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Dec. 29, 2020 - Ron Paul Liberty Report
18:53
How The Fed Created The Greatest Socio-Economic Crisis

The politically-connected rich keep getting richer at the expense of the middle class and poor. The Fed is the apparatus that makes it all happen.

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Time Text
Fed Money and Economic Control 00:14:23
Hello, everybody, and thank you for tuning in to the Liberty Report.
With me today as co-host is Chris Rossini.
Chris, welcome to the program.
It's great to be with you, Dr. Paul.
Very good.
We want to talk today about a subject that I think is very pervasive.
Everybody's concerned about it.
Everybody's reacting to it, but they really don't spell it out quite the way I think it should be.
Because I believe people have an honest concern about where the wealth is going and why some people are super rich and some people are super poor.
And generally speaking, Republicans and Democrats are saying, well, we just need to distribute the money a little bit better.
And that, of course, is what we've been looking at in these last week or so.
You know, should we give everybody $600 or $6,000 and on and on?
And it's all up to the government.
Rather than looking to the government to solve the problem, they ought to look to the government and the understanding of the government of the cause of the problem.
And certainly the vehicle for doing this is the Federal Reserve, because the Federal Reserve is the biggest taxer and the biggest instigator and regulator and instigator of what's going on.
So they run the idea and the principles of the central economic planning and they facilitate all this activity.
And lo and behold, it doesn't work out quite the way it should be.
And I think there are two problems that have to be dealt with.
We'll talk a little bit about this.
One is a lot of people who endorse the system we have are sincere and they want to help people.
There's another group that know exactly what's going on, and it's an opportunity for them to enhance their wealth at the expense of the middle class.
And the reason why I think this is so serious is I think, you know, politically speaking, the wiping out of the middle class is very, very dangerous.
And we're starting to see signs of that.
You know, our streets are blowing up.
There's a lot more violence, a lot more anger.
And yeah, I don't think they're talking about what they should be talking about.
And that, of course, is the Federal Reserve.
I'm sure you've given some thought to this and concern for this.
So what are your opinion?
What's your opinion?
Yes, I actually want to paint a picture for our listeners today so that they can maybe better understand how it works.
Let's say that in your town, there's an auction that goes on.
And, you know, everybody in your town relatively has the same incomes.
And the auction is taking place and everyone is bidding and everything seems normal.
Well, let's say a Fed guy pulls you aside and hands you a million dollars that the Fed just printed up.
Well, you can now go into this auction and start bidding up prices until you win whatever it is that you want.
And everyone else is a loser.
The Fed guy didn't hand them the money.
So this is what happens in the economy.
The people who receive the newly printed money first, the ones that are closest to government, they go into the economy and they start driving up prices.
And everyone else who's on fixed incomes, who didn't receive this new money, they watch prices rise around them, kind of like the auction.
And they wonder what's going on.
Why are my bills always rising?
Why is a loaf of bread $5?
It used to be $1.
Well, that's how money that is printed out of thin air and that is handed to select people first, that's how it works its way to benefit the people who receive it at the expense of everyone else.
Very good.
The one thing that's happening today that people are recognizing, and you hear frequently, you know, the rich are getting richer, the poor are getting poorer.
But only what it only does is excite people into saying, well, that's why we need more government redistributing the wealth.
But that's been so overblown.
I mean, what they have done is unbelievable that it even, you know, lasts as long as it has because they're printing like they've never printed before.
And the middle class is getting poorer.
The statistics show very clearly that the middle class is a lot poorer, and the wealthy are getting a lot wealthier.
And it's been especially bad in these past 20 years.
But it's been going on for a long time.
Matter of fact, it started when the Fed started it, mainly because the people who have access to the money first, they get many benefits.
As it circulates, what the average person gets are the higher prices, and they pay the taxes.
People don't look at this as a tax.
All people generally think about is: how's the government going to take care of me?
How can they pay for this?
And so they think it will last forever.
And so, therefore, you can't even get some people who believe in domestic welfare to be critical of the overseas spending.
They just let that go.
And this budget they just passed represents this.
And you hear noise coming from the Fed: well, Congress has to get their house in order.
They shouldn't be spending so much money.
Well, this is sort of a fictitious argument because no matter whether the Fed does it directly or indirectly, it's always the Fed's fault.
I have thought about and worked on this issue of the Federal Reserve and central economic planning for years.
But I really think that the political power comes from who controls the money, who controls the Federal Reserve.
And there's no one person that does that.
That is a group of people that do that.
And their special interests are covered, whether there's the welfare state here at home, which is seen as the food stands for the poor, or whether it's the military-industrial complex.
It's interesting, they both endorse the same ideas, but they sort of argue who's getting the best benefit.
And that's why I think this violence is going to get much worse.
And, you know, people, you know, the socialists are getting pretty bold because the disruption in our communities are so great that people are thinking about it.
And the other problem we have is the Federal Reserve and facilitating endless spending have really taken over our educational system.
And they preach the doctrine, you know, that central economic planning is the best.
And the best group to do this are people who control the money and they can have whatever they want.
But the sense that I have is that people are starting to realize, no matter how eager they are to get the next check, I think they realize and they're starting to realize that this can't last.
And I think that helps build the angle, anger.
And people are just saying, can I get my fairy share before the whole thing comes down?
So I believe we live in very dangerous times for this because they are not dealing with the subject of the principle of money and spending and debt.
And this they talk and argue about how big the budget is going to be.
And now it used to be tens of billions, and that was a big deal.
Now it's into the trillions of dollars of deficit each year.
And nobody would even think of this if they didn't have a dependency on the Federal Reserve to print the money and deal with it.
But that's just more Addiction to a program that is inevitably going to fail.
And it is the central economic planners that work through the Federal Reserve that I think is the biggest threat to our economic stability and to our liberties.
Right, Dr. Paul, and you make a good point.
It's really what we see in Washington is just factions fighting.
They're like vultures trying to get their hands on the money.
And they're all politically connected.
You mentioned a few of them.
And what happens is they get used to this.
They get used to the Fed money being printed and handed to them, and they become dependent on it.
And that's why we always see the same story: Wall Street bailout, Wall Street bailout, military-industrial complex.
It's just goes round and round.
And they start to believe that this is reality, that this is the way it is, and this is the way it should be.
And they have no understanding or feeling of the pain for the average person that pays for this.
They don't know what it's like to constantly downgrade their standard of living because there's not enough money at the end of the month because prices are rising.
They are totally detached from the regular people.
And the only thing that they think about with the regular people is to just convince them that we have to just keep doing this.
That, like you mentioned, trillion dollar spending, $2 trillion spending.
Just throw a few couple hundred bucks to the public to keep them happy, and the trillions, the rest of it will go to us.
And, you know, you get that $600 check.
What if over time that $600 ends up costing you $6,000?
So it's a very bad system that just, it's the few that feed off the many, and the Fed is at the center of it.
You know, and there's all these government programs, none of them do well, you know, whether it's the facilitation of financing the educational system, which is in shambles, whether it's just welfare in general or the military-industrial complex.
But the thing that bothers me really the most, it really enhances the opportunity for the warmongers and the profiteers to start wars and precipitate wars and bomb people and put sanctions on all this economic planning.
And they figure the Fed will stand behind them.
But that's what I think is coming to an end.
And the only thing that's holding it together still is an almost an abnormal dependency and trust in the stability of the dollar.
Of course, the dollar is not quite as stable as it was before, but it's had its ups and downs.
But there are some dire predictions which people should pay attention to.
And that is maybe in three, four, or five years, a country like China or somebody else might come along and usurp the authority of being the issuer of the reserve currency.
Now, that would be a really, really big deal.
And one thing people have to realize: if a country or an individual, for that matter, or a business, if they live way beyond their means, there has to be an adjustment.
They have to live beneath their means in order to get back to square one and get busy again and produce.
Well, we haven't been forced to do that yet, but that's what will happen if we lose the reserve currency status, if we no longer can just print the money and hope it's going to take care of things.
That is going to be when the people are going to realize there are a lot of people in trouble now.
You know, more than half of the country, the middle class, that's a big deal going on.
Middle class is being wiped out.
It's going to be a lot worse than that.
There will be always the elite who will be able to escape it, most likely, even though sometimes when this type of a problem gets out of hand, whether it's under radical fascism or communism, you know, only the political power mongers control this, but not the elite wealthy people.
So, how it works out is unknown.
The thing that has to be challenged is central economic planning with the use of the Federal Reserve to control the economy and control the social aspect.
And look at the social controls that we've had with fighting the virus.
And this is all in challenging the whole concept of liberty and the giving up of the trust in liberty and people taking care of themselves.
And it's been turned around that if you don't support all this, if you don't support the war, you're not patriotic.
If you don't support masks for coronavirus, you're not patriotic.
You're out to kill people.
And they won't look at it objectively.
But I think the numbers are growing and people looking at this.
And that's certainly our goal: try to get as many people as possible to look at how sound money, how important it is, and why that would restrain government.
And without restraining the money machine, I think it's going to be very difficult to restrain the politicians.
That's right, Dr. Paul.
I'll finish up by continuing that thought.
We have a government that is unrestrained financially.
The only thing that can stop it is the laws of supply and demand, which always stop this kind of nonsense.
This is only 100 years old, which is a spit in the bucket when you consider the whole of monetary history.
And, you know, money should develop in the free marketplace, and that's where it belongs.
And for thousands and thousands of years, gold has been money.
And it's the simple reason it has a lot of great characteristics is because it can't be counterfeited.
You know, if government wants war or to hand out welfare, they can't counterfeit gold.
They have to tax you.
They have to come and get it from you.
They have to convince you we want this war.
And you can say no.
You know, there are tax revolts.
People are against it.
So what happened with the creation of the Fed is the government eliminated that.
If they want wars, if they want welfare, they just print the money.
Why Free Markets Matter 00:03:52
And we're totally out of the picture.
It doesn't matter what we think, whether we want the wars, whether we want the welfare or not.
They just do it on their own.
They are unrestrained.
And this is not how a free society functions.
This is how a authoritarian society functions.
And until it exhausts itself, we have to deal with it.
But we need the ideas of sound money to replace it once it does exhaust itself.
Very good.
And more and more people are starting to recognize how serious the problems are.
And now there's a big gang going on in who exactly is to blame.
And I put a lot of blame on what has happened in our educational system and how government has operated the schools for many decades, 100 years that they've been involved and it keeps getting worse.
And they predict, they teach an indoctrination and teaching people that Keynesian economics can solve our problem.
We just need smarter people to do the central economic planning.
But now the name of the game, and this is the demagoguery that we hear constantly, is whom should we blame?
Is it a Republican Democratic argument?
I think said, forget that.
There's a little bit of that by a few on the fringes on both sides that deal in principle, but basically not.
They're power mongers and they're definitely deeply embedded in the principles of central economic planning.
The whole thing is, how can we paint one side worse than the other?
Now, these socialists who have gained a little traction and now are serving in the Congress, their answer is very simple.
You guys have run the free enterprise system.
Look at what it's done.
It's all freedom.
Too much free markets.
And then they go on and on.
And even the conservatives accept the fact that we just need better planning.
Don't spend quite a head, don't have quite so many debt.
Don't interfere in this war, interfere in some other war.
They'll have a little bit of adjustment.
But the far left, the radicals, the progressive who want radical change are arguing the case that what we have is proof positive that freedom fails.
And we have to refute that.
If we can't refute that, then we're in really big trouble.
So it's an intellectual battle.
And the best way to do this that I have found, and there's a fair number of people who would share this technique, and that is that what we have is not freedom.
We don't have free markets.
We don't have sound money.
We have regulation.
We have unnecessary war, on and on.
And what we have is we have a system as a consequence of the distribution of wealth by the Federal Reserve.
The rich keep getting richer.
And that's less than 1% who's coming super rich.
The middle class is disappearing.
You can't blame that on freedom because when we had a maximum amount of freedom, we had the largest, wealthiest middle class in the history of mankind, but it's gone.
And what they're dealing with is crony capitalism.
I don't even, I don't like to use the word capitalism in a favorable term because so much of it is crony.
That doesn't mean I don't believe in free markets.
I want free markets to be separate from crony capitalism and also this idea of corporatism where the corporations and the governments work together.
And when that happens, there's always a drift toward a fascist system.
And even though there's people out there shouting that the problem is fascism, fascism, some of them are the most fascist of all of them.
Liberty Works, Authoritarianism Fails 00:00:33
So I think identifying the reasons and the ideas behind this and naming things correctly is very, very important.
So I make it more simple by just saying liberty works and authoritarianism doesn't work.
And the principle of libertarianism says that everything should be voluntary as long as it's peaceful.
And believe me, we would be a lot richer and a lot safer under those circumstances.
I want to thank everybody for tuning in today to the Liberty Report.
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