 Thank you, sir. Thank you all for coming here. Thanks to the Schrader family for sponsoring this event and that comment about all my enemies reminds me of a Man I co-authored a number of books with Jim Bennett Colleague of mine at George Mason years ago. He's from Mississippi He grew up in Mississippi and on things like this. He said he would say If they're nipping you in the butt, you know, you must be ahead of them No, sir It was an old southern slang And I never forgot that And he also said government is like a septic tank the big chunks rise to the top So, you know, I see some people writing that down taking notes. I thought I learned at the Mises Institute Before I left the hotel this morning, I read an article about Tucker Carlson's latest Antics he's in he's still apparently still in Moscow and he and his staff went to a grocery store And they filled up a grocery cart with what they thought was a week's worth of groceries and they didn't look at any of the prices and And they asked each other well, how much do you think this would cost back home? And they all settled on about 400 bucks with the groceries and then when the bill came it was 104 and And in Tucker Carlson said well that that really Radicalized him he said against the establishment in America and then what they're what they're doing and so I blogged that on something about it on Lou Rockwell comm and And said should we send Tucker Carlson and end the Fed t-shirts? It's not the establishment it's the Fed that's another problem now my my topic the topic that I gave for this is who Benefits from inflation and some of it sounds pretty pedestrian now I mean a lot of you are familiar with reading about the Fed and and so forth know a little bit about that But you could write a whole book about that and I might do that I might write a book on who benefits from inflation because the average person they know they don't benefit from inflation But but who does you know? Somebody does and they don't understand that much at all So maybe that that'd be a whole book to talk about and so and you could write a whole book many many books And so in the time I have I'm just going to mention a few things about who benefits from inflation and some of the other speakers I'll probably mention this to it gets involved in some economic theorizing Regarding some guy named Richard Cantion the French economist. I'm not going to get into that I'm going to go down a list of things. I think are kind of unique about Inflation and my title could be who benefits from the Fed You know, it's one and the same after all and we look at inflation as an increase in the money supply Well debtors of course benefit from inflation and the federal government is the biggest debtor. So there that's item number one and Item number two that I wrote down here is something that maybe you're not all familiar with is as Fed orchestrated bailouts You know when we have fed when the Fed Fed has always financed bailouts of one Part of the economy or another and this is ruinous of capitalism, isn't it? You might be familiar with the famous bailouts of after the 2008 crash and In what that did was to tell tell these bankers Goldman Sachs and Citibank and the rest Profits are yours. The losses are theirs. You know, the taxpayers will cover your losses profits are yours That's ruinous of capital and that ruins the profit and loss system You can't have a capitalistic profit system if you have this system of fascism basically in the years ago I actually wrote several articles called with titles like economic fascism and one of the things there was a characteristic of that in Germany and Italy in the early 20th century was massive bailouts You know when you know fascism was they allowed private property But it was very heavily controlled and and the de facto a part of the state and so they had to bail them out And so that's what the Fed has been involved with for example in the 90s There was a whole spate of these there's one thing that they called the tequila crisis Now for those of you who are tequila drinkers It wasn't that there was a shortage of tequila anywhere. It was that the Mexican peso was devalued and the American big banks Citibank Goldman Sachs had been Borrowing buying Mexican bonds big time and they were stuck the Mexican government was starting not to pay and so Allen Greenspan Works hand-in-hand with the White House to orchestrate the bailout So-called Mexican bailout, but it was really a bailout of Goldman Sachs Once again and and the big banks that had Borrowed all this money had held for holding all these Mexican bonds And then there were these these genius the academic economists who Started working for a firm called long-term capital management And that went bust and that they ended up getting a 13 billion dollar bailout and that was that was Greenspan's work also along with the White House Citibank 40 billion 45 billion dollars in loans From the government and a guarantee that if they had 300 billion and more in losses that the government would cover that And in return for that the government demanded equity in in Citibank Yeah, how's that for socialism? There then of course the great recession in 08 The maestro as Greenspan was called The Fed printed twice as much money in 13 weeks As it had since in the previous century To to finance the bailouts of various parts of the economy And david stockman's great book the great deformation Uh gives chapter and verse of what was going on here And that the big lie was that the economy would collapse unless companies like Goldman Sachs once again Now the financier of the political class in washington Uh was bailed out, you know the the big insurance company aig had to be bailed out And and david stockman points out that after the big bailout of golden sacks six months later Uh, they were it was always solvent. There was never any threat to them going under like layman brothers They paid themselves 16 billion dollars in salary and bonuses And in just six months earlier that would the entire economy was going to go into the great depression again If this didn't happen, I remember Bush saying that So so Greenspan and the White House conspired in all of these all of these bailout examples Which tells you how ludicrous the idea is that we have an independent fed That the since it's very beginning they have claimed that the Fed is independent independent of politics If you ever saw the movie the um the big short about the the 08 crash one of the very last scenes Was not a movie scene. It was an actual NBC news scene of The fed chairman walking out of the White House I don't know if you remember that from the scene and that was you know the the chairman of the independent fed walking with the White House And so so that's that's how it how it works. And so the bureaucrats from the fed and political hacks from the White House in every administration meet weekly The weekly meetings, so there's no independence The fed never never has been And so and in return In return for all this, of course the wall street banks lavishly financed the careers of the The politicians and the note I wrote to myself here is organized crime on steroids and another another thing that's created is My old professor, uh, james Buchanan who won one the Nobel prize in 1980s Was 86 I think I guess it was now it's ancient history now But he wrote a book co-authored a book called democracy and deficit and they had a big section on what's called fiscal illusion And it's not the kind of thing that students would read about that much in a textbook But fiscal illusion a simple idea that you know printing money to pay for government programs Makes the perception of the cost of government lower And it doesn't seem like it's expensive. Just think if if the government said, okay, we want to We want to finance the war in ukraine and we're gonna have to send every family Uh, uh, taxpaying family a bill for $20,000 this year You know, I would imagine that the enthusiasm there would use these far fewer yellow ribbons on trees in america And you know the color of the ukrainian flag And bumper stickers and all that if you got that $20,000 tax bill to send to the the criminals in ukraine As far as that goes So even adam smith in his famous book the wealth of nations 1776 pointed out he said that wars Would be less frequent and shorter If they were financed by taxes and he was really expressing this idea that Buchanan called fiscal illusion That the and they make the perceived cost of war lower and everything else And everything else not just war The fed, you know, when it was created in 1913 It financed about a fourth of world war one And so there might not have been american participation in world war one Had it not been the fed in existence and of course the income tax came in also at the same time and the top rate went from Well, it was originally seven percent and it went to 77 percent Because there was an emergency after all, you know the war As far as they never did go back down to seven percent Okay, and so So that's you know one example of who benefits from inflation And of course harming the economy with inflation causing boom and bust cycles and just price inflation Uh creates economic instability depressions recessions And that's all good news for the welfare bureaucracy, isn't it because it increases the demand for welfare bureaucrats And so life was always better in washington dc when the when the american economy crumbles And I lived it when I worked at george mason. I lived in the the swamp for for eight years And so I was able to observe that you know good or bad It just keeps on growing no matter what no matter happens, but especially when it's bad As far as that goes Political business cycles. There's such a thing. There's a literature in economics called political business cycles And we're about to enter one now It says, you know, if you take a course in macroeconomics at a university, they'll they'll they'll teach you how to stabilize the economy They'll they'll say make statements about how the purpose of the Fed is to stabilize the economy Here's where there's a famous one that Many generations of american college students were were taught about what the fed does Okay, this is from paul samuelson's famous textbook He said the federal reserve's goals are steady growth in national output and low unemployment It's sworn enemy is inflation paul samuelson If aggregate demand is excessive so that prices are being bit up the federal reserve board may want to slow the money supply When does that ever happen? Thereby slowing aggregate demand and output growth if unemployment is high and business is languishing The fed may consider increasing the money supply thereby raising aggregate demand and augmenting output growth in a nutshell This is the function of central banking To make everything stable and and prosperous and that's what generations of college students were were taught about the fed But the political business cycles, uh, and then there's a big literature on that Uh, it introduces some common sense and this book by my old professor to my old professor James Buchanan and richard wagner democracy and deficit Where they talked about fiscal illusion also talks about the political business cycle We're in the lecture presidential election year now And so if the current fed chair chairman wants to keep his job He has to increase the money start increasing the money supply and do things that uh, that the incumbent party Wants that wants to do if he wants to keep his job And this has happened in history over and over again. There was an economist named, uh, robert weintraub who wrote Published some academic journal articles about this about it goes from the 1950s through the 1970s This is an older article and every time a new president comes in He lets it known if he wants faster money growth or if there's already priced inflation He wants slower money growth the fed Chairman doesn't form because he wants to keep his job Just like every one of you does who's who's working you want to keep your jobs, right? You don't want to get fired and so as soon as the fed chairman and so It's there's built-in instability now in return for taking the heat on, uh, on When the economy does go bad Uh, the fed is allowed to accumulate a big slush fund And part of what happens here is the politicians, of course They always take credit for the booms when the fed creates a boom the politicians Take credit for it But then when the bus comes They call in the chairman of the fed, don't they and they have like like this soviet union style Beatdown he sits there and they ask him all these questions And then when this happened when ellen greensman was before Some senate committee after the crash of oh age It was like that, you know before that they were calling him the mat the maestro There's even a book called the maestro by bob woodward. He's the mice. He's orchestrating the economy That's how that's how they think the economy works And my friend my friend the late yuri malsef told me That when this was happening green span is on cnn And they're they're grilling him and they're blaming him for the what's gone wrong finally He got they got something right, you know finally and he said he got a call from an old friend in moscow You know those of you know by yuri. He was a soviet defector. He was an advisor of mckel gorbachev and he became A participant in mesey's university events for 30 years after he came to america And uh, and he spoke at many of these events himself and by yuri told me his old friend from moscow said yuri Well, they take him out back and shoot him About green span because because That's what they did in the old days in a soviet union for something like that And and that was his thinking In uh, yuri assured him. No, he's not they won't shoot him. They'll probably uh, you know, they'll give him an even better job Okay somewhere so So the way the fed finances its salaries and its perks and everything like like that Is by by buying bonds the fed print, you know It creates money out of thin air and buys bonds Its income for its own salaries is from the interest on the bonds Okay, and then the congress tells the fed Uh, you pay your expenses for running the fed and then whatever's left you have to give back to the treasury Now think of the incentive that creates Okay, if I want to have 10 assistants. I'm the you know, I'm some fed bureaucrat And I pay them each six figure salaries Well, that increases the expenses and who cares, you know, whatever's left. Yeah, we'll send if there's one dollar left We'll send it to the u.s. Treasury and so it gives an incentive to spend pretty lavishly on yourself If that's sort of the incentive created by this and it also has a built-in incentive for price inflation, doesn't it? Because buying bonds you're putting money Into circulation you're increasing the money supply when you buy bonds You know open market operations and so out of the self-interest of the fed bureaucrats themselves and the whole fed bureaucracy Is inflation? It's not it's not stabilization policy like paul samuelson said in in his flaky textbook That was the same the same textbook by the way that predicted that in by Uh in 1989 in 1989 edition that by the year 2000 the soviet economy would be bigger than the u.s. Economy And it's the same the same textbook okay, and so And so that you know, you know, ron paul was spent many years Arguing for auditing the fed and there's been very little of that ever because every every time somebody proposes that the banking industry Circles the wagons and and usually succeeds But there have been some episodes where some facts have kind of Snuck out and there was a wall street journal article that i've held on to all these years since 1996 And about some of this and i don't know how they got this this information About some of the perks at the fed and i'll just read some of the things if this was 1996 They have 25 000 employees Very well paid government jobs There's an air force of dozens of lear jets fleets of vehicles a full-time curator of artwork hundreds of billions of dollars in assets and in 1996 the head janitor Made 163 800 plus benefits and salary That was 28 years 28 years ago the head janitor made that kind of money and so And so that's how it works when they when they when they buy the bonds they create inflation And it's let the good times roll at the fed. So if you want to know who benefits from inflation Well, there you have it. There's you know, first and foremost There's a lot of talk about the you know, the big banks and the old banking industry and all that But the fed bureaucracy itself is the main the main beneficiary and so There are two economists They're both old friends of mine and bill shugart and the late bob tallison who was a professor of mine at the virginia tec Back when the dinosaurs still roamed the earth published an article in the american economic review and explained the consequence of this In the convoluted language of economies That is in the economics journals and here's a quote This was an econometric test of their theory about about this the fed Spending money on itself said we found a positive and significant Ceteris paribus relationship between changes in the monetary base and the size of the fed bureaucracy Okay, so so anyway, so i'm just i'm just telling stories here There have been articles published in the american economic review, which is the top academic peer review journal in the field of economics Documenting this that when the fed buys bonds and inflates the money supply Surprise surprise the fed bureaucracy gets bigger Ceteris paribus, you know, all other things equal and there's cause and effect there in other words Okay, the fed also has what i call the fed's praetorian guard Uh Another old acquaintance larry white. He's he's an austrian school economist He wrote an article published an article back in 05 about The fed the employees the fed at that time had 495 staff economists and 120 consultants Okay And these are all publicists for the fed basically These people that's their main job just like congressional staffers are basically publicists for the Member of congress that they work for these guys are in gals or publicists for the fed 300 other economists are are invited to its conferences year in and year out Murray Rothbard once said That your tip your average academic monetary economists Would would stab his mother to death with a fork for an invitation to a fed conference That's you know, you make your career. You know, i'm among the the anointed That of all the things murray ever said in my presence. That's sticks. That's one thing that sticks out He was he was such a brilliant guy, but you how could you forget something like that? Okay, and anyway larry white found that 74 74 of all academic journal articles on monetary policy Were written by fed economists or economists subsidized in some way by the fed consultants Interns something like that. So the whole literature on monetary policy is totally dominated by the fed Out there and so and so these people are all paid too. So that's that's so that I call it the fed's praetorian guard You know, and they they they very quickly try to shoot down any any criticisms I was talking to phil this morning about how one of my students Uh Well, I've had a student come into my office once when I was a professor He said, you know, I've taken all the courses on monetary economics at the university and until I took your class I had no idea. There were criticisms of the fed No, no one ever mentioned it anywhere and that's that's that's that's how it is Now that's how things are Well, the fed is also What I wrote in my notes here the fed fed funding of woke communism And the fed is now into all sorts of things not just monetary policy But more and more fed research publications Are about climate change racism inequity gender discrimination And I'm going to get all involved in that now and Janet Yellen is full bore ahead with that And that's that's the new the new direction of the fed not just You know monetary policy who cares about that anymore Uh another a paper written by published by the independent institute in oakland california Uh look took a look at the ratio of sort of the democrat republican ratio of fed employees And they noted first that in the economics departments academic economics departments in the us For every one republican there's four or five democrats So the the academic economists is about four to one of maybe five to one They're fed leadership. They have a category called fed leadership. It's 25 to one The younger employees of the fed 40 years old or younger 20 to one And the board of governors 45 to one I don't know how they got that number 45 to one, but that's that's what they wrote in this in this article And so so the fed is just another You know woke washington dc bureaucracy Uh, and of course, yes, it does The monetary policy and all that but it's it's branching out into a lot of other areas And uh, and I'm not mentioned that Joe Salerno a while back I think there's a fruitful area of research for the austrians to get into all these other things the fed is involved in You know, we we've had a lot of books and everything on monetary policy But but after the crash of 08 Uh, there was sort of a it was sort of hilarious to me. There were some very prominent people They were trying to trying to blame the crash of 08 on first thomas jefferson This was in uh in the wall street journal And ron paul, of course is ron paul's I'll see if I can find the quote. Uh, I'm talking about here In the financial times, there's a stockbroker named henry coughman is He must be 150 years old by now. I debated him at the cato institute in 1983 on 101 my books And he's still around and he said, um This is in the financial times. He said well allen greenspan was a protégé of ein rand in the early 1960s Therefore the fed is a libertarian institution Therefore, it's it's this anti fed mentality that caused the crash That was in the financial times Okay, then in a wall street journal John steel gordon is a business historian, but in the wall street journal Wrote that it was the the uh the the blighted breath of thomas jefferson But as as enunciated by ron paul Because jefferson opposed the creation of the first the bank of the united states the first the precursor of the fed There's a famous debate between jefferson and alexander hamilton jefferson took the anti central banking And so here's the wall street journal Had with john steel gordon saying well, this was thomas jefferson and ron paul birds of a feather That's why we had to crash of 08 and after that happened So these people are calling the fed a libertarian organization They're they're even a few few of the so-called beltway libertarians that were saying this As well it's the shocking lead of me anyway, so I looked up The fed has a publication called the structure and functions of the fed and so I and it's online every year There's a new one. I looked it up And I and they they they explain what the fed does in addition to monetary policy And i'm just going to rattle off a few things that's on their list of what they do what they're involved in and It's hard to believe that the soviet union Had more central planning than this that was more pervasive than this their list of the here's here's our What we do what we regulate and control bank holding companies state-sharded banks foreign branches of member banks Edge in agreement corporations u.s. State licensed branches Offices of foreign banks national banks savings banks non banks subsidiaries of bank holding companies thrift holding companies financial reporting procedures accounting policies of banks business continuity consumer protection laws securities dealings of banks Information technology used by banks foreign investment by banks foreign lending by banks branch banking bank And they I could go on for like three more pages reading these things And this and these are all functions that are not monetary policy additional things that the the fed is involved in And so uh, so I wrote this article called the myth of the libertarian fed and it was on lou rockwell years ago About this and so this is another big bureaucracy that benefits from inflation You know all the all the people that work in all these these areas of the fed it's it's a giant octopus of government bureaucrats And so that's also who benefits from the fed And so in addition to other things that i'm sure joe and patrick are going to mention other things like the canty on effect and all that But I thought this would be something a little different to know how they these the sort of the the This the blatant self-interest of the fed bureaucracy really drives a lot of what goes on here And it seems maybe funny. You shouldn't have to explain that to people But I don't think the average person really knows much about this or thinks about it And and so that's about my story for now, and I'm sticking to it And uh, thank thank you all for coming and for sporting the misage institute And uh, and right and there is there is a $1,000 exit fee. Did we tell you about that? I meant to send out an email before I came here