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