WEBVTT NOTE Chapter 4: The Viability of the Gold Standard 1 00:00:00.000 --> 00:00:04.800 The Viability of the Gold Standard This speech was delivered at the Burton S. Blumberd 2 00:00:04.800 --> 00:00:10.080 Gold Conference at San Mateo, California, September 14, 2002. 3 00:00:10.080 --> 00:00:15.160 In the 19th century, notes Murray and Rothbard, debates on monetary issues were highly public 4 00:00:15.160 --> 00:00:16.640 and intensely controversial. 5 00:00:16.640 --> 00:00:22.040 Do you favor the national bank, the gold standard, bimetallism? 6 00:00:22.040 --> 00:00:24.640 What's your opinion of the free silver movement? 7 00:00:24.640 --> 00:00:29.200 What is the most important, the highly liquid money that can prop up commodity prices or 8 00:00:29.200 --> 00:00:33.680 Or a sound dollar that promotes thrift and discourages debt accumulation? 9 00:00:33.680 --> 00:00:37.500 Should the monetary system reward debtors or creditors? 10 00:00:37.500 --> 00:00:42.000 These were issues debated in the nation's newspapers, discussed in political meetings, 11 00:00:42.000 --> 00:00:44.080 and raged on in the streets. 12 00:00:44.080 --> 00:00:46.640 Every educated man had an opinion. 13 00:00:46.640 --> 00:00:50.440 Part of the reason is that frankly people were much better educated in those days. 14 00:00:50.440 --> 00:00:55.240 It is astonishing to imagine today that average people had the metal equipment to enable them 15 00:00:55.240 --> 00:01:04.080 The Federal Government had long been involved in money precisely because this is one of 16 00:01:04.080 --> 00:01:08.920 the first areas a government likes to get its grubby hands on when it takes power. 17 00:01:08.920 --> 00:01:13.320 The U.S. government was no exception despite constitutional provisions that it would appear 18 00:01:13.320 --> 00:01:16.200 to restrict its monetary power. 19 00:01:16.200 --> 00:01:17.680 Matters are radically different today. 20 00:01:17.680 --> 00:01:23.520 It is very rare to ever see an article addressing the money question in the nation's newspapers. 21 00:01:23.520 --> 00:01:27.600 Debates and discussions are left to the academic journals with the self-published tracts of 22 00:01:27.600 --> 00:01:32.520 money cranks, with the major exception of the Austrian economists who continue to believe 23 00:01:32.520 --> 00:01:37.900 that the money issue is both academically important and politically crucial. 24 00:01:37.900 --> 00:01:41.520 This is why the Mises Institute has been sponsoring research and writing on the gold standard 25 00:01:41.520 --> 00:01:47.780 and promoting an idea that most public intellectuals find absurdly anachronistic, that a gold standard 26 00:01:47.780 --> 00:01:50.600 is better than our current monetary system. 27 00:01:50.600 --> 00:01:55.020 What's more, we not only believe that the gold standard had a better record historically, 28 00:01:55.020 --> 00:02:00.840 we believe we ought to institute a gold standard right now. Even many libertarians find themselves 29 00:02:00.840 --> 00:02:06.840 mystified by our focus. Who cares about these arcane issues of monetary policy? What does 30 00:02:06.840 --> 00:02:12.120 it have to do with the fate of human liberty? Could we pick a policy agenda that is more 31 00:02:12.120 --> 00:02:17.680 unlikely to come about? Are we just gluttons for political failure? Why not trim our ambitions 32 00:02:17.680 --> 00:02:19.960 to Political Reality. 33 00:02:19.960 --> 00:02:24.360 It is true that not a soul in Washington, apart from our heroic congressman from Texas, Ron 34 00:02:24.360 --> 00:02:27.680 Paul, says a word about the gold standard. 35 00:02:27.680 --> 00:02:31.920 Even Alan Greenspan, who once wrote that freedom is inseparable from the gold standard, dreads 36 00:02:31.920 --> 00:02:33.960 being asked about the subject. 37 00:02:33.960 --> 00:02:37.960 To him it is entirely theoretical with no practical import. 38 00:02:37.960 --> 00:02:41.480 In any case, he doesn't want people looking too closely at the kinds of things he does 39 00:02:41.480 --> 00:02:47.120 at the Fed any more than the Wizard of Oz wanted anyone to pull back the curtain. 40 00:02:47.120 --> 00:02:51.560 Most economists have no interest in the issue. What's more, the most influential economist 41 00:02:51.560 --> 00:02:57.160 of the last century, John Maynard Keynes, hated the gold standard with astonishing intensity 42 00:02:57.160 --> 00:03:02.520 and he considered it his great accomplishment in life to have assisted in its destruction. 43 00:03:02.520 --> 00:03:06.860 Even to this day, his influence is immense, with most economists accepting the broad framework 44 00:03:06.860 --> 00:03:11.040 he laid out in his work and sharing his conviction that the worst thing that could befall any 45 00:03:11.040 --> 00:03:16.840 society is for the government to lose power to manage economic life. There are many objections 46 00:03:16.840 --> 00:03:34.840 Let me respond to the point about realism. There are a lot of policies which seem unrealistic to promote. We can admit that there is little prospect the post office will be privatized anytime soon. But that fact does not diminish our responsibility to push the idea. 47 00:03:34.840 --> 00:03:40.840 Nothing could be more obvious than admitting that private enterprise would do a better job of delivering letters than the government. 48 00:03:40.840 --> 00:03:47.840 But if no one says it, if people are not willing to state what is true again and again, all hope for change is lost. 49 00:03:47.840 --> 00:03:53.840 And sometimes, just stating what is true is enough to bring about change when conditions are ripe for it. 50 00:03:53.840 --> 00:04:02.840 In the debate on the post office, we have the added advantage of being able to point to a superior and very well-developed sector of private package and letter delivery. 51 00:04:02.840 --> 00:04:07.840 The reason it is thriving is due to loopholes in the law, which these companies exploit. 52 00:04:07.840 --> 00:04:15.840 If the letter statutes were repealed, I have no doubt that first class letters would be delivered by private enterprise within days. 53 00:04:15.840 --> 00:04:20.840 That is precisely why the post office is so anxious to hold on to its legal privilege. 54 00:04:20.840 --> 00:04:27.840 In any case, as with the gold standard, it might be said that advocating privatization is politically unrealistic and therefore a waste of time. 55 00:04:27.840 --> 00:04:35.840 What's more, we might say that by continuing to harp on the issue, we only marginalize ourselves, proving that, once again, we are on the fringe. 56 00:04:35.840 --> 00:04:42.840 Again, I submit that there is no better way to assure that an issue will always be off the table than to stop talking about it. 57 00:04:42.840 --> 00:04:45.840 This applies to the gold standard, too. 58 00:04:45.840 --> 00:04:50.840 The case for radical monetary reform is as obvious as the need to sell the post office. 59 00:04:50.840 --> 00:04:54.840 Every year or 18 months, the world goes through some sort of monetary convulsion. 60 00:04:54.840 --> 00:05:01.840 and Monetary Convulsion. In the last 10 years we've seen it in Mexico, all throughout Asia and now Latin America. 61 00:05:01.840 --> 00:05:09.840 To one degree or another there are few problems of international economics not traceable to the grave limitations of a world fiat money system. 62 00:05:09.840 --> 00:05:13.840 That includes the problem of the business cycle itself. 63 00:05:13.840 --> 00:05:18.840 In the 2001 and following economic downturn, unlike any I can remember, 64 00:05:18.840 --> 00:05:24.840 The Austrian theory of the trade cycle has received a fantastic amount of public commentary and attention. 65 00:05:24.840 --> 00:05:29.840 The core idea of this theory is that Fed-created credit is responsible for the boom and bust, 66 00:05:29.840 --> 00:05:35.840 and it has been embraced by top economists at some of the largest and most prestigious investment houses. 67 00:05:35.840 --> 00:05:40.840 The Mises Institute has done a fine job of getting the word out about the true cause of the business cycle, 68 00:05:40.840 --> 00:05:48.840 But the real reason it is getting such attention is that it provides such a compelling explanation of the 1990s bubble and the later crisis. 69 00:05:48.840 --> 00:05:57.840 Neither do most of these economists doubt that financial bubbles would not be a problem under the gold standard, even if they believe the gold standard introduces problems of its own. 70 00:05:57.840 --> 00:06:09.840 Far from being an arcane and anachronistic issue, then, we can see that the gold standard and the issues it raises get right to the heart of the current debate concerning the future of the world economy and its reform. 71 00:06:09.840 --> 00:06:18.840 What the critics who denounce gold are really saying is that the government and its friends don't like the idea of the gold standard, so therefore they are not going to favor one. 72 00:06:18.840 --> 00:06:22.840 Why do government and its partisans dislike the gold standard? 73 00:06:22.840 --> 00:06:30.840 It removes the discretionary power of the Fed by placing severe limits on the ability of the central bank to inflate the money supply. 74 00:06:30.840 --> 00:06:36.840 Without that discretionary power, the government has far fewer tools of central planning at its disposal. 75 00:06:36.840 --> 00:06:42.000 and its Disposal. Government can regulate, which is a function of the police power. It 76 00:06:42.000 --> 00:06:47.240 can tax, which involves taking people's property. And it can spend, which means redistributing 77 00:06:47.240 --> 00:06:51.960 other people's property. But its activities in the financial area are radically curbed. 78 00:06:51.960 --> 00:06:58.120 Think of your state and local governments. They tax and spend. They manipulate and intervene. 79 00:06:58.120 --> 00:07:02.240 As with all governments from the beginning of time, they generally retard social progress 80 00:07:02.240 --> 00:07:08.160 and muck things up as much as possible. What they do not do, however, is run huge deficits, 81 00:07:08.160 --> 00:07:13.320 accumulate trillions in debt, reduce the value of money, bail out foreign governments, provide 82 00:07:13.320 --> 00:07:18.720 endless credits to failing enterprises, administer hugely expensive and destructive social insurance 83 00:07:18.720 --> 00:07:24.240 schemes or bring about immense swings in business activity. State and local governments are 84 00:07:24.240 --> 00:07:29.040 awful and they must be relentlessly checked. They are not anything like the threat of the 85 00:07:29.040 --> 00:07:33.840 The federal government. Neither are they as arrogant and convinced of their own infallibility 86 00:07:33.840 --> 00:07:38.800 and indispensability. They lack the aura of invincibility that the central government 87 00:07:38.800 --> 00:07:43.620 enjoys. Why is this? You might say it is because the federal government already does 88 00:07:43.620 --> 00:07:48.240 these things, but no government has ever been troubled by the prospect of providing redundant 89 00:07:48.240 --> 00:07:53.620 services. You might say that state-level constitutions restrict their activities, but our experience 90 00:07:53.620 --> 00:07:57.400 with the federal government demonstrates that constitutions can't restrain a government 91 00:07:57.400 --> 00:08:02.100 by themselves. The main reason, I believe, is that the state and local governments do 92 00:08:02.100 --> 00:08:07.820 not issue their own currencies controlled by central banks. It is the central bank, 93 00:08:07.820 --> 00:08:11.940 and only the central bank, that works as the government's money machine, and this makes 94 00:08:11.940 --> 00:08:16.900 all the difference. Now, it is not impossible that a central bank can exist alongside a 95 00:08:16.900 --> 00:08:21.840 gold standard, a lender of last resort that avoids the temptation to destroy that which 96 00:08:21.840 --> 00:08:26.600 restrains it. In the same way, it is possible for someone with an insatiable appetite to 97 00:08:26.600 --> 00:08:31.240 to sit at a banquet table of delicious foods and not eat. 98 00:08:31.240 --> 00:08:35.000 Let's just say that the existence of a central bank introduces an occasion of sin for the 99 00:08:35.000 --> 00:08:36.240 government. 100 00:08:36.240 --> 00:08:40.320 That is why under the best gold standard, there would be no central bank, gold coins 101 00:08:40.320 --> 00:08:45.040 would circulate as freely as their substitutes, and rules against fraud and theft would prohibit 102 00:08:45.040 --> 00:08:49.060 banks from pyramiding credit on top of demand deposits. 103 00:08:49.060 --> 00:08:53.480 As long as we are constructing the perfect system, all coinage would be private. 104 00:08:53.480 --> 00:08:58.400 would be treated as businesses, no special privileges, no promises of bailouts, no subsidized 105 00:08:58.400 --> 00:09:02.720 insurance and no connection to government at any level. 106 00:09:02.720 --> 00:09:07.040 This is the free market system of monetary management, which means turning over the institution 107 00:09:07.040 --> 00:09:10.500 of money entirely to the market economy. 108 00:09:10.500 --> 00:09:15.180 As with any institution in a free society, it is not imposed from above, dictated by 109 00:09:15.180 --> 00:09:20.520 a group of experts, but is the de facto result that comes about in a society that consistently 110 00:09:20.520 --> 00:09:25.020 Money respects private property rights and encourages enterprises. 111 00:09:25.020 --> 00:09:29.620 Money is not something chosen by social managers, but the consequence of economic development 112 00:09:29.620 --> 00:09:33.800 as society moves from barter to indirect exchange. 113 00:09:33.800 --> 00:09:38.400 One commodity that is widely in demand comes to operate as a medium of exchange, a commodity 114 00:09:38.400 --> 00:09:42.580 for which any good or service can be traded with the expectation that this commodity will 115 00:09:42.580 --> 00:09:45.840 be demanded by others in future exchanges. 116 00:09:45.840 --> 00:09:52.080 Precious metals, gold in particular, have traditionally served as the money of choice. 117 00:09:52.080 --> 00:09:56.840 As Rothbard explained, the institutions we call banks serve a dual function in the free 118 00:09:56.840 --> 00:09:57.840 market system. 119 00:09:57.840 --> 00:10:02.160 First, they provide safekeeping for one's money and offer money substitutes that they 120 00:10:02.160 --> 00:10:06.000 certify really do represent money in the vault. 121 00:10:06.000 --> 00:10:09.680 And second, they provide credit services both to savers who would like to see money risked 122 00:10:09.680 --> 00:10:15.480 in the loan markets and to borrowers who need cash for purposes of consumption or investment. 123 00:10:15.480 --> 00:10:21.040 The banks work as brokers between these parties to affect mutually beneficial exchanges. 124 00:10:21.040 --> 00:10:26.320 If any market-chosen commodity can perform the function of money, why are we Austro-libertarians 125 00:10:26.320 --> 00:10:28.400 focused on gold? 126 00:10:28.400 --> 00:10:32.480 It is often said that we have an obsession with gold and a fixation on the subject of 127 00:10:32.480 --> 00:10:33.480 money. 128 00:10:33.480 --> 00:10:37.940 To some degree, however, this alleged obsession has been shared by popular culture and by 129 00:10:37.940 --> 00:10:43.320 financial markets as a continuing testimony to the power of the idea of gold as a guarantor 130 00:10:43.320 --> 00:10:45.200 of value. 131 00:10:45.200 --> 00:10:49.160 Whenever a writer wants to convey the idea that something sets the highest standard, he 132 00:10:49.160 --> 00:10:53.720 refers to it as the gold standard. I was amused the other day to read in the London Daily 133 00:10:53.720 --> 00:10:59.040 Telegraph an article on grade inflation in British schools in which the writer counterpoised 134 00:10:59.040 --> 00:11:04.080 the grading gold standard of the past. The metaphor seemed quite apt. 135 00:11:04.080 --> 00:11:08.420 As for financial markets, events this year have again underscored the underlying obsession, 136 00:11:08.420 --> 00:11:12.800 if you want to call it that, that the world's financial markets have with gold. It is not 137 00:11:12.800 --> 00:11:17.160 Not a coincidence that gold mining stocks were the best performing during the bust period 138 00:11:17.160 --> 00:11:18.960 of this business cycle. 139 00:11:18.960 --> 00:11:23.200 And earlier this summer we saw spot prices of gold begin to move very rapidly in response 140 00:11:23.200 --> 00:11:28.320 to the growing perception that the financial sector was far from bottoming out. 141 00:11:28.320 --> 00:11:33.120 Try as it might, the establishment just can't seem to crush the perception that gold is 142 00:11:33.120 --> 00:11:35.640 more reliable than government's paper money. 143 00:11:35.640 --> 00:11:40.300 Indeed, gold continues to be seen as a standard of soundness, as the commodity to free to 144 00:11:40.300 --> 00:12:03.300 Gold continues to be perceived as a safe haven from the wiles of political opportunism and violence. 145 00:12:03.300 --> 00:12:09.300 J. Bradford DeLong, former Assistant US Treasury Secretary, wrote the following just the other day. 146 00:12:09.300 --> 00:12:14.380 Eighty years ago, John Maynard Keynes argued that governments needed to take responsibility 147 00:12:14.380 --> 00:12:19.140 for maintaining full employment and price stability, that the pre-World War I gold standard 148 00:12:19.140 --> 00:12:23.260 had not been the golden age people thought it was, and that its successes were the result 149 00:12:23.260 --> 00:12:29.300 of a lucky combination of circumstances unlikely to be repeated. Keynes was an optimist in believing 150 00:12:29.300 --> 00:12:33.540 that government could learn to manage the business cycle. 151 00:12:33.540 --> 00:12:37.860 DeLong continues to point out that the record of post-gold currencies has been a disaster 152 00:12:37.860 --> 00:13:07.860 In this respect, fiat currency is much in common with socialism. They both failed to live up to their promises, and indeed failed miserably by every standard, but they both long outlived their failures simply because political elites had too much invested in them to change the system, and the intellectual class worked overtime to shore up support for the failed system. Eventually, of course, full-blown socialism collapsed, just as I believe that fiat currency systems will. 153 00:13:07.860 --> 00:13:12.620 is written. It might be thought that the mix of government and money is too far gone, too 154 00:13:12.620 --> 00:13:18.060 pervasive in the economic system, too inextricably bound up in the economy to be eliminated without 155 00:13:18.060 --> 00:13:24.820 economic destruction. In truth, taking back our money would be relatively simple and straightforward, 156 00:13:24.820 --> 00:13:29.780 much less difficult than the daunting task of denationalizing and decommunizing the communist 157 00:13:29.780 --> 00:13:35.220 countries of Eastern Europe and the former Soviet Union." And for all the reasons that 158 00:13:35.220 --> 00:13:39.620 The gold eventually emerges as the money of choice thousands of years ago. It continues 159 00:13:39.620 --> 00:13:45.620 to have the properties that make it the best money of choice today. It is portable, divisible, 160 00:13:45.620 --> 00:13:50.780 fungible, durable and has a high rate of value per unit of weight. It is compatible with 161 00:13:50.780 --> 00:13:55.940 today's economy, driven by information technology and lightning-quick financial transactions, 162 00:13:55.940 --> 00:14:00.740 as it was compatible with the 19th century economy of every industry and agriculture. 163 00:14:00.740 --> 00:14:05.020 It has not technical limitations that prevent the dollar from being redefined as a unit 164 00:14:05.020 --> 00:14:11.380 Weight of Gold, but political ones. The monetary benefits of a gold standard are clear enough 165 00:14:11.380 --> 00:14:15.860 and they include life without inflation, an end to the business cycle, rational economic 166 00:14:15.860 --> 00:14:21.480 calculation in accounting and international trade, an encouragement to savings and a dethroning 167 00:14:21.480 --> 00:14:26.720 of the government-connected financial elite. But it is also political considerations that 168 00:14:26.720 --> 00:14:31.860 draw people to support the gold standard. Gold limits the power of the state and puts 169 00:14:31.860 --> 00:14:38.700 Once you begin to understand the role of the monetary regime in the building of the modern 170 00:14:38.700 --> 00:14:44.020 statist enterprise, providing the means of funding for the entire welfare warfare state 171 00:14:44.020 --> 00:14:49.340 and generating financial instability and destroying savings and undermining living standards, 172 00:14:49.340 --> 00:14:53.860 you realize that there is far too little interest in the subject in the mainstream press. You 173 00:14:53.860 --> 00:14:59.580 begin to realize that the 19th century focus on the money issue was entirely appropriate. 174 00:14:59.580 --> 00:15:04.460 Once having read Mises or Rothbard or any number of great monetary theorists, you begin 175 00:15:04.460 --> 00:15:09.020 to realize that understanding the monetary regime is the key that unlocks the mysteries 176 00:15:09.020 --> 00:15:11.540 of political control in our time. 177 00:15:11.540 --> 00:15:15.580 The Fed was created not to scientifically manage the economy, as the journals claimed 178 00:15:15.580 --> 00:15:20.100 at the time, but because it met the institutional needs of both the government and the banking 179 00:15:20.100 --> 00:15:21.380 industry. 180 00:15:21.380 --> 00:15:25.360 The government sought a means of finance that didn't depend on taxation, and the banking 181 00:15:25.360 --> 00:15:36.360 The banking industry sought what Rothbard called a cartelization device. That is to say, the banking industry was seeking some way to prevent competitive pressures between banks from limiting their ability to expand credit. 182 00:15:36.360 --> 00:15:44.360 Well, the central bank fit the bill. A central bank managing a currency that is not tied to anything real fits the bill even better. 183 00:15:44.360 --> 00:15:51.360 If a little power to inflate is good for the government and its connected banking and financial interests, a lot of power to inflate is even better. 184 00:15:51.360 --> 00:16:11.360 The Power to Create Fiat Money is the most ominous power ever bestowed on any human being. 185 00:16:11.360 --> 00:16:15.520 The power is rightly criminalized when it is exercised by private individuals, and even 186 00:16:15.520 --> 00:16:19.520 today everybody knows why counterfeiting is wrong and naivish. 187 00:16:19.520 --> 00:16:49.520 Far fewer are aware of the role of the federal government, the Fed, and the fiat dollar in making possible the largest counterfeiting operation in human history, which is called the world dollar standard. Fewer still understand the connection between this officially sanctioned criminality and the business cycle, the rise and collapse of the stock market, and the continued erosion of the value of the dollar. In fact, a sizable percentage of even educated adults would be astounded to discover that the Federal Reserve does more than manage the nation's money accounts, 188 00:16:49.520 --> 00:16:54.200 In fact, its main activity consists in actually creating money that distorts production and 189 00:16:54.200 --> 00:16:58.360 creates inflation in the business cycle. In fact, I would go further to suggest that many 190 00:16:58.360 --> 00:17:02.840 educated adults believe that gold continues to serve as the ultimate backing of our monetary 191 00:17:02.840 --> 00:17:07.680 system. It would be astonished to discover that our money is backed by nothing but more 192 00:17:07.680 --> 00:17:13.980 of itself. We have our work cut out for us, to be sure, mainly at the educational level. 193 00:17:13.980 --> 00:17:18.680 We must continue to state the obvious at every opportunity. The fiat system is exactly what 194 00:17:18.680 --> 00:17:22.680 A system of paper money backed by nothing of real value. 195 00:17:22.680 --> 00:17:26.680 We must continue to point out, because of this, our economic system is not depression-proof, 196 00:17:26.680 --> 00:17:29.680 but rather highly vulnerable to complete meltdown. 197 00:17:29.680 --> 00:17:33.680 We must continue to draw attention to the only long-term solution, 198 00:17:33.680 --> 00:17:40.680 a complete separation of money and state based on the commodity that the market has always chosen as money, namely gold. 199 00:17:40.680 --> 00:17:45.680 Apart from making the intellectual case, the biggest obstacle we currently face 200 00:17:45.680 --> 00:17:56.680 is the most all theoretically viable plans for radical monetary reform depend heavily on those who are currently in charge of mismanaging our money as being the ones to manage a transition. 201 00:17:56.680 --> 00:18:03.680 In many ways this is akin to expecting the Poland Bureau to have instituted a free market economy in Russia before the Great Counter-Revolution. 202 00:18:03.680 --> 00:18:09.680 Can we really expect that Alan Greenspan is going to wake up one day and decide to do the right thing? 203 00:18:09.680 --> 00:18:12.680 It's possible, but I seriously doubt it. 204 00:18:12.680 --> 00:18:18.160 I recognize that this problem is a real one, but it is no different from the rest of the 205 00:18:18.160 --> 00:18:23.780 practical problems of instituting freedom. When we call for spending cuts, we are implicitly 206 00:18:23.780 --> 00:18:28.600 calling on Congress to do something that is against its self-interest. When we call for 207 00:18:28.600 --> 00:18:33.720 deregulating financial markets, we are expecting the SEC to do the very thing it is least likely 208 00:18:33.720 --> 00:18:39.520 to do from a bureaucratic pressure group perspective. When we call for sound money, we are similarly 209 00:18:39.520 --> 00:18:53.840 This takes us back to our original question. Is the gold standard history? Is it so preposterously 210 00:18:53.840 --> 00:18:58.800 unrealistic to advocate it that we might as well move on to other things? It won't surprise 211 00:18:58.800 --> 00:19:04.320 you that my answer is no. If there is one thing that a long-term view of politics teaches, 212 00:19:04.320 --> 00:19:34.320 Back in 1997-98, you were considered a crabby kook and behind the times to warn that the bull market and tech stocks could not last. But economic law intervened, and fashions changed. Back in those days, too, had you suggested that the business cycle had not been repealed, you would have been dismissed out of hand. But economic law intervened. In the same way, there will come a time when the current money and banking system, living off credit-creating 213 00:19:34.320 --> 00:19:41.200 by a fiat money system will be stretched beyond the limit when it happens attitudes will turn on a dime 214 00:19:41.840 --> 00:19:46.400 no advocate of the gold standard looks forward to the crisis nor to the human suffering that will 215 00:19:46.400 --> 00:19:51.920 come with it we do however look forward to the reassertion of economic law in the field of money 216 00:19:51.920 --> 00:19:57.600 and banking when it becomes incredibly obvious that something drastic must replace the current 217 00:19:57.600 --> 00:20:02.560 system new attention will be paid to the voices that have long cast dispersions on the current 218 00:20:02.560 --> 00:20:07.200 System and call for the restoration of sound money. 219 00:20:07.200 --> 00:20:11.200 Must a crisis lead to monetary reforms that we will like? 220 00:20:11.200 --> 00:20:17.120 Not necessarily, and for that matter, a crisis is not a necessary precursor to radical reform. 221 00:20:17.120 --> 00:20:22.480 As Mises himself used to emphasize, political history has no preordained course. 222 00:20:22.480 --> 00:20:26.520 Everything depends on the ideas that people hold about fundamental issues of human freedom 223 00:20:26.520 --> 00:20:28.600 and the place of government. 224 00:20:28.600 --> 00:20:33.260 Under the right conditions, I have no doubt that a gold standard can be completely restored 225 00:20:33.260 --> 00:20:39.480 no matter how unfavorable the current environment appears towards its restoration. 226 00:20:39.480 --> 00:20:44.260 What is essential for us today is to continue the research, the writing, the advocacy for 227 00:20:44.260 --> 00:20:48.760 some money, for a dollar that is as good as gold, for a monetary system that is separate 228 00:20:48.760 --> 00:20:49.760 from the state. 229 00:20:49.760 --> 00:20:54.720 It is a beautiful vision indeed, one of which the people and not the government and its 230 00:20:54.720 --> 00:20:59.780 and its connected interest groups maintain control of their money and its safekeeping. 231 00:20:59.780 --> 00:21:03.340 What has been true for hundreds of years remains true today. 232 00:21:03.340 --> 00:21:07.960 The clearest path to the restoration of economic health is the free market undergirded by a 233 00:21:07.960 --> 00:21:10.200 sound monetary system. 234 00:21:10.200 --> 00:21:14.960 The clearest path towards economic destruction is for us to stop working towards what is 235 00:21:14.960 --> 00:21:16.080 is right and true.