Hi, welcome. It is 101 Eastern Time. That's 10 01 PM in Tashkent, which means it's time for vision, a weekly show about the trends ideas and disruptions affecting the future of our democracy. I do need to start today's show with a quick programming note. You can see from the image that should be coming up on your screen in comparison to last week. I am in phase one reopening, but you can, you can be rest assured that this, this haircut and the shave have been conducted strictly in accordance with public health guidelines. So nothing to worry about on that front. But let's get back to the show. Last week, we began exploring the question of how to manage an election in a coven 19 world, and we heard that the challenges are profound. That it could take two to $4 billion to ready our election system for potentially far higher vote by mail rates and for needed improvements to polling places in the event of an active coronavirus epidemic or pandemic. We also learned that we need to start planning now, even if we hope and pray that coven 19 will be a memory in the fall. And that the tools that we might use to assure this vital democratic process during a potential covert recurrence also further risk those most disconnected and most marginalized in the voting process. So we face some big questions, can we pull off a generational reform of our election system. Can we do so in a way that gives everyone a vote and a voice. And can we accomplish all of this without exacerbating declining trust in our democratic process. So we have a lot of questions that we're going to continue exploring this week on vision. Today we're going to be talking to Spencer overton who's the president of the joint center for political and economic studies and our tour of artists the chief executive officer of the National Association of Latino elected and appointed officials, also known as Nileo. We have a lot to discuss we're really lucky to have both guests so we might go a little bit long today and I'd love to just jump right into the discussion so without further ado, please welcome Spencer Vargas. Thank you for joining. Thank you for joining. Well, I am really eager to dive into this. And I think the place I'd love to start the place that I'd really love to start is kind of giving our audience a bit of context, you know when we're not entering this election in a vacuum. We have we have had challenges generationally in this country around ensuring everyone has the right to vote. The nature of those challenges is has of course changed over over the years. In many ways for the good. So I'd love to start by just hearing from you all about kind of what's the state of civil rights around voting, you know what are the big challenges issues concerns. When we think about making sure that elections are open to all maybe Spencer will start with you and then go to Arturo. Sounds good. Well, you know same this has been going on for a long time in terms of really since the beginning of our republic in terms of excluding particular citizens or designing systems that result in particular factions of the population having influence and power really you know since the founding of the nation. Obviously, you know, we saw it in the 60s in the 70s and we talk about, you know, the Voting Rights Act and the South and the Southwest and enfranchising a number of people. And then we saw kind of the current generation Sam after Bush v Gore in terms of 2000. And, you know, in the last couple of decades, some of the big issues have been, you know, voter suppression through restrictive procedures right whether that involve purges of voter registration roles or making registration more difficult or excessive identification requirements that are up and over above the existing identification requirements that have been working opposition to voting by returning citizens so these are some of the barriers that we've seen in the last 20 years, and then in just the last election cycle Sam, you know, we saw voter suppression through social media you remember that the Russian Internet research agency created social media accounts that posed as African Americans, they built up trust with African Americans and then right before Election Day, they urged black voters to boycott the election. Well, African Americans just make up 13% of the population black audiences accounted for over 38% of the US focused ads that were purchased by the Russians, and almost half of the user clicks. So, you know, this, this voter suppression in terms of social media is is also an issue.  What, what are you seeing what what are what are the what are the measures active or passive, you know, in some ways that are actually affecting people sense that they they can or are able to vote. Thanks Sam and thanks for inviting me and Spencer good to see you. Let me just follow up on some of the things that Spencer mentioned first you know in my view, the right to vote in this country is fragile. And we are seeing more efforts to try to introduce more cracks into the voting process in a way that suppresses the vote of certain population groups in particular Latino and young people. Texas I think is example a in efforts to create systemic barriers that result in making it more difficult for Latinos to vote everything from the type of ID that is required to vote in the state of Texas, for example, a gun license, you're good to vote. A university of Texas is a state agency issued ID is not a valid ID for voting. Okay, who's more likely to have a student ID, a young person who's most likely to have a gun. Well, I think that's self explanatory. Now these are the kinds of barriers that have been introduced in the past 10 years. And why the past 10 years, because in our view as we look at the emergence of Latinos as now the second largest potential segment of the electorate. Now, just about on par in terms of the size of the African American citizen voting age population that for Latinos are that we're seeing efforts now to turn the clock back on Latino voting power and we see it in the streets when we encounter Latinos to your question. Many Latinos don't vote simply because they think the system doesn't work for them. And then when you see these kinds of barriers being erected, it just reinforces the notion that voting is not something that Latinos particular feel is welcoming or something that they're being invited to. And that's where we need to intervene as nonprofit organizations civic engagement organizations to stand up our democracy and to actually engage like Latinos and others who are encountering these barriers to figure out how do you register to vote and how do you vote. And so what is COVID changing anything about that is COVID changing either the nature of the impediments or the feeling you know the feelings that you described that are sound like the that are as important right that the people in a way can be their own barrier you know reinforced by what they they perceive what what changes are you COVID has made the situation situation exponentially more difficult in terms of the gauging like you know since civic participation. Now we're just looking at the census, the census has been completely disrupted by COVID. The censor had to stop its field operations, as all of us have been sheltering at home for the past 10 weeks. Now we would think that having a captive audience would allow us to then engage those people to fill out their senses. You had nothing else to do at home but watch Netflix right one with me, but COVID has so disproportionately affected the Latino population both in terms of infection rates, death, and the health, I mean the economic and social impacts that it is now even more difficult to break through that COVID noise to engage Latino households about the importance of this active civic participation. And I think this is setting us up with lessons learned of how we need to engage our community to get those are eligible to vote to do so come November. Spencer, what you know when in thinking about the impact of COVID I'd like to maybe we can pick up on something you raised which is kind of this emerging barrier which is the way that the social media environment can be influenced to discourage someone from participating to discourage someone from voting is that how you know that we've talked a lot in the show about the sort of infodemic really with COVID the amount of misinformation that some of it has to do with health information but a lot of it has to do with information about you know, when you can go out when you can't go out what's safe to do what's not safe to do are you seeing, are you seeing or worried about any ways that this the challenge or social media as a suppression tool. The task to size is during COVID. Yeah, Sam. Yes, and I definitely want to respond to that. I want to take a couple steps back though, right because something that I think we all recognize as conventional wisdom is important to get on the table that the death rates among African Americans and Latinos are much higher than the population as a whole that when we talk about who's an essential worker, who's on the front lines when we talk about grocery stores delivering food, healthcare workers. We're talking about African Americans and Latinos here who are actually on the front lines and expose so you know kind of before we even get to the democracy piece, we've got to recognize the very real threat that this poses to the health of African American and Latino communities in terms of being vulnerable and susceptible. We also have to recognize that you look at those employment unemployment numbers off the roof in terms of Latinos generally African Americans have the highest unemployment rates. In April, we found out that Latinos have leapfrogged over African Americans in terms of unemployment rates with African Americans, it jumped from about 6.7 to 16.7% unemployment in just a month. In fact, it jumped even higher than that. So we see economic impact there. There was a recent study that showed that black and Latino business owners were more likely to close and less likely to access PPP stimulus funds here. The community in terms of health and economics is already been hit. But when we talk about democracy, when we talk about being in Milwaukee, Wisconsin, where, you know, and you got to make basically a choice between your health or the right to vote where they only have about nine polling locations. And normally they have, you know, over 100 polling locations, you know, you shouldn't have to make a choice when we talk about registration drives and these drives being incredibly difficult in person already. But now with COVID you can't do really registration drives is difficult for people to go to a government office and register to vote. Those are some real issues and then when we talk about social media and voter suppression, certainly there is one, the challenge of disinformation that is out there generally about what we did in terms of our communities, certainly with regard the threat in terms of democracy like we talked about last time. And now you've got a scenario where and we'll talk about a little later. You know, President Trump talking about fraud, and we'll talk about that soon in terms of the fact that it is completely overstated and overblown as a threat, especially compared to some of the barriers. And when I'm making a false claim about a voter fraud. Twitter responding, not by taking down his tweet, but by pointing readers to information and factual information about vote by mail. And then the response being as we saw today the possible executive order. Twitter should not be immune from lawsuits for its activity and should not enjoy the same protections as Section 230 of the Communications Decency Act provides to other platforms and calling for an investigation into tech companies. We want tech companies to ensure that good information is on their platforms that's not misleading. The executive order is definitely the wrong way to go. So we've got a lot of variables that are here in front of a Sam. In some ways the executive order is just the logical extension of a Twitter war into the into the regulatory sphere. But what I mean let's go back to the sort of the fundamental point that you laid out Spencer, you know, Arturo, how do you respond to that can, can this really critical democratic procedure survive, you know, a level of economic and social disruption that is this profound. This disproportionate in its impact. I mean what are in the face of those facts about who is being affected about the communities that are most affected about the vulnerabilities that we're seeing are what are some of the things you know you and your colleagues think we need to do in order to assure, you know that in a really critical election, people don't have to make a life or death choice to exercise their rights. Right well my response is our democracy has to survive we have no choice, but to do everything we can to ensure that democracy triumphs in the middle of this challenge. I also believe that it is a strong democratic society that is able to take on the challenges of a pandemic like COVID-19, and we have to engage all of the segments of our population equally in that, and we're not doing that. And so we need to refocus government response to COVID-19 to direct the resources to those who are being most affected by the pandemic, which is not what is happening right now. For example, yesterday, Nalel did a briefing for Latino state legislators with data, polling data that was conducted by Latino decisions for an organization called Somos. And in that data, we found that 40% of Latinos said that they did not receive a stimulus check, because they were for some reason ineligible, and they were also the most likely to be making less than $25,000 a year. Now $1,200 for those families would make a much more significant difference for them in this crisis, but they're not getting that relief. And that's the kind of readjustment that we need to do to how the government is responding to COVID-19. We have to make sure that the most vulnerable segments of our communities are being supported at this time. And when it comes to civic engagement, we need to make sure that the resources are there to allow everybody the equal opportunity to register to vote and to vote in November. Now, there's this great conversation happening about increasing vote by mail. We support that, but we also know that Latinos are much less likely to use a vote by mail ballot than non-Latinos. So if states are going to move towards vote by mail, and not all of them want to do that, by the way, because many people are not interested in putting a ballot in every single eligible voter's hand, and that's a different conversation we can have as well. But for those who do receive a vote by mail ballot, we're going to need a very comprehensive, robust public education campaign about how to vote by mail. Now, look, I have a master's degree. I vote by mail, and I have to go through that ballot a couple of times to make sure I get it right in terms of how I'm marking my ballot, which envelope I'm signing, which envelope I need to put on the outside and the inside. It's not an intuitive process. And if we're going to move our election systems to vote by mail, we have to make sure that states have the resources to carry out those elections, and that we have the public education campaigns so that people can actually exercise the right to vote. Even with all the vote by mail opportunities out there, we're still going to need in-person voting in a way that is safe and secure and that people feel comfortable doing. Well, I want to go to Spencer in a minute, but tell us a little bit about what you think we'll need to do around in-person voting in order to make sure that people who, as you point out, already feel disconnected from this process actually feel that this is a safe choice for them. What are some of the things you guys are looking at? Well, in-person voting has been a great tool to make sure that people get the assistance and the resources and the support they need to vote in terms of having questions answered and having language assistance provided where federal civil rights laws require it. Now, I see that one of the questions on the chat asks about recruiting younger people to be poll workers. Absolutely. We need to do that because your traditional poll worker is an elderly citizen retired person who's doing his or her civic duty, but many of them are now in this very vulnerable population group of being affected by COVID. So many polls in the primaries that we saw did not have sufficient staffing because their go-to poll worker pool just wasn't available. So we need to do new recruitment strategies for new poll workers. We need to make sure their experience is safe and secure. That the polling locations are large enough to have such a distancing that you have the sanitation element in place so that people feel comfortable when they approach a machine, that it is clean and ready for them to use. All that takes people power to make sure that it happens and that takes resources. Well, Spencer, could I first hear from you just on vote by mail? Because that really is occupying a lot of the oxygen right now. I think partly because of the perceived logistical challenge and actually making sure it happens. How do you think about vote by mail, both as a response to the possibility of a COVID influenced election, but also how to do it responsibly given the concerns? Right. Sam and Arturo, okay, there's this first issue, which is that states and localities have lost a lot of tax revenue in terms of income taxes and sales taxes. And as a result, they need resources. We don't want them to cut away from democracy in order to balance budgets. So when we talk about stimulus money, we need resources that are targeted to preserving democracy. Right. So that's number one. And it can't just be any old thing as Arturo suggested and just mentioned and stated. Latinos, but then also African Americans, there are studies actually the data is kind of is mixed at least with regard to black folks. Some studies say that black folks may be more likely to vote by mail. There are other studies like in Florida where they looked about black folks and Latinos that said black folks were less likely to vote by mail. Right. The traditional universal vote by mail states are only five of them Colorado, Utah, Hawaii, Oregon, Washington here.  You know, there may be a few Latino folks in Colorado, but some of those other places, you know, are very sparse in terms of folks of color so we don't have great data right so we need to make sure that when we have a black vote by mail one it's not universal so that there is an in person option, but then the vote by mail we take precautions so it's accessible. What do I mean by that. I mean, allowing a signature match for your ID so not a notary requirement where you got to go out and get a notary here and expose yourself to the virus, not a photo ID requirement because a lot of people who don't have top years at home have other things, a signature match, a timely signature curing so that if the government says oh this doesn't match up with the registration card. People can actually come in, clean it up and say hey I am who I said I was your computers are off here. We'll drop boxes so that people can drop off their ballots, allowing third party groups to pick up and submit sealed ballots, allowing vote by mail ballots through that are postmarked through Election Day. Additional protections for tribal communities, many of them do not have street addresses so some additional protections for them that are important. Now, now with this and we're dealing with two groups right, we're dealing with one group that would say let's just do universal vote by mail that's the simple solutions and no, we got to have these protections right. There's another group that says, oh we can't even do vote by mail because a fraud right and that's President Trump's perspective. If we look at fraud it's incredibly rare. There have been about 250 million ballots cast by mail in the last 20 years. About 204 of those have been a problematic fraudulent so that's one case of fraud out of every 1.2 million votes your, your five times more likely to be struck by lightning, then to find a fraudulent ballot. Don't give me something else to be afraid of. So, so, so anyway, that's kind of the vote by mail piece. I think a thorough covered we got to have safe in person voting, you know, and take procedures for that. So let me, I mean, as I listened to both of you, you know, so much if we get this right, you know, so much of the administrative energy and cost will go into the procedure, you know, it'll go into in the best case scenario, making sure that we've really set up the polling place as well making sure that we've done vote by mail, as you point out Spencer in a really reflective way, thinking about the need of the individual voter. So, none of there won't be any energy to actually communicate to people who bring in a whole lot of assumptions about whether this system is actually trying to help them vote or not. And you both alluded to this and we're getting a lot of questions about that how what's what's going to need to be done between now and November to communicate to people that indeed this is safe and indeed there are ways that you know here's how you fill out your mail in ballot. Here's how you can be sure that you're protected here are questions to ask as you go to your polling place if you've got concerns and want to make sure that it's safe what are who's going to do that and what's the best way to do that maybe Spencer we can start with you and then go to our Turo. Yeah, well, you know we really do need to have a federal allocation of resources and there needs to be some strings attached in terms of public education as Turo mentioned, as well as real outreach so that people are able to participate we shouldn't just assume that this is going to happen. It's different and it's going to take some significant effort here. You know, when we talk about ensuring that polling places are not crowded and ensuring curbside voting, all of this takes time and it's a logistical and you also need election officials to be on board with it and as we noted, generally elections are administered at the state and county level. So the only way you can really do this federally is by funding it and basically saying if you accept the funds here are the restrictions and so we need the funds now about $4 billion now so that states have time to set up systems to effectively include people there be some elected officials who might say hey, we're not interested in including folk but you know I think many Americans believe that it is important to include all eligible voters in terms of giving them access to freely participate without jeopardizing their health. Turo, how do you think about communicating this and getting people comfortable? Well, before we communicate to people that they should be comfortable in this new voting systems, we first have to make sure ourselves that the new voting systems are in fact safe and secure, and that's where the resources come in. That's where the federal government needs to provide relief to the states and localities who have lost significant amount of tax revenues right now, that they do not have the resources in order to create safe and secure voting systems. Once we have that in place then we need the resources for this public education campaign so that voters understand one, how to vote by mail, that's the way they choose, but if they want to go through the in-person experience to know that it is in fact safe and secure and if we're smart about this as a country, we can use this experience to come out of this to make our democracy even more inclusive and more participatory. If the kinds of systems we can put in place now to deal with COVID-19 can actually lead to a different way of conducting elections in the future post COVID-19 that in fact makes it more accessible to everybody. So we should look at this not just as a short-term investment about November 2020, but how do we invest for the long term to make sure that our democracy continues to do it. So let's, yeah, go ahead Spencer. Sam, I just wanted to point this out because, you know, I wanted folks to know we're not, we got some data here, we're not just, we're not just making this stuff up. In 2012, on average, African Americans waited in line 23 minutes, Latinos waited in line to vote 19 minutes, and whites waited in line 12 minutes to vote. So if we've got a scenario where people are waiting in crowded lines and polling places, we're talking about a scenario where African Americans are twice as likely, and Latinos are almost twice as likely to be exposed to crowds and lines if what happened in 2012 happens in 2020. So this is real data in terms of the past, and we have to design systems so that everyone can vote safely. Well, this is so this is actually the kind of the issue I want to leave on and ask you both about, which is, you know, I having, you know, we talked to Nate personally from Stanford last week, you know, the three of us, you know, as a point of disclosure of work together on voting issues in the back in the dark ages, and five or six years ago. And, you know, I, I have to confess one of my fears is that even before COVID, every really good public servants, really committed civil society organizations are fighting to keep our election system at like a B minus, right, like at a, at a level where if you really want to work hard, you can vote. And if you're really willing to work hard. You know, you might have a chance to, to, to wait in a long line and vote and that's kind of the best we can achieve and you've both alluded to the fact that we really should be seeking higher here. You know, no, no one should have to, no one should have to show up at the polling place and ask, because of how I look, am I going to have to wait longer than someone else, you know, no one should have to show up at a polling place and ask, is this going to be healthy for me, no one should wonder today, whether the election is going to be available to them. And while that ideal itself in an imperfect society may be hard to reach. You know, I guess I'd ask you each, you know, like what's what are the one or two things that you would do to to to reach above that just barely passing grade to build to build a better election system for the future what are the one or two things you do if we're really are trying to to seek higher as a democracy to see the opportunity to weigh in is the kind of the great defining advantage of our system rather than the thing we must endure. Every every four years so maybe our turn and start with you what are what are one or two big reaches that you think we should be considering and then we'll go to Spencer. Well, I would say that the kinds of things we have been wanting to see put in place before COVID-19 not become a reality. And that's that counties and states invest in modernize equipment and whole books that are updated registration systems that are kept up to date so that people can assure that they themselves are registered allowing people same day voter registration with adequate protections. Registration of 17 year olds so that once they turn 18, they're already registered to vote, making the voter registration process more universal so that all eligible citizens are able to vote is is are the kinds of things I would be investing in. Spencer, how about you. Yeah. I think the first thing to just be honest about is that too often elections and election rules, it's like gerrymandering. You got a scenario where politicians are selecting voters rather than the voters selecting politicians, and we want to move away from that concept. And also right now, your vote, your right to vote depends on where you live. Right. And so we really want everyone to be able to participate and when I say everyone. You know, I'm certainly talking about underrepresented communities, but I'm also talking about military voters through you Ocaba, right, I mean, everyone being able to meaningfully participate like that is democracy. You know, some of the things that are talked about certainly online registration and same day registrations important registration serves as an important barrier in terms of purging and in terms of other things to me something we haven't talked about is that there's no turning folks who are eligible, you know, who would otherwise be eligible to vote should be able to vote here there's notion of putting a scarlet letter on somebody for life or once they've, you know, served their time. So the premise of we want to hear from everyone, and I'm not we believe in like liberty in this country so I don't know that we will have compulsory voting anytime soon like we have compulsory jury service. But one advantage of that is the elections based on ideas as opposed to suppressing particular parts of the population and what we want as a norm is for everyone to participate. I think these are great thoughts and I, you know, I think one of the questions we're trying to explore in this show I think you guys have have framed up really well is, you know, what is the ideal of democracy, and how do we, how do we, if covid's not an opportunity to improve it how do we make sure we don't lose sight of that ideal, despite a really a really unprecedented disruption so I for folks who want to continue to dive into this you can follow Spencer on Twitter at at Spencer and definitely check out the joint center at joint center.org and you can follow Arturo on Twitter at at Arturo Nileo and you can also go to Nileo.org is as always will send this out to everyone on to everyone who joined the show but Spencer Arturo I couldn't imagine a more important conversation with two more important leaders in this space so really appreciate you joining us today. Thanks Sam and I'm honored to also be with Arturo here right. Excellent thank you both. Before we go folks I, I want to tell you a little bit about what's coming up on vision we've got a couple more shows on elections. Next week June 4 will be talking to two former commissioners from the Federal Election Commission, Trevor Potter and Ann Ravel and on June 11 will be talking to Seth Flaxman who's a digital innovator who is really trying to change the way that we can interact with elections and vote. As a reminder, this episode will be up tomorrow you can see this episode in any episode on demand at kf.org slash vision. Visit us at vision at kf.org or visit us on Instagram at vision.kf please stay for a few seconds to take the survey we appreciate your views and as always we're going to end the show to the sounds of Miami songwriter Nick County you can check out his music on Spotify thanks so much for joining us everyone until next week.


About a year or so ago Bob Murphy and I started discussing a project about money mechanics and it came from a Fed Federal Reserve publication which has been out of print since the 90s which attempts to explain sort of the plumbing behind both central banks and commercial banks and their interplay with fiscal treasury and it's pretty complicated and there's sort of a knock on Austrians is that we live in a theoretical world but we don't much understand how banks actually work. So Bob took on this project and has done an absolutely remarkable job. It's actually on our website basically complete in form where every chapter is a clickable link. There's a landing page to it and we're going to produce it in a written form and distribute that later this year. So not only is it going to the history and origins of money with a lot of menger and mises, he goes into history of the gold standard, again the plumbing and mechanics behind all of this but then he has sort of separate treatments of inflation and shadow banking which I'm sure many of you are familiar with, the extraordinary kinds of monetary policy we've seen since the crash of 08 and now hyperdrive since the crash of well the engineered deflationary crash of 2020. He discusses MMT which is obviously a seductive and trendy theory which is going on right now, cryptocurrency. So it's really a remarkable short course in money all in one place, one landing page and for those of you who have a particular interest in it, I really encourage you to check it out because I think it's going to be a very important product for the Mises Institute and I'm very, very pleased that Bob was willing and able to do it. So please give him a big round of applause. Well, thanks Jeff for those kind words. And so, yeah, as Jeff says, this is available right now. If you just Google my name and find it at the Mises Institute website, you'll see it and he says each chapter is clickable. So what I'm doing in this talk is I thought I would just summarize some of the pertinent points from this rather than trying to go ahead and give like a summary of each topic. Instead, I just picked a few of them and I'll elaborate someone on them. So this is what we're covering in this talk. U.S. commodity money history. Do textbooks get the bank credit creation backwards? Talk a little bit about the Fed's balance sheet. There was a redefinition of M1 that occurred back in the they retroactively did it so that where the redefinition kicks in is of May of last year. We'll talk about that and then they abolished the reserve requirements. All right, so those are the things I'll try to cover in this particular talk. But like I say, there's a ton of stuff in that book that you can go to the clickable links and see. OK, so let me talk about this. So in terms of understanding money mechanics, you know, as Jeff said, the original vision was sort of to say, hey, we've been teaching in a certain way, does, you know, does the new paradigm affect things? So those new things are in there. But the reason I want to talk about this is there's obviously an affinity when the Austrian tradition with hard money and, you know, commodity money and me, I would encourage you if you like that stuff, but you've thought like, oh, wow, there's a lot of history there. And gee, I don't really, you know, the stuff about the silver and buy metalism and all this stuff, it's too complicated. I I tried to boil it down. So I would say if that stuff is always interested, you try giving the chapter I did here a chance because there is a lot of interesting things in there from a hard money perspective. So, for example, and this is something when I was younger, the way I thought it worked was that, oh, the US government always printed green pieces of paper, you know, with presidents on them and that set a certain number of dollars. But you could just turn those in and then get a certain weight of gold or silver and actually that's not eventually that's what it meant. But historically from when the Constitution, you know, the constitutional republic, as it were up through about the Civil War, the US federal government, what they would do is say, you bring us gold or silver and then we'll stamp them into, you know, legal official coins denominated in US dollars. So to be clear, there was one in the War of 1812, specifically, it was the year 1815, there were treasury notes that has a quasi-money status. That was the only exception to this claim, just if you want to be a purist about it. But generally speaking from, you know, the Constitution up through the Civil War, with the, you know, the actual money, the base money in the US were gold and silver coins denominated as dollars. And if you wanted paper notes, it was that banks would issue them. Right. And so what that was technically was a claim on the actual money, which was, you know, the gold or silver coin that, you know, the government had authorized as being legal tender. OK, so that's just to give you an example of what I mean. So you might see sometimes you could read Rothbard or, you know, Joe Salerno talks a lot about it, that you may think of, oh, the gold standard is the government prints pieces of paper and then you can turn them in and get gold based on some, you know, redemption rate the government announces. And I'm saying that's historically the gold standard was much stronger. Like they thought of the dollar. So the coin eject of 1792, for example, the dollar was defined as a certain number of grains of gold or a certain number of grains of silver. All right. So it wasn't that, oh, yeah, we're printing paper dollars and we pledge to redeem them at this rate. It's like, no, what the dollar was just like to say a foot was 12 inches. It's not that they said, oh, right now the exchange rate between inches and dollars is 12 to one. It's like, no, it was it was a much more fundamental thing. They were saying this is what the unit consists of. OK, so on the one hand, you might say, what's what's the big deal? Why are you stressing this distinction or this nuance? But I'm just trying to get you to see how the idea that, you know, the money was not a piece of paper was was much more deeply imbued back then. A little bit on this in case you've read some of this stuff. So at the time, you know, why would they do this? Why did the coin eject of 1792 define the dollar as a certain amount of grains of silver or gold? It was because this was what was called bimetalism, as the name suggests, meaning it's two standards. And notice that that was exactly a 15 to one ratio. And the reason they picked that is because at that time, that was roughly the market exchange rate between gold and silver, right, that gold had about a 15 times more, you know, in terms of per weight market value and the global markets. So what Congress was trying to do, the rationale with this is they were trying to make it convenient to have dollars of different sizes or I should say money denominated in dollars of certain sizes based on, you know, the transaction. So if you needed to buy something expensive, you could have a $20 gold coin, right, and that would be a larger, but then in terms of getting change back and, you know, smaller purchases, you'd have smaller, like a $1 or a fractional, you know, a quarter, meaning one quarter of a dollar, right, that's why it's called a quarter silver coin, right. And so that that was the rationale. And the reason they get again, they locked in the 15 to one is because at that time that was roughly the correct ratios. They were trying to respect, you know, the natural or the market relation. But then what happened, and this is where Gresham's law comes into play, is once they had locked that in, and Mises talks about this a lot. He says that when governments tried to enact a bimetalism standard or a bimetallic standard, in practice, it would be an alternating monometallic standard. Okay. And so I'll say that again, and then I'll explain what it means. So what Mises claimed was governments historically, when they tried to enact legislatively a bimetallic standard, in practice, it would be an alternating monometallic standard. And so what happened is, you know, they could pick an exact exchange ratio in terms of saying our sovereign money, you know, whether it's the German Mark or the French Frank or, you know, the U.S. dollar, if it's defined both in terms of gold and silver, and they, you know, they have to pick some kind of ratio between the two, in practice, the market exchange rate's going to fluctuate. And so if it goes too far in one direction, then with this ratio, necessarily either gold or silver is overvalued, and the other one is undervalued, and so everybody naturally, when they have to make a purchase, is going to spend the thing that's overvalued, right? They want to get rid of the stuff that the law is making more valuable than it really is, as it were. And likewise, you're going to hoard, you're not going to spend the ones that is being arbitrarily penalized, right? So for modern people, just to get a sense of what this means, just to put it in real terms, many of you probably know in terms of U.S. coinage, if you have like a quarter or a dime that was issued in 1950, there's actual silver in that. So if it's a quarter, the silver content of a U.S. quarter that was coined or minted in 1950 is worth much more than 25 cents. So you would be silly if you went to the store and the merchant says, oh, that'll be $1.25, you wouldn't take out a dollar bill and then that quarter and pay for it, you could, but that would be silly, right? Because you would be giving up an object that was worth much more than 25 cents in terms of the silver content. You would use a different quarter that also has stamped on it 25 cents, you know, legal tender, but doesn't have 25 cents worth of silver in it, right? So likewise, back when the coins were genuine silver and gold, if something cost $10, you would use coins to pay for it, you would put down coins that the metal content was actually worth less than $10. If you were to melt them down and sell the metal, as opposed to coins that if you melted them, the metal content would be more than $10, right? So that's what I'm getting at. And so Gresham's law, the way it's distilled or summarized is to say bad money drives out good. And that's what they're getting at, that they're saying that the money that's being overvalued is the one that gets spent and is in circulation and everybody holds back and sits on the money that's being arbitrarily penalized in terms of the legal tender laws and so forth, all right? So that's what would happen. So in the U.S., it flipped. Like I say, initially, this really was the right ratio, but then the ratio moved up to about 15 and a half to one, you know, the actual market ratio around the world. And so that, you know, made the U.S. sort of like on a de facto silver standard, and then things moved the other way. And so then, you know, so it was one coins were all in circulation. Then it went the other way towards where it's 60 and the U.S. changed the definitions more towards 16 to one. And then it flipped the other way. And so what they over, what they had been overvalued. And so then it flipped and the coins that were in circulation switched around. So the U.S. ended up being on a de facto gold standard. And then this led, this gave rise to, I'll move on to the next slide here, but I don't want to get bogged down too much in this, but just to connect some of the dots for those of you familiar with U.S. monetary history, you may have heard of what's called the crime of 73. And that is when in 1873, the U.S. government began demonetizing or continued the process of demonetizing silver, and they ended eventually what was called the free coinage of silver. So again, the way this worked historically, back in its heyday, is the government wasn't just creating the money. They were saying anybody who wants more dollars, bring the U.S. mint a certain weight of gold and we will stamp them into gold coin, official currency, according to these ratios or silver. And so then they stopped doing that eventually with silver and that later was retroactively when the silver interest realized what the problem, they had called it the crime of 73. So William Jennings Bryan, who was famously his cross of gold speech you may be familiar with. So he was in favor in the late 1890s of resuming what's called the free coinage of silver. And what that meant was, hey, let's go back to the policy of the way it used to be before the crime of 73 when people could just bring actual silver and then get stamped into U.S. currency, the silver coins that were legal tender and that counted as real dollars. Whereas up, you know, at that point, you couldn't do that anymore. So just to think through the logic, so you may know that William Jennings Bryan was a populist. He was a friend of the indebted farmer and, you know, an opponent of the Wall Street fat cats. And so how would that, the economics of how does that line up? Because if what was then what would happen is given the prevailing, you know, exchange ratios they would have used at the time, if they had resumed the so-called free coinage of silver, more people could have taken a weight of silver that was worth less than a dollar, taken it to the mint, stamped it into dollar coins. And so that would have allowed that, you know, it would have inflated the number of dollars, right? And so prices would have risen.  And then so that makes it easy, you know, raises agricultural prices makes it easier for you to make the payments to the bank and it tends to hurt the creditors if this is unexpected. Okay. So that's the way all the stuff interplays. But in case, like I say, you've heard phrases like that, like the free coinage of silver, that's the kind of thing they had in mind. Okay. So now completely different topic in this, in this book that I did for the Institute, do the textbooks get it backwards. And so here what I used as a springboard over the years, there have been a growing chorus of critics who have said, yeah, the way you go and learn money in banking and open market operations in a typical economics class, if anything is exactly backwards. Okay. And then this line of criticism was actually crystallized recently. So this thing that I've got a screenshot here of this money creation, the modern economy by these authors, this is a publication from the Bank of England. All right. So this isn't, you know, some crank website. This is a pretty serious institution that, and they summarized all of these alleged myths that you would find in the standard textbooks.  I tried just you folks realize to like boil us down into PowerPoint, but it was going to be too difficult. So I'll just verbally walk you through this stuff. So quick review, you know, how does, how would you learn in a normal textbook? And so here this is what like Rothbard would do in the mystery of banking or just any area where Rothbard goes through and explains this is how the Fed and the banking system interact with each other in order to inflate the number of dollars. But it's not just an Austrian exposition. This is how, you know, standard textbook would teach this stuff 20 years ago, regardless of whether you're Austrian or not. And so again, the claim is going to be where I'll go in a second with this is the allegation is that this isn't how the real world works. This is just what economics professors tell you. So very quickly to review the standard story, again, that you would get in Rothbard, that you would get in a normal economics class 20 years ago is that, oh, the central bank, if they want to lower interest rates, what they do is they engage in open market operations. They go out into the financial markets, they buy some assets, let's say, treasury securities. In so doing, the Fed, I'll just deal with the US example, the Fed, when it goes and buys more treasury bonds, let's say, from a private dealer, the Fed effectively writes a check, you know, it buys a billion dollars worth of bonds. So the Fed effectively writes a check for a billion dollars, gives it to the seller, that seller goes and deposits it in the bank. Now that seller's bank account, let's say it's Bank of America, their account balance with the Fed goes up by a billion dollars. So at this stage in the analysis, the Fed's balance sheet, its assets have gone up by a billion dollars and new treasuries and Bank of America's reserve account with the Fed now is a billion dollars higher. And so in that transaction, the Fed just created out of thin air a billion new dollars in base money, right? Because it's not like there was a piggy bank somewhere that Powell had stockpiled and then that went down by a billion. When the Fed ever since 1971, when the US dollars not redeemable or anything, the Fed can just do whatever it wants, right? There's no constraint on how much stuff it can buy. There's no legal constraint. OK. And so that's the way the story proceeds. And then according to the standard orthodox economist's exposition of how a central bank pushes down interest rates, the story says, OK, so now Bank of America has a billion dollars in new reserves and let's say the reserve ratio is only 10 percent. So of that billion new reserves, Bank of America only needs to keep a hundred million in the vault or on deposit with the Fed and that nine hundred million is now excess reserves and it can go lend that out to its customers. And so how does the how does Bank of America induce nine hundred million dollars more in loan activity, right? If before we were in equilibrium, now it wants to lend out nine hundred million dollars more. How is it going to do that? Well, it could either lower credit standards, you know, give to borrowers that before it would reject or it can lower the interest rates asking. And so by lowering the interest rate, you know, you move along the demand curve for loanable funds and more people or people want to borrow a greater volume of funds. OK, and so that's the way economists, like I say, 20 years ago would have explained this is how the central bank, if it wants to, pushes down interest rates. It buys assets, creates more reserves, banks then say, oh, we have excess reserves, let's lend them out. We got a lower interest rates. And that's how the central bank pushes down interest rates. Going the other way, if inflation is getting too high, by which they mean price inflation, then the central bank gets nervous. They want to raise rates. What do they do? The mere image of that, they sell assets off their balance sheet. The central bank does. So in the US case, the Federal Reserve sells bonds. The people who buy the bonds from the Fed have to write checks when that check clears with their bank, the bank's reserves with the Fed go down. Now that bank realizes, oh, we're short on reserves because there's reserve requirements. That means we need to shrink our outstanding loan portfolio. And so as people pay back loans, they don't roll it over as much or they call in outstanding loans. And so the total amount of credit contracts and by shrinking that, you know, the supply of reserves and supply of credit, it tends to raise interest rates. OK, so that's again called open market operations. That's totally standard stuff. That's the orthodox story. So that's what the critics have been alleging for years. The economics professors get totally backwards. They're saying, no, in practice. And so here I'll just summarize some of this perspective. We'll say in practice, that's not what happens if you go talk to an actual banker like someone who's been in a meeting where banks bankers are considering, you know, our loan portfolio and what do we think? They say nobody ever asks, hey, do we have access reserves? That that's that's not how bankers think in the real world, how they think is, is this a good loan? Like we've got these applicants for mortgages, you know, whether it's commercial or residential properties. And does this look like a good loan or not, you know, these particular terms? And if so, let's go ahead and make that loan. And then, yes, as an afterthought, if it turns out we're short like legally, oh, gee, we don't have enough reserves to satisfy our legal reserve requirements. Then we go out into the federal funds market as a bank and we just borrow it from where we need to. And so that's what the federal funds market is. And that's what the federal funds rate is. If you're familiar with that term, it's the interest rate in that market. So commercial banks borrow from and lend reserves to each other. And so a bank that has access reserves can just lend it to another bank that has deficient reserves. And that's how they satisfy their reserve requirements vis-a-vis the Fed, for example. OK. And so that's one of the things in this book or in this report from the Bank of England that they're saying is so notice that's that's the opposite way. And they also say the central bank doesn't set interest rates. OK. Or rather what they say is the central bank doesn't set doesn't alter the quantity of reserves. Instead they use it they target interest rates and that the commercial banks through their activity endogenously determine how many reserves are in the system. That's actually the way they put it. OK. And so they say that's that's different from how the textbook says it's oh the central bank if it wants to engage in expansionary policy buys assets and floods the system with more reserves. And then the banks say oh more reserves let's go make more loans. And again then again the critics are saying no no in reality it's the opposite. If the banks want to make more loans they do that first. And then because they made more loans they go out and they find the reserves to sort of satisfy them legally. OK.  So what I know how do I respond to that in the book is I say actually both narratives are internally consistent. It just depends what you're holding fixed and how you're you know imagining the central bank is operating. So the commercial banks as a whole they do they cannot create reserves. So to say oh if Bank of America has a bunch of good applicants for mortgages you know the real estate market is hot and they want to make more loans and they go ahead and do that and then as an afterthought they scramble and borrow more reserves. Well that assumes there must be some bank out there that has reserves to lend to them. But if all the banks collectively are doing the same thing they can't all borrow access reserves from each other. Right. If each bank is short you know the commercial banks do not have the legal ability to create more reserves. Only the central bank can do that. All right. So what is true though is if the central bank if its policy is to set an interest rate like to say we want the federal funds rate to be five percent. Now let's say all of a sudden the real estate market starts booming and the commercial banks start making more loans and because of that now with a given amount of reserves that the you know the Fed controls are insufficient for all the banks to satisfy the reserve requirements because their loans are going up and now the banks are trying to borrow from each other and the federal funds market and that pushes up the Fed funds rate to seven percent. Now the Fed looks at that and says oh the actual federal funds rate is seven percent our target was five if the Fed wants to push the actual Fed funds rate back down to the target then they have to go buy assets and put more reserves in the system to push it back down. OK. So you see how it's really just holding fit you know deciding what are you assuming the central bank is doing. It's still true that if the Federal Reserve wants to lower interest rates it buys assets and floods the system with reserves. Everybody agrees with that. It's just you know you could think of it that way or if you're thinking of it is not what the Fed's doing is picking the interest rate it wants. Well yeah if that's the way the Fed's operating that it is true that what the banks do the Fed sort of passively adjust the reserves to accommodate you know the needs of business. OK. So it's again both narratives are internally consistent and they're both useful ways of thinking about it and just but just be aware that there's it could go either way in terms of you know this is how things work. So it's not that the critics and the way they explain things here shows the textbooks are wrong. It's just saying this is a different way of of thinking about it. All right. Let's look at the Fed's balance sheet here. So this is the first QE. This is QE 2. This is QE 3. And that's what happened from the Corona virus. All right. So you can see the huge expansion how much that dwarfs what was unprecedented you know after the financial crisis. And you can also see it wasn't just a one time increase. It's still going up monthly and you can see like even that the the rate that you know the the angle of that line is pretty steep right now. OK.  All right. So that's in terms of just the quantitative shift beyond that though there was a qualitative shift in what the Federal Reserve has been doing. So this started aggressively back in the wake of the financial crisis and then they just up the ante with the pandemic. So what I mean is it's not just that the Fed is buying a much higher volume of assets. It's the type of assets that the Fed is buying is vastly different right. So I don't have a slide here but if you go and get the you know the the chapter in the online version I have some charts showing the composition of the Fed's balance sheet and how that's changed over time. But historically before 2007 the Fed typically just bought U.S. Treasury bonds right and the idea of the Fed for example going and buying bonds issued by major companies or buying stocks on Wall Street that would have been you know a huge scandal because they would have said there's a huge invitation for corruption there. You don't want central bank officials based in the New York Fed going out and being able to effectively prop up stock prices of individual companies because you know that's such a huge invitation to corruption and yet that's now where we are the Fed right now and sometimes they it goes through like a broader financial vehicle that has these things packaged in it but still nonetheless the Fed can now ultimately or indirectly own things like credit cards, student loans, car loans all sorts of individual companies bonds ETFs that are you know broad based in those things. So all sorts of things that the Fed before would not be able to buy now they can do it and also there's sort of an implicit admission that what they're doing they know is a dubious legality is because technically the way they did this stuff starting back in 2008 like let's say the Fed wanted to buy some mortgage backed securities. The Fed didn't just go out and directly buy those assets because again that the statutory language authorizing the Federal Reserve and giving it the legal authority to buy assets wouldn't allow that right. It wasn't clear you could do that and so and but the Fed had broad powers to make loans right and so what they did is they created these LLCs that were called made in lane and that's because just like there's wall in terms of the geography of Manhattan there's wall street and then made in lane is right near there and so they have like a made in lane LLC that since were limited liability corporation. So they create this legal entity and then the Fed loans money to the made in lane LLC and then the made in lane LLC goes out and buys mortgage backed securities right. So the feds and we didn't buy mortgage backed securities we were talking about that would be illegal we don't do that okay. So that's partly what they did and there's like a law review articles that I you know I cite in the thing where it's not you know some libertarian with an axe to grind just legal professors saying that this is arguably illegal what they're doing here but at the time because people were convinced the world was collapsing that all the feds here to save us thank goodness that you know a lot of people didn't didn't raise you know raise objections to say hey I'm not sure the fed can even legally do this but I'm just saying that's technically what they did to help quash the dissenters and the people saying you just you don't have the authority statutory to do this stuff all right. So that's partly what they did okay. There was a redefinition of M one all right. So this let me explain what happened and then I'll talk about this chart. So the fed made a sort of obscure what they did is they changed there was a certain regulation and the fed tweaked that such that if you had a savings account. So in the U.S. like there's distinction between checking and savings account and historically there was really a distinction there a checking account was a demand deposit it meant that was money you had immediately accessible to you whereas a savings account is the name suggests that was money that was more of a time deposit that was supposed to be oh you know if you're a couple and you have your your accounts at the bank the checking account is the stuff you put in so that when you go and buy your groceries every week you pay the rent what what have you you use your checking whereas the savings account is all we're putting money aside for that vacation next year or put money aside for the kids college and that's what you'd put in the savings account and so there was a distinction the savings account typically paid a higher interest rate and again there were supposed to be limits on it once you put the money in the savings account it was harder to get at because that was your savings right so that was the idea but over time the distinction became blurred and it was real easy especially you know with the rise of online banking and things where you could just go and you know online to your account just move money from your savings kind of your checking account and so this distinction kind of fell away and but technically there was a limit that you could only do it six times a month I believe up till last year and then the Fed just got rid of that requirement too and so then from that point forward even savings account you know there was no there was nothing in practice to distinguish the savings account balance from a checking account balance and so that's why in terms of these monetary aggregates savings account balances before 2020 or before May of 2020 used to be part of M2 but not part of M1 but then because of this regulatory change which went into effect in May of 2020 now there was no distinction between checking and savings accounts in that respect they were just as liquid and so that's why they're saying now okay savings accounts now have to be included as part of M1 so this is the chart of M1 and so if you just looked at it in isolation you'd see this huge jump and then you would know that oh don't be freaked out about that you know Glenback or somebody would say but we insiders know that that's just because of a definitional change but it's kind of sneaky because M1 even under the old definition really did spike at that point so I don't know Joe Solano has an essay on this stuff where he gives some of what he thinks are the ultimate reason like why are they doing this what's the point of this so he doesn't stress this one this is just my I'm just throwing this out there it's conceivable they partly did this because it masks what actually happened to M1 right in other words people seeing this huge jump are going to say oh well that's right when the redefinition occurred and dismiss it has merely a redefinition but I'm saying no M1 even under the old definition really did jump a lot right in this time period too so the Fed really did the banking system really did allow a huge expansion in M1 even according to old definition and the way to see that which I've done in this chart is as I put M2 in there right so that's this one okay so again M2 was not affected by the definition change all they did was they changed the grouping so something that before was M1 sorry was in M2 but not in M1 now becomes part of M1 but M2 the definition has not changed at all and you can see how much that jumped up going into the you know the pandemic or the the fear over the pandemic last year okay so that's one way of just explaining what what happened in case this was on your radar also let me mention I won't dwell on it too long here and I think I will have a few minutes for your questions at the end of this talk but one of the chapters in this understanding money mechanics because we deal with hey wasn't there supposed to be hyperinflation you know after the rounds of QE weren't a lot of these right wing types hard money types of warning about the dollar collapsing Zimbabwe wheelbarrows of cash and that didn't happen so you know what's the story and so one of the ostensible reasons for that that you know people who were warning about QE and then looked like they had egg on their faces one of the defenses they'll give is to say well it's because the money stayed bottled up in the financial sector and it didn't get out into the hands of the public and they give various reasons for why that might have been the case and I'm but I'm saying that's strictly speaking that's not correct right that I mean there are reasons that the banks didn't lend as much as they otherwise might have but M1 or M2 whatever when you're looking at went up tremendously in 2020 as this chart shows and even after you know going into 2008 2009 2010 they rose at much faster rates than they had before okay so just be just be careful if you're if you know if you're trying to deal with a critic who says oh you guys were worrying about hyperinflation it didn't happen don't just say oh because the public didn't get their hands on the money that no according to standard definitions the supply of money in the hands of the public did go way up after the financial crisis and then certainly after this it's just you know retroactive that the demand to hold money went up even more or went up almost as much and that's why you didn't see prices explode but you know looking at that you might have thought gasoline should be $20 a gallon right now so gasoline did go up a lot in the last 12 months you know and measured in US dollars but not that much and so I'm saying that the public did shift its demand like they wanted to hold more actual cash and that makes sense right this pandemic hits everybody's you know doesn't know what's going to happen there's a lockdown in addition to hoarding toilet paper and paper towels what else would you want US dollars that's a good thing right I don't mean that you use it instead of toilet paper but you know I'm saying right so maybe you should I don't know but you get what I'm saying so it that does make sense and so you could see how you know the authorities would have passively accommodated that if you want to use real antiseptic language the way you know some people who think everything works fine that's how they would describe it but regardless of your interpretation I'm just saying make sure you know the facts that M1 M2 did explode over the last 12 months and you can see they continue to grow rapidly okay another change that alarmed some people that happened just recently is last year the Fed got rid of reserve requirements so in this chart you can see required reserves going back several years and they went up so this is the financial crisis in 2008 and so why did the required reserves they go all the way up and then they fall off a cliff right so that line there that vertical line is not just the edge of the graph that's showing required reserves going back down to zero right that's what that is alright and so that happened last so it's I tell other people the other economists and they don't think it's a big deal but I think this is funny that last year the way they announced this it was a Sunday it was in March so if you think back you know early March when more and more people started to say hey you know there's this thing from China and it's coming around and then all other people say oh that's racist don't talk like that and then all of a sudden it flipped to oh my god this is you know why is Trump a more ignoring this stuff he's a monster and the Fed on a Sunday evening had an emergency you know meeting and they announced various measures about how we're going to deal with this you know emerging pandemic and they had a press release and at the bottom of the you know the standard like FOMC notes or something and at the bottom there was this paragraph that said in addition to the above measures the Federal Reserve also took other steps to bolster liquidity and did it including changes to reserve requirements and then elicited some other things and which is a throwaway line and said for more information see the Fed's website and there was like a footnote or sorry a hyperlink but if you click that it didn't take you to further explanation about yeah what are these other measures to bolster liquidity of which you speak it just went back to you know federalreserve.gov okay so that was kind of a dead end but then if you went to like press releases that section if you knew where to look then there was another press release or addendum given to the you know the thing that had said mentioned that as a throwaway line even though it wasn't linked and then if you look at that it listed like five things in the very last one said oh yeah starting next month reserve requirements are 0% alright and so I that's to me that seemed weird but no one else cared but anyway so that's the way they actually announced this and so historically in the US reserve requirements were roughly 10% alright give or take and so what this is saying is now there's no reserve requirements so to be clear this wasn't binding at the time the way economists use that term right so there was there were access reserves in the banking system as a whole right because the Fed had bought so many assets starting in late 2008 and banks hadn't made proportionally as many loans so there was all sorts of access reserves so banks already were fully satisfied so whether reserve requirements are 10% or zero but that didn't affect it's not that you know that this changed it it's not that by doing this now banks could do something they weren't allowed to do the week before because banks were already had were awash in reserves but I think partly why they did this was to open the door you know down the road when things go back more towards normal now they've gotten rid of the reserve requirements so that's just but whether that's why they did or not I'm just pointing out that's what they did okay let me end with this particular slide and maybe I'll have time for one question this is something I covered in the in the chapter and I think it's useful because especially in the wake of the financial crisis you know there's things like the Dodd-Frank Act there's what's called the Basil Accords that you may have heard of and one of the things that's often stressed is oh they're beefing up capital requirements for banks and I think sometimes you know if you're a student especially like you don't understand what's what's that is that a reserve requirement what does that mean so I just had this simple example I'll go through it real fast here and if you want to see more of the details you can you know click on the and read through the chapters but here's a hypothetical bank balance sheet on the left hand side it shows the assets of the bank it's got six million an actual paper currency sitting in the vaults four million dollars is the bank's deposits with the Fed right so electronically the Fed says ah yes Acme Bank you have four million in your account with us and it's got ninety million dollars in mortgages right so it has lent out ninety million dollars and and that money was spent right so that all what the bank is actually holding is the you know the IOU like the legal claim on the people who owe the bank money over the next thirty years let's say and those are valued at ninety million right so there's a hundred million in assets the bank holds terms of its liabilities it's got ninety five million dollars in customer checking account balances right so of all its Acme Bank's customers they have checking accounts and if you add it up how much collectively do those customers think they have in their checking account with Acme Bank the numbers ninety five million so from Acme's perspective that's a liability we owe these people ninety five million notice they couldn't satisfy them they only have ten million you know they only have six million in the actual vault and they could get four million like that from the Fed if they needed to but if all ninety you know if ninety five million people want or they want to withdraw ninety five million Acme doesn't have it right so there's that issue they're vulnerable to a bank run I'm just pointing that incidentally and then the other five million is and that's it right and so in terms of to make the left and right hand side balance that means there's five million in equity right so the people who own Acme Bank the shareholders they have five million in equity based on these numbers okay so in terms of formal reserve requirements if this were before the Fed phased them out back if if Acme needed a ten percent reserve requirement the way you would compute that is you'd say there's ninety five million in checking account balances so if Acme needs ten percent of that that's nine point five million does Acme have nine point five million in reserves yep they've actually got ten million right they got the six million in the vault and the four million with the Fed counts that's as good as money in the vault legally speaking so that's ten million so they actually have five hundred thousand in excess reserves right so if some other bank was short and needed money Acme could lend them five hundred thousand and still be good with their own you know visa their own reserve requirements however in terms of the Basil Accords that say you have to have at least eight percent equity meaning that the capital to total assets ratio with these numbers no they wouldn't be because they've only got five million in capital meaning shareholder equity like assets minus liabilities over a denominator of a hundred million in assets right so their capital ratio is only five percent and since the Basil Accords insist on at least eight this bank would be under capitalized okay so you see how so those are the distinction that's different to reserve requirements and capital requirements so yep Acme in the grand scheme is okay in terms of customers showing up and wanting to take out some of their money they've got oh we got you know ten percent we got more than or we have yeah more than ten percent but in terms of if the market value of those mortgages goes down just a little bit it could wipe out the capital of this bank right because they only have five percent capital ratio and so Acme Bank could go bankrupt if the real estate market crashes even though they're okay if an unusual amount of people want to withdraw their money because they have so much in reserves right so that's the distinction between those two things all right let me I have time for one quick question yes so how much of a CPI increase do you think be required for the Fed to personally increase the one-star rate seven point two three percent he asked how much would CPI need to go up in order for the Fed to raise interest rates to um it would have to be I mean again I don't know a number it would have to be a lot though let me just mention two other things real quick so the Fed has I didn't cover it here but one of the other shifts they made last summer is they switched to average inflation targeting meaning they're saying it's okay if the economy runs hot if it's making up for past undershooting just on average we want to hit our target so that's why right now even though inflation even according to their numbers is like five something percent the headline number and then even with the core blah blah blah three percent or whatever they're not tightening because they're saying no no we just want to say on average and so you know since we think we were undershooting now that's what we're going to do so answer your question I think they did that to give themselves rhetorical leeway that they can let the economy run hot and not be violating their own targets so I think it would take a pretty big CPI number for them to then say oh yeah we better start tightening okay thanks everybody


Hello everybody! Welcome to my channel to Bohemian Crafting. Here is Iva and today I'm coming to share with you a very special project I made. It's kind of my surprise for Sophie, she's owner of Mines Barathe and Wild Eagle. I promised you to show one project from her collection. That collection is called Playtime. It's with kids and it's really beautiful but when I took the video with my project from this collection I was kind of surprised how badly I felt about this project. When I watched that project with my eye it looked great, gorgeous, but when I took it, took that video it was like I didn't feel right. I felt really bad about that project so I didn't share it yet. It's waiting in my bedroom for remaking somehow. I have to change something and I still I didn't realize what is wrong there. So I wanted to surprise Sophie because I really felt really bad about that project. So I put cheese, this beautiful collection from her shop. It's called Hello Christmas and I have to say it's gorgeous. It's really gorgeous. It's gives you that proper Christmas feeling. So I made file folder or folder journal or Christmas planner. Anything you want to use this for I think it's able because it has pockets, it has multi openings, it has blank pages and it's really huge and I really hope you will like it because that collection is stunning. So this is cover. That front cover I didn't make too much embellishments. I used only those wooden snowflakes and here is one of those amazing images from this collection. Here with this clip and with those snowflakes like embellishments. It's holding this beautiful envelope from this collection. It's this opening. I buck it with this vintage note paper music sheet and it looks like this one. It's really stunning. So it's this envelope. I didn't put anything inside because I'm not sure what I can put inside right now. Here I made just very small, very small, what is it, booklet and this is cover. Here is piece of those beautiful images. Those what is the bingo card I found on Pinterest and this I found there as well. This is back cover. Again I use those snowflakes and I use this trim. I've got it on my eBay if you will be interested to purchase that. I've got a few of them on my eBay because it's really stunning. When you open it it looks like this. I'm gonna move this a little bit because this will be you. It can be opened on this side like this and it can be opened here as well. I'm gonna show you later. So here we've got pocket. Here I really love this. Here is Noelle I think. This is Noelle because Noelle worn this green green what is it, cloth and it's really gorgeous. It's that stunning vintage proper vintage image of Noelle or Santa Claus and I made here three pockets. One is here, another one is here and another small one. It's here on the top. It's like this one. This envelope it's fit there properly. So here are three pockets I made. This is from this collection as well. I packed that with just with the net paper so it's extra space for journaling. And I've got here those two tags. Those tags are like clocking clocking cards. I think it's called clocking cards. When you're going to work and you have to put that card to that machine when it makes and you've got their tick which day you came and which hour you came. This is from my country and it's from 1963. My auntie found it for me huge box which I'm gonna use them because they are amazing. So I included here again that beautiful envelope in those pockets. And when you open it you've got this section. Here I've got just a few coffee dyed papers. This is left over so I fussy cut out with not fussy cut out.  It's that flat deli but you've got this flat deli and then it's that Eiffel tower so I die cut this flat deli. And it's just blank papers, coffee dyed papers. It's like for your notes or plans or drawing. And it's holding with the beautiful mini mini pin or pack. No, pin pack. It's here and here we've got those pockets. This can be opened up. Sorry, my fork. I'm trying those bowls made over the fork and it's really easy peasy. I really like that. So this can be opened like this. And here is so many gorgeous pockets, bags, spaces for journaling or for notes. Here I made two a little bit deeper pockets here and here behind this doily which is also in that beautiful collection. And I include loads of cards. I made those are recipe card, recipe recipe. I hope I'm saying that right for your Christmas food, cookies, anything you like to eat about Christmas. So here is so many of these in those pockets so you can plan which food you're gonna cook or prepare which cookies you're gonna bake. This is from this gorgeous collection and here I made it like on the thing. So here is space maybe for some picture IQ cooking or like you preparing that beautiful table. Here I've got small booklet I used again papers from this collection. This is just pocket and this tag is from this gorgeous collection. I decorated it very easily with this coffee died mini tag with this jingle bell. Again, here I used glossy accent and this gorgeous look what I found in my stuff. Okay, these couches I hope you will see that large eyelet it's eight millimeters I think eight millimeters huge eyelet. I've got full back of these and I thought that I don't have a tool but when I purchased these I purchased also tools for using these huge eyelets and I really love them they make beautiful embellishment. So I use glossy accent on this this one and it looks like this it's from this gorgeous collection. Here is backside here I make like slide pocket behind so it can be something can be nope yes yes slide behind just small note here is vintage image photography and here just few pages for journaling here another gorgeous image this I've got from Pinterest and again few pages for writing down your plants maybe I saw many of you making that December daily which is really gorgeous but I'm not the person who is writing down every day what I made maybe it's wrong because then I don't don't remember what I did or what was excited at that day so I think to to do those daily planners or daily journals it's amazing thing especially on Christmas time. Here I've got Christmas shopping list I found it on eBay as well not on eBay on Pinterest as well and it's holding right behind this one and this just slide in here no yes no yes yes today come on like this okay here we've got this gorgeous image and I made pocket behind and I include there those index cards few tags they are made just from paper it's just extra space for journaling or for notes here small tag and this is another image from this gorgeous collection again I packed it with linen paper so it's here in this pocket and I made because I really love all those tabs in folders I made here it's like the dimensional pocket and I I'm gonna take off all these cards and I hope you will see that I made that um tabs on those pockets as well and I use this gorgeous paper from this collection and it looks really really great I really like this one. Sophie made amazing job with this collection it's really that Christmas feeling I love Christmas I love all that time even that madness about Christmas I really love that it's it's just such a beautiful time in the year and I included those cards I'm gonna put them later and here we've got close it like this go there go there and here we've got small packs in those four pockets they are just teeny teeny maybe for small photos like those profile photos or for small notes they've got in those four pockets and here it's closing on magnet holding on magnet so it's uh this I found on uh on Pinterest and it was like Christmas for tomato I found it those beautiful frames so I made them like extra space for journaling or for your photos and when you open it on that other side you've got this one here you've got again those frames and here I've got extra space for journaling and also I need some I'm gonna take it from here I've got pocket behind for tags and this is the same here is space for journaling my in-view space for journaling here it's space maybe for photos or for some extra notes and you can include dates you know those numbers everywhere and make it like your daily December daily and capture all your moments in December and here I used it's not a toilet paper roll but it in the same style I used just cardstock and I made it like those three pockets they are including tags I think all of them one it's probably lost inside come on put go there it's there put in all of them I've got tags and also all of them they had pocket here so you can slide something behind those beautiful doilies come on go there from that other side I use those labels I've got those dies on my ebay as well if you're if you're interested they are uh oh my god uh tonic studio I believe hopefully they are tonic studio and I made it like uh what is it not pocket like slide pocket like this all of them and these beautiful images I found on uh oh my god I'm not sure why I'm saying that ebay on Pinterest as well and here we've got like this one pocket here this is image from this beautiful collection so it's pocket here one pocket behind that beautiful image again with this clock card and another pocket behind that looks like this when you take off everything it looks like this one so you could there's so many tags and images and I forgot to put there and here I've got like a mat or holding for your notes this I saw on Xenarovan uh on her channel I think I watched some gothic gothic photo album not sure which photo album I watched her tutorials and she made those paper clips through that mat so you can hold anything on that so I use that that idea I will put link for Xenarovan channel down below so you can check out this amazing woman she's amazing amazing artist so this is just easy peasy mat and you can place there anything you want and decorate it anyhow you want again that clock card from this side I decorated with another beautiful paper from this Sophie's collection I really like that collection it's it's so amazing it's proper vintage and it has so many beautiful images so it's here and just slide in behind those tags and it's holding everything nicely together and it's also making beautiful background for those pockets this section and now we're gonna move to this one and it's opening like this here we've got pocket here we've got pocket I made two tags using one paper from this gorgeous collection they are here here is pocket and I've got two tags inside two three three tags inside and I stand them like this go there go there and I think here I used those stamps are from Tim Holtz Christmas collection and here I made two small booklets they are holding with this large paper clip one it's slide from from bottom and I saw this one on a Cathy Orta channel she's making those slide holders so when it's from the bottom it's sliding up and it's like looks like this here is pocket come here my skin is so dry from from the work it's so many there now and I've got so so dry skin sorry so here and here is small pocket with this nice and naughty list it's here when you open it here is another beautiful image from this collection Hello Christmas and here another image from this gorgeous collection Hello Christmas and I made it like a booklet looks like this here is small pocket so you can something put here and hold it and this is from backside and it's like holding holding spot you know it's too early and I think my brain still doesn't work so I'm very sorry for my English my sons are still sleeping so it's really early and it's sliding just like this inside and here we've got another booklet and it's sliding from this opening spot and here I made small pocket using again this gorgeous beautiful paper and there is just few paper tacks including for your notes here that booklet here is pocket so you can put anything there this is that other sign as you can see those images are gorgeous and you've got there so many those great signs like joy peace love then is Merry Christmas there is so many so many documented memories ho ho ho it's really gorgeous and the the sample 25 it's there many times so you can fussy cut out and decorate it your pages really well with this collection here another image here is again a pocket and this is that very small booklet here is noel and then I used image from this collection this is actually paper from book where was a book for noel so I used that it wasn't about christmas by the way but this was there like uh like name of capture so I used that and here just a few ledger papers slinner papers large tacks so it's very small booklet for your notes and it's sliding just right here slide it there like this this is here and here I've got just small flap it's holding this together here I've got small tag and it's holding this pocket with this bingo card when you put there those tacks you actually don't need to put there anything else but I mean this one like embellishment so if you slide it all over it's holding really well everything together so I think it's all what I can show you about this folder journal it was really amazing to work with this collection that collection it's stunning and it's proper christmasy and because I love christmas I really enjoy it and I hope that Sophie will like it and I'm sorry I can't still show you that playtime with those kids but if you can go to check out both these collections this is hello christmas from mind's battery I will put links down below and if you can go to check out that playtime with kids I failed to work with that collection I hope I will repair that project somehow and I will be able to share with you but I hope you like this one because I really enjoy and my next video will be probably about this as I was watching Cathy Orta channel I saw that her lap book and then I was googling what lap book mean and I saw many other videos from kids from school which I didn't know they are using it's a really amazing thing that lap book so I tried to make a few of them just from a coffee diet paper and from book pages and I really like that it was like proper relaxing you don't have to think about if I can put this there because all those book pages they are matching all together and it was really really relaxing crafting very easy crafting so I think I will place them on my eBay as well probably like this maybe someone will be interested to decorate it I think it will be so funny to decorate this one and again I use those ledger papers so all of this will be probably on my eBay if you are interested and I really hope you will go to check out this gorgeous hello Christmas collection thank you so much for watching I hope you having wonderful time before Christmas I hope you you are prepared already for Christmas I'm not I need to bake our cookies I need to decorate our Christmas Christmas trees I have to say I failed with my Christmas tree I somehow in that spring house cleaning you know in spring time you're making that huge cleaning that everything what what is old have to go out and you want to have a nice fresh house on the spring so somehow I think somehow I lost half of our Christmas tree what I found it's just that top you put to that pipe and you put those branches to that bottom pipe so I've got those branches but I don't have that bottom pipe I've got only that top so I decide because I've got two those stops it was happened to me I think two years ago so I decided to do not go to buy another Christmas tree I've got one small one proper all small one and I'm going to make our Christmas like from Mr. Dickens Christmas Carol I'm going to make three mini Christmas trees one for the past one for the present and one for the future I'm not sure where I will place them because we've got a really small house but I will try so thank you so much for watching have a beautiful time have a wonderful time with creating something with this gorgeous collection enjoy and if you can share it with me because I will love to see what you create with this collection it's really amazing thank you so much for watching have a beautiful time and see you next time bye


So if you watched that battle I posted a while back I uh lost my earring during it. I've had the earring for like two years. What's up guys my name is Kai and I just got back from a 12-day road trip from the bottom of the west coast to the top back down to the bottom that's from San Diego to Seattle and back down. I've always wanted to do a road trip but I never had an excuse until my aunt wanted to give us a table and I volunteered to go pick it up. Before I went off the road trip I did a lot of research beforehand looking on youtube videos and blogs about how to make the most and conveniently navigate your road trip and one of the biggest tips that kept popping up was that you should bring good company and it makes sense why road tripping with friends is an important tip. It's safer you save money on gas and lodging and you'd be in good company throughout the ride but unfortunately nobody was available and I would be going on this road trip alone.  Road tripping alone means that your trip is entirely in your hands and you can take it wherever you want to go. Being a solo traveler allows you access to a lot more places that you wouldn't be able to go in as a group for example I didn't have a lot of places to stay while I was road tripping I didn't book my accommodations in advance which I don't recommend I feel like you should have those settled as soon as you can but I'm lucky enough to have gone on Facebook looked into my communities of breakers and schoolmates and hit them up for whenever I was coming to town very last minute and I really appreciate all of you guys who open your doors to me and I'm sure it was a lot easier for you to do so because I was alone and not with more people that is one of the reasons why I believe road tripping alone is very beneficial because you are the boss of your trip and that means that you can take it wherever you want it to go and you can go on whatever tangents you want without any pressure of having to hold a group back and this actually segues into number two very well which is it is very easy for you to make connections. I don't know if you've ever been in a group of friends outside maybe like a tea shop or a restaurant and you are with them but you see other people that you want to talk to but you really can't and you really don't want to because you're already with friends that is not the case when you are alone if you ever want to go up to somebody and talk to them you can because you don't have the obligation to stay with the pack because I wasn't already part of a road trip group I was traveling with I was able to meet and connect with new people new communities that I feel like I wouldn't have had the opportunity to if otherwise it is much easier to go down the rabbit hole by yourself because with a group it all might not fit number three I would say is a huge huge factor and benefit to traveling alone is that you learn self-sufficiency you don't have anybody to depend on to keep track of things for you or drive for you you are by yourself until you find a way to connect with other people as daunting as that sounds it's not so bad when you're actually doing it you're not thinking and you're not scared about the struggles that you'll be facing you're just dealing with those struggles so if you're looking for a way to improve your self-sufficiency I would highly recommend going on a road trip alone because traveling alone forces you to be self-sufficient and during all that time being alone in your car and on the road you have access to what I believe personally is one of the most valuable things you can have especially when you're my age an adolescent or somebody just trying to find their path and that's the space to discover yourself you don't have to obligate yourself to other people's agendas you are on your own journey you are in the car alone that means you get to listen to what you want you get to think about what you want because I was on a road trip alone I did a lot of things that I feel I wouldn't have been able to do if I were with friends which is like listen to a 24-hour audiobook on Benjamin Franklin's life even with my closest friends I feel like it'd be really hard to listen to that just casually but because I was alone I was able to learn while driving and in the silence I was able to think my own thoughts and seeing all those different environments fly by and experiencing all these things in your own headspace is so powerful for your growth in conclusion while traveling with friends is the popular choice I believe road tripping alone offers so many unique benefits that can truly truly shape and form the foundations of who you become as an individual for the better to those of you all who met with me housed me took care of me talked to me on this trip I can't thank you enough and I'll never forget the times we had and I plan on paying it forward so don't worry while I was on the road for hours not really having that much time to sit down and edit I'm now buried in footage and I have to find my way through all of this stuff and I apologize for the lateness for the crossroads podcast if you haven't watched that video of my announcements I am launching a podcast now that I'm back I am going to go 100% on this and get this out to you guys by the end of this week which is the second week of October go ahead and follow me on instagram at vertigo.vision for regular updates and uh my website is also the same name vertigo.vision and that's where the crossroads podcast will be hosted on top of that it'll be posted on youtube spotify once we hit five episodes apple podcast and all of your favorite streaming sites I look forward to talking to you guys soon please let me know how you felt about this video and what other videos you'd like to see thank you guys for watching take care and best of luck on all of your journeys I will be rooting for you peace