Does anyone have a question? This is the part where you ask questions, and we make up answers.
Yes, sir. Let's see, I'm going to try to boil that question down. I think you're equating
the price of gold with the price of crops, more or less, or the increase in the money
Supply created by the Federal Reserve and 0% interest rates has led to the price of
commodities going up, including gold, and so some people think it's different because
this will go on, and I don't understand how the gold plays in there, if you can help me
Money with that.
Okay.
So, yeah, it's two different questions.
I think that I tried to make a couple of points in the talk that were probably rather subtle,
These low interest rates have provided the perverse incentive to stay in farmland as
opposed to selling farmland because you can't get any higher interest rate or any higher
return on that.
So, and the crop yield, you know, driven by China and India and wherever it may be, we
don't know whether that's real, imagined or what have you.
I mean, there's speculation in those markets just like any other market.
So generally bankers will leverage up this land and that's where the real problems will
become because if that average 5% farmland loan becomes 7% and it doesn't take too much
imagination to imagine a 5% farm loan going to 7% or even 10% for that matter, that will
will cut the legs completely out of this market, really no matter what happens to crop prices.
They could stay the same. If crop prices were to come down at the same time we had a rise
in interest rates or a fall in the dollar, which would precipitate a rise in interest
rates, the same thing could happen. So that's the way I'd answer that part of the question.
is, I don't know, somebody else want to take a swing at the gold. Is gold different this
time? Is it, is anybody arguing that gold's a speculative bubble and, but it's different
this time?
Well, no, I mean, the way I would handle it, as you're right, would, I'm not telling people
I think gold is going to, for sure I'd bet my life gold's going to be higher next month
I'm speculating it's going to go up next month, but it's there so you don't get completely wiped out, would be the way I would say.
I forgot one quick thing. I'm just making an announcement for the high school people in there.
If you want to go to school in the area, I forgot to mention, if Tyler Watts could just raise your hand.
He is an Austrian at Ball State. He just wanted me to mention, if you want to see him and Jim McClure as well,
that they want you to know that they're in the area and they have a strong Austrian program there.
Do you guys have an opinion on gold prices or speculative land?
Oh yeah, they could. The government uses taxes, borrowing and money printing to finance everything.
And so, yeah, in theory, but of course with printing money by the Fed makes it easier,
for one thing, and it creates what economists call a fiscal illusion in that, you know,
I just published an article a few months ago on inflationary finance of war, and imagine
if President Bush, trying to persuade us to go to war in Iraq, said, okay, it's going
to cost a lot of money, and I figure it's $20,000 per family.
I think there would be a lot more opposition to that war than there was if you did that.
So it makes it more difficult, and therefore there would be less of it if we just resorted
to tax finance and not inflationary finance, but that requires abolishing the Fed.
Hold your applause please, we want to continue with this.
Okay. Yes, sir. The question again, the government holds a lot of land. Yeah, pretty much the
entire western half of the United States is pretty much owned by the federal government.
Where I came from, spent 22 years in Nevada, 86 percent of the land in Nevada is owned
by the Federal Government by the BLM, and there were reasons for that, actually, that
tie into a lot of work that Professor DiLorenzo has done in terms of Lincoln, actually, right?
Well, yeah, well, the home, you know, if you want to talk about history, the original Homestead
Act in the 1860s, there's a historian named Ludwell Johnson who once published an article
Showing that the majority of it went to corporations, there were a lot of people who got 160 acres
to farm, but he made the case that over half of it went to mining, forestry and railroad
corporations and I think more up to date, a lot of that land historically has been leased
to ranchers at below market prices, so it's a form of pork barrel politics of a congressman
and making, giving a sweetheart deal to campaign contributors who are ranchers or our friends
in Montana at the Political Economy Research Center for years have been writing articles
and books about how in the timber industry, you know, all the timber lands that are owned
by the government are leased on the cheap to timber companies who then clear cut the
timber and create all kind of environmental devastation compared to on their own privately
But our friends in Montana, they used to say that 50% of the land west of the Mississippi
is owned by the federal government.
That's a statistic they used to use.
In Nevada, what is it, 86% of the whole state of Nevada?
And I know in Nevada, in Doug's case, it's really like the government operates like the
mafia because when the developers, during the boom outside of Vegas, when the developers
wanted to build land, the first thing they had to do, like all developers everywhere
here in any city, is bribe the politicians to let them buy the land that the government
owns.
And like anywhere else, even if the government doesn't own the land, you still have to get
permits.
And so that's how a lot of county commissioners and these people finance their political careers
through sort of Tony Soprano-like activities.
If you want to do business in town, you've got to give me my share, is essentially what
they're saying.
Every once in a while, there will be some kind of proposal to privatize a small piece
of a government-owned and managed area, in the National Forest, for example. Those proposals
come along every once in a while. And whenever they do come along, there's a huge outcry
from the environmental lobbies which are just completely invested in the idea that any movement
of ownership from government to the private sector is wrong, a movement in the wrong direction.
They would actually like to move more land under the control of the government.
But this is also another case where the subsidies and the government management benefit interests
that you might not expect if you'd never really looked into how these programs operate.
In the national forests, for example, where the land is leased to timber companies to
cut the wood, we know there have been some studies by my old friend Barney Dowdle at
at the University of Washington that showed that the costs of managing the national forests
exceed the value of everything produced in the national forests.
So it's like a net loss just from the fact that the government is operating and managing
these areas to begin with.
But if you look at what national forests are for, you discover that they don't really exist
exist to cater to forestry companies as much as they exist to cater to road builders.
There are more miles of road in the national forest system in the United States than in
all the rest of the country combined.
All the interstate system, the state roads, the local roads, add them up, that's not as
many miles.
Of course, this is a different kind of road, but it just gives you an idea of how many hundreds
of National Forests, and of course that's all made with contracts with road building
companies and they make beaucoup bucks from doing this work and they have sweetheart arrangements
with the people who manage particular areas of National Forests and what have you.
But this is also something that the environmentalists have fallen down on because some of the biggest
complaints about the despoilation of the National Forest occur because all of this road building
creates tremendous amount of erosion and it wrecks the streams and rivers in these areas,
kills fish and other riverine life and so it's just terrible for the environment.
never should be happening in the first place because, you know, if people had to really
pay market prices for their access to cutting this timber, the whole system would operate
differently.
Well, I came from, again, the Soviet Union was called environmental Auschwitz in the
sense that they destroyed their nature more than anybody else.
However, I had a strange, very strange experience where the state of Nevada was invited by a
a very radical group there to talk about
Bureau of Land Management and how the mining claims
are being served and what not, and so my point was
that government does not have any role
in ownership of land and that definitely
should be privatized, however, amazingly enough,
my host, who were pretty radical at that time,
Bruce Babbitt, maybe you remember, he was a home secretary
and he was raising grazing fees per cow,
like almost 40% up and so they were pretty radical, they would invite me to a pub and
they were just throwing darts into his eyes, put his picture there and Bruce Babbitt and
Janet Reno and what not and however when I said that they should be, they said no, no
this is ridiculous, no, we don't need this, we don't want this land at all, they wanted
just to reduce the grazing fears, reduce grazing fears, keep them low so they can rape the
So the question is, does the executive branch have the power, if the right libertarians were
elected, if they could just shut the tap off at the Department of Agriculture, just stop
But you guys all go sit and do nothing, download porn all day, what they do at the SEC or whatever.
So, yeah, I'm certainly not qualified for the question.
Yeah, the first thing people would say is that, well, the Constitution gives Congress the power of the purse,
and so they could force the President to do it.
but nobody in Washington pays attention to the Constitution anymore. Whenever Democrats talk about the Constitution, it's only to try to block something the Republicans want to do.
Whenever the Republicans talk about the Constitution, it's only to block something the Democrats want to do, but neither party believes in limited constitutional government.
About five years ago, Ron Paul invited me to go to his office in D.C. and give a presentation
based on my book, The Real Lincoln, to him and his Liberty Caucus, about a dozen members
of Congress.
And during that evening, one of the things they all agreed on, is about a dozen members
of Congress, is that no one in Washington will take you seriously if you try to make
a constitutional argument against any kind of government program.
They all nodded in agreement with that.
And so, my answer to your question is, yeah, why shouldn't a president do this?
And it should give the Congress the big middle finger if they start talking about the Constitution.
And the same with the Supreme Court.
You know, I think we should...
This idea that the Supreme Court is black-robed deities who announce to us what our freedoms
are to be did not always exist.
It's a post-Civil War phenomenon.
Before the Civil War, there were Andrew Jackson, for example, when the Supreme Court said the
Bank of the United States, which was a precursor of the Fed, was constitutional, he responded
by in essence saying, thanks for your opinion, but my opinion is different.
And so we didn't always bow down to these black-robed deities of the Court.
And I think we'll never have freedom again in America, really, until we start giving
and every member of the Supreme Court, the big middle finger, too, and say, so what?
You know, that's your opinion. Keep it to yourself. You know, we have, we, and Andrew
Jackson reminded the Court at the time that there are three branches of government, not
one. And so, so this was an invention that the Supreme Court has the sole, whole sole
power to decide on constitutionality. So I could see a Ron Paul-type president just doing
There was an attempt, several attempts during the Reagan administration to impound authorized
funds and it gave rise to court challenges which went to the Supreme Court and the drift
to the rulings was that the executive may not unilaterally impound these funds. Now,
as Tom says, if the executive branch were willing to say the hell with the Supreme Court,
it wouldn't matter because the Supreme Court is just nine persons with no private army
of its own. On the other hand, if the executive were to act that way in current political
and Social Sciences, it would run a tremendous political risk and I'm willing to say, although
no one knows the future, that it would end up being totally repudiated because even though
the Supreme Court has no army to enforce its rulings, it still has a considerable power
of public opinion behind its rulings and the people dispute the rulings of course greatly
for all kinds of reasons.
But that's different from disputing the authority
of the court to exist and make constitutional rulings.
And I think if the executive branch took that position,
it would find itself very much on the losing end
of the political fallout.
So I think maybe it was easier to do in Jackson's day
than it would be today.
Ultimately, the only way to achieve this is to do what happened in a former Soviet Union
and have all the states secede and create one that's a society of liberty rather than
the society of tyranny which we live under today.
Yeah, well I'll move to Indiana.
I take it the Monsanto issue with using intellectual property laws to keep their seeds from being
used by anybody else, right?
Is that...
Yeah.
I mean, my view of that would be that that's not a legitimate right that they have and
they're keeping food out of people's mouths.
And they're using the power of government, the power of their lobbying efforts to keep
small farmers out of the market.
And so, yeah, I personally wouldn't be a Monsanto fan, or at least the way they do business.
Anybody else?
This is by no means something I did a lot of research on or anything, but I have talked
with a few people that were, you know, in agriculture that didn't seem to be demonstrably
insane. And, you know, the guy didn't, you know, then talk about how the aliens mistreated
him or anything. And he was saying it's not just the issue of, you know, sort of aggressive
practices but he was saying stuff and again, I didn't verify this but this is what he was
telling me that like if the breeze blows the seed onto your land and then Monsanto can
to come in and prove that you have some of their strain, then you have to pay them money.
Even if like you didn't buy the product and put it, just the wind took it on and he was
saying like sort of there are some small independent farmers that just hate everything they stand
for and yet the stuff, they can't keep it off their land and then now they're stuck having
to pay them and then it, you know, they can't even remain independent if they wanted to.
So if that's true, certainly that sounds crazy to me.
Sir, the effects on agriculture during Chairman Mao's what? Great Leap Forward. I'm sure
that's what they figured it was. Yeah.
Well, I can't speak with any genuine authority about that, but from what I have read about
The effects of the Great Leap Forward in agriculture were very bad in terms of hurting the productivity
of agriculture at the time.
One of the things that the government did during the Great Leap, so-called, was to absolutely
clean out the cities and force people, at least for a period of time, to go out and
work on farms.
Can you imagine anything worse for farming than having a whole bunch of totally inexperienced city slickers sent out to help you farm?
It's a disaster. We used to hate it when people came out to hunt pheasants and ducks on our farm, but this had to be very harmful.
And it was done really for ideological reasons. It was to basically break everybody's will and spirit
by showing them that they could be put out in the country doing very hard, unpleasant work.
And in fact, they had to do it, like it or not, whether they enjoyed the pay or the conditions or whatever.
So the idea was, you know, we're going to create this new man,
and the first thing we had to do is destroy the old man's type of thinking by breaking him,
Program, just the way when you go in the military, the first order of business is to break you,
so you'll do automatically anything you're told to do.
Well, I was one of these slick urban dwellers.
And in the Soviet Union, they would send most people, when I was a student, every September
and October, I would spend in pretending that I'm picking up potatoes, yes.
That was massive.
at that time I was pretty young or whatever so I just had a great time. Others, older
people, theyivid just drinking themselves into oblivion. Nobody was picking up potatoes.
Only to put them in the fire and then eat them with the pickles or whatever. But in China
I had a friend who was Soviet advisor, can you imagine, Soviet advisor to Chinese Department
of Labor. And he was part of that. And his stories were just amazing. That, for example,
they decided to kill all yard birds, sparrows. They're considered sparrows. And we were attacked
by sparrows because they eat a lot of grain and a lot of rice. And so the whole country
was murdering sparrows. And he was, so the vice, also recruited because he needs to show
his understanding of that. And they would come with pots and pans and beat them to the
The point that poor sparrows have, and sparrows cannot fly more than five minutes, they have
a heart attack and they drop.
And then people would fight each other to pick up sparrows because they need to show
them.
And then if you have enough dead sparrows, then they exchange it for a medal.
Yes, can you imagine?
And then I worked for the Soviet Department of Labor, and my minister, usually I would
go to him because I worked with the Minister of Labor, and he would call and would say,
Don't draft him, because I need him, so just draft somebody else instead.
And I was kind of, because he would all the time would do that, and I asked him what is this for?
I mean, what is this for this? It doesn't help agriculture. I was kind of naive and whatever.
He said, yeah, but it keeps people a little bit more humble. Yes, it's like TSA today.
You know, they can take your picture if naked or whatever, or do the tricks you like, and the same thing, that you have a family responsible, you have a lot of things to do, and they will say, no, this is not important, just go, and they will drive you on a school bus, ten hours from Moscow, dump you in the middle of a swamp, and that's it for two months, and that was it.
In China, that was, I think, the last coffin. They've beaten into entrepreneurship and
creativity of Chinese people at that time. After that, everybody was submissive. The
human toll of that experiment with agriculture in China, almost 16 million people died because
starvation during the Great Leap Forward. That's wonderful. Also, those of you who
are interested in murders and crimes of socialism, you can look at the University of Hawaii.edu.
and then Slash Rammel, Rammel that's Professor Rudolf Rammel of University of Hawaii. He
wrote a lot of books about democide, about government murdering their own people. I think
the best one is called Death by Government. His point was that this is the worst disease
that you can have is government and government is murderous diseases, wars on AIDS or anything
else.
Well, I'm not a great fan of the Prime Minister, Mr. Putin, nor his spokesman, President Medvedev.
They are all KGB stooges.
But even under, I would say, kind of half-fascist thing they have, it's still greatly forward
because what they did now, Russia became a net exporter of grain again.
Moreover, they're exporting almost as much as grain as the United States does.
In the year 2019 they have this, I don't know if it's a statistical delusion or not, they
think they will become the first in the world in exporting of grain.
Most of this Arab unrest in Arab countries was not because people were looking for freedom
or read too much of Mises and Hayek and began to throw out their social parasites away.
No, because food prices increased by 70-80% in all these countries.
Mostly because of the huge drought in the Southern Russia. Southern Russia is producing
a lot of cheap, low quality, but food grain, which is mostly was exported to countries
in developing world, into these countries. And so today, today it's much better. What
they do, they kind of privatize it, those who would like to assume the proper. The problem
is that it's, I think it's a huge human, human disaster. For example, I go to Baltic states
In Estonia, I met a gentleman from Finland. He was buying land there. Buying land for
almost nothing. For what reason? His point is that they privatized the land properly.
Everything is private. But already peasants, they hate this land because for them it's
kind of part of the privatized concentration camp there were slaves in. So they don't
value this land. They sell it cheap. They want to go to the cities and forget about
All these atrocities that they experience. So it's really, really pretty sad. But now, again, it's much better than it was.
Yes, yes, yes. They, in the beginning, they stalled the privatization of land. It was nationalized.
However, but since 1995-96, they began to privatize. It's still about half of it is publicly owned, even today.
All right, yeah, I'd love to hear more about this, but I'm afraid we have to shut it down.
I am very pleased that you all came.
Thank you for my speakers, Yuri Maltz, Bob Higgs, Robert Murphy, and of course, Tom DiLorenzo
here behind me.
Thanks to the crew of Chad Parrish and Will and James and Christy, of course.
It was a pleasure to be here in Indianapolis. We hope we can come back next year. Thank you to Weaver Popcorn for making this all possible.
If you have a chance to buy a book on your way out, please do. Otherwise, enjoy the rest of your weekend. Thank you.