Yellen: Inflation & Your Lower Standard of Living Is Good For Society
Feeding fairy tales to American citizens is the modus operandi of Washington D.C. The latest on the economic front is a real doozy. When the (unconstitutional) Fed counterfeits dollars, it ultimately results in a rise in prices for goods and services. Americans suffer a lower standard of living by being forced to buy less with the dollars that they worked for. Does this immoral process sound like it's 'good for society' to you?
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, good to have you with us.
It's great to be with you, Dr. Paul.
Good.
We have an interesting topic today, which we talk about quite frequently.
We're going to talk about money, inflation, the Federal Reserve.
And this time, instead of hitting hard on Powell and the ownership, the ones that really run the Federal Reserve currently, but we want to talk about Yellen.
She used to run the Federal Reserve.
She was a Federal Reserve Board chairperson when I was in Congress.
And that was a mixed bag.
To tell you the truth, I didn't know whether she was going to speak or fall asleep sometimes.
But anyway, she's been around and she's obviously part of the establishment.
And she made some comments this week.
And you and I have talked about it a little bit.
And it gets a little bit silly because it reflects a philosophy in economics that she follows, which is anti-Austrian economics.
It's pro-Fed economics.
It's pro-Keynesian economics.
It's pro-debt.
So she made some silly statements about inflation and what's going on.
Sometimes you wonder, I'm never sure, are they really ignorant about what they're saying, or do they know exactly what they're doing?
And their job is to pacify us.
And, you know, that happens in coronavirus endemics as well as wars overseas.
The officials are always trying to pacify us and distort things and dissuade us from many criticism.
And I think that could apply to Janet Yellen, Secretary of Treasury.
Obviously, somebody who goes from the Fed into Secretary of Treasury, she has a fair amount of establishment clout.
So I imagine she probably knows who the insiders are, and she talks with them all the time.
But anyway, she's made some weird statements this week that you're going to tell us a little bit more about.
But it's just that it's a distortion, you know, of what they and a reflection of an illusion about money.
And the one thing that I think one main reason why they preach inflation, you know, inflation, they count inflation as CPI increase.
We need inflation.
They've been doing this for years.
We want 2% inflation, which really, in a way, is criminal because they're just trying to steal the wealth.
That's diminishing the value of the currency that everybody has.
So it should be in a form of called dishonesty.
And so they've been begging and pleading for 2%, but guess what?
It's a lot more than 2%.
Oh, it's been up more than 2% for a long time.
But their goal was to have 2%.
And Chris, I think their ultimate goal, their immediate goal about when they inflate and debase the currency is to pay down debt.
You say, oh, no, the debt's still $28 trillion.
Oh, yes.
But if inflation devalues your currency by 50%, your debt goes, your real debt goes down by 50%.
So real debt is a big problem.
It's never going to be decreased by the Congress.
So they have to have gimmicks.
And I think that's what Yellen was relating to this week, convincing us and everybody we're supposed to accept all this nonsense because the one thing that I never heard up there was a sincere effort to reduce the size and scope of government, reduce the printing of money and reduce debt.
They're not interested in that.
And I guess you wouldn't be surprised to hear that.
That's right, Dr. Paul.
And Yellen is, I guess, notorious now since it's more than once for saying silly things.
I remember she made the statement that she didn't think there would be another financial crisis in our lifetimes, which is, I guess we'll see about that.
But yeah, she tried to pass off inflation as it's actually good for society.
So it's good for everyone.
You know, the fact that you can't buy as much with the money that you have is good for everyone.
And obviously that's ridiculous because it's not everyone that suffers from the system that we have.
It's not across the board.
In fact, the very reason why there is a Federal Reserve is because what they do affects people unequally.
Only a small percentage benefit at the expense of everyone else.
If everyone had the same outcome, there'd be no point in having the Federal Reserve.
So, and those who benefit are the politically connected, those who are close to the government, those who are close to the Federal Reserve.
And they are doing just great.
You know, whether there's inflation or not, because it's at the expense of the rest of the society that doesn't understand what the Fed is or what it does.
Now, there's nothing wrong with being wealthy.
If we had a free market and the government didn't tilt the tables to the benefit of everyone, it's good to have a rising standard of living, but it would have to be at the service of others.
In the system that we have now, it's at the expense of others.
So it's ridiculous to say that inflation is good for everyone.
Yes, and I think this comes from the fallacy that most Keynesians believe, and it's convenient for others, and that is that when they see the economy moving along and prices are going up, and they call that, you know, price inflation, they think this always represents economic growth.
But they don't realize if you do have a sound currency and you have a healthy economy and things are going well, the market drives down prices.
And that's where the benefit is to the consumer.
The reverse of that is print the money and one group suffers more than the other.
And it's usually the middle class and the poor.
And they're always short money.
Even in this crisis, which started actually with the Federal Reserve getting into trouble before the coronavirus, but then all of a sudden, the stupidity of lockdown, people were out of work and all kinds of bankruptcies going on.
And the mantra was, there's not enough money.
I need more money.
I can't pay my rent.
I can't pay this.
And that's always the case.
They don't have enough money when the source of the problem was they had too much currency, too much Federal Reserve notes being printed.
And when they see they don't have enough money, they're not talking about real money and real purchasing power.
They're talking about they just want the cash to pay their bills, not realizing that that was the fault of the Fed having already done that.
But most people still, I think, erroneously refer to inflation as prices going up.
Even if the prices are going up because of a hurricane, They still think that's inflation.
Inflation is when the government creates money out of thin air.
But just thinking about the prices is a narrow way of thinking.
They should be thinking about the money supply, is that my supply going up?
And also malinvestment.
Malinvestment is a big deal because when you take the money and print the money, you're subsidizing those who benefited by the deficits that have gone on.
So they take it and they subsidize the investments made by non-economic reasons.
And the most important thing there, and this is one thing that matter of fact is written into one of the mandates for the Fed, and that is to regulate interest rates, especially long-term rates.
That's part of it.
It used to be to just control inflation and unemployment.
But now it's to regulate long-term interest rates.
That's QE and that kind of stuff.
So what happens, though, then is the malinvestment.
There'll be booms and busts and spending.
And that's what's going on.
This is, to me, Chris, one of the most bizarre things.
I don't know if anybody predicted it.
There probably was somebody that did.
What they should expect a year ago is, you know, what this is going to turn into is they are going to print a lot of money and there'll be nobody wanting to work.
And there'll be a significant unemployment rate, a lot of jobs going seeking, but nobody wants to work because it would print so much money and subsidize unemployment.
So the old rule is if you subsidize something, you get too much of it, which is a malinvestment misdirected.
So it goes into the pockets of people receiving welfare.
And there's no incentive to go to work.
So this is in compound, it's the government directing the money with the deficits and giving directions on how to spend it, which occurred during the housing bubble.
And the other is just the fact that people make different decisions when the interest rate doesn't reflect savings and production.
And of course, there's really no real savings, and the production is low.
But the businessman, you hear it all the time.
You see it on the ads all the time: buy a new car, zero raiser of interest.
And if you save your money, which is something that I learned at a young age and tried to teach my family members, there's no sense to saving money when they give you 1%.
And then it's rigged to pass out free money to the big banks and that sort of thing.
So distortion is the name of the game.
Yelling is part of that.
And the only thing that will reverse this, unfortunately, I wish I could be optimistic and say, well, we just need a few more members in Congress and they can start changing the rules and the laws and the spending.
That's not going to happen.
We're going to have a crash.
We're going to have to have monetary reform.
But one thing good, though, about it, Chris, is a lot more people that are aware of this.
The Austrian School is growing in strength, and that's what is most important.
And we have the various organizations like the Misens Institute that have participated in that.
But right now, we face a major crisis.
Yes, probably the biggest ever.
We have, as we mentioned, the Fed printing untold trillions of dollars.
But then we have Biden on the other side with proposing a $6 trillion budget, which is just astounding.
Because not only is it terrible for the Fed to destroy the value of our money, it's compounded when government takes all this money and then goes and spends it.
Because as you mentioned, real prosperity occurs with savings, productivity, and successful entrepreneurship, you know, profits and losses.
When government spends, all of that goes out the window.
Savings are gone.
Americans, corporations, governments are all in debt.
Productivity shrinks, as you mentioned.
People are choosing not to work.
They would rather get the government check, even though there are 9 million job openings out there.
And entrepreneurship is boxed out by a government that bails out zombie companies, keeping businesses around, wasting money on endless wars.
In this COVID, we saw the ventilators, they buy all these ventilators and they end up harming people, and now they're sitting in a dump somewhere.
So when government spends, it's waste.
There's no economics involved.
It's all political.
Inflation's Illusion00:06:21
They do it to look good because they think it'll help them in some election or something.
So we have these two forces, the Fed and government spending, that have just twisted everything to the point where, yes, a crash is unavoidable at this point.
But what isn't unavoidable is understanding the right ideas and how to get out of the mess that they've created.
Very good.
That's absolutely right.
You know, you mentioned the $6 trillion budget.
It's estimated that the income this year may be $3 trillion.
But they don't look at that as a problem because they know that the Fed will do whatever the Congress wants.
So they might have to monetize or print $3 trillion.
They did, what, six last year or something.
It doesn't matter to them.
They just do it.
It's amazing that the confidence level is as high as it is.
But for the people now that are living in the streets and are losing their jobs and they don't go back to work and all kinds of problems, you know, there's a segment that's already very much depressed.
But you know, the other word that all the individuals at the Fed have used for years, and so does Yellen, and that is they, yeah, there is that price inflation is stirring its ugly head.
And they never say they are the cause of it.
The price is going up is always somebody else.
The businessman does it, the labor unions do it, and there's a storm.
There's always an excuse for prices going up.
And there are excuses in the free market for why when they go up, but they're usually in certain areas and it takes care of themselves because the problems are solved.
But now people just say that, you know, that this come and they want to reassure it.
And what is the word that they use?
And I just get a big kick out of this.
And they don't sweat it.
It's okay.
This inflation, and they're referring to prices going up, is transitory.
Well, it's barely getting started.
They've denied it for, you know, to a large degree in a couple of years, but the last couple of months, it's really raising its ugly head and it's going to go up.
And as long as you look at those money supply figures, and we've put those charts up on charts up on occasion to show what the monetary base is going doing, it is just going straight up.
And you can be assured that prices, the price inflation is not going to be transitory.
It's going to be very aggressive.
You can't predict it.
You can't predict who the worst victims are.
We know the beneficiaries will be in the banks and government, people who receive government money and big government benefit.
But it is something that this is not going to be transitory until we change our ideas.
I think the basic flaw is that the American people and the people of the world generally have lost their thoughts about having a more libertarian government and a government to protect our liberties.
And they've turned it into something where the government is supposed to take care of us and that we have to be dependent on them.
And that costs a lot of money.
So that's why it's not going to change until the money is rejected.
And right now, we're getting at that point.
I mean, that's what this is a big, big deal this last month or so because they had to admit that the money is being debased and they have to say, oh, well, we have to reassure the people.
You can imagine whatever they're being, okay, they need reassurance.
They're getting a little bit worried.
Let's tell them it's transitory.
Let's tell them it's just going to go away in a month or two after working years after years of pretending we didn't have enough price inflation.
So it's absolutely bizarre.
But I think there's going to be big things happen economically during this next year.
Very good, Dr. Paul.
I will finish up by concluding that we really do live in an empire of lies.
And this, what we hear about inflation is just another part of it.
You know, we've covered on this show, especially this week, with the CDC director Walensky, is warning how 12 to 17-year-old hospitalizations, and then you look at the CDC's own stats, and the hospitalizations are down lower than almost they've always been.
You know, we've had Fauci contradict himself repeatedly and now reaching the point where he says that attacks on him are an attacks on science.
So it's a very big empire of lies.
In the war area, we've had, and I believe we did a show on this too, that the longest war that we've had in our history in Afghanistan, the entire time they've been saying we're turning the corner, turning the corner for 20 years.
Iraq was supposed to last for weeks or months.
We were supposed to have 15 days to stop the spread.
So when you look at this big picture, this empire of lies, it's a fake world that has gone mainstream and it only exists in people's minds.
It's not real at all.
And, you know, the real world is challenging enough as it is.
So if you're a person that accepts this fake world, you're making your life tremendously harder still.
Hopefully, the Ron Paul Liberty Report, we do a good job in helping to show you what is versus what isn't.
And hopefully it helps to guide you to navigate your world a little bit better.
Very good.
And on the lies, people are coming around to believing that the government is not very truthful.
That's a healthy attitude, but there's still a lot that, you know, become fearful and then they capitulate.
And whether it's a virus or the Chinese or somebody come along, they have to be very fearful and do whatever the government tells us.
CPI Rise and Gold Validation00:04:03
You know, on Thursday, the report came out on the CPI that went up significantly.
And the gold was, you know, trading that day down, down a bit.
But as soon as the CPI came out, I think gold went up maybe $25, $30.
It was a big jump right away.
And the reason I mentioned that is, you know, the CPI hasn't been going up, at least the one that government reports, and they don't tell us the truth.
They changed the way they record the CPI.
But this has to be bad because they admitted to it and went up and immediately reversed the downturn on the gold.
And the gold jumps up, which means there definitely is a connection.
It isn't always connected that the CPI will tell you what the gold price should be.
It doesn't work that way.
But right now, because this is just the beginning of the CPI going up, and what the gold price does is it validates what is actually going on.
You know, when I was in Washington and the Federal Reserve Board Chairman and the Secretary of Treasury would come before the committee, they frequently used a term and they used a similar term, whether it was a Fed official or a Treasury official.
And they would concede, Chris, a lot about what we're saying.
Oh, yeah, you should be concerned.
You know, the government has to be doing this and deficits.
You know, we have to be cautious.
And yes, yes, we do think that we're going to have the inflation and there'll be some good things.
But the one thing, one term that they always use that I sort of got a kick out of, they said, well, if that happens, if the dollar goes down, if you predict the dollar is going to go down and lose value against other currency or against gold, the only thing they cared about as long as it was orderly, because they sort of conceded, yeah, that's going to go down, but their job was to make sure it was orderly.
And they work real hard at that.
They work overtime on that.
And that was why, you know, after the crash in 1987, they established the plunge protection team.
And that's, you know, Treasury and the Federal Reserve getting together and getting involved in the market so that they can try to alleviate the panic.
And they want it to be sort of orderly.
Well, when this gets out of control, there will not be as much orderliness that they would like.
Order comes from liberty, and the liberty comes from a government doesn't finance their system through the kind of spending and printing of money that we have today.
The whole thing is, is the Federal Reserve really is a taxing authority.
It's a spending and a taxing authority.
They spend a lot of money.
We can't keep track of it.
We can't audit.
So they appropriate and spend more money than the Congress ever does because they're dealing many, many trillions of dollars.
It has nothing to do with the Constitution saying that all funding should go through the Congress.
So they have done that for a long time.
And they also produce their taxing authority because if your cost of living goes up, that's the value of the dollar goes down, the value of the dollar goes down because they spent money in debt and they're printing money to cover the debt.
So they are a taxing authority and they are a spending authority.
That's why I have strongly suggested for many, many years, motivated me to get into politics, is the Federal Reserve really needs to be checked out and really eventually audited and then get rid of the Fed.
The Fed's Taxing Authority00:00:06
That would be my position.
I want to thank everybody for tuning in today to the Liberty Report.