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Sept. 9, 2022 - Ron Paul Liberty Report
30:59
The Monetary System Will Be Reformed, And Gold Will Be Called Upon

In a world drowning in debt, the monetary system itself is on borrowed time. When the moment for reform arrives, gold will play a role once again. The era of money being a whim of counterfeiting central banks is drawing to a close.

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Gold As Money 00:07:46
Hello everybody and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, welcome to the program.
Happy Friday, Dr. Paul.
Very good.
Today, Chris, we're going to be talking about something that is very important.
And I've been toying with the idea of dealing with gold as money.
But, you know, I went to Washington to help straighten that mess out.
And I don't know what I've done.
I've gotten a little bit of attention, but not necessarily.
But I do think the world and our government is moving toward the importance of gold being used in the monetary system.
Not because the economists of our universities and the politicians in Washington all of a sudden said, hey, Ron Paul was right.
We've got to go to the gold standard.
It's out of desperation that paper money always fails.
So that's what we want to talk about today, because right now there's a lot of articles appearing.
There's always articles appearing about the stock market and the bond market and interest rate.
But the articles this week have been more on the dollar.
And even though the dollar is strong on the international market against other currencies, the dollar really isn't strong, and it's the potential of dealing with the dollar.
Right now, nobody's made much of a calculation because the interest rates have crept up, and it hasn't helped the savers in the country.
They're not getting any more money.
But the interest rates have crept up, you know, in treasury bills and long-term bonds.
Guess who that's hurting?
That's the government.
Who's the government?
That's us.
So yes, there is a big burden of things going on and it's going to put pressure on the dollar.
How this will actually work out, it remains to be seen.
But I do know that over history that even our country did it.
They resort to gold when they have to restore confidence.
After the Continental Dollar failed, they finally said only gold and silver could be a legal tender.
They suspended payment on several times, World War I, and then also during the time of the Depression, immediately they said that you can't use gold anymore.
You're not even allowed to own it.
But when they realized this was getting out of hand, they finally re-legalized gold, a step in the right direction.
So they do resort to gold, and that is the story.
And the countries we hear now, sometimes, you know, the countries that have gone through runaway inflation, they're talking and moving in that direction.
So, you know, there's a lot of power and control in the special interest, but ultimately, there's a lot of power and control that there's even a small amount of freedom that people will resort to a sensible system.
And so far, we don't have one.
But, you know, we're not going to talk so much about investment, so to speak, in gold, even though that is a real thing.
And a lot of times it's referred to more as insurance.
But it is very important.
That's one of the reasons why we work closely with Birch Gold, because they help us out on our Ron Paul Liberty report.
And they also offer an opportunity to get more information from them on just how you handle this, because there are so many variables.
The government's available, the deficits are available, and people can't predict the future.
Even those of us who think we understand the free market and the business cycle, we realize timing is out of the picture.
So investing is a tough job.
And really the basic reason why it interests me, it's trying to protect the most number of people possible because we are going to have a major crisis.
And you don't want to be there with your family and 100 other people.
The more the merrier that understands what liberty is all about and those principles and also why precious metals have to be legal.
And that was also one of the reasons why in Congress I always pushed the legislation of legalizing competing currencies.
And if somebody can come up with a very straightforward absence of all fraud and have a crypto type currency, I think they should be legal.
But I just don't believe that people should stretch it and do illegal things.
That's the government.
They've been doing that with money for a long time.
But that is, you know, alternative.
So if you are interested in getting a little bit of information, Birch offers some information.
There's a number on the bottom of this page.
It's a text number.
If you call there, they'll send you information.
And guess what?
It doesn't cost anything.
It costs them to send it to you, but hopefully it'll be a benefit to you if you read it and catch up.
But I love to study monetary history and all of history and how the cycles occur.
So that fascinates me.
But I also see why gold and silver are part of the answer.
Because if you believe in a free society, you are going to resort to something of value.
And, you know, it goes all the way back to the Bible, you know, honest weights and measures.
We don't have honest weights and measures.
We don't even have a definition of our dollar.
And that was destroyed in 1971.
It used to be defined in a weight of gold or silver.
And this held the government in check.
Except our government, for many, many years under Brown Woods, we had so much gold and wealth and we were spared a lot of the tragedy of international war that we were able to benefit from this and also owning the reserve currency of the world.
We did quite well.
But guess what?
The stories that we're reading now about could this finally hit the dollar?
I believe it will.
I believe it's already hit the dollar.
Prices are going up and that's an early sign.
But it's when the other countries start to reject it, trade breaks down.
We have compounded that problem by interfering with sanctions and tariffs and all these things, along with not providing a unit of account that you can define.
So nobody, you know, when I'd ask that question, the one thing the Federal Reserve officials would say, well, if you came and you want your dollar bill redeemable in something, we'll give you another dollar bill.
You know, they say that in public and sort of smile.
You know, so it's silly, but it's really sad because they don't understand how important that is.
But the ones who know how important it is, who benefit from this, because there's always a group of people who will benefit from it, and that's the real tragedy, is the wealthy people will benefit much more so than the average person and the middle class, and that's going to cause and contribute to class conflict.
And of course, we have more and more these days noise coming from the cultural Marxists, and they're looking for chaos, and they're looking for controls like this.
So class conflict is something that they look forward to because that offers them an opportunity to introduce their wonderful, wonderful philosophy of Marxism.
Yeah, sure.
So this is very important.
I think definitions are important.
Fed's Role in Crisis 00:02:37
Definition of what truth is, definition of what the law is, and also the definition of what money is, and people being required to live within their means and not create wealth out of thin air as our politicians do for the various special interests.
Chris.
Very good, Dr. Paul.
Yeah, the Federal Reserve is about as anti-American institution as you can get.
It is a group of banks that make up the Fed, and they were given monopoly control over our money.
This is totally unconstitutional.
But its primary purpose, the Fed, is to take care of the biggest banks and make sure that they're always made whole.
So when the biggest banks get into trouble, the Fed prints the money, makes them whole, and the rest of the population has to pay for it.
I mean, it's what a terrible system, but they got away with it, and we've been living with it for a hundred years.
And, you know, their primary goal is self-preservation.
That's always a top priority.
Make sure the biggest banks are going to be okay no matter what we're going through.
And they will seek to preserve themselves even against other central banks around the world.
I think, you know, we're now seeing the Euro is dropping.
The British pound is dropping.
They're, you know, suffering tremendously their economies in Europe.
And the dollar index, as Dr. Paul pointed out, it's at the highest level since 2002.
But that does not mean that the dollar is healthy.
It just means that the other currencies around the world are falling apart even faster.
So while the Fed may preserve itself for the moment, you know, the same fate awaits us that Europe is going through.
And we will have to suffer the same consequences just at a later time.
It's like a game of musical chairs where one chair is always removed, but at the end of this game, there will be no winners.
Not even the Fed will win this game.
And that's what we're talking about is there's going to have to be a major monetary reform to put together a rational system once again.
And once again, I want to remind our viewers that when those reforms are finally agreed to, that it has to happen.
It can end up in a real calamity and end up with a worse dixtiger than ever.
But a lot of times, as it's happened so far in our country, and hopefully at least when the reform comes, that we'll make some sense out of it rather than resorting to the violence that it could create.
The whole thing is, is gold, gold is honest.
You can't print gold, and it keeps the politicians on us.
Lives Lost in Long Wars 00:04:00
That is the thing.
The politicians can't play favorites.
They can't buy votes to the average middle class by promising free lunches and free everything.
You know, send you to college for free, and I will loan you the money, but you don't have to pay it back.
That kind of nonsense.
But if you're on a gold standard, you can't do that.
You say, well, wouldn't the country be a lot poorer?
No, you get a temporary benefit, you know, from counterfeit money until the people wake up and decide, hey, this is counterfeit money.
What are we going to do?
I'm going to get rid of it.
You try to sell it, and before everybody knows about it, then they're all trying to race to the doors to find out what can they buy.
And that is what is starting.
And that's why prices are going up.
So gold is a protection of liberty.
Gold, if you're on a gold standard and the politicians have to be restrained, you know, the warmongers wouldn't win all the votes.
Republicans and Democrats inevitably pass the defense budget.
And then they both endorse the policies that said, well, a little war here, a little bit war there.
That might our president, you a famous person in history.
Yeah, sure.
And they actually believe that because under some circumstances that has worked.
We're people that fought a much more legitimate and moral war than what we did in the Middle East.
You know, two wars.
If you look at Iraq and also at Afghanistan, plus others going on, these things don't go on for a year or two.
Just think the World War II, because it was a declared war.
It was a serious thing.
People went together.
There were some things that could have been done differently.
But after three years, that whole thing was over with.
So there has been no effort to even pretend they knew why they were starting a war and why went 6,000 miles away to start bombing these countries.
And it wasn't just Iraq.
I mean, we've been fighting with and stirring up problems.
Us, we did, by a coup that we committed in 1953.
So it goes on and on, and the threats continue.
And if we didn't have a, if we had a gold standard, do you think we would have bombed as many bombs as we did just in Ukraine?
You know, I understand I think we dropped more bombs on Vietnam than in World War II.
It's totally insane.
I mean, it's the destruction of wealth, destruction of lives, foreign lives and American lives.
It just goes on and on.
And if we can't learn a lesson from Vietnam and now the Middle East and these other places, there's something wrong with us because the evidence is so strong.
The evidence is there.
And you say, well, how can we stop it?
Because we have these politicians.
They don't listen to the Constitution.
That is true.
But I tell you what, if you had honesty and money, they would be restrained.
But it also would mean that if we had a very much restrained government monetarily and constitutionally, there would be no incentive to send people to Washington.
There would be no incentive for the bureaucracies.
There would be no incentives for the bailout and the subsidies and the deficits and the war and the welfare.
The incentive would be gone.
You say, oh, wouldn't that be terrible?
There'd be so much chaos.
Yeah, wouldn't it be terrible if the federal government wouldn't be hiring more IRS agents to collect more money from the poor people and the middle class and then pass on the benefits to the wealthy?
Oh, yeah, you didn't have to pay taxes and you worked hard and you got to keep what you earned.
Austrian Economics Insights 00:14:40
And I mean, yeah, that's real chaos.
But you look at our inner cities in the last two years, that's a symbol of what is coming.
Some people say, well, that's settling down right now.
Not really, to some degree, less in the news maybe.
But that is still there because that is a natural consequence of us being involved way too much.
And think of the calamity and loss of liberty when it was decided upon that the medical treatment for all people in this country should be handled by the government, even to the point of micromanaging exactly who should get a shot and not a shot at the same time somebody's making profits and then picking up a whole class of people like kids under five and saying, oh boy, this is a fertile field.
We can scare the mothers now and we'll just start selling them.
They have stockpiles already for these vaccines.
And now they're just discovering that it's some of the side effects from it.
So it's a system that would be restrained to some degree.
You still need a pot of morality in those that end up getting to Washington.
But I'll tell you what, it is something that if you have an honest monetary system, there are restraints because you can't afford it.
And people would have to work and take care of themselves.
That would be a big difference.
Right, Dr. Paul.
And earlier I mentioned how the Fed's top priority is self-preservation and preservation of the biggest banks.
And, you know, no matter what we have to suffer to make that happen.
But, you know, Congress and politicians have the same self-preservation mentality, too.
And that runs up sometimes against what the Fed wants.
Politicians, they want to spend, spend, spend money that they don't have.
They have 30 trillion of debt.
That stops, it doesn't stop them at all.
So they keep sending, you know, every week we hear about billions more going to Ukraine, you know, climate waste and subsidies and all that nonsense.
Then you got the student loans.
They find any excuse whatsoever to keep spending money to just keep this artificial bubble going.
And, you know, I saw yesterday, Powell, the Fed chairman, says, you know, this spending, this is unsustainable.
And he's been raising rates, you know, consistently.
And wouldn't you know, the big spenders are not very happy about this.
Elizabeth Warren is already saying, you know, if the economy goes downward, it's the Fed's fault.
So you can see that they butt heads.
They want to keep printing.
And the Fed, like I said, they want preservation.
They don't want to destroy the dollar.
They'll gladly take a recession depression before hyperinflation.
At least that's what I think.
So they may have a PR problem if Congress is upset that their printing press is getting tapered back a little bit.
So we wouldn't have these problems without a central bank.
We only have these problems because it exists.
It should not exist.
So you have all these people, Congress and the Fed, all these people who are creating problems, they're battling themselves to preserve themselves.
And no matter what, we're the ones that have to foot the bill, and that's a real problem.
Very good.
You know, the boom period is hard to stop, especially in the early stages, because nobody understands what the cost is really going to be.
And there will be beneficiaries, and that goes on.
But the whole thing is that the boom, according to the Austrian economists, recognize that as the boom is going on, that there's always a correction.
And this is one thing that Mises and Hayek said, you can't avoid it.
If you inflate even a little bit, you have to have a correction.
It might not be as big as the one coming.
Right now, we're facing the biggest boom ever because of the power and the influence of the American economy and our political and military power.
So the bubble is bigger than ever.
But everything that they have said about the business cycle, the Austrian economists, I believe they're really on target there.
So they say, you can't avoid it.
And you can do one thing if you don't understand it and you try to pass over or smooth over the complications that you make it worse.
I think one of the dumbest things I ever read of them worrying about a depression that was brought on by the Federal Reserve inflation for World War I and 1920s was the onset of the Depression.
And that meant there was a desire.
The market always wants deflation.
They want to wipe out all the bad mistakes, the malinvestments and all the debt that they can't handle and get a fresh start.
That's the way, that's what the market is demanding.
But they had a policy back then in the 30s that the farmers, the farmers couldn't make any money.
Prices were too low.
And they were having a great deal of difficulty.
And the food chain was interrupted.
There were people unemployed and people hungry.
And it was a horrible mess.
And so what did they do?
They say, well, what we need to do is we need to get farmers to make more money.
And if they could have more money, then they'd buy more stuff, more tractors in the hole, and then they could produce this food, and the food is going to go to the people who don't have much money.
It was total nonsense.
How are they going to get the prices up?
Plow the crops under.
People starving across the whole country.
So the government goes in there and say, you're going to plow this up, but people get in trouble if you have 10 acres.
Oh, you were told you could only have seven acres.
And they'd make them plow it under.
That's how insane it gets.
And these people, you know, the people who run these programs actually believe they were doing the right thing.
They were doing the best they could.
But there's others who have other motives.
But that is something that, you know, Mises, as early as 1912, identified, you know, the Austrian business cycle early on.
And he was one of the first to show that if you print money in lower interest rates and create too much easy credit, people do dumb things.
And that means malinvestment.
For instance, an easy way to see this is maybe they'll move in and they'll build too many houses in an area or too many cars or something like that.
So the consumer has to quit buying and then there's a correction for that.
So it's the malinvestment that goes on.
But Mises identified that in 1912.
But Mises and Hayek, both Austrian economists, you know, before 1929 were probably one of the very, very few who predicted the crash.
And so there's, there's, but they didn't say what day it was going to occur.
There's no way to do that because it involves a subjective factor of the panic on people rushing and doing things and panics are uncontrollable.
But if you have certain economic laws that you can believe in and trust, if you print a lot of money and pretend that it's really worth something and cause all these mistakes, that there will be a payment for that.
And that's what we're getting now.
We're just starting.
We're just nibbling away at starting the payment.
And a good example of paying for is how are we going to take care of all the students that owe a lot of money.
Nobody in this country believes they're going to all go to work and pay it off.
But back in those days, when I would oppose programs like that, you don't even care about the kids' education.
That kind of nonsense.
And this is a whole reason why people have to understand it.
And I do not know of any other group.
Bits and pieces of the business cycle as understood by Austrian economists.
It's available.
But it's really the Austrian School of Economics.
And one thing we should recognize, the great contribution to understanding this has been the Mises Institute under Lou Rockwell.
And he's been doing it for years.
I think it's 40 years now they've been doing it.
They've introduced it.
We have no idea how many people have been influenced by that organization.
But that is what has to be done because that is what they did in the 30s.
As the universities came out in the middle of the depression, they had been influenced by Keynes and then Paul Samuelson, who went into our schools and brainwashed our kids, and they had a control.
Even back then, there was a lot of state control.
When the government runs a school, they will promote the government.
So that is the reason that people should look for other options if they possibly can.
Chris.
Very good, Dr. Paul.
And I second that.
Always visit Mises.org, looterockwell.com, wonderful, wonderful sites.
A lifetime of education exists on both of those sites.
I'm going to close by trying to bust a myth, you know, a very common myth.
We know, especially the people that are watching this, that, you know, the Fed is the source of inflation.
But we live in a big world with a lot of people, and many do not understand that that's where inflation comes from.
When you go on social media, you'll see the leftist pundits.
You know, they float this idea that corporations are to blame for inflation.
It is their greed that is causing inflation.
And this is just not true.
You know, if corporations are greedy, then they're greedy all the time, not just in 2022.
At all times, corporations want us to pay the most amount of money for their products that they can sell it for.
And if you want to call that greed, then it's greed.
But at the same time, we want to pay the least amount for whatever they're selling.
If I pay less for one product, that leaves me with more money to buy another product.
So I'm greedy in that sense.
I want to pay the least amount.
They want me to pay the most.
That's why there's market prices.
That settles this battle of greeds, so to speak.
Now, when we're in a situation like today, where prices are going up everywhere, butter and bread and gas and energy, all across the board, this is signaling that something is wrong with the money.
And what is wrong with the money is government has spent trillions of dollars that it does not have and it only was able to spend it because the Fed printed it and handed it over for them to spend.
So the dollar devalues, it is worth less.
And, you know, corporations have to adjust.
They have higher costs.
They have to raise their prices.
So it's that corporate greed.
It's always government spending money it doesn't have and the Fed printing it, allowing them to get away with it.
So that is a major myth that unfortunately a lot of people, they get away with with corporate greed.
It's always the Fed, and hopefully more people will come to understand that.
Very good.
You know, and one thing that goes along with that is the understanding of what capital is.
You know, in a free market, it's not too hard to explain.
You know, if a person has $10,000 and he saved it and had it, so he wants to go out and start a business.
And his job is to find the customers.
And if they like his product and he gets no benefits from the government, he invests it and he produces a product and he sells it and he gets $1,500.
He makes $500, $5,000.
And that extra is capital.
He can save it.
He can spend it.
He can waste it.
He can do whatever he wants.
And I'm assuming, of course, under a free market, we wouldn't have to pay taxes on it because the money is supposed to stay there and help him and his family and reinvest it.
Now, if you save it, if somebody else borrows it, then it starts another business.
But there is a reason to think about capital because even under these conditions where we don't do savings, see, that's an important factor of the free market is people work and save and they guide the interest rate because the more savings there is, the lower the rate and the more borrowing and that works out.
But if you don't do that, the savings raise, what if the government just gives you the money?
Well, there's no incentive to save.
It still bugs me right now to no end that people just, I work hard, I save, I have this money, I have a couple dollars, and they want to pay me 0.5% or something.
I mean, if they want to go out and borrow something, somebody's making 12%, you know, if they have to pay, or they have to pay 12% credit cards and things.
So it's a very, very bad system that they have.
But the capital has to be used.
It has to be earned.
And the people who just get it from the printed money from government, how can that be capital?
That's not capital.
No, it is capital.
Because if it dilutes, if you have $10,000 in the bank and they inflate the currency, print a lot of money, and you don't have $10,000.
You only have $5,000 worth of purchasing power.
Somebody stole your capital.
And if you spend it, you know, you can invest it.
But the capital is stolen that way.
And that is the reason why, you know, it's pervasive.
The Federal Reserve and that system is so bad.
It does introduce the notion that they can hide what they're really doing.
And that's why we end up with a medical care system that we have today, which is so sad to me of what's happening.
And when I think of the pharmaceutical companies, and if I think of the bureaucrats, if I think of the ringleader of the bureaucracy in COVID, you know, lockdowns and all this, that is so bad, and the destruction of the doctor-patient relationship.
Protecting Freedom and Liberty 00:01:39
And for all that, the people are probably paying, you know, 75% more than it would be in a free market.
And we have a couple examples of people running totally free market medical care and the prices are way down.
So that is the reason I concentrate on protecting freedom and protecting liberty and protecting sound money because that is what is going to enhance, you know, the people's ability, their standard of living, and a much better society.
But it is not a complex system.
It's just recognizing that people have a right to their life and their liberty, and they should have a right to the fruits of their labor.
And all of a sudden, you have a couple rules to follow.
You can't kill people.
You can't lie to people.
You can't harm people.
And you can't mess up their property.
Oh, that's the case, huh?
Yes, and if you're not allowed to rob your neighbor, and you can't send your congressman to rob from the neighbor because you want something.
It's not all that complicated.
But one incentive, people say, well, that's too much trouble.
I like a free lunch.
I'll tell you what, your free lunch is going to disappear.
But if you have this system where you have freedom of choice and you have volunteerism, believe me, you won't be begging for more welfarism in a country that can't afford it.
So the system right now is in a position where it's going to be changed.
The monetary system is going to change.
There will be reform.
And we can start off by being serious about the Federal Reserve and serious about sound money.
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