 Well, when I first came to the first-ever meeting of the Property and Finance Society, that was four years ago in this very same place, I was really looking forward to it. Not just because I had finally found an economic theory that made sense of Australian economics. Not just because I had finally found a philosophical theory of politics that made sense, that's Ayanako capitalism. Not just because I had found a theory of ethics and morality that finally made sense, the ethics of private property. No, I was looking forward to it mostly because I thought the society would be, for me, a support group. You see, I was not a normal man. I was an investment banker. And it's not easy being an investment banker. Everybody hates you or despises you or both. For example, I am French, so I have a lot of French friends. And you know, a French has been brainwashed by a Marxist man. So whenever I go back to my French friends, they think that I'm a capitalist pig who pigs in the blood of the people. And they even said it to me at New Year's Eve parties. You know, happy New Year to you. As Hans mentioned, in my previous career, I was a university professor. And when I announced to my dear professor colleagues that I was leaving to go to Wall Street, they thought I was prostituting my considerable intellectual talents for something as days as money. So all of which is worse, being a prostitute or being a capitalist pig. Namely, I thought that by coming here, at least I'd find some people who respect my profession. I would be a capitalist hero. Imagine that is the point that I was. I realized that members of the property influence society thought that investment bankers are thieves. As Hans mentioned, elegantly, people who enrich themselves at others' expense without anyone noticing it, which is the title of my talk. At this first meeting, 2006, some brave souls tried to explain to me while I was a thief, but I have to admit I did not understand a single word. I think I did want to understand. It's only after a study at home, coming back to many months of Australian economics that I understood the penny drop that I was a thief and exactly why. So that's why I'm going to explain to you today. Just in case anybody wonders, I'm looking back a little. Maria Rothbard has been very clear about that. Even if you're an eco-capitalist, you can work for the state. I mean, he did himself work for state universities. So it's completely okay as long as you don't do anything evil, like shooting people, torturing them, or collecting taxes. I didn't do any of that, so I'm completely fine. This is a very special kind of thing, thievery, the most elegant kind, because like Osunsu said, the art of war is to conquer the enemy without firing the gun. The art of thievery is to steal without the victim knowing that it's being fleeced. But the sum of this is that the thief himself doesn't know he's stealing, which was my case, I'm sorry. Here we go. I will anchor the presentation on a quote by Jim Rogers, who's a very nice guy, he co-founded the quantum fund, George Soles, retired at age 37, and recently he left with his wife and two daughters to Singapore, because he just didn't believe in the US anymore, so he's apartment in Central Park. And he's often quoted on the world call.com on communities. So his quote, very famous, you're repeated it on TV many times. You don't see any 29 year old cotton farmers driving around in Maserati, but you do see a lot of 29 year old on Wall Street driving around in Maserati. This is not the world, the way the world is supposed to work. This is a Maserati. In order to figure out what's going on here with Jim Rogers' quote, we need to have a model of the world, or more specifically of the economy. Another level of the economy is that the market is a social network. Social networks are all the rage nowadays. Facebook, social network, Myspace, I think you can show them on LinkedIn now, so really everybody's on it. The internet is just a big social network also, because each web page links to only a few of all the possible pages in the world. And those few links give a certain topology to the internet, which is exploited by Google and PageRank, but similar in social network, that is the market, because there are so many butchers, only by the meat from who was the same one or two butchers and so forth. So in this social network, every arrow represents a relationship between a buyer and a seller, and you see that not everybody buys and sells from everybody. So this is, I think, a realistic model. Well, only 26 people, because I ran out of letters, and I took the arrows more or less randomly, but that would be enough to illustrate the purpose today. There's a folk theorem about social networks, which is a six degrees of separation theorem. It says that anybody in the world, like a gondolier in Venice, is related to anybody else, president of the United States, through six degrees, they know somebody who knows somebody who knows that person. It's not really proven, but it seems to hold true with most social networks. And they even made a movie out of it. So we're gonna pick somebody at random in this social network, which is the economy, like Mr. B, for example. We're gonna look at his social network. He buys from C, GM, and the people who are in red. So they are first degree of separation from Mr. B. There is first circle. In turn, the people in red, they buy other goods and services from the people in orange, B, L, R, G, and D. So these are the second degree from Mr. B. They're twice removed, second degree of separation. And so forth, you can give different colors to all the circles, and at the end, I designed a network so they'd be exactly six degrees. So the people invited to V and Z are the furthest removed from Mr. B through economic transactions. They don't trade directly. They are quite far, they're six degrees apart from each other. You can see the whole network now with all the colors. It is useful to represent the economy as a series of concentric circles around Mr. B. Remember C, GM in red, the first circle, the inner circle, orange, and so forth. V and Z in the outer circle of the economy furthest removed from Mr. B. Where does this lead us? We can take this model for a spin and inject money into it. Mr. B, then, will be the one who injects money. He creates money out of thin air, so Mr. B is B for Ben, you know. When he does so, he doesn't. Just sort of give the money away to people. Even to his first circle. He can't do that because that would be conspicuous. He'd print the money, give it to his friends, that would be conspicuous, and that would qualify as stealing without anybody else's money, because everybody would notice that. So when he does, he takes this newly printed money and he buys something with it. That looks okay, I'll be buying myself things all the time and Mr. B goes shopping. So who is in first circle relative to Mr. B? Well, first it was shopping for labor from macroeconomists and monetary economists. Most monetary economists actually work for the Fed or have taken money from the Fed in the past, so that's what he does. He also buys treasury bonds and he buys toxic debt produced by Wall Street. You can see the balance sheet of the Fed has a blue, sort of, at the bottom, treasury bonds and everything else is toxic debt produced by Wall Street. Don't see any economists in the balance sheet but they're in the income statement. So that's the first circle, and in the term of the second circle, these people turn around and Fed economists would not actually talk about this in the future, whatever. Old people service because they paid out of treasury money in the second circle. They set up a labor to the state and 29-year-old Muslim bankers, who are all the friends of D. Rogers, they're also in the second circle because they are selling their labor to investment banks. We're now going to go through all the circles and third circle, there's a Maserati dealer. Maserati to the second circle in the Muslim banker. And so fourth, sixth circle, who's in the sixth circle? The rest of us. The rest of us, yes. So that's a 29-year-old Muslim banker. D. Rogers, all the friends. And the rest of us, they're breadwinners, normal people, to summarize the main street. Now, assume Mr. B doubles the quantity of money while it's going to happen. It's not just an assumption because this is what happened to the quantity of money since 1917, obviously he doubled it at the end, but even before that, it was always sort of increasing. I know the feds put in theory, brain money out, but cumulatively, it's pretty clear that it's only going up. So then what's going to happen in the economy when he does that? The first step is that he's going to turn around and buy things from his first circle. That means that the prices of goods and services produced by the first circle will go up. There'll be more demand. Then we'll come in with pockets full of lots of cash and just buy everything inside. That means the people who are in the first circle will have more money because they have more demand for their goods. They will turn around and buy stuff with it, real stuff that some of them will consume. And because of the structure of the economy, they'll back from the second circle. So they're better off. They have more money, they buy stuff, they consume it, they're happy. That's the first step. Then you see we've done something with the second circle. We've put more of their stuff, so there's going to be a trickle-down effect here. Surely the price of goods and services produced by the second circle will go up, not directly because of them, but indirectly through the first circle. They'll have more money and they can buy more stuff from the third circle, but there is a budget. What they can't do is they can't buy anything from the first circle anymore because Ben Bernanke has outbid them. Everything's first circle is really, the price went up too fast, too high. They can't compete. There'll be more money, but only by buying stuff in the third circle, which was priced at Avon-Gonop yet, can they consume something. So they're not ambiguously worse off or better off. They're better off in one way, but they're worse off because they can't buy anything from the first circle. We'll see where this is going. Now we touched the third circle, same thing. And once again, they're better off because they can buy more stuff from the fourth, but less worse off because they can buy less stuff from the first and second because prices are better before they can see the money. So fourth, fifth circle. Right, go to the sixth circle. So eventually, if the money go trickle-down to them, prices will go up of the goods produced in the sixth circle. They'll have more money, more dollars, more digits, if you wish. But they can't afford anything with it. They can't buy anything from the first, second, or fifth circle. They've been surprised out of all this consumption that they used to do. And they can't turn around to buy stuff in the seventh circle because there's no such thing. So they are unambiguously worse off. That's a theory. And we can summarize that by saying that creating money out of thin air just transfers the wealth from the outer circles of the economy to the inner circles, from main streets to wall streets. Graphically, you can see the wealth flowing from the outskirts to the center. And if you look at it sideways, if you are in the circle close to the center, you're better off. Otherwise, at the outskirts, you are worse off. So then we can answer Jim Rogers and explain to him why he saw what he saw. 29-year-old investment bankers, the Maserati goes out among the first ones to lay their hands on the newly created money. Whereas the 29-year-old cotton farmers are among the last to lay their hands on the newly created money. And that's why they do not drive Maserati's. Now, that's something surprising to this. It's an intrinsic feature of the modern economy. It's not an abuse of the system. It has to be like this, because as long as money gets created, it has to be created somewhere. And whoever is standing close by will get first debt to be better off. There's no other way to do this. As long as we give somebody the right to create too much out of thin air. Obviously, I did not come up with this. Richard Cantillon did. He lived from 1618 to 1734. So it's called the Cantillon Effect. He has a Spanish name, Cantillon. But he was born and raised in Ireland and made his fortune in France, speculating on John Lowell's bubble, which was the real first big bubble of paper money. And he saw it, he lived in it, he made money with it, he understood it, and then he wrote the book. This book. Everything here is false. It's not translated from the English, because at the time he was worried that he would throw to jail, so they just pretended that that was translated from the English, but it wasn't. And Fletcher, Giles, and Wolverine, they don't exist, they let it just don't exist. So at the time he had to go play a few tricks to get published. This is what he said in his book. He didn't talk about paper money, he said, I suppose gold money is created out of, not out of tin air, but out of the ground, from gold mine. So whoever is hovering around this gold mine, the owners of the mine, the adventurers, the explorers, the smelters, the refiners, all the workers, they'll be bare off because they're the first ones to lay their hand on the newly minted gold. They'll be accustomed to better cloth, finer linen, better furnished houses. The share of the other inhabitants who are further removed from the creation of gold money from the gold mine, well, they have less share of all the good things in life, less meat, less wine, less wool. Right there, exactly what I said before, the outskirts get really cut. That was how mainstream economics was done in this time. It stayed like this for a long time, we can actually understand this sentence. Now, this paper presented it at some universities, I've written it up for publication in a mainstream economics journal, and this way it looks like it. If we vectorize this expression and multiply both sides from the left of the matrix A we obtain beta minus one a m equals m a one plus a p, where one denotes conformable vector of ones. So you can continue like this for many pages, like here we have the square root of minus one, it was actually like this, and this, and this. Exactly the same paper as our journal did, but I had to do a few fancy tricks to get it publishable. So, the system only works because some people are cheerleading for it. And who are these cheerleaders? Well, there's the Machlifrinists, they say, we need to keep the system going, otherwise there'll be no growth. The government says, well, we need to keep the system going, otherwise there'll be a rot in the street. And the investment banks say the same thing, they say, oh, we need to keep the system going, otherwise there'll be a recession. Funnily enough, they are the ones who leave in the first circle. They operate on television, one after the other, they say, well, it was a good system. How do they pacify the average voter on the outskirts who gets hurt? They have obfuscation. Nobody actually understands any of this. But more than that, they have the old scapegoats technique, where they point their finger at the scapegoat. And who is that? That's Alfran, the 29-year-old investment banker driving Maserati. He's not really the worst defender in the world. I mean, I think the state benefits more from the system. And the economy makes a profession also. But you know, it's an investment banker. So, is investment banking immoral? Well, it depends. If you're willing to end the Fed, it's wrong to also look. If you're willing to denounce fractional reserve banking as a product, if you are willing to repeal legal tender laws and enact the separation of money and state, like church's state has been separated, then yes, you have the right to participate in the investment bank. So that's really you, basically. Everybody else has to shut up, okay? In front of his beloved mobile team, it is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow.