 So we'll begin by talking about banking crises and the weaponization of money and banking. And I just want to start off by saying that the weaponization of money and banking is nothing new. If you look back in even ancient history, you look at the Roman Empire, we see that in the Roman Empire they were debasing their own currency. If you look at a chart of the purity of the silver coins during that time period, over the course of about 200 years, the silver content of those ancient Roman coins fell by about 50% or more. And you have to ask the question, why? So why would this sort of thing happen? And the answer is when governments overextend and they increase their spending and they have this huge increase in debts, they have to come up with a better way to fund their exploits, to fund their war making. And the way that governments have found to do it, including the Roman Empire, was since taxes are very unpopular, instead of raising taxes, we can just take the valuable metal out of the coins. And so that explains why the base metal in the silver coins was falling. So this is a very old idea and it has to do with the way governments respond to the unpopularity of taxes, where they want to increase their spending, they want to increase all the sorts of programs that they want to do, and they know that they can't pay for it with normal taxation, so they have to extract the wealth in another way. So coin clipping was also a very common practice in antiquity, where the governments and other counterfeiters would shave off the edge of the coin and collect the metal so that they can create new coins that were just a tiny bit smaller than the ones that were already issued. So it's just a means of extracting wealth. It's just a way to get wealth and be able to command resources in the economy without doing something as unpopular as raising taxes. I encourage you to read Murray Rothbard's excellent history of money and banking in the United States, where he talks through the sort of progression of government control over money and why they would do that sort of thing. And at the beginning he talks about how the US different state governments in this area were, they were waging different wars and if they lost the war then they didn't have enough plunder to take home. And so they would have to pay the soldiers with the promise ordinance. They had to promise to pay the soldiers after the war and unfortunately they would lose some of these wars. They wouldn't have the plunder to pay the soldiers and so they would have to delay and default on those promises. And the way that they would have to do it is they'd have to just make them accept the paper and they would do this by implementing new laws like legal tender laws. And so the origin of all of the regulations that we see is just from the fact that governments can't stay within how much money that they've collected in taxes. And this goes back to throughout all of human history throughout millennia. So it wasn't until later that governments realized that they could exploit the banking industry. And the reason why this was a fertile ground for the government to inflate and increase the money supply is that they realized that banks were handing out these banknotes, these little pieces of paper. And it's much easier to print off a big roll of paper with people's names on it and promises on it as opposed to mining and minting new gold coins. So they saw that this was an area where they could dive in, they could take control of the banking sector and if they could increase the money supply and acquire funds and do things that way then it would be all the more easier because they weren't constrained by the costly production and minting of gold coins. So making crises would result. And the reason why is because the people are wise to what's going on. They see that banks can issue more notes than the actual gold that they had in the vaults. And so when people come to try to redeem their banknotes for the gold that's in reserve, the bank comes up dry sometimes. The bank doesn't have everything that they've promised to pay. And so this was a very common problem throughout the 19th and even in the early 20th century. And it was really this sort of problem that was a part of the rhetoric that was used to get the Federal Reserve started, to get central banking started. And the idea was, yeah, all of these banks are causing all these crises. We're the government. We can step in. We can help out. We can fix this sort of problem for everybody. We can be a lender of last resort for the banks that are failing. And the government can implement federal deposit insurance so that everybody's deposits up to a certain limit will be safe. So it was in this sort of way where the government's pretending to help out. The government is saying, we're here to fix some sort of problems and not cause problems. We're not here to extract wealth. We're here to fix the problems that we see in the banking system that made the public tolerant and sort of willing to let the government step in. And that's where the Federal Reserve Act created the Federal Reserve and allows central banking to start. And this brings me to a really important idea that was developed by Robert Higgs in his book Crisis and Leviathan. If you haven't read it, I highly recommend that you read it. It's particularly relevant for modern times. And in Crisis and Leviathan, Robert Higgs talks about how governments make use of crises to expand their size and their scope. And if you look at the 20th century, which is what Bob Higgs does in his book, he shows how in each crisis episode, there's a big ratcheting up of the size and the scope of government. They start doing things that they didn't do before. Government spending increases dramatically. And then after the crisis period subsides, the government might get a little bit smaller. It might be a slight decrease in spending. They might relinquish some of the new programs and activities that they were doing during the crisis. But it never quite goes all the way back down to where the government's size and scope was before the crisis. And so Bob Higgs thesis, I think, is just obviously true if you just look at any sort of metric of the size and scope of government, especially in the 20th century. But if we can connect that to the existence of bank crises, which it's timely to discuss the sort of thing now. If we think about how fraction reserve banking and all of the machinations of the central bank is causing these sorts of crises, inflations and booms and bus cycles, then it's like the government is creating its own fertile ground for growth. So it's creating the crises that enable and cause public opinion to turn in its favor. So it's like everybody is panicky. Everybody is scared during this crisis. And so we're more willing, maybe not the people in this room, but the public in general is more willing to give that ground to the government, to allow the government to enact the laws that it wants to to start the new programs that didn't exist before. So I've been thinking a lot about this thesis about how public opinion and different crises that come up enables government growth. And I've been thinking about how to connect this more explicitly with government control over money and banking. So not only is this area of money and banking a perfect example of government increasing in size and scope, you can read Carl Manger and Ludwig von Mises and Murray Rothbard and they show how money is something that is a product of the market. The banking sector is something that could be done by the private market economy. We don't need a government to implement to give us the institution of money. In fact, both Mises and Manger showed how that's impossible. It can't even happen. So whenever the government does start to co-op those sorts of institutions, it's definitely an example of the of the ratchet effect hypothesis that Bob Higgs talks about. Moreover, fiat money and the government's ability to print paper to finance its own spending and everything that it does, it enables government growth. So if the government doesn't have to collect taxes every time that it wants to start a new war, every time that it wants to start some sort of new welfare program, if it doesn't have to dramatically increase taxes to pay for those sorts of things, then it's much easier for the government to do that. And especially in our modern case where it's there's sort of a shell game that happens where the government issues debt and then it goes to the private financial or somewhat private financial institutions who then sell it to the Federal Reserve, then it's sort of like you have to see the step-by-step process to be able to see the big picture, which is that government is simply paying for its large increases in size and scope by inflating, by increasing the money supply and in so doing surreptitiously extracting wealth from the population. So it's not something that shows up on your tax bill. It's not something that you can see as a line on your paycheck where the government's withholding some of your income. It's something that shows up when you go to the grocery store, when you're buying a house, when the prices of everything that you're purchasing is increasing. And so that's how the government is able to impose costs on everybody else. So it's the expansions of government come at the expense of the entire population. So I've mentioned how inflation and government control over money and banking actually causes the very crises that enable and give grounds for the government to grow. And one great gem from the Austrian School of Economics is the business cycle theories. And I'd like to just go through just very briefly sort of the step-by-step process of how that works. The way that one incursion into money and banking in the form of inflation can cause further incursions, further government interventions. So if you read Rothbard, by the way, if you want a great overview of Austrian business cycle theory, I recommend you check out America's Great Depression by Murray Rothbard. It's an excellent history of the time. And in the first chapter, he just talks through what is the business cycle? Where do business cycles come from? And Rothbard points out that it comes from artificial credit. It comes from the bank increasing the money supply and that new money coming into the economy through credit markets. So when there's an increase in the money supply, either through the Fraction Reserve banking system, which I mentioned, or through just the Fed has bought a bunch of new assets and the money supply has increased, that new money comes into the economy at a particular point. It isn't trickled out from helicopters over the population. We don't all see the new money show up in our bank accounts all at the same time in proportion to each other. So what it comes into the economy through a particular point, and that by itself just shows that there are benefits, that there are localized benefits in distributed costs to this sort of action. And you can just think about just a regular run-of-the-mill counterfeiter and the sorts of benefits that a successful, who doesn't get caught, a successful counterfeiter would have. They'd be able to buy all sorts of new goods and services for themselves, and everybody else has to pay for that in the form of higher prices. So when the government does that, they increase the money supply and it comes in through credit markets. There's all sorts of effects, but one of the most important ones is that the interest rate no longer reflects people's time preferences. So we all have our own time preferences in which we decide to save a certain amount, consume a certain amount, and the amount that we save, the amount that we relinquish and give over to producers is a hard limit on them. It gives them just a certain amount of resources that they can use to pursue the different production projects that they want. So entrepreneurs have this hard limit on the types of production projects that they can undertake. But when interest rates are falsified and it looks like there's way more resources available for production, it means that these entrepreneurs, they start to, they start all these new projects that take longer and they'll employ more people and the stock market can boom and so firm values go up. And it makes it look like everything is great. So we have this general boom period, but unfortunately it can't last. And the reason why is because there haven't been resources set aside for those new projects that were started. It just sort of looked like there was. So all of the new money that came into the economy made it look like there were enough resources for our economy to grow and expand. But it's all a farce. It's not actually there. And this is not some like crazy conspiracy theory because it's actually in the stated purpose of the monetary policy that they implement. So if you look back at Federal Reserve transcripts and their press releases, they'll say, we're trying to make it cheaper to borrow. We're trying to save the economy and stimulate the economy. And of course, all the Austrian economists are like, yeah, that's the problems. You can't stimulate economy with just new green slips of paper. It takes saving. It takes capital accumulation. It takes sacrifice to actually get the growth that you want. So the crisis inevitably comes usually when the central bank is put in a position to force interest rates to come back up or to allow interest rates to come back up. And this is what is happening now where people have become angry with the price inflation. They've decided that the price inflation that they see is not good. And so now the Fed is in this position if it wants to keep its popularity to dampen the price inflation that's happening. And the way they do that is by turning the money spigot off, by allowing interest rates to increase. And so when this happens, firms have to figure out what sort of projects can we continue with these new higher interest rates, with the actual availability of resources. And it's a painful sort of process. Even though we can sort of talk about it academically, it's painful for people to lose their job. It's painful for businesses to have to close down. It's a very painful process. But despite the pain of the process of a recession, it's a necessary correction that needs to happen. But nevertheless, a crisis happens. And as we all know what happens during a crisis, well, public opinion is there to allow the government to step in and save the day, so to speak. So the public cries out for stimulus checks, the public cries out for additional expansionary monetary policy, the public cries out for unemployment checks and all sorts of new increases in government spending. And so here we see this is the source of government growth. This is where the government can expand and grow. It's when the people are in this sort of desperate position and they're ready to accept all of the new things that the government is happy to do. So besides Austrian business cycle theory, which is I think a fascinating topic, there's been a resurgence of research in some of the underlying more sneaky, more subtle effects of inflation. And especially in the works of Mises scholars like George Guto Holtzman and Joseph Salerno, they've looked at how inflation infects our culture and infects our personality and psychology and how it causes us to lower our rate of time preference, to favor the present more and to save less. And what this means for us in our current topic is that it means that the more the government inflates, the more the money loses value, it means that the people are put in a more desperate position. So if people are disincentivized to save, so there's no reason to save if the value of your money is dropping precipitously, it means that people are going to be more desperate when a crisis comes. It means that people are going to be more willing to look for some sort of savior, including in the form of government help to step in and help them out because they're in this desperate situation that was caused by the inflation in the first place. So it's a really evil sort of surreptitious process that I think harms our culture in ways that we're just now starting to comprehend. Of course, Mises saw it, Rothbard saw it, and the authors that I mentioned before, Holzman and Salerno, see it as well. I highly recommend you check out that work because if you just look in social media and if you look around the world today, you see it everywhere. You see the cultural degradation. You see the collapse of the institution of the family and communities as well falling apart. And I think the Federal Reserve and the government inflation has a huge part to play in that whole process. So these crises come, and I'd like to mention just one of the recent examples, which is the Silicon Valley Bank, banking crisis where it was an old-fashioned bank run where the Silicon Valley Bank had purchased a bunch of assets in the form of loans, loans to Uncle Sam, and instead of keeping a bunch of cash in reserve. So they were engaged in fractional reserve banking. And so when people got a little bit panicky and people started withdrawing their cash because prices are increasing and the economy slowing down, when these firms were pulling their cash out, people realized that SVB was not in a position to pay all the depositors back. So the panic sets in and people run to the bank and they try to redeem their deposits, withdraw their deposits, and of course the bank comes up empty handed. And what was really interesting is another perfect example of the ratchet effect going back to Bob Higgs' Crisis on Leviathan thesis. Because if you remember what happened is the FDIC, the U.S. Treasury and the Federal Reserve all worked together to sort of stretch the limits of what their actual authority is, to stretch the limits of what powers had been delegated to them. And in this case they insured deposits in excess of $250,000, which by the way just means that instead of the depositors in the bank paying the cost of this failure, it means that whenever the government is stepping in it means that everybody has to pay the cost. There's no way to just sort of get rid of costs. Costs have to be borne by somebody and through the magic of government it means that the costs are borne by taxpayers, by everybody else as opposed to the people who were involved in the problem. So another thing that we've just seen in the past week or so is that the Federal Reserve is now using the SBB collapse as a scapegoat for an impending recession. So these crises are the health of the state. They're the health of the state's ability to expand, to get bigger, and really the hinge for the ratchet effect to take place is the fact that public opinion is there to accept the growth in government power. So I just want to make a few predictions about what might happen, some soft predictions don't hold me to these, but I think it's pretty safe to say that the government will use a crisis in the future to implement a central bank digital currency. Of course the brilliant researchers at the Fed have been writing papers about how great the Fed is and how all the sorts of things that they would be able to do with a central bank digital currency, but it should be clear that a CBDC would just be, that would be the last step. That would be the case where the government finally has complete control over our ability to earn money and our ability to spend it in the way that we see fit. It's something that we should be fighting tooth and nail against because it would be devastating. If you look at the way the government treats our income and our ability to spend now and just hand over or think about handing over complete control over it to the government, then you can sort of imagine the nasty things that they would be able to do. You go to the wrong protest and your money is frozen. If you have the wrong amount of money in your account, like maybe over $600, then there's going to be extra special fees associated with that or reporting that needs to happen. So it's really the last step. And I think that all of the papers and the speeches about central bank digital currencies, both at the Fed and in the World Economic Forum, I think they're priming the pump. I think they're trying to get public opinion on their side so that when the next crisis comes where they want to implement it, it's not something that's brand new to our ears. It's something that we've heard before. It's something that we can look back at. Oh yeah, they've been talking and planning on this for a while, so it must be okay. So we need to see their actions and see their rhetoric for what it is, which is they're trying to corral public opinion so that when the next crisis comes, they can expand in size and scope once again. And this leads me to my conclusion, and we'll have some time to do some Q&A. This means that our only hope is to make it as unpopular as it deserves to be. So we saw how ancient kings in the Roman Empire were able to use coin clipping and debasement to extract wealth from their population. And the reason why is because high taxes would have resulted in revolt. They were very unpopular. And we saw how Higgs showed that the ratchet effect hinges on public tolerance and numbness to government expansion. And so this is why I think the mission of the Mises Institute is so critical. So the things that I mentioned before, they're a promotion of teaching and research in Austrian economics and individual freedom and honest history and an international peace. These are the sorts of things that if we're successful and allowing people to see the state for what it is and see inflation for what it is, then we can break this cycle. We can break the way that the government uses inflation to extract wealth and to expand its own power. And so that's why I think the mission of the Mises Institute is critical for civilization itself. Thank you.