 And so that system worked fine up until through the 60s when there was a lot of different programs instituted which were designed to help the poor or there were more government funding to help the politically or the economically disadvantaged. So all these programs, whether they're good or bad, it's not really a political statement, they made the government print a bunch of money that they didn't have. And other central banks started really worrying about are we really going to get all our gold back if we try to take all these dollars which are now worth less because all this money is being printed because all these programs. So they started getting nervous and they started redeeming their dollars for gold. And then you have 1971. 1971 President Nixon defaulted on the US debt. So the United States defaulted on 1971. They refused to pay back other central banks in gold. And at that point you had the 70s where you had a great amount of inflation because around the world people lost faith in the dollar. And gold skyrocketed at that point and it went up to some ridiculous dollar per ounce. So basically what the United States said was we're not going to give you gold but you can still use the dollars as their currency. We'll just promise to pay you dollars. So dollars at that point were substituting gold. And they were promising other central banks that will be responsible with our dollar printing policy and it will work, trust me, basically. So that's what they said. So what happened was it did work somewhat after Volcker came in during the Reagan administration. It started really working well. Reagan came in with Paul Volcker who's the Federal Reserve Chairman. He raised interest rates really high. You may have heard about this and that really kind of broke the back of gold and brought inflation under control because it was really hard to get a loan unless you paid a really high interest rate. So of course there's less loans in the system, less money in the system and it contracts the money supply. So as far as central bankers go he's probably the best one of the whole century, of the whole last century. So that worked but at the same time to finance the deficits that Reagan was running they still printed a bunch of money and the United States wasn't more debt than they ever were before. So they were still printing a bunch of money in a form of treasuries that were selling. And at that point in 1987 you had the SNL crisis which nobody really hears about now. It was during the first Bush administration. 1987 were all these thrifts or sort of like banks got into trouble where again they were insolvent. They made a bunch of real estate loans that went bad. Again because of meddling as far as how much they paid out on deposits versus how much they were taking in on the loans that they had out to people that were buying homes. So this is really the beginning of the era of the bailout because the government put through a bill which allowed a lot of these thrifts to be saved. So they printed about $500 billion at that point altogether to recapitalize a lot of these thrifts so the banking system doesn't go down. And it was supposed to be the only time that this ever happened. So then everything worked fine for about ten years and then well five years. And then you had really beginning of course you had the end of World War I cold war at that point and everybody was really happy and there was a lot of positive sentiment in the United States. And of course you had the tech bubble. So you had the stock market the NASDAQ run up to just sky high numbers throughout the 90s last century. And a lot of these companies really didn't even have a revenue stream but people were ready to buy the stock of these companies. I'm sure you probably heard of Peter Schiff. He's one of the people that predicted the financial crisis of 2008. He was at the time around 98 97. He was a broker just trying to sell exxon to people these solid value companies. And everybody who would talk to would say you know I want to buy Yahoo and he said listen the price of Yahoo right now for the price of Yahoo you could buy the whole country of New Zealand. Would you rather have New Zealand or would you rather have Yahoo and people would say I'd rather have Yahoo. So what happens is when interest rates are brought down which is what happened during the 90s as well during the Greenspan era. Greenspan was a Federal Reserve Chairman who seemed to be very astute and he didn't really say much. He was known for being very mysterious. But he didn't even say much because he didn't really want people to understand what's going on. He had interest rates very low and that allowed a lot of money to flow into the system and it went into the stock market. So the stock prices got ran up and what happened was of course it was unsustainable. Eventually everybody comes to their senses and there is the big crash of 2001, 2000, 2001, 2002. What happened at that point Greenspan again brought interest rates to almost zero. So about 1% record lows. They've never been that low ever. So that got us out of that recession probably earlier than it would have otherwise been if there was no intervention. But what happened afterwards? All this money had to go somewhere and the central bank does not know where this money is going to go when they lower the interest rates. They just know that it's going to go somewhere and the economy is likely going to improve a little bit faster because once they flood the market with a bunch of debt it has to be liquidated. If they lower interest rates flood the market with money again it won't be as painful. So when they flooded the market this time with cash what happened was you had the real estate bubble. There was other few policies where the banks were required to loan out to people who didn't really couldn't afford a home. So you had to loan out to those people and then you had to and plus you have very low interest rates where the banks were encouraged to make loans because the Federal Reserve allowed banks to take money from the Federal Reserve where they were charging those banks about maybe half a percent or 1% and loaned out at 4%. Of course that's a great business model. So then you had the crash of 2008 and we're still in that same scenario where we're trying to recover from that. There's a lot of bad debt out there that has not been liquidated. Why are we still going through these problems? Why does not feel quite that we're in a period of prosperity right now? Even they flooded the market now with about $5 trillion this time around. It's because there's a lot of bad assets out there that have not been liquidated and until those assets are liquidated we are not going to really have a real period of prosperity. What needs to happen and what would happen let's say if there was no Federal Reserve as of like right now let's say is there would be a very severe contraction in the money supply that would be a very severe recession but it would probably last about six months to a year. A lot of banks would fail, a lot of companies would go out of business but the ones that are left would be the most powerful, the most solid companies. A lot of mid-sized banks, a lot of mid-sized businesses would be left standing and really then we would have a real economy based on real solid fundamentals and then we would have more prosperity like we had in the late, at the end of the 19th century. But that's not likely to happen. And why? Because who got the bailouts last time around? 2008. It was your AIG's, it was your Merrill Lynch, which I worked for. It was your Bank of America. It was these guys that went to the same schools that go to the same cocktail parties as the Federal Reserve Chairman and all his buddies there. So what you have to understand is the Federal Reserve exists to increase bank profits and to fund the government. And the way they do it is they tax you through inflation. They don't tax you through real tax increases because nobody is going to go for that. But I think I'm out of time and if you have any questions, I'll be around for a few minutes. Okay, I got time? Okay, all right. All right, well, so what I will say is where are we going now? Where are we going into the future? I would say at this point the Europeans are trying to preserve their banks and that's why you see them trying to bail out countries which are insolvent. Of course you have Greece where people have insane benefits. I think it's something like if you retire, you get pension and then if you die your wife gets pension until she dies and then her kids get a pension. Something along those lines. So obviously you can see where that's unsustainable. Again, not a political statement, we're just talking money here. So why would you ever bail out somebody out? Let's say if we were on a gold standard and you actually have to give gold to Greece and you have to tax the people where they have to turn in part of their gold so that we could give gold to Greece to bail them out. Do you think that would actually happen? No, that's why there's a central bank for all of Europe which is able to print a bunch of money and give it to Greece for free. Why? Because a lot of other banks in Europe own a lot of the European debt or a lot of the Greek debt. And if Greece is allowed to default and get out of the Euro then those banks are likely to suffer very big losses. Now shareholders are likely to suffer very big losses. So they're going to keep interest rates very low and they're going to continue on trying to bail Greece out. I mean according to my predictions I think they're just going to keep trying to do it. They're going to try to kick the can down the road. The debt limit in the US is likely to be increased and they're going to kick that can down the road. The path we are on here is unsustainable as well. So let's talk about how you can protect yourself as far as the money you earn and if you want to just at least keep the real value of what you have. Not even make money but let's just keep the real value of it. So if you have long term assets let's say you have savings where you want to start a business down the road maybe say two, three, four, five years down the road I would say you should have part of your money in cash and certain currencies are still viable even if there are fiat currencies that are more responsible in the US but I would definitely say part of your money common sense you should have it in gold. Don't buy, I prefer to actually hold the real coins I wouldn't buy the GLD or these other ETFs that you can buy buy some coins, buy the ones that are not the numismatics not the collectibles, buy the ones that are just very common but that are readily exchangeable. Some silver too is okay but silver is a little bit more tied to the economy than gold is to other areas of the economy, production. So gold really if you want to protect yourself against inflation just buy some gold coins I would say for your long term money do half in gold, half in fiat currency because if you do it for your short term money the problem is you have to keep exchanging it back and forth and it's really inconvenient. So any money that you're saving a year out or further I would say just do that for yourself just to protect what you earned.