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The Cost of Cognitive Dissonance

Where does the Central Bank Digital Currency threat originate?

Sunday, October 8, 2023
9 mins

If the entire modern banking system was based on a simple deception, wouldn’t you want to know about it?

Richard Werner’s revelations about the Central Bank Digital Currency are as alarming as anything we’ve been hearing about ArtificiaI Intelligence - it doesn’t take a genius to work out that the combination of the two could be nightmarish.

We hope that readers will watch the whole video and offer comments.

(We have transcribed most of the slides presented in the first 40 minutes, with occasional remarks, not verbatim, summarising key observations. The underlining and emboldenment are, for the most part, as they appear on Werner’s slides.)  

(293) [ENGLISH] Richard Werner on CBDC’s and how they prepare you to be their slave - YouTube

‘In 1928 the economist John Maynard Keynes predicted that, a century hence, people would be so prosperous that they would not need to work. His prediction was based on productivity gains leading to income gains. Keynes was accurate in his calculations. Indeed, the prosperity actually generated has proven to be in the upper end of his estimates.

But we still have to work. So, what’s gone wrong?

What Keynes could not fathom or imagine is uneven distribution. A tiny elite would claim all the income and the rest of the population would be drones.

After a delay because of WW2, optimism about the achievement of prosperity was renewed in the 50s and 60s. Expectations were higher that, due to advances in science and economics, high growth and prosperity could be achieved. Was this a reasonable expectation? Yes it was…

Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings.’ JFK, 10.06.63 (6mins,20secs)

After the 50s and 60s optimism, another setback - a decade of ‘stagflation’. (Figures varied across nations - detailed at 7mins)  What was the reason? We were told it was due to ’external events’ i.e.  war in the Middle East (sanctions, oil embargoes) oil supply shock, prices shock (October 73)

To repeat - we were told in the 1970s that the high aspirations of prosperity for all could not be achieved because of this adverse supply shock. (8mins,58secs)

Instead, people were told that energy had to be rationed. The use of cars was restricted in Soviet-style rationing, even in Germany and Austria.

But is that official narrative true?

Was the 1970s inflation and economic stagnation really due to an external energy shock caused by war and sanctions?

How does the economy really work?

Economists of all major ‘schools of thought’ agree on one thing: ‘Lower interest rates lead to higher economic growth.’ It follows that if you raise interest rates you get slower growth. Werner calls this ‘the law and the prophet of equilibrium economics.’ This claim has been made for the last 200/250 years. It is reiterated daily via msm, central banks, taught in all major universities etc. We can assume it is well established in peer-reviewed journals.

In fact, how many empirical studies are there? 100,000s, 1,000s? 100s?

No. There are zero. 

This is a taboo subject.

But let’s have some empirical research.

We should use scientific methods in economics.

There were no studies until:

Kank Soek-Lee & Richard Werner (2018) Reconsidering monetary policy, Ecological Economics (Half a century of correlation and statistical causation between interest rates and economic activity in the US, Japan, German and the UK (quarterly data) 

Kank Soek-Lee and Richard Werner (2022), Are lower interest rates really associated with higher growth? New empirical evidence on the interest rate thesis from 19 countries. (12mins,45secs)

‘Reality is the opposite of what they tell you’ (diagrams: correlation/statistical causation) 

This is the opposite in both directions. The reality is that high rates lead to high growth, low rates to low growth. (13mins,37secs)

Cognitive Dissonance?

Interest rates are the result of economic growth.

So they cannot at the same time be the cause of economic growth.

The facts contradict the official story of monetary and banking policy.

It is not rates but bank credit that determines economic growth.

So, why do central bankers keep repeating the mantra that they use interest rates as a policy tool?

It is only a smokescreen.

(Reminder - this lecture was delivered in 2022)

Contradiction by central planners: ‘Inflation is not due to monetary policy but monetary policy will now end inflation.’ (This could be viewed as a good example of ‘doublethink’.)

Today the central bankers claim, once again, that the present inflation is due to war in Europe (Ukraine) and the subsequent supply and energy price shock.

But if the present inflation was not due to monetary policy - as the central bankers claim - how can the present ongoing monetary policy measures end the inflation, as they claim they will?

Conclusion: The interest rate thesis is false.

There is no consistent empirical evidence that lowering interest rates will increase economic growth or that higher rates will slow growth or inflation.

Interest rates are consistently positively correlated with economic activity and usually lag.

Interest rates are not useful as a monetary policy tool. For central banks to use interest rates in line with a recovery they would need to raise them.

Dame Kate Barker, former member of Bank of England Monetary Policy Committee: ‘I have come to wonder about my time at the Monetary Policy Committee setting interest rates. It’s been a bit of a waste of time really.’ (at the University of Winchester, 11.2.2019)

So where does the idea come from that interest rates determine growth?

Answer: Equilibrium. 

And where did the idea of equilibrium come from?

The Concept of Equilibrium.

One tool is used in economics, for everything: (diagram at 18mins,05secs)

Theory: Markets always clear and they are efficient.


1 Perfect information

2 Complete markets

3 Perfect competition

4 Instantaneous price adjustment

5 Zero transaction costs

6 No time constraints

7 Profit maximisation of rational agents

8 Nobody is influenced in any way by the actions of the others

THEN: It can be shown that markets clear, as prices adjust to deliver equilibrium

Therefore: prices are key including the price of money (interest)

  • DIAGRAM - supply/demand - axes Price/Quantity

‘Prices move to give us equilibrium’ is a convincing/elegant concept but for it to work all 8 assumptions must hold simultaneously.

Methodology in Scientific Research (21mins,30secs)

There are two approaches to scientific methodology.

The empiricist approach, also called inductive approach (or positive approach)

The axiomatic approach, also called the deductive approach.


Inductive: characterised by the inference of general laws from particular instances. (COED)

Deductive or axiomatic: ‘In logic, the procedure by which an entire science or system of theorems is deduced in accordance with specific rules by logical deduction from certain basic propositions (axioms), which in turn are constructed from a few terms taken as primitive. These terms may be either arbitrarily defined or conceived according to a model in which some intuitive warrant for their truth is felt to exist.’ (Britannica Concise Encyclopaedia)

The latter seems very suspect from a scientific point of view. Feelings? Arbitrarily? Intuitive?

How do scientists normally work? They rely on data. They can find patterns. ‘If this happens and that happens…’ You develop hypotheses from observing the data.

A Primer on Methodology in Scientific Research

Which approach is most widely used in the sciences? 

This is an empirical question. 

Using the inductive approach we can answer it by observing what scientists actually do.

It is found that many scientists follow the steps below:

1 Careful observation of a set of natural phenomena

2 During observation the material is organised in categories and classifications.

3 Observation of certain patterns and associations of the data.

4 Reflection leads to a characterisation of the observed phenomena. The characterisations are explanatory theories.

5 The explanatory theories can be revised or rejected in the light of new facts that emerge or are collected.

This process of developing a scientific theory is widely accepted in the sciences. It is called ‘inductive reasoning’.

Methodology in Economics: The Deductive Method

  1. Axiom: Individual ‘rational’ utility maximisation

Individuals are rational and selfish-autistic (they do not care about others at all, are never influenced by others, and mainly want to maximise their own consumption and accumulate goods and wealth).

  1. Assumptions
  2. Perfect, symmetrically distributed information

4. Complete markets

5. Perfectly flexible, instantly adjusting prices

6. Perfect competition (no oligopolies or monopolies, everyone a price-taker.)

7. Zero transaction costs.

8. Infinite lives, no time constraint, others.

An ‘axiom’ is something that we assume to be true, which is handy because then we never have to check whether or not it actually is true. This is a theoretical ‘dream-world’ in which markets are optimal. Any intervention by policy-makers to ‘change things for the better’ is not needed in an optimal dream-world. That’s why they say we need to deregulate, liberalise and privatise. Popper recognised that followers of a particular school of thought may want to defend their theory.

A theory that cannot be tested is not a good theory.

Methodology in Economics: The Deductive Method

The deductive approach is less open to constant modification and improvement. It is not directly concerned with empirical reality.

Karl Popper recognised that followers of a particular school of thought may adopt what he calls ‘an immunising stratagem’ which enables a scientist ‘to guard his theory against being falsified’.

This is a problem especially in the deductive approach, which is prone to immunisation and abuse by ‘reverse engineering’.


  1. Start with your preferred conclusion: what do we want to ‘prove’ or conclude? E.g. government intervention is bad; big business is good, should have unlimited control in society.
  2. Identify how a model would have to be formulated in order to conclude as in 1.
  3. Identify the assumptions needed to justify the model in 2.
  4. Identify the general axioms that might help justify the above.
  5. Finally, the most important step: present the above in reverse order.

How is this different from the manipulation of research to support preconceived agendas, which is wholly unscientific?

Equilibrium: Not truth from facts but Alice in Wonderland (29mins, 40secs)  Believing unbelievable things.

Markets can never be ‘cleared’. Supply and demand will never match perfectly. 

The real economy works differently.  Markets can only be expected to be in disequilibrium and that means markets are ‘rationed’. 

Rationing: Core of the New Paradigm

If only one of the many assumptions does not hold, markets do not clear.

Economics must recognise pervasive disequilibrium as the dominant state.

What happens when markets do not clear (i.e. always)?

Demand does not equal supply. Markets are rationed.

Rationing in one market affects other markets.

In our world, information, time and money are rationed.

Thus practically all markets must be expected to be rationed.

Rationed markets are determined by quantities, not prices.

The outcome is determined by whichever quantity of demand or supply is smaller (the ‘short-side principle’)

99% of economics books assume ‘equilibrium’ literally. In equilibrium there is no discussion about power.

Rationing: The Hidden Power Dimension Becomes Visible.

The ‘short-side’ principle also reveals. The short side has the power to pick and choose who to do business with.

This power is usually abused to extract ‘non-market benefits’ 

E.g. who will get the job you’re applying for? What will the decision-maker ask for in return? (Think Hollywood #metoo)

What about money? What is the short side? What is larger: supply or demand?

Who supplies most of our money?

What else have they been lying to you about?

Why are banks so important?

What is it that banks do?

According to the economics experts and finance textbooks, banks are

‘deposit-taking institutions that lend money’

But is this really true?

If banks are really important and powerful you must expect a lot of misinformation about them! (35mins,40secs)

At around this point in the lecture (36mins), Werner realises that he’s running short of time and delivers the rest of his slides and commentary at breakneck speed. There is at least as much information packed into the final twenty minutes of the hour as there was in the first two-thirds. We will not attempt to summarise further because there is already more than enough to cause any objective reader grave concern.

The interview which follows the lecture allows Werner more time to explain how this banking situation ties in to other issues: covid, lockdown, war in Europe, transhumanism. 

One of the most striking aspects of Werner’s presentation and the way it was received by the audience and interviewer is an apparent acceptance that the agenda of the WEF is a real problem and cannot be dismissed as mere conspiracy theory. It is made plain that major banks and other undemocratic global organisations are not behaving in good faith and have long-since developed plans which threaten human freedom and dignity at the most fundamental level.

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