Main Thesis: The speaker advocates abolishing the Federal Reserve, arguing it causes inflation, distorts credit, and fuels boom-bust cycles.
Historical Context: Cites the termination of the Second Bank of the U.S. under Andrew Jackson as precedent, noting conditions like public anti-inflation sentiment and political opportunity.
Policy Roadmap: Details Rothbard’s plan to repeal the Fed’s charter, treat it as insolvent, liquidate assets, and redeem liabilities using revalued gold, alongside ending federal deposit insurance.
Legislative Angle: References Rep. Thomas Massie’s bill to abolish the Fed and transfer assets/liabilities to Treasury, with a structured one-year wind-down.
Gold & Precious Metals: Emphasizes gold’s historical role as money, the practicality of gold redemption via Treasury-held stock, and the need to redefine the dollar in gold terms at a much higher price point.
Reform Alternatives: Summarizes Alex Pollock’s incremental reforms: reject the myth of Fed independence, prioritize sound currency over elastic currency, abandon arbitrary 2% inflation targeting, and enforce standard accounting with real oversight.
Opportunities & Risks: If sound-money reforms advance, gold and precious metals could structurally benefit; fiat-liquidity-driven assets face policy and valuation risk.
Market Implication: No specific public company tickers were pitched; the investable takeaway centers on a pro-gold, anti-fiat monetary backdrop.
Transcript
Good morning everyone. Glad to be here. Thank you very much to Andy Horde for sponsoring my talk. I'm Jonathan Newman. I'm gonna talk about how to end the Fed. I'll see you guys later. Yeah. Um, so last supporter summit we premiered uh our documentary playing with fire and we talked about how terrible the Fed is, how it props up this uh banking system that's based on, you know, dishonest banking practices uh causes all sorts of problems. And near the end of the documentary, we uh talked about a path forward getting back to sound money, but uh sort of light on the details because the main purpose was to show all the damage uh caused by the Federal Reserve. So, in uh in this talk, I'm going to talk through uh some of the plans, especially one by Murray Rothbart on on how to actually go about how do we actually get rid of this thing if it's so bad. And the way that I'll uh the way that I'll uh go about it is by trying to answer four questions. First, do we need the Fed? Secondly, do we want the Fed? So, we'll cover some basics and then we'll get to the meat where we ask, "Can we end the Fed? And if so, how do we do so?" And there's a great meme there between Jay Powell and Ron Paul. If we ended the Federal Reserve, what would you replace it with? And of course, the answer is, when you remove a cancerous tumor, what do you replace it with? The answer is nothing. Okay. So, first off, uh, do we need the Fed? No. So, Maybe I can uh help us get back on schedule here. [laughter] Uh the uh the reason why we don't need the Fed is because we know that money originated on the market. Money is an institution that was created by the market. Uh it's not something where we need uh a central bank. We don't need the state to issue it. Uh, of course, this is not the position held by our friends in the modern monetary theory uh camp or the chartist as well. They say that the the state originated money. That's where money comes from. Um, and in the chapter that I wrote for a forthcoming book hopefully early next year uh called antiMMT um I wrote about how their claims are just completely wrong. So they one of their favorite examples is uh ancient Mesopotamia. They claimed that these clay tablets that were issued by temples and you know palace administrators that those were used as money. And uh I I didn't see anybody like trying to counter this. And so I took a look at at the literature myself, the the uh archaeological literature. And no archaeologist has ever said that these clay tablets were used as money. And if you actually look at the the uh uh inscriptions on the clay tablets, it's they're basically just receipts. There's just accounting. They're keeping track of, you know, where different goods were being held in the different storehouses. But what the archaeologists do show, what they have concluded, uh, and there's there's broad consensus on this is that in ancient Mesopotamia, silver was used as money. So this is, you know, this is, you know, hundreds of years before coinage. And so I I have a picture down here of, uh, from one of these archaeologists that showed how they actually went about doing that. So, this is that's a long silver ingot, and they uh they call it a a chocolate bar ingot. And the reason why is it has these indentations on it, so it's easy to snap off a little piece of of the silver and use that to to make the way to to make the payment. Um, and so I guess instead of wallets, they had these long bars of silver to facilitate their transactions. So even even before coinage uh people were using metal, people were using silver and eventually gold um as money. But also um we know uh banking originated on the market. So we don't need a central bank to provide banking services. Uh of course the private commercial banks in our modern economy, they like having a central bank because it it's a lender of last resort. It coordinates the expansion of credits so that no one bank gets in particular trouble. Uh they they like having this sort of arrangement. It it protects them. But banking originated without a central bank. So we don't need a central bank for that um either. And yeah, so there's nothing about our complex economy. Oftentimes we refer to Robertson Crusoe as a simplifying thought experiment to help us develop economic theory. And what that does is that helps us, you know, figure out what's actually going on. What's the cause and effect? How how does savings and capital accumulation result in economic growth and increasing standards of living so that we can better understand more complex advanced economies like ours? But there's there's nothing about money or banking that uh changes substantially once you get to a complex economy such that you need some centralized control. We don't need a central bank to to to manage all of that. Okay. Next up, do we want the Fed? >> No. [laughter] So, uh, the Fed is a central planner of money and credit and since it's outside the market, it's groping in the dark. So, Misus did not use that to refer to central banking, but it applies here. He was talking about uh under socialism, the central planning boards, they don't have any sort of uh, you know, good information. They they can't economize the use of resources because they don't have market prices for for factors of production. They can't know economize what what they're doing. Uh but the same thing applies to any government bureaucracy. It applies to the central bank as well. Uh which means that with with government control of of money and banking and credit uh we will get the wrong amount of money. We will get large increases most likely large increases in the supply of money as we'll see. Uh we'll get all sorts of you know bad distortions in credit markets. Uh we have a protected uh set of institutions uh so they're not subject to the market test. Of course, I'm referring to fractional reserve banks. Um, and so because the the Fed is outside of the market, it's it's this, you know, protected money printer, a counterfeitter, uh, it means that it it can't do what would be good for any sort of producer, any sort of organization that's interested in economizing resources. Um, but another reason we don't want the Fed, uh, is because it siphons away our wealth. um as many of us are familiar with the canon effects explained why when there's a particular source of money or money comes into the economy through a particular point uh the early receivers the people who are closest to the money spigot they benefit at the expense of of people further away um and so the people who are further away uh they have to you know pay the higher prices that have been bid up by the earlier receivers uh before their own incomes before their own selling prices have increased and so this This is a way to, you know, transfer wealth from one group to another group. And of course, the fa the ultimate winner in all of this process is the government itself because it's able to sell its debt and increase its spending with the backing of of a money printer. It uh props up the inherently unstable banking system and instigates the boom bust cycle. So whenever the Fed is uh increasing the money supply and pushing down interest rates as we're all aware uh it starts um the business cycle process it causes entrepreneurs to to misjudge uh which production plans are feasible and which will be profitable. Uh they start new longer lines of production that can't be completed. So these are all reason financial crisis banking panics. Uh it's moving wealth away from us. It's not economizing anything. It's outside the market. These are all reasons why we don't want the Fed. Okay. Now, um more difficult question, can we end the Fed? And one answer uh is maybe it has been done before. So, there was the the second bank of the United States that was um uh in it was killed according to a a quote that's sometimes attributed to Andrew Jackson by Andrew Jackson. Uh and so I thought it would be interesting to look at what sort of circumstances applied in that case. So what how how was it possible for that central bank to be ended in the United States and what lessons can we learn from it that might help us to end our our current central bank? So what did it require? And so number one it required a popular understanding that the central bank caused inflation. So, uh, Andrew Jackson was a populist president and there was a a broader a better understanding in the time that the central bank was the one that was responsible for the price inflation that they would see. Um, and so people understood that inflation is bad. The central bank causes it. And so because of that, it was more likely for them to elect somebody like Andrew Jackson who would end up uh killing the bank. So we also needed an anti-inflation president. >> [clears throat] >> Uh another very important uh piece that's not that we don't have today really so it's sort of u would make it more difficult for us to end the Fed today is uh Andrew Jackson actually had an opportunity to end the bank and that's because its charter was up for renewal and I encourage you to read Murray Rothbard's uh book a history of of money and banking in the United States where he goes through the story like how what were some of the you know what were some of the events who were some of the people involved involved. Um there was uh Nicholas Bidd was uh trying to uh he tried to bring the charter u earlier. He was trying to you know force Andrew Jackson's hand uh and they did apply for the the charter early uh but Jackson vetoed it and they didn't have enough people uh in Congress to override the veto and so with that they were able to you know start the process of ending the second bank of the United States. Uh and then later after uh Jackson uh was was reelected then he was able to completely get rid of it, completely disestablish it. But you should check out Rothbard uh and read the the whole story. You know, character characteristically Rothbart it's it's great reading. You know he's very easy to read, very clear and engaging style. [clears throat] So what would we need? We would need this opportunity. We would need an anti-inflation president. we would need an uh an insufficient majority in Congress to override a presidential uh veto. So the answer to the question of can we in the Fed, maybe it's been done before, but we're missing some of these conditions. Okay. Next, how do we end the Fed? And I I'll call your attention to a bill that's been uh proposed uh by Thomas Massie to abolish the Federal Reserve. [applause] and uh I compare it to uh Rothbart's plan. So Rothbart has this series of of three essays which the the Mises Institute has pulled together into one small uh booklet. Um and it's called Taking Back Our Money. You might have received it in the mail. Uh and at in the last essay, the third one, he actually has a plan like how would we actually go about uh getting rid of the Fed. So step one is repeal the Fed's charter. So this is where we don't have the opportunity that Jackson had. So it's there's not some, you know, horizon. There's not some uh, you know, future date in which the the Fed would have to reapply for its charter. Uh, but this is definitely something that Congress and the president could could do could be done to repeal the Fed's charter. Next is to uh basically treat the Fed like an insolvent bank. Uh, which it is. Um it as uh Alex Pollock has written about it's uh uh it's deeply in the red. It has it hasn't been able to you know send the Treasury its remittances that it that it has earlier. Um and so it's it's it's it's losing money uh partly because of this new policy where it's paying interest on on reserves. And when you treat it like an insolvent bank that means that you have to liquidate its assets. Uh, one interesting thing here that actually makes the process easier is that all of the government bonds held by the Fed can simply be written off. There's just like this accounting ghost. It's this thing that can go away because uh it's the government owing money to itself and so it just goes away. So that's uh easy part. Uh the next part is uh more difficult uh or at least there's some you know technical issues and legal issues involved. Uh Rothbart proposes revaluing the the Fed's gold stock at the market price of gold and use that to redeem the Fed's outstanding liabilities. So as we're liquidating the Fed, getting rid of its assets, it also has liabilities that need to be taken care of. And so Rothbart says use the market price. It was much lower when Rothbart was was writing this, but when he was writing it, the gold price was much higher than it was when the obviously when the Fed was established and also when we got off Breton Woods. >> [clears throat] >> uh but use use the uh proceeds from use the revalued gold stock to uh redeem the Fed's liabilities. Now uh one legal issue here is uh the the Fed owns uh gold certificates uh and the gold is held by the Treasury. Uh but these gold certificates are non-marketable, nonredeemable. They're just pieces of paper. The Fed can't, you know, go to the Treasury and say, "Here's a gold certificate, and the Treasury has to, you know, cough up some gold." But if we u ended the Fed by first, you know, pulling all of its assets and liabilities to the Treasury, which is in Thomas Massiey's plan, then the gold is there at the Treasury and can be used to help liquidate uh or redeem the the Fed's liabilities. Next, Rothright has a plan forward. So, how do we how do we uh go from, you know, liquidating its assets, treating it like an insolvent bank to actually, you know, having sound money? And Rothbart proposes going back to redefining the US dollar as a certain weight of gold, which is uh a good plan. Uh but of course, we can't do that at, you know, $35 an ounce or or 20. It would have to be much much higher. um uh these days. Uh another very important part of Rothbart's plan because he doesn't want to just end the Fed, he realizes that there are important implications that follow from that uh is we also have to get rid of uh federal deposit insurance. We have to, you know, make sure that banks are getting back to honest banking practices, get back to, you know, keeping full reserves. Uh he he says a full reserve discipline. And if we end the Fed, then that means that they don't have a lender of last resort. So you have to get rid of all of these other regulations and all the other things that the government does to protect the uh banks uh when you're getting rid of the Fed as well. So So that's one plan. U I'll mention that Massiey's plan is similar. Uh he more explicitly says that the assets and liabilities are transferred to um other agencies, other parts of the government like the treasury. Uh and then the parts of the liquidation process are overseen by the OM and others. Uh but there's a one-year time span where this happens. But if you read Rothbart and taking back our money, it's like a we'll just rip the tumor out, that sort of thing. Okay. So, uh can the Fed be reformed? This is something that I I added recently, uh actually last night after a discussion with the distinguished Dr. Pollock. Um there this is also a long shot just as much as you know ending the Federal Reserve. Uh but there are some good ideas including uh from Rothbard. So you might think that Rothbart is only intent his only goal is to just get rid of the Fed um liquidate its assets, treat it like an insolvent bank. But Rothbard sort of uncharacteristically does offer some ideas short of that, short of being able to end the Fed, what what else can we do? Um and he says well one thing that we could do is uh make it illegal prevent it from being able to uh purchase assets and make loans. So he says better to abolish central banking altogether but if that cannot be accomplished then as a transitional step the central bank should be frozen and prevented from making further loans or especially open market purchases period. And so this would prevent the Fed from being able to uh uh prevent it from exercising a lot of control over changes in the money supply, especially these days because the the main thing that the Federal Reserve does is open market purchases. Uh but there's also um a plan offered by uh Alex Pollock. And so just one month ago today, he gave testimony uh for a task for House Task Force on Monetary Policy. Uh, and I I encourage you to read it or watch it if there's video. I I read it. Um, great great stuff in there. He says, uh, basically Congress is falling down on its job. Congress should be overseeing what's going on at the Fed, but Congress and the Fed, they talk about how great the Fed's independence is. Um, of course, it's independence is a myth. uh the current situation that we have now where they have this independence rhetoric uh but you know dependence in terms of you know the Fed is always ready to finance the government's uh deficits uh it it makes it more difficult for people to see what's actually going on um it's so the independent independence and rhetoric alone is like the worst case the worst sort of institution but that's the one that we have uh but Pollock argues quite convincingly that independence should be uh rejected uh you should not have the borrower be the the treasury be the boss of the of the lender. Uh he said and then he has six steps of of certain things that the congress could do that that the fed should do uh to fix problems at the fed. So this is all short of abolishing the fed but what else could be done? So he said that uh it's um its goal should not be to provide or furnish an elastic currency which was in the original text of the Federal Reserve Act but to uh furnish a sound currency one that people could rely on which would be much better. He also points out how the Fed has just sort of presumed to take on this plan to uh target 2% inflation. But if you look at the the text uh that the Fed refers to as its dual mandate, uh it the dual mandate simply says that it should uh provide for stable prices, provide for uh price stability. Um but the Fed has just sort of on its own decided we're going to target, we're going to interpret that as uh 2%. So that's outside of of any sort of congressional direction. They decided to do 2%. Also practice uh standard accounting. They're doing all sorts of tricks calling the their losses you know deferred assets exit mort mortgage investing be recapitalized which in short if I'm interpreting correctly means uh since the Fed is incurring losses then the private commercial banks that own stock in the Fed should uh you know share in those losses. Uh and also that there should be dedicated subcommittees, subcommittees on the Fed for the Federal Reserve um in the House and the Senate as opposed to one big committee that the where the senators and the uh Congress people, they don't really have any idea what's going on at the Fed, especially the younger ones. Okay, so how do we how do we get there? Here's here's the hard part. The Fed has been around for a long time. It has uh its own great PR. That's one thing that the Fed is is really really good at is is, you know, presenting itself as this technocratic, sophisticated, uh we're very smart. We know exactly what we're doing. We're always going to be able to achieve our goals. Uh and so the hard part is for us to counter that. It's for us to show what the Fed is doing is wrong. It shouldn't be doing all those sorts of things. And we have to convince a critical mass of people that we don't need a central bank and that we don't want a central bank. And one especially difficult aspect of this is that the second bank of the United States was only around for about 20 years. Uh but the Fed has been around for over 110 years. And so there's a lot of people who have been, you know, indoctrinated. They've been uh propagandized to think that we need a central bank. And what the Federal Reserve is doing is is great. So what do we need to do that? Well, I'll I'll ask what other organization's mission is to promote teaching and research in the Austrian school of economics and individual freedom, honest history and international peace in the tradition of Ludvig von Mises and Murray Rothbard which also includes in the page on its uh mission that it seeks a free market capitalist economy and a private property order that rejects taxation, monetary debasement and a coercive monopoly of protective services In short, in order for us to achieve this, we need this. Thank you. [applause] >> [applause]
How to End the Fed | Dr. Jonathan Newman
Summary
Transcript
Good morning everyone. Glad to be here. Thank you very much to Andy Horde for sponsoring my talk. I'm Jonathan Newman. I'm gonna talk about how to end the Fed. I'll see you guys later. Yeah. Um, so last supporter summit we premiered uh our documentary playing with fire and we talked about how terrible the Fed is, how it props up this uh banking system that's based on, you know, dishonest banking practices uh causes all sorts of problems. And near the end of the documentary, we uh talked about a path forward getting back to sound money, but uh sort of light on the details because the main purpose was to show all the damage uh caused by the Federal Reserve. So, in uh in this talk, I'm going to talk through uh some of the plans, especially one by Murray Rothbart on on how to actually go about how do we actually get rid of this thing if it's so bad. And the way that I'll uh the way that I'll uh go about it is by trying to answer four questions. First, do we need the Fed? Secondly, do we want the Fed? So, we'll cover some basics and then we'll get to the meat where we ask, "Can we end the Fed? And if so, how do we do so?" And there's a great meme there between Jay Powell and Ron Paul. If we ended the Federal Reserve, what would you replace it with? And of course, the answer is, when you remove a cancerous tumor, what do you replace it with? The answer is nothing. Okay. So, first off, uh, do we need the Fed? No. So, Maybe I can uh help us get back on schedule here. [laughter] Uh the uh the reason why we don't need the Fed is because we know that money originated on the market. Money is an institution that was created by the market. Uh it's not something where we need uh a central bank. We don't need the state to issue it. Uh, of course, this is not the position held by our friends in the modern monetary theory uh camp or the chartist as well. They say that the the state originated money. That's where money comes from. Um, and in the chapter that I wrote for a forthcoming book hopefully early next year uh called antiMMT um I wrote about how their claims are just completely wrong. So they one of their favorite examples is uh ancient Mesopotamia. They claimed that these clay tablets that were issued by temples and you know palace administrators that those were used as money. And uh I I didn't see anybody like trying to counter this. And so I took a look at at the literature myself, the the uh archaeological literature. And no archaeologist has ever said that these clay tablets were used as money. And if you actually look at the the uh uh inscriptions on the clay tablets, it's they're basically just receipts. There's just accounting. They're keeping track of, you know, where different goods were being held in the different storehouses. But what the archaeologists do show, what they have concluded, uh, and there's there's broad consensus on this is that in ancient Mesopotamia, silver was used as money. So this is, you know, this is, you know, hundreds of years before coinage. And so I I have a picture down here of, uh, from one of these archaeologists that showed how they actually went about doing that. So, this is that's a long silver ingot, and they uh they call it a a chocolate bar ingot. And the reason why is it has these indentations on it, so it's easy to snap off a little piece of of the silver and use that to to make the way to to make the payment. Um, and so I guess instead of wallets, they had these long bars of silver to facilitate their transactions. So even even before coinage uh people were using metal, people were using silver and eventually gold um as money. But also um we know uh banking originated on the market. So we don't need a central bank to provide banking services. Uh of course the private commercial banks in our modern economy, they like having a central bank because it it's a lender of last resort. It coordinates the expansion of credits so that no one bank gets in particular trouble. Uh they they like having this sort of arrangement. It it protects them. But banking originated without a central bank. So we don't need a central bank for that um either. And yeah, so there's nothing about our complex economy. Oftentimes we refer to Robertson Crusoe as a simplifying thought experiment to help us develop economic theory. And what that does is that helps us, you know, figure out what's actually going on. What's the cause and effect? How how does savings and capital accumulation result in economic growth and increasing standards of living so that we can better understand more complex advanced economies like ours? But there's there's nothing about money or banking that uh changes substantially once you get to a complex economy such that you need some centralized control. We don't need a central bank to to to manage all of that. Okay. Next up, do we want the Fed? >> No. [laughter] So, uh, the Fed is a central planner of money and credit and since it's outside the market, it's groping in the dark. So, Misus did not use that to refer to central banking, but it applies here. He was talking about uh under socialism, the central planning boards, they don't have any sort of uh, you know, good information. They they can't economize the use of resources because they don't have market prices for for factors of production. They can't know economize what what they're doing. Uh but the same thing applies to any government bureaucracy. It applies to the central bank as well. Uh which means that with with government control of of money and banking and credit uh we will get the wrong amount of money. We will get large increases most likely large increases in the supply of money as we'll see. Uh we'll get all sorts of you know bad distortions in credit markets. Uh we have a protected uh set of institutions uh so they're not subject to the market test. Of course, I'm referring to fractional reserve banks. Um, and so because the the Fed is outside of the market, it's it's this, you know, protected money printer, a counterfeitter, uh, it means that it it can't do what would be good for any sort of producer, any sort of organization that's interested in economizing resources. Um, but another reason we don't want the Fed, uh, is because it siphons away our wealth. um as many of us are familiar with the canon effects explained why when there's a particular source of money or money comes into the economy through a particular point uh the early receivers the people who are closest to the money spigot they benefit at the expense of of people further away um and so the people who are further away uh they have to you know pay the higher prices that have been bid up by the earlier receivers uh before their own incomes before their own selling prices have increased and so this This is a way to, you know, transfer wealth from one group to another group. And of course, the fa the ultimate winner in all of this process is the government itself because it's able to sell its debt and increase its spending with the backing of of a money printer. It uh props up the inherently unstable banking system and instigates the boom bust cycle. So whenever the Fed is uh increasing the money supply and pushing down interest rates as we're all aware uh it starts um the business cycle process it causes entrepreneurs to to misjudge uh which production plans are feasible and which will be profitable. Uh they start new longer lines of production that can't be completed. So these are all reason financial crisis banking panics. Uh it's moving wealth away from us. It's not economizing anything. It's outside the market. These are all reasons why we don't want the Fed. Okay. Now, um more difficult question, can we end the Fed? And one answer uh is maybe it has been done before. So, there was the the second bank of the United States that was um uh in it was killed according to a a quote that's sometimes attributed to Andrew Jackson by Andrew Jackson. Uh and so I thought it would be interesting to look at what sort of circumstances applied in that case. So what how how was it possible for that central bank to be ended in the United States and what lessons can we learn from it that might help us to end our our current central bank? So what did it require? And so number one it required a popular understanding that the central bank caused inflation. So, uh, Andrew Jackson was a populist president and there was a a broader a better understanding in the time that the central bank was the one that was responsible for the price inflation that they would see. Um, and so people understood that inflation is bad. The central bank causes it. And so because of that, it was more likely for them to elect somebody like Andrew Jackson who would end up uh killing the bank. So we also needed an anti-inflation president. >> [clears throat] >> Uh another very important uh piece that's not that we don't have today really so it's sort of u would make it more difficult for us to end the Fed today is uh Andrew Jackson actually had an opportunity to end the bank and that's because its charter was up for renewal and I encourage you to read Murray Rothbard's uh book a history of of money and banking in the United States where he goes through the story like how what were some of the you know what were some of the events who were some of the people involved involved. Um there was uh Nicholas Bidd was uh trying to uh he tried to bring the charter u earlier. He was trying to you know force Andrew Jackson's hand uh and they did apply for the the charter early uh but Jackson vetoed it and they didn't have enough people uh in Congress to override the veto and so with that they were able to you know start the process of ending the second bank of the United States. Uh and then later after uh Jackson uh was was reelected then he was able to completely get rid of it, completely disestablish it. But you should check out Rothbard uh and read the the whole story. You know, character characteristically Rothbart it's it's great reading. You know he's very easy to read, very clear and engaging style. [clears throat] So what would we need? We would need this opportunity. We would need an anti-inflation president. we would need an uh an insufficient majority in Congress to override a presidential uh veto. So the answer to the question of can we in the Fed, maybe it's been done before, but we're missing some of these conditions. Okay. Next, how do we end the Fed? And I I'll call your attention to a bill that's been uh proposed uh by Thomas Massie to abolish the Federal Reserve. [applause] and uh I compare it to uh Rothbart's plan. So Rothbart has this series of of three essays which the the Mises Institute has pulled together into one small uh booklet. Um and it's called Taking Back Our Money. You might have received it in the mail. Uh and at in the last essay, the third one, he actually has a plan like how would we actually go about uh getting rid of the Fed. So step one is repeal the Fed's charter. So this is where we don't have the opportunity that Jackson had. So it's there's not some, you know, horizon. There's not some uh, you know, future date in which the the Fed would have to reapply for its charter. Uh, but this is definitely something that Congress and the president could could do could be done to repeal the Fed's charter. Next is to uh basically treat the Fed like an insolvent bank. Uh, which it is. Um it as uh Alex Pollock has written about it's uh uh it's deeply in the red. It has it hasn't been able to you know send the Treasury its remittances that it that it has earlier. Um and so it's it's it's it's losing money uh partly because of this new policy where it's paying interest on on reserves. And when you treat it like an insolvent bank that means that you have to liquidate its assets. Uh, one interesting thing here that actually makes the process easier is that all of the government bonds held by the Fed can simply be written off. There's just like this accounting ghost. It's this thing that can go away because uh it's the government owing money to itself and so it just goes away. So that's uh easy part. Uh the next part is uh more difficult uh or at least there's some you know technical issues and legal issues involved. Uh Rothbart proposes revaluing the the Fed's gold stock at the market price of gold and use that to redeem the Fed's outstanding liabilities. So as we're liquidating the Fed, getting rid of its assets, it also has liabilities that need to be taken care of. And so Rothbart says use the market price. It was much lower when Rothbart was was writing this, but when he was writing it, the gold price was much higher than it was when the obviously when the Fed was established and also when we got off Breton Woods. >> [clears throat] >> uh but use use the uh proceeds from use the revalued gold stock to uh redeem the Fed's liabilities. Now uh one legal issue here is uh the the Fed owns uh gold certificates uh and the gold is held by the Treasury. Uh but these gold certificates are non-marketable, nonredeemable. They're just pieces of paper. The Fed can't, you know, go to the Treasury and say, "Here's a gold certificate, and the Treasury has to, you know, cough up some gold." But if we u ended the Fed by first, you know, pulling all of its assets and liabilities to the Treasury, which is in Thomas Massiey's plan, then the gold is there at the Treasury and can be used to help liquidate uh or redeem the the Fed's liabilities. Next, Rothright has a plan forward. So, how do we how do we uh go from, you know, liquidating its assets, treating it like an insolvent bank to actually, you know, having sound money? And Rothbart proposes going back to redefining the US dollar as a certain weight of gold, which is uh a good plan. Uh but of course, we can't do that at, you know, $35 an ounce or or 20. It would have to be much much higher. um uh these days. Uh another very important part of Rothbart's plan because he doesn't want to just end the Fed, he realizes that there are important implications that follow from that uh is we also have to get rid of uh federal deposit insurance. We have to, you know, make sure that banks are getting back to honest banking practices, get back to, you know, keeping full reserves. Uh he he says a full reserve discipline. And if we end the Fed, then that means that they don't have a lender of last resort. So you have to get rid of all of these other regulations and all the other things that the government does to protect the uh banks uh when you're getting rid of the Fed as well. So So that's one plan. U I'll mention that Massiey's plan is similar. Uh he more explicitly says that the assets and liabilities are transferred to um other agencies, other parts of the government like the treasury. Uh and then the parts of the liquidation process are overseen by the OM and others. Uh but there's a one-year time span where this happens. But if you read Rothbart and taking back our money, it's like a we'll just rip the tumor out, that sort of thing. Okay. So, uh can the Fed be reformed? This is something that I I added recently, uh actually last night after a discussion with the distinguished Dr. Pollock. Um there this is also a long shot just as much as you know ending the Federal Reserve. Uh but there are some good ideas including uh from Rothbard. So you might think that Rothbart is only intent his only goal is to just get rid of the Fed um liquidate its assets, treat it like an insolvent bank. But Rothbard sort of uncharacteristically does offer some ideas short of that, short of being able to end the Fed, what what else can we do? Um and he says well one thing that we could do is uh make it illegal prevent it from being able to uh purchase assets and make loans. So he says better to abolish central banking altogether but if that cannot be accomplished then as a transitional step the central bank should be frozen and prevented from making further loans or especially open market purchases period. And so this would prevent the Fed from being able to uh uh prevent it from exercising a lot of control over changes in the money supply, especially these days because the the main thing that the Federal Reserve does is open market purchases. Uh but there's also um a plan offered by uh Alex Pollock. And so just one month ago today, he gave testimony uh for a task for House Task Force on Monetary Policy. Uh, and I I encourage you to read it or watch it if there's video. I I read it. Um, great great stuff in there. He says, uh, basically Congress is falling down on its job. Congress should be overseeing what's going on at the Fed, but Congress and the Fed, they talk about how great the Fed's independence is. Um, of course, it's independence is a myth. uh the current situation that we have now where they have this independence rhetoric uh but you know dependence in terms of you know the Fed is always ready to finance the government's uh deficits uh it it makes it more difficult for people to see what's actually going on um it's so the independent independence and rhetoric alone is like the worst case the worst sort of institution but that's the one that we have uh but Pollock argues quite convincingly that independence should be uh rejected uh you should not have the borrower be the the treasury be the boss of the of the lender. Uh he said and then he has six steps of of certain things that the congress could do that that the fed should do uh to fix problems at the fed. So this is all short of abolishing the fed but what else could be done? So he said that uh it's um its goal should not be to provide or furnish an elastic currency which was in the original text of the Federal Reserve Act but to uh furnish a sound currency one that people could rely on which would be much better. He also points out how the Fed has just sort of presumed to take on this plan to uh target 2% inflation. But if you look at the the text uh that the Fed refers to as its dual mandate, uh it the dual mandate simply says that it should uh provide for stable prices, provide for uh price stability. Um but the Fed has just sort of on its own decided we're going to target, we're going to interpret that as uh 2%. So that's outside of of any sort of congressional direction. They decided to do 2%. Also practice uh standard accounting. They're doing all sorts of tricks calling the their losses you know deferred assets exit mort mortgage investing be recapitalized which in short if I'm interpreting correctly means uh since the Fed is incurring losses then the private commercial banks that own stock in the Fed should uh you know share in those losses. Uh and also that there should be dedicated subcommittees, subcommittees on the Fed for the Federal Reserve um in the House and the Senate as opposed to one big committee that the where the senators and the uh Congress people, they don't really have any idea what's going on at the Fed, especially the younger ones. Okay, so how do we how do we get there? Here's here's the hard part. The Fed has been around for a long time. It has uh its own great PR. That's one thing that the Fed is is really really good at is is, you know, presenting itself as this technocratic, sophisticated, uh we're very smart. We know exactly what we're doing. We're always going to be able to achieve our goals. Uh and so the hard part is for us to counter that. It's for us to show what the Fed is doing is wrong. It shouldn't be doing all those sorts of things. And we have to convince a critical mass of people that we don't need a central bank and that we don't want a central bank. And one especially difficult aspect of this is that the second bank of the United States was only around for about 20 years. Uh but the Fed has been around for over 110 years. And so there's a lot of people who have been, you know, indoctrinated. They've been uh propagandized to think that we need a central bank. And what the Federal Reserve is doing is is great. So what do we need to do that? Well, I'll I'll ask what other organization's mission is to promote teaching and research in the Austrian school of economics and individual freedom, honest history and international peace in the tradition of Ludvig von Mises and Murray Rothbard which also includes in the page on its uh mission that it seeks a free market capitalist economy and a private property order that rejects taxation, monetary debasement and a coercive monopoly of protective services In short, in order for us to achieve this, we need this. Thank you. [applause] >> [applause]