WEBVTT NOTE The Current Crisis in the Light of The Theory of Money and Credit 1 00:00:00.000 --> 00:00:07.680 My assigned talk this afternoon, it is just a talk. I don't even have pictures. I think 2 00:00:07.680 --> 00:00:14.960 we can make do without them. The assigned topic is the current crisis in the light of 3 00:00:14.960 --> 00:00:18.840 the theory of money and credit. Yeah, I want to talk about that, but I actually want to 4 00:00:18.840 --> 00:00:26.320 compare several crises since the origin of the Federal Reserve system, which I think 5 00:00:26.320 --> 00:00:36.840 will shed more light on the current crisis. But before I do that, I guess I have a caveat 6 00:00:36.840 --> 00:00:45.360 or confession. I don't read German, okay? And so I listen to Guido, and I have to confess 7 00:00:45.360 --> 00:00:53.760 that George Selgin and myself and others have been wallowing around for years in this English 8 00:00:53.760 --> 00:01:01.120 Edition of Theory of Money and Credit, so take that into account when you listen to my talk. 9 00:01:01.120 --> 00:01:07.560 I do want to point out before I begin, though, that there's only a small, small section 10 00:01:07.560 --> 00:01:12.880 in the English version, and I would guess the German too, although the words are longer, 11 00:01:12.880 --> 00:01:19.800 maybe it took more pages. There's only a very small section in the Theory of Money and Credit 12 00:01:19.800 --> 00:01:23.080 that deal explicitly with the business cycle. 13 00:01:23.080 --> 00:01:25.760 And there they are, that's them, okay? 14 00:01:25.760 --> 00:01:27.400 That's ten pages. 15 00:01:27.400 --> 00:01:33.840 Near the end of the book, actually this is the revised edition so it has the added essay 16 00:01:33.840 --> 00:01:42.040 on monetary reconstruction, but in the original book it was very near the end and only a few 17 00:01:42.040 --> 00:01:43.400 pages. 18 00:01:43.400 --> 00:01:48.880 So I think it's something of a remarkable thing that we can look at that now and say, 19 00:01:48.880 --> 00:01:57.720 This gives us insight even to the current monetary crisis in the U.S. 20 00:01:57.720 --> 00:02:04.240 That relevant material is in the final two chapters of the final part, part three of 21 00:02:04.240 --> 00:02:16.040 the book, and it spans ten pages, which almost justifies this last talk which we just heard 22 00:02:16.040 --> 00:02:18.840 of not taking into account the business cycle. 23 00:02:18.840 --> 00:02:20.320 It's just a very small part of it. 24 00:02:20.320 --> 00:02:25.320 You look at the basic concepts of monetary theory. 25 00:02:26.040 --> 00:02:27.840 Well, in looking at those few pages though, 26 00:02:27.840 --> 00:02:32.880 I can pick out several aspects of the business cycle 27 00:02:32.880 --> 00:02:35.120 that are with us today in one form or another 28 00:02:35.120 --> 00:02:38.480 and that have to come together to make a good story 29 00:02:38.480 --> 00:02:41.760 about the current crisis and other recent crises. 30 00:02:41.760 --> 00:02:45.960 I list a half a dozen and I'm hesitant to mention this 31 00:02:45.960 --> 00:02:53.200 This first one in light of the earlier panel this morning, but the subsistence fund, okay? 32 00:02:53.200 --> 00:03:02.920 And I'd like to give my own view on how that fits into the theory by saying that, you know, 33 00:03:02.920 --> 00:03:11.080 this was 1912, and the terminology of the classical school was still in circulation, 34 00:03:11.080 --> 00:03:20.460 And Mises himself used classical concepts throughout the book, including the one of the subsistence 35 00:03:20.460 --> 00:03:21.460 funds. 36 00:03:21.460 --> 00:03:27.320 It goes back to, someone said earlier, Boehm-Bawerk, well, it goes back to David Ricardo, who talked 37 00:03:27.320 --> 00:03:32.200 about the subsistence fund, and by that he really meant it. 38 00:03:32.200 --> 00:03:38.680 In other words, Ricardo had a pretty dismal view of where the economy was headed. 39 00:03:38.680 --> 00:03:46.460 When it would finally reach long run equilibrium, he thought, the workers would be operating 40 00:03:46.460 --> 00:03:54.240 at a very much of a subsistence level, hand to mouth, trying to make do day by day. So 41 00:03:54.240 --> 00:04:04.160 subsistence really was what he meant. And by fund, Ricardo always wrote about an agricultural 42 00:04:04.160 --> 00:04:12.160 Even though he wrote so much later than Smith and the Industrial Revolution was off and running, 43 00:04:12.160 --> 00:04:19.160 he thought in terms of agriculture and the time period he was dealing with was governed by the growing season. 44 00:04:19.160 --> 00:04:29.160 And so workers had to make do somehow between the time they planted the crop in the early part of the year and harvested it in the late. 45 00:04:29.160 --> 00:04:37.420 and during that time they needed enough corn to stay alive and therefore the 46 00:04:37.420 --> 00:04:43.440 subsistence fund had a much more literal meaning and application then than it did 47 00:04:43.440 --> 00:04:52.960 later. What the concept does for Mises is point to the inherent temporal element 48 00:04:52.960 --> 00:04:57.160 in the production process. In other words, it takes time to produce. You start now, 49 00:04:57.160 --> 00:05:06.680 and how much later depends on, well, how much you can borrow to fund your enterprise, how 50 00:05:06.680 --> 00:05:13.400 much capital goods you can create over that time and so on. 51 00:05:13.400 --> 00:05:18.320 And so he was introducing, if I put it in modern terms, he was simply introducing the 52 00:05:18.320 --> 00:05:26.040 time element as an endogenous variable in our theory of macroeconomics. 53 00:05:26.040 --> 00:05:29.440 And I think that was the purpose that it served. 54 00:05:29.440 --> 00:05:34.640 But he also has a notion of heterogeneous capital, and he's talking about capital goods, 55 00:05:34.640 --> 00:05:41.080 which is another way of indicating this important time element. 56 00:05:41.080 --> 00:05:46.480 The production process takes time, and over time you go through a number of stages. 57 00:05:46.480 --> 00:05:50.960 He didn't use the term stages, that's Hayek. 58 00:05:50.960 --> 00:05:56.680 But the point is the same, that the capital goods you put together, the things you do 59 00:05:56.680 --> 00:06:03.600 during the production period, determines the time profile of the output. 60 00:06:03.600 --> 00:06:10.920 And you want that time profile to match the preferences of consumers, all right? 61 00:06:10.920 --> 00:06:16.620 And so the heterogeneity of capital might give you a circumstance where halfway through 62 00:06:16.620 --> 00:06:21.140 Through the process, you see that you're not going to be able to complete, or it turns 63 00:06:21.140 --> 00:06:26.620 out to be unprofitable to get the remaining resources to complete the capital process. 64 00:06:26.620 --> 00:06:28.820 That's what gives you the downturn. 65 00:06:28.820 --> 00:06:33.940 So I don't see any inconsistency between the notion of the subsistence fund, understood 66 00:06:33.940 --> 00:06:42.940 as Mises did, and the heterogeneity of capital, and they're both in that slim 10-page span 67 00:06:42.940 --> 00:06:45.260 of theory of money and credit. 68 00:06:45.260 --> 00:06:48.860 That was two, subsistence fund and heterogeneity of capital, and the third one I mentioned 69 00:06:48.860 --> 00:06:52.500 is the relationship between saving and investment. 70 00:06:52.500 --> 00:06:57.260 If they're equal, and I'm putting this in more modern terms, S and I, saving and investment. 71 00:06:57.260 --> 00:07:00.340 If they're equal, you get sustainable growth. 72 00:07:00.340 --> 00:07:05.740 If savings is short of investment, you get unsustainable growth, which takes the form 73 00:07:05.740 --> 00:07:08.500 of the boom and bust, the business cycle. 74 00:07:08.500 --> 00:07:13.440 That's in theory of money and credit in those pages. 75 00:07:13.440 --> 00:07:17.520 The notion of a natural rate of interest, this comes from the Swedish economist Newton 76 00:07:17.520 --> 00:07:24.840 Vicksel, but it's critical to Austrian theory and is virtually ignored in macroeconomics 77 00:07:24.840 --> 00:07:26.400 today. 78 00:07:26.400 --> 00:07:31.320 Interest rate today is considered a policy tool, all right? 79 00:07:31.320 --> 00:07:40.600 But in the Austrian theory, it's an important price signal that allows entrepreneurs to 80 00:07:40.600 --> 00:07:44.240 to undertake projects that can actually be finished, 81 00:07:44.240 --> 00:07:47.800 because they have enough savings to work with and so on. 82 00:07:47.800 --> 00:07:49.640 So that comes into effect. 83 00:07:49.640 --> 00:07:54.040 In fact, I'm going to focus on that a little more 84 00:07:54.040 --> 00:07:57.560 after I get through the other couple of points. 85 00:07:58.840 --> 00:08:01.600 There was the understanding again from Newton Vicksell 86 00:08:01.600 --> 00:08:05.600 that interest rates can be pushed below their natural level 87 00:08:05.600 --> 00:08:07.680 by credit expansion. 88 00:08:07.680 --> 00:08:09.520 And in fact, that's what causes the trouble. 89 00:08:09.520 --> 00:08:15.780 that causes investment projects that, to be started, that are actually too long, given 90 00:08:15.780 --> 00:08:21.040 the willingness of people to save in the economy. 91 00:08:21.040 --> 00:08:25.400 So you can push the interest rate down, the market rate below the natural rate. 92 00:08:25.400 --> 00:08:26.400 That causes trouble. 93 00:08:26.400 --> 00:08:30.160 That causes a misallocation of resources. 94 00:08:30.160 --> 00:08:37.560 And my last point, number six, is that it inevitably ends in a bust, booms end in bust 95 00:08:37.560 --> 00:08:44.720 if they're triggered by credit expansion and a falsified interest rate where the market 96 00:08:44.720 --> 00:08:46.720 rates below the natural rate. 97 00:08:46.720 --> 00:08:52.360 If you have increased saving, you can get a boom, it's a genuine boom, it doesn't go 98 00:08:52.360 --> 00:08:58.040 bust, but a credit-induced boom does go bust. 99 00:08:58.040 --> 00:09:06.180 Now I want to look back then at several business cycles, booms and busts, starting with the 100 00:09:06.180 --> 00:09:10.060 The Great Depression, not going to spend much time on any of them, because we don't have 101 00:09:10.060 --> 00:09:20.060 that much time. But we'll see how it goes. And recognize, as Mises did, that the natural 102 00:09:20.060 --> 00:09:25.980 rate of interest can change. And there's a subjectivity in Mises, that the people have 103 00:09:25.980 --> 00:09:33.100 time preferences, that the demographics change, and that can cause the natural rate to rise 104 00:09:33.100 --> 00:09:56.100 to follow. Technological advancements can affect the natural rate of interest. If there's more opportunities to take advantage of, investors are willing to pay more to borrow and take advantage of them, believing, maybe correctly, that they will pay off in the future. So the natural rate of interest can change. 105 00:09:56.100 --> 00:10:11.600 One of the things Mises says, and maybe you have to be a little careful in reading it until you pick up exactly what he's saying, is that what's important is not whether the interest rate actually changes. 106 00:10:11.600 --> 00:10:24.100 Here I'm talking about the market rate, the rate governed, sort of, influenced by the Federal Reserve. It's not so important that it literally fell, what's important is whether it falls relative to the natural rate. 107 00:10:24.100 --> 00:10:36.700 All right? And this gives us several possible scenarios, all of which we can find examples of in the sequence of booms and busts. 108 00:10:36.700 --> 00:10:49.300 Let me start out with the simple one, and that would be what I think of as the public choice view from the Buchanan-Tullock School. 109 00:10:49.300 --> 00:10:57.300 and it corresponds to a book by Buchanan and Wagner called Democracy and Deficits and so on. 110 00:10:57.300 --> 00:11:02.300 In that book they acknowledge an Austrian style business cycle. 111 00:11:02.300 --> 00:11:07.300 And this is an instance where the natural rate doesn't change. It doesn't have to change. Sometimes it doesn't. 112 00:11:07.300 --> 00:11:11.300 You have a natural rate that is what it is and it stays that way for a while. 113 00:11:11.300 --> 00:11:17.300 Well, that reflects people's subjective preferences about consuming now and consuming later. 114 00:11:17.300 --> 00:11:35.300 But now suppose that the Federal Reserve starts pumping money in, drives the interest rates down, and does it, and here it's public choice, for political reasons, for political advantage, for winning elections, right? 115 00:11:35.300 --> 00:11:46.300 Well that certainly causes the business cycle in sort of standard form, that's the easiest application of the business cycle, and it corresponds to episodes in history where, for instance, 116 00:11:46.300 --> 00:12:03.300 In this instance, Arthur Burns helped Richard Nixon get re-elected by goosing up the money supply and dealing with the aftermath post-election. 117 00:12:03.300 --> 00:12:15.300 Or for another one, Alan Greenspan helped Bill Clinton get re-elected in 1996 by doing the same sort of thing. 118 00:12:15.300 --> 00:12:35.300 I might add that we think about this theory when we think of Alan Greenspan in 1992, I guess it was, 1990, you tell me the year, who didn't help George Herbert Walker Bush get re-elected, and Bush hasn't forgiven him yet. 119 00:12:35.300 --> 00:12:53.300 Okay, but those instances where you can or you might be able to help or you refuse to help or whatever, we can understand in terms of relationship between the rate of interest on the market and the natural rate of interest that doesn't have that Federal Reserve influence. 120 00:12:53.300 --> 00:13:03.700 Other episodes come to our attention where technology, enhancements in technology are important. 121 00:13:03.700 --> 00:13:11.700 And here I think both of the 1920s, tremendous decade, it was a wonderful place, a wonderful time to be alive. 122 00:13:11.700 --> 00:13:18.700 I wasn't, I mean, you know, it would have been a good time to have been alive. 123 00:13:18.700 --> 00:13:22.700 A lot of technological innovations, lots of great profit opportunities. 124 00:13:22.700 --> 00:13:33.500 Increase in the demand for credit would cause the interest rate to rise to take advantage of the technological advancements. 125 00:13:33.500 --> 00:13:43.400 But they could actually take advantage of them only to the extent that the increased interest rates brought forth more saving, you see. 126 00:13:43.400 --> 00:13:52.000 Now, things didn't quite work out that way because the Fed, guess what, accommodated the increased demand for credit. 127 00:13:52.000 --> 00:13:57.120 In fact, that's what they took to be their mission. We accommodate the demand for credit. 128 00:13:57.120 --> 00:14:03.680 Which means that the interest rates didn't change, didn't change, all right, when they should have. 129 00:14:03.680 --> 00:14:09.680 So there's an instance where the rate of interest was held below a natural rate, 130 00:14:09.680 --> 00:14:13.840 which had just risen because of the technological innovations. 131 00:14:13.840 --> 00:14:23.840 This is a particularly significant episode in my own view because several years ago I had some 132 00:14:23.840 --> 00:14:32.120 give-and-take by mail with Milton Friedman after I'd published an article critical of some of his 133 00:14:32.120 --> 00:14:37.800 stuff, critical of his so-called plucking model. If you've ever heard of that, I won't go into it. 134 00:14:37.800 --> 00:14:45.360 But I used the business cycle theory to base my criticism on. 135 00:14:45.360 --> 00:14:50.120 And he wrote back, we wrote back and forth a few times, but he wrote and said, and actually 136 00:14:50.120 --> 00:14:54.040 sent me a printout of interest rates during the 20s. 137 00:14:54.040 --> 00:14:56.240 He says, what are you talking about? 138 00:14:56.240 --> 00:14:58.880 The interest rates didn't change. 139 00:14:58.880 --> 00:14:59.880 They didn't change. 140 00:14:59.880 --> 00:15:03.440 They can't, nothing can depend on the interest rate. 141 00:15:03.440 --> 00:15:07.200 We can't explain anything in terms of interest rate because it didn't change. 142 00:15:07.200 --> 00:15:14.520 And of course, Friedman, first and foremost, is an econometrician. He's empirically oriented 143 00:15:14.520 --> 00:15:21.160 to the hilt, all right? And all of you, all of you, I don't know, have studied econometrics, 144 00:15:21.160 --> 00:15:25.640 some of you, most of you, I don't know. A lot of you have studied econometrics. And 145 00:15:25.640 --> 00:15:32.800 you know that if an independent variable doesn't change, you might as well not put it in the 146 00:15:32.800 --> 00:15:41.640 And so that's why interest rates weren't seen as being particularly important. 147 00:15:41.640 --> 00:15:45.040 For the Austrians, they were important. 148 00:15:45.040 --> 00:15:52.800 In fact, Hayek described that particular instance as, in terms of the job of the economist, 149 00:15:52.800 --> 00:15:58.720 he said the job of the economist is to look for aspects of the economy that are hidden 150 00:15:58.720 --> 00:16:00.280 from the untrained eye. 151 00:16:00.280 --> 00:16:08.280 In other words, you have to see that the factors were there to cause demand for credit to rise and hence the interest rate to rise, but it didn't. 152 00:16:08.280 --> 00:16:13.280 Why not? Because of the accommodation. What does that cause? Guess what? Boom and bust. 153 00:16:13.280 --> 00:16:23.280 Called the Great Depression, which was made a whole lot worse, of course, by all the ways the government tried to deal with the Depression. 154 00:16:23.280 --> 00:16:36.280 Similar boom and bust was during the dot-com era. The dot-com boom was triggered in large part by technological innovation. 155 00:16:36.280 --> 00:16:46.280 And so we got the same kind of a replay there. We got increased demand for credit and accommodation by the central bank. 156 00:16:46.280 --> 00:16:52.280 The interest rates not changing particularly much, but still gave us boom and bust. 157 00:16:52.280 --> 00:17:03.280 Now, I'd like to mention those two episodes, I could mention others, but mention them to give you a stark comparison with the recent crisis. 158 00:17:03.280 --> 00:17:14.280 And recognize that, say, the dot-com boom and bust, or the technology during the 20s, those were real and positive aspects of the economy. 159 00:17:14.280 --> 00:17:20.440 economy. That actually gave us some real growth, and the Federal Reserve just caused an artificial 160 00:17:20.440 --> 00:17:26.320 boom to piggyback on top of that growth. But we had some real growth there that we can 161 00:17:26.320 --> 00:17:34.880 make use of when we had to deal with the bust. Not so in the last crisis, because once again 162 00:17:34.880 --> 00:17:40.760 the Fed was piggybacking on something else going on, but what was going on was a misallocation 163 00:17:40.760 --> 00:17:47.080 of Resources in the Housing Market, which was not a wealth-enhancing situation. 164 00:17:47.080 --> 00:17:52.160 It was not a real positive development, a very negative development. 165 00:17:52.160 --> 00:17:57.280 And then look at it in terms of interest rates. 166 00:17:57.280 --> 00:18:01.800 And here we could go beyond Mises because he wouldn't have imagined such a thing in 167 00:18:01.800 --> 00:18:10.740 1912, but there's other ways that interest rates can be lowered other than the Fed. 168 00:18:10.740 --> 00:18:15.620 And one of those ways is what we call risk externalization. 169 00:18:15.620 --> 00:18:23.100 In other words, if the federal government in some way takes the risk away from a certain 170 00:18:23.100 --> 00:18:30.260 kind of lending, let's say in housing markets, then it stimulates the housing industry. 171 00:18:30.260 --> 00:18:35.780 You have what looks like a low interest rate, but it's simply an interest rate stripped 172 00:18:35.780 --> 00:18:38.620 of its risks. 173 00:18:38.620 --> 00:18:40.860 And the federal government is pretty powerful that way. 174 00:18:40.860 --> 00:18:45.400 They can't actually shunt that risk off into the Atlantic Ocean. 175 00:18:45.400 --> 00:18:47.820 If they could, we'd all be better off. 176 00:18:47.820 --> 00:18:51.980 But they can externalize it and hide it as they did. 177 00:18:51.980 --> 00:18:59.500 And of course the culprits here are Fannie Mae, Freddie Mac, and Barney Frank. 178 00:18:59.500 --> 00:19:01.580 And there's your risk externalization. 179 00:19:01.580 --> 00:19:04.500 Now does this get the Federal Reserve off the hook? 180 00:19:04.500 --> 00:19:06.740 Well, not really. 181 00:19:06.740 --> 00:19:14.420 Because had the Fed not chimed in with its own expansion, then any extra borrowing in 182 00:19:14.420 --> 00:19:18.140 the housing market would have had to come at the expense of loanable funds in other 183 00:19:18.140 --> 00:19:26.340 parts of the economy, where loans would be more scarce there because they'd gone to 184 00:19:26.340 --> 00:19:28.060 housing. 185 00:19:28.060 --> 00:19:34.140 But the Federal Reserve did kick in, but now instead of offsetting an increasing interest 186 00:19:34.140 --> 00:19:38.660 Interest Rate, it compounded a falling interest rate. 187 00:19:38.660 --> 00:19:41.700 And that's how you got the interest rate, or you didn't do it. 188 00:19:41.700 --> 00:19:51.540 That's how the Fed got the interest rate down to 1% in 2003 and 2004, a period that almost 189 00:19:51.540 --> 00:19:57.980 every economist of every stripe says that that interest rate was too low for too long. 190 00:19:57.980 --> 00:20:04.620 And Anna Schwartz, a monetarist, who tends not to look at interest rates, said that. 191 00:20:04.620 --> 00:20:09.420 So the monetarists, at least at that point, started paying a little bit of attention to 192 00:20:09.420 --> 00:20:12.980 interest rates. 193 00:20:12.980 --> 00:20:17.900 Now look at it in the post-bust era. 194 00:20:17.900 --> 00:20:20.820 One percent sounds kind of high these days, doesn't it? 195 00:20:20.820 --> 00:20:24.140 It's got it down to zero. 196 00:20:24.140 --> 00:20:27.900 And we have an understanding here based on this. 197 00:20:27.900 --> 00:20:34.700 of why this recession is so bad and why it takes so long to get out of it, because you 198 00:20:34.700 --> 00:20:42.460 have the distorted housing markets as a result of Fannie Mae and Freddie Mac, and you have 199 00:20:42.460 --> 00:20:50.020 the distorted credit markets as a result of infusion during that 2003-2004, and now you 200 00:20:50.020 --> 00:20:55.340 have further distorted credit markets because the Fed is holding the interest rate down 201 00:20:55.340 --> 00:21:07.340 the Fed Funds Rate, since December of 2008 and into the foreseeable future through 2013, according to Bernanke. 202 00:21:07.340 --> 00:21:17.340 So, all of this though, it's amazing, all of this can be deduced from Mises' Theory of Money and Credit. 203 00:21:17.340 --> 00:21:24.340 Those factors are all either there or implied in those pages by the interest rate. 204 00:21:24.340 --> 00:21:31.340 So let me leave you, though, with a warm feeling and a warm thought, is that look at the current situation. 205 00:21:31.340 --> 00:21:39.340 We have the interest rates at zero. People are saying the economy is picking up or whatever little. 206 00:21:39.340 --> 00:21:47.340 No, no, we're suffering from the recovery. The economy is on life support. 207 00:21:47.340 --> 00:21:53.980 If you have to have an interest rate of zero to get anything at all going, then the economy 208 00:21:53.980 --> 00:21:56.900 is on life support. 209 00:21:56.900 --> 00:22:02.020 In addition to that, you've got the Federal Reserve, which has expanded high-powered money 210 00:22:02.020 --> 00:22:09.300 so much that the reserves and the bank are astronomical. 211 00:22:09.300 --> 00:22:11.300 And in fact, have you all heard the term? 212 00:22:11.300 --> 00:22:14.060 I'm sure you have, you pay attention. 213 00:22:14.060 --> 00:22:17.620 They talk about Bernanke and his so-called exit strategy. 214 00:22:17.620 --> 00:22:21.380 It means, how is he going to get back all those reserves 215 00:22:21.380 --> 00:22:23.660 when the banks start expanding? 216 00:22:23.660 --> 00:22:26.380 And I've heard him say several times 217 00:22:26.380 --> 00:22:30.140 that he's confident in his exit strategy. 218 00:22:30.140 --> 00:22:34.660 And at a recent conference where several federal reserve bank 219 00:22:34.660 --> 00:22:36.900 presidents were, I asked one of them. 220 00:22:36.900 --> 00:22:40.420 I said, so we're in uncharted waters. 221 00:22:40.420 --> 00:22:42.140 The interest rate is zero. 222 00:22:42.140 --> 00:22:50.700 Reserves are astronomical. How is he confident in his exit strategy? And this president of one of the 223 00:22:50.700 --> 00:22:58.460 feds looked at me and he says, being confident is in his job description. He has to be confident. 224 00:22:59.100 --> 00:23:05.820 Okay, so I think we need to reword what he really means, that his strategy is to pretend to be 225 00:23:05.820 --> 00:23:12.820 Confident. And that's where we are today. Okay, thank you.