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Nov. 1, 2019 - Ron Paul Liberty Report
18:00
The "Not Enough Inflation" Hoax: Is It Ignorance or Deception?

The dollars that you work hard for are always buying less and less, yet the government tells you there's 'not enough inflation'. The Federal Reserve is a government-created monopoly that counterfeits dollars by the billions and trillions, and you're supposed to believe that this is "capitalism." Oh, the tangled web they weave...

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Inflation's Deliberate Distortion 00:09:38
Hello everybody and thank you for tuning in to the Liberty Report.
With me today is Chris Rossini.
Chris, welcome to the program.
Great to be with you, Dr. Paul.
Very good.
I want to talk about inflation.
Once again, there's a lot of misunderstanding about what it's all about.
And the Fed is the engine of inflation, but they're in total denial on purpose, so they don't want blame for anything.
The Fed notoriously, I'm sure you know, Chris, has always wanted to take credit for good times.
And when times got bad, they wanted to take credit for getting us out of bad times.
Well, I think of it a little bit differently.
I think they give us all the bad times, and they cause, and they've never produced good times.
But that's their goal, and people have become very dependent on the central bank and the Federal Reserve rigging interest rates and doing all these things.
But, you know, the Fed met this week, and Powell, you know, came out with a statement that has been repeated so often.
And it has to deal with really the definition and what the story is about in inflation.
And he said that inflation is under control and within range and we have room.
We can have a little bit more inflation if we need it.
That was sort of his theme.
And he's talking about the 2% of the CPI.
And I think that is so deceiving.
And I wanted to spend some today, Chris, on just talking about the reality of inflation.
Who causes it?
And what kind of harm, what should they be looking at?
And I postulated a question, what if the CPI is not a very good measurement of inflation?
And quite frankly, I don't think it is, and it's done on purpose because there's no inflation.
So therefore, the Federal Reserve can do what they want.
Interest rates are low, and they're already ready, and they're already involved in trying to take care of the next recession, depression, and hasn't even theoretically started yet.
But they have room now.
They're treating it, but they're running out of tools and running out of ammunition because how much lower can they put interest rates?
Because that's always the thing that can solve the problem.
And lowering the interest rates is just inflation.
They have to inflate to distort the market rate of interest.
And that's the whole problem.
And it works fine.
It benefits the special interest groups.
Wall Street loves it.
The president loves it.
The liberals love it.
The conservatives love it.
Everybody likes low interest rates, except it's so unfair.
And that is the problem.
The banks and the big corporations can borrow very cheaply.
Government borrows very cheaply.
The average person who gets stuck with a credit card debt, they pay 17% interest rates.
And the people who have to borrow to get their kids to college, they have to pay high interest rates.
So it's such an unfair system.
And it is related to the fact that kids are in debt and that the middle class is getting wiped out.
And it also gives ammunition to the socialists.
Say, see, see these free enterprise systems, it doesn't work.
Capitalism is a total failure.
And that's why we have to have socialism, because they want us to believe, and incessantly the media keeps saying, you know, that the capitalism is failing, and that is a problem.
But, you know, I want to go over Chris and see how many things we can just say, what they ought to be looking at.
If I don't want them to look at the CPI, because even the CPI theoretically should give us some information of printing money, but there's a lot of reasons why it doesn't.
Like, one, they rigged the CPI, and the CPI is actually lower, reported lower than it really is, and there are segments of the economy that has a much faster rising CPI than other areas.
So it's not reliable.
So I would like to get people to think otherwise because it does affect prices, there's no doubt.
In this regard, everything doesn't go up together.
Right now, I would say the biggest bubble where the highest prices are, where there's going to be a big correction, I would say the price of bonds.
When interest rates are very low, and now they want them at negative rates, and that's a reflection of inflating the money supply, and they think this is good, but that's a price.
So I would say, Chris, we have a very, very big bubble in the bond market representing the debt, and the debt is another bubble created by inflation.
And I would limit my definition of inflation to the increase of the supply of money and credit by the Federal Reserve System, creating very distorted interest rates.
That's right, Dr. Paul.
You asked, what should people do?
And I would answer, trust your own judgment.
I mean, I know just by looking at my bills that there is inflation.
I don't need a government expert to tell me that there's no inflation.
And that's the critical thing here for all Americans is to trust yourself first, even if you're wrong at times.
As long as you're lying to yourself, that's what they do in Washington.
They lie to themselves.
But trust your own judgment.
Now, Washington wants you to trust their judgment.
They want you to trust their words, their experts, their so-called scientists and professors.
And that's done to remove any confidence that you can have in yourself.
And the media plays a major part in this too.
Media is always trying to tell us, oh, the majority thinks this.
The majority thinks that.
Well, who cares what the majority thinks?
If you're interested in the truth, it really doesn't matter what the majority thinks.
So when you look at your own bills and you see that dollars are buying, that's all you need.
You don't need a CPI to tell you otherwise.
Right.
And in our title, we talked about, is this just ignorance from the educational system or is this deliberate?
I always worked in my early years of studying this, and it has to be just ignorance.
They have to just not recognize the significance of interfering in the monetary system with excessive money creation and lower interest rates than the market.
But Mises in Human Action does talk about this, and he convinced me that it's deliberate because the Fed doesn't want you to start thinking, oh, it's caused by the Fed.
Oh, they've disrupted interest rates.
No, they want you to think that prices rise, you know, because there's too much profiteering or the wages are going too high because of labor unions.
So they want to blame something else.
And he claims it's deliberate.
So all this nonsense about no inflation, I think it's very, very deliberate.
They have to know what they're doing when they, you know, the Federal Reserve people.
Because when you look at it, when you look at the spending and the debt building up and the distortion of interest rates and all the bubbles that are floating around, they say, don't worry about it.
We're in charge here.
And there's no inflation, so we don't have to worry.
Matter of fact, that was one of the things they did in the Depression.
They said there was no problem in the 20s because there was no inflation.
But afterwards, especially in Murray Rothbard's book on the Great Depression, he pointed out that there was significant bank monetary inflation which caused the inflation.
A lot of it went into the stock market.
Right now, in the 70s, the inflation of the money supply went into a lot of consumers' goods, even worse than it is now, even though I don't think we see an accurate measurement of it.
But they said, no, they were reassuring themselves all through no inflation, it's okay.
But then they became believers that it was a stock market.
Well, the Federal Reserve Board chairman that I knew over the years was always concerned about the Depression.
Bernanke was probably the most radical, but they were all the same that we will never have a depression again.
The money supply will never shrink.
We will always provide the necessary money.
And right now, look at the challenge they've had.
They had this huge, serious recession in 08 and 09, and they got us sort of past that.
They really didn't solve the problem, but they did it by printing a lot of money.
I think they're prepared to do it again.
And I think there's so much money into the system, and there's still interest rates rising like the other day.
And we've talked about this.
The repo rate jumped up to 10% because they said they didn't have enough money, which is astounding.
So the markets are very, very powerful, and the corrections will come.
Money Supply Dilemma 00:03:49
And the system is just very, very fragile.
Another thing that people don't talk about that creates this illusion is the fact that we have been able to have a very, very tricky export.
We export our money, export the dollar, print the money, and buy stuff.
We like cheap prices, and the people like to make stuff, and then they make profits.
We get angry with them when they start accumulating dollars and spending them here and interfering because it's not long-lasting.
But no, we've been able to export a lot of inflation because the dollars go overseas and they don't immediately go into our consumer market.
But it is a system that is, you know, there's so much immorality involved on it.
It's a fraudulent system.
And people need to see it in those terms, not just bad economics.
If a private company ever did this, it would be considered fraud.
People would go to jail by deceiving the people.
And ever since we've had a Fed, there's been deception, you know, on what the money was all about until they finally totally and completely admitted to total failure and eliminated any relationship of the dollar to gold by 1971.
So that is what has gone on.
But I'd like to do for all of us to do a better job in pointing out what we see in the market that is a reflection of what the Fed is doing other than the CPI because they say, oh, the CPI is okay.
There's a lot of distortions in the market that we should be aware of.
That's right, Dr. Paul.
And you're totally right about this, the immorality of this entire system.
And you called it, I believe I've seen many times, an empire of lies.
And that's exactly what it is.
An empire of lies.
Everybody sees what they want to see.
You know, take a look at Democrats.
They see lots of things that aren't there since 2016.
But on the other side, you have President Trump this week tweeting that this is the greatest economy in American history.
So there is no truth to be found anywhere in Washington.
And while the president is claiming the greatest economy in American history, the Fed is acting with desperation.
They're doing QEs, even though they're not calling a QE.
They have rates down almost to zero again.
And this is supposedly the good times.
And we have almost trillion-dollar deficits in the good times.
What is going to happen in a recession?
They have painted themselves into a terrible corner that deserve because they shouldn't be doing any of this stuff.
But Americans are going to have to really reconsider whether or not they want central planners anymore.
Yes, and I think what you're pointing out, of course, is what we should expect.
But there's a lot of people who don't want to believe it.
And if they do, they say, I can't do anything about it.
We'll just have to wait and see what happens.
But this next one's going to be worse than the last one.
And that really raises a lot of questions.
But some other places where I see inflation, the results of the inflating the dollar, where we have prices way out of proportion.
How about in the military?
How about the DOD?
What about almost everything the government does?
Prices are always much higher.
What about the educational system that the government manages or the medical system?
Prices are way higher than the market would be otherwise.
You know, there's another area that I think not many people talk about.
And I just sort of thought about it recently where there's a lot of price inflation.
And that is in politics outside of what the government's doing.
Price Inflation's Political Cost 00:04:19
How about in political campaigning?
You know, to run for president, now you don't need a couple hundred million.
They're talking about a billion dollars, you know, to run for a major office.
And they also spend a lot of money.
And if you want to see where some of the money goes that people donate to campaigns, it's to the people who does the advertising, the running of the campaign.
And that's always escalating.
Even now, you'll hear another record is set.
Another record is a special election.
And that's a reflection of the fact that credit is easy, the money is floating around here, and they're pushing those prices up.
But they're not included in anything the Federal Reserve would report because they don't want you to think that it's related in any way to the Federal Reserve.
The Federal Reserve, they do not want to be blamed for any of these problems.
Right, Dr. Brawl.
I'll finish by saying that I'm sure that the planners around the world, once this dying monetary system reaches its end, that they think that they'll just replace it with something like it or even worse.
They're the masters of the universe.
They'll just rig up something else.
Well, that's not a given.
And that's why it's important for a critical mass of people, not a majority, but a critical minority of people to be able to convey the ideas of sound money.
And that means everybody watching this show, that means you.
We all have our own personal spheres of influence.
And when the people around us are struggling and they're looking for answers, we have to be able to provide it for them.
So thank you for watching or listening to us on iTunes.
If you are able to convey the ideas of sound money and liberty, then the empire of lies has no chance.
Very good, Chris.
And I just want to reiterate a lot of what you've been saying there.
And another thing that people don't realize is the big government occurs.
A lot of people complain about big government one place or another.
But big government doesn't occur because just because taxes are high.
That's just only part of it.
The real tax is the ability of the Federal Reserve to create money and credit and buy that debt.
And so, if you don't like big government for different reasons, conservatives might dislike big government for one reason, liberals for another reason, but all big government depends on the Federal Reserve system.
We wouldn't have a system like this.
All one would have to do is go back and look at what happened since 1913 and look at the expansion of government, our involvement in wars, our involvement in welfare redistribution.
And that is huge.
So, if somebody is thinking about peace and prosperity, they can't do it with the Federal Reserve because the Federal Reserve is, you know, they tell us a little bit, but they're a big member of the deep state.
They have a lot of power on what they can do.
Because if they just said, well, we're going to just protect a free market system of money, we're not going to interfere in interest rates, we're not going to have credit expansion, all of a sudden, you know, there'd be a big difference.
Of course, we don't need a Federal Reserve.
We should think about how wonderful it would be if we would have a free market voluntary system where people would work hard, spend it what they have, what they have left over, they would save, and other people would invest it.
It used to be called the wonderful nature of the invisible hand, but unfortunately, the invisible hand, which worked quite well, has been turned into the iron fist.
And that's what totalitarians want: an iron fist.
And no matter whether they call themselves fascists, socialists, or communists, it's an iron fist because if you don't obey, there'll be a penalty levied on the individuals.
So, if one is looking for more peace and prosperity, one has to consider the elimination, total elimination of the Federal Reserve system.
And in the meantime, until it self-destructs, we ought to know more about it and we ought to pass the bill to audit the Fed and get to the bottom of why it exists and what kind of special interests benefit from it.
I want to thank everybody for tuning in today to the Liberty Report.
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