Show Notes

Guest Bio: JP Parker & Anouk PInchetti

JP Parker

JP Parker is a recovering futurist with a passion for integration, activation, and acceleration. Serving as an Earth Regenerator, she’s dedicated to fostering prosocial facilitation, seeking transformative solutions for a sustainable and harmonious future.

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Anouk Pinchetti

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Anouk brings a wealth of experience in the IT industry, progressing from desktop support to the role of COO. As a facilitator deeply passionate about sustainability and complex systems, Anouk’s fascination with currency design dates back to the mid-’90s. Currently, he directs his focus towards understanding how emerging technologies will revolutionise resource allocation and coordination methods.

Summary

JP and Anouk delve into the intricacies of the current financial system, shedding light on its inherent flaws. The conversation covers concerns about fiat currencies, the influence wielded by central banks, and the consequences of exponential money creation leading to unsustainable growth on our finite planet. They discuss wealth concentration issues, advocate for ethical currencies, and underscore the importance of community-building and embracing alternative value systems. Anouk provides insightful reflections on intrinsic value, encouraging a shift in societal perspectives on wealth. JP highlights the pivotal role of agreements in determining currency value and explores the transformative potential of digital currencies such as Bitcoin and Ethereum in reshaping economic paradigms. 

“…the richest, and this is from Oxfam, just last month, the richest 1% grab nearly two thirds of all new wealth worth 42 trillion created since 2020, almost twice as much money as the bottom 99 percent of the world’s population during the past decade.”

~ JP Parker

“And we’re seeing the signs everywhere of the natural world collapsing because it cannot bear the weight of an exponential currency system and that misaligns a lot of incentives from top to bottom throughout societies that lead to a lot of externalised costs. And the fact of the matter is, when you’re all living on one planet, there is no external, right?

We’ve globalised everything. We are interconnected across multiple continents, right? The computers we’re speaking on now, no country could have created those alone. We need all the continents to be working together and there is no “you” out there to externalise harm to, so we’ve got a society that’s big enough and complex enough to impact the entire world and we’re destroying the entire world in the process because we’re all trying to turn everything into more dollars because a rainforest isn’t worth anything.”

~ Anouk Pinchetti

Ethical Currency: Navigating Sustainable Growth on a Finite Planet

In this podcast conversation  JP and Anouk discuss various issues with the present financial system, particularly focusing on fiat currencies. Anouk highlights how fiat currencies are loaned into existence, creating a system tied to debt.

The monopoly power of central banks over currency creation gives them immense influence over the economy and government. The exponential growth of money creation based on interest is seen as unsustainable on a finite planet, leading to environmental degradation.

JP adds that when governments print more money, it acts as a hidden tax on everyone, contributing to inflation and potentially leading to economic collapse. They discuss the fear-driven aspects of greed and the challenges posed by the current fiat currency system.

Anouk introduces the concept of Gresham’s Law, stating that bad money drives out good money, drawing parallels to the current situation with fiat currencies.

The conversation delves into the global interconnectedness of societies and the need for alternative ways of measuring and allocating value. They touch upon the hope brought by blockchain and cryptocurrency, not just as replacements for traditional currencies but as tools for educating people on economic principles.

JP emphasises that speculation and greed are outcomes rather than driving forces of the financial construct. Anouk suggests that community building and alternative forms of currency can be vital in reshaping societal values. They reference the history of Monopoly as a game that can be played ethically (Prosperity Game) or unethically (Landlord’s Game), reflecting the choices societies face.

The discussion concludes with the idea that societies need to find a balance between accumulation and distributing public goods more equitably. They express concern about the concentration of wealth and advocate for reassessing value, aligning incentives, and focusing on ethical currency to build a more sustainable and just financial system.

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Transcription

Please note: While we do our best to edit the following information, some finer details of podcast conversations can be lost in transcriptions.

[00:00:16] AKP: Join us at the Riff Bar on the FarOut Show, where JP, Anouk and I discuss ethical currencies, uncovering flaws in the financial system, addressing concerns about fiat currencies, central bank influence, and the repercussions of unsustainable, infinite growth on a finite planet.

[00:00:32] JP: It’s virtually impossible if you’re in survival mode, to be focused on caring for the planet and caring for each other beyond what you can just do while you’re trying to keep a roof over your head and food in your family’s mouth. And it’s really important to know that so it is really on the shoulders of the people who have the capacity to focus on this to do this on behalf of everyone.

[00:00:59] Anouk: The biggest hope that I had for blockchain and cryptocurrency was actually not even that Bitcoin would take over everything, or that time banking would displace the dollar. It was that thousands of people or millions of people would be able to engage with the challenges of our financial system, start educating themselves on economics, start educating themselves on what value actually means, what is actually needed by their communities to actually thrive.

[00:01:48] AKP: Information provided in this episode is for informational purposes only. We do not offer financial, legal, or tax advice. The content represents an exchange of opinions between the podcast host and guests who are not licensed, financial, or registered investment advisors. Trading cryptocurrencies involves significant risk of loss and the host and speakers do not assure any specific outcomes.

[00:02:18] AKP: Welcome to the FarOut Show. JP and Anouk are both dear friends and in our weekly calls are often discussing how we can impact humanity and the planet by creating a form of currency that simply supersedes the one we’re shackled with now. They both have such miraculous and windy paths that have led them to where they are now.

I’m going to ask each of them to explain those briefly, later. So let’s start with what the basic problems are in our current financial system, and then move on to fantasticate about how we can change these by building new incorruptible railroads for how we exchange value. I know it would take days to document the current currency issues, but can you both give me a kind of a bullet point version of the present situation?

[00:03:04] Anouk: There’s a lot wrong with the present situation. If we’re looking at just the financial system as the fiat currencies are currently set up, then we’ve got one currency, one fiat currency in each country that is exchangeable for everything. And rather than being tied to something in the real world, it is loaned into existence.

So every dollar means there is a dollar and a little bit of debt that is owed back to the banks that printed it out of nothing. Um, there’s a, you know, there’s only one bank that’s allowed to do that for each country. So they have a monopoly on that, which is a lot of power and influence over, well, basically control of the entire economy and therefore the government.

As well, right, the golden rule being he who has the gold makes the rules. Well, he who can make the gold up out of thin air because currency is no longer backed by gold makes all the rules and, um, and we’re seeing that play out, but more importantly, since everything is predicated on interest, we have an exponential curve on the amount of money being created and leading to infinite growth on a finite planet.

And we’re seeing the signs everywhere of the natural world collapsing because it cannot bear the weight of an exponential currency system and that misaligns a lot of incentives from top to bottom throughout societies that lead to a lot of externalised costs and the fact of the matter is when you’re all living on one planet, there is no external, right?

We’ve globalised everything. We are interconnected across multiple continents, right? The computers we’re speaking on now, no country could have created those alone. We need all the continents to be working together and there is no “you” out there to externalise harm to, so we’ve got a society that’s big enough and complex enough to impact the entire world and we’re destroying the entire world in the process because we’re all trying to turn everything into more dollars because a rainforest isn’t worth anything.

In our accounting system, pieces of lumber are, and all the things that we don’t capture an account for as value, end up just being sacrificed on the altar of trying to keep up with the interest that’s being printed out of nothing by a for profit driven institution. So, I’ve touched on bunch of things there.

I hope they make sense to people, but I will leave it there to avoid getting too complicated. Um, JP, anything you’d like to add?

[00:06:24] JP: I think that was really comprehensive, my friend. Really comprehensive. I think the only thing I would add is, is just the understanding that when, when governments print more money, that is a hidden tax on everyone, and so we have this, this extraordinary, complication to the problem of fiat currency in the beginning. And, you know, historically, every fiat currency that an empire has had, the people in power could not resist, uh, this capacity to print more money when you want to that inflate that creates inflation.

And ultimately hyperinflation, and that is what collapses the empire itself. So we have this bizarre situation, as I know, because just pointed out where we are now globally interconnected and very intimately, economically. So. when the big printer, which would be, of course, the reserve bank of a particular country, well, it’s identified with this country, but it is, in fact, as it says, it’s its own entity answerable to no one, frankly, when they print, or authorise the printing of however many trillions are desired, that dilutes the value of everyone else’s dollars, or currencies. And the value of everyone’s labour, and it drives the costs of what it costs us to live up and up and up. So just a P. S. a postscript to everything you’ve said, and which is to also understand that these are that fiat systems are really inflationary well, and volatile and and pretty much everything that all the sort of nefarious qualities that are ascribed to new forms of currency, are right.

The current form is rife with them. So, that’s all I wanted to add. Very well spoken.

[00:08:46] Anouk: Beautifully added. I do have one little tidbit I couldn’t help, but it reminded me of it. As soon as you talk about inflation, I’m always reminded of Gresham’s Law. Yes. Which is that bad money will chase good money out of circulation.

So that if a society has gold coins, for instance, and then the government goes, you know, What? These paper receipts are actually a lot easier to print, and we can make more of them easier than we can make gold coins. And we’ll just tell people they’re worth the same. What actually happens, because people trust the gold coins more, if they have gold coins and they have paper receipts, they will use the paper receipts to trade with, and the gold coins will disappear under their mattresses.

That means that if you have Bitcoin and it’s solid, or you have some other really good, stable value token, right? Something that’s real, that it will be hoarded and hidden away while people prefer to use funny money and monopoly currency to trade with each other. And that actually makes it difficult to do what we’re talking about here to bring better money out.

[00:10:17] JP: Agreed. 

[00:10:18] AKP: Then would you say, that speculation and greed are the driving force of our current financial construct?

[00:10:23] JP: I wouldn’t say they’re the driving force. I would say they are the result. They are the outcome of, well, what they drive is the survival focus. Yeah, and you know, so if you, if the value of the money you make keeps falling, of course, you’re going to stick gold in the mattress. Of course, you’re going to buy things now before the price goes up.

It’s so that the whole greed thing is really more driven by fear than anything else. So there’s a couple of fears, fear of not getting any, and then there’s a fear of losing it. If you have it, these are both running people’s programs. And truly, if you are in survival mode, which, I don’t, I don’t, I can’t cite the current statistic because I don’t know it, but it is extremely imbalanced in terms of the number of people who control more than 50 percent of the wealth of the world.

That causes fear on both sides, right? On the have side and on the have not side. And it, it is, it’s virtually impossible if you’re in survival mode to be focused on caring for the planet and caring for each other beyond what you can just do. While you’re trying to keep a roof over your head and food in your family’s mouth, and it’s really important to know that so it is really on the shoulders of the people who have the capacity to focus on this to do this on behalf of everyone.

The theme of this conversation, which is creating ethical currency. Yeah. Well, in fact, because I was like, okay, we got the bad bit . There’s gotta be a feel good at the end, right?

[00:12:12] AKP: Well, I, I’m calling it intentional currency, but I like the way you call it ethical currency.

What is ethical currency then? And is there a way of us creating that in the light of this? Intense sense of overwhelm, especially after the last few years that we’ve experienced but when we’ve seen what these extremely wealthy people in power are able to do and treat us like puppets, how, how is it that we can, we can see a way forward?

[00:12:46] JP: I’ll hand that to you to begin with, Anouk.

[00:12:49] Anouk: Thanks, JP. It’s not easy. We find ourselves at the tail end of this current system where we have come to, let’s just call it the top 1 percent of, of the world’s wealthy owning, 50 percent of everything. And because the exponential nature of the money system has to keep gobbling up all the things that previously weren’t part of the financial system.

You find that, you know, things that used to be free, whether it’s your neighbour’s kids babysitting your kids or, ketchup with your chips or being able to speak to a human being when you call the company up, when you need something, they, they all start costing more money and they, they all start, they’re all being taken away so all these things are, are being co-opted into the economic system. So you find that as this leads to its conclusion, you can’t even compare what a generation ago was like when all the things that we could take for granted a generation ago in terms of community connections, in terms of relationships that we rely on, in terms of people growing their own food and taking care of people around them in their neighbourhood that wasn’t ever mediated through this system, has now been gobbled up and the longer we wait, the more entrenched, all these things are, but as this system is coming to the point of collapse, the hope I see is that it cannot stay the way it is.

It has to change because societies will collapse under the weight of its unsustainability. And societies are collapsing into violence and war in an effort to just maintain the status quo a little bit longer at the moment. And that’s where we have an opportunity now, and we had an opportunity. since 2009 to at least start experimenting with different ways of tracking and measuring value and trying to do things in different ways and setting up alternative systems that don’t have some of the same flaws.

The biggest hope that I had for blockchain and cryptocurrency was actually not even that Bitcoin would take over everything or that time banking would displace the dollar. It was that thousands of people or millions of people would be able to. Engage with the challenges of our financial system, start educating themselves on economics, start educating themselves on what value actually means, what is actually needed by their communities to, to actually thrive.

And work on ways to measure that and to allocate the relevant resources in the right places. And sometimes currencies are the best way to do that, to align different incentives so that everyone within a community is behaving in the best way for everyone else. And sometimes you might want to take money and currencies out of a specific community altogether in an effort to encourage the non-economic incentives to thrive. It actually takes carefully assessing which communities in which situations and when your community is separated from each other, nobody trusts each other because every institution has lied to everybody and every institution has pointed at everybody else at being at fault and we’re more atomised and we’re more isolated.

[00:18:11] Anouk: I think more often than not, the first step is actually community-building. Before this talk started, uh, JP was telling us about a lovely place, the sound of which sounded like the old speakeasies, right. Which is a, which are a, rich tradition of, of community in resistance as an alternate being able to have a place to express alternative points of view and being able to express value in different ways than the predominant culture, and being able to express your views in an alternative way to the predominant narrative, are both equally important parts of revitalising communities. And a way of living together on this planet in the face of the drastic radical changes that are happening right now and that we can see going forward into the future as technologies like AI start disrupting things even more. I hope there’s a little bit of good news in that.

[00:19:25] AKP: What does value mean? That’s one of the things you referred to Anouk, that you think that people need to develop an understanding of. 

[00:19:32] JP: Oh, just a little, a little, a little addition there, Abi.

[00:19:39] Anouk: And I’ll let you go take this one.

[00:19:42] JP: I actually have an answer to that, but I, I want to, um, to touch on, you know, where the good news is, because there is good news and there are good people all over the planet who have been engaged in this query for a long time. And, uh, one of the first ones I want to mention was a famous, very famous guy at the end of the 1800s and I didn’t find out about him until just a year or two ago, you know.  And I found out weirdly, uh, that I’m a Georgist and I didn’t know there was this guy called Henry George. And essentially he, he pointed out how our economic systems could save themselves. He was very, very popular. And, his solution was so rational, many of us have in fact, considered that same, his same approach and he’s been written out of the history books completely.

And in particular, his approach has been written out of economics. So it was a roundabout way, I found out that I was a Georgist because we have a game that is very well known all over the world called Monopoly. And when I was a little girl, I watched people play this game and become extraordinarily mean to each other.

And I couldn’t believe it. And it was like, I like to play with the little, the little metal cars and trains and things, but to actually play the game. I refused. I’m like, no, no, this just makes everybody mean. And if you’ve ever played Monopoly, you realise that the winner of Monopoly wins by collecting all of the wealth to themselves and everyone else is bankrupt.

And that’s how you win that game. So what I discovered was the history of the game and the game was made, by a woman who was a student of Henry George. and she wanted to convey to the world, that you can play the game of money in two different ways. And so she created one game called the Landlord’s Game.

Which is what became Monopoly and she created another game called the Prosperity Game for the Landlord’s Game was just designed to show you what not to do. And the Prosperity Game was designed to show you how to do currency and wealth building ethically, and it really just adds in a consciousness of you cannot accumulate forever until everyone and everything else outside of you is bankrupt.

You can accumulate to a certain point, and then you need to return the public goods to the public. And that was the Prosperity Game, which of course, nobody played. And the Landlord’s Game through a series of questionable activities, let’s just say, became Monopoly and the world has been playing it ever since. And Wall Street is Monopoly and so many other games and what we call gamification today, you know, are Monopoly.

So for me, the hope is, we’ve thought of this before. We’ve been here before. It’s actually not that difficult. We just have to find that point where we, where we go, all right, that’s enough accumulation. Now the rest is turned into public goods. And then we need to sort out a way to equitably distribute those public goods so those don’t wind up in particular hands. And I did find the statistic, which I wanted, which is really pretty shocking, which is that the richest, and this is from Oxfam, just last month, the richest 1% grab nearly two thirds of all new wealth worth 42 trillion created since 2020, almost twice as much money as the bottom 99 percent of the world’s population during the past decade.

The richest 1 percent had captured around half of all new wealth. It cannot continue. So what we have, they call this, the World Economic Forum publishes a thing called Survival of the Richest and that’s, that’s, you know. That’s kind of where empires end up, and that’s what we have to change.

So, to answer your question about value, Abi, because this really became clear to me during the Global Financial Crisis, I had this thought as that was going on, and we had some extremely extremely poor behaviour on the behalf of, you know, on behalf of the, in particular in the United States of, uh, both, the political and the banking fields, and people lost their homes, right?

Left and center. And it was really dire, and no one, no one took responsibility for that. So I remember thinking, wow, wow and it was actually at that time that I, that somebody sent me the original Satoshi Nakamoto paper on Bitcoin and I read it and I understood what its intention was, which I thought was great, but it was way too early and it was an experiment at that time.

But yeah, we, we, the thought that occurred to me was, you know, if all the money in the world disappeared tomorrow would we stop trading with each other? No, of course not. We just find other ways to do it. And there are many, many forms of currency. And what we might want to do is start thinking about those forms of currency, as being real.

And using them, you know, I like to laugh that that, Australia and Italy will have no trouble. Should, you know, the, the, um, the current systems go down for whatever reason, because there are universally acceptable currencies, you know, in Italy, it’s Parmesan. In Australia, it’s a carton, and other countries will have other things, right? That people universally value. So I’ll end with, okay, my own definition of value. And it’s just one because it’s important to understand that there’s value and then there is perceived value. And most of what we talk about when we’re talking about value is a perception of value, which can vary quite dramatically for person to person.

So I will give you mine. And what my definition of value is something that it has meaning and relevance to my life. That’s what what I call value. And that that meaning relevance could be in terms of survival, or it could be in terms of a perception. Okay. Last story and then I’ll be quiet. So, one of the best, demonstrations I ever received of what value, how value, is about meaning. 

I was sitting in a circle and the leader of this circle handed a piece of cement around. It was just a chunk of cement. There was some paint on it. It’s kind of crumbly and she said, you know, just just hold this in your hand and consider what the value of this thing is.

So we pass it around the circle and it’s like, you know, it’s heavy. It’s a piece of cement. Right. She’s like, think about what you would pay for this. And we’re kind of giggling, right? And it comes back to her and she holds it up and she says, Now, what if I told you that this piece of cement was a piece of the Berlin Wall?

Because it is. What just happened to this value, to the value of this piece of cement? That’s perceived value. Okay. Back to you, Abi.

[00:28:21] AKP: Thank you. No, thank you. That, that is fascinating. And I had a feeling you were going to say the Berlin Wall. I don’t know if you already told me the story. I don’t think so, but I had this, I had this sense.

But would you say then, like when you talked about perceived value, the first thing that popped into my mind was our entire fiat currency system, like the cash we use every day because it has a perceived or an agreed value, but it doesn’t have, uh, it’s not backed up by an actual asset like it used to be, you know, like with gold, uh, when that was decoupled by Nixon in 1971. 

And I don’t think many people, I certainly never did until I started talking to you guys, I never realised that we exchange value every day in the form of cash, we buy this for that and that for this, that cash is, is, is worth nothing other than what we agree that it has, other than the value we agree that it has.

[00:29:18] JP: That’s what currency is. It’s that, that it’s that agreement. And, you know, so a lot of really, fine thinkers in the space of how can we create ethical, intentional currencies have also come to that conclusion. You know, it’s really about the circulation of our agreements. And this is where we kind of move into the whole world of digital currency, and the evolution, you know, from a truly scarce resource, which is Bitcoin to a resource that circulates agreements, which is Ethereum.

And these are the two sort of significant, initial answers to how we might do currency differently. What do you think?

[00:30:12] Anouk: Beautiful. I like the stories in there. And yes, I am a huge fan of Henry George. His main, his main idea was, land tax, a tax of 8 percent on land could replace the need for income tax.

And he’s written much explanation as to why. Because the value that accrues to land, if you buy a piece of land and the value goes up 10 times, that’s because, not because you did anything, it’s because the entire community around you built schools and hospitals and shops and roads and sewage systems and all sorts of infrastructure that made your land, well, it’s quote unquote your, I don’t know if, you know, something that existed a hundred million years before you were born and will exist a hundred million years after you’re dead really can’t be considered yours.

Uh, I think that’s a very strange notion to begin with, but, uh, your land. Has gone up in value, not because of something you did, but because of what everybody else did, so it’s not a certain the extra value that accrues to the to the land owner is not a measurement of the service they’ve provided to the community.

It’s literally a direct proportion to the disservice they’ve provided to the rest of the community because their ownership is preventing everybody else from actually using that land. And I remember I’m going to butcher the quote terribly, but, he said something along the lines of imagine if you come into heaven and what a horrible place would heaven be if everyone who got there before you chopped it up into little pieces that were all owned and fenced off and you weren’t allowed to go there. What kind of place would it be then? Right? I’m not even, I’m not even pretending that is a, that is a paraphrase. It is a terrible paraphrase. But you said words to that effect. All right. So sue me.

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