 Our next speaker will be Professor Dr. Thorsten Polight. He is the president of the Ludwig von Mises Institute in Germany, and he is also the chief economist of Degusa Goldhandel. And Degusa Goldhandel is the leading European precious metal trader. And he has just recently written a new book called With Money to a World Domination with Mitgeld zur Weltherrschaft. And he's calling for a free market and money. Please come on stage, Professor Dr. Polight. Dear ladies and gentlemen, welcome. With my talk, I want to accomplish two goals. First, I want to explain what money is and what it is not. And I will argue that money is the medium of exchange. And that being the medium of exchange is the only function of money. And second, I will point out why the size of the money supply does not matter. And that the money supply doesn't have to grow to make an economy richer. These two insights can be considered timeless truth about money. And I believe they are also of the utmost importance if we want to understand better first the role of sound money, place for our society's economic progress. And second, what the desirable properties of sound money are, past, present, future. So let me start with the first issue of my talk. And that is explaining what money is. Money is the universally accepted means of exchange. In fact, money is good like any other good. What makes it really special is that money is the most marketable, the most liquid goods of all goods in the economy. And let me say, money is no consumption good. Money is not a production good. Money is the exchange good. Money is the exchange good. It is a good so-called of sui generis. And I should also note that money is not a claim on goods. And in a free market system, no one is obliged to give you something for your money. Let us move on and ask, what are the functions of money? According to most textbooks these days, the answer is money has three functions. Means of exchange, unit of account, and store of value. And I should add means of deferred payment function. Upon closer examination, however, we can see that money has just one function. And that is the means of exchange function. The unit of account function and the store of value function and even the means of deferred payment function are merely sub-functions of money's means of exchange function. And this is easy to understand. The unit of account function expresses the exchange ratios of goods and services in money. For example, one apple trades against one euro. And the store of value function and the means of deferred payment function means simply that people hold money for exchanging it tomorrow or next year or in two years' time rather than today. From this, we can draw the following logical conclusion. If money has just one function, the means of exchange function, then it does not matter how small or large the money stock in an economy is. In other words, whether the money stock is $1 million, $1 billion or $100 billion does not matter. Any given money stock in the economy is as good as any other for financing or transactions. Irrespective of the actual size of the money stock, any turnover of goods and services can be conducted with a given money stock. A large money stock of, say, $10 billion would lead to high goods prices, while a small money stock of, say, just $1 billion leads to low goods prices. What is perhaps most important to note in this context, and this might catch you by surprise, is this. No increase in the money supply can improve the monetary function of money. No increase in the supply of money can improve the monetary function of money. An increase in the money supply will merely delude the effectiveness of each money unit in serving as a medium of exchange. In other words, a rise in the money supply does not confer any social benefit. Why? Because money is, like any other economic good, subject to the so-called law of diminishing marginal utility. So a rise in the quantity of money reduces the marginal utility of the additionally obtained money unit versus vendable items, so goods and services you want to buy. As a result, and other things being equal, the additional money unit will be exchanged against vendable items sooner or later, thereby raising prices in money terms. And now you might ask, why is it then that in today's monetary regime in the US, in Europe, in Japan, in China, in Latin America, the money supply is increasing and relentlessly? This is indeed an excellent question. And I promise I will provide you with the answer towards the end of my talk. Meanwhile, let me ask you a question. Would you prefer money that loses its purchasing power over time, or would you rather hold money that keeps or even increases its purchasing power over time? I think that most people who are in their right mind would opt for money with stable purchasing power or money that gains in purchasing power. If you were to hold money that is gaining purchasing power, wouldn't that be great? Of course it would be great for you. But wait, what would happen if and when goods prices would not rise or even fall over time, which would be the case if the purchasing power goes up, you know? If prices go down, the purchasing power of money goes up. If that were the case, wouldn't that cause a significant problem for the economy as a whole? Let us assume people opt for money that has a constant supply. You may think of people using, for instance, Bitcoin as money, and the total amount of Bitcoin is a constant 21 million units. An increase in the economy's output, more goods and services, would then lead other things being equal to deflation in good prices, right? The amount of goods and services would go up, the money supply would remain constant, and the outcome would, other things being equal, that the prices of goods and services decline. Wouldn't the economy fall over the cliff then? Wouldn't it destroy firms' profits? Wouldn't consumers stop consuming if prices go down? The answer to all these questions is no. Well, a firm's profit is simply the spread between revenues and costs. In an economy where the prices of goods go up, which is the case in today's inflation regime, the successful entrepreneur has to make sure that revenues rise faster than costs. Likewise, in an economy where prices decline, so where there's price deflation, the firm has to make sure that its costs fall faster than revenues. A firm that produces goods and services in accordance with market demand, with market demand, can flourish in a price inflation regime as well as in a price deflation regime. What would price deflation do to consumer demand? Wouldn't people refrain from buying goods and services today as they can expect to buy them cheaper at lower prices in the future? The answer is no. First of all, there are goods and services, the consumption of which cannot be postponed. Think of food, clothes, shelter, there might be more examples. What is more, there's a phenomenon in the field of human action that is called time preference. Time preference means that people value a good available today higher than the same good under the same conditions at a later point in time. The manifestation of time preference is the so-called originary interest rate. It represents the value discount, a future good, so an apple I receive in one year's time, such a value discount, a future good, suffers vis-a-vis the present good, so the apple in my hand today. Time preference and the originary interest rates are always positive and can never disappear. As they are categories of human action. What time preference means for people's demand, I would like to illustrate with a very simple example. Imagine a car costs $50,000 today and $40,000 in a year, so we have price deflation. Future goods have a lower price than present goods. Whether people will buy today or postpone the purchase depends on the marginal utility. Of course, the marginal utility of buying a car for $40,000 ranks higher on my value scale and presumably yours than paying $50,000 for the car. When it comes to making the decision of buying now or buying later, people, however, do the following. They compare the discounted marginal value of purchasing the good at $40,000 in a year from now against the marginal utility of buying it for $50,000 today. And if the discounted, the discounted marginal utility of buying a car for $40,000 in a year is lower than the marginal utility of buying it for $50,000, now people buy now. If it is higher, they will postpone the purchase. Everyone will use the individual time preference rate for the original interest rate for discounting the marginal utility of buying the car in a year for $40,000. As people's time preference can never be zero, let alone become negative, and we may have some opportunity later on to discuss the current interest rate environment, we cannot conclude that people will delay their purchases only because of lower goods prices in the future. In fact, all depends on people's time preference. If people's time preference is high, people will tend to buy today. And if their time preference is low, they will tend to postpone their purchases. What this example should tell us is this, there would be nothing wrong if and when goods prices were declined rather than rise over time. For this would not mean that demand will dry up, that the economy would literally speaking vanish in a black hole. In fact, it is a leading, or this is a leading. This is a misleading, a false idea. The economy can and will most likely prosper if and when the prices of goods decline. Prices of goods do not have to rise to make an economy richer. There is no economic reason why you should believe that the money supply has to rise over time to make an economy wealthier. So to speak, I'm making a case for a type of money that cannot be increased at will or even remains constant like Bitcoin or other media. But what about credit markets? If prices of goods decline, you may ask. If, for instance, prices fall by 3% per year, the purchasing power of my money would increase by 3% per year. In this case, I would not exchange my money for a T-bill or an Austrian government bond that yields only say 2% per year. To make me part with my money, a borrower would have to offer a return on investment that is higher than the increase in the purchasing power of money. Market credit interest rates would approach zero in nominal terms. The price component would become negative, corresponding, gross or moto, with a positive real interest rate component. It may well be that under such conditions, so you have good price deflation, you have a constant money supply, credit would become more expensive when compared with today's so-called fiat money world. Firms, however, would then fund the expenditures more by retaining earnings and by rights issues. So issuing new stocks rather than taking on new debt and people would buy a higher portion of their savings in company stocks. They would put a higher portion of their savings in company stocks rather than debt instrument. In a world of goods price deflation, the credit market can be expected to function without any problems. But credit markets would not be inflated as much as they have become in today's fiat money world. That should be pretty sure. What do I mean when I mention fiat money? Fiat money has basically three characteristics. It is money monopolized by the state. The second characteristic is state-sponsored central banks and close cooperation with commercial banks to issue fiat money through credit expansion. It is, or fiat money is, so to speak, money creation out of thin air. And the third characteristics, fiat money is dematerialized money. It consists of colorful paper tickets and bits and bytes on computer hard drives. Be it the US dollar, the euro, the Chinese renminbi, the Japanese yen, or the Swiss franc, they are all fiat monies. Fiat money is by no means harmless. In fact, it has far-reaching economic and societal consequences, effects that extend beyond what most people would imagine. Fiat money is inflationary. It loses its purses in power over time. It benefits a few at the expense of many others. So the first receivers of fiat money are those who gain in value and the late receivers lose in value. Fiat money causes boom and bust cycles. It leads to over indebtedness. It corrupts society's morals and it most likely will ultimately end, but we do not know for sure in a depression on a grand scale. The issuance of fiat money stealthily shifts resources out of the hands of the many and it puts them in the hands of the governments and its beneficiaries. Like the financial industry, big business, government employees, recipients of government contracts to name just a few. The monopoly over fiat money production allows the state to increase its financial power immensely, making it possible to expand at the expense of consumers and entrepreneurs, freedoms and liberties. It is by no means overdone to say that fiat money paves the way towards the deep state or makes possible the deep state and ultimately towards a totalitarian state. So here we have arrived at an answer to the question I raised earlier. Fiat money system has been established for benefiting some at the expense of many others, especially the state and its beneficiaries. You should not fall victim to the belief that the widespread use of fiat money does by no means testify voluntary acceptance on the part of many reasons. Thank you. First, governments have established so-called legal tender laws, which effectively privileged the use of government fiat money over alternative media of exchange. Money is, as you know, not only used in cash transactions but also for payments of debt. And legal tender laws means, a legal tender law means that the state decrees that money contracts, so-called money contracts, can be settled by what the government says it's money. If a government decrees its own fiat currency as money, the government's money is privileged against other money candidates. It's very important to note. Legal tender laws lead to a privilege of on the part of fiat currencies against potential competitors. And what is more fiat money, which is of lower quality than, say, gold or silver, perhaps Bitcoin, who knows, and other crypto units in terms of retaining its purchasing power, drives out better money. And this is what the so-called Gresham law tells us. Money overvalued by the state, drives money undervalued by the state, out of circulation. So legal tender laws are a very effective way to fend off monetary competition. And second, governments have imposed capital gains taxes and or value added taxes on goods that might compete with fiat money, such as gold, silver or crypto units, thereby making them uncompetitive in comparison with the use of fiat money. That's a big, big problem for those who consider a free market in money desirable. In view of the severe economic and ethical defects of government's fiat currencies, there is good reason, I think, for making a case for a free market in money. In a free market in money, people would have full freedom to choose the kind of money they wish to hold. And people would also have the freedom to offer goods that others may want to demand as money. In a free market in money, it will be the demand for money, it will be you guys that will determine what money is. And we should have real doubt that most people that you will choose something as money that lives up to the qualities of something that can be termed sound money. So money that at least will preserve its purchasing power over time. What kind of money would be chosen in a free market? We don't know. But presumably you would opt for something that is accepted as a means of exchange by say your baker. So Mr. Wingen would think about something which he can exchange against bread in his village. And the baker in turn would be willingly accept this something that he thinks his cobbler, the shoe producer will accept as a means of exchange. In other words, people will go for a good that has the highest marketability, the highest liquidity of goods available. And when we tend to know, and then we tend to know which physical property such a good might have, it must be scarce, it must be homogenous, it must be durable, transportable, mintable, divisible and must, and it also must represent a relatively high exchange value per unit. And this explains very well why in the past people have decided to use precious metals, especially the form of gold and silver as money, whenever they had the freedom to choose their own money. The message I would like to hammer home is that there's no reason to fear that a free market and money wouldn't work. In fact, it can be expected to work just great. Like any other free market such as, for instance, the free market for sports shoes, books, music cars and mobile phones. In other words, a free market and money would provide the best possible money at the lowest cost. Ladies and gentlemen, so far I have presented you with some timeless truth about money. So I have not talked about my new book. And money is indispensable for a modern economy, for it serves as the means of economic calculation. Without money, we could not sustain the kind of division of labor and as a result, the economic prosperity which has been built up over the past. The critical question is whether in the age of digital transformation, new technologies can be taken advantage of for bringing about better money, sound money. And I'm quite optimistic that the chances are there. The latest developments in markets for crypto units are certainly promising, especially so as they signify, that people have gone out searching for better money. Also, the many entrepreneurial attempts to digitize the world's premier currency, namely gold, have made exciting progress. However, while technological progress provides excellent opportunities for improving our money, it might not prove to be sufficient as governments and their central banks do their best to prevent a free market in money. And they are powerful defenders of their monopoly status. For instance, central banks consider issuing so-called central bank digital currencies. If and when this innovation hits the market, monetary authorities would tighten their grips on the money and credit system and monetary developments even further a rather disconcerting outlook I may add. In fact, there's the acute danger that the growing power of central banks or monetary affairs, if not stopped and rolled back, will ultimately bulldoze that what is left of the free market society. So what is really needed is monetary enlightenment, monetary enlightenment, familiarizing people with time-tested and timeless truth about the nature of money, informing the people that there is better money for them and encouraging them to demand sound money, that serves their needs better than government's fiat currencies. And once people realize that they will be better off with free market money, the chances are there to end government's monopolization of money, legal tender laws and tax burdens imposed on potential money candidates. Sound economics reveals that people would enjoy more freedom and greater prosperity with the means of payments that they are allowed to establish in the free marketplace. So there is good reason to call for a free market and money to give people the freedom to choose which kind of money they would like to use, precious metals or cryptocurrencies or whatsoever. I hope that today I was able to make a contribution to monetary enlightenment and have provided some input for our discussion later on. Ladies and gentlemen, thank you very much for your attention and I hope I could save my throat. Thank you.