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March 14, 2023 - Ron Paul Liberty Report
30:01
Biden's Bank Bailout Isn't Fooling Anyone

President Biden's attempt to reassure Americans that the US banking sector is doing just fine had the opposite effect: banking stocks plunged after he spoke. Will his bailout-that-isn't-a-bailout shore up the economy or are we heading for 2008 on steroids? Also today, another antiwar rally to hit DC this weekend. Finally: House Republicans take aim at domestic spying of Homeland Security Department.

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Market Winning Over 00:15:14
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today is Daniel McAdams, our co-host.
Daniel, good to see you today.
Good morning, Dr. Paul.
How are you this morning?
Doing well.
Checking my bank account to find out if there's any money there or whether the government took it from me yet.
There sure is a lot of excitement going on in the financial markets.
No kidding.
You know, I saw something in the paper this morning that said that Bill Griffin, who was the founder of Citadel, he said, breaking down before our eyes.
Capitalism is breaking down before our eyes.
He's a good guy.
He's critical of the bailouts and all.
But I got to thinking, well, when did capitalism break down?
See, I think back a little bit.
The setup and the prediction of the breaking down was there.
And it looks like today they're patching it together and it calmed down a little bit.
But it's amazing how long the system works.
But we haven't had true free markets in a long, long time.
And they're never been perfect.
But it certainly has been challenged here in the last couple of days.
Yeah, it has, absolutely.
And, you know, it's only been 24 hours when President Biden went on TV to assure everyone that this is fine, this is fine, as the flames were all around him, as the meme goes.
After he assured everyone that everything is fine, the bank stocks, of course, dropped and they had to halt trading.
Let's put the first article up because I've got a lot of questions.
America has a lot of questions and you've got a lot of answers.
We'll see.
But this is the Wall Street Journal's view yesterday morning.
Biden's bank bailout whoppers.
The president offers assurances that markets don't believe.
And that kind of captures exactly what we're talking about.
He went on TV to assure everyone, and no one is assured.
So what is your take on what's going on?
What happened yesterday?
And what does it mean for the future?
I'll start off by referring to Biden's announcement.
Because I think there was a president in early 1930s who said, everything is fine.
Everything is fine.
There will be a chicken in every pot.
And I think he went down in infamy.
And that, of course, was Hoover who was optimistic.
But that's their job.
They have to pump up the people.
And even when things look pretty good, it's always pumping over and above reality.
And that's how some of these systems last so long.
And because deception is a great tool, because if people believe and trust in the system, it can go a long way.
But it shouldn't surprise a whole lot of people that we have these crises in spite of all the rules and regulations and unlimited credit.
And everybody's watching it.
And all those congresspeople, they're watching it to prevent this.
And there's been so many promises.
But to see a run on the bank, I sort of fascinated with it because they think they can stop it.
And they may have temporarily stopped the run in the bank because they had to promise everything to everybody.
I don't think, you know, I've seen statements there of reassurance coming from the FDI saying, nobody's going to lose any money.
Nobody's going to lose any money.
I think if they wouldn't have done that, things would have gotten much worse.
But by doing what they're doing, it's sort of like the drug addict is coming up.
Please, please save my life.
And boy, they give him a shot and he's doing better.
But the drug addict ended up out in the street.
And I think of the people that are out in the street right now, there's multiple causes for people living on the street.
But it definitely has something to do with the economy.
And so the bubble, the bubble economy comes from inflating the currency, deceiving the people with low interest rates, pumping up the statistics.
And finally, the market speaks.
When I became fascinated with the markets, it was in the 60s when they talked about the abuse of the Bretton Woods standard because we had the privilege of printing the reserve currency.
And we say, we'll keep the dollar at $35 an ounce.
Well, a lot of people knew a long time before that, we're printing so much money, it's going to break down.
No, we're going to always honor our dollar until 1971, which means that there was a contest going on there.
Common sense by the people who are knowledgeable, they were saying this can't last versus the people who want to maintain the organization and the international financial community.
And so the market always wants to deflate.
Governments always want to inflate to calm the markets.
And they can do that until the people lose confidence in the currency.
And individual companies can do this, countries can do this.
But the most threatening thing to world economy is when somebody has a big stake in the economy, like we do, and the dollar is sort of universal.
And when that currency comes under attack, that is a big deal.
And we saw the initiation of a big deal, and we've had bits and pieces of that all along.
So the warning's out there.
But even today, things are a little bit settled.
I don't think people are rushing to the banks right now to get their currency.
But I'll tell you what, I'll bet there's a few people worried about it when they see these big banks with a lot of money.
But the big question right now, Daniel, is who's really insured?
You know, it's supposed to be, well, if you have $250,000, you're insured.
But then there's a question of the technicalities, how many names are on the bill.
But the government today, I saw one announcement, everybody's going to get their money back.
So that's why I've always said, and you've heard me say it, that inflation will win out over deflation because the debt has to be liquidated and confidence in the money will be lost.
And I think that's what we're witnessing, the beginning maybe of the final end of this.
That's the strange thing because, you know, they didn't want, you can't say the word bailout.
This is not a bailout.
Biden was so adamant about saying.
And let's go ahead and skip one and go to the next clip if you can.
One instead their regulators offered solutions.
There we go.
So this is the Wall Street Journal again talking about what Biden is doing about the bank.
And he said regulators offer solutions that bail out even uninsured bank depositors, as you mentioned, and other banks at unknown costs that Biden isn't acknowledging.
Take Mr. Biden's pledge that no losses will be borne by the taxpayers.
That seems like a fraud.
He said the money's going to come from the fees that banks pay into the deposit insurance fund.
The Wall Street Journal calls his bluff on this and says that's not really the case.
This insurance only covers part of it.
So what does this mean when basically everyone gets their money, don't worry about it.
So if I had a couple million dollars in this bank, I would feel a lot more relieved than if I, like my own account, I have about $10 in the bank.
You know, but the lying continues.
It's the fudging and trying to tell the people to calm down.
They have to fib a little bit.
They wouldn't call it lying, of course, and to calm the markets because there's a psychological factor because people do panic.
You know, bank runs are panic, but they're legitimate because, you know, originally nobody got anything, but now they have decided that if necessary, we will send out the helicopters.
We're going to send helicopters out.
And that's exactly what they did with COVID.
Just think of the trillions of dollars that they passed out under COVID.
And that was by the conservatives.
That's what they did.
But then they have to continue to reassure the people.
Like today, the CPI came out and they said, oh, just as we expected, there was 6%.
The core inflation is not so bad.
And it was exactly what was predicted.
And the reaction has been, you know, not too bad because it looks like interest rates won't go up anymore now.
See, that was the market winning over.
So everybody knows, well, they can't raise interest rates now.
So the stock market skyrockets, and that's not real value at all.
It's just manipulation.
But the thing about this CPI, that they use that to manipulate and set how fast they should run the printing presses.
And now they're working real hard.
They monkey around and they got the prices going up probably 10 or 12 percent.
And they're aiming to get 2% price inflation.
So they're working on that.
But the 6% today, wow, is terrible, but it's not maybe as bad as it really is.
Because if you look at food, it's like 50%.
So if they exclude two items when they present the core rate, that's the only thing I count.
But the core rate, which should be the most important, they should report only the things they exclude because it's food and energy.
Food and energy.
Yeah, I saw that.
That is removed.
And oh, it's not so bad.
But you can't keep fooling the housewife.
The person that does the shopping.
It just is all fake.
And that's what happens.
There's fake, then there's the panic.
Then there's the question: will the lying and the innuendos and the promises of the printing presses running will work and it'll work to a degree because they can't see it.
They've just gotten a shot of heroin.
And the economy is slightly improved today.
But the fundamentals are gone.
And this is why I sort of poke a little fun at that: the statement that capitalism is breaking down before our eyes.
I think it broke down in 1913.
That's when the real predictions occurred.
Then, of course, 1971 was the first blatant announcement that we were bankrupt because we didn't honor our commitment.
We defaulted.
And that's when they closed the gold window.
And they did that for 40 years.
And they're still struggling, but they don't.
There are some who are talking about it.
Some central banks have actually gotten frightened that they're actually buying gold.
But it's going, the problem is that it can be resolved.
It will go through the ringer.
The market could help us, but there will be a liquidation of debt.
You can't be totally in debt and then go to real wealth and ask you, ask them for more money.
The market doesn't work that way.
So they're totally have to expect the liquidation of debt will continue.
And my prediction has always been it will be through inflation, the destruction of the value of the money, because they're always going to do exactly what they did today and yesterday.
Yeah.
I had a couple of other things.
If we can put up that next clip I was wondering about.
Now, this is about the exception that we talk about.
And it just strikes some people as unfair.
Actually, do the next one if you can.
No, go back one and go back two, actually.
Sorry, there we go.
There we go.
Now, this is the Wall Street Journal.
And it's interesting how they frame this because it has a political dimension.
I think that is certainly the undertone or theme of the editorial in the Wall Street Journal.
It said, yet after venture capitalists, and they have in parentheses, Democratic donors, and Silicon Valley politicians howled, the FDIC announced Sunday it would cover the uninsured deposits under its systemic risk exception.
Apparently, Silicon Valley investors and startups are too big to lose money when they take risks.
They benefited enormously from the Fed's pandemic liquidity hose, which caused Silicon Valley Bank's deposits to double between 20 and 21.
I think you would talk about that doubling being artificial, and it paid a high interest of 5.28 on large deposits.
So the market was distorted by this huge amount of money going in under the auspices of the pandemic.
It enriched all of these Silicon Valley investors, a bubble, the tech bubble.
I think you wrote about it last week in your column, the tech bubble, which went into this bank.
And now all of this, when it's collapsing, they're still going to get their money out of it.
That's right.
And really, the political thing that goes on is who are the victims and who are the beneficiaries?
Who were the beneficiaries for the 30 or 40 or 50 years where people were tolerating this?
And it was usually the wealthy people doing it.
And it looks like they are able to skirt the real damage.
Because even if you don't have money in the bank, they can get to the middle class and the poor because of what I mentioned earlier on.
The prices of food and energy may go up 20 and 30 percent and they have trouble.
Living and housing is a is a very expensive item and that that makes a big difference.
So the middle class, you usually suffers on this.
I do want to mention two other things that are just general principles that would be needed to be addressed someday when we have monetary reform.
And the founders understood it, and that was, if you have, if you have a money, a currency that you want to use, you have to be able to define it and that is the unit of account.
And there was a precise weight of silver that was designed by the founders.
What would make up a dollar?
But we've we lost that and the final loss of it was when they stole, took the gold away from the people, and that's creeping back in because a lot more people are recognizing that.
But the other thing is is more invisible and people can't see it.
Most people understand the printing of money.
You're passing out this money, but even that is a little confusion confusing, because they they don't print the money anymore, they just, they just have a little compute computer there and they create digits and and that is an easy job to inflate and that's why they think they can solve all the problem.
But the the one thing that they don't talk about is fractional reserve banking.
You know, if you have a hundred dollars and i'm your banker and I put in a hundred, and you put it in and uh it, and you and we have an agreement okay you, you can loan it out and we will share the benefits uh-huh, but I don't.
Nobody creates money, but the banks take it.
They hold the home, hold the money, and one general rule they generally have is and that depends on the circumstances if they get the hundred dollars, they loan out seven hundred dollars.
It's just seven-fold increase.
It's all insured and they and it's all well.
That helped the economy.
You could buy more cars and more houses.
Prices will go up a little bit.
So it's very enticing.
I think the analogy of the drug addiction is just perfect, because it sounds.
It sounds like wonderful.
Barney Frank's Banking Reform 00:02:57
You're always feeling better with these drugs until you die.
Yeah, I think if you and I did that, we'd go to jail.
I had one other little thing, if you don't mind, and this is an old colleague of yours who I think you had a lot of respect for, and that was Barney Frank.
Now, he went on to get on the, you disagreed on some things, but you agreed on some other ones as well.
And he actually helped you get your subcommittee when the Republicans wouldn't help you.
But he's on the board of Signature Bank, and they also failed over the weekend.
And it's interesting because the Wall Street Journal points out that the Biden White House is playing politics with this.
Surprise, surprise.
But it's interesting the debate about a signature bank because apparently there was under the Trump administration, there was a slight change in the Dodd-Frank banking rules that made it a little easier for smaller banks to compete.
It got rid of a lot of the paperwork so they could compete with bigger banks.
And now Barney Frank said that didn't do, that had nothing to do with the signature bank collapse.
But the Biden White House is saying, well, it was all Trump's fault because he got rid of all the regulations in the banking.
So I don't know if you noticed that.
Yes, and I would have trouble with Barney on, you know, deregulating.
He liked regulations.
And the principle in Washington is the Fed does this thing, and they're the smart people to manage the money supply.
But they also realize that it has to be regulated and modified.
So they're big regulators at the beginning.
All they had to do was define the currency and keep it from inflating and destroying the value.
But now they're the architects of all the regulations.
Nobody's complaining about to the Congress, not much anyway.
They're complaining about the feds didn't regulate enough.
And how are they going to regulate and get us out of this mess?
It's all because they refuse to accept the honesty of money because it limits, you know, one of those common things that they have, and it's called fraud.
There's a limitation on fraud and counterfeiting.
This is legalized counterfeiting is how it works.
You know, counterfeiters, until they get caught, some of them never get caught, but until they get caught, they do pretty well.
If people don't identify it, they can go out and buy a lot of stuff.
But this is what happens.
You know, this is why it's sort of an irony.
Those wealthy people in the bank in Silicon Valley, they all of a sudden, they're under the gun, but it looks like they're going to save their skin.
Yeah, on anyone else's back.
Well, I had a couple, just a couple quick clips.
This is from a Newsweek article.
And just to demonstrate what happened after Biden reassured us, if we can go to that next clip, these are all the banks and what their stocks did after Biden was supposed to make us feel better.
I'm not going to read them all, of course, but it goes from the Western Alliance Bank Corporation.
They were down 47%.
PacWest Bank down 21%.
First Republic Bank Common Stock down 62%.
Coalition For Peace 00:04:31
So here's a whole page.
And do the next one.
There's another whole page of the small banks that really fell apart.
If you can do that next page, fell apart after, though, you can go back on that one.
There we go.
After the president reassured them.
We're going to move on now to a couple of other relatively minor things compared to the bank collapses.
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Very good.
Shall we go on?
Let's move on, yeah, to an anti-war rally.
In other words.
Yeah, we could talk longer on the banking thing.
You know what?
I predict there'll be something to say about tomorrow, maybe.
The way the things are going.
So, Mananda Protest.
We didn't go to this one, but we cheered them on.
We hope a lot of people show up because their platform is not exactly as I would write it, but it's darn close.
I mean, for instance, this coalition is coming together.
This is meant to be a coalition of the progressives and libertarian types and independents.
Just look at the first couple things on their agenda.
Peace in Ukraine, abolish NATO.
That's pretty good.
Fund people's needs, not the war machine.
No war with China.
That's a good idea, too.
And so there's some other there.
But just the fact that I think it should be seen in context of what we participated here a few weeks ago.
The rally that we went to up in Washington.
And now there's another one.
So I think numbers are important.
And there'll be people, you know, even at our conference that we attended, the one thing we avoided was trying to get, you know, a litmus test.
Okay, what are you going to do about taxes?
And maybe I should have said, what are you going to do with the Fed?
Matter of fact, it wasn't that interesting when I talked.
You know, here was an anti-war rally.
But it was appropriate because we got the chant and the Fed.
That's right.
And that is true.
But I think it's good that they're doing it.
I hope the crowd is loud and I hope somebody's planning the next one.
Yes.
Yeah, and we can even put that up.
This is from our friends at anti-war.com.
They're announcing this rally.
It's on the 18th in front of the White House.
And as you say, Dr. Paul, it's the left coalition.
It's the Answer Coalition, Black Alliance for Peace, Code Pink, et cetera, et cetera.
I think our rally was a little bit more broad-based because it explicitly brought together libertarians, liberals, and conservatives.
But nevertheless, as you say, we wish them well.
The more the merrier, the more the better.
And I have to say, if you go to the next one, their demands, and you read a couple of them, they're not as bad as I feared they might be because a lot of times when some of these left coalitions get together, they'll put everything but the kitchen sink in there.
This one is pretty concise.
You're right.
Peace in Ukraine, abolish NATO, that sounds good.
End U.S. militarism and sanctions.
That's good.
No war with China.
Now, people have said that's really great that they mentioned that because a lot of the people on the right are with us on Ukraine, but they're with us because they'd rather go to war with China.
The end U.S. aid to racist apartheid Israel, I don't think we would put it that way because it doesn't matter what the nature of the country is.
It's the U.S. aid that's the problem.
Positive Message, Negative Reality 00:03:20
We talked about that before.
And that gets you out of problems.
And there are a couple of other ones.
And AFRICOM, that's great.
End the siege on Syria, free political prisoners.
So overall, it's a good message.
It's a positive message.
The one thing you can say about the Answer Coalition is that they're very good at organizing.
They know how to get buses together.
They know how to bring people together.
So I hope it's great.
I hope our guys have another rally or something of nature.
And I just got an email from Nick, who was one of the organizers with some of the things they have planned in the future.
So it's a very, very positive thing.
So I think something to be optimistic about.
Well, the final thing we wanted to do is, if you're done with this topic, is kind of an update on a story that we covered a couple of weeks ago.
And if you can put that next clip up.
This is the Homeland Security Department.
And we talked about how they've started spying on Americans.
I know it was shocking, Dr. Paul, because you never expected that when they wanted to hold on to it.
But now the GOP, the Republicans in charge of the House are looking into it.
And I think that's a positive thing, Dr. Paul, because it does seem like they are getting out of hand.
You know, we're not too surprised about this because there were a few warnings that we gave.
But I'll tell you, there's another individual that's probably not surprised.
He's probably disappointed.
And he has suffered for holding his position.
And that's it, Snowden.
Yeah.
Because that's exactly what he did.
He worked on, you know, what was an authority given.
Oh, you can spy on people overseas, but not in America.
You wouldn't want to do that.
Then it got a mixture.
Well, what if it's an American who's overseas, but his cousin's in the States?
It's just a principle of surveillance without a justification.
That's why we have a Fourth Amendment.
You have to know why you're doing it.
But then we found out that getting a search warrant is not all that difficult.
That's a political game in this country.
So that's why my conclusion has been, unfortunately, that the justice system in this country is not in very good shape.
It's in shambles.
And unfortunately, it is seen.
And we've been forced into thinking about this.
It's almost like you hear somebody, oh, somebody has to go, and he's in a trial.
And, well, who appointed him?
You see, probably not a pointee or Democrat point.
It has its partisanship at its worst.
And defining it sort of like journalists.
You know, where is the independence of journalism?
We know the six great ones of the Iran.
They're not that many.
But that's the way judicial system should be.
They shouldn't be identified, you know, like that.
So, but anyway, I'm not shocked.
I'm disappointed that it goes on.
But the only thing we can do is expose it.
And we just wish the judicial system would eliminate this kind of stuff in the courts.
But you can't even depend on the courts.
Yeah, yeah.
So, I mean, this is so predictable.
It was predictable back when we were having these battles, and you were about the only one who said, we don't need this.
It's not going to be good.
They're going to be spying on Americans.
Oh, Ron, we're not going to do that.
We're just going to spy on the bad guys.
Guessing On The Bad Guys Still Think 00:03:45
Well, here we go.
This is what's happening.
And the Republicans, unfortunately, they bought into it after 9-11.
And they're still buying into it.
You know, they're looking to reform.
Oh, you guys, you went a little bit too far.
And that's kind of typical of how they work.
But they did.
There are three Republicans on the Homeland Security Committee who sent a letter to Alejandro Mallorcas, who is the secretary of the Department of Homeland Security, questioning what they're doing, questioning the domestic spying.
And here's a typical of what the GOP would say.
There appears to be a pattern of mission creep and overreach by the department emerging at the expense of Americans more than foreign actors who threaten the homeland.
Well, guess what?
You gave them the authority to do this.
They're going to abuse it.
That's what government does.
And so you shouldn't be surprised when they do this.
But let's hope at least now that there's some attention that something can be done about it.
And the way you stated that, it's the power and the authority that you grant they should never have granted to them.
And then they go and they abuse it, which is human nature.
And then you can make these predictions.
But Daniel, we also have to point because we like coalitions.
We even gather information here.
And I think they've been strongly stereotyped as fitting into one mold, but we keep reading them, and they come up with items.
That doesn't mean we agree with all that they do.
But when you're in agreement with them, why fight with them?
So I'm glad that Politico did this article.
Yeah, they definitely have a bias, but I find myself looking there in the mornings to see what we're going to do, what they're doing.
It's certainly easier than other places we used to go.
Well, I'm going to close out, Dr. Paul, if you're ready.
I just want to thank our viewers for watching the show.
We've had a pretty good streak of numbers lately, and so that's all because of you.
So if you do come here, if you're new here and you haven't subscribed, please subscribe.
Please hit like.
That doesn't cost you anything, and it helps boost our numbers and boost the show up.
And we appreciate it very much.
Dr. Paul?
And you might remind them, if you would, that live streaming is available, or do they all know that?
Hopefully they do, yeah.
Watch us live.
You can comment.
Some of them have fun doing that.
Yeah, that's great.
But I too want to close by thanking our viewers.
It's been very helpful to have strong support from people.
And Daniel alluded to the fact that our numbers are going up, and that we're very happy with because we want to reach people.
The whole thing is getting a message out.
I think that is the only tool that's available.
And it's being challenged because they're going to spy on us, cancel us, punish us.
But it's still, when you think back, that the main way they passed information around was at the time of the founding of this country was pamphleteering.
And, you know, the bad guys could come and burn your pamphlets.
But I still think, in spite of all the shortcomings we have, guess what?
We even use the internet.
You notice that?
We use the internet.
So it's a wonderful tool.
It's just that we need some basic rules about property rights and who should be regulating.
And fortunately, we have a pretty good document called the Constitution.
And when I refer to that in trying to work out an answer, I think we can come up with something.
But the one item that helps me the most is voluntarism and property ownership and contract.
That is what is important to do.
Have contracts, understanding, and all associations, whether they're economic, social, sexual, religious, or whatever, if it comes together in a voluntary manner, guess what?
There'd be a lot less fighting going on in the world.
And that's one goal that we have.
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