productivity growth and things like that. but especially the way that chuck schumer and bernie sanders are dealing with this particular issue so chuck schumer and bernie sanders call for restriction corporate share buybacks they remember when you were on wall street was just when share buybacks were allowed because up until one thousand nine hundred two they were illegal to buy back your own shares and then in one thousand nine hundred two the f.c.c. safe harbor rule ten b. eighteen overturned that so they allowed basically share buybacks and it has gone crazy since hundreds of trillions of dollars has been bought back so last year more than one trillion buybacks were announced by large companies after corporate tax cut pushed through washington late twenty seventeen left companies with a lot of extra cash to spend but instead of significantly raising worker pay or investing in equipment companies mostly use the cash to buy back their stock and some large companies are buying back billions of dollars of shares while announcing

layoffs and factory and store closings the senators wrote in a new york times opinion piece you know they want to have trillion dollars in tax cuts last year all these big corporations and primarily they used it to either give them shareholders dividends or share buybacks which especially benefited the stock the executives at these companies because they get stock options that they get to print themselves free of money but in particular chuck schumer and bernie sanders are proposing legislation that would prevent companies from buying back their own shares unless they first pay workers at least fifteen dollars an hour and offer paid off time and health benefits. right so stock buybacks are anti free market capitalism right because normally companies that go into a recession and they're not equipped to handle the recession they go out of business it's called creative destruction and new companies arise and that's called capitalism it's dynamic it creates job opportunities and has organic growth if

companies are allowed to buy back their own stock particularly with money they're borrowing from the federal reserve bank at zero percent interest then they can weather a downturn by simply goosing their earnings and rewarding executives to fail so it's a way to reward executives to fail and that's totally anti-capitalism that sounds more like some than communist backwater and yet it has gone on since the early one nine hundred eighty s. as part of the reagan factor deregulatory the pock that we're still living through the tyranny of that now as far as bernie and his buddy down there in the government in washington d.c. . that idea of tying minimum wage to stock buyback is as they say in britain a dog's dinner it's a it's a mash up of a lot of different things into incoherent slop just tell you what bernie and schumer drop the idea of wealth redistribution and socialism and then just

figure out that free market capitalism and opportunity access to opportunity comes back to hard money which we went off in one nine hundred seventy one and that's really the beginning of the downturn well it's also about incentives and incentives have been game theory and played very well on big queen so the incentive for all people is to cheat and steal and take and get as much as possible get as much as money as possible but with the consensus mechanism on big queen for example you can it wants you to try to fifty one percent attack and still it wants. you to do that to make it stronger here in america we have a system whereby this system is controlled by so many oligarchs that they get to cheat and take from the rest you have to find a way to incentivize these executives out of their own personal greed to make more money and become wealthier and become more prosperous and get mansions and yachts

and all that sort of stuff that they can't cheat right now for example with the share buybacks these guys are able to buy back their own shares with that so there should be for example something whereby those executives the c.e.o. is none of the c. class they can't sell any shares during share buybacks so that should be one way for example to basically reduce them rigging and defrauding the system they're naturally greedy they naturally want more than all of their neighbors and they're naturally going to rig it in their favor so you have to find incentives to prevent them from doing that i mean there's two points our number one competition drives innovation and drives growth that drives the american system of entrepreneurial ism and you can also call that greed but if the system is tightly regulated and with just the incentive mechanisms forget about that for a competitive people to try to create innovation that's all you really need second

of all and you know to the second point there this idea of mixing and matching and trying to create a utopian vision administered by some central potentate in the centralized democratic party of course is a recipe for disaster. and then i'll go quickly to this next headline and just briefly say this is from march twenty eight hundred corporate stock buybacks are booming thanks to the republican tax cuts republican said their tax bill will go to workers and said it is going to wall street and they point to a new york university researchers. gutierrez and thomas philip and who recently in a working paper for the national bureau of economic research exam a possible reasons for a lower than. expected corporate investments in the united states since the early two thousand they determined that decreased competition tightened corporate governance and short term pressures are in play in other words companies don't face enough competition to force them to actually invest in improving their businesses and they're increasingly paying attention to what's happening in the boardroom and pressure from shareholders to make fast money and we have

a follow up on that with the m b e r but in terms of the we cover this in the kaiser port over the past ten years that there are fewer and fewer companies and in fact when they engage in share buybacks are fewer and fewer shares available for the public so you have reduced competition you see that all across america a ca obamacare has really exposed the health care sector is that there is no competition whatsoever and you're forced to participate in it you're forced to participate in the stock market through your four zero one ks and things like that so you know with fewer and fewer competition there is a few you know these aren't they're basically state backed industries they get to control the entire internet all the ad revenue online goes to either facebook or google well look with no competition as price discovery so you end up with say prices in fixed prices beget fake news comes out of fake prices fake news you want to get rid of fake news we store competition in the marketplace to

get real prices and then you'll get real news well the famous price of all is the price of money and who says that the u.s. federal reserve bank and that isn't this headline also from the m.b.e. are looking at how the role is productivity in the economy and it's the same issue with the share buybacks they're looking to they're pointing to a number of the minimum wage of course is going to reduce perhaps wages of people making twenty five dollars now those companies and you say what we can do share buybacks and reduce their salary to fifteen and we still meet chuck schumer and bernie sanders like parameters for. and we can do this so here's a headline from wall street hoops low interest rates factor and slowdown of economic and productivity growth m b e r this is something we've seen since the financial crisis all around us the concentration and consolidation of corporate market power in entire industries largely by a mergers and acquisitions made possible by abundantly available funding at ultra

low interest rates for the largest companies and the concurrent slow growth economy dogged by per peck suddenly slow productivity growth this is occurred across the board for years in developed markets with zero or negative interest rate policies such as the us and and euro zone in japan but now the national bureau of economic research was also calls out the official us recession's released a study that gives an additional major reason for how long term interest rates lead to a concentration of corporate power that then drags down productivity growth and growth these powerful. entities become even more powerful and even wealthier and they get to basically own the fed essentially they get to speak to drone pal they get to have lunch with him and beg him to please reduce interest rates even lower because that enables them to keep out competition because they in particular get access to the zero percent interest rates their competitor has to pay the upstart has to pay

two or three or four or five percent which is a huge disadvantage when trying to compete against the incumbent right and the term aggregate demand is what's used by the keynesians like the paul krugman the nouriel roubini and jerome powell or janet yellen or ben bernanke who believe that the way to manage an economy is to focus on aggregate demand instead of competition there and see competitive they don't like competition they think it's causes quote losers instead they focus on aggregate demand by printing trillions and trillions and trillions of fake fia money the same way fog off farmers in france forced ducks to eat. grain until their livers are extended and then they're harvested for their livers americans are being harvested by the health system for their health their bad livers their bad health are being harvested by the obamacare american health industry after the. valar of forest aggregate keynesian nonsense in the form of money trillions so the orthodox thinking that would be found in the

economist who are hired by the federal reserve bank find in the literature on paper low interest rates should encourage more what they found by looking at actual model the structures of economies structures of markets in particular and looking at the models of what actually happens they found that a reduction competitive within destry the reason is that while both the leader and follower within an industry increase their investment in response to a reduction in interest rates the increase in investment is always stronger for the leader as a result the gap between the leader and follower increases as interest rates decline making industry less competitive and more concentrated and thus the productivity growth slows that means the economy the future slows they can

basically rig the perception of it by rigging their earnings per share by buying back shares to make it look like they're growing but in fact it's all evaporating the running discussion on this with danny blanchflower for years he clings to his orthodoxy of central bank religion of money printing and it just doesn't work sorry danny but you're wrong all right so let's take a break and when we come back much more coming your way so don't go away.

tough and the flu virus to my fellow swain are both excessive because our ballot itself mukti of our. plans in this way got to dog so hard not to think of the mother disappeared this moment to look like a coward and i don't mean to start then if. this is the only thing that we do is music because everybody fights a useful way to. the floor lookin for the fee all sound is worthless woody allen and all the evil adults of the day. but i think it is this is the fans that is something.

welcome back to the kaiser report imax keyser time now to return to our conversation with simon dixon of banks of the future dot com download their new wallet the banks of the future wall is available for down or you must download it right now simon you look like they're stressed out down there in cancun mexico. yeah it's pretty it's pretty painful being in but it's been

a great comfort in talking about this a touching roundtable of course and another fantastic conference bruce fans and showing the lights out as usual now simon we were talking about the latest on because so what sort of developments are you looking for as an investor in this space going forward i'm still interested in anything that supports the adoption of the. coin and the exchanges have traditionally turned out to be almost all investment day. early rounds with crack and. finance a shapeshifter many of the. really we're looking at to said small can now be institutional so i just think to many as the traditional largest institutional player is that they see bitcoin as the any thing that they can actually work with at the moment which is

a real shift from what we've seen you know recently to traditional institutions trying to loss and ridicule bitcoin then they tried to replace it with. chain and copyright. but now they're really doing a u. turn and building for queen as they want to get involved in munching their encrypt the currency exchanges their iron lightning channels for our merchant adoption and their income the nation to allow people to actually own board into the next wave of institutional product yeah i mentioned crack on their holy mackerel yeah we both invested in crack and back at the beginning of this company. right it was. you know millions of dollars valuation they've announced funding round in the multi-billions which i guess you guys are involved with and they also announced a one hundred million dollars purchase of a futures trading firm. why is this good and what does

a futures trading platform deliver to the space simon well crack and is able to now engage in by all and futures market which allows people to be leveraged but there was there with the same same time acquiring critics. through the rigorous process of getting regulated by the financial conduct in the u.k. and the interesting thing to observe this is to engage in the futures market because that seems to be my personal perspective on that is during this time all we have seen billions and billions all you know even the count the trading within the crypt i malke it and i believe that that is the financial institutions misconceptions issue himself on bitcoin and then actually trying to gain from an openness to power and use the normal crazy capitalism in all it's a little unfair and institutional christer exchanges annoyance i guess what they have probably the grain. but at the same time i still believe in the accounts all

the people actually storing bitcoin the way it was designed to be on their own hall why will it benefiting from the personal freedom of being able to spend your money store your own money without some of these knowledge institutions that would have been but the two are going to compete and i think malkuth are going to be even do incredibly well yes fascinating point there to. crack as a u.s. company but u.s. customers can't use it because it appears as though there's a regulatory turf war not have necessarily to protect customers but rather to carve out some space for some competition so the regulators have a reputation of being what are what are known as captured regulators who work in the entrust of business and trust and corporations rather than the greater good what what i'm hearing is a description of that coming to the fore and i'm black hole as i describe it as. followed up all the bad actors and bad regulators and just continues to fight back

against the banks stirrers as we call them now let me continue you are based in the isle of man there are the headlines of the new regulatory regime around crypto tell us about it. well i don't mind has always been trying to pull the crypto industry they were the world's first government max you remember way back and i think twenty thirteen twenty fourteen when we went to the first cover conference that was organized by a government that were looking to support the crypto industry the challenge was at the time. the launch planks just didn't want to support the industry that's monique's frank was happy to support the industry but then. i love mind share as the great british pound currency they have the money they print their i know. but they clear through the bank of england and the bank of england and the u.k. banking system have been particularly unsupportive of the crypto industry trying to

keep hold of entrenched monopolies and get rid of any disruption in the central banking so i love mine have in the meantime been looking at craig saying regulatory structures and trying to support the industry independent of. g.d.p. caring and the bank of england entrenched interest and now they're coming back with a second wave of looking to become a bit of a chain hub i hate so this not too little too late because as you know the bank of england trying to correct exercise their employment they have the island. you know they are an independent parliament they do have their own minds around and the market has moved on the last twenty being twenty fourth the day and we'll do what we can to support the industry and i hope. maybe they can prisoner and nice and then. g.d.p.

stable coin as a combat and then used to coin maybe as some kind of collateral in a big way and then the eighty five thousand of off on the line and i think it will be a great middle experiment in seeing if chris kind of actually be used. if you actually destroy a. bank in court. right now what about the legacy banking system this there are still needs for on ramps and off ramps from fat banks not necessarily helping out there often refusing all crypto related customers do you see that changing or a wall new competitor has put them out of business simon. i see a big desire small in each bank to actually get involved in this industry you know we've seen that there are banks out there that actually do banking the way we thought it was meant to be done you know where they are actually and meter stories between bar with and then the and they see massive suppose it and things like stable coins like for example tabs are and various other stable coins have been in

the dollars behind them and the banks happy to compete for those deposit the challenges is the largest clearing bank. then the content directly into central banking all the ones that are trying to hold onto that position of power and then exercising their influence over some of the small in each bank that want to support the industry and that's for you know at the central banking level is where we're seeing the challenges. you know the small in each bank the looking to get into this industry looking to support it and then looking and you know many of these banks operate on a full reserve basis whether simply you know receiving interest from the cause it and you know doing banking the way we actually thought it was it was going to be able be really interesting to see if the combination of bitcoin as collateral stable coin. and you know whether central banks can actually whether we can

create a competing financial system with some of the smaller nice banks my fear is the central bank can call it how i will certainly look to do everything they can to. prevent a small can be a display we have competition competing jurisdiction and one country. you know cost how light behaves. is competing with another island that wants to do things in a different way but we're just saying not friction in the time by the way before i forget congratulations you know i was looking at the back to the future website i see of guys have put together. something like six hundred fifty million dollars worth the details when i think about they names that get mentioned most often in this space and terror digital currency group. you know bank of the future is really the leader the pine air one of the biggest if not the biggest and it's all been done really as a bit coin maximalist someone who wrote the book bank to the future set the stage

for the soul phenomenon to take place so on that note finally now simon you were in hong kong for a while during the time that china was essentially controlling mining and were the biggest investors in i.c.a.o. is another crypto investments what's the mood there now did you get wrecked did the government stop at all what happened. so i still spend a lot of time in hong kong i'm going to be that next month on beacon and a couple of conferences you know china or is a very interesting part of the ecosystem hong kong does host some. they want to keep saying they're quiet and just get on with business trying there is a very different beast. hong kong and china you know early there in shanghai during the time when. they decided to shut down point exchanges and china is really really interested in block chain without coin and using it as a way of exercising controlling more data taking away more previous day and they

want to get rid of any tokens so that they're not traded on exchanges and they just want to get the benefit of what they see as a database so that they can and exercise more important and control over that people and they see a great the moment and i think that will be a great time on from government to try and use the chain as a way of actually. making animal control over that people and kind of so they can fight against it going this counter culture. and the friction on the show will continue and. you know we see that in places like china where. they decided to fight against it in the strongest way we have about twenty seconds care to guess what country might be the first to put bitcoin in the strategic reserve simon. i think it's going to be a small island i think we're going to have a game to reckon with if you ation where the central bank is not using coyness

reserves and making a bet on the industry becoming you know you need to equate and it and they're going to be the main beneficiary and then going to be again every situation in a game of chicken where the last one to it don't they will be the ones that have the most entrenched interests which is the launch of current like you have in america you can read in the new year and simon thanks and thanks for coming on the kaiser apart thanks for having me all right and that's going to do it for this edition of the kaiser in part with may max hazare and stacy harbor i'd like to thank our grand if you want to catch us on twitter it's kaiser report and so next time.

blue to them so. much for those who couldn't support you. but it. will show you this new you believe this is cool because it's a good. muslim also and this is also good you're going to go good girls. don't go to shows a lot but do the same you want to show the story should go. to the top to. the to leave until it was done that is the mr gates. look it is it's. just testing understand just need to mount

a mash told. to stop the president and his control his party comes to. those who have petitions to told the story to snoop on little newell because those are the girls with you for your supporters to your station shouldn't be you should cook door for one who is doing business. i've been saying the numbers mean something they've mattered the us is over twenty trillion dollars in debt more than ten white collar crimes happen each day. eighty five percent of global wealth he longs to be ultra rich eight point six percent market saw thirty percent rise was just because he rose to twenty thousand dollars . china is building a two point one billion dollar

a i industrial plant but don't let the numbers overwhelm. the only numbers you need remember in one one business show you can't afford to miss the one and only boom bust. happened and another one of the highest in one thousand swayer both assume. bandicoot sold more tickets to. the plaza this way got to dog so hard not to think of the mother disappeared this moment there was a plant that i want and i don't mean to start then if. this is the only thing that we do is music because everybody fights his own weight. if you are you can call the fifty pound his bill frist woody allen. will be

available. but i think it is this is the found that is what comes. next again the government must be defeated. it is surprising that the prime minister is ignored even if. the results are. the reason why is criticised for failing to even appear in parliament as it delivers yet another crushing brags it defeats on brits.