economics and things that are not part of what the mainstream media might say so this is quite alarming for a mainstream media headline and it's from peter coy business editor economics editor i'm sorry bloomberg and his headline reads the tyranny of the us dollar the incumbent international currency has been american for decades is it time for regime change and it's a very bizarre just two paragraph article and it doesn't really say anything other than this sort of paragraph by the latest tally of the european central bank america's currency markets make up two thirds of international debt and alike share global reserve holdings oil and gold are priced in dollars and euros or yen when somali pirates hold up ships at sea as dollars they demand and threats to be cut off from the dollar base global payment system strike terror into the life of iran north korea and russia it's no exaggeration to say that the dollar's primacy is at least as valuable to the us as

a couple of aircraft carrier strike group well there's a direct correlation between air strike carrier groups and the dollar the dollar has no intrinsic value it has no trade value trade value has collapsed ninety seven percent since it was launched than nineteen thirteen and as paul krugman of the dollar is backed by the pentagon is backed by violence and the dollar is. surely a tie to the american empire well then that's why it's interesting that peter coy economics editor of bloomberg is now asking is it time for regime change it's not for asking that question is bloomberg news asking that question yes well that's right and because the the writing is on the wall as the saying goes other countries are looking to the dollar rise that's the phrase that has become popular in the last. a few years dollar as asian china russia definitely on the dollar

is asian camp they are hoarding gold they're building a goal as the play dollar rise they are looking for the dollar to trade significantly lower. in. yeah you're right in the mainstream media is pointing out the fact that we've been talking about it for a while checking our heterodox economist sources but now the heterodox has become the orthodox well based on his suggestion in the title the tyranny of the u.s. dollar i don't think these nations that are dollar rising i don't think they care about the price of it i think they care about the tyranny of it is what he's suggesting and i think what we've suggested and you know jim rickards has also suggested that on the show and i know i and bited him to come on the show today but he was on his way to washington d.c. he said to talk to some folks there we know who those folks might be about the

dollar is they shine so with the dollar is ation we also come to another headline suggesting that you know mean stream sort of figures are coming to the kaiser report way of thinking and this is another possible downgrade for the u.s. debt and this is economic inequality could cause us debt downgrade moody's says economic inequality isn't just an academic idea as the recent wave of populist voting has made clear but a new report suggests that worsening inequality in the u.s. could have financial repercussions for the country that report out by moody's early in october from the credit rating agencies moody's investor services called government of the united states rising income inequality will likely weigh on credit profile and i remember after the us election and they mention the populist wave we got blamed for pointing out the possible cause. of the populous wave as the

wealth and income gap and perhaps the people of wisconsin wish michigan for example did not want the t p p or t t ip trade deals so perhaps that was more likely for it rather than some foreign some guy who lives thousands of miles away whether it was in a cave or a bin laden or moscow for putin you know it's always some foreigner way over there that has some sort of mystical control over american population but here moody's agrees with us that it could possibly be the wealth and income gap that is more important just confusing because in aggregate the numbers look better than you know they look like average wages are going in the wealth effect of rising stock market causing the market for jets to trend higher in even the market for use jets is trending higher but if you dig into the numbers you see that there is whining was an income gap so the averages might be going higher but that's just

a meaning like there's a huge concentration of wealth in the top one percent or top one tenth of one percent and it's making the average is mislead the pundits on the mainstream the averages are going up averages median is going down so that half the population is earning less and less so i mean as i want to look for of what joran you know half the population is actually earning less yeah yeah so the median going down and then this causes this wealth and income gap which leads to all kinds of problems that we've talked about and they go on to say why they are thinking moody's is considering a downgrade and basically they're putting the u.s. on watch to be downgraded so they said that in short the moody's analysts wrote the deficit is likely to serve as inequality increases the need for more social spending to support lower income households even as tax cuts that benefit the wealthy reduce revenue. meanwhile fiscal consolidation efforts that attempt to

reduce the burden of entitlement spending by hiking payroll taxes or cutting benefits would ultimately exacerbate inequality asked for inequality moody's thinks it's already problem so deepening it would be serious right so i mean downgrading the debt now i think movies are one of the rating agencies downgraded american treasury debt already from aaa today double a double a plus plus i think that was maybe just briefly and then they upgraded it again so they've been flirting with this idea for a while they absolutely should downgrade the debt because the debt is still skyrocketing the trump administration has spent heavily the debt is over i think twenty one trillion and you have now the interest on the debt becoming the second graders budgetary line item right after the military defense spending if i looked at my figures recently we're going to talk about that in the next episode actually we're going to go over all the data about the deficit debt and all that sort of so

this is you know this is beginning to will smell bad because you've got a population that's meyer in debt and a lots of other social problems and there's no way to pay for the stuff this theory of trickle down that can be paid off by tax cuts that encourage rising g.d.p. and therefore a bigger tax base that hasn't really ever worked in the thirty years that it was first proposed and you know it's not going to work ever well a lot of people in america will say if you look in the mainstream media they'll say well you know all these social justice warriors and all of these social democrats these people who like bernie sanders you know the fact is they're commies and they should you know we should get rid of them from the political space because inequality is not something to object to because you can't begrudge somebody who's a multi-billionaire from having their billions but if the system is rigged to create that situation in here there's actual economic consequences. we already pay

something like six hundred billion dollars a year and just on interest on our debt as a nation and here they're suggesting that it's actually going to rise because of this wealth and income gap but finally i want to say you know jared cushion or son in law of the president of the united states i want to show you one way that the wealthy can get wealthier wealthier based on the legal system that they own the legislative system that they owe own in particular gerrard whose net worth is nearly three hundred twenty four million dollars appears to have paid almost no income tax from two thousand and nine to two thousand and sixteen the new york times reports the u.s. tax code allows real estate investors like cushion or whose family company cushion or companies has spent billions of dollars on real estate over the past decade to write off depreciation or properties devaluation because of use or wear and tear so he's reported significant depreciation on these assets that he has he's gotten to write that off against millions in income so he pays nothing in income tax unlike

the ordinary joe bag of donuts or. you know yet the pay a lot in income tax we've paid a lot more than this guy he's now he's now basically paid by our taxes as well by the way but this is the sort of system that you know it's there was actually a carve out in the latest tax legislation just for these property developers to keep their this loophole that basically allows them to avoid any income taxes leona helmsley you know twenty years ago so only the little people pay taxes i mean she's a property developer her husband helmsley property is an empire really and in the property market you have this depreciation. aspect that allows you to avoid paying taxes while having a property that goes up in value. but this is the beauty of property and property speculation and this is how. fortunes in america have typically been based on

property and so but nothing has changed as such to make this any different because the property market is the number one source of revenue i would say roughly speaking for the banking sector so the banking sector has the strongest lobbyist in washington whether it's in the u.s. or the u.k. lending into the property market is their number one source of revenue and they use a control the legislative branch so until you get bankers out of the legislative branch that is to say until you get bankers stopping making laws for themselves you know every time they get caught breaking the law they write a new law and that makes what was illegal suddenly legal as you saw with the s. and l. crisis of the eighty's they made a legal through passing laws and then we had a two thousand and eight crisis that was the same repeat of s. and l. crisis but the difference being that this time it was legal i want to point out as well that here in report in two thousand and sixteen we had francine mccann on to

say why would trump try to hide his tax returns and this is exactly it because the mainstream media she said would have focused on the fact that he had reported massive losses and they were going to he's not a billionaire but in fact what the truth is what price report covers is that this is how they they get to report massive losses they get to look like losers on their i.r.s. tax returns in order to stay wealthy that's the way they say wealth you only can become wealthy if you don't pay any taxes like he's done and we covered that in christ report back in two thousand and sixteen where we said trump would show massive losses as well they don't write us off states in for the second half right after this break.

seemed wrong. to me. to shape out just because the adjective and in detroit equals betrayal. when so many find themselves worlds apart. just to look for common ground. ran out of the flow to the first out of the jaws with. the concepts of preparing to perform i had actually prepared myself to die. he had one of those sorry trust me. it was slow and homo stuff her clown.

discontinuity was. good. so getting. what. was it he could with. yes i did make sure. they. call it b.s. get. up. with this manufacture consent to stick to public will. when the ruling classes to protect themselves. in the final. we can all middle of the room see. the real news is.

welcome back to the cars report i'm max kaiser the time of turn june. is the co-founder of a whole show you know welcome thank you now you are co-founder of osho we're out in las vegas and it's really a security conference could be the first. big security conference in crypto and yet for the very beginning security has been such a huge issue in crypto from the mt gox blow up to every single day things are blowing up people lose their wallets how come security hasn't gotten the attention that it deserves you know so that's a great question i think that what's happened is there's these these periods of

influx in the markets where a whole bunch of new people come in and the people have already been off for the last period of like hacks and like all the alcott stuff and all these other things they kind of learned their lesson they got burned a couple times and they do take siri security more seriously they demand from the wallets of the things that they use that they they go through a greater level of security diligence and process but then when all these newcomers come in they haven't had the experience of being burned and there are fresh to it they're they're thinking about like all the the possibility and so they're entrepreneurs starting new web sites and doing all these things to grow again traction to try to use these technologies and sometimes they leave security the wayside and vegas a lot of people just jump right into the blackjack table they don't really know anything about blackjack but they're excited and they lose everything so you go do the research or so explain as i understand it what. you've created

a kind of standardization for security so the whole show if you do business with a company and that company can say we've been host show scrutinizer we've got the whole show seal of approval you know. and that becomes an industry standard for security is that true is not a fair assessment kind of i mean what we've been helping primarily with small contract audits to begin with and then we start doing things that were like penetration testing and other pieces of the security infrastructure and security hygiene that company needs to undergo but we start out only doing pieces of the security for companies and security needs to be much more comprehensive they need to consider everything right i mean the attack vectors are multiple they can come in and any place i mean every single week there's more hacks morse it does it mean facebook is major security breaches everything is a major suit as anything one hundred percent secure. historically i would say no

basically anything that can be hacked at some point will be now in the case of software it's a problem if the software is hacked and there's problems in the case of crypto currency of course it's money so if you're a user and you hear that everything gets hacked all the time what does the user do when they try to spread their accounts over multiple platforms or how can you mitigate the risk on the side of the user. you could split across multiple platforms i'd say doing a little bit more diligence right now on what's out there and what's available for security use is probably a better avenue than just like you know randomly using a bunch of different services hoping that you know they're they're not you know targets on the dart board by say that we're we're still pretty early on in that the industry as a whole needs to kind of grow and that's that's why we're throwing this conference as to how those conversations and find out like what resources are out there for companies to use what resources have not yet been developed and need to be done in

a collaborative way why is it seemingly more difficult in crypto than let's say their traditional banking space like one of the unique challenges in this space that you're facing one is just the cryptocurrency wallet. and the wall is you know it's held in software it's a never really been the case before that you know a basically a string of characters your private key holds you know the access to all of your your your money and that brings some really unique challenges from like custody to you know theft even if you know exactly who the culprit is that has stolen crypto there's really no guarantee that you could ever recover it so the fundamental base layer that need security is the wallet layer while even. that yes absolutely needs to be secure but there's a lot fragmentation there's a whole bunch of different wallets for different recurrences but the bigger mistakes are usually made by users wallets are technologically complex and the way

they're designed now isn't ideal for the average person where they might lose those private keys where they might not secure them properly and like you know very much like a password or something you know people might get access to them and steal their funds and the it's just way more difficult more burdensome for the user the consumer even the entity to try to protect those assets right in case in the case of crypto once you have the private kids like i stole your wallet and i've got cash and that's it you're not really going to recover it type event that's the challenge there so let me ask you a question about quantum computing because people have suggested that this is a security threat at some point the future and can you talk a little bit about it like what is it how does it relate to crypto and is it a risk we actually have a speaker from nasa that leads the quantum group that's speaking tomorrow that i'm pretty excited to learn more about this very topic. for a big point for example there is a maximum complexity to how much the hashing rate power could be in the sense that

you know the the prefacing can go but the prefacing. string on the resulting hash is a bunch of zeroes so. theoretically the maximum difficulty would be all zeros and if we ever get to a point where we have such a large amount of computing power that we could calculate the hash for that instantaneously then the security backbone that supports big point would just dissipate it would be to be useless and so as you deal to rewrite the chain from any point in history and that's what proof of work is supposed to protect against so i guess that would be one of the threats of you know having just an immense amount of computing power with quantum processing that being said you know you could obviously for quick point input like quantum resistant algorithms in protect against that. ok so what house where are we on the cycle like away is that because they are quantum computer stories are coming out more frequently measuring cubits

or something it's all happening where were we as a threat in the time i mean it's difficult to say but i'd say we're still pretty far away because even if we get the hardware to where needs to be meaning we have quantum computers that are capable of doing what i say like breaking sha sensually it doesn't mean that. we would have the software. ready to employ on those quantum computers very quickly it's a different way of thinking and it's different than all the way like you know our present programming languages are so far abstracted above what's essentially a binary system and so to use called quantum with cubits would be very very different so it was shot to fifty six with secure hashing out of rhythm to get the six there was have been new iterations and some would say better hashing out of the. three for example so what would show off three how much of

a protection do they are were designed offer. i mean if in a sense in the the scope of quantum computing almost nothing. really because. so ok well i am going there you came on the show because i just changed my life. no tell us about the smart contract strace some people argue that you can't do it on. a big court and by somebody i mean undress on top of us what are your thoughts about this i mean the big point i felt he was not constructed to be able to handle contracts or do like you know the centralized processing and if you tried to convolute a way in to you know specifically declined to do it it would be very burdensome on the chain so it's an unrealistic use case that being said i know there are some companies trying to build a layer on top that and i guess it depends on how much of the the processing or

virtual machine happens in our other layer versus what happens a big client and. so i'm not too familiar with what that looks like right now. i'd say you know if things are in try hard enough all right fair enough so low let's just get a feeling for what you would consider being in the whole show and you guys are like the big name in security now so what is the most secure areas that you're looking at that you are focused on in the next year or two years what are you really focusing on. so one is wall it's we are building a wall and it's just like an area that like since the very beginning of the company and even before you've always asked us how do we store securely. you know what should we use how should we do it and we never had a great answer for people and so we decided that basically we would build our own

and so that's definitely one huge piece on our roadmap the other thing is tooling that helps people write smart contracts more securely and develop on protocols more securely so. that's what meadowsweet is all about we open source that and we started building that in january to help us do the security analysis that we need to do because the tooling just didn't exist so where we had to build it all we got a couple of minutes let me speak broadly you know you got a start up owing guys been around fourteen fifteen months and so as an entrepreneur as a startup is this your first startup it's my tenth your tenth and what were the lessons you learned that you brought the whole show they had so many. so of those had many of them failed some of them succeeded one of them was a big one exchange that we sold the crack in. and so i learned

a lot has security lessons there but probably the more valuable lessons i learned from that was just kind of like from a legal regulatory standpoint that like no one really knows what's going on in a lot of these areas is just so new and a lot i'd say the big lesson out of that is learn it yourself go dig and dig into the documents again so you know whether it's legal documents or it's programming code or whatever. learn about it and figure it out and see it because i mean i feel like there's just no better guidance than in going into it and trying to figure out how it all as a start up what's common mistake people in startups make that you can pass along some wisdom here a veteran of over ten startups now with zero show looks like a winner like what to what can a mystic to the millions of people watching and thinking i want to do a startup like what is a couple of the pitfalls they can avoid and there's so many even the ones that i

did well and i there's still so a mistake i made like one of them i didn't do any marketing at all and i realize that's a big problem now how important is stamina and other words when you do. startup you're twenty four seven dealing with stress more or less and you need to eat right exercise and just count your stamina yeah ok i'd say that that's actually a big one is don't burn out like you know you you can be so tempted to work those hundred hundred ten hour weeks after week after week and at some point you are going to burn out though if you do that and if you are now it's just way more damaging overall than if you had just cut back a little bit and maybe you didn't meet that deadline maybe you didn't close that deal at least you can continue operating finally people are familiar with hardware wallets trizone others now there's some concern has been a concern about the middle attacks and it's not a little bit about the risks there and what your thoughts are i mean at the end of

day every single thing that you're storing or crypto on is going to have some sort of potential exploits or vulnerabilities and hardware waltzer no different i think that a better approach than just keeping your capital on a single hardware device or only accessible by one is to use a multi signature approach where you split it up and in that instance it becomes less important whether or not that one device has some sort of very limited vulnerability because it's one of many fair enough you know some cohen thanks for being on the kaiser report thank you that's going to do it for this edition of because a report was made mascaras are and stacy ever want to thank our guests you know some co-founder of osho and founder of this fantastic event social con in vegas if you want to catch us on twitter it's kaiser report the next time i yell.

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