 Every year of the Mises Institute, we had the Schlarbaum Prize last night. We also give the Rothbard Prize It's a beautiful medal with Murray's likeness on it Given to someone who was exemplified libertarian principles and the Rothbardian tradition it also includes an ounce of gold and This prize and and the gold As a result of a gift from the light George W. Connell of parachute, Colorado was a wonderful man a very successful oil geologist and himself a great libertarian and so it's Many great many great people have gotten this award and it's it's my honor to present it to another one Mr. Doug French not only has it has a devotion to Rothbardian principles in a devotion to Murray himself and Received his math you'll see from his bio and on the sheep, but he received his master's degree from Murray And I can still remember Murray calling me so thrilled that he had a banker who had the right to use on economics and Well, my Doug French though it was it was great So Doug come on up and let me present this medal to you and thank you and recognition of all your great work and Your devotion to Murray and to Rothbardianism. Mr. Doug French Well, thank you, Lou. This is of course a tremendous honor and I have a very Very soft spot in my heart for for Murray for those who don't know the story I had no idea who Murray Rothbard was and was just sifting through the UNLV catalog on about 1990 or thereabouts and stumbled on a course called EC 742 I believe the history of economic thought and taught by Rothbard it said and So I decided to enroll in the class and actually One of my classmates tried to talk me out of it. He said that you don't want to take it with this Rothbard guy he's a kook and He suggested another professor that I could take an independent study and I At the time I was working full-time as Lou mentioned in the banking business. Yes, I was in the fractalized banking Business, so I'm a banker with a checkered past for sure but So I was urged not to take Murray but you know I was working during the day and I didn't I didn't really want to play the politics of Those working on their master, so I just went ahead and showed up the first day and I remember Murray coming in and A gentleman by the name of James Philbin carrying a stool behind him and Murray had a pocket full of pens and the minute he hit the door he started talking and it was about the first Gulf War and The craziness of those politicians trying to trying to lower gas prices Don't they understand supply and demand and he just he just went on from there. There was no talking about Syllabuses there was no talking about Taking role He had centuries and centuries and centuries of economic history to cover and he got right to it, so believe me I I Thank my lucky stars every day Butler mentioned serendipity last night and believe me I was hit very hard by the serendipity Stick and I am I am very pleased and When you get struck by Murray's kind of lightning you feel like you need to give back and What I I don't give back to United Way. I don't give back to local charities but I've tried to give back to the to the Mises Institute and You know when we talk about Murray and his name has come up over and over in this conference and And we and Lou mentioned last night about how many How many Mises Institutes there are there's not very many Rothbard institutes? And and it's not because necessarily that he was so radical that nobody wants to name their Institute for him it is really the the Market power if you will the brand name that has been created by Lou Rockwell's 30 years and You're 30 years of support. I was just in Bodrum, Turkey at an event I met with some young guys who most of them are Running Mises Institutes around the world and there was a discussion I Participated in and the question was asked why did you name your Institute Mises? Sweden or Brazil or Lithuania or whatever it was and the question and the answer always was There is a brand name that's been created With Mises when Mises is the name of your organization You know it's legitimate. You know that it's uncompromising in its ideas and You know that it's part of something much much bigger so all of you should be Commended for creating not only something that resides at 518 West Magnolia and Auburn, Alabama Not only at Mises, Oregon the United States, but Lou mentioned these organic this organic creation of Mises institutes all over the world and it's a credit to him and it's a credit to you for creating a brand that is again uncompromising in its devotion to liberty I Hope that Murray is Looking down upon us today, and I think the first thing he would say probably is How could he had my medal so early in the morning? For those of you who knew Murray he was very much a night owl and So to ask him to speak before noon was definitely something you didn't you didn't want to do but But I think that I would hope anyway that Murray is at least in some small way a proud of proud of me and What I do know for sure is it is very proud of His friend Bert Blumert who passed away Unfortunately a couple years ago, and he is very very very proud of Lou Rockwell for the great work that he's done to build this organization over 30 years and Beyond being proud he is overjoyed at what you as donors have created in the Mises Institute So you can be very proud of that. I'm sure Murray is smiling down upon us You know Lou told me a long time ago a very pithy little saying he said no tank no think and so Believe me most of you are the tank and There are a few thinkers here, but it takes the tank to make the thinking work So I thank all of you For your support of the Mises Institute. I thank you Lou And the board for this recognition the Murray metal it means so much to me and Believe me your reach is beyond what happens in Auburn has not stayed in Auburn It has gone worldwide. So thank you Thank you And now I have work to do during the debates and on the campaign trail Probably one of your favorite candidates Mitt Romney Said repeatedly that the first thing he would do on day one of the many things he could do Because it's not like America has any problems But the first thing he would do is cite China for manipulating its currency. It's the first thing he would do Take the oath his hand would come down He would kiss and and immediately Immediately call China a currency manipulator. I was thinking this is truly the pot calling the kettle black In fact, it was just a couple of weeks ago that the Brazilian Finance Minister blasted the feds QE 3 or If you will QE infinity policy for setting off current currency wars around the world Again this year. We've had the Fed. We've had the ECB We've had the Bank of Japan all announcing Easing within days of one another and the effects are inflation in China Food riots in Egypt stock bubbles around the world Consumer price inflation in Brazil and higher unemployment in developing countries now Romney's hectoring of China's is really not so harmless You combine this Romney rhetoric with the Federal Reserve's QE to forever Policy and these are the sounds of what we will call At least for the purposes of this talk the currency war three And it is in its initial stages now. I think most people in this room accept that the big picture is the government's eventually Inevitably reduce the value of their currencies to their intrinsic value and that would be the value of the paper or virtually zero but in the meantime politicians are looking for votes and Governments look for an advantage over competing governments It's not just rockets and bombs that gets fired It's a wars raged on an economic front and the current and same manipulation is the primary weapon And just as America's military industrial complex wages war all over the world Forget about this strong dollar dollar policy that you continually hear and have heard for years America has been the leading advocate of currency devaluation or debasement for the last 200 years Through the revolution through the Civil War the Great Depression The inflation of the Carter years and now Bernanke's QE forever We are continually devaluing the dollar James Rickards has written a wonderful book called currency wars and he warns of a complete collapse in the dollar during this Currency war three he says the Fed chair Ben Bernanke is Engaged in the greatest gamble in the history of finance He says a dollar crashes overdue and it's not a matter of guesswork The preconditions are already in place Bernanke's attempt to print America's America's way out of its economic jam is in essence a declaration of currency wars against the entire planet He writes that the new currency war is the most meaningful struggle in the world today The only struggle that determines the outcome of all others And he explains that while currency wars are fought on the world stage they actually begin at home They they begin with domestic policy this when you have a an economy lacking in growth an economy with high Unemployment a weak weak banking sector worsening public finance With economic growth stymied time and time again Countries look to depreciate the currencies and promote export growth and investment Now there was once a classic gold standard That really was practiced around the world. It was long ago that most of us don't remember only from the history books But it was self-equilibrating it operated essentially like a club The members strictly adhered to The rules that were unwritten, but they were well understood Free market forces prevailed government interventions were minimal Exchange rates were stable What kept this all in place? How did this happen? Well The Federal Reserve hadn't been created yet There was no us central bank to mess up monetary matters This monetary Tranquility was jarred with the creation of the Federal Reserve in 1913 And as Murray Rothbard explained in a book I hope is out front for sale. If not, it's certainly on the institute's website in the bookstore The history of money and banking in the united states the colonial area to Night to world war two the Federal Reserve act was just part of a wave of legislation brought about by the progressive movement At the time big business was tired of competing and continually innovative to stay ahead of falling prices Because that's what you have when you have a stable monetary unit as Innovations are made prices fall. There's a continuing array of competitors and big business was Was tired of that and they wished to use the power of government to establish and maintain cartels In an effort to ensure high profits The plan was to quote Transform the economy from a roughly laissez-faire to centralized and coordinated Statism according to Rothbard now what Records calls of currency war one began with the german hyperinflation in 1921 and it ended with france breaking with gold In 1936 at the same time that england was devaluing the pound sterling In between there were various continuous monetary fireworks For those of you who've seen a great Movie by woody allen midnight in paris. You were probably struck by the number of very creative and Literary literary types usx patriots that ended up in paris In the mid 1920s Well, you wouldn't be surprised that there's actually an economic answer for why they were there at the same time And that's because the french franc Had collapsed in 1923 And so the internist hemming way scott and zelda fits gerald Gertrude stein they could all afford comfortable lifestyles living in paris because the franc had collapsed and they could use their strong dollars at the time To live a very comfortable lifestyle In paris Now by this time the classic gold standard was long gone It was replaced by a deeply flawed gold exchange standard that allowed central banks to inflate Caused the boom in the 1920s and therefore it required the The correction of the 1930s, which of course we've heard about previously that fdr Essentially exasperated with his government policies FDR Started his term in office actually by by closing banks It was one of the first things that he did and then he confiscated the people's gold In fact the the language of fdr's FDR's order is really quite chilling. It's it said that uh citizens have until may 1st 1933 To deliver to the federal reserve system quote all gold Gold bullion and gold certificates now owned by them And this was under the threat of a $10,000 fine or 10 years in prison $10,000 At the time in 1933 was a fair amount of money 10 years of prison is always a fair amount of time in prison Now citizens received they didn't go away empty-handed when they brought in their gold they got 20 They got $20 and 67 cents per ounce Only to watch the new president move the price up to $35 an ounce after he had confiscated it all and that amounts to a 70% devaluation Now rickards places uh currency war two from 1967 and 1987 In between uh currency war one and currency war two we had the brenton woods agreement Which was a phony gold standard that? henry haslett who as lou mentioned last evening was One of the initial supporters in the mesas institute henry haslett actually predicted that it would Collapse and this set the stage for currency war two Now currency war two began with a number of crises in the british Sterling and then a flight from the dollar into gold And charles de gold called for a a return to the gold standard In fact the president the french president said he would be very helpful He he offered to send the french navy to the united states to ferry the gold back to france I don't think americans have viewed the french quite the same way ever since This all led up to richard nixon of course preempted everybody's favorite show bonanza on uh august 15th I don't know how he had the audacity to do that august 15th 1971 Telling the nation that he was closing the gold window because of the evil international speculators He left out a part about the money printing and budget deficits and all that It was the evil international speculators He instituted a 10 percent surtax by the way on all imports, so he effectively Devalued the dollar in the trading arena Now the devaluation was to spur employment But within two years the united states was admired again in a recession It suffered three recessions between 73 and 81 And while uh at the same time purchasing power dropped from 77 to 81 Dropped in half Suddenly everyone was talking about something that They'd never heard of before stagflation something that wasn't supposed to happen according to the canesians Of course tall paul volker Who doesn't seem to be able to go away? At the time he took over as fed and hiked interest rates Price of gold plummeted in the dollar strength and but that dollar strength finally gave Got in a way of export Export jobs and the and the plaza court of september 85 was an attempt to drive down again The greenback's value primarily against the yen and the mark And it worked from 85 to 88 the dollar fell at 40 against the french franc It was cut in half against the yen and it was dropped 20 against the mark however That devaluation did little for the u.s economy and in 87 They met again at the uh the louvre in in paris and in the louvre accord It was hatched again to stop the dollar's fall the bank of the japan participated And they were very willing to expand their money supply to depreciate the yen Versus the dollar well this depreciation of the yen versus the dollar Hiked off one of the greatest stock market booms in the history Probably in the history of the world the niké index went from 10 000 in in 1985 and By the end of the decade it was almost 39 000 And if you follow the niké index you'll know that Of two decades later that market has never ever recovered So currency through a currency war three has just begun And this one's going to be the worst one yet after 40 years of massive government money printing and explosion of derivatives and See currency war three will be fought on a massive scale And it's a real risk to the entire monetary system So how this is going to end up we really don't know but you know mesis had a three-step program Uh or or he thought there was three steps to inflation first Government could print all they want and prices wouldn't go up nearly as much as the money supply That's kind of where we are now in stage two the demand for money falls That intensifies price inflation And instead of stage three prices go up faster than the money supply Then the shortage of money Causes the public to agitate government to print more And when government does more of this then prices and money supply spiral upward And that's when we have hyperinflation So small change in preferences among just a few people could lead to this collapse because financial framework is just this weakly constructed canesian Traption of fiat money government deficits and financial alchemy Any one of a thousand events could trigger the collapse and the last straw we won't know until after the fact It's been said that war is the health of the state For that this conference certainly true But i'd say currency wars are a sign of a desperate government That's willing to do anything it can to wreck Its citizens lives to benefit its own agenda Chaos is the most likely outcome of the latest currency war It's not going to be pretty After the desperation government gets mean and when government gets mean After their currencies collapse they freeze the people's assets They grab the people's gold and they institute capital controls unfortunately Currency war is neither a spectator sport and it's certainly not a game We all have to participate Because this is the government's war that's on each and every one of us It's not a matter of if The war has already started Now's the time to get prepared Thank you