Insist it is another governing body that allows investors to insist on where their orders go thats being broken. So the rules are being broken. I dont know what kind of a violation it is. You will read about this in the newspaper. The rules are in place and the investors were exercising their rights they just have no history of it and they never ask where the order goes. Its hard for them to find out where it goes and how it is erected. So, it is a problem more historically it just never been done. Now it was a radical to go to fidelity or say start telling them where to send the orders because theyve never done it before and the bank was furious that they were telling them they were doing that but they are doing it. So now it is a matter of the rules being enforced more than anything else. After what you just said i can see the optimism would get turned around because the individual does have the power, but is it against the standard with the Municipal Bond to the places like alabama contracting . It is in the aid the financial markets. It is about the Interest Rate markets and the Foreign Exchange scandal. The commodities in the scandal why our markets all of a sudden so heavily manipulated by the big wall street banks . It probably because they can. Partly it is because the historic sources of the revenue for wall street have dried up and it has been cramped by dodd frank so part of it is response to the survival for the banks and the individuals in the ban banks. Its the same thing playing out in the stock market. And i think that is why its happening. Basically, technology has reduced the natural and the useful role played by wall street and eliminating it in some markets and you have to find other things to do. [applause] we are going to bring a table up your just get a couple of minutes to get organized. Barnes and noble is out on the patio and they have some mouth on cloud well books available for sale to the because theyll blink bac coauthor steve forbes and evil is a talk about their books and how the destruction of the dollar threatens the Global Economy. This event was held at politics and prose bookstore in washington, d. C. In june. Vr very privileged to have with us this evening a very recognizable figure in the media and business world. Steve is of course editor in chief of forbes magazine, the nations leading business magazine and he has had a Media Company that includes not only asian and european editions, but a number of Web Properties focus on politics, sports and financial markets. Many of you will also remember steves spirited campaigns for the republican president ial nomination in 1996 and in 2000 during which he promoted the idea of among other a flat tax along with a new Social Security system, medical savings accounts, term limits and a Strong National defense. This evening steve comes to us as an author is not a new role for him he has written or cowritten five previous books and six and the latest one, bonnie how the distraction of the dollar threatens the Global Economy and what we can do about it. The views wont be surprised to read the criticisms of the Central Banks and monetary policies with the fed now winding down its quantitative easing steve c. Is an opportunist moment to think the monetary system. The goal was to make the United States stronger but instead it has made the country weaker. Something has to be done. Here to explain what needs to be done along with coauthor elizabeth who is a Communications Executive is steve forbes. [applause] thank you very much for coming out the book is about money, Monetary Policy is one of those topics that seems to intimate a lot of people for some strange reason. And as a result, the Federal Reserve for example has less formal oversight from capitol hill and from congress and our intelligence agencies into the thesis of the book is that the topic of money is very straightforward and simple. Even though it is shrouded in a lot of jargon and eat rations that the odds of the idea of money is very basic. Weve gotten away from it and our policymakers today no less about money, Monetary Policy than they did 100 years ago. Since the early 1970s, even though we have had too many decades in the 80s and 90s, overall cover growth rates since we went off the brendan woods system of the old Gold Standard in 1971, the u. S. Average growth rates are less than they were before 1971. And if we maintain that growth rates that we have for 180 years up until 1971 if we maintain those growth rates after 1971 on average the u. S. Economy today would be 50 larger than it is now. 40 years compounding effect reverse compounding adds up to a lot. Savor having 50 higher incomes and what will it mean for the deficit, what will it mean for Social Security, what will it mean for a lot of the social positions today . Over time this adds up and it is a critical reason why it takes two incomes and a family to do with one income due to the scope could do and taxes are a large part of it, but the basement of the dollar since the early 70s is a critical part of it as well. And when this happens when you dont have a stable currency, you end up with people not getting ahead of a lady should and median incomes not growing the way they should and leaving as my coauthor elizabeth will discuss in a few minutes the fraying of the social fabric and adoption of the trust and positions. It is a process that not one in a million will be able to diagnose. So thats why we wrote the book. Now since Monetary Policy doesnt usually get to the heart beating or flutter away some of the reality shows do, i will begin by just giving you an advanced reward and that is to give you a travel tip. If you ever find yourself in an airplane and coach, the middle seat, on the runway, watching your life passed away and you want a little bit of elbow room, Start Talking about Monetary Policy. They will cut you a wide group. [laughter] succumb as a result of the chaos that we have had slow moving since the 1970s, the Federal Reserve has got enough in terms of more and more power but the more power it gets the worse we are. You take the quantitative easing which i will discuss in a moment even though they are not deterring the thing which is a good thing if it ended up contracting the economy rather than stimulating the economy. In terms of money its very basic. It makes transactions buying and selling which is how we proved our standard of living which is how we exist it makes buying and selling much easier. Now in the old days we had the barber that was very inefficient so lets say that i sold an ad in forbes, how would i get paid . Perhaps with a herd of goats. Im being a little facetious but lets say i wanted to buy ipad for the writers so i went to the apple store 3,000 years ago with a herd of goats and they said i dont want to go to i want a sheep. So i have to figure out how to swap the goats for sheep and have to hire a sheepherder because you dont want the bolts to eaboysto eat the sheep. The sheepherder wants to be paid with wine. I have red wine and he wants white wine. Imagine if we still had barker today trying to deposit a cow and atm it just becomes very inefficient. So in essence what money does most of the time it doesnt have Intrinsic Value unless you have gold coins and the like but it makes the transactions easier and in that sense money measures the value. Thats all it does it measures value the way clocks measure time, scales measure weight, rulers measure and it measures value. So because it represents value and may transactions easier and in that sense it is a form of communications. It lets you know information to do all of the billions of leds around the world each and every day. So, money in and of itself is not welnot wealth but it represa claim on products and services. Think of it as you would a coat check. A coat check has no Intrinsic Value but in a restaurant you put your code in the closet you get a coat check and it represents a claim. So money represents products and services that have already been produced. So the idea that if we stimulate the economy by printing money it would be like a restaurant saying if we create more code checkcoatchecks that was reallye production of more coats. Nowhere does not. Its a claim and it represents the claim on a product or service. So money works best when it has a fixed value. Just like a clock as 60 minutes in an hour and imagine what the world would be like. Your daily life would be like if the Federal Reserve did the clocks with it goes to the dollar imagine floating the clock. So you have 50 minutes an hour one day, 48 minutes the next 20 to the next, even asked. He would soon have to have hedges and derivatives to find out how many hours you are working each day. Lets say you are baking a cake. You have to figure out is that inflationadjusted minutes, real minutes . It makes life much more difficult. Imagine what would happen if they change the number of inches and a foot and you are building a bridge in the suddenly you learn instead of 12 inches it is now 10 inches imagine building a house. It makes things much more chaotic. So money works best when it has a fixed value and then the question becomes what is the best way to do it and even though it is absolutely out of fashion in the economics profession the way that it worked in this country for the first 180 years of existence is you fix it to gold. Why . Because more than anything else that keeps its Intrinsic Value. As it has for 4,000 years. You cant be story it. Every ounce is still in the world today and its been pointed out that perhaps the gold ring that you are wearing may go back to the egyptian pharaohs and egyptian times. You cant destroy it. It is hard to make but not too hard, so you dont get much of it at a time and because you cant be story it if you find a big gold mine, even though California Gold rush which is one of the biggest ever only increase the annual supplies by about three or 4 and then taper down to the average one and a half or 2 so unlikely to you dont get dropped or things like that and you dont have to worry about storage or mice eating the gold. So whether you would freeze it or keep it coming you cant be story it. It has very unique properties. So it stood the test of time for 4,000 years. Now people think if you mention gold that does that mean we have to have gold coins . You have to have 100 backing . Know, think of it as you would the ruler. It is a fixed measure of the values of lets say we fix the dollar to gold of 1,200 per ounce. All that would mean is that it went above 1200 in the marketplace, 1,200 per ounce and that means it is creating too much money so it creates less money. Figures below 1280 to create a little more money so that lets the marketplace determine the need of what is needed in terms of money so if you have a vibrant economy you are going to create more money. You dont have to own an ounce of gold to do it. The british ran the Gold Standard with very very little amount of gold but they knew what they were doing. And they responded to the signals in the marketplace and it worked right up until world war i which blasted that and a lot of other things. So gold in that sense is like the ruler. The fact that a mile has 5,280 feet doesnt restrict the number of miles of highway you build. So to give you one little fact that you can use at a Cocktail Party to show how brilliant you are, from the time of our existence, go back to the revolutionary war in 17751 rightbrace while agricultural nation, up until say 1900 when our population increased to 25 fold and we went from a small nation for the industrial nations of the world during that period of time that amount went up only 3. 5 fold. The money supply went up 160 fold even though the dollar was fixed in gold. So, the gold makes sure the values be fixed. It isnt restricted to the supplies we have a vibrant economy and these are the needs of the marketplace. We have a stagnant economy. You dont create it, so it is very, very basic. When people lose sight of that, when you end up with what we had in 71 from one crisis to another we had a terrible decade of the 70s. We got it right in the 70s and 90s and we moved ahead. But in the last decade, we went backwards and a starting in this partisan thing it started under the Bush Administration and the treasury department, Federal Reserve started to weaken the dollar to stimulate exports and thats how we got the housing bubble. Anytime you undermine the integrity of the dollar, the dollar, people go onto the hard assets. From the mid1980s to the last decade the price of a barrel of oil was a little over 21 million a barrel. What is it a . Eighty, 90, 100 . The middle east crisis may not get up to 110. Back in the 70s none of you are old enough to get under the 70s. [laughter] its called pandering. [laughter] tried it in politics. Didnt work which is why i am peddling books right now. [laughter] but back in the 1970s, it went from 3 a barrel the last time it went off the rails to almost 40. Everyone thought we are running out of oil and going to go up to 100 then Ronald Reagan came in with pole folder and they killed the installation of the 70s and about well went crashing down to 10 a barrel and the average 20 to 25 a barrel. Succumb it is like putting a virus in the computer. If you dont trust the value of money what it means is you get less investment and investment is less productive because you buy existing things rather then things in the future. Investing is risky enough that you dont know whether you are going to get back 100 cents a dollar that may not pay off for five years or seven years with her you get back a decent hour, 20 cents a dollar is more uncertainty which is why we have been stagnant and dead in the water by our historic standards. So thats why we wrote the book money. It represents a value. Gold is the first way to fix that value. And if we understand that, then we can move ahead and get back the kind of rates that we had before 1971. Obviously there are a lot of other things we have to do. But experience shows us that if you dont get the money right in terms of a fixed value, you can get other things right and gift taxes right, the spending, the regulations, but if you dont get the money right, its going to undermine Everything Else because it is the basis of Everything Else. The basis of transactions and ie trust, the basis of investment. And because when it works we dont realize what makes it work. Its like air. When its clean we take it for granted. My goodness air is important. Yes. So, many is in the same way. And one aspect of money that gets overlooked because we always focus when we think of it in economics and gdp and the like is social trust. We have a chapter that elizabeth is going to discuss for a few moments. The chapter talking about how the basing of money in the basis of society undermines the fabric, the social fabric in ways that go beyond simply gdp numbers and exchange numbers. So, i will call up elizabeth at one thing to keep in mind is when money is stable, the brainpower goes for a productive use. Just one example before 1971 when the currency didnt much fluctuate because we were fixed to gold very little currency trading. Now that currency trading is a huge activity all around the world. Daily volume over 3 trillion. Tens of thousands of the best brains in the world focused on activity that wouldnt exist if we had a stable money and brainpower that could be used for medical research and other productive things. So, this has consequences that go beyond merely gdp and the qb and what other acronyms they throw out. With that, let me say thank you and turned over to my colleague elizabeth. [applause] good evening. Its good to be here. I would like to talk a little bit about that chapter, chapter five which is money and morality how the base of the society and people found this chapter particularly thoughtprovoking. It starts out with that quote steve mentioned from the economist and i will read it in its entirety. Lenin was certainly right. There is no surer means of overturning the existing basis of the society than to be botched the currency. It engages all of the Hidden Forces of the economic law on the side of destruction and if does it in a manner that not one man in a million is able to diagnose. And we say in the book that unstable money is a little bit like carbon monoxide. Its odorless and colorless yet you dont know the damage it is doing until it is nearly too late. Thats because people are not always aware when the government weakens the currency an and they only see the effect of that which is one reason why debasing money is so corrosive. People say that money is about greed but in fact its about trust. It permits strangers from all nations and societies and all walks of life to come together and conduct transactions based on a commonly agreedupon measure of value. In this way it promotes cooperation between people. It serves as an instrument of communication as well and it tells us what a society values. Not just materially but with its priorities are. So, when money is corrupted, its ability to act as a facilitator of trust and cooperation is corrupted as well. It underlines the vital relationships between the buyer and seller and between the lender and adapt. The philosopher john locke described the fish are its produced at the core and he wrote and you have all probably heard this as well whether the creditor is forced to receive less or the debtor is forced to pay more than his contract, the injury is the same whenever a man is defrauded of his view. During the periods of unstable money you often see a particular scenario unfold. Scapegoating and corruption, social unrest and often increasingly coercive government. And in the worst cases it can unleash the forces of political extremism that can lead to the rise of dictators. Recently an investment strategist wrote a particula