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March 3, 2023 - Ron Paul Liberty Report
27:07
Is ESG Investing A "Ponzi Scheme?"

The market is always more powerful than governments, central bankers, oligarchs and ideologues. Of course, these groups do not like this fact, and are always hatching schemes and scams to try to overpower the market. ESG (Environmental, Social & Governance) policies are the latest iteration of politicizing the economy. It too will go down in defeat.

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Time Text
Inflation's Gold Impact 00:03:23
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.
Great to be with you, Dr. Paul.
Very good.
We're going to talk a little bit about investments today and thinking about how people should and should not invest.
And also, we're going to be talking a little bit, and this is Friday, and I usually like to take this time to remind our viewers that we work closely as partners with Birch Gold.
And gold is always, you know, a subject that has fascinated everybody that has ever lived in the world, according to history.
Thousands and thousands of years.
It's still going on.
And as usual, there's a lot of interference.
Governments interfere all the time, and the central banks interfere.
We started off with a gold standard in the United States, and then the foolishness of creating a Federal Reserve meant that the Federal Reserve would take a gold dollar that was worth $20 an ounce back in 1913, and they've converted it to where it's almost $2,000.
It's going to go up higher because it's an inducement to spending money and think it's painless.
Well, we don't believe it's going to be painless.
We already see people suffering because we see the inflation and the cost of that goes in with the average person paying it.
And that is because the prices go up.
So we're interested in that.
And I want to invite our viewers, if they'd like to get a little bit more information from Birch Gold, if you text Ron at 989898, they will send you some information as free.
And you can look at it, decide what you'd like to do, see if you want to increase or change what you're doing with gold.
But gold has been good throughout history.
And right at this particular moment in time, there's a lot of big talk about will the central banks, including the United States, eventually, just out of necessity, have to go back to sound money.
Because the last bit of relationship to the dollar to gold, we got rid of it in 1971.
And I'm amazed it lasted that long, but it's not doing well.
And that means there's a lot of anticipation.
And you say, well, is that to mean the price of gold is going to go up?
You know, I don't like to say that because really the value of gold and the purchasing power of gold is rather stable throughout all history.
But the price, the dollar ratio to gold, it's inevitable.
So if it was $20 an ounce way back in 1913, it's a lot higher now.
So this is the reason that I think that it's good to know as much as you can about gold.
So once again, if you text Ron at 989898, you can get hold of Birch and I can send you some free information.
And then Chris, I want to go into a subject having to do with inflation more specifically.
And you and I have talked about this because there's one of these financial groups that's managing trillions of dollars, and that's Vanguard.
Rules and Scores 00:09:53
They participated in, you know, the nonsense about, well, here's a good way to make more money if you invest only in companies that are woke and they take care of the environment.
And that will be good for the environment.
And you're going to feel great about yourself.
And you're going to make more money because everybody's going to jump in and invest.
And when that came out several years back, I was very reluctant.
I was a pessimist on this.
I said, that's not investing.
And that's a distortion.
If people do invest in it, it's malinvestment because we have so much credit out there and people are running out of stocks that they can manipulate.
So they jumped at it, especially when the social pressures were on.
And the people who wanted to be corporations wanted to be awoke and do what they were supposed to do.
We saw a lot of the activity of corporations doing what the government wants during COVID lockdown.
And that's still going on.
And this whole investment in ESG, which stands for environment and the government and social purposes.
It's all social pressure.
It's something that people are interested and they're moved by it.
But why we call your attention to it today, Chris and I were visiting about this with Vanguard because the CEO said enough is enough.
This is not really investing.
And, you know, it's almost like the king has no clothes and he's going to be in trouble if he doesn't have any clothes on.
So what they're doing now, though, is sorting it out.
And a lot of the governments, Europeans, are cracking down and they're going to force you into it.
We've tried to do it.
Biden wants to put pressure on these investments.
Fortunately, the Republicans right now are trying to resist some of the more regulations on there, but the whole thing is nonsense.
That doesn't mean that people shouldn't have the right and desire, and there's probably some good investments out there about that would be helpful to the environment.
I think under certain circumstances, I've always been fascinated with windmills.
You know, maybe you're in a rural area, maybe a good windmill wouldn't hurt anything.
They did that for a lot of years.
So I like that idea.
And if there's a benefit, fine.
But to force people into and coerce them and punish people if they don't do it, bad news.
I call that mal mal investment.
And now the corporations are waking up.
Vanguard is leading the charge that says enough is enough.
And several states have removed their funds, including Texas and Florida.
And they say, we're not going to invest in these companies just because you say that we can join the woke empire.
So I think it's starting to crack.
It's going to be rough and tumble.
The people who love this opportunity, including the corporations, why they go along with it, is always baffles me.
And why they went along with all the nonsensing COVID lockdown.
Since it doesn't make sense, but it's sort of like mob psychology.
We better do it.
It'll be bad publicity, and maybe we can make a buck.
And yeah, it's true.
Maybe they would look good environmentally, and maybe they will make a buck, but they're going to lose a buck too.
And that's why we call your attention to what's going on and the announcement by Vanguard.
Chris?
Excellent, Dr. Paul.
Yes.
And the momentum seems to be building against this ESG stuff, which is really just politicizing business.
Companies make decisions and they're scored.
They're giving a score.
They love to score.
You know, they want to social credit scores, score the companies.
It basically is politicizing everything.
And that's how it is with the leftist ideology.
Everything is political.
And, you know, so companies will make decisions not economically based, not based on what consumers want, but based on an agenda.
And, you know, as a consumer, that's one of you have the freedom to make your own economic decisions.
That gives you an element of making your own choices.
Well, of course, with the authoritarians, they don't like you having freedom.
You know, you'll buy what you're allowed to buy, what these companies are allowed to make, and they're scored based on this agenda.
And it's all politicized.
So, and Dr. Paul, you make a great point.
You don't have to be against windmills, but their thing is, no, everybody will use windmills.
We're going to get rid of fossil fuels.
This is how it's going to be.
They dictate.
It's by decree.
This is not how an economy works.
This is Soviet-style stuff.
And, you know, fortunately, the tide is turning and people are starting to wise up that this is not the way to go.
You know, what the Republicans are currently doing now, I think it's passed both the House and the Senate.
Of course, it requires a presidential signature, and Biden says he will veto it.
It was to try to rein in some of the rules written in 2022.
And that's way over the top, the rules allowed to be written.
That's not the way you're supposed to legislate.
And they do this.
But fortunately, even though it should have been automatic and they should never have had the power to write laws, but there is an additional law and rule passed by Congress a few years back that you can introduce legislation to stop the regulation.
It should be they should have come to the Congress to start the regulation, but now the Congress just has this one thing that we can resist allowing these regulations to go into effect.
Now, that rule back there was just a bit horny.
And I think it's sort of more of this corporatism because under COVID, you know, the corporatists, the government says, oh, we're not against First Amendment rights, but the partnerships they had with social media, they did what the government wanted.
And if they didn't obey the rules and lock down and fire people and all this, you know, the social media destroyed some of these people's lives.
And this is in a way similar because they want the corporations to obey.
Now, this is how they're trying to cover and say, this is not a big deal.
So the Biden administration said, to be clear, these rules that the Republicans are trying to get rid of, those rules aren't a mandate.
It does not require any fiduciary to make investment decisions based solely on ESG factors.
The rule simply makes, it makes the sure that retirement plan fiduciaries must engage in a risk and return analysis of their investment decision and recognizing that these factors can be relevant to that analysis.
That's just more paperwork and adjustment.
Maybe it's after the fact they go ahead and do it.
No, we're not going to force you to do it.
Just a little old recommendation.
But, you know, by the way, we have authority to make sure people aren't being cheated by their investment.
So we'll just add that in there.
It's just a gimmick.
But I see it as a further extension of an association between government and big business.
And I call it corporatism.
And corporatism is not good.
It is not free markets.
Even though you have corporations in one area and government supposedly not doing too much in this other area, it's a dangerous situation.
And they're in collusion.
So in many ways, philosophically, the fact that Vanguard has stood up to this is very good.
And it's good that the states that have resisted being pressured into putting their money into these investment companies, that I think is good.
So it's in a way about sort of like COVID.
COVID was just so outrageous that people were frightened and terrorized with it.
And they went along with it.
And they didn't want to look like they were unpatriotic.
But enough was too much.
And finally, they ran into some problems at schools that they're still trying to sort out.
Some monstrous things going on.
Essentially, in the schools right now, the teachers can teach what they want, and they can even prohibit and deny the right of the parents to know what they're teaching in those schools.
So it is a mess, that collusion.
And right now, I would say once again, Vanguard is moving in the right direction.
I also think there'll be more because it doesn't make any sense.
I think this is malinvestment.
It's a mistake.
They wouldn't do this if the government wasn't involved.
And this is encouraged for certain reasons, some of these regulations, but it's also encouraged because of the old-fashioned malinvestment that comes with low interest rates and a lot of credit.
And people make mistakes because they're looking for something to do with their money.
And so this is a malinvestment that is related to that, but it is not exactly the same.
The first is the Fed creates the problem, too much credit low rates, and businesses do the wrong thing.
This actually encourages the Fed to print more money, but it also puts pressure on the companies to make investments like this.
And these companies that have done it, I think a lot of them have made a lot of money doing this over the years.
Ponzi Scheme Missteps 00:03:36
And that's one reason why I think it's a Ponzi type scheme.
A Ponzi scheme is that after a person gets into the market and they're making dividends, they get somebody else to come in and put their money into the account, and they take that money and pay off dividend.
That's the classical Ponzi scheme.
But this one is you just get more people to invest in those stocks and it builds up the wealth of these companies and they have economic power.
And right now, though, they're at a crisis point because it looks like there's going to be a reversal of this because, of course, the markets are going to get very, very rocky, and we're going to have a lot of trouble.
And they're going to wake up and say, you know, that management of investment by the government, total failure.
And maybe they'll include in it and a contribution by the Federal Reserve has been a total failure as well.
And maybe we'll actually even get an audit of the Fed so that we can get rid of it.
Chris?
From your lips to God's ears, Dr. Paul, maybe someday.
Yeah, I have no qualms personally with products per se, whether it be solar.
I have some neighbors that have solar panels on their roofs.
I have a friend who has an electric car.
I mean, it's neat.
I wouldn't get one for myself, but, you know, I could see the novelty of it.
But, you know, these are political products, you know, in my estimation.
They're pushed by the government.
And the government has, it's not like a company where you have to voluntarily give your money.
The government takes your money.
There is no voluntary.
And then they go and spend it the way, you know, I saw Ford is selling 9,000 electric cars to the government's post office.
This is politics.
Is that a good economic decision?
Government doesn't worry about that.
They're just going to take tax money.
They don't have to worry like a company about profits and losses.
Is this the best decision to make, you know, given the resources that are available?
Government does not think that way.
That's how they are with loans.
You know, look who government gives loans to.
People who in the private life would not get a loan.
They're like, no, that's too bad of a credit risk.
We cannot do that.
That's too big of a risk.
So you get it from the government.
They don't care.
They'll just tax money.
And look what happens with the student.
Now they're trying to repeal the student loans.
So you see how government, they do not care about economics.
They care about their agenda that they push.
And they push, and they tell you that by 2040, 2030, that there's all going to be electric cars.
You know, they give these big predictions.
We'll see by the time we get there what the reality looks like.
It's almost 100% the opposite of what they say.
So yeah, this is all political products.
And that's why when you make decisions and you buy political products, you know, it's a risk because you don't know what the future holds.
Right.
You know, there was another good article on this subject.
Gazero Hedge is very efficient in getting information out on this subject.
But this just came out just last week, and the article was.
And I looked at it and I misread the title and then I had to read it and pay attention.
But when I just glanced at it, it said, the EU warns their quote, there is no escape from its ESG environmental madness.
Oh, the EU is warning of the danger of it?
Well, I thought that's our job.
But you know what the warning is?
If you don't do as we tell you, watch out.
EU's Hard Warning 00:08:57
We're going to come down hard on you.
There is no escape from the government dictating to you.
That made more sense than thinking that the EU warns there is a danger.
You better watch out.
They're right.
There is a danger.
But don't go getting more involved with the government.
This might be a good time for people to stop and think, how do I get away from this government?
So it's a system.
People are going to continue to look for investments like this.
And they know there's a problem with inflation.
And whether it's the COVID lockdown or whether this kind of things, it does push up prices.
But that is some, that's a little bit separate from just the inflation.
But it means that it's a combination of things.
When COVID hit, we were already in a problem with the Federal Reserve.
Prices were going up.
The inflation was milder.
But since then, it has been getting much worse.
There was the natural correction already starting when COVID hit.
So we had the correction of the bubble, a much smaller bubble back then, three years ago.
And the correction there was coming.
But then the suffering and the penalty of all the regulations added on to it.
So you have the devaluation of the currency, but then you have the price pressure on all the regulations.
It's a mess.
It's more than just the money supply.
The money supply, nothing could happen without the money supply going up.
But what happens is when you have ESG or you have COVID lockdowns, it makes it that much worse because the market would help correct it if the market would operate and try to correct what the Fed's doing temporarily, of course.
But if the Fed made a mistake and there's a problem to it, the markets can help a whole lot by if the people in the legislative branch don't add taxes.
But if you add on taxes on this, you have the inflation tax and more taxes.
But if you allow the market to work, the market actually helps dissolve and get rid of the bubble because the bubble has to deflate.
And that's why they won't let it deflate the old-fashioned way.
You know, you just have to allow the payment.
You have to go bankrupt.
But governments go bankrupt by printing more money and passing out just paper that has no value.
It's in the process.
It's very, very dangerous.
It's a political danger.
There's too much of this misconception.
Too many people are still relying on the nuttiness of Austrian economics.
I mean, the naughty of the Keynesian economics and find out the delightful answers in the Austrian economists because they understood this from the beginning and they're the only ones that can offer us an answer on how to get out of this mess.
Chris?
Very good, Dr. Paul.
I will give my closing statement.
Yeah, please pay attention when you make economic decisions.
Is this a political product that I'm getting involved in, or is this a market product?
If it's political, you're likely going to end up with regret at some point.
And the vaccines are a perfect example of that.
That was all political.
That was not the market at work.
That was pushed by the politicians in league with the moneymakers that made the jabs.
And the goal was to continuously give them to us to stay up to date and then prove that you're up to date in order to function in society.
Fortunately, that dystopia failed.
But that was a political product.
Another huge one that Americans have been just robbed beyond belief is war.
They get emotions going.
There's a bad guy somewhere.
And just over and over, it's just failure.
It's $6 trillion gone.
And now they're $2 trillion gone.
And they just move from one to another.
That is a political, that is not the market at work.
That's the bureaucrats at work, and we pay for it.
And just imagine if we had that $6 trillion from Iraq to put in this country and for our own personal lives.
That was an option, but that option is gone.
And there's lots of regret after all these wars.
And after the vaccines, there's lots of regret now.
So you've got to pay attention.
Is this political that's being pushed on me, or is this an actual economic market phenomenon that I should be involved with?
Very, very good, Chris.
I just want to close by making the point that ESG is not that investment.
Even though some people are going to make money, have been making money, it's really the wrong way to go.
If they are making money, they're only encouraging people to do dumb things.
And they'll continue until it breaks.
What we're saying here is Vanguard is saying, watch out, it's starting to break.
A lot of other people know that.
A lot of people go with it because they don't want bad publicity.
And they think that, oh, they're bigots and all these kinds of things because they've been terrorized by the people who run wokeism and say you better do it or else you may be in bigger trouble.
But you know, the problems we have are bad.
I think they're very serious.
I think they're bigger than anything that the world has ever faced in a financial sense.
And also the international scene is so dangerous too.
But it wouldn't be hard.
The solution is easy, but there's a little bit of acceptance of a mistake and the acceptance of a little bit of effort and pain that you have to suffer through.
Because the one thing that we could do is accept the Constitution and say, you know, gold and silver has to be legal tender.
Nobody can print the money.
And that's not complicated.
It's just that the people who want to print the money are the big banks and the big corporations, the military-industrial complex, the pharmaceutical industry, because they believe they can get hold of it first.
But the middle class pays by having the inflation.
So this whole idea that we need to have paper money because the middle class is going to benefit from it.
How else are we going to send them welfare checks?
The other thing that we must do if you want the market to help solve these problems is reject the interventionism and the planning of government through regulations or through the Federal Reserve and the manipulation of credit.
And that is everything has to be voluntary, whether it's social, personal, religious, sexual, whatever, voluntary arrangements between two people.
Whether you're the businessman or the customer, just have an agreement.
We come together, and then both sides are happy.
But no, the government gets in the middle and writes thousands of regulations and then interferes with the monetary unit, the measure of the unit, the unit of account.
They destroy the values because nobody knows what the unit of account is worth.
And it wouldn't be hard to have a unit of account.
But we're not on the verge of having that happen.
The other thing under today's conditions, there's been so much debt and so much bad malinvestment that liquidation has to come.
It is coming.
It's coming right now.
The market is stronger than the government.
The market is in the process of shifting gears and showing that liquidation has to happen.
Since nobody, nobody, there won't be enough people support cutting back spending and cut back printing money that the liquidation of debt is inevitably going to be accomplished through the liquidation of the value of the money.
And so that'll tie you over and people will feel better about it because in conditions like this, the saying always is, things aren't so bad.
I just don't have enough money to pay the bills.
And I think that's, you know, I understand exactly what they're saying.
But no, that's the wrong thing to say.
I don't have enough purchasing power of my dollar that was guaranteed at one time and is not guaranteed now.
And we're residing on this fraudulent system of counterfeit money.
So I don't think any of those things are hard to understand.
I talked to a lot of young people in colleges and they had been brainwashed with Keynesian economics.
And it wasn't hard to get them excited about this because it's based on a moral principle and it's based on a constitutional principle and it's based on pragmatism of if you want prosperity.
The nations that have fold the greatest amount of free markets and sound money, the more wealth there has been and the more peace.
Victories in Ideological Struggle 00:01:00
How can you beat that?
I think it sometimes has to be placed on those of us who send the message out because if we did a better job, they would accept it.
But there's also forces that are in opposition to like the ownership of all the propaganda is put out there, whether it's social media, regular media, the government, and on and on.
It's a tough job.
But it's an ideological struggle.
I think ideas do have consequences.
I do see victories at times.
I see victories on the short run already with COVID.
And I see a bit of a victory when somebody is involved with Angola and say, enough is enough.
This doesn't make any sense.
Well, there's a lot of other things that don't make any sense.
So the whole thing is the solutions come with just developing a little bit of common sense.
And I think that would be a long way in the direction of solving our problems.
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