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Over 35 years experience working in oil and gas accounting with privately held oil and gas producing companies. Also have a blog that covers monetary system issues and the potential for major future monetary system change. (http://lonestarwhitehouse.blogspot.com/)  - email: ... more

Robert Bell of KlickEx Comments on Monetary System Reform

Date: Sunday, August 12, 2018 10:13 PM EST

Readers here know that we have featured New Zealand based KlickEx on the blog several times in the past. KlickEx is on the front lines of innovative technology for cross border payments systems and for technologies that can be used by central banks.

 

KlickEx Founder Robert Bell is recognized globally as an expert in payments technology and for creative ideas on how to promote financial inclusion in places where it is needed the most (such as the islands of the South Pacific). Robert has also been a great mentor, willing to share his knowledge and experience on the issues we cover here over the past few years.

 

Robert kindly agreed to do a Q&A style interview for readers here discussing his thoughts on the current status of monetary system reform and its potential for the future. He works with central banks and banks around the world, specializing in real time cross border payments that help promote financial inclusion. 

 

Last fall he announced a partnership with IBM and Stellar to implement what he described as the first institutional scale payments system to run on a blockchain platform (which we covered here). So he brings us an inside perspective on the latest information available regarding what is happening in Fintech and the potential for monetary system reform globally.

 

 

 

 

 

Robert Bell - KlickEx

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Q: After the 2008 financial crisis, many people felt that some kind of major reform to the existing US dollar based monetary system was close at hand. In fact, that was the very reason this blog was launched. Why do you think we have not seen any major reform to the global monetary system so far at this point in time?

 

A: Wow. This is a great question. I was one of the people who wanted to see the reform - very much - as I was inside banking at the time, and was more convinced than most, that banking as we knew it, wasn't as important as people inside the industry believed it was (as it stood then). 

 

In my opinion, at that time, central banks were sitting on their hands, believing in a set of financial theories that were very incomplete, and as a result,  what we saw was an utter embarrassment to the establishment. The bit I think was worst, was called the Capital Asset Pricing Model, and it had an extremely stupid assumption: That the market knows best. It allowed mathematical proofs to be built on this, and as we know, the market doesn't always know. It's the best we have, but it's almost never correct, otherwise it wouldn't change so much every day.


The danger of this is a complete lack of inherent responsibility to disclose what you know of what you sell. A lack of good faith. And CAPM eventually leads bankers to believe that something is of merit, if someone else will buy it, no matter how bad it is, no questions asked. And others buy things, because math tells them too. It's very dangerous. That led to what was primarily a greed and stupidity crisis. And it was potentially unbounded in scale. It wasn't really anything to do with the structural functioning of the system, but the human institutions that run it, in the back rooms, and the ethics involved on risk and honesty when things are bought and sold. 

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