So inflation. So we live in interesting times, right, we're living in science that I don't remember potle else to them, I lived through powerless to the period nenteen seventy, but really following generation two generation, maybe inflation is weird. It's it's a falling concept. Is that I happened interspience have being zero or twelve years now before that, they weren't much higher than zero. Inflation as being a non event economically and econo perspective for a long long time.
And FED, I think, incorrectly has been deemed this amazing entity that has just managed to manage that economy beautifully and everything's gone smoothly and cool. You know, we had we had great Span and the Nankee and now at Gen YEA and the power that they've all been doing an amazing job and people who fans and there's a consequence. I think that's true ust the Lord, there's a very few and they having very few challenges to what the FED have
done for a million years now. I think a very different perspective. I think defense respond hole slow, we can let me go with that. I think defens respond over the two thousand and eighty other night two thousand financial crisis. I think the FED has done the zat job of all of that period, and we did not see one manifestation of a bad job that deft does, which is inflatable with lots of things you could screw up either that are
not manifest in inflation. So really the question of the FED is we're talking a little bit about the economics, but uh, and then we'll talk about, well, you know, should it be a FED, What is the role of government use of the economics, and does that include a monopoly over the issuance of money which is what the FAN has, and and different the ability control of the con used prices and using the regulating the financial system. So what is inflation? Um? I mean, I think we're all experiencing
right now what we call price inflation. Prices going on with really no reason to see hover avoid We can understand like proted, invadequeen and advice all goes. That makes sense follow us, right, because supplies being constraint, demand is still the same. You have the same demands, small supply, whatever
prices they go up. But that wouldn't cause inflation. That would cause prices oil to go Now, why wouldn't you cause inflation because if you have a set amount of money chasing a set amount of goods, if the prices one good goes up, and if I can afford less of bits, what's gonna happen to the prices elsewhere? You might specula say I'm spending in a more money in the oil, then what happens And I've only got a certain amount
of eco, then what happens to my constumption of other things? It goes down, and therefore that's gonna happen to be reflected in the prices to those listening to their bight. So so that's where we've got relative pricing, relative price moves. They impacted by supply shocks, by things like ward by embargoes, So you can have a relative price movement with the price of all goes through the rule and we have an inflation. So something else is going on
here and people length supply chain. You remember, this was all about supply gains. It was all about the difficulties of getting loose from triam TV United States. But again you have to actually, so okay, I can't why that is? We can go why all these other prices going Why it isn't
there again, this relative price moved. Okay, I spend less suthing in China, or it's gonna move money in China because those you know, supplies constrained, so uh prices going out, and then I should spend less money and other sovereign Dave prices you do now, So at the end of the
day, something else has to go on, but to be sustained. Inflation, that is place is going up throughout the economy, not just oil, not just stuffing trying, but also ransom, real estate and I don't know if you sold my college textbooks, so whatever about all that stuff would be bought. See if everything seems to be going the question is when does that happen? How does it happen that everything thing goes up? Because what we
characterize this place inflation Again it measure inflation is tricky. You know, you have to feel curious at how people measure inflation when we talk about it. But the way they we want to measure inflation is a popular that they shoot, not the want to the Federals at, but the one that people too. It is called EPI. We constuct their consumer quation the edge and basically what they do is they take a basket of the goods the average consumer consumes,
and they figure out how that changes in races of the time. Now there is us looking in an American consumer. Everyone of us in a sense experiences inflation different because our backs gate of goods is different. So not all aspects of goods are going up at the same goods. That makes sense, all right, So what would cause all these goods go up in price? Not to some Well, what cause prices or anything to go up? Increase
demand? If suddenly we all decided we're moving to name a little town anyway, and we also up in demand real estate, we want to bye, what's gonna happen to quite local real estate prices? They can go up. I live in Puerto Rico, and both the last five years Puero Rico has experienced that, right, A bunch of Americans have showed up, many of them before they come of crisis. Many of them were crypto mine, that is, with all feeling like that because they ask and they say, we
want to buy the best properties of an eye lander. And guess what happened to the best properties side? All of them went through the all of all prices with those stags went up, not logan and I'm eating it because that's not with the ending from the man who go high end those all the them. So suddenly people demand not just realistic that they demanded everything more. They start consuming more and you know we haven't had time to confuse small. Then
what happens prices prices go up to reflect that increase demand. Typically prices go up, all having them animals. Prices go up, it'll drop and therefore all the prices will probably stabilize and you won't see sustaining inflation. So substandars like you, but it's constantly going up means that I demand stop. You raise your price and keep them in again, keep in the same arounds and
you raise it again. I keep them in it. So the question is how can I when when my getting my money, how can I keep going any stuff? Don't matter what a price you say, I can't them anymore. And the only way that can happen is somehow I am getting more and more and starting the software. It usually happens. It's something like what happens to be cool. Everybody gave a check for me. You love that money. We all suddenly had a little bit more. We all took that money
and went out and demanded and bought suffer that we eased the price. But where did the second wave? It comes from the third wave in the fourth wave, well those coming out from Okay, how prices gone out? And go to my employee and say, listen, buddy, prices going I want to wage, So my wages are going up, so I have money and when where is my Oh how can they pet you? Because they're raising prices.
So the whole thing becomes the circle of you stimulate the main adviser, sending people chats, sudden people you applause, they go out of the shoot it that raises prices. Not when I said the check, where did that come from? That check? What we said, everybody, If that checking come from taxes. If I send you guys checks, but I tax those guys over there, then they never been able to balance up because they're on the wall. Will trade. You're on the wolf with equas shoot it was
shoot less, no inflation. But if instead of taxing it from them, I just puison. Now there's actually more money in the system. And with more money in the system chasing the same un of buildings, you get higher prices. And that's what that that will happen right when um, when COVID stimulus happen us, then the Trump and then dividend. The government basically printed money on a law of scale and didn't see government and printing money in the
path through the financial prices to printing money. But then they hit it. They do the shell game where they they pretty money. They give you money and then they, you know, put it away in some account where you can't touch it and you don't have to continue, which is called bank reserves. But here they stay your check home. So what are you gonna do?
You spend it? And as a consequence, it manifested itself, built it through the system, and prices are going out and prices continue to go up because wages continue to go up because employer employees of the any higher wages. Unemployment is very low. Employers don't have a lot of valvating power, and employers raised pricess that can play the employees more, and employees every money, and they a few more fights, and you can see how this gets
out of go. This is why people talk about if you listen to the news, they talk about inflation expectations. It's not picked about the money printing if you're people who I would step dating in terms of prices people and are expecting in terms of wages. And of course we know that I've got a
continued spin. We know that we are running evermore logic deficits. So though Biding just came out and declared it kind of deficit more than Inhale administration got right between last year AGAs and the ship, but I avoided exactly the same thing after the is a big city those packaged in two thousand and nine, and then when the stimulus we've gone in two thousand days. Sis, Yeah, that's because I didn't spend that trillion dollars I said last year as a
one. Biden is really exactly the same thing. But the deficits are so huge. Every one of those deficits that we funded somehow ultimately they bound them through thirty money. So that's where inflation got froment comme song is putting your money? Who picks the money in there in the day? In our system in the United States, because we have a federal Reserve of Central Bank that
is supposed to be independent in the how independent? Who really isn't supposed to be independent, but the government does is the governess sells bombs, So how does those bonds become in order to finance it's defence? Is how does those bonds become money? Enhance of people? But who buys all the bonds? Which used to be the Chinese buy bonds, the Japanese will via bonds,
and Dutch and Britisher via bonds. We would buy me the own bonds, but there's so much of this stuff that we can We can't the Chinese and stop buying it. The Japanese don't buy many American bonds anymore, So who's buying it? Yeah, so the federalserve bos thout the government. So it's like the Federals are taking It's like the government has two pools and they're shifting
between the two bulls. Right, So the govern issues bonds, the bonds to go to the federals, and the federals at sets money and that's how you want what they about the monetizing the debt. That's monetizing the debt, that's turning bonds into cass new catch it didn't just look this is they talk about the debt having a balance sheet and a very large balancing. That's all the bonds that they bought, which is huge. It's like eight times greater
than who was before the financial crisis. It's who time graded and was before COVID. So they need printing money like crazy, and as they shrink. What they're trying to do now is shrink the baluchie. What happens when you shrinting the value and sell the bonds and the fenders who takes some money? What does it do with that money? In acentive gouns? So many is
going that's how you can take money out of the economy. So the FED is constantly manipulated the monomy meet how with an economic and then if I got out of demand and we can as as a whole um create But it really is determining the amount of literally money that's in a box and then our bank
accounts and then institution is getting used. And it's constantly doing that by buying in stelling the bonds and by sitting interest rates high any interest rate, the more other people are willing to buy about the bonds, that's what I can do it because the higher word for that, So that is a way of not to have to monetize the debt. The lower, you know, the
lower the interest rates, a less demand from outside. The lower the interestrate, the will the fetish called the value the dead in money high end of the debt, the less economic. The higher the interest rates, the less economic activity. Why because it costs me a lot of mon inc inbout money to borrow. And if I follow less and if I consumes useless and the best less because I can't bol in as much because it just creates a higher
the economy starts slowing down. And when the economy slows down and gets shoot less, and that for susplices become down. If the economy slowed down, what I said in the government, it goes up. When unemployment goes up, whatever it's the balcony power of employees goes down. So I can't balking anymore. So I accept the wages I have kept my spending, and efflution comes on. That's the logical what's going on, right, They're trying to
create, resenting the purposeful. They're trying to slow down the economy, and economs are any blowing less than one percent, so they're trying to slow down economy. Ultimately, creative success is Unempoyment says, it's consumpting this is to mean different quite, to stop place and way to stop going. Think about power that that heaters a political class and the fit. It's how over all
of our lives. Basically we've handed the federals of visibility to control i'll supply and i'll been handed to control maybe a must important price in the entire economy. There's how much one of the price that interest rates in the entire economy.
To talk about the money, we have to control in a sense, every aspect about you know, you guys, when there isn't a session, when there is a who when money's cheap, when money is expensive, it's the only products that we have money which we basically nationally we've given a bureaucratic organization the authority to determine, how about what we use, how this money has been nominated, how much serious are there and how we use it? A lot of power. I don't think we can quite appreciate, you know.
Uh, we have criticize, often criticize and so beech union. Oh you greadlines? Why were they gread lansing? So we can people who are saying waits are bad. Everybody is controlling supplied. God actually was controlling the price. I mean collect the farm with controlling supply, the governess and controlling advice. And when God controls the price, the price is always long because they won't have the inputs necessity. He man supplying demand, so the government.
If if the government sets the vice low, how much it would fire? If you think it is produced? If I told you you haven't produced the bread there, I don't be selling it for fifty cents. You can only sell the fifty he said, You don't even produce him to supply shrinks. If device has been gunning set by controls love. If the price is set high, what happens? Everybody can use it, but nobody wants to buy it. And the beauty of the honor place it is a show.
We walk into the ghosting school and there's almost always bread there, right, and always the price the favor and that supply demand is always manage and then has to do with the entire is supply cheat having prices and all the prices each grating all the information necessary to be a good read and deliberated in the
supermarket. Bous when you have said proplying that whole question mechanism go at some bureaucrat as a model models says, by the vator of the ass, he plugs in ass and he tells everybody this is a bt of rered no real information to beat your movements advices, and you get either shortages or over supply. Oh, same thing is happening. In fact, they've got vast models, nasim models. By the way, they never didn't predict inflation because that
was a suspice to do. But models with each agree with the expectation out. Oh if we take it with the so the team with that, we get to get a recessions right. Oh, we get a motive a session that we can see the placient. Oh, we've got severual planners against set advices and expecting him to get advice. They couldn't get it right for an easy product like great, but it's relatant, civil and so weet union.
They never got the prices gaty rights. Yet we are demanding the secual bankers get the price of money, which is like a million times more complicated rights by setting the interest rate and by something how money. I think there's a general principal deal. We'll get to my appoch to high account it. But the internal principal is secul planet doesn't work, never has doesn't work for bread,
doesn't work to interest, strate doesn't work for money. And indeed the history of the Federals or a history of disaster after disaster, that the disaster. But it was always back in ninety fourteen, the first big crisis that face was talking about your COLLAPSI anything between nine, which the Pharaohs are based
on. Most econners in the hall, the most economist betters at least screwed up and took a dropped in the stock market and I'm all of the section and turned it into the depression, and we got an depression nineteen sixties and saturation, we got em played. Since then, we've got a business site goes hopping down, we've got a financial crisis. All of those you can put the feet of the simple plants of the dead. And I'm not saying
about people. You go at economic stems, it's not even that. If you could give thee the best thing in the world, even the best algorithm, the smartest AI cancer the finding and that's exactly what they're trying to do. So from an economics perspect killing economics perspect that they got an impossible job. And I don't think there's an easy fix. People suggest rules. Um uh, you know, sort of take away the discretion to take away that
a little good manipulation. Rules are dead and what they do today, but rules based on what. And again it's a form of centeral plan And the question partially is why as a central planning work. And one reason is this problem of calculation in the fact that we don't have a market that sizer. But the other issue is let a simple planning assume. Let us behind any form of simple planning, you know, in a bigger picture, can generalize the more. Why don't we have a gona? What's the proposed to done?
There's a lassitudents you should know. Let's propose the gona organize yourselves. Yeah, so to organize us. So suppose are got means to organize us? We trees and people like God, no, no, how they do that? You know? Then say, you know what's root for us? They know what our values are, and they know what kind of realized that we should live. And they have a small ones and we have a little dama, and they're gonna organize us and tell us how to their other lives.
And that's a comic view of what they govern should do it. It goes back to the players were polling. Player wanted to organize us. A love that you're starting to organizes us, but you wanted to organize the aspect to be like you play. It was gonna have the philosopher keyes choose who we should marry. The philosophy he's gonna choose you compared to the lacom Key's gonna because you're in a cave and people gotta played over you're you're the inventor
the cave. Right, you're in a cave. You see shadow. If you don't know the truth, only the philosophers know the truth, they will be to take your life. But that's the year of organizing our life for us. I don't think anybody organize my life. Pretty dead. Good job we're gonna do home. So what do we got from them? What are the common views? Protection? Yeah, so we need done to detect. And I would argue that that's the only thing we really need in a sense,
the only looking who really need done it for protection. It's more applicated protection to business evolved and making that protection objective, which is which is not easy and not simple, but it is fundamentally ultimately protection, What facilitates human will being? What is it that makes it possible for human beings to vinally? What's that stability? Stability? Uh so I'm looking at something more fundamental than that. So it's sultauility virum. Even as individually, what do we
need to look to subvide and providus? You well, you can avery much. What makes it let's say that, what makes it sham? What allows us to survive as a biological lantic people? Home sad right now? Every reason yeah, ability to think of aliving, reason ability to use online, to be throughout? What is good for us? I want to bad for us? What you know, what's gonna lead to death and what's gonna lead
to life? At the very basic how can anybody you have the gene for hunting, gef agriculture, I mean even the base he might be good at, but you might not apprege it's good at. I'm taking that above. Thank you if you If if I take any money, you drop you to the end of the dams. There's only one thing. There's what a fun amount of thing you have to do in order to survive it. If you rely on your genes, if you rely on your instincts, you will die
very quickly. What's the one thing you have to do in the survival hams Okay, they go do it hell soul problems, So go back at agriculture. But yet that you know what great species was slow? Well we we don't have a clause. We don't have things go ring down a pis and invited to it. But you have to do that signing and survivors a human being? How don't get invite the boos don't have ye again, what we have a plan? We have that we have to build trapped or to build
weapons. We have the strategist. We have to hunts, but to hunts we offended. We have to go through comminition if to go to it posts of reasoning stay with that agriculture. Nobody's bold with the knowledge that the seed turned into a pliant and you have to water it, yet you fertilize it. All of that is discovered knowledge all that why somebody and then somebody figure
it out. It's the fundamental way which you may be survival by using him money and I would the front of the movement a way to achieve happiness, to achieve anything like as a human being is ultimately by using him money. I mean, you get to act on it. But if the sub by actually being willing to think it through, choose your diary, and then it's a hath achieves on what's the enny of that? What's the thing that makes you? If they eat you relevant? And ultimately you won't even do it?
What would I do you to make your things? And you will? I'm sure to kill it? What's that France? Yeah? I frighten you. And what's the most fright anything I can do to you? Yeah? Bias violence is the most you know, because I could have gotten the back of your head. Reason is that? Talk about reason anymore? You surviving on other cancer? Following my word, if I tell an entrepreneuri this stuff over a year, I don't step cells never going to be approved by the
FEAT together. You can do all the research in the world and you can do it, then he's not gonna even do it. No preventure capitals getting your guts that you shot down a whole yield of human in death about using basically behind us, we're not gonna allow us. Baith who ask you, but we're not gonna allow m that's a threat, that's a threat to you like that's a fact your lifehood, that's a threat. There's limits where you're
going to devote your attention, where you going to devote your reason. You're thinking you're a rational so human being by themselves as individuals living alone. The government heatings right, there's nobody to force them. But once we get into boots some people and to force other people to do stuff. That's just the reality of life. There's always gonna be some people who want to you violence.
It's one way another to force us to do something. How Sometimes the buyo who manifest themselves, he's just pulling out your guy to see in your head. Sometimes a violent WI manifest that suffering fraud. I don't care to sit the violence right, fraud. There's a way of getting something from you through the session and sometimes a violence rule will manifest itself in this group voting to take them stuff from the school called the demoms. The democracy can't addrest
itself and violent. Just to ask you, soccerces right, why it's somebody denied as he was doing without doing is corrupting the youth's challenging the fundamental leads, God's reality. All these things and the citizens of athomens wouldn't tolerate guys. They got together and they voted based put it the trial. It was basically a democratic folks. The violencial then be speech in democrasy. If you're
home. So whether we get together in a group or we want to agree on the one thing that is most important looking to suffie to agree are is no buyous, no coursion, no force, And we need an institution to be able to you know, make sure that that need HAPs and that's together.
And that's the purpose of governstribute. It has to be usually the purpose usually government to the oper usually government in the way for some people doing to ePower of other le But that ideal of govern it is eradicate force of humanity graft, so as individuals can use their minds as individuals in pursuit of their will values. We a force, coursion, authority, free a people kind of for see their way into their lives. What's that? What's that concept?
If you will to I guess the constitutional concept the captures this idea that you should be free of coosion, you should be free of violence, fear, force and at the government's job. Well you gonna job some thank you, but whatever what is the concept they captured the idea video if you don't need to because the suit's own line right right, I mean after an individual heights up the right can like what's the right your life mean that you pilosships
have to be careful? Or what does the right can like need but forsoo perspective and will locking perspective. And I think from the montom falls in the standing out the right that I need your right to make decisions about your life. You're know anything to you out how you want to live go limit. It's freedom of freno farm force colosion bo and once with all the gomment take that line, you know those take your freedom to ask me of theclosion.
Not to be either entity of code, but to be the entity that extracts coursion from society. The vagulability is the right thing to through rights, to lecture, to talk about ideas. We are cosimente of coorse. They soon happens, and there's a frost of kings in the in declaration of the gas there is you as individuals living your life based on your own mind. So accident. The declaration comes after the enlightnment or Drea enlignment where it comes from
the juryan period with a your reason thought is elevated the human experience. And that's the only way your knowledge, it's the only way we can decide that our values, the only way we achieve our lives. And all the government any ability and not telling you if you can't account consume what you can account invested what you cannot can't cannot do with your life. That's the opposite,
that's the violation of price. That's a gona using coding against you. And in that sense, if you all that kind of view of the governors, then to attect us at teck out freedoms but got rights to protect us from coaching the force they what war? Would you governa have any money? No, I mean, it's sad that they even included in the constitution. It would be nice to just exclude it it um. But yeah, then it's it's a it's an immaniting of you're not setting the value of it's a very
basic simple things that they were supposed to do. Not manage an entire financial system as they do today, certainly not have a simple bank. They basically nopolize all money. And where if I would have stop it, you know. I mean people are trying out at a bad point, the crypt out to have their own money, and we'll see how long the government lets them do that. Right now, the market itself is employing, so the gun doesn't happen to do anything. They did that sit back and wait as the
crypto bubble collapses. But if bitcoin accidentally for good, is there any doubt that the government would shut it down and use closion to stop it? Because the governor hasn't anop to be over money. But we're didn get that that scursion and that's force that's telling what I can I can I do? So in my view, the gun has no role. You know, we cannopulize and that's a big, big statem ambitiously no in how we can use other
than help define and detect populos. Property can be tricky to let your populize, the tricky populighte on the web, tricky even figuring out exactly where it ben says exactly where the popery line is as probably you know some problems the students who needs is not always straightful. They will look at it. It's they help help define them. Again, maybe the ultra of disputes that we are duelded suits when we use a quote system or the artrey and have objective
rules and how to how to do it that. But i've the govern has no business in how we can unic lives. And as soon as it tries to set into economic lives, it's easy for us. It's using colosion, it's imposing its will on us and the Federals. Again it's a good example the Federals. It was Establishment King fourteen. Because politicians will piss out. Then in the big financial crisis of nineteen o Saturn read about this big financial crisis. A lot of dances fail. There's a lot of problems to use
economy, looks like there's a break of a depression. Teaching more in a prior bank accepted, got all the other bankers in New York together, locked them in the room, and they sat down. They figured obsolutely we shouldn't be solved the problem. They basically helped. Some banks got dissolved at the bank up bailed out, but it was all gone prided, no government bail
and it was resolved. And a lot of politicians who really get set because how private issues, how so they are hearings and the consequence with those hearings would ultimately establishment of a central bank. It takes away the power from JP Morgan and gives it to if you o court, somebody appointed by the government to hold on with this. So you get nineteen fourteen, you get hearings, nineteen fourteen, you get reserved, and yeah, power of private bankers
is shrow dramatically, is a consequence. And then you get and then in the thirties you get mess a bank regulations. If you guys the securities law and you know all that has been vidual securities and bank laws, and since then it's just piloting regulations by regulations, very relations regulations and what a regulation. There are attempts to in the local life basis simple, the client human. They are ways they'll all of you. It's ways to fix market failures.
But then they have a waste to the ways that actually create more data interview. I don't know single regulation is actually fixed a soabar market failure.
And you can see them pilot off if you study securities regulation, it's just it's just layers want to talk to the other more regulation, mo reulation to try to fix the problems of the purious regulations group and as part of that, you know, in my view there should be no fimers of I mean the issue of money and the issue of white money should be and the issue of all of that should be to us. You know, a couplas what do we demand now? I started when we demand goal it's money that was
a kind of standing. Maybe in the future mid clin, I don't know. I doubt it, but maybe it will be a good clint. Whatever it is, why is it they need something simple and its business unless they're trying to organize society in other words, and shoe that st called common good public interest. When I am a common good public interests, I want to run for the years because they always is cold or they want to control my life. They don't trust me to choose my own values. They don't trust
me building my life the way I sepa. They want to impose it. Will I mean an excuse all yes, you might be looking right, No excod how do they know that? How do they measure it? So whole problem utilit terianism, how do we figure it out? It's impossible. It's just a way of control. It's just a way for power. So you can tell you that it's I think he's looks and hood review review, Asian reviewing more dangerous than anybody in the life in terms of one ing twelve hours.
Once you start interpreting the Constitution not protecting individual rights, but it's protecting some kind of common good that nobody can define except that people can power. You're heading towards as disaster. But that's where I'm pushing. I think much of the many way it seems to be heading. Oh yeah, I'll take any kind of questions you guys want to on this way anything else? Yeah?
So did I agree with you on almost everything? Almost, but you know, just impractical reform and as we look forward, you know, we had for a number of years Screenspan that the follower of iron Man, but it's great a claim called Australia h during that time Freeman uh and and others. I was less comfortable with it. The freedom proposed, you know, you do some sort of Freeman the world. You do that in formulat, you have it less discretion of that. You seem uncomfortable with this. Wouldn't
this be a better at least transition proposal? No question? So if you had to choose out another fit today you give it that there was a chat, then a move based FED is much better than the discret move that discractionating FRED is ultimately um a politicize fan. So you see how Paul settling game. So the in twenty eighteen and Paul wanted to space and plump water Man yelled at him and sudden into going down. Um, you've seen that many
times. To isis because that as days never go up doing eventually like and can go back to chet your bed increases into speak to in the position level because they dont want to play polls. Um, they come down to you because the gold ya. So in in nineteen ninety two they started decreasing interest rates just a little too late from Roo the boots. Just what Clinton won one quarter two if they started the quarter earlier plan that was the election where
it was the economy student. So yes, so we would be better than the struct because I don't trust the discustion. You know, the Federals is the largest employer ehds and economics of economics in the world. And I don't know why I don't trusts some of who is some of the economists a finance guy. I don't trust these economists, and but they all get PhDs out
of schools. They all have to write the same kind of visitations. They are told pretend to hold the same kind of views because the gods employer ecs and economics as a particular view of the world, and you benefit. So you don't give much as sentence of dead, you don't give much interesting things. The problem with the rules which one doesn't really work. How long is the work? What about in crises? It's too easy to violate the world
of prices um so yes, better but not the solution. And it's interesting because when Trump Trump got to nominate a federal reserve, Federals of chairman used to move a point in power in the first back room, and he had a choice between power and John Taylor. John Taylor is an economist from from Stanford University, very very well, regarded fairly to be market generally talks to fream marketing. But Taylor has a famous rule there. It's called the tailor
rule, which is the rule fond to the cost. It's a move out of the better reserve should be a So they see Trump had a choice between wolves guy, that's streussing every guy. And I remember at the time, I said, it's not East way to get the pick. There's no one hell, and it's not some trump any further. He started to think of rules started because then he has no power. Boy play your super has no
power. He picks the stressing again because in the funny this is the problem of politics, and you know, one of the mini models is there's not about economics, it's about politic All of these things up about politics kind of given. So he picked Pobbly because he couldn't easily manipulate power. John Taylor would said, following the rule, you know, and and long term in the look now it's a real question, and he talks about's a good guy.
That's a real question with it under that kind of aligal pressure, would a federal chiming seeks to the rule or not? You know, that's the actually terminator. I'm good spending it, and he didn't. I think I'm good. Tam was following some kind of rule in the nineties, but then in the two thousands he abandoned it. And then we got and I think
it's a consequence that it's abandoning it. We got the financial question. Yeah, it was following the tailor role up until Yeah, two thousand, two thousand and one two, when he abandoned the tar roll fter nine eleven, and by abandoning the TERA well after nine eleven, created the economic the inch state, the economic confining it. That led to a financial question and whether
it's a tailor role or whether it was a gold price rule. I mean, it looks like a telele exposed, but it's sometre that's what he was actually doing. He might be calling a gold crisis, which we could be consistent with his writing earlier. Hard to tell, but he abandoned it very quickly. When when when? When? When he needed to? Which was after nine or what you thought? I don't needed to or to leven nine eleven? So the banking background to study act better regulations, et cetera.
I'm curious what your opinion is on the benefits of some sort of marketcy purity regulation, protective investors, persons, the downside a company to distract some proud in the actual business purpose. So I'm I believe in I believe in the regulation, but I believe that the best way to regulate business is stronger and businesses themselves, kind of what we can call voluntary regulations, for example, securities regulation, which I mean is a disaster and a mask. I mean
I I one of the things I use I run. I run a hedge front and it used to be in a nights that what graduated a headgehunt or a mutual fund was a hedgephunt was unregulated. I believe kind of need to do any in vitement and that's not truguale. I act to regulac in the amount of anything that you do buy all of these things. But you know,
and there's so much paper. We have a full time flings officer, a small little edge fund which is insane, and the paintle can do restrictions and constraint of what we can say, whether we can do social media, can I treat about my front? And then who can I accept money from? Like unless you have five million dollars in investable securities right liquid assistance, you can't invest in by it. So I find this convergent people only and
people complain about it. You call it right. If you're middle class, you can't invest in my her point you can't invest my her by law. And even if you're William and Son, even if you're a page financing because I mean, this is the stabidity of it. It's one science spit off. Whereas I think what would actually happen, because it's true that if you had no rules, it would be crazy, and I think you people participated
in the markets and people would be afraid. Like let's say, you know said treading the vows talk about its trading is interesting topic in gos stools better you know, if you had no insid of treading, then a lot of people say, oh, I don't want to trade because I meant trading against some of these insect for nation and so well, what is the market menked is to solve these gonn And this is the thing, there's always a mogamating.
If there's something was streaming ability to do something, there's a bucket opportunity todea for someone who can come in and set the story. So who hasn't sent it to regularly financial activity where it wouldn't be regulation by gods and regulations to collet who insecurities? That said and said who makes money off of volume? For example change that used to be in the oldest NYC and as Zac
Philadelphia change he called Boo Board of Trade. They were all distinct exchanges competing with one another, and one way they could compete about it with one another. There's different rules but listening and trading. So for example, i NYC has with me no inside of trading rules. You can anybody for tradure, no no move restrictors. Naze said, do you know here the things that allowed you things that are another and let's see what my books better. Economic.
But the idea of if you need to have gomity controls or analarchy kails is I think falls because you have market. The market needs order, and I think that order will come from institutions that the market will create in order to facilitate that order. Exchange is a good example, but we don't go to common stops and change stift. We have to have an exchange. It helps us and reduces all the information costs and all the transacting costs that they
involved. But it could also now, for example, it could set standards for financial story. It could say, if you want to listen to the NYC, you have to abide by these accounting these accounting moves and another change could do another. Oh, and it could have if you're this kind of company, these that kind of goals and do this kind of county that kind. No, instead of that, we have one set of county goals that event, and they apply equally to high tech companies, to old industrial companies,
set to services companies. They all acquire out basically under the same accounty rules, which makes no sense of amun As Silicon Valley in the two thousands, there were a series of companies there will issue two sets of financials, the one fast be of course, you know, and one what they thought made sense for you guys, and they stopped doing it because it's suspensive. But you don't get any flexibility with one site. Spit all government rules govern
we do that. So I think there's always always mechanisms that solved the problems through a market that the gun is trying to solve the regular and regulations always screw them, always, Like the acc is a good edita, right, it sounds pretty good, And you don't want to have to bother and to go to the banks to figure out if the bank soldiers are out solder, so you just give them a bank amount and the gun who get to use the funds? And that's right, and it's easy And what all does it
do? Well? Preach massive moys that the bank doesn't care about losses because it's gonna bail about the only care about the outside. What happens when you care about the outside, don't care about the losses, you take on huge amounts of risk. So banks said that because of the post that shooters which you have to get, you can't take deposit in the let's get it, I guess you deposit. So then you have a whole set of regulations of
limiting duristic in your bank because they were taking on too much risk. Because of the regulation, there was Britant place to protect suppltimately the positive, the little bad and honey a little bit. You know that to every thousand dollars in cash in the bank account, it's never to particul nobody you watching kids about the little bit. It's always to protective beat guys who actually the manipulate votes in the d But it's the control, so regulations sh Then you have
regulations and risk and then banks are limited in what they can do. To see a pivot regulated something else where you got to vote something else on there and that's how you get lay up on, lay up on lay what they are now if you if you look at a bank. You come from that environment. I mean, the amount of regulations is just unbelievable, and some of them conflict with one of them. You've got on the one hand,
you've got privacy laws, for example, at a bank. On the other hand, you have these requirements to let the governor where never there's a quote suspicious activity or anything over ten thousand dollars. But now they want to lower that. Even so, what do you do. Do you protect the privacy of the individual or do you let the where you have to let the govern nowhere you are so violating the privacy laws. And how do you resolve those?
Well? Banks resolved by schools and more. And that's what they care less elect your privacy than you do a viva to see how the better just that their finger and resolves that. Obviously everything great, um, and you get rid of all these arventure is what is the realistic path to towards that end where you started? Yeah, I mean, I don't know. Especially you have to get the way people elected and the people that the people us
the people who be electing. We actually at the once a dissolution of a separation the government from the economy and sub level and we don't have a need that it. Assuming we had it, then you would have to figure out a carefully designed path of awinding these kinds of relations. And it's not easy because if you eliminate the risk controls over banks which you keep deposit insurance in the banks are going to take out too much risk, is one simple example.
So you have to lay out them off in ways that minimizes the risk of a system. And that's very complicated. But I would say, you know, if if you gave, if you gave me, you know, I take out four year an ATA program and say every year we do these steps. First of all, you have to be completely transparent, so the market has to know what's coming. So for example, with regard to the to the reserve, I would first goal in gold standard and then dissolve the
for reserve, so because the goald stid would give it stability. And the way to go to gold stand is to say, okay, day for twenty twenty four, we're going in a gold standard. Whatever the price of gold is that day, or the average over the last three months or whatever that is the price. With fixing gold, that's a fright you're going to use for the future for goal. And then once you do that, then now I'm dissolving the fact. Here's how we're doing These are the Fike steps.
This is that where we're being this gold into the pot, all these reserves which are now in gold to the banks themselves, and the banks themselves get it. And by the way, banks start planning on having a print, because you're gonna actually be pinning money. To the extent we start an economy with cash, you're gonna actually have to print that cash, set the pig that out. But he has the date when it's gonna happen. And then at the same time, in parallel, he had the regulations with eminating he
is that. He he had the different steps that we're taking, you know, to get rid of it. All of it would have to be transparent because otherwise, every time you do this it will be shocked to the system and and markets would get you know, fleaked out of So you have to do it slowly and systematically, and it has to be over you know, given the presidents of like every four years, it would have to be over a four year period. You have to have a four year plan for undoing
financial regulations. Four years is that's pretty intense to get it done for you. But you have to do the same thing. I mean, might views you have to do rid of subsecurity? I could get a medicat one way or another. We're going to it's just a question of do we do it when they're bankrupt, if we can do it when we have time, text pliant how it looks like. And if you che to do the same thing. You can't just come off and say, well, say know sub security
anybody. You have to say, okay, here's the plan of how we had do It's if you're twenty years old, you don't get it, but if you're six, you'll probably get most of it. And he's how we'll get funded it. And you have to have a you know, one of the strategies about political systems. Nobody has a plan except to spend money.
But beyond that distal and when they do come up with some kind of plan, it's usually a hot pot of different rand or stuff that different sentatives of Congress and stick into the buildings in order to get something out of it. But it's not doesn't call even on the left, it doesn't call less into anything other than more power and a greater power. So you need to have
a plan. You need to have you never a strategy. You need to be able to be unbelievably transparent about how you go from point A to point because otherwise you pretytails. Seems as long as politicians have somethlever, he says, they don't have any incentive to having a plan that or comes to the table and we'll ask. I mean, you know it's always that we get politics and we deserve so we can blame the politicians, but any us,
we all demanded plan. I mean, looking Republicans who learning this last time? Did they have a positive message? But says fun me that you unit if you went for Republian this is what they were going to do other than dat abortion, but this is what they were going to do. What they said finance bad on inflation. Okay, what do you need to do by eflation? Psych he did all these vadicanspract what do you got if you were there? We know what Trump would have done. What would you have done
if you were bad? Don't even ask the question? Um crime, crime is rampid because you know the police, Democrats whatever, these are national Republicans. Okay, what are you even do by this, what are the actual steps did you plan to did you induce clan an amount? None? Black? You know, compare that to make one of the most successful in Republican UM congresses, which is the nineteen eighty four kind of New Gingridge Revolution.
Right, there was a contact with America. I didn't agree with much of it, at least you this is what this is what they believe, this is what positive they were going to do. And this time if you'd ask McConnell or mcconfee, what about a contract. No, no, no, no, we don't we don't have to be presentive positive and we went and
we go vote for the bath Fords anywhere. So I'm kind of happy that they had a bad night GISs, even though I hate to them, because as much as anybody, I'm glad because somebody had to stop it in the face and tell it what you're doing to sue it, and you left you it has to do that. Who else is going to do it? So, uh, you know, this is what is it? Probably plenty of Standfords, we know what the Democrats kind of standing. What are the probably
in Standford, particularly postpone. I don't think even he knows what these so we the people have to demand better and have to expect better um and only then when we get better politician. We won't get it by chance. I mean, an accident might have. But I I mean I think Ron and Radian got elected who I think was better, a little bit better at leason because the culture shouldn't because those real ship people demanded something defilty. They were
so better would you be caught out? What had happened in the seventies and inflation for septis that they wanted to be different. They're willing to experiment, and Radion was kind of okay, let's go in. Essentially did that with twelve. But the gulf between Trump and the Radiant was huge because Trump said, I'm not going to tell you how to fix all the problems acrost them and we said, yes, great because of the real estate developing. Must
know what you're doing. And Radiant actually laid up. Ragan actually had a vision. Ragan actually told you what he's spout for and what he was going to do and what he wanted to do. And again I did we were a country of the plan. But at least he had a plan. He had some kind of vision, and so we won't get changed until we demand up all the issues. I'm staying for something and actually be willing to communicate
what that is. That's going to be a veniens final question, right, group, let me say, uh, so, not on the topic inflation, but on the topic of the minimal state. Yeah, I does even artist for some sort of minimal state doesn't have a stand army, And how does it stop that standing army from the community government? So I don't know if it was like a little of certain niches. Uh, it seems that So, I mean, I'm for limited government. I don't even like small
government. Limited governments a rate for second, and limited by individual rights. That's that's super person doesn't have a standing on I think in the end of the day, it depends who you are, right. Uh. You know, if if some countries can afford not to have standing arms, sometimes you cannot afford to not. And I think the United States, given where it is geographically and given kind of its ambitions, needing the standing of um.
But this is the challenge, how do you fund the standing? And this is I think what keeps a what in a truly limited government inspective, might kind of government would keep restraining is to make it a limited you know, a standing army of owning so much size and not unlimited size. Is that I think that ultimately m funding for such an army would have to be in some phone involved in that is that it was would not be course aspectige because
it's because of taxation. Then yeah, there is a massive and sent to grow that army and to keep going into there, and it's very difficult coust to organize. They're increasing a texted just a little bit. It's it's it's too incremental. And as an economy votes where if the texts ten be sent and the economy has grown a lot, then they're getting a lot of the money. But what you know, you think that actually um, what they need on an ear basis stays about the same, doesn't actually wrote But if
you make contributions to support the military evolved if any knows dissolved it. But imagine a world which we all go checks to be government for the form then a you would depending on your view about military, you would support it more or less um. But if they would engage in a way you didn't support, fo would stop supporting that. They would get a less money U if uh if if the money needed to expand, it would atomate the case there
actually convince you, I'll make of the need to grow the military. I think it would become much more sensitive through our wants as a citizens who have than to be powerless to be and their ambitions. But you know, the United States arguably has devotes a huge amount of this money to a Samuel army and today and that's actually because we've taken on the mission of defending the title,
and that's not a mission to take most Americans actually wants. So one thing I agree with Trump on was, I mean, the Eupeans contribute almost nothing to do on defense. We basically detect them. They're free writing enough of us. Why why should the United States even be native? I mean, I understanding the Upeans want a United defense to protect themselves against training Russia,
but why why do we need to be part of them? We have the money because we're willing to do it, because President the United States has a lot of power. He does so the politicians that is set to be part of an ATO. But this is really protecticalizing property of American citizens.
Skeptic and I think we have we could have small army, We didn't have that basis and hundred twenty fifteen countries about the world, and I bet you that of one hundred and twenty, less than twenty actually have to do with the security of Americans and the rest have to do with middling in other people's fairs, primarily, uh, you know, increasing our politicians power over other countries and power that have little to do with protectives. So how do you
protect the guard? The military can taking over ultimately either if it's small. You know when you would have protected is that have such a great country that it would that the people would rebel against such a military and the military would never want to do it because it would do it because no mechanism you can build in that to protect you. To be crazy occurred as you know, people can do bad things. Bad things will happen, and you want to
minimize those. And I think a system that has a very limited to government constitution very clearly defines the role of the government. I think, I was it's pretty murderous. It will be a lot of data and defining the social government, limiting the government appropriately defining it. I mean, it would be nice, right to defining an industation and then explicitly said that the role of government is protecting to do right, not do anything else. That would have
saved us a lot of damage over the last two hundred years. Um, but that found this is the leg than thought that was something They just assumed it was in the water right, it was in they were in at the lane. This is just part of the cultural environment in which they lived. They couldn't imagine the word which we have no concept what thing you can do right? So off I mean literally in ninety ninety set of law schools.
They don't know what they do with me. Indeed, the most conceptions of rights a wholes are not certainly know what the problems man when a declaration of constitution wouldn't know how many Supreme Court justices today sitting on the Sucreme Court think that the Declaration of Independence is important for understanding and constitution well problems. That's it only Supreme Court judge that thinks that do have any relevance, and a
Scalia that think the ad any relevance. Scalia thought individual rights or nonsense on steps. That's a great conservative Supreme Court judge thought individual rights a founding concept of American idea the whole basis for the forming of an American government. That concept that walking content was, according to Bentham and Scalia, nonsense on steps.
So yeah, you know, we've got a long path to go just to resurrect the ideas of the founders, never mind to modernize them into being in general, take the lesson of the last two hundred and fifty years and apply it to a modern constitution. Yeah, yeah, one more question. I can go on all day. What are your what's your outlook for the next two three years? Some people saying and filing recession. Oh you know, we're gonna have a second next year. I don't think there's a way
all of that. This idea that that can engineer a soft landing is again a belief in simple client is ability to do the stuff that just doesn't exist. This is an organization didn't see the inflation coming. Why would we believe that they could undo it? You know, soothed So we're gonna have a recession. I mean the two question questions how deep is a recession going to
be? And then is there a second gonna be enough to kill in playing because people could get and only ending seventh way of lection in that way is the interperience. And we had this session and inflation went down, and the FED lowered interstation, inflation went back up, and it went like this until VOLCA finally raised space force. He was a dead v percent of the VISP senting. But the only reason I think inflation was actual filled during the VOCA
the years, it is not because of VOCA. He did when he was Menata. At the same time, Ron Reagan the taxer poem, or at least it may change it. The taxo the nineteen eighty two and Jimmy Carter and Ron Reagan completely deregulated economy massive hemid merchant and was given caught up and then under REGA. And what does that do? That free up supply? So if if, if inflation is this mismatch of demanding of supply, one way to fix it, it's to liberate supply and by deregulating you in presupply
crisis stable. And this is the role of the federal government. Inflation of beds. He regular. But I don't know a single Senator Carlog. Maybe I know three senators who think that the US government should be ready to on a skipe, maybe Rand Paul, maybe only at home. I mean, you know oldays they would say maybe take clues or maybe league, but I don't believe they care about anything anymore. Um after they after you know the way they go all out to Trump. So I think it's rand Paul,
it'll keep out. But so don't peoples to be religion today? What do that to do? Is you need to spike in at experience and then you regulate picking up spending. No way that's happened. So I wouldn't be surprised if we had a session and we continue to have inflation after so we could. It looks like they're going to mimic the nineteen senters. Nobody wants to win the lesson um and nobody has to political cover. We used to work
in the US to actually do what sences. Now you thought maybe for Publicans want hopefully they win the House. I hope we'll probs win the House because that out of the police stop. I think the one thing Republicans is good
at it when they're in the opposition is they tend to reduce spending. What they do is they they kind of deal with the president, the Democratic president, to uh that if he wants to get anything done, that he has to you know, free spending or cut spending, you know, cut it as a percentage dupe of someone and and that will be good for inflation. Is the market sees government is not growing at the same pace as it was going before. That will be good in so inflation. Um, So that's
one thing. And I think the publicans will probably the House, So I think I think that that will be a good signal. The de regulation is not going to happen, certainly not individed. And I don't know who the a public president would be who will be regulated athough people saying the centers is a rady nights. Um, you know, I'll believe it when I see that, and then M yeah. And then we'll see if Powell has the courage to take this where it needs to go. He seemed a given credit.
He's saying the right things, right, he's saying the right things. He's saying will continue to raise as high as necessary, but saying it in doing so. We'll see what the police compression becomes. Out West is a sective. There's an employment people sad, people are happy, and it's all that's fauld and all the leftist economists say, knowing you never need to do as industrates at all. Inflation is going to die by itself. I mean we're giving that a reading now, so the pressure will nouns on me.
So so you know conditions, the hot flats and predictions and sent the hoard of the long the predictions. But I do expect it a second, and I fear that it won't be enough in sort of ending inflation, because I think inflation might be most accepting with the one they less out of stuff ball, thank you, thanks stress, and very differently