Sums up all these various subjects through the exposition of information theory, which i think is the major scientific breakthrough of the century, the information theory, behind all our technologies, and i believe its best explained our economy. Host do you identify as an author or identify as a consultant or what . Guest im not a consultant. Although, clayton christian, the 27th most influential consultant. He used to be a partner of mine. So its but im chiefly a writer, but i also have been an investor, and im a venture capitalist, and im serious about that work, which has supported me as much as my books over the years. Host whats been your best seller . Guest my best seller was wealth and poverty which made me president reagans most quoted living author. What are some of the things you have invested in that have succeeded . Guest well, a company which is the leading Knowledge Network company, creates its a Software Program that connects you to consultants, and they signed up hundreds of thousands of consultants, and you just call up them with the ten questions you want answered, and theyll connect you to the consultants who can best answer them. And its been a tremendous success, the company is where worth many billions of dollars, and i was the first major outside investor. But also a Company Called otoy, which is a fabulous next Generation Internet company that renders 3d images across the internet, and has signed agreement with the National Hockey league to actually transmit 3d images of hockey games in the future. So, and israeli company. Spent a lot of time supporting various israeli companies, including easy chip, and asock, which is eliminates the cell towers ultimately by moving all the processing from your cell phone, the voice processing, complex voice processing, to data centers, and this will mean that all youll need to collect the signals from cell phones will be a small antenna. It could be a shirt hanger. A simple antenna rather than a complex Computer System that is involved in these big cell towers you see everywhere. So, ubiquitous antennas, and mostly invisible antennas. So a lot of and then ive got a been supporting a Company Called imusoft, which wants to move drug production, pharmacology, away from big drug factories around the world, in puerto rico or whenever they are to the human body itself, he human body has trillions of and which can be programmed to produce any proteins or molecules you need for a lifetime. You change the dna in the immune system and it can permanently correct chronic conditions, and this is imusoft, started by a young Computer Scientist who said who saw at a discovery institute, which is the founder of the discovery institute, and he saw that the human body is like a computer. Its programmable. And he set out to program it. And peter teel has been the major investor in that company. Peter teel is the best investor in the world for my money. Host how did you become you . Where did you get started . Guest i started writing speeches for politicians, and probably my real shaping experience was being stuck in lansing, michigan, for a whole year, writing a book for george romney, who was running for president , called the mission and the dream, and i was in a motel room out there, and they didnt pay me regularly, it was a somewhat feckless campaign, and lansing, michigan east lansing, michigan, wasnt all that inspiring, even with Michigan State and bubba smith as the football player, and but i learned economics while i was there, and the mission and the dream, later evolved ten years later into wealth and poverty which i could write fast and effectively bastide id previously developed the ideas in lansing. Almost suicidally unhappy. Host who is your favorite economist . Guest hayak or mark skousen is a terrific economist, and he is empress sayreow of freedom fest, where i am at the moment. Host you did mott mention Milton Freedman. Guest Milton Freedman is brilliant, logical mind and Nobel Laureate economist, but my newest book, which is a short book, ircalled the 21st 21st century case for gold, new information theory of money, tries to refute Milton Freedmans monitorrism. Which has been adopted by people like paul krugman, who is New York Times now ben laureate, columnist, and conservative magazines have adopted, and it prevails in the world economy, and it has resulted in a currency market that transacts 5. 4 trillion worth of currencies every 24 hours. Thats a third of u. S. Gmt every 24 hours, thats 100 times all the transactions and all the stock markets in the world put together. Its 25 times all the trade in goods and Services Reason the world put together. And yet, it purpose, which is to define a value for money in every country around the world, failed because, as a measuring stick, the currency values are more volatile, they change more rapidly, than the Economic Activity theyre supposed to measure. So, this currency trading, 5. 4 trillion a day of currency trading, is an utter failure, and its based on Milton Freedmans belief that currency should flow, which has been deposit by liberals adopted by liberals eagerly and is really a foundation for Monetary Policy around the world. This book targets that ridiculous way of setting the monetary index. Host how do you set it . Do you return to the Gold Standard is . That politically feasible . Guest well, the Gold Standard has been a great success. I mean, it fueled the industrial revolution. 200 years of the fastest growth in the history of the world, and the long multimillenial stagnation that afflicted the human race since adam and eve. And but the Gold Standard is measurable in part by identifying the time we really establish government control of money, which was in 1913, with the establishment of the Federal Reserve board. And since 1913, and the establish0. The fed, if you had a Million Dollars of dollars, they would be worth around 20,000 today. Well, if you had Million Dollars of gold in 1913, theyd be worth about 40 million today. And the 40 million roughly corresponds to the 0 growth of the world economy. The gold is really the measuring stick of value that far exceeds the measuring stick of any currency. Currencies have become meaningless, and the recent they have become meaningless as a measuring stick is because theyre part of what they measure. And the essence of a measuring stick, it has to have roots of value outside the domain it measures. And you dont put measuring cup in the cake and not allow the plastic to melt and pervade the cake. But thats what our money policy essentially does. It takes the measuring stick and puts it in the cake and it results in a hyper trophy of finance. The economy is now 35 of all profits are generated by financial activities rather than by actual real economic production. And that is dire problem. Host what exactly lets take a step back. What is the Gold Standard. Guest the Gold Standard is a method of valuing goods and services by a specific amount of gold, and the reason gold the Gold Standard works in this capacity as a measuring stick is because just by happen stance through history, gold has cancelled out Economic Activity in its price, because as Mining Equipment and exploration gear has improved, from panning nuggets out of streams in california and n the gold rush to gigantic Mining Equipment of today, gold has become more difficult to mine and proportion is the Mining Equipment has improved. So, in effect, the increasing difficulty of mining gold from deeper, more remote lows, and thinner distributions, has cancelled out the effect of the huge improvement in gold Mining Equipment, and less gold as the measure of time. Gold is a measure of the time it takes to distract it. Extract it, and because its in time is the element that remains scarce. The economy where the government controls everything. And being on the Gold Standard would make the government decisionmaking government influence out of that. Is that out of the the monetary standard. The way entrepreneurs and the economy decide what resources they are going to use and what amounts and with the products they are going to produce and where they are going to sell is all determined in the view of another economist by one with money as an Information System and my book is a new Information System, new information theory of money and came to this theory which is contrary to all the previous analyses of the Gold Standard because all the previous people thought gold is as good as money because it is intrinsically valuable as much as jewelry, and my friend told me that jewelry is valuable and people cherish it because it is really money and money is separate from the economy and the root of the value of money is in time and this insight i sort of came up with was not fully because the inventor of that coin bitcoin of the internet could become an important world couldnt become a bitcoin is explicitly based on zeroing out the impacting technology so as the computer power doubles every 18 months, he was worried that if he made his bitcoin dependent and responsive to Economic Activity in the computer industry, it wouldnt be a stable measuring stick it would be a function of the ingenuity. It would be explicitly on the time that it would take another block. Although i have my suspicions of who influenced and i discussed in my book. Hes a brilliant mind who really hes a precursor to bitcoin and it is gold for the internet, and because it has the same source of value as gold routes its value in time because it cancels out all the other factors, all that is left is the time that it takes to produce it. Time the time is the perfect monitoring measure because. It is an externally scarce and remains scarce when everybody else grows abundant. It cant be avoided or stolen very well. Its equally distributed to everyone. Its the universal standards and the constant of the universe which is the speed of light. The measurements of unit are ultimately in time. I go through that in the buckle of the existing measurements are all finally from a meter to the kilogram. And some other factors that finds its ultimate abilities in the constancy of time. Is the case its a case of gold written for the layman. Its still an interest in economics and a some sort of an awareness of economic thinking. Thats not a degree of economics or anything like that coming in and agree to it could degree that would prevent you from understanding it. Why do you say that . Because economists have been taught they dont understand information theory. Economists in my book, knowledge and power i developed a new theory of economics based on the information and thats completely different. I dont think that capitalism is an incentive system, i think its an Information System. Claude shannon, the great inventor decides information essentially as the guy and if everything i told you today you already know. Information is the unexpected and shannon was a developing. And he developed the theory is that undermine the entire internet, the seven layers of the internet from physical the physical to the actual machines and lawyers to the application and i believe that we need a new step in information theory that co. It would be a transaction layer based on the bitcoin. The transaction layer where you have time stamped events and transactions and covenants. Among the things that it can do is return the power to the producers of content from the aggregators of content. Largely today because there is no transaction layer on the internet. The internet is built up with clutter. It is a 33rd of all webpages. Advertisements on the internet are ads on the internet. It is a protocol for the advertisements of the power today is in the hands of people that can aggregate even though most of the advertising is not by the recipient and the value subtracted advertising is really both an act and so we want value added advertising. And a future life after google will explain how we can have the life of the value added advertising to allow content producers to collect their own payments and not be dependent on all these big aggregators anymore and thats a promise at this point because it can automate transactions and remove the hassle out of transactions on the internet. What do you mean by the word velocity . This is the flaw in Milton Friedman speak my theory that he recognized words and his life in 2003 he actually acknowledged that his theory that everybody has adopted now was in fact not successful and the interview with the financial times. The reason its not successful is that is inclusion is money supply and the velocity which is the turnover of the money supply , how much people spend equal places and transactions in earthly gdp. Monetarism explains that money is the factor that controls Economic Activity and that assumes money cant rule unless it is a stable as part of friedmans nobel prize came from the velocity which said that it was stable and reflected the technology of human beings that was outside of the economy. People stayed with the young and old. It means that the philosophy at any point is a constant depending on these psychological propensities. And its wrong. It turns out to be anything but stable. During the last recession, the money supplies rose like a rocket and the fed went from 800 million to 4 trillion but we put all the rich if it stayed constant but instead it felt like a rock and multiplied all increases in velocity. And increases in the money supply were nullified by the collapse of the velocity all around the world. Each can come at europe, everywhere. So Milton Friedmans p. Turned out not to be correct and so Paul Krugmans theory wasnt correct either because he based all of his current prescriptions in the u. S. On the assumption that the money supply rules and so this is time for a new theory of money and information theory and that is what my book provides. We have been talking with george about his eight team books. The 21st century case for gold and information theory of money. Or watching book tv on cspan2. We wanted to show you a panel from last months boston book