Welcome, folks, this is Tom O'Brien of TFNN. We're here five days a week. We go seven hours a day. We go 24 hours a day on the internet at tfnn.com. Always remember, folks, whatever you think about, you bring about whatever you focus on grows. Hope everyone's having a great day, safe day. Let's make it a great week, folks. To begin, a great relationship, know what you want.  There are millions of men and women on, and some of them will make a great match for you and others won't. The two of you only need to be a key and lock, a match that works. Mugging wise, let's take a look at it out here. We have the Dow Industrial's up 279, Nasdaq down eight, S&P's up 20. Gold, gold contract down $26.10 traded 1970, an ounce silver, an ounce 16 cents, $23.17 an ounce. Light Sweet Crew, up $3.66 cents, at $72.95 a barrel, notes and bonds. The 10-year note, down a full point, plus three ticks, at $1.15 flat, the 30-year, off almost two points, one point plus 31 ticks, 32 ticks equals one point, at $1.3012, and King Dollar. King Dollar right now trading down $269 at $102, 847. The year is at $107, the yen is out here at a price point of $131, the British pound is at $122 to one U.S. dollar. Our phone number is<PHONE_NUMBER>. Give us a call, folks, want to know what's going on in your world and the world of the S&P's. Let's take a look at it. What do you have? Well, if we take a look at the E-mini first, I suspect I just did that update that we're gonna be gamed somewhere around this 2033, no, 2000, 4033. Right now you're 19 ticks, 19 points rather. And what's happening now, this is cool, this is here. So watch how this shakes out, folks, okay? You see this bar right here? The bar that we're talking about, the 10-minute bar that we're on right now. Let me look at this thing, yeah. Okay, so it's 309. And this 10-minute bar, what happened here, folks, is we got to 4027, but yet we're at 4020 right now. But see the volume? See how the volume exploded to the higher? When you see something like that, that is saying that it still wants higher price. This is a tricky one, but the bottom line is that it's telling me that it does want to get up into the bar where we started off from, which is the 4033 this morning. So we'll see how that baby shakes out. We go into the, that's in the short term. We take a look at the spy, bottom line, you get a sideways move, you get a sideways move out here with light volume. Pull this baby up. Yeah, well actually you're gonna be higher with light volume. And I suspect the next couple of days you're gonna bounce around, we'll probably go test the spike that we had out there on last Wednesday. That was the 402, also with light volume. This will mess around here for a bit after the way that bottom line, you had the couple banking deals and the market didn't get down a lot. That's real, well actually it didn't get down at all. I think we finished up last week. Yeah, we did, we finished up last week. That's how deep it is right now because that has to do with where we came from going all the way back to January. That's the reality. We're gonna take a look at the NQs. Bring up the NQs, we take a look at the NQs here. What do we have inside the NQs? Okay, so these babies here, same type of setup. See that volume expansion? That volume expansion. Okay, we're going against 15, 150, one second. 15,000. We just did 12, 13,000 right there. This wants higher price too. This wants higher, we'll see where this shakes out. And the Qs, once we got 848. Yeah, we're not inside, the NQs have to get inside the 12,848, that's the number because the NQs are set up differently than the S&P. They get inside 12,848, then it would have game up to the 12,952. Gold, we look at the gold contract out here, bottom line inside the gold contract. You get 1935, that's wide open to get hit once again. It's so interesting, man. My take is that we are going to 2,500 right now. Now what does right now mean? This is what gets interesting, right? It's like, okay, it's right now, like two or three months from now, or two or three weeks or two or three days, right? I'd say we're in the two or three month deal. You can see, oh, they're trying to hold this baby down. They, there's just, there's some traders at both sides of the market. That's the bottom line. As it keeps pushing over this, 1983, it is getting sold, can't hold price at that level. That sets up right there at 1935, coming back down again. Now, most of the time, yeah, 1935 is the top of that. 1892 is the bottom. And if they're right in that context, folks, what will end up happening, it will be fast and furious, because that's what gold loves to do. Fast, furious, just take yourself. Now, let's talk about the bond market, because it looks to me like bonds have bottomed, and I suspect that that is it, that the rates have peaked. We take a look at this, what you're gonna see, you're backing down today, okay? We're backing down with 1.1 million contracts. Well, when you take a look at this, man, I mean, we went higher in a dramatic way, and both times we backed down. We backed down a little last week, went top side again, had pretty good volume at the high, but that was 100% move for move. Now, you're just backing down slightly. And the Fed has a deal, there's no two ways about it. The deal is employment, price, stability, right? Well, guess what, folks, this is gonna be, it's not gonna be unique, but what's gonna, what has already happened is this, they had to push so hard and so fast that they blew up the banking system. And it's blown up, man. It's just like one of the targets in the den, I definitely was saying earlier, that yeah, banks have assets, but they're allowing the banks to say those assets are worth more money than they are, okay? So picture, this is what you have. If the Fed keeps going up on rates, right, that's more of an implosion. So they're looking at, okay, am I gonna implode the rates? Or do I have to stop the rates? And the fact of the matter is, bottom line, inflation's gonna go more. But it gets heavier than that. The bottom line is that they're gonna burn the public versus burning the banks, because you can't burn the banks, well, not the burning of the banks, but the bottom line is that the banks would burn, and if all the banks burn, then everything burns. So my take on this, and I'll bring up the chart when we come back from the break, you know, the bond market, technically, it looks to me like it's going higher. We already have three higher highs, two higher lows. And so I think that's the way it's gonna go. And then, you know, bottom line, if you haven't got the gold report, go check it out, because that means hard assets are going, man, big time, because if they're gonna make that choice, guess what? Prices are still gonna go up, because every time that they do raise rates, the losses of the banks get incredibly more. Stay right there, folks, to come right back.


Johnny dollar so you've stayed on there in Miami. That's right good If I had any sense, I'd stick around in Florida the rest of the winter Why not going on back to the snow and cold of Connecticut, and who are you? Don Don it's nice to hear from you. How did you know I was down here from Pat McCracken at Universal Adjustment Bureau? So I told him I'd try to catch up with you before you head up on north again. I think I will Yes, sir nor rain nor sleet nor snow nor anything else. She'll keep this insurance investigator from heading home Getting away from here in one piece Well, you're still holding down the office of tri-state life and casualty aren't you? Well, I love you dearly done I've been paid a lot of nice fat commissions by that company of yours exactly and that's because of that very last two or three Cases I've handled for you have been so risky so dangerous and so darned unprofitable No, please darn. Let me duck this one. What all I need is five minutes with you Five minutes. That's right Well, what kind of a case could I possibly cover in five minutes? None at all that I know of well then did I say anything about taking on a case? Well, no, but I'll tell you this Five minutes with me over here may very well keep me from getting involved in something pretty serious Yeah, like what?  Yes, johnny Well, I still think you're kidding But okay, don I'll see you. I'm sure it's a gag has to be And yet Coming from don boom hour CBS radio brings you bob reddick in the exciting adventures of the man with the action-pact expense account America's fabulous freelance insurance investigator yours truly johnny dollar expense account submitted by special investigator johnny dollar to the tri state life and casually insurance company office in sarasota, florida Following is an account of expenses incurred during my investigation of The big date matter expense account item one 2020 playing fair tips and taxi In a little over an hour from the time I left miami I was in sarasota talking to don boom hour in his office near the foot of main street Sure johnny simply because I asked you to wrong don only reason I agreed to come on over here on my way back to harksford is because it means a little more time away from the snow up there Yeah, florida is pretty nice this time of the year, isn't it? Handle a jewelry store robbery there in miami, huh? Yes, and almost got my head shot off Which is why I'd like to be able to relax for a while But now What is this case you seem to think I can solve in five minutes for you? I told you I have no case for you Yes, I guess you did all I want you to do is to check over some uh Some of these figures for me Uh don you know the only kind of figures that I give a hang about I know I know the one's on pretty girl Why not after all it's because you're a state old married man. Don't knock it johnny How is francis by the way fine just fine. Do you give him my best do it yourself? I told him that if I could persuade you to come here at all I was sure I could get you to stick around for a few days. How about it? We'll see Now about those figures you mentioned oh, yeah Johnny have you kept any account of the monies we've paid you this past year in commissions I can tell you down to the last penny good because If it agrees with these figures here All you have to do is sign this statement and the bureau of internal revenue will quit threatening to send me up the river So that's what the big emergency is one of my part-time clerks balled up some of the paid out items a couple of months ago and The tax man just wants proof that we actually gave you this money. So If this figure agrees with yours And it does good good Well then take this pen A fixture lawful legal signature and try for once to make it legible sure Under the desk Johnny those shots are right outside on the street telling me move over so I Hey, why shots did you say? What's the matter with you? Can't you hear him? Just take a good look out there? Come on?  Do you mean that mob? It's gathering Yes It looks like half the town has come to see what it's all about I hope they don't lean against my plate glass window and break it in. Look at that cross work out. Yeah pretty too, isn't she? Yes, come on. I'll see if I can give her a hand. Come on, Don. Oh, why not? Now I don't think I know her Johnny. Well, that's too bad But she might do anyway. I do for what? That's a date for you. What else a date? Sure That wingding that Francis and I are taking you two out at the art club on bird key tonight. Oh, sure She is kind of cute looking, isn't she? Nice looking car too brand new and after all you're going to need some transportation Come on. I'll see if I can find out what's wrong with that bus of hers. Sure. Johnny, you go right ahead Okay, I will and purely incidentally find out if she has a nice evening dress. She'd like to show off tonight Why not? A number of years ago It was said that in spite of the large population of this planet Men and women remain the most inaccessible things on it Today we see this lack of understanding among peoples of the world reflected in headline stories But it isn't because the people of the world are enemies All people want to be friends Long before the termination of world war two Reverend Eugene Wood the Methodist minister from Oceanside, California Went into a scotsdale, Arizona camp where german prisoners of war were interned and offered his services to the imprisoned men Among other things reverend wood taught the men English and he taught them about the united states of america During the following years after the men had been repatriated to their native germany Nearly half of the internees corresponded frequently with reverend wood Those men expressed a unique understanding of the people and the country of the united states of america This great feeling of friendship and understanding prompted the minister to make a pilgrimage to europe To seek out the men he had befriended in the prisoner of war camp in arizona This gesture on reverend wood's part gained him a fantastic welcome everywhere he went In all the places he visited he spread the gospel of love and friendship and had it returned to him There were no enemies Only men with the love of freedom The right of all men By the time i got outside the door of don boomhowers office it looked as though half the town was gathered there By the time i got in the car where the cute little blonde gal was fighting the ignition switch to cut the engine stop it from backfiring Three quarters of the town was present Including the merchants and customers from all the stores and cafes and hotels there on main street The folks had come to see the fun and of course offer all kinds of unhelpful suggestions Well don't just stand there please Can't you help me get this thing stopped can't you turn off that switch? I mean the ignition key. No, and i've already broken two fingernails Well, all right, then pull the release for the hood the wall under the dash there to the left of the steering post you see it That's it give it a pull so i can go around to the front and raise the hood Now what's gonna let do oh that awful no When i get the hood open i can pull a wire off the distributor and stop the engine distributor What's the distributor just pull on that little handle That one go ahead pull it Okay, now if i can get the hood open i excuse me. Excuse me And i surely would appreciate it right here now What the sam hill don't tell me this thing is stuck to And now it's your mind telling me what's the big idea around here officer. That's right But y'all think you're trying to do around here. I smell a few anyhow Now look help me get this hood open. It's stuck. You mean it isn't noisy enough for you as it is Okay fair now i'll take care of this man. You and the boys get the crowd moving along. Okay sergeant Now you look at everybody. Look will you help me get this hood open so we can stop the engine stop the engine Yes, sure now come on.  I have been trying to I told you officer That's just a trouble.  Now i love this. No sergeant Well, that is the the ignition switch is stuck And I tell you if you all don't put out this there noise Plus I'm gonna haul you in the car and this gal friend of yours off to Yes, yes, it's stopped. Well, that's that oh it is, huh Young lady you get this car out of here and over to some repair shop for this happens again. You hear me now When I wait miss miss what you did is stop it from making that off. Oh nothing absolutely nothing, but now I Upset about it happening right here on the main street. Okay. Okay. Okay. Just get it out of here Fair enough.  Oh my pleasure and maybe I'd better go along with you to make sure it Doesn't do it again. Oh, it runs fine now, but thanks anyway, I'll tell you to get this thing out of here Yes, sir right away. Oh, no wait wait, please wait nothing you go on Listen listen, I want to I just want miss miss The only thing you want to do is keep out of jail officer The idea letting that thing backfire out here on main street. What do you think I had anything to do with it? If I had any sense, I'd lock you up right now. Oh, no, wait a minute officer Go on get on your way. I don't know who you are The only way I'm going to find out is by putting your name on the blot out headquarters for the statement of peace What and I'm going to do just that unless you make yourself might as scarce around here in a hurry Now go on. Oh now look here. Will you don't bother me?  Okay, sergeant. All right. You mean well, I guess that's that Well, it doesn't look as though you did too well, johnny Now I didn't really have a chance to talk to her. That's too bad Yes, it is She's a living doll. All right Are you sure you don't know who she is done? No, sorry But don't worry, johnny. I'll round you up some kind of a date for the affair at the club Now let's see maybe bill hall knows somebody nicer Forster harmer What's the matter? I said, what's the matter? Oh, um Nothing nothing. I um I was just thinking And I'll bet she dances like a dream I wonder what her name is. No, we'll never know. I'm afraid Now don't bank on that But now if you'll just sign this statement that you came over here to sign. Oh, sure Hey here Here use this pen. All right There you are Legible too Now I'll call francis and tell her that you're staying over with us Only I'd notice the license on her car Then I'll see what charming good-looking girl around this town is available I doubt if even the police and would like the famous johnny dollar for a date tonight Obviously that one cop didn't know her Hardly dare to ask him anyway, johnny Which means that probably none of the other police who were there would be of any help either What are you talking about that girl my date for tonight? Oh now johnny. I was only kidding about her Well, I'm not but you don't even know her. I will chances are that if if you should find her and Proposition her for a date.  I'll risk it. Yeah What if she turns out to be somebody's wife No wedding ring. Oh You did notice that I noticed that Among other things, but how are you going to find her? Well, if she's still here in sarasota if she lives here. Oh now johnny. This is all a little Okay, okay. Go ahead and find her How? Well I have an idea. Yeah, what may I borrow your car for a little while? Yeah, yeah Yeah, help yourself game When do I see you again? But just give me a little time all you want Up until dinner time when you'll have to pick me up here Now what yes, I see stopping at that jewelry store across the street. Here comes another proud car from the other end Uh-oh johnny. Yeah, I see him same policeman. You're arguing with a few minutes ago Only why is he coming in here? I'm sure I don't know officer All right now bust up what just put up your hand so I can slip these cuffs on you Sorry, mr. Boom. What are you talking about? You think I don't know now what you all were up to out there you and that girl What creating all that disturbance out on the street without backfiring car now officer So it's to draw the crowd so as your confederate could have a clear field to rob that jewelry store across the street Put out your hands. Oh now hold everything that store was robbed while the mob was gathered around the car Thanks to this man's diverse nerve tactics somebody walked out with must have been 60 or 70 thousand dollars With the watches and pins and rings and everything So they called us up. I wrote the insurance on that store. Now if you don't want to come along peaceful, mr Now whoa now Yeah, yes officer wait. What's that mr. Boom? How don't you know this man? This is johnny dollar Johnny dollar. That's right y'all mean That freelance insurer Well, you mean the friend of the lieutenant that comes down here now and then this is johnny dollar here officer My credentials. I've known him for years officer. He's johnny dollar. All right, and these papers all look Yeah, if he was out there by that car so don you insured that store, huh? Does that mean I'm on expense account as of now as of now? Yeah, well now fine fine and as long as I have the keys to your car Well, I'll see you later. Yeah. Now you wait a minute, mr Yeah, unless I can get lieutenant phillips to identify. Oh, he'll be glad to I'm sure yeah now you all wait You're the only suspect I got oh no, you haven't By the time the officer had recovered his wits enough to barge out the door after me I'd raced around to the back of his office and taken off in don boomhowers car Stop number one was the car agency that sold the same make the gorgeous blonde have been driving that backfired there on main street No, they hadn't seen either her or the car in the repair shop Well, yeah, one of our nice new models kick up and backfire like that. No, sir Then I made the rounds of every car agency in town nothing All right that clinched it for me. I mean the reason for that car acting up as it had But how to find it if that is it was still in Sarasota I drove aimlessly all over the place hoping and praying that somehow I just happened to spot it Yes, and hoping that don boomhowers been able to explain things so the police wouldn't track me down and cramp my style I racked my brain for some idea some idea how to find that girl in her car And I guess the strain on my so-called brain made me a little foolish Or I suddenly found that I'd driven way out of town way out on be rich road I started ahead into a little side road on the edge of the swamp to turn around and then Well, don't tell me there isn't luck in solving these cases Stole there a couple of hundred yards up that dirt road was the car. I'd been looking for And standing beside it Waving for somebody to stop and help her Was the luscious little blonde Somebody came along to help me get this old car started. Well, hi there Why it's you a nice man who tried to help me back in town none other Well, you're certainly my good Samaritan today. Now. What seems to be the trouble. I don't know. It just stopped another one I I don't know a thing about cars except how drive them Now maybe I should have gone along with you after that trouble back in town Well, somebody who knows something about these things should have Well, this time I see you got the hood released to work Yes, I just pulled out that little handle and it popped open. Yeah Well now let's see Just um, how did you happen to be coming out this way? No, maybe I was out looking for you Oh why Well, well, I first saw you there in town. I thought maybe I'd ask you for a date tonight And don't hand me a crack in the face for saying it. Why should I? Well, thanks You're cute What's your name? Johnny Johnny dollar You're Well, that's a funny name Gee Johnny, I I hope you can get this run again for me. Well, I'll take a look So I took a look with one eye watching her But she didn't make a move just stood there smiling I replaced the ignition cable at a jarg loose And then I saw it That simple little device that meant this car had been rigged for backfire deliberately Just like the old chicago mobsters did it in order to cover the sound of gunshots And then then I thought I heard a noise inside the car Somebody hidden behind the front seat maybe When I walked around and opened the back door I see yeah, that's right. Mr. Johnny dollar. You see a 38 and it's aimed straight at your belly Should I pick up a rock and slug him Jim? I just relax um and that's sacking there full of the loot from the jewelry store. What else did he fix the car south? Yeah, I think so Jim. Oh, it's fixed.  Yeah, yeah sure turn around darling. Okay. Now Jim listen Turn around So I can be nice to you Give it to you in the back of the head so you won't know when it hits me. Oh, no, no wait, jimmy. Look what look That car that's come on what it looks like. They followed me after it.  Dollar sure sergeant and I suppose I might have known you'd be tailing me Yeah, well, yes, sir. Thanks. Thanks very much Well, it's a pleasure mr. Dollar and now What about her johnny? Now listen johnny. Well, you see I kind of asked her for a date officer. Yes, he did But how about if she has a date with you instead? Say at headquarters So thanks to sheer luck and clean living of course I'll pick up a commission on the recovery of all that jewelry Expense account total only that 20 bucks or so for the extra plane ride What a life Yours truly Johnny dollar They say that clothes make the man A smart-looking uniform can do even more And oddly enough Military uniforms usually have been patterned after the civilian clothes of the day With some pretty fancy additions, of course The buxkin clad rifleman soldier of 1775 Was dressed the same as the frontier trapper The naval seamen the same as the merchant sailor It wasn't until the new american government was able to get enough money scraped together that uniforms Started to get fancy But the uniforms weren't really uniform The infantry had one color combination and the artillery had another Even most regiments were dressed differently Some uniforms were blue and white Some were red and white And others were red white and blue Oh, yes, it looked like a pretty patriotic army But each man also made an excellent target It was more than a hundred years before it was decided that all the frills and colors Plumes and gold braid would make a better dress uniform than fighting clothes As battle tactics and weapons changed So did the uniforms Today, the american fighting man has a greater chance of survival in a uniform that blends with nature And it's a uniform to be proud of for the great american heritage it represents Yours truly johnny dollar starring bob reddick is written by jack johnstone Produced and directed by bruno zirato jr musical supervision by ethyl huber Here to now a cast were madeline sure what is sally robert griden as the sergeant Carl frank as don boomhower larry hains as jim and larry robinson as the car dealer Be sure to join us next week same time and station for another exciting story of yours truly johnny dollar This is art hannah speaking Johnny dollar has come to you through the worldwide facilities of the united states armed forces radio and television service


J.Crew, Mickey Drexler stepping down. I don't think anyone could really have turned around. You know, J.Crew is a parallel company in the mall. And the mall is dying. Parallel's dying. Now, PVH has managed to transcend that. And they just won some illustrious awards for Calvin Klein for their designer. But PVH's strength is inventory control at the mall and great growth in Europe. J.Crew did not have that as a backdrop. And by the way, Mabel was doing quite well. I know he wasn't able to blow that up.  I say he said he was overrun by technology. And that's true. But, you know, let's see what James Brett does from West Elm. But I think that the idea, if you go over the conference calls for Lululemon, a last quarter, not this one. If you go over the last two conference calls for Urban Outfitters and you talk about fashion, I think you would understand exactly the jam that Mickey was in. I don't want to judge Mickey too harshly. He's one of the great merchants of our time. And I don't think that anyone can really navigate that scenario. Zara's has had some luck in fast supply chain. But look at Ralph Lauren.  And that's not done well. And I can just, you know, I can tick off all the different apparel companies that are having trouble in the mall. Mickey was just one of them. That's all.


Okay, so we are almost done with the clumping part So what I want to do now is create another net box around the grass card itself. So we'll just call this grass card and Then let's just collapse both these guys. All right, so you could probably see how nicely this Wraps up function functionality for you. All right, just keeps your graphs nice and clean Keeps your sanity, you know, because you can get quite lost in some of these Houdini networks And so I I tend to try to stay organized as possible. Plus it also helps other people To understand what you're doing With your networks. Okay, so let's go and actually get these all bent So I want them to bend the base off of their current density value over here. Okay, so We know we have a point here All right, we know that this particular point here Has a density value that goes from zero to one. All right, so as we get to zero I want to have it bend a little bit more and as we get to one. I want it to be a little bit more straight Okay, so let's drop down a bend node here and we're gonna wire it in right after we do our UV transform Oh and inside of the UV transform here so instead of Dividing it by four I multiply it by a point two five because if we just take the width of our texture I just wanted to note this. All right, so if this is zero and this is one we divide it by four We get point two five and so to make our UVs, you know exactly perfect. We need to make sure that our card cross-section Line is also zero point two five and that basically makes a perfect fit So if I were to come back in here, you can see that all over UV shells now fit perfectly in Line if I were to turn on single pass here You can see that we're getting that Perfectly so awesome. So we're getting you know, our UVs automatically selecting a spot on the UV shell cool So let's focus on the the bend now. So I just want to basically put this guy in there All right, so let's just take a look at what we get when we bend, you know A certain angle and it's it's not doing anything right yet because we need to set up a couple parameters first All right, so our capture Direction is going to be one. Okay. We need to make sure that our It's just sitting directly. All right in the y direction and we need our up vector to be set to something like x or Z so I'm actually going to do the z direction so you can use these little lines to determine where it's going to bend So now if I were to bend this You can see that we're bending The grass blade accordingly. All right, so everything's working out perfectly for us So far to leave that just not you know a static value.  This is why we make HDAs So we don't have to search around for stuff So we can you know make different types of grass clumps now Pretty cool stuff, so I'm gonna keep kind of tight for right now I'm just I just like the look, you know And again another reason why we're gonna make an HDA out of this So basically when we come and just use this particular node all these properties will be up here So we won't ever have to dive into the node again cool All right, so let's jump back in and just get this finished up. So what I want to do I Mean you could leave it like that, you know, it's totally fine Or what we can do is we can pull off the information I really just want to show how to do this because understanding how to Grab data from other nodes, you know without them necessarily being hooked up to each other is a very crucial Component understanding Houdini. All right, this allows you and kind of freeze you up in terms of being able to create really complex systems And you know while this grass clump might seem simple. There's a lot of stuff that goes into it So I that's why I really wanted to make this little mini course Because I thought it would be a good exercise and you know making a real game asset So let's take care of this bend. So what we want to do is I want to basically get the current Density value. All right, so to do that all we need to do is say point So we're gonna use the point function and we need to tell it what which node we want to grab that point information from and in this Case we want that copy attributes node. All right, so this guy right here Okay, so I want to get the information from that node All right, and the attribute that I'm interested in is called density. So we type that in and I want the first component Cool, okay So And I also need to set a point number. So you notice if we mouse over this Let's actually do that and pull up our help information by hitting F1 on the keyboard. You can see that the Point expression function takes a surface node that where we want to get the information It needs a point number where we want to get the information from It wants the name of the attribute and then the index of that attribute So what I need to do is put in zero for this right here There we go All right, so you can see now we're getting very very subtle bend a bend a point two isn't gonna do us anything So what I want to do is I want to fit this now So I want to say fit zero one you can probably start to see how Often this fit function comes into in the play. So I want to say fit zero one and our minimum value So when we're at zero, I want the bend to be something like let's say 40 And when we get more towards one, let's do something like 15 All right, so we're fitting all that information. So there we go So let's go even more. Let's do something like point nine or let's do something like 90 And there we go, and let's do something like one just for the middle So now we actually have control over the spread. All right, we can promote these to our HDA once we get to that particular Section so this just gives you another level of control over your grass clumps All right, so you might notice that we also have this these little orange tips while it looks pretty cool We can control that in the texture So we don't necessarily need that and that's really just coming from this visualized falloff inside the bed So I'm gonna turn that off and that gives us a better look at what our grass clump is starting to look like All right, so pretty cool stuff All right, we can even go and randomize all this So if we just do a random I well you know, this might actually Kind of mess it up a little bit, but we don't want it to be so perfect Yeah, so it this messes it up a little bit We have to do a little bit more work to randomize the bend I'm gonna leave it just how I had it before just for this particular Course and I'll let you mess around with different ways of randomizing those particular values All right, so with that we now have our grass clump all done Okay, so I'm just gonna leave this guy inside of a net box But I'll leave this you know exposed because this is kind of the the main or final network in our thing So this is just going to be our for loop Like so and there we go So in the next couple of videos what we want to do is we want to get this particular Grass clump now Export it out to unity, but I also want to include all the LEDs for it. All right, so we're gonna go through and cover that process Thanks so much


So, continuous integration is about making sure that your software is ready, that the software is actually working all the time, so the default state of the software is that it's working. But the software doesn't actually deliver any value to users until it's in production. So, the key insight of continuous delivery is that we can take continuous integration and actually extend that idea of keeping the software in a working state all the way out through your process to release to users. And we create what's called a deployment pipeline. This is a very simple example of a deployment pipeline. It's linear, there's no branching out for people to be able to do performance testing and UAT independently and so forth, but it serves to illustrate the case. So, what you can see is people are checking in codes to try and conversion control. That triggers build and unit tests, which is the standard continuous integration loop. If the CI build fails, it's very important to actually then fix the problem. Either by going and trying to find the file that you forgot to check in, or if you can't fix the build within a few minutes by reverting your change out of version control. One of the most selfish things you can do as a developer is to leave broken codes on trunk, because what that means is that the rest of the team is not working off a known good state. And we should be able to get that feedback in about 10 minutes or less, preferably just a few minutes. And that means making sure that you're just running unit tests because they're fast and that you keep your unit tests sweet, well factored and rapid. Once we have a build, so obviously that first build fails, we then fix the problem and we have a build that passes the unit tests. And at this point we move beyond continuous integration. We take the build that we've created as part of that first step and we then perform comprehensive automated acceptance testing against that build. Again, that might take a bit longer. Typically, for a large system, you would see acceptance tests might take a day or several days to run.  And when those fail, again, the first priority of the team is to fix that problem. We need to prioritize keeping the system working over doing new work. That's one of the key mindset changes when you're moving to continuous integration and continuous delivery. So we fix that problem. Once we have a build that passes all the automated tests, we can then take that build and push it downstream to the more expensive processes like performance testing, manual processes like user acceptance testing and so forth. And it should be possible. The key thing is that the notification goes downstream and the people downstream can push a button to deploy the build of their choice to the environment that they're using for testing. And then when we have a build that's passed all the testing processes, it should be possible for people working in technical operations to be able to self-service any build of their choice at the press of a button to staging and to production. The key with continuous delivery is that every change results in a build and every build is a release candidate. And the job of the deployment pipeline is to prove that that build is not releasable. We can never prove the absence of defects. We can only ever prove the absence of known defects. So we want to try and find all the known defects and if we can't, we should feel totally comfortable releasing that build that's passed through these steps to our users. And if we don't feel totally comfortable doing that, then that means that our validations are not good enough and we need to improve the quality of the software. So in continuous delivery, every build is like a hero in an epic and the hero wants to marry the beautiful woman but first the hero must pass a series of tests. The hero has to get the big pile of gold and then fight the evil monster and then have an emotional reunion in the underworld with his father. And then finally, the build gets to marry the beautiful woman. It's like a swambre in Hindu culture. So every build is a release candidate and the job of the deployment pipeline is to prove that it's not releasable. If it's not, then we can release it. And what this does is it changes the way we think about software development. The default state is that every change should be releasable to our users. In typical software developments at scale, that's not the case.  And we have to put a lot of effort into stabilisation phases. We put in countermeasures like release trains, all these techniques which basically cater to the fact that it's very expensive to do that. It's important to bear in mind that countermeasures like release trains and integration and stabilisation phases are not the inevitable consequence of scaling agile. They are a sign that something is wrong with your engineering practices and insufficient attention has been paid to test automation and to investing in engineering practice and well factored loosely coupled architecture. Continuous delivery is about making it cheap and low risk to deliver incremental change to users. And there's a constellation of techniques. The deployment pipeline is just one. There's a piece around making it cheap to provision and manage infrastructure to be able to manage database changes in a cheap low risk way. There's a whole number of techniques that we describe in the Birken that are out there on the web. The high performance companies like Netflix and Etsy are practising. Why do we care about doing this? Martin talks about the fluency model and when you get to 3 or 4 stars there's this idea that the team is actually participating in deciding what's valuable. My favourite statistic on what's possible in terms of continuous delivery comes from Amazon. In 2011 Amazon was deploying changes to production on average every 11.6 seconds. They were doing up to 1,079 deployments in a single hour to about 10,000 boxes. Now it was expensive and painful for them to reach that level of fluency. And they need to change their architecture and the structure of their teams to build small self-organising teams that can independently push their services to production in order to do that. What it allows them to do is actually do A, B testing on all their features. Anytime they have a feature, they can run a feature idea. They run an experiment on a very small percentage of users to find out if that feature idea is actually going to improve the top line revenue metrics that they care about. Based on doing a large number of experiments, the guy who invented Amazon's A, B testing framework, he has this observation. Evaluating well-designed and executed experiments designed to improve a key metric, only about one-third were successful at improving the key metric. What that means is two-thirds of the software features that we build provide zero or negative value to users. And if you're not measuring the value of the features you're delivering, two-thirds of the work that you're doing is not adding value, and it may in fact be subtracting value. These are good ideas, features that people thought were slam dunk ideas, and two-thirds of them delivered zero or negative value. It's impossible to predict which features will actually deliver value to users, so if you're not testing to discover whether they are in fact valuable to your users, you've got a problem. We have this word requirements. Whose requirements are they? They're not the user's requirements. Users don't know what they want. Users know what they don't want once you've built it for them. They're the customer's requirements, the person who's paying the money. So just in the last few minutes that I have, I want to give an example of consumer's delivery at scale in a non-webby environment. So I'm going to talk about the HP LaserJet firmware team. This is a team that builds the firmware for HP's laser jet printers, and they had this problem. They were going really, really slowly, and they weren't able to get new printers out nearly as fast as the competition. And they looked at what they were spending their time doing, and they were spending all this time doing activities that were zero value add. Every time they brought out a new range of printers, they fought the code in version control, and they were spending 25% of their time porting code between branches When they made a fix to one printer, they would have to port that fix over to all the other ones, same features they added. The quality was poor, they were spending 25% of their time on product support, they were spending 20% of their time on detail planning. And what they decided to do was to re-engineer the system, to re-architect it, build it from scratch in a way that would enable them to build off trunk. And they would have one single firmware build for all of their different ranges of printers and scanners and multifunction devices. So they rebuilt the software so that they could have one build, and when the firmware woke up, it would look and see what device it was on, and turn on only the features necessary for that device. And in that way, they could have one build and they could work off trunk. And between 2008 and 2011, they evolved this very powerful deployment pipeline that enabled them to work off trunk at scale. So bear in mind this is not where they started, this is where they ended up after two to three years of evolution of their process. They were able to have a team of 400 people working distributed across three countries, this is distributed across Brazil and America and India, 400 people making 100,000 lines of code change every day to a 10 million line of code base and getting 10 to 15 good builds a day out of their initial check-ins to trunk. So anytime someone wanted to check in, they'd run a couple of hours' worth of automated tests against their change before it ever made it into trunk. It only makes it into trunk if that initial set of tests works. Then any build that comes out of trunk, they run level two tests on a simulator, they built a simulator to simulate the actual hardware platform. And then they run another, if a build passes that step, then they run another two hours' worth of tests actually on logic boards, printer logic boards in racks to make sure that that build is good. If that works, then they run overnight about 10,000 hours' worth of tests in parallel that's their complete regression suite. So within 24 hours you get feedback on the quality you'll check in. And if those tests break then they immediately fix them. And in this way they got to a state where their software was always releasable. They completely eliminated the needs for stabilisation and integration phases. And what that meant was the business could change its mind and introduce new features well after release candidates came out just before actually releases of the firmware. And they were able to renegotiate their relationship with the business and move away from doing detailed upfront planning and say, OK, we're not going to do upfront planning in detail. Instead, if you want to change your mind about what features you want to build, you can do that at any time because there's only one day's worth of working process off trunk at any time. So you can stop what we're doing and work on whatever you want. So I mean this is a team working on firmware building automated tests. So this is a powerful demonstration that these techniques work at scale even in very complex domains. And as a result of this, they were massively able to reduce the amount of time spent on non-value added activity, increase the amount of time spent on innovation, and that completely changed the economics of the software development process. They wrote a book on this. I recommend buying this book. It's short. It gives you the value proposition of doing this. And it demonstrates that we don't need to do things like stabilisation, integration, release strains in order to be able to run agile at scale. This is hard. It's complicated to do. I want to leave you with one final thought from Jesse Robbins, who is head of availability at Amazon. The way you implement this is not by creating a programme or a project. It's by everybody every day working to continuously improve their process. Jesse's rule is don't fight stupid, make more awesome. And that's what I want to leave you with. Every day, think about going to work, think about one thing you can do today to make things slightly better for everyone around you. And if everybody does that every day, that's how we continuously improve our process and get better at what we do and create better outcomes for the business. Thank you. Thank you.


Nikolai Gerchev will present the F.A. Hayek Memorial Lecture sponsored by Toby Bexendale. I am especially proud to note that Nikolai was a Rowley Summer Fellow at the Mises Institute in 2002 and 2003. He earned his Ph.D. in Economics from the University of Paris in November 2006. Nikolai has published articles on monetary institutions and general economic theory in the quarterly Journal of Economics of Austrian Economics, the Journal of Libertarian Studies and Libertarian Papers. He has contributed essays to books celebrating Hans Hoppe's work and the centennial of Mises's Theory of Money and Credit. The latter work and actually a book by Hans Hoppe, a recent book by Hans Hoppe, they are on sale at our bookstore. The latter work on Mises's Theory of Money and Credit is entitled The Theory of Money and Fiduciary Media and it was edited by Guido Hulsmann. Currently, Nikolai works as an economic analyst for the European Commission in Brussels, an international public organization associated with the European Union. So I welcome Nikolai. Hello everybody. It is a great pleasure for me to be back at the Mises Institute, which I must thank first for having given me the opportunity some 11 years ago to finally start my economic education after having earned a master's degree in economics from a very reputable French university. And I must now thank the Institute a second time for this great honor to present the 2013 Memorial Hayek Lecture. Hayek is not the Austrian economist par excellence. A number of richly documented scholarly articles have demonstrated that with respect to a few critical issues, Hayek's economic and social thought is not fully reconcilable, not to say contradictory, with the praxeological method or libertarian ethics. It is very moment, however, this impurity of Hayek is of great relief to me and a secondary reason for renewed sympathy for the man. After all, an Austrian economist who is currently employed by the closest European equivalent of the International Monetary Fund hardly qualifies either as an Austrian lecturer par excellence. The primary reason for my appreciation for Hayek, though, comes from his early, very valuable contribution to monetary theory. In the first part of this lecture, I would like to briefly present Hayek's thinking and main conclusions on what he called monetary nationalism. Then I will attempt to expand this approach in order to show how monetary nationalism leads to monetary imperialism. And finally, within this analytical context, I will appraise the recent increase in cooperation between governments, as observed since the policy response to the banking and public finances crisis in Europe. In a series of five lectures delivered in 1937 and published under the title Monetary Nationalism and International Stability, Hayek offers an in-depth analysis of the main deficiencies of the present-day monetary system. In a nutshell, he identifies two factors that disrupt international economic relations. The fractional reserve commercial banks on the one hand, and the national central banks on the other hand. The instability generated by the fractional reserve banking system, or a banking system working on the proportional reserve principle, as Hayek puts it, is rooted in the fact that a relative change in the demand for different types of media of exchange results in a nominal change in the aggregate overall supply of money. For instance, a decline in the aggregate demand for cash is followed by an increase in the supply of bank credit and bank-created fiduciary media. Indeed, because banks keep fractional reserves only, the lower demand for cash, when offset by an equally higher demand to hold deposits, creates extra liquidity for the banks. And this extra liquidity serves then as a foundation for a bank credit expansion that is much larger in size. In Hayek's own words, quote, the most pernicious feature of our present system is that the movement towards more liquid types of money causes an actual decrease in the total supply of money and vice versa, end of quote. Hayek is interested, above all, in the implications of the fractional reserve principle for the process of economic adjustment to relative changes in international demand. At the international level, this pernicious feature implies that gold movements between countries lead to an over-proportional contraction of bank credit in the gold-exporting country, while credit and money expand over-proportionally in the gold-importing country. Hayek emphasizes that under purely metallic currency, and by this he means 100% commodity standard, there would be no systematic relation between an outflow of money and the level of interest rates. However, the situation is altogether different in that mixed metallic standard, where banking is organized along national lines according to the principle of national proportional reserves. The outflow of money, because it contracts credit at home and expands credit and money abroad, does imply an increase of the domestic interest rate beyond its natural level and a decline in the interest rate abroad. Interest rates then become disconnected from the social time preference and propagate malinvestments. Now, on the ground of this central finding, Hayek concludes that a crucial ingredient for international monetary stability is to reform banking in line with the 100% reserve principle. As a consequence, the solution to current monetary problems would be rooted in a far-reaching reform of the banking sector itself. It seems to follow from all this that the problem with which we are concerned is not so much a problem of currency reform in the narrower sense as a problem of banking reform in general. In addition to his explicit support for the 100% reserve banking, Hayek elaborates on the cured critique of central banking. His analysis of national monetary policies debunks the alleged benefits of what he calls monetary nationalism, namely the doctrine according to which the aggregate money supply on the territory of the nation should not be determined in line with the market forces that govern the flows of money among the different regions of that same nation. To put it simply, this corresponds to the case of independent national currencies, which are produced under the privileged control of independent central banks. In such a system, the adjustment process to relative changes in international demand is meant to take place through alterations of the value of the currencies and not through actual money transfers. Hayek demonstrates that such a purely monetary adjustment, far from bringing about the necessary real changes, is actually introducing new disturbing factors. Alterations in the currency exchange rates put in motion a redistribution of income among all industries, including those for which demand has not moved. Distribution is not sustainable in the sense that it is inconsistent with the new consumer preferences. Imagine that the international demand is shifting away from some national sector. Under homogeneous monetary standard, the redirection of the monetary flows brings in itself a change in relative income and profits, which then redirect the factors of production so that the new production structure becomes consistent with the new consumption pattern. This natural equilibrating force is not available in the case of multiple and independent paper currencies. Here, the uniform depreciation of the currency does not trigger the required real adjustment in relative prices, which alone would reflect the new demand structure. Rather, the monetary adjustment creates a generally inflationary environment in which the adjustment process is engineered by an increase in the prices and incomes in all other sectors. Hayek emphasizes, quote, that the final positions of the individuals will not be the same as that which would have been reached if exchanges had been kept fixed, because in the course of the different process of transition, all sorts of individual profits and losses will have been made, which will affect that final position, end of quote. The inflationary impact of the depreciation brings about a purely monetary that is ultimately self-reversing disturbance, because it causes a temporary boom in some sectors. The boom, however, is clearly unsustainable, as the eventual rise in costs will reveal that there are no real funds to finance the expansion of the production. In these lectures, Hayek does not detail the operation of the trade cycle. Nevertheless, he still makes it clear that the inflationary policy of the central bank leads to investment decisions that ultimately will have to be reversed. Whatever its other alleged benefits, monetary nationalism will always disturb the economy because of the boom-bust cycle that it creates. Hayek also adamantly explains the fallacy behind that other most celebrated benefit of inflation, namely to allow economic adjustment in the event of rigid wages or, alternatively, to avoid the need for painful cuts in nominal wages. Nowadays, this is still an often referred to argument in favor of recovering competitiveness by means of an external devaluation, when internal devaluation, that is, by the price mechanism, is considered either politically unacceptable or simply impracticable. Here again, Hayek emphasizes that inflation is in no way a substitute for the natural decline in the wage of that specific type of labor, which faces a negative demand shock relative to all other types of labor. It engineers a generalized decline in all real wages, which cannot restore equilibrium in the relative cost structure. Moreover, the decline in real wages might be expected to be short-lived, as wage earners will be quick to learn the negative impact of inflation on their real incomes and will require an adjustment. In anticipation of the rational expectations, Hayek clearly states that it will soon prove illusory that it is easier to depreciate wages by creating inflation rather than to allow specific nominal wages to go down. Furthermore, Hayek argues convincingly that a system of independent central banks suffers from an inbuilt inflationary bias. First, if the central bank adopts the policy to stabilize the international revenue, group pressures will prevent it from engineering a deflation when a deflation would be needed in order to offset an increase in the international demand for the products of some industries. For all practical purposes, a stabilization policy would be followed in one direction only, and most notably in the countries where prices tend to fall lowest, relatively to the rest of the world. In this sense, quote, the possibilities of inflation, which this offers if the world is split up into a sufficient number of very small separate currency areas, seem indeed very considerable, end of quote. Second, Hayek points out that whatever the specific policy the central bank chooses to follow, it will always act as a lender of last resort. This empowers the central bank to refinance any bank in the event of a bank run. In full knowledge of this, commercial banks lend less prudently and expand their balance sheets beyond natural limits. In a sense, central banks lose the full control of the money supply and are bound to accommodate an inflationary boom started by the banks. So Hayek identifies the moral hazard problem related to central banking very early and stresses that the control of the money supply is, quote, the fundamental dilemma of all central banking policy. And he further stresses that the only means to restrain banks' credit expansion would be to credibly commit not to act as a lender of last resort. Such a commitment, however, would be clearly contradictory with the very idea of independent national currencies and central banks. And this is how Hayek completes his full argument about the impracticability and instability generated by monetary nationalism. To sum up, Hayek's early monetary thought reached two main conclusions. First, a system of multiple national central banks, which all act as lenders of last resort for the domestic financial sectors, is inherently inflationary. Second, such a system is marked by a high degree of economic instability as the generalized inflation prevents the necessary real adjustment and introduces monetary disturbances of their own. In what follows, I would like to develop Hayek's first conclusion by further exploring the inner tendencies of a system of multiple central banks. The distinctive feature of modern central banks is their political and privileged position within the economy. Indeed, the very framework in which paper monies are produced and introduced into circulation is fundamentally different from the framework of commodity monies. Commodity monies which evolve out of the direct voluntary exchanges are subject to the rules of both horizontal and vertical competition. On the one hand, different commodities can be competing on the market for fulfilling simultaneously the function of a medium of exchange. Additionally, various producers of the same commodity can be competing for offering certification services with regards to the specific monetary objects in the economy. On the other hand, and much more importantly, the producers of any of the commodities which serve as a medium of exchange must compete in the context of generalized scarcity with the producers of any other good. This implies that on the market, an expansion of the money supply is costly as factors of production must be bid up from other sectors. Thus, the price mechanism through its influence on the expected relative profitability of any business venture naturally regulates the quantity of money in the economy. This natural regulation of both the production and the purchasing power of commodity monies also ensures that those who venture into supplying media of exchange do not benefit from a privileged position. Their income and wealth are positively affected if the demand for money rises relative to other commodities including other media of exchange. Inversely, a negative income effect occurs if competition intensifies or demand declines. Competitive money producers must cope with the uncertainty related to the management of private property and could occasionally be driven out of business exactly as any other capitalist entrepreneurs. Most significantly, the fact that they supply the economy with the medium of exchange or one of the media of exchange does not confer on them any special status that would allow them to claim more of the aggregate output of the economy than what they earn on the market. That is what other property owners transfer voluntarily to them. Things are altogether different with paper monies. To begin with, it should be emphasized that the acceptability of paper monies in the daily exchanges is rooted exclusively in the government sphere. Given that they have no non-monetary utility and therefore no alternative source of valuation, the foundation for ever accepting to hold paper monies that is to be certain that they will be accepted in return by other individuals in the economy ultimately comes from the legal certainty that any attempted rejection will be defeated by government intervention. Paper monies owe their existence to legal tender regulations enforced by coercive states. This economic fact is important as it underlines that states and paper monies share a common essential feature, namely their coercive nature. One implication of this political nature of paper monies is that their production and supply escape the discipline imposed by the market. Competition-driven cost considerations and consumer-determined return expectations are absent from the calculus of paper money producers. Indeed, the cost of producing one or 10 units of a given paper money are all identical, which implies that the marginal cost of increasing the money supply is zero. This grounds a very special privilege to any paper money producer, namely the capacity to acquire for free goods and services already produced by others. To borrow Rothbard's expression, a paper money producer could consume without producing and thus seize the output of the economy from the genuine producers. End of quote. The supply of paper money is then involved in nothing else but the special kind of exploitation, which could be labeled monetary exploitation to be distinguished from exploitation by means of taxation or direct regulation of the economic activity. This makes it clear why paper money production is always legalized, protected, and de facto controlled by the states, which do not admit of any rivalry in the exercise of their local monopoly of expropriation. Given the lack of any nature that is market-driven check on the quantity of paper money is produced, the question of the limits on their supply is of particular interest. As a matter of fact, this is a problem with which money producers themselves have been confronted. How should monetary policy be conducted? Much, if not all, of the mainstream monetary research of the past century can be seen as an attempt to provide an answer to that apparently simple question. However, the large variety of mainstream practical advice has left untouched the core of the problem. The problem itself is not a trivial one, especially in the light of not infrequent cases of hyperinflation. A hyperinflation develops when expectations for a continual loss of purchasing power lead to a significant drop in the demand to hold money. Such expectations arise when monetary prices have been increasing already for a significant time span, which in itself is the result of major increases in the money supply. The typical central bank response is to further increase the money supply in order to address an alleged shortage of money. This, of course, only feeds the inflationary expectations. The end result of this vicious circle is a galloping increase in prices and a deteriorating capacity for money to intermediate exchanges. Money users might then turn spontaneously to an alternative media of exchange, produced either by the market or by another central bank. From the outset, this would suggest that a paper money producer faces no strict quantitative limit, save for the extreme risk of eviction by a foreign rival. However, this risk is crucial from the point of view of the state, as it implies a significant loss in its exploitation capability. It also highlights an important limiting factor, namely the very existence of and rivalry between other paper money producers. The extreme case of hyperinflation also makes it clear that the paper money producer, despite all legal tender legislation, ultimately relies on the individual's consent to continue to accept its product. This consent, which must be renewed time and again, is always relative to the quality of services rendered by rival monies. Indeed, any state which alone intensifies monetary exploitation faces either a gradual depreciation or a sudden devaluation of its currency relative to other currencies. This very fact limits its capacity to further increase the money supply through two channels. First, the loss of purchasing power means that a stronger increase in the supply of money would be needed in order to yield the same expropriation effect. Second, the public consent is seriously endangered, which could lead to a further depreciation of the currency. It is clear that the obstacle in front of a single state to expand its monetary exploitation is the very existence of multiple paper money producers. The solution to this conflict situation is to deprive rivals of their capacity to act independently. This does not only help the state to increase monetary exploitation internally. It also allows it to grow externally and to enlarge the territory that it dominates. This tendency to expand monetary exploitation above its internal limits and beyond the current political boundaries is best characterized by the notion of monetary imperialism. And this is a concept which I am borrowing from Professor Hoppe, who first introduced it in Austrian analysis. The concept of imperialism is fully justified as the conflict situation persists and the tendency to expand does not vanish so long as the last rival has not been deprived of the independent control of its money supply. Monetary imperialism is in the very nature of paper monies and can be seen as a specific expression of the general conflict between rival states, in particular with regards to money production. As long as there are multiple paper money producers, the policy of monetary imperialism will then not be avoided. Moreover, its expansion is guaranteed by the fractional reserve banking system itself. Because they are regularly weakened by the bust phase of the economic cycles they themselves create, the inherently bankrupt fractional reserve banks drag the domestic state into bailing them out, thereby significantly endangering its financial condition and capacity to act independently. It follows that at any given moment, some paper money producers are weaker financially than others. According to a generalized progression theorem formulated by Professor Huseman, political centralization and ultimate unification are in the interest of both the financially strong and the financially weak political entities. Hence, the very same weaknesses of fractional reserve banks that bring national central banks into existence also make sure that the centralization process is fully completed internationally. Commercial bankers might even actively promote submission to a stronger foreign money producer, given that they critically depend on the reliability of a strong lender of last resort. We could distinguish two general forms of monetary imperialism, unification and cooperation. Unification results in the effective reduction of the number of paper money producers. Monetary cooperation is a less intuitive and more subtle case of imperialism as the number of paper money producers is not reduced, even though they act for all relevant purposes as one. This broad classification offers a reinterpretation of the present-day monetary arrangements. There are three distinct institutions that bring about monetary unification, in which case the dominant central bank expands the territory on which it controls the money supply. These institutions are dollarization, the currency bought, and the monetary union. Dollarization occurs in cases of hyperinflation when people spontaneously quit the domestic money and begin to use a foreign paper money of relatively better quality. The domestic money producer is evicted while the foreign central bank gains an extension to its territorial monopoly. Cases of official dollarization have also occurred recently. An official agreement allows the otherwise evicted central bank to keep some form of existence, and maybe even to get back a portion of the sceneryage it used to earn. The most prominent current examples of dollarization include Uruguay, Nicaragua, Kosovo, Montenegro, and more recently Zimbabwe. The currency bought addresses the issue of sharing sceneryage, so to speak, by design. The setup of a currency bought always proceeds from an official agreement by virtue of which the domestic central bank declares that it will produce cash bank notes and replenish domestic banks accounts that is produced the base money in the economy, exclusively in exchange of the foreign reserve currency according to a prefixed conversion rate. From an economic point of view, the domestic currency is no longer money per se, but a simple money substitute redeemable in the foreign money. Hence, a currency board effectively transfers the monopoly of money production to the foreign central bank. Its own specificity lies in the fact that the evicted central bank keeps its physical existence while its economic nature is transformed from a money producer into a deposit bank. Real world examples of currency boards, such as those in Hong Kong, Lithuania, Estonia until recently, and Bulgaria still, have all operated on the fractional reserve principle. This means that only a portion of the foreign currency received has been effectively kept in reserves as such. The vast majority has always been invested in interest-yielding securities denominated in the foreign currency. The yield on these securities has functioned as a partial compensation for the last scenario that the currency board used to earn in its previous quality of a central bank. This also explains why a central bank would prefer transforming itself into a currency board rather than accepting a dollarization even if it is an official one. The third form of monetary unification, namely the setup of a monetary union, is not much different in essence. Should the single money of the union be already produced by one of the member states, then the union, the setup of the union, is equivalent to official simultaneous and multiple dollarizations. If a new paper money is introduced, then the setup of the union must undergo an initial stage where the member states pack their currencies to the new money to be issued by a new central bank. In a sense, the new paper money, which lacks a history of prices, must be borne as a money substitute, initially produced by a de facto currency board. The next stage consists in interchanging the nature of the monetary objects, whereby the money substitute becomes money and vice-versa. In the final stage, the money substitutes, that is the previous paper monies, disappear physically. And the different steps of the European Monetary Union until the eventual physical introduction of the euro in January 2002, perfectly fit into this sequence. And currently, both the East African community and the Gulf Cooperation Council countries are contemplating, completing their plans for establishing monetary unions. Because monetary unions reduce the number of rival paper money producers, they allow for an increase in monetary exploitation. The expected end result is higher inflation than otherwise and a strengthened tendency towards further monetary centralization. They also facilitate the less straightforward form of monetary imperialism, namely the intergovernment and inter-central bank cooperation. By coordinating their policy actions, that is by increasing monetary exploitation together, paper money producers eliminate the disturbing divergent developments in the currency's purchasing powers. Thus, users' consent is better secured as no viable alternative is left. The permanent risk of bankruptcy of fractional reserve banks encourages cooperation between paper money producers, also on an ongoing base. Assume that the central bank decided to remain conservative and not to expand the money supply together with the other central banks. Its money would then appreciate, relative to the other currencies, and will keep appreciating so long as users expect the conservative central bank to keep its policy. Because its money keeps purchasing power better, its international demand would increase, which would result into higher inflows of deposits at the commercial banks. Paradoxically enough, the conservative central bank loses its capacity to control domestic banks' liquidity. Furthermore, a sudden change in users' expectations could reverse the international flows of deposits and cause the illiquidity of the commercial banks, especially if they have used the deposit inflows for credit expansion at home or abroad. The attempts of the central bank to recover control over the liquidity of the banks, for instance by means of sterilization policy, de facto would also imply that a foreign-induced monetary policy has to be followed. The extreme instrument for insulating the national banking sector from this phenomenon of hot money would be to abandon the conservative policy early enough, that is to accept monetary cooperation. A recent case in point is a decision of the Swiss national bank to not to let the Swiss franc appreciate below one franc and 20 cents for a euro since July 2011. From the point of view of the more expansionist central banks, it is also in their own interest to cooperate even exposed, that is to provide support to foreign central and commercial banks in difficulty. A severe banking crisis in one country could undermine the stability of fractional reserve banks elsewhere. Not only because banks' balance sheets are interlinked through the international interbank market, but also due to the very low degree of divisibility of confidence in banking. Despite their inherent rivalry, paper money producers do share a common interest, namely the avoidance of bank runs. Good real world examples of exposed monetary cooperation are the coordinated policy decisions between the five major central banks since 2008, and in particular, the US dollar euro swaps which were meant to provide dollar liquidity to illiquid European banks. Monetary cooperation is an instance of the general intergovernment cooperation which can also take the form of direct financial assistance through intergovernment loans. I would like to spend the remaining of my lecture precisely on an economic analysis of these official loans which have become lately very prominent in Europe. The structural weaknesses of the fractional reserve banks lead to often unforeseen bailouts, the magnitude of which is unknown upfront and results in sizable budgetary deficits as well as in an increase in the implicit government liabilities. This puts governments in a difficult financial situation due to ever-increasing funding costs. Beyond the point, the cost becomes so high that governments decide to stop issuing new securities and to look for an alternative funding option. Such an alternative is offered by the so-called official international assistance which is typically dispensed either bilaterally or most often by the International Monetary Fund. The outburst of the public finances crisis in the European Union has led to a wave of unprecedented intergovernment solidarity that brought about a number of specific and dynamically evolving instruments for granting aid to fellow members of the Union. The latest of these instruments is the European stability mechanism which is a permanent and new financial institution mandated to lend up to 500 billion euros to euro area member states. Other instruments exist also for the members of the Union who have not adopted the euro yet. Since 2008, seven out of the 27 member states of the Union have received official assistance and an eighth one is currently negotiating such official support. Typically, funding has come from the IMF for one third and from the applicable instruments of the Union for the remaining two thirds while the active involvement of the European Central Bank has been sought. While the total loan envelope is determined, effective disbursements of the loan take place in quarterly installments after experts of the lending institution's review and deliver a positive opinion upon the implementation progress with a predefined so-called economic stabilization program. This program details the specific policies and attached deadlines that the government must follow with respect to fiscal, structural and banking issues. It is a de facto conditionality agreement between the lenders and the borrower that is meant to ensure that economic imbalances are resolved and funds will be properly spent. Thus, the overall economic and social impact of the official foreign assistance is determined by the economic stabilization program itself. In order to understand its basic features, we must compare it to its counterfactual, namely how fiscal and economic imbalances would have been addressed without foreign assistance. In a nutshell, this counterfactual would have consisted in a market-driven restructuring of both the economy and public finances. To begin with, the government's funding difficulties would have resulted into restructuring of its spending. Expenditure cuts would have been simply unavoidable in the absence of official assistance. The economic role of the high interest rates that private lenders start to ask is precisely to signal the increased scarcity of funds and to impose a lower expenditure pattern on the government. A self-imposed correction based on higher taxes would not convince financial markets. First, higher taxes would not address the structural problem that is at the origin of the high public deficit. Second, they would undermine future productivity and the capacity of the government to easily generate additional revenues. The adjustment of government expenditure to the available tax revenues would also automatically contribute to addressing weaknesses in the economy's structure of production. A cut along all forms of subsidies would lead to the bankruptcy of businesses which were artificially maintained at a cost for the taxpayer. The subsequently released factors of production, including labor, would be redirected to sectors where they would be better employed, even though at a lower nominal remuneration. A market-driven restructuring in government finances would, in a sense, free the economy from that part of the government's interventions which private lenders consider excessive. The market-driven solution would also make lenders aware of their own responsibilities. Beyond the point, the restructuring of government activities would also include a rescheduling of the outstanding public debt, which would imply losses for the investors in sovereign securities. Such losses would result in an appreciation of the risk associated to public debt. And then, in higher yields, asked for funding governments. This would be the ultimate sanction that would guarantee long-term discipline in public finances, both ex-posts and ex-ante. In a sense, the very possibility for a market-driven correction of government excesses would prevent such excesses from arising in the first place. Against this background, an official economic stabilization program clearly thwarts this natural adjustment process. In essence, the cheap official funding allows the government to maintain its overall size without scaling down. Nevertheless, because the reality of the imbalances could hardly be denied, the necessity for adjustment is fully recognized both by the official lenders and the borrowing government. Now that the market-driven correction is precluded, the adjustments must then take the form of administratively decided and implemented policy actions. This sheds new light on the nature of the so-called conditionality, often presented as a means for avoiding the buildup of moral hazard caused by the cheaper than the market funding granted by official lenders. Conditionality appears to be much more fundamental and implied in the very notion of intergovernment support, not to say that its actual record in effectively preventing moral hazard has been rather poor. The key problem with an administratively decided stabilization program is that it is trapped in an inescapable internal contradiction. On the one hand, the provision of sufficient financing to cover the government's funding needs over the next years, typically next three years, reduces obviously the urgency to adjust public finances and to undertake long-term oriented structural reforms. On the other hand, the policy conditionality itself is rooted in the idea and full awareness that an economic adjustment is much needed. This fundamental contradiction leads to very low incentives to implement unpopular, though necessary reforms. It also implies that, in practice, an official stabilization program is unlikely to succeed. The official creditors do not have sufficient knowledge where the imbalances originate from. It is not enough to point at excessive public deficit and debt. One must also find which government programs and policies are at the origin of the unsustainable spending. At the same time, assisted governments have little incentive to sort out their finances and to terminate policies and practices that create financial holes. Why would the government fight bureaucratic resistance if funding is, after all, available? The typical response to this knowledge and the incentives problem is to impose only a very gradual correction path on the general public deficit and to subsequently adjust the conditionality requirements to the effective progress made by the government. Thus, while some broad expenditure cuts are imposed, it is fundamentally up to the borrowing government to specifically identify them and to ensure their implementation. Let me now examine the economic consequences of intergovernment support programs in some further detail. From the outset, an official loan implies the bailout of holders of public debt. That is domestic and international banks or other investors, such as pension funds and insurance companies to which fractional reserve banks also have an exposure. Because the official loan reduces the likelihood of losses for private investors, the market price of public debt does not decline as much as it would have declined otherwise. An official loan contributes then to maintaining the value of assets of investors in public debt above what their portfolio would be worth in the case of a market-driven restructuring. It produces a counterfactual redistribution of wealth from taxpayers to the government's creditors and most notably to the fractional reserve banks. Indeed, in Finne, the official loan is to be repaid out of future taxes. Hence, an economic stabilization program implies stronger future taxation. That is, a heavier government weight on the economy, the exact opposite of the counterfactual market-driven solution. An immediate first-round impact of an official foreign loan is to increase the liquidity of the domestic banking sector. This is due to the fact that part of the additional funding is spent on goods and services, including publicly employed labor, offered by residents. As the government spends more than it would have spent otherwise, revenues of state-employed factors of production are higher and so are their owners' deposits at commercial banks. The banks, which are the ultimate beneficiaries of the increased liquidity, can use it for repaying their own creditors or otherwise improving their profitability by expanding bank credit to the economy. Thus, a foreign-funded economic stabilization program is imminently inflationary. Even when it is nominally limited to supporting the government alone, it contributes to refinancing all debt-based relationships created by the fractional reserve banking system. Given that they prevent local episodes of deflation and contribute to coordinated global inflation, official loans and the intergovernment cooperation that puts them into place are definitely driven by the phenomenon of monetary imperialism. The specific economic policies that accompany the official loan can be categorized in three areas, fiscal, structural, and banking. In the area of fiscal issues, it is required that the government gradually reduces its deficit over a number of years to a level considered sustainable. The sustainability is determined mechanically based on the growth projections and the subjectively determined acceptable level of public debt. While in the European Union, the sustainability threshold for public debt has long been put at 60% of GDP, that is of the gross domestic product of the economy, it has been doubled since the crisis. Similarly, deficit requirements are not determined in terms of effective nominal targets but relative to structural targets, that is allowing for cyclical slippages in public spending during the bust. Finally, only part of the deficit correction comes from expenditure cuts. Tax hikes or an expansion of the taxable base are equally popular tools. Thus, an official foreign loan becomes an effective instrument for international tax harmonization. Tax optimization opportunities for individual investors are reduced, which is a clear benefit to the foreign credit estates. The so-called structural policies relate to the fundamental conditions of conducting economic activity, such as labor contracts, pension arrangements, state monopolies, protected professions, or trade barriers. The required adjustments in these areas are meant to increase the economy's overall productivity and its international competitiveness in order to generate sufficient surpluses that would allow the timely repayment of the overhang of foreign debt. However, structural policies are also extending the notion of improved efficiencies to areas such as tax collection, public finances framework, and tax evasion. While structural policies do introduce higher economic freedom in some sectors, they also lead to a stronger government in general. In addition, much bolder and genuine reforms would have been implemented had the national authorities not received an official foreign loan. It is alleged quite often that the conditionality attached to the foreign loan is the best opportunity for policymakers to carry out reforms that would have not been implemented otherwise, for lack of sufficient degree of social support. The truth, however, is that this argument wrongly compares the structural reforms under the loan conditionality to the situation prior to the government's financial difficulties and that it ignores the impact of the cheap official financing. Finally, the third policy area included in the program covers the banking sector itself. Measures here aim at ensuring that banks are adequately capitalized and provided with sufficient liquidity. Undercapitalized banks, whether effectively or in light of the projected results of stress tests, receive state-funded capital injections which are financed by the foreign official loan. In the event where the undercapitalized bank is also deemed non-viable, restructuring and resolution are applied, such as dividing the bank into two institutions, a good bank and a bad bank, or consolidating it with another entity. Without going into the detail of all possible banking sector measures, a common feature can be recognized. The fractional reserve principle of modern banking is maintained while accidental changes in the business landscape are voluntarily admitted or even actively promoted. As a result, the banking sector is even more regulated, supervised and controlled by governments. In substance, everything is done to avoid the far-reaching reform Hayek has called for. This summary of the stabilization policies required by an official foreign lender shows that genuine problems are tackled by half measures. Even though some benefits could be expected in the long run, they are immediately offset by increased government involvement in economic life. As a consequence, administrative programs are bound to yield poor results which would quickly be used as evidence for the need for further government involvement. In a nutshell, economic stabilization programs promote anti-free market reform sentiments. This raises the broader question whether such programs are not anti-reformist in their very nature. And there are strong reasons to believe that this is indeed the case. First, the economic conditionality attached to the loan delays or even precludes some critical reforms. Second, the loan brings about a generalized bailout of all credited to debt relationships and an increase in the money supply, both of which tend to maintain the social and economic status quo. The higher future taxes, which are the necessary implication of a foreign bailout, put a burden on the future wealth to be produced by the economy, that is, on the younger generation. At the same time, current owners of wealth which has been accumulated in an unsustainable manner are mostly shielded from bearing losses. Thus, a bailout hinders free entrepreneurship and precludes the natural renovation of the economic elites which market-driven bankruptcies would have generated. These conclusions are strengthened when we consider what would have been the specific impact of a market-driven restructuring on the banking sector. The unavoidable cuts in government spending would have resulted in a lower income for state-employed factors of production and subsequently in much lower liquidity within the banks. This would have led to a lower capacity of the economy to reimburse debts, to a surge in the non-performing assets on banks' balance sheets and hence to the need to acknowledge unforeseen losses. A market-driven restructuring would have resulted, therefore, in an initial contraction of the money supply which would have been further amplified by banks' own financial difficulties and, most certainly, bankruptcies. Reflection of reserve banking system would have imploded in such a deflationary environment due to its own structural vulnerabilities. The main macroeconomic achievement of an official foreign loan is to avoid precisely this outcome, to ensure that the money supply does not contract and that banks do not go bust. The end result is that financial instability remains embodied into the system despite all official attempts to limit crisis and their international transmission. The preservation of the fractional reserve banking which might be seen as the very rationale for the intergovernment cooperation becomes a cause for the buildup of additional imbalances and then for further cooperation and monetary expansion. In conclusion, Hayek's early work on international monetary relations is strikingly topical. He has argued convincingly that the fractional reserve principle is a major cause of imbalances in the international economy. My goal here has been to further substantiate this insight on the ground of paper money's political nature. This specific aspect of modern banking is an independent source of international conflicts which find a temporary resolution in the phenomenon of monetary imperialism. Its current outcome is increased intergovernment cooperation and further political centralization. The structural weaknesses of fractional reserve banks are the main driving force of these developments. This highlights once again Hayek's crucial insight that the fundamental banking reform is a necessary prerequisite for any monetary reform aiming at international stability. Thank you.