TIME of MISTRUST

A plea for trust in a time of mistrust. Trust is the foundation on which monetary systems are built. Trust forms the basis of international diplomatic relations and is the foundation for all progress.

But what happens once trust is shaken?

The diplomatic dispute over a multibillion-dollar submarine treaty – which took place three months before the Russian – Ukrainian war, concerns about a new cold war, and the collapse of the Bretton Woods system exactly 50 years ago are the manuscript for this maritime-themed French-American story about money and trust. It is an object lesson for our times, where we are witnessing the emergence of crypto-financial markets and thus stand on the threshold of a new form of money.

TIME OF MISTRUST

by Jochen Werne

After the traditional long summer vacation, France awakens in September from its brief self-created slumber, as it does every year. Life begins to take its usual course, even if some are still reminiscing, perhaps enjoying the first harbingers of post-Covid worry-free life. Not so Philippe Étienne. For him, on the other side of the Atlantic, in Washington, which is actually picturesque at this time of year, autumn begins with a diplomatic thunderstorm. A storm that must have been new even for the 65-year-old gray-haired eloquent ambassador of France. 6160 kilometers away, at the Élysée Palace, Président de la République Emmanuel Macron decides to call his top diplomat in the United States, along with his Australian counterpart Jean-Pierre Thebault, to Paris for consultations. The unprecedented act in Franco-American history is justified by Foreign Minister Jean-Yves Le Drian with the “exceptional gravity” of an Australian-British-American announcement, and impressively underlined with the words “lie,” “duplicity,” “disrespect” and “serious crisis.”

At the heart of this crisis is the surprise announcement by the aforementioned countries to enter into a strategic trilateral security alliance (AUKUS) with immediate effect. An alliance that also provides for the procurement of nuclear-powered submarines for Australia, effectively putting to rest a 56-billion-euro French-Australian submarine order already initiated in 2016. The conclusion of the agreement comes at a time when U.S. President Joe Biden has asserted to the UN General Assembly, “We do not seek – I repeat, we do not seek – a new cold war or a world divided into rigid blocs.” However, experts, such as renowned historian Niall Ferguson, have been talking about this so-called “new cold war” between the U.S. and China since 2019, and it is not about nuclear arms races, but rather about technology supremacy in cyber security, artificial intelligence and quantum computing. Even though nuclear-powered submarines are at the center of the diplomatic dispute, one is quick to note in the AUKUS agreement that cooperation in the aforementioned fields is one of the most important components of the treaty. An objective that is perhaps also congruent with French interests. But the dispute between the old friends is less about the “what” than about the diplomatic “how” – that is, about the breach of trust that is triggered when close allies are simply presented with a fait accompli. Facts that also affect them financially and personally.

Because money and trust are closely interwoven. The trust of a bank that the creditor will repay its debts. A citizen’s trust that the currency in which he or she is paid their salaries is stable. A state’s trust in a currency system that the agreements made there will be honored by all. Georg Simmel, in his “Philosophy of Money,” sums it up this way: “Money is perhaps the most concentrated and pointed form and expression of trust in the social-state order.”

Last year marked the 50th anniversary of another French-American trust-busting melodrama with a maritime backdrop. Benn Steil, senior fellow at the Council on Foreign Relations, describes the moving events of August 6, 1971, in his book, The Battle of Bretton Woods, as follows: “…a congressional subcommittee issued a report entitled ‘Action Now to Strengthen the U.S. Dollar` that concluded, paradoxically, that the dollar needed to be weakened. Dollar dumping accelerated and France sent a warship to pick up French gold from the vaults of the New York Fed.”

At first glance, this dramatic gesture by then French President Georges Pompidou in the final act of the collapse of the Bretton Woods system seems as strange as the withdrawal of ambassadors today. The basis, however, is similar and lay then as now in an equally shaken trust between the great nations that were nevertheless so closely intertwined. Without going deeper into the new monetary order created after World War II, with the U.S. dollar as the anchor currency, it is important to understand the reason for the French revolt evident in the “White Plan.” The plan provided that the U.S. guaranteed the Bretton Woods participating countries the right to buy and sell gold indefinitely at the fixed rate of $35 per ounce. The dilemma of this arrangement became apparent early on. For by the end of the 1950s, dollar holdings at foreign central banks already exceeded U.S. gold reserves. When French President Charles de Gaulle asked the U.S. to exchange French dollar reserves for gold in 1966, the FED’s gold reserves were only enough for about half that amount. The ever more deeply anchored loss of confidence forced the American president Richard Nixon on August 15, 1971 to cancel the nominal gold peg and the so-called “Nixon shock” ended the system as it was.

And where something ends something new can or will inevitably begin.

Today we live in a world where the stability of our currency is based on our confidence in government fiscal policy, the economic strength of our country, and the good work of an independent central bank. However, we also live in a time when new currency systems are already looming on the dense horizon. The basis for this was laid in 2008, not surprisingly, by one of the most serious crises of confidence in the international banking system that modern times have seen. And the new systems are being implemented with the help of cutting-edge distributed ledger blockchain technology. The new, with its decentralized nature, is challenging the old. While many of the new currencies in the crypto world, such as bitcoin, are subject to large fluctuations, stablecoins promise a link and fixed exchangeability to an existing value, such as the US dollar or even gold. However, the old Bretton Woods challenge of being able to keep this promise at all times remains in the new world. Millions of dollars in penalties imposed by the New York Attorney General’s Office on the largest U.S. dollar stablecoin, Tether, for not being fully verifiable do little to help trust, especially when less than 3 percent of the market capitalization is actually deposited in U.S. dollar cash. As always with new ones, trust has to be built up. This can be done privately, perhaps with a stablecoin backed 100% by central bank money, or by the state, with well thought-out central bank digital currencies, such as the digital euro planned by the European Central Bank.

We live in a world of perpetual rapid change and trust is, as Osterloh describes it, “the will to be vulnerable.” Without trust, there are no alliances, no togetherness, no progress.

Philippe Étienne was back in autumnal Washington after just a few days and has since been working again on what diplomats are best trained for – building trust.

Sources

Billon-Gallan, A., Kundnani, H. (2021): The UK must cooperate with France in the Indo-Pacific. A Chatham House expert comment. https://www.chathamhouse.org/2021/09/uk-must-cooperate-france-indo-pacific (Retrieved 24.9.2021)

Brien, J. (2021): “Stablecoin without stability”: Tether and Bitfinex pay $18.5 million fine. URL: https://t3n.de/news/stablecoin-tether-bitfinex-strafe-1358197/?utm_source=rss&utm_medium=feed&utm_campaign=news (Retrieved: 9/30/2021).

Corbet, S. (2021): France recalls ambassadors to U.S., Australia over submarine deal. URL: https://www.pressherald.com/2021/09/17/france-recalls-ambassadors-to-u-s-australia-over-submarine-deal/ (Retrieved 9/25/2021).

Ferguson N. (2019): The New Cold War? It’s With China. And It Has Already Begun. URL: https://www.nytimes.com/2019/12/02/opinion/china-cold-war.html (Retrieved: 9/30/2021).

Graetz, M., Briffault, O. (2016): A “Barbarous Relic”: The French, Gold , and the Demise of Bretton Woods. URL: https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=3545&context=faculty_scholarship p. 17 (Retrieved 9/25/2021).

Osterloh, M., Weibel, A. (2006): Investing trust. Processes of trust development in organizations, Gabler: Wiesbaden.

Steil, B. (2020): The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the new world, p. 377.

Stolze, D. (1966): Does de Gaulle defeat the dollar? In ZEIT No. 36/1966. URL: (https://www.zeit.de/1966/36/besiegt-de-gaulle-den-dollar/komplettansicht (Retrieved: 9/26/2021)

The Guardian Editorial (2021): The Guardian view on Biden’s UN speech: cooperation not competition URL: https://www.theguardian.com/commentisfree/2021/sep/22/the-guardian-view-on-bidens-un-speech-cooperation-not-competition(Retrieved: 9/29/2021)

Unal, B., Brown, K., Lewis, P., Jie, Y. (2021): Is the AUKUS alliance meaningful or merely a provocation – A Chatham House expert comment. URL: https://www.chathamhouse.org/2021/09/aukus-alliance-meaningful-or-merely-provocation (Retrieved: 9/24/2021).

Time Online (2021): France sees relationship in NATO strained. URL: https://www.zeit.de/politik/ausland/2021-09/u-boot-deal-frankreich-australien-usa-streit-nato-jean-yves-le-drian?utm_referrer=https%3A%2F%2Fmeine.zeit.de%2F (Retrieved: 9/25/2021)

Mission NORTH SEA ENDURANCE – the Trailer

Enjoy a glimpse of the thrills awaiting the men aboard their expeditionary sailing yacht in the North Sea with this introductory trailer featuring moments from previous GOST missions.

NORTH SEA ENDURANCE TRAILER

Sustainability-POC-Report. World‘s first 100%-electric armoured e-truck in action with Prosegur

July 6,2021

Original published in German in “TRUCKERS WORLD powered by MAN“ – translation by Deepl.com

CLEAN and SAFE.

Cash transport with the MAN eTGE

The world’s first armoured electric money transporter is now in use at the security service provider Prosegur. Since the armouring was realised in lightweight construction, the electrically powered MAN eTGE has enough payload and range for city traffic. On tour with the environmentally friendly cash messengers in Potsdam.

For safety reasons, Prosegur’s cash messengers always travel in pairs or sometimes even in threes – a well-rehearsed team. Today Uwe E. is driving the yellow money carrier through Potsdam. His colleague Andreas H. watches the surroundings from the passenger seat. He mainly looks for hedges, backyards and other possible hiding places. Because “the others” could be lurking there in ambush. That’s what H. calls criminals who are after money and valuables transported in the vehicle, doubly protected by the armoured outer skin and the armoured inner cabin. The course of each tour, each of which covers several banks, ATMs or shops, is planned in detail to minimise the risk of robbery. At Prosegur’s Potsdam branch, a security guard watches on a monitor as the GPS signal of the MAN eTGE moves through the city and keeps in touch with the two cash messengers by radio. Driver and co-driver are highly concentrated while the electrically driven van glides almost silently through the streets. “This silence while driving is great,” says money messenger Andreas H. with satisfaction. “Without noise, I can focus even better and am less exhausted at the end of the working day.”

However, the advantage of the noiseless drive is not the main reason why Prosegur uses the world’s first armoured electric money carrier. The company wants to prove to itself and the entire security industry that electric mobility is not only suitable for normal delivery traffic, but also for the special requirements of cash-in-transit. Despite the additional weight of the armour, which reduces the payload of the vehicle and the already limited range of the electric battery.

Lightweight construction for armouring
Since Prosegur has already had good experience with the conventional MAN TGE panel vans in its fleet, its battery-electric variant, a MAN TGE 3.140 E, was chosen as the test vehicle. The STOOF company provided it with armouring and dispensed with steel in order to save weight. Instead, aramid was used, a lightweight high-performance fabric that is also used by the military for armoured vehicles and protective clothing. In this way, it was possible to realise the cash transporter with a tare weight of 3,150 kilograms, including the armour. “Its battery charge allows for about 120 to 130 kilometres of range. That is absolutely sufficient for our tours in the urban area” tells Alexander Lange, who manages Prosegur’s fleet. “Our electric money transporter travels 70 to 90 kilometres per day. There is still enough range left over as a safety reserve.”

Prosegur has been using the MAN eTGE since September 2020. It has since been integrated into normal operations. The test phase has been successfully completed. The proof is in: environmentally friendly transport of valuables without local emissions is feasible. The electric version has proven itself very well. “As a company with a large fleet of vehicles, we want to make an important contribution to climate protection, so there is no way around electric cash-in-transit vehicles,” announces Jochen Werne. The Chief Development Officer of Prosegur in Germany estimates: “A large part of our tours – especially in urban areas – can be realised with battery-electric vehicles.” For supra-regional shuttle transports, according to the current state of the art, another drive solution with a higher range is still required.

At Prosegur, the changeover to electric mobility will take place in carefully coordinated steps. Jochen Werne emphasises that in addition to the purchase costs of the vehicles – the fleet comprises 900 cash-in-transit vehicles and 300 service vehicles – additional costs must be calculated for setting up the charging infrastructure. Until now, the MAN eTGE has been charged overnight at a simple 230-volt socket. After around eight hours, the battery is full again. “In order to fully exploit the advantages of electric mobility, high-performance charging stations are of course indispensable,” Werne explains. Despite the necessary investments, the head of development at Prosegur also sees a great economic opportunity in electromobility: “In a long-term total cost consideration, this technology can even save money.”

A sign for climate protection
In Potsdam, Prosegur is setting a clearly visible example for climate protection with the MAN eTGE.

In contrast, the money messengers Uwe E. and Andreas H. want to attract as little attention as possible to their risky job. For each customer, they park as close as possible to the entrance. Uwe E. quickly slips into the shelter of the building and soon after back into the vehicle. For the short distance, he carries the valuable cargo in a special transport security device. After completing their rounds, the money messengers drive their “e-tank” through a security gate back to Prosegur’s premises. Safe and clean.

Sustainability World Premiere: PROSEGUR launched first MAN armoured E-Truck

Hauptstadt-TV reported on August 6, 2020. Coverage here

Today, on 6 August 2020, the time had come for a world premiere, the first armoured money transport vehicle with an electric motor. This project was only made possible by a collaboration between the MAN vehicle and engineering group and the special protection vehicle manufacturer Stoof and the security service provider Prosegur. Together, they have succeeded in making the heavily armoured vehicles more environmentally friendly. As this report shows.

International Understanding: Expedition Baltic Sea Hawk

An expedition supporting the creation of international understanding and the creation of awareness for the UN sustainability goal No.14

EXPEDITION MISSION

THERE HAS BEEN AWAKENING

We are living and experiencing a time where we are globally opening borders again. It’s a time of hope and a time to celebrate the great achievements mankind made throughout cooperation, diplomacy and exchange.

Like in the days – many of us do record very well – when the Cold War ended and borders opened, brave women and men worked intensively in many projects to overcome also the barriers in the minds of the people. Fear was replaced by the hope for a better future for mankind. Adversaries became friends and as a result nationalism and populism were disarmed.

With Expedition Baltic Sea Hawk we want to commemorate with a ceremony on sea all those who were engaged for international understanding because we’re convinced that in these days it’s more than ever important to create understanding for the continuation of the historically longstanding period of peace in Europe. The GOST ceremony supporting international understanding will take place at the historical site, where sailors of the navies of NATO and Warsaw Pact operated with a sober attitude in closest distance during times when political tensions were on the edge.

SUSTAINABILITY

In addition to that we will support the UN sustainability Goal 14 by creating awareness for the BALTIC SEA AS A TIME MACHINE predicting the impact of human activities on our oceans. 

Overfishing, warming, acidification, pollution, eutrophication, loss of oxygen, intensive use of coasts—all these are phenomena that we observe around the globe. Because they have been particularly drastic in the Baltic, but also because some key problems were successfully addressed, the region can, for good and for bad, tell us what to expect and how to respond to the challenges of the future. 

The Baltic Sea, as a model region, can contribute to achieving the United Nation’s Sustainable Development Goal 14— THE CONSERVATION AND SUSTAINABLE USE OF THE OCEANS, SEAS AND MARINE RESOURCES

JOCHEN WERNE
Co-Founder GOST and Expedition Leader
It‘s a great privilege commanding the flagship of Expedition „BALTIC SEA HAWK“ during this offshore challenge through the Baltic Sea to the North and hence crossing twice one of the planet’s most exciting waterways: the Kattegat. With a commemoration ceremony supporting international understanding we will remember and honour the sailors of the navies of NATO and Warsaw Pact who operated during the Cold War in these waters always with a sober attitude in closest distance, even when political tensions were on the edge. Their professional engagement has been instrumental for the long-standing period of peace in which we have the comfort to live in.

It‘s a great privilege commanding the flagship of Expedition „BALTIC SEA HAWK“ during this offshore challenge through the Baltic Sea to the North and hence crossing twice one of the planet’s most exciting waterways: the Kattegat. With a commemoration ceremony supporting international understanding we will remember and honour the sailors of the navies of NATO and Warsaw Pact who operated during the Cold War in these waters always with a sober attitude in closest distance, even when political tensions were on the edge. Their professional engagement has been instrumental for the long-standing period of peace in which we have the comfort to live in.

JOCHEN WERNE
EXPEDITION LEADER & CO-FOUNDER GLOBAL OFFSHORE SAILING TEAM