allowed because up until one thousand nine hundred two they were illegal to buy back your own chairs 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 the 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 of 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 ansa capitalism that sounds

more like some 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 the actual formal rules and laws but just the way it's a son of us to work as a arena 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 on 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 determine 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 poured 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 they don't need to it's more like a soviet sort of system where there's 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 there's no price discovery so you end up with fake prices and fake prices beget fake news comes out of fake prices fake news you want to get rid of fake news restore 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 that isn't this headline also from the m.b.e. are looking at how the role of zero percent interest rates has actually reduced competition reduced productivity in the economy and it's the same issue with the share buybacks there. looking to there pointing to a number of the minimum wage of course is going to reduce perhaps wages of people making twenty five dollars now this company's going to 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 when 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 u.s. 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 on the production side of the economy and this is another problem with wealth and income gap is that 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 is the keynesians like the paul krugman and nouriel roubini and jerome powell or janet yellen or ben bernanke who believe that the way to manage in the. amee 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 fear money the same way fog off farmers in france forced ducks to eat grain until their livers aren't extended and then they're harvested for their livers americans are being armistead by the health system for their own 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 a growth in the economy because it encourages companies to borrow and invest but 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 in long term interest rates tends to make market structure less 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 could basically rig the perception of it by rigging their earnings per share. there 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 claims to his orthodoxy of central bank religion 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 don't go away.

since the soviet system collapsed and it's hard not to see developments in the western world in a similar law it's all we witnessing the final act of the cold war and if so what comes next. to. me today. that me or now with.

the. i see let him make. me. must lead people by is no good keep the slow you or me you are the focus on the stuff you still. want. to see in the film was not budgeted for the good movie didn't. really.

change. the law. there's incontrovertibly evidence that we're being visited and frankly everyone in very high ranking classified projects knows this the public hasn't been told because they've been wanting to keep the secret for reasons of technology and the macroeconomic petrodollar system. welcome back to the kaiser report imax guys are time out which are now 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 download you must download it right now simon your look like you're stressed out down there in cancun mexico. yes it's pretty it's pretty painful being in but it's been a great conference talking about this a touching roundtable of course and another fantastic conference bruce fast and shooting the lights out as usual now simon we were talking about the latest on because i 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 on my for well investment day. early rounds with crack and. finish a shapeshifter many of the. really we're looking at two said small can now be institutional side to staff and they starting to take off one of the things i

call from this conference is speaking 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 their i won't chain and copyright. but now they're really doing a u. turn and building for bitcoin as they want to get involved in munching their encrypted car and the exchanges there and 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

around in the multi-billions which i guess you guys are involved with and they also are now. a one hundred million dollars purchase of a futures training 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 do leverage but there was there with the same same time acquiring critics affinities been through the rigorous process of getting regulated by the financial conduct in the u.k. and the interesting thing to observe this is a u.s. company that is actually normal our way the u.s. to engage in the futures market because that seems to be you know a lot of friction in the u.s. the million men around this industry and my personal perspective on that is during this malkuth we have seen billions and billions all you know even accounts in

trading within the current time all kit 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 credit capitalism in the launch there and institutional christer exchanges annoyance i guess what they have probably the great. but at the same time i still believe in that county 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 own 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 markets are going to be going to incredibly well yes fascinating point there to. crack as a u.s. company but u.s. customers can use it because it appears as though there's a regulatory turf war not to 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 caps. should regulate us who work in the interests of business interests and corporations rather than the greater good what what i'm hearing is a description of that coming to the fore in an but as you point out that's not the way because it was designed and so far because the big coin black hole as i describe it has swallowed 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 three 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 mine as the great british pound currency they have to my county 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 amendment entrenched interest and now they're coming back with a second wave of looking to become a bit of a change i hate to this not too little too late because of you know the bank of

england trying to correct exercise their influence of the island. you know they are an independent parliament they do have their own minds around and the market has moved on a lot since twenty being twenty fourteen days and we'll do what we can to support the industry and i hope. maybe secam prisoner and nice. g.d.p. stable coin as a combat and then use that 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 crypt can 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 for 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 series between bar with and then the and they see massive suppose it and things like stable coins like for example it's had there and various other stable coins have been in the dollars behind them and the banks happy to compete so that i suppose that the challenge is is the launch of a clearing bank. then the content directly into central banking all the ones that are trying to hold onto that position of power and exercising their influence over some of the small in each bank that want to support the industry and therefore 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 simple and then looking and you know many of these banks operate on a full reserve basis whether it's simply you know receiving interest from the pulpit 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 collateral table coins. and you know whether the central bank can actually whether we can create a competing financial system with some of the smaller nice banks my fair is the central bank and call it how i will certainly look to do everything they can to. prevent a small to 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 of if i

forget congratulations you know i was looking at the back to the future website i say of guys have put together. something like six hundred fifty million dollars worth the details when i think about they names they 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 a centrally 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 is

a very interesting part of the ecosystem hong kong does have some of the largest companies encrypt the hong kong is very much you know. they want to keep saying they're quiet and just get on with business. and there is a very different beast however hong kong and china are very different different economies. we were actually there in shanghai during the time when. they decided to shut down the 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 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 the moment from government to try and use changes the 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 timeframe 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 again theoretically if you ation where the central bank that's not using coyness reserves and making a back on the industry becoming you know quite and it and they're going to be the main beneficiary and then it's going to be again that you asian in a game of chicken where the last one to adopt it will be the one to have the most

entrenched interests which are going to aren't like us in america g.d.p. and great in a new year a band simon dixon thanks for coming on the kaiser report thanks for having me all right and that's going to do it for this edition of the kaiser report was made max kaiser and stacy herbert like to thank our guests index of back to the future check out their website download the wallet or even to buy simon's book back to the future that set the stage for this all revolution in my view and if you want to catch us on twitter it's kaiser report until next time i. see the blue of them so much. and good to those who.

much of those who heard and supported you. would hope. that it. really. showed you the snooper you believe this is true because it's a good. muslim also and this is also to do with bloomberg or good girls. don't go to shows a lot but to distribute to show you stories should go. from start to. until the two needed so it would be the little one wished they'd say look it is it's. just testing understands dish mutant to mash dog. destructive president and please introduce my students.

as we have produced a toast listening to snippets on little new of those of us the girls are with you for your support just to your station shouldn't be you should cook door for one who is doing business. tough and handling of the entire system accounts the way you both assume because ballack itself movie theater i. was in this way got to dog it so hard luck the thief in the other disappeared this moment the look of the hand they cower and end up in the start then if. this is the only thing that we do is music because everybody fights in his way. on the floor you can feel the fee is worthless woody allen the whole movie about

a lot of the. what i think is this is the fun that is accompanied. yes to get the government to be defeated. it is surprising that the prime minister's nor even. the results of. treason may as criticized for failing to even appear and parliament as a deliberate yet another crushing bragg's a two feet on britain's prime minister. and the p.c.c. reproducer.