Transcript of the above video: 

As the title of this video suggests, we are discussing the BIS. What is this? Well I had another channel where I would talk about these issues kind of off away from this channel, because they didn't really jive with one another at the time. Developments are changing and I am going to be talking about some of these developments more and more on this channel because it is becoming increasingly pertinent especially for example to ex-pats in Thailand, to Thais who do business internationally, a lot going on here. 

I thought of making this video after reading a recent article from Forbes, that is forbes.com, the article is titled: Cross-border CBDC Focused Project MBridge Moves Forward. A couple of things here. I want to sort of, as Wikipedia puts it, supply some disambiguation here between CBDC and what has also been conflated with CBDC, Central Bank Digital Currency which is being called here in the Thai vernacular this "Digital Wallet". What I am talking about here is the difference between a trade settlement currency, which in my opinion could come to totally replace the sovereign debt markets that we have come to be used to lo these roughly 100 years that we have been dealing with both the Bretton Woods, what I would call Bretton Woods One and Bretton Woods Two, so Bretton Woods One being the actual agreement they made toward the end of World War II wherein the US Dollar became the world's reserve currency but then the US Dollar was redeemable back to the other currencies pegged to it, the Dollar was redeemable in gold. And we saw that redemption occur when de Gaulle sent an entire, well he sent a couple of battleships over to New York to repatriate their gold during the Vietnam War - which ironically we Americans followed the French into in less than a brilliant fit of pique - but basically he saw that we were spending more than we were producing effectively; he saw the deficits that were being created and he said "yeah I want to repatriate our gold." At that point, Nixon temporarily closed the gold window and then did a deal that I would call for example, and folks like a guy named Zoltan Pozsar out there have called Bretton Woods Two which was effectively what we call the Petra Dollar arrangement which according to many sources out there supposedly and depending on how you look at it, but yes it effectively ended. It was a 50-year arrangement that apparently ended within roughly the past 10 days from the time of the filming of this video. So we went through Bretton Woods One, Bretton Woods Two and now we are sort of at the end of that and arguably we are in, Zoltan Pozsar called it Bretton Woods Three, I would simply call it we are moving into really a completely different system in many ways. It will have some similarities but for example I am not convinced sovereign debt is going to continue to exist in the same way it has up to this point and the reason for that is mBridge itself, but let me get into it. Quoting directly: "For more than three years, the Bank of International Settlements (BIS)", and let's do some background: the Bank of (or for) International Settlements was created as a by-product if you will of the Dawes plan and the Young plan which were reparation schemes devised after World War I in the so-called interwar period, whereby those schemes were designed to pay reparations from Germany to the Entente Powers for the damage caused by World War I. And they created this thing called the Bank for International Settlements which basically acted as a clearinghouse; it sort of became an Entrepôt if you will for gold transfers. That's BIS's mandate; that's what people really fail to understand about the Bank for International Settlements. For those who want further insight into that, I strongly urge you go check out a book called the Tower of Basel, it is very insightful as to the history of the bank including kind of some interesting narrative story about some of the former Bank Heads, what they had to go through during some of the wars that they had to deal with as the bank has existed. But understand, at the end of the day, BIS's function is not Commercial Banking, it is not even really like Central Banking, it doesn't exactly lend money or anything. What it does is it moves gold around; it acts as a gold broker. That's a big deal. Also understand, it has a proven track record of having done this during Wars and people can get upset and I understand the upset that people can get about things like during Germany's time during the Second World War, they were moving gold around and it looks like they stole that from folks that they had imprisoned, placed in camps and things, again not to go too deep into that, but it was the byproduct of some pretty bad acting if you will on the part of the government at the time in Germany.

That said, BIS continued to deal with it; BIS continued to act for lack of a better term as an honest broker purely for the facilitation of gold transfers. Now more or less, and you can take a moral high ground on these things, but understand at the end of the day there is at least something to be said for the notion of an honest broker who just moves the capital around and going into this era of let's say at best, ‘trust but verify’, but perhaps probably more likely nobody trusts anybody maybe in the international economic arena more and more as this multi-polarity and the stratification of these different regions and states goes on. Honestly it does seem to call for something akin to an honest broker at least in terms of gold transfers. And remember, gold became a tier one asset within roughly the past couple of years and as a result we have been seeing major changes and tectonic shifts with regards to both sovereign debt issues as well as the rise of things like BRICS in the BRICS countries and the attempt to create a different more broadly based system of movement of international capital. Quoting again: "For more than 3 years, the Bank of International Settlements (BIS) and the Central Banks of China, Hong Kong, Thailand, and the United Arab Emirates (UAE) have been working on a cross-border Central Bank Digital Currency (CBDC) project known as mBridge. In a nutshell, the project aims to improve efficiency, speed and transparency in cross-border payments." You know, when I read that line I thought of the line from Marshall McLuhan a Canadian communication theorist who said "the medium is the message". In a lot of this talk about so-called de-dollarization, and let me be clear I'm not a Chicken Little who thinks that that is just going to happen overnight, I think it is going to be more gradual than people understand, although it will have rather dramatic impacts on especially those who are primarily operating on a dollar basis. Leaving that aside, I don't know the full ramifications of that I can't predict the future, but bringing up Marshall McLuhan, I think what people are failing to understand and the notion that "the medium is the message" message I think that's the point with mBridge. I've been seeing a lot of people saying "mBridge is a Chinese initiative!" Well it's a Bank for International Settlements' initiative. They talked about this some years back when they were talking about Operation Icebreaker, then the IMF came out with their Unicoin. Now BRICS has come out with their Unit. Basically what mBridge is it's the platform, it is the medium. The message if you will are the currencies or the currency units moving across it. The medium is the platform and I don't think people are fully comprehending that. Quoting further: "A key part of the rationale behind mBridge is the observation that traditional correspondent banking is often slow, expensive and complex." Although they didn't have any problem with it, told us it was insanely efficient lo these decades that have gone by that that has been our primary modus operandi. I find that rather interesting! Quoting further: "The project aims to solve these problems with its purpose-developed permissioned distributed ledger technology (DLT) called the mBridge ledger, or mBL, that supports instant peer-to-peer and atomic cross-border payments and FX transactions using wholesale CBDCs." That term "wholesale CBDC" is the big differentiator there between what we have been calling the Digital Wallet here which I have a huge problems with. I do not like the idea of CBDC, so-called digital money at a retail level. Cash still needs to exist; we still need to have privacy in terms of our personal individual financial transactions. Now that said, as a trade currency, a CBDC is quite interesting. Because effectively it looks to me like rather than using sovereign debt and bonds to sort of act as reserves in this new system, instead it's just going to be based purely on trade and commodities; it's what do you trade? can you settle for it? and then it's my understanding 40% of this mBridge thing or I should say maybe that's not correct, 40% of the BRICS unit which will be fungible on the mBridge platform is going to be gold backed or at least that's what they are saying right now. Well that would make sense and it would be in line with policy changes within the BIS making gold yet again a tier one asset, in my opinion it always was, but officially making it yet again a tier one asset. Then I have also seen people saying "oh BIS is just latching on, this is a Chinese initiative". Look at the end of the day, the Chinese Digital Yuan, their renminbi, their currency, one, it's not fully floating, they have a ton of manipulative control over it and on top of that, it's a CBDC and it is full surveillance. I mean they have social credit scores up there. Other jurisdictions don't want that and quite honestly, I doubt they want to hang on to tons and tons of Digital Yuan. What they probably would like are things like oil and gold which the Shanghai Gold Exchange in conglomeration with Russia, in conglomeration with this mBridge platform, will allow countries for example down here in Southeast Asia, Southern Asia, places like India, even Africa and South America which once were sort of at a disadvantage vis à vis the Swift system, are now going to have, will presumably may have more, for lack of a better term, equality when doing business on an international basis. They will be able to have fair settlement and that is what seems to be the primary concern here is a mechanism of quick, efficient and fair settlements of value-for-value transactions and that is apparently what seems to be the goal here. Now again understand, and this mBridge platform involves primarily Thailand, Hong Kong and the United Arab Emirates. As I have discussed in other videos, I view these as the three nodes between the maritime powers, the non-"World Island Powers", the non-Eurasian Powers, "World Island" to use a term borrowed from Halford Mackinder; again these nodes will sort of hook into that. So I think as time goes on, the currencies associated with those three nations, with those three jurisdictions I should say, will probably become increasingly in use as regional currencies. So things like the Hong Kong dollar, the Thai Baht and the Emirati, what it is they use, the Dinar over there, those currencies I think will start to see more regional importance as economic actors are trying to plug in if you will to the economic system of the increasingly industrializing Eurasian land mass.

How exactly this plays out and what exactly this looks like remains to be seen but what's interesting to me is that I think this entire system could effectively replace the current infrastructure we have in place in terms of sovereign debt which is then, you either receive receipts back in terms of the interest on sovereign debt in currency and then you reinvest it whatever, but long story short, this reserve banking system that we have been operating under to this point, I think there's a good chance that a lot of the fundamentals of that system could be replaced by what they are calling a CBDC but what in my opinion is more accurately described as a trade currency - in this case multi-currency, trade currency platform - in the form of the new mBridge.