Think Forward: Conversations with Futurists, Innovators and Big Thinkers
Welcome to the Think Forward podcast where we have conversations with futurists, innovators and big thinkers about what lies ahead. We explore emerging trends on the horizon and what it means to be a futurist.
Think Forward: Conversations with Futurists, Innovators and Big Thinkers
Think Forward EP 141 - Banks Will Crumble Like Cookies, But Keep The Coffee Hot with Emmanuel Daniel
Emmanuel Daniel unpacks how digital finance prioritized monetization over true inclusion, then traces a larger shift from markets to networks where information compounds value. We test CBDCs, stablecoins, tokenized deposits, and ask whether debt has become the economy shaping tech, geopolitics, and personal wealth.
• VC‑driven digital finance and unmet inclusion claims
• Personalization versus centralization in money and platforms
• The ice trade analogy for financial inefficiency
• CBDCs stalling, stablecoins rising, tokenized deposits emerging
• China, India, and Africa leapfrogging legacy payments
• DeFi’s network logic versus TradFi’s market logic
• Debt as the economy and digitized sovereign liabilities
• 2035 outlook on tech advantage and investable nations
• History’s cycles informing finance futures
• Personal concerns about growing insularity and cross‑border work
Find Emmanuel’s work at emmanueldaniel.com. Think Forward Podcast: www.thinkforwardshow.com and on YouTube under ThinkForward Show
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Thank you for joining me on this ongoing journey into the future. Until next time, stay curious, and always think forward.
Coming up on today's show.
SPEAKER_01:In digital finance is because the VCs dominate digital finance, um the the idea was to onboard millions of users and then monetize them. That's digital finance. So this whole rigmarole about inclusive finance, for example, there, you know, oh, we want to bring finance because it's a benefit to the masses, to the people out there without access to finance, and that's why they're poor. The actual motivation was to onboard them and monetize them. You know, and for someone like me, I look at indicators such as lending rates. Did they go down for poor people? No, it didn't. Never, nowhere in the world has lending rates gone down for poor people as a result of digital finance. Society is moving from um the markets economy to the network economy.
SPEAKER_02:Emmanuel? Yep. Welcome to the show. What could um what could we talk about? Oh, so many things. But first, let's start with you. And who are you? Where did you come from? What's your mission? What's your purpose and you know your your calling?
SPEAKER_01:Well, I'm Emmanuel Daniel, I'm the founder of something called the Asian banker. I founded it in 1996 when there was no publication or platform covering traditional banking across all of the Asian markets. And the thing about starting something, a publishing business, a consulting business in Asia is different from Europe or the US because the moment your plane takes off, you're in another country. So the same distance that you'd fly from New York to Chicago or even New York to San Francisco, you would have traversed 18 countries in Asia. And we're culturally very different. So for me, I I trained as a lawyer, but for some reason, this whole idea of uh getting on a plane and meeting people of different cultures fascinated me at that point in my life. I was 32 years old at that time. And I chose the banking industry because I s I said to myself that, well, unconsciously said to myself that banking is a cathedral industry. A land in any country is right there next to big government, you know, it's like a cathedral in the center of town. And everyone's got something to do with banking from the time they're born to the time they die. So if you want to understand countries, uh you know, start with banking and stitch it together from there. You know, we're now like almost 30 years into that business. Uh we're no longer Asian banker because I have an office in Dubai, we do business in Africa, we run programs in Silicon Valley in the US, we we run leadership programs in London. So we're now called TAP Global. Um uh it's been a fascinating ride uh at for on two geopolitical fronts. Uh in the year 2000, I started my office in Beijing, uh, or in China, actually Shanghai in 2000, and then in 2004, we moved to Beijing, not knowing that uh in 2001 China was going to sign uh the WTO agreement, uh, and that was going to open up uh an incredible uh long run of economic um you know uh progress never known to man, that uh that a country and a nation and a civilization can develop so quickly and take advantage of all the opportunities out there and become second to none almost. And I had a front seat view of that development. I because I covered banking in the early years in 2000 to 2010, the Chinese were telling publications like us, please come to China, please teach us, we have a lot to learn from you, uh, you know, things like that. And so I got to meet a lot of the decision makers, understood the story. And in that time, I was also traveling to the US. And I remember a conversation in 2003 in Washington, um uh at that uh that that hotel where you know the deep throat met with um you know with uh with a journalist and I forget the names, um the you know, and and I was right. Woodward and Bernstein.
SPEAKER_02:Woodward and Bernstein.
SPEAKER_01:Wood Woodward and Bernstein met there, right? Um and uh and I was with a senator and with a lobbyist, and they were saying to each other, uh, you know, America can afford the um the Gulf War, the the attack on Iraq. It cost the US at that time uh a billion dollars a month. But however, we have grave concerns about China's financial situation because you know they they've got a huge non-performing loan portfolio that is going to bust at any time. That was 2003. I remember that conversation very well because take it 10 years later, and then you see what happened. You know, which country actually progress leaps and bounds, builds high-speed railway and um you know, across the country and all that, and and which country went into start you know, getting into um insurmountable debt uh in the US today's uh 130% uh debt to GDP ratio, that kind of thing. China is, by the way, 300% today, but uh almost all invested on uh on developmental assets. Anyway, so front seat view of all this, all of all of these developments um and then um having to struggle through understanding or making a sense of what's true and what's fiction and what's sustainable and what's going to, if you project it into the future, it's going to blow up at some point. And and those are the issues, that th those were the years that they were my training years in that way. Um and the other thing that I had great opportunity was that because I was the Asian banker, the funny thing is I had I was standing uh in the front of the queue whenever it meant meeting uh American politicians. My book, for example, uh the forward was written by none other than Barney Frank, who wrote, uh who was a congressman at his time, he was the chairman of the banking subcommittee, uh co-authored uh the legislation that still um you know governs banking in the US and many other countries, the Dot-Frank Act, uh, that kind of thing. And then I can rattle off names of you know um chairmen of banks, congressmen. And the reason is every time they came to Asia, they needed someone who they can use as a you know a post, uh, like uh you know, get a sense of direction and all that. So and we always had that opportunity. And I would spend three weeks with it with the chairman of uh Wells Fargo, Dick Kovosovich, at that time. I had him all to myself, you know. So it's interesting that I may come from out there, but I work my well my way back into the global ecosystem and and uh have my own views on how things have developed. Today, when we look at how the global ecosystem is uh degenerating or rather breaking up into no longer a single country dominating economics and security, I have a chance of um assessing the alternatives and how they are working out. And I'm working on my second book, which has to do more with geopolitics, building from where finance has evolved and what finance is thinking teaching us about geopolitics. And one of the first things that finance teaches us about geopolitics is that very little about policy and geopolitical trends is achieved through design. And actually, we learned that in finance because, on the one hand, we like to be able to say that you know country progressed because it made all the right decisions along the way. But if you take a country like the US, it didn't consciously make a decision to become what it is today. It was a result of opportunities, responding to opportunities, uh is a result of sometimes moments of distress, and crises actually create economic trends more than design, that kind of thing. So those were the those were the formative elements of the way I think about geopolitics today. And I've come to a point where whenever someone asks me about trends about how a country is likely to respond to challenges or opportunities and all that, I always say to them, look under the hood and look under the financial hood and see what it's made of, and then project from there. You know, and so from you know, that's essentially who I am in you know my own journey.
SPEAKER_02:So you have uh the latest, we know you're talking on this next book, but your latest book is called The Great Transition, which it basically predicts personalization of finance. Now, people have talked about that for a long time. You know, the personalized finance, if you will, and we can see that to a degree in terms of how things are changing the customer experience on portals and other types of, but this is a bit more radical. So could you explain that for the you know, the listeners, the viewers, for the audience, if you will? So can you explain us to the audience what this looks like?
SPEAKER_01:The technology is taking finance very simply to a level of personalization where two people who need to transact with each other can do so directly without an intermediary. Theoretically, that's what finance should eventually become. And practically, enough of technology is taking us very close to that. If you take Bitcoin, uh cryptos, for example, uh the whole idea is that it's a P2P uh payment platform. It's it's got no legacy infrastructure the back to make a transaction happen. But having said that the personalization of finance is here, I'm actually enraptured by the whole dynamics of the of the tension between personalization and centralization. In other words, the desire of institutions, traditional institutions, new institutions, to want to control the personalization trend, to own it, to define it, to invest in it, and to to make all of the utility and technology possible. The venture capitalists, the regulators, the traditional institutions, all of that. So there's a great battle actually taking place today between personalization and centralization. And the conclusion I'm coming to today, after having written my book, is that we might come close to personalization, but there's another trend underlining that, which has nothing to do with finance in itself, but in the way that human society is predicated, in that we almost always fall back on intermediaries to moderate our transactions, our relationships, all of that. I I use this example in my book because I do take salsa lessons, for example, and it just fascinates me that I could go to any city in the world. I learned salsa in Singapore and in Beijing, where I have an office and I spend a lot of time. But if I went to Los Angeles, I can just go onto the dance floor, pick up anybody, and that person would know exactly what I'm doing. If I'm doing a cross-body lead, a cross-body lead is the same, whether it's uh in Singapore, in uh Frankfurt, in Los Angeles. And there was no committee that decided what a cross-body lead is, you know, and so so the human society's ability to hold together and create trends without an intermediary is profound. Uh, you know, and and we see that in other areas in art, in uh music, and and so on. And yet we don't see that in in um you know in in finance, uh, for example. So so then the question is what what conditions need to exist for there to be the kind of quid pro quo between people? And the nice thing about the dance analogy is that dance keeps evolving, you know, and then from Salsa you have new dance forms like Kizomba and Zook, and it just keeps going and nobody dictates the terms, nobody defines the moves, and yet it becomes universal and global without cost almost. So I I put my finger on that and say, what is it about humanity that's able to create trends in that way? And yet we need institutions to create trends in finance and economics and so on. So it's this battle between centralization and personalization that I'm spending a lot of time thinking about and trying to define the elements that dictate them. And when you think that way, you're able to look at modern platforms, for example, as centralization teams, you know, social media platforms, technology platforms, and today you have data centers in AI and so on, that that um the temptation to centralize and to own the structure is so strong. Um, you know, and and and then I'm able to think through a narrative where what will define that and and what will dissipitate that, which what will deconstruct that so that individual humans can take ownership of their own data, their own relationships, um, you know, and and their own transactions. Um so so that's um that's what it enables me to do.
SPEAKER_02:So two things. One is I was a competitor, this is 20 years ago, 30 years ago. I was a swing dance uh swing dance. Uh oh, it's done. So Lindy, how I agree with you in the kind of pick up anything as you go if you learn the fundamentals. One of the speaking of analogies, one of the things in your book I as here living in Boston, I'm originally from the mid-Atlantic, but the ice trade analogy, which I think is harvesting ice. So I want you to kind of talk about that and kind of mapping that to the future of finance, kind of connecting. I think it's a really wild thing. You think about ice and it's just yeah, I won't I won't give it away. So you can share the audience, may never heard of this.
SPEAKER_01:The cover of my first book has got a block of ice on it. And so I used to the ice analogy to say that look, there was a time when we used to get our ice from the lakes outside Boston, right? And it used to freeze. So did the Hudson. That's right.
SPEAKER_02:So did the Delaware. The Hudson, the Delaware, they all used to freeze.
SPEAKER_01:Absolutely. And and from the uh lakes of Boston, you'd put the ice on horse-drawn carriages and take it to New York, and it went as far away as Cuba. The ice trade used to be so big that there were ships that carried ice from Boston to Cuba. Then in uh why how did it not melt?
SPEAKER_02:How did it not happen?
SPEAKER_01:How did it not melt, you know, and and so much is lost in that process. And so I used that analogy to explain that's what finance is today. The dollar that you have in your pocket would have uh gone through an entire global banking system, finance system, where it is subject to interest rates, exchange rates, bank charges, security costs, and all kinds of things before it ends up.
SPEAKER_02:It's like tax it's like taxation telephone. Play a game of telephone, and it's things completely different on the other side of the of the circle, of the talk and same thing. The dollar you had ends up being like a dime on the other side.
SPEAKER_01:Yeah, that's right. You know, and economics dictates that, right? So you have inflation on top of that. So um that's how inefficient finance is today. Uh, you know, and it's and it's uh owned by the intermediaries. And you know, when you when when you draw that to to the ice trade, to this day you'll find the ice merchants' warehouses somewhere, you know, outside of Boston. You go to the Midwest, you'll you'll you'll suddenly r run into something that looks like a huge bond, but it used to be an ice warehouse.
SPEAKER_02:Yeah, so what we would do here I know in Baltimore too, like you would get a block and it would be delivered for your ice box. The here we still actually have a few ice companies that over time they still serve like they still make and deliver and they're still around. They just do obviously have a different you know need or distribution for that. You know, and I think it's about change, and like we talk about in Super Shifts. Um we talk about, you know, the quick, quick sorry, so so so kind of ultimately quick transitions of change that kind of up upset the system and reform new systems. You know, you have some contrarian talk and I wanted to I wanted to touch on some of the some of the financial instruments. You talked about this about the the digitization, but like you think banks are gonna crumble, I like the quote, crumb crumble like cookies, and you also think CBDCs, which I think I agree, which will fail. Because I think the controlling it's just did just for those listening, this is different from stable coins. This is a different kind of um but yeah, can you you wanna get your what's your perspective on that and the resistance, you know, the political resistance?
SPEAKER_01:Let's keep it the uh uh you know, let's get the basics right first. So yeah, go ahead. Take take the ice trade, and and how do we get our ice today? We manufacture it in our ice boxes, in our refrigerators. It's personalized. You you you get it when you want it and how you want it, and you own the whole process. What made that happen, you know, in the early days of the refrigerator, it was uh chlorofluorocarbon CFCs. So so what I what I try to do is look for the CFC of finance. You know, what will cause finance to become personalized that you don't need an intermediary? And and and there I I've identified several elements that need to be in place for finance to be personalized, carry that quite well. We are now in a process where governments, big businesses are responding to the crypto challenge. And as they do that, they they come up with synthetic alternatives in the hope of still owning that process. And so, because I get the fundamentals clear in my own mind what it is that I'm looking at, whenever I see a trend, so there was a time when CBDCs were a trend. And what were C C BDCs? Central bank digital currencies? It was central banks and governments being really afraid that they're gonna lose the plot if uh cryptos take over. Because even today, there's a lot more trade taking place between unbanked people around the world through the use of stable coins and crypto than is recognized in the system. And even as governments and large banks, American banks, for example, will not do dollar clearing for highly stressed countries like Somalia or you know um Namibia has some problems. I mean, like you just go to difficult countries and and they are stumped because they cannot participate in the global financial system as it exists right now, and they're finding the alternatives viable uh at a personal level. And then there are global uh interbank regulators like the Bank for International Settlements, which issues warnings that crypto is bad because the transactors are anonymous, which is not true, uh, you know, and and uh and money laundering and all that needs to be controlled. So we we are looking at the plot being evolved, and we have now reached the point where the bankers have realized to themselves that if central banks issue their own digital currency, that immediately disintermediates the traditional banks as they are in the existing system. It's like if you can send money directly from a central bank to the end user to central bank digital currencies, you don't need us as banks. And then they stop short in their tracks on that one and said, you know what, we can't really promote CBDCs. And the US eventually killed it by saying by introducing legislation saying that CBDCs are bad because uh the state shouldn't be shouldn't have so much power and information over individual transactions. And then now they've gone to the next uh possible scenario, which is to encourage banks to issue their own versions of CBDCs called tokenized deposits. While stable coins are a very clear alternative, just sitting there, the technology has already been invented, but the traditional banks were afraid of being disintermediated as a result. So you see, um this there's this great battle between centralization and personalization underway right now in finance, and it's working its way through. Um as the individual gains increasingly more ownership over his transactions and his relationships, that will create, and that's why I wanted to talk to you, Steve, because that's going to create geopolitical, new geopolitical scenarios and realities where the state itself doesn't have control over its own people. Um you know, and then what does what happens to you know the relationship between states as a result? Um you know, and and these things get played out, or these themes get played out subtly. They they are the subtext of what you read in the newspaper, that that the state doesn't have control over large swaths of its population because they're able to generate their own wealth between themselves and all of that. So that's uh that's how I reconstruct geopolitics using finance as the as the base and understanding how finance actually works.
SPEAKER_02:When you look at the Asian markets, excuse me, you built Asian Banker. It's one of the it's one of the most respected financial intelligence platforms. I mean it's been you've had it for many decades. A lot, you know, we have a global audience, but many are not from like the the the Asian markets itself, like when you look at the US and you look at like Asia, what do you think what patterns are you seeing in the in the mark in the Asian market that are missing? Like the changes? Are they are they different in terms of this personal centralization? Are they different? Like what are you seeing?
SPEAKER_01:What's interesting is that uh we've come to a point where, regardless of where something like Bitcoin was created, it's actually creating new opportunities in markets that we're not even thinking about. And the interesting thing about finance is the leggards always are able to leapfrog the incumbents. So if you take payment systems, for example, in the US, you've got Visa, MasterCard, uh, and you've got a domestic payment infrastructure that has worked for many years. It takes a week to clear a check, um, you know, and and it's so difficult to dismantle that legacy infrastructure because of the number of players uh who are involved in you know processing that kind of transaction. Then you go to the other side of the world and you uh it can be in Asia. Today it's actually more Africa. Asia is as encumbered by legacy infrastructure as the US now, some countries in Asia. But go to a country which has got no legacy infrastructure, and suddenly you see payments, a revolution taking place. First it was China. But because China closed itself to Visa and MasterCard, and and then it tried to recreate its own version of Visa Mastercard called China Union Pay, but without even realizing it, Alipay and WeChat, which were startup technology platforms, suddenly dominated the payment infrastructure in China hands down. When I'm in China, I don't carry a wallet. A WeChat Pay is sufficient for everything and it's integrated into your social ecosystem. And and the Chinese, when they go to the US, they cannot believe why you need a quarter to pay toll gates and you know stuff like that. Um and then India. I wanted that too. India aced China because China's payment platform was created at a time when the Chinese government was still uh getting a handle on how to regulate these things. So the the technology players were able to go ahead of time and and uh build infrastructure and universalize it so that it became nationwide. It's it's now incumbent. Like you cannot run away from WeChat and Alipay. The Indian government looked at what was happening in China and said, you know what, we're not going to allow any one technology player to dominate our payment infrastructure. Uh, and then, of course, the the regulators in China come after the fact and regulate these platforms. What the Indians did was let's give everybody an identity. And once we've given everyone an identity, any player can come in and provide a payment infrastructure because uh there's no question about the identity of the parties involved in a transaction. And so they've come up with another model which has also digitized payment in India, which we thought that will never happen. And today uh it's got a national infrastructure, but multiple players compete with each other and so on. There, the funny thing is that you think that China is more regulated than India. Actually, India is more regulated than China. The regulators in China learned their craft over a period of time. They are well regulated today, uh, but the Indian regulators inherited their civil service structure from the British. So they've always had it. They they were always uh uh you know a heavy hand on uh free enterprise. So um so they they've managed to um control uh the the role of free enterprise in creating new infrastructures and so on. And then you go to Africa, where today you have cross-border payment infrastructure provided by uh IT companies essentially, uh, and telcos um uh able to move far ahead. I've had in the US, I was attending a conference in Vegas, and on the third day of the conference, they happened to put three Africans on the stage, and they were saying that we don't understand why the US payment infrastructure is so backwards, and um, you know, we can do instant payment between countries like where we are in Africa. So the the point there is that um the the countries with a clean slate are able to leapfrog the countries with a huge legacy infrastructure. And we're gonna see a lot of that. Even in AI, we we need to think about who's starting with a clean slate. The countries which are very dependent on structures like Google and you know and the existing digital infrastructure platforms might actually find themselves assigned to being very uh legacy societies where uh they've never had this need to go in and do a search, suddenly find themselves leapfrogging and and getting problems solved using platforms, you know, like going straight to the answer rather than asking the question. So uh uh technology always favors uh the uh the new the the new players rather than the incumbents. And that's what I've learned uh in finance, and I see that uh you know play being played out again and again.
SPEAKER_02:Speaking of uh newer technologies, I mean DeFi. Just kind of keep on the disruption thing. So I've worked in with DeFi for many years, been in crypto for a long digital assets. Seen a lot of great things it can do and some nefarious things it can do, you know, or the the fraud it's open to. It's not an easy system to learn in terms of the terminology and the and the workflow. People have models that you know, mental models for years, but it is forcing change, right? Rather than it's like replacing it. I you know, you've seen Bitcoin be adopted into uh ETFs, be adopted as a corporate part of their trust and their balance sheet. Right. We're seeing mass adoption by traditional finance firms to allow it to be part of an asset pool now, you know, for a an part of their portfolio, right? So when you when we see it like force change, what do you see? I mean you mentioned like you know independent payments. I mean, still with Venmo or other PayPal, you still need an intermediary to make that happen. What do you think? How do you see Trad TradFi and DeFi evolving together? Oh uh TradFi, okay. It's always been we always talk about the conversations of them over there and them over there. That's not the reality. The reality is they're gonna have to pee, they're gonna have to coexist or use each other in different ways to add value. So, yeah, that's what I wanted is to do something a little different than the traditional kind of conversation that's out there.
SPEAKER_01:Yeah. Um, so the way I construct my own response to what you're saying is this. What did we learn in digital finance? You know, before we go to decentralized finance. Yeah. What we learned you know, what we learned in digital finance is because the VCs dominate digital finance, um the idea was to onboard millions of users and then monetize them. That's digital finance. So this whole rigmarole about inclusive finance, for example, there, you know, oh, we want to bring finance because it's the benefit to the masses, to the people out there without access to finance, and that's why they're poor. The actual motivation was to onboard them and monetize them. You know, and for someone like me, I look at indicators such as lending rates. Did they go down for poor people? No, it didn't. Never, nowhere in the world has lending rates gone down for poor people as a result of digital finance. You know, so the venture capitalists are need to be rewarded for building the infrastructure, and and and that's digital finance. Decentralized finance, interestingly, technically there is no winner or loser. Uh, the way I describe it in my book is that society is moving from the markets economy to the networked economy. In the markets economy, we are transaction-centric, that is, willing buyer, willing seller, the transaction is concluded and the price is settled, and there's a winner and a loser, you know. Depending on how you look at it. In a network economy, everyone is a winner. The more networked you are, the more the asset that you're holding gains in value. And the best asset in the network economy is information. Information is the one asset that doesn't leave you when you give it away. And the funny thing is, you need to give it away to make it more valuable to yourself, that kind of thing. So the math and the mechanics of digital assets is different from assets in the in the digital in the markets economy. So in digital assets in the network economy is different from assets in the traditional economy. And that is why when I listen to Warren Buffett, for example, or Charlie Munger say that crypto is bad, we don't understand it, and so on, and it doesn't have an underlying asset. Absolutely, I understand where they're coming from, because they're coming from the markets economy. That an asset has to have an underlying value for it to be able to realize its potential increase in value and all that. Whereas in what they don't understand is that in a network economy, the mechanics is quite different. And that's what we're looking at. The funny thing about DeFi is that we've got a lot of distractions right now, like futures and derivatives and all of that. That all has to do with intermediaries trying to be a player in an evolving system. The idea of staking is interesting because you profit because you lend to the creation of a new asset. That in itself is a very pure idea. It never existed before. It's valid in itself and is proven to be safe to this moment, right? So that's good. And I think that what the financial system is trying to make sense, both the traditional players and the new ones coming on stream, is is there any value in digital assets? And what constitutes digital assets? You know, there's been a lot of experiments taking place, and you know, you you uh digital assets being created and and then losing their value and so on. Uh it's actually the early days of the network economy being uh taking shape. And eventually we will start seeing the digital assets uh that will make sense and the the ones that you know will collapse by by the wayside. Uh and even then, because it's the information industry, uh information era that we are we are we are moving towards, you know, there is such a thing as ephemeral assets, meaning assets that have a value in a period of time and then they just dissipate for the next asset, those types of things. So so the the ground rules of uh a decentralized finance economy are just being laid right now. Interesting.
SPEAKER_02:Because I'm thinking about DeFi, and it always gets me back to someone's running the servers, someone's running the yield server, right? Someone's someone's store. So it's not really truly decentralized. When I think of decentralized, just hear me out. I think of somebody with a you know hard hard wallet and their ability to almost like I have two of them here for those of you listening, not watching. I have two like ledger touch wallets, which are really cool. If I could touch them together and do a transaction directly to them, but still, I mean somebody's on the blockchain's gonna process that. So they're gonna get their transaction fee. But the fact that I have to really transfer this to another place and then make that work, you know, there's so I think what really, and that's a deeply philosophical idea, what is decentralized finance, right? What really is considered DeFi, right? Is it all these different unique mechanisms? To your point, which earlier is that I think banks will eventually adopt them. Because why wouldn't they want to have yield farms? Like if they have the security of data centers and they have all the liquidity pools, the yields, like they'll they can continually be a mechanism for those that maybe want to be continually it's like going to an ATM. You have to get, you know, borrow money, like you you you still have to interact with the systems. I think the next couple of years are gonna be very telling. There'll be another wave, and you mentioned before, yeah. I personally am not a meme coin for it. I don't know how white people do meme coins or do other types of things. Um I'm very much wary of fads or other types of uh anything that's hyped because there's a lot of rug pull types of uh scams out there. There's a lot of good stuff too. I've made far more investing in crypto than I ever did just with traditional I I have traditional assets, but you know, far more. And I will continue to do that. So we you you had mentioned earlier in the show, you know, there's an upcoming book, and that's called The Winning Civilization. That's travels, you've been to it's 130 countries. Only done a portion of that uh size, that's pretty extensive. So we talked about kind of the implications of technology and the trad versus DeFi. In the future of finance, how does you talk a lot about geopolitics, but beyond the kind of traditional like depressions or hyperinflation, like how does geopolitics really shape the evolution of a system? Because we are like in the book let me let me elaborate in the book Super Shifts, we talk about this new age of intelligence. Like there's a previous age, age of engines, which is the the industrial revolution essentially, for 200 years. And we created traditional banking finance, and obviously that traditional banking goes all the way back to like the Templars and you know the Medich, like that goes for mil you know centuries. But if we look at geopolitics now and we have things that can be decentralized, what is it what does it mean for the evolution of the system itself in this kind of new age? What does it mean for us?
SPEAKER_01:Everything you said about DeFi is uh transposable to AI. Who owns I mean the just that whole phrasing that you you you went through just now is applicable to AI and how AI will evolve, who would own the service and who would own the knowledge, uh, you know, and and uh who would be able to profit from from that. All of that is the same. The big thing about you know decentralized finance and and geopolitics is also I've said this in my book, and I think I want to say it again emphatically, that we are now at entering an economy where debt is the economy. D E B T. Debt is the economy.
SPEAKER_02:What do you mean by so what do you yeah, uh what do you mean by that? Debt is the economy? Because we've always had people have always had debt. There's always been debt, there always there will be debt.
SPEAKER_01:So, but there's so there's any number of economists right now saying that, hey, the US has to, you know, step down from its debt exposure, it's just unsustainable, and that it will affect the US as a global superpower, all of that. And so what I'm saying is that we are not ever going to step down from debt. All major countries in the world will continue to issue even more debt uh to in order to grow. And that should instruct our idea about how wealth will be created in the future. Today, there was a time when wealth meant combo compounded interest that gains on your little deposit account. We are now way past that. If you're not invested in securities, you're not ever going to fight inflation, you're not going to generate wealth on the back of your basic assets. And then we're going to another level yet again, which is that what happens when sovereign states issue indeterminate debt? In other words, like, you know, to solve yesterday's problem, we're going to issue more debt. Debt to GDP in the US is 130. Um, debt to GDP for China uh compound, I mean uh you know, put together is nearly 300 uh percent of GDP. Japan is way over 300%. The funny thing is, Japan has been um 300% debt to GDP for the last 20 years, and it's and it's held together pretty good. It's created an ecosystem where its own people are investors in its own debt. It's not even exported to the rest of the world like the US debt is, you know. So there is a sustainable model in creating indeterminate debt. And what did the Japanese government do with the debt that it created? It just created useless infrastructure around the country, you know, long tunnels under the sea, high-speed railway, uh, this and that, uh, just to keep the economy growing. And over time, it does have an impact. Like today, uh uh there's a deflationary force underway in Japan. The yen can't hold its rates, the population is decreasing, so the GDP growth can't um grow fast enough to deal with the debt that has been created. But the US will when looking at the benchmark for sovereign debt, the US still has a long way to go. You know, 130, it can go to 200, it can go to 300, and the US will look very different than it is today. For a while, it will be driven or being it'll be amortized by the developments taking place in technology today in the US because technology will absorb all the excess liquidity being created. That's exactly what is happening right now, and that's what's funding uh technology developments. So, as debt becomes the economy, the question then comes, becomes how do we get investors in our debt? How do we get universal investors? In other words, we need to digitize our debt and make it as palatable to investors from around the world. And we'll promise to be the hardest working nation in the world to anyone who's holding our debt. And so we're looking at a regime right now where debt is being digitized and internationalized.
SPEAKER_02:Yeah.
SPEAKER_01:You know, the the US does it very well. A number of other countries are very likely to continue doing that. So when that happens, we have to start thinking about the ordinary person has to start thinking about how your wealth is going to be created. Uh, and that's why those who are suggesting that digital assets, for example, have an upside potential in terms of the valuations going up on the back of the liquidity being created from the debt economy today, uh, it makes sense. You know, so so that's how we need to be thinking about personal wealth, geopolitics, and entire financial systems in the future.
SPEAKER_02:So let's, as this is a show about with futurists and big thinkers, let's take a look into the future. So let's say the world of 2035. You pop in there to observe the finance world, what does it look like?
SPEAKER_01:The ability to generate debt and and uh export it uh will become more well developed and more universal. Countries will take advantage of that. Then it becomes a a question of being an attractive country to invest in. Uh and in that regard, uh, you know, the US still has a lead because of what's it what it's doing in technology today, but it might lose that lead if it's uh if its edge in technology starts to taper off and other countries cap you know catch up with the US on that. Now, for that, by the way, I I look back in history. The funny thing about being a futurist is that you you really need to know your history well to feel comfortable about trends that have actually been happening before. That it's not new. We don't need to fear it because um it's the it's human nature.
SPEAKER_02:Um you know the funny thing is this that the best futurists, the best futurists are historians. Like they understand cycles, they understand pat what's what we need to do is patterns. So, what is the thing you're seeing history?
SPEAKER_01:Well can I just as an aside, by the way, a lot a lot of what has been happening in the US has not disturbed me at all because the way I say it is it's happened before, you know. Has a has a president misbehaved before, it's happened before. Has the US got into indeterminate debt before it has happened before?
SPEAKER_02:What's different is it's so well documented and so much easily shared in terms of every, you know, and then there's the media will always try and pipe things. I mean, we could talk about yellow journalism from you know a hundred years ago, but now they can fully the like the like the transformation or collapse from like go every 80 years or so, like Strauss and Howe. And look, I don't know if I'll ever have Bray Dalio on here, but I gotta call him out on his conversations. He doesn't give them credit. And like he uses all these things, but he doesn't like Strauss and Howe looked at the 80, 90 year cycle, and this trend we're going through it now, right at the end of the winter, and it's gonna get rough. But it's this but this collapse, transformation, whatever you would call it, this this fourth turning, the the next is a spring. It's a it's a it's a it's a beautiful kind of like new place to be. We have to go through it. And the last one, which was World War II, was you know somewhat documented, but in terms of living memory, that's what's it very I that's what I find is interesting. Everyone thinks it's unique and new, but it's just so much more documented and shared, and people are getting it. And yeah, AI is definitely a different animal that kind of throws in a whole new curve, but you know, again, or other transformational technologies. They mean the atomic bomb, you know, changed everything.
SPEAKER_01:So anyway, that's so so the thing about what we're going through right now is this that the Industrial Revolution may have been originated in the UK and several European states, but the states that the states that eventually harnessed it, scaled it, mastered it, and dominated other economies were Japan and Germany. And why? Because they were well better organized to harness technology. And that's actually what we're seeing today. AI may have originated in the US, but the societies or the nation states that are going to be able to harness it very quickly and scale it are the ones that are much more regimented, much more controlled societies where the leadership has a lot more control over direction, policy, things like that. And that shouldn't surprise us, you know, that it is the dictatorial states that will actually dominate technology in the future. And in fact, when you take technology to the next level, you you talk about if if we were talking about um interplanetary travel and so on, you actually need a a lot more organized society uh than you know a liberal left-leading um society. A left-leading society uh will not be able to handle um um you know scaling and transitions and so on as as much as a conservative, well organized uh or even militaristic society, which is what Germany was in its time. So so we we we go back to history to identify, put our fingers on what the operating elements were. And these are the operating elements that we are we are looking at right now. None of what's happening today should surprise us. The rise of China or the ability of Russia to survive a war and still uh you know hold together as an economy, as a well-functioning economy right now. Russia is doing okay economically. Then the question is how far will they be able to take it? And uh there are drastic consequences depending on the leadership and and what they do with it.
SPEAKER_02:Well, things don't surprise you, but what keeps you up at night? Is there anything like in the financial sphere, like the future finance that kind of keeps you up like we're worried about?
SPEAKER_01:I I've moved away, I've moved to beyond future finance. Uh um I because I've personally function in different societies, I'm in the US four to five times a year, I'm I'm in China six times a year, you know, like every other month I'm there. So I'm actually switching between realities. If the one thing that keeps me up awake is that the sensibilities that give me the opportunity to build my business, to to be relevant to our people and so on, if if that degenerates, then I've got to be concerned about my own future. So I'm concerned about a world where um I will not be given the chance to contribute and and to be part of um you know development. And that kind of reality, we are bordering on it. Like, you know, countries are becoming insular, people are becoming more myopic in terms of you know who's important and not. I was just in uh um, you know, cut in Central Asia, for example, and it's very interesting that they they are progressing quite well, um, you know, in the same way that East Asian countries like Singapore, Taiwan, Japan have been evolving in the last 30 years. So the the idea of nationalism is is growing very, very obviously. And the uh and the freedom that I have to transpose between realities, between societies, and still be relevant and create an international business. So the thing that keeps me awake at night is the more insular societies become, the less that those of us who transcend borders will have opportunities to to grow businesses that make sense for everyone.
SPEAKER_02:You can also answer kind of my legacy question I always ask everybody, you know, how how do you want the work to be remembered? Like and you're all kind of, you know, kind of done, tired with the world, ready for somebody else, you know, to watch watch it happen. Like what do you want people to say about your work in this in this in this life? I always like to ask because it it opens up a lot of deep meaning, you know, and it a lot of reflection.
SPEAKER_01:You know, a few of us will have the opportunity to to do something, whether it's in the sciences or in the arts, that profoundly influences a lot of people. I still have another 20 years to to have a shot at that. And sometimes it's uh what you've gained over the past 30 years or so that makes the that 20 years possible. But I think that all of us uh will will need to be satisfied with the fact that we've made the difference in one person's life or uh, you know, a few people's lives around us. In my case, I've given employment to a few hundred people uh in the time that I've been in business and I've seen how they've grown. Um, you know, and and then uh I would like to be remembered for having made a statement or made an observation that helped humanity figure out a new face. And that's work in progress at the moment.
SPEAKER_02:That's great. That's great. You mentioned the book is coming out, and I know the Asian banker. So, what what's coming up and what should people know about, and where can they find you? Because I think that's the big, you know, because they want to learn more about what you're doing, which is great, wonderful stuff.
SPEAKER_01:Emmanuel Daniel is Emmanuel Daniel.com is a good starting point. In fact, I'm I'm I'm doing more writing there, and from there, you'll see that I've been posting different things on LinkedIn, on my on my TikTok account, and my uh Instagram, which is a combination of speeches that I've given as well as places that I visit, and I try to make a point and I post that so I'm actually using different media to communicate different things, but the one place that you can find all of that is my my blog page, emmanualdaniel.com, and that's a work in progress. I've been posting articles that are more geopolitical in nature, taking stock of different countries' responses. So, India or Africa or the Middle East, uh, how are they thinking about their own geopolitical directions? The moment I think I've figured out how to think about them, I I write something and it's posted on emmanuelDaniel.com.
SPEAKER_02:That's great. Well, I want to thank you for the time today. It's been a wonderful conversation about finance and the world and just getting a global perspective, which everyone needs to have. So thanks again. And I'm now we're gonna have Rion again soon. Thanks.
SPEAKER_01:Thanks, Steve. Thanks, Steve.
SPEAKER_00:Thanks for listening to the Think Forward Podcast. You can find us on all the major podcast platforms under www.thinkforwardshow.com as well as on YouTube under ThinkFord Show. See you next time.
