1
00:00:00,200 --> 00:00:02,300
Welcome to Keith's night. 
Don't tread on anyone and the 

2
00:00:02,300 --> 00:00:06,100
libertarian Institute. 
This is why the state demands 

3
00:00:06,100 --> 00:00:09,100
the control of money by Hans 
Hermann APA. 

4
00:00:09,500 --> 00:00:13,600
Imagine you are in command of 
the state defined as an 

5
00:00:13,600 --> 00:00:17,200
institution, that possesses a 
territorial Monopoly of ultimate

6
00:00:17,200 --> 00:00:19,900
decision-making. 
In every case of conflict, 

7
00:00:19,900 --> 00:00:23,900
including conflicts involving 
the state, and its agents 

8
00:00:23,900 --> 00:00:26,500
itself. 
And by implication, the right to

9
00:00:26,500 --> 00:00:29,500
tax IE to unilaterally, 
determine the price. 

10
00:00:30,000 --> 00:00:33,600
That your subjects must pay for 
you to perform the task of 

11
00:00:33,600 --> 00:00:37,100
ultimate decision-making to act 
under these constraints or 

12
00:00:37,100 --> 00:00:39,500
rather. 
Lack of constraints is what 

13
00:00:39,500 --> 00:00:42,000
constitutes politics, and 
political action. 

14
00:00:42,000 --> 00:00:46,400
And it should be clear from the 
outset that politics then by its

15
00:00:46,400 --> 00:00:50,300
very nature. 
Always means Mischief, not from 

16
00:00:50,300 --> 00:00:53,000
your point of view, of course, 
but Mischief from the point of 

17
00:00:53,000 --> 00:00:56,600
view of those subject to your 
role as ultimate judge, 

18
00:00:56,600 --> 00:01:01,400
predictably, you will use your 
position to Rich yourself at 

19
00:01:01,400 --> 00:01:04,700
other peoples expense more 
specifically. 

20
00:01:04,900 --> 00:01:08,700
We can predict in particular 
with your attitude and policy, 

21
00:01:08,900 --> 00:01:12,500
vis-à-vis money. 
And banking will be assumed that

22
00:01:12,500 --> 00:01:16,600
you rule over our territory that
has developed beyond the stage 

23
00:01:16,800 --> 00:01:20,300
of a primitive barter economy. 
And we're a common medium of 

24
00:01:20,300 --> 00:01:22,700
exchange. 
Iea money is in. 

25
00:01:22,700 --> 00:01:26,400
Use first off, it is easy to see
why you would be particularly 

26
00:01:26,400 --> 00:01:31,400
interested in money and monetary
Affairs as State ruler, you can 

27
00:01:31,400 --> 00:01:35,400
in principle confiscate whatever
you want and provide yourself 

28
00:01:35,400 --> 00:01:40,000
with an unearned income but 
rather than confiscating various

29
00:01:40,000 --> 00:01:44,700
producer or non consumer goods, 
you will naturally prefer to 

30
00:01:44,700 --> 00:01:48,300
confiscate money because money 
as the most easily and widely 

31
00:01:48,500 --> 00:01:51,300
saleable and acceptable. 
Good of all allows you the 

32
00:01:51,300 --> 00:01:54,800
greatest freedom to spend your 
income as you like on the 

33
00:01:54,800 --> 00:01:58,300
greatest variety of goods. 
First and foremost, then the 

34
00:01:58,300 --> 00:02:02,400
taxes you impose on. 
Will be money taxes, whether our

35
00:02:02,408 --> 00:02:06,500
own property or income. 
You will want to maximize your 

36
00:02:06,500 --> 00:02:10,100
money tax revenues in this 
attempt. 

37
00:02:10,100 --> 00:02:13,000
However, you will quickly 
encounter some rather 

38
00:02:13,000 --> 00:02:16,200
intractable difficulties, 
eventually your attempts to 

39
00:02:16,200 --> 00:02:18,800
further, increase your tax 
income, will encounter 

40
00:02:18,900 --> 00:02:22,400
resistance in that higher tax 
rates will not lead to higher, 

41
00:02:22,400 --> 00:02:26,200
but lower tax, revenue your 
income your spending money 

42
00:02:26,300 --> 00:02:29,500
declines because producers 
burdened with increasingly 

43
00:02:29,500 --> 00:02:32,300
higher. 
Or tax rates simply produce less

44
00:02:32,700 --> 00:02:36,200
in this situation. 
You only have one other option 

45
00:02:36,200 --> 00:02:39,200
to further increase or at least 
maintain your current level of 

46
00:02:39,200 --> 00:02:41,800
spending by borrowing such 
funds. 

47
00:02:42,100 --> 00:02:44,100
And for you, you must go to 
Banks. 

48
00:02:44,400 --> 00:02:48,200
And hence, your special interest
also in Banks and the banking 

49
00:02:48,200 --> 00:02:50,700
industry. 
If you borrow money from banks, 

50
00:02:50,900 --> 00:02:54,400
these banks will automatically 
take an active interest in your 

51
00:02:54,400 --> 00:02:58,700
future well-being. 
They will want you to stay in 

52
00:02:58,700 --> 00:03:02,200
business, IE. 
They The state to go on its 

53
00:03:02,200 --> 00:03:06,600
exploitation business and since 
Banks tend to be major players 

54
00:03:06,600 --> 00:03:10,200
in society, such support is 
certainly beneficial to you. 

55
00:03:10,600 --> 00:03:14,200
On the other hand, as a -, if 
you borrow money from Banks, you

56
00:03:14,200 --> 00:03:18,000
are not only expected to pay 
your loan back, but to pay 

57
00:03:18,000 --> 00:03:22,500
interest on top. 
The question then that arises 

58
00:03:22,500 --> 00:03:26,700
for you as the ruler is, how can
I free myself of these two 

59
00:03:26,700 --> 00:03:31,100
constraints IE of tax resistance
in the form of falling tax 

60
00:03:31,100 --> 00:03:36,500
revenue and of the need to 
borrow from and pay interest to 

61
00:03:36,500 --> 00:03:38,700
Banks. 
It is not too difficult to see 

62
00:03:38,700 --> 00:03:40,700
what the ultimate solution to 
your problem is. 

63
00:03:40,700 --> 00:03:45,300
You can reach the desired, 
independence of taxpayers, and 

64
00:03:45,300 --> 00:03:50,300
tax payment and of banks, if 
only you establish yourself. 

65
00:03:50,800 --> 00:03:55,000
First, as a territorial 
monopolist of the production of 

66
00:03:55,000 --> 00:03:59,600
money on your territory. 
Only you are permitted to 

67
00:03:59,600 --> 00:04:02,800
produce money, but this is not 
sufficient, because as long as 

68
00:04:02,800 --> 00:04:06,300
money is a regular good, that 
must be expensively produced, 

69
00:04:06,600 --> 00:04:08,700
there is nothing in it for you 
except expenses, more 

70
00:04:08,700 --> 00:04:12,800
importantly, then you must use 
your Monopoly position in order 

71
00:04:12,800 --> 00:04:17,899
to lower the production cost and
the quality of money as close as

72
00:04:17,899 --> 00:04:23,200
possible to zero. 
Instead of costly quality money 

73
00:04:23,400 --> 00:04:26,200
such as gold, or silver, you 
must see to it. 

74
00:04:26,400 --> 00:04:30,100
That worthless pieces of paper 
can be produced at practically 

75
00:04:30,100 --> 00:04:35,100
zero cost will become money. 
Normally no one would accept 

76
00:04:35,100 --> 00:04:38,300
worthless pieces of paper as 
payment for anything pieces of 

77
00:04:38,300 --> 00:04:42,100
paper are acceptable as payment 
only insofar as they are titles 

78
00:04:42,400 --> 00:04:44,800
to something else. 
IE property titles. 

79
00:04:45,100 --> 00:04:49,100
In other words, then you must 
replace pieces of paper that 

80
00:04:49,100 --> 00:04:51,700
were titles, too. 
Running with pieces of paper 

81
00:04:51,900 --> 00:04:56,400
that are titles to nothing under
competitive conditions, IE. 

82
00:04:56,400 --> 00:05:00,300
If everyone were free to produce
money, a money that can be 

83
00:05:00,300 --> 00:05:03,400
produced at almost zero costs 
would be produced up to a 

84
00:05:03,400 --> 00:05:08,300
quantity Where marginal revenue 
equals marginal cost and because

85
00:05:08,300 --> 00:05:11,600
marginal cost is zero. 
The marginal revenue, IE, the 

86
00:05:11,600 --> 00:05:15,100
purchasing power of this money 
would be zero as well. 

87
00:05:15,200 --> 00:05:18,800
Hence, the necessity to 
monopolize the production of 

88
00:05:18,800 --> 00:05:22,800
paper money. 
So as to restrict its Supply in 

89
00:05:22,800 --> 00:05:26,200
order to avoid hyper 
inflationary conditions and The 

90
00:05:26,200 --> 00:05:31,300
Disappearance of money from the 
market altogether and a flight 

91
00:05:31,300 --> 00:05:36,000
into real values and the more, 
so the cheaper, the money 

92
00:05:36,000 --> 00:05:39,600
commodity in a way, you have 
this accomplished would all 

93
00:05:39,600 --> 00:05:43,200
Alchemists and their sponsors 
wanted to achieve, you have 

94
00:05:43,200 --> 00:05:47,200
produced something valuable 
money with purchasing power out 

95
00:05:47,200 --> 00:05:48,900
of something practically 
worthless. 

96
00:05:49,200 --> 00:05:51,200
What? 
Achievement it costs. 

97
00:05:51,200 --> 00:05:53,900
You practically nothing. 
And you can turn around and buy 

98
00:05:53,900 --> 00:05:56,800
yourself, something really 
valuable such as a house or a 

99
00:05:56,800 --> 00:05:59,700
Mercedes, and you can achieve 
these wonders. 

100
00:05:59,800 --> 00:06:02,500
Not just for yourself, but also 
for your friends and 

101
00:06:02,500 --> 00:06:06,300
acquaintances of which you 
discover that you have all of a 

102
00:06:06,308 --> 00:06:10,300
sudden far more than you used to
have, including many economists,

103
00:06:10,300 --> 00:06:14,600
who explain, why your Monopoly 
is really good for everyone. 

104
00:06:15,500 --> 00:06:18,500
What are the effects first and 
foremost more paper? 

105
00:06:18,500 --> 00:06:22,900
Money does not in the slightest 
effect, the quantity or quality 

106
00:06:23,100 --> 00:06:26,400
of all other non-monetary Goods 
there exists. 

107
00:06:26,400 --> 00:06:30,300
Just as many other Goods around 
as before this immediately 

108
00:06:30,300 --> 00:06:33,700
refutes the notion apparently 
held by most if not all 

109
00:06:33,900 --> 00:06:38,100
mainstream economists, that more
money can somehow increase, 

110
00:06:38,400 --> 00:06:42,300
social wealth to believe this as
everyone proposing, a so-called 

111
00:06:42,500 --> 00:06:45,100
easy money policy as an 
efficient. 

112
00:06:45,300 --> 00:06:48,600
And socially responsible way out
of economic troubles. 

113
00:06:48,800 --> 00:06:54,000
Apparently does is to believe in
magic that stones or rather 

114
00:06:54,000 --> 00:06:59,600
paper can be turned into bread. 
Rather what the additional money

115
00:06:59,600 --> 00:07:03,000
you printed will affect is 
twofold on one hand. 

116
00:07:03,100 --> 00:07:07,500
Money prices will be higher than
they would otherwise be and the 

117
00:07:07,500 --> 00:07:11,600
purchasing power per unit of 
money will be lower in a word. 

118
00:07:11,600 --> 00:07:15,400
The result will be inflation 
more importantly, however, /. 

119
00:07:15,500 --> 00:07:18,800
All the while the greater amount
of money does not increase or 

120
00:07:18,800 --> 00:07:22,100
decrease, the total amount of 
precisely existing social 

121
00:07:22,100 --> 00:07:26,300
wealth, the total quantity of 
all goods and Society. 

122
00:07:26,400 --> 00:07:31,000
It redistributes the existing 
wealth in favor of you and your 

123
00:07:31,000 --> 00:07:35,800
friends and acquaintances, IE 
those who get your money first, 

124
00:07:36,200 --> 00:07:39,500
you and your friends are 
relatively enriched on a larger 

125
00:07:39,500 --> 00:07:43,800
part of the total social wealth 
at the expense of impoverishing 

126
00:07:43,800 --> 00:07:49,900
others who as Result on less the
problem for you and your friends

127
00:07:50,000 --> 00:07:53,000
with this institutional setup. 
It's not that it doesn't work. 

128
00:07:53,100 --> 00:07:56,000
It works perfectly. 
Always to your own and your 

129
00:07:56,000 --> 00:07:59,400
friends advantage and always at 
the expense of others. 

130
00:07:59,800 --> 00:08:04,400
All you have to do is to avoid 
hyperinflation for, in that 

131
00:08:04,400 --> 00:08:07,600
case, people would avoid using 
money and flee into real values.

132
00:08:07,600 --> 00:08:10,300
Thus robbing you of your magic 
wand. 

133
00:08:10,600 --> 00:08:13,700
The problem with your paper 
money Monopoly, if there is one 

134
00:08:13,700 --> 00:08:18,000
at all is only Lie that this 
fact will be immediately noticed

135
00:08:18,100 --> 00:08:22,700
also by others and recognized as
a big criminal, rip off that it 

136
00:08:22,700 --> 00:08:26,300
indeed is. 
But this problem can be overcome

137
00:08:26,300 --> 00:08:29,900
to if in addition to 
monopolizing the production of 

138
00:08:29,900 --> 00:08:34,400
money, you also set yourself up 
as a banker and enter the 

139
00:08:34,400 --> 00:08:37,799
banking business with the 
establishment of a central bank 

140
00:08:38,600 --> 00:08:41,700
because you can create paper 
money out of thin air. 

141
00:08:41,799 --> 00:08:44,600
You can also create credit out 
of thin air. 

142
00:08:44,600 --> 00:08:47,200
In fact. 
Because you can create credit 

143
00:08:47,200 --> 00:08:50,400
out of nothing, without any 
savings on your part. 

144
00:08:50,400 --> 00:08:54,000
You can offer loans at cheaper 
rates than anyone else. 

145
00:08:54,400 --> 00:08:59,000
Even at an interest rate as low 
as zero, or even a negative 

146
00:08:59,000 --> 00:09:00,600
rate. 
With this ability. 

147
00:09:00,900 --> 00:09:03,700
Not only is your former 
dependency on Banks and the 

148
00:09:03,700 --> 00:09:07,700
banking industry eliminated. 
You can moreover make Banks 

149
00:09:07,700 --> 00:09:13,000
dependent on you and you can 
forge a permanent Alliance and 

150
00:09:13,000 --> 00:09:17,700
complicity between Banks. 
And state, you don't even have 

151
00:09:17,700 --> 00:09:19,500
to become involved in the 
business of investing. 

152
00:09:19,500 --> 00:09:23,200
The credit yourself that task 
and the risk involved in it. 

153
00:09:23,200 --> 00:09:25,400
You can safely leave it to 
commercial Banks. 

154
00:09:25,400 --> 00:09:31,200
What you your Central Bank need 
to do is only this you create 

155
00:09:31,200 --> 00:09:36,800
credit and of thin air and then 
loan this money at below Market 

156
00:09:36,800 --> 00:09:40,500
interest rates to commercial 
Banks, instead of you paying 

157
00:09:40,500 --> 00:09:44,900
interest to the Banks Banks, now
pay interest to you and the 

158
00:09:44,900 --> 00:09:47,100
bank. 
Intern loan, out your newly 

159
00:09:47,100 --> 00:09:51,400
created easy credit to their 
business friends at somewhat 

160
00:09:51,400 --> 00:09:55,500
higher but still sub Market 
interest rates to earn from the 

161
00:09:55,700 --> 00:09:59,300
interest differential. 
In addition to make the banks, 

162
00:09:59,300 --> 00:10:01,200
especially keen on working with 
you. 

163
00:10:01,400 --> 00:10:04,800
You may permit the banks to 
create a certain amount of their

164
00:10:04,800 --> 00:10:08,300
own new credits of checkbook 
money in addition. 

165
00:10:08,900 --> 00:10:12,900
And on top of the credit that 
you have created fractional 

166
00:10:12,900 --> 00:10:16,500
Reserve banking. 
What are the consequences of 

167
00:10:16,500 --> 00:10:19,500
this monetary policy to a large 
extent? 

168
00:10:19,500 --> 00:10:23,300
They are the same as with an 
easy money policy. 

169
00:10:23,300 --> 00:10:26,500
First and easy credit policy is 
also, inflationary. 

170
00:10:26,600 --> 00:10:29,600
More money is brought into 
circulation and prices will be 

171
00:10:29,600 --> 00:10:34,000
higher and the purchasing power 
of money lower than would have 

172
00:10:34,000 --> 00:10:36,500
been the case. 
Otherwise s, the credit 

173
00:10:36,500 --> 00:10:41,300
expansion to has no effect on 
the quantity or quality of all 

174
00:10:41,300 --> 00:10:43,200
Goods. 
Currently in existence. 

175
00:10:43,400 --> 00:10:47,000
It neither increases. 
Nor decreases their amount. 

176
00:10:47,100 --> 00:10:50,200
More money is just this more 
paper. 

177
00:10:50,500 --> 00:10:53,800
It does not and cannot increase 
social wealth one. 

178
00:10:53,800 --> 00:11:00,400
Iota, third easy credit. 
Also in dangers, a systematic 

179
00:11:00,400 --> 00:11:04,600
redistribution of social wealth.
In favor of you, the central 

180
00:11:04,600 --> 00:11:10,200
bank and the commercial Banks 
within your cartel, you receive 

181
00:11:10,200 --> 00:11:14,600
an interest return on money that
you have created at practically.

182
00:11:14,800 --> 00:11:20,600
Zero cost out of thin air 
instead of on money costly saved

183
00:11:20,700 --> 00:11:25,400
out of an existing income. 
And so do the banks who earn 

184
00:11:25,400 --> 00:11:30,600
additional interest on your 
Costless money loans, but you 

185
00:11:30,600 --> 00:11:34,800
and your Banker friends there by
appropriate and unearned income 

186
00:11:35,000 --> 00:11:38,700
you and the banks are enriched 
at the expense of all real 

187
00:11:38,700 --> 00:11:43,700
money, savers who receive a 
lower interest return than they 

188
00:11:43,700 --> 00:11:48,500
otherwise would IE without the 
injection of your, and the 

189
00:11:48,500 --> 00:11:52,200
bank's cheap credit. 
And to the credit Market, on the

190
00:11:52,200 --> 00:11:55,400
other hand, there also exists a 
fundamental difference between 

191
00:11:55,400 --> 00:11:59,400
easy, print and spend money 
policy and an easy print and 

192
00:11:59,400 --> 00:12:03,200
Loan credit policy. 
First off, an easy credit policy

193
00:12:03,200 --> 00:12:07,400
changes, the production 
structure, what is produced? 

194
00:12:07,400 --> 00:12:12,700
And by whom in a highly 
significant way, you the chief 

195
00:12:12,700 --> 00:12:16,100
of the central bank can create 
credit out of thin air. 

196
00:12:16,600 --> 00:12:20,300
You do not have to first save 
money out of your money income. 

197
00:12:20,300 --> 00:12:24,900
IE cut your own expenses and 
thus abstain from buying certain

198
00:12:25,000 --> 00:12:29,300
non money Goods as every normal 
person must if he extends credit

199
00:12:29,300 --> 00:12:33,300
to someone, you only have to 
turn on the printing press and 

200
00:12:33,300 --> 00:12:35,900
can thus undercut any interest 
rate. 

201
00:12:36,000 --> 00:12:40,200
Demanded of borrowers, by Savers
elsewhere in the market granting

202
00:12:40,200 --> 00:12:44,300
credit does not involve any 
sacrifice on your part, which is

203
00:12:44,300 --> 00:12:48,000
why this Institution is so nice.
If things then go. 

204
00:12:48,000 --> 00:12:52,400
Well, you will be paid a 
positive interest return on your

205
00:12:52,400 --> 00:12:56,500
paper investment. 
And if they don't go well, well 

206
00:12:56,500 --> 00:12:59,800
as the Monopoly producer of 
money, you can always make up 

207
00:12:59,800 --> 00:13:03,600
the losses more easily than 
anyone else by covering your 

208
00:13:03,600 --> 00:13:06,800
losses with even more printed 
paper. 

209
00:13:08,000 --> 00:13:11,400
Without costs and no genuine 
personal risk of losses. 

210
00:13:11,700 --> 00:13:15,200
Then you can grant credit 
essentially indiscriminately to 

211
00:13:15,200 --> 00:13:18,500
everyone and for any purpose 
without concern for the credit 

212
00:13:18,500 --> 00:13:22,500
worthiness of the debtor or the 
soundness of his business plan 

213
00:13:22,800 --> 00:13:26,000
because of your easy credit 
certain people in particular 

214
00:13:26,000 --> 00:13:29,800
investment bankers who otherwise
would not be deemed sufficiently

215
00:13:29,800 --> 00:13:33,700
creditworthy and certain 
projects in particular of Banks 

216
00:13:34,100 --> 00:13:37,000
and their main clients. 
That would not be considered 

217
00:13:37,000 --> 00:13:39,500
profitable. 
But wasteful or too risky 

218
00:13:39,800 --> 00:13:43,800
instead do get credit, and get 
funded. 

219
00:13:44,700 --> 00:13:48,500
Essentially the same applies to 
the commercial Banks within your

220
00:13:48,500 --> 00:13:52,200
banking cartel because of their 
special relationship to you. 

221
00:13:52,400 --> 00:13:56,500
As the first recipients of your 
Costless low-interest paper, 

222
00:13:56,600 --> 00:14:00,400
money credit, the banks to can 
offer loans to prospective 

223
00:14:00,400 --> 00:14:04,300
lenders at interest rates below,
Market interest rates. 

224
00:14:04,500 --> 00:14:07,000
And if things go well for them, 
they go. 

225
00:14:07,000 --> 00:14:09,100
Well. 
And if they don't, they can rely

226
00:14:09,100 --> 00:14:13,000
on you as the monopolistic 
producer of money to bail them 

227
00:14:13,000 --> 00:14:17,100
out in the same way as you 
bailed yourself, out of any 

228
00:14:17,100 --> 00:14:21,400
financial trouble by more paper 
money accordingly. 

229
00:14:21,400 --> 00:14:25,100
The banks to will be less 
discriminating in the selection 

230
00:14:25,100 --> 00:14:29,300
of their clients and their 
business plans and more prone to

231
00:14:29,300 --> 00:14:33,400
funding the wrong people and the
wrong projects. 

232
00:14:34,700 --> 00:14:38,500
And there is a second 
significant difference between a

233
00:14:38,500 --> 00:14:43,000
print and spend and a print and 
loan policy and this difference 

234
00:14:43,100 --> 00:14:47,100
explains why the income and 
wealth redistribution in your 

235
00:14:47,200 --> 00:14:50,800
and your Bankers friends favor 
that is set in motion by easy 

236
00:14:50,800 --> 00:14:56,600
credit takes these specific form
of a temporal boom-bust cycle. 

237
00:14:56,800 --> 00:15:00,500
IE of an initial phase of 
seeming General prosperity of 

238
00:15:00,500 --> 00:15:03,900
expected increases in future 
incomes and wealth. 

239
00:15:04,100 --> 00:15:07,300
Followed by a phase of 
widespread impoverishment when 

240
00:15:07,300 --> 00:15:10,500
the prosperity of the boom, 
period is revealed as a 

241
00:15:10,500 --> 00:15:14,500
widespread illusion. 
This boom-bust feature is the 

242
00:15:14,500 --> 00:15:17,700
logical and physically, 
necessary consequence of credit 

243
00:15:17,700 --> 00:15:22,100
created out of thin air of 
credit on backed by Savings of 

244
00:15:22,200 --> 00:15:25,600
fiduciary credit or however 
else, you may call it. 

245
00:15:25,900 --> 00:15:30,700
And of the fact that every 
investment takes time and only 

246
00:15:30,700 --> 00:15:33,900
shows later on at some time in 
the future. 

247
00:15:34,000 --> 00:15:37,000
ER, whether it's successful or 
not. 

248
00:15:38,100 --> 00:15:42,900
The reason for the business 
cycle is as Elementary as it is 

249
00:15:42,900 --> 00:15:48,000
fundamental Robinson, Caruso can
give a loan of fish, which he 

250
00:15:48,000 --> 00:15:52,300
has not consumed to Friday. 
Friday, can convert these 

251
00:15:52,300 --> 00:15:55,900
savings into a fishing net. 
He can eat the fish while 

252
00:15:55,900 --> 00:16:00,900
constructing the net, and with 
the help of the net, then Friday

253
00:16:01,600 --> 00:16:06,300
in principle is capable of 
Paying his loan to Robinson plus

254
00:16:06,300 --> 00:16:09,600
interest, and still can earn a 
profit of additional fish for 

255
00:16:09,600 --> 00:16:12,300
himself. 
But this is physically 

256
00:16:12,300 --> 00:16:15,500
impossible. 
If Robinson's loan is only a 

257
00:16:15,500 --> 00:16:21,300
paper, note denominated in fish,
but unbanked by real fish 

258
00:16:21,300 --> 00:16:24,500
savings. 
IE, if Robinson has no fish 

259
00:16:24,600 --> 00:16:28,800
because he has consumed them 
all, then, and necessarily. 

260
00:16:28,800 --> 00:16:32,100
So Friday must fail in his 
investment. 

261
00:16:32,100 --> 00:16:35,200
Endeavor in a simple barter. 
Our economy, of course, this 

262
00:16:35,200 --> 00:16:38,300
becomes immediately apparent. 
Friday will not accept 

263
00:16:38,300 --> 00:16:42,000
Robinson's paper Credit in the 
first place, but only real 

264
00:16:42,000 --> 00:16:46,000
commodity credit and because of 
this, the boom-bust cycle will 

265
00:16:46,000 --> 00:16:51,000
not get started but in a complex
monetary economy, the fact that 

266
00:16:51,000 --> 00:16:55,400
credit was created out of thin 
air is not noticeable. 

267
00:16:55,800 --> 00:17:00,300
Every credit note looks like any
other and because of this the 

268
00:17:00,300 --> 00:17:03,800
notes are accepted by the takers
of credit. 

269
00:17:05,000 --> 00:17:07,900
This does not change. 
The fundamental fact of reality 

270
00:17:08,000 --> 00:17:11,400
that nothing can be produced out
of nothing and that investment 

271
00:17:11,400 --> 00:17:15,800
projects undertaken without any 
real funding whatsoever by 

272
00:17:15,800 --> 00:17:20,200
savings must fail, but it 
explains why a boom, an increase

273
00:17:20,200 --> 00:17:24,400
in level of investment 
accompanied by the expectation 

274
00:17:24,599 --> 00:17:28,099
of higher future income and 
wealth can get started. 

275
00:17:28,099 --> 00:17:31,500
Friday does except the note 
instead of immediately refusing 

276
00:17:31,500 --> 00:17:34,200
it and it explains. 
Why? 

277
00:17:34,400 --> 00:17:38,400
Then takes a while until the 
physical reality reasserts 

278
00:17:38,400 --> 00:17:42,600
itself and reveals such 
expectations as illusory. 

279
00:17:43,300 --> 00:17:45,300
But what's a little crisis to 
you? 

280
00:17:45,600 --> 00:17:49,100
Even if your path to riches is 
through repeated, crises brought

281
00:17:49,100 --> 00:17:53,100
about by your paper money regime
and Central Bank policies from 

282
00:17:53,100 --> 00:17:56,100
your point of view from the 
Viewpoint as the head of state, 

283
00:17:56,100 --> 00:17:59,800
and chief of Central Bank. 
This form of print and Loan 

284
00:18:00,100 --> 00:18:03,100
wealth, redistribution in your 
own and your Banker friends 

285
00:18:03,100 --> 00:18:05,900
favor. 
Well, Less immediate than that 

286
00:18:05,900 --> 00:18:09,900
achieved with a simple print and
spend policy is still much 

287
00:18:09,900 --> 00:18:14,000
preferable because it is far 
more difficult to see through 

288
00:18:14,200 --> 00:18:18,200
and recognized for what it is 
rather than coming across as a 

289
00:18:18,200 --> 00:18:22,500
plane's Roddenberry site in 
pursuing an easy credit policy. 

290
00:18:22,700 --> 00:18:27,200
You can even pretend that you 
are engaged in the selfless task

291
00:18:27,200 --> 00:18:30,800
of investing in the future. 
Rather than spending, on present

292
00:18:30,900 --> 00:18:34,200
for evil, T's, and healing 
economic. 

293
00:18:34,300 --> 00:18:38,000
Crises rather than causing them.
What a world. 

294
00:18:38,000 --> 00:18:39,600
We live in. 
Thank you for watching Keith 

295
00:18:39,600 --> 00:18:41,000
Knight. 
Don't tread on anyone in the 

296
00:18:41,000 --> 00:18:42,500
libertarian Institute.