Hello everyone and a very good afternoon. We are back with another episode of Entrepreneur India's Smart Investing series, your weekly dose of personal finance. I am Shupra Singh, Chief Correspondent at Entrepreneur India and your moderator for today's panel. So as we enter the festive week, it's only appropriate that we pick a topic around that. So today, just one day before the festival of Dhantheras, we want to discuss whether this year is a good time to buy gold as we're still in the middle of a pandemic and we're still going through the economic slowdown caused by the pandemic. So let me start by introducing our speakers. So we have with us today, one second. Okay, so we have with us today Dhaval Kappadia. He's the director portfolio specialist at Morningstar Investment Advisor. He leads investment counseling business at Morningstar India. He's also a CFA and CFP. Dhaval has about 20 years of experience in areas including fixed income, equity markets and investment advisory. Prior to joining Morningstar in 2011, he worked at Axis Bank leading a team of investment advisors and he was responsible for setting up the investment and portfolio advisory platform at Axis Bank. Welcome Dhawan. Thank you very much for joining us today. So our second speaker is Navneet Dhawan. He's the vice president commodities research at Mutilal Oswal financial services. He's managing commodities and currency research at Mutilal and in the past he has worked with Anand Rathi commodities for five years tracking ferris and non ferris metals and two years with central wealth management tracking metal sector and metal companies. Thank you very much for being here with us Navneet. Okay, so you know, so then there is actually a day you know when people rush to buy physical gold and not so much for investment purpose but for you know prosperity and because it is considered to be auspicious but in today's discussion I want to primarily focus on gold as an investment. So I want to start by you know looking at some data from the past so I just called some data and from what I could see so basically I you know what has been the gold prize on Dantes in the last 12 years. So you know so from what I could see that you know since 2008 gold has yielded an average annualized return of a little over 7%. So from that perspective you know why don't you tell me let's start with you Dhawan. So you know what are the prospects of gold as an investment in the you know long term from that perspective. So you know as far as you know my understanding goes typically gold has been viewed from two or three points of view. One is it has been viewed as a way to beat inflation or hedge against inflation. The second way in which it has been viewed is obviously that it is a store of value or it does well during periods of significant market volatility you know like we've seen this year as well when gold has done well you know particularly in the early part of the year when we saw significant market correction not only here but worldwide as well. So typically people view gold from you know largely these two kinds of perspectives you know either as beating inflation or you know doing well during periods of market volatility or significant market uncertainty. Now if you look at it from an inflation perspective and you know I was looking at history over the last about you know since maybe about the 1960s 1970s or so. Gold you know during the 1970s and you know oil prices have moved up a lot globally and you know inflation was pretty high at that point of time you know in US as well inflation was running almost in double digits. Many other countries inflation was fairly high and at that point gold did fairly well so it did sort of play the role of sort of beating inflation and you know acting as a store of value during that period but then in subsequent periods such as you know the 1980s or particularly late 1980s, 1980s, 1991 and so on so forth we've seen when inflation actually came down a bit and was relatively new to it. Gold prices which gold didn't do as well as such in fact you know it underperformed the expertise and it generated negative returns as well. So my point is that yes it has beaten inflation on occasions but one can't conclusively you know make a statement that at least we can't saying that you know gold will beat inflation consistently over a period of time. So from that point of view that is not a very sort of strong argument at least from our perspective. The second reason is that yes it has whether it's played a role of acting as an insurance policy to the portfolio to an investment portfolio. In other words you know when markets see significant volatility like we saw this year or 2008 and so on so forth how is gold performed. So generally gold has done well during those kind of periods as such even like I said even this year we've seen you know after a long period of lull in gold prices from you know 2013 to about 2019, gold prices actually corrected by about 35% and they've now only reached the peak levels that we saw in 2013. They've only reached those levels only this year. So but it tends to prove we're dealing either to a market volatility. So from that point of view it does play a role or it can potentially play a role as an edge against market volatility or like I said you know that's probably an insurance policy against market volatility or whatever. What would people like to see? Yeah yeah what would you like to add here Navani? Let's get your view on this. I largely agree with what Dhaval is saying and typically gold as a measure of value gives you protection against inflation against uncertainty but over the last 10-15 years we've seen it acting like an investment tool largely and people have been flocking on to gold kind to generate kind of returns as compared to just a store of value or probably a diversified to a portfolio. So at the later stage we'll discuss what kind of proportion should one have in their portfolio but I think it's a it's a measure of investment where you have now various avenues to invest into gold. Definitely it doesn't be its inflation at times but at times it generally kind of beats inflation and gives you and some returns. So gold by nature has a very typical tendency to move for two three years and then go into a slumber for four five years. So that four five years it kind of eats into your return which you've garnered over the three four years. So my sense is that if somebody's got a long term perspective then it's advisable from a 10-15 years perspective to be strongly bullish on gold but from a short term perspective you've got to get the timing very right when to enter and when to exit the market typically you are investing into physical gold or any other asset medium that you choose to but the timing has to be very right if you want to generate additional alpha to your portfolio. Okay so let us also now talk a little about prices because you know in the past 18 months or so I mean just to talk about the recent prices it has been steadily rising so I mean maybe Namneet you can take it up you know what are the factors that have kind of pointed these gold prices in the last 18 months and you know going forward how much more is it expected to go on from here because you know with the new with election results and everything there might be a fiscal you know stimulus in the pipeline from the US government. So what are your views on that? Well uncertainty is a friend of gold and the more the uncertainty around the globe the more it is better for gold prices. So the last couple of years as you rightly pointed the market has been pretty uncertain global economies have been very uncertain it all started I believe with the US and China trade war some kind of sanctions against each other then US in having sanctions on Iran then the oil price rally oil price collapse then inflation rising up very sharply central banks over the last 18 months or probably 24 months have bought down their interest rate very significantly. If you see US interest rates are very close to zero and in many of the parts of the world you have a negative interest rate trajectory also in talking about our nation we had interest rate roughly around 9% currently we stand roughly around four and a half percent so it's almost half of what we were about two and a half years back so these kinds of cuts have been beneficial and people are no more interested in parking money into fixed securities or bank FDs and are looking to aspirational buys or any other tool that can give you better returns. Equities has its own set of problems as to how valuations are placed and what is overstretched was in not stressed but gold it is not very easy to derive the fair value for gold and you don't have a P multiple or you don't have a DPS which can give you a rough estimate as to what's the fair value of gold at this point in time so you've got to go by what the momentum the market is what the economic backdrop and scenario is and look to invest into gold whenever you feel comfortable maybe in tranches maybe in lump sum but investment should be definitely what you should be considering you. So when you say you know investment should definitely be considered so if I have to only talk about gold ornaments I mean I don't know see you know your your experts you must know better you you know interact with clients I don't know how much do people actually buy ornaments with the you know with investment proposition in mind I think it's just something that they can maybe use for you know marriages the kids marriages or functions or whatever. So in that sense gold ornaments as an investment tool how you know how appropriate how lucrative that is. If this question is for me ornaments I do not count it as an investment tool it's definitely you parking some money into gold you can flaunt it you can wear it you can use it you can keep in your bank like that is all different but as soon as you buy a gold ornament you lose roughly 7 to 10 percent in the making charges as compared to if you buy a raw form of gold or if you bring a coin of gold so ornament definitely is not a very lucrative bet as far as investments are concerned but it's it's a fair bit of investment which is going into gold you do know generally typically Indian mentality is not like you kind of liquidate your ornaments yes if you want if you want any kind of liquidity you could look to liquidate your gold bars or coins but not ornaments that's the last resort that you could look at too. So ornaments are typically something that keeps comes to your place goes into your lockers or goes into your actual consumption but it's not a fair value of investment that I will call that one could be looking at to liquidate at some point in time. Would you have to say here Dhaval? I mean just purely looking at investment options within gold yeah maybe you wouldn't I would probably agree with Nagni that you wouldn't look at ornaments purely as investments I mean if you're actually looking at investing into gold from an investment standpoint you know as like I said as maybe as an insurance to your policy or your portfolio and things like that or to diversify your portfolio then it can be through other modes such as you know whether it's gold ETFs or you know hovering gold bonds or gold mining stocks is another option although they're slightly different they may react slightly differently to gold price movements but then you know and then there are these you know derivatives which are essentially meant for people who want to trade in gold as such but then I would think even from a long-term investment point of view obviously there is a cost to holding you know ornaments right I mean maybe the easiest people don't keep so much of the stuff at their home right we will tend to keep it in the bank in a locker and so on so forth there is a cost to holding physical gold on top of it there is no underlying cash flow return or unlike a fixed deposit or a bond or equity where you get dividends from bonds or you get you know coupon in case of gold there is no such applying return that you get so therefore it's not really meaningful to hold or it's I would say there is a fair bit of cost to holding physical gold particularly if it's in the form of ornaments. So you know since you deal with clients the world directly in PMS services so I want to understand you know over the years have you seen any trend in you know clients moving from physical gold to electronic gold because from what I can tell from data that I mean inflows in gold ETFs have been steadily rising so what has been the trend like? You know to be honest I think you know if you looked at the period from about you know 2012-13 to about 2017-18 I mean it flows into gold ETFs really did not increase in fact they were coming down I mean people were actually in fact you know pulling out money from gold funds or gold ETFs it's only in recent times like you said you know when gold prices have started to do well suddenly people think you know it's worthwhile to get into gold I think that's a typical sort of at times unfortunately the investor mindset they tend to enter asset class which is done well so in in short I don't think there is any significant trend so to say that people where one can say that all right you know people have stopped buying physical gold and started buying you know ETFs I don't think there is unfortunately you know although the media talks about it we talk about it from time to time but unfortunately I don't think that trend has really come in where people have switched over from buying physical gold to buying ETFs but rather I would think probably just to close out that point I would think that instead of buying gold I think the younger generation is now moving to other asset classes so I think that's the change maybe you know our parents or our you know elders were essentially buying a fair bit of physical gold in terms of ornaments and so on but I think that trend probably appears to be so reducing in that sense how has the trend been in the last you know eight months now that we were you know in the middle of a pandemic and the markets were like completely you know on a tailspin how is the trend now because gold is always seen as a as a hedge against a downturn but I think that's the point you know I don't know if people have really there are obviously into ETFs and into gold funds you know flows have improved over the last you know six to twelve months or so but I think it's more because of people are looking at the past performance the last you know one one and a half years of performance and putting money there rather than looking of it actually as as a portfolio diversifier or the way we are talking about it I don't think people are looking at it that way I think people are just sort of probably most investors appear to be attracted more so by you know the returns like I said over the last 12 to 18 months rather than you know the other things that we were talking about. Okay so Namin let me come to you so okay so you know I think so far in the discussion we've all agreed that okay gold does over the long term it can help beat you know inflation so if somebody has to invest in gold what are the options that he can look at so we've I mean you know what are the options apart from physical gold to consider if one has to invest in gold. As you rightly pointed physical gold is one of the larger market where consumption is at the moment and if you see in the last nine months data first couple of quarters there was a slack in the physical coins and bar sales but in the last third quarter it's picked up really very well and it surpassed levels what what it was in 2019 as well jewelry sales have taken a hit because of marriage slowdowns or probably marriage is happening at a lower scale as to what they were previously happening and kind of the run up in prices so people are a little conservative as to how jewelry sales have reacted but coins and bar sales have reacted very sharply. ETFs have seen a decent amount of volume pickup and I would say its significant amount of volume pickup on the exchanges the ETFs were not as liquid as they are they are at this point as double rightly mentioned there has been a massive pullout from ETFs from 2011 12 to 2019 but 2020 has changed the story for the ETF market and you name it and these ETFs have huge amount of volumes happening on the daily basis as well as sustained open interest in these ETFs are indicating that people are now looking towards this method of electronic gold as well. Another format of gold that we are seeing is digital gold which is coming to the offering where PTM has got some offering or PhonePay has got offering. Motilla Lozwal has got a product called Mi Gold where we have a back-end tie up with MMTC PAMP. Well most of these guys have back-end tie up with MMTC PAMP and offering your digital gold which is five years free of cost storage for you and you can buy 24 hours a day 365 days a year and liquidate it immediately. So if these kinds of facilities are available why would one go to buy a physical gold and have pay locker storage charges and something like that. One of the caveat that I feel that people are looking at is the rise in GST and the additional charges that they are incurring and gold at this point is nine. So that's not what digital gold or what the ETF gold has is offering you. So I think a lot of interest is coming towards these aspects and short-term traders who have a very short horizon are trading on the domestic exchange rated platforms also like the NCX or NSC. But those are typical trading clients who do not have a two years five years time frame horizon. So people who are banking on say probably two three years time frame are looking at ETFs, digital gold and physical gold at this point in time. Somebody's got eight years perspective should be looking at sovereign gold also. Sovereign gold bonds also are very lucrative asset gives you about two and a half percent interest rate taxable but the returns after eight years are tax free. So my sense is that somebody who's with a longer time frame can look to buy or invest into sovereign gold bonds also as I believe that from a long term perspective that's also one of the good investment bet for gold. So I have two questions here. I'll take them one by one. So one is listener one she's asking. I do not have a DMAT account. So I cannot invest in an ETF. So what options do I have? Well, if you want to invest in digital gold, you need not have a DMAT account.  A DMAT account has got shares inside it. Digital wallet has got gold inside it. So number of units like your mutual fund units can be visible in that digital wallet. So you need not have a DMAT account if you want to buy a digital format of gold. If you want to buy an ETF specifically then you need to definitely have a DMAT account. So even if you don't have a DMAT account, you can invest yes through gold savings funds. So there are mutual fund companies have mutual funds schemes that invest into ETFs. So obviously to buy a mutual fund you don't necessarily need a DMAT account. So you could buy the gold savings funds that mutual fund companies are offering and in turn they would primarily invest into their own gold ETF. So that's another option. Okay, another question that I'm getting is in terms from a liquidity perspective, which is better between a funds of fund and an ETF? Yeah, I don't think that fund at any point of time is a short liquidity. Like again we were discussing earlier that maybe over the last about six to ten months interest in investing in gold ETFs is going to be, therefore trading volumes are increased. But then if you look at periods prior to that, I mean volumes were very great. So from that point of view, to invest to a fund of fund at least, you are short in a way of liquidity because the fund house may vary between whenever you ask for a retention asset. So from that point of view, I would think already from a liquidity perspective, fund of fund over a longer period of time over a sustained period of time or across different market cycles, I mean fund of fund would offer better. Okay, so coming back to our discussion, so so far from what we have discussed I think we can simply say that gold is an investment class in itself, cannot necessarily help fulfill financial goals. I mean, of course it can be part of portfolio. So in that sense, how much of one's portfolio should be exposed to gold? I mean what is the optimum percentage to have in your portfolio? See when gold was kind of in a slumber mode in 5% allocation, a decent amount of allocation. But when the momentum started over the last couple of years, we've revised it upward and we've advised our clients to have at least 7.5 to 10% of their portfolio into gold prices. As we believe that it's likely to give you better returns than the other asset classes that are in competition like equities or real estate or debt funds. So from a two years perspective, we are strongly bullish on gold and that's the reason we are advising them who have allocation of roughly around 7.5 to 10% as per their comfort. And for a DIY investor, I'm sorry but I mean since I mean of course you're advising our clients but for a DIY small investor who has to kind of take care of his portfolio investments himself and he might not be able to take tactical calls in every two years. So what about such an investor? So if you ask me, I would think that you know gold prices have sort of moved up a fair bit. I mean that's what our view is that we've seen from Ravi already in gold prices and at least the way we are seeing it is that you know they seem to be above their fair valuation. From that point of view, I would rather think that you know getting into an asset class that has done so well over the last 12-18 months in a big way is not the greatest idea at least the way we are seeing it. So from that point of view, I would think that maybe 3-5% allocation at best can be so far off in gold but I think it's at least the way we are seeing it is that it's an expensive insurance policy at the moment. So I would actually recommend a slightly lower allocation. What would you like to say Anamit, you know for small DIY investors? As I mentioned that our view is strongly bullish for the next 18 months and the narrative has changed largely. It was kind of a slower growth, slower economy, lower interest rate, higher inflation scenario but over the next few quarters we will witness that liquidity will be the primary driver and higher inflation will be one of the larger drivers and we strongly believe that central banks have run out of ammunition at this point in time. They have tried to do their best in the last 2-3 quarters to make sure that the absorbs or shock ups from the pandemic is taken care of. So they have now run out of ammunition so not much is expected from them. So liquidity is going to drive up asset classes and gold is a very small market as compared to what the size of the market looks like to be. So I believe that even a small proportion of money which is into negative yields at this point in time moves towards gold. Prices are likely to rally about 20-25% from here and we have our targets at $2,000, $4,000, $5,000, $5,000 on the domestic front. Hence we continue to maintain a strongly positive view along with a higher allocation of 7-10%. All right okay so we're running out of time so I want to quickly take one last question from our viewers. So Debargay is asking, US markets have been rallying on the back of election results and Pivitsar vaccine news. Gold tends to move opposite to stock markets so should we expect to fall in prices any soon? I think obviously the US markets have rallied for like you said for a couple of reasons. One is the uncertainty around elections going away and probably people are expecting that there is some further development on the vaccine front. So that's the exact point you know once the uncertainty tends to reduce, gold prices tend to also come off because it is like we said in our heads again uncertainty or significant kind of market volatility so I mean very difficult to say where they can move in the short term but at least I think if we are thinking that a fair bit of the rally seems to be behind us and in case in terms of obviously very difficult to derive a fair value for gold like we're trying to do it for equity, we're trying to do it for bonds or even real estate but for gold because there is no underlying capture you know it's just that you're you're buying gold in the hope that there is somebody else who's going to see more value in the gold that you're buying. So in short I think that you know probably as the uncertainty tends to reduce you know probably gold prices can come off or the attraction can probably come off. What would you add to add here on this as you know concluding remarks here? I believe that there are various avenues at this point where you could be looking to invest into gold and market is opened up significantly. It's not just a means of to beat inflation or a hedge against your portfolio or just insurance policy now it's behaving like a typical asset class. In this year there is a lot of saving for investors as they have not been able to go to foreign travels, aspirational purchase have been taken ahead. So a lot of money is coming into gold at this point in time along with that the returns is also very lucrative and attractive that is what is making a run behind this asset class and I believe that until prices start to reverse very sharply there is money supply going to come into gold and investors are going to be loathe what this asset. So my sense is we continue to expect a positive view along with strong investment flows. Alright okay so that brings us to the end of our session. Thank you very much Dhawalla Navneet again for being here. Thank you to our viewers for joining us today for this. I hope that you had some you know interesting key takeaways from our discussion today. Well wish you all a very happy Diwali, stay safe and well have fun.


How important is it for you guys to find a different way to win some games, a couple of sack flies, a double-flag rounder? Yeah, no question. If you want to be a complete team and a really good one, you've got to win games at times in different ways. And we've done that. We've done that early on in the season. We were kind of finding our way offensively. We cashed in a couple times, but had a few chances to break it open, couldn't quite do it. I thought the pitching staff led by Garrett made big pitches in the most critical times of the game. He got out of a couple really big jams when he probably made his best pitches and needed to cast her the same, Holmes the same there, and then Chappy finishing it off. So yeah, another really good team win. You mentioned Garrett. He was in a really tight spot in the sixth inning. What did you see from him that allowed him to bear down and get those last two outs? Yeah, I thought he was in a good rhythm actually as in the middle of the game. I felt like he started throwing the ball really well and really started to execute that inning. Santana gets the bloop on him the other way. And then who was it after that smoke got on base? And so he's in a jam. And I just felt like he really started executing with the fastball at that point. I thought in the prior inning he executed some good change-ups, not a pitch he used a ton tonight. And at the finish, I just thought he executed when he needed to. I thought he got a big out of, obviously, Perez earlier in the game when he lost command there for a couple hitters, made a big pitch, though, to Salvy. So on a night it wasn't necessarily perfect. He was at his best in the biggest moments. We got the update of left-growing tightness for Joey Gallo. What happened and what is the situation? Yeah, it's that. We'll see how he's doing in the morning when he was out. I think when he broke for a second on that stolen base and it was foul ball, I think he fell a little tightness in there. So just didn't want to take any chances with it. So we'll see what we have tomorrow. What's your level of concern with him? Nothing yet. I mean, he feels pretty good right now. His strength was pretty good. But I think we'll know a lot more in the morning. You mentioned before the game that Trevino and Cole were not necessarily a pairing that was going to last. But after the last two games, does that make you think that there's an added comfort level there? Again, no, I'm no more or less comfortable with either guy with him. So it'll be kind of how it matches up. You made a face. I mean, Higgy or Trevino, like I'm good with either. However it matches up and the week's rolling out, I'm comfortable with both of them. What's been different with Garrett? I don't think there's been a lot different other than the first four hitters in Boston. Vladdy having a night in Toronto. So I think it was close to being really good. And then the Detroit game was a wonky one that got away, pitch count, and he lost command. So I don't think that had anything to do with the catcher. How encouraged have you been with what you've seen from Labour in the last few years? Really. I mean, he's working really well. He's competing really well. He's been a big part of this. And he's had, obviously, some really big at-bats for us. More good at-bats today. Sacfly that just missed one that really could have broke the game open. Good at-bat to start the game with the base hit to left. So definitely encouraged by how he's playing. Did they just ditch the pitch come in the ninth? Or did they fix it? No, they fixed it. Yeah. With Gallo, was it something he mentioned, or is it something you guys noticed? Yeah, he said something coming back to Travis Chapman over at first base there. And then we were just kind of checking on him underneath and running them through some tests and stuff. And I just decided I didn't want to risk it at that point.


New administration led by the president, Bolo Tinibu, has renamed some federal airports after some notable Nigerians as part of the reforms of the aviation sector. This is according to a memo by the Federal Ministry of Aviation dated June 1st, 2023, according to the memo. The Medugri Airport was renamed after the immediate past president, Mohammad Buhari, and the Potakot Airport after the late nationalist, Obafemi Awoloa, while the Nasrawa Airport immortalized the late founder of the Sokoto Caliphate, Usmendam Fodyo. Also, the Benin Airport was renamed after the late Oba of Beni Oba Akanzua. The second, a Benin Airport after the late Senate president, Chuba Okadigbo and the Ibadon Airport after the premier of the Old Western region, Ladoke Akintola. Hello. Hope you enjoyed the news. Please do subscribe to our YouTube channel and don't forget to hit the notification button so you get notified about fresh news updates.


The title of my lecture this afternoon is Errors, Business, Cycles, and Government Stimulus. So I'm going to start off as any good Austrian economist does by looking at the data. As we know, our science should be data-driven and all of the... It's not a good joke. Okay, stop there. All right, so I actually want to look at a little bit of data because I think it will help highlight really the central point that I want to make here at the very beginning. All right, so here we have... This is the data on home prices as measured by the Case Schiller 20-City Composite Home Price Index. It gives us a rough idea of what home prices do over time. And we can see very clearly what we would call the housing bubble happening from about 2000 to right around 2006, 2007, being the peak where things slowed down and stopped. And then, as we all know, things collapsed shortly thereafter. So there's the data, and now here is my rendering of it, which is remarkably close to the real thing, which is shocking given my own artistic abilities. But what I want to point out is that point right there at this peak right around 2006. Because I think one of the great dangers whenever we start looking at the data is to forget what's actually happening. This is something where I think we as Austrians have an advantage and that we know the data isn't just data. What we're talking about here are house prices. And what is a house price? Well, it's an exchange ratio between a sum of money that people are willing to pay to buy a house and the house that people are willing to sell or what they're willing to accept in order to sell that house. So what is actually happening up here at the peak is not just that some data series reached a maximum, it's that there are actual people that have decided they're willing to pay these very high prices for houses. And there are people that are willing to sell to them, but there are people that are willing to pay very high prices for houses just before housing prices collapse. I want to suggest that this is pretty good evidence that error is a big part of business cycles. Because it's very hard for me to imagine what kind of story we could tell where these people that are paying these very high prices for houses are not, in fact, making errors. After all, okay, yes, we all have time preference. I'd rather have my house sooner rather than later. But I might be willing to wait a year to pay 20% less for the house, which we know is actually what happened over the course of this particular cycle. So if we saw this coming, if we actually knew what was coming with housing prices, odds are good we would not have paid that price for that house in 2006. I think Rothbard, I just picked up off of the table yesterday, Economic Depressions, They're Causing Cure. This also appears in a great little book, The Austrian Theory of the Trade Cycle and Other Essays. When I picked it up, it was free, so why not take another copy? So here we go. Rothbard says here on page 9 in this version says, Okay, in this case, the odd fact that needs explaining is this. How is it that periodically, in times of the onset of recessions, and especially in steep depressions, the business world suddenly experiences a massive cluster of severe losses? A moment arrives in business firms, or in this case homeowners, previously highly astute entrepreneurs in their ability to make profits and avoid losses. Suddenly and dismayingly find themselves, almost all of them, suffering severe and unaccountable losses. How come?  You can say why and it means the same thing and saves you four letters. How come? Here is a momentous fact that any theory of depressions must explain. So that's kind of our taking off point here. There's this huge cluster of errors where people are specifically paying too high a price for particular types of goods, specifically capital goods or these long range investments. As individual people, a house is probably the longest range investment that I'm going to make that's any kind of physical good. So why is it that people are overpaying for these things over the course of the business cycle? And it ends up that this idea that error is at the center of really trying to explain business cycles is nothing special to the Austrian school. You can really interpret a lot of the work of Robert Lucas, who is one of my favorite named economists. It ends up, this last name is my first name, it's great. I like to say I was named after Robert Lucas. He was named several years before I was. I don't think my parents had ever heard of him, but it's true I was named after he was named. Anyway. And one of the big points that he made in the New Classical Revolution was really pointing out that if people foresee what the results of a particular policy will be, they typically act in a way that will offset a lot of those results. Meaning, if we're going to get really these cyclical fluctuations where we have these booms followed by busts, it's really only unanticipated things happening that lead to this happening. And this has always, it ends up, been at the center of Austrian business cycle theory. All right, so then how do we think then about expectations in order to try to explain these clusters of errors? Now before I go too far, I do want to mention Dr. Holzman wrote a paper, I think it was about 15 years ago now, called Torta General Theory of Error Cycles. In this paper, he more or less says that what I'm going to be doing with the next 40 minutes is mostly nonsense. But, you know, he's not here, so I'll just kind of set him aside at the beginning and then we'll move on. But his claim, and I think it is useful to talk about it, he says that he really takes what he calls the essentialist theory of error. And what that means is that if we are approaching business cycles, as praxeologists that as we are studying human action, the application of means to attain ends, we really can't explain error because nobody sets out to make errors. Oh, I really want to be wrong about this. That's not really what we mean by error. Error is that I applied means to attain an end, but failed to attain the end that I tried to achieve. So we can't really analyze why people make errors if we're taking as given this action. It doesn't immediately follow. So what he suggests is that we should just take errors as given, we accept that they exist because foresight isn't perfect, and then we move on. He does suggest that as economists, we can identify certain institutions that are inherently erroneous, that is where the end that they are supposed to achieve cannot possibly be attained by the means that they're trying to use. He points to things like fiat money as an example of this. But then he calls the rest of us, myself, in this camp, but if I'm in a camp with Mises, I feel pretty good. He specifically points to Mises as having what he calls a consequentialist theory of error. What we're trying to do is suggest that there are conditions under which errors become more likely, and that we can understand the Austrian business cycle theory in this way, and that during the boom, we created conditions in which entrepreneurs are more likely to fall into errors that eventually get revealed, say right here in 2006, and then things end up falling apart as we realize our means are not suited to attain our ends. So with all of that set aside, let's just go ahead with the consequentialist approach. Now I first want to point out three different approaches in the mainstream to expectations and error. The first approach is the approach of perfect foresight. Perfect foresight suggests that errors simply do not exist, that people can foresee perfectly, and any choice they make, they in fact know exactly what the consequences are going to be, regardless which option they choose. Now to be fair to the mainstream, I don't know of any mainstream economist that actually suggests that this is true in any real sense, but it's the kind of thing where it's a convenient assumption to make, make some of the math easy here and there, so occasionally we do see that. So perfect foresight is one option. Another, which I think is far more common, and it's certainly one that I dealt with a lot in graduate school, is rational expectations. Rational expectations suggest that not that we know everything about the future, but that we know everything that can be known about the future, and there are, of course, there are some random things that may happen where we don't know exactly what will happen, but we can at least know what the probability distribution is. So I can say if I roll this die a million times, that on average I'm going to add everything up, divide, and get three and a half, so I understand the structure of the probability distribution, but at the same time, if you ask me to roll the dice here in Vegas one time, the odds that I'm going to lose are fairly high. Not because I don't understand the probability distribution, but because I don't know what specific draw I'm going to get on this specific roll, and that's kind of the view of rational expectations. We understand the way the economy works, we understand the probability distributions, but sometimes these unexpected things happen, and we get a bad draw, and as a result we end up with error. And there's another view, which is adaptive expectations, which I think is probably the most realistic of these three, and suggests that our expectations are formed based on what we've seen in the past. So we see past data, when we look at that past data, we develop ideas about how different things connect, and as a result we act on those expectations, which may or may not actually be right. We could actually form expectations about the future that are totally wrong, because the data can sometimes, in a sense, lie to us, or the unexpected can't happen. So these are three different ways of approaching expectations from the mainstream view. Now when we look at the Austrian literature and how do we explain error, I think there are a few different explanations out there. There's just kind of a general explanation around that just says that, well, foresight is difficult, we know this is true, there are certain things that are difficult to foresee or perhaps impossible to foresee ahead of time, and as a result we sometimes end up with people making errors, we might end up with lots of people making the same kind of errors, and we can therefore end up with business cycles. I don't think this is a very good argument, because in the end the problem with the business cycle is not just that people are making a bunch of errors, it's that people are making a bunch of the same types of errors. After all, if we're just making errors, some people are going to overvalue housing, some people are going to undervalue it. One would think that on the whole there's no particular reason to believe we'd see a housing bubble if we're just making errors, but if there's something in the economy that's leading us to systematically overvalue housing, then we might be able to get an explanation of business cycles. So we need to have some explanation why foresight is not just failing, but failing in a very specific way that we're overvaluing particular types of investments, these long-term investments, the early stages of production and the like. Another explanation comes from Walter Block, at least he's one person that I've seen suggest this, and he suggested in the Austrian theory really central to it we know is the low interest rate that comes from the Federal Reserve or the banking system introducing new money through credit markets, this process of credit expansion. That's what Block would point out, is that these low interest rates in effect act as bribes to make a specific type of error. Specifically when interest rates go down we know there are sectors that are more interest rate sensitive, especially in the early stages of production or on the consumer side, things like housing, this very long-term investment. So we're being bribed into starting those particular types of investment. And I think there is something to this argument, but I think we can go a bit further. I think there is more of an explanation. Another argument that I've seen, I'm as Carillion Dempster's argument, which if you sat in on my Game Theory lecture you already know how I feel about it. In the boom, at Carillion Dempster they try to give a game theoretic result suggesting that entrepreneurs, while it may be that all of us collectively if we all invest in the boom we create this unsustainable boom that's going to collapse. Each of us individually plays so little role and actually has a good reason to participate in the boom. So we end up with the boom anyway despite the fact that we could have prevented it in a sense if none of us had invested in the early stage of the boom leading to the overvaluation. I want to say about one of my other troubling points about this argument is I think it does fairly well explaining why somebody that's Austrian-informed might go ahead and invest in 2002. Okay, we know that this housing boom is eventually going to collapse. It's certainly true, but at the same time there is money to be made in the intervening four years. But it's very difficult using this argument alone to explain 2006. At this point now there is no longer any individual incentive if I have a good foresight about what's going to happen in the future. There's really no longer an individual incentive to go ahead and invest in this overpriced house that I know is overpriced when I know that the turnaround is coming very soon. So I think this game theoretic argument by itself isn't going to work very well. We have to have some other explanation. So my favorite explanation here. This is not original to me by any means. I first saw this argument made by Baxendale and Evans. I've also written a little bit kind of adding on to giving some credence to what they suggest. And what they say is that just like capital is heterogeneous, that it does different things, we also have heterogeneity amongst our entrepreneurs, specifically in regard to entrepreneurial quality. So it's not just that we have good entrepreneurs and bad entrepreneurs, or that we just have entrepreneurs as a kind of amorphous glob. Rather we could rank our entrepreneurs from people at the top. So I might point to somebody like Peter Schiff, who seems to be very good at having good foresight about where markets are going to hit and when. I can predict the collapse of the housing bubble with astonishing detail. So some people are very good entrepreneurs at the cream of the crop or at the top of the spectrum of entrepreneurial quality. Then there are other people, I might put myself among them, that are toward the bottom in terms of quality of entrepreneurship. That is our foresight is not very good. Now, again, this is an empirical question, so to present some data, I have one account, it was the account that I started when I started college. I put a couple thousand dollars into it, and that was 15 years ago now. I now have one dollar and 19 cents in that account. I believe when I was in college, the best predictor, a company would go bankrupt, was that I would buy it a few months ahead of time. One after another, I'd buy this company and went bankrupt. I'd buy another company, went bankrupt. But another company went bankrupt until finally I did literally only have the one dollar and 19 cents that didn't quite divide evenly into the shares I was buying. So I have that account, I keep that account to remind myself where on the spectrum I fall. How much should I consider starting a business? And I'm probably not. I just lend my money out at interest. That's something I can do. So you have this range of entrepreneurial quality. Some people are at the top, some people, me, are at the bottom. And typically what happens through the market process is we know through profit and loss are you have people like Peter Schiff, they make good investments, these investments pay a return. As a result, they acquire more capital and have a greater command over the real economy thereby. So we have the people at the top are continuously acquiring additional command over the economy. Then we have people at the bottom, like me, who invest a couple thousand dollars, managed to turn it into $1.19. And over time have less and less control over the economy as we don't have the resources to command very many resources in the economy. So typically what would happen is that we have some spectrum of people up here at the top that are the people that actually regularly earn profits and actually would convince people to give them money to invest for them and the like, they would actually attract the financial capital they need in order to have command over resources in the economy. Meanwhile, the rest of us have established track records showing that you should not, in fact, give us money to invest under any possible circumstance or lousy entrepreneurs. And as a result, people don't give us money to invest. So for the most part, what we see is good entrepreneurs are running the economy and the economy runs very well. They have good foresight. I don't have to put in an order for wedding race markers years ahead of time so they know it's coming. They saw it coming. I just walk into Staples. I pick up the wedding race markers which really meant somebody years ahead of time knew that I would need it, which is kind of crazy. But somebody did that and was very good at it and they're the people that command the economy because of the profit and loss system. So why does this go wrong in a business cycle? According to Bax and Dale and Evans, what happens is we know that we have this credit expansion and what it does, it does a couple things. One of the very important things that it does is that it increases the amount of financial capital available. Which means now it's not just the very top people that get capital. It's also a few people here below. People that could not previously get loans or what have you to make investments now find it is possible. After all, there's more money available in the banking system. We have to find more people to lend too. We've already lent all of the best investors so we've moved down the list of loans. Now I add to their argument and I suggest that what really happens as we approach the peak of the business cycle is that this gets even worse. So if you've read Peter Schiff's writings that toward the peak of the business cycle he definitely did not want to own a house. So he was shopping for some place to live. They were showing him houses and he said, no, this is crazy. I'm not buying a house. I'll in fact go across the street where I'm going to pay rent for this apartment this is actually less than my house payment would be across the street and it's a nicer place. The housing bubble was just so bad I think in California where he was living that it just made absolutely no sense to him especially knowing that things were going to collapse. So we have the Peter Schiff's of the world say this is not going to continue I need to get out. The closer we get to 2006 the more of these people try to get out. At the same time we know the Federal Reserve is continuously putting more and more money into the capital flowing in. It's going to have to go to somebody if the banks want to make any money with it. It's not just going to sit in the vault. It does now. We have enough doubt about people's abilities but at the time no we need to make sure we lend it out so it gets invested. So what happens? Well, there it is. So these people at the top at least some of them the really really good ones that Peter Schiff's drop out so they're not in the market anymore as entrepreneurs we want to continue giving loans we have to take the money that would have gone toward those people and give it to people even further down the list. So what we'll see happen then during the business cycle is a systematic decrease in the value or not value but in the quality of entrepreneurs. So normally the economy is run by people that really know how to run an economy that have good foresight can know what people want and so on and so forth but when we have this monetary expansion happening we first draw in people that have low enough quality they would not normally get funds but secondly because all the high quality people leave we draw in even more people that really make a lot of mistakes to the point where even I it ends up can get a mortgage. It's true, it's kind of crazy. Anyway, so what happens? We're drawing in a different set of entrepreneurs so the way that I would answer Rothbard's question in a sense it's not that we have all of these entrepreneurs that normally do a really good job but then suddenly become idiots because of the business cycle it's quite different. In fact what happens is we have a bunch of idiots out there that normally can't be entrepreneurs they can't get the funding for it but thanks to the monetary expansion and thanks to the fact that the good entrepreneurs are getting out now idiots can become entrepreneurs so it's not that entrepreneurs suddenly became stupid it's rather the stupid people so I suggest this may be a somewhat better explanation for why we see a lot of errors happen in this case and then add to it the low interest rate incentives we can see exactly the types of errors that are going to be made as described in Austrian business cycle theory so let's talk a little bit about the role of capital in Austrian theory in a sense repeating a lot of what Professor Garrison has already said as we know the Austrian theory of the business cycle is really all about these distortions that happen in the business cycle that happen in the capital structure we have these artificially low interest rates driving people toward investing in these long production processes in the capital goods that specifically support those processes and as we know drawing from Mises capital is not all the same capital is not this amorphous blob rather it takes the form of very specific goods as I like to say no matter how large the McDonald's is it will never be able to produce a car for you a huge deep fryer will not produce a car it's the wrong type of capital you have to have the right type of capital to produce the right thing so for producing in various industries focused on things that make sense to invest in if interest rates are low and then interest rates stop being low suddenly these investments don't look good anymore we have all these very specific capital goods that have specific uses that are no longer actually going to be useful since we don't actually want to produce the things that they are specifically designed to produce kind of the analogy that I like to make is we can imagine if the government created the subsidy system where they were subsidizing lead baseball factories giving huge amounts of money to anybody that produced lead baseballs we can imagine that as a result of this we'd have some politically minded entrepreneurs say okay I can grab some money let's start producing lead baseballs so we start building factories installing machinery all designed around melting lead and putting it into a baseball form and then we try to sell it find out nobody wants to buy it but fortunately thanks to the subsidy the government just buys it all up and we're good as soon as the subsidy stops though we know our business is in trouble in fact it's very similar here if we push down interest rates some businesses look like they make a lot of sense we start adopting these sorts of businesses we see that interest rates are going to correct okay if we're these types of people down here that see what interest rates are now but don't account for what they're going to do in the future then we start making investments in the equivalent of lead baseball factories it ends up as we know from Austrian theory interest rates can't stay low forever they eventually have to go back up when they go back up these investments just like the lead baseball factory stop making sense with the result being we have a bunch of capital that is now no longer useful it cannot be used to fulfill the desires that consumers actually have so when the collapse comes what we're really doing is revealing that these capital goods were in fact mistakes we should never have invested in these things to start with so what then happens in the crisis crisis these things get revealed we abandon the lead baseball factories and we end up if we look at the economy see lots of lead baseball factories sitting empty and everybody gets depressed and I take a drink of water to save my thirst believe it or not that also happens during booms I still drink water alright so anyway so we have all of this it looks like idle resources and start getting itches we have people that were trained to make lead baseballs now they find out they can't find a job at least not one that pays as well as their old lead baseball job we have all these factories that are designed to make lead baseballs that are sitting empty man if only there were a way if only there were something we could do and sure enough that's what people start calling for we know as soon as the recession hits where we have the crisis things start collapsing unemployment rates go up and people start saying well we have to do something which is a very interesting sentence to deconstruct what do I mean by we I don't think I've ever been part of the we that was intended in this sentence we does not mean I personally need to go out and do something about the state of the economy what it really means is that people in Washington are in the government governing authorities so say the Federal Reserve or in Congress or the President they really need to do something but we live in a democracy so we're the government well they need to do something in Washington they need to pass some kind of policy that are going to get these people re-employed okay right so and something what is the something a lot of the time we don't necessarily care as long as there's some promise that it's going to do something to create jobs as if there's a shortage of jobs anybody who wants a job by the way I have lots of work to do in my yard my garden which I've told you about before is in a horrible state at the moment it could use quite a bit of weeding I will happily pay you 15 cents an hour there's plenty of work the problem is that I'm not willing to pay something you're willing to accept so that's part of the adjustment process that has to happen if we want to convince people that they actually have to work they have to start realigning their expectations about what jobs are going to pay and specifically the jobs they're qualified to do are going to pay but we know people are hesitant to do this especially if there's some promise the government might be able to get me a job paying what I was used to so what then happens I like to look at what happened during 2008 really as kind of a model of the way the government stimulus typically will work so there's a call we have to do something we put together some kind of stimulus program and what we're really interested in is we want to create jobs that's the thing we say we're not really interested in creating jobs itself it ends up creating jobs it's fairly easy and doesn't necessarily result in a whole lot of permanent waste in the economy but I can after all say pay somebody to watch TV at home and write reviews or something like that if they were going to be unemployed anyway okay it's not really a huge waste of resources when I'm unemployed I want to watch TV anyway we're not really changing the way resources are being used but we're providing an income and that's really what people want they want an income not a job I will happily if anybody wants to relieve me of my job but still provide my income I'll happily make that step and I think most people would because leisure plus income is better than work plus income anyway what people actually want is income but we associate that with the job so okay we have to create jobs but we don't want to have these jobs like paying people to watch TV at home one that's a really difficult political sell and secondly even politicians have this sense that the economy at heart is about producing things they kind of miss that it's about producing things that people want but it's about producing things so we see even when the government is trying to have these stimulus programs to create jobs they do things that economically make more sense than they really should do if they were just trying to create more jobs, if that makes sense the story is told from Milton Friedman that he was visiting I believe it was India and he saw these people by the side of the road digging trenches as part of this work program and they were using these shovels and he said to the government official that was showing him around he said well you know you could invest in this backhoe you could dig this trench much much more quickly use a fraction of the manpower you'd need and it's actually going to be fairly cheap for you to do this so that would make sense and the official said to him oh well no this program is not about that it's about creating jobs Milton Friedman turned to him and said well then why aren't they using spoons because we even understand even a government official doesn't want to use spoons to dig the trench we need to at least have the appearance of productivity so what then can we do to make it appear productive as we are doing this stimulus one thing we could do is look around for shovel ready projects shovel ready is a great phrase shovel ready meaning that we have pretty much everything set up we've done all the steps we need to get to the point all we need is just a little bit of government money and then we can get this thing off the ground so we look for things like we say well we just came off a housing boom well that means we have lots of construction equipment sitting around what else could we do with this construction equipment we could repair roads and bridges crumbling roads and bridges being one of my favorite phrases from President Obama we need to repair our crumbling roads and bridges it ends up we already have people trained to do construction we already have all this construction equipment that was being used before it's not all necessarily good for roads and bridges but a lot of it is so we can bring that back in we have all of these empty lead baseball factories we have all of these people trained to make lead baseballs all the government needs to do is buy up a bunch of lead baseballs and we're going to end up having lots of production not necessarily production of much value but we're going to see lots of production people are doing jobs and we already have all the resources we need to make this happen so what does that suggest then if we have governments and I would suggest this is the kind of government we have that at least wants the appearance of productivity with its stimulus they're going to be very tempted to use the capital that is available and is going unused but as we know from what we just said about errors about capital the capital that's available and is unused is precisely the capital we should never have invested in in the first place so what happens then they come in with a stimulus now all these businesses that had failed or at least were on the verge of failure and that should have failed if we're going to free resources to do something that consumers actually want done get locked in those old positions because government steps in and says ok we'll pay you to keep doing what you were doing so step in we bail out the banks close or that would be disastrous bank closure it's horrible so we can't let that happen we want to make sure we save all of these jobs and banks maybe fire an executive here or there or replace them with somebody else but for the most part we want to make sure people don't leave the financial sector we don't want to lose too many jobs there we don't want people to lose their jobs in construction we don't want people to lose their jobs here there so we try to lock people in those old positions but the result is really only that we end up locking resources exactly in those places that we have now had revealed to us are erroneous that are not in fact creating much value ok so that's pretty much the point that I wanted to make if we think about it seriously and really what it means, what is the signal we're getting once things turn around what does that say about the types of stimulus that the government begins to offer us thank you very much


Good evening comrades. We are here at police service headquarters where we have come to give solidarity to our deputy national information chairperson, Ambasada Emmanuel Muamba, whom we learned was picked up this afternoon in woodlands at a tower beaten, bandod like a common criminal by the Zambia Police. As we are here, this is what time we arrived here around 1830. They are not allowing access to anyone to see him, including his lawyers. They have been pleading with the police to allow his lawyers to be part of the interrogation. But so far, nobody has been allowed. As you can see, he is still inside. We don't know where this country is going. Our constitution provides that one should have a lawyer to be present when they are being interrogated. We have Emmanuel Muamba, who was our ambassador in Ethiopia, ambassador in South Africa, a person of reputable status being picked like a common criminal. The police have got no regard for anyone whatsoever because they are receiving police constructions. Where is our country going to? This has to stop. This must stop. I end here for me. Thank you. On behalf of the members of parliament who have turned out to equally give support to the community of Emmanuel Muamba, we are saddened with this continue police action and that police brutality. The report that we got was very disturbing, which was in the house, that MCC Emmanuel Muamba was picked up and beaten at the kawash, turned into a vehicle like a common criminal and brought here to serve his headquarters. We are obviously here to give him support and we came here to see him and find out how he is doing. We have not been given access. So, two things. One, the continued brutality of suspects. If common Emmanuel Muamba is a suspect, he still enjoys his rights. Secondly, we are here with his family. The family deserves to know where Emmanuel Muamba spent the night tonight. The wife is here carrying his medication and she wants to pass over the medication to him. So, you can imagine that we are back to the colonial times where people will be tortured. Suspects are tortured because a country is sliding in a police state. What is even more disturbing is that the criminals, the real criminals are still working in the streets. The people that took advantage of the 65 million kwaisha, which was seized by anti-corruption commission, are still working in the streets. Government has struggled to try and justify, but we know that the money never hit control night and night. I wish the police could devote that effort to try and arrest those criminals who are working in the streets. There are criminals as we are talking now who are mining in case here and all these criminals are working freely. We know that criminals are being bundled and tortured, you know, like common criminals. Now, kwaisha, we were discussing the other day, we saw this coming. Zambian, countrymen and women, we want you to be reminded of one thing. Whenever the UPND government does something wrong, they find a sacrificial lamb. Komredi manu mwamba is today a sacrificial lamb so that Zambians can stop talking about the deposit slip that never came to follow. Zambians should forget about the 65 million that disappeared in some account. So they have picked up the manu mwamba, they know that everybody focused on trying to secure the freedom of our company. So this is who we are, because we are women's community. Well, thank you so much, leader of the position. For me, I feel very sad today, very sad that it is now for the 65 million, no deposit slip, but fake papers being laid on the floor of the house. And I'll come to the issue of those papers being fake, because they are fake. And then the issue of mining KCM, how to soldier it, we have 6.1 billion quarter FIC import. All of these things are not making sense. Now, the police have a lot of work. They have a lot of work. We were told by a PS in the village of Roma Feras that some of these people were actually fake. Now, fake papers, how do they become so important? The papers are fake, isn't it? They are fake, that's what we are saying. How do they become so important? The old general's reports, we were told, they were sentisito of this. The following day, the old general, the old tazu did the work. We are being researched, laptops taken away. So it's how fake are these rika gens? That is a thing, but the problem is for me, there is a lot of work for the police. A lot of work, you know, because of the poverty levels which have escalated. A lot of thefts are going on. People are being beaten. Instead of concentrating on these criminal activities, the police are concentrating on PF. PF is not an enemy of the people. PF is just an alternative leadership for the people, isn't it? You can draw a lot of ideas from PF. You can get a lot of ideas from PF because PF was in opposition for many years. PF was in opposition for many years. If you are serious, you can draw a lot of lessons from the existence of PF and you can make your governance a little better instead of laying fake papers on the floor of the house, instead of just promoting national division, instead of doing just all these things which are inimical to the nation, you can become a better leadership by providing the necessary leadership as opposed to just looking for PF. PF is not your enemy. Your enemy is poverty. Your enemy is debt, which you claim PF left, but you have borrowed more than you have been able to raise yourselves. You have borrowed more than what you have been able to raise. Okay? So PF will never be your enemy.  That is your enemy. Because when you tell lies, people are going to know that wu fi if you lay a deposit which is not, people will know that it's not a deposit. So wu fi mga maa nasha kwa wu fi, mamma nuku teke caro wu wu ii noga kapa kola ga, is wu mambo kui kata if you pondo, not to be a PF. You will be okay. If you do these things even in IMF as you do your restructuring of debt, they are going to say you are credible. You can't be saying you are credible, mlele teki hafizun paramedu. No, we are credible. I'm sorry. Yeah. Just before I invite Kassinia Kansu, the issue of human rights, the issue of the rule of law, it forms part of a good record for the country. I think that even as described, trying to structure debt, the government must do something more and that something more is to follow the rule of law and respect human rights because the human rights violations and the torture of members of the public, the torture of suspects that we are seeing may just affect our good record and in turn affect the negotiations that are ongoing insofar as debt destruction is concerned. Kansu, you may wish to. Thank you very much. Thank you. We are making a statement on issues that have to do with the governance of the nation. Frankly, if anybody has had any doubt that this country has now become a policy state, what we have been witnessing in the last two weeks in particular the last two months is testimony to the fact that we are really in a policy state. It may not be affecting a lot of zambians because it appears that the target right now is a patriotic front. But the reality in the spreading of education is that once you are finished with one group, you will begin to root for another group that you can yet aggress. Today, we are here following up a matter not only of one of our ambassador, Emmanuel Mata. We are also following up a matter involving Andy Duterte and also Thompson Piro. The young bloggers who were arrested two days ago who have not been given access to their lawyers and who are still incarcerated. When we came here, we were informed by people that were around where non-repomobiles picked up and people that were also witnessing the time that Mr. Duterte and Mr. Piro were being arrested. And it has confirmed to us that they are still locked up or they are still hold up somehow within four-side waters. But the police have refused to give us the access to them as their lawyers and also as comrades from the parliament. Honourable Makebi Zulu was here earlier on before I came and he's been engaging the police command to try and see if they can give them access to these three individuals in order for them to just get information of whether they've been tortured or not. Now, the reason why the police would restrain you from accessing your client is clearly because they have either tortured him or they wouldn't just want him to be able to have legal representation at the time they interrogated him. If you get into the culture of interrogating citizens in the absence of their lawyers, then you have arrived at a police state. This is not the only case we are following up. There's also a case of Honourable, of sorry Dr. Zumanizi. He has been incarcerated, he has moved from one facility to the next without being presented before the court. His lawyers have made an application to court and they've asked the court to issue a rate of labour scopers. Even that matter is being in its movement at SNEW's rate because now we can even begin to accuse other institutions of being complacent to the degeneration of the rule of law that we are experiencing as a nation. How can you take such a long time to issue a rate of labour scopers? Ideally a rate of labour scopers is supposed to be issued within 24 hours to 248 hours. Comrade Zimba has been incarcerated for the past two weeks. How can you take such a long time to issue a rate of labour scopers? If you relate also to the case of Honourable Nixwantilam, secretary general of the patriotic front he has had to protect himself because if the law cannot protect you, a human being can use the initiative to protect themselves. He has challenged the issue of that warrant against him. On the basis that he was in the high court on the day that was supposed to be in the high court issued a ruling in which it says it doesn't have powers to cancel that warrant. We all know that if one individual is required to appear before two courts you are mandated to appear before a court which is superior to the other court. On that day Honourable Nixwantilam was supposed to appear in two courts in the high court in the subordinate court. He sent word to the subordinate court including documentary evidence because it appeared before the high court in the matter where you cited the contempt of court. Now contempt of court are criminal proceedings and the subordinate court in Kawambu also criminal proceedings so two criminal courts were here in the same individual's cases. He was obliged to appear before superior court because on that account alone the law court should have given him an agenda. Unfortunately the courts in Kawambu issued a warrant against him. When he challenged by bringing the case in the high court to challenge the decision of the subordinate court because it is an inferior court the high court which is supposed to be superior court has decided to wash its hands off often. Now if you call that justice then you have to change the definition of justice because in this case it is actually a miscarriage of justice instigated by the court structure itself. Now one lives to one. What is going to happen if an individual be required to appear before the subordinate court as before the high court? What decision do you make? So it is just this confusion. We are hopeful that whatever next steps the lawyers wondering what we are going to take if it is appearing to the court of appeal we can make an appeal to the court which will just come out and deliver justice. In the quality of justice that people expect of an institution like the high court and the court of appeal we have been practicing law for a long time you will know that if you explain to the subordinate court that on the material day when the high court, they are mandated not to wish a benturata dynasty but in this case because you are dealing with a leader of the opposition in the name of the secretary general and some people who is actually a member of parliament who you want to humiliate and embarrass you decide to step the law and focus on ensuring that it gets punished. The reality about the law is that if you don't follow the law you just create an appeal. These people that you keep victimizing but using the law to vilify them like what happened to your ambassador because very unfortunate one look as you were there started crying because they saw what he was going for he was humiliated, he was vilified he was assaulted by the police who were supposed to protect him and now we've been here we spent the last 4 hours trying to find out if we can have access to him we are not even aware what condition is in we don't even know now where he is but insofar as we have been informed including the police officers who operated to us he is actually within this facility here and we are hopeful that somebody can listen to what we are saying and make a reasonable decision and ensure that we are given access to him to establish his experience and quite frankly if anything has happened in terms of torture he is supposed to be given access to be allowed to go and seek medical attention you can't torture someone but then confine them somewhere where they cannot be accessed by their family the wife is with us we are hopeful that somebody can listen to this and make a decision thank you so much it's very sad to see what has happened in our country we want to go to one country which is an example of which we should not pretend but just one reason why no one asked to say our comment it's probably solid and they can't allow us to see him in the state in which he is but what we should not forget is this power which we acquire doesn't last forever so all they are asking from the government is can we see justice to prevail please note the dreaming if anything hasn't even yet been charged why not let him have access to his lawyers so that he can explain exactly what the situation is and more especially his wife and the family members over here we are not asking for much we just want to see him and if possible find out where he is and how he is to it it's very sad we should not forget or lie to ourselves this is just political power which is not going to last forever if the government comes and goes but if we will be treating ourselves like this what about if they were to leave power and the other government comes and they will be happy to be treated the way they are treating PFO members I don't think this is the best way if really we want to create an atmosphere whereby it's once under one nation let us preach what we are talking let us practice what we are preaching about as once under one nation not whereby we preach something else and then what we are doing is contrary to what we are talking about thank you thank you, so bantu men and women we remain determined and we try and welcome them you can see members of parliament people arriving at Fosec gotten we are resolved so that within the course of this year we should be able to find comrade muamba if possible find a medical practitioner who can attend to him we are all worried in what state he may be in going by what we were told by those that witnessed the brutal arrest our national youth national women chair lady is here so she may want to say something thank you this is a very sad moment especially for us women I could actually see the theory eyes of mrs muamba the agony that she is going through death like every other woman not knowing what has happened to your husband as I conversed with her she said her last conversation with her husband was called the lawyer so you can imagine just the torture of not knowing where your husband is what has happened to him the president himself is a father he is a husband and I am sure he would understand if the first lady were to go through such anguish he himself on several occasions has given statements that he would not want anybody to go through such kind of lamentation but this is what is happening and may appeal I think to the general populace out there is that this brutality is real and the Suda the Zambian people wake up to the reality that we are under capture and today it could be one of us here at the police station tomorrow it will be somebody else I think everyone has the right to justice if not with the members of parliament but at least if they could allow him to see the wife but his wife would be able to come the children at home and called for this is a democratic dispensation everyone has the right to be head even at whatever level of criminality everyone has the right to be head so I call upon all women across the country in all corners this isn't funny anymore we have real issues at hand just the agenda of parliament we were making documents that were fake before the house so these are issues that we should be debating and standing here outside the force headquarters wondering what has happened to our police so we appeal as a mother as a wife as a sister to his excellence in the president can justice prevail I also want to speak on behalf of my brother Zuman if there is anything that he has done take him to court that is why he has been arrested but take him to court so justice prevails if he has done something wrong let's see the courts decide but holding him like that without giving him an opportunity to be head is and called for it is fair and also where what is very surprising is that where is the international community when all this is happening this is happening I was once minister of information I have European Union I would have the US government approaches where are they where is this silence my appeal is that can we begin to speak on these issues that is why we need the international community to come in please be an independent moderator this is our appeal can you begin to speak for us where is this silence coming from I remember when I was minister of information I had the European Union the US ambassador or ambassador has come to our office but what is happening today so please can we begin to speak even without the donor community where are these ambience where are the ambience that fought for this party democracy where are these ambience that fought for equality for all zambience can we begin to speak it is not a matter of being in opposition it's a matter of justice it's a matter of every zambience standing up and speaking for what is right today I might not be there tomorrow it will be somebody else but can justice prevail can ambassador be given an opportunity to see his lawyer be given an opportunity to see his wife I can imagine just a settlement that the wife is going through not knowing where your husband is there are rumors right now that he has been brutalized so you can imagine what the wife is going through so please whoever is in charge of this mess can we please have order can honourable Emmanuel Muhammad be given an opportunity to see his lawyer even in an interrogation you have the right to remain silent even when your lawyer is there but you can imagine what has happened to this country where people are abducted and taken to places where her people don't know so please present her kind can you do what is right before the people can you do what you promise that you will do for the people outside good evening for me it's a very sad evening just coming out of parliament instead of going home you hear that no ambassador mwamba has been this is what we call abduction if your family can't access you it means that you have been abducted whilst as we are politicians we can be denied what about the children what about a lawyer what is happening in this country I rarely comment on such things we just need to have order the minister of home affairs should facilitate that mwamba should be able to see the husband it's just the order that the wife should know where the husband is she is the next of kin before we even look at any other person the woman to access and see the husband may appeal to his excellence haka in the each of them you will understand what it is and what mwamba is going through right now and you wouldn't want any other person to go through what you went through honourabochirango he's not omnipresent to say he can be in two places at the same time only a witch can maybe be found in two places at the same time you understand to say higher court is supposed to submit to them higher court but you just want to squeeze him out of parliament and then you say Zambia is a democratic nation where will the pride be we lost kabushi because of the same kind of treatment we lost the kwacha because of the same kind of treatment now you are targeting kawamba it is not good you should allow democracy it should be able to flourish we can't allow a situation where you squeeze out members of parliament so that the new numbers can grow that is what democracy works it's important that you put these things to order allow the real law law to take place we can't allow to have a member of parliament at war just because you knew and the lower court and the higher court they communicate they know very well to say honourabochirango in a particular court at that time in addition honourabochirango is a man living with disability if we have any in regard for people living with disabilities to be represented in parliament can't we give him chance so that he can be there to attend to the issues which concern marginalized population in this country it's important that we try while you understand you are in power it's important that you look at some of the people who are disadvantaged in this nation I submit Thank you The last time this matter came on the floor of the house regarding abduction of members of parliament the Honourable Minister of Home Affairs came up sharply and denied that there is no such thing as abduction of members of the public but there it is people who reported to us from the kawash told us that Honourable Comrade Imano Mwamba was actually abducted after being brutalized and yet Honourable Mwimbu comes to the floor of the house to give an impression that he is running a very professional ministry and everybody is conducting themselves in a professional manner we want to place it on record this evening that abductions have continued the torture of suspects has also continued like the Honourable Chair lady put it we wonder where the international community is how is it that suddenly they can't see anything wrong with the new donor administration we were in government before and we know how many times they wrote articles and made statements about government at that time what we have seen now has not been seen in the past 25 years yet the cooperating partners the donor community is totally quiet we are now wondering as members of parliament how are we really being said by these friends of ours or is it that they may have other interests that we do not know that's the question that begs that's the question that only they can answer thank you very much sorry Honourable is it true that the police are acting on the instruction from Tabukawa and because Tabukawa issue the instruction was live on media when he was addressing the media and after that he is tracking these things happening now you see when you dealing with the third government government of cowards they can act in any way even the seniors can obey instruction of the donor because there is no order there is total lawlessness so I won't be surprised that Tabukawa now is in charge of issue instruction I mean we have a minister of local government the person who is issuing instructions to the minister is the minister of the secretary general of the party I mean if you want to talk about constitution we have a minister and local government but the Honour was taken over the ministry in essence is the what you call the secretary general of the UCND so yes I'm not surprised that now issuing instruction to the police to arrest the president I wouldn't doubt it Honour minister according to how authenticated they said later which they have accused the ambassador and these other bloggers who say they have secreted how authenticated is it I think my colleague called that they termed it as a fake letter so why is there so panic around fake documents why should there be so much panic because I think they are sending a different message not to the church they say to the church that the documents were fake and that's the whole country went back thinking about it but the panic around those documents they may be constructively authenticated those particular documents out of this panic we are now becoming suspicious I think there is some authentication of those documents given the action why should you brutalize somebody over fake documents why should there be so much panic we have a young man in police custody a couple of days now are you sure that is what you do over fake documents so maybe we need to start thinking we have to relook at the contents of those documents because they convinced us the documents were fake I think they are authenticating those documents we need to read those documents to understand the substantive content of those documents if you must also look to the site in fact their approach is very directed these documents have been circulated by a lot of people in fact the biggest number of people that I told you about is a UPNJ car because they first erupted in the UPNJ courts if I send UPNJ car then I will push them to the PF road and that is in the public purview but you have seen at the time they literally targeted people that are responsible for keeping that what you find in the media line but you will see a honorable member is actually the one who is leading a media team and you have seen the way he has been working around the media, zambians are informed real time what is going on in the country but this information did not actually come from honorable it came from the blog that belongs to UPNJ it actually sprayed onto the blog that are public to everybody else and to UPNJ itself but why are they only targeted these two individuals I mentioned Ivo and Thompson are actually bloggers for UPNJ why they are the only ones who have been arrested and then why are they pointed to Mamban in fact a little of the people say Mamban only became a victim after Tabukawaana made a declaration that is being looked after how do you, you don't even belong to the police how do you really want to break the news where was the police spokesperson you know but if you notice this is being played like a reader because even the police person issue some statement recently you know connected with the in this stage is where and more people are going to be arrested and the people that say more people are only members of the protected fund why aren't you arresting everybody else in fact the police even know where this came from they even know the individual whose response was putting it in the Zambian situation but that person has been conveniently avoided and they've gone for people that they know are responsible for putting the image of the protected fund to be made high enough and they think we're going to collapse by doing that we will not, like Tabukawa is the same all the time this is not a political question they pay everything which is owned by Zambians and Zambians remember very well what the protected fund has done in this situation if anybody thinks that by making these maneuvers they're going to destroy the existence of the protected fund they are playing in those in there the sooner they leave it the better for themselves so I think the question really is how authentic is that document the panic is sending a different signal to all the Zambians the Zambians are now taking interest to read those documents and understand the content because what it appears that they may not defect documents at all from just the action of the police thank you