entitled america's future on the new silk road and it's subtitled the physical economic lucia's for loss the physical economic principles for  know and this is the document we are getting out to the policy people to the elected officials to the population in general with the responsibility of educating the population the politicians and the policy later now i will start with something not directly in the hands of it and that is the issue of money this is an area of great confusion which actually should not be molly de medium of exchange of goods and services is a technology created by society the development of the form in use of money is as much a part of the economic demolition of mankind as the discovery fire or the  steam engine but like any powerful technology that society has created in this depended on increasingly money can also be used as a weapon of unspeakable money allows for the interconnection of tree of larger groups nations and continents trade beyond the ark is not possible without money to develop me and our money has undergone many stages the emergence of gold and silver as a basis for money is still with us but gold and silver how limitations it is congressman to use and the volume of trade possible is largely limited by the amount of active gold and silver in circulation that's not to call the silver to your keep under your mattress or whatever is the amount of active gold or silver in circulation it was actually and most people here not most people in the west don't know this it was actually chinese civilization debt broke through these limitations and invented paper and paper money gold and silver could be stored and paper money could be issued in many multiples of the gold and silver that was stored essentially stored on deposit this was extensively by chance last three dynasties it is doubtful that without paper money china could have had the viable economic activity that had made china the most productive and advance civilizations time the chinese back then had already pioneered the use of state credit through its emperial system to expand their economy europe and their colonies european nations in their car was the only good using paper money to a small degree in the sixteen hundreds and into the seventy's it is hamilton who fully established the use in value of paper money as leverage leveraged by gold and silver and a national bank ok this is because the first to really make this paper money system outside of the historical chinese example a method now i'm going to go into now the genius of hamilton is this is very short but one hope you get a sense of this and dealing with the crisis of the lack of money at the founding of the republic h is for report to congress in ninety eight seven hundred ninety one represent a revolutionary broke through in understanding the relationship of money credit banking and physical  now credit can be an iou but it can also be a form of money it can have two aspects money is what you used to exchange for goods and services  now i will cook quickly go through a distilled distillation of the three principles that hamilton develops in his report these are not the specific things that he proposed these are the actual principles that that that are distilled i would try to steal from an examination of his reports and and the relationship stability of first of our without financial stability there can be no development speculators and money changers rule when there is financial instability and that goes for baghdad as well as today where you have financial instability the speculators in the money changers rule you know your you know your name you don't where hamilton wrote these reports this situation which was at the beginning of the us republic there was seven a total of seventy three so for gold and silver were scarce and made scarce or by the instability which caused people to hoard their golden syrup in times and in times of now hamilton did not propose to pay any of the debt off this very important point he did not want to pay off the d did not want to pay off the debt and i either had a very small fraction of his face value rather he proposed to far on that debt as face value this was revolutionary and his proposal which was adopted funded the entire debt at between four to six percent interest per year depending  to four million dollars annual revenue per year the debt was fully funded the debt was fully funded now this converted this vas revolutionary war debt to treasury notes those treasury notes became a stable source of income for those holding the treasures or they could be exchanged because they were not also this funded that was in small enough denominations i mean bigger than coins or what happened but smaller denominations that could also circulate as money as well acquired an aliquippa stable value till then it has rather contrary tends to fluctuation and security incident to it in an unfunded state render it a mere commodity one asked such being only an object of occasional and particular speculation all the money applied to it is so much to vary from the more useful channels of circulation for wish the thing itself a force of no substitute so that in fact one serious inconvenience of an unfunded debt is that it contributes to the scarcity this distinction which has been little if not if at all i tell it to is about the greatest moment it involves a question immediately interesting to every part of the community which no other than this whether the public debt by a provision for it on true principles shall be rendered a substitute for money or whether by a being left as it is or by being provided for in such a manner as will soon those principles and destroy confidence it the that's how that massive industrial transformation of that lincoln did that was done under lincoln and continued on was paid for by debt created which was funded by which could also be used  similar reasons that we have a much bigger system situation today the us actually facing starvation a total collapse of the nation took place because the entire system our financial systems deposit under a commercial bank arrangement shergill deposits restored confidence restored some degree of financial stability without doubt there could be no name without financial stability you can't f a fixed exchanges between nations why in order to do the same thing on a global scale establish a global financially stable system high as a weapon plunder rather than as a benefit then the threat of trade instability was destruction nations caused by currency speculation is the primary and has been the primary means by which nations and their economic behavior have it controlled by international banks and international finance the good news is that the one dollar one road expense ends up as vast the net monetary profits to speculators for nothing produce the leading personally example of this is none other than george so and actually through deregulation to speculation has grown from currencies to everything including speculation on speculation or derivatives and a current too big to fail banks this system will soon end one way or another and the first step is just create financial stability this is why glass steagall is has to be the first step because it creates financial stability productive capital hamilton develops in his report on the national bank the concept of productive capital essentially one hundred dollars in your mattress or one hundred dollars in speculation or one hundred dollars in a bank leveraging productive investments are not the same they are not the same dishes not how much money but what does the money do one hundred dollars in a mattress is worth nothing to the society because it is not being used one hundred dollars the speculation might be worse than nothing because it might be used to cause instability this very simple concept which how to do god's is completely rejected by the current economic theories book is based on a government going into debt to increase the money supply with no more sponsibility to where the money goes to whether is productive or not for halogen financial stability was not sufficient it is only a program was to the roof the same thing is true klasky goal is only a prerequisite stability it does not determine how money is used stability does not determine the productive power of money for instance how are great projects going to be funded and hamilton the remedy for this is the establishment of a national bank a national bank can organize and leverage the existing money and the creation of new money into large projects that would be impossible for the private sector or those needing an immediate return on investment a national bank does not need an immediate retired on investment if the economy grows and the economic activity grows did a positive world defining for the projects and if you really want to get a sense of this for special one on our national debt because it's really it's really delightful because you really place it out how you do it and he lays out how you do it and it's it's it's really nice so now let's fast forward here today all of china's six or seven major banks all operate like alexander hamilton is national bank so they all just have one national that they have the equivalent of six or seven i don't know precisely all the details but they have different banks for different things but they all function this way this is why china can make long term investments are all over the world without being concerned imminent return with immediate returns on the these investments this is how the one about one road is being finance which is currently eleven times the marshall plan to build europe after the war and will soon be up to twenty times th in just eight years china has invested twenty trillion in both china and abroad this is how much of this is also the essence of the russia second law and national bank now we come to the third principle in hamilton development a matter of fact and how to time the very concept of developing manufactures was a completely revolutionary farmer with the new implements the new technology the new tools to increase productivity to increase productivity of agriculture both per capita  track farming with tractors is two orders of magnitude more productive than did having no just not having tractors so this is an early example of what little costs increasing to productive power of labor with this there is a need to increasingly integrate being developing manufacturers factoring areas in urban areas where the rural farmers transportation is a real issue because most farm areas that was it they couldn't really produce for the city and you couldn't maintain large urban populations likewise you could improve their their agriculture and if they produced a surplus it had to be are consumed in the nearby area so tainted a massive development of transportation infrastructure and hamilton's time it was roads and canals and a little later on after hamilton it was the r this increased and the division of labor bringing larger and larger urban rural elements together and also created a situation where the role surplus rule labor concocted to the urban areas to participate in manufacturing is the only proven way to alleviate poverty is no other way to alleviate poverty you cannot alleviate poverty by spreading money around you cannot alleviate poverty myself by you know taking out redistributing the money in the society not you don't do it you can't do it that way yes this is the only way and how much in understood and chinese understand it also today they made that very clear to do that and so one hundred million people out of poverty in the last two decades so this is how you do it this is also china's one by one the policy what is china's one part as most basic level it's connecting all of the rule areas all of the areas where resources can be attractive to manufacturing centers on a global scale efficient that's what the one