Day, welcome to the FRMO quarterly conference call. As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Thérèse Byars. Please go ahead. Thank you, Justin. Good afternoon, everyone. This is Thérèse Byars speaking, as Justin just said, and I'm the Corporate Secretary of FRMO Corp. Thank you for joining us on this call. Now I have a little bit of housekeeping I have to do, and that is this. The statements made on this call apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that any of the security transactions referenced today have been or will prove to be profitable, or that future investment decisions will be profitable or will equal or exceed the past performance of the investments. For additional information, you may visit the FRMO Corp. website at www.F-R-M-O-C-O-R-P.com. Today's discussion will be led by Murray Stahl, Chairman and Chief Executive Officer, who will review key points related to the 2023 Q1 earnings. A replay of this call will be available for one month beginning at 7:50 P.M. this evening. To listen to the replay, instead of dial-in numbers this time, please use the link provided in the October 13th, 2023 Q1 earnings press release, which may be found on the FRMO website by clicking the link called Information Statements and Announcements. This press release can also be viewed on the OTC Markets website by typing in the ticker symbol FRMO and clicking on the News link. Now I'll turn the discussion over to Mr. Stahl. Okay. Thank you, Therese, and thanks, everybody, for joining us today. It's actually not very long after the annual meeting call, so not a heck of a lot has changed in the brief time since we had that call. You can see the figures. I'll just note a few things that I personally think are interesting, and I'll await your questions, and I'll talk about some things we're working on. Shareholders' equity, you will observe, is a little bit shy of $189 million. Now, that's the key number, not the $345 million. That's a bigger number because we need to deduct out the non-controlling interest. Non-controlling interests largely come from the consolidation of HK Hard Assets one and two. Too, you will recall from our last meeting, we just started a few months ago, so it's building up, and I'll talk a little about that in a few minutes. I believe the $188.9 million, that's our record. The cash I'll call your attention to is a little over $36 million. It's particularly noteworthy it's over $36 million, because we paid some taxes and that drew down our cash a little bit. Things are going very, very well. The only reason I bring the shareholders' equity and the cash balance to your attention and, of course, the investments at record levels as well, that we have more than enough liquidity to do what we wanna do. What we wanna do, of course, is build out our cryptocurrency business. Money is not the issue. The issue is the nature of cryptocurrency itself. I referred to this in the last conference call, and I'm gonna emphasize it now because I think it's worthy of emphasis. There are vectors like the price of cryptocurrency, the cost, I should say, of cryptocurrency machinery, the what's called difficulty rating, which is the number of machines you're competing with to obtain the block reward. Most important in my mind vector is what's called the halving. Meaning every four years, the number of Bitcoin you get for solving a block is cut in half. Now, mathematically, if you reflect on this, I think you'll see this, that that's the exact same thing as if they doubled the price of the equipment. Generally speaking, the equipment is declining, but mathematically it's almost as if they double the price of the equipment when they do this. Why? Because to generate the same number of coins, you would have twice as many machines. You would have to have twice as many machines operating. Bitcoin or cryptocurrency in general, Bitcoin in particular, is very much like any commodity, that its selling price to a large extent, has to be a function of the cost of production. In the last year plus, the cost of production was in decline. It was in decline because the equipment that you need to mine cryptocurrency declined in price a lot. How much did it decline in price over roughly a year? Declined in price by in excess of 75%, and it continues to decline. Imagine if it were wheat or soybeans or something that's a little more tangible than cryptocurrency. Imagine if it were something like that. The price of seeds or the price of land, price of water for irrigation, even the cost of labor had declined by some such quantity. I think everyone would reasonably anticipate that the price of that commodity, wheat, soybeans, what have you, would decline to reflect it. Perhaps not to the exact percentage of the decline, but the customers, the consumers of these products would benefit to a very large extent, maybe to the entirety of the decline. Crypto is the exact same way. Right now, if you do this, if you were to look at the price of crypto between now and June fifteenth. June fifteenth is when the Federal Reserve started raising interest rates aggressively. The interest rates don't have that much to do with the cryptocurrency, but in any event, you'll see cryptocurrency has not been very volatile at all, unlike its history. Why it's not been volatile? Well, one is a thesis, and one is a reality. The thesis would be, and this is a very big maybe, perhaps people who trade cryptocurrency are finally beginning to understand the vectors that largely govern the cryptocurrency price and pay attention that you really shouldn't put in big orders for equipment because those equipment prices are gonna fall, and the machines will become your adversary, and that they'll decline at a rate faster than you're actually depreciating them. It's a big problem. Maybe people understand that, maybe they don't. That's my speculation. The reality of things is that, can't deny when the halving is coming. It's coming in about 568 days. We may be a day off in that reckoning because I don't check the number every day, but it's something along those lines. At the moment, the vector of the halving, which as you'll recall, has the effect of essentially doubling the cost of producing Bitcoin because you need twice as many machines to produce the same number of coins. That's more or less in balance with the decline in machines. The machines keep declining at the same rate, but it's a lesser price. So the lower the price of the machine, if it declines by the normal weekly, roughly 3%, it's gonna have less impact on the price of Bitcoin or the cost of producing Bitcoin. Then dominant vector will inevitably be the halving. As it gets closer and closer, it becomes more and more dominant. We fully anticipate that the price of the crypto, in our case, largely Bitcoin, is going to go up. You might say, "If we know that, why don't we go ahead and buy a lot of machines?" Well, I just gave you the answer. Because in any given period, including the period in the future, the machines are likely to fall in price. We don't wanna have no machines. We just wanna have enough machines to take advantage of the momentary profit in Bitcoin, and then we're redeploying some of that Bitcoin to buy more machines. It's the appreciation of the Bitcoin that we generate 'cause don't forget, when you buy equipment, you are paying for it in Bitcoin. I'm quoting, or I do quote, this is my practice, dollar prices for the equipment, and they're normally on websites expressed in dollars, but the vendors won't accept dollars. They accept Bitcoin. One of the ways of looking at Bitcoin, I think this is a very good way to look at it. Basically, you spend X Bitcoin for a number of machines. The machines will last for a given number of years. At the end of that time period, what you hope to achieve is the machines will be largely worthless, but you will have produced more Bitcoin, the number of Bitcoin you expended to purchase the machines. That you might think of as a natural interest rate on Bitcoin, the way you multiply your Bitcoin. We were just waiting for an opportunity to start buying machines, which we are in the process of doing with our various entities. Our various entities, just to remind you, are Consensus Mining, which will be quoted somewhere around December first. Winland, that we own roughly 30% of. Winland now called Winland Holdings, formerly known as Winland Electronics, that we own roughly 31% of, and we would love to buy more, but we're in a quiet period for Winland, so we can't buy more. During the quarter that just elapsed, we were buying more Winland, and we'd like to increase our holdings of Winland. Why do we wanna increase our holdings of Winland? Because Winland is growing the number of Bitcoin it has in the manner I just described. Last, but certainly not least, we own 7.1%, and Horizon owns over 50% of Hashmaster. Hashmaster is several things. It mines for its own account. It is a hosting company, meaning it hosts other people mining, and of course, it repairs machines. That's strategically very important for us because if you have machines, the one certainty you have about machines is sooner or later they will need repairs, and it's very good to have this available to us. That's our business. We're going slow because we basically, if you look at it, we avoided what other people refer to as the crypto winter. We may not have another crypto winter if people come to understand how cryptocurrency works. Time will tell if that is the case. We have every intention of expanding the cryptocurrency business gradually in a sensible way. It's worthwhile noting before I take some questions, that crypto, as exciting as it is to us, the whole project could still fit, could still fail. It's possible. Personally, I don't think that's likely, but it's possible. If it were to fail, by looking at the balance sheet, you will see our cryptocurrency mining assets, those are machines. It's not the entirety of our crypto investments. So the crypto investments, which are the coins, that's included in investments, so it's placed somewhere else. Normally we read all the numbers, which we didn't do this time, I think because we read the numbers last time. Am I correct in that, Therese? Did we read all the numbers last time, how many coins we had of every type? Did we do that? Yes, we did. Certainly in the shareholder letter. Yes, I believe so. Okay. Yes. We're now reading it because it didn't change by much other than the fact that it went up. Generally speaking, it's going up every day. The machines we're buying, basically we're looking to replace machines that are worn out. I dare say we bought the machines very well. I'll just mention this. I think I mentioned in the last meeting, but you might recall over two years ago, we purchased some machines which we swapped for with Winland for a greater stake in the company. Those machines have been operating very well for over two years. If we were to sell those machines today after using them for two years. Also worth noting that we depreciate machines over three years, so machines are 70-odd% fully depreciated. We could sell them today for more than we paid for them. You have to be very, very judicious in the way you buy new machines. At the moment, we're just buying some machines to replace the machines that we believe are reaching the end of their useful life. It's not gonna be a big purchase. It's not a big deal. And we'll update you further. Hopefully over the next quarter, we'll be able to grow the cryptocurrency business in the same way we've been growing it in every quarter, and we'll give you an update then. But those are the main things we're working on. One other point I wanna mention, which deals with HK Hard Assets. HK Hard Assets One, you're well aware our biggest position is TPL. We funded HK Hard Assets Two with some TPL shares, 'cause we had them and wanted to give the portfolio life. The objective is to buy other things. We have one, two, three, four. There are four other investments in Hard Assets that we are in the process of purchasing. Hard Assets already generates, I would say, a decent amount of cash flow for X months of life. We're gonna be building that up aggressively over the next year, or at least it is our desire to do that. We'll have to see what happens. That's the update. Not a major change from what happened in the annual meeting. One other minor point. I keep saying one other minor point, but it is a minor point, and it is one. You'll note on our balance sheet the mortgage that we have, that is the building in which Hashmaster operates. You'll see the amount of the mortgage. It is our belief that the building is worth twice what we paid for it, and the mortgage is only 70% of what we paid for it. There's that. One other point. I keep saying one other point, but I'll make yet another point. Pay very close attention, if you will, to our security sold short and look at the profit. That is a significant generator of capital for us, and it continues to be. At the moment, we've been expanding, let's say, the short position, so there are some interesting things to do there. You'll note that's gonna grow. It hasn't grown in the prior quarter. Now is a good time for it to grow, so expect it to rise, not a huge amount, but a little bit. I think that includes all the general remarks, and, maybe now is the time to go to questions, if you have them, Therese. I'd be delighted to answer. Yes, I do. The first one is: Would you explain the non-controlling interest? Why do you need to show, and who are the owners of the non-controlling interest? I'm assuming they're not owned by FRMO, is that correct? The book value is then? Okay. Let's do it this way. The book value of FRMO is $188.9 million. That's what FRMO has. Non-controlling interests come from two entities. The major one is HK Hard Assets, and the second one is HK Hard Assets Two. Why do we show it? Because FRMO controls that capital, and number one, that's the correct accounting treatment. Who are the other people? Well, the other people are largely yours truly. I may be. If I'm not the biggest investor in HK Hard Assets Two, I'm up there. I didn't look recently. I may be the biggest investor in HK Hard Assets. No, I'm close. There's FRMO, obviously, and that's an investor. There's Horizon Common. I'll describe what that is in a second. There is myself, and there's Horizon Kinetics, that's different, Horizon Common. I'll explain the difference momentarily. There's a big shareholder of Horizon FRMO. There are a couple of small shareholders. Those are the owners basically. Horizon Common represents a lot of the capital that was extracted from Horizon Asset Management. If you might recall, prior to 2011, there was Horizon Asset Management and Kinetics Asset Management, and they were owned by the same people, and they did more or less the same thing. Kinetics would run the mutual funds and Horizon would do the individual accounts and do the research. That's probably the cleanest way to explain it. Everyone will always ask, "Why do you have two separate companies? Why don't you have one company? It'll be easier to understand." We combined them. Over the years, Horizon had produced a lot of capital that was in Horizon. We merged the investment management companies. It didn't make sense to have that kind of capital in the investment management company known as Horizon Kinetics. It became separate. The function of Horizon Common, private company, is just to invest capital. How much capital is in Horizon Common? If you're interested, it's something on the order of. It fluctuates every day, but it's something on the order of $185 million, something like that. Might be more by now. It's something like that. It's not insignificant. It's not far from the shareholders' equity of FRMO. It's just our capital. It's run by and owned by the people at Horizon Common. My money is there in Horizon Commons. You could say, if you look through, I've got a pretty big stake, and then I have a personal investment in HK Hard Assets 1 and 2, that I add to every month. Even though the month is not over, I'll probably be adding to it this month as well. Why do we show it? Well, apart from the accounting treatment reason, that's the correct accounting treatment. It really represents information for shareholders. How much capital, if we want to do something, FRMO could deploy if it chose to deploy. Now, beyond the capital, there's also the margin lines, which we never really use. In the case of FRMO, it's something like $95 million or $96 million or $97 million. In the case of Horizon Common, it's probably another $30 million or $40 million. There is a lot of buying power there. It's enormous buying power. It's just that we never found anything we really wanted to buy in size. All the buying we've done has been incremental, and it's added up to a lot of money over the years. There's total assets, which you'll observe, last line on the FRMO financial statement balance sheet exceeds $371 million. If you go back, and you'll see on the FRMO website, it's not that many years ago, it was a smaller number. We're trying to disclose everything that we could think is relevant so people can see what our cards are. That's where we stand. I hope that's a thorough and transparent answer. If not, I'm happy to address other parts of it if need be. That sounds good. All right. The next question is much broader. It's about inflation, and it is: In the Q1 of 2022 Horizon Kinetics commentary, management mentions that a recession is not a long-term concern for oil investments because the shortage is "structural", and that "it doesn't matter whether there's lower economic activity". What does management see today as the most convincing or credible bear thesis to FRMO's long-term structural inflation or energy shortage thesis? Does management have any thoughts on the knock-on effects on society of being correct on their long energy thesis and what the end game for FRMO's investment thesis looks like? Well, that's a lot of questions, but let's go through it. Yeah. There is no guarantee that we're going to have inflation. Based on what we see right now, it's the best judgment we can come up with. Number one, we could be wrong. Number two, the world can change, and we're going to change with it. We're not in love with the inflation thesis. Incidentally, inflation is not such a great thing for society. It's actually very harmful. It's socially very divisive, and it creates a lot of problems. We don't desire inflation. The problem is this, and let's just look at the United States budget as an example, but it's the same problem in every country. The only difference is numbers. I wrote about this. It's just not out yet. My last thing I wrote about dealt with this subject. Anyway, the United States government revenue, in round numbers, let's call it $4.8 trillion. The United States government spends, in round numbers, $6 trillion. They might have to spend some more money than $6 trillion. We don't know. No one knows because if we had a recession, I just gave you two numbers, what can we reasonably infer would happen? Well, if we have a recession, people are going to lose their jobs. Chances are stock market's gonna go down. There'll be less capital gains taxes to be paid. That $4.8 trillion, the government might not get $4.8 trillion. How much would they get? Well, it depends on how severe the recession is. Depends how big the unemployment rate is. It depends on how many people take early retirement and have to collect their Social Security. It depends on if people lose their medical insurance because of unemployment. They have to depend on Medicare or maybe Medicaid. Depends on if people need food stamps, if it's getting that bad. Depends on lots of factors. We don't know what it would be other than we can say it's probably likely to go down. The expenses which I just mentioned, they're likely to go up. The most important of those expenses, even though it isn't the biggest, is interest on debt. Why do we know for sure that's going up? Well, one, the debt keeps increasing. You can follow that, by the way, on Treasury, the Daily Treasury Statement. You can see how much money the Treasury takes in every day, how much money you need to borrow every day. Literally, you can follow it every day if you want to. It's actually unbelievably interesting. Anyway, the interest rate is higher and the principal balance, so that's gonna go up. If we don't have inflation, what's, and we had a recession instead, what's going to happen? It may be the $1.2 trillion deficit in extremis. Hard to know what it's going to be. It may be beyond the ability of the nation to fund under normal circumstances. You certainly don't want to give a big tax increase during a recession because it might make, it probably will make the recession worse. What if there was an escalation of the military conflict like Ukraine? Let's say it escalated, which is a very realistic possibility, and wars cost money. What would happen? The most reasonable thing is if we're not gonna have inflation, the numbers are far, far more problematic than if we're gonna have inflation. Based on what we see, it's more reasonable to assume that we're going to have inflation because of the debt issuance and the structural deficits of not the budget itself, which is a problem, but the structural deficits of investing in commodities generally. We haven't done that as a global community for about four decades. Now we're beginning to pay the price of that. It's a problem. Specifically for the next month or so, let's give you a couple of data points. In the last, call it 10 weeks, 12 weeks, whatever it happens to be, U.S. oil production has declined by 200,000 barrels a day from 12.1 million barrels to 11.9 million barrels. Not that big a deal, but it's 200,000 down, not up. The Strategic Petroleum Reserve, the sales in the next couple of weeks, the Energy Department is gonna sell over 15 million barrels. Next couple weeks, chances are the oil price is not gonna go up. That's a lot of oil to put on the market. When we release the number for this past Friday, I believe the Strategic Petroleum Reserve balance is gonna be something around 400 million barrels. We're gonna sell, let's say, 8 million barrels of oil a week. 8 goes into 400 only so many times. It's pretty obvious that can't continue forever. It might not be a good idea to sell your Strategic Petroleum Reserve all the way down to zero. Next data point. These are just data points that anybody can get. It doesn't take a lot of research or whatever. Next data point is OPEC is cutting production by 2 million barrels daily. That's gonna start in early November. I don't remember what day, but I don't think it matters. That's a lot of oil. Next data point, December 5, the Europeans will not be able to buy Russian oil. Under the European version of the sanctions, the European nations can buy Russian oil up to December 5, 2022. Russian oil, as far as they're concerned, is still on the market. They're gonna stop buying it, and they're gonna have to find another source. All those data points are coming up. That's the basis of the inflation thesis. We're not in love with it. If we need to redeploy, we're gonna redeploy it to something else. At the moment, it doesn't seem like it's a good idea to us. We leave well enough alone. There you have it. I think I've answered every part of that question. Did I miss anything, Therese? I don't think you did. I hope not. No. Anyway, if you think of anything, let me know, and I will address it. No, I think you did. You included the energy thesis and so on. That's good. All right, the next one has to do with the money supply. Currently, M2 velocity is near all-time lows, and my understanding is that of the bank reserves that are created from quantitative easing, only a very small amount of that actually makes it into the real economy via the credit creation mechanism of direct lending. While the M2 monetary base has certainly been increasing, this does not mean that the current monetary supply is lesser or greater than in previous times. We can actually see that total U.S. credit growth has been at a much lower trending rate ever since 2008. Could management comment on the possibility that M2, while a fine measure for the monetary base, is not an effective measure of the circulating or supposedly expanding money supply? Are there other composites of metrics to justify the currency debasement thesis? Is there a risk of an availability bias of information here? Just as an example, revolving credit lines are functionally similar to money, but not accounted for in M2. I have a lot of questions there, too. I'll sum it up in one, 'cause actually I didn't know I was getting this question, but it just so happens it's not out yet. I was writing about this. I mentioned earlier the Daily Treasury Statement. They put out a Daily Treasury Statement. You can go to it. What I wrote, I use September 30, 2022. It's not that long ago, 2022. You can look at any day. The only reason I use September 30, 2022 is that's the last day of the fiscal year, so you get to see the yearly numbers. It's kind of interesting from that standpoint. What I would ask you to do is look at the issuance of Treasuries. Now, when I say issuance, 'cause we're talking about velocity, I say issuance treasuries, we're not interested in the net amount. Like, how much money did the government borrow? In other words, how much did the United States government debt increase over the fiscal year, which is over $2 trillion. A lot of money. We're just talking about velocity, 'cause most U.S. Treasury debt is short. The Treasury is constantly redeeming debt and constantly issuing debt, and the numbers are just unbelievable. What I'm gonna do, if you'll bear with me, I'm gonna just log on and read you a number. The reason I'm gonna do that is because if I read it from my notes, you wouldn't believe it. But I'll get it in a second, so you just need to bear with me. I wasn't expecting to have to do this. Let's see if I can get it. Just bear with me a second. Anyway, rather than keep everybody waiting, I'll just read my notes. The actual debt issuance. Now, remember, this is not how much deficit how much debt increased or the deficit. This is just the debt issuance and debt redemption. The debt issuance was, and get ready, $149.8 trillion with a T. The debt redemption was $147.3 trillion with a T. That's the velocity. In other words, what is velocity supposed to measure? Velocity is supposed to measure what people are doing with their money. The reason the velocity is low is because the three governments are federal government, state government, local government. These numbers I gave you are just the federal. Their spending represents 45% of the gross domestic product. Because it goes through the Department of the Treasury rather than the banking system, it's so huge, it's such an important part of velocity, and we're not picking it up. We're not measuring it. We're looking at what the people are doing. Now, it's still a lot of money, what the people are doing. We're not looking at what the governments are doing. I just gave you the federal numbers. There's the state numbers, there's local numbers. These numbers are even bigger. That's what's happening to the velocity. We're not looking at it because somehow we're not properly picking up what government has done to velocity, and I believe that's a big problem. Just as far as getting data, rather than reach a conclusion, it's just so you wanna reach a conclusion, you gotta get the right data. You gotta figure out what the government's doing. 45% of every dollar that's spent in this country annually is spent by one or several of those branches of government. Now, actually, as huge as that number is, it's 45%. It's worse than that. Why is it worse than that? Actually, it's much worse than that. The reason it's much worse than that is because that number is not counting the government-sponsored organizations like Fannie Mae and Freddie Mac and Ginnie Mae. They also have debt, and they also spend money, and they also back mortgages, et cetera, et cetera, et cetera. Those balance sheets, they are in the multi-trillions. I didn't even begin to add up. A lot of that debt is short. I didn't begin to add up how much of that rolls over every year, except it's a really big number. Now, if I really wanna do it, I could've added in, had I wanted to, and be thorough and be complete, which unfortunately I'm not being right now. I could have added in the Bonneville Power Administration. I could have added in the Tennessee Valley Authority. There's lots of governmental organizations. There's the U.S. participation in the World Bank. There's U.S. participation in the International Monetary Fund. There's U.S. participation in the Bank for International Settlements. I haven't even added up what the Federal Reserve has done and the regional banks of the Federal Reserve, what they've done. These numbers are just astronomical. It's just that all those entities collectively are absorbing a great deal of the monetary action. We're not really, in my humble opinion, measuring it properly. I'll just leave it there, unless I missed something, Therese. Hopefully I didn't. I think that was thorough. Next question. A lot of the monetary debasement arguments seems to rely on the idea that the Fed will pivot from their rate hike cycle and step in to monetize U.S. debt as the hiking cycle to fight inflation starts to affect financial markets in a politically unbearable way. What are management's thoughts on the relationship between stock valuations and both tax receipts and the government's ability to service its debts? Could higher rates from the Fed actually stimulate production of goods by spurring credit supply from banks who would be more eager to lend to solvent businesses at these more profitable terms? I believe this was a position of the economist Walter Bagehot, among others. Well, I'm not sure what the banks. I don't even think the banks know what they're going to do. Situation is too fluid. I don't think the banks have a good plan what they're gonna do. With the Federal Reserve, it's pretty easy. Federal Reserve has to stand behind Treasury, whether it wants to or not. You can have a very interesting and lively debate. I just won't participate because I don't know what they're gonna do. You have to stand behind the Treasury. There's a whole series of scenarios where the Treasury might find it very difficult to finance the deficits. Deficits might get very, very large in a lot of, you know, different circumstances. They'll have no alternative. That's what I believe will happen. Now, will the Federal Reserve all of a sudden become accommodative and lower rates to prevent a recession? Possible. Personally, I don't assign a huge probability to that. It's possible, but the central bank would lose a lot of credibility if they did that. They're committed to a certain policy, and I think they're gonna have to see it through. I think the consequences of not seeing it through. You see the Bank of England, they didn't see their policy through for very long, and it is having a very bad impact on the country. Now, raising rates as they did, has a lot of consequences that are detrimental, not the least of which is just people have to pay more for their loans. Let's look at it this way. If you're a student, let's say you borrow X dollars to complete your education. Let's say that amount was $100,000, just for the sake of argument. Well, you're gonna pay it back over decades. Raising the interest rate 2%, if that's what the number is, adding 2% to the interest, basically, and you'd be assuming you're gonna pay back that debt over decades, just doubled the price of a college education. Even though it raised tuition. That's the problem. That's my contention is when you do that, interest is an expense to people. At the end of the day, what's the difference, I would argue, between raising the rate and having to pay more on interest or having to pay more on gasoline. If you gotta pay back your student loan and you have locked in the rate, which a lot of people didn't because they couldn't afford to, now your college education cost just doubled. That has consequences for people that they will carry with them for most of their adult lives. Similarly, let's say you just happen to live in an area where you need an automobile rate. Well, the interest rate was so low, adding two percentage points to it dramatically raises the cost of a car. Actually, the interest expense increase on financing a purchase is actually greater than the inflationary impact on the price of the car itself and the gasoline you have to buy for the car. To me, I just don't see that monetary policy, once you have this kind of debt, is gonna be very effective in doing anything, whether it's inflation or anything else. Monetary policy, by the way, was invented 100 years ago. They knew about it more than 100 years ago. It was rigorously practiced 100 years ago. The idea was when the economy gets a little too vibrant, you raise interest rates and you slow everything down, meaning you reduce effective demand. Reducing effective demand by enough, you will calm the inflationary pressures. That's the society, at least the American society 100 years ago, in the governmental sense, was not a very leveraged society. In a corporate sense, was not a very leveraged society. Today, we live in a massively leveraged society. Even the relatively, by historical standards, modest increase in rates is inflationary in and of itself. It just raised everybody's expenses. By a lot. The very thing I would argue, and this is my personal view, so and I think I'm in the minority in this view, but you're worried about inflation, just raised everybody's expenses. You created the inflation. What are they supposed to do if somebody has a student loan and they can't afford to pay the student loan because the interest rate is higher? They're gonna have to get a raise. It's that simple. Let's look at oil. Well, how do you think oil comes to the market? What do you think stands behind a refinery? It's debt. How do you think they're able to afford to constantly retrofit the refinery for all of the environmental requirements that the refinery has to comply with? The refinery company borrows money, and now they're gonna pay more for it. Although a lot of energy companies are leveraged. If you're not gonna leverage, well, then you're gonna have less capital available. Equity capital is almost impossible to raise in the energy world. They're not raising capital. What capital they can raise or are willing to raise is more expensive than otherwise. Even equity capital, you raise interest rates, it lowers P/E ratios. It raises the cost of equity capital. If you make the capital more expensive and simultaneously do everything you can by selling Strategic Petroleum Reserve to lower the price of petroleum, maybe for very sensible reasons, are you gonna get more oil? You're gonna get less oil. If you get less oil, how is that gonna contribute to inflation? For all those reasons, I don't think the monetary policy that's being waged is gonna be all that effective. Oh, one other thing I should have mentioned. I should have mentioned at the outset. It just occurred to me right now. I neglected to mention it, so I'll mention it now. Raising interest rates, as you've observed, has also increased the value of the dollar. That makes U.S. exports a lot more expensive around the world and makes foreign goods cheaper to the United States. From that point of view, foreign goods are cheaper. That's actually fighting inflation, but it's also recessionary. Even with the greater purchasing power of the dollar in international markets, we have this kind of inflation where you can't raise the dollar much more or then we're really gonna have a recession. We've had 'cause we import a lot of goods in America, we've had the benefit of a strong dollar. It's the strongest inflation fighter you can get, and we're about to end the period of dollar increases because it's just the recessionary pressure is just too great. We'll have to see what happens to that. There you have it. By the way, it also raises the inflationary pressure for foreign countries because oil is priced in dollars. Oil might go down, but their currency goes down as well. The price of oil for them is going up. Inflation is a worldwide phenomenon. You have to solve it on a global basis. I don't think you can have a local solution to the inflation problem. That's another point I'd like to make. Anyway, I'm done. I think I've said enough on this subject, unless you think I should say more, Thérèse. Well, you might with the next question. It's quite a long paragraph with a few questions in it, but I'll just read it from beginning to end, and then we can take it from there. In past thought exercises, for example, in the Q2 2022 FRMO earnings call, as well as the HK commentary from the Q4 of 2021 and the Q1 of 2022, the idea is proposed that the Fed is currently trapped into letting inflation run hot for the long term based on taking the total collective U.S. debt and applying some uniform rate increase across all debt instruments and comparing that increased interest expense to current GDP to illustrate the risk of a contraction in GDP and subsequent recession. Here, management appears to assume that the vast majority of the total collective U.S. debt is essentially of short maturity, recurring, and non-discretionary, thus giving the rate hikes an immediate impact on interest expenses. What is management looking at to make the determination that this exercise is close enough to the real world to be useful? Could management break down? Well- Do you want me to continue with the rest of the question? Go ahead. Okay, sure. Could management break down this? I thought it was over. I didn't realize. I know. Keep going. Could management break down this explanation in a bit more detail as well regarding by what economic logic this additional interest expense is interpreted as being, quote, "taken out of" or reducing GDP to create a contraction? There's more. If the issue is a debt spiral, the Fed stepping in with money printing for tax receipt deficits on interest expenses and entitlements, then what is management looking at to determine that new U.S. Treasury issuances could not be made without moving rates and thus causing such a spiral to fund these deficits or that taxes could not be raised sufficiently to cover? Do you want me to go back to the first part of the? No, no. I get the basic idea, and you can guide me if I miss part of it, which I inevitably will. Basically- The entire debt of the country doesn't obviously mature in one year or even two years. There's some people. That's the problem with inflation. There's some people who locked in long-term rates. Other people didn't. It's dangerous to generalize, and that's true. However, what we can do is we can use indexes to get a basic idea of where we stand. The most important sector of the debt market is the part of debt market where the credit is questionable. I would argue the most important part of the debt market is the high-yield market. That's the market where the balance sheet's most leveraged. That's the market where if we had credit problems, that's where it's gonna be expressed. I think most people would agree on that. If I go to the high-yield bond index, I'm using the iShares iBoxx $ High Yield Corporate Bond ETF as a proxy, but there are other ETFs you can use, but I think you'll get a similar number. The weighted average maturity of the iShares iBoxx $ High Yield Corporate Bond ETF is 5.39 years. That's what it is. Here we stand, and we can say 20% a year, more or less. It's not exact, but I'm just rounding down. Twenty percent of the debt is going to mature every year in the high-yield sector, and that's what you have to worry about. In the banking sector, there's another part which are what they call leveraged loans. On one hand, they're the top of the credit hierarchy, but they're much shorter maturities. The average maturity might be something like three years. A lot more debt coming due. They're as dangerous. The banks like to make them because they have higher coupons than conventional high-yield. They have shorter maturities. The rates on bank debt are floating. Irrespective of maturities, whether you're three years or five years, whatever, on leveraged loans, the bank adjusts the rates instantaneously. That's another sector you have to use. That's the problem. Problem is that the entire debt structure of the country is vulnerable to high interest rates immediately. It's that the most credit-challenged sectors of the market are very vulnerable to high rates. That's the problem with monetary policy, and that's the problem with inflation. If it was uniform throughout the entire society, you could make generalizations as an investor or as a participant in economic activity. You could somehow adjust to it. The problem is it's not uniform society. What's going to happen is the least creditworthy segment of society is going to be the first credit segment of society to bear the burden of higher rates. That's what makes it so dangerous. It's not everybody. There are plenty of people who have 30-year mortgages, and they've locked in very low rates, and they won't have a credit problem. There are some people that are credit-challenged, and their rate is floating. There's some businesses. Now, that's certainly not the majority of the country, but that might be 10 or 15 or 20% of the country. What happens if they're challenged, those businesses are challenged by those high rates? They owe the money to otherwise creditworthy companies. The otherwise creditworthy companies are themselves 10 times leveraged. They just have good credit. A typical bank is 10 times leveraged. Doesn't have a lot of tolerance for credit problems. A small segment of society can create a big problem. That's sort of the way we're looking at it. We're not saying that a 1% or 2% rate increase is going to affect everybody, uniformly. Actually, we're saying quite the opposite. Sorry if I gave the impression that we were looking at uniformity in society. We're not looking at uniformity. We're looking at the stress placed on a relatively small segment of society. That stress by that small segment of society might be unbearable. Think of all the debt that's now packaged into tiers, and there are lower grade tiers, and there's very little tolerance at lower grade tiers. These would be the B-minus tiers, whatever. Leveraged loan packages, you'll see the consequences, I believe, within next year. They won't be slight disruptions, in my opinion. We'll see what happens. Just curious, I know that you touched on this. The last part of that question was, what is management looking at to determine that new U.S. Treasury issuances could not be made without moving rates and thus causing such a spiral to fund these deficits or that taxes could not be raised sufficiently to cover? Well- Go ahead. Well, taxes is easy. Let's do the tax part of it first. We'll just look at the figures, I believe, and I'll just I have my notes. Bear with me. I'll check it in one second. I'll be with you. Give an accurate number. I believe, and we'll see if I'm right. I wrote this down. There's 125 million taxpayers, income taxpayers in the United States of America. 125 million people. That's it. The workforce of the United States, I'll give you some numbers. I wrote this in the compendium, so most people won't believe it, but these come from the United States government. The U.S. labor force, meaning the people who are working and pay taxes, in the year 2000, there were 159.6 million people that worked and paid taxes. Today, there's 158.8 million people who are paying taxes. Now, of those 158.8 million people who are in the workforce, about 30-odd million of them have income that's so low, they don't owe any taxes, or at least nothing that's requires them to file a tax return. Therefore, the entire system is dependent on 125.8 million people. Now of the 125.8 million people, 23.3 million people work for the government. That's both federal government, state government, and local government. Now, all those people pay income taxes, of course, but their salary comes from the taxpayers. It can come from no other way. If you net them out, the 125, let's say minus 23, it's 102 million people that are carrying the burden to support a population of 335 million people. Most of the people, we let out the lower income people. Most of those people are not far from the 40% bracket. Now, 40% in federal income, they're in the 30s for sure. That doesn't count state taxes, doesn't count local taxes, doesn't count property taxes, doesn't count sales taxes, doesn't count gasoline taxes, and so on and so forth. The average person, if you look through, is paying well over 50% and arguably probably over 60% of their income in taxes. We can't raise taxes on those people unless you wanna have inflation, because they'll just. They'll demand, and they'll be entitled, and they'll get it. They'll demand increases. By the way, it's even worse than that because there are some inelastic expenditures that people have to make that they didn't make in the past, which is health insurance. A lot of people are insured by their employers, but the employers have gradually inexorably passed on the cost of the insurance to the employees. You bring home X dollars in your paycheck, but you also have to pay for your health insurance. You have to count that as well. There's not a lot of flexibility in that. Now, as the first part of the question, you know, will the rates increase because the federal government is issuing too much debt? The only reason, the only way I would see that happening is if the creditworthiness of the United States were to come into question. In that circumstance, yes. They try issuing debt, it's gonna be a problem. At the moment, nobody really questions the creditworthiness of the United States. The history of the last 120 years is littered with nations. Everyone took their bonds because nobody questioned their creditworthiness, and perhaps they should have questioned their creditworthiness. Lots of countries should have had their creditworthiness questioned. Wasn't questioned, and people lived to regret. It may one day happen in the United States of America. I hope it never does, but you can't exclude the possibility. If it were to happen, that would be the circumstance, if the creditworthiness of the nation were questionable. I hope that is thorough and complete. I believe it is. The last question. Good. Are inflationists underestimating the unique political and military advantages that the U.S. and U.S. dollar has when making historical analogies versus, say, Turkey, Argentina, or any other countries with twin deficit issues? Okay, well, all I can say to that is that there was a time 100 years ago that Argentina had a higher standard of living than the United States. Argentine debt considered more creditworthy than U.S. debt. Matter of fact, there was a time that Czarist Russian bonds were considered more creditworthy than American bonds and U.S. Treasuries. These things have a way of changing and changing very, very rapidly. If you look at the twentieth century, how many nations can we count that were once creditworthy and where the bondholders got nothing? I literally mean nothing. We say the Austro-Hungarian Empire, the Ottoman Empire, the Czarist Empire, the German Empire, the Japanese Empire, the Republic of China. Not the People's Republic of China, the Republic of China that became the People's Republic of China in 1949. If you own Chinese bonds, what happened? You can paper your walls with them. The twentieth century is replete, and these are all big countries. I'm not even talking about the small countries. Twentieth century is replete with examples of nations that just borrow too much. Many, many, many examples. We could have a very nice lecture go on for hours just listing the countries that got themselves in trouble. The temptation, if you start from the creditworthy posture, is irresistible to borrow money. It was only 100 years ago that the British gilt was the signature security in the world. Then Britain fought the First World War and became a creditor nation, never really recovered. It happened really fast. We need to be mindful of that. I just try to stay out of debt myself. At FRMO, you can see, we pretty much stayed out of debt, and that's the way we like it. I personally would recommend that for a lot of nations as well, but of course, that's not realistic, and that's not going to happen. There are very few circumstances in history in which debt, while not viewed as excessive at the time, proved to be excessive and became problematic. It's hard to imagine a nation that used debt aggressively that didn't ultimately have a very serious problem. In most cases, they just didn't pay it back or it became debased, so they did pay it back, but they paid a pile of dollars. That became problematic. That's the best answer I can think of giving. I hope it's successful. That was the last one submitted before. I know that you probably can't discuss this, but I know that there are shareholders who are very curious about Texas Pacific Land Corporation, and I just wanted them to know that we're not ignoring it. But I'll leave it to you to say why perhaps you can't talk about it, certain aspects of it. Well, it depends on the question. Why don't you give me a question, and I'll Well, it has to do with the proxy vote now and the many proposals that are on it, especially the share issuance one. I'd rather not. You understand. If you're on a board, I hope you understand there's limits to what you can say and be a lot of fun to talk about it, but just can't talk about it. It'll have to remain there, and what will be will be. Thank you, Murray. That's a good answer. I hope that that's satisfying to the shareholders who were curious about it. That was our last question. Well, it's probably not satisfying. The question is, what are you going to do about A, B, C and D? That's really the question. Of course, this is not the forum to undertake. No, you're constrained by being a board member, and I respect that, and I'm sure they do too. I hope so. Anyway, that was our last question. I believe that unless there are any other comments you would like to make, that brings us to the end of this conference call. Okay. Well, I just want to thank everybody for attending and listening, and I really must say, I think the questions are great. I enjoy them. Don't hesitate to submit them. If something we didn't address that's a concern of yours, I mean, we'll get you an answer. We're trying to be as transparent as possible. Just want to emphasize the cryptocurrency aspect of it that, you know, we're focusing on, even though it's a small part of our assets, it's very important to us. We're thinking about it constantly. Nothing is set in stone. If the world changes, we're not whatever our posture is with regard to inflation or cryptocurrency, we're not wedded to it. If it proves that circumstances are different than those we believe were going to materialize, we'll have no hesitancy in changing our posture. Hope you take that to heart. Again, thanks for listening and thanks for your support. Of course, we'll reprise this in about three months and look forward to talking to you then. Thanks a lot and good afternoon. Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.