The answer is Bitcoin. Now what was the question?

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July-August 2018

MEDIA

The answer is Bitcoin.

Now what was the question?

AX KEISER is a radical American broadcaster and ﬁlm

-maker. Alongside his wife Stacy Herbert he hosts

Keiser

Report

, a ﬁnancial programme on Russian state media

channel RT that features heterodox economics theories

and what they deﬁne as ‘Financial War Reports’.

The Inde-

pendent

describes the show as “mischievously seditious” and Keiser

as “America’s most outrageous political pundit”. He boasts a Trumpian

self-conﬁdence.

He also co-hosts the weekly economics programme

Double Down

on Radio Sputnik, presents a weekly show about ﬁnance and markets

on London's Resonance FM, and writes for

The Hufﬁngton Post

. He

has been an advocate for environmental and libertarian causes. In

2011 he became an evangelist for Bitcoin, a cryptocurrency, which is

a type of digital currency in which encryption techniques are used to

regulate the generation of units of currency and verify the transfer of

funds, operating independently of a central bank. There are no

physical bitcoins, only balances kept on a public ledger in the cloud,

that – along with all Bitcoin transactions – is veriﬁed by a massive

amount of computing power.

He has backed Bitcoin and several other successful, innovative cryp-

tocurrency and blockchain-based (a blockchain is an open, distributed

ledger that can record transactions between two parties efﬁciently in

a veriﬁable and permanent way) businesses through Heisenberg Capi-

tal, and also created the ﬁrst commercial prediction market and

patented virtual trading currency and securities market, which he

called the Hollywood Stock Exchange and later sold to Cantor Fitzger-

ald. Its technology allows traders to exchange virtual securities, such

as "MovieStocks" and "StarBonds", with (again) convertible virtual

currency, the "Hollywood Dollar”.

His company, Karmabanque (Stacy is "Chief Anarchy Ofﬁcer"),

intended to short Coca-Cola shares from their then value of $41 to $22

(£11). The campaign said it would "commit to as much money as it

Michael Smith interviews Max Keiser

July-August 2018

4 3

takes to take down Coke". He lived for a long time

in London though he and Stacy left it for a while

last year in fear of regulators, aggressive banks and

energy companies: “the regulators in the UK were

constantly threatening us. Threatening us in a very

belligerent manner. They made us feel as though

our safety was not really secure”. He said he would

return to the US if Trump was elected president,

though he has castigated his fascist and racist ten-

dencies. He now lives in North Carolina.

I met Max Keiser on the periphery of MoneyConf

in June in Dublin. He was engaged, charming and

quickﬁre at all times.

What do you make of Ireland?

I’ve been coming here for years. I came here during

the 2008 crisis. We were lobbying and rooting for

accountabilit y for the bankers. We felt they had com-

mitted grievous crimes. We got a lot of attention for

that. I did a show with Pat Kenny where I compared

Sean Fitzpatrick and David Drumm to ﬁnancial pae-

dophiles, that they had the moral character of

paedophiles, that they should be prosecuted as such

– that they should be run out of town.

Since 2008 things have changed. the IMF have pro-

vided the bailout, the property market is back in a

bubble, you had the water charge, the poor are get-

ting screwed once again and the bankers are going

to get another huge bonus again.

Do you think Ireland is worse than other coun-

tries and in what way?

The government in Ireland is one of the most corrupt

in the world. The wealth and income gap is one of

the most severe. The bankers here are atrocious,

reprehensible.

Any particular reason why that’s the case in

Ireland?

I think its because it’s a bit of a backwater and

nobody is really paying attention so it’s developed

into a crony-capitalist culture, and the media plays

along. RTÉ is atrocious, they routinely sensor oppos-

ing views. They routinely give credence to stories

that should never see the light of day – written by

corporations for corporations, by bankers for bank-

ers, by corporations for corporations.

Do you think we’ve handled prosecutions better

than in the US?

There hasn’t been proper prosecution of bankers

anywhere in the world.

Any countries that you admire more than

others?

Bitcoin is the answer. It is self-governing. As the

world shifts over to Bitcoin we can say goodbye to

bankers. We don’t need them.

What is the appeal of “crypto-currencies” like

Bitcoin?

You don’t need a banker. I can send you value, you

can send me value, without an intermediary. There’s

no third party needed to validate the transaction.

Bankers are horrible.

What’s really going on in the global

economy?

Central banks continue to inﬂate the debt to GDP

Ireland is a bit of

a backwater and

nobody is really

paying attention so

it’s developed into

a crony-capitalist

culture, and the

media plays along.

RTÉ is atrocious’

LOWER

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MEDIA

Numbers to unsustainable levels – 240%. It will end

in a huge bond collapse. We’re in a 5000-year bond

bubble, that is the bubble of all bubbles. Interests

haven’t been this low in 5000 years. Bitcoin is not

in a bubble: bonds are in a bubble.

What is your political philosophy?

Bitcoin – it’s self governing, it’s self deterministic.

Be your own sovereign.

How has your background inﬂuenced you – how

did Bitcoin become so central to your life?

I have an extensive background. As an entrepreneur

you’re always looking for freedom to express your-

self, entrepreneurially. It’s been frustrating having

to deal with banking corruption and regulatory

corruption.

Can you talk to me about Israel?

Palestine is an ongoing conﬂict. US interests would be

best served by taking on board all stakeholders in the

region and ﬁnding some equitable way forward. The

Palestinians don’t have any agency in this struggle

and the US could is in a position to provide them with

it. I’d like to see more equitable discourse. No-one is

going to win. It’s simply causing continued conﬂict

not serving anyone’s interests.

What is Heisenberg Capital?

Heisenberg Capital is a ﬁrst-generation crypto VC

fund.

Hmmm.

Tell me about Sweet and Sugar

Sweet is a platform that is just launching. It allows

artists, for example musical artists, to reward their

fans using a sugar token which can then be used to

buy stuff online. It has a growing list of artists and

brands as partners, most recently the Black Eyed

Peas. The Sweet platform is the ﬁrst marketplace

where artists, brands, and cultural inﬂuencers can

recognise and reward fans with a digital token

(Sugar) for performing meaningful social and user

actions.

It’s a way to reinvent social media so that fans

can be compensated for being fans. I advise on the

economy. The Sweet economy is a $20bn token econ-

omy. I’m advising the company about the best way

to manage their economy. Of course I have extensive

experience in virtual economies having invented

one. They also are looking transition to a public

blockchain, and I’ll be helping them.

What is Karmabanque?

Karmabanque was a project that star ted in the early

2000s. It is a way to monetise dissent by allowing

people to focus on the weapon of no-cost, the boy-

cott, and to turn that into an effective monetary

and ﬁnancial weapon by organising boycotts

around two key metrics: companies that are vulner-

able to a boycott and companies that are the most

hated. Karmabanque is a database that selects com-

panies that are the most hated/vulnerable and

exposes them to a universal boycott. It simultane-

ously encourages hedge funds to make negative bets

against, or short-sell, that company. Customers

remove their sales from the company, the stock price

goes down and shor t sellers beneﬁt. A portion of the

short-sell proﬁts are used to expand the boycott.

You’re marr ying hedge funds and activists to redirect

how money ﬂows in an economy to suit the

activists.

How did it work?

The hedge funds loved it but the activists hated it.

I went to the then President of Greenpeace who told

me that Greenpeace survives on the $5 street con-

tribution and they cannot be anywhere near

associated with high ﬁnance. It would alienate their

basic $5 contributor on the street. I explained to him

that his system had been around for decades and it

just doesn’t work. The ecology is still collapsing and

maybe there is a need to consider another strategy

at which point he said he was not interested. The

problem was the activists. Activists want to feel

good - they don’t really want to do anything. Green-

peace, liberals in America… they want to feel good

but they don’t want to do anything, change anything

– it’s all about virtue signalling. I’m all about entre-

preneurialism, doing things.

Talk to me about the politics of ﬁnance as an

exclusive mechanism for tackling environmental

problems.

It’s a mechanism that should be given more serious

consideration because the political avenues have not

worked so I think it’s time to consider something

new.

In addition to conventional means?

You know, my Karmabanque strategy is to redirect

the economy in ways that suit the activists. But I

found the activists are just not interested. They’re

interested in continuing to feel good, in saying they

want to change. They don’t want change. There is

not a critical mass of people who want change, there

are people who don’t want change and there are

people who say they want change but do not want

change. There are very few people who would

Open-source is still free – that’s the

freest expression, the greatest hope

against a purely tyrannical State

We try to help

free-market

enterprises to be

censorship-resistant,

permissionless and

State-threatening

July-August 2018

4 5

actually pursue actual change – usually that occurs

on a local basis: one individual decides they can

invent a new light bulb made from recycled plastic

bottles and it has a huge impact in Africa and it

catches on for a year or two. Or Micro-ﬁnancing in

Bangladesh was a fantastic ﬁnancial solution for

empowering women but it got taken over by big

banks and they drove it out of business.

Do you have a normative view as to what

should be society’s standard store of value? For

example carbon has been mooted as the ulti-

mate store, that gold really has no intrinsic

value whereas carbon is scarce and

life-determining.

A store of value allows you to spend money in the

future. According to Aristotle gold was the perfect

store of value and form of money because it was: fun-

gible, divisible, portable and desirable, and so carbon

misses out on a couple of those things – portability,

though a diamond is portable – the fungibility is not

great with diamonds because there are many grades.

[I say I’m talking about trading carbon emissions]

That’s a whole different scheme, the carbon credit

scheme. There’s a school that thinks Bitcoin is not a

store of value like gold, though I think it is – it’s a store

of value. It is a good medium of exchange, or is it nei-

ther? A carbon credit scheme is using the ﬁnancial

markets to transfer the cost of carbon emissions from

emitters to create credits available to individuals as

credits. They then can use that to buy, it becomes

money to them. It’s an income transference scheme

like a universal Basic income scheme. When it was ﬁrst

introduced I supported it in the

Ecologist

magazine in

the UK under Zac Goldsmith. It’s a really great idea and

it could easily be done. I think the vested interests of

the energy industry will do what they always do to

ensure it will get any traction but of course it’s a great

idea.

How central is equality, particular the redistribu-

tion of resources in accordance with need?

Equality can take many forms. This brings up the two

major socio-economic and political schools of the last

100 years. Broadly, you have communism/socialism on

the one hand and capitalism on the other. Socialism is

very much concerned with equality and capitalism is

not. But I disagree.

In Socialism because it’s a top-down hierarchical

structure, power is not distributed as advertised.

Power ends up concentrated within a very small group

of people who are then trying to do something impos-

sible – to create prices for the market. No-one can do

that so it fails. Only the market can create market

prices. You don’t see the equalit y promised. Show me

an example where it worked. The Northern European

countries are mixed economies, not pure socialism or

communism.

Let’s look at capitalism. Capitalism has the chance

of equality because you’re distributing goods and ser-

vices and ideas in a way that market forces are

determining accessibility and, let’s call it, price. Price

can mean availability. In Africa which has been

plagued by top-down dictatorial governance, you

introduce cryptocurrencies like Bitcoin which can be

traded freely over cheap phones and internet ser-

vices. These economies grow and thrive – there’s

equality of a price. The price that farmers in Africa

can offer to the market 100 miles away – transferring

funds using Bitcoin; and that works. That’s equality:

that’s equality of opportunity, equality of price.

[I say

that it is not equality of outcome]

The outcome is that

all those want to par ticipate in a sustainable economy

that is self-nourishing are free do so. It doesn’t pre-

vent anyone from participating in that economy,

whereas in socialist economies not everyone can be

Max, Stacy and friend on Russia Today

There is not a critical

mass of people who

want change, there

are people who don’t

want change and

there are people who

say they want change

but do not want

change

4 6

July-August 2018

the leader of the Communist Par ty for example. That’s not equal-

ity of outcome for everyone – that’s a rigid hierarchical system.

It doesn’t work. That’s why China went a different model. The

government can’t decide the price of a commodit y, good or ser-

vice, in a rigid way because it leads to distortion.

Do you think people are more naturally inclined to free-

dom than equality?

People are going to mimic nature, and nature mimics free-mar-

ket capitalism. Look at photosynthesis for example. It breathes

in carbon and the green leaf exhales oxygen. It’s a perfect

market.

Where will the media be in ten years?

The media has now overlapped the surveillance state. It’s not

about pricing any more. It’s about human rights. Initially free-

dom of speech was considered a human right, now it’s not

merely being mispriced or not made available, it has been lit-

erally eviscerated, destroyed, by the surveillance state. At this

current rate I see the media and free speech being eliminated

within ten years.

Do you still believe that

the media are going to the

price point called free?

I said that in Los Angeles

when Napster was intro-

duced. The studios were

ﬁghting Napster and of

course free music had

transformed the music

industry but it did not get

rid of Bittorn and other free media and you see the spirit of

free access is available in open-source projects like crypto-

coins such as Naxcoin. Naxcoin was created by fans of the

Keiser Report and everyone is contributing to that freely. It’s

creating a product that will be easily accessible and you can

exchange value on it. That trend of moving towards freedom

is alive and kicking in open-source software development.

That’s where you see the clearest expression of it right now.

Why did Microsoft buy Github for $7.5bn in June? Because

they couldn’t compete with Free. What they do with it will be

interesting. They kind of messed up Skype when they bought

it. Open-source is still free – that’s the purest expression of

free speech, the greatest hope against a purely tyrannical

State. If there are enough people living within that open

source community, they will be the ones doing battle against

the surveillance state. But the surveillance state clearly has

many tools that it can use.

Where do you see yourself in 10 years?

I don’t see much change to Max and Stac y. We’ve been doing

this for ten years. We travel the world and report. We report

on ﬁnancial hotspots, on Fintech and Bitcoin. We try to give

people an insight into what’s happening on the ground in

these locations where there are pockets of resistance. Bit-

coin is the currency resistance. We try to a place where we

are channelling the best of the best: that’s entrepreneurs

that software developers the best builders of products that

will help free-market enterprises to be distributed, censor-

ship-resistant, permissionless and State-threatening.

MEDIA

At this current rate I

see the media and

free speech being

eliminated within ten

years