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May 27, 2022 - Ron Paul Liberty Report
16:56
Are China & Russia In Better Economic Shape Than We Are?

Russia is a commodities powerhouse; China a manufacturing powerhouse. Both nations have tremendous stockpiles of gold, nuclear weapons and major trading relationships around the world. Meanwhile, the Federal Reserve has printed trillions of dollars, the U.S. government intervenes in all aspects of our lives and endless wars have economically devastated us. The "land of the free" took a terrible turn, and must head back to freedom.

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Why Do We Focus on Fed Rates? 00:03:21
Hello everybody and thank you for tuning into the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, welcome to the program.
Dr. Paul, it is great to be with you and we are going to start today's show.
We want to address a common question that we get and the question is, why do you talk so much about the Fed's constant manipulation of interest rates?
You know, that's a fascinating question.
It's a fascinating subject, too, because it's something that although the markets talk about interest rates all the time and they are significant and they have a lot of effect on investment and they have an effect on the gold price as well.
But the whole thing is very few people understand exactly what's going on.
Not too infrequently when I'm on a business station and I'm talking about this and suggest that the market should dictate interest rates, they look at me, what do you mean?
They think the Federal Reserve's job is to manipulate interest rates.
And that's how they do the economic planning.
And I talk a lot about it because there's a lot of misunderstanding.
For right now, we see the Fed is deliberately raising interest rates because they had deliberately kept the interest rates very low.
It's nothing near the market rate of interest.
And the market rate of interest is crucial in a free market economy.
It gives a lot of information.
How much money is being saved, how much money is being sent, and how much investments are being made.
So all this activity.
But once the government and the Federal Reserve interferes with the interest rates, then that distorts it.
And that's why we have the chaos we have here.
That's the symbol of the instrument that the Fed uses to complicate our economic system.
And that is where we are today.
One thing is, is, you know, prices are going up, there's a lot of inflation, people are trying to figure out what to do.
But one thing that I have discovered is that this whole notion that as interest rates go up, people shift their investments to bonds and interest-paying instruments, and they sell their gold.
Well, a little bit of that can happen at the beginning.
But in the 70s, when I was watching this carefully, interest rates went up to 21%, and the price of gold went to $800.
So some of those clichés are not true.
But it makes it more difficult for the investor.
And the ultimate protection against chaos in the marketplace, these problems we talk about here, whether it's interest rates or what the money system is all about, it's been there for a long time, but it usually means that the dollar price of gold goes up, the price of gold in the commodity that is being used, because they're destroying the money.
And that is what's happening.
But a lot of people are wondering, prices are going up, gasoline is going up, what are we doing?
How is this going to be handled?
Is this a good time to buy gold?
Of course, I've been investing in gold and buying gold for a long time, so I generally think it's always true, especially since 1971, because I knew exactly what they were doing.
But no, somebody has not invested in gold, they should think about it seriously if they think the economy is in trouble.
Monetary Reform's New Players 00:12:55
And that is the reason that I'm working right now with Birch Gold Group, because they have experts there that will talk with you and go into this issue about what the pros and cons are and how you store your gold and what the best way it is, because it isn't one way.
What I do currently now with gold is not what somebody's doing that might have just gotten out of college, that sort of thing.
So that's the reason to talk to somebody who's been in the business of helping people protect themselves against chaos in the economy.
Will be the people that you can get a hold of if you look at the number on the screen and get hold of somebody at Birch Gold Group.
Very good, Dr. Paul.
And going into our regular program, we both noticed this week a great article from our friend Nick Jambruno.
And we've actually had Nick on with Doug Casey on the Liberty Report, and he writes at the International Man website.
And he talked about Russia and China.
And I do want to read a quote to start the show.
He writes, China is the world's largest producer and buyer of gold.
Russia is number two.
Russia has one of the largest stashes in the world.
Nobody knows the exact amount of gold China has, but most observers believe it's even larger than Russia's stash.
So Russia and China could use their gold to engage in international trade and perhaps even back their currencies.
And we have to really think about that because we live here in the United States, and our country is a money printer.
It prints 40 billion one week, 2 trillion here, 6 trillion stimulus.
And do you hear about gold at all in this country?
No, you're not even supposed to think about it.
And on the other side of the world, who we're told are our enemies, we have a commodity powerhouse in Russia and a manufacturing powerhouse in China, and they're both loading up on gold.
So the question is, should we be so belligerent to countries that are in this situation, whether it be Ukraine or Taiwan or South China Sea?
I mean, is this the right relationship that our country should be pursuing in this kind of climate?
Dr. Paul, what do you think?
Well, I think we're digging a hole for ourselves.
It is sort of strange to think that monetary reform, excuse me, monetary reform is coming now from Russia and China, not from America, because we have continued to abuse the dollar as being the reserve currency of the world.
And this to me means that we're going in the wrong direction.
You know, I love to talk and read about and study monetary history.
And I was thinking that when gold was taken from the American people back in the 30s, it was 1934.
It was a year before I was born.
And for 40 years, we weren't even allowed to own gold.
That was a big history.
And then, of course, gold was re-legalized in the 1970s.
But that was a consequence of the breakdowns of the artificial gold standard designed at Bratton Woods.
So that was done in 1971 with the collapse of that.
And we've embarked on a course where we have lived on borrowed time and borrowed money because we had the reserve currency of the world.
And Chris, some of those things you were saying there is indicating that other people might understand economics a lot better than we are doing.
Our policies are following because, you know, they're gathering up the gold.
And we're not doing that.
We're not talking about it.
We tried to have a serious discussion on monetary reform with the Gold Commission back in 1980, but that did help in one way in that we got gold to the point where we were minting gold coins again to emphasize that gold is really the money.
So right now, though, historically speaking, I think we're witnessing the early stages of the transition from the dollar reserve standard to a new currency.
Whether the Russians or the Chinese or a combination of them will do this, accomplish this, it's not known.
But one thing for sure, history shows, that countries that have a reserve currency, if they abuse the standard of money, if they print the money, confidence will be lost, and then a new group will come in and have a reserve currency.
Almost always, the new currency or the new standard has to be that based on a commodity.
And gold generally is the commodity that is used.
I think we're witnessing that, and I think it's very historic and very dangerous, and people should be paying a lot of attention.
And if they do, if they understand it, they'll find out why gasoline prices are high, and they're going to find out why grocery shopping is very difficult.
Yes, very good, Dr. Paul.
The next topic we wanted to cover is we all know of the big sanctions that were imposed on Russia.
It was a free-for-all pile on.
And today we're reading that the Russian ruble is the strongest since 2018, and they're selling lots of gas.
I wanted to quote our friend Nick again.
He said, you know, China, India, Iran, and Turkey, among other countries, announced or already are doing business with Russia in their local currencies instead of the U.S. dollar.
These countries represent a market of over 3 billion people that no longer need to use the U.S. dollar to trade with one another.
The U.S. government has incentivized almost half of mankind to find alternatives to the dollar by attempting to isolate Russia.
So once again, Dr. Paul, we are seeing U.S. policy backfire in our face, producing the exact opposite of what they intended to do.
And what they ended up doing was a type of cancel culture mentality.
Except they tried to do it on a major nuclear power like Russia.
Dr. Paul, is this how foreign policy should be conducted by the United States of America?
Well, obviously not, because it is the monetary system that allows us to do this because we have the reserve currency of the world and we take it and we abuse it.
As long as you can get away with it, the governments that are managing a reserve currency world, they keep doing it until it finally collapses.
And that's why we're in the midst of it.
Those items that you just cited, I think, is just strong evidence of what I was saying.
You know, we live in historic times, and it's already starting.
It isn't like it's a brand new idea, because our foreign policy has designed a situation and environment that has made us not very popular around the world.
You'd be surprised, I bet, the resentment is a lot stronger than it's expressed.
But because we still are powerful, have the most wealth, the most bombs, and we control the financial system the most, people can't be anti-America too strongly.
But we already know how many times we put on sanctions and why we have motivated individuals like China and Russia and the collusion of the two together, they may well be able to pull something off.
But the big thing is it's the weakening of the dollar.
The dollar isn't weak on international exchanges right now, but it's weak when you go to the grocery store.
And that's really what counts.
And that is why, you know, there will be an end to this situation, the currency that we have right now.
There will be a substitute, and it will involve commodities.
And Chris, you have already mentioned that people are using commodities as money.
It's in a way unfortunate because it's a reversal, because it took centuries for people to go from pure bartering into using a commodity, which was gold.
But it was amazing improvement in civilization once they were able to do trade in something short of bartering horses for cows.
That was too awkward.
But now we're drifting back.
It's more efficient than using dollars, especially when we're putting sanctions on people and being involved in so many wars that they're actually thinking it's clumsy to use commodities, but the commodity that is most useful over the centuries has been the precious metals, the gold and silver.
And that looks to me like that is the way we're moving.
Yes, Dr. Paul.
My final point for today is, you know, those who watch us regularly know that the big umbrella that we speak for is liberty.
But the two, you know, subcategories, I guess you would call them, would be foreign policy of peace and commerce with other nations and sound money.
We cover the Fed.
You know, those two things, those two ideas, your ideas on foreign policy on money are huge when it comes to the big topic, which is individual liberty.
And in the end, we need both.
We need sound money in this country and we need to shift away from this idea of world empire.
It is a foolish goal.
It always has been for any country that has tried it.
And it is harming us greatly.
You know, we need a policy of non-interventionism.
Don't try to force others to be like you.
It does not work.
We know in this country we have a lot of busybodies that try to use government force to make other people like them.
It does not work, even within a country.
Well, our federal government for a good hundred years now has used that philosophy around the world.
They have been the busybody of the world trying to use force to get the rest of the world to be like them.
It does not work.
And we say, that's enough.
Let's stop now before we really give ourselves a major economic crisis.
In the end, Thomas Jefferson, in this respect, was very right.
Our policy with other nations should be peace, commerce, and honest friendship with all nations, entangling alliances with none.
Very good, Chris.
Excellent.
You know, and I think if you try to narrow this down on exactly where the fault is, we talked a little while ago about the interest rates being a major event, manipulation of interest rates, how deceiving it is and how much trouble it causes.
But the problem that we're dealing with here under the current monetary situation is that we've lost any dedication to a unit of account.
Nobody knows what a dollar is.
I remember asking a Federal Reserve Board chairman once, you know, I have a Federal Reserve note here and it says it's redeemable in money or whatever.
And I said, if I turn this in to the Federal Reserve, what are you going to give me?
And they said, another Federal Reserve note.
You know, and that's where the problem is.
There's no definition of it.
And now people are struggling.
That's when you hear these stories that they're talking about commodities again.
It's really a good discussion.
But it's also very dangerous because people don't give up their empires very easily.
And the more deceit that goes on and the bigger the empire is, the more they have to, you know, throw the weight around being an authoritarian and saying, look, you know, this is what we do.
If you don't do what we tell you, we're going to sanction you.
We're going to put on tariffs on you.
And we will control your finances and we will close down your bank account.
And that is so dangerous.
That will lead to a warp and people were already involved and have been constantly involved.
But eventually what happens is we can't afford it and we tied it over for a long time.
But right now, there has been a lot more interest in what's happening right now because the one serious thing it does, it does separate the categories of people who gain wealth and those that lose.
The wealthy do benefit, the people who are on the inside, the people who are part of the deep state, they get wealthier.
At the same time, the middle class gets poorer and there's more antagonism.
Wealth Divide and Social Discord 00:00:36
So there's social discord too, not only international, but domestically as well.
And that's why we've seen the stirrings, even in this country, which is very scary, of how much activity is being on and how much progress the Marxists have made.
And that is a sign that people are restless.
But I'll tell you what, I still have optimism enough that if people hear the truth, they will come our way and they will participate in a society that is truth.
If they're looking for peace and prosperity, they will be with us.
I want to thank everybody for tuning in today to the Liberty Report.
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