“We must prevent the introduction of central bank digital currencies “because that is the epitome of a centralised, controlled, even totalitarian system,” economist Richard Werner has warned.

Speaking in a recent episode of The Kim Iversen Show, Prof Werner said the current inflation crisis the world is currently facing is the direct result of intentional decisions made by central banking institutions.

The banking and development economist observed that in 2020, the world’s central banks, including the US Federal Reserve, acted in a “coordinated fashion” and enacted an “intentional policy” they knew would cause massive inflation 18 months down the road.

Werner told political commentator Kim Iversen that the inflation that began in late 2021, which the world is still experiencing had nothing to do with an energy crisis or wars.

“Nobody can say this was a mistake. They [the central banks] on purpose created this inflation – that’s what my work shows and there’s no doubt about that,” Werner said.

Werner, a professor at De Montfort University in the UK, created the Quantitative Easing (QE) model – also called the Quantitative Theory of Credit – which he says is “arguably the simplest empirically-grounded model that incorporates the key macroeconomic role of the banking sector.”

QE is a kind of monetary policy that involves a central bank purchasing securities from the open market to reduce interest rates and increase the money supply. Iversen told Werner he is an interesting figure because QE recently showed up in the news for exacerbating the current financial situation.

“A lot of people would blame you, as the person who invented Quantitative Easing, for the crisis that we’re in,” Iversen said. “At the same time, a lot of those people that feel that way are also the very people who don’t trust this central digital currency [and] don’t trust the World Economic Forum – and you seem to be also in that group.”

“I think that blows a lot of people’s minds,” she said. “They don’t really know what to make of you and your policies. Are you the good guy, are you the bad guy?”

Werner said most central banks incorrectly applied his QE policy by following only part of his advice – and at the wrong time.

QE was designed for a time of deflation and a contracting money supply, Werner said, not for a time period when we already had an expanding money supply and expanding demand. “It was not designed for this situation,” he said.

Werner urged listeners to make sure the economy “stays decentralised” by using local banks – and setting up new local banks.

“Central planners don’t like that,” he said. “They want companies and banks to merge. That’s really part of a Sovietised system – too much central control – [and] we need to do the opposite,” he told Iversen.

Werner said using cash is a means of decentralisation and freedom, whereas anything digital and central is going to be about control.

“To support cash is a key way to preserve our freedom,” he said.

According to Werner, we must prevent the introduction of central bank digital currencies (CBDCs) — government-backed digital currencies issued by a central bank – “because that is the epitome of a centralised, controlled, even totalitarian system because, of course, they’re going to be programmable and they will be programmed,” he told Iversen’s listeners.

“It’s just nothing like we’ve ever had in the past and any totalitarian dictatorship could only dream of such enormous control tools,” he added.

On November 15, 2022, the Federal Reserve Bank of New York announced it was teaming up with global financial giants including Citigroup Inc, HSBC Holdings Plc, Mastercard Inc and Wells Fargo & Co to launch a 12-week digital dollar pilot programme to assess how banks can process digital dollar tokens within the central bank system and to quantify their potential impact on speeding up payments, the New York Fed told Reuters.

The results of the pilot programme, which uses simulated data in a test environment – have yet to be publicly released.

• A Tell / The Defender report / By Suzanne Burdick. Prof Burdick is a reporter and researcher for The Defender based in Fairfield, Iowa, USA.