 I guess we want to be done by 5.15, if we finish earlier then again keep in mind that you round up your troops because at 6.30 we want to load the buses to go to the fishing village, I hope the weather will be cool. I'd like to ask Professor Bagus, this lecture is going to be the basis of your next new book called Banksterism and if not, why not? Well, most of the comparison I already do when we have 5.15 on point, so my speech today was based on this, maybe not the analysis of the extent of the comparison on possible future research, why not would be obvious, of course there was a time question, many things to do, but it's not possible. This is actually addressed to everyone who carries this question. I listened this morning with the attention to Professor Papi and Professor Bagus and some of the others who were talking about the worthlessness of the currency, the government not doing the currency, the various dubious banking practices and I found myself agreeing with everything that I heard. On the other hand, I'm also trying to account for the fact that the United States in the 20th century saw an enormous increase in the extent of living, in the 1950s and to the last few decades of the 20th century, the disposal of income rose considerably, I forget what's been hesitating to account, the fact that the men were working and so forth, but still the disposal of income does rise considerably in this period of time and the United States is made to have one of the highest standards of living in the world and it continues to have this despite the fact that the dollar is running from problems that has become increasingly devalued. It would seem to me that sort of given the economic problems that were pointed out, the United States has done very, very well and how to explain the successes of the American economy given the fact that there's happened by bad government and by increasingly devalued money and questionable banking practices. I think this is an example of a possible, now I will point you out how critical it is now to see. First of all, the same sort of banking practices are in place in all small countries, not just in the United States, the same as in Germany, France and so forth. And second, because something like this, we can say, look in the 19th century standards of living were significantly lower in the entire Western world as compared to what they are today. At the same time, we have seen a growth of government also throughout the entire Western world from the 19th century up to this day. So does it fall that because the growth of government societies in Western Europe grew, obviously they grew, we are richer, was the fact that government grew the cause for the fact that we are richer. The answer is no. Despite the fact that we had all these voluntary mismanagements, we didn't grow. We would be infinitely richer if it were not for the fact that these types of policies had to be implemented and are still being conducted day in and day out. So it is just an illusion that we see two things going down, to see that one is the cause of the other. I agree with you entirely at the same point, many, many times, but I am astonished by the success, the resilience of the American economy given the confidence and dishonesty of the government in the way that you described, despite this fact. You know, we have not been like each other, like other countries, but you know, honestly, what seems to be an incompetent and in many ways stronger. Western Europe and the United States have a bright population. They even, up to this day, have a pretty good work ethic still. The Germans could continue to work very hard despite the fact that most of the money is siphoned off by countries like Greece and Spain. So it is an expression of the ingenuity of German businessmen, of American businessmen, of Dutch businessmen and businessmen in many, many other countries that have made these six possible markets to miracles. They find a way around all sorts of obstacles that are put in their place. Nonetheless, those are obstacles and without them, of course, the performance would have been much better. But we explained the difference in terms of standards of living of Western Europe and the United States as compared to Arab countries and so forth. I'm inclined to believe, basically, in the seats that Richard had put up. This has something to do with the intellectual capacities and capabilities of various populations. We are lucky that we still have this type of population, unfortunately. The performance in these areas is also one that we find. I just want to add one interesting thing. As a side note, even in the mainstream literature it is recognized that the gold standard, the classical gold standard, even though it was not a perfect system or it was not the best system possible, in the 19th century the growth, at the end of the 19th century growth in the United States was actually higher than it was in the 20th century. You can even read it in Simon Poulsen as the Keynesian inventor of GDP and Milton Friedman's history of monitoring the history of the United States. So two classical mainstream economists demonstrated that actually growth in the 19th century was higher than the classical gold standard. Those economists, or other economists, using data, they say that it was less stable environment, but still the growth itself was actually higher. Maybe one additional note on this. This is even more astonishing given the fact that of course it is easier, so to speak, for rich countries to save and invest than it is for poor countries to save and invest. So the growth rates were higher despite the fact that it was at that time given that the general population was poorer, far more difficult to save and invest, and it has become significantly easier now with the status of living being significantly higher, despite the fact savings rates and so forth have actually declined, even though it should be easier to save nowadays than it was 100 years ago. I have a question for Dr French, and I'm not sure if you understood correctly what you were saying about the walking away from contract, because if the idea is that you can simply walk away from the contract, my own concept of the agendism falls apart. So I would like to understand whether what we're saying is that people who have all the money in order to buy a house, or you've got the site and so on, walk away because the vendors are benefits that are financed by government and guaranteed by government agencies such as HANIMEA and the United States, and that is the reason why in this circumstance people can walk away from contract, or whether you believe that, well, I have the pledge to reform or repay a certain amount over a certain amount of time, but if the collateral that I gave falls in demand, then I'm not going to repay whoever is the vendor. And I think that there is a, I know I'm not going to, I know nothing about banking, but I think that there is a certain class of loans that are made with a mortgage and so on, in no recourse clause. And that explains, for instance, why Morgan Stanley could have a walk away on a high-beam property of the university you mentioned, because it's actually not Morgan Stanley in bottom line, but presumably the subsidiary of Morgan Stanley, and very active of properties and so on, that they rented and the rental income was not sufficient. So the subsidiary went to us, and there was no recourse on the parent company, but the homeowner buys the property. That property is not yielding any revenue. So there is no way that the person can repay unless the repayment comes from their salary. So it is a salary at a stretch, and by the way, small way, you have actually broken your pledge to pay some money out of your salary in order to pay back the debt. Well, I would come back with this. A number of people are granted 30-year loans when they're your age, or my age. And clearly that borrower wouldn't have 30 years to repay their loan. There wouldn't be a year to do that. In my view, lenders were playing the market, the real estate market, just like borrowers were. And so while they want to stand on their eyeballs and say, you need to pay until the very end, they've taken this loan and sold it, often many times. So this isn't like you borrowed money from your brother long, not that anybody should ever do that, but who has actually saved money for gone consumption to hand and done without the use of that money to allow you to do something like that money. This is money that, these are loans that originated, sold in the secondary market. And in some states, there is not a remuneration. California being one, I think Arizona is another. And so in various states, by state, there's also other costs to this. I'm not saying that somebody can walk away and not have costs associated with it. We certainly have chased, potentially, for decades for the difference between what the lender sells it for as a sale and what you love. So this is not a walk away scot-free and forget about situation. The only thing I'm really addressing or trying to address is this moral outrage toward people who, in my view, are making a reasonable economic decision. That is the best for their situation. Most people don't do this lightly. Most libertarians would not say that it's ethical to necessarily pay your taxes, but you do. Most people do, but most people lessen the amount of tax that they pay. And yet, we're supposed to, at the same time, because we have this contract on a specific mortgage, pay that when it makes no financial sense. So, I mean, there's, again, it's not, to me, it's not an easy decision. I wouldn't tell any individual. I wouldn't advise them whether they do or not do it. But I just think that the moral outrage against these people, I believe, is misplaced. The point I'm trying to get across here is that it's a perfectly reasonable financial decision. You pay a price in terms of your credit report, although that's been lessen over time, because it's come out recently and there's been a study done that people who strategically default are actually better creditors than other people, because they use credit responsibly, they underuse their credit cards, and they typically, the other distinguishing feature about these people is they bought their loans recently and they have no personal attachment to it. Many people they pay on their loans because they have an irrational, personal attachment to that property. So, again, to me, the reason that I explored the issue is that, number one, libertarians had a reasonable argument on either side of it. And very vocal, especially on the, you must pay till the end of time. And I was trying to think, since I didn't have Murray Rothbard down all the good talk to about this, I tried to imagine if I went down Murray and said, those are questions nobody would say, and that's what I was trying to come up with. That's a question to, rather more seriously, which was argued in your presentation. I think it's happened this questionnaire, sort of the general format. Would you consider yourself to be very happy, very happy, not very happy, unhappy? Now that seems a very straightforward question. I'm not thinking any of us here would have any difficulty in answering questions like that and getting a score. And furthermore, the validity of these studies is shown by the results which are that people who are high-earners are happy, learners are less happy, and the unemployed are particularly unhappy. All that seems very sensible to me, and I think we should take it on board. I think the way to deal with this problem is to consider implications of this. We see where it always is leading to. It's leading to the conclusion that we should tax high-earners more and distribute the proceeds to the poor and the unemployed. And that is the implication of this work. And that is not a new indication which is particularly congenial to people like ourselves. Nevertheless, I think the way to handle it is to point to adverse effects of a high tax, high redistribution policy. For instance, such a policy encourages high-earners to integrate tax-earners. And such a policy, as part of the unemployed are concerned, but giving greater welfare benefits to unemployed encourages them to remain unemployed. So I think we should combat this position. I draw your attention to the adverse effects of these policies, rather than simply dismissing it all as having their validity. There was a good question there, was there? That thing about it is they still use these questionnaires to proclaim that utility is cardinal and measurable, which is not, and therefore you can make it a personal utility for parents. So I think we have to argue with that also, because that's the main claim that they're making. But I did mention the effects of the welfare state, which they tend to ignore in this literature, so I would agree with you that that's one way of doing it. I think it's also important to argue against the way they use these questionnaires to proclaim that social welfare maximization is a real thing, social welfare functions exist, which they don't. And very well, of course, criticisms of people who answer questionnaires are still valid today, so you have to take them with a big green of salt. And I also believe you're really fueling the stupid ideas, too. I want to just say something about the stupidity of this research. I mean, the one result was, it was reported in all papers, all incomes above 73,000 dollars, 73,000 dollars would no longer make people happy. Now, it wasn't all, it was number 73, I'm not quite sure about anymore, but if that were true, then every person who just gets a job offer for 74 would just decline it because this additional south of dollars does not make me any happier anymore. And it's an easy way to, with this whole concept, I have not seen anyone who has done anything great whatever, somebody wants to offer me more, give me a bigger donation. Of course, I will not decline it because it will make me less happy than I was before. Every donation, every dollar I take from my case, this whole thing does not fly. I just wanted to follow up with, I can't remember who wrote this, but it was a similar survey of happiness in Mogadishu, and they brought up in particular, they particularly mentioned a couple of butchers, and these guys basically chop up meat all day, and they're incredibly happy. They're poor, they're destined to have, but they're relatively very happy because they're a relative perception of social status, it's okay. And if you go to every other country that looks like there's a hydro correlation between the position of social status and the absolute number of dollars, so I'm just wondering if there's anything on the social status perception versus just the dollars. Well, the research I reviewed for this talk was mostly on material inequality, and there's a lot more, you know, you can't say much in a half hour, but even the whole issue of inequality and use of these statistics is very shady, because for example, in the U.S. anyway, I know some studies were done by some of the Fed economists actually looked at, if you look at statistics on inequality by income distribution by the quintile of the distribution, it looks flat for a hundred years, it hasn't changed, but it's not the same people. The individuals who were in the lowest quintile in 1980 are not the same individuals who were there in the year 2000 because there's a lot of mobility, and there's a Fed study that showed that, for example, a very high percentage of it was over 70% of the people who were in the lowest quintile in 1970 were in either the top quintile or the top-jewel quintiles by 1994, so they weren't the same individuals. So there's a lot of mobility in the U.S. economy, and all of that is lost, and we just look at these statistics on income inequality in an aggregate sense. These researchers were able to do this because the University of Wisconsin for about 40 years now has been tracking individuals and paying them to give them information on income and so forth, and so they're able to actually see the actual mobility of real people and how they've done it as a very big sample of thousands in socioeconomically diverse, and so that's a much better way of looking at income inequality than just these broad statistics, and I doubt that they have these researchers who do that because they wouldn't get to see done correlation coefficients that they do with their research done now. Primarily for Nicolai Geryshev and Sir De Laurento, I'm always surprised by the prominence of the bad ideas like the ones who are discussing. Is there any evidence that the importance of these ideas are feeling pressured from what seems to me like the growing influence of the Austrian school? I wouldn't say this. This Professor Fenn's research is clearly making progress. It is the broadest. What has become clear over the last two years in the financial crisis is that economists, mainstream economists, has been increasingly more concerned with the real issues about African economics, about economic policy, the impact on the growth of the business cycle. So, happiness research and psychology in these areas are receiving preless attention by economists between the mainstream and the self-sacrificing. From this point of view, maybe there is a link to make with the Austrian school because the Austrian school is very strong in explaining the real world and the real phenomenon of which we have been concerned for the last two years. I think there was one of the major American news magazines, Newsweek, one of them has a cover story. It said something like the failure of the economics profession and it said something along those lines. Of course, it didn't mean the Austrian school and the Austrian school were included in that, but the fact that they were totally clueless about the causes of the crash and then it had nothing to say that it was good about what to do about the crash but the Austrians did the Austrians and the other ones who predicted the bubble, especially the people associated with the reasons to like Mark Thorne and then of course what to do about it and so the mainstream people have paid a lot more attention to the Austrians and meanwhile interest in Austrian economics is booming. The Mises University, which we told last year had the highest attendance ever when we turned a lot of students back even though Doug had knocked down walls literally at the Mises Institute building to make room for more people and the Mises Dougworth website is the seventh or eighth most heavily trafficked economics website in the world even more, it's even busier than the White House like Doug and the Wall Street Journal as far as a number of people have read it and so the Austrians are going in the opposite direction of the mainstream but mainstream is sort of always tenured professors who don't really care and they keep on writing the same articles to pad their reservations and of course it was the purpose of these two speeches to put the pressure out on these people to see the university of history well now I think Doug would have got these two speeches directed at their two most famous scholars Another question to Tom and Nikolai I consider the disciplinarity quite important but the problem seems to be a high kind of misleading or even fraudulent disciplinarity where psychology is mistaken for economics but if those researchers actually confide their work to psychology and stop claiming to be economists would you then consider this kind of psychology as my legal, would it teach any way or lessons about human nature because I find it quite possible that there are certain monetary decisions which decrease, report its happiness it shouldn't be relevant politically from a philosophical point of view might be quite interesting if relevant to some of these phenomena The utility is not measurable you can't put a brain measuring machine on somebody's head and feed them a piece of candy and see how many noodles are listed on the side of the machine that sort of implication of the whole idea of the utility is cardinal and measurable sort of like a Frankenstein monster kind of machine that we put on our brains do that as long as you understand that I was just talking to one of the physicians in the group earlier about how he questions the patients on how much pain are you experiencing on a scale of one of my doctors does the same thing a biology doctor who's about to make up a number I had the idea of what he was going to say about that as long as you understand that this is not really that scientific I suppose it could be useful but it's subjective and you know one of the critiques of this too is there are different cultures there might be one culture where people are sort of not inclined to say I'm unhappy about anything there might be another culture but they pretend that they're always happy despite being unhappy that's what Rothbard mentally said you can't really rely on the truthfulness of questionnaires enough to observe people's actual behavior as long as you understand those things that take away the soul I suppose it could be useful outside of economics just the same way if you we get calls from this and that yet somehow it might be more or less entertaining to know what these people think about that issue so if you find out that unenjoyed people tend to be less happy than unenjoyed people it's not exactly a surprising surprising as long as you're the opposite because unenjoyed people are actually far happier than people who make a billion dollars that would surprise you why did you surprise me with some of this? but again if you take it just as an information of what they have said to certain question but the entire purpose of this having as a research is of course to find excuses for economic indirection and ultimately to see destruction of all private property rights I take your point that it would make sense to have this entire psychology economics field reviewed by psychologists also my feeling there is that psychologists will also find it quite doubtful psychologists not necessarily accepting also this empiricism positive approach that will be already a first problem and that interdisciplinarity indeed makes sense but only if the different disciplines are properly acknowledged it doesn't make sense if you meld two disciplines into a single one losing what the goal of your research is by the way even in the project freedom society statement works that it is not said that the goal is multi-disciplinary research trust is different research fully acknowledging the status of different sciences different social sciences my question is for Dr. French do you think whether it has nothing to do with whether it is formal or not for a person choosing to walk away from the law but rather he just choose to consume now versus getting easier credit in the future and so my next question is about the normally caused nature of mortgage in the US because I don't know whether I'm right or not but I think it is quite unique for the US that the mortgage is normally caused whereas in other jurisdictions like Hong Kong we cannot just walk away from the law because you need to sign a personal guarantee when you buy a drug something like that so what do you think is the cause of that normally caused nature what was the first question again well because you said the ethics of default but is it is there anything to do with ethics because it's just a person I mean he choose if I walk away from the law but I don't have any consequence so of course I wouldn't walk away from it like for example if I'm 18 years old and I walk away from the law no problem but if I were 20 years old I wouldn't walk away just my question is whether it's an ethical issue or not well I frame it in that context certainly the person who gave you the title of the speech did but I would put it more as an individual business decision and you're right if you're a young person who's concerned about future credit and how does the way go on on your credit report your future job prospects those kind of things where possibly a strategic default will have a detrimental effect on your future then maybe that decision certainly is going to be different but if you're 200% $200,000 underwater and you're paying a $4,000 house savings and the house will never recapture that native equity and you can have the same house same neighborhood and you can rent or buy and have a payment of $1,500 I mean we're talking about significant numbers we're talking about significant life type of choices here nobody's going to walk away for $200 $300, $400 what I'm talking about here is something very significant where people are weighing okay my credit report I've got perfect credit at $720 I'm going to go down to $530 which is going to be very uncredible it may take seven years to get back Fading may it's not going to do another mortgage if they determine a strategic default for seven years so there's a heavy price to pay potentially a lot of people probably need to get out of their home ownership mythology that you buy a home and automatically goes up in value every year you can use it as a cash ATM and they're reading money and then you will live happily ever after this buy your own home program was instituted in say 1918 by a clerk who for 40 years had been president they created this whole idea that if we can get Americans trapped in their neighborhoods they will be more protective of their property more interested in local politics more interested in national politics so my content I didn't talk about it today I talked about it a lot in the book the government has fostered this idea that home ownership is it's not only a good financial decision but it's good for your country and that's why every president certainly every modern president George W. Bush George H. W. Bush Clinton, you name it they all have this idea that everybody needs to own their own home and so I think government has fostered this idea of tracking people in this situation for many years second question why would that happen by the jurisdiction if somebody left home alone we can't just walk away why would somebody walk away if it is not a great force is that the question because lenders if they don't think they'll have much to get from your other assets may make the business decision not to change for your additional assets and so that is a chance you're taking so you're going to have a deficiency so you have a deficiency of 50,000 100,000 and you walk away they're going to probably hang a judgment on you before that amount and big banks are not all that good at collecting they're a lot better getting the money out the door they're going to screw them on the list I think the professor often pointed out that you're going to stop today and every incentive if you're creating money out of nowhere to do as much of it as possible and not necessarily be as careful as you should when you're lending them money so on the collection side they may if they determine that okay it's going to take me 50,000 to collect this if I'm chasing 100,000 and I think the guys got a vote and I think the guys I think his wife has a pretty awesome jewelry and the case is just everything is tied up in person so you may walk away but the other issue is they may sell that judgment so anybody who does this has to be aware anything that the judgment a big slow stupid bank may not be chasing them some very enterprising judgment buyer who bought the 50,000 judgment for a thousand dollars in their life later in their life later saying let's make a deal and they may be very animal and very aggressive but for non-recourse states it's a much easier decision recourse states it's a much trickier to cross that and that's why I say walking away from people you don't bother with stuff there's threats there and you don't bother with stuff and not for this hour and you say and you say for this hour why did you remain so much it's German from you guys again I have questions like French even I'm not answering both questions I'm still not persuaded with your remarks and I think you are perfectly right when you are describing from a positive perspective how people behave and why they behave this way not in another way but you jump to ethics very easily and you justify some of this behavior and I must say that I'm afraid that you are opening a Pandora House which may destroy the Victorian concept of contract and property as well because you are personally deciding not to walk away because the house gets lost in the basement during spring or in the plumbing system doesn't work properly and you may decide just to walk away because it's not as good as it's supposed to be and I think it's not the reasonable reason to walk away from contract to justify it and if you go further of course from a positive point if you find a bicycle and nobody sees you you may take a bicycle and this would be a business decision but it doesn't mean that we have to justify this kind of business decision it's simply a completely different area and I think that comparison to taxation or social welfare and social security is not correct actually because in case of banks you sign an object in case of taxation contracts are not existing and in fact if you look at the practicalities in main cases it's a person who applies for credit to buy a house it's not a bank who forces it and just for the final remark it's a favorite example from UK there was a case with a lady who sued the bank because she thought the bank actually seduced her by offering extended credit and actually their offer was made exactly on the day when she lost control and of course the offer was put in a very nice manner like please go and spend all of it and actually she did during next week and then after having no money to pay back credit she sued the bank because the bank seduced her and actually she won't and I think that this is a very dangerous path and don't you have enough of going this path so simply well this is what makes for a good Q&A I suppose but don't laugh at my hair boy that's a tough crowd no in terms of taxation you decided that you would pay to become a tax right? yes? you decided that you decided not to pay and you decided not to pay and is it ethical for you not to pay taxes? sure sure and is it ethical I mean when you say that while we get taxed and that's not equivalent to a mortgage because you voluntarily got into a mortgage when you voluntarily sign off and pay income tax then you got a job and you make income you voluntarily you voluntarily sign on to pay property taxes when you own property you voluntarily sign on tax when you buy things okay sit over there in the ivory tower if you wanted I'm talking about the real world here and what I'm trying to talk about versus this libertarian problem I just wanted to add that well in principle you are right the contract is a contract but it's not always that easy to just say that the contract is a contract a few years ago I had an exchange in Phillip we were talking about possible monetary deflation in the current monetary system let's suppose that the banks collapse and nominally your debt goes 1000% up in most of the bank's debt so under the circumstances well we need a sort of arrangement for the whole country to reorganize the debt structure but then from your perspective you could just say well you took the credit pay the whole debt to me and the current benefits the banks hugely so it's like let's say in 1991 we had one company one company providing telephone services okay so let's say the telephone service the company comes in in 1991 offers you a contract sign it or otherwise and you sign the contract saying customer for the next 100 years or until I die then in 15 years suddenly you have market economy developed you have competition between different companies so you can choose a different company but then you're not allowed because you have a sort of contract it's like the state would show up at your door and say you want to pay the taxes right no but sign the contract now no I will not defend myself by saying that the state is a voluntary institution you sign the contract now didn't you right that's right admit that you would right you sign the contract you will die out of hunger but the situation is completely different I know it's not completely different you are right it's different but it's not completely different it's the question of of continual right when do you show the borderline right and that's how what do we what do we borrow that from you it is very important that you took in each specific case so to speak let's say I go to Burma P and he gives me a huge loan not as a private person but as a head of central bank do I then have the obligation to repay the loan or can I default on the loan and walk away would he be treated in the legal system in the same way as if I received the loan from you personally and there I would say of course if I default on Burma P then it's perfectly alright after all he is a head of a criminal organization I have no moral obligation whatsoever to pay anything back to him it depends on the status of Fanny May and Freddie McLo whatever his American name is how we would categorize them so I think all we can think about is each individual case has to be examined after all each individual case would of or they have to look into the facts of the case and then determine whether this would be another part of the lawsuit or would not be I'm sure that you agree that Burma P I don't have to say obligation to a Burma P as I would have to do personally carry on with central bank balance sheets and this is for Philip and Matus this is not an ethical question it's just about history or about the future you can take it either way so central bank balance sheets something that's fairly likely to happen in the next few years is that the measured core consumer inflation will eventually start to pick up like our headline inflation measured consumer inflation has already been done dramatically and when this happens the Fed will probably start doing a tightening and that tightening may very well include kind of a reverse QE to biology and squeeze it down now if they do this in a undoubtedly higher interest rate environment they're going to take huge losses they're going to be selling treasuries and mortgage backs in making an environment in which the average interest rate of the treasury curve is 6 rather than 2 or 3 my question to you is well it's a bunch of questions about does it matter do you know of historical cases or cases right now where central bank losses potential losses are already constraining so-called independent monetary policy where the central bankers are trying to protect their own institutions because even though they're really part of the state they also have their own personal agendas and if they lose a ton of money they've got to go and get a recapitalization where they just but they can't bury it right because they're selling bonds they actually sell bonds to contract the base losses so we can approach this from either a historical like has central banks been constrained by their own P&L or in the future will the U.S. be constrained we have a lot of central banks now with huge balance sheets with tremendous potential losses you're right at least cannot even solve it in the sense that it cannot pay because it can just produce dollars too instead but it's to have a negative capital on the balance sheet would be problematic for the confidence in the currency there would have losses it would be obvious that there are not many real not many real assets left to defend the currency in case of problems or for monetary reform for that matter or because when they sell assets and losses it becomes obvious that there was nothing or there is nothing left to do a monetary reform or to have you know the foreign exchange markets to defend the currency etc. so it might have a bad effect on the confidence in people might start to sell the currency for their dollars and you see it also that it matters for the ECB because ECB don't cost and also print it with zeros however in December they increased their capital why? because they are of course expecting losses from their adventures and employment and they don't want to have negative capital and this has cost for them because they reduce their profits and they pay back less profits to the government to do this capital increase so they care they actually care for their energy and of course they have cases of central banks or that central bank of Iceland for example it basically it went basically insolvent because it has had debts but they don't have foreign currencies so they are even more but of course the ECB it's not so much further because they don't have so many foreign nominated debts I would say that it doesn't really matter whether they have negative capital or not the central banks could easily do what they're doing still even if they would have even if they had negative capital the guests would be probably well the economists would have the accountants in the back would have a problem probably but what they would probably do they would go to the treasury or get the extra money the government would have to buy money in the financial market they would issue new debts to recapitalize the central bank and then that extra debt would be bought again by the central bank what they would have to do is increase public debt but this of course doesn't matter under the circumstances because the public debt we just roll over as I still demonstrated so I don't think there is any problem with with negative capital for the central bank my need for money for smaller countries my need for money for smaller countries not for ECB or the federal reserve system coming here and apart from that I don't think also that the balance sheet per se is that important for the strength of the currency I think the other factors are more important the investors are not really paying attention to really paying attention to what are the currency reserves in particular central bank Philip actually argues that the the value of currency depends on the quality of the exchange and we'll soon see verification of this hypothesis I guess so after all the capital the central bank is completely fictitious this is not the result of an economic protective activity so it's very easy for governments to recapitalize the central bank the central bank just buys more of the treasuries and the government does not spend the money but put it in this special account of capital reserves in the central bank so this can be a cashless operation the recapitalization of the central bank to any given level is purely cashless but your question has a particular relevance for the euro area and really is the following any profits from the monetary operations that Philip detailed are redistributed but any losses are kept on the specific central bank provided emergency equity assistance now we are having this issue currently because Irishness are borrowing almost as much as they borrow from the regular operation directed from the central bank is emergency loss and what ever losses could be realized on these emergency loss would go directly from the state that of course this would increase the cost of borrowing of the Irish state even more and so there is a kind of specialization of profits within member states of the euro area but there is individual better individualization of possible losses and this could in the long term break further conflict within the euro states yeah we are here just one example imagine that it is negative capital because they do all of it and they find there is no gold so there is a loss there is no gold negative capital when we do the recapitalization which is cashier's transaction would nothing happen to the gold I would doubt I would doubt because things come from which there is no real asset to that what we can see and perhaps this is a question for Professor Halba given the parasites and the gang of thieves that has taken over all of these countries and all the idiots academia and the journalists that would go along with them create these stupid theories that rob more people of more of their property from a competitive position of the lovers of liberty what is the strategy to benefit from this I mean if we are trying to compete against them and create something as an alternative all these bad guys are actually goods in terms of creating something alternative that would attract some of the people that don't want to be volunteering in the market the first part of the question is why doesn't anything like this happen the whole world is dominated by this parasite in nation states and second what can we do about it to make it less likely that it will continue like this in the future for questions that I wish I had the answers to that on the one hand we have to realize that the first huge amount of people benefit from this state and state employees in many countries we have already 50% of parasites and then we have democracy and these 50% of parasites they love parasitism I mean personally I'm not very hopeful that liberty is just around the core we think that for the time that we have left for ourselves we should just almost enjoy this see a door of crazy things going on as long as they do not really personally grab us and kill us incarcerate us I must say I frequently I read the paper and I find all these particular things just funny and I don't really know what to do about it just accept try to enjoy my life as much as possible go on with what I do hopefully nobody will grab me personally and hope for the best but to be pessimistic I have not seen any major progress in terms of freedom in some interview recently there has been every single better yes of course technologically I have seen that but I would not want to live in the 19th century but in terms of personal liberties I think people in the 19th century of course they found personal liberties that they have currently they have to say something more optimistic but I am not one of those that has great optimism this is why I think this is also a solo to enjoy each person to come to me and to have a lot of dissolution in the world I think I quoted Gary Horton last year on this question they are saying in America that you cannot fight the city hall do whatever it wants to you but Gary Horton says that you can pee on the front steps and run away that's a lot of what you do just to say that there are four more people on this we've got 60 minutes to the right so I would like to have a brief question that adds to that because of of all of our state that's the reason why we have the products that we have I would just make a few assertions that I would observe that the lifetime tax rate in the 19th century is approximately 20% lifetime tax rate defined as what fraction of your life did you have to give up to the state to see what fruits of your life in the 20th century the lifetime tax rate was about 90% I'm talking primarily from the American perspective about their analogies and the other western countries and in the 19th century they said there were 20% lifetime tax rate we had the gold standard we had monetary stability in the 19th century we had money 98% in some countries much more than 98% of our money on the destroyer are the welfare of the welfare state so the question is we would like to watch the life how much better off we would have been if we had the same conditions from the tax monitors down the point in the 20th century as we had in the 19th century how much better off we would have been if we had a place like there the old standard century in the last century this would be a question for if you are going to get tuition I have no idea but of course it would be I think that would be a little bit well seared you would be a little bit well seared please have a reminder as I said as I said I am not the kind of person who does these calculations I am sure that there are some people who calculate these sorts of things I have never thought about it and I wouldn't even know how to do the calculations I have a question for Mr. Hall is there any study regarding the level of taxes and tax inflation people pay around the world can we compare that to the level of taxes that slaves and slaves used to pay and something else I have a comment on the ethics of walking away from the contract I have to be clear from Professor Kinsell about that he has a case that breaking a contract is not a violation of the libertarian code probably that's in his conception that Kinsell is made to work let's ask the question is there any study regarding the level of taxes and tax inflation people pay around the world I should only answer the question is the tax section nowadays is higher than what the tax section was it was before some private slaves I would say yes it was higher than what was it was before some private slaves I would say yes it was higher than what was imposed on private slaves again I'm sure there are just empirical studies about this I'm not an expert though I only really remember the comparison of current tax rates and the degree of exploitation that slaves were subject to and the answer is clearly that the level of taxes being extracted from the slave was low as compared to what is extracted from I remember reading something by Paul Craig Roberts he said medical surfs paid something like 40% and in the US anyway if you were to get statistics on tax revenues from all levels of government and divide by national income you'd get over 40% but that doesn't count the inflation tax regulation causes the price of business services to go up and all the other effects of government that are really implicit taxes so Craig Roberts is right then yes in the US and America it's far more than medical surf when you include the taxes that we have to pay the slaves it's 40% without that if you include the tax before you tax your income because apparently these are not taxes when you include that it might be 70% with I think this question might be dead now Doug I thought you answered the question which was there's a difference between loaning and speculating and so I don't think it's an ethical question it's only an ethical question there's asymmetry in the speculation so if I think I'm giving you a loan and you think you're speculating that's a problem but if we both know that we're speculating which I think you were trying to make the case for it's not an ethical question I think we should if you say one more question one more question one more question I'm very interested in gold as a money I've watched it over the last two years the development particularly in the northern states in Malaysia where the gold and the iron and silver are about to peak but we have money at the end there and the recent decision in Utah to allow gold to be circulated as money in defiance of the U.S. legal tender laws I also know that the commodity commodity exchange in Chicago as well as JP Morgan in the course of the last couple of years have allowed gold to be used in the same way as cash in the U.S. treasurer or collateral for margin purposes these are indications to be of an erosion of the legal tender laws and a great progress point for us to note my question to the panel is actually to the panel in general I'm very interested in looking for other signs of relaxation of legal tender laws not enforcement of legal tender laws either from a historical perspective or from your various studies that you have seen or that you might want to see legal tender laws not the abolition of legal you shouldn't abolish them because then we would have anything to do legal tender laws become immaterial except of the currency itself I mean I don't know of historical examples where legal tender was removed by the decision of the authority what happens is that there is a hyperinflation and another currency appears and the question is will this be a commodity currency produced on the market or just another state produced currency with a different name and in order to have a commodity currency imagine to me that this is a critical mass of people that are willing to a commodity money and willing to deal only with other people who accept commodity money probably we are not there yet but what we are still seeing is that some foreign central banks are increasingly buying gold and more and more skeptical about Western, American, public debt insurances as investment opportunities I think that you can allow us right now really essential I think they are very important the moment they go off for example gold standard and then we say dollars will be legal tender for the order but I would think right now will not have a huge effect if legal tender was going to be eliminated because just the size of the state is so big and context is indeed it might be important the opposition of the legal tender is quite actually important if you also introduce the competition in the banking industry right then it would have a tremendous effect actually if the banks would sponsor the ACP development even in the other current currency if you just leave the central banking system with current existing key companies and licensing of the banks for this particular currency even if you leave this because if you introduce competition completely free competition nobody would trust the banks anymore they will collapse but even if you leave that system at home and then abolish the legal tender loss and introduce a form of competition in other currencies and then freedom of banking services in other currencies I would think it would make a huge difference it could make a huge difference here was that thank you all and again keep in mind please please please please