 Nomi Prins is our first speaker this morning. She's one of those people who has really done amazing things across different disciplines in her life. She's a mathematician and a statistician by training. She had worked, I assume, as a quant of some sort at both Bear Stearns and Lehman Brothers. Lehman Brothers no longer with us. She is an historian of central banks in general and the Federal Reserve in particular. She's written some absolutely fascinating books from both a historical and a technical perspective, including all the President's bankers, which we have outside. We'd love to have you get one signed by her. And she's got a great new book coming out called Artisans of Money. So please welcome Nomi Prins. Thank you. Thank you, Jeff, for that lovely introduction. I feel uplifted. Thanks all you guys for being here this morning. And Jeff was talking about, I'm going to start with the action item first. I was going to do it at the end, but I just want to kind of tail on to what he had said about cash, because it kind of relates to a lot of what I'm going to be talking about and a lot of what you guys are probably thinking about on a regular basis, which is that if there's a sort of outside group, and it's not the government, it's the central banking system. It's the Federal Reserve. It's the Bank of Japan. It's the European Central Bank. It's the People's Bank of China and so forth that really have not just the ability, but the wherewithal and the lack of any kind of restraint to decide how much the value of cash is, how much interest you can receive for keeping your cash, for example, at a bank, which is nothing. And in fact, you actually pay money to banks for the luxury of keeping your money. So nowadays, for example, if you have an account, it's a JP Morgan Chase, and you have less than $1,000 in that account for the year, you're paying $20 a month for the luxury of just keeping that $1,000 there. That's $240 a year. You are paying them 24% interest on your money to keep it in a bank. That's ridiculous. But that's really what's happened in the last 10 years since the financial crisis, and it is 10 years. I mean, isn't that crazy? 2007 happened 10 years ago. We are at the beginning of the decade since the buildup to the financial crisis happened. The financial crisis occurred in steps. In March 2008, Bear Stearns, where, as Jeff mentioned, I worked, imploded, and was taken over by JP Morgan Chase, who charges 24% on your $1,000 to keep in their bank right now. Lehman Brothers imploded in September of 2008. I also worked there. And I also worked at Goldman Sachs. So if you're sort of keeping, I also worked at Chase. He didn't mention that. So the tally here is that two of the banks I worked with no longer exist. And two of the banks that I worked with are sort of running the private banking system. But where they've been helped is really the central banking system. And that's the area of the government and the private sector that really falls through the cracks. And it doesn't have rules of its own. It has an act that created it, the Federal Reserve Act, which was created in 1913 to establish a Federal Reserve. But there aren't a whole lot of rules as to what it can do. And there have certainly been no limits to what it can do since the financial crisis. And in that wake, it has also required the rest of the central banks of the world to do what it wants. So the Federal Reserve has not just been pivotal in making sure that you gain no interest on your money that's kept in a bank. The Federal Reserve has also made sure that throughout the world, that phenomenon exists. And so what that's done is it's created an artificial financial system that had not existed before the financial crisis. The Federal Reserve itself, and I want to talk a little bit about that, because that's how Jeff and I actually connected. And before that, I actually connected into watching the Federal Reserve, because my agent is actually Ron Paul's agent, as that happens. And Ron Paul, of course, was working on the Fed and other initiatives from his work. And that was where I started to really look at the Federal Reserve after having looked at the private banking system, the history of the relationships between private bankers and presidents and our political system, and how they've basically collaborated through the years to influence policy. So it's not just the government that's influencing policy. It's the bankers that are influencing the government to influence policy. And now we have this renewed sense of power of the central banking system that's adding on to that influx of artificial information, artificial stimulation, artificial subsidization, and artificial money that is now our system. But the Federal Reserve itself was started really in 1910. That was when the meeting at Jekyll Island happened. I like to go on the road, because I like to be in airplanes. I like to drive. I like to get air miles. I like to see new places. And I like to actually get my own information. And that's really part of thinking in general. Whatever you believe politically, whatever you believe ideologically, whatever you believe in your life, thinking for yourself and looking for your own information is really key to all of that. That's really where it starts. And that's what I prefer to do. I certainly read other books, but I like to go on the ground. So I took a trip to Jekyll Island off the coast of Georgia. And Jekyll Island itself, it's kind of interesting, because now there's a causeway that connects the state to the actual Jekyll Island, which was a member club. It was effectively a resort for people like J.P. Morgan at the turn of the century, where they could go and they did with their wives, with their kids around the holidays. And they would sit there for a week and kind of talk about how to divvy up policy and look at the world and change the world and influence the world. And their wives and kids would be off sort of doing things on their own. And the ratio of servants there was seven to one. And so everybody was very well taken care of. And there was no way for the locals in Georgia to get there. The only way in and out of this resort, of Jekyll Island, of this part of Georgia was to effectively take a boat and to come in through a dock. And these bankers would come in, these industrials would come in, and they'd be escorted literally from, the distance between here and the back of the room, maybe they would require these servants, these escorts to sort of come in and initiate them into their time there to sort of be important, sort of look at how the world was going to be in their eyes and be shaped. And over the years there's a causeway and there's other ways to get in. But in 1910, what happened was, it was three years after a panic that happened in New York in 1907. 100 years before our financial crisis. So a century before we started getting into this new financial order, there was a panic in New York. And the reason the panic started was like all panic. Someone tried to game the market. And there was a bunch of guys that were connected to a trust company, a bank for a collective bank, a private bank. And they decided we're gonna buy up a lot of copper. We're gonna push the price up. We're gonna push the price up. We're gonna get other people in at the top because that's what happens if you speculate. If you're gaming a system, you sort of move the needle up and you get out before everybody else does and then you basically make the profit in between. And so that's what they tried to do, except a bunch of people got wise to this. So they cut in front of these copper speculators and they cut them out out of a ton of money. So this information got into New York and people were a little upset by this because one of these two individuals also ran, it was part of the board of a bank called Nickerbocker Trust Company. Now no one's really heard of it. It doesn't exist anymore. It doesn't exist because it failed like Lehman Brothers failed. It failed like Bear Stearns failed. But at the time before it failed, it didn't let people take their money out. And so all throughout New York, there started to be lines in Harlem on Fifth Avenue in the middle of the city where people were in front of this bank angry, trying to get their money out. They would sleep 2 a.m., 3 a.m., 4 a.m. to make sure they would be there when the doors opened so they would basically merge into where the tellers would get their money out. They were having skirmishes with the police of officers at the time who had clubs instead of guns. So there was actually a lot of fighting in the streets for people to just get their money out of this one bank. And Teddy Roosevelt, who was a president at that time said this is not good, not on my watch. He was trying to basically bust up a lot of the other industries at the time in the United States, in particular standard oil industry, which was one of the Rockefeller entities, and other industries. But he wasn't touching banks. He wasn't going to touch banks. And he didn't want to be bothered by having to touch banks. In addition, he had a really good relationship with J.P. Morgan, who was the key banker at the time. And who is the still, he's the key banker in this room, J.P. Morgan Chase remains the largest most influential bank in the United States. So his legacy permeates this room today. But he basically had been bankrolling the Treasury Department before this time. And when the panic happened, Teddy Roosevelt turned to him and said, what do you need to fix this? Because I'm afraid up here in Washington, I'll sort of stay out of it, what do you need? And J.P. Morgan said, I need $25 million. So the first bank bailout actually happened in 1907. And not a lot of people know about this because it wasn't considered a bailout because it all happened sort of undercover. J.P. Morgan said, you know, I got this, I'll take it, I'll fix it because other banks are starting to get contaminated. There could be panics, I'll sort this out. So he has this meeting in his library off of Fifth Avenue and he gets a bunch of his friends together because that's how this works. And his friends included representatives from banks called National City Bank, which is now known as Citigroup. Chase, which is now part of J.P. Morgan Chase. And basically some of the bigger banks at the time. And he said, I got this $25 million. Let's give it to our friends. He did not give it to Nicaragua Trust. He did not try to help the banks that were imploding. He did not try to help the bank that was not allowing its own customers to take out their own deposits. He helped a company called the American Trust Company. Why? Because he had shares in the American Trust Company. And that's how it works. And then he pocketed some of the rest of the $25 million. There was, the panic did basically get contained. The New York Times wrote a full front page on J.P. Morgan basically calling him the king. So he got a lot of kudos out of the fact that he spent none of his own money. He pocketed some of the Treasury Department's money. He said he would take care of what was the first bank bailout in US history. And he came away being called the king. So he did okay out of this, but he was concerned. And he said, you know what? I don't know if I can go through that again. He actually died a few years later. He wasn't in good health. He was kind of portly. He didn't really eat well. He drank. So he was worried. And his son was going to take over the family business, which was the Morgan Bank. And he wanted to have things be comfortable for him going forward and for the legacy of their family and their money. So he pushed to have a central bank. And for three years, there was a man in Washington who was on the Senate Finance Committee named Nelson Aldrich who was the Senator for Rhode Island. And his son, Winthrop Aldrich, was a banker in New York. Ultimately became the head of Chase for two decades. But at the time was a young banker and rising. And he had a connection into J.P. Morgan and he had a connection into those people that were in that library that night, with J.P. Morgan deciding how to dole out the government's money to save themselves. And he said, all right, I got this. For three years, he tried to come up with a way to push through Congress some kind of a form of what became the Federal Reserve. And he traveled to Europe and he took bankers with him and they were looking at how the Bank of England operated and how the Bank of France operated. And they decided to do none of that and to ultimately have what is a private institution right now in Washington, even though what they did at Jekyll Island, what they created at Jekyll Island in 1910 on the impetus of J.P. Morgan's push was not the Federal Reserve Act that ultimately became signed by Woodrow Wilson in 1913, but it was the precursor. And the way even Jekyll Island related into that history was really interesting because when Nelson Eldridge was in New York talking to Morgan and seeing his son, he got hit by a trolley car. So he's at Madison Avenue, he's talking to J.P. Morgan about having a meeting actually in New York or at his place, which was a manor called Warwick in Rhode Island. And that doesn't happen because he gets hit by this trolley car, he gets laid up, he's unconscious, things are happening to his body, he's staying at his son's house. And J.P. Morgan is basically saying, look, you have to move this thing along. Here's my membership to a place you should go to. And that's how Jekyll Island actually worked. It was a membership, just like the Fed is a membership. It was people like J.P. Morgan who could come across and say, we can get there, we can get on those boats, we can get into this island, but no one else can come here unless we let them. And so six men, including Nelson Eldridge, ultimately went to Jekyll Island in the fall of 1910 to figure out what the Fed was gonna look like on J.P. Morgan's membership. Now that's not conspiracy theory, that's just he was the only member. And I know this because I saw the records. So when I was in Jekyll Island, as I mentioned, I actually went through with the historian that is still there, they have the place that's now a resort, I mean you can go there, I think it's like 200 bucks a night, there's golf, there's this little area where you can see how the items that they required when they were there used to be created, whether that was their food, or whether that was clothes they might need that they didn't take from them when they came there. And in that area, I looked at the books, the guest books from this period. And they're all ledgers, I mean they're leather bound, they're dirty, they're dusty. But you can see how people came into this area and none of them were members. Nelson Eldridge was not a member, none of the bankers he had was a member. The only connection they all had was JP Morgan. So there's a lot of proof that comes into play in terms of the bankers in particular JP Morgan being what was the impetus for the Fed. The act that created the Fed wasn't passed until a Democratic president was in power, but it didn't matter because the Federal Reserve doesn't care and the leaders don't care whether someone in office is a Republican or Democrat. Wall Street doesn't care whether someone in office is a Republican or Democrat because they really operate independently of politics. They influence politics, but they operate independently of politics as they did then. So since 1913 when the Federal Reserve was created specifically to help the most elite banks, it's gone about doing that. Throughout the century that happened after that, there were periods where it influenced and helped banks less than more. And its day job was supposed to be to set the value of money, to set the interest, ultimately of what we receive on our cash if we have it in banks and what the government has to pay on its debt if it issues debt into the markets. But at the same time, it also has been providing discounted cash to the banking system. And where we saw this in steroids was in the financial crisis of 2007, 2008. Now the Fed knew exactly what was happening before the public knew what was happening because they knew the state of the banks, and in particular was J.P. Morgan, there was Citigroup, it wasn't Lehman Brothers, and it wasn't Bear Stearns. They were sort of byproducts of what the bigger banks were doing. It was the bigger banks that were creating the securities that toppled the economy. It was the bigger banks that were using Bear Stearns and Lehman Brothers and not that they're innocent of anything, but that were funding them in order for those banks to buy the securities from them. So J.P. Morgan would create securities, Citigroup would create securities, they would effectively loan money to companies like Bear Stearns to buy them. And then when the securities devalued and Bear Stearns couldn't repay the money, they suffer twice and J.P. Morgan and Citigroup went to the government because they had more connections to the government and said, well, can we have help? And the government said sure. And the Federal Reserve said sure. And the result of that was the bailout that happened in 2008. And it was something that's much, much bigger than the bailout because the financial crisis was just the beginning and again a decade beginning of an entirely new financial order where these central banks, and I call them the artisans of money because in the last 10 years they've not just bailed out the banks in the beginning of the crisis. They have manipulated the value of cash. They've manipulated the availability of money to these institutions in order for them to effectively continue to speculate without being slapped on the wrist more than the $160 billion of fines that they were required to pay, which is not a lot of money if you consider that they have trillions of dollars of treasury bonds on the books of the Fed gaining the interest that they need to repay their fines. So they're still doing fine because in the wake of these last 10 years almost, the Federal Reserve has acquired four and a half trillion dollars worth of securities, of debt. And it's not only done that, and this is where I moved on to the artisans of money and this concept of what else it's done besides just decide the value of money, the value of interest, it's created all these programs, quantitative easing, quantitative easing with a twist, operation quantitative easing and all these sort of manifestations of ways to keep the value of money down, to keep the printing presses, which is the euphemism for it, going. Mark Carney who runs the Bank of England called quantitative easing an unconventional measure. This unconventional measure has created about $20 trillion worth of debt sitting on the books of central banks throughout the world, doing absolutely nothing productive for society, for the economy, for small businesses, and for individuals. It's literally been a system and a program whereby the Federal Reserve has required the major central banks around the world to behave like it did, which is keep money cheap and buy securities, buy corporate bonds, buy stocks depending on the country, buy particular government bonds on a particular part of the yield curve because that's what they wanna do and decide to tell the public all of these reasons why that's happening. And the reasons that the Federal Reserve has given for maintaining a tenure policy that was supposed to just be an emergency policy to fix a banking crisis. The reasons have been everything from we need to promote growth, to we need to promote jobs, to we need to fix the problem of Brexit and not have what's going on in Europe impact the growth that could be happening in the United States. It's because there's an emergency somewhere in the world that has nothing to do with the financial situation. It's because it's Tuesday. It's basically anything. And what I did for researching this book and I'm actually here a week and a half before it's due. So this is all quite fresh. I'm literally writing the conclusion. You guys can even like help me if you have Q&A afterwards. If there are particular areas, you can help me create this book. But what I did was I looked at the timeline between the beginning of the financial crisis to now. And I went around the world. So not just into States and the United States, which I did to write all the president's bankers because that was about presidents in the United States and bankers in the United States. I decided to take a trip around the world. And I went to Mexico and I went to Brazil and I went to China and travel tip on China. Don't go to China in July. Because it's really, really hot and it's really, really sticky. But when I was in China in July, I realized that the shift that has happened since this financial system has been so artificially prodded and pushed and altered by the Federal Reserve is that the entire geopolitical system has changed. China called the Fed out in 2009. Germany has been calling the Fed out basically since 2009. The BIS, the Bank of International Settlements which is the central bank of central banks has been calling out the Federal Reserve has done and what it's required all the other banks to do and all these manners of fabricating money. The IMF has called it out. And yet it keeps happening. So I'm in China, it's really hot. I can't breathe because it's not just hot. It's like the air is so bad in Beijing where it just gets into your lungs and it just like squeezes them and it just makes them feel like you need oxygen. You need to basically step inside in order to breathe. And I'm going to meet this economist named Michael Pettis. And he's interesting. He's actually a really independent thinker too. It's difficult to even tell or need to tell what his politics are. But he looks at what's happening with central banks and economies and how one is being impacted by the other. And while I was there, I also met with a journalist named Michael Shulman. Now Michael Shulman had been in Japan before he moved to China. He wrote for Time Magazine. And he wrote a really interesting article in 2010 which I came across this week as I was trying to finish up this book. And it clipped. Some of the things the Fed had said about how they weren't doing quantitative easing. They were basically doing just a credit program. They weren't copying the Bank of Japan who had done a version of quantitative easing between 2001 and 2006 to fix their situations from the banking system perspective. They were doing something new. They were creating artisanal money. They were creating their own way. They were making it up as they went along. And they were admitting that they were making it up as they went along. And that's pretty powerful because we now have a system where not only is $20 trillion of debt on the books of the central banks, the entire debt of the world has changed. That global debt to GDP is a multiple of three. There's three times the amount of debt in this world as there is productive anything. That's a phenomenal figure. That has all happened because not of government policy, not even because of the private banks that required cheap money to begin with to keep themselves going in their current construct. That completely happened because of the Fed. So the entire not just financial system, global economies have basically been impacted by trying to follow this idea of creating debt because it's so cheap to do it and pushing debt to the future, to the future, to the future. That if that future comes and there's a really negative element, whether that is war, whether that's a natural catastrophe, whether that's a combination of a bunch of derivatives books between Deutsche Bank and Citigroup and Goldman Sachs going belly up, whatever it is that happens together has the ability to now not just crash the banks, now not just crash the stock market, now not just crash certain corporate debt markets. It has the ability to take where we are right now, which is a much higher leverage in the world than even banks gave us into the financial crisis and have it really dump on citizens, on people, on populations throughout the world, again, regardless of what anyone believes or what anyone votes or what anyone thinks in a really massively dangerous way. So I go back to the action item that I mentioned in the front and the Jeff item and how do you fight that? Well, there's a couple of things I think should be done with respect to banks and currency. I think banks should be broken up. I think they're too big. I think if you made them smaller and you made them less able to take and require this cheap money from the Fed in order to be operational, where they charge us on deposits and don't give us interest on other deposits, that system doesn't make any sense. So if they were smaller, they would require less laws even to protect us from them because they would not have the massive influence that they now have, which is larger than it was before the financial crisis. There's ways also to look at the currency. The entire manipulation of debt, of the markets, of cash, also had an effect on the dollar. Every time the Fed moved rates, it had an impact on the dollar. Every time it got a bunch of G7 central banks in a room together or on the phone or in some exotic country where they all would meet up and said, you need to do this policy because we are doing this policy. And that's a lot of what the documents I've been reading for this book have shown. Every time that happened, it hurt the financial system. Every time it happened, it created this risk being pushed into the future. And a lot of that was to protect the dollar. A lot of that was to protect the United States and the Federal Reserve's sheer power. And it continues to go on. So one thing is to look at, for example, SDRs, which is the IMF's basket of currencies and to have something that's not just predicated on the dollar but predicated on more security so that the more currency, so the dollar doesn't have the same power that it could have just alone as a reserve currency. As something central banks, the Fed in particular requires other central banks and other countries to have. And gold could be a part of the SDR. When we lost the gold standard in 1971, we basically took outside checks and balances off of the Fed. And that wasn't discussed at the time, but that's what happened because we took checks and balances off of the dollar. So now all of a sudden, there's no external counter to what the Fed can do. There's no external counter to what the dollar needs and therefore for our policy to be world policy. And that's not necessarily a good thing. We screwed that up a decade ago. We're still screwing that up every day. So those are the things we can do. In the meantime, what you can do individually goes back to that first action item. It is about taking cash out of banks. It is about just having a reserve for yourself. All these banks have reserves with the Fed that aren't going to you, that aren't going to the economy, that are helping to keep the value of cash that you would keep with them down. So what you can do is keep some of that to yourself. That is what they're doing. So again, I echo that. There's other things that are connected to how geopolitics has changed in the wake of this artisanal money era that I call it. But that's a topic that will be in the next book. But also is that idea of thinking and knowing this stuff for yourself is looking at, which I know you all do, the information that comes across the news somewhat skeptically and looking at original sources. I make my researchers for these books do original sources. They hate me because they're like, well, Reuters said this and Bloomberg said that and CNBC said this and Fox said that. And I'm like, well, no, what did they say? What's the original document? What actually happened? Forget everyone else's interpretation, but what actually happened? And I think that's the other thing you can do in terms of empowering yourself, your investments, whatever it is, is really take with a grain and salt everything everyone's saying, even what I'm saying, because we are just kind of processing the information we get. And a lot of the information that's processed in the news, in media, has not slants, but it's not full knowledge, it's not full data. So what you can do is read more and read across your ideologies and read across your politics because you'll get to a truth if you can expand the information that you're taking in. And it might not appeal to you on an ideological level, it might, it doesn't matter, but it's information that you can step back and process objectively. So that's the other action item I would ask you to take and it's fun. And you can also get air miles doing it and that's fun too. Anyway, I would like to thank you for listening and look forward to your questions later. And again, if you have comments on how I should end this book, I welcome them. So thank you.