limitations. more than we have had. and the right thing is to live with that. . .

and the country behind them wanted the agency to do if you look carefully again that president obama's speech today you will see that he is basically arguing that more of the covert action responsibility should be shifted to the military under title x the authorization of which the military openly takes action rather than being title 50 covert action for example why not have special operations forces training the syrian rebels? they don't need to be paramilitary officers. it's ridiculous. so, i think that is the desire the president has made a proposal today or talked about a way of doing that. i think it makes our partners nervous and that is what's holding it up. if you need more detail, read my

column tomorrow. finally on the question jim is a friend of mine and i tried to hire him at the "washington post" years ago and i' i am sory to say that he said no but he is a fine reporter and a very brave person and i just hope the supreme court will respect in the discussion of whether journalists have a special privilege to resist the subpoena is a very complicated one in the world where essentially everybody is a journalist. everybody with a computer. how am i different from you? do we all have a privilege to say to pick and choose which grand jury subpoena has respect? because we all have the right to publish now so it is a tough one and it's almost a box i don't want the courts to open because when you get inside of that box i fear that there will be a

statement. there is no privilege. you are no different than anyone else but on the specific question absolutely it shouldn't be compelled to reveal the sources. >> this is one of the few times i think that we can go on for hours. we don't have that much time but when i look around the room i see friends like david bradley, judge webster meeting at the watergate. we have the makings of a great novel right here and we could have a lot of fun, but i do think we have been going back and forth between contemporary political issues that are happening in real-time and we see the president and the legislator trying to th to diall of powerdown various powers and how it works in the world of intelligence and both of you have written beautifully about how things go wrong.

we think about intelligence and the power in that sector but it is how things can get screwed up and i think that you are helping us have a debate through these novels that makes the discussion much healthier than it would otherwise be. so i want to thank you for joining us today. we have the book blowback and the director both out there in the lobby. are you going to be able to have a glass of wine &-and-sign a few bucks? i want to thank everyone for joining us today. an audible conversations an audible conversations

steve forbes and elizabeth trace the current economic troubles to the ending of the gold standard in the 1970s and discuss with the weak u.s. dollar means for the global economy and call for the return to the gold standard to help stabilize the economy. coming up next on booktv. we are very privileged to have with us this evening it very recognizable figure in the media and business world. steve forbes is of course editor-in-chief of the forbes magazine the nation's leading

business magazine and he has headed a media company that includes not only asian and european editions that a number of properties focused on politics, sports and financial markets. many of you will also remember steve's spiritesteve's spiritedr the republican presidential nomination. among other things the flat tax with the new social security system and medical savings accounts, term limits and a strong national defense steve comes to us as an author that isn't a new role for him and has written or cowritten five previous books. money and how the destruction of the dollar threatens the global economy and what we can do about it is every bit as an emphatic,

reason and as the earlier works. anyone familiar with his free-market libertarian views will not be surprised to read his criticisms of the central banks and existing on the kerry policies with the fed one winding down its monarchy did using he sees the moment to rethink the mind of monetary system and to ensure the soundest currency by returning to the gold standard. he writes in the book freeing up the dollars was supposed to make the united states is stronger. insteastronger. instead it has made the country weaker. something has to be done. to explain what needs to be done along with steve's co-author elizabeth ames who is the communications executive is steve forbes. [applause]

>> thank you very much and all of you for coming out. as brad indicated the book is about money, monetary policy, and the monetary policy is one of those topics that seems to intimidate a lot of people for some strange reason and as a result, the federal reserve for example has less oversight from capitol hill and congress then our intelligence agencies and the thesis of the book is number one the topic of money is very straightforward and simple even though it is shrouded with a lot of inclusion be idea of money is very basic. we've gotten away from it and our policymakers today know less about money and monetary policy than they did 100 years ago and since the early 1970s even though we had a booming decades

in the 80s and 90s, overall our growth rate since we went off the system of the old gold standard in 1971 the u.s. average growth rates are less than they were before 1971. and if we maintain that growth rate that we had for 180 years up to 1971 if we maintain that those after 1971 on average, the u.s. economy today would be 50% larger than it is now. 40 years compounding effect reverse compounding adds up to a locked. just to savor for a moment having 50% higher incomes, what it would mean for the deficit and what it would mean for social security, what will it mean for a lot of the social divisions today? overtime this adds up. it's a critical reason why it takes the two incomes and a family to do with one income could in previous generations.

taxes are a large part of it but since the early 70s it is a critical part of it as well and when this happens, when you don't have a stable currency, you end up with people not getting ahead of the way they should maintain income isn't growing the way they should and leading as my co-author will discuss in a few minutes the fraying of the social fabric the reduction of social trust and more divisions. and it is a process that not one in a million will be able to diagnose and so that's why we wrote the book. now since monetary policy doesn't usually get to the heart eating or flutter the way some of the reality shows do i will begin by giving you an advanced reward and that is to give you a travel tip. if you ever find yourself in an airplane in coach, middle seat

on the runway watching your life pass away and you want a little bit of elbow room starts talking about monetary policy. they will cut you. a wide birth. [laughter] since the 1970s the federal reserve has gotten more and more power, but the thing is the more power that it gets, the worse we are. you take the quantitative easing which i will discuss in a moment and even though they are now tapering the thing which is a good thing it ended up contracting the economy rather than stimulating the economy. in terms of money the thing to understand is that it's very basic. it makes transactions by ian and selling just how we prove our standard of living and how we access the by ian and selling

much easier. in the old days we had to barter which was very inefficient so let's say i sold an added forbes 3,000 years ago. how would i get paid? perhaps with a herd of goats. not being a little facetious here but say i wanted to buy ipad for the writers so i went to the apple store 3,000 years ago and the owner says i don't want goats i wanted sheets. so i have to figure out how to spot the goats for sheets. and maybe have to hire a sheep herder. he wants to be paid with wine. i have red wine and he wants white wine and it becomes very efficient. remember if we still have barter today trying to deposit a cow in an atm. it becomes very inefficient. so msn what money does most of the time it does not have intrinsic value unless you have

gold coins and the like but it makes the transactions easier and in that sense the money measures of value. that is all it does. it measures the value of the way that clocks measure time, scaled measures weight. because it represents value it makes the transactions easier and in that sense it is a form of communications that lets you know information to view all of the billions of transactions we do around the world each and every day. so, money in and of itself is not wealth, but it represents a claim on the products and services. think of it as you would a coat check that has no intrinsic value. but in a restaurant if you put your coat in the closet and get a coat check it represents a claim on the code. so the idea that creating money that represents products and services that have already been produced. this ithis would be if the ideat

as we stimulate the economy by printing up money to be like a restaurant saying that if we create more coat checks that will study late production of more coats. nowhere does not. it is a claim that represents the claim on a product or service of what money does. so money works best day has a fixed value. just like a clock has 60 minutes in an hour in action at the world would be like, what your daily life would be like if the federal reserve data to the clocks but it does to the dollar. imagine floating the clocks of you have 50 minutes in our one-day and 48 x. card 22 the next and 80 the next. you would soon have to have the hedges and derivatives to figure out how many hours you are working each day. let's say that you are beating a cake. bake the batter for 45 minutes you have to figure out is that inflation to be adjusted minutes, real minutes? it makes life much where

difficult. imagine what would happen if they change the number of inches and a foot. you are building a bridge and suddenly you realize it's 12 inches the foot is now 10 inches. imagine building a house it makes things much more chaotic. so it works best when it has a fixed value and then the question becomes what is the best way to do it. and even though it is absolutely out of fashion still in the economics profession, the way that it works in this country for the first 180 years of existence as you fix it to the gold. more than anything else in the world gold keeps its intrinsic value. every hour that has been mined is still in the world today. it's been pointed out that perhaps the gold ring that you are wearing the answer can raines going back to the egyptian pharaohs and egyptian times you can't be story it. it's hard to make the plot too

hard. you don't get the california gold rush that is one of the biggest ever. only increase the annual supply of three or 4% and then taper back to the average one and a half or 2% so unlike me, you don't get the drought or things like that. you don't have to worry about the storage or mice eating the e gold so whether you would freeze it or heat it up, you can't be story it. it gets very unique properties is withstood the test of time for 4,000 years. people think if you mentioned gold doegold does that mean we o have gold claims? he have to have 100% backing in all of that? think of it as you would the ruler. it is a fixed measure of value so let's say that we take six to $1,200 per ounce.

all that would mean is that if it went above 1200 in the marketplace that means the fed is creating too much money so that creates less money so if it goes below 1200 u. have to create a little or money so it's like the marketplace determine the needs of what is needed terms of money so if you have a vibrant economy you are going to create more money. you don't have to own an ounce of gold to do it. it's the gold standard with a little amount of gold but they knew what they were doing. world war i blasted that and a lot of other things. so gold in that sense like the ruler, the fac fact that a miles 5,280 feet doesn't restrict the number of highway that you built. so at a cocktail party to show how brilliant you are from the time of the existence.

the population increased 2540 and we went from the small nation to be industrial nation in the world. during the period the time the amount wound up only three and a half old. gold make sure the valu the vals fixed and does not restrict the supply. you have a vibrant economy and these are the needs of the marketplace. you have a stagnant economy. you don't create it, so it is very, very basic. when people lose sight of that, you end up having what we have had since 1971 when we go from one crisis to another and we had a terrible decade in the 70s ofs and it's semi-rated 80s and

90s. they will stimulate exports and that's how we got the housing bubble. anytime you undermine the integrity of the dollar, people go into the hard assets. they go into the last decade the average price was over $21 a barrel. what is it today. it's called pandering. [laughter] tried it and politics. that's why i am peddling books now. [laughter] but ac that in the 1970s, oil went from $3 a barrel in the last time we went off the rails to almost $40. everyone thought we were running out of oil and going to go up to

$100 then ronald reagan came in with paul folder they killed the terrible inflation and oil went crashing down to $10 a barrel and the average 20 to $25 a barrel. so it's like putting a virus in the computer if you don't trust less investment. that means more uncertainty which is why we have been stagnant dead in the water ir historic standards. the money represents value. gold is the best way to fix that value. but if we understand that we could move ahead and get back

the kind of growth rates we had before 1971 there are other things we have to do but experience shows us if we don't get the money right in terms of the fixed value you can get other things right to get the taxes right into the spending rate and regulations right if you don't get the money right it is going to undermine everything else because the basis of everything else, the basis of the transactions into trust and investment and because when it works we don't realize what makes it work. it's like air. when it' it's cleanly taken forr granted. when we have pollution by good, a year is important for a yes. so money is in the same way. and one aspect that gets overlooked as we always focus on economics and gdp and the like is social trust. we have a chapter that we are going to discuss for a few moments about how debasing money

undermines the fabric social fabric and in ways that go beyond simply the gdp numbers and exchange numbers. so i will call up elizabeth but one thing to keep in mind is when the money is stable in value, the brainpower goes to the productive youth. one example before 1971 when the kurds he didn't much fluctuate because it was fixed to gold very little currency trading. now currency trading is a huge activity all around the world. the daily volume over $3 trillion. tens of thousands focus on activity that wouldn't exist if we had a stable money that could be used for medical research and other productive things. so this has consequences that go beyond merely gdp and whatever

other acronyms they throw out. let me turn it over to my colleague. [applause] good evening. it's good to be here to talk about chapter five which is money and morality help to debase the society and people have found the chapter particularly thought-provoking and money. it starts out with the quote that steve mentioned from the economist john maynard keynes and i will read it in its entirety. lenin was certainly right there is no means of overturning the existing basis of society than to be botched the currency. the process engages all of the hidden forces of economic law on the site of destruction and it does it in a matter of which not one man and a million is able to

diagnose. and we say in the book that unstable money is a little bit like carbon monoxide and you don't know the damage that it's doing until it is too late and that is because people are not always aware when the government is weak in their currency and the only see the effect of that which is one reason why debasing the money is so corrosive and people say that it's about greed but in fact it's about trust. money prevent strangers from all nations and societies and walks of life to come together and conduct transactions based on the commonly agreed-upon nature of value. in this way it promotes cooperation between people and serves as an instrument of communication as well and tells us what a society values not just material that's what its priorities or so when the money is corrupt, its ability to act as a facilitator of trust and cooperation as corrupt as well. unstable money is the vital

relationship between the buyer and seller between the lender and the debt to the philosopher john locke described this fissure that is produced at the society's core and you've also probably heard this as well whether the creditor is forced to receive less ordered the data is forced to pay more than his contract, the damage and the injury is the same whenever a man is defrauded of his view and during the periods of unstable money ace particular scenario to unfold into the social unrest and increasingly coercive government and in the worst cases it can unleash the forces of extremism that can lead to the rise of dictators. they wrote a particularly good piece of describing this classic

scenario that has occurred throughout history and he points out that monetary has coincided not only with the persecution of pre- world war ii germany but also with the french revolution's reign of terror for at the salem witch trials and other bloody episodes in the centuries. but this kind of destruction off trust and unrest is not just a remote historical occurrence, it's taking place in many areas of the world today such as the middle east and europe, and into a certain extent, the u.s.. the analytic of south african investment advisory house has issued reports called riot alerts to predict the likely trouble spots and the firm has been able to forecast the unrest based on the monetary abuse and serious because 200% of hyperinflation tops the list in february of 2013 voted by argentina, south africa and

egypt. they had increasing food prices. the financial crisis was very much a betrayal of trust and then the fed pulled them out from borrowers and this led ultimately to the collapse of the financial excuse me, the wave of the foreclosures that led to the collapse of the financial institutions and triggered the market meltdown of 2008. there is a worldwide distraction of trust that ricocheted from one continent to the next in your bank failures and bailouts

shook the confidence of global investors hoping to bring on the sovereign debt crisis over there. and we all remember those days and i will read a quote from an economist who told "the new york times" in this day and age it's not around the block when it is under way it doesn't matter anymore. it's really about trust and this worldwide loss of trust very quickly turned to rage and protests in the ground sheets to the streets. in 2012 there was the pew research center that we cited in the book that says americans have been more polarized now than any other time in the past 20 years and what they basically said is most of the increased polarization has taken place not just in the last few years but during the presidency of george

bush and barack obama and both administrations were weak dollars in the administration. they've coincided with the weakening of the money. basically when the money is weak there is a sense of increasing unfairness of the system is rigged and that you are being defrauded. people on fixed income salaries either money-losing value while other people are reading what look like. they have a stronger connection can actually a stronger connection to crimes than joblessness. the crime rate in the u.s. dropped immediately after the financial crisis when there was

a serious deflation but they began to move up and 2010 the quantity that easing which is an interesting thing that we say in the book. both the left and right agree this is a period of the malays but we hope that the book helps to put aside some of th the finger-pointing that has been taking place in recent years and helped them recognize the role of the dollar as the catalyst into the corporate. thank you. [applause] so, we now come to the q-and-a as brad said if you could come up to the microphone if you have a question and if he will free ask away.

the concept of the stable money and so forth and i guess i would just ask this, why is it so many countries including the united states have dropped the gold standard and why is this sort of theory so unpopular and why is it that you mentioned the fact they said one in a million will correctly diagnose so that is a hint that there is a basic fundamental reason that it's hard for people to understand this and for other economists. why do you b. leave that they

are so relatively few economists that accept your proposal. the reason the gold standard lost the dominance that it has had in terms of intellectual circles was a result of two catastrophes. one was the first world war which began 100 years ago this year, destroyed the classical gold standard and after that war because the standard worked so well you. they would go to the prewar old chrysler switches to kill us if you double or cripple the trace is recommending that you have a catastrophe and that to the

revaluation. they didn't do it. the classical economists said that the real economy is the production of the products and services created the money economy is the symbol of products and services. he reversed that and said that money is the driver of the economy and its the production of products and services that respond to the money. so he put the cart before the horse. and so they got up with the idea that if you print up money that can stimulate the economy. it will certainly stimulate activity but all it does is going to activities that normally wouldn't have been like the legal boom that we had in the last ten years, the boom that we had in the 70s, the housing bubble that we had we had a surge in the 70s. it's not the catastrophe this

time because the government wasn't involved in it and it's like putting the virus on the computer. you get activity but it's false activity. agriculture went through a huge hit we grew in the 80s that a lot of activities that drive an false and funny moneearth falsed to be liquidated in the 80s. who knows if we get stable money and with false investments we have had out there. so there's world war i ended the great depression. but he knew why the depression came. it was like able out of the blue and they were desperate for solutions. we explain in the book that it was triggered by a hideous trade war that we had with the smoot-hawley terrace after we blew up the world trading system everyone retaliated. then every country made it worse by aggressively amazing to

raising taxes. the depression was ongoing in the u.s. and we raised the top income tax rate overnight from 25% to 63%. excise taxes which are the sort of sales tax were enacted on the numerous item and including a stamp tax on the checks if in the early 30s he wrote a check to pay the bill and you had to pay the tax to the government for using the check. so the tax increases came in the u.s. and britain and germany went to serve on the taxes so they say let's try funny money so they devalue the pound and numerous other countries and so one bad thing was done after the other. despite that experience we still got the gold standard after the wawar into brendan woods system designed in 1944, worked perfectly well but by then the idea of using monetary policy to

guide the economy and using the government to guide the economy was so prevalent. it was blown up gratuitously and we have been floundering ever since. as i mentioned the 80s and the '90s the gold average roughly $350 an ounce, it was -- it had fluctuations but give him a c+ for the monetary policy. so we got growth from it but it still wasn't what we would have done it in the early part of the last decade we went off the rails again and we still haven't dug ourselves out of that one to two catastrophes, world war i, great depression but now it is beginning to reverse below the radar screen but a growing number say they be this funny money which was tried before adam smith came along and he demolished the idea of funny money may be smith had it right maybe we should re-examine

things again so this is what the book is contributing to, getting back to the basics on money and getting the conversation going so we can get back on track again. the federal reserve if it is doing its job right should be no more important than the euro of the weights and measures in the commerce department. by the way if you ever run into the federal reserve official, ask them in terms of assuming power by the fed ask them they say that they want to end a half% inflation becaus because e belief in creating extra money stimulates the economy that translates to a typical family and that is for thousand of dollars a year of expenses. ask them who gave you the authority to tax an american family an extra thousand dollars a year and applied us paying that extra thousand dollars for stimulate economic activity? i would love to hear. i've asked that i haven't gotten an answer.

just click >> it just seems that even the iab lead you are correct that something is wrong with the money. i don't think that it is a broad enough discussion moved to really cover what's happening to us economically. it's so much were sophisticated now than it was i.e i believe ye an elvis is going. a few things i will throw out a feat youthe value of gold changs fluctuates a good deal and a lot of the value of gold was artificially created by legislating it is the center of the value of money so it had the reverse effect, too. there are times in history we haven't had enough money we hadd to expand. there were panics in the 18 goods but the point is that isn't fair in your thinking some more broad concept of distribution of wealth and

income? it seems complicated in this situation that we are in. >> of the key thing is to wreck it i is it is a measure of the value. it's not the money supply it is when the dollar is created in the marketplace that has a fixed value. it's more about the markets valuing of the u.s. dollar in hopes for the future so when they felt the world was coming to an end the debt crisis default and everything else shot up to 1900 the world didn't come to an end as for now it is about 12 or 1300. in 1980 looked like the world is

coming to an indiana shot up enp from $870 an ounce before going back down again after ronald reagan so that is more about the perception of the value of the current evencurrency then aboute intrinsic value of the gold. as for legislating to value the reason that rose up was not bankers getting together and saying let's do this. they simply went into a businese business and couldn't keep their hands off of it but it rose out of the needs of the marketplace of people doing transactions with each other. so it was a spontaneous thing and what isaac newton did 300 years ago with britain was to affect codify what people thought needed to be done. they were under constant attack from spain, lousy land.

because of its sound money it led to the rise of the capital markets and then they became the financial centers of the world before london did even though on paper the country had nothing and britain became the financial center when it fixed the gold even though it was a second-tier power before they did this they had a lohave a lot of other thig but having stable money brought it all together so the marketplace sent over 4,000 years this is the way to do it and as a result the economy is always get more complex as you get more and more growth. that's what adam smith talked about in the division of labor and of the jobs rise up if you setup applications -- a few years ago is that short for applications for college? what are you talking about? ipod is that a remake of a movie

about monsters of ipod people? things rise up that you can't even imagine. so the candidates just a fixed measure the value that makes measuring the transactions a way that we improve our standard of living with more and more trading and more and more specialization and we can focus on what we do best so we don't have to spend our time hunting food or things to survive we can focus on what we are best at. >> given the dependency of the markets on the monetary policy and the willingness to create money whenever they feel like it, and aliens at a time, what is the return to the gold standard click for the markets and for the industry? >> i think that if we decide to do it and we well i hope it is not a result of a crisis but a result of people saying we have been drifting on and off and we

are not doing what we did historically let's start it. by the way there is a congressman, representative kevin brady who has proposed a commission, bipartisan. going on the gold standard all that would mean. it's a much bigger economy. there are a lot of smith that we discuss in the book. it causes deflation and bad times for farmers and all this kind of thing. what it does is allow the humankind to surge forward and the changes you get in the intoe economy it wasn't gold that led to hard-pressed agriculture but the fact we learned to grow more food and we are still learning to grow more food we just take

corn for example it popped in my mind. right now in the 30s a typical acre produced 27 bushels. today it is 150. we wrote about a fellow in iowa that is now about to invent breakthroughs. after world war ii they employed 1.2 million people. today they employed less than 200,000 kerry about ten times as much freight so that economies are always adjusting. it's back nation and people wondering him i going to get ahead, it's my 50 year old son going to leave the house.

i always carry silver with me and i'm kind of weird like that but anyway this is a 1,923-dollar the two most interesting things i realized after learning over the past two or three years with gold and silver and all that is that you can buy the same amount of gasoline today with this dollar as you could have before 1964. and i guess before 1964 all quarters and dimes and dollars were made out of 90% silver and that was just a mind blowing fact that although this is still 1 dollar you go to the coin shop and it'claimshop and it's wortht of silver. go out with your 20-dollar bill and you can buy the same amount

of the four to 5 gallons you could have in 1964 so what that tells you is the price of gas stayed constant in the relation to gold and silver whereas the price today of gasoline rose. the second most interesting fa fact. it is the same as a silver dollar and a tw two half dollare the same as this dollar so before the dimes are smaller. where do you see silver playing coming into the picture.

in the existence from george washington and alexander hamilton. wait for the applause of most of the economists in the so-called experts. before they went off the rails again. the gallon of gasoline was 1 dollar. imagine what life would be like today if you could pay a dollar for a gallon of gas that was only 12 years ago. now what is it, in terms of silver for centuries old and a silver roughly had the same relationship. 15 ounces of silver was worth 1 ounce of gold.

but what happened in the 1870s and started in the 1870s was that people started to use more and more paper money. the coins per convenience starting with hamilton once people could get accustomed to the economy. and with the rise of paper you didn't need coins this much. so, the demand for silver fell so by the mid-1980s it was 30-1 and today is the 60-1 so it has held up more than a silver but your point that the money had a constant value and certain things like oil or the gassing of gasoline had remained constant and you make a very, very fundamental point. a lot of what we see and think of as rising costs like energy is really the evaluation of the dollar and the fear of the future devaluation of the dollar so it is a very good point. by the way if it is a silver dollar that you have if you flip it on this table you will hear a

nice sound. that's how we got the phrase sound money. [laughter] >> what are your thoughts on the concentration in the banking industry and the consolidation and concentration of the deposits asked him if the question is what about the constant consolidation of the big dig industry. it's wanting to get the consolidation as a result of the natural force of the marketplace and efficient use and the like. it's quite another when it's a result of regulation and fiat. the first part of history we had a lot of extra bang is because of regulations, not because of the nature they wouldn't allow the banks to combine when the bank of america to the original bank of america in the 1920s started to do with california

and when he took the bank across state lines using the bank holding company if you had a bank in one state you're not allowed to hold a bank and another and so we had a bank holding company and the congress passed an act to stop them from doing it. we had dodd frank and they had at the end was the purpose of driving small banks out of business and the reason they are doing it you talk to a small bank today and they will tell you it's not the economy that's killing them it's the regulation that's killing them. the reason they are trying to do that is that it's easier for the government to control and allow the small entities out there. that's why they make it impossible by the way for the single practitioners and health care. he spent 90% of your time filling out forms since the practicing medicine. they don't like gdp having so many doctors out there. they want you to be part of the collective in the hospital or a big company easier to control and regulate.

so, that's what's happening now. you see that consolidation is much as artificial as it is the nature of the changing concentration and the grasping of power they are not putting their claws in the insurance industry. after the elections they are going to go after the mutual funds come equity funds, hedge funds, anything they are going after to reduce the risk. what it means when you reduce the risk of the way they want to do it if you're not going to get any innovation. they would have never allowed the 40 years of the fun playing in those days they regulate the banks can pay for the interest in those days and they blew that out. so it is a bad thing and it is coming about by fiat rather than by nature and that is a bad thing because one of the virtues we have in this country is our vibrant innovative capital markets. they went off in the last few

years because the fed went off the rails after history, we have always developed numerous ways for people to get capital. by contrast in europe it is all bank oriented which is why they get very few new companies because they don't have a system that nurtures countries from being babies and adolescence and they become big and go public. they don't have it and one statistic they called commercial industrial loanand industrial ls country, bank lending and about 1.5 trillion. in europe the equivalent number when you take europe together it's about the same population then when you add up all of the economies about 4.8 troy and. they are way over dependent on banks which is a very fragile suffocating dangerous system so you bring up a good point. we don't want to go that way.

>> i want to go to the core of your argument and ask you what we are forgetting in the way that people really are. so forgive me -- >> we can cure that. >> hopefully. >> to some extent there is a moral argument that of course everybody has heard about the development in germany in the 1930s into the way the inflation has destroyed the fabric of society. but things don't always work that way. people do foolish things. go to the history of the sovereign country and you will see a lot of dreams and

constantly look at the economic industry and the devaluation as a way to bring things in order, to bring them back without so to some extent, one could strongly developed the argument that inside contrary to what they are saying. it's not going to change human nature. that's not going to change current. they only try to change human nature by ending up in with people killing them. so that you are always going to get like in the early