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centers to provide low income favorites of the tools they need to be ready for anything. i'm cast along these television companies support cspan2 as a public service. >> thank you so much for taking the time to do this interview. i wonder if we could start it really broad. your book obviously is about the pressing topic of the day, inflation. you define inflation a little differently in the book than is traditionally talked about here at america. i wonder if you could go through your definition and how it differs from other definitions? >> won't really come as we explain in the book there's two kinds of inflation.-m non- monetary and monetary the non- monetary a kind that afflicts would beat about like a drought or the lockdowns we had during covid, or the war now undergoing in ukraine which is affecting food supply and energy supplies. those kind of events could send

thup prices per be for example with theoc covered lockdowns how intricate the supply chains were. huge distraction sending up prices. the authorities will allow it will work itself out. after world war ii for example the u.s. economy underwent a huge transformation from a wartime economy to a peacetimet economy for making cars those things you do not do overnight. eventually the price situation settleses down. the monetary kind of inflation resultsmi when central banks create too much money undermine the value of their currency which leads to rising prices. because people do not understano quite prices seem to be going up for no real reason. lisa economic problems but also political and social problems as we explained in the book. >> okay interesting.

i when she could talk a little bit about how that differs from the way we traditionally talk about inflation the central banking which is very much a communist typicallyly understand the other side of inflation very demand on how your framing scores with that one? there's monetary and nonmonetary can coexist as we are experiencing today. in a normal economy for currency is stable prices rise and fall because of supply and demand. prices go down most normal signals is what makes obscene economy work which is why we can do literally billions of transactions here and around the world each day.

swe see now we explained in the past government for thousands os years blame other forces they blame others rather than themselves for the mistakes they make on the monetary kind. >> you've kind of just alluded to this. what if you walk us through what you see is the cost of the 2021 inflation which is obviously continuing into today. >> one cause is on the monetary front the federal reserve for the federal reserve even before the covid lockdowns was undermining the value of the dollar pretty sought and rising commodity prices rising gold prices. their brewing trouble even before what happened. during the lockdowns in 2020 on

the federal reserve the covid crisis the severity would reseed it was still churning out tons of money. and they paid for that by creating money literally out of thin air. they employed a gimmick which we explain in the book to try to make sure this money did not flood the economy all at once. they create excess amount of money and they are not even going to stop this money creation. they announced recently there would you stop it. awfully late in the game. raiding too much money undermine the integrity of the dollar. and so you pay a price for that and the location and the economy pretty also combine that we have not still fully recovered from the lockdown pretty look at china recently those severe ing think are unnecessary lockdowns massive lockdowns and shanghai beijing and other major cities

in china disrupted once again supply chains which is going to meet delays, higher prices at the marketplace the non- monetary kind of inflation factors are still there. so putting barriers in the way of oil and gas. not to say raising prices of the pump that's not just because economies are recovering it is also because of a lack of es supply. and putting in regulations on infrastructure. they put in new rules they're going to make infrastructure projects more difficult to get approval for. all of these things combined together to give us an economy is going to be going into unnecessary trouble. the federal reserve's gotta get its act together by the government has got to get its act together in terms of just leaving the economy alone. not putting up the arbitrary barriers. and the amazing thing is we have seen in the past and these

policies are in place, by golly things start to get better. of course i'd like to see tax cuts not tax increases by think that would help economic outputs which would help the rising prices. more supply but i don't think were going to put that in the near term. >> allowed to return to this later. before i do want to continue oni the topic a bit. obviously we saw a lot of spending from the government in response to the covidar chakra. we saw the cares act in the manner billion-dollar package and then we saw the american rescue plan under president biden. to what degree do you think government spending impact restaurant during the initial lockdowns obviously some emergency spending had to take place by don't think anyone would argue with that. unfortunately the pace of spending continued into 2021. you mention what president biden

did on them spending bills how do you finance them? a big chunk of the financing was done by the federal river reserve buying government debt auction the bonds off the dealers turn around and sell them to the feds. and the fed money is created. the fences are going to buy a billion dollars. goldman says fine how does the fed pay for those bonds? they credit a bank account. it's the ultimate atm machine. they just created out of thin air. it was justified they do in 2021 at a huge pace keeping interest rates artificially low in the

fed unwind this and away x obviously very timely topic. we recently had a decision which the announcer going to start shrinking those holdings. most economists would say process you just describe it which the fed creates money and put that in the system in order to buy these bonds is not quite the same as government spendingf in the sense a lot of that money sits on bank balance sheets it does not trickle into the economy in the same way. i wonder what your thoughts are on that. how inflationary that process really is. >> you have massive amounts of spending and the scale of the spending and the crisis exceed anything we've had in peacetime. so the question becomes how do you finance a it?

you finance a big chunk of it was financed by the federal reserve buying this each and every month. in creating money out of thin air. trade spending and pressure for the federal reserve by financing it. otherwise he said it might not y they would have higher interest rates than they wanted. he would have trouble per the fed stopped in and bought the bonds. one point during the crisis in 2021 buying the new debt which is unprecedented that scale a bond by the federals reserve. now as you alluded to the going to go fast on that. but they are starting at a very, very slow pace. what the danger of the federal reserve right now in this mistaken notion you fight inflation by depressing the economy.

slow job creation and avoid a recession. soft landing in terms of economic terms as mick crashec landing a full blown recession. but it is a bogus idea they fight inflation is by depressing the economy. by the fed should do it is keep the dollar stable in value. they did this and the late 1980s and 1990s. when alan greenspan was ahead of the fed and he said at the time he was keeping the dollar's version that late 90 the frame of reference which led to 2008. late 1980s and 1990s. now they're back to the idea you

have to really slow down economic activity to fighty inflation. that gives us unnecessary trouble. in the fed unfortunately is going to make it much more difficult. i said let's get back tot that point that alan greenspan prints an important point in your book. if a redo i want to finish talk about purchases that's important point in yourak book. how do you square this argument you are making which bond purchases spur inflation with the reality that we have had bond purchases often at large quantities saw very low inflation. under how this things work together? >> very good very pertinent question. what happenedr after 2082 thing. one is the federal reserve while

they are creating this money and affect froze the money. the fed buys the bonds, they credit the bank account the dealer has of the federal reserve. what did this was something they've never done before but they start to pay interest on those. they have never done that before. at the same time they were putting pressure banks to slow thdown lending. banks were hiring more in 2008/2009 for they are hiring compliance officers the loan officers. the value of the loans went down even though the reserves went up. and at regulatory manner it was putting pressure on banks while they thought lending was risky so slow itnk down. they are paying interest so that banks are still earning money on that. even though they did not lend it out. and also the banks replenishing, rebuilding their balance sheets leading up to 2008 banks took on

too much debt. they did not have enough equity. they did not have enough free assets you might say. and said they had to spend several years. one ofof the reasons what they call quantitative easing was to help the banks replenish the balance sheet. they have this thing and they regulators around the world got together and putting capitol requirements forel banks. meeting the new requirements. you had a period of time regulators did not want to be aggressive or paying interest on reserves and banks for rebuilding the balance sheets that had battered in 2008 and 2009 because they went overboard and lending before 2008, 2009. it was very clear in 2019 that requirements were more than fulfilled.

banks were brimming with reserves so we're heading for trouble even before covered. banks are loaded with cash. loaded it lending activity picks up that's with occult money creation when banks are to lend the money. that could cause problems in the economy. see what the economy does when they try again through regulation, interest rate and the like and try to freeze the money they created to make sure it stays in the deep-freeze and does not go into the economy. strange, but that is what they did to correct obvious losing quite a pickup in mortgage lending. aside from that it's been relatively steady throughout this. we have seen on tic and project loads but not credit card indebtedness increase. i wonder if he did this a problem for tomorrow? is this something were going to see in a has not manifested yet? or is it arty happening? >> i think one of the things we have to keep an eye on is the

payments made during the covered .risis we wanted to keep everything above water like earn money on the job. is that cash starts to run down and the savings rate is starting to move down and people see prices rising up, and getting less for their wages. as you know there rate rising at a faster pace than the wages are. i think you'll see pressure for people to be borrowing more. toe borrowing again. so you have situation where the distortions created by the covid lockdowns are going to start to work their way through and you're going to have a situation where there's a lot of money. essentially out there people are going to start to desire to borrow again. people want to spend again. people want to live a life again

and but they're doing in the headwinds of rising prices, which means they're going to be looking for more cash. okay, interesting interesting, and i wonder you know you obviously you mentioned earlier the greenspan era as in the early you mentioned the greenspan era in the '90s as a period that you think is worth emulating. i wonder if you could walk through in a bit more detail what you mean by that. >> guest: during the 1990s which they called at the time great moderation, the federal reserve kept the value of the dollar r steady. interest rates were fairly steady so you had an economy that was growing after bill clinton came in and put tax increases that slowed things down but then he put it in with tax cutsod that people forget today including a cut on the capital gains tax and so the u.s. economy enjoyed a boomft after the 80s.

there were ups and downs but it was a decent period. there was relative stability on the value of the dollar and so the economy responded to that. the thing to remember is money makes it possible to buy and sell —-dash so it shouldyo havea stable value. when you buy a pound of cheese you expect to 16 ounces. it's not 18 and the next. you buy a gallon of gasoline and expect it to be steady. the economy works best when money has a fixed stable value. but you know you're going to get pretty much you lend it out that year, three years, what you'reuc going to get back is pretty much what you lend out. again that instability you get the long-term investment or

speculation and then you get in trouble. what happened in the late 1990s i don't know whether the federal reserve meant to do this or not, but the clinton tax cuts and rise of the internet where they kept the taxes off with a highly irregular tory hand at all use all the economy boom. the dollar became desirable and at the federal reserve started to tighten up we sell it in the crash as commodity prices and agricultural prices go down. oil prices went down. andt then, so that was a mistak. the federal reserve tightened when it shouldn't. in the early 2,000 as they went in the opposite direction with an official recession but then when the opposite direction weakened the dollar so it went from 25 to 100. is that because it became scarce and people were using it more, no. it wasn't so much was getting more valuable with the dollar

wasd getting weaker and when you have that weakening of the dollar it leads to people going ato hard assets starting with commodities which came crashing down and led to the crisis of 2007, 2008 and 2009. >> it's interesting you mentioned oil because that is a market that is very affected by global supplyan and demand. it seems that would be the kind of thing you talk about when you talk about the shock to inflation but i wonder why it is more of a money thing in this case. >> the price would change if people want more or less of it but when you get these violent changes in price, even though the economy is hadn't much changed, then you know you've got a currency problem. going back to the 1970s with the inflation of the 1970s as

we discussed ink the book, oil was about three dollars a barrel up and down throughout the 60s. then when the inflation started we had several rounds of t it during the 70s and 80s. the price went from roughly three dollars a barrel to almost $40 a barrel. people talked about it must be running out. we need to invest more. we saw in terms of hard assets we sell the prices zoom up because it was a hard asset and commodity prices go up and then when the inflation ended in the early 1980s, oil crashed o from $40 a barrel to ten or 12 and settled at the 2025. so you had the depression in the 1980s in texas. the rest of the economy was doing fairly well. it was in a virtual depression, the crash in the energy institute. you saw them experience the same thing. aiello which had been a red

state went democratic in 1988 because of the farmers going broke because they borrowed. the price for the crops were going up and suddenly the prices crashed and they were left with a lot of debt. one of the things that happened in the farm belt since it is as a result of the weakening dollar but most were very careful this rtime not to take on debt becae they remembered what happened before. so this is like a virus in a computer. it's supposed to tell you what people want, but they don't want. if it is giving false information like oil is suddenly very valuable, then you get money misallocated, capital misallocated and you end up with the tears you had in the 80s and the oil patch and they went through a hard time after 2012

so again, stability is good. you want the prices to be set by people buying and selling thef marketplace, not because it changes the value of the dollar. >> i think practically all attribute the 70s and '80s oil experience in large part to the embargoes that were happening with opec and extremely constrained supply during the 70s and that rebounded during the 80s. i wonder how you think about that supply side of the dynamic. >> this again one thing we point out is a symptom of inflation, not the cause but the result in this case of a monetary inflation. the opec made very clear in the 70sar they said prices are going to go out and so again it

wasn't so much it became more powerful, there was a weakening dollar. we made the t situation worse by putting on price controls which distorted the markets, so we had of these lineups where you wait two hours to get 5 gallons of gasoline and you're allowed tola buy gas depending on your license plate, stuff like that. so, the mistake of devaluing the dollaron and then the controls they put in during the situation tturned to a disaster.r. but when the dollar was finally stabilized in the early 80s, use all the oil prices coming down and while they focus on that, copper prices went up but there was no opec and copper aluminum prices and others were going up and there was no equivalent.

it was the result of a weak dollar. >> do you disagree or have other data? >> in the 1970s what you find is when the currency weakens and we walk people through the book. whenen you have that kind of distortion, people will do some anticipatory buyingit because ty figure they won't be able to get it and we see that play out a little bit during the covid lockdowns suddenly people feel we are not going to be able to get paper towels or be able to get this or that so you get an artificial surge that then when things comb down they play out

so that's what you saw in the 70s. t it was an international market and when they said we won't sell oil to the u.s., there are plenty through holland and then they wouldt sell it to us. the oil flows where the demand is. so suddenlynl again in the 1970s it didn't suddenly become more valuable but on the scale of 12 to 13 going from three dollars to $38 or almost $40. it was the weakening of the dollar. oil went t tumbling down. >> i think it's important to know that there were some constraints in the 70s. >> some of the constrained was again price controls put on when reagan took off the controls in

the 1980s, investment flowed and you got more oil and a lot of prices. so a stable dollar, more supply. >> you talk about the greenspan era quite a bit and in the context of stable prices being essential. obviously in the early '90s we still had some inflation. sort of hovered in the two to 4% 'range which is similar to what we've seen for much of the decade prior to the pandemic and ibo wonder if you could talk a little bit about how you square that away with the idea that it would be better to have no inflation at all. >> you have to make a distinction between the nonmonetary and monetary inflation. paul voelker who headed up the

federal reserve and killed the terrible inflation at a very high cost that had been inflicting us in the 70s because in the 70s they fight it and then it would come back worse than before so we went to a very quick period to stop it once and for all. we did an interview with him a couple of years ago and he would roll his eyes at the idea that 2% inflation is good. in terms of the stability of the dollar, you don't want inflation or deflation. now this is a very subtle point. you may get prices going up because the supply and demand. for example, a hotel taken from a very poor country is going to be a lot cheaper than the hotel in singapore. very prosperous country. when a country becomes more prosperous and people's salaries

are going up in real terms they not only start to buy more things but they want more services. a barber isn't going to continue to beaw as accepting as you sawn the 1970s were the early 80s,s, four dollars for a haircut. so you're going to pay the barber more because the general prosperity is going up so that is just supply and demand and this gets to one of the flaws of the price indexes and as they don't keep up with the changes when you have more services coming online and more products, the whole rise of iphones, cell phones, take the original cell phones coming out of motorola

'across $3,950. now even though they may cost 51300 depending on the model they are virtual supercomputers. that is awfully hard to calculate in a consumer price index whether that is up in price or down in price. the typical automobile today short of a microchip that emphasizes it is infinitely more complex than that of the 1970s with the 1980s. so, those kind of things. so it may depend on how you put the consumer price index up and what you put in it. up one or 2% but that's different from a currency losing value. so the key thing is again, keep

thee dollar study in value, prices will go up and down depending on supply and demand or if you get a drought or something like that but these things will workrk themselves o. so in terms of the consumer price index it could make the case that ifo you have stability it might go down a little bit not because of the depressed economic activity but because of productivity. you make a point in the book about arguing that we shouldn't be aiming for any inflation over time. when they explained that they use basically the logic you laid out which is that over time as the economy evolves, you're going to want to pay a little bit more in wages so a little bit of inflation is like the grease on the wheels of the economy and i wonder if you can walk us through the argument of

why that is in the right way to think about, things. >> it's manipulating in the measure of value. we have 60 minutes and an hour if the fed was in charge of the bureau i could see them making the case if we gradually increase the number of minutes from 60 to 61 or 62 what that would do to productivity. people would be working longer at the same wages. you say that's ridiculous. then people would start to notice there's something strange going on. the same thing. whether it is your handheld or

paper ticket it is the claim on a real service and event. money is like playing chess. if you get it from working or selling and then you areo able o go out and use it to purchase something you want. so the idea that if you manipulate the value of what you earned somehow could gin up the economy, it never works and one thing to keep in mind is when you think manipulating money, whether it's low-inflation or low inflation orhigh inflation o wealthmp. you looked for example we point out for 180 years of the economists they hate to hear this buts for 180 years there'sa gold standard tord the early 1970s, and t of the post world war ii they put in a thingsy called the brenton woods international monetary system you can look it up online. the35 dollar was fixed to go ovr 35 an ounce all that meant is it

went above 35 and they've tried to keep it stable. since we had ofel this era of unstable money since the early 1970s, the average rate has gone down to 2.7%. i hate to use numbers like that but if you think it's a little less but notot that much. you compound the slower growth of the last 50 years compared to the previous book we have for 180 years, you compare that average growthpo compounded and realize over time it's been devastating. the median household income today is roughly about $67,000 depending onon how you measure .

i think most people would say we would love and economy today where we are earning 20, 30, $40,000 more with stable prices. that is the long-term cost. and the thing is money is how we relate to strangers. i don't have to know you but we can do a transaction together, a business complex supply chains with people we don't even know by using something trustworthy and when the money starts to change in value and people don't understand why it's changing, why of the dollars are not going as far as they should be we are suddenly speculation ass pointed out it seems to be a way to get ahead rather than honest work

debilitating in society and leads to social problems. countries are repeatedly playing with their money and devalue their money and more violent societies. they have more crime. brazil in the last couple of years tried to stabilize but it's been notorious for decades look at the crime, terrible so you get less social trust, lawlessness and have unstable money. there was a book written about the term hyperinflation which made possible the rise of adolf hitler when they completely destroyed their currency. a book called when money dies pointed out before that hyperinflation germany was probably the most law-abiding countryw- on earth. everyone obeyed the rules and then went to hyperinflation and that went by the boards because you were a sucker if you played by the rules because you were going to lose.

you t had more people cheating, people not looking to the future just living for the moment it was debilitating to civil society that was a hyperinflation but over time you can get a gradual undermining of social trust not as dramatic as germany and venezuela but still debilitating so it's not just an economic thing on prices and stuff like that it's also about how we interact and trust one another and something economists don't pay attention to what they should because it has consequences in the fabric of the society. >> i have so many follow-up questions i will start with one that zeroes in on the point you growth rates i think the mainstream economic argument why they've fallen over the last 30 or 40 years centers on the aging of the population.

people are working and buying more, buying houses and having kids. as people age you have less of that activity. i think the second thing people sort of talk about is this idea that a lot of the low hanging fruit when it comes to macroeconomic development already happened becausese we wt through the industrial industril revolution and the era of interconnected. all these are good for the economy,y, but those things that happened i think robert gordon who wrote a book on this sitee you can't reinvent a washing machine. so that with the one you just laidng out. talking about economic growth in the future, you can't see the future. now what. in the early 1990s.

imagine if you could bring somebody back from the dead and the 1980s and try to explain the internet you would have a hard time doing it.e nobody foresaw the rise of google. nobody saw the rise of facebook and so they say well everything has been invented. youho find in every era now we e in a period of consolidation. when the great depression hit we had a lot including president franklin roosevelt when he was running in 1932 saying the rate is over. a period of management and emconsolidation. there is no resemblance to the

economy. look what was happening below the f surface of things. microsoft was being invented, southwest airlines, all these things t nobody saw at the time were rising up and fedex paid a whole new industry. there is the rise that made it a whole new industry. nobody foresaw that in the 1960s or what it would do to the mainframe computers, so people say we are in a period where all the inventions are over. know there are people out there working in garages and elsewhere but with things we can't even imagine especially in healthcare. o

we are seeing a lot of research and i hope i am at an age i would like some of these to happen where we are combating diseases, some major big things are in the offing. coming up with things other people didn't foresee. there's a book a few years ago about the rise of paypal. credit card companies and banks at the time that was t starting they could haveav crushed it. the big guys didn't see what they were doing and realize the implications of what they were doing so even though the stock has taken a hit with over $100 billion and now the incumbents at the time. things people never would have thought of.

>> i wonder how you square that away with what wee have seen in the international context which is very much the case as countries develop and sort of move up the industrialization ladder and population grows slow the growth does. china is an obvious example that we've all probably watched happen in our lifetime it went from a double-digit across the economy to moderating down to 6% and i wonder how you square that experience where it does seem like the story checks out and what you are arguing. >> it's one thing for a country needve to grow but also we have deep problems with china today, very strategic problems. for a while you had not only catching a up in china is

remarkably as long as you were not involved in politics, it allowed the entrepreneur is to flourish so china became rather inventive. so it wasn't just catching up and that is the key thing it's not just taking what's there and saying we are not there within five years we will be where everyone else is. it'sat you have constant changen innovation where what we accept as normal today looks obsolete and silly tomorrow so in the munited states because of the massive regulations and other mistakes we've made we haven't been creating new businesses on the scale that we traditionally did. i think that will change and we are going to create an environment where that flourishing will happen again. so again a people are always looking to do things better. people are always coming up with ideas and most of them fail but some of them stick and profoundly change our lives. just to go back on that a little bit i remember in the 1980s

when pcs first came along and people wondered, that's interesting. what areke they good for, keepig track of recipes in the kitchen, making typing easier. when you start to network the machines, p what does it do. in the early 19 '90s we put ibm in the corporate graveyard.t they are now back but no one foresaw what these devices thats look like they are just playthingsou for hobbyists what they would do in terms of changing their lives. even if you are utterly technically ignorant you can operate an equivalent of a few years ago. in the book you talk about going back to the gold standard as a solution to the current inflation and i wondered if you could lay out your arguments

there. >> in the various kinds we touch on, for a variety of reasons there is an intrinsic value better than anything else. not perfect but better than anything else. so once you tie the currency to say gold it means it doesn't restrict your money supply as we point out from 75 to 1900, 75 when we started the money supply in the country as best we could figure out went up 160 fold and it went up three or four times. like a clock measures time and weight, gold and money measure

value. 1800, 2,000, all that means iss the dollar will stay relatively stable on value. if it starts to move up above 2,000, that's a signal that creating too much money. so below 2,000 is a signal you're not creating enough money. over the span of history you never had an inflation when you had a gold standard and the u.s. at 180 years they fixed the gold and put in the silver. we had a gold standard from the 1790s and 1970s.

money makes it possible when people do invest in the future, take more risks, and more trust in the day-to-day activities and over time the results are astounding when you look where we began. we didn't invent it. the dutch did and became a global center of the world. alexander hamilton we took it on another step and became the capital center of the world and the largest economy in the world. about a country can get the regulations ride, the spending ride, taxes but if you don't get the money right, you're going to have problems because money again isn't wealth in and of

itself, it is a measure of value and that is what i wish the central bankers would understand. you don't muck around with flask -- scales. as the viewers may be familiar with we were on a variety of the gold standard. we've left it pretty regularly during the civil war we basically completely abandoned the gold standard and expanded the money into circulation. there was inflation after the civil war but i guess i wonder that did happen repeatedly and i wonder how you see the gold standard working.

we couldn't meet the demand basically and i wonder what you think has changed and why would we be able to do the gold standard today? >> two things. periodically you mentioned the civil war but as they understood after the war, you would go back to it. so, the civil war we went off it and during the war times, everything goes by the board. you do everything you can to survive the two world wars so the peacetime finance goes by the boards. everything focuses on winning the conflict. and post-conflict you try to reestablish what you had before to get back to normal and move ahead. ira think they made some mistaks in the transition but it was done. that's what we did after world war i and world war ii.

britain b for example during the napoleonic war. it was written off the gold standard as we are fighting the world war for their existence but after the war was understood, it would make the transition back onto a gold standard. after world war i, and this is for another time, but they made huge mistakes. it was always understood certainly in this country. we went off of it not because of any existential crisis but becauseca of economic and

political thinking. the u.s. was not pursuing monetary policy in the way it should to keep the dollar fixed at $35 an ounce. if they sold and bought bonds to keep that there wouldn't have been a crisis, so why don't they go off of it, they thought nixon at the treasury secretary and others thought you can have a devaluation of the dollar that will help stimulate the economy. we are in a mild recession of 69 and 70. there's an election coming up in 1972. as the politicians think that is the most important thing in history. so they close the window and put in the wage and price controls as ao way to boost the economy and win the election. but by taking the u.s. off with

the devaluation the dollar sank like a stone and the countries had chaos. you had the terrible inflation of the 1970s and they didn't have to go off of it. it was a political decision and false economic thinking to think you can let your currency go up and down like a stock. you're supposed to have fixed weights and measures and that is the big mistake and it was unnecessary. we've been paying the price for it ever since. so it destroyed a system but we didn't realize the full implications of it. i think someday.

we are in an era of slow slowness. whether it is fighting diseases it's going to a astound us. but we do get spoiled by it. to say what this is, we just take fore granted. they didn't have a crisis that justified it. >> interesting. in the book i want to make sure we hit this point it might be the alternative and i wonder if you could walk through your thoughts on that.

>> i don't think that it will be an alternative though it is a speculativee vehicle. the kind of crypto that we think of is volatile and you cannot use it as money. imagine if seven years ago you took out a mortgage, $250,000 mortgage on your house. the real miracle of the crypto is what they are creating in terms of the technology, watching, the block chain technology i think in the next ten years will change the payment systems we have. again another subject for another time. but where we think you should watch what's happening with crypto is a class called stable coins that are growing in

popularity. the stable coin is tied to a specific asset whether it's gold, the dollar, the basket commodities but it is tied to something so you have stability and value. i think this technology evolves and becomes easier to use crypto currency for the commercial transactions and ultimately easy and trusting to use these things to write long-term contractso that you wouldn't dare do today. you're going to see in the coming years stable coins become an alternative to government currencies. i thinkto you're going to see te

regulatory political battle coming with stable coins, crypto's versus government money and that's going to be very interesting to watch but that is where on the money aside you will see the surge is going to be with stable coins where people say i trust that more than a central bank and in a country likeke venezuela or thee others it's going to have a lot of appeal. >> we don't have a lot of time left so i want to make sure we talk about this. there's a section in the book where you talk about where you think people can invest to weather the current inflation and i wondered if you can walk through your bigger planes of what is your advice in this moment of inflation. >> we began you talk in the book that we ran a cover story in the inflation of the 1970s and the coverr was how you can prosper

with inflation.e then how you can fight inflation so when we got into the story we said there's no way most people canro fully protect themselves from inflation. it's going to hit everyone but there t are things you can do, whether it's stores that deal with bargains, whether it's hard assets or real estate, farm land, forest land, things like that.e' look for companies. this takes work. there's no easy way to do this. but you try to find companies that have a history of good cash flow. one of the things that's going to happen now that the fed is raising interest rates a lot of companies were surviving because they could get virtually no interest loans. they are going to be choking when those rates go up so you're going to have some on the field

coming with the bad. but in terms of the investing you've got toat do the work. which companies have good cash flows. what companies have a history of raising dividends where you can look forward to keep up with inflation. we walk people through that but again you have to do homework for example in commercial real estate, there are some cities you can make a case not like new york or san francisco or igwherever or where there mighte over a building of commercial real estate. you don't wantd to do that. so there's good real estate and real estate you want to avoid so you can do some of these things and you should have some gold just not as an investment but as an insurance policy. you want it as an insurance policy. you walk through whether it's

better toat own the coins. i think it is. then we talk about there are certain companies that deal with royalties you might want to look at and the other thing to keep in mind is what works during the inflationary period probably won't work during the non-inflationary period so you have to be ready to be nimble and beyond the look out it doesn't matter if the government isn't serious and it knows what it's doing. theno you're going to have to change because we mentioned earlier it's a wonderful thing in the 1970s. farmlands were disasters so it worked with one era, doesn't necessarily work in another. you have a pretty provocative lien in the book as i say as

somebody that covered the fed in monetary policy, so i wonder if you could expand a little bit and we can make this our final topic. but you say and i'm quoting from page 130 there's no such thing as price stability even during times of little or no inflation. we do know the price stability so i want to know what you mean by that. >> the prices are always' changing as people's preferences are changing, products and improvements come along. so the. prices fluctuate. they don't stay flat. it's a typical house 30 or 40 years ago. very different. certainly going to need more electrical outlets were juice thanso in the past. so you're always o going to get those kind of price fluctuations. people might liker a fancy shoe or whatever so that will

fluctuate and the price may crash. then you measure what is price stability. the consumer preferences are always changing as new stuff comes along and looks like it's exotic and expensive today but then it becomes a commonplace tomorrow. how many people could survive today without a handheld? twenty years ago, how many days can you go without your cell c phones as we called them then and t you could go two or three but today you have to have it with you all the times of these things are changing and there's no way the governments can anticipate the changes, nobody can proceed the future. i don't know what steve jobs is going to come up with. and so, the governments can't foresee the future and it's hard to even measure what people are

doing today. more humility would be in order. >> thank you so much for taking the time. it's a really interesting topic. >> thank you.

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