 Okay, well thank you Patrick for that presentation. Thank you everyone for coming out. I am just now coming back, I think many of you have probably heard of Jordan Peterson. He has what's called the ARC. So he, well first of all, there's the World Economic Forum and with Klaus Schwab who looks like a James Bond villain if you haven't seen him and he really does. If you don't know who I'm talking about, go look it up. I'm not exaggerating for hyperbole here. And so he, so the World Economic Forum has been like this villain for several years now in terms of like people who are on the right are conservative or libertarian in terms of trying to like centralize financial and political power and so forth. And so Jordan Peterson's event, it was called the ARC, the Alliance for Responsible Citizenship. And I was just over in London for that and then came here. So my point is that we really do appreciate you folks coming out here. It's to say, oh yeah, what are you gonna do on Saturday? Oh, I'm gonna go to someplace and watch for several hours of people putting up graphs here of financial things. That's not what a lot of people wanna do on a Saturday. So we do appreciate you coming out here. And again, what they were doing over there in London is a similar thing that they were realizing, for a lot of long time people were saying, somebody ought to do something. And so that's partly what they were trying to do over there. I will say like, partly what we're doing here is like the future and the case for optimism or pessimism. It was interesting over there because they were trying to build it as, hey, we're building alternative institutions and things like instead of us just complaining, let's go do something. And yet, Jordan and the opening talk, they picked that acronym ARC for obvious illusion to NOAA. And so I was thinking, yes, you're gonna survive but they seem to be conceding that everything's gonna get wiped out but maybe enough of us will survive to rebuild. So I don't know if that's supposed to be optimistic or pessimistic. Last thing I'll mention is, and this is true, so I was tweaking my slides last night in the hotel room and then I just went to go, so what I'm speaking about is the Fed and the fate of the US dollar and I'll go ahead and advance. So I'm gonna be speaking, I think Murray talked a little about the inverted yield curve a bit. So I am going to, as one of the things discussed briefly as part of what I'm gonna talk to you guys about, about what I think's coming in 2024 if there's gonna be a recession. And so then when I saw that, oh, wait a minute, Patrick's going right before me and his topic is explicitly, are we headed for a recession in 2024? And I didn't know what his answer was gonna be, right? And so I thought it's gonna be awkward if he gets up here and says one thing to you guys and then I come up and say thanks and I say the exact opposite. And so I was thinking, should I text him in court? But then I thought, no, even if that does happen, no matter what happens in 2024, we can go and selectively pull video for our ads to show Mises Fellow predicted what happened in 2024. So as we'll see, fortunately it actually happened like, because this is what a common, like if you had two astronomers and they said, hey, where is this comet gonna be in the sky next year on this date? Clearly like there's a fact of the matter, whereas with, as you see with economists that's more, we don't just say yes or no, it's more, well, if this thing happens, then this is what will happen. Whereas if this happened, and partly that's because economists are slippery, we're intelligent, we know how job security is. No, no matter what happens, I can say, I said that. That's what I said. But the other thing too though, just joking aside, is that in the social sciences as opposed to like saying, where's a comet gonna be if it comes to a recession, it in the Austrian school incorporates this, I think better than other schools have thought people have free will, like systems are very complex when you involve millions of human beings. And so that's partly why you can't treat the economy like just as this mechanism that can be controlled by a few smart people, twist and dials and such. Okay, so having said all that though, I will try to give you more than just generalities in terms of what I think is coming in store. All right, so this is an outline of what we're going over and I don't have too much time, so let me just jump right into it here. Okay, so the inverted yield curve, Jonathan mentioned, the first Newman mentioned when he gave his talk, I have a book, I think there's some copies out there called Understanding Money Mechanics. If you don't want to get the physical book, everything from the Mises Institute is available, the PDF is for free online. But I go through this more specifically with, I'm gonna have to go fast here for you folks, just because I got so much I want to cover. But I think this is a pretty important issue and if you want to understand more, I do cover it in detail in one of the chapters in that book. So the, unfortunately, just in case you guys don't really, we have a little issue that a lot of these charts, one thing is, many of you might be wondering, who is this guy Fred and why are they stealing all of his charts? All right, so this guy, it stands for the St. Louis Federal Reserve, that that's where Fred comes from. And the reason we economists tend to use this a lot is because they have a lot of the official data sets, like from the Bureau of Economic Analysis, Bureau of Labor Statistics, so forth, all kinds of data in their archives, and then they have a very convenient charting tools. And one of the things that they do with their charts and the reason economists like them is they have vertical strips showing when the recessions occurred. So what this is the inverted yield curve and what that means, I don't want to, I know some of you might not have a finance background, it looks at the difference in the yield on certain maturities of government bonds. So the one that I'm using here is the difference between the 10 year yield, so meaning if you lend money to the federal government and you buy a US Treasury that's 10 years in maturity length, what's the annual interest rate that you're getting on that for lending them the money for 10 years? So that's the 10 year yield and then compared to the three month yield, right? So you're just lending money to the government for three months, then they're giving you your principal back plus the interest they pay along the way. So the difference in those rates is what the spread is and normally at least since World War II that has been upward sloping, right? So in normal times, the yield on a 10 year bond is higher than on a three month bill, okay? And the intuition, Jonathan talked a little bit, just that you're tying your money up for longer, you don't know what's coming down, 10 years is a much more uncertain thing. You're gonna have to be promised a higher interest rate even per year to give your money to the government for 10 years as opposed to just three months. And so typically the yield is higher than 10 years but there are occasions when that flips the yield curve inverts and the yield on the three month is actually higher than the 10 year. And so in this chart, this black line is the zero point. So that's showing when these things go negative that means the yield on the three month is higher than the 10 year. And every time that happens where the yield, the spread is negative, soon thereafter there's a recession, okay? And now it's not merely just looking at correlations here. This actually, that's partly what I do in the book, Understanding Money Mechanics or the chapter on this topic is I explain why I think this dovetails very nicely. This relationship, like why should that be? It dovetails nicely with Ludwig van Mies's explanation of why the boom bus cycle occurs, okay? So specifically, in the Massassian story, I'm gonna be real quick here, of course, the idea is that the central bank, if there is a central bank, because his theory even worked before central banks, but when there is a central bank, it kind of leads the pack, it inflates, it floods the market with new liquidity that's not backed up by genuine saving that pushes down interest rates below what you might call the natural level. So they're artificially low interest rates and then that causes a boom. And so in that kind of framework, and also a critical thing is that the central bank has more control over short rates than long rates. So when we say the Fed cuts rates, really we have in mind like short term rates. And so in that kind of environment, that's gonna push the three month yield low. So the spread is normal, that's positive. And that's a boom period. But then prices start rising, the central bank gets nervous, they slam on the brakes, they tighten and they hike rates. But again, that's short rates. And so there's the three month zooms above the 10 year and then there's a crash. Okay, so I'm explaining how like, so Mises wasn't talking about yield curve spreads per se, but I'm just explaining if you believed in Mises's story, but then decomposes it will actually, there's multiple interest rates, what would that look like in terms of the yield curve? It actually fits this pattern. Okay, and so if you've bought that story, one major line of evidence as to why I do think there's gonna be a recession in 2024 is that you can see like, you know, going negative. So here, this is a very negative spread and it's starting to bounce back. And so historically, again, you can't see it, but these recessions all occurred shortly after the thing came back, you know, it dipped down and then came back positive and then there'd be a bunch of recessions here and here. Okay, so again, assuming this thing pops back up, you would expect there to be a recession pretty soon after. So for that reason, if you put a gun to my head, there's gonna be a recession in 2024, I think there would be. Also, as Murray said though, that doesn't mean in real time they're gonna say, oh, there's a recession, that there's always a lag with that stuff. So like it's after the fact, when they look back and say, when did this recession occur? I think they're gonna say it happened in the first or second quarter of 2024. Okay, one thing I'll be real quick on because this is more of an inside baseball one that I'll move on to the more general stuff, but for those who are curious, this is a well-known, this inverted yield curve predicting a recession. That's a well-known phenomenon. It's not that Austrians have a lock on that, but what is interesting is when mainstream economists explain why this is, they give a totally different explanation than what you just heard from me. So Paul Krugman writing about the yield curve says, oh, the reason it inverts before a recession is because investors know a recession's coming because they have access to the real world on the ground data, the people in the markets with their own money at risk are gonna know this stuff more than Joe Schmoe. And so they see a recession coming. They forecast, oh, during the recession, the Fed's gonna cut rates. And so that's why long rates through arbitrage get pushed below short rates. And then hence, oh, and then their predictions are fulfilled and there's a recession. But if that were true, when the yield curve inverts, it would be because the 10 year goes below the three month. But here I'm decomposing it. I'm showing you the red line is the three month and the blue is the 10. You can see when there's that mismatch, it's because the red shoots above. That's why the yield curve inverts. It's not that the 10 year plummets, it's that the three month shoots way up. So again, consistent with the Austrian story that it's the Fed tightening that causes the business cycle to tip over. Okay, so again, we have some repetition, but that's good at showing that we actually are independent scholars here coming to the same types of conclusions. I think Jonathan and maybe one other speaker had the same slide. This is showing remittances from the Federal Reserve to the Treasury. Okay, so it's a nice little relationship. The federal government gave the statutory authority to create the central bank back in 1913. They also, the year that they had the income tax, not a good year for many of us in this audience. And part of the way that system worked is the Federal Reserve, yes, it can create money out of thin air as we say. It can buy bonds, they earn interest on that. And so in normal times, the Fed earns a profit, right? It shouldn't be hard to do when you can create money electronically. You should be able, but actually, the Fed recently messed that up. The Fed is literally losing money. So normally just to finish the train of thought, the Fed after it pays its bills and it does give dividends to its owners. So the private banks literally own the Fed. Some of you may not know that, but some people think that's weird where they hear it. It'd be like if Pfizer literally owned the FDA. And so yes, that's true. So once the Fed pays its official creditors, there's dividend payments and such, it usually it has money left over and then it remits that to the Treasury. And so that's what this lineup here was, for all these going back, so I think this, I know you can't see it, this starts in 2011. That's what that is, first quarter of 2011. So you can see how that was the norm with all the QE and everything. When the Fed expanded its balance sheet, it's sitting on all these bonds, generating interest, and then the Fed would pocket that, again, pay for the electricity, pay the staff economists and everything, say how great the Fed is, and then remit the balance to the Treasury. So in a sense, federal spending was a little bit, was that much higher without having to raise taxes or borrow more money to that amount. And then in recent years, it's plummeted. And so why is that happening? Again, some earlier speakers alluded to it is because the Fed has effectively been borrowing short and lending long. And so when you're in a situation like that, and then short-term interest rates zoom up, whereas long-term rates don't respond as much, you get caught. And so the Fed has effectively been paying a lot more for its funds in terms of what it's earning on its assets or its liabilities in terms of what compared to what's earning on its assets. Okay, and so that fundamental mismatch is what's happened here. So don't worry, the Fed's not gonna close up shop. They're not gonna say, oh, it was a good run and thanks everybody, we'll see our way out. That's not what they're doing. Again, they can create money electronically. They're not gonna shut their doors. But what's interesting is they saw this coming. And so Jonathan and I on a recent Human Action podcast episode, if you go to mises.org in the podcast section, Jonathan and I have a podcast there where I should be clear, I have a podcast, I let him join me sometimes, just to be clear. And but fairly recently, you can go through and it was within like the last six or seven episodes talking about the Fed's trillion dollar loss, something like that, you go and click on it. And we go through a lot of the specifics there, but we mentioned that one QE started, right? So after 2008, I forget the exact year off the top of my head, it was like 2010, 2011. They made an announcement, like they buried it in the footnotes of one of their press releases where the Fed said, oh, from now on, we're gonna handle the accounting this way in terms of how we report stuff. And effectively, I'm getting to the punchline here, what they said was that if we owe the treasury, if it turns out that instead of us having a surplus that we normally remit to the treasury, which if you think of a balance sheet, would show up as a liability to the treasury. That's the way they would report it. You got your assets, so from your guys point of view, the assets are over here, the liabilities and shareholder equity over here. So the assets are whatever they are. They buy a bunch of mortgage, back securities, treasuries and whatever. And then over here, they've got liabilities. And so from the Fed's point of view, like currency and circulation is technically listed as a liability, just going back to gold standard days. And then one of them would be, oh, if we're supposed to remit whatever, 70 billion to the treasury, they would list that for that period as a liability. And then whatever the difference was, would be the shareholder equity or the capital in the Fed. And so they made it a rule change saying if it should turn out that instead of us like having a profit of 70 billion and then listing that as an asset or as a liability that we owe the treasury, if we lost money, what we're gonna do is we're not gonna take that off of our capital. Instead, we're gonna list it as a negative liability owed to the treasury. Okay, so for those of you who like run your own business, that would be a neat trick to have. That if you had a big loss one period that would have wiped out your capital and so you would have been insolvent or loosely some people might say bankrupt, those terms are different technically, but where your liabilities are higher than your assets, that means you're insolvent. That's not a good thing to do if you're a business owner. But the Fed prevented that from happening because they said, no, no, what we're gonna do is, again, if the assets drop 100 billion, you gotta show that somehow over here and the way they were gonna do it is list negative 100 billion owed to the treasury. So that's the way, as opposed to making our capital or shareholder equity go down by 100 billion. So they announced that years ago and it kind of flew under the radar and then like zero hedge, I think, picked it up and said, you know what this means? I think they're realizing all these bonds they're buying under the QE rounds. They realize when they start normalizing and raising interest rates, they're gonna have huge losses, at least, you know, mark to market on those assets and maybe they're getting ready so that, because it would be awkward if the Fed were technically insolvent and had negative equity, right? So maybe just to avoid that awkwardness. So anyway, we speculated at the time, that's why they might be doing it and that's what they're, you know, they are using that mechanism now. And so this just to give you an example, this is from a Mercatus study that came out in, I think early 2023. So I think the numbers have moved a little bit but I think, you know, the spirit's still the same. But what this is showing right there is saying the change in the market valuation of the Fed's assets, right? So when interest rates rise, the value of an existing bond goes down. And so as the Fed has raised interest rates, that's caused lots of problems. Some earlier speakers were showing how like the treasury having to make interest payments on the outstanding debt, you know, as that gets rolled over, the higher rates is a problem. But among other implications, it means that, you know, the Fed sitting on trillions of dollars of bonds, fixed income assets. So as interest rates rise rapidly, the value of those goes down and it's lost about, you know, more than a trillion dollars in terms of that. Now, you might say, if you know how this stuff works, you might say, okay, but isn't that just kind of like a paper loss? If they just hold those bonds to maturity, who cares? It's worse than that. What this is showing is over the next from 2023 to 2032, how much less the Fed is going to remit to the treasury, it's got a present discounted value of $979 billion. Okay, so this is a real mismatch like money coming in and out. And I have to move on because there's more stuff I wanna cover here with you guys and run out of time. But part of what's going on is the Fed actually has to pay to keep its financing options open, right? It really is paying for its liquidity to then go and invest or its deposits. And so specifically the interest on reserves, if you're familiar with that is that the Fed in the fall of 2008 started paying the banks to keep the reserves parked at the Fed. That was a new policy at the time. And so that's why, and that's a very short-term thing. And so when the Fed raises rates, that's one of the main mechanisms that it uses. And so that's the sense in which the Fed basically like is borrowing 100 billion in short-term financing to then go invest in long-term bonds to keep that money parked at the Fed. They gotta raise the interest rate they pay on deposits or reserves, I should say. Okay, so that's what I mean. So it's not merely the Fed back in the day bought a bunch of bonds under QE2 and now the market value went down because they raised rates, but who cares, they're just gonna sit out. It's not like that. No, they actually are actively having to pay for the financing because if they didn't keep those short rates higher, if they let them go down, for example, then people would pull the reserves out and they would lend it out in the private sector and then price inflation would be higher than it is right now. So they kinda painted themselves into a corner. Okay, let me now pivot a little bit and just talk a little bit about the fate of the US dollar. So here's something coming from an IMF data. This is a Federal Reserve study, but we're relying on IMF data looking at of all the officially reported reserve currencies held by various central banks around the world. Ironically, the point of this Fed study was to say, don't worry, the US dollar is in good shape and their point was see, look at the most recent numbers, 58% of global forex reserves consist in US dollars. Well, okay, but their own chart shows that back in 2000, that was at 71%, okay? So again, just from the year 2000 to 2022, if you look globally, the central bank foreign exchange reserves, the percentage that used to be dollars was 71%, and just over that 22 years, that's dropped down to 58%. So it's not that the dollar's gonna crash next Thursday or something, but that is a pretty significant trend, and I think you're just gonna see that continue, especially as the US, whatever you think about Russia and Ukraine, the US was definitely using its status as holding the leading world's reserve currency to punish certain regimes that weren't doing what it wanted by just threatening and saying, okay, well, we're just gonna shut your banks out of the global system, right? And so a lot of countries that maybe aren't even ideological or don't care what they're more on the fence in terms of who we're gonna lie with, I think that's, they're realizing we don't wanna be so dependent on the US dollar because if Washington just decides to turn off our banks, we don't like being in that position. Okay, another element here, just to see how the trends have changed over time. So what I'm showing here is outstanding treasury debt held by the public, okay? So when the US government borrows money, lots of different institutions can buy those bonds, including the Federal Reserve, but also foreigners and also foreign central banks. And so what we're seeing here is the red line, this middle one, that's the total amount of outstanding US treasury debt held by all those various players. And you can see how like in the 2008 crisis, it started rising rapidly. And then here is, when the lockdown's COVID spending happened and it shoots way up. And so the green line is the amount of treasury debt held by foreigners. Okay, so you can see for a while, they kind of moved in lockstep, right? The pattern of that is similar. And it did rise a bit, but then around 2014, they kind of had enough, they threw in the towel and jumped again a little bit over here. But my point is you can see it kind of leveled off even as the treasury just kept issuing like crazy. And so what this blue line is showing is the percentage of total treasury debt held by foreigners. So you can see it piqued back here, which is like 2010. And then it's fallen rapidly. Okay, so up here, is it about 48%? I don't know if you can read that. It was about 48% of the total treasury debt was held by foreigners. And it's fallen pretty rapidly down to here. It's like about 30%, okay? It not that many years. So again, just showing if the treasury continues to borrow lots and lots of money over time, the amount held by foreigners is gonna keep dwindling, or the percentage at least, and more and more of it is just gonna be held domestically. So part of the narrative here, I make the case in more detail in Chronicles magazine, had me write an article that just, it's in this current issue that's out now on the fate of the dollar. Part of what I'm getting across is the US since the end of World War II with the so-called Bretton Woods system had enjoyed a special privilege where they could, the rest of the world was holding dollars instead of gold basically. So we could get away with things that other countries couldn't because we could just kind of run the printing press and other countries would send us cars and TVs and whatever in exchange for the dollars because they were holding the dollars as assets. But that era is coming to an end and that I think we're reaching the tipping point where the more dollars that are created or the more treasury debt that's created, it's not just gonna get absorbed by the rest of the world because they treated basically the same as gold. I think that that is no longer the case. And so no, if we issue more debt, it's gonna have the same consequences that happen when other countries do that, namely yields go way up and that makes their economy crash. Okay, another element just to show again some of these longer term trends that I don't think bode well for the fate of the dollar. So using the official numbers and you can put lots of asterisks here, but according to the official statistics, the US in terms of their gold reserves, back in 2000, they claimed they had 8,100 tons of gold that stayed basically constant through the last official amount they had in 2022, whereas China's official reserves in 2000, they report 395 and you could see those of quintipple to 2000. So officially China still has lower gold reserves than the US, but you can see how much it's gained. And so again, if part of the narrative I'm expressing to you is that I think we're moving away from the US being the lone superpower by a long shot to more of a multipolar world where, I'm not saying China's gonna be the global superpower next week, but I'm saying I think the US is gonna get knocked off of its pedestal and we're gonna have more of like a multipolar globe in the next 10 to 15 years, let's say. All right, so this is part of it. Also, if you listen to Tom Woods' podcast, recently he hit on a guest called Dominic Frisbee based in the UK and he has done the data on this. Frisbee's claim is that for one thing, these numbers are inflated, right? I think lots of you have heard that argument that among other things the Fed has resisted audits of its gold holdings because the claim is that they've been shorting the market and whatever and that they don't actually have that much gold there. As Murray was saying, move to Fort Knox and check to see if the gold is there. They probably wouldn't let him in the door. So that's one issue that maybe this 8,000 figure is not correct, maybe that's too high. And Dominic makes the case, he's looking at like mining data and other things that we have public access to. He thinks this number is way understated. He thinks that China actually has to have at least something like 16,000 tons of gold right now because we have good data on, from this point to this point of how much mining they've done and half of those companies are state owned, right? So that's kind of data, more micro level data to say this number has to be way bigger than that, which would fit like why would China be understating it? Well, if they're sitting on a lot of treasures, they don't want to crash the dollar, they kind of just want to sit in the corner getting stronger and stronger while the US implodes. That's what Dominic's theory is. That makes sense to me too, that the Chinese communists, I mean, they're commies so they don't have everything right, but they kind of like, they have a more long term view of things. They don't have to win elections the way US presidents do in the same way and they can have a longer term view and just be like, no, why don't we just keep, amassing gold and so forth and then we'll just let the US kind of further away its advantage. Okay, so what are my conclusions? That's a Caddyshack reference, I'm sure some of you, this is the theme where he goes, well, we're waiting. So I hesitated, I said, oh, should I put this up here? Because what if it's a younger crowd? No, I'm sure you guys all know what Caddyshack is. So just briefly here, I just got a minute left here. So I think, yeah, absent something major, I do think that, yeah, in line with historical trends, it would be very surprising, put it this way, if there's not a recession that begins in 2024, a lot of things will have to be updated to say, oh, a lot of these normal trends that had almost a perfect track record since World War II, the big asterisk when that totally didn't come through was in the year 2024, right? So again, it could happen just past performance as no indicator of future success, right? So that is possible, I'm not saying it's a guarantee, but to me, it's not just Austrian theory, there's a lot of conventional financial metrics and such in patterns that you can see out in the data that would not hold true if there isn't a recession that starts in 2024. Again, absent something, if Ali showed up and gave us all kinds of things that made free energy or something that could change it, but you get what I'm saying. Normal conventional things, I think, yeah, there's gonna be a recession in 2024. As the treasury, I mean, I didn't have time here to get into it just because I didn't wanna overload you with too many charts and such, but yeah, Jonathan showed some of the things normal, we're not being pessimistic, just normal baseline projections with the increase in Medicare and Social Security spending and things like that, interest on the debt, even if interest rates just kinda normalize a little bit, you're not forecasting catastrophes, the federal government is gonna just have to borrow so much more money going forward. And then as we've seen, I think the rest of the world is calling it quits, that they're not gonna absorb that. So I think all those trends push towards a displacement of the US dollar such that 10 years from now I don't think people are gonna be so casually referred to the dollars, the global reserve currency, I think it's gonna be obvious that it has lost that they sort of squandered that advantage that we had. So with that optimistic take, thanks everybody.