 But the Fed is doing a lot more than just kind of interest rates a lot more. And the interesting thing to me about the Fed, and I remember actually commenting on this and not knowing what the answer was. But months ago, the Fed started intervening into the repo markets into the repurchase markets and repurchase markets are these very short term markets where people, where companies, not individuals, but companies and basically put up treasuries as collateral. This goes to the liquidity issue that Rob was talking about. So let's say I'm a corporation and I've got a bunch of treasuries, I've got a bunch of bonds in my portfolio, in my vault or whatever. But I need cash. I don't want the treasuries I need cash. So what I can do is I can go into the market, it's called the repo market, and I can lend my treasury to another party and they give me the cash. And then I can use that cash to pay taxes, to pay payroll, to pay suppliers, to do whatever things I need for the cash. And I remember in the fall, there was this day, so the interest rates in this market are very, very low, because you've got collateral, which is a government bond, and it usually get paid back less than two weeks. It could be a day, it could be overnight, it could be a week, it could be two weeks. So it's very short term loan, highly collateralized. And yet on a day, I can't remember the month, but in the fall, interest rates went to 10%. And the Fed immediately intervened with like $50 billion and started pouring money, started participating. So basically, it was the one accepting the treasury and giving out the money, right, lending out the money. And right now, by the way, it's doing it at the tune of $1.5 trillion, right? It's basic supply and liquidity of $1.5 trillion. Now, this isn't just money going into the economy because they get it back. But if they keep doing this, it is at $1.5 new trillion in the economy. Now, so this is in the fall, and I remember saying to people in the fall, this has to be a signal that something is crazy in the market. My speculation at the time was that certain banks were trying to borrow in the overnight market, and other banks didn't want to give the money because they were afraid they would default. And I think the primary bank at the time that was suspect was Deutsche Bank, European Bank, so a disaster, having a disaster really since 2008, but certainly since the Greek financial crisis. And people just didn't want to lend money to Deutsche Bank, so they were driving interest rates way up. And you can't always tell who your counterparty is. So it's hard to unwind these. Anyway, the Fed intervened, but it was already suspect because why does it need to intervene? Banks have a lot of liquidity on the books, and the books, there's a lot of liquidity. So why is the Fed intervening? And I think that was a first indication, not of coronavirus, but something was going to happen sooner rather than later. And now we're seeing, of course, all of that on steroids where the Fed is basically committed to providing liquidity in every sect of the economy. And there are people arguing that the Fed should be allowed now to buy corporate bonds, stocks, everything to provide liquidity to every market. That would be interesting to say the least, but that would be an unmitigated disaster if they do that. Long term, short term it will feel great. Long term it will be unmitigated disaster. But so far, they just started buying municipal bonds. That's the latest that they're buying. So they're buying now treasuries, U.S. bonds, in other words, government bonds, they're buying mortgage-backed securities and they're buying munis, municipality. And notice what that does, that lowers the cost of buying for city governments who probably can't afford to run their programs. And the Fed basically were doing a massive bailout implicitly of all these cities and counties that didn't plan for something like this. Yeah, I mean, I think the mutibond market crashed by the most since 1981 is the headline I saw. But on top of that, a few programs you left out, Iran, Money Market Funds, they announced a program to support money market funds, and then also commercial paper to buy commercial paper to support. So that short term paper is, what's that? Tell us what commercial paper is. Oh, yeah, commercial paper is basically short term loans to corporations. So it can be from 30 to 90 days typically. And so corporations would issue this to get short term loans to pay for inventory that they're going to sell within 30 to 90 days, maybe meet bills that are coming due sooner than they get the revenues for them and so on. But here's one thing though, is when you have ultra low short term interest rates and longer term rates are higher. So if short term rates are zero and long term rates are three or four percent, maybe a lot of corporations are going to issue short term paper to build a factory or do some kind of long term investment because you can save yourself a lot of money that way. So as a result, they get in this illiquid position where all of a sudden they can't borrow the money they need anymore. They want to keep rolling over these short term commercial paper loans to fund their long term investments. All of a sudden they can't. They don't have the money to pay them back. The market starts to collapse and then the Fed to the rescue. Okay, so one of the parallels then with 2008. So 2008 it was the Fed started doing things that people never imagined that the Fed would do. And so you're saying now in this one they're doing even more new things that they've never done before in the face of this. One of the important differences is in 2008 some people objected. There were voices to say, wait a minute. You don't know nobody's objecting. There's no voices out there saying no, they should sit it out or they should do something different. Everybody basically is on this train of the only hope we have is that the Fed does more liquidity. More. Exactly. So again, there's a real sense and this is I guess an epistemological point. I mean, there's a real sense in which our scope of thinking keeps shrinking every crisis and people become more complacent, more tuned with intervention in the mixed economy and authoritarianism. It's the point you made about Trump's election. It just constantly reinforces this dulling of the brain, of dulling of the mind. I mean, I think one sense dulling of the mind is that nothing bad has happened so far. So back in 2008 people were complaining because it's okay, you're doing these radical monetary actions and policies which you'll seem pretty extreme and have to have bad consequences. But 10, 12 years later, we still have not seen the bad consequences or at least they've been under the surface and they're starting to come to light now. But everybody thinks, oh, it did great. It saved us in 2008. It caused the economy to recover and we had an amazing economy and stock market for the last 10 years. So it worked now. So they don't connect what's happening now to the fact that that's the unwinding of all the things that Fed was doing before. So the first thing the Fed has done is they've reactivated all the programs that they did initiate in 2008. So like the Money Market Fund was something they did in 2008. The Quantitative Easy is something that they started in 2008 and so on. But now they are doing new stuff like the Mutibond stuff is something new. But I think you're right, all the voices are now pushing them to do more. So you'll bail out Mutibonds now, backstop, treasury repos and so on. But again, because they think it works, another thing is people thought it would cause inflation. Even the Fed thought it would cause inflation or at least it was a good chance it would. In fact, they've been trying to cause inflation for the last 10 years and failing and not sure why they're failing. And here we mean price inflation. We mean price inflation. Sorry, yeah, price inflation. Yeah. So people worried about that in 2008. That didn't happen for some reason, which I don't understand. And the Fed doesn't understand even. So it seems like it doesn't cause any bad, same with deficit financing. So the government can borrow 30-year bonds, got as low as 0.7% yield last week. Now they've jumped back up to 1.7% for 30 years. But I mean, that's just an astonishingly low yield for 30 years. So, you know, we're already running a trillion dollar deficits, US budget deficit was already a trillion dollars going into this. And now, you know, they're going to be doing, I think, I think the headline a couple hours ago said the stimulus package is now up to 2 trillion, the Congress is voting on. Well, the British did the equivalent of 3 trillion and the Dutch, in Denmark, they've just done the equivalent in the US, what would be 2.5 trillion. Okay. Yeah. It's incredible. Size of GDP. Yeah. So they think they can borrow as much as they want and yields don't go up and inflation isn't going up and so on. So they think they can do all these things and there will be no bad consequences and they think it will help. So I mean, that's the kind of dulling of the sense of it. So it will cause bad things down the road, but nobody understands that or connects with that. And it already has, right? So while there was no inflation and there were no crashes and the economy seemed to be doing okay, the economy only did okay. Right? So from 2009 on, the economy has grown, including under the greatest economy in all of human history, Trump, it only grew at around 2%, which is pathetic, truly pathetic in terms of economic growth. I think I saw this statistics once, if the United States had grown between, I don't know, 1890 and 1980, 1% less per year during that period. We today would be poorer than Mexico. Okay. 1% compounded is huge. So the fact that we only grew at 2% versus 3% historical growth or 4% or 5% potential growth, who knows, maybe 67%. I don't know what the upside potential is of a truly free market. That is the real cost. Even without this crisis, the cost is the fact that there was no growth. And then that there was probably more growth in areas where we didn't really need it. Right. And no growth, maybe for example, in hospital beds in areas where we didn't need it. Because I don't know if one of the reasons we don't have hospital beds is because of regulation and because of cost cutting, dictated by Medicare and Medicaid. So, you know, maybe private hospitals like pretty bad would have more bed. So all of that is unseen. This goes back to economics in one lesson by Hazlett. It's the unseen that is important in economics. And yet nobody wants to see the unseen. Nobody makes the effort. And I mean, just, I don't know if this gets too far away from where you want to go on car, but just to throw this on the pile too, in terms of consequence, it's the last 10 years. It's been brutal for anybody on a fixed income. So with 0% interest rates, and you can't afford to take a lot of risk because you're 80 years old. So you can't put all your money in the stock market and hope that it's higher 20 years from now. You need a fixed income that you can count on this low risk, but you can't get that because interest rates are so low. So that's been brutal for people trying to live on a fixed income and not take undue risks. It's hard for people who are saving for retirement if you can't get decent yields on bonds. So they have to put all their money in the stock market instead and hope for the best. Now that's crashing, and who knows where that's going to go to, right on the point where the baby boomers are reaching peak retirement age. And your pension funds and insurance funds have been suffering for the last 10 years because they build in a certain assumption about what kind of yield they're going to get on bonds, which has not been anywhere close to being realized. So insurance funds are finding their portfolios are in rough shape. Pension funds are way underfunded, and now they're going to be even more underfunded with the stock market 30% lower. So I mean, it's one thing that I saw about a year or two ago, the Illinois, which is one of the worst in terms of pension underfunding, the public pension, the treasurer issued something like $10 billion of bonds, municipal bonds, so that she could take that money and put it into the pension fund to put into stocks because she could issue bonds at a few percent and then stocks would make 10 or 20% a year. So that was her plan for you're getting the pension fund back on a sound footing. And I thought, okay, that's going to be a disaster, of course. And here we are. So now it's going to be, the Illinois pension funds going to be even worse off than it was. Yeah. And to reinforce what you just said, it's not just the Illinois pension fund. I'm sure a lot of 80-year-olds seeing yields and bonds so low, seeing what was happening in the stock market, shift the portfolios into stocks. I know that pension plans, insurance companies, endowments all went way more into stocks than they should have because there was no yield. So this is called yield chasing. And you see that in financial markets all the time. People are willing to buy you ridiculous stuff just to get a little bit more yield and take on huge risk. And of course, the consequence of that is what we're experiencing right now. A lot of these people are going to be wiped out. And many of these pension plans and insurance companies were already underfunded before this. Now are going to be hopelessly underfunded. And who knows where that leaves us in the short run and in the long run? Yeah. And especially with the largest segment of the United States population hitting retirement age right now. What we need today, what I call the new intellectual would be any man or woman who is willing to think. Meaning any man or woman who knows that man's life must be guided by reason, by the intellect, not by feelings, wishes, wins or mystic revelations. Any man or woman who values his life and who does not want to give in to today's cult of the stare, cynicism and impotence and does not intend to give up the world to the dark ages and to the role of the collectivist roads. Using the super chat. And I noticed yesterday when I appealed for support for the show, many of you stepped forward and actually supported the show for the first time. So I'll do it again. Maybe we'll get some more today. If you like what you're hearing, if you appreciate what I'm doing, then I appreciate your support. Those of you who don't yet support the show, please take this opportunity. Go to www.uranbrookshow.com support or go to www.subscribestar.com, Iranbrook show and make a kind of a monthly contribution to keep this going. I'm not showing the next