SLP336 Sam Callahan – The Problem with the BIS

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Sam Callahan of Swan Bitcoin joins me on the show to talk about the Bank of International Settlements (BIS). We chat about:

  • Formation, and shady history
  • Why it’s not accountable
  • Their plans for social control
  • CBDCs
  • Loss of privacy
  • War on Cash
  • What can be done?

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Stephan Livera links:

Podcast Transcript:

Stephan Livera:

Sam welcome to the show.

Sam Callahan:

What’s going on Stephan.

Stephan Livera:

Yeah. Great to speak with you. And I’ve seen, you’ve been doing some excellent work in terms of your writing and your thread writing on Twitter. And I obviously wanted to chat with you about a bunch of things. But today I know you’ve got a lot of stuff to talk about with the BIS. So for anyone who doesn’t know you, who are

Sam Callahan:

You? So my name’s Sam Callahan. I’m a Bitcoin analyst at swamp Bitcoin. So I’ve been there for about nine miles now. And yeah, I’m just a Bitcoin or, you know,

Stephan Livera:

Right. And as any Bitcoin should be, we try to challenge and skeptically think about things. And in this case, it’s really skeptically looking at the BIS. So who are the BIS?

Sam Callahan:

Yeah, so the BIS are the bank of international settlements and they’re essentially a bank for central banks. So you can think of them as like a commercial bank that has complete legal immunities because they were set up under an international treaty and they basically serve central banks, just like a commercial bank would serve regular clients. And so they give out short term credit to them. They hold deposits for them. They do all kinds of things. A normal bank would do for central banks. And they are history is a little bit complicated, but that’s kind of what they do now. And then along with just being like a bank for the central banks, they’re also like the most elite event planner company in the world, cause they basically set up all these seminars and committees and a lot of very important discussions happen behind closed doors in Switzerland at the bank of international settlements. And then on top of that, they actually have the largest data repository of international capital flows. And so they’re used as like a research center and they, they give off their data to other central banks and that’s kind of what they do now.

Stephan Livera:

Right. And so is there anything you might wanna share a little, if you could share a little bit of insight into their history as well and how these, how these guys Formed?

Sam Callahan:

Yeah. It’s a good question. And we’re gonna have to go back through history if you don’t mind. I think it’s important to understand where these, how they came to power and kind of their whole history to understand why they’re talking about central bank, digital currencies and why anybody’s listening to them today. I think it’s really important that we go back in time. So they really started way back in after world war I with the treaty Versai they basically laid all the guilt of the war on Germany and they made them pay ridiculous war reparations that they had no way of pay because their economy was totally in shambles. Millions of people died. And it was completely unrealistic the numbers that they came out of the treaty. And so wer hyperinflation happened in the early twenties. And then all the way up until 1929 Americans actually were investing in Germany to help rebuild their economy.

Sam Callahan:

But then 1929 happened and the stock market crashed and then all that money and investment dried up. And then Germany was once again about to go into economic crisis. And so that they had their bay basically revamp all the war reparations so that they wouldn’t go into another hyperinflationary event. And so in 1930, all the central bankers and politicians got together and they basically sat down. They’re like, all right, well, can we do so they basically revamped those war reparations made it a little bit easier for the Germans to pay it at the same time they created this bank to help administer the loans to Germany and help also administer the war reparations from Germany to the bank of England, to the bank of France. And so it was almost like a neutral party. That was a middle man. Okay. And so when they did this, it was incorporated in under an international treaty, meaning that it has complete immunity.

Sam Callahan:

So the bank of international settlements doesn’t is not held accountable by any government, any law, they can do whatever they want. So the Swiss authorities cannot enter the business premises. Their assets can’t be seized. They don’t pay tax on any of their incomes. And that extends all the way to the bank managers of the biz for life. All right. So they have complete legal immunity given it’s under the international treaty. So, so they got set up and that’s what they initially were doing, where they essentially Germany would say, Hey I’m gonna, I’m gonna give you guys some gold or some foreign currency to give to the bank of England to pay off my war reparations. They’d give it to the biz. The biz would say, Hey, England, Germany paid this. Do you want it all right now? Or would that, inic your own currency?

Sam Callahan:

Do you want us to hold onto it for now? And that’s what they did. And then England could draw on the funds whenever or they wanted now 1931 happened. And that’s when the Nazi communist party got a third of the seats. And this caused like a panic throughout the world. And suddenly a lot of capital left Germany again. And they were about to go into another economic crisis. And then the biz said, all right, we gotta do something about this. So they got all the central bank together and, and they said, we’re gonna give a loan to them. And this was the first time essentially central banks got together and gave a loan to another country that was in economic crisis to help revive the economy. So this kind of set the stage for central banks, this idea of, Hey, we can dish out a bunch of capital to a economy and revive it and that works and it’s also profitable for us.

Sam Callahan:

So, so that was like their second way that they made money. After war reparations was giving out loans to struggling economies and they started doing this to hungry and they started dishing out loans to any economy that was in trouble. Now in 1934, Hitler said, we’re not paying the war operations anymore. Like it’s a shame on our people. And he just said, Hey, we’re not doing this anymore. So the bank of international settlements just suddenly like, all right, what’s our purpose now. That was why we were created. I get, we give out these loans so whatever. But then it realized that there’s actually a lot of profits to be made by fees and commission by just being an international clearing house for these central banks. So moving large amounts of capital with gold, as well as foreign currency exchange they traded between central banks.

Sam Callahan:

And so they basically created this innovation at the time, which was earmarked gold. And it was essentially subaccounts held at central banks that were BI accounts. So all these central banks had specific subaccounts that were BI accounts. And so when the central bank of England wanted to pay gold to say the federal reserve, it didn’t have to put all the gold in a boat and transport it. Now they can just say, Hey, biz, we’re gonna move our gold out out of our sub account into another biz. Subaccount under the federal reserve and it’s just a bookkeeping mark for the BIS. They collect the fees and the commissions, and it’s really quick and it’s really fast. And so that’s how they kind of shifted their purpose from war reparations to giving out loans and to now moving large amounts of capital. And so moving up, are you with me right now?

Sam Callahan:

Moving up to the world war II. This is what they really started to do because no longer did countries like trade as much. Once world war II broke out. I mean, there’s a war going on, right? But the biz kept their doors open and they were like, how are we gonna keep our, how are we gonna make profits now? And what they ended up doing was they helped Germany move the gold from Lood like the Lood gold from countries that they conquered from their central banks that they conquered. They helped Germany move their gold into their own accounts. And that’s on a BI survive world war II. And so theres a huge scandal called with the bank of CCHO of AIA. So essentially when Germany invaded CCHO of AIA the, the central bankers in CCHO Sava were very smart.

Sam Callahan:

They moved all their gold before German forces got to the country and they moved it to the bank of England into one of these BI accounts and these subaccounts and when Germans, Germany got there and they wanted the gold and they were like, Hey, we want this gold. We conquered you. So they basically put a gun to the central banker’s head and said, Hey, tell the, is that we, you wanna move your gold into the rice bank account? Like, and then the central bankers of Czechoslovakia said, surely the biz won’t do this, right? Surely they won’t they’ll know we’re under duress. And why would we want our nation’s gold moved into the German account? And this is really important. Cause it kind of tells you what the business priorities are. They think that they act above any political interest. Any social interest is below them.

Sam Callahan:

They are the high priest of finance and their only mission is to promote like efficient flows of capital and then create financial and economic stability, like whatever that means. So they, they really work. Like they don’t really have a moral compass. They only care about the finances. So to them, it, it was just, Hey, Germany says that they have, you know, the gold they’re saying they want to transact it. We’re not involved with this war, whatever we’re gonna move the gold. So they just moved all of the wealth of chuckles of AIA into the re mark BI account against their will. And this was a huge scandal. And the United States like said, what is this bank? That’s working as a financial arm for the Nazis. Like we wanna shut this down. Right. And, and the bank of international sediment said, Hey, we’re a neutral party.

Sam Callahan:

Like we’re just moving gold. But this was like very, very big deal at the time. Okay. And then, so 1944 comes around and it’s Bretton woods and everybody remembers Bretton woods for the creation of the dollar reserve system and you know, all that, but they don’t remember two other things with Brenton woods. And one of ’em is the creation of the IMF and the world bank happened then. And the second was, there was a huge discussion about liquidating, the bank of international settlements for their role of moving Lood gold, right. And being, working with the Nazis, the big the bank, the biz always kind of said, you guys need us for post-war reconstruction. We’ve shown that we can give out loans to countries and revive economies you’re gonna need us. But when they created the IMF in the world bank, suddenly they didn’t need the biz for that at all.

Sam Callahan:

Like they already had the functions covered by the creation of the IMF and the world bank. And so, so they had really struggled to justify their existence at that point in 1944. And then the US treasury secretary at the time, he said, you know, we gotta shut this thing down. They’re way too powerful. They’re protected under international treaty. We gotta this thing down now, lo and behold, John Maynard Kanes would not sign the Brenton woods agreement with that clause in there. So these familiar names come into play here, John Maynard, Kanes said, we are not gonna have that clause in here. I’m gonna walk away. It’s too big of a decision to be made here to shut down the pits. And so it wasn’t included and the biz just kind of got away and everything was forgotten about that whole thing about the gold and the Nazis.

Sam Callahan:

It was just kind of swept under the rug. So that’s the beginning of the biz so and then and then just a little bit more so after that, they kind of struggled to, again, justify their existence. But then the Marshall plan was a 12 billion American plan to revitalize the European economy after world war II. And they suddenly were like, who’s gonna help administer these loans. Who’s gonna help kind to build back this whole system and build a more European integrated payment system. And the, this just kind of rose their hand and, and that kind of assured their survival throughout the entire 1950s. And so they, they set up the European payment union, which they did all the fees and commission of that. And they, they used all the funds of the Marshall plan and kind of helped revitalize the economy of Europe.

Sam Callahan:

And then by the time in 1965, what their real purpose is today was the IMF. They basically said they did a huge two year study of the, the global monetary system. And the IMF said, Hey, all essential banks, we’re gonna aggregate data of all the commercial banks in your area. And then we’re gonna give it to the bank of international settlements. Who’s gonna analyze the data and be it early warning sign for all essential banks. If anything, cracks notice in a global financial system, the bank of international settlements will be there. And that’s kind of their general purpose today is they’re this huge data repository and research center that other central banks use. And that really started in the sixties. And so that’s kind of where the bank international settlements started. It’s very complicated and they’ve shifted their purpose throughout the early years into what they are today. Right. And

Stephan Livera:

It’s really interesting as well. Some of the comments you were making there around the international treaties that almost render them immune to accountability from the average people of most countries. And so if an average person of a country, one to it, to do something about the existence of these entities, like the BIS, what realistically could they even

Sam Callahan:

Do nothing, literally nothing, not even a government can do anything. That’s the thing is, and that’s why, you know, you have to start asking questions like who is this organization because they have a ton of power and they should really shape the world a other policy decisions. And they’re in the ears of these really these central bankers and these politicians, and they really, they heed their advice. But they’re completely unaccountable. And if you think about it, you know, it kind of infringes on the sovereignty of nations all over the world and especially democracies where like America, as a Republic, it’s made up of elected officials who are elected by sovereign individuals. And those sovereign individuals did not elect anybody at the biz. Who’s making these really, really big decisions. So they’re these transnational organizations of unelected officials that are making really important decisions. And so you, we should question them, but nobody does. And nobody can really do anything about it because they have complete legal immunity by the way that their, their statutes are basically protected by the international treaty from 1930. So yeah, it’s, it’s, it’s interesting.

Stephan Livera:

Right. And it also, I mean, hypothetically, let’s say if you could have enough people who were interested, maybe they could, they could sort of bring up a movement to try to make something happen, but essentially it would just be, it’s an extremely high bar to change anything about the BIS at this point, that it would just take a lot of people all riling up and saying something at it or doing something about it. And I think it, the point that I wanted to ask a little bit further about is, as you were saying, it’s some of the people inside these entities act as though they are above it. All right. They act as though they sort of go even above and beyond, like what would typically be expected for people in some of these roles? It, all, this reminds you of how there was a recent I can’t remember the exact example, but I think it was a us defense person who was like collaborating with like a Chinese defense person and saying, we would tell you, yeah, right. It’s kind of like, you know, are these people having an allegiance to like, to their own people in their own country? Or are they just having their own interests at heart?

Sam Callahan:

You know, these guys they really think they’re like the high priests of finance. So they think like we should kiss their feet because of what they do for us, which is financial stability and provide economic growth and, and prosperity for all. That’s kind of what they were founded on. It’s part of their mission statement today. So they think that they’re at such a high level that they’re, they only care about finance. So it’s like what I was saying. They, they don’t, they don’t really have a moral compass. They do not care about the, the frivolous activities of those pesky politicians and governments. It’s part of the reason why it was created under international treaty by these central bankers. It was the same central bankers that started the bank of England and, and the federal reserve. It’s the same characters. They wanted a bank that, that acted above governments, cuz they were sick of, of dealing with it, of all the, the regulations they thought that, you know, they wanted to act in finance. So that could stabilize the world. And that’s kind of the same mentality that we see today.

Stephan Livera:

I see. Yeah. And so Sam, I know you’ve been going through and doing some research on what the BIS have been saying. So I guess, firstly, what, what were you hoping to gain by going through, why bother going through all these papers and research and maybe if you could tell us a little bit about some of the high level insights that you found

Sam Callahan:

I’ve always been into just did in like learning about these like organizations and central banks, you know, even before I got into Bitcoin, I studied the global financial crisis pretty deeply. And I was always, I used to go into the federal reserve website and like keyword Bitcoin on all the transcripts of speeches and stuff like that so just to try to find nuggets of what they were doing because you know, it’s like that quote no, no di and you’ll never be defeated. I think’s really important to understand what they’re thinking and what kind of plants they’re their planning for the world, because it gives us a better idea of how to protect ourselves and what narratives kind of to combat, because you can kind of see what they’re thinking. Cause they kind, they lay it all out there. It’s not, they’re not really like secretive about what they’re planning.

Stephan Livera:

And so then out of your research, what were some of the high level themes that you were seeing? So,

Sam Callahan:

So basically a few things they are really interested in a global digital ID system. They want to set up what they call like an account based CBDCs, which is tied to a specific identity of an individual, the main critiques against Bitcoin throughout all these publications were it’s bad for the environment and it’s used by criminals. So that’s still what they felt on with Bitcoin specifically. And then they really think that the vaccine rollouts are important for the economic recovery. And those are probably probably the most high level things I’d say.

Stephan Livera:

Right. And so let’s go a little further into this whole idea of central bank, digital currencies or surveillance coins or control coins. What are they and why is the BIS so excited about things?

Sam Callahan:

Well, essential bank, digital currencies. They’re essentially the why the biz is excited about them is because they provide efficiencies. So that’s all the biz really thinks about is how can we make capital movement more efficient, how can make cross-border transactions more efficient. And then they actually provide it easier transmission of monetary policy because you’d have a direct account at the central bank. So, you know, today when we do monetary policy, it goes, it basically create bank reserves. And then it depends on the banks to loan out those funds to main street. And so it’s very inefficient. And so that’s been an ongoing problem, you know, with central bank digital currencies, what would happen was an individual would have a direct claim with the central bank, a CBDC with the central bank. And so that would allow them to do all kinds of new things with monetary policy that they can’t do today. And it actually allow them to see how it’s working in the economy in real time. Right now they have to depend on like delayed reports from banks to see how the monetary policies actually getting into the real economy with, with a CBDC there’s a lot of benefits for them, for how they kind of elicit their monetary policy kind of bring it into the economy as well as just like cross border payments and all these efficiency gains from it. So what

Stephan Livera:

Kind of, could we see to those of us just everyday individuals out there if CBD BDCs were to be proliferated more broadly?

Sam Callahan:

Wellfor us, I mean, essentially it would kind of infringe on our privacy and our freedom, right? So our freedom of choice of if everything is cashless and it’s in a, you only have a CBDC that really gives ’em a lot of power, so they can do anything. They want really any kind of monetary policy, if you don’t like it, there’s really nothing you can do. And this is in a world without Bitcoin. Right. But, but they would be basically if they wanted to do negative interest rates, they could do it. If they wanted to say like, Hey we wanna give only the monetary policy to this specific cohort of people who did this. We wanna cut people access off from the financial system because they’re dissidents. So we don’t agree with what they’re saying. They could do that. So, so it’s kind of a more draconian world.

Sam Callahan:

And then what they would be able to do is get all your data. I mean, they would have basically all your financial data to use and to analyze. And so it, it, it would basically set up this potential for state surveillance and control. So yeah, it’s, it’s kind of scary to think about what could come from that. I think the bank of international settlements, I think there’s, you know, there’s probably some good people and they’re good natured people who actually have good intentions with this stuff. And they’re just thinking about the benefits, but they don’t think about how this could be used poorly against the people. And so those are the, what the potential scenarios are. If, if we did get on this account based CBD system with the July D system combined with it,

Stephan Livera:

I see. So summarizing, essentially if central banks had complete oversight into the money using a C BDC, they could essentially see everything that’s going on in the system. Any semblance of privacy would be gone and they could start to very specifically target monetary policy and they could start to target very individual people’s access to things they might say. We don’t want you to spend your coin on air flights because you have used this X, Y, Z number of emissions, or we don’t want you to purchase this kind of food because we think that’s not healthy or not aligned with our sponsors. So there could be all kinds of ways where a person might go into this with good intentions, even, even if we were to steel man, that view and say, well, we’re gonna use it to stop the terrorists or whatever. Yep. The reality is even in that sense, there’s still going to be a massive loss of freedom and a massive loss of autonomy for the everyday person.

Sam Callahan:

Yeah. And they say that, I mean, they say it in their own jargon. They say it, I mean, they say in addition you know, we would have programmable and allow information specific monetary transfers, you know, that’s how they say it. Right. But if you, you know, decipher that, that’s basically what you just said, right. They’d be able to have specific information to give monetary transfers. And if you think about how the independence of the fed has basically eroded over the last, you know, five years or so, and how close to they are to treasury, you can see how politics can get involved with this power. And so that’s when it kind of gets scary.

Stephan Livera:

Right. And additionally, it might push things more in a global direction, right? So currently the world does not have a global government. There are something like 200 nations on the earth today. But to some extent, this push towards global central bank digital currencies may mean an attempt to supersede each nation’s own sovereignty and control.

Sam Callahan:

Yeah. I would say that they already have that power, you know, they’ve already wielded that for decades. Like I said, they basically influenced policy decisions on the, these governments. So they they’re kind of already do that, but this would just give them more ability to do that. And so like, you know, we probably talk about this at some point, but like the multi CBDC systems that they’re setting up, they really say like one rule book, but they don’t say like, who would write that rule book or who would enforce it? You know, who would it be? Would it be a committee of central bankers? You know, and they just like the ECB or the bank of international settlements when they’re under these international treaties, there’s nothing anybody could do about it. Like literally. And so, yeah. I mean, that’s kind of why I I’m so passionate about getting this information out there because I feel like in a way that this sovereign of nations are at risk here of, of these organizations, thesesupernational organizations.

Stephan Livera:

I see. Yeah. And so, as you mentioned, I mean, we might as well go into that. So with multi CBDCs, can you give us an overview of what kinds of ideas they are proposing here?

Sam Callahan:

Essentially, you know, they realize that all these central banks are working on central bank, digital currencies. I mean, there’s like, I think something greater than 80% of ’em are, have a pilot program or have been doing research into ’em, but they’re realizing that it’s not gonna work. If they, everyone just has their own little CBD system that doesn’t help anything cuz that’d be extremely inefficient. And so their, then their idea was get ’em on all on one system that would have one digital ID system as well as one rule book for the monetary system, the infrastructure and, and one person or a group of people or an organization would be the operator of that system. And so they’re trying to make the inter interoperability, interoperability of these payment systems to reduce friction. Their idea was to have this global CBDC system under one rule book. And so they don’t really specify, it’s really early days with this one that, that they’re just getting into this. I mean, it’ll probably take them a or a decade to try to do something like this, but that’s kind of the idea behind it. Right.

Stephan Livera:

And so sometimes it’s almost like they float a trial balloon out there and then yeah. Eventually over time that idea does actually become, come to fruition. And so I guess on one point we could think, well, hang on, how feasible is it that all of these say 200 different countries or even let’s say a hundred of the larger ones, how realistic is it that we would see them agree? Because in many cases they have different values, different religion, different culture, different ideas. How, how likely is it that all the central banks or say the governments of those large nations would be able to agree given at least to some extent they have countering interests with each other.

Sam Callahan:

Yeah. obviously, yeah, the world’s pretty like divided right now. So you’d think it wouldn’t be that likely, but honestly I think people that’s probably higher probability than you think because when the world goes to and there’s actual crisis, what happens is, is these central bankers get together at these Accords at these, you know, committees at these conferences specifically in basil at the bank of international settlements, where they have these discussions and they try to re rebuild this system, create a new system. And, and it reminds me of a lot, these multi CBDs. It reminds me of the Euro because the Euro was actually the bank of international settlements child. They created it in 1989 at the Dolores committee they got together and they basically wrote this paper about, at the European union to European integration. And it’s this kind of the same thing where you have all these different countries with different cultures, but what the biz did was they created the European union again under international treaty.

Sam Callahan:

And then the same thing they wrote about 15 working papers, similar to the CBDC of all these working papers about the Euro. And then in 1999, fast forward, the treaty of Amsterdam that European central bank is created with the biz under the same legal immunities. And it, it manages 27 countries. And when the countries join the Euro zone, they give up their sovereignty, their monetary sovereignty to the, the European central bank. And what, what happened with the Euro is what you’re saying, where it goes back to the biz. They don’t think about the political, the culture, anybody. They just think, wow, this is gonna be great. You know, trade is gonna flow and it’s gonna be really efficient if everybody’s on one currency. But what they found out was that everyone’s different, like Germans, like to save more or Greek spend more. And they all had their own fiscal policy and tax tax policies and spending.

Sam Callahan:

So it’s been kind of a mess with the Euro. I mean, it’s been a disaster so that the multi CBDs remind me a lot of the Euro with the bank of international settlements, because it’s the same thing they’re trying, but they’re doing it at the global stage. They’re trying to put every single country with different needs, different cultures under one essential monetary policy, under one rule book. And we saw how it happened with the Euro and how it went, but they’re still thinking this is a good idea. So I think it is possible, I think, is it likely, I’m not sure that it’s pretty hefty lift for them to get this not only built, but then to get everybody agreed to it. I mean, things would probably have to be pretty rough out there in terms of the current system, maybe collapsing or being in trouble for this to actually get pushed through, I think, but it’s possible.

Stephan Livera:

So with those parallels there as well around the EU and the Euro and what went on there in terms of the sovereignty of the individual nations being diminished in favor of the EU, obviously a, another aspect I’ve seen you talk about is this idea that central banks all around the world can late information. And so what are you seeing there? Are they able to correlate information on individual people and then tie that in with spending information?

Sam Callahan:

Yeah, so you know, in 2019 in one of their papers, they said that they use like, you know, financial surveillance tools and they used to use 12 tools. And now it’s 71, I think today. And so from the pandemic if you think about it from their perspective, how much happened in, in 2020 in terms of the liquidity swap lines and central banks, like I give ’em a little, they probably just need more tools to understand where the flows are are going right now. So that’s probably part of it. But you have to understand like financial information. It can tell a lot about an individual. I, I don’t know what this quote is. I forgot who said it, but it’s like, tell me, show me where you spend and I’ll tell you what you worship. And so you can, you can piece together information about somebody by their financial information and really learn who they are as an individual, just by having that information.

Sam Callahan:

And we, that’s kind of what we learned from Edward Snowden and, and the use of big data. And so one of the papers looked at the big data of central banks and how almost 80% of ’em use machine learning and big data today. And that’s only increasing. And that paper was interesting because they’re not like wondering if they should do it. It’s more like we have so much of it that we can’t store it and process it and analyze it. This is a problem. And they’re actually teaming up with other central banks together to be like, Hey, let’s share resources so we can analyze this big data better. And they’re scraping websites. They’re looking at social media, they’re, they’re looking at all that stuff. And you have to wonder like, what are they doing with that data? And so, but, but the problem is that they’re under international treaty.

Sam Callahan:

So even if they were misusing that data, there’s nothing anybody could do. And so there’s no way to even look into how they’re utilizing this massive amounts of data. And this goes back to 1965 with that IMF research report. So essentially they told all the commercial banks to aggregate, aggregate their data, their sets, liabilities give it to their local central banks. And then the, all the central banks give it to the biz. And so the biz has like got all of it and, and they, they have all this data to do with it. And that’s why they put out a lot of research and that’s why they do all this stuff. And to be fair with them, I’ll, I’ll throw ’em a bone because given the business origins of Weimar Germany, they are really against excessive, easy money and credit. And so in the early nineties, they, they used that access to data of, of looking at the flows and the credit markets to say, Hey, there’s a lot of easy, excessive credit going on in Asia right now.

Sam Callahan:

Like you guys gotta chill out. And then suddenly in 1997 we had the Asian debt crisis. And so the biz was warning about that. And then in 2003 and 2004, they were banging the table about the easy credit going on with Fannie Mae and Fred Matt, like almost four years before the global financial crisis. So I have to give ’em a little bit of credit, so that’s kind of what they do. The good side of, of the data, right. They’re tracking, but there’s a lot of, you have to wonder all this other stuff that they have and why are they looking at social media accounts? Why are they looking at these things? Because they have so much of it. They literally probably have more data than anybody in the world. They have the world’s largest data repository of financial information in the world, hands down. And so there’s no accountability. There’s, there’s nothing at all to kind of check them of what they’re doing with that data. And they only, that’s only increasing, it’s not going, you know, the trend is increasing that they’re using more and more data and using machine learning. And so you have to just, you have to ask some questions and nobody’s really asking any questions about that, right.

Stephan Livera:

And related is this idea of credit scores acting as a kind of disciplinary device. And this is very reminiscent of what is going on today with the Chinese communist party in the social credit scores going on already. So do you see parallels there and what’s coming to the rest of the world?

Sam Callahan:

Yeah, I mean, unfortunately it’s an interesting paper because it’s titled what lessons we can learn from China. And it’s really about FinTech companies. So it’s about the rise of Alibaba and Tencent and financial associated with Alibaba as major, essentially financial players as payment systems and the business looking into them as almost like competition and wondering if that’s good and what are the effects of these large FinTech companies on the financial system for stability. But this is kind of what I’m talking about. They almost like tease certain things like little nuggets, and what they did is they threw in this little story and it it’s really out of place in this paper. Like, it doesn’t really make sense why they talk about it. And they, they basically say about credit scores in China, how they’re aunt financial had these credit scores. And then they worked with the courts of China about these people who defaulted on their car loans.

Sam Callahan:

And they were saying how the credit scores, but specifically the private information backing the credit scores can be used as disciplinary forces. And so what happened was 5,300 of these people who defaulted on car loans, they were blacklisted from thousands of merchants and services. Their names were released to the public. And so they were ashamed and restricted and they were voluntarily, you know, they voluntarily paid off the loans after they did that. And, and, and the biz just found that interesting. And it’s, it’s, it’s such a weird thing to throw into this paper to actually put into print and you have to ask like why they did that. And then if you think about a credit score, it’s kind of like a pseudo social credit score. It’s kind of been normalized, but it’s not like what China’s doing, but you can kind of see how it’s a slippery slope and kind of lead to something like that in the future. So

Stephan Livera:

With all of these things and the aspects of social control, you mentioned, what are we seeing in terms of the war on cash? Are you seeing, what, what kind of impacts are you there around the discouragement of cash payment?

Sam Callahan:

Well, you know, in that, in that one paper, they talk about like how a CBDC would work in a cash society. And you know, one of the things with the CBDC like we talked about before is it gives them kind of complete control over the monetary policy. Specifically, if you think about something like negative interest rates, one of the reasons why they can’t just enforce that now is everybody could just withdraw the cash and put it under, you know, their bed or something, whatever. If there’s no cash to go to, there’s no escape valve, they can kind of trap people into whatever policy they want and there’s nothing anybody can do about it. And this isn’t what they explicit in the paper, but they’re just kind of exploring what that world would look like. And so, you know, again, this is like in a non Bitcoin world.

Sam Callahan:

Thank, thank God for Bitcoin, because we can just go over to that and opt out. But in a cashless world, they would have even more power with the CBDC. And you know, the war on cash has been going on for a while. The Kenneth Rogoff is a major economist that wrote a book on it, and, you know, for you can’t surveil cash. So that’s their justification to try to get rid of it. One of the things it’s used for illicit activity, all those common things to justify the CBDC it’s the same thing. <Affirmative> but the thing is actually, I looked into this a little bit and cash is actually on the rise, which I found surprising throughout the world. So it’s a, that’s a good thing. It’s, we’re not very close to a cash flow society yet, but they’re definitely exploring what that would look like.

Stephan Livera:

So Sam, what can be done about all of these things? What can be done about the BIS? Is it lobbying? Is it activism? Is it building an alternative? What do you think?

Sam Callahan:

You know, I think just like raising awareness about this stuff is important, which is, you know, when I wrote this thread, I wasn’t expecting the response, but one of the active congressmen retweeted it and he said, this is a threat to our democracy. And that was really cool. More so because he knows about it now, and I don’t know if he was familiar with what was going on here and I don’t know how many congressmen even know what the bankruptcy international settlements is, let alone their plans for or CBDC. And so raising awareness talking to people about this stuff who have large platforms is important. I think now obviously Bitcoin’s a huge part of this. So I think with Bitcoin, for me, like when I think about all these privacy you know, problems with this, CBDC, you know, I look at Bitcoin and I think there’s a lot of improvements to be made on that front too, with, with privacy and Bitcoin.

Sam Callahan:

And so how do, how do you use Bitcoin more effectively to ensure your privacy? And that’s using things like Whirlpool and coin join as well as, you know, supporting privacy enhancing technologies like mesh net works and things like that. That’s kind of how we can protect ourselves against this future. And it’s part of the reason why I’m Bitcoin only, I mean, I think it’s the only tool period to help combat this problem. And, and I’m interested in real threats to freedom, which is the CBD CS and these supernational organizations and, and, and big government and, you know, state surveillance and things like that. And so Bitcoin, because of its decentralization and censorship resistance you know, there’s nothing that even comes close to Bitcoin. And so it’s why I spend all my time on it. And I don’t worry about any of these other, you know, all coins because they don’t don’t have the same assurances at all, and they’re not gonna help us in this battle against CBDC against these you know, organizations that really are a threat to our freedoms and our privacy.

Sam Callahan:

And so when I think about like David and Goliath, for instance, you know, David had the perfect tool to bring down in a really powerful fo hit him right in between the eyes he dropped. Same thing with like Achilles Paris had the perfect tool, bow arrow hit down, bring ’em down a really powerful fo and the bus bank of international settlements in the central bankers have held power for decades. I mean their masters at it, and they’re on the money printer. They are the money printers. So they have endless funds, they have endless power. So you need the perfect tool, right? And so I think supporting Bitcoin and putting all your efforts into Bitcoin is the right move. If you wanna try to combat this, this scary draconian future

Stephan Livera:

Well said, Sam. So I think there are a lot of issues with these supernational organizations and ultimately not facing the same level of accountability that other institutions and individuals face. And so I think it just comes down to enough people being aware about the challenges and the problems that they pose to a free society. So is there anything else you are looking at from a supernational organization point of view that people should be aware of?

Sam Callahan:

You know, I kind of, I did for a lot of different organizations. I haven’t really shared my research yet for the other ones, but, you know, there’s, it’s just like, there’s so many of ’em now you know, there’s the IMF, there’s the world economic forum and there’s all these characters and connections between them. And so, you know, I, I’m probably gonna be sharing more research in the future. I think I’m gonna make this more of like a, a thread series called behind enemy lines. It’s kind of dramatic, but you know, I’m gonna, I’m gonna keep sharing some of these stuff with the IMF, it’s all kind of intertwined and they’re all kind of on the same page with a lot of things. And you see, like, when you talk about like, can these things coordinate with one of don’t know, I think the pandemic is a perfect example where you, you saw like coordination at the governmental and supernational level that we’ve never really seen before.

Sam Callahan:

They’re all kind of parroting the same narratives and it just seems like very coordinated. And so I’ll definitely like share more research. It would probably be going into a long thing if we start getting into the IMF right now or something like that. But yeah, there’s, there’s a lot. Yeah, there’s, there’s a lot to get into with these organizations and, you know, that’s what, you know, I’m just kind of focusing on the problem. Because a lot of it’s like kind of, it’s more hopeful to read about Bitcoin and the solution. And I think it’s, it’s fun to read, search that stuff. It’s not as fun to go into the business publications and, and read about like a dreadful future that they kind of have in store. And so I think it’s important to share that. So people under better understand the solution, which is I think Bitcoin and you know, like somebody said, ’em like comments. They’re like, thanks for this through man, but I’m gonna go take a shower and watch the wash the BI off me. So I think that’s kind of how I feel when I’m researching it, but, you know, I think it’s important. I think it’s really, really important to get these messages out and to raise awareness.

Stephan Livera:

Well, that sounds fantastic. Sam, I’m looking forward to seeing more of your threads and of course chatting again when the time’s right. But where can people F find you online if they wanna keep up with you and follow your work?

Sam Callahan:

Yeah, so, you know, I’m mostly on Twitter, so you can follow me@samcallah. And then I write, you know, blog posts on the Swan website. So just go to swan.com, check out some of my blog posts on Bitcoin. And yeah, that’s pretty much it that’s where I spend a lot of my time.

Stephan Livera:

Fantastic.Thanks for joining me.

Sam Callahan:

Thanks, Stephan. Appreciate it, man. Have a good one.

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