 Our next speaker is Dan Sanchez. He is the head of our online Mises Academy. If you go to the Mises.org website, you can find our Academy there. We have really interesting outstanding classes taught by professors who are well-versed in Austrianism. It's the kind of stuff you can't get at your high school, you can't get at your local college. We have a lot of great courses from the past that are in the Hopper that are archived. If you're interested in any of that kind of thing, go to Mises.org and click on the Academy. Reach out to Dan Sanchez. He is a very well-read Austrian and libertarian, and he is going to talk about how inflation acts as attacks. Thanks. Speaking of the Mises Academy, Joe Salerno who you just heard is going to teach a class starting this week, starting April 15th, and there's a flyer for his class. It's called Understanding Monetary Chaos, and so he'll be talking more about what he's already been talking about. So there's a meme going around of Ben Bernanke, and in the meme, he's ordering a pizza, and the pizza guy asks him, would you like your pizza cut up into four pieces or eight pieces? He answers, better make it eight pieces. I'm feeling extra hungry. So if you understand why that's a silly response, you'll understand some of the things I'm going to be talking about. Like Joe said, inflation, that there are two definitions. There's increase in the supply of money, and there's an increase in the price level. And my point is that no matter which definition you're talking about, inflation is always a tax. And as a tax, it's always a redistribution of wealth. It's always taking wealth from some people and giving it to other people, either the government itself or to a beneficiary of the government. Now, going back to Joe's Angel Gabriel scenario, it's easy to understand why everyone would like their own personal money supply to increase, that if you have more money personally, then you are better off. But then is it really correct to extrapolate from that that if that happens with everyone, that everyone would be better off? If everyone just magically had their money supply increase, if the society would be wealthier that way. I mean, if that were true, then great news. The government has that kind of magic power with fiat money. The amount of money is whatever the government says it is. So let's just imagine that the government just told everyone, you know, you could just add some zeros to your bills. You know, it's kind of messed up that not everybody can afford a new computer. And so let's just add three zeros to all of our bills. So even if you only have a dollar, now you have $1,000. Now everyone in the whole society can afford a new computer. But with that logic, why stop there? Not everyone can afford a private jet. Just keep adding zeros until everyone in the world can afford a private jet. And then society is so wealthy that people are just flying jets just to get a gallon of milk. Obviously there's something wrong with that. And to help understand what's wrong with that, let's imagine this room as the whole world that out there, it's only space and that the whole economy is in this room. So the floor is all the available land. All the objects are different capital goods like tools and factories. Or consumer goods, things that we actually consume and use for their own sake. And that we are the population. So different people here own different of those resources. Some own land, some own capital goods, some own consumer goods. And we also all have money. Let's say that it's a fiat money system. And that your memo pads or whatever paper you have in front of you is your computer screen and it shows your bank balance. And let's say just coincidentally everybody has a million dollars. So let's everybody write one million dollars on a piece of paper. Just add a dollar sign, one, and then six zeros. No comments though, just six zeros. That's the money that you use. And so we're all a market economy. Some of us own land. Like you, sir, you own the land behind you. And that's forest land. And the person next to you, he's a capitalist. He owns axes and saws. And he rents the land from you. He buys logging rights from you. And he spends some of his money on that. He also spends some of his money on workers at the table in front of him. And those workers take wood from the forest and create plows out of that. And then you, sir, are a farmer. You own the land behind you. And you use some of your million dollars to buy the plow and hire labor to use the plow to make food, those donuts back there. That's some of our food supply. Now, if any of this stuff that we're talking about, except the money, besides the money, were to duplicate, we'd be better off. If suddenly, if just magically those donuts just all duplicated, then we'd have more food. And fewer people would go hungry. Or if the plows or farm workers or farm land magically increased, then we could make more food and everyone better off. Or the forest land and the axes and the workers in the forest. If they magically increased, then we can make more plows, which could make more food, which would make us better off. But what about money? Would increasing that make us better off? Well, let's just try it. Let's everybody on the count of three add one zero to your bank balance. One, two, three. Did anything change? Look around you. Do we have more buildings, these tables? Are there more donuts back there? Do we have more workers? Are we stronger or smarter as workers now? No, society is just as wealthy as it would have been if we hadn't added that zero. But that's not the way inflation actually happens. The government's not that magical. They can't just make money increase evenly for everybody. Instead, what they do is they give it to give new money to some people first. So usually those people that they give the money to first, like Joe talked about, are privileged bankers. So let's say that over here at this table, you guys are all privileged bankers. And only they are able to get some of the new money. So now just you guys on the count of three write a zero, another zero next to your bank balance. One, two, three. OK, now are we richer as a society? No, we're still not richer. The same amount of consumable and producing stuff is still there as if it would have been otherwise if they hadn't added the zero. But are they better off? Yeah, they're better off. But how could they be better off unless other people are worse off if, like we've already established, the same amount of stuff exists as before? They can't get more stuff without other people getting less stuff. Normally that's not the way a market works. Normally markets are win-win that if you exchange with someone that both of you win, because by definition you value what you got more than what you gave up. But with this, it's definitely win-lose. They've won, but since there isn't more stuff, they can't win without someone losing. That is redistribution. The government has done something that makes some people richer at the expense of other people. And that's a tax. Government has redirected some wealth from some people to other people just by declaration, just by fiat. They're not richer because they produced more, that they did a better job producing. They're richer just because of something that the government did. Now, how do they end up getting richer? Well, one way is let's say that you, sir, that you would like to buy a house. You'd like to buy her house. But so would you, Anna, over here. Now, you bid for the same house. Now, Anna loves the house, but now she's not as rich. And you are much richer than you would have otherwise been. And so you're able to outbid her. She says, oh, OK, I'll pay $50,000. And you don't even love the house that much. It's just like a guest house, just like an extra house, whatever. But you've got so much money, like Joe talked about burning a hole in your pocket. You can bid, sure, I'll pay $60,000 instead. And so now the house, that if the government had not inflated, would have gone to Anna, is now going to you. It's almost like the government reached out and redirected the house from Anna to you. That's redistribution. And we have definite winners and losers, OK? Who else is a winner in this situation? The person who sold the house. Because if the inflation hadn't occurred, she would have only been able to sell the house for $50,000. But the price got bid up to $60,000. So she benefits. Well, then can you then reason from that that, well, all the prices of things that we sell will get bid up and everyone will benefit? Well, remember, that's impossible, because adding zeros didn't increase the amount of stuff that can be consumed or used to produce. So someone has to lose. Eventually, some people get the money only after the costs of the things that they pay for get bid up. So maybe something that you sell like your labor. The price of your labor goes up. Your wages go up. But not as fast as your rent went up or not as fast as your groceries went up. So you end up losing. So that's another way that inflation is a redistribution. What happened is that it redistributed wealth away from people who got the money later to people like the house seller who got the money earlier. And one of the institutions that gets the money earliest is the government itself. So the government really benefits from this process as well. Another way that it's a redistribution. What if you borrow money and you owe $1,000? Well, just because inflation happens, your debt doesn't change. But your wages do. And after your wages go up, then owing $1,000 isn't that big of a deal anymore. You are a winner. But what if you're a saver? What if you saved $1,000 just in case you got hurt at work so that you could afford to not work for a while as you get better? But then when you do get hurt, you find that all the prices went up. So you thought that saving $1,000 would get you through that. But the prices went up, so it doesn't get you through that. And so you are a loser. So again, it's a redistribution taking wealth from debtors and giving it to savers. Now, what would happen if this kind of wealth transfer was conducted the normal way with just taxes and welfare? So what would happen if these losers were taxed of what they lost? So the person who doesn't get the house, the person who gets the money later, the person who tried to save, if they were actually sent a tax bill by the IRS, and they had to pay a tax. And then later on, they saw welfare checks or corporate subsidies or whatever going out to the winners, going out to the person who got the house and the person who got the money sooner earlier or the debtor. What would happen then? They'd get really upset. They would see that happening, and they'd want to put a stop to that. The IRS in this situation is like a mugger. You see the mugger pointing a gun at you. You see him taking the money away from you, and maybe if he's like a welfare giving mugger that you see him giving it to other people. But the Fed is more like a pickpocket than a mugger, that you don't even realize it's happening. It's a lot more subtle. The person who lost out on the house, all they see is that, oh, well, them's the breaks. I got outbid by this person. That's not the government's fault. Or the person who just sees his wages going up slower than his cost of living, he said, man, times are tough. But that's not the government's fault. Or the saver who said, man, I'm really burning through my saving faster than I thought I would, but that's not the government's fault. So this kind of redistribution, this kind of tax, is much, much more insidious, because people don't even know what's happening. And so people are less willing to resist, to demand that it stop happening. And that's why Ludwig von Mises, the great economist who this institution is named after, called inflationary policy, quote, the most radical revolutionary institution in the world. And it's not a political revolution. It's an economic revolution that happens quietly every day. Every single day that the Fed inflates is just quietly siphoning wealth away from some people and transferring it to other people. And that not only hurts the people that it siphoned from, it hurts us all. It hurts the entire economy. Because the more that people are rewarded just for being the beneficiary of government privilege, the more that they're rewarded by government, and the less they are being rewarded by how good of producers they are, then the less people will end up producing. So to sum up, inflation is a tax. Taxation is theft, and theft always hurts the economy. Thank you.