Dr. William Pierce, physicist-turned-author of The Turner Diaries (1975–1978), argues racial homogeneity and government overreach fuel conflict, citing the Oklahoma City bombing’s methodology as coincidental while dismissing Jewish population claims in Nazi Germany. Currency historian Andrew Gause warns Treasury Secretary Rubens’ actions inflate the money supply, risking a 10% dollar devaluation and depression within six to twelve months due to $5.5T debt ceiling hikes, with Social Security’s $3T in bonds collapsing instantly. He advises tangible assets like gold—privately held by the Federal Reserve—not paper investments, predicting Clinton-era inflation (1977–1980) will repeat under a Republican president and Democratic House. The episode reveals systemic financial manipulation and racialist ideology’s enduring influence on fringe economic strategies. [Automatically generated summary]
Indeed, it is morning there after 2 o'clock in the morning, so it was nice of you to rouse yourself out at this hour.
Doctor, I guess I'd first like to know, since we've got more time than 60 minutes to do a piece, I'd like to know the metamorphosis involved in somebody who was a physicist in a hard science becoming a fictional author of the kind of book that you wrote, the Turner Diaries.
There were two, you say, movements going on at that time, which affected life on the university campus where I was teaching, as well as around the country.
One of these movements was the anti-war movement.
The other was the so-called civil rights movement.
Now, this was at a time when our government was sending, drafting and sending young Americans overseas to fight the Viet Cong, and an average of 100 a day were coming back in body bags.
And here we had people running through the streets in Washington, D.C. and in some cases other large cities in America, waving Viet Cong flags and chanting Viet Cong slogans.
unidentified
And the government wasn't doing anything about it.
How can a government like this claim to be fighting a war in America's interest, asking young Americans to die and allow the allies, the supporters of that enemy, to be demonstrating in our streets without opposition?
I had to see if I could understand what was happening and what the implications of this were for the future.
Without going into all of the details, the civil rights movement also was turning the country upside down, calling all of the old values and old ways into question at that time.
No, no, I would not have been out in the street demonstrating on behalf of the enemy.
What I could not understand at that time was what the proper position of the government should have been.
Should it have been to try to fight this war to win, in which case this demonstration on behalf of the enemy's partisans in the streets simply would not have been tolerated?
Or should it have been simply to say, hey, we made a big mistake.
We're not going to continue to sacrifice our wealth and our blood in this conflict, which is none of our business, and pull out immediately.
On balance, Doctor, which one do you believe, even with today's perspective, would be true, that they should not have been an enemy of ours because we should not have been in that war?
You know, if it had been my choice to make, I would have stayed out from the beginning.
But once in, once committed, once having made a major sacrifice, my inclination would have been to go ahead and finish the thing quickly and decisively.
I was also concerned by another movement which was going on simultaneously, and that was the so-called civil rights movement, in which we had all sorts of demonstrations going on, which,
again, called into question our values, our standards, our lifestyle, and I really couldn't understand the significance of the of these things.
I had to stop and back off, try to figure out, now, what does this mean?
Here we've got people claiming that this zegination is okay.
We've got people claiming that it's not proper for a group of people to have self-determination and to have a homogeneous society, that we have to mix it all up.
We have to mix these different races, mix these different cultures together.
What's going to be the implication of this for the future?
This is really quite a drastic change from the way we have done things in the past.
And one of the consequences of looking at what was going on in this Vietnam War movement and also in the civil rights movement was I had to do a lot more reading of history, a lot more thinking about the significance of these things than I had ever had a chance to do before as a student or as a professor.
unidentified
And I began coming to some conclusions and I began writing.
And a friend of mine said to me, this was the late Revello Oliver, who at that time was a professor of classics at the University of Illinois in Urbana.
He said to me, hey, you know, people just don't read this kind of stuff that you're writing these days.
People are interested in serious writing.
If you want people to listen to what you have to say, if you want them to think about the ideas that you believe are important, you've got to put it in the form of recreational reading for them.
Well, then you've jumped a question on me because I wanted to understand whether, in fact, from you, the Turner Diaries really was intended to be a real message carried in a somewhat entertaining form, and you have just confirmed that that is true.
So it really is.
It really is your message in that book.
unidentified
Well, yes, I had a very definite message in that book.
The message, however, is not the details of the plot.
an increasing cosmopolitanism, and accompanying that, a growing alienation, a breakdown of the bonds of community, a loss of the feeling of identity that we had felt as a people up until that time.
Code words, a few code words, but drawing from the 60-minutes conclusion, which you seem to sort of grudgingly, you know, confirm, that to get America back or to solve this growing problem as you perceived it, the blacks, Jews, even Hispanics basically must go?
Well, any society which is to remain healthy has to maintain a reasonable degree of homogeneity.
You have to have a consensus among the people.
You have to have a shared sense of history, a sense of family, if the society is to hold together, remain healthy, and continue to move forward in a progressive sort of way.
Well, if you don't have homogeneity, that is, if you don't have a shared history, a shared blood, shared values, then you cannot really feel that you have a sense of responsibility to the community around you.
You tend to have excessive individualism, excessive egoism, and at the same time, an alienation so that the society as a whole has nothing to hold it together.
We all went through similar experiences in similar environments over tens of thousands of years before we came to this country, conquered it, settled it, and began building a new civilization here.
I think that it's reasonable to say that we are, that we have always fought for the things that we believe were worth fighting for in the past.
It was seldom that we believed that it was proper just to roll over and play dead when we were attacked by people who wanted to take away from us our land or make us change our way of life or deprive us of our freedom.
Well, I guess that different tribes perceived us in different ways, but I think that certainly many of them must have looked upon us as invaders, as a threat to their way of life.
You know, the course of world history has been one of conflict between peoples, between races, with the ones who were strong being able to take territory away from the ones who were weak or were not willing to fight and imposing their genes and their values on the land.
Probably not one of your favorite people, Reverend Louis Farrakhan.
Well, very interesting, actually, intellectually interesting individual to me.
I would also like to interview him, but you're, I'm sure, familiar with the way he feels about the black race in America and the white race in America.
In many ways, you are strange intellectual bedfellows, are you not?
I've seen him in some good interviews in which he has suggested that, in fact, in America, the blacks, the whites, should physically actually go their separate ways.
In his case, he would like he has suggested some strip of appropriate land to where America's blacks might go.
Yes, you know, it's a coincidence that you mentioned him because prior to the 60 Minutes interview, I asked a friend in New York to send me a video of any Wallace interview so that I could familiarize myself with his style.
And my friend sent me a video of an interview that Wallace had done a couple of months earlier with Louis Farrakhan.
And so I viewed that interview the day before my own interview with Wallace.
I thought Farrakhan did an admirable job of presenting himself in a way that would strengthen his position with his people.
I've always admired certain things about Farrakhan.
I'm sure that we would disagree on many things too.
But he is one of the black leaders that I have had the greatest respect for.
Okay, well, you need a certain amount of genetic variability in a population if that population is to be able to respond to changes in the environment.
But we have gone far beyond that with the things that are happening today.
When we were living in Europe, we always had quite a sufficient degree of genetic variability to take advantage of a fairly wide range of circumstances.
There is an optimum degree of genetic variability for a population.
From what I have seen in the news media, they have some pretty wacky religious ideas and some even wackier economic ideas.
They believe that a certain amendment to the Constitution wasn't properly ratified, and therefore the Federal Reserve System is illegal, and therefore they are entitled to print their own money or something to that effect.
Is there any way that you can see a justification for their, in effect, constructing their own monetary system, issuing liens upon which they wrote checks which were no good and blah, blah, blah.
Is there any way you can see that truly justified by their complaint regarding the Fed?
Yeah, you know, as long as they do this among themselves, of course, more power to them.
I think that the unfortunate thing is that they were able to get some other folks involved in this thing by sending their checks out to buy things that they wanted, like new tractors and so on.
They should have thought this thing through a little more carefully because that brought the federal government into it.
But I do sympathize with their basic position of just wanting to be left alone, of feeling that the government was pushing them too hard, even before they did these things which the government decided it had to step in and deal with forcefully.
Well, if we are to maintain any form or level of civilization, then there has to be some rule of law.
I mean, their mortgages could not be paid, so they simply stopped paying them and so forth and so on, and the checks and the death threats issued with regard to local officials.
Now, should the FBI or should a government or a law enforcement group be doing essentially what's being done right now, and that is trying to bring them to justice?
Yeah, you know, if I go out and take money away from my neighbor who is not part of my thing, so to speak, then I expect the government to step in and say, hey, you can't do that.
One of the things that I've always been careful to do throughout my adult life is never borrow money, never be indebted to a bank, never be in the position of having to make payments that I might not be able to make someday.
These folks got themselves into that position where they began seeing the banks as their enemies, as taking advantage of them because they were overextended and the loans that they had taken out.
And I understand that the government has to protect the interests of the folks outside the Freeman community as well as the interests of the folks inside the Freeman community.
Well, you know, as I said before, I don't know any of these folks up there personally.
I don't know much about their organization except what I've seen on the news, and I hesitate a little bit to give advice because I don't really know what all of their considerations are.
If I were into this thing as deeply as they are, you know, facing the prospect of many years in prison, I might be inclined just to stick in there and fight it out.
If I could go back, however, and start over again, I'd say, hey, I did this the wrong way.
I think that it's possible to withdraw, to get the government out of my hair to a certain extent, to keep my kids out of the public schools without getting entangled with the FBI the way these freemen have.
And if the government could offer them some sort of a deal where they could make restitution for some of the economic irregularities that they are alleged to have been engaged in, but didn't have to go to jail.
unidentified
I think maybe I would look at a deal like that long and hard.
Say, hey, I didn't really start this off the way I should have.
If I can get out of this without having to spend the rest of my life in jail, maybe I'll try to do that and then go my own way a little bit more prudently in the future.
When I first made contact with him, he had phoned one of my people who is in charge of book promotion and said he was interested in publishing the Turner Diaries.
unidentified
And so I called Stewart.
And he was in a meeting at the time.
But when I gave my name, his secretary put me through.
Well, you know, I hope that we don't have to go through all of the Bloodshed and the unpleasantness that I imagined back in the 1970s when I was writing the book.
I would hope that we can wake up and try to choose a more prudent course before we get involved in this all-out warfare that I imagined.
But if I look at history, I don't see a lot of grounds for hope.
It seems like we have very seldom wakened up to the, you know, and chosen a more prudent course.
It looks like we've generally done things the hard way.
We've generally done things the bloody way.
And I don't have a lot of hope that we won't end up going through a great deal of unpleasantness in the future.
Now, again, asking you, would you, in other words, your personal preference, would you see this as inevitable or even something that you would want to happen?
But while you suggest that about yourself, you're saying you will not practice what you, in essence, preach, that we must become a participants in change.
I mean, the specific plot in the book, which involved nuclear weapons and a lot of other unpleasant and violent things, that's not something that I look forward to with eagerness.
I tried to make a gripping adventure story so that people wouldn't put the book down after the first few pages and say, ho-hum, I've got better things to do.
All right, are you pleased by or not pleased by the fact that apparently Timothy McVeigh, the man accused of blowing up the Murrow building in Oklahoma City, apparently embraced your book and your story almost as specific instructions.
I think the inspiration for the bombing in Oklahoma City was the massacre in Waco, Texas that took place two years earlier.
And you might ask Bill Clinton and Janet Reno whether they're pleased that what they did in Waco in killing all those women and children has inspired Timothy McVeigh and others to blow up the federal building in Oklahoma City.
He was the subject of the lead story on 60 Minutes this last Sunday.
He is an author, Dr. William Pierce, author of the Turner Diaries, widely believed to be sort of a Bible to extremist right-wing groups.
And we're going to ask more about that here in a moment.
We have the luxury of having more time than Mr. Wallace, so we explore a bit.
Back now to Dr. Pierce.
And where we left off was with Timothy McVeigh in the Oklahoma City situation.
And Dr. Pierce, while indeed his motivation for doing what he did may have been revenge for Waco, I think that's clearly probable.
Again, his method was nearly identical to that method described in your book, where I believe a militia member, white militia member, drove a truck full of fertilizer bombs or a big bomb under an FBI building in Washington, D.C. and blew it to smithereens.
Even according to Mike Wallace, down to the mix of the fertilizer, that close.
And Timothy McVeigh, who I understand was a student of military science, must have been aware of this, that it's the weapon which has been used traditionally, and it's the weapon which makes sense if you want to do large-scale damage to a strong structure like a concrete building.
A lot of people are speculating that the government blew up the building themselves to serve as a pretext for cracking down on the militias and for outlawing firearms.
I don't believe the government blew up the building themselves, but I always wondered what happened to these unexploded bombs that they were talking about early in the newsreel coverage of this thing.
And I think there was an explanation that they were there for training or they were there.
I can't exactly recall, but it did sort of drop off.
Then there were people who said that, well, there were two explosions, not one, and they attempted to produce seismic records that indicated that was so, and, you know, and on and on.
And then, of course, John Doe number two, we could go on and on about the sort of urban myths, maybe some of them not myths that have grown out of this.
Well, as I said, I was following all this, and it was a while before the conclusion was reached by the authorities based on their investigation that, in fact, this had been a truck bomb using ammonium nitrate fertilizer.
But at some point, you must have begun to see the fact that there was a connection or that people would perceive there was a connection, one of the two.
You know, it was quite a while later before there were reports that, what's his name, McVeigh, had read the Turner Diaries, that he had talked about it to some of his Army buddies.
You know, I've watched the news reports of the World Trade Center bombing, too.
And it came out, I think, a little bit more clearly and a little earlier in that bombing that it was a truck bomb that was used in the World Trade Center bombing.
Now, people don't ask me, say, well, don't you feel responsible for the World Trade Center bombing?
I mean, after all, it was a bomb similar to the one you described in the Turner Diaries.
It's clear, again, that the motivation for that bombing was not something that these folks who blew up the World Trade Center had read in a book.
It was what our government has actually been doing over in the Middle East.
And these folks wanted to send a message to the government and say, hey, we don't appreciate the fact that you're supporting Israel and Israel is killing our people.
And I think, again, in the case of the Oklahoma City bombing, it was somebody who wanted to send a message to the government about something that the government had actually done, namely the massacre in Waco.
It wasn't an inspiration that came from reading a book, my book or anybody else's book.
I believe, in other words, that these incidents that we have seen happening almost simultaneously on a historical scale, the World Trade Center bombing, the Oklahoma City bombing, the Unibomber and his mail bombs, I think that this is just the beginning.
I don't share a lot of those sentiments that are common in the left wing, but I do sympathize with some of the things that apparently were bugging him when he wrote that manifesto.
Specifically, yeah, he has complained about what this over-industrialized life style has done to us as a people, what it's done to the world.
And when I was studying history, I was struck by the changes that the Industrial Revolution made in the life and in the thinking of people.
It took people off the farms, out of the countryside, away from the villages, and urbanized them.
It packed them together into factory towns, into mill towns.
And I think that by and large, this was an unhealthy change.
Now, I'm not a Luddite like Mr. Kaczynski.
I'm a bit of a technology freak myself.
I've always been interested in computers and other devices.
But I do think that the way in which technology has been applied to our lives has not been well thought out, that it has had some very unfortunate consequences.
And I could see Mr. Kaczynski agonizing over these things in his manifesto, and I sympathize with a lot of what he said.
Often I wondered why he chose some particular guy as a target when I couldn't really see that this guy was responsible for the things that Mr. Kaczynski was complaining about.
And I got the impression that maybe Mr. Kaczynski was acting more out of frustration, out of the feeling that he just had to do something and hadn't really worked out an effective plan of action to change the things that he found disagreeable.
Well, the folks who were fighting against the government in the Turner Diaries were concerned about a specific threat, and that was this computerized identity card system that the government was developing.
And the computers were in the basement of the FBI headquarters, and so that's why they put the bomb there.
But I don't think that he hoped to stop some of these industrial programs he saw as life-threatening by killing some forestry official or some professor at a university or what have you.
All right, Timothy McVeigh, for a second aside, how do you feel about the fact that your book has been embraced as sort of a Bible of the extreme right?
That's what these people up in Montana are, the Montana Freemen.
There are people with other ideas.
And I doubt that all of the people who are opposed to the government for one reason or another could agree that the Turner Diaries is a Bible for them.
I think maybe a lot of people who are opposed to the government find certain ideas of interest in the Turner Diaries, but I don't think that as a whole they would accept it as a Bible.
I don't believe that I or anybody else continues to be conscious and to be able to think about things and observe what's going on after his body has been destroyed.
Wouldn't it be these very men that you describe, that you admire, values you admire, who would bring about a system of identification that you would see blown up?
If there were to be such a thing, and many believe that we are headed in that direction, would it not be instituted by the very people you suggest you admire?
Very interesting, a physics professor, and then I guess retired and became an author.
And many people say his book forwards the idea of hatred, in fact, culminating in a race war.
It is a fictional work about a race war with a message, and we discussed that, and I think it's an important aspect that you really did want the message out, Doctor.
Now, I think arguably, whether it's racial hatreds or it's hatred of the government, it is certainly these days increasing, and it's headed toward something.
Now, one side preaches we must end this stupid, wasteful hatred between people because of races and differences that we have.
The other side, and I think it fairly is your side, sees that as increasing or even wants it to increase.
One way or the other, we want to have some resolution.
We'll have some final resolution in our society, a race war, or some way to cure this hate.
Which way is it going?
unidentified
Yeah, let me interject something here.
Talked about the internet in one of your commercials just a minute ago.
But I think that the only way that we are going to stop it is to look at the causes of it and try to undo those causes.
I think that when we have this conflict developing between the races as a consequence of these programs to force the races together, to force them to mix, we've got to say, hey, maybe this program, this idea that everybody will be happy if we force them all together, maybe we were wrong on that.
Maybe what we need to do is the sort of thing that Mr. Farrakhan has been advocating.
We need to let people do their own thing.
We need to allow them to separate if they want to, and then perhaps we can decrease some of this hostility.
Yes, you know, there was a civil war going on in the book, and the revolutionaries had captured Southern California, but they had not pacified Southern California.
Well, there were people who were hung for having betrayed their race.
I remember a specific example of a real Tor who was hanged because he had participated in a program which provided lower-cost housing to racially mixed couples, for example.
And the revolutionaries regarded him as an advocate of this program, which they regarded as racially destructive.
And so he was hanged not only as part of the pacification program, but as an example to the rest of the population.
We got ourselves into a pretty unfortunate mess in this country by starting off with a slave-based economy in the South back in colonial days.
When that slavery came to an end during the Civil War, we dumped three million freed slaves into the general population and laid the basis for the problem that we have today.
A lot of people thought they saw a solution to this problem, thought they could head off a lot of unpleasant consequences by sending the slaves and their descendants back to Africa.
And President Lincoln looked with favor on this program and was helping to formulate a plan for repatriation at the time he was assassinated.
Well then this is asking you to speculate, of course, but just out of curiosity, how would you see a separate white nation or how would you see it delineated from a separate black nation?
Well, it's just something that I imagined you would have thought of since you feel that that is the only possible direction that will look or ultimate direction, whether we have a race war or we don't have a race war that will cure this problem.
So then you must have occasionally imagined the differences between these governments, structures, lands, peoples.
Well, no, I mean, I don't try to design the type of government that some other group of people will have.
I don't believe that we should impose our ideas about government on other people.
I've never agreed with this idea that it was America's mission to make sure that every country in the world had a democratic form of government.
I don't believe that we should have taken upon ourselves the burden of changing the religion of the people in Africa or India or anywhere else.
I think that we should concern ourselves with our own problems, our own people, our own development, and let other people have the form of government, the religion, the institutions that they find congenial to them.
You know, after the First World War, Germany was in pretty bad shape economically, socially.
They had a government known as the Weimar Republic, which Tolerated homosexual behavior, which tolerated all sorts of things that a certain liberal set found very congenial, but which was very distressing to the more tradition-minded component among the German people.
And Hitler developed policies and programs which restored Germany to health, not only to economic health, not only to political strength, but to moral and spiritual health.
He managed to get all of the German people, or virtually all of them, behind him with this policy, these policies that he formulated.
He did a job which was nothing short of miraculous.
And I'm not the only one who has looked upon these policies with a degree of admiration.
Winston Churchill, back prior to the Second World War, expressed his admiration for what Hitler had done in Germany, for Hitler's policies and programs.
Well, you know, one of the things that Hitler and his followers were determined to do in Germany was to free German society from the very disproportionately strong Jewish influence that had built up during the period of the Weimar Republic.
The German newspapers were disproportionately in Jewish hands.
The legal profession was very heavily in Jewish hands.
The Jews had developed a disproportionately strong influence in the universities, in the arts.
Well, the Jews have, by working together, by having a strong sense of racial solidarity, by cooperating with each other, had a great advantage toward doing that sort of thing in every country that they have moved into.
And Ms. Adolf Hitler, of course, went far beyond that when he then, in lands he successively conquered, collected generally the Jews and made a good shot at genocide and killed millions.
That just as the government in this country rounded up citizens of Japanese descent and put them in internment camps or concentration camps, the same thing happened in Germany and in the German-occupied territories during the Second World War.
I'm becoming a little hoarse, and probably you'll want to allow some of the callers a chance to call in, and I think I'll let you talk to those callers.
Now, currency historian Andrew Gause is a nationally recognized authority on the U.S. monetary system.
Oh, you're going to like this.
A member of the Industry Council for Tangible Assets and Life member of the American Numismatic Association, that's collectible coins.
Mr. Gause has been an invited guest on more than 450 radio and TV programs where he has spoken on a wide range of financial and political issues.
A regular guest on Washington, D.C.'s blanket culminate.
I've never heard of that one.
And recently featured on PBS-TV's Tony Brown Journal, Mr. Gawes strives to alert listeners about how throughout our nation's history, America's monetary policy has been shaped and controlled not by elected officials, but by private vested interests.
Mr. Gauss was recently invited to speak to a gathering of state and federal officials in Ogden, Utah, where he addressed the problem of our national debt.
Oh, we'll talk about that.
Outlined a program of monetary reform based on a return to constitutional public treasury system.
Many of his lectures are now available on audio tape, including the definition of money, the Bill of Rights, the Federal Reserve, and on and on and on.
A lot of things you're going to want to talk about.
The truth about money, megaflation 2000, the ravages of inflation, denominating your wealth.
Well, basically what's going on, Art, is we don't have a closed sum game.
And the reason for the run-up in gold and the reason for the run-up in the stock market is all this fresh money that came into the market as a result of Treasury Secretary Rubens shenanigan by taking the money from the Civil Service Trust funds and converting it into instant money, if one.
Well, they're talking to the wrong guy, see, because as the Secretary of the Treasury, his actions were proper and prudent.
In other words, he acted to save the Treasury of the United States.
But as the trustee of the government employees trust fund, to my mind, he breached his fiduciary responsibility as a trustee of that fund.
He allowed the fund to be effectively looted.
You know, he took an IOU from a deadbeat, effectively.
If, in fact, the nation is on the brink of default and his action was taken simply to avoid default, then wasn't he breaching his fiduciary responsibility as the trustee of the trust fund?
What most people don't realize is that the majority of the money in this nation is not in the form of cash or in the form of demand deposits at the bank, but it's in the form of long-term Treasury obligations that have anywhere from an 18-month to a 30-year maturity.
Well, that's right, because what has happened is over the years, the government of the United States has convinced we the people through various maneuvers to establish different trust funds.
Now, there's some 170 different trust funds that we've established as we the people for various things, from fixing our roads to building new airports to our Medicaid trust fund and our social security trust funds and our government employees' retirement funds.
You have almost $3 trillion of hard-earned money.
I'm not talking about pie-in-the-sky money because each week when you see those deductions come out of your paycheck, that's current money that you just earned.
And it's remitted right into a big bucket, effectively, because it's not segregated into the trust funds.
What happens is the government takes all the money that comes into the trust funds every day and they replace it with IOUs, Treasury bonds.
So $3 trillion of the national debt is owed to trust funds that are earmarked for various things.
Now, if you look, for example, at the Highway Trust Fund, first of all, the condition of our roads is deplorable, but there's $160 billion sitting in the Highway Trust Fund.
Why can't we fix our roads?
Because it's $160 billion in IOUs, in Treasury bonds.
And until they mature, the money's just not there.
So although that's where those people that tell you that this whole national debt is a mirage, that's where they get it from.
Well, it has been suggested there are people out on the fringe who say, look, why don't we mint a $5 or $6 trillion coin, and that will cancel the debt.
But, you know, I'm reading in between the lines with the Fed here, and they've actually made the following statement that we're not as concerned with the paper money supply as we are with the electronic money supply.
And I can understand that because the paper money supply, like I said, it's only $500 billion.
But the electronic money supply, Art, that's almost $5 trillion.
So as long as we leave them with the power to electronically create money, I think they probably wouldn't squeal too loud if we take the notes back.
While we're on that subject, I recall an interesting statement by John Major in England.
And he said we are in extremely dangerous economic times that literally trillions or a trillion dollars or more could change hands electronically across the world, flashing across the world overnight.
Well, this increase in the debt ceiling, okay, if it would have just been proposed straight and clean, an increase in the debt ceiling to $5.5 trillion, I think that would have been enough to set the world on its ear.
And they would have just raised their eyebrow at that.
So by going through these machinations, we're able to wind up in that location with a debt ceiling increase of half a trillion dollars, and no one is any more concerned.
As a matter of fact, most people are breathing a sigh of relief that we're going to come to an agreement.
What the Congress is saying to the people, what the people should understand, is that the Congress is saying we want to raise the debt ceiling to $5.5 trillion.
Then we're going to print a half a trillion dollars worth of bonds.
And then the Federal Reserve, if necessary, will create a half a trillion dollars in order to buy those bonds.
So, see, there's no shortage of money.
There's no crowding out effect.
There's actually an increase in the supply of money.
And proportionately, you know, one man in a hundred can't figure it out.
They can't diagnose what's going on.
By increasing the money supply 10%, you're going to decrease the value of the dollar by 10%.
um if you had to make a wild guess and they always do come in and save it and manipulate where will the smoke and mirrors and capability to manipulate any longer simply under the best of circumstances no longer be possible?
There was tremendous arm twisting to buy that issue of bonds.
Yes, I would agree with that.
I see.
I will say that the announcers on the financial news channels were amazed at the quantity of the debt that is being brought to market.
They just, never before in the history of this Republic has this quantity of debt been brought to the market.
And it's going to affect one of two things.
Either A, the federal government will crowd out all the private borrowers, thereby driving interest rates up, which in an election year is not going to happen.
Or B, the more likely scenario is they will simply create whatever supply of money is necessary to pay all this impending debt, and it will seem like there's no problem because, Art, you know, all that freshly created money's got to go somewhere.
It'll go into the stock market.
It'll go into gold.
It'll go into real estate.
And it'll lead to a general euphoria.
I mean, you can track this back in history from the founding of the Federal Reserve.
I hate to think of the implications of a roaring summer economy, a roaring economy into the election, a roaring Dow, you know, jobs everywhere, plenty of money everywhere, plenty of money that you can borrow, low interest rates.
It just breaks my heart, but the Federal Reserve and the current administration or the Federal Reserve and the administration that they choose work hand in hand with each other.
The Fed cooperates with the president if they want to get him reelected.
And in this case, Alan Greenspan's coming up for renomination next month.
And the recent interest rate drops should show the fire being lit in the stock market and the real estate market's starting to stir.
Unemployment is down.
You're going to see a roaring, booming economy.
The problem is that the person who already has amassed a pile of dollars and plans on getting through the next five years without losing purchasing power had really better wake up, especially if those dollars are stored in fixed return investments like bonds.
And I'll tell you who is pitting the husbands against the wives.
You know, it's like every week my wife got her hand out for a few more dollars, brings home the same amount of groceries.
And if I didn't know better, I'd be mad at her.
Well, how are you wasting this money?
I'm giving you the same money I've been giving you for the last five months.
How come you're bringing home less groceries every week?
You must be stopping off at the bingo parlor.
So this perception, this, you know, you don't know who to point your finger at, it harkens back to the Jerry Ford administration when he used to wear that button, whip inflation now.
Well, there are many profound arguments about this, and I am not necessarily a detractor of the Feds.
In other words, constitutionally, only Congress should be minting money and controlling the supply of money.
But when you consider the alternative to the Fed, in other words, I'm kind of a supporter of the Fed, and that gets me in a lot of trouble.
In the sense that if we were to go back to our constitutional way of doing things, putting the money supply, interest rate adjustment, all the rest of that that the Fed now does into the hands of the people who are doing the unrestrained spending would just simply hasten the end date as far as I'm concerned.
Actually, what it would do is it would force prudence on them because they would.
See, the Fed enables the Congress to spend our children's money and our grandchildren's money.
If Congress did not have the ability to issue bonds, but only had the ability to issue notes, then the notes that it issued would cause the inflation that would get Congress thrown out instantly.
Now, I think both you and I agree that they're not crazy enough or maybe smart enough.
I don't know which would be the right way to think about it.
To allow default to occur, there are some who would argue you might as well let it crash and burn and rise from the ashes like the Phoenix and come up with a real system.
However, they won't do that.
I'm sure we agree on that.
They'll do what they are going to call the responsible thing.
See, the one thing that those people who say let it crash and burn don't realize, they think we're operating in a vacuum.
We're going to let it crash and burn and then we maintain the jurisdiction over the problem.
But the fact of the matter is that if the federal government defaults on its treasury obligations, it will be hauled before the international court in The Hague and foreclosed upon.
What would occur is the taxing authority would pass from the Congress to the bailing out institution.
Now, I suspect the bailer would be the International Monetary Fund or perhaps the World Bank.
But the way that the bailout would occur, for example, is a third party would create world currency units or North American currency units, and they would offer an exchange of these things dollar for dollar.
So if you had a dollar on deposit in the banking system, they would exchange it for one of these world trade units, and then your new power of taxation would pass to this new organization, similar to the Mexican bailout.
If you look at the Mexican bailout, what did the Mexicans have to do?
They had to funnel all of their oil dollars through the New York Federal Reserve Bank in order to get that bailout.
So we would be forced to do the same thing.
We'd be forced to funnel all of our tax revenues, say, through the World Bank or through the International Bank of Settlements or something on that order.
It wouldn't rise up as a free republic with its own monetary autonomy.
You know, forget that, because we would be, in the court of international law, we would be a debtor nation with a judgment against us, and the creditors could move to enforce those actions up to and including UN sanctions.
You know, all these people who have mutual funds, who seem to think that it's, you know, you can get in and out very easily, have never tried to get out during a falling market.
Everyone in a mutual fund would immediately see their asset value evaporate.
If they could get a sell order through, they'd be lucky to come away with half of their money.
So effectively, you'll be able to wipe out a big pile of existing monetary values and spread it out wide.
Because although it's, you know, a hundred or two mutual funds, they represent the capital of, you know, a million or two investors.
So you catch them all in one big net, so to speak.
It would be something like, you know, 4 o'clock in the morning, the break would have already been felt in Tokyo.
You know, at Citibank in New York, they would know that the break is happening.
The rest of America's asleep.
You'd wake up 9 o'clock in the morning and the financial markets would be in chaos.
The long bond would have tanked two, three, maybe four points overnight.
Gold would have shot up in multiples of its trading range.
Well, you would see trading limits because remember, we don't trade gold anymore.
The physical possession gold market would shut down instantly because the futures market, the derivatives market, would have reached its limit for the day and would have stopped trading.
So the official price of gold will be bogus.
And no one who holds physical possession gold will sell at those levels.
So what you'll have is the derivatives market relating to gold will collapse, much as the 10 market did.
And then the physical possession market that exists after that, and goodness knows, you have three and a half times the total supply of gold on the planet today is being risked right now in the derivatives market.
So that if every trade were settled in the derivatives market, it would take three and a half times all the gold that is already above the ground.
A derivative is something that derives its value not from the item itself, but from the right to trade that item.
So that if I said to you, Art, I'm going to give you the right to buy 100 ounces of gold from me in November for $425, even if I don't have the 100 ounces of gold, even if you have no intention of buying it, we can gamble on the price of gold.
It's not having physical possession of the item, but rather having a contract that derives its value from the ability to buy that item.
So derivatives can be bought on bonds, on stocks, on gold, on commodities of all kinds.
And that's, you're right, what got Orange County in trouble because the treasurer of Orange County figured that interest rates were going to go down, and he bet a bunch of money.
He bought the option or the right or the obligation to buy a certain number of bonds at a certain date in the future.
And when that date got there, the bonds were worth far less than what he was paying.
That's how he lost all that money.
So derivatives market in gold means that if the average person today wants to buy gold, he calls up his Merrill Lynch stockbroker, whoever he does business with in stocks, and says, I want to buy gold.
And the guy says, well, you can buy the gold fund or the gold stock or the gold options.
And if you found a better professional gambler, he might have been more savvy than the treasurer there, who I understand was playing well beyond his depth.
The Federal Reserve Bank's Open Market Committee encourages the use of derivatives because they use them to shelter or to hide their financial maneuvers.
In other words, if the Federal Reserve Bank of New York decides that interest rates need to go down, and in order to make them go down, they should buy bonds, thereby driving down the price.
They driving up the price, driving down the yield.
They sell or buy derivatives of bonds.
They don't want to have to actually load up on bonds.
They want to be able to sell options or contracts and affect the market.
And the same is true with gold.
So I really believe that this entire market developed, this derivatives market, as a way to allow the big boys to manipulate the markets so that the average guy cannot figure out what's going on.
If you have a a a sharp rise in the price of gold, everyone panics.
But if through the sale of derivatives you're able here's the example.
Let's assume everybody tomorrow panics and starts rushing out to buy gold.
Normally the price of gold would skyrocket.
But if the Federal Reserve Open Market Committee can sell contracts on gold, thereby filling the demand, filling the supply, and causing the price to stay stable or at least not rise so quick, then they have the whole time that that derivative or that option runs to unwind their position.
And instead of the price of gold shooting up $100 overnight, it goes up $100 over three months, and nobody figures out what's going on.
Anyway, so, in other words, slowly move into tangible assets now.
Not only will it be worth money, but as the economy gets in trouble, it'll be really worth a lot more money or a lot more trading power or whatever is left of an economic system when the paper money ceases to be of great value.
And in a system where there's financial chaos everywhere and people are losing their shirts to stocks and bonds and other paper-type investments, tangibles shine.
And the person who has those tangibles will be able to swoop in and take advantage of bargains.
I mean, I remember in 1980, entire houses trading hands for $2,000 in silver quarters or for a couple of $20 gold pieces.
These are the types of trades that you'll be able to take advantage of if you've properly positioned yourself.
Now, if you're like everybody else in stocks and bonds, you'll be trying to get out with what's left of your skin.
So take a portion of your wealth and move it over to what the Constitution says is money, and that's gold or silver coins.
I publish some booklets.
I'll give them away to any of your listeners who use your name.
Educate yourself, find out what's going on out there, and then take action to protect yourself.
It's just that it's going to be distracting because it's going to be going on in the background all the time.
And I'm not prepared to let you go.
So we've got new $100 bills.
Now, ostensibly, our government is telling us that they are printing these bills to foil the counterfeiters.
And in fact, in the Bakaw Valley, in Lebanon, it's my understanding that Iran and others are quickly printing up counterfeit U.S. dollars with what I heard were actual plates they got hold of somehow.
Representative Jim McCollum revealed that to the people of the United States.
I found it shocking.
Not only did they sell him the press, but they sent technicians over there to align it and calibrate it.
And then, of course, he fell out of power.
The Aytolo Komani came in, and the press fell into the wrong hands.
And then, of course, the East Germans got the plates down there.
And so now, in the Becca Valley in Lebanon, is a printing press that prints currency that the feds refer to as super notes because they cannot tell them apart from the authentic thing.
So when the Federal Reserve Bank can't tell them apart, how on earth are you and I supposed to?
You have Republic National Bank shipping over billions of dollars in planes out of New York in $100 bills to Russia, where I understand there's over $220 billion in $100 bills circulating there alone.
And then you have the other capitals of Europe being flooded with this counterfeit money from the Becca Valley.
So you have so much in the way of $100 bills circulating in Europe that I think that, well, they understand what's going to happen a lot better than we do.
I think they're going to one day, very soon, outlaw or demonetize the old $100 bill in favor of this new $100 bill.
And in doing so, they'll be able to capture like $300 billion in money without ever firing a shot.
And if we are willing to not demonetize the old ones, but merely to trade them for the new ones, then aren't we, in effect, legalizing that counterfeiting operation?
I don't see anything even resembling Mad Max, folks.
You know what I see, Art, you and me on a rocket chair porch 20 years from now talking about how we would work all day for $100 and our kids down on the ground laughing at us.
Well, they may be laughing, and it may turn out that way, or they may be chasing after us, old folks, and instead of the rocking chair, we'll be seeing how far and fast our feet can take us from a very angry generation ahead.
I have a problem with the notion of allowing multinational corporations to import products into this country tax-free and then taxing the wages and the lifeblood of the American people.
You spoke earlier about the commodity market and the options market.
What would be the worth in looking at it that way?
And let's say that gold is $400 an ounce, and you say you have an approximate net worth of $400,000, that you went into the commodity market, the options market, say a year or a year and a half out and took a contract for 1,000 ounces of gold or the equivalent in silver.
I don't, I mean, the problem, again, the problem, my problem with the derivatives market is simply that it's an amplification of the problem.
So when the boom comes or when the bus comes, it's amplified by the derivatives market.
Now, for the average guy to buy contracts into the future, it's a risky proposition.
You might just as well lose all of your money as make any money.
So I prefer the physical possession market.
If you're going to buy gold, you buy it physical, you hold it in your hand, you store it yourself, you don't get any margin calls.
The worst that can happen is if the gold price doesn't rise, at least you're holding an asset.
If you buy an option to buy gold in the future and the price doesn't move, every bit of money that you put up in terms of premium is gone.
So while it could amplify your returns, it could certainly amplify your losses, and that's the main reason I don't like derivatives for the average investor.
Well, then the reverse of that, then let's say instead of that, that you take a certain amount of money, say, that you're willing to risk, whether it's $10,000 or $20,000, whatever, and you go to your broker and put it in the coin, what do you call it, held by the banks in New York.
The Roaring 20s were named that because of all of the hot money that was created to finance World War I.
And as it filtered back into the economy throughout the 20s, the similar situation to what we're looking at now, although the reason was different.
It was a war.
The reason is different from the current reason, but the effect is the same.
You had a lot of money going into the stock market, pushing prices ever higher, pushing real estate prices ever higher.
And ultimately, that inflation was followed by a collapse, which we're all familiar with, the Great Depression.
So I think the caller is essentially right, and his timetable pretty much agrees with mine.
Within the next 12 months, there will be some drastic shifts in the monetary values in the United States.
And he's right.
The people that have money are the ones that will suffer the most.
The average wage earner and the debtor, he's probably going to make out the best because he's going to be repaying his loan with dollars that are worth less than the ones he borrowed.
Yes, your guest forgot to mention one thing about one world money, and that is there won't be a debit card or a credit card, but rather probably a chip which would be inserted on the right hand or under the skin of the right hand or forehead.
Municipal Bonds and Foreclosure Risks00:10:17
unidentified
And this will probably be the mark of the beast, which is prophesied in the Bible to come just before the Antichrist rules the world.
I can't argue with that, but I just say to people who are waiting, if you're waiting for somebody to come and say, put this chip under your hand before you take action, I think you're waiting a little too long.
I suggest that by the time that occurs, if that even occurs, we will have already moved into a cashless society, and most transactions will be conducted electronically.
This will be just sold as a method of convenience.
One is IRS 6045B, which says basically, if you sell me Kruger Ants, I have to have your Social Security number and I have to report it to the Treasury.
The other one would be the Trading with the Enemy Act of 1917, as amended in 1934, which simply says at any time the President can outlaw the private ownership of gold bullion.
In that case, Kruger ants, Maple Leafs, all of that falls under the auspices of gold bullion.
So, I mean, I would urge you to trade your Krugerants for old circulated $20 gold pieces or even low-grade uncirculated $20 gold pieces.
The premium difference between the two.
In other words, a Kruger ants worth about $4.25 right now, and a $20 gold piece in its worst circulated conditions worth about $475.
For that little bit of difference, you might as well go with the insurance.
I could be wrong, but I just think that municipal bonds will suffer the same.
You know, unlike stocks, bonds are all tied together with one rope.
And the minute that the treasury bond yield falls, that's it.
It's over.
All of the other municipal bonds, corporate bonds, everything goes right along with it.
Unlike the stock market where one stock can completely collapse and the others can still continue, if there is any break in the long bond, it will drag municipal bonds, corporate bonds, just all brands of commercial paper right down the tubes with it.
So I'm just not a municipal bond fan.
I think anyone who buys a municipal bond at this level has to really have their head examined.
You know, you're looking at 6% long rates.
30-year money is 6%.
What's inflation?
3 or 4%?
You know, what's your real gain there?
You're almost losing money to inflation.
So I would really think carefully before I tied up my money for 30 years at 6%.
And instead of doubling those mortgage payments, pick up some survival silver, gold or silver coins that will protect you a lot better off than an extra mortgage payment.
If the U.S., in fact, defaulted on the debt, and if the international authorities tried to enforce sanctions against us, I have to wonder what role our military power would play, or would there be any such confrontation?
In other words, would we rebel at international action taken against us, do you suppose?
I'll tell you the one thing that does give me hope, though, is I see, and I'm not a member and I don't support or promote, the militias.
They are your last line of defense.
I think if the people decided that the military was going to act against us and the president called out the militia, I think he could count on the people of the states to defend this country.
And the hot dogs on the right and the hot dogs on the left are running at each other like a big old freight train, and somebody's going to ignite this pretty soon.
And you know, it's funny that the extremist militia guys are the ones that get all the press.
I know several militia leaders who are ex-military men, sober, sound thinking individuals that you would have no trouble dealing with on a one-to-one basis.
And if you found out that they were militia members, you'd be shocked.
But the people that seem to get all the press and all the publicity are those extremist friends groups that can somehow discredit the entire movement by their thoughtless actions.
I want to ask you a little bit more about what would happen if the United States defaulted on their debt.
Sure.
I have a friend that we argue about this all the time, and he says that if worse came to worse, the United States government would just tell all their creditors to go take a hike.
And Mike, what I'd like to know is what would actually happen if you allowed that as a possibility, what would be the next things that would happen?
Okay, well, the first thing that would happen is the Social Security Trust Fund would be broke because the number one item in Social Security trust funds are Treasury bonds.
So if the government defaults on its debt, then Social Security collapses immediately, not five years or seven years from now, but tomorrow, the next day.
And then all the trust funds besides those, so all the civil service employee pensions are gone.
All of the Federal Deposit Insurance Corporation insurance is gone.
All of the every trust fund, remember, 170 different ones with $3 trillion in bonds, all of it, United States debt.
So $3 trillion would be wiped out of the money supply.
And if the government defaulted on its debt, and this is a real technical point, if it defaulted on its debt, then technically that money is wiped out.
And if you wipe $3 trillion out of the national money supply, a depression will ensue that will just rock the foundations of this nation.
It's not going to be a clean ceiling hike, anything but I suspect the Republicans are going to, at least it certainly looks like they're going to attach all kinds of conditions.
Because, first of all, I believe that they would defend their Treasury Secretary with all the lawyers that they have.
And secondly, I think that the implications of a default would be far worse than any personal repercussions to my freedom or my financial affairs with the action I've taken.
I would divest a trust fund against legal authority and take the money and pay the Social Security recipients.
If Howard would just pick up a real issue like Art Bell does, if he would pick up one real issue instead of wasting the time of his listeners, you're an obviously intelligent listener.
In other words, the guys who get to decide what they're going to sell an option for in November or December of 1999, they're operating with a full deck.
They know as much as anybody can.
And that's a real good indicator, ma'am.
That's a good thing to point out.
unidentified
And also, I see another thing.
How come a year out from now that the, let's say, in the corn, soybeans, that sort of thing, real commodities, the cash price today is what those prices are now.
So that means for the future, those are the low prices.
You look at whatever you call an asset, and if it represents debt, get rid of it and get on the equity side of the journal, preferably a physical possession equity, you know, something that you hold in your hand.
Exactly, because that's how you really produce wealth.
You know, when you grow stuff out of the ground, you are producing real wealth.
When you exchange paper dollars for produce, you are not producing anything.
So that's what we really need to get to in this country, is a production-based economy and a tax on consumption and free production.
If we will just take those steps and remonetize our Federal Reserve system with United States notes, we could have this Republic back on a steady course within five years.
unidentified
Have you heard this rumor that one more half that Rubin has available to him is selling our gold reserves?
Well, yes, technically, except that the gold reserves of the nation are pledged against the Federal Reserve issue.
So that's when he can't sell the gold reserve, and I assure you that'll be the last thing he does because it's pledged against our Federal Reserve note issue.
So that technically doesn't even belong to the United States.
It belongs to the privately owned Federal Reserve Bank.
The largest gold supply on the planet is buried beneath the sub-treasury building, the former sub-treasury building, which is now the Federal Reserve Bank of New York.
And that's a privately owned bank.
And in their vaults lies the biggest store of gold on the planet.
So, you know, the golden rule pops its head up again.
There is gold in Fort Knox, but it's pledged against the monetary reserve, so it doesn't belong to the United States.
The only thing we have is a strategic gold reserve.
And believe me, compared to our Federal Reserve note issue, it's minuscule.
I like credit unions only because it's honest banking.
Commercial banks create money out of thin air, so they have an advantage over credit unions.
I would suggest if you have money in a credit union, understand that it's tied to your neighbor's 30-year mortgage.
If you don't mind having money in there for 30 years, it's a great place to put it.
But if you're looking for a short-term out, you might get caught in a squeeze if a bunch of depositors start requesting their money back from a credit union and the credit union has it all loaned out in 30-year bonds or 30-year proof.
By the end of his second term, we'll have double-digit interest rates, double-digit inflation, skyrocketing commodity prices, a Republican president, and a Democratic House.