Socrates Demonstration
COMMENT: Marty, the demonstration of Socrates at the conference was mouthwatering. With everyone in less than 6 months claiming to have artificial intelligence is really laughable. I understand the tremendous amount of work you have done is just the front end process. Your system is way beyond artificial intelligence. That is why so many people flew in from around the world for this three hour conference even from Turkey and Russia not to mention China.
You are the ultimate source of information and the one everyone follows yet never credit in the West. The man from China said you are regularly cited as the source in China, yet everyone assumes they violate copyright sources. That was a shock. What your staff demonstrates was way beyond what others pretend to have.
This is very exiting
Congratulations
LP
REPLY: Thank you. Everyone has been working around the world very hard. Yes it is shocking and how dishonest the industry has become since so many try to mimic whatever we do. Others suddenly claim to have cycles of war without acknowledging the source as if they have miraculously created it all on their own suddenly. Yes we are widely quoted as the source in China. People realize they do not have the expertise and trust us as a reliable source. My stand against the banks is far more respected outside the USA than within. Internationally, it is a badge of honor. People realize they would not have done what they did unless our systems were really the best. So yes, it is impressive in China to quote us where in the West they steal whatever we do and try to pretend to be the source without the support behind it.
Now firms are all claiming to have AI systems that talk. They will only cheapen the entire technology and in a crash, their fake systems will fail and that will reflect back on everyone. They are only trying to make as much money as possible and rip us off constantly, which shows their integrity is absent. If that is the case, then how can you deal with any firm who steals from others. That means you have to count your fingers when you shake hands.
I will not reveal what we will do with our systems for others will suddenly claim to have that technology in 30 days or less and that will be a total fraud. Making a computer talk takes 2 hours. They are most likely writing reports and having the computer read it and claiming this is AI.
What you saw was a glimpse. There is so much more your eyes will pop out. This will change the entire industry. That will only be revealed when we launch and only to those who become registered clients. Sorry, we cannot even show most of this for it will be just mimicked. It will not be available to even see what we are doing on the blog.
Enough plagiarism. It is not just the lack of integrity, it is the fact that their dishonesty will screw society for when such technology can really help society, they will discredit it with their fake AI systems that are at best expert systems. They do not create real learning machines. I have learned so much from Socrates for this is beyond AI. What this will do is way beyond human capacity to even think and rationalize.
Swiss Proposal to Take All Credit Away From Banks and hand it to Government
There is also a referendum that will come up with the same stupid idea that all credit decisions should be handed to the central bank now in Switzerland. If these people could not manage a peg, can you imagine what will happen to the entire credit markets? This is just entirely brain-dead.
These people FAIL to comprehend even what is the problem. Instead, they want to go off and claim that the entire credit system is at fault and end capitalism in its entirety. We are becoming simply like cattle to be herded and used for the sole generation of work to support those in power. Just astonishing. It is becoming clearer to see how the West is committing suicide and Asia rises to the new Financial Capital of the world.
Musical Chair Banking
QUESTION:
Hi Martin,
I read the Iceland proposal before you posted your comment about it. I knew intuitively it wouldn’t work because they were putting government in charge of credit creation – like placing the wolf in charge of the hen house. (I believe my conclusion came from your Education – thank you.)
I listened to your ‘Solution’ conference and you confirmed what I was thinking, which was government spending should be no more 5-10% of GDP (with tax revenue exceeding that amount so there is NEVER a deficit).
As you suggest, government is necessary in society as it fills a critical role, but that role should be clearly defined. Credit creation by a bank fills a critical role in a society, so long as that role is clearly defined.
When I read that for every dollar deposited, banks can create 90 cents of loans with it, it strikes me as too much leverage. Just as you defined that government spending should be no more than 5-10% of GDP, what leverage do you feel is appropriate for banks? Is the current system too much or would it serve just fine as long as the credit went to loans that bettered the economy (as you state it, so long as the credit goes to relationship banking and not transactional).
Thanks again for all you do.
D
ANSWER: There are several problems with the whole credit picture. The reason we have banking crisis is because banks borrow short-term and lend long-term and that was the traditional relationship banking model. So they lent on property with mortgages and they held that on their books monitoring you and/or your business. That was the relationship banking model.
The transactional banking model was they securitized the loans and sold them. Under this model they became just brokers. They could care less if you paid off the loan – that was not their problem. It changed the entire incentive from conservative to just write the loans because they had people willing to buy.
Great Depression Land Auctions
The fractional banking people criticize was exaggerated by FDR during the Great Depression. Real Estate collapsed and he tried to revive the market. Without banks lending, that meant property fell to at best 10 cents on the dollar. ONLY people with cash could buy. FDR created the 30 year mortgage. By extending the time horizon, he was effectively bringing forward someone’s earning capacity to 30 years to spend now (leverage). It was government who extended that model – not the bankers.
The 30 year mortgage became the norm. In good times, it leveraged the entire real estate market. If you now eliminate that lending and say government will be now be in charge rather than the free market – OMG. You know who will get first dibs – their families.
The fractional banking is not the issue as much as manipulating the yield curve. Because governments are the largest single debtor, they drive the interest rates while they are stupid in still assuming they can raise interest rates to fight inflation. It has the exact opposite impact for the government spending will now automatically escalate to cover interest costs. Inverted yield curves wipe out the banking model and the current collapse in short-term rates expand the profits of bankers tremendously.
The NY Boys argued to drop Glass-Steagall so they could trade rather than keep loans on their books would reduce THEIR risk and strengthen the banking system. The blew up the world like Iceland, took no responsibility, and then told Congress if they were not bailed out then government could not sell its debt. The 2007-2009 Crash illustrated this model does not work and now they bribed Congress to repeal Dodd-Frank so it is back to the wild and crazy times. Politicians are not there to protect society, they are simply there to line their pockets with few exceptions who are the freshman typically since the longer they are there, the more corrupt they become.
The issue is not to hand banking to bureaucrats nor is it plausible to terminate banking. What is plausible is to restore Glass-Steagall, outlaw proprietary trading and restore relationship banking. The big money center banks are controlling government with effective bribes in form of campaign contributions to both parties and they have become traders, not bankers. Let them raise money and be hedge fund managers but not to trade with other people’s money where they keep the profits and hand the losses to government.
The wild times have come from the trading side and the collapse of relationship banking. Deal with the problem directly. Somehow we seem to just be dancing around in circles. This is like musical chairs. When the music stops, we are in trouble. We have to define the problem looking at every aspect, not just one. If we do not stop transactional banking, we are in for another crash that may be worse than the last one.