Insist it is another governing body that allows investors to insist on where their orders go thats being broken. So the rules are being broken. I dont know what kind of a violation it is. You will read about this in the newspaper. The rules are in place and the investors were exercising their rights they just have no history of it and they never ask where the order goes. Its hard for them to find out where it goes and how it is erected. So, it is a problem more historically it just never been done. Now it was a radical to go to fidelity or say start telling them where to send the orders because theyve never done it before and the bank was furious that they were telling them they were doing that but they are doing it. So now it is a matter of the rules being enforced more than anything else. After what you just said i can see the optimism would get turned around because the individual does have the power, but is it against the standard with the Municipal Bond to the places like alabama contracting . It is in the aid the financial markets. It is about the Interest Rate markets and the Foreign Exchange scandal. The commodities in the scandal why our markets all of a sudden so heavily manipulated by the big wall street banks . It probably because they can. Partly it is because the historic sources of the revenue for wall street have dried up and it has been cramped by dodd frank so part of it is response to the survival for the banks and the individuals in the ban banks. Its the same thing playing out in the stock market. And i think that is why its happening. Basically, technology has reduced the natural and the useful role played by wall street and eliminating it in some markets and you have to find other things to do. [applause] we are going to bring a table up your just get a couple of minutes to get organized. Barnes and noble is out on the patio and they have some mouth on cloud well books available for sale to the because theyll blink bac coauthor steve forbes and evil is a talk about their books and how the destruction of the dollar threatens the Global Economy. This event was held at politics and prose bookstore in washington, d. C. In june. Vr very privileged to have with us this evening a very recognizable figure in the media and business world. Steve is of course editor in chief of forbes magazine, the nations leading business magazine and he has had a Media Company that includes not only asian and european editions, but a number of Web Properties focus on politics, sports and financial markets. Many of you will also remember steves spirited campaigns for the republican president ial nomination in 1996 and in 2000 during which he promoted the idea of among other a flat tax along with a new Social Security system, medical savings accounts, term limits and a Strong National defense. This evening steve comes to us as an author is not a new role for him he has written or cowritten five previous books and six and the latest one, bonnie how the distraction of the dollar threatens the Global Economy and what we can do about it. The views wont be surprised to read the criticisms of the Central Banks and monetary policies with the fed now winding down its quantitative easing steve c. Is an opportunist moment to think the monetary system. The goal was to make the United States stronger but instead it has made the country weaker. Something has to be done. Here to explain what needs to be done along with coauthor elizabeth who is a Communications Executive is steve forbes. [applause] thank you very much for coming out the book is about money, Monetary Policy is one of those topics that seems to intimate a lot of people for some strange reason. And as a result, the Federal Reserve for example has less formal oversight from capitol hill and from congress and our intelligence agencies into the thesis of the book is that the topic of money is very straightforward and simple. Even though it is shrouded in a lot of jargon and eat rations that the odds of the idea of money is very basic. Weve gotten away from it and our policymakers today no less about money, Monetary Policy than they did 100 years ago. Since the early 1970s, even though we have had too many decades in the 80s and 90s, overall cover growth rates since we went off the brendan woods system of the old Gold Standard in 1971, the u. S. Average growth rates are less than they were before 1971. And if we maintain that growth rates that we have for 180 years up until 1971 if we maintain those growth rates after 1971 on average the u. S. Economy today would be 50 larger than it is now. 40 years compounding effect reverse compounding adds up to a lot. Savor having 50 higher incomes and what will it mean for the deficit, what will it mean for Social Security, what will it mean for a lot of the social positions today . Over time this adds up and it is a critical reason why it takes two incomes and a family to do with one income due to the scope could do and taxes are a large part of it, but the basement of the dollar since the early 70s is a critical part of it as well. And when this happens when you dont have a stable currency, you end up with people not getting ahead of a lady should and median incomes not growing the way they should and leaving as my coauthor elizabeth will discuss in a few minutes the fraying of the social fabric and adoption of the trust and positions. It is a process that not one in a million will be able to diagnose. So thats why we wrote the book. Now since Monetary Policy doesnt usually get to the heart beating or flutter away some of the reality shows do, i will begin by just giving you an advanced reward and that is to give you a travel tip. If you ever find yourself in an airplane and coach, the middle seat, on the runway, watching your life passed away and you want a little bit of elbow room, Start Talking about Monetary Policy. They will cut you a wide group. [laughter] succumb as a result of the chaos that we have had slow moving since the 1970s, the Federal Reserve has got enough in terms of more and more power but the more power it gets the worse we are. You take the quantitative easing which i will discuss in a moment even though they are not deterring the thing which is a good thing if it ended up contracting the economy rather than stimulating the economy. In terms of money its very basic. It makes transactions buying and selling which is how we proved our standard of living which is how we exist it makes buying and selling much easier. Now in the old days we had the barber that was very inefficient so lets say that i sold an ad in forbes, how would i get paid . Perhaps with a herd of goats. Im being a little facetious but lets say i wanted to buy ipad for the writers so i went to the apple store 3,000 years ago with a herd of goats and they said i dont want to go to i want a sheep. So i have to figure out how to swap the goats for sheep and have to hire a sheepherder because you dont want the bolts to eaboysto eat the sheep. The sheepherder wants to be paid with wine. I have red wine and he wants white wine. Imagine if we still had barker today trying to deposit a cow and atm it just becomes very inefficient. So in essence what money does most of the time it doesnt have Intrinsic Value unless you have gold coins and the like but it makes the transactions easier and in that sense money measures the value. Thats all it does it measures value the way clocks measure time, scales measure weight, rulers measure and it measures value. So because it represents value and may transactions easier and in that sense it is a form of communications. It lets you know information to do all of the billions of leds around the world each and every day. So, money in and of itself is not welnot wealth but it represa claim on products and services. Think of it as you would a coat check. A coat check has no Intrinsic Value but in a restaurant you put your code in the closet you get a coat check and it represents a claim. So money represents products and services that have already been produced. So the idea that if we stimulate the economy by printing money it would be like a restaurant saying if we create more code checkcoatchecks that was reallye production of more coats. Nowhere does not. Its a claim and it represents the claim on a product or service. So money works best when it has a fixed value. Just like a clock as 60 minutes in an hour and imagine what the world would be like. Your daily life would be like if the Federal Reserve did the clocks with it goes to the dollar imagine floating the clock. So you have 50 minutes an hour one day, 48 minutes the next 20 to the next, even asked. He would soon have to have hedges and derivatives to find out how many hours you are working each day. Lets say you are baking a cake. You have to figure out is that inflationadjusted minutes, real minutes . It makes life much more difficult. Imagine what would happen if they change the number of inches and a foot and you are building a bridge in the suddenly you learn instead of 12 inches it is now 10 inches imagine building a house. It makes things much more chaotic. So money works best when it has a fixed value and then the question becomes what is the best way to do it and even though it is absolutely out of fashion in the economics profession the way that it worked in this country for the first 180 years of existence is you fix it to gold. Why . Because more than anything else that keeps its Intrinsic Value. As it has for 4,000 years. You cant be story it. Every ounce is still in the world today and its been pointed out that perhaps the gold ring that you are wearing may go back to the egyptian pharaohs and egyptian times. You cant destroy it. It is hard to make but not too hard, so you dont get much of it at a time and because you cant be story it if you find a big gold mine, even though California Gold rush which is one of the biggest ever only increase the annual supplies by about three or 4 and then taper down to the average one and a half or 2 so unlikely to you dont get dropped or things like that and you dont have to worry about storage or mice eating the gold. So whether you would freeze it or keep it coming you cant be story it. It has very unique properties. So it stood the test of time for 4,000 years. Now people think if you mention gold that does that mean we have to have gold coins . You have to have 100 backing . Know, think of it as you would the ruler. It is a fixed measure of the values of lets say we fix the dollar to gold of 1,200 per ounce. All that would mean is that it went above 1200 in the marketplace, 1,200 per ounce and that means it is creating too much money so it creates less money. Figures below 1280 to create a little more money so that lets the marketplace determine the need of what is needed in terms of money so if you have a vibrant economy you are going to create more money. You dont have to own an ounce of gold to do it. The british ran the Gold Standard with very very little amount of gold but they knew what they were doing. And they responded to the signals in the marketplace and it worked right up until world war i which blasted that and a lot of other things. So gold in that sense is like the ruler. The fact that a mile has 5,280 feet doesnt restrict the number of miles of highway you build. So to give you one little fact that you can use at a Cocktail Party to show how brilliant you are, from the time of our existence, go back to the revolutionary war in 17751 rightbrace while agricultural nation, up until say 1900 when our population increased to 25 fold and we went from a small nation for the industrial nations of the world during that period of time that amount went up only 3. 5 fold. The money supply went up 160 fold even though the dollar was fixed in gold. So, the gold makes sure the values be fixed. It isnt restricted to the supplies we have a vibrant economy and these are the needs of the marketplace. We have a stagnant economy. You dont create it, so it is very, very basic. When people lose sight of that, when you end up with what we had in 71 from one crisis to another we had a terrible decade of the 70s. We got it right in the 70s and 90s and we moved ahead. But in the last decade, we went backwards and a starting in this partisan thing it started under the Bush Administration and the treasury department, Federal Reserve started to weaken the dollar to stimulate exports and thats how we got the housing bubble. Anytime you undermine the integrity of the dollar, the dollar, people go onto the hard assets. From the mid1980s to the last decade the price of a barrel of oil was a little over 21 million a barrel. What is it a . Eighty, 90, 100 . The middle east crisis may not get up to 110. Back in the 70s none of you are old enough to get under the 70s. [laughter] its called pandering. [laughter] tried it in politics. Didnt work which is why i am peddling books right now. [laughter] but back in the 1970s, it went from 3 a barrel the last time it went off the rails to almost 40. Everyone thought we are running out of oil and going to go up to 100 then Ronald Reagan came in with pole folder and they killed the installation of the 70s and about well went crashing down to 10 a barrel and the average 20 to 25 a barrel. Succumb it is like putting a virus in the computer. If you dont trust the value of money what it means is you get less investment and investment is less productive because you buy existing things rather then things in the future. Investing is risky enough that you dont know whether you are going to get back 100 cents a dollar that may not pay off for five years or seven years with her you get back a decent hour, 20 cents a dollar is more uncertainty which is why we have been stagnant and dead in the water by our historic standards. So thats why we wrote the book money. It represents a value. Gold is the first way to fix that value. And if we understand that, then we can move ahead and get back the kind of rates that we had before 1971. Obviously there are a lot of other things we have to do. But experience shows us that if you dont get the money right in terms of a fixed value, you can get other things right and gift taxes right, the spending, the regulations, but if you dont get the money right, its going to undermine Everything Else because it is the basis of Everything Else. The basis of transactions and ie trust, the basis of investment. And because when it works we dont realize what makes it work. Its like air. When its clean we take it for granted. My goodness air is important. Yes. So, many is in the same way. And one aspect of money that gets overlooked because we always focus when we think of it in economics and gdp and the like is social trust. We have a chapter that elizabeth is going to discuss for a few moments. The chapter talking about how the basing of money in the basis of society undermines the fabric, the social fabric in ways that go beyond simply gdp numbers and exchange numbers. So, i will call up elizabeth at one thing to keep in mind is when money is stable, the brainpower goes for a productive use. Just one example before 1971 when the currency didnt much fluctuate because we were fixed to gold very little currency trading. Now that currency trading is a huge activity all around the world. Daily volume over 3 trillion. Tens of thousands of the best brains in the world focused on activity that wouldnt exist if we had a stable money and brainpower that could be used for medical research and other productive things. So, this has consequences that go beyond merely gdp and the qb and what other acronyms they throw out. With that, let me say thank you and turned over to my colleague elizabeth. [applause] good evening. Its good to be here. I would like to talk a little bit about that chapter, chapter five which is money and morality how the base of the society and people found this chapter particularly thoughtprovoking. It starts out with that quote steve mentioned from the economist and i will read it in its entirety. Lenin was certainly right. There is no surer means of overturning the existing basis of the society than to be botched the currency. It engages all of the Hidden Forces of the economic law on the side of destruction and if does it in a manner that not one man in a million is able to diagnose. And we say in the book that unstable money is a little bit like carbon monoxide. Its odorless and colorless yet you dont know the damage it is doing until it is nearly too late. Thats because people are not always aware when the government weakens the currency an and they only see the effect of that which is one reason why debasing money is so corrosive. People say that money is about greed but in fact its about trust. It permits strangers from all nations and societies and all walks of life to come together and conduct transactions based on a commonly agreedupon measure of value. In this way it promotes cooperation between people. It serves as an instrument of communication as well and it tells us what a society values. Not just materially but with its priorities are. So, when money is corrupted, its ability to act as a facilitator of trust and cooperation is corrupted as well. It underlines the vital relationships between the buyer and seller and between the lender and adapt. The philosopher john locke described the fish are its produced at the core and he wrote and you have all probably heard this as well whether the creditor is forced to receive less or the debtor is forced to pay more than his contract, the injury is the same whenever a man is defrauded of his view. During the periods of unstable money you often see a particular scenario unfold. Scapegoating and corruption, social unrest and often increasingly coercive government. And in the worst cases it can unleash the forces of political extremism that can lead to the rise of dictators. Recently an investment strategist wrote a particularly good piece describing this classic scenario that has occurred throughout history and he points out that the Monetary Base has coincided not only in the persecution of the jews and the pre world war ii germany, but also with the french evolutions reign of terror and the caelum which trails and other episodes in the centuries. But this kind of destruction of trust and unrest is not just a remote pistol or cold occurren occurrence, its taking place in many areas of the world of today such as the middle east coming europe and to a certain extent, the u. S. The analytics in the advisory house have issued reports called the likely troublespots and the firm has been able to arrest a based on the rate of the monetary abuse. And a serious but suffered nearly 200 hyperinflation topped the list in february of 2013 followed by argentina, south africa, egypt, india and turkey all of which have been into leaders. Of course the political cause for the unrest in and i and it s different forms in Different Countries but it has been a catalyst. And the riots that began in the arab spring for example you may remember it started over the increasing food prices. The financial crisis was very much a betrayal of trust. Help create a housing bubble and then instead polled the rug out from under borrowers and this led to ultimatelletter to ultime collapse of some financial wave of foreclosures which led the collapse oto thecollapse of thee institutions and triggered the stock market meltdown of 2008 and then after that in turn itself a worldwide destruction of trust that ricocheted from one continent to the next. In europe the bank shook the confidence of the Global Investors hoping to bring on the sovereign debt crisis over there. And we all numbered those days and i will read a quote from an economist from the bank who told the New York Times in this day and age the bank runs around the world not of outofthebox. Once it is underway it doesnt matter anymore if you have good loans or bad loans people lose confidence in you so that is obviously shoving if this is really about trust. And the worldwide loss of trust very quickly turned to protests and we say in the bucke book itt from Balance Sheets to the streets. In the 2012 there was a poll by the Research Center that we fight in the book that said americans have been more polarized now than any other time in the past 20 years and what they basically said is most of this increased polarization has taken place not just in the last few years, but during the presidencies of both george bushes barack obama and both administrations were weak dollar administrations. So there was definitely if the polarization is coincided with the weakening of money. Basically when money is weak and there is a sense of increasing unfairness that the system is rigged and that you are being defrauded. People fixed income salaries see their money losing value while other people are reading what look like artificially and unfair gain and the link between the effort and the reward is severed and thats why in economies with unstable currency gets more corruption and crime and a number of studies have found that inflation has a stronger connection to actually a stronger connection to crime and joblessness. The crime rates in fact in the u. S. Dropped immediately after the financial crisis when there was a serious deflation but they began to move up in 2010 during the quantitative easing which is sort of interesting thing that we say in the book and these are just a few highlights from the chapter. And both left and right agree today that this is a period of malaise that we hope this puts aside some of the fingerpointing thats been taking place in recent years and helps them recognize the role of the unstable dollar as the catalyst into the culprit. Thank you. [applause] we now come to the qanda. If you can come up to the microphone if you have a question and feel free to ask away. Rather than try to debate the ideas here of the concept of stable money and so forth i guess i would just ask this. Why is it that so many countries including the United States have dropped the Gold Standard . And why is this sort of theory so unpopular and why is it you mentioned the fact you gave me the quote who said one in a million well correctly diagnose the problems of its kind of a hint that there is a basic fundamental reason why its hard for people to understand this and for other economists or whatever to sort of accept the theory backs why do you beat me that they are so relatively few economists that accept your proposal . The reason that the Gold Standard lost dominance that it had in terms of intellectual circles as a result of two catastrophes. One was the First World War which had began 100 years ago this year and destroyed the classical Gold Standard. And after that, because the standard worked so well, they didnt really realize what made it work. And so, britain didnt do it right going back to it. That led to for example after the war they tried to ignore the inflation of the First World War created and try to repay the price which is ridiculous if youve doubled or tripled your money supply and recognize even the onetime catastrophe and do a reevaluation. They didnt do it so they harmed their economy that way. Keynes came along and turned a classical economics but its very basic. Classical economists said the real economy is the production of products and services. The other is a symbol of products and services. He reversed that and said the money is the driver of the economy and its production of products and services that respond to the money. So he put the cart before the horse and so they got to the idea that if you print a money that can stimulate the economy. It will certainly stimulate activity. But all it does is go into the activities that normally wouldnt have been like that will boom weve had in the last ten years and that we had in the 70s, the housing bubble we had a surge in the 70s. Not the catastrophe this time because the government wasnt quite as involved in it. But its like putting a virus in a computer. And a computer. You get activity but it is false activity in the 1980s you had energy go through a depression, agriculture went through depression, the commercial real estate went through a huge hit. We threw into the 80s but a lot of activities are under the false and funny money had to be liquidated in the 80s. And you saw that with housing today. And who knows if we get stable money what other things are false investments we have had out there. So theres world war i and the great depression. Nobody knew why that depression came. We exploiting in the book that it was triggered by the hideous war that we triggered mr. Hawley tariff. We blew up the Global Trading system. Everyone retaliated. Then every country made it worse by raising taxes. For example the depression was ongoing in the un. We raised the top income tax rate overnight from 25 to 63 . Excise tax which is a sort of sales tax was enacted on numerous items including a stamp tax on the checks. In the early 30s if you wrote a check to pay a bill, you have to pay a tax to the government for using a check. So, the massive tax increases came in the u. S. And britain and germany went berserk on the taxes so the deep end o into the downturn. So then they said while its trying funny money so they started it by devaluing the pound and numerous other countries and so one bad thing was done after the other. Despite that experience, we still got a Gold Standard after the war in the Brandon Woods system designed in 1944. It worked perfectly well, but by then, the idea of using Monetary Policy to guide the economy using the government to guide the economy was so prevalent that they didnt know how to preserve the system, which is why we blew it up in 1971 gratuitously. And we have been floundering ever since. As they mentioned the 80s and 90s the gold average was roughly 350 an ounce. And they had some fluctuations, but give it a c for Monetary Policy. And so, we got growth from its budget was still not what we could have done it in the early part of the decade we went off the rails again and we still havent dug ourselves out of that one. So two catastrophes. World waworld war i, great deprn but now it is beginning to eaters and its still below the radar screen but a growing number of thinkers are saying hey maybe this funny money that was tried before adam smith came along and demolished the idea maybe smith had it right. Maybe we should reexamine things again so this is what the book is contributing to. Getting back to basics on money and getting of a conversation going so we can get back on track again. And so the Federal Reserve if it is doing it job right should be no more important than the bureau of weights and measures inside of the commerce department. And by the way, if you ever run into a Federal Reserve official, ask them in terms of assuming power by the fed can ask them. They say they want to cover two and a half inflation because they believe that creating extra money stimulates the economy. That translates to a typical family an extra thousand dollars a year expenses. Ask them who gave you the authority to tax an American Family an extra thousand dollars a year and why it is paying that stimulate Economic Activity . I would love to hear ive asked it, but i havent gotten an answer. It seems even though i belief you are correct that something is wrong with the money i dont think its a broad enough discussion of two cover whats happening to us economically. Its so much for sophisticated now than it was then i believe youre in ours as. A few things i will throw matthew the gold changes fluctuate a great deal and a lot of the value of gold is artificially created by legislating it as the center of the value of money. So it had the reverse effect, to back. But there are times in history when we havent had enough money. We had to expand. There were panics and 18 hundreds. But the point is isnt fair in your thinking a broad concept of the distribution of wealth and income . It seems simplified in this complicated situation that we are in. Of the key thing is to recognize money is a measure of the value just like the clock is a measure of time. And if you grasp that when you see the gold doesnt influence the money supply it just makes sure when the dollar is created in a marketplace that has a fixed value. Now to take your point on the fluctuating price of gold that is less about the Intrinsic Value of gold and more about the markets valuing the u. S. Dollar now in the fear or hope for the future. So when people thought the world was coming to an end in 2011, remember the debt crisis, default and Everything Else . Gold shot up to 1900. The world didnt come to an end as analogous 12 or 1300. In 1980 it looked like the world was coming to an end in the shot u up from300 to 870 an ounceg back down again after the election of Ronald Reagan. So, thats more about the perceptions of the value of the currency than it is about the Intrinsic Value of gold. As for legislating the value, the reason it rose up was not the bankers getting together and saying lets do this. It rose out of the marketplace. It rose out of the marketplace and that governments quickly went into the minting business and couldnt keep their hands off of it but it rose out of the need of the marketplace, people doing transactions with each other. His account as a spontaneous thing isaac newton did 300 years ago with britain and gold was in effect to codify what people thought needed to be done. Holland for example in the 15 and 16 hundreds under the attack from spain, they are under water literally. Small population that because of the sound money and fled to the rise of sophisticated Capital Markets and they became the Financial Center of the world before london. Even though on paper this country had nothing. Britain became the Financial System when it fixed the gold even though it was a secondtier power before they did this they had a lot of other things going for it. But having the stable money brought it all together. So the marketplace sent over 4,000 years this is the way to do it. And as a result of economies always get more complex as you get more and more growth. Thats what adam smith talked about in the division of labor and the jobs rise up. A few years ago is that short for applications for college . What are you talking about . If you said ipod is that a remake of a movie about monsters from the ipod people . Things rise up that you cannot even imagine. So, again its a fixed measure of the value. It makes the measuring transactions the way that we improve our standard of living more and more trading, more and more specialization where we can focus on what we do best suite of to spend alof to spend all oe growing food and hunting mastodons or things to survive. We can focus on what we are best at. Thats what you get with fixed money. You can do those more easily. Given the dependence of the economy and the markets on the Monetary Policy and the willingness to create money whenever they feel like it billions of the time, what is the return to the Gold Standard look like or the markets and street . Think that if we decided to do it and we welcome i hope it isnt a result of a crisis, but a result of people saying we have been drifting on and off for 40 years and we are not doing what we did historically. Lets start it. By the way, there is a congressman kevin brady who has proposed a commission by partisan to examine the Monetary Policy and i think that is a good start to get a debate going. But going on the Gold Standard all it would mean over time is you would have a much bigger economy if we went back [inaudible] no. We discuss them in the book. The question was what it crashed the market. Though. There are a lot of mass that it causes deflation and bad times for farmers and all this kind of thing. No. What it does is allow the humankind to surge forward. The changes you get in the economy it wasnt gold that led to hardpressed agriculture. Its the fact we learned to grow more food and we are still learning to grow more food. Take corn for example. It popped in my mind. Right now, in the 30s a typical acre produced 27 bushels. Today its 150. We proved about a fellow in iowa who is now back to an event breakthroughs in corn that are going to lead to 200 or 300 or 400 bushels per acre. So agriculture today, 2 of our economy. 100 years ago it was 60 or 70 . Railroads for example after world war ii they employed 1. 2 million people. Today they employ less than 200,000 kerry about ten times as much freight. So economies are always adjusting upward rather than what we have now in its stagnation and people wondering and i going to get ahead . Is my 50 year old son ever going to leave the house . [laughter] yes, sir. Thanks for coming out. I am probably a part of the minority that agrees on the principles that i cannot afford gold at all. Its about 1,600. I always carry silver and im kind of beard like that anyway this is a 1,923dollar worth about 20 today. The two most interesting things ive realized after learning over the past two or three years that gold, silver, all that stuff you can buy the same amount of gasoline today as you could have before 1964. And i guess before 1964 quarters combined have dollars and dollars were made up of 90 silver and that was a mind blowing back to that although this is 1 dollar you go to the claim shop and it is worth 20 because it is made out of silv silver. The uk by the same amount of gasoline as you could have in 1964 so what that tells you is that the price of gas stayed constant whereas the price today of gasoline rose not because the price of gas necessarily rose but because the purchasing power of the dollar has gone down. Ten times is the same weight as the quarter and im sorry, 10 is exactly the same weight as the Silver Dollar in four quarters is exactly the same weight as the Silver Dollar. And two half dollars is the same as this dollar. So before the dinosaur smaller than the quarters for a reason. 2. 4 times is the same weight as a quarter. You talk a lot about gold and my question is where do you see silver playing into the picture of your idea in a society . In terms of the idea from the society it is never an idea with human beings. But going back and a sense giving in essence what we did the first 180 years of existence from George Washington and Alexander Hamilton until nixon blew it up and 71 with the applause of the most economists and socalled experts. Apropos of complaint on gasoline, just go back 13 years, 12 years before we went off the rails again big time instead of smalltime. The gallon of gasoline was 1 dollar. Imagine what life would be like today if you could pay a dollar for vaseline. That was only 12 years ago. Now what is it three and a half or four depending what part of the country you are in. In terms of silver, for centuries gold and silver had the same relationship. There were 15 or 16 ounces. What happened in the 1870s, starting in the 1870s was that people started to use more and more paper money. Small claims were convenient. People could get accustomed to the money economy but with the rise of paper you didnt need the claims as much and so the demand for silver fell so by the 1890s was 32 antedated 601. So in that sense it has held up better than silver. But the point that the money had a constant value answered in things like boy old with a gallon of gasoline have remained constant and you make a very fundamental point a lot of what we see and think of as rising costs like energy is a devaluation of the dollar and the fear of the future d. Bell uh and of the dollar to very good point. By the way if you flip it on the table you herein i found sound and thats how we got the phrase sound of money. [laughter] what are your thoughts on the concentration of the Banking Industry an and that consolidatn in the concentration of the deposits . The question is what about the consolidation of the Banking Industry. Its one thing to get consolidation as a result of the Natural Forces in the marketplace. You can get efficiencies and the like but its quite another when it is a result of the regulation. And the first part of the history we had a lot of extra banks because of regulations not because of the nature of the politicians wouldnt allow the banks to combine. When bank of america, the original back in the 1920s started to do in california when he took the bank across the state lines, using the Bank Holding Company to get around the restriction if you have a bank in one state youre not allowed to own a bank in another. So he had a Bank Holding Company and they passed an act stop them from doing it. Today they had the imp today they had the implicit purpose of driving small banks out of business. The reason they are doing it its not the economy, its the regulation. The reason they are trying to do that is its easy for the government to control and a lot of small entities out there. Thats why they make it impossible by the way for the single practitioners and health care. You spend 90 of your time filling out form instead of practicing medicine. They dont want you to be having so many doctors out there. They want you to be part of a collective in the hospital or big company. Its easier to control and regulate. So, thats what is happening now. What youre seeing now on the consolidation is as much artificial more than it is the nature of the changing marketplaces. And the other danger of the grasping of power they are not putting the applause of the insurance industry. After the elections they are going to go after mutual funds come equity funds, hedge funds, anything that moves they are going after to reduce the risk. What it means when you reduce the risk they want to do it, you are going to get no innovation. They never would have allowed the rise of the money fund when they regulate with the banks could pay for interest. The financing expedia become day in the republic. Just statistics, what they call commercial industrial loans in this country, banks lending commercial industrial loans, about one and half trillion. In europe the equivalent number when you take europe together is about the same population, a little bit less than when you add up all of their economies. About four and a half trillion. Way over dependent on banks which is a very fragile, suffocating, and dangerous system. You bring up a good point. We did not want to go that way. It is . Hi. Thank you very much for the stimulation. I want to get to the core of your argument and ask you if a in fact, you are not for getting the way people really are. Forgive me for simplifying. Cure that. Maybe. Hopefully. Developing to some extent the argument that inflation is bad and, of course, i mean, everybody has heard about the developments in germany in the 1930s and the way inflation has come indeed, destroyed the fabric of society. But things dont always work that way. People dream. People do foolish things. I mean, go through the history of sovereign European Countries and you will see a lot of dreams and constantly look at the years of economic history. It is