The unconstitutional and immoral Federal Reserve should not exist. But it does exist, and it has created an economic debacle so great, that the world has never seen anything like it before. The Fed was created in an attempt to control market forces that are uncontrollable; to try to "plan" the economy, despite the immutable fact that it cannot be planned. The Fed has failed. There was never a chance for success.
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They've been doing it, but sometimes they lose control of it.
They think they can control it.
That's the way the Fed's always operated.
We'll get into trouble, but we can handle it.
We can handle the inflation or recession.
They always reassured me that I worry too much.
They can handle what they can handle it.
But it was certainly a hectic week.
And, you know, just on Wednesday, I believe it was that it was obviously very clear that the British pound was getting very, very weak.
And people started selling the pound, but they also started selling long-term British bonds.
And this caused a lot of chaos.
Now, also, this caused some excitement in the metals market.
So I think this might be a good time for our viewers to seriously consider, you know, clicking on the text number on the bottom of this page and get a hold of the Birch Gold and get some material because they will send material out that deals with this problem.
And to me, the big thing, and I've watched this stuff for a long time, but I'm always looking for more information.
But I started watching this all the way back in the 70s when gold was illegal and yet it was $35 an ounce.
It was just really crazy times.
But now, you know, it's very, very hectic.
The markets do exist to a degree, and it's challenged by the deep state that controls the Federal Reserve and all the spending.
So it happened quickly in England with the Bank of England because they couldn't, it was evident that, you know, their pension funds were guaranteed by this government.
So it's not surprising that it spilled over into the financial markets of the United States.
You know, stocks went down sharply.
Gold was up 50 bucks.
So silver was up significantly.
So things can change.
So I think that just tells us that, yes, if people come in late and just think about protecting oneself when times are tough, it's much better to prepare a little sooner.
But it's getting to the point where we don't know what's going to happen and you might not have a whole lot of time.
It's sort of like when should you buy your fire insurance?
Not when you see the smoke.
So this is the reason I do work with Birch Gold Group.
And they do have information that they will send.
If you click on the text number, they'll send it to you.
They don't charge you anything for that.
But you can find out more about them to find out whether they can help you in making these decisions.
Because even though I pretend to, you know, watch the markets and think I know a little bit about them.
But one thing I know about them is you can't predict very well, even for the super experts on all sides, because it deals with human action.
And this is what Mises taught, the human action.
You can't put numbers into the computer and predict how people are going to react.
So this is the reason I work with Birch Gold.
So if you're interested in that, just go ahead and click on the text number and they will send you some material and they won't send you a bill.
Well, anyway, Chris, I know this is, to me, it's too bad it's so serious because to me it's really fascinating.
But it's serious.
I'll tell you what.
This type of thing ends up in a lot more than people's heartache when they lose their wealth.
And it can lead to the type of social warfaring that leads to a hot war.
Zero Pressure, Missed Goal00:04:41
And we have those going on as well, contributing to this.
And then we have wars against ourselves.
We have wars against COVID.
We have wars that we enter into and coups that we have to deal with.
We have a big job.
We have 150 countries that we're involved in.
We have to take care of.
And then we have surprises because we can't predict the future.
And yet you and I have talked, Chris, and we tend to agree that how will we in the United States escape what happened in England even to a greater extent?
Because eventually this lowering interest rates, we realize it didn't work.
So they say, oh, we've gone too far.
Let's raise interest rates.
Because higher interest rates means there's a lot of economic activity, and that's good.
That's why over the years they said, we need more inflation.
Our goal is at least to get it from zero up to two and this nonsense.
And now, of course, and I predicted that nobody will see the two, and nobody did.
It went from two, maybe a day, and then three, four, and then all of a sudden the interest rates, they confess up to at least that CPI is up.
Oh, that's an indication of a healthy economy, sure.
But now the Fed, Chris, don't worry about it.
This is just talk because it's so obvious that they don't know what they're talking about, so we don't worry too much about it.
But they have another goal.
It was 2% for a long, long time.
They missed it, and they missed it, and it's 8 and 9.
And now they have a new one, 3%.
That doesn't make sense.
If they're at 0 and they want to get to 2, if we went to 3, that's not a big deal.
Oh, no, it's up to 8, 9, 10%.
They want to get it back down, at least to 3.
You know, when you think about central economic planning through the manipulation of money and credit and interest rates and have an understanding about the marketplace and what sound money is all about, you have to just throw up your hands.
These guys don't know what they're doing.
Chris, go ahead.
That's right, Dr. Paul.
And yes, central planning never works.
But there's always those few out there that they're going to try to make it work, and they always fail.
So we're now in the Fed version of that story.
And yeah, like you mentioned, the Bank of England, they caved to pressure.
They reversed course.
They are back to inflating again.
And of course, the pound is getting hit because of it.
The Federal Reserve has raised interest rates a few times, but they're still obscenely low.
But because our economy is so messed up that even at this low rate, things are starting to break.
And the longer they maintain where they're at, the more political pressure they're going to get to lower, go back to zero, go back to zero, look how bad things are.
Especially from, you know, the left is in power now and they're spend crazy.
So they want that money flow, that money created out of nowhere so that they could spend it.
So we've got to remember that the pressure that the Fed gets is the pressure to do the wrong thing.
It would be wrong to go back to zero.
It was wrong to do it before.
And it would only make things worse.
More inflation will only make inflation worse.
This is so obvious.
So will the Fed, that's what we wonder, will they be like the Bank of England and pivot back down and throw in the towel?
Or are they going to stand firm?
Now, if they stand firm and keep raising and allow all the bad investments, they're going to have to go under.
We're going to see companies go out of business, companies that we know will be no more.
And there are a lot of interests against that happening.
So there's pressure from every angle.
This is why central planning can never work.
We think the Fed is likely to cave at some point when is anyone's guess.
Yeah, that's right.
And a lot of people do a lot of guessing.
And a lot of people have responsibility for themselves and their family because they have to deal with trying to save.
It used to be simple where if a person worked hard and protected even before the government was going to guarantee that they would have a pension fund, people would save.
And my parents, when they retired, there was Social Security, even though then it was peanuts.
But my grandparents, there was none of that.
But I don't ever remember them being poor in the sense that they, oh, they lost their house.
Government Guarantees?00:14:48
They were out in the street.
There was ten cities.
You know, all of this.
So it's a fallacy to think that if you turn the responsibility over to government, they're going to take care of us because there are too many variables and too many factors and too many special interests.
And once there's intervention used to manipulate markets, then it's a contest between the interventionists.
Who gets it?
Do the rich get all the benefits or the poor get it or what happens?
So there's a lot of competition.
And right now, the competition is very strong, and the people seem to be winning whoever has the strongest lobbying system.
And you take something like the military-industrial complex.
They do quite well, and every day we keep spending.
Even the American people are just beginning to wake up and say, why are we sending all that money to buy more weapons in Ukraine?
And they're starting to get a little rational on this.
And yet just this week, the Republicans and Democrats are getting together and they're going to pass a must pass bill to keep the government open.
And there's a bunch of money in there for Ukraine.
So at the same time, think of the problems that we have in this country.
Think of combining it with the idiocy of what people is, especially in some of the states now, maintaining some rules and regulations of what were invented or created during the epidemic.
And conditions just totally deteriorate.
And they just avoid the whole talk about the contest between authoritarianism and liberty.
And that's where the problem is.
And right now, there are some good people waking up in the various states, trying their effort to at least turn it around and go in the opposite direction.
But one thing that a lot of people don't quite understand in that there's a confidence factor.
You know, conditions were bad in England, and people will talk about a weaker pound.
But So often there will be an event that will get turned on and it sort of snowballs, it's contagious, and they lose confidence in the system.
And it's easy to do that when there's so many distortions and lies told.
And, you know, the pretense that the Federal Reserve can produce interest rates that would reflect what the market would really do.
Chris, you already talked about the deadly results of manipulating interest rates, but the whole thing is solved by the market.
But, like you say, it's painful because the market, I say, you know, interest rates ought to be 10%.
Of course, it should have been market rates a long time ago, and we wouldn't have these bubbles.
So we don't sit here, at least I don't sit here and say I'm predicting that there's going to be inflation, inflation, inflation.
I predict that the inflation, inflation, inflation that we've had with QE, and we had a whole system built on it, is now, you know, letting the people know what inflation really is.
It'll lead to higher prices, distortions, and chaos, and contests between, you know, who gets the benefits.
And that causes a lot of conflict.
And there's a lot of conflict in this country today.
But the one big thing that can give a lot of false confidence and have some psychological benefits that the British didn't have.
And that is they don't have a reserve currency anymore.
They lost that a good many years ago.
And therefore, they don't have a backup.
United States, you might be able to compare what we're doing and what our Fed's doing in our debt and the conditions that we have.
Because if you look at us guaranteeing government debt, you have to add up Social Security, Medicare, Medicaid, the obligations of hundreds of trillions of dollars.
And there's no money there.
There are IOUs there because the money you get, as soon as it comes in from the people paying into their Social Security, it's spent.
And we put Treasury bills in there.
Well, that's what happened in England.
People didn't want, especially long-term bonds.
But that has been happening ever since QE.
That happened.
That's why we put in QE, we bought those bonds.
That was historic.
And so, yes, they're talking about pivot.
If I were a betting person, and I wouldn't bet on anything as serious as, but if I were, I bet they're going to pivot and they're going to shift gears and they will go back to this whole idea that we can't deliberately allow the interest rates to go up, even though that might be what some people argue in the market wants, but it's not going to happen.
Who knows what will happen in between?
But the next major move, I believe, will be the Federal Reserve doing something like what the Bank of England just got through doing.
Right, Dr. Paul.
And that's a shame if that happens because we don't believe the Fed should exist, but we should want interest rates to rise as painful as it may be.
And the reason being is because the alternative is even more painful.
If you destroy your currency, that's much worse than a recession or a depression that you can get out of.
This week we also noticed, in addition to England, Germany has announced a 200 billion Euro inflation relief program.
I mean, they're adding inflation to an inflation problem.
And Germany, of all places, where they went through hyperinflation in the 1920s.
It's amazing what we're seeing.
And we do not want the Fed to go down that road because hyperinflation, should it ever occur here, is hell.
We just saw this storm down in Florida, and I have relatives down there.
One of my aunts went to Costco before the storm hit.
And she took video of the place, and the food was gone.
Nowhere to be found.
There was no food.
And, you know, this is not in hyperinflation.
Those shelves will be restocked because we're not dealing with hyperinflation here.
But in hyperinflation, that is daily life.
You're trying to get rid of this money that is constantly losing value.
You'll get rid of it for any hard object, you know?
So we do not want to go down that road.
And if the Fed does pivot, as Dr. Paul believes will happen, and they have a great history of proving that that's probably what they're going to do, then we run the risk of someday getting to that point, and we do not want to be there.
Very good.
You know, the Bank of England did two specific things, and we've been already alluding to it.
But there's a new administration there, and it's being tested, and there's all kinds of predictions of how long that will last.
But almost every country is vulnerable to this type of chaos because nobody has a sound money.
And the irony right now is the greatest noise I hear about somebody saying, well, we need competition with the American dollar, and we need to have a new reserve currency, which seems to be like a pretty natural thing to think about.
And they say, yeah, and what we need to do is we need a gold-backed currency to compete.
And that's pretty neat, too.
But the irony is it's Russia that's talking about doing it.
Can you think of anything more unusual than America selling its soul by printing money and causing this chaos around the world and having an empire that's sort of collapsing on us and then have the Russians come along and introduce a gold standard?
Well, we'll have to wait and see what happens there.
But the first thing the new administration did said, we have to spend more money, spend more money.
We've got to deal with this inflation, sort of like Biden.
If you have this bill and spend more money, it'll take care of the inflation, too.
But that's a long story of their rationale for this.
But I don't think many Americans believe that nonsense, that all you have to do is spend more money, and that's going to take care of inflation.
I think Nancy Pelosi sort of leans in that direction, too.
So that would increase spending, you know, by the government stimulating, but it's not going to restore confidence.
It won't do that.
But the other big thing they did is they did the pivot, which means they were now going to buy bonds because nobody else wants them.
And you can't have interest rates going up, up, up.
And that's sort of the QE stuff.
And that's what we did for a long, long time.
I don't know, nearly probably 10 years.
We kept buying and buying and buying.
And now we know it won't work.
So we have to get rid of some of these.
We have to get back to normalcy.
And that's why they have to sell them back.
And once again, but that's shrinking the money supply and that's to lower interest, raise interest rates.
It's not going to be tolerated.
It's chaos.
It's here.
And there's no, I believe with great confidence that there's a lot of people in this country that understand free market economics and know exactly what has to be done.
But the politics of it, it's not going to be done because the pain is too great for the market to be allowed to work because the initial stage is there will be more pain than we have.
But you, well, how can you justify that if it's going to be painful?
Nobody's going to do that.
That's probably right.
Nobody's going to do it.
But the alternative is in maintaining this status quo and learning how to land this economy so we have a soft, smooth landing.
That's what they pretend to be doing.
But they can't do that.
So they're going to continue with this and they're going to tinker until there's an event that will be not just similar to what just went on with the Bank of England, but probably a day of reckoning much, much bigger.
Chris?
Very good, Dr. Paul.
I will finish sort of with a bigger picture thought that I had recently.
And people in our camp, if you want to call it, there's a lot of pessimism, and rightly so.
We live in a time where authoritarianism dominates people's minds.
They believe in it.
They want it, many people.
So it's easy to be a downer.
It's not hard.
And there's many people who think, oh, this is all part of a big plan collapse, and they're going to give us digital currencies and social credit scores.
Whether or not that happens, you're giving a lot of credit to people that maybe don't deserve that credit.
I mean, look what happened with COVID.
The new booster came out, and I saw that 1% of people, who are a little over 1%, are actually getting it.
And the fear was, oh, they're going to give us, it's going to be a medical tyranny.
We're going to have to show that we're up to date.
No.
See, it flopped.
So we can't give them so much credit that they're just going to maneuver the world to their will because it just doesn't work that way.
And especially the Fed.
The Fed has created the biggest mess in the history of the world economically.
To say that they're just going to erect a new system and it's going to be a success.
Maybe that's not the best way to think about it.
Maybe it's better to have a little bit of faith that maybe some good can come of it instead of we're dead no matter what happens.
You know, that's not the way to go.
And all you need is just a little truth.
I mean, look at what Dr. Paul did in his presidential campaigns.
Even with all the blackouts and everything else, and people were making blimps just to get his name out there.
And look, just that little opening, all the good that came from it.
So there's a lot of unknown variables, and we shouldn't be doom and gloom that we're just going to be stuck in this digital prison and we have no hope.
You know, we should have a little bit of faith that maybe some good can come.
Very good, Chris.
I'm going to close with just an emphasis on the fallacy of believing that government insurance will tide the day and tide us over and get us through.
So as long as there's a government insurance program, whether it's medical insurance or flood insurance or whatever, because there will be conditions beyond everybody's control.
Sometimes it's natural and unavoidable, but most of the time that we're talking, what we're talking about are problems created by deeply flawed government programs, the things that we've been just talking about.
Too much spending, too much inflation, too many regulations, too many wars.
That's all preventable.
Instead of pumping in vaccines into little kids that they don't need and they do more harm than good, we should be doing more prevention in the economic sphere of not doing these dumb things because we get to this point where, okay, the only thing is, is people are scared now because over the years that I've been in medicine, people say, I can't pay my pills, I can't pay my bills.
And they would always argue there's not enough government.
Of course, you know, when I got out of medical school in the early 60s, Medicare and Medicaid hadn't been passed yet.
And there weren't that big a problem, tell you, compared to what is now.
So that keeps getting worse.
So the worse things get, there's always a new Medicare program.
But it's a guarantee.
Do this and guarantee the government will do it.
There's insurance.
They can insure against flooding and wind insurance and our retirement funds, student loans, and everything.
But the whole thing is the system is deeply flawed, and it's a fallacy to say government insurance is going to take care of it because the insurance, which is what's happening in England today, is they lost confidence in the insurance.
Answers in Free Markets00:00:28
The government's buying, you know, long-term bonds.
And to a large degree, it's happened here, but we've been getting away with it.
Now we're pretending we're going to correct the mistakes of QE, and yet that's not going to work out either.
So we're at a point that we have to make a major decision with this.
And to me, it's just the answers found in free markets and sound money.