WEBVTT NOTE A Seminar on Money 1 00:00:00.000 --> 00:00:09.760 I think I have 45 or 50 minutes to talk to you about money. 2 00:00:09.760 --> 00:00:13.600 This is simply ridiculous, you know, it's impossible. 3 00:00:13.600 --> 00:00:22.280 Therefore, but on the other hand, you know already something about money, you know, even 4 00:00:22.280 --> 00:00:31.720 Sometimes there are disagreeable experiences with not sufficient quantities of money. 5 00:00:31.720 --> 00:00:40.380 And as we mentioned quantities, we approach already one of the problems, perhaps the most 6 00:00:40.380 --> 00:00:45.760 important problem from the practical point of view, the problem of the quantity of the 7 00:00:45.760 --> 00:00:48.080 supply of money. 8 00:00:48.080 --> 00:00:59.600 We are talking in economics about the supply, supply of useful things, supply of useful 9 00:00:59.600 --> 00:01:09.400 people, and so on, and then we are talking about the supply of money. 10 00:01:09.400 --> 00:01:17.800 The supply of money is something very different from the supply of other things, you know. 11 00:01:17.800 --> 00:01:25.680 The supply of shoes, the more shoes are available in the country, the smaller is the number 12 00:01:25.680 --> 00:01:29.960 of people who must do without shoes. 13 00:01:29.960 --> 00:01:34.840 And it's the same with most of the other useful things. 14 00:01:34.840 --> 00:01:43.520 But with money, it is something a little bit different. 15 00:01:43.520 --> 00:01:51.560 It's not true that the supply of money is something which you have to deal with as the 16 00:01:51.560 --> 00:01:53.760 supply of other things. 17 00:01:53.760 --> 00:02:03.720 The supply of money can be seen from the point of view of the whole economic system, it can 18 00:02:03.720 --> 00:02:05.720 be too large. 19 00:02:05.720 --> 00:02:13.880 While the individual and the whole society are in perfect agreement with regard to the 20 00:02:13.880 --> 00:02:23.040 supply of most other things, the problem of supply is not so simple as that when we are 21 00:02:23.040 --> 00:02:26.120 dealing with money. 22 00:02:26.120 --> 00:02:39.680 You hear every time I see somewhere printed the word, the supply of money, I have an uneasy 23 00:02:39.680 --> 00:02:40.680 feeling. 24 00:02:40.680 --> 00:02:49.180 Because increasing the supply of money in the economic system, the total supply of money 25 00:02:49.180 --> 00:02:59.340 is something quite different from increasing the supply of commodities. 26 00:02:59.340 --> 00:03:14.300 Therefore, those books and lectures in which one talks about the supply of money and in 27 00:03:14.300 --> 00:03:34.300 In which people are discussing the problem that the annual supply of money should be increased by 3% or 5% or some other percentage, these discussions are misleading. 28 00:03:34.300 --> 00:03:48.300 They are misleading because they are leading directly to one of the most critical problems, to the problem of inflation. 29 00:03:48.300 --> 00:03:52.300 What does it mean, inflation? 30 00:03:52.300 --> 00:04:08.780 We know that most of the useful things, most of the useful commodities are not available 31 00:04:08.780 --> 00:04:19.020 in quantities which would make it possible for everybody to enjoy as much of them as he 32 00:04:19.020 --> 00:04:20.020 wants. 33 00:04:20.020 --> 00:04:34.420 And we know that it is a very beneficial thing to be a man who increases the quantity, the 34 00:04:34.420 --> 00:04:42.660 supply of useful things, whether these are shoes or books or something else, it is always 35 00:04:42.660 --> 00:04:51.460 The better that the supply should be increased, then the supply should decrease, but with 36 00:04:51.460 --> 00:04:57.540 money there is something different. 37 00:04:57.540 --> 00:05:15.460 As we have today a state of affairs in which the governments are in a position to increase 38 00:05:15.460 --> 00:05:23.340 the supply of money and they are doing it because this increasing of the supply of money 39 00:05:23.340 --> 00:05:36.660 on the part of one institution, group or factor, while all other factors must be satisfied 40 00:05:36.660 --> 00:05:45.180 with the money which they are getting on the market, because this increase brings about 41 00:05:45.180 --> 00:05:50.500 certain problems, let us say, the problem of inflation. 42 00:05:50.500 --> 00:06:07.700 I could try to deal with the problem from a right general standpoint, beginning with the 43 00:06:07.700 --> 00:06:19.940 most simple things and proceeding step by step to a system that implies all the essential 44 00:06:19.940 --> 00:06:34.340 This would not be a job for, I think, 45 minutes, I don't know, perhaps 48 minutes. 45 00:06:34.340 --> 00:06:49.900 Therefore, I want to start with the most important, practically most important problem, the problem 46 00:06:49.900 --> 00:06:52.420 of inflation. 47 00:06:52.420 --> 00:07:01.340 As conditions are, as we have today in most of the countries of the world, almost in all 48 00:07:01.340 --> 00:07:12.220 of Countries of the World. The Governments are in a position to increase the quantity 49 00:07:12.220 --> 00:07:31.300 of money and they are making use of this power. The Government, let us say, wants to spend 50 00:07:31.300 --> 00:07:46.900 People don't pay taxes with great enthusiasm and the government doesn't like a nation 51 00:07:46.900 --> 00:07:52.360 that has little enthusiasm for the activities of the government. 52 00:07:52.360 --> 00:08:05.880 And therefore the governments want to find a method of spending which does not burden 53 00:08:05.880 --> 00:08:06.880 the individuals. 54 00:08:06.880 --> 00:08:22.520 The governments want to appear as institutions that are giving, while in fact they cannot 55 00:08:22.520 --> 00:08:33.320 give if they had not first taken away, and taking away by taxes is not very popular. 56 00:08:33.320 --> 00:08:37.280 And therefore the governments are increasing the quantity of money. 57 00:08:37.280 --> 00:08:44.100 Let us take the following situation, the typical situation. 58 00:08:44.100 --> 00:08:54.080 The government wants to spend more than it did spent up to yesterday. 59 00:08:54.080 --> 00:09:05.240 But it doesn't want to tax more or it simply cannot, by political reasons, it cannot tax 60 00:09:05.240 --> 00:09:06.240 more. 61 00:09:06.240 --> 00:09:20.240 It cannot also borrow the money because the conditions under which such a borrowing could 62 00:09:20.240 --> 00:09:27.960 take place are considered from the point of view as unsatisfactory, but when the government 63 00:09:27.960 --> 00:09:38.200 does something which is familiar to everybody, the government increases the quantity of money. 64 00:09:38.200 --> 00:09:55.160 This is a very cheap prospectus in the world in which paper money is legal tender. 65 00:09:55.160 --> 00:10:08.040 The governments and the writers for the government make fun of the fact that the nations of the 66 00:10:08.040 --> 00:10:27.120 in the world consider gold as money and they try to say a lot of things against the gold 67 00:10:27.120 --> 00:10:37.280 standard only that they have no valid arguments against the gold standard because the gold 68 00:10:37.280 --> 00:10:45.240 The gold standard works like the paper standard of the government works in a way which the 69 00:10:45.240 --> 00:10:48.600 government itself doesn't consider as satisfactory. 70 00:10:48.600 --> 00:10:55.160 Let us take the most practical case. 71 00:10:55.160 --> 00:11:02.920 The government wants to spend more and doesn't want to tax the people. 72 00:11:02.920 --> 00:11:12.920 The government wants to appear as Santa Claus. This is a very agreeable situation. It is 73 00:11:12.920 --> 00:11:21.920 a situation which is much more popular than the situation of a tax collector. And therefore 74 00:11:21.920 --> 00:11:31.920 the government does not tax the people in order to get the money for its new expenditure, 75 00:11:31.920 --> 00:11:47.520 But it prints it. This is very cheap, very cheap procedure. What happens now? If the government 76 00:11:47.520 --> 00:11:58.720 had collected the tax, the money it needs for some additional new expenditure, by taxing 77 00:11:58.720 --> 00:12:10.720 of the People, the taxpayers would have been forced to restrict their spending, their expenditure. 78 00:12:10.720 --> 00:12:19.000 They had therefore a definite quantity of money, the money which the government has taxed away 79 00:12:19.000 --> 00:12:29.640 would have disappeared from the hands of the people, of the citizens, and would have reappeared 80 00:12:29.640 --> 00:12:33.640 in the hands of the government. 81 00:12:33.640 --> 00:12:46.080 The people who had paid the taxes had been forced to restrict their expenditure, and 82 00:12:46.080 --> 00:13:01.080 The government has expanded its expenditure. It is not to be expected that the commodities 83 00:13:01.080 --> 00:13:10.640 which the government would have, which the government wants to distribute, directly or 84 00:13:10.640 --> 00:13:20.820 and Directly are the same which the citizens would have spent and therefore there appears 85 00:13:20.820 --> 00:13:28.820 some problems which we cannot deal with because we have only 45 minutes but what we have to 86 00:13:28.820 --> 00:13:41.900 realizes this, if the government taxes the people and the people are forced to restrict 87 00:13:41.900 --> 00:13:51.860 their expenditure, then the prices of certain commodities and services are necessarily dropping 88 00:13:51.860 --> 00:14:04.060 because there is a smaller demand for them than was before. 89 00:14:04.060 --> 00:14:10.380 On the other hand, the government appears now on the market with the money collected 90 00:14:10.380 --> 00:14:19.220 and the prices of those commodities and services which the government wants to buy and buys 91 00:14:19.220 --> 00:14:30.700 in order to spend certain things are going up. By and large, the average prices do not 92 00:14:30.700 --> 00:14:43.540 change. This is only an approximate statement but for our purposes it is sufficient. Therefore, 93 00:14:43.540 --> 00:14:50.100 The purchasing power of the monetary unit by and large remains the same. 94 00:14:50.100 --> 00:15:00.900 But if the government prints the additional money, the situation is quite different. 95 00:15:00.900 --> 00:15:09.340 This is the situation which people have in mind when they are speaking about inflation. 96 00:15:09.340 --> 00:15:19.220 The government appears on the market with a newly created quantity of money, created 97 00:15:19.220 --> 00:15:26.060 specially for this purpose, to buy. 98 00:15:26.060 --> 00:15:31.900 And the quantity of commodities and services didn't change. 99 00:15:31.900 --> 00:15:39.300 Therefore, the result of this government printing of additional money and spending this money 100 00:15:39.300 --> 00:16:01.060 Money on the market means a tendency for prices to go up, and there is a different situation 101 00:16:01.060 --> 00:16:02.060 now. 102 00:16:02.060 --> 00:16:08.820 If the government had taxed the people, the taxpayers would have been forced to restrict 103 00:16:08.820 --> 00:16:19.220 They are not forced to restrict their buying on the market immediately enough because the 104 00:16:19.220 --> 00:16:24.620 government didn't take away the money. 105 00:16:24.620 --> 00:16:32.700 And so we have now on the one hand higher prices paid by those people to whom the government 106 00:16:32.700 --> 00:16:33.700 gives the money. 107 00:16:33.700 --> 00:16:41.180 Let us assume that these are government employees. Certain government employees who do not discuss 108 00:16:41.180 --> 00:16:46.700 the problem, whether it was necessary or not necessary to improve their situation. This 109 00:16:46.700 --> 00:16:55.500 is quite a different thing. But the fact is that these government employees or people 110 00:16:55.500 --> 00:17:01.820 who are getting money from the government for some other reasons, that these people 111 00:17:01.820 --> 00:17:11.700 are now in a position to pay more, to offer higher prices on the market and there is nobody 112 00:17:11.700 --> 00:17:23.700 on the market who is forced to restrict this expenditure and whose behavior brings about 113 00:17:23.700 --> 00:17:33.420 without a drop in prices, and then this drop would be compensated by the opposite tendency 114 00:17:33.420 --> 00:17:38.340 emanating from the higher pay of the government. 115 00:17:38.340 --> 00:17:47.140 And this is the situation of inflation, and this is all the wisdom of the governments. 116 00:17:47.140 --> 00:17:57.180 I can say in all the periods of history, but in the period of history in which we are living. 117 00:17:57.180 --> 00:17:58.180 This is inflation. 118 00:17:58.180 --> 00:18:11.940 This is precisely this inflation, this is a word newly created when these things appear 119 00:18:11.940 --> 00:18:23.700 There is, from the point of view of government finance and public finance and general finance, 120 00:18:23.700 --> 00:18:35.740 there is no possibility to avoid a tendency to add higher prices when the quantity of 121 00:18:35.740 --> 00:18:39.140 money is increased. 122 00:18:39.140 --> 00:18:47.260 It could only be avoided if this increasing of the quantity of money were compensated by 123 00:18:47.260 --> 00:18:49.940 something else. 124 00:18:49.940 --> 00:19:11.740 For instance, in the 19th century, there happened several times that with improvement of geographical 125 00:19:11.740 --> 00:19:28.180 knowledge and the increase in traveling, the people discovered new sources of gold production. 126 00:19:28.180 --> 00:19:38.300 The gold production increased and for instance, in the middle of the 19th century, there was 127 00:19:38.300 --> 00:19:48.100 There was such an increase once in California and there was at another time such an increase 128 00:19:48.100 --> 00:19:59.300 in Australia for a definite period, a new quantity of gold above the regular yearly 129 00:19:59.300 --> 00:20:04.500 increase in the production of gold was flowing into the market. 130 00:20:04.500 --> 00:20:13.140 And this brought about higher prices, this was, if you want to call it inflation, we 131 00:20:13.140 --> 00:20:23.180 use another term in order not to confuse the things, but it brought about similar effects. 132 00:20:23.180 --> 00:20:32.420 That means the people who were happy enough to meet the first arrivals in California and 133 00:20:32.420 --> 00:20:42.860 I found that gold quantities, these people, they are appearing on the market with additional 134 00:20:42.860 --> 00:20:51.460 gold, new gold in this world, and they bought many things in a very short time. 135 00:20:51.460 --> 00:21:05.540 Some places in California who had been simply in the uncultivated zone became equipped with 136 00:21:05.540 --> 00:21:14.780 many things which in the west were known before. 137 00:21:14.780 --> 00:21:24.620 The people in these countries, in these districts of Australia and California had at that time 138 00:21:24.620 --> 00:21:39.620 a similar experience, similar to the conditions of inflation, but this was a limited problem. 139 00:21:39.620 --> 00:21:49.260 It was limited because the quantities, the additional quantities were very soon integrated 140 00:21:49.260 --> 00:21:56.580 into the whole system of monetary problems and there were no further increases in the 141 00:21:56.580 --> 00:21:57.580 quantity of money. 142 00:21:57.580 --> 00:22:04.980 But this is different if the increase in money is simply an effect of the printing on the 143 00:22:04.980 --> 00:22:07.500 part of the government. 144 00:22:07.500 --> 00:22:09.180 The government prints. 145 00:22:09.180 --> 00:22:17.100 The government may declare never again, but who is the government? 146 00:22:17.100 --> 00:22:21.060 In the best case, it's the present chief of the government. 147 00:22:21.060 --> 00:22:30.700 And tomorrow, there will perhaps be another man in the government, or the same man will 148 00:22:30.700 --> 00:22:35.140 say, I said this under different conditions. 149 00:22:35.140 --> 00:22:36.140 of Change. 150 00:22:36.140 --> 00:22:41.100 It seems now to be necessary to increase the quantity of money. 151 00:22:41.100 --> 00:22:42.500 Why? 152 00:22:42.500 --> 00:22:57.740 Because next month there are elections, and such in this way one must say. 153 00:22:57.740 --> 00:23:08.700 Some people tell us how silly to take this yellow metal as money and so on and so on. 154 00:23:08.700 --> 00:23:15.220 Why are you in favor of the gold standard, they say? 155 00:23:15.220 --> 00:23:26.300 My answer is because you who are asking this question, because you can print money, but 156 00:23:26.300 --> 00:23:39.620 The answer is the gold standard is an accident, a geological accident, I would say, that there 157 00:23:39.620 --> 00:23:47.500 is such a limited quantity only available that we can deal with it as much. 158 00:23:47.500 --> 00:23:56.820 Perhaps, I don't know it, nobody knows it, perhaps one day people will discover a method 159 00:23:56.820 --> 00:24:07.980 of producing gold out of nothing, out of not-gold, that is, saying, if this will happen, the 160 00:24:07.980 --> 00:24:13.380 people who will live at that time will have a problem today. 161 00:24:13.380 --> 00:24:25.060 But we today have another problem. Our problem is not to increase the quantity of money, not 162 00:24:25.060 --> 00:24:34.420 to make inflation. You know, inflation, this is like all... I don't want to say that 163 00:24:34.420 --> 00:24:44.660 Inflation is a bias, I don't take these methods of talking serious and so on, but seriously 164 00:24:44.660 --> 00:24:49.100 there is one thing with inflation. 165 00:24:49.100 --> 00:25:00.700 You cannot tell today, later or not, tomorrow or today after tomorrow, people in the government 166 00:25:00.700 --> 00:25:08.220 will not be prepared to inflate for some reason, they will have some excuse, they will say 167 00:25:08.220 --> 00:25:17.100 inflation is bad, never should be a question of inflation and then they say yes but we 168 00:25:17.100 --> 00:25:25.340 didn't take into account the conditions of an important war, really this is, they didn't 169 00:25:25.340 --> 00:25:31.900 And then, they are increasing the quantity of money. 170 00:25:31.900 --> 00:25:41.740 And then it happened again and again in the history that inflation was continued up to 171 00:25:41.740 --> 00:25:58.380 to the point in which the purchasing power of the monetary unit reached the zero point. 172 00:25:58.380 --> 00:26:09.900 This has nothing to do with the problem of the cause for which people did the inflation. 173 00:26:09.900 --> 00:26:22.580 Let us now talk about historical problems. It happened again and again in the history 174 00:26:22.580 --> 00:26:36.980 of mankind in the last 200 years, not earlier times, that people went inflating, that means 175 00:26:36.980 --> 00:26:48.180 In modern methods of inflation, that means imprinting paper money so far that they finally 176 00:26:48.180 --> 00:26:52.180 reach the zero point. 177 00:26:52.180 --> 00:26:57.780 This happened, for instance, with the so-called continental currency and the War of the American 178 00:26:57.780 --> 00:27:05.940 Revolution in 1781 and so on. 179 00:27:05.940 --> 00:27:14.660 It was a very desirable experience for some people, but don't forget, at that time, at 180 00:27:14.660 --> 00:27:25.100 the end of the 18th century, the people of America, the colonists of America, the colonists 181 00:27:25.100 --> 00:27:34.100 of the North American colonists that revolted against England, were an agricultural people. 182 00:27:34.100 --> 00:27:43.340 More or less everybody was connected with agriculture and he didn't buy the food, he didn't buy 183 00:27:43.340 --> 00:27:44.340 other things. 184 00:27:44.340 --> 00:27:52.900 The food, this is something that you ask to your wife, where is our food, if we had to, 185 00:27:52.900 --> 00:27:58.340 but it is not the problem of going to the market. 186 00:27:58.340 --> 00:28:06.580 And therefore the impression which this left and the whole problem was of minor importance 187 00:28:06.580 --> 00:28:15.620 only for the Americans at the end of the Revolutionary War. 188 00:28:15.620 --> 00:28:24.900 I mention it only because I assume that you are very well familiar with the financial 189 00:28:24.900 --> 00:28:33.900 History of the American Revolution. But it happened again and again in other countries. 190 00:28:33.900 --> 00:28:47.900 Later and later, at the time, when everybody, more or less, was living in money economy. 191 00:28:47.900 --> 00:29:04.980 and you should not believe that the whole thing is inflationary, that this is a vice of our 192 00:29:04.980 --> 00:29:22.140 There is a very bad general tendency of historians or pseudo-historians to ascribe all virtues 193 00:29:22.140 --> 00:29:31.060 to the past generations and all vices to those living today. 194 00:29:31.060 --> 00:29:43.020 I would be very unhappy if you were to believe that what I wanted to say is that all ages 195 00:29:43.020 --> 00:29:51.260 were very virtuous, but only since the invention of the printing press, they have developed 196 00:29:51.260 --> 00:29:52.260 a paper money. 197 00:29:52.260 --> 00:30:02.260 There were already inflationists in the ages, long, long before the printing press. 198 00:30:02.260 --> 00:30:09.260 I can't give you all historical examples. 199 00:30:09.260 --> 00:30:19.260 I want only to advise you if you want to study this problem. 200 00:30:19.260 --> 00:30:29.140 There are many important cities, also in the United States, but still more natural in Europe. 201 00:30:29.140 --> 00:30:40.740 There are historical museums in which you find the coins of the past collected and you 202 00:30:40.740 --> 00:30:47.340 can look at these coins from various points of view, mostly people look at it from the 203 00:30:47.340 --> 00:30:53.060 from the point of view of aesthetics, but you could also look at it from the point of 204 00:30:53.060 --> 00:30:59.740 view of the history of not of coins but of money. 205 00:30:59.740 --> 00:31:07.060 And then you will discover that for instance in the second century after Christ, the Roman 206 00:31:07.060 --> 00:31:16.460 emperors were already very efficient in making inflation, only, imagine, inflation of a very 207 00:31:16.460 --> 00:31:28.900 by different kind, which was not called inflation, developed only later, they didn't have the 208 00:31:28.900 --> 00:31:31.220 printing press. 209 00:31:31.220 --> 00:31:43.740 And people in general believe that most of the vices of mankind developed only with development 210 00:31:43.740 --> 00:31:51.140 of Modern Methods of Production. Now, the printing press is certainly a modern method, 211 00:31:51.140 --> 00:32:04.260 but the method of using money for such purposes as the inflationists of our days are using 212 00:32:04.260 --> 00:32:11.300 it was already known and practiced by the Roman emperors of the second century after 213 00:32:11.300 --> 00:32:24.700 only that they had other methods, they had only hard money, silver coins, and their method 214 00:32:24.700 --> 00:32:34.740 was, there was no question of printing, the question was of admixing a little bit copper 215 00:32:34.740 --> 00:32:45.740 to the silver and to more and more, and under the assumption that the people, that the masses, 216 00:32:45.740 --> 00:32:51.500 that the people will be stupid enough not to see it. 217 00:32:51.500 --> 00:32:59.740 At the beginning, really they didn't see it, but more and more and then the governments 218 00:32:59.740 --> 00:33:10.260 became more aggressive, let us say, and they took more and more copper and the colors changed. 219 00:33:10.260 --> 00:33:16.380 You know, when you add copper to silver, there's a tendency for the color to change a little 220 00:33:16.380 --> 00:33:17.380 bit. 221 00:33:17.380 --> 00:33:23.420 And this is some, this was too much for the people, you know. 222 00:33:23.420 --> 00:33:37.660 And you had this story of dealing with silver coins and mixing copper, you had this as a 223 00:33:37.660 --> 00:33:47.860 method of government finance even in the modern ages before the development of the printing 224 00:33:47.860 --> 00:33:53.100 press in the field of the production of money. 225 00:33:53.100 --> 00:34:09.580 What I want to say is, and this is, I think it must be known by everybody is this, increasing 226 00:34:09.580 --> 00:34:20.300 the quantity of money is not the same as increasing the quantity of money. 227 00:34:20.300 --> 00:34:30.300 Therefore, to use the term supply of money is already very dangerous, very dangerous. 228 00:34:30.300 --> 00:34:40.300 Because you have a lot of people who consider themselves as specialists in monetary problems, 229 00:34:40.300 --> 00:34:49.300 who are using this term supply of money and say, the supply of other things increases, 230 00:34:49.300 --> 00:34:53.300 Why should not the supply of money increase too? 231 00:34:53.300 --> 00:34:59.300 And there is one specialist says every year 2% 232 00:34:59.300 --> 00:35:05.300 Another specialist says every year 3% 233 00:35:05.300 --> 00:35:11.300 There is no limit to such progress 234 00:35:11.300 --> 00:35:17.300 And really we have professors who are discussing 235 00:35:17.300 --> 00:35:27.940 Should the yearly increase of money be 2% or 3% or 5% or what else? 236 00:35:27.940 --> 00:35:43.140 If the money is made by mortal men who have the great facility of a printing press, then 237 00:35:43.140 --> 00:35:57.780 And this is a very dangerous way of formulating the problems. 238 00:35:57.780 --> 00:36:10.580 Every kind of question dealing with the problem of the supply of money can be answered and 239 00:36:10.580 --> 00:36:17.980 is answered from the point of view of, from the personal point of view of the people who 240 00:36:17.980 --> 00:36:20.580 have to answer this. 241 00:36:20.580 --> 00:36:33.940 If people have debt, then they are in favor of what has been called a light monetary unit. 242 00:36:33.940 --> 00:36:47.460 If people are expecting that the additional quantities of money, the creation of which 243 00:36:47.460 --> 00:37:00.140 they are suggesting, will first come to the group of people to which they are belonging, 244 00:37:00.140 --> 00:37:20.540 It is absolutely out of question to leave the decision where the quantity of money should 245 00:37:20.540 --> 00:37:31.780 be increased by 1% or by 1000% to leave this to the people or to the government or to any 246 00:37:31.780 --> 00:37:34.420 specialist and so on. 247 00:37:34.420 --> 00:37:42.820 What this means has been again and again demonstrated by history. 248 00:37:42.820 --> 00:37:57.260 There were, if you look at the history of the last 50 years, you will find that in almost 249 00:37:57.260 --> 00:38:08.900 all countries of the world inflation went far beyond the proposals and ideas, even of 250 00:38:08.900 --> 00:38:31.900 If we want to have money, it must be something that cannot be increased with a profit by anybody, 251 00:38:31.900 --> 00:38:36.900 with the government or citizens and so on. 252 00:38:36.900 --> 00:38:50.900 And the worst faking of money, the worst things that were done to money, 253 00:38:50.900 --> 00:39:05.380 were not done by criminals, but it was done by governments, which by and large very often 254 00:39:05.380 --> 00:39:15.780 could be considered as ignoramuses, but not as criminals. 255 00:39:15.780 --> 00:39:36.820 We had the people who were living in the period of between 1900, that is 1920 and 1950, had 256 00:39:36.820 --> 00:39:46.580 A dozen times this experience in various countries of the world. 257 00:39:46.580 --> 00:40:05.220 People will say, oh, this may be the effect of bad monetary policies, but we are in favor 258 00:40:05.220 --> 00:40:22.740 The problem is not what a man who has no power and no influence and no possibility to increase 259 00:40:22.740 --> 00:40:31.700 the quantity of money or to derive any advantage from the increase of money may say. 260 00:40:31.700 --> 00:40:35.100 These people don't come. 261 00:40:35.100 --> 00:40:45.260 This is a pure theory, a very abstract theory if you say if I were the head of the government 262 00:40:45.260 --> 00:40:55.900 I would only increase every year the quantity of money by X percent, not more, only X percent 263 00:40:55.900 --> 00:41:00.220 and I will say three percent and not more. 264 00:41:00.220 --> 00:41:12.300 And what will you say if the people elected will add one percent today and the second 265 00:41:12.300 --> 00:41:15.700 percent tomorrow and so on? 266 00:41:15.700 --> 00:41:31.700 Specifically, we cannot have a system of money, which the decision is left to the people who derive.