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Jan. 11, 2024 - Ron Paul Liberty Report
21:01
Democrats To The Fed: Stop Raising Rates!

Democrats want the bubble machine turned back on. Stop raising rates! Our unconstitutional and immoral monetary system, run by the Federal Reserve, is like a game of financial musical chairs. Everyone wants to take credit for the fake and illusionary boom, and no one wants to hold the bag during the very real and very painful bust.

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Fed's Political Influence 00:15:00
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.
Very good.
We want to talk about the Fed today.
Everybody's talking about the Fed.
It used to be they didn't pay that much attention to them, but a few people are waking up.
Guess what?
It's politicized.
Democrats take a position.
Sort of.
They have different opinion, and if they could play this political game, blame the Democrats want to take credit for good times and punish the Republicans for the bad times, this sort of thing.
But in truth, you know, they're dealing with the Federal Reserve.
Who's to blame for all that?
And, you know, we were postulating a minute ago.
I said, Woodrow Wilson, you know, creating this monster.
And there's been a lot of argument from the beginning of our history when Jefferson and Hamilton would argue this whole thing about whether you should have central banks.
And it was pointed out back then.
They knew there was a danger in doing this.
And we've been living with it, but we've been getting away with it just due to other circumstances.
But right now, today, the Fed's ability to manipulate is running out of steam is what's happening.
Because even though they lost such a lot of information that they were getting with the close down of the Bretton Woods, because that was the delinking of gold to the dollar, which means they lost a lot of benefits of getting something to do with market interest rates.
But that was in 1971, and they've been able to work it out due to the circumstances of us being very powerful militarily, economically, and we have an ability to run the reserve currency of the world.
So that gave us a tremendous advantage.
But we've abused that advantage.
And what we're seeing in witnesses today, Chris, is what I think is a consequence of that, that something big has changed.
And I sort of date the big change in attitude and the realization was the recession in 2008.
And it's still going on because we never got out of it.
That's when they invented QEs and all the manipulation.
And they're up against the hard rock place.
They don't know what to do.
They think, well, all we have to do is tinker with the interest rates.
And they have this belief that if you have a booming economy, you will have high interest rates, and this would be good.
So what they want to do is print money.
Therefore, more than 10 years, they were looking for, well, you know what?
We don't want to get into a recession.
So what we need is a little more activity because we want inflation.
Inflation to them is punishing the consumer, have prices going up at least 2%.
So indeed, they achieved it.
They finally got it to 2%.
But there was nothing magic about it other than the fact that the Austrian economists were correct.
They say, yeah, when you get to 2, you're going to need 4% and 6% and 8, 10 if you're measuring the CPI.
And that's where they are.
And I think they're in a box.
And that's why today people are on pins and needles because later today there will be the announcement by the Fed on whether they're going to raise interest rates 0.25, 0.5, or 0.75.
Well, it's not going to be 0.25.
It's more likely to be 0.75 because that's what they're anticipating.
And it's not going to be one because the market's been conditioned and they want things to be done in an orderly fashion.
So I'd be shocked and surprised if it's anything other than 0.75.
But if you think about it in economic terms, what really difference does it make if you're going to rig it and not solve any problems because you don't have the right information?
And if somebody said, do you think 0.75 is right?
Well, I don't know.
Well, does that mean you would be for one?
No, I wouldn't be for one.
I just want them out of the business.
I don't want to concede anything to the system that would concede that there's a group of people there that know a lot more than the marketplace.
And that's what we don't have.
I think that's why we have this crisis.
And I think today we'll hear a little bit more about this crisis that we face because it's not going to go away after Powell makes his little speech this afternoon.
Right, Dr. Paul.
And as we mentioned yesterday, recession is a done deal.
You know, we had years of the government spending trillions of dollars.
Now, they're $30 trillion in debt.
How can you be 30 trillion in debt and still spend trillions more?
Is it magic?
No, it's the Federal Reserve creates the money out of thin air, and then the government spends it.
Now, when they do this, this creates a fake boom.
It looks good on paper.
Things feel good.
It's called the wealth effect.
You feel wealthier than you actually are.
And the politicians, they're very happy to take credit for it.
They're brilliant.
Look at what they have created.
But all fake booms have to turn into a very real bust that you're really going to feel.
And politicians do not want to take blame for that.
They want to keep their jobs and they want to keep their party in power.
So the idea is when the bust comes, hopefully the other party will be in power.
You just blame someone else.
And the Democrats are now starting to blame the Federal Reserve.
It's the Fed's fault.
Now, it is the Fed's fault.
They're the ones that created all the money, but it's also the government's fault for spending all of this money that they did not have.
Now, we want to make clear that Republicans would be doing the same thing right now.
They don't have the reins of power, but they also want to take credit for fake booms and blame someone else for when the bust comes.
So this whole system is so rotten to the core, and we only experience it because there is a Federal Reserve.
But as Dr. Paul has been pointing out, for many, many years, the Federal Reserve should not exist.
You know, Chris, you made the point that they shouldn't be surprised.
There's expectations and they've messed this up.
So nobody should be really shocked with what the results are.
And a lot of people will come up to me and say, yeah, I remember you saying this and that, then it happened.
How did you know that?
Well, really, from the Austrian viewpoint, you don't know that because what we're doing, and I think you implied this, what we had, Chris, is that we were just observing the creation of the problem already.
The inflation has been going on for a long time.
And the rules are that if you inflate artificially and pretend this is the market, it has to make a correction.
The market is very, very smart and powerful, and it usually cancels out the mistakes, but not until they have injured a lot of people and there's been a lot of transfer of wealth and a war would have been fought there and that sort of thing.
So I don't think anybody who understands Austrian economics are clairvoyant.
I don't think we're given this whole perception that we know what the future will bring.
But I think it's reasonable to assume that there are economic laws that we can understand.
And what happens is we're observing it.
So we say, well, how did you know the inflation was coming?
Well, what are you looking at?
I was looking at the money supplies.
I was looking at QE.
I was looking at what they've been doing.
There was the inflation.
So now what we're seeing is the complications of the inflation.
Where it gets tricky, which is really difficult, is what will the politicians do about it?
And that's what this big deal is about today.
The Democrats are unified on this because they want to blame the Federal Reserve and the Republicans all for the recession that's coming and say, please don't raise interest rates because that will cause our problems.
Well, even if they didn't do anything, the interest rates will go up by the market forces would push it up too to sort of turn the spigot off because there is too much debt, too much malinvestment, and the market will say, in order to get back to a sound economy, you have to liquidate this debt.
So I think that people who wonder about the future, they can just look and study the policy that we're doing today and who endorses it.
Oh, we have a few people in Washington.
We have the Congress.
We have the bureaucracy.
We have the Federal Reserve.
We have all the economists almost from our university.
They're all saying the same thing.
They vary it a little bit to be a little bit different, but it's always the same thing.
Central economic planning through the manipulation of money and credit and have a monetary system that has no unit of account that anybody can understand.
So expect a mess and expect it to get much worse.
Chris?
Yes, Dr. Paul.
And the Fed obviously is making decisions that are much too powerful for anyone to make.
Nobody should have this power.
But a thought came to me this morning, and Americans do need to beware because politicians, and they've even mentioned this in the past, they may want to rip this power away for themselves.
In other words, instead of having a central bank control, quote-unquote, monetary policy, the politicians themselves, the government themselves, would have that control.
And we do not want that at all.
I mean, can you imagine a Bernie Sanders dreaming up Green New Deals and then going and printing all this money to go fund their dreams?
I mean, that would be a major disaster, too.
So Americans should beware if that ever gets floated out there in the media or politicians, you know, once they start blaming the Fed, they'll be like, you know what, maybe we should be the ones that are spending this money and creating it out of thin air.
The point that we've been driving is that nobody should have this power, neither a Federal Reserve nor a politician.
You're absolutely right about that.
And you could take what you said about monetary policy and apply it to a lot of other things.
What if we could apply that to medicine?
We wouldn't have had a COVID crisis.
We would have a problem, but we wouldn't have had to turn it into a monstrous problem with lockdown, violation of civil liberties, and just looking around for an opportunity to do what?
Make government bigger than ever and actually punish the people who want to tell the truth.
The process of the culture of Marxists is to destroy the principle of truth.
And if they can do it with COVID or the monetary system or whatever, they're going to do it.
And then that will give them an opportunity to say, yes, what we need is a more Marxist system.
And this is one thing that we have to give their side some credit because they've been very successful because their greatest goal is to having chaos in the streets.
Just think of what the destruction of the Department of Justice and the FBI, the CIA, the corruption is involved.
And then you have these arguments over all the political elections.
There's chaos.
There's been chaos.
There's going to be a lot more chaos.
And that's why it's so important that we expand our ranks so more and more people understand, yes, you've got to live within the rules.
And they all say, that means cut spending and let the monetary authorities not print so much.
Yes, that does.
And they say, well, that'd be horrible on the short run.
That is true.
It would be tough.
Yet, the argument there isn't that if you do it our way, we know how to do it without it having any repercussions.
What happens is really what people should be warned about, if you don't do what is necessary, cut spending, balance the budget, and release the creative energy, which means deregulate the economy, what happens?
Well, you march on to total runaway inflation.
So if you want to try to avoid the chaos, you've got to take it and fix it now, because we're marching in that direction.
Very, very dangerous economically, but it's very, very dangerous politically because the money then and the wealth then will not be delivered fairly to everybody else.
See, one reason why we complain about the system we have today is there's an unfair distribution of wealth.
The wealthy get wealthier and the poor get poorer, that sort of thing.
But if we continue to do what we're doing right now, that gets much, much worse.
And the only system that provides a good opportunity for a large, wealthy middle class is to have a free market economy and sound money.
We once had a notion about that and did pretty well.
But right now, it's getting to be a distant memory.
Yes, very good, Dr. Paul.
I will finish up with my closing statement.
You know, we're seeing in the headlines politicians complaining about decisions are made, and it's almost as if they're being made by people that are above them.
Now, Congress did unconstitutionally create the Fed, but it makes you wonder who is the real government here.
You know, American people, we're drilled into thinking that our government is our government.
We have representatives.
You know, go cast your vote, make your voice heard, wear your sticker, rah, rah, rah.
Think about these last couple years with COVID.
People came out of the woodwork, Fauci, Bill Gates, the World Health Organization, and it was like they were running the show.
And then they disappeared from the scene.
I mean, it makes you wonder about all this representative government stuff.
Think about the Trump administration.
He would say some things that we had, you know, we didn't like a lot of his policies, but there were some that were pretty good, and he'd come out and say it, only to have someone under him come out and say, oh, no, he didn't mean that.
Prevailing Attitude Shifts 00:06:00
And then nothing would happen.
Now, we're told that this is the most powerful man in the world.
Why is somebody repeatedly that's under him coming out and saying that, nah, forget it, you know, he didn't mean what he said.
And then nothing would happen.
See, all this power should not exist.
It's such big concentrations of power.
And that's not what America was meant to be.
This was supposed to be, and it started out as a land of liberty.
Instead, we have these power blocks, and they just battle each other.
And we're just here just to take all the punches.
We need to shift back as soon as possible to a land of liberty, but that will only happen when people understand what that is and really, really desire it.
You know, one of the Democrats that was talking about this thing, he says, this is not too big a deal, but we can do this.
He says, the goal has to be taming inflation without hurting GDP.
Taming inflation to him is keep the prices down.
And if you listen to Biden, that means the businessman should charge less for their goods and services.
And we need to calm things down so we'll close down our production of oil and gas.
That'll help too.
That's taming inflation without hurting GDP, which is, of course, a farce.
But, you know, there's so much of what you said is true about who really is the government.
I had, you know, during the COVID thing, and even now it continues to improve to a degree, but there's still a lot of weird things going on out there.
But when the parents started attending PTA meetings and finding out how many other problems there and grabbing hold of this, I thought, well, this is who the government should be.
It should be the people.
And that, of course, was an argument for, you know, a Republican form of government.
You have smaller units and the people got together and they set policy.
But that to me is just amazing.
But the people have to be a participant.
And the government eventually will always reflect a prevailing attitude of what the people think.
I would say the prevailing attitude, especially if you look at all the graduates of our colleges right now, is not that of a libertarian principle of property rights and volunteerism, low taxes, that sort of thing.
That's not the prevailing attitude.
But there is an attitude alive and well and growing that it participates in it.
But I don't believe everybody, if you do it a poll, everybody say, oh yeah, I like that cultural Marxism.
That looks really good.
But yet they're in the influence.
They're representing the government because they have been shrewd enough to infiltrate just about every system, whether it's education, whether it's our, you know, the legal system.
They have infiltrated and they have these attitudes.
But so the reason I mention this is because it looks overwhelming.
You don't give up.
You get energized because you see the spot where it's breaking.
And on the monetary issue, that gets sort of risky because when people get sick and tired of all this and they want to use an alternative and they use something other than the Federal Reserve notes, which they're cracking down on now, they want control of everything.
Probably get, you know, attack the use of cash and these sorts of things.
That would be just more loss of freedom.
That's what is coming.
But that is the reason, of course, why over the years I have always introduced legislation and thought, well, what needs to be available is get rid of the legal monopoly of the control of money and credit so that people can do their business, you know, in the open.
So if you're going to have people rebelling against the system, unfortunately, if you read stories, what has happened in other authoritarian countries, it's pretty bad if you violate the dominance of their monetary systems because they want the monopoly.
But that's coming.
It's already started here.
Actually, it started 30, 40 years ago with the Banking Secrecy Act.
Yeah, the Secrecy Act was to make sure the government knew everything you were doing.
So that is there.
But yes, the people can wake up and can do it, but still, the final answer, it doesn't have to be that we're going to have 51% of the people all of a sudden voting the way we want and we're going to change Congress.
Not likely to happen.
But we can get people better educated.
And that's why I think we should support the education of what a true free society is all like, because the people have to believe in this.
And I was encouraged during my campaigning because I met a lot of young people that usually get written off.
It's not that they're in the majority and they get to run student council in their schools, but there's a lot of young people who just have good instincts that we have to feed into and get people to understand it.
Because the tool that we have is a powerful tool, but it doesn't use any violence.
It's voluntarism.
It's ideally, you know, it's idealistically defending the cause of liberty, which brings about peace and prosperity.
But at the same time, it has to be done voluntarily.
I see a lot of that, but not yet enough.
So we need to encourage everybody to keep their eyes open, keep getting oneself informed in order to spread a message that's worth spreading.
I want to thank everybody for tuning in today to the Liberty Report.
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