 Welcome back to Think Tech. I'm Jay Fidel. This is Community Matters. Our guest is Gerald Jensen. We're going to talk about the banking system and how it's a ticking time bomb. This is very important to get to the fundamentals of our society and evaluate. It's a time for evaluation. It's a time for reform, for correction. And Gerald, who is an engineer, will help us do that. Welcome to the show, Gerald Jensen. Thanks, Jay. Thanks for having me. To get all the details of what we're about to talk about, pick up my book, The Big Solution, Deactivating, Taking Time Bomb of Today's Economy. And yeah, let's talk about it. Let's talk about the changes we need to actually get to the next stage of a society, of evolving society. And the banking system is the fundamental problem we face today. Okay, let's talk about the problem before we talk about the solution. What is the problem with the banking system? Well, fundamentally, the banking system hasn't evolved in about a hundred and 10, 20 years. The basic principles of our banking system were put in place in 1913 with the Federal Reserve Act of 1913. And this is where the banks basically created or bought the rights to money creation from the federal government. And there's a story behind it. JP Morgan, that JP Morgan, the largest bank in America, bailed out the federal government in 1907. And six years later, as a direct cause of that, the banks created the Federal Reserve, it's a private corporation where they can print money, and then the banks like JP Morgan can actually use that printed money to make loans to businesses and people, mortgages and so on. And that is the fundamentals of how our banking system and our finance system works, that money is fundamentally credit. Was there a time that it did work? Well, initially, there was the gold standard and the gold standard created quite a lot of restriction behind money printing because you could only print as much money as you had in gold. And so it was kind of constraining, and that worked for a while, basically up until World War II and the Great Depression. And they started very quickly, even just after World War I, but right in that range between World War I and World War II, they started doing basically where they did not have to reserve as much gold as they had issued in credit. So basically it became a fractional reserve. And now that expanded the money supply and which helped grow the economy. Well, you know, move forward to Nixon. Nixon realized that, or under Nixon, he was put under a lot of pressure because foreign governments were flooded with US dollars and they started buying gold for dollars or they took the dollars that they earned and bought gold and the United States was losing all the money in Fort Knox. And Nixon said, wait a minute, I don't want to lose all the gold. So I'm not going to sell any more gold, which basically decoupled the dollar from gold. And from there, you had the massive inflation of the late 70s and early 80s, where a Volcker came in and jacked up the rates to 18, whatever, 20% very high rates, and basically crushed the economy because nobody wanted to take out a loan or expand credit supply with that kind of interest rate. And what that did was it put the inflation in society, put that on the backs of the working man. Inflation was no longer controlled by gold. Now the working man was to control for inflation. So anytime the economy cooks up a little bit like it is right now, it's kind of hot. What do they do? They raise interest rate, reduce the money supply, and guess who bears the brunt of it? All the people who get fired because the economy has to slow down in order to control inflation. Now, well, that's problematic in and of itself, but when you get into it, the real fundamental problem is that money, because banks control money supply, is defined as credit. JP Morgan himself said, and he's quoted as saying, money is either gold or credit, and everybody still believes that today. And the problem is it's false, and the reason is as an engineer, I know that there's something called first principles. First principles are like the laws of thermodynamics, their universal rules and laws of the universe that are always true no matter what, even for dollars and economics and banking systems. Fundamental principles of the universe are just true always. So when JP Morgan said that money is either gold or credit, he was wrong because that is not true according to the laws of the universe. According to the laws of the universe, information, which is what money is, right? And how do I know money is information? We know that because on the serial, on every dollar bill, there's a serial number. That serial number goes into a database or is controlled by a database at the Federal Reserve. So in other words, money is tracked by a serial number information. And we also can see it in action, right? We can wire money across the world, data across the world, that you can basically digitally create money everywhere, and then we learn that from cryptocurrencies, that it's just information. So here's the problem, and here's that universal principle that needs to be applied so we can start engineering the financial system, and that is this. Everything in the universe is engineerable. In other words, you can control the variables into a process to create the outcomes you want. This is how we create better cars, computer systems, anything that is engineered. This is the fundamental principle that is being used. We control the inputs into a process, and we can therefore can control the outputs. This is the fundamental principle. The problem with our economy and the banking system and the global economy is that the only input into our financial system is credit, and that causes a very specific type of work to be done and only that type of work. That work that has to be done has to be credit worthy. If it's not credit worthy, banks won't loan the money, and that work doesn't get done. Well, we know from our own households that there's a problem with not doing the work that has to be done. For example, nobody pays me to clean my house. If nobody pays me to clean my house, then why should I do it? Well, if I don't do it, what happens? Garbage piles up, the sink's full of dishes. All of a sudden it becomes toxic, and all of a sudden if I keep living in my house, I'm going to die. It's just not livable anymore. Well, think about our planet. Well, why is it we can't clean up the oceans from all the plastic and pollution, and why is it we can't clean up our atmosphere from all the carbon dioxide and pollution in the atmosphere? Same reason, there's no money in it. In other words, the banking system prevents us from doing the work we need to do. Let me jump in. So he was wrong when he said it's only gold or credit. No, but he has to think. He's not fundamental principle that is right. What is the fundamental engineering concept that we have to see here in order to understand the problem and thus create the solution? What is that principle? That principle is that money is credit or gold if you're a banker. That's what money is to a bank. No doubt about it, right? However, money is also information, and information can be anything. Information can be money wired across the internet or money can stop looking at it the way he looked at it. Correct, because the way he looked at it was from a banker's point of view, but we should look at it as information. Yes, and information we can do anything we want with. And then we apply the rules of engineering, engineering processes, and we can control the money supply. That's what it is, right? We can control the money supply, but we can also start fixing the environment. We can start increasing how much money people earn. We can also, through engineering, control the cost of living. Today, the cost of living is out of control. Engineering allows us to apply principles that can reduce the cost of living going forward. Okay, well, let's start with the money supply, and we'll go to the other guy. I like to understand the relationship. So the money supply, it's information. So somewhere, and I'm thinking computer programming, you say engineering, but I think it's really computer programming when you're dealing with information, it's information technology, right? So, okay, I have a little black box, okay? And this black box is going to control my money supply. And we'll get to other control points later. But what do I put into the box, and what do I take out of the box? How does the box affect my society? What instructions is it giving my society so that everybody buys into the money supply as established by the little black box? Well, today, money supply is very consistent, actually. It's at about a trillion dollars. So money is paid towards debt, and money is given out as debt. And so basically, there's this constant coming and going of money, creating a pretty consistent one trillion dollars in the money supply. And it's all done through credit payments or credits being paid out. So when we understand money as information, well, then there's a whole bunch of new ways of controlling the money supply. And through engineering and logic, you can understand and look at the society as a whole, and you see all of a sudden, all of these opportunities to improve efficiencies and improve society and improve outcomes, which is what we don't have today. We don't have any way of controlling outcomes. This is why they're always saying, well, what's the economy going next? Who knows? Because there is no control over our economy. I totally agree. But what comes out the other side? Suppose you put in lots of data about how things are doing, selected data, if you will. And what comes out the other side? Is it interest rates? What would it be in order to rationalize the whole system and do it better than the banks do? Right. Well, we look at the very big inefficiencies in society today. And the biggest inefficiencies today is actually the social safety net, three quarters of the federal government spending. So you're talking about $3 trillion approximately is towards safety nets. This is a tremendous amount of money, and it's highly inefficient. But on top of that, you've got states and cities spending on top of that on homeless shelters and food banks. The spending is unbelievable. Why is the spending so great on safety nets? Because I go to the home situation because people can usually relate to that. Well, if I have five kids, and I say, well, nobody's paying me to take care of my kids, so I'm not going to take care of them. And then what do you do? Well, you hope for the kids' sake that the government steps in and starts taking care of the kids. I don't know. We're bringing them somewhere to get food and take care of them. Well, that's exactly what happens in our society today. Well, their economy isn't taking care of the poor. So, well, who's going to take care of the poor? Well, I guess the government's going to have to take care of the poor. And that's exactly what happens. What we want is an economy that takes care of the poor, where everybody is included. So how do you do that? How do you do that efficiently, way more efficiently? And it's easy to be more efficient than have you ever been in a interrail in Europe or cross-country traveling. The amount of money you actually need to live on a daily basis is very little. Like five, 10 bucks, you can actually get by, right? Today, the city of San Francisco spends $25,000, this is just the city of San Francisco, spends $25,000 per homeless person in that city per year. So it's up to, billions of dollars. The spending on safety nets is incredible, and it's an incredibly wasteful. So fundamentally, you understand, if you have multiple ways of injecting money into the system and pulling money back out of the system, and we can talk about both sides of the equation in your black box scenario, that the first and most important principle is actually getting rid of the safety nets and just making sure that everybody in the world has five bucks a day to spend. Because this way, they can get the food they need and they can get the shelter they need if the economy is structured around that scenario. How do you feel about Andrew Yang, remember him? Well, okay, so now this is the mistake that everybody does when they first start reading my books and principles. They say, oh, you're talking about basic income. It's not basic income. It's very different because money that comes from the Federal Reserve is printed. It's printed out of thin air. Nobody owes. It's not credit. It's money, but it's information. It's not credit. You see, the problem with basic income is it's credit. Either the federal government has to borrow the money, or whoever is issuing the basic income has to borrow it from somewhere. And this is the fundamental problem with the banking system that money can only exist as credit. Now, as soon as you realize, hey, money's just information and we can issue money to solve social problems, societal problems, well then, oh, wow, boom, I just solved poverty, something they say that will never be solved. In fact, as long as the banking system controls money supply, poverty will never be solved because it's cooked into the system. Poverty has to exist because otherwise they couldn't control inflation. This is what they're doing right now by raising interest rates and doing reverse quantitative easing. I'm with you, Charles, but I don't know how this family, the hypothetical family, the case study, if you will, how are they cared for? Say five kids that might have been a mistake to have as many as five kids. He doesn't have a job that'll support that, but we don't want it to be poor. And we want to have this new banking system that you're talking about, this new money system you're talking about, actually take care of him so he is not poor. Isn't it Andrew Yang where you give him a guaranteed income? Or is it something that is calculated by the black box? And what I get so far, and you can correct me if it's not in line with the book, is that we have a federal system where the federal government for political reasons gives money away when people are squawking about poverty and homelessness and the like. We have state systems and 50 states that give money away for also political reasons in those states. And we have duplication of effort, redundancy, all over the board. We have irrational inconsistencies between the programs in state to state and state to federal. And there's a lot of money dropping through the cracks that is wasted. I get it. And I'm thinking this black box is, it's about six inches square. And it makes critical decisions that affect everyone everywhere. And it makes them on the basis of all the considerations that would apply to federal and state. And you take the politics out of it. It's mechanical. It's engineered. It's programmed. Yes. Okay. So the question is, how does my family, whether a fellow doesn't have much of a job and maybe his wife works, maybe not, and there are five children, what does the black box do for them to keep them out of poverty? Well, first of all, several million kids go to bed with not enough food every night in the United States. So whatever we're doing right now, the food stamps, whatever, it isn't working. They're kids that are losing out on their potential because they're not eating enough in the richest country in the world. So think about all the other countries in the world where it's much, much worse, but even in America, millions of kids every night. Now, well, first of all, we have to understand that if the kids are getting $5 a day, that is actually enough money for a nutritious meal. So how a kid doesn't have $5 in today's society to get a decent meal is just mind-boggling. So yeah, if you're poor and you're deciding not to work, yeah, you're going to have to work just to take care of yourself. But that's the key thing here is that there's so many people in homeless shelters, unemployment lines or on welfare, you name it, whatever safety net you want to call it, that are perfectly capable of taking care of themselves. And this is really the problem. We don't want government doing anything, period, but especially we don't want them taking care of us because that's a double-edged sword, right? It might be great when you get that welfare check, but all of a sudden, you've got Ted Cruz saying, hey, before you get that check, you got to pee in this cup or you got to do something else for me because I'm paying you. Meanwhile, it isn't the poor people's fault. It's the economy that doesn't work correctly because the banking system has the reins, the controls to the economy, but they don't know how to use them. So we've basically, out of control economy, doing who knows what, going who knows where for what purpose, none, right? Because we're literally in a car going faster and faster because the economy has to keep growing without a steering wheel. We can head off a cliff into some kind of dystopian future or we can head into a wall with global warming or pollution in our food supply. In other words, we can't control, we have no way of knowing or where we're going, but one thing's for sure, if you're in a car that's going faster and faster, eventually you're going to crash if you don't have a steering wheel. Oh, I agree. I think we're seeing that now and the cliff isn't that far away, but let me ask you, if I made you Congress, Charles, and President, both. Yeah, I solved the world's problem in like a month. I literally, I didn't know exactly what to do. It's in my book too. What would it look like? What would the bill look like, the statute? I think I could get away. Well, if I could control Congress, but especially with presidential powers, you can literally do an executive action to go into Federal Reserve because it's a corporation with executive action. You can literally change a single document. It's called monetary policy, which has been essentially the same for over 100 years. You change monetary policy away from this credit principle and into information and engineering society. Boom. It's a brand new world and our troubles are now solvable. And I can tell you how to solve global warming, pollution in the oceans. We can solve all our problems if we get rid of our current monetary policy in the Federal Reserve. Okay. What would it say, though? You want to make a change? What exactly would it say in the change? Well, in my book, the big solution, there it is. I do. You wanted to buy the book to know the change? No. Well, it is, I think by reading the book, and it's a bit of a long book, but it does explain to everybody how we got here, the history behind it, but also all the problems it's causing right now from poverty to pollution. There's so many problems, and it shows the reader how it's solvable, why it's solvable, and why it's not really complicated to think about. It's a story so everybody can understand it. What is the change? What is the magic change that I need to do to get rid of the burdens of the existing banking system and go on to a moral efficient system, economic system, economy in the United States? So it's to solve these problems. There's got to be one core point. One executive order, as you were talking about monetary policy, or Congress has to pass a bill, which Congress has trouble doing these days, especially if it's profound like this. What do we have to do in order to reach the other side here and avoid the problems in the existing banking system? Well, I mean, I actually think, I mean, you can call me a conservative or a Democrat or a liberal, you know, I'm both because the truth is outside of current politics. Politicians are really fighting inside of a box that the banking system has put them in. So yeah, there's no good solutions. Wow, only five minutes left. Yeah, I mean, so there's, I may come in with eight tools, but fundamentally, the thing that has to change inside the Federal Reserve is that you got to kick the bankers out. The bankers cannot control money supply. Engineers, scientists, mathematicians, perhaps, maybe perhaps some, you know, some economists, but basically a new, in the long term, it would have to be a new part of government, a fourth part of government, kind of like the Supreme Court, where engineers and scientists get elected maybe a lifetime position like the Supreme Court to go into the Federal Reserve and properly run and construct our society for a sustainable future for an equitable present where we eliminate poverty and things like world peace are possible if the economics are right. Any place in the world where there's peace is because the economics are right. The scientists and the engineers who are somehow selected for this would have the power to change money supply and it wouldn't be the bankers anymore. I mean, am I right to say it wouldn't be the free market of the bankers anymore? It would be a careful plan using the best engineering and programming principles they can come up with and it would be centralized in Washington and it would apply to all the states. Am I right so far? Yeah, we can even keep it in the Eccles Building. That's what the Federal Reserve is today in Washington DC. Okay, a couple of questions flow out of that. What happens to all the bankers? Are they going to be employed or unemployed? What happens to all the people in the NGOs and the charitable organizations that help people with this very inefficient system we have now? Are they out of a job? Well, I'm no fan of charities. I don't think charities should exist. So charities are super inefficient, even the best ones. So, you know, yeah, sorry, if we live in an inefficient economy, you don't need charities. I mean, it's almost by definition. If the society worked correctly, well, then you wouldn't need charities. Charities are a solution to a system that doesn't work and it's a bad solution and so is government taking care of people. Banks do actually a fundamental role and it's an important role and that is sometimes you want to borrow money in order to get something done because it's a good idea. So banks don't go away, but they just don't have this role anymore and banks could still go to the Federal Reserve to borrow freshly printed money. There isn't a problem with that. The problem is only when it is the only way to get money into the economy. When it's the only way to get money into the economy, you constrain what's possible and then you wind up having all of these problems and you wind up not being able to engineer society for a sustainable future. It is, once you really get what I'm saying, and this is why I wrote these books, and by the way, your readers can pick this one up for free on Amazon, Optimizing America. That was my first book, my first crack at it. And this is my second one. You can also pick this one up for free on some platforms. But the point is, is that once you get this and once you get dialed into it, how bad our world is today. See what people don't realize is that as humans, we are so adaptable. We're adaptable to put mass on our face and hide in our houses for years. We're so adaptable, we accept almost anything that's thrown at us. And the truth is, in today's world, society is so bad. It is awful once you look at what's happening. I mean, do you people actually realize that there is a genocide of poverty? Poor people are literally being eliminated globally by the millions every year. And that includes millions of kids too. Every year. So if you're poor, you're on the list. I don't want to reference that list, but you get the idea. Poor people are being are being killed off because they don't have enough money. But why don't they want to solve the problem? Yes, we could, we could, we could solve, we could solve poverty globally, easily, nationally. And not only that, it actually makes us richer. Our economy will go gang bounced busters once we gain these efficiencies. We'll have more work to do because there's actually infinite work out there. You know, the only reason why we have trouble with automation, taking our jobs and artificial intelligence is because the banking system puts artificial limitations on what work we can do. Once we release those limitations, there is so much work we can do. And we can make this world so much better. Well, make me an entrepreneur. Okay. I'm an entrepreneur and I want to start a shoe factory. I'm just picking that out of the air. And I don't have the money to start the shoe factory, to hire people and build a building and equipment and whatnot. How is the new system going to make it easier for me to build and operate my shoe factory? Well, do you live in America? Uh-huh. Well, I mean, we can say that in today's system, that would be a really bad idea, because you're competing against China and Vietnam, where people are making a dollar a day or something. And so making shoes over here, unless you have a fully automated concept, it would be really not a good idea to build. Let's assume I do. Let's assume I have a great concept and I have a patent on a machine that will make shoes better than anyone else can make them. Let's assume that. How can I start my company in the new system that you're describing in a better way than the existing system? Well, so the difference would be that in the big solution world, which is what I call it, you are going to have a massive middle class, right? And you're even going to have poor people that have an ability to actually save a little money and actually buy your shoes as well. So the entire market space is much larger, right? So there's more people buying shoes, new shoes. So that's the potential, is that you can actually engineer a massive middle class where today you can't. It's just up or down with the interest rates, right? This is the lever. We've got a hammer and we use it. The new system, the up or down in the interest rates would not happen. The new system, if I go to a banker and I want to make a loan of a million dollars for my shoe factory, I can still get it, right? Except there won't be so many guardrails on it. There won't be so many controls on how I operate. What's the difference in the new system in terms of my opportunity to fund the investment I need? Well, I think fundamentally in the new system, you're definitely going to have to deal with higher interest rates. And again, this will be engineered. Today, you have basically zero interest rates because in order to grow the economy, we need to keep issuing credit, even if it's for really, really bad purposes like building a 55-bedroom mansion for Elon Musk because he's the new richest guy in the world. So what happens is if you start issuing money in other ways of credit, well, then a way to restrict the amount of money in the supply is to raise interest rates permanently. So you would have a permanent higher interest rates, but here's the caveat. Now, is your shoe company totally green? Are those shoes biodegradable? Are they recyclable? Do they have something that makes our society more sustainable than the Chinese shoes or whatever shoe you want to buy? Does this matter in the new system? It does matter because- That advised me to do that. Because in today's world or in banking system, we have one interest rate. And that is also, again, restricting society for, you know, in an engineered bank or engineered financial system, you would have variable interest rates. So if your shoes are particularly innovative and they are particularly green for the planet, well, then you get a lower interest rate. Now, if you were going to build a tobacco factory for a highly addictive cigarette that is going to be financially sound because of its addiction rates, well, you might have to pay a much higher interest rates because you're literally costing society some massive medical bills, right? So variable interest rates are actually productive if you know where you're going. If you have the bank or the current banking system where we have no clue where we're going or how fast our car is going or if there's a wall 10 feet ahead of us, right? Well, then variable interest rates don't make sense because you don't want to pick winners and losers. Well, sorry. Will this all be delegated to that committee of engineers? Yes, variable interest rates delegated to engineers. So that would really take a lot off Congress's plate. And I'm not saying that... Yeah, smaller government. Yeah, smaller government. Yeah, for sure. Much smaller government. And maybe... What the founding fathers intended. Yeah, okay. But it is. No doubt about it. We're about out of time. And I wanted to ask you one last thing, which I think is very important. Let's assume that I go out and get my hands on both of your books. Let's assume that I... Three, three books. Three books. Sorry. Two more free. Okay. And I understand that the banking system is not doing a good job, that we have redundancies and inefficiencies all over the lot with our federal system, federal and state system. And I want to rationalize this and make this a more efficient economy. Okay. So my name is Jay. I live in Hawaii. What... Here's my question for you, Charles. What do I do? Where do I go? How do I make this happen? Well, first it's awareness. I mean, you know, if you remember Copernicus or reading about Copernicus and the planets were round, everybody said, what are you talking about? We're standing on flat ground here and you're saying, I'm actually standing on a ball. You're crazy. Well, lots of people talk about Federal Reserve. They're called crazy. And I think, you know, there has been many people who've said, what a weird, mysterious thing the Federal Reserve is. Well, I'm here to tell everybody, this is why the Federal Reserve is a damned thing right now and it's causing all kinds of trouble. And I'm trying to do it in a very simple way that everybody can understand. Once everybody understand what's going on here and the politicians start picking, believe me, even politicians can understand this. This is not complicated, right? So once we get the knowledge out there, the information out there, start talking to people about it, we need to start talking about the Federal Reserve and the banking system and how to do things properly. That's the quest. That's why I do as many shows as I can. I try to get the word out there, but people do understand this. They would vote for politicians, candidates, who would understand it also. And the platform points for those politicians, candidates, would be to modify the banking system, modify the role of the Federal Reserve and create a sort of a unified, new, engineered, programmed banking system. And that means an awful lot of people would have to get off an awful lot of less rational platforms and do this. But here's the thing. This serves conservatives, pure conservatives. Obviously, you can't serve somebody who's completely crazy, but from liberals to conservatives, this serves everyone because this is not inside the box. This is outside of the box thinking, which is obviously what we need. This is an out-of-the-box solution. And with it, utopia is actually possible. World peace, the end of poverty, all of these things are actually possible. And not only that, it will make us wealthier. The elimination of poverty will make us richer. Efficiencies are always better. What we're talking about is putting modern science on, what do you want to call it? The wing of the government. Right. And changing politics. That means changing the entire structure of our country, really. And we get a long way to go. And that road that we have to go down is a political road to change our society. So keep writing those books, Gerald. We're going to need more of them. Thank you, sir. And I'm waiting for the right opportunity to write my next book. This has to happen. It's not like there's a choice. We literally have a gun to our head, or we're literally driving in a car faster and faster, well over 60 miles an hour, and we will hit something that will end society as we know it. It isn't a matter of if, it is when. Elon Musk put it at 12 years, and he wants to start a colony on Mars. Well, I've got a better plan. Let's save the planet by just changing one single document, monetary policy. We can literally save the planet and create world peace. It's crazy. Let's go ahead at a time, Gerald. Thank you very much. Gerald Jensen, author. And the proposition is to examine the international banking system and identify, you know, what the problems are and change it. Thank you so much, Charles. Appreciate your thoughts and your books and your appearance here on Think Tech. Aloha. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, Twitter, and LinkedIn, and donate to us at thinktechhawaii.com. Mahalo.