Unveiling the Machine: Richard Werner’s “Secrets of the Financial System” at TEDxAISB Youth
Richard Werner, a renowned economist and banking professor, presented a thought-provoking talk at TEDxAISB Youth, entitled “The Secrets of the Financial System.” In his presentation, Werner delved into the inner workings of our modern financial systems, challenging conventional wisdom and shedding light on the role of banks in creating money and shaping the economy. His insights, delivered with clarity and passion, resonated deeply with the young audience, igniting a spark of curiosity and a critical understanding of the forces that influence their future.
Werner’s central argument revolves around the counter-intuitive reality that banks don’t simply lend out existing money. Instead, they create new money when they make loans. He explained this process, known as “credit creation,” using clear examples and illustrating the direct link between bank lending and economic activity. This concept, often misunderstood or ignored, has profound implications for understanding inflation, economic cycles, and the distribution of wealth.
His presentation didn’t shy away from complex topics. Werner explained the crucial distinction between “Quantity Theory of Money,” which is widely accepted, and the “Credit Creation Theory,” which he advocates for. He meticulously laid out the evidence supporting his position, highlighting empirical studies that demonstrated the direct impact of credit creation on asset prices and economic growth.
One of the key takeaways from Werner’s talk was the responsibility that comes with understanding these “secrets.” He emphasized the need for informed citizens and policymakers who can critically evaluate the impact of banking practices and advocate for a more sustainable and equitable financial system. He challenged the audience to think beyond the surface and question the dominant narratives surrounding money and banking.
Why this matters for youth:
Werner’s message is particularly relevant for young people today. They are the future leaders, entrepreneurs, and consumers who will inherit the consequences of the current financial system. Understanding the mechanisms that drive economic growth, influence inflation, and shape asset values empowers them to:
- Make informed financial decisions: Recognizing how banks create money allows young people to better understand the risks and opportunities associated with debt, investments, and savings.
- Become responsible citizens: Armed with this knowledge, they can engage in informed discussions about financial policy and advocate for changes that promote economic stability and social justice.
- Develop innovative solutions: Understanding the limitations of the current system can inspire young entrepreneurs to develop alternative financial models that are more equitable and sustainable.
Richard Werner’s TEDxAISB Youth talk offered more than just an academic lecture. It provided a critical lens through which to understand the complex world of finance, empowering the next generation with the knowledge and tools to shape a more prosperous and just future. His message is a call to action for young people to become informed, engaged citizens who can critically evaluate the financial system and advocate for a more equitable and sustainable world.
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As Professor Werner states, here and in his wider work, the German economy built its strength with the aid of a large number of small community-savvy banks that have the sensibility to tune-in to the needs of small, specialist businesses. In fact one of the core elements that enabled China's amazing economic uplift, was the creation of a similar model of banking, after Den Xaioping's study of the German system.
Is it just a coincidence that the German economy is being quietly decimated currently, due to the actions of geo-political forces directed by the alternative banking system of global corporatism? Is it any wonder also, that the eventual target of those same forces, as they wage war against Russia so as to gain access to the huge store of resources of the Russian landmass – is China?
He contradicts himself frequently. First by law of physics he says there cannot be growth. Then later he talks about creating growth.
Brilliant indeed!
Brilliant!!!
See also Steve Keens praise in general of Richard's work but critique of Werner's How to Achieve Long-Term Sustainability on his Building a New Economics substack page.
Other heterodox economists to check out are Steve Keen (The New Economics: A Manifesto, Minsky/Ravel systems dynamic monetary software), Richard Murphy (Taxing Wealth Report 2024, Green New Deal) , Richard Werner (Princes of the Yen), Michael Hudson (J is for Junk Economics) , Clara E. Mattei (How Economists Invented Austerity & Paved the Way to Fascism) , Abby Innes (Late Soviet Britain) . PS His credit creation equates with basics of MMT Modern Monetary Theory.
Masters of the Yen
Some economists are saying Trump 2.0 could trigger another inflation wave. But honestly, the market still climbing. Maybe the economy doesnt control the market as much as we think?
All you have to do is get the government to limit spending to taxation and problem is solved. No more borrowing to bail out the system and the system would cleanse itself. No more ability to counterfeit money and the corruption would retreat. A man can dream can’t he?
That is why we introduce real asset backed currency is needed.
We call that Quantum Stable Coin developed by South Korea.