US Currency: Picheis Al HaMatbe'a & Inflation - Rav J David Bleich

I left some of the most outrageous things for the end and I'll never be able to get to all of them. So today I will take the least outrageous of those but also the most difficult. Uh and it's complicated and I don't want people to get confused and I don't want to get confused myself. So let me first tell you what I'm going to say and then maybe it'll be easier to follow. It's not hard but it gets complicated. Number one, uh, Rabbi last week was absolutely correct. The Kazish and the are saying two separate things. I don't see how you can conflate them. That's point number one. Point number two, I don't think there's a disagreement between them at all. And that's because I think that was dealing with one particular problem that had nothing to do with us. and uh he really didn't explain what he should have explained. He left that for the incident. I think I'm not going to talk about the and the today because we already did it this month. But when we did it this month, I purposely said I'm not going to talk about ribbus because that we're leaving for the end. But the the um uh has a very brilliant economic exposition the the history of money and what money is all about. It could be published in an economics journal. He's absolutely right and I don't think anybody can be clearly on it had a problem. So he dealt with a problem. That's not what I want to talk about today. I think the got that wrong also. That's beside the point I'm talking about. I'll show you why it's done. Number two that which is a I've published it already in not in this context and that is that if you want to be yourself something you can be yourself one of two things either you yourself something specifically or you can be yourself only doesn't make any difference because we have if I myself widgets so I don't have to pay you widgets you don't get specific performance performance. Why? In this case, you don't get specific performance because so it makes no difference. We'll come back to that point later in the course of what we're talking about. But basically there are two kinds of there's a and there's a sh for which and there's a she of m whatever you want that's a different kind of isus but again I don't think except for ri and ribus is going to make a lot of difference and number three which is really where I'm heading is that maybe before three three fiat money is money and that knew money was money and that's not what he's saying. He's saying something totally different. That's three. So now number four. Number four, US greenbacks are something else. It's a new kind of moment. It's not fiat. I call it a hybrid. I made up the term. It's a new kind of a moment and it's got its own gador which I'll try to explain. And the Federal Reserve notes. We're not talking about the gold certificates. It's the current of course. No money. Armani and creambacks you know we what we use all the time okay yeah I think that that's a new kind of bria and I fit think it fits in very easily but it's got to be defined that's what makes it you so let me start from the beginning theam is number one everybody quotes oneam but there are fouramers and I'll give you the numbers the firstam is your day that everybody knows then there's another test which I don't think is important for us and then there's a k it's the last before the hashmotes not before it's the last in the in the the first seder of of the numbers the numbers go on but this they're called and then there's something which I don't know whether it's the gas or it's not the gas because it would take me forever to figure it out. Uh he's talking about the value of in his days with different kinds of currencies back and forth and and no lumbus there unless you understand what he's saying. There may be a lot of lundus there but he's giving me conversions one way the other way. I'm sure there's a Revel PhD someplace for somebody who can go through all the operating maribis and tell me what it is they're talking about just explain what the currencies were how one converts to another doesn't whatever that's it that's not my problem but it's there and for all I know it has the relevance I just haven't figured out the relevance but uh it's there so let's start from the cyer and again it's hard to figure out which it's hard for me to remember not to figure out which problem comes from which of these chas because primarily what we're concerned with is the the one which I think is really the one year and the one year but he raises the problems in all of them as I understand it the had a number of problems with regard to the banknotes of his time uh his first problem was that it was And the first time I looked at it, I said, "What's he talking about? This is not the I don't want to talk about mamm today. The mamm was a problem to see this." It was they were suddenly they were writing Ius or it was basically a bill of credit, but they were using it asar and then they were reusing it. If you're going to a diner about if you're talking about the um the melik uh I don't know what's problem is at all thear as he describes it from he wrote a little piece of paper saying that he's going to give the person who's holding this that's why I called the nam the matrix he's going to give so much and so much silver, gold coins, whatever he's giving there. The first time he I I collect it, it's give it back to him, but he doesn't go print another one the next week. He uses the same one over again. I haven't heard that the came to be and say, you know, I know he signed all this, but I know also I don't have to pay the money I promised him. is not about in here more important that I think that too which is why I don't understand what he's saying because in the second ch in the end they were dealing here with an interesting case there was a case of two people who went to ven and they were and one of them had a hundred bank for 100 whatever it was and he wants change so he took from from from he took 10 times in the end that he doesn't have the 100. He doesn't know what happened to the hund. So they're having now a he wants his 100 and she he's ruining Shiman says I gave you the hund and no one is accusing the other of being a liar. I'm sorry of being avid. They may be accusing the other of shading the truth a little bit and being mazm and telling you things but I know exactly what happened here and I think also what happened here you have two honest people they're the clearest and this is all happening at night and they're having putting money down on the table you know it's the the with with a heart that's not there anymore. There were coin flying around. One of the go picked it up and put it in his pocket. So now I've got a problem. Yeah. And these didn't no one was trying to fool anybody. The only problem is they they they proved that something is missing because they each took and they bleed each other. Each took out his wallet and I came with such and such amount of money and I spent so much and so much today. This is what's left. I'm missing 100. And the other guy says, I came with so much money and I spent so much and this is what's left. I'm missing a 100. Somebody's missing something here. Something's going on, but nobody's gene. The first one says, "I gave it to you." And he says, "Not only did I give it to you, but I told you I'm giving it to you." I know what he wanted. So he added with that to make me a a pa for not remembering that he told me. I don't think it makes a difference. You know, the guy says, "She never never gave it to me. He never told me." And so you know there but who is telling the whole truth I don't know but nobody's really lying here and nobody is trying to cheat anybody and that's you got a it's a fairly simple sh it's now go figure it out who is the who has the burden of proof and who hasn't satisfied the burden of proof with these signers but then you all the problems here the first problem was that it's what is this anyway It's a and this erases the other ones also to which I shrug my shoulders and say isn't here claiming between us we're all honest people and he's using it over again and we're going to pretend that it's not what is our problem yes he starts off that and makes it sound as if we have is that's why I disappoint I spent to make before we makes it sound as If he be on sto every day of the week we're not how many times was he ever mash onto whe all the chish but I haven't seen one that deals with a shu onto and he makes the point in this chuva without realizing that if he makes this point he's got any more to talk about in the other chas when I go and I ask the uh this guy for my hund that he hasn't given me oh I gave him 10 tens and he gave me the hundred I don't want the $100 bill. I want its value. I don't want the piece of paper. I don't care how you give it to me. You want to give me 10 tennis back. I'll take that also. You want to give me shove, I'll even take that. I just want to work with nothing. I'm not he wants Ishtar back. He doesn't get back. He gets nothing. Success rate for Shmeir. I don't know what difference it makes whether it's notar until France comes and says I don't have to pay. But he's not here. He's not claiming he doesn't have to pay. Everybody is pretending that it's perfectly validar with thear and that's uh uh the he has a few more things like that. I don't again I don't understand even what difference it makes. He claims that you can claim not only for but you can claim from from his from his from if they're going to pay I haven't heard them complaining either that you're happy to take the crown. this comes along with it. Apparently, they think it's a good deal for them. And he so here you're making a a shu that's on the you can't make a she like that on the won't work. Number two or three. How can I give it to somebody else? It's so I didn't give it to you. So what? Who cares whether I gave it to you or not? Uh nobody's claiming that it's worthless. If you come you claim it's worthless. So you have to he doesn't have anything. That's not what the dentas are always about. I we we you know we we pretend I'll talk about monopoly money afterwards but as long as nobody is complaining there's no dera. So there was no I wasn't knocked to you. So now what do you want? Uh you're not you're not coming with autah that gives back to me because there's no it's not I want the piece of paper back. That's not your I admit I got the from you. Are you something? So if you don't take this, I'll have to give you gasol. I don't have gasol. So what's this in there all about anyway? I don't know what he wants. Now uh something else he has which to me is also mindboggling. He tells me I'll prove to you that it's not laishar because he tells me I don't know I don't know Austrohungarian law. He's telling me that if I burn the bank note and I come with a deser will give me a new bank note. Now he he must have been living American. I understand I I'm not I I don't know these things. I'm not supposed to know them. But my impression is if I'm wrong, you'll correct me. My impression is if I take a bank note and I make ashes out of it, as long as you can read the serial number, two serial numbers on each bank note, if you can read them in the ashes, you can go to the bank and they'll give you a new one. Why not? They see it because it's it's it's absolute evidence. There can't be any other way. You can certainly tear it in half. You go with one half to the bank, they'll give you nothing. You tear it in half and bring them both pieces, they'll give you a new bank note. That's it. You've got enough riot. So what do I care if the mel it's it's only the melik is telling me I accept other also if I take aar and burn it and I have two adim who see me burnish a realar not not Joseph and I have two adim who tell me what's in thear I can go to bed it's the worst they can be made this wasn't it's queen bezon told me more or less they won't be able to from but certainly will be worth this proof that it happened and frust and he doesn't try to take advantage of these Jews. They come with substantial riot. He sees they're not lying. So he does what's right fair and equitable. He practices equity also. So what is all of the you know the big problems here? Then when he's finished with all of this and he tells me for reasons that you know because Rab Javari told you last week and we spoke about it before uh he's telling me that the bank note is because and he throws in and the is and therefore it's it's becomes goes exist. Now remember just parathetically that the Rambam says how do I know who's a melik who's not a melik if it's that's that's the riot that I made him a melik and if he's a melik he has the right to mint coins it's enshrined in our constitution it came from the prerogatives of the melik I think it must have said that before I'm not going to repeat it again that's what the melik does with dicea not a dicea I couldn't care less but I think it is a dais why not and that leaves me with my problem. He tells me it's good even for hectish in two separate places to play because I'm g to to a hed good. I can be I can play by because the picture is with I think but okay the picture is it's because it's got a picture on it. What's his big problem? His big problem is pigeon because sure it's because the mel said so but they can't be good and the melim he's the king of kings and he doesn't have to accept what they're saying downstairs and I don't understand that either who made him a melo in the first place what difference does it make he doesn't the doesn't need the he doesn't need the he doesn't need the div he doesn't need thear only he gave the mel the kayak If he gave us whoever it is the cream to make. So he gave the to make for why is worse than if can bind the why can't humanel bind them the same way. It's all for purpose. It's all for you know this this system and make the system work. That's what the wanted. What's this big problem with pin? And then finally comes ribbis sort of he doesn't know what the status of this is for purposes of ribbus. He doesn't he tells me it's tifa for everything else. Why shouldn't it be for also uh he may be telling me I don't know go back to Rabbi will first year or is it he may be all of this I can do whatever I want in your he becomes kind of a suffices didn't make any difference I have absolutely no idea with regard to all of this now Uh let's talk about um uh American currency for a second. Uh American currency I think most people would say is legal tender. Why is a legal tender? Why do I accept it? I accept it because I pull out a bank note from my you know once upon again I don't want to repeat all this but once upon a time I could have gone to the bank and gotten a silver dollar in exchange for a silver certificate. I can't do that anymore. Number one, because there no silver certificates in circulation, you can buy it in a coin dealer. And number two, the bank does not have any silver dollars. I remember when they changed it, I had a and a sister. He sent his sister, he no for they would played this game for a month. He was taking he he he took he gave a $10 bill or $20 bill and he took coins, silver coins. They were mixed up with with non-silver coins, the new ones that came out. He took out all the silver ones. And he went back and he was maled with a couple of pieces of paper and he got his $10 bill back. Then he went to the next bank and did the same thing. When he was finished with the day, he had silver coins which worth more than a quarter. And he went to 40 where was it? Where they sell these things on 48th? 47th Street. He went he got money for it. It was big money. He he made a lot of money doing this but didn't last very long. It didn't last very long because didn't take very very long for the silver coins to be taken out of circulation totally and completely. They s the the the the dollar bills they took out. That was easy. You read it. They they weren't going to go look for every quarter or a dollar. Is it silver or is it the fake? Now the one we replaced it with. So they kept on sending it back to the banks in the rolls. And this guy was smart enough to figure this out. So as long as they were sending it back to the bank and every time every day was fewer and fewer of these, but they was he was making money on it. That was the real silver. But in any event, the old once upon a time you could get silver for the silver dollar to I only remember $1 bills. Maybe people can remember when there were five and $10 bills that said silver certificates on them. I don't think I ever saw one. Uh some other people can remember. I don't know. But that was because they took those out of circulation long before me. So today I go and it says that what what what what makes this a legal tender because it says this is legal tender for all deaths private public and private that's the legend on the top I thought that meant this is calls it once upon a time you didn't take the melik's coinage off your headl as reasoned as said, "You don't want to take the coin, so we'll not suit you. That's the fine." The fine is you don't take my currency, says the secretary of the treasury or his boss, you don't take it, you'll get nothing. So that's why even though I know that what they give me every month and I go to the bank and I get silver certificates for it or Federal Reserve notes for it, I'm sorry. I know it's worthless, but I play the game because there's no other game in town. if I don't take it, I'm not get anything else. So I I go along with it, but I know better. So that's what it sounded like to me. I say bey. And I thought that that was the fact that the uh you can punish me by not giving me anything else if I refuse to take this on the but I got wiser in my old age. I know it's not true. Be dusi. I thought that you cannot you cannot denominate a contract in Japanese yen and expect to get Japanese yen. I thought that's what they're askering that we do. That's the melik. You take in my med you take my coins. You can't go bring me Saudi Arabian coins or who knows what. You got to use American coins here. And if you make a contract to pay in yen, the court won't look at it. It's like an illegal contract. when Kurs don't get their hands dirty with illegal contracts. The milik said, "You're not allowed to do this. It's an illegal contract. Goodbye. Good luck." Then I discovered that it just isn't true. That I can write a contract that will be payable in yen. Only there's a little wrinkle here. If I go to court and say, "This guy promised me a million yen for a 100,000 widgets. I want my yen." The court will say you're entitled to damages. You can't get yen because we can't give you yen. It's not currency here. I can't force anybody to give you yen. But I can force you to give its value in dollars. So why do I write it in the first place? Because I know the currency is fluctuating. I want the value of the yen. I'm not betting on the dollar. I think the dollar is going to go down. I think the end is going to go up. That's why I did it. And I'm going to get I'll be paid for it and the court will enforce it. I think it's enforceable. And I think it goes beyond that. I think and here I have no case law and I don't think there's a case out there and I may be wrong but I think I can give you a hypothetical and I do not know of any case that actually happened. I have somebody in Japan and I wrote him a contract I'll pay him in yen and Japan has become like Russia was in the bad old days. You can't bring any valuta. You can't bring foreign currency in. You can't take any foreign currency out. You can't bring any dollars into uh uh uh into Japan and you can't take them out of Japan. So if this guy has a contract, he's getting he's getting compensation. The damage is not being paid in yen. What's he going to do? He's going to have to go to uh uh to Japan with his yen. I'm sorry, with his dollars. But they won't let him in with his dollars. you know how to bring it bring it in. So this guy has nothing he can do with it. I would make the case for him that he's entitled to equitable relief and therefore he's entitled to specific performance. You can get specific performance in American court. Not usually when you can't when when the spec when money isn't going to satisfy the person because he needs something else then you get specific reforms. The classic case is real estate. You don't tell me you're going to give me damages for not going to closing after you made a contract. Every piece of heroate is unique. You're going to give me money. Who needs the money? I want the real estate. Give me the money. Uh you won't get specific performance in other places. I know that if I sign a contract to sing in the Met, uh I can't get specific performance. Not because there's any way to pay them for my not singing. Yeah. they they will get all the thing they lost in the box box office for gunp profits is also consequential damages but I forget about what they teach in law school there are other theories but I think the simplest theory is that court knows how to seize money but court does not know how to teach a frog to croak I'll go to the meds and I won't sing what do you do what it's impossible to get specific performance for these things but if you can show that specific performance is a remedy and there's no other remedy you'll get it. And I think that's true even with a contract that's denominated in yen. If you can't get satisfaction or satisfactory compensation in some other way and I gave you a scenario, it's only fair and equable. And we just force him to pay yen. Go buy yen and give it to him. He can't do anything with with the dollars. Uh so that it seems to me that it's not not it's not anymore. So I'm left with till now was telling me it was aar on the and now it turns out that that's the that's what make it value. So take and the crucial point is that I'm taking it for itself for it intrinsic value because it's values my head and not its instrumental value meaning what I can buy with it. Aar is worthless to me lots of pizza is useless. Knowing how to do aar is trade it for something else. So it's not goofy moment. But if I needed to protect my head, that's called goofy moment. You're telling me that this is needed to keep me out of jail or needed so that I should be able to spend it. But it turns out that there's no such. I can get yen instead of this. So it's not not there's no punishment for not taking it. So what makes it altogether whatever it is it's not. So that's why I said that the is totally irrelevant. uh and if you will ask the samsaur and what about our money so he can say one of two things either he'll tell you what I'm going to say later is correct or he will say it's monopoly money and what about monopoly money it's got no shavas at all if it has no shavas at all then forget about kids and gz from mcotton why can't I go steal money if it has no shavas has no shavas altogether and it's not aar we already established it's not There's no way can hold an American green back as aar at least I think. Now the lawyers may disagree with me but I think there's no way that it can be interpreted as aar in the Israel and that's because it's not aar for the melik. If he's not a star for him how could it be aar for me? So it seems to me that either it's worthless in which case all bets are off. There is no such thing as money. is really smoke in mirrors and not only don't I ever problems but I can go rob a bank and nobody can do anything with me in the soil I took things that are valless uh so that it seems to me that if you talk about forget American currency if you talk about fiat money and you tell me that this is monopoly money you can convince me that in the state of monopoly wherever this is that it's real money and that there's ribbus there also if the kids are playing a game and you're not allowed to play do this in terms of the laws of Monopoly the way it's played usually they're varants of the game don't confuse me but you're not allowed to borrow money in Monopoly because there's nobody to lend you the money it doesn't work that way but if I could you know do something illegal by guessing somebody give me $2 and I'll give you back a $5 three three steps later you know three chances later in the game I think it might even be reuser unless we realize it's if the kids are taking it seriously and they're living in a state of monopoly and it's fiat money. I think it'd be I said be the first one to say it's true. And why? If you ask me why, I can only say because of course he knew the he knew was all the kids playing Monopoly. All these people running around the street. That's what makes it. And he had a problem because what he had wasn't it wasn't it was he had his own little private problem and he said whatever he said to resolve it. to me it wasn't the problem. I didn't have to resolve it. But if yes, he resolved and finished. I don't see a between and the uh the uh the I think that the understood understood very well only he was a little bit earlier and he took it for granted. He didn't think he had to put it in writing for us. He had to put it in writing. So came along and put it in writing. But if I'm right now, then the first or the first uh I suppose the first uh outrageous thing that I'm saying is that fiat money is money. And not only is there gazzle for fiat money, which I think is a fiddish if you don't believe me, you know, like don't take my holy sword. And number two, uh there's ribbis on fiat money also. And nobody ever said differently. Wayimar Republic where everybody knew it was worthless. They took it anyway. They didn't want to but they took it anyway. You're telling me there was no sea. There was no problem of ribs in the way republic. It was fiat money. If you tell me that is the Yeah, it wasn't. So you tell me and theamifer whether it was in the way republic I can't buy that. It seems to me that there's no it was money and everything that proceeds there from now if I'm right with that then I mean you know I don't know if it's a kesh but I think that fiat money is better than the American greenback that would be good I wouldn't have better better in terms of what I have to say it'd be easier we could close up and go home American money is fiat money we say fiat money is money you finish goodbye American money is I call the hybrid Why do I call it a hybrid? It's not really a hybrid. It's something totally different. Uh how do you get money in the first place? You get money because there's something called tea and a bank Rothschild. The banks before uh we had American currency or the before US green banks. The banks took money and they gave you little chits and you could take the chit and go back to the bank and you would get spec sheet. You'd get a silver coin, you get a gold coin, you got a gold bar. I don't know what you would get, but you could ask actually ask for it and you would get it. So what was this like aar not on the mel but a star on Rothschild which he says is a star. That was a star a real star. When the Melik, the king, the US government began issuing coins, it had money in Fort Knox and it was a silver certificate. Were there gold certificates once upon a time? I I suspect there were gold certificates once upon a time and it was a star on the and I had to talk about the but I went to the bank and they gave me whatever gold and silver I wanted. No more uh don't get any gold and silver. Not only that, but worse, and this is where people get a little bit confused, all the gold in Fort Knox will not satisfy 1% maybe 2% I have not exact figures of all the greenbacks that are out there. There are many, many more greenbacks than there is gold in the hamelik. Now you have to remember that gold has a certain value. Uh once upon a time in ye kazal it was gold to silver 25 to1. When uh we began learning hilus ribbis a couple of decades ago the exchange rate in in New York was I I the silver was also approximately $5 an ounce. I think I don't know the exact value of silver. I do know the exact value of gold as of yesterday morning. All I had to do is take the today's times and I discovered that gold is 200 sorry 3,228 or something of the sort per ounce. A couple of months ago when we talked about the same issue, what is gold and what is silver? It was significantly less. It was 200 something. Gold went up almost a third in a relatively brief period of time. Uh, not why. You can figure that out as well as I can figure it out. Why is gold worth so much more per ounce than silver? Kazal 25 to1. What happened? I'll tell you what happened. What happened was they discovered the new world. And in the new world, there was lots and lots of silver, which means supply and demand. The value of silver went down against the gold because there's more silver around. uh when you're talking about $500 an ounce or $2,300 an ounce, you're talking about the relative value of one against the other, or at least that's what you seem to be saying. And now it went all the way up. What made it go up? I'll tell you a little story. It's got nothing to do with anything. And I don't even know why the story happened, but in the early days of the pandemic, one of my balab, he's a doctor, young doctor, but I suspect he has a few dollars. He's calls me on the phone. He wants financial advice. He wants to know what he should invest in. He wants to know whether should his money in the stock market be or should he put it in certificate of deposits or maybe even gold. And I answered him and I said there's one thing I don't know anything about the stock market. I know anything about gold. I can tell you only one thing. A little bit about economics I picked up. Not that you ever studied econom. I'm not an economist. I know one thing. I know that they they just gave everybody what what was it? $1,200. It was called a um No, stimulus. No, it had a word for it. Stimulus. It was called a stimulus. They gave me $1,200. And Trump wants me to be thankful forever after for him giving me $1,200. You know something? He cost me a lot of money. He didn't give me any money. He thinks he did. Or he wants to lie and tell me he did. You know what happened? Inflation. the inflation ate up more than the $1,200. That's exactly what I told this young man. I can tell you, look, there is no way in the world that in this pandemic with the stimulus that there's not going to be inflation. If there's going to be inflation, protect yourself against inflation. Don't think that if you buy a CD, you're protecting yourself. You buy a CD, you're not protecting yourself because in the history of Western money, there's always been inflation. They're always pulled in inflation until we get to the Way Republic, which case all bets are off. And if the CD is not giving you at least the rate of inflation every time you put money in the bank, you're throwing the money away. I have trouble explaining that a to my wife and to my mother. Neither one is a dummy. But it's hard to explain to them why it is that putting money in the seed, not there's much involved here, that putting money in CD is throw your money away. Now, you may tell me that you have no option. There are other options, but don't tell me the other is a risk and this is no risk. Of course, it's a risk. It's more than a risk. This is boring as a it's got to be and the other, if you're smart, you know how to play the market or whatever else that the investors do to make money. But that's all because we have this phenomenon called inflation. So we have what we're dealing with when they begin issuing money against the the gold in Fort Knox. And after a while there's not enough gold in Fort Knox. Uh Trump wants them to take money out of circulation. No one's going to do that. And that would kill the economy. But what happens again it's it's economics 101 or even less than that when you go to the bank and put money in the bank we it's a and they do it purposely what do you call it you call it a deposit if I have a piece of paper it says deposit slip that's not a deposit it's a I'm not depositing money in the bank they want you to think what some of these people I referred to before think that they took your money and they went back in the vault they put it in the vault And when you want it, you come back and you'll take it out. Myorcasa sporasa was different. Theorasa was a piggy bank. That's a credit. I They knew they there. They knew already. I thought it was one choice Cooper one choice sultan. No, no, no, no. Theoras didn't say that. No, no, no, no. That they were too sophisticated for that. Yeah. Rothschild couldn't have made any money that way. Okay. All right. But what what what does the bank do? The bank goes to the Federal Reserve and it says to the Federal Reserve, look, we don't have any gold. And you already issued as much as many greenbacks as you're going to issue against the gold. But I got something else. I've got mortgages. We lent this money to people and they gave us mortgages as collateral. Who says that you lend money only against gold? lend me money against mortgages. And whoever is telling the the the Federal Reserve what to do said, "You're a brilliant economist. Why can't I use mortgages to back the currency?" So, they proceed to take the the mortgage and the mortgage is nothing more than because they already got your money. The bank has no money. All I have from you is a mortgage and I'm lending money against the mortgage now. So, I lend the same money twice. But the bank is smarter than that. When the bank, the Federal Reserve won't lend you 100 pennies for a dollar. They'll lend you what? 90 cents on the dollar. They give you 90 cents on the dollar. So, now it was $1,000 mortgage. I had $900. I go back to my bank and I can only issue a mortgage for $900. So I could next morning I have only $900 to lend and I get interest on $900. So now I've already earned interest on $1,000 and interest on 900. And I go back to the Federal Reserve and I say here's another mortgage. Give me again 90%. And then you get what? $81. I call this $100 factorial. The mathematicians know exactly how much you're going to get. How much interest is the bank getting on your $100? They're giving you 3% and they think they're being very nice to you because it's more than inflation. So they would hope, but they're not they can't run their banks on 3%. They're getting 50% by the time they're finished because they lend the same money over and over and over again. And this is all kosher voser. Who says it has to be bank has to be based backed by gold? It's backed by mortgages also. Fine. Economy would be fine. I have no problems. I wouldn't have problems with this derivatives. Everything would be fine. Except there's one big problem. There's one Malva who doesn't have to give collateral. You and I go to the bank. Yeah. $100, $200. Maybe they'll give us, but we're a bunch of schlamasles. They're not going to give us any real money. Real money. You got to produce some collateral. There's only one malta who gets real money without collateral. And that's called the US government. US government goes and says I and controls the money supply. They borrow as much as they want and they borrow don't have to borrow only what they need. They can borrow more than they need for their reasons. And what's it backed by? Two answers. One by nothing. It's fiat money. Or full faith and credit of the United States. What is full faith and credit of the United States? I ain't know what it means. And let no professor of economics confuse you. You know what? The city doesn't have the right of coinage. It can't. It's a reserve power to this government. What does the city do when wants to borrow from a bank that has nothing to give for collateral? It gives tax receipts because the city can levy taxes. The state can levy taxes. And the bank knows this. There's no limit. The bank will limit up to the amount that they can tax without forcing everybody into bankruptcy because you're bankrupt. Nobody's going to pay taxes. So the whatever full faith and credit means, I know what it means, but let them tell you what they want. Full faith and credit means our power of taxation. We're good for the money because I can always get it. Whether you care whether I have it or not, you know, it's Yeshua. I'll go and I'll levy taxes and I'll get it. Don't let anybody tell you that it's backed by the courthouse in Foley Square or by the doicile called the White House or by the redwoods in Yellowstone National Park. That's what some people will tell you. All the great assets of the government. I don't know what they are and what they what they could possibly be. It's irrelevant. That's not what full faith and credit means. Full faith and credit means this kind of is it. Is it there? It's not there. Does it work? It works. So now what is I called it a hybrid? Uh some of it is backed by valuta and a mortgage as far as I'm concerned is valut. And some of it is the mel promise. It's not a star. The melo is saying, you know, take my word for it. When you need it, I'll give it to you. It's not even a rel. It's fiat money. But it all goes in the same kaboodleoodle. It's one big pot. I know that there's nothing I know too. It's a secret. So, please don't tell anybody outside this room. I think we can, you know, trust the people who who who who watch the tape. But don't let people know that there anything beyond the value that's presented to the Federal Reserve window is anything but smoke and mirrors. That's all it is. But it we pretend it's not because we think this thing which we called the full faith and credits of the United States. But then what is it really? It's got to be more than that. What I said was oversimplification. You know what's really happening? The United States will suddenly decide no more taxes. Nirvana, we not we're not going to charge taxes anymore. All you people are holding notes, we are not going to tax, but you're entitled to get what you're entitled to get, which means all the gold in Fort Knox and whatever the government can sees from non-payment of the mortgages because nobody's got money to pay the mortgage anymore. So, what does this really mean to me? It means something very ownorous. It means that when the o the the the treasury started issuing money without real backing it was diluting the backing there were x number of gold dollars in Fort Knox let's say there were a million till now I had a million dollars in gold coin out there now I issued I can not allow own gold coin anymore but I have $2 million of certificates which in theory I can trade in for whatever ever is in Fort Knox. So each one of these is worth 50 cents, right? If I had to liquidate whatever the government is holding and take money for it, it would called it would be called uh or I'm sorry. The dollar was worth one ounce yesterday and today it's worth a half an ounce. It's called Alham. So what is the worth? What are we supposed to do? Uh it seems to me that if we deal with a classic case of alhamd we have is the riff and the riv the riff says that he which is the riff which is the raven the he says he gives him whatever it is p doesn't make any difference and the uh uh I have to give what is in in that particular case and others say that it's not the case uh now let me to talk about for the writing it seems to me that if I have to give you the the full amount uh again I told you I don't want to get confused it's easy to get confused here uh if you're dealing with a so the riff the the riff says they have to give him the full value because save the malva and marsham the marsham it's difficult to stand but he keeps saying the malva can't lose he's repeating to me over and over again the l in a different context obviously but he's telling me the say the malva can't lose here the malva lent he wants to get what he got back that's the mala and I have to ask aash what do you mean the mala if it's ribb it's ribb everything yeah you're talking about he's telling me he can't the mouth can't lose you talk a capitalist. Why shouldn't the malva have a we have a we have the says that the ribbus is also so why is it the mala so it has to be because it's not ribbous why isn't rib because I gave this is what I gave you this is what I'm entitled to get back according to the rivet he says who cares about deva uh you you you get only what it was worth you get what it's worth is what it says the number of mbayas that there were before you get the same number of mayas now and who cares whether you get the same value when you spend it in the shuk the mbbe is the mbaya so uh uh it would seem to me this is the first outrageous theme for the day it would seem to me that according to the riff everything is to what not to it's something else. Cost of living is inflation. There is a different kind of inflation which determines the value of the currency. What is that? The number of greenbacks in circulation. Now that I said before, there's got to be inflation if you have more greenbacks in circulation because supply and demand. How many greenbacks are there in circulation any given day? I don't know that because New York Times didn't tell me. But you don't have to be very welcome to find out. Any anybody can find it out. It's there. Look in the computer. You'll know how many how how many dollars there were. And if they even have two page one is just cash and there's cash plus checks. We'll deal with check with cash. They'll know how much there was yesterday and how much there was today. Today there's more than there was yesterday. I can pretty much guarantee now if we have inflation today over yesterday. I know exactly how much is attributable to P alad. Every time you write a new Federal Reserve note, you are diminishing the backing of each Federal Reserve note. The deflation is going to go up exactly proportionate to the increase in the number of don't confuse me with the checks with the number of dollars in the in circulation and I can predict that I can predict I I don't predict a number in circulation because I know it just look it up. I can predict the uh uh the inflation in so far as the inflation is tied sud to the increased number of federal reserve notes in circulation. The bake can do that to a fraction of a penny. That much I think you're entitled in without according to the riff. I go into I say, "How do I peel? I took out my economics textbooks. I proved it to you. Give me more because the the the piece of paper that you gave me today is worth less than the piece of paper was yesterday because you chopped off part of the piece of paper. You used it to back two different two different accounts." No. I said that I don't even have to claim I have to going to make it sol for the rivid can't do these things whatever I give you that's what I give back so I'm you know you want to say kimling I play kimling whenever you go to bed and claim kim but what I really want to say is that's I've described this is a kind of a hybrid currency it's not really a hybrid currency it's a currency which is backed in part and not backed in part some of it is backed and some of this fiat and the fiat is cloymer attached to what's real because in theory I'm supposed to be able to get back uh from whatever is backing all of this and if you're talking about liquidating that would go into what is liquidating so that if we were again I don't want to talk about things I talked about before the fact I can't go and say I want to liquidate doesn't mean anything we talked about in the corporations I made a deal with the government I won't try to liquidate until you go bankrupt. We made a deal with the corporation. I can't say good or good until you go bankrupt. But in the meantime, we we know exactly what's going on. We know how to do the ledgers. We just look at the ledgers. Call in an economist to explain all of this to you. So that is, you know, kind of a little minor kish that we have how much you can claim when you have an ordinary sub ordinary dollar for dollar ma for ma without making it. Uh it seems to me it's the rift. You've got a pretty strong claim. Now Kashi is what about for the rivid? For the rivid it's not automatic. Question is for the rivid could I make a that indexes it to exactly what the riff calls index. We already explained all this for the riff and for the riff it's automatic for the rivid in order not to have to say can I write can I write a an agreement which will index it to whatever I would get had been like the riff and how would I manage to do that I don't think it's very hard at all and that comes you know the next little piece next little piece is a gammorra and ais and one has nothing to do with the other says is sing. Don't ask me why, when, or how. I don't the rest I look for. Don't explain me why the melik did this. is I know why the melik is on the he takes 10 coins and he clips them and he hands you back 10 coins but each one weighs less than each of the coins they took in he clips one one/10enth of its weight and he ends up with profit what does it do to be val has to take two two coins or three coins and give you back two each one which is one and a half of the old ones what's he gained from this I suspect that he has gained something from it uh but that's not my problem. Uh but he did it. I told you that's part of the PhD problem. Why why people were doing things like that was on the MBA means was on the way to the MBA by the time we get the endor Mah. So says na you have to get I borrowed 10 gold coins. They worth they weighed 10 ounces. Each one's one and a half ounces. I give you back 10 gold coins. Each one says one ounce, one mark, one shilling, one whatever. And I give you back 10 coins. It's the same coin. Says the same name on it. What's got to do with the weight? Nothing. But it's called the same thing about says you think even if it's, you know, I don't know how big a nafia was, but even if it was a nafio that you increased to that much. So one was one and a half. Now it's 2 ounces instead of 1 ounce. Oh, she says for coil and pay. What's going on here? This doesn't make sense. The pays are going to be cheap cheap. I'm going to get more pay for any one of these gold coins because there's more gold in circulation. If it's because of the TV, if it's because there was says Raj and there's really a lot of more then it will be otherwise it was only because of the weight of the coin. We're not going to be monaka because of the weight of the coin. Why we trying to fool here? I gave you more speci. I call that ribbus. I gave you one ounce and you gave me back two ounces. Why isn't that rivous? Eloh of Yeshua. They did this with the zuzim of argus. They did it and was a significant amount. It was way heavier and they got away with this. So first of all, what's the asking? Simar says um linasco says thrashi there's there's nasco in my hand which I presume are little coins from 2 oz I get more ounce coins than I did from 1 oz rib. is happy. How can you get away with all this? And then turns around and says as long as it's like it's you can get away with this if it's only 20%. A fifth more than fifth you can't get away with it. I don't know what's the difference a fifth or a tenth or double. What's the difference? Ribbus is ribbons. What's the sheer ribbus? It's not like we know it's got a shear. And this sounds to me like rivers gone. And I can get around all of this. Comes along the rush and says it's Mexicus. It's not real rivers. It's only real. It's only Mexic rivers. So what's the rush telling me? The rush is telling me that with only Mexic I don't care how much the weight is. Weight is irrelevant. Yeah. Only it seems that you can't get away with more than 20%. You'll ask me why according to the ro there must be some kind of that's the people get away with that too only doesn't look very nice. So the go that's how I would learn the sweet according to the uh to the rush. Now I have one other source and then we see what's habakasha why how do you get away with this all together it's really ribbous then I have ausis theis is one blood earlier says and It's worthless. So what am I supposed to do? So I give you I suppose we'll do with you the the franks. Forget about the scrolling. We have a new frank for the old franks, but it's a new franks. I take the 10 old franks and I give you a new Frank. That's my to take I owed you 100 Franks. I owe you 100 new franks. Or if there's somebody else will take the old Franks. So here's the old franks. Good. Now, Rashi says that we're dealing about from merchandise. This is what happens with merchandise. Tesa says Rashi is wrong. What does Ty say? He says Rashi. Then he proceeds to say what does he say? says that there's no putting back all my old he says and for and all going to be the same. We're only talking about a person who made a deal. I'm going to pay money. So since I paid money now we've got this whole business of whether I can give you have to give you real money that means whatever the old ones are worth or go take it and go to Mish spend it there I told you I'm going to pay you so therefore I have to give you the old moyes even though it's who knows how much I see one principle and again I I think it's I I said it in something else but I think it's it's from here also I think that there are two ways I could be mak myself I can be m myself either to give you a certain amount of money I'm giving you money can't give you anything else worry about but only what the money would be worth if I gave you money now is denominated Or I can say you gave me a bushel of wheat. I owe you the value of bushel of wheat. How I pay to use my business whatever it's it's pay you some other time. And I can do this in one of two ways. There's only one thing I can't do is this with I can't I can't do it with so which is everything. I can't promise you that I will give you the value of a saw. Why can't I promise that I'll give you the value of the made otherwise now I want to know a small little side question should be even though the and we see that's that's here also one Naza for another NASA so I'm giving you one coin for another only it turns out that's even mut uh but how it's ribbous tells me it's ribbous how can I do something like that the answer is very simple. I can do something like that because so bes for another saw is every saw equal. There can't be two s are equal. Can you go measure two? They should be exactly the same. Impossibly should be the same. A shekel for a shekel. The two aren't going to weigh the same. So 50% of the time I'm going to be giving you ribbus. Eli that's not called ribbus. I was myself more than I took. I was they give you back. What do you want from me? Doesn't do the weight. And whoever is a a a a British pound that's worth an ounce. And now I got another British pound that's worth two ounces. What's the difference? It's a pound. It's a pound. It's got the same. It's It's called a Nazco. Not called Nasco. It's called a MBA. Like the is called a MBA. Comes along the Gmorra and says, "Yeah, you can't get away with this more than 20%." That's the Rabon afterwards. But basically, this was my was to give you back even a nasco and that's what he would do. Now there's And what about if I do this? So bisau I can't do so bisau with a saw but I can do it nasa vanasa why can I do it nasa banasa because they never made a takona not to not not to borrow nasa bas that's how you can get away with it that's all nasa banaska when the price goes up is really a so only nobody made so nobody everything is fine so now we come to theus's case's case is I borrowed money and we made a task is not I'm going to pay you the value but I'm going to be I'll denominate it in so myself and look guess what I'm to give you the mb and I have to give you the mb because there's no problem here I'm allowed to be myself mbramia with mb called I can either be myself pramaki for pramakia which is so so I don't want to or primaxia for apples or primactia for a specific coin. So I did it for a specific coin that I'm allowed to do and that's not called rivers because we just went through all this. It's not rivers. Why? According to the uh to the ro is only rivers because it's really not so I don't care how much it weighs until we get to a certain point. Now parenthetically maybe if it's double it's a little bit too much and Rashi says that double is derisive. Yeah. One kita, second kita, one weighs one millimeter. One one one tenth of an ounce and the other weighs 1 and a half tenth of an ounce. That's okay. But by any time you get to 210 of an ounce, it's too much. That's already mid ribs. So why? Because everybody knows that two twoim I can't tell the difference between one other. When you give me a giant kita, doublesized kita, everybody sees that. In Nazca, certainly everybody sees that. And that you can't do. You can't that's that's that's if you start with the rush everything is fine. So now I start going in reverse. I if I can do all these things when I borrow ordinarily I'm borrowing I'm borrowing to return tells me stol I'm going to return in speci borrowed 100 franks I'm going to give you back 100 franks but that's because it was it was it was ma and it's always mut do I have to have ma no I can have ma for something else I can also have something else which I will repay inve how much I for I would have to give you I would have to give you so many so many and that's how I would denominated this I'm denominating it but I'm making a kind of a deny here that if I want to I can pay I call that the reverse am I allowed to do this to say I'll give you more more ordinarily so except one time so M is if it's so even according to the rivid if I borrow money I may really have to pay what it's worth but I'm stipulating that I'm not going to pay what it's worth I'm going to pay so terrible thing is only never made an is I'm making it so mood according to the rivid. And what is mmida? Mmah is to the amount in circulation the weight of each one of these federal reserve notes which goes down all the time. But I'm stipulating that it be uh as many as is necessary to make up for the first that the so be equal to the first number number of that I started with and that if if if I'm right in the nature of American money then it's hetra because I can I'm in effect with an agreement that for the right I have to put into writing but I put it into writing and putting into writing means I've turned it into a kind of so and I can be myself to do this and I'll have to pay what it's worth, not the number of coins that are in circulation out there. I hope I didn't confuse you. Nobody ever wrote a hed this way. Not yet. Not yet. uh when I called I am not the first person who's used that kind of picture if you look in the in it's called in the anyway it's the he tells me can also be so in the cases he's talking about and the brud talks about ma that could be so now again if you're dealing with places that are dealing in foreign currencies. Of course, it's so that's pay. But I I I don't want to talk talk about it too much, but one of the things I'm leaving for this PhD student, I want him to tell me what was talking about. I I have no idea what it means. He's talking about uh he says he says I think he means brutes or something. I don't know what it means. Holland in Holland they had this and I once upon a time thought he was talking about I'm not quite sure he's talking about he may have been talking about a bank note that we had in this country before we had a federal mint that banks were issuing their own. uh and he tells us the then he talks about what the mini kamadina was and he talks about whether it would be sobbas or wouldn't be so basau and tells me that sometimes these things can be so basau and sometimes they're not so and you have it in the pursuit you do more or less the same thing that sometimes I don't know what's so what's not so I can conceive of a situation which everything is so uh I'm not sure in a hypothetical ical universe which would have been Europe before the European Union and before the euro. Uh I saw people running around Europe with with 10 not 10 wallets but different compartments. They had British pounds, Swiss Franks, German marks and Swiss uh Franks uh and that depends where they went what they used now and and these were all Yates among the suffering. They were all Yates in the same place. Is there any place where they're all Yates? Of course there were. uh initi when there was inflation I talked about last time before now I think that they were both so that make them both so and again I know that we were buying a $1,000 appliance nobody would take your scrolling but if you went into a store they would take either scolium or they would take dollars and they knew more or less what the shower was and yeah everybody I know all the articles that really the standard was the dollar how do I know the standard was dollar depends to whom the businessman was a dollar. the the schlamasle in the street was still the pound and he even walked around with two tiny little currencies which was the tifa and which wasn't the you can tell me both are ta you can tell me both are uh are payra because there is no ta what do you do if there's no tifa if there's no tiv and if I lend $5 or $5 it's so that's why I kept saying that I think the American dollar is a hybrid because otherwise it's So, if you tell me that it's fiat money, it's so what is this? Can't be. So, it's got to be tie in one sense. It's got to be money because otherwise it's I'm not the one who made it up. He's mor it's complicated.