The Fed's raising of interest rates has big spenders in the government upset. Many years of near 0% rates have created the biggest bubble in history. The government and the people are saddled with historic debts. Of course, the big spenders want The Fed to crank the printing presses back up. This is the fate of central planning and attempting to control the economy. It cannot be done. Sound money and free markets are the only way out of this mess.
Hello everybody and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, good to see you.
It's good to see you too, Dr. Paul.
Okay, very good.
This is Friday.
This is when we generally try to concentrate on economic policy.
And to tell you the truth, we're not too excited about our economic policy.
And just changing political parties sometimes help us.
Sometimes it just is a coalition of people who believe in a system that is unworkable.
And so there's a lot of bad news out there.
There was some news this morning that I saw that sort of makes this point.
The article says, Yellen sees lower U.S. recession risk.
Oh, things are getting better.
But she said consumer slowdown is what we need.
What's going on?
Oh, they have delicate control of everything.
And they have a plan for a soft landing.
And we at this organization believe that a soft landing is not likely, even though if it happens, find a DNA.
The market's helping us out.
But in the meantime, a lot of people that listen to this station and this program, and a lot of people around the world right now are investing in gold because they think gold is a haven to this crazy monetary system and economic system that's going on around the world.
It's not just the United States.
Matter of fact, we probably are exempt from it to a large degree because so many other countries are worse off.
And it's one of the reasons the dollar hangs on to a leadership position and they still are a reserve currency.
But a lot of people are assuming that's going to end.
And I think that's one of the reasons why people are looking to protect themselves.
And there's a lot of activity and a lot of purchases.
But in their effort to protect themselves with gold, all of a sudden you found the gold price is, you know, not very steady.
It's up and down.
And I think one thing is the market ultimately sorts it out like they did during the Bretton Woods era.
Eventually, the market said $35 an ounce is a silly thing to do.
So eventually that happens.
But in the meantime, there's a lot of ups and downs, and people are thinking maybe 10 and 20 years for their investments and their retirements.
And I can understand why it would cause some difficulty in making decisions.
The one thing is there's a big difference between making a decision today or tomorrow, the next day, or even in a week, versus 10 years from now or 20 years from now, long term, because a lot of this stuff is going to last for a while because the mistakes made in the economy have to be liquidated and erased so that we can get back to real growth again.
So one of the things I've done is I've associated myself with Birch Gold Group that talks about this issue and that are willing to send you something free.
And it's called a brochure that will talk about gold.
All you have to do is text Ron at 989898.
That's text Ron at 989898 and we'll send you some information about the pros and cons and help people along to understand what's going on with gold.
So I am convinced that ultimately we're going to have a calamity, which will mean that the dollar is going to go down sharply more and there won't be other dollars and currencies to rescue us and people are going to rally to gold.
One of the reasons, of course, I believe this for a long time, and in a way it's been very, very true, and that is when we severed the link with gold back in 1971, gold was $35 an ounce, boy, this is leading into an era of big government and big spending.
And, you know, $2,000 an ounce is moving along, but I think there's a lot more to go.
But nobody can predict exactly when that will happen.
But we do know that when government's out of control and they spend too much, run up debt, and then create currency out of this middle air, it leads to a lot of trouble.
So, Chris, we will continue our efforts on my Fridays, especially, and talk about what's going on.
I want to sort of talk today a little bit about the relationship of the Federal Reserve and the Congress.
Because while I was in Congress for a good many years on the banking committee the whole time, when a Federal Reserve Board chairman came before the committee, I had a few questions for him, for them, and sometimes they would squirm, and sometimes when I was looking for, how does this happen?
Who's to blame for all this?
The one thing a Federal Reserve Board chairman said would not say is they never took any responsibility for anything.
And it was always the Congress.
And that was a half-truth because Congress was spending too much money.
And they didn't have the money to pay the bills.
I mean, there was a limit to taxation.
There was a limit to borrowing.
So they had to have this fiat system and trust in the dollar, which was a political thing.
And they were able to do that for a long time.
But manipulation of price is very important because there's a perception.
If for some reason next week gold goes for just under $2,000 to $3,000, believe me, that would be a big event.
But when it went from $35 an ounce to $800 an ounce, that was a big event too.
And that can happen.
And that's the reason the policy is so important.
And the blame, what the Fed would say, oh, it's the Congress.
They spent too much money.
And we help them along.
And yet the Congress will, I mean, they'll give out, and there's a lot of them in the Congress that will yell and scream about how terrible the Fed is.
Bad policy, bad policy.
They never mentioned the fact that it's impossible to do what the Federal Reserve is pretending to do.
They can't do it.
So that argument goes back and forth.
And I think it will continue because I think it's a system that is unworkable no matter even with the fact that it's universal, it's around the world.
All the countries use fiat money, but people are less enthusiastic than ever before.
So I think the argument between is it all the Fed's fault or is it all the congressional fault?
I think it's all the deep state's fault because my conclusion is I believe that the deep state, special people in special places, are able to manipulate and have a lot to say about the Federal Reserve and as well as control placed on the Congress and the banking system.
And that's where the problem is, the whole system.
So we talk about current events and other things, but we still concentrate on this program to talk about what needs to be done.
And ultimately has to be a change in our monetary policy.
Chris.
That's absolutely true, Dr. Paul.
And you mentioned earlier how we hear about soft landing, soft landing.
This week was Janet Yellen.
And people should know by now that the government will never tell you how bad it actually is.
It's always fine.
They always have it under control.
You could be down to your last crust of bread, and they will tell you that you've never had it better.
So my thoughts are the chances of a soft landing are slim to none.
And I was trying to think of an analogy as to why I think this way.
And I did think of one.
It's been almost 30 years since I went to bars or nightclubs.
And back then, I don't know if they still do these things now, they used to have nights where it was 25 cent beers.
And the place would be packed because beer was so cheap.
And I thought to myself, you know, what would have happened if they would have, throughout the night, raised the price to $1 and then $3, and then $5, and $10?
That would have changed the entire scene.
You couldn't deny, you know, that everything changed that night for everybody that's in the bar.
The hangovers would start to kick in as the price went up.
And the longer the price was up, the quicker the hangovers would kick in.
Well, that's very similar to what we have with the Federal Reserve.
They artificially kept rates at 0% for something like 10 to 15 years.
And people got hooked on this 0% rates.
And now we're at 5%.
So to think that everything is the same and we'll be fine and they have it under control is to be very naive because they changed the playing field.
And the problem is not that the rates are now higher.
The problem was the 0% rates.
That was totally fake.
And they created an entire fake economy bubble.
And now the hangovers are starting to kick in.
And the longer the Fed keeps rates where they are or raises them further, the more the hangovers are going to kick in.
So I think soft landing is out of the question.
Chris, you bring up a good point because the government does send out a lot of propaganda.
It's getting to be more open because people have figured it out.
So if you look at the CPI and say, oh, the CPI just went down a little bit or went up a little bit.
A lot of people now in the markets, they will respond by saying, well, we don't really believe what the government's telling us, but we do believe that there will be a reaction to those numbers.
So it's usually propaganda.
But the Fed and the people who really run the show, they need support from the public.
Government Propaganda Revealed00:02:58
They just can't do it isolated.
You know, they tried that with COVID, but the people finally learned what was happening.
They finally ended the nonsense of COVID.
And so when they come in and they want this control of special interests and the people who benefit from a system like the dollar system under the Federal Reserve, it's always couched in moral tones, high-level tones.
We've got to take care of the people.
We've got to protect our national security.
We've got to provide peace for the world.
We have to be a good world policeman.
And all this stuff is in.
And if you don't do it, you're not very patriotic.
So there's a lot of effort put into that.
But what I sense in the last couple of years is a breaking away from that.
And people are starting to think better because they sense that the trouble is out there, which so far the Federal Reserve wouldn't admit.
And even Congress, with their bipartisanship, they do talk about it and they know it, but not quite to the point where they say, what we really need is not so much a bipartisan effort by bringing people together who basically believe the same thing.
There should be a Federal Reserve and there should be a welfare state and we have to police the world.
And they come together and they really support that.
But they have to get obedience.
The people have to support these efforts.
And one of the clichés that they use in getting a personal approach to get people to sacrifice and do the things they want, because their system is supposed to, the tools they use, they want to promote diversity.
I guess that's a good idea.
They want equity.
That sounds like a pretty good idea.
They have inclusion.
Oh, sure.
But what they don't tell you, and if you don't do it the way we do it, we're going to use force to make you do all those things because it'd be good.
I think a diverse society is a libertarian society if they're honestly doing it.
Equity sounds like equal justice before the law.
That doesn't exist, but they're arguing for that.
Then they have inclusion.
Well, of course, voluntary inclusion is wonderful.
That's what civilization is all about.
So they've couched in those terms, and people say, Well, yes, we have to go along with it.
But what about in economic investments?
They have to do this too to put a guilt trip on people if they're not investing the way the woke people want them to invest.
So they have the major holders of capital in this country, the super amounts of capital.
You're not invited into a system like that and guarantee that you'll get your loans when you want to and you play ball well with the establishment.
What do they do?
The test there is: what's your story on environmentalism?
Are you for dealing with climate change?
Counterfeit Money Matters00:12:59
Are you right on that issue?
How about social, social activities?
And you know, the welfareism, sure, you have to want to take care of people, so you have to do that before you get to join the club and guarantee protection and guarantee contracts and guaranteed with some protection from the government.
But then you have the government involvement coming in with regulations.
Regulations can help people if you get rid of them, and regulations can hurt you if they want to punish you.
And there's a lot of that going on.
But I think that, in a way, is breaking up a little bit.
And that's why, in spite of the damage done by bipartisanship, I think there's enough differences right now where some good suggestions are coming out of the Congress with the Republicans leading.
But still, the big picture is controlled by a bipartisanship that generally aren't exactly in Washington.
They're the ones who are behind the scenes pull the strings.
And that is being exposed more and more.
And it's also what has to be exposed if we ever get the country to agree to a constitutional republic.
Oh, you radical.
And in a way, people, you can be called a radical if you're a strict believer in the constitutional principles that are written down and literally believe that.
Boy, that's when you really are a radical.
You could be called a terrorist by believing in something like that.
That has to change, and that's what we hope we can participate in at the Liberty Report.
Chris?
Excellent, Dr. Paul.
Yes, you make a great point.
The big spenders inside and, as Dr. Paul points out, outside of our government, they want to bring back zero rates or near-zero rates.
They want the Fed to pivot.
And it makes sense.
If you go back to my bar example, you know, people would want to bring back the quarter beers.
Don't raise the price to $5, $10.
Bring it back.
You know, and the big spenders in Congress are not happy with the Fed.
They're threatening the Fed.
They may even threaten to revoke their charter because they were used to 0% rates.
And honestly, if there's 0% rates, you don't really need a Fed.
It's as if the Fed is not there.
So it's Congress literally printing money for whatever they want.
And look what they've done in the last 10 to 15 years.
Look what they've done to our culture.
That was done with funny money.
And that's what zero rates get you.
And Dr. Paul mentioned climate.
They have all these people afraid of the weather.
And that government, with their so-called investments, non-economic investments, and all these things, as if they're going to plan the world, as if it's like a video game that they could just maneuver pieces.
This was all done with zero rates.
So that's what they want.
They want that back.
And, you know, it would be worse if Congress could print money because they would hyperinflate faster than anyone.
You know, as bad as the Fed is, they do want to save the dollar, at least that's my thinking.
Congress would not care because it's all politics.
They just want what they want and they don't care about consequences, whether it's wars, welfare, just give me this law, give me these rights, and they don't care about any consequences.
So it would be much worse.
Now, the best idea is sound money.
No Fed and no Congress printing money, but it would be much worse if Congress was in charge of the printing press.
Very good.
You know, one reason why I remain an optimist, which sometimes I have to reassure myself of that, and other people will ask questions, is because there's, in a way, two worlds.
There's the ideological world, the ideas of the principles, and they're out there and they always remain.
They don't totally destroy.
You can't destroy truth.
They can ignore them and things can get worse.
And I think of the 20th century as that's what happened because there was more killing and more problems than ever before.
And now, on the surface, people say, well, at least in the United States, things are pretty good.
People want to still come here.
But I think the foundation has been really, really rocked.
And so on the short run, I think things are very, very dangerous.
Because if an individual or a company has an ability to borrow money and interfere endlessly and risk everything, and it lasts for a long time, and a lot of people paid attention to them, either for false reasoning or by some gimmicky and advertisement.
But on the short term, the debt and the malinvestment has to be liquidated.
You just can't keep building on it.
I mean, where are we?
A trillion dollars used to be a lot of money.
Now, well, we're up to $32 trillion now.
And the rate in the next 10 years is unbelievable, which I don't think will last because something's going to crack and it will be a big, big deal.
Because the malinvestment and debt, in order to get good, solid growth again, you need two things: the elimination and liquidation of the bad stuff and the bad investments, and also a change in the monetary system.
You just can't do this and just keep printing money.
You know, in 1875, they returned to the gold standard by removing greenbacks and having a sensible fiscal policy.
Today, that's not the case.
So, we're in for a big trouble.
We're in for a lot more inflation.
I don't believe for a minute we're going to have a soft landing.
I think there's already a rough landing for a lot of people.
And that leads to political chaos.
And some of these people who work in the deep state wanting to control the social order and the economic order, in truth, because they work through corporations, they're not like communists who are crystal clear, get rid of the corporations and free market.
They work with the corporations and intimidate the corporations, and the corporations sacrifice the principles that they should be holding.
And they evidently don't realize what happened.
So, as long as that's going that way, the conditions will get worse.
And I believe that we're already in a society that is easily defined as corporatism, and that being very negative, that the corporations are partnerships with big business.
And that to me is a serious dilemma.
It will have to be proposed or exposed.
But Mises said, If we continue on the road of interventionism where government's involved in economics and all these policies, which has gotten much worse since he's been around, that it will lead to fascism.
Some people claim that it's on our doorstep.
Hopefully we can contribute something that will prevent that from happening.
Chris?
Very good, Dr. Paul.
I will make my closing statements.
Yes, we need sound money and free markets because both of those provide the truth.
Supply and demand, sound money, no counterfeiting.
They will provide economic truth.
Now, that will not solve all of our problems, not even close, because this would not change human nature.
People will lie, people will cheat, people will steal, no matter what, whether you have sound money or not.
Okay, it's just under our fiat system, it encourages it, it institutionalizes it, it makes it legal to lie, cheat, and steal.
But man will have free will.
We will not change human nature.
You know, the people that tried to change human nature were the Soviets.
They were convinced that they were going to create a new Soviet man.
And you can go and read about this superman that they were going to create.
They created hundreds of millions dead.
They changed nothing.
They just starved everyone and worse.
So human nature will not be changed even with sound money, even with a constitutional government, even with free markets.
People are people with free will, and there will be people that will choose to do the wrong things, period.
But at least with sound money, the entire system is not a lie.
And that's what we live under, an entire lie.
And everything, look at everything is fake.
Elections are fake.
Vaccines are fake.
The news is fake.
The food that they're trying to make is fake.
Social media, it's all fake.
It's a fake world, but it lives on counterfeit money.
If we could just change that one little element to sound money, boy, would humanity, as flawed as it is, would at least head in the right direction.
Very good.
You know, the effort to change things is difficult.
The effort to understand it is not easy.
The desire to change it and understand the principles, that's a real challenge.
But it's doable because people have thought along these lines.
I think the greatest period of time of people trying to think about previous problems and conditions, political and economic, was at the time of the founding of this country.
For individuals, they didn't have any government schools, but I'll tell you what, the founders were very well educated.
And they proposed a Republican form of government.
So that was startling, and there were a lot of benefits, and we still have a lot of benefits from it.
But I tell you what, we have a mess.
It's not going to be easy.
You can't turn a switch and all of a sudden change the people's attitude.
Because the moral high ground is that make people think that you're taking care of the poor.
Oh, yeah, you're against the poor.
You don't have a heart.
That's not Christian.
And they'll go on and on about the evils of liberty.
And yet, the truth is that people do better with liberty than any other system if you're concerned about the poor and the downtrodden because they're treated so much better.
And the incentives of the whole system changes.
But there is one law that has been used over the centuries for 150 years.
Bastiat in the middle of the 19th century had a good rule.
And he wrote it up in a little book called Bastiat's Law.
He talks about the principle of law.
And it's not complex.
And I think if people would say, well, that sounds like a good idea.
Don't they do it that way?
No, they don't do it.
He suggests it.
He suggested this really wild idea that governments shouldn't be able to do any harm to their neighbors that you and I can't do to our neighbors.
We can't steal, rob, and kill, and injure our neighbor.
We don't have a right to walk into their house.
We don't have a right to tell who's coming into your house or your country against your wishes, and you have to pay for it all.
No, the Pascal law is governments can't do it.
So if my neighbor can't come into my house, and he has to respect my property and my privacy when I'm at home, then how can he send the government?
Just look at what the FBI is doing now and the security they're providing.
It's always to make us safe and secure.
And that, of course, is if it's fake because it's there to control and maintain the power that they have.
But the sneaky approach is that only government can provide a safety net.
And that is not true.
The more effort they do by stealing from one and taking care of another, the worse the system goes.
That's why foreign aid has always failed because it's always usurped by the people who are the authoritarians, who are the strongest in that country.
It never helps the poor people.
So the safety net is an argument there.
But if it applies to little companies and individuals, I wonder why the safety net mostly goes to the giant corporations and the banks and the pharmaceutical companies, the military-industrial complex, the medical industrial complex.
It all goes to the wrong places, but it's all done because people are sympathetic that there are poor people.
The evidence is overwhelming that the freer a country is, the more prosperous it is, and the less poor, suffering people you have.
But people think there's a free lunch out there, and the answer is there is no free lunch.
There might be, it might look like that when people get away with stealing and saying it's a noble thing for government to come and steal.
But until people understand the moral principle that government cannot do what you or I can't do with our neighbors, that is the fallacy that we exist with, and it isn't too difficult to understand.
It's tough for people to give up the notion of a free lunch.