What do you say are the most significant developments that have occurred since 1971.

Collin: Monetary expansion—but we get a lot of criticism on this. People say, “oh you're not taking into account many of the regulatory changes, or the socio-cultural changes that happened around that same time period, that caused some of these second and third order effects that you attribute to this one 1971 data point.” If you were to sit down and talk with us, we'd tell you that the story goes back much further. We would trace it back to 1944 and 1933, and we would look at the Great Depression in America in 1929. We'd look at the creation of the Federal Reserve in 1913, and then ideally, we'd go all the way back to the birth of fiat currencies in the United States before the U.S. was even a country. We'd look at the early fiat experiments, we'd go back to the bi-metal standards, we'd look at the process of coin clipping under the feudal lords. The story obviously doesn't start in 1971, but certainly that's when there's an interesting inflection in the data that you can point to and say: “look what happened here, everything went crazy.”

We attribute the expansion of monetary policy to gross malinvestment. Malinvestment that's perpetuated and unable to be liquidated, in such a way that it creates second and third order problems in our society that are exacerbated as this bubble continues to be expanded, and the can of the liquidation of malinvestment is kicked down the road.

Jan: On your website, the first chart I see is about inequality. How does what you just said ties into inequality in society?

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