance, that ending of scarcity? Either the perception of scarcity or the actual kind of fight for resources that mankind has been a part of since time immemorial?
Speaker 3:Yes, which are really tightly linked, you know, because one of the reasons why it really is so easy to end scarcity profoundly for humanity is that largely it is an illusion, and it's an illusion that we buy into in and out of the day. You know, I can see it in myself, whether it's through time or all different kinds of resources, and we sort of oscillate between feeling secure, feeling insecure, and so this has certainly been the basis of humanity for a very long time, let's say five, six thousand years of recorded history. But the profound point and change is that we actually can isolate the root of where scarcity is produced in society. And of course we largely would believe maybe there's a flaw in human nature, it comes from greed, or there's inappropriate political systems or corruption, you know, or even just bad economic policy. And I think these are sort of the basic ideas that we all toss around. We sort of collectively accept that the root of the problem is in there. Or if we just get fully exasperated in terms of how to find a solution, we say, ah, you know, humanity ends up being greedy, or they're just, they're just some bad apples where you know you really can't get beyond this and none of that is really true. All of those are just sort of symptoms of a system that is structured inappropriately, and it's not the political, economic or even social system that's not structured correctly. They again are sort of out shoots or trying to solve the problems from the real structural problem, which is how we create the money unit.
Speaker 3:And so money itself, when we look throughout the history of humanity, has been architected and designed over and over and over in a multitude of ways, and when there were golden ages on the planet or thriving through Renaissance, expanding times of creativity, the money unit was typically created properly, or the predominant way that money was coming into the system was done correctly.
Speaker 3:And the big shift is that money itself needs to represent our contributions versus being an object or a thing that we need to get in order to give our contributions. And so I do want to back up and sort of just rip the mechanics apart, really simply about how money comes into existence today, and I think again, mainly we believe that we have an understanding, but there are nuances that it is different than what we really think, and this is the root of the problem. So when money is created incorrectly, it becomes truly the cancer, it becomes the problem that creates scarcity. So today, our money itself is what produces scarcity, and it's quite incredible, because we all think more money would be better and more money will solve the problem, and it's. I'm not saying that we all shouldn't have more money or that people shouldn't be more wealthy, no, no, it's that the money unit itself must be designed correctly to begin with. So that then begs the question what are we using this money today and how is it created incorrectly?
Speaker 1:This is mind blowing stuff for me actually, because recently well, I wouldn't say recently, maybe a year ago I was exposed to some of the writings of David Graver, the guy who's known for Occupy Wall Street. When I looked at his some of his books, like Dawn of Everything, a lot of things resonated with me which earlier I had this misunderstanding about the guy. So when I listen to you, these things are music to my ears because it's your approach is very novel. Also, like the way you're describing like I think you had a phrase here which I want to recall and repeat is that money is causing, the way it's designed is causing the problem is also very interesting rabbit hole to go into and I would like you to expand a little bit more on that.
Speaker 3:Oh, thank you. Yes, exactly, and this that is the root, because when we create money, especially in a way where it produces the scarcity, we then misaligned the entire foundation of society, because, first of all, we decided that living together was better. Now, whether we tend to irritate one another or annoy each other, still, at the end of the day we are, we are in agreement that living together is, is much more rich, is better and really is the basis of survival. So it's survival, it's the rival, it's the mystery of life. We cannot separate relationship from the basis of life, and whether the most mundane to the most intimate, and that whole idea of living together, understanding ourselves through any kind of relationship, is, in fact, the basis of money. We designed money together as a community, through a social contract, as a technology. Money was simply created as a technology which, low and behold, now, with the crypto boom or the onset of Bitcoin, and now the blockchain revolution and digital assets were coming back to us to get the glimpse that, yes, wait a minute, money is a technology. And you know, often people will say, oh, no, money is energy, or money is power, or money is freedom. No, no, no, money is a mere technology. We created it in order to assist us in exchanging our contributions with one another, and so freedom and power and energy are our contributions. The divine essence that's wrote that flows through each and every human, and every new human that's born is adding to the whole total sum of humanity. Every town, every family, every community is more valuable than when a new baby is born, because a new essence and a new creativity has has shown up on the scene. So the basis of wealth is all of these beautiful ideas and the expression to even our Monday labor and the things that we do for one another. This is actually the basis of abundance. It's the fabric of community. In relationship we're always exchanging, whether it's attention and any kinds of things, and money was meant to represent that.
Speaker 3:So the problem that we are living with today, and why we're so confused and lost, is that we have managed to create money in such a way that it comes into society separate from contribution. It comes into society separate from value that we're producing, and then it can actually be created as a scarce commodity. And when money itself is created as a scarce commodity, quickly, you get sort of you condition the worst of humanity. You often destroy competition because instead of competition being a healthy thing that ignites new creativity, it can become more of a survival war, like a reality, and then it often can mute the best of creativity and and work to create conglomerance and kind of stronghold power in concentrated forces. And so today money is created solely as a debt, and this is different than the Federal Reserve making the money.
Speaker 3:Often we just sort of think that the Federal Reserve prints the money and this is really not the case.
Speaker 3:So that nuance has to be broken apart, because there's this profound shift in in consciousness, we could say, but really just in perception, as we start to understand that all of what we contribute in the world whether it's you creating this beautiful podcast and the interesting and fabulous minds and and people, what they're creating are putting together, or the end of scarcity, me writing this book no one could really stop me from doing it.
Speaker 3:Even if I had to stay up until five in the morning and write and go to work the next day, the passion was there. And so these beautiful things plus the mundane things we do, are just really the abundance of life flowing through us and instead the way money is created today in society. Excuse that perception. It actually means the right amount of money is not circulating and in fact it's probably also not circulating where the bulk of the people who are contributing real labor or work is flowing, and it's very, very skewed. The good news is it's very easy to fix it's. It's exceedingly easy to to change the system once we get the very sober, simple recognition. But I think the best place to start is actually to look at how money comes into our society today and where the era is.
Speaker 1:Thank you so much for that. So you know, I want to quote this statement from David Graver. Coming back to David Graver, he had quoted once. He said we have become a civilization based on work, and not even productive work, but work as an end and a meaning in itself. So I want to get your reaction on that. And secondly, something that you just mentioned if you can expand on that as well, regarding the Federal Reserve, when people view it as printing money, isn't that the case? Like with the fractional reserve system? Don't they have this one lever to pull up and down every time you see inflation, or the to cause an opposite effect of inflation?
Speaker 3:Yeah, unfortunately, no, I would say that's sort of mythic. Years ago, the Fed did actually create a certain amount of reserves that either helped expand or shrink the money supplier. It really does not work that way today. So there are three fundamental ways in which banking or money would be created through the banking system, and one would be, you know, in intermediate. The bank would be an intermediary Reserves. Money could be created so the government could create the money. There would be a set stock of money in the economy and when people went to go borrow that money, it would either be 100% backed meaning that there was no fractional lending or creation of money and someone would just be borrowing someone else's savings.
Speaker 3:Most of the neoclassical economists believe that that's the reason why they actually did not see the financial crisis coming and there was so much misleading on that, because they didn't see that, as money was created as a debt, that it was actually expanding demand. So most of us believe that, of course, it's fractional reserve lending, meaning that if a dollar is deposited in a bank, that then the bank can go out and create nine new dollars and lend a total of you know, 90%, keeping that 10% in reserve. It really has not worked that way for a long time and then, sort of, when we entered the COVID era in March of 2020, officially in the United States, we went to 0% reserves in our banking system. So, whether it's in Europe, you know where the rules were much, much lower in terms of what percentage of reserves needed to be in the system or here in the United States, we don't use that system anymore. We're using just the credit creation system, which means that a bank can lend any, can create literally create any amount of money with no reserves, and what keeps the bank solvent is the capital to assets ratio. So a bank still needs to make sure that its assets are solvent. What are its assets? Well, it could be mortgage derivatives, it could be stocks, it could be different loans, and typically the Bank of International Settlements in Switzerland decides that ratio for the Federal Reserve system, which really includes about 57 different countries or most of the western world. Most of the allies of the United States are in the Federal Reserve or Bank of International Settlements system, and so when the cap or the capital to assets ratio number is set, that's a pretty important. I would say it's even more powerful than most of the legislators, and these people are obviously not elected. They're in Switzerland and you know. So most of our banks today have to have $8 in capital per $1,000 of loans. So as long as banks are relatively solvent, they'll continue lending and lending and lending and lending, which today is absolutely creating our money supply.
Speaker 3:And so it's a very important statement to get this that money is debt. It's not created as debt, but it is debt. So if you think of a quarter, there's a head side and a tail side. They cannot be separated. The same thing is true when you look at any money that you see whether it's money in an investment account, a banking account, a check, you know, a tuition payment to school, a gift to someone it is a debt that someone owes to a bank. And so when we look at the dollars in our accounts, we're looking at the head side of the quarter, but there also is the tail side, meaning that that dollar has an expiry date. Largely that we can't see, because it must be repaid as a debt. And so when someone goes to a bank today and they say, okay, I want a mortgage, I want maybe a loan for college, the bank is going to create that loan more or less, and it's created through double book entry, minus 100,000 plus 100,000. And so the 100,000 is journal entry into someone's account. Great, it looks like money. It's really someone's debt. And they also then are given a schedule, a monthly schedule, to pay that debt back in some period of time at some interest rate.
Speaker 3:And the interest rate doesn't really create inflation the way we think we do. There's an amazing economist, richard Werner, who wrote the Princes of the Yen and vastly understood this ahead of most economists, and he even shows that there's a positive correlation with interest rates, so that when you raise interest rates, it actually raises GDP, it actually creates the inflation that the Fed is looking to end, and when you lower interest rates, it does the opposite. The problem is just as a quick aside when you go to raise interest rates to stop inflation, you're more or less saying you're going to burn the house down to put out the fire. So the level of interest rate actually creates the velocity that someone has to run in order to pay back the loan. The higher the interest rate, the faster people have, the more they have to earn in a shorter period of time to pay back that loan.
Speaker 3:So when someone goes and borrows $100,000, they get $100,000, quote unquote in their account but they also get the double book entry of the minus $100,000. That as soon as we sign on the promissory note, that money is now tapped into existence in the account and the clock begins that that payment, the first payment, must be met and repaid. And so for the vast amount of people in the economic society borrowing money now, the chase is on. They have to get out there, they have to quickly earn the money to meet the debt payment or obviously they can lose their home, any collateral that was placed against that loan. And the more and more loans that are taken out, we get this false impression that the economy is doing better because there's more and more money circulating. But there's actually greater and greater and greater leverage and more pressure that people have to run to capture the money. Now we know that when a debt is paid that obviously that portion of the debt is retired. So if I take out the $100,000 and now the 15th of the next month comes and 1000 of that principle, let's say, is due and I send in a check for 1500, maybe 500 goes to interest and 1000 goes to the payment, we know that now I only owe 99,000 because that 1000 paid down the debt. But what we're not fully conscious of is that because, like the quarter with the head and the tail side, that when that $1000 is paid against the loan, that $1000 is also destroyed and no longer circulating in the real economy.
Speaker 3:So money itself is not created as debt, it is debt, and so 97% of our money supply is created through the commercial banks or the banking system when people go and get loans. Now the Fed may create reserves and print reserves, but they have very little impact on the quantity of money that the banks can create, because if a bank is solvent, if a bank has met its capital to assets ratio, it can continue to create as many loans as it has borrowers, and so borrowers are actually where our money comes from. And when the Fed creates reserves, those reserves don't go into the real system. They aren't. They are not dollars, even though on the dollars that we're using it says Federal Reserve notes, but instead those reserves that the Fed creates really are just tickets of solvency for the banks, and reserves are also sort of linked to check clearing. But you know, banks borrow from one another. The Fed has the window, there's a lot of liquidity, there's delay, often 30 days delay in terms of how that stuff is squared.
Speaker 3:The main, the real way, the system that we're working on today, is that, like a credit card, banks are just creating as much money as borrowers can handle, and so the reason why this becomes quite precarious is that money fundamentally no longer represents our contributions and, as the social instrument that we created, where our contributions were the primary thing, that the abundant thing in our society, as we looked at sort of the magic and the mystery of nature, the symbiosis of nature and the ever expanding talents and sort of surprises that we get in the whole sort of journey of our lives between hard times and good times, money was supposed to be an instrument, a tally, a token of exchange where we said, ok, here's how I contributed and here's what I withdrew, to create a foundation of life that would be supportive for a society that was hopefully evolving. And now, instead, when money comes into existence, primarily as mortgage debt today, there are many, many things that happen. Number one you get a destruction of investment capitalism. We end up really not living on a capitalist system, an investment capitalist system, but we blame the system, saying it's a terrible capitalist system, when in fact, we're largely living on a finance capitalism or a corporate system, and banks, originally, were supposed to be these beautiful contributed citizens in society who would help evaluate a business that was intending to create something for a community and assess its value and the demand for those services and say here yes, you're credit worthy. We're going to verify this and make your contribution liquid, give you a ready as a credit. We're going to create this capital for the good that you're going to come for.
Speaker 3:So the difference between money being created as a credit for contributions versus a debt and today 80% of our money in banks is created as mortgages some college tuition money and maybe some car loans, but most of it is mortgages. So we are creating our money supply out of a consumer debt and what happens at that point and we all can see it in our lives is the price of housing goes up exponentially because the loans are available and because the payments are paid back monthly. People often say, well, interest rates will go down, the payments will go down at some point, or it's only this percentage of my income, or if I don't buy it now, I'm going to have FOMO, I'm going to miss out and I won't be able to get in later, and so housing prices typically continue to rise despite interest rates going up. We saw this when Greenspan raised interest rates from 2007. Oh gosh, actually this was a different time, but 17 times Greenspan raised interest rates and it did not really stop. It didn't slow anything down at all because instead it was the other mechanics.
Speaker 3:When money is created as mortgages, the two things that happen are number one, the price of housing accelerates Because you're creating the liquidity for that consumer debt, that mortgage. So if somebody can bid 50,000, they can bid 100,000. And so we have seen the price of a home from the 70s, which used to be three times one person's salary, to today, in the cities or more pricey areas, easily 10 times the salary of a couple. And we also have seen college education which, again in the 70s, was almost free, or free even. I think UCLA tuition used to be $200 or $500 a semester to being something that now has really made a lot of these kids indentured servants as they come out. And so this is how creating money as consumer debt destroys capitalism, because that money that was supposed to be tied to value is not going to invest in entrepreneurship, in businesses, to increase the wage earning capacity and on top of it, it's making the two tenants of the American dream owning a home, going to college largely unaffordable for most people.
Speaker 1:Those are some amazing points. I just want to keep listening and not interject you with questions. Wow, so okay. So one thing you had mentioned and I want to come back to is that the Fed seems to be not the bigger problem. The bigger problem is the lending that's going on, and I totally agree with that.
Speaker 1:The going a little bit back in history, american history, I was intrigued by the greenbacks. For those who don't know, was these money that was created during the Civil War from you know, during the Civil War, lincoln and his folks decided well, if the European banks we cannot lend, cannot borrow from them, we will create our own money called the greenbacks, which didn't follow the fractional reserve system that is today. One of the reasons they also went with their own government issued currency was because back in the day, those banks in Europe had one class that you know whosoever takes the loan pays the debt of the losing part, the losing side as well. So that I thought that was quite interesting and I would love to know your thoughts on that. Like, and possibly going to some aspects of your book as well as to how we can reach that abundance state, the removal of scale.
Speaker 1:I actually like your title better the end of scarcity. It's not indicating abundance, which you know. Some of the folks, like Peter Diamantes and others, they talk about abundance, which you know. That's a separate topic we can go in deep rabbit hole of. But what are your thoughts on, say, if there was something that was backed by the government but not having this fractional reserve kind of system, would that scale or how things would have been?
Speaker 3:Yeah, I'll tell you. When the country was first created, all of the founding fathers, or the colonists, they were all highly in debt. So they left England because they were looking for a new start and gold, being the primary currency of that time, was too scarce. There was not enough in circuit or it was made scarce. This is the problem, of course when a single commodity is used as money, it can be made scarce. We really don't know how scarce diamonds are or gold is or any of these kinds of things, but nonetheless they were unable to have enough money flowing in order to sort of retire that debt. But they were able to create enough labor, they were able to create enough services for one another and so, sure enough, when they started here and when they started in New England, we have a misunderstanding of colonial script and we often are just told it was paper money. It became inflationary, they created too much and that again the money supply did not represent the amount of productivity that the people had. And this is really not true. So many of these colonies were very careful to make sure that the quantity of colonial script in circulation equaled the productive capacity of the people, and that's the bottom line secret of all of it, if the government were just to do what the MMT or say the modern monetary theory people and to say, listen, the government's going to go back to creating money. Many people have said that when Keynes actually came out and talked about the government being a debtor, that it was never supposed to be a debt, that the government was just supposed to create money, that whatever, like the monopoly banker to make sure that there was $200 when you pass go and this is actually all originally correct thinking, because you're coming back to that.
Speaker 3:Money is a technology that, like the equal sign in the equation, facilitates exchanges. And so if you and I were given a math test with 100 questions on it and the goal of the test was to solve as many equations that could solve, now if 70 of them solved, we would simply create 70 equal signs. We wouldn't have 52 and we wouldn't have 84. We also would not have to go and dig up equal signs out of the backyard before we got started. So money as a technology is just supposed to be like an inch or a pound or a degree or an equal sign. It's a technology and the founding fathers understood this well. Abraham Lincoln's treasurer understood this well when they created the greenbacks and in England they also understood this very well for 600 years when they used tally sticks as money and they were able to break the stick. This is actually how we got the stock market Break it into a stub and a stock, and because the stick breaking created a fingerprint so it couldn't be counterfeited. And if the people were more productive, they broke more sticks and more money circulated in society in order to allow the creativity and the real enterprise to expand. This brought about so much enlightened thinking that in 1250, we got the Magna Carta. The Magna Carta was the precursor of the Constitution, which was the product of 500 years of intense enlightened discussion and thinking. So these people were really quite profound in their systems thinking and how to structure things, but they understood that money was simply supposed to be a token of exchange representing the accurate productivity. There would be more money in circulation or less money in circulation, ebbing and flowing, depending on how productive the people were.
Speaker 3:Now, when Lincoln ran into a big problem well, I mean, I'll just quickly go back to the colonists. What really created the Revolutionary War is that England outlawed the ability to create colonial script backed by their productivity. That script was actually backed by productive land banks and it represented farmland. And you can actually read this in the old banking documents and from Britain where they said that the money system of the colonists is a system of mischiefs. It's going to put out the monarchs and basically create a brain drain from Europe to New America. So it was systematically ruled out and you also can find it in some old writings that it in fact it was not really religion, but it was money. That was the start of the Revolutionary War. So in young America we had properly created money, probably until about 1812. And in 1812, sadly, the old British banking system was reinstalled and the White House was burnt down. There was the War of 1812. It absolutely was a banker's war and for most of the 1800s the war was on.
Speaker 3:I would argue that probably all of our wars that we see are monetary war wars, because the instability in society is just when the people are creating the money supply. Where it represents the people's real productivity. You have a solid foundation, people are supported, creativity is supported, corruption absolutely dies down and when you go to a system where money is created as a scarce commodity, you get control. You get all different kinds of stratification of society and you just have a lot of survivor-induced behavior.
Speaker 3:So, lincoln, when the Civil War was starting and the country was broke for a host of reasons, largely coming from these foreign banking systems sort of the beginning of the Federal Reserve system, which is much of the early history of the United States and how those banks again were really not used to create finance for productivity but creating finance for sort of a control system. And so when Lincoln needed money to arm and prepare for the Civil War, france and England offered them loans at 24 and 26 percent. So they knew that it was failure already. And that's when the treasure chase came out with the idea of saying let's create green backs. And Lincoln wasn't so keen on it at the beginning, but he really was left with no choice. So they started to issue green backs and green backs were simply a dollar backed by the full faith of the United States government, and they worked beautifully for a long, long time and then, unfortunately, they were still outlawed and we were really in 1900, the gold standard law came in and silver money was largely demonetized and we went to single commodity money, which there was a much greater depression in 1873, because the people knew that if we didn't have silver money, there wouldn't be enough tokens circulating to allow for those contributions and exchanges to happen and instead you'd end up with this sort of scarce, hierarchical, desert like environment, prone to booms and busts because the gold coins would be too scarce and often in the hands of the wealthy and not really in the hands of people who were producing or coming up with also new ideas.
Speaker 3:So the story repeats itself over and over and I looked at about five or 6,000 years of history and David Graper did some amazing research, you know just really, as to the origins of money as well. I had the good fortune of speaking with him at a conference in New York City years ago. Sadly, I think, he passed away a couple of years ago. But such a brilliant, such an insightful man and you know it's the backstory of all history is this monetary history? It's the truth, and it just becomes very, very simple because when we begin again to issue money, backed by something, yes, but really backed by the promise to deliver goods and services, boom, we change the world and we're the first generation, we're the first civilization in the last, you know, 6,000 years of recorded history have who now can do this on scale and scope, because of blockchain, that no other people before us have been able to do with success and to do it without counterfeiting but many our grandparents it, probably. It really doesn't matter what corner we looked in the world, we're going to find the same principles going on with money.
Speaker 3:And in the 1800s, when there were depressions and all these instabilities, states issued script money backed by production. In Massachusetts, the fisheries and Gloucester, massachusetts issued script money backed by a certain amount of fish to deliver. Leather factories, boot manufacturers in Lawrence, massachusetts, issued script by a certain amount of boots to deliver. You know, in all the ranching states we had it backed by food.
Speaker 3:And so we're on the precipice of having this great understanding, this simple understanding that money is simply supposed to represent our contributions and that's how it should come into existence. And we still can have some money coming into existence for consumer debt, but probably, when it's done correctly, we won't need that either. There'll be other ways to do it. And so I do believe, around the precipice of the great money revolution, that, even though there'll be some instability as all of these different things come to bear, what is standing on the other side of that tunnel is the opportunity for a beautiful world that we even have a heart, such a level playing field and an opportunity for people to really decide how they want to contribute and how they want to live that I think what could be possible for the children of the future is extraordinary.
Speaker 1:Yes indeed. So, christian, I want to switch gears and ask you which projects in this space, this crypto space, interest you. You don't have to be explicit, but like what hope do you see with all these, you know issue around this industry as well, what hope or the eventual thing that's going to help us get there?
Speaker 3:Yeah, absolutely. I mean, first of all, you know, just even the concept of Bitcoin and blockchain is beautiful the idea that literally peer-to-peer money can be verified and created and traded among great distances and scale and scope. This was a profound shift in the consciousness and the belief of humanity. And yet, to really feel the effects Blockchain itself, just in the fact that we can verify, you know again, I think, in the next few years, what we're going to understand, what we're going to experience and what the vast amount of people won't have to understand but just will productively use, for me, the most important thing that I think that the greatest paradigm shift that we're going to see is when producers themselves will begin to issue their own credit, and I'm seeing inklings of this in different ways. Nfts, to some degree, are on the precipice of this. You know, it just depends how we would skew it to look at it. But when we actually start taking farmers or ranchers who begin to issue their own credit-backed money, the world is going to change profoundly. So when we look at the decentralized finance world, I think this is critical because the access to capital, but also making sure it's legitimate capital, is primary, and I think that that may be challenged in some of the hierarchical, old sort of old school structures where, you know, we'll have all different kinds of maybe new gatekeeping coming in for creating loans. Again, if a loan is created properly, it's the lifeline of humanity because, again, it's representing the new creativity or the productivity of the people that is looking to happen. So I would say what I do think we're going to see, which I have some limited evidence of, but I think we're going to see big corporations begin to issue their own money.
Speaker 3:And so, just for hypothetical illustration, if you were to take something like an Airbnb or an Uber and often these two companies can have challenging reputations in the sense of saying, oh gosh, they're feeding off of their network and people are sort of left by using them and they can dictate so many different kinds of things when a certain amount of rides become backed by Uber money or air, or a certain amount of stays backed by Airbnb, b&b money or a fraction of it, now credit can be raised so these companies can actually build capital, like from a crowdfunding or a token issue, but it becomes legitimate because it's backed by a certain amount of verifiable services to deliver that there is provable supply of and provable demand so they could not issue more than that demand. And so right away, we are going to begin to get sort of this biosphere of different corporate money, or producer credit, producer money. And now if Airbnb, as an example, or Uber, as an example, or to do this, they would also be able to do real profit sharing or equity sharing, partnering with their producers, so cars, all their drivers, they could even do an incentive schedule to say, oh, this amount of rides, you get a car wash or a tire rotation or new tires or a new car or car insurance paid for. So whole different way, just from the savings of issuing their own credit, rather than going through the actual monetary or capital markets, raising bonds. And likewise Airbnb could do that, and I think we're going to see that. I really believe we'll start to see that from Amazon, amazon Coin might actually begin to expand out to represent a certain amount of Amazon product. Well, in essence, what I do think we're going to see is this slew of corporate money.
Speaker 3:There are some projects out there that have begun with this basis and where producers themselves or businesses themselves are beginning to issue tokens or backed by a certain amount of service or product to deliver, and Robert Grant, who's in Orange County. They're preparing to create tokens backed by a certain amount of cybersecurity services. There's the plastic bank in Vancouver, who actually pays different people who live on island nations to pick up the plastic in the oceans and pays them back in currency and could switch to plastic tokens. So when money moves from being backed by gold or backed by silver, much like the aggro product, the aggro coin, which I think is very, very interesting I think we're going to begin to see this incredible revolution of producer backed money, and the big thing is that the amount of coin or money that's issued must be strictly limited to the amount of supply that can be verifiably delivered, limited by the real market demand, and it will circulate as a normal currency that people will use and wallets will simply process and do the fungible transactions between the coins and then, when it's returned for the service, the coin will be burnt and then the next season new coin will be issued. So this is what I believe is the real digital assets. It's the real money revolution that's coming aside from all projects and it's sort of the strictly held how to redesign money and it's the market driven stablecoin Rather than a stablecoin that's tethered to some type of fiat currency that's still created from consumer debt, that's devoid of actually being legitimately representing contribution.
Speaker 3:Instead, these type of producer credits that are issued from either farmers to, hypothetically, in Amazon. You now get a real stablecoin whose whole goal is to stay at $1 a dollar. A dollar, because if a producer issued more coin than there was for demand, the person who owned it, obviously the coin would drop less than that parity of a dollar. Or if they issued too few, the person who had the coin the coin would be worth more and the person would have the corporations or the producer's profit. So the whole goal would be for the producer to keep the amount of coin in circulation at one at parity, because it's simply the equal sign. It's not an extractive tool, it's money done correctly. People don't need to have actually the value of that money go higher Because in fact we start to have the basis of the abundant world, which is coming from a functionally correct creation of money as a token of exchange.
Speaker 1:You just mentioned companies issuing their own money. Wow, I never thought of that actually, to be honest, in all my interviews recently. I mean, then I'm thinking Frederick Hayek, the Nobel Laureate economist, who in his book the Nationalization of Money, he kind of argued the exactly the same point, that why there is a monopolization of money printing, and not perhaps the same context, but slightly in a different context, but still I would say it's quite similar. So any thoughts on that?
Speaker 3:Right, this is what money has always been, and it has sort of been written out of the textbooks or lost in the idea, especially when you go to single commodity money, like thinking that sound money is gold money. And it's not that gold money is bad or that it isn't sound, it's that it's scarce. And so when I say that money cannot be scarce, it doesn't mean that it's unlimited. It means that it should be representing the productivity that's looking to trade. So it should be exact. And so who can do that? Corporations do that, businesses do that. Who should be issuing our money supply? Should it be banks, who are issuing it off of mortgage debt? That's making life more unaffordable and the money system more unstable, because it creates booms and busts, because finally there's a tipping point where people cannot run fast enough to pay the monthly payments. Or should the money supply be issued from the promise to deliver the goods and services that are the basis of society, that is, the basis of money? So, yes, that's exactly how it was always intended to be. And now we're remembering. And on top of it, we have the technology that no people before us have had, so we get to do it as efficiently, as beautifully, as gracefully, as elegantly as ever was desired. I really believe our ancestors are sitting on the edge of their seats and just praying and knowing that we can do this. And so all the instability that we may see and sort of other competitions for limiting access to things you know different kinds of things that may come about perhaps create the squeeze for the birth canal of these ideas, where we begin to take the responsibility of our money supply and because our money supply represents our labor, and on top of it, at that point you get the full, you get the democratization of the creation of legitimate money. So blockchain or a lot of the projects are certainly when it was the cryptocurrency sort of rush of you know, 15, 16, 17. That was still based, in my opinion, more on the old exploitative speculation, you know, dotcom bus type of idea of 2000.
Speaker 3:I ran into the Bitcoin White Paper in 2009 when I was researching all of this, when I saw that we were using mortgages instead of money, that money itself really didn't exist, and I thought the White Paper was fantastic, it was fascinating, but to me it was not money, because it was something that was created as stairs. It was a store of value. It was possibly some type of investment, some type of commodity, and so when we switch back to corporate money like this, or producer money, the you know reputable farmers or pillars of our communities who want to do this, we now create the democratization of our own capital. We're able to even create creditworthiness that we can verify, and reputation now matters again, and you sort of corporations become good citizens, not through legislation, not through regulation, but through real market mechanics. And you know, we don't have to teach people to do this or that or have somebody's opinion be more important than someone else's, or have think tanks decide things.
Speaker 3:Instead, when the money unit is created properly and it comes in and out of existence based on how we're ebbing and flowing with our productivity, instead of the artificial booms and busts, now already the value system starts to come in alignment with life as people determine themselves.
Speaker 3:And the other thing that's going to happen with this is we're going to have information on corporations that sort of blow the bond market and the stock market, you know, to a whole new proportion when we look at corporate bonds or we look at these kinds of things.
Speaker 3:We have a limited amount of information and or some people have an opportunity for more information than others. When we go into a producer credit system, the market will have so much transparent information about what type of products are being created, how much demand is there for that, and that when people create products of real demand. Do we want to know the food? You know the, the how our food has traveled, what's gone into the food. We can have true accountability on the products that are being sold, and companies will always be able to get funding from their customers. So we don't even have to have one ideology that's better than another. Get a beautiful, free world that's based on meritocracy, egalitarianism beyond what even would come from having you know some technocrat or someone else to dictate to others, but because, simply, you create the money properly.
Speaker 1:Yeah, my next question would be where do I sign up for such a place?
Speaker 3:It's so fantastic. Yeah, I know, I do. I really am encouraging people to. Well, the book has the blueprint for producer credits. You know the end of scarcity and you know, hopefully much more will come. But you know, I do I.
Speaker 3:Any type of communities can begin this, you know, I even think rewards points and loyalty points are are like a shade of it, they're an echo. And if we could make all rewards points fungible and you know which American Express did in like 2008, they were doing there was something called the plenty point system. I can't remember if that was American Express, but back in 2008, when people couldn't find work, american Express said listen, here's a list of charities. If you want to volunteer at these places, just do a double check to prove that you did it and then we're going to issue you X amount of points for the hours that you volunteer. Now that's a producer credit.
Speaker 3:Unfortunately, that program went away, but much of this is very, very easy for us to start to put in place and I do see inklings happening already. I think Agrocoin is very you know, very resonant with this and and certainly the cybersecurity token that's coming in California and hopefully there will be many, many more, and I think you know, once people actually start to see the concept, like oh wait a minute, money is just supposed to represent our productivity, limited by supply and demand, why you know. And then on top of it, just to keep the, that the token itself should stay at parity at a dollar. A dollar, a dollar. Now, you know most people. The market itself will encourage producers of all kinds to get involved.
Speaker 1:Any thoughts around how and maybe people should read your book about it and I'll have the link of the book below in my description Any thoughts around like how this can come about in the current system or, you know, current system of enforcement. Do you see that as a possibility for, say, the next decade or something longer?
Speaker 3:You know, I do. I think that community currencies themselves have been in existence for hundreds of years. You know, we have the Berkshires in Massachusetts, we had Ithaca dollars, there's the Bristol Pound in England, so the basis of community currency exists, and when producers in their communities go to do something like this, you wonder what you know. Of course, this is not a legal or financial you know statement, but ideologically they're very much the same. So I think that it's very simple for communities to begin things like this through their exchange systems and I think that as we start to see something like this really coming about, the clarity in terms of regulation should be quite simple, because this is not something you know that people would be buying for speculation or these kinds of things. But you know, we'll see how all of this unfolds in the next few years and if money itself, if capital itself, continues to become more limited, whether it's through central bank, digital currencies or other kinds of things, the interest to be able to self issue credit properly is only going to grow. So the dialogue is going to grow.
Speaker 3:And in Canada you have Canada Tire, which is much like Walmart, and they issue, I think, 100, you know they've issued over 100 million Canada dollar, canada Tire dollars and people will use it also as a complimentary currency. So there's a lot of basis. There's a lot of food for discussion. I'm hoping to, you know, create a circle on my website is my name Kristen raggisoncom, where you know I have a little sign up for people just to join a community so that we can start to have more discussions.
Speaker 3:And next year, hopefully, I'll like a cartoon book coming out for kids. And then there's the audio book on audible, which can be a lot easier for people, even though I feel like sometimes I need to just sort of read chapter one. Chapter one I like to read over and over because it sort of undoes a lot of the indoctrination. But I think this is coming back and communities already engage in circles of exchange and so many different kinds of these basic paradigms. Now, if we begin to merge it with technology, we just have so many opportunities to make a difference and a legacy of difference for all those who are coming after.
Speaker 1:Thank you so much, christian, on coming on the show. I would love you to be back on the show sometime in the future. I wish you best for your book, this current book and future, future ones that are in the pipeline.
Speaker 3:Oh, thank you so much.
Speaker 1:It's such a pleasure Well wonderful pleasure is all mine, thank you.
Speaker 3:Thank you.
Speaker 1:Bye, bye. You, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you, you.