Hidden Forces

Latest Episodes:

The Age of Cryptocurrency and the Remaking of the Modern World | Michael Casey Sep 23, 2019

Show notes

In Episode 101 of Hidden Forces, Demetri Kofinas speaks with Michael Casey, an acclaimed author, journalist, researcher, and entrepreneur who currently serves as CEO and founder of Streambed Media, an early-stage video production and technology platform that seeks to optimize capital formation and creative output in the digital media industry. Michael is also chairman of CoinDesk's advisory board and a senior advisor at the MIT Media Lab's Digital Currency Initiative, where he has spearheaded research projects that employ blockchain technology to achieve social impact goals.

Michael Casey's breadth of experience as a financial journalist for Dow Jones and the Wall Street Journal, as well as his time spent stationed overseas in Thailand and Argentina, provide him with a unique perspective on the 'problem of trust' and what he calls 'the Internet's original sin.' The latter is a reference to the observation that the inventors of packet switching and the basic Web protocols did, according to Casey, "a masterful job figuring how to move information seamlessly across a distributed network. What they didn't do was resolve the problem of trust." "On the one hand," writes the chairman of CoinDesk's advisory board, "the distribution of public information was disintermediated, which put all centralized providers of that information, especially newspapers and other media outlets, under intense business pressure from blogs and other new information competitors. But on the other, all valuable information – particularly money itself, an especially valuable form of information – was still intermediated by trusted third parties."

This intersection between money, communication, and trust serves as the basis for Demetri and Michael's conversation during this episode. The two discuss Shoshana Zuboff's work on Surveillance Capitalism, the loss of faith in financial institutions and central banks (including recent actions by the Federal Open Market Committee and the intervention by the Fed in the overnight Repo market), and how cryptocurrencies and distributed ledger technology aims to reinstill this lost faith by resolving the problem of trust.

The overtime to this week's episode is an exhaustive exploration of the forces driving cryptocurrency adoption around the globe, the cultural impetus behind these forces, and the financial imperatives fueling Bitcoin's ascent as truly global money.

You can access the overtime, along with a transcript and rundown to this week's episode through the Hidden Forces Patreon Page. All subscribers also gain access to the overtime RSS feed, which can be easily be added to your favorite podcast application.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Hedera Hashgraph Goes Public as Governing Council Deploys Nodes | Leemon Baird & Mance Harmon Sep 16, 2019

Show notes

In Episode 100 of Hidden Forces, Demetri Kofinas speaks with Hedera Hashgraph founders Leemon Baird and Mance Harmon about Open Access, now that the network has officially gone public. This is the go-to-episode for anyone looking to understand the public ledger and why Fortune 100 companies like IBM, Deutsche Telekom, Boeing, and others have joined Hedera's Governing Council.

As a seed investor in Hedera Hashgraph, Demetri's involvement with the public ledger goes back to September 2017, when he first invited Leemon Baird onto Hidden Forces to discuss the Hashgraph Whitepaper. Weeks later, Demetri put on an event at the Assemblage NoMad where Mance Harmon joined a panel alongside two other members of the executive team. The panel explored the innovation of Hashgraph consensus, specifically virtual voting and gossip-about-gossip. On March 13th, 2018, Leemon and Mance announced the launch of Hedera Hashgraph at an event in New York City, and on August 1st, 2018, news of the ledger's $6 Billion valuation was made public. Six months later, Hedera announced the initial group of Governing Council Members, and six months after this IBM, Tata Communications, FIS, and Boeing were announced as having joined Hedera's Governing Council as well. Two years since Leemon Baird first appeared on Hidden Forces to share the news about Hashgraph, Hedera has finally gone public. Open Access also marks the beginning of Hedera's strategic 15-year coin distribution, with HBAR tokens beginning to be released on exchanges in the US and Asia.

This recording is meant to be the go-to-episode for anyone looking to understand Hedera Hashgraph DLT and the functions of the Hedera Governing Council. Demetri also references a back-and-forth on Twitter between him, Hedera's technical lead, and a number of Hedera skeptics resulting from a medium post by writer and blockchain enthusiast Eric Wall. Hedera's technical lead, Paul Madsen, responded with his own posts. Demetri has encouraged anyone interested in learning more about Hedera Hashgraph to engage with the team through their Telegram channel, as well as on Twitter.

Relevant Timecodes:

00:11:53 Governing Council Announcements

00:14:08 Hedera Consensus Service with Hyperledger Foundation

00:16:50 What is Finality?

00:18:57 Probabilistic Consensus: The Problem with Not Having Finality

00:20:25 Proof of Work Slows Us Down

00:21:51 How is This Possible?

00:28:57 Coq Proof

00:34:05 Theoretical Competitors to Hashgraph

00:35:59 Database Sharding

00:44:15 Proof-of-Stake vs. Proof-of-Work

00:49:39 Hedera Proxy Staking (POS)

00:50:58 Private vs. Public Networks /Permissioned vs. Permissionless Databases

00:52:35 Path to Decentralization

00:53:45 Market Capitalization & Network Security

00:56:16 Addressing Scams

00:58:47 Theoretical Attacks, Proxy Staking & HBARS

01:06:12 Network Fees

01:08:08 How Governance Works in Hedera

01:10:07 Governing Council: "Can's" and "Can'ts"

01:17:19 Ownership of HBARS

01:19:21 Stability: Open Source vs. Open Review

01:27:29 Regulatory Approach: Squeaky Clean

01:31:32 Use Cases

You can access that rundown, along with a transcript to this week's episode through the Hidden Forces Patreon Page. All subscribers also gain access to our overtime feed, which can be easily be added to your favorite podcast application.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Sources of Financial Instability: Challenges for Monetary and Fiscal Policy | Claudio Borio Sep 09, 2019

Show notes

In episode 99 of Hidden Forces, Demetri Kofinas speaks with Claudio Borio about outstanding sources of financial instability and some of the challenges facing Central Banks as the economy and markets begin to show signs of weakness heading towards the end of 2019. Dr. Borio heads the Monetary and Economic Department at the Bank for International Settlements and has written extensively about some of the longer-term, structural forces bedeviling policymakers since the early 2000s.

More recently, the Federal Reserve held its annual Economic Symposium in Jackson Hole, Wyoming, where Fed Chairman Jay Powell delivered a speech titled, "Challenges for Monetary Policy," in which he addresses "three longer run questions" bedeviling policymakers. In the speech, Powell breaks up the post-war history of central banking into three distinct eras: 1950–1982, 1983–2009, and 2010—. The day before Jay Powell's speech, on August 22nd, former Treasury Secretary Larry Summers, published a series of tweets where he conducted a similar retrospective analysis of central bank policy going back to the stagflationary period of the 1970s. According to Larry Summers, "the high inflation and high-interest rates of the 1970s generated a revolution in macroeconomic thinking, policy, and institutions," while the "low inflation, low-interest rates and stagnation of the last decade…deserves at least an equal response." Further, Summers writes, "the financial crisis had roots in bubbles and excessive leverage caused by efforts to maintain demand after the 2001 recession," which suggests that perhaps, the maniacal focus on inflation amplified by the experience of the stagflationary nineteen-seventies blinded central banks and policymakers to a build-up in financial risks exacerbated by keeping interest rates "too low for too long" during the 1990's and early 2000's.

The conversation you're about to hear was recorded on Monday, August 19th, several days before the publication of Jay Powell's speech, as well as Larry Summers' tweets. Some of the key questions we attempt to answer during this discussion are: "What's driving the slow growth environment that we are in?" "Are rates low because central banks are keeping them low, or are rates low because central banks, encouraged by a prolonged period of disinflation, kept interest rates chronically below the 'natural rate' for too long, thus encouraging the growth of asset price fueled credit bubbles that have turned central banks from being stewards of the expansion to now being managers of the contraction?"

Demetri and Claudio also explore the different eras highlighted in Chairman Powell's speech, search for the origins of inflation targeting as a policy objective, question the efficacy of neutral rate targeting, and consider some of the possible consequences that could arise from an economic model that has increasingly come to rely upon debt financing in order to grow.

In the overtime, Demetri asks Dr. Claudio Borio questions about the BIS 2019 Annual report, with a keen focus on some of the more immediate risks facing the global economy. This week's rundown is particularly useful for those seeking to gain a deeper sense of the issues discussed during the podcast. You can access that rundown, along with a transcript to this week's episode through the Hidden Forces Patreon Page. All subscribers also gain access to our overtime feed, which can be easily be added to your favorite podcast application.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter a at @hiddenforcespod

9/11 Terror Attacks and the Saudi Connection | Senator Bob Kerrey Aug 26, 2019

Show notes

I've taken the next few weeks off for a much needed summer vacation. I'll be releasing a couple of overtime segments while I'm gone that are normally available only to our Patreon subscribers.

This segment was recorded with Senator Bob Kerrey, one of the ten members of the 9/11 Commission. Not only are his comments about the Kingdom's involvement in the attacks provocative and revealing, but the conversation itself is jovial and pleasant in a way that is rarely seen in our politics today.

This recording also includes information about upcoming episodes, including conversations with the Chairman of North America for Louis Vuitton, the co-founder of Kickstarter, and many other notable guests.

I hope you all enjoy it, and please feel free to reach out to me by email at dk@hiddenforces.io with any feedback or suggestions about the show and our upcoming lineup of guests.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Hong Kong Revolution: Geopolitical & Financial Implications for China and the World | David Webb Aug 19, 2019

Show notes

In Episode 98 of Hidden Forces, Demetri Kofinas speaks with famed Hong Kong investor David Webb, an outspoken critic of China's authoritarian grip over the coastal territory.

There are two parts to this story that we explore during this conversation. The first deals with Hong Kong – specifically, its political and economic future as an independent territory of mainland China. The second deals with China itself – specifically, its political and financial stability as the most leveraged economy at scale, in the world.

The events in Hong Kong over the last several months – exacerbated by Chief Executive Carrie Lam's determination to push through the Extradition bill despite mounting opposition – have created a terrifying sense of crisis and disorder in the city. Videos of police beatings and retaliatory violence by protestors, as well as satellite images of what appear to be armored personnel carriers and other vehicles belonging to China's paramilitary People's Armed Police, have created an ominous sense of foreboding in the city. "One country, two systems," might be the fault line upon which the tectonic forces shaping China's political and economic development are colliding, creating mountains of civil unrest among Hong Kongers. At what point do the political tremors in Hong Kong become civic earthquakes capable of shattering the fragile peace between these two irreconcilable systems? Will open society prevail in Hong Kong, or will China do whatever it takes in order to reassert control over the former British colony?

In the second part of this conversation, David Webb shares his insights from his decades of experience studying the Chinese economy and investing in Chinese companies listed in Hong Kong. Those insights include a discussion about China's overleveraged banking system, an overvalued RMB, and a system of Ponzi financing for Chinese companies listed on non-mainland exchanges. David Webb also contests a thesis famously put forward by hedge fund manager Kyle Bass about the precarious position of Hong Kong's currency and the risk of decoupling with the US dollar. Additional topics include a new "tech cold war," China's propaganda battle, the US-China trade war, and much, much more.

There is no overtime to this week's episode on account of some technical constraints. Instead, we have made the transcript to this conversation available to Overtime subscribers, which will be published in the next day or two. You can gain access to the transcript, as well as a copy of the rundown to this week's episode directly through our Patreon page.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

What is Bitcoin? | A History and Ontology of the Cryptocurrency with Nic Carter Aug 12, 2019

Show notes

In Episode 97 of Hidden Forces, Demetri Kofinas speaks with Nic Carter, co-founder of both the VC fund Castle Island Ventures, as well as the research and data analytics company Coinmetrics.io. Nic also has a master's degree in philosophy, and the two spend much of the overtime applying that discipline to bitcoin by examining the works of people like Friedrich Nietzsche and his philosophy around essence, John Rawls and his veil of ignorance, as well as applying a strain of utilitarian thought to questions of money and society.

This conversation with Nic Carter is an attempt to understand Bitcoin as more than just the sum of its parts. One of the lessons that Demetri has taken away from his continued research into Bitcoin through the works of people like Nick Szabo, Paul Sztorc, and others, is that trying to measure the cryptocurrency against existing systems or conventions is almost always counterproductive. This is likely because Bitcoin is more than just money or a payments network. Bitcoin is a movement. Within it exists a competent community of intellectuals who are actively engaged in what often feels like a grand project to remake society. This comes across in the seriousness with which Bitcoiners apply themselves. This is true whether we are talking about the engineers working on enhancements to the base layer or whether we're talking about those contributing intellectually to debates about governance, economics, and ethics. In this sense, Bitcoin is not what most of us think it is, and even what we think it is, is constantly changing. Bitcoin's resilience and adaptability, as both a store of value, but also as a diverse community of people who are coming to the cryptocurrency from different backgrounds and with differing motivations suggests that there is much more going on here than just naïve speculation.

As Nic Carter points out during this conversation, Bitcoin is a "subversive idea." Bitcoin is an experiment in social organization that doesn't play by the rules of the state or by the conventions of modern society. The momentum behind this movement is likely to grow, especially if governments validate the concerns of its proponents with further debt monetization or preferential bailouts in the event of another global financial downturn. In short, Bitcoin is not going away, and it is incumbent upon all of us to understand the message that it is here to deliver.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Matt Taibbi | Democratic Contenders, Election 2020, and the Goldman 1MDB Scandal Aug 05, 2019

Show notes

In this week's episode of Hidden Forces, I make available the overtime to my episode with journalist Matt Taibbi that aired on February 18th, 2019.

In this overtime, Matt Taibbi shares his experience on the campaign trail with Donald Trump in 2016, as well as his predictions for the 2020 election. Matt and I also discuss the Goldman Sachs 1MDB scandal, which has remained largely out of the headlines.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Raoul Pal | The Fourth Turning: Generational Theory and the Future of Global Money Jul 29, 2019

Show notes

In Episode 96 of Hidden Forces, Demetri Kofinas speaks with investor and co-founder of Real Vision, Raoul Pal about the future of global money in a multi-polar world, including a discussion about Bitcoin, Libra, debt, demographics, and much more.

The inspiration for this conversation derives from a theme captured in William Strauss and Neil Howe's Generational Theory, also known as the Fourth Turning, where the authors describe a four-stage cycle of social moods associated with recurring generational archetypes, which they call "turnings." These include: "The High", "The Awakening", "The Unraveling," and "The Crisis." The question we explore in this conversation is: "are we at the fourth turning, and if so, what does this mean for the type of change we can expect to see in the coming decades?"

All of this leads to a discussion about digital currency in a multi-polar world where the power of governments to maintain the global order is diminished and where corporations and the private sector may gain an opening to provide alternative forms of money in support of global trade and commerce. Where does bitcoin fit in this world? What about alternative protocols and currencies? Will governments even allow them? Can they stop them or will they welcome them and does this point the way towards a path that will lead inexorably towards truly global money?

As always, subscribers to our Hidden Forces Patreon page can access the overtime to this week's episode, which includes a continuation of our conversation about digital currencies, but also a discussion about central bank policy at the Fed, the ECB, and the BOJ, as well as a discussion about economic indicators and what Raoul relies on most for his own projections about where we are in the business cycle.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Ben Hunt | The Narrative Machine: Investing in a World of Tall Tales, Big Games, and Giant Cons Jul 22, 2019

Show notes

In Episode 95 of Hidden Forces, Demetri Kofinas speaks with investor and author of Epsilon Theory, Ben Hunt, about the power of narrative and how it is used to shape and control our behavior as investors. This episode also includes a series of in-depth discussions about the long legacy of the 2008 financial crisis, identitarian narratives, three-body problems, the challenge of making accurate predictions, and 'The Great Bitcoin Epic.'

Ben Hunt's background and career path have been anything but ordinary. He received his Ph.D. in Political Science from Harvard, co-founded multiple tech companies, and managed his own billion-dollar hedge fund. When he isn't busy writing about market narratives or indeterminant models, you can find him tending to his horses, gathering a fresh basket of eggs, or engaging in other chores on his family farm in Connecticut.

The main themes from Epsilon Theory that we focus on in this conversation include the three-body problem, as well as Ben Hunt's writings on narrative and the power that comes from shaping how people think about the world. This leads to a variety of discussions about various market phenomena, including a unique, thoughtful, and illuminating conversation on bitcoin – its culture, the narrative of bitcoin, how that narrative emerged, how it has evolved, and how it informs the price of bitcoin. Below are time codes for this episode:

06:45 How Markets Changed After March 2009

10:33 The Story that Changed the World in the Summer of 2012

12:24 No Fundamentals for Markets Anymore

15:54 The Three-Body Problem

27:02 Past Performance is Not Indicative of Future Behavior

32:14 Turning Capital Markets into Political Utilities

34:45 Origins of Fed Communication

39:04 Forward Guidance and the Loss of Market Resilience

40:40 Informational Feedback at the Fed

43:50 Inflation vs. Deflation Narrative

46:26 The Role of Central Banks

49:11 Bear, Lehman, and the Banking Mafia

53:19 Shitcoin US Dollars

58:15 Facebook Libra and Censorship Embracing Coins

1:05:59 The New Bitcoin Narrative

1:08:01 Comparing Development Models for the Internet and Crypto

1:09:16 Culture of Bitcoin: Tech vs. Finance

1:14:13 Loss of Faith in Government

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

Jerry Colonna | Heeding the Call to Adulthood: Lessons on Life and Leadership Jul 15, 2019

Show notes

In Episode 94 of Hidden Forces, Demetri Kofinas speaks with author of REBOOT, Jerry Colonna about leadership and the art of growing up.

This is a deeply personal conversation, but it is also one that draws upon the common wellspring of human experience. Learning to be a great leader is also about learning how to become an adult, and this requires that we learn how to embrace life in all of its beauty, suffering, and grace.

The introduction to this week's episode retells the story of Minos, King of Knossos after whom the great Minoan civilization is named. The Minoans populated the islands of the eastern Mediterranean during the second millennium, and are thought by some modern scholars of antiquity to have provided the substance for Plato's Atlantis reference in Timaeus and Critias.

As is often the case, this week's episode overtime rivals the full episode in quality and depth, as both Jerry and Demetri share personal stories of suffering, grace, and transformation. You can access this part of the recording, along with our entire library of subscription content on the Hidden Forces Patreon page at http://patreon.com/hiddenforces.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

Subscribe & Support the Podcast at http://patreon.com/hiddenforces

Join the conversation on Facebook, Instagram, and Twitter at @hiddenforcespod

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