Powell Admits The Fed Doesn't Know What It's Doing
It's rare, but politicians and central bankers sometimes (accidentally) tell the truth. This week, Jerome Powell claimed The Fed, which unconstitutionally counterfeits trillions of dollars, has little understanding about inflation. They're apparently 'surprised' that counterfeiting trillions caused prices to skyrocket. Central planning always fails. We desperately need to use sound money again.
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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.
It's great to be with you, Dr. Paul.
Very good.
Guess what?
I'd like to talk a little bit about the Federal Reserve today.
Are you game?
I am game, of course, of course.
It's an important subject.
I decided, I think it was the year, well, I thought about it through the 1960s, and I found it fascinating, but I really got involved in trying to fully understand what the Fed was all about and trying to do something about it because I saw it as a real threat and a threat to the financial system and a threat to our liberties.
And right now, I would look back and say, I think my suspicions were probably right.
Because we haven't messed.
Now they're...
Now they're getting into social engineering, so we better wake up a lot of people quickly because I think some big changes are coming.
A lot of people talk about these changes and they call it a reset.
And I read about that and I get the gist of it.
You know, there are major things and changes in the political functions and social structure.
But you know what?
I never quite grabbed hold of that term, reset.
I think it's way too mild.
That's what I do to a clock or the television say, you reset it.
As if you just turned a switch and it's going to be reset it.
I think what's going on is much, much bigger.
And it's more involved in financial and social revolution and the nature of how most people in the world are living and will live as these changes come about.
So it's just, I think it's a degree.
I think everybody uses the word reset and they know what they're talking about, but they know there's a lot of changes coming.
But the changes are really rapid in the financial markets.
I mean, even today, gold prices are way down and then they recover.
And cryptocurrencies way down and they recover.
And, you know, in the stock market, it's in a terrible shape.
And I often think about how people react to these markets.
And I know how I react because although I understand the big picture and I understand the long term, I understand economic laws.
But quite frankly, I don't have the personality to try to understand and make a living or even preserve my wealth by being in the marketplace.
And that to me is a big job.
And I think it's getting more difficult than ever.
I think our Federal Reserve Chairman is going to reveal to us that he doesn't know exactly what's going on.
And certainly the people I knew in Congress had no idea about Austrian economics.
And most of them are interventionists and they've been taught this.
And you can get a computer and a calculator and you can predict the future, which Austrian economics totally rejected.
And you know, I got interested particularly in speaking out was after the Bretton Woods failed.
And immediately, of course, even before it was in failure, many of us were buying silver coins and numismatic gold coins in preparations of protecting ourselves.
And it wasn't too difficult for me because I was thinking long term.
I wasn't thinking about trading during the day.
Back then, they didn't even have futures markets in gold and silver.
But now you can do all kinds of things and it moves rapidly.
It takes a lot of technology and understanding on how to do it and whether or not you can predict these short swings, which I don't think a lot of people think they can, but they don't.
But it's something that information is helpful.
Matter of fact, the futures market, as wild as they may seem, they do serve an economic function.
But I've never been interested in dealing with that on a personal level, but I have been interested in trying to understand economic laws and how that affects what I do for myself and for my family and how you plan for your kids' education and this sort of thing.
So that is a lot easier for me because I started with one obvious fact in 1971.
They no longer were going to have a definition of the unit of account.
Gold was not going to be defined as part of our dollar system.
And I said, that is big trouble.
That is going to usher in, you know, wild inflation and really ups and downs and wild business cycles.
But ultimately, it will be definitely a depreciation and devaluation of the currency.
And I believe I was right on that.
It continues.
It's an economic law.
I didn't invent that law, by the way.
I just sort of observed that.
And I think economic law is one thing.
But understanding the short run is another thing because it's legitimate and people have to move their currencies for legitimate financial reasons.
There is a lot of speculation in that and a lot of variables, but it's a different system.
This is one reason why I've been interested in referring our viewers to a place where they can get more information if they are thinking about the short term and the long term and what they can do.
Because I've met a lot because so many of my supporters have been young people even back when they were in college and in high school.
They're now working.
And I can imagine it's tougher now than it was for me back in the 70s, as bad as it was then.
And so they're looking for help.
And that's why I am working with Birch Gold.
And I'd like to refer to them and offer to the viewers today to get more information on what I've been talking about.
And they're putting out a free information kit to go over this and guide you.
And to get this free kit, it's not difficult because there's a number at the bottom of your screen.
You can text that number and you're going to find out how you can get this free kit.
And that is not complicated.
No buttons to push to find somebody that you know will answer some of your questions.
But I think the kit's going to be very helpful for you.
Then if you have more interest, then you can follow up.
But I think that certainly has been helpful for me to think about the long term versus the short term and how important it is.
And I think, and just to sort of conclude, this idea is I think the fluctuation in what's going on and the devaluation, I think it's just starting.
And yet at this time, we went from $35 an ounce now to up to $1,800.
And believe me, it's way quiescent now compared to what's going to happen.
So that's why investments are going to be more difficult.
And just think of planning for children's education.
So this is going to continue.
But of course, we talk about the economics all the time and what's happening in the inflation.
And we'll continue to do that because I see the Fed as the financier of everything that we do because they make the money.
They're moneymakers and They rule us in a way because they can threaten us, they can blackmail people because they have overwhelming power in the financial system.
You know, it was started off way back.
Well, all we're going to do is make sure the Fed is going to be able to give us stable prices.
I don't know what kind of grade I'd give them for that, but not a very good one.
And then the other thing, they said, we're going to always argue for full employment.
Now, the government statistics on employment right now are, you know, they look real good and that there's jobs available.
But I think that's just a reflection of what happened to employment with COVID.
So I think the unemployment situation is very fragile.
So those are the two things they set out to be.
But now they're doing a lot more things, and that's what we want to talk about today.
What else do they think they can do?
And what should the viewers consider to be as a warning that we have to be on our toes because it doesn't drop out of the sky?
Inflation, it doesn't come out of the sky.
There are some precise reasons why that occur.
And of course, we've honed in on the real culprit, and that's been the Federal Reserve, Chris.
Excellent, Dr. Paul.
And you know, Ron Paul has been for 40 years saying that the Fed does not know what they are doing.
And he's been right.
And it's not because if he was Fed chair, he would do things differently.
It's because nobody can do what they try to do, which is centrally plan the economy.
It's, you know, if he was Fed chair, he's often said he would shut down the Fed.
That would be job number one, because there is no way to centrally plan the economy, and they only create booms and busts, and they are the source of inflation.
Well, this week, Fed chair Powell was on some kind of forum, and he said something that really caught our attention.
He said, quote, I think we now understand better how little we understand about inflation.
He said, this was unpredicted.
So he's basically saying that they don't know what they're doing.
However, I don't know if I believe that completely.
You know, they counterfeited trillions of dollars.
They didn't know that that would drive up prices.
I doubt it.
But that's the usual pattern with people who have power.
They, you know, they do the wrong thing and then claim that nobody knew.
Think back to the Iraq war.
You know, did nobody know that going across the world to try to remake an entire society from the ground up wouldn't work?
Ron Paul knew that it wouldn't work.
In fact, all his speeches are available saying, don't do this.
This is the wrong thing to do.
20 years later and $6 trillion later, we had to come home.
What about the lockdowns and the masks and the vaccines?
Did nobody know that those wouldn't work?
Well, those censored people, they knew that it wouldn't work.
So it's the same thing with the Fed.
The Fed knew what they were doing.
They knew that creating trillions of dollars would cause prices to skyrocket.
But of course, they don't want the blame pinned on them.
But this is the usual pattern.
Just do the wrong thing, censor the people who are saying to do the right thing, and then claim that nobody knew that this would happen.
You know, Chris, when I first saw this quote from Powell, I thought, well, you know, this isn't all bad.
You know, sometimes you can find something in there and say, well, this might help something.
Because he says, I think we now understand better how little we understood about inflation.
Well, that's a step in the right direction.
A mini step.
It's pretty small.
I think of the analogy about drugs because when a person's on drugs and really wants off, it's finally when that drug addict makes the decision that he has a chance to get a cure and seek some help.
But I don't think Powell's quite there yet, but at least he's recognizing there's something wrong with this addiction, this addiction to central economic planning with the Federal Reserve.
Matter of fact, they're expanding that.
They want to do more, not less.
It used to be that they only had two mandates, price stability, and full employment.
But now they've included a third one which has been around for a while, and that is alter long-term interest rates.
They've been doing that too, but if that's acknowledged as one of their functions, and guess what?
How would they have done QE if they couldn't manipulate long-term interest rates?
That's what they did.
But they manipulate everything else.
But there's legislation now proposed that they're precisely given a role to play for social and economic justice.
The whole woke ism program, they're already involved in wokeism.
We've complained already many times on this program that the influence that the Federal Reserve has on the corporations, that the corporations bow over because the Fed has so much control of them.
And that's how people throw up their hands like I have in the past.
Why are these corporations doing this?
This is suicide.
They're destroying the marketplace.
And of course, they're not quite in the marketplace because they're in business now, especially with the Fed, because even if they're not sympathetic to the policy, some of these corporations have no choice.
They have to go along with it because they can be punished harder to get loans and manipulation, or they can be punished in all sorts of ways.
But they're going to, if this bill passes, they're going to have that as a legal objective.
It's not that that would change what they're already doing, but it just would put it out on the table and make us legal because they do a lot of it anyway because they are economic planners, central economic planners, but they're also now admitting what we really want to be are the social and justice planners.
And that, of course, takes us a long way from free market capitalism.
It's putting us right into the category of corporatism, which if we're not careful, we're going to end up with fascism, and that's not good.
Not at all, Dr. Paul.
And I do remember in the past, we've probably done a show that the Fed, you know, one of their new jobs was climate change, and they're just adding on all this wokeism, all these things.
I mean, is it really a leap when you claim to do one impossible thing to just add on other impossible things?
Because that's virtually what they're doing.
What is the Fed going to do about diversity and climate change and all the other woke buzzwords?
Sanctions Backfire00:12:19
Nothing.
The most famous example of this is the president of the United States.
You know, if you read the Constitution and what his job is and then compare it to modern day to what people believe his job is, boy, is there a big gulf in between those two.
I mean, people today believe that his job is to make everyone safe and happy and feed you and educate you, make sure oil prices are satisfactory.
He wants to make sure that you have a job, you have enough money, you have retirement money, you have social security, and then it goes up to he runs the economy and runs the world.
I mean, that's all it was.
It's just adding on all these fairy tale things that one man can possibly do any of this, and he doesn't do any of it.
But that's how far beliefs can go, you know, and that's what the Fed is doing, adding climate change.
It really means nothing.
So is it a big stretch for them to do it?
No.
The important thing is to stay with the truth, and then you won't believe in all these fairy tales.
You know, we live in an age now that it's become popular to support sanctions.
And it's interesting that they've backfired.
We've talked about that, but it has backfired in destroying a coalition that was available to us to some degree over the past several decades.
And the coalition, of course, would be constitutionalists and libertarians, along with progressive Democrats who were opposed to war.
And that certainly was very, very active during the Vietnam War because it was the progressive left that represented the real opposition.
So that was available.
But now the opposition coming from the progressives is virtually down to zero.
And one thing that I noticed when I was in Congress, what would happen is when we have votes to do something short of military intervention, bombing or sending in troops or whatnot, they would come up with a bill.
Well, let's punish them.
Let's sanction them.
Let's deny their right to be in the financial markets and on and on, some type of economic punishment.
And we, who had the largest military, the richest nation, and operated the reserve currency of the world, we had a lot of leverage.
And then we got, you know, financial and political control of things like United Nations and NATO and G7.
And we could put pressure on them to go along.
So if we would say, okay, it's time to go to war against Ukraine, you know, they all towed the line, even though we might, we're not going to send troops, we're not going to send troops.
So, and the progressives always voted for those steps toward war, which if they were done to us, we'd call it a war against us.
You know, if we have sanctions put on us by China or Russia and they had a naval protection and a naval presence in the Gulf of Mexico and the Chesapeake Bay, we call that an act of war.
But that compromise has been very, very bad.
And those sanctions are, you know, what are so encouraging.
People think, you know, a little bit of sanctions won't hurt that much.
And you won't lose your liberties.
And maybe we can accomplish what we want.
Well, they don't work.
And people are waking up to find out that they don't work.
But guess what?
G7, they agreed to go along with the United States suggestion.
I can't believe this will come to fruition, but they discussed it.
And I don't know whether they will wake up in a true sense of the word, wake up and say, this is stupid.
They want to ban, this is all silly.
They want to ban the sale of gold to the United States.
And, you know, why don't we look and see how the ban about us buying oil, how'd that work out?
Well, our gasoline prices went up.
Russia found a way to get along around the sanctions.
Russia got richer.
They were making hundreds of millions of dollars and sold more oil than ever before.
And yet, who ended up paying the literal penalty?
The American gasoline car drivers who had to pay five or ten dollars a gallon of gas.
And now, but the whole thing is, is you know, I think gold is even more fungible than gasoline.
And how are they going to do that?
And let's say they were able to say, Russia, we don't want your gold and we're not going to let anybody buy your gold.
We're going to make them keep their gold.
Well, you know, the day is going to come when gold is going to not just be very important and very valuable, it has to be used for the rebuilding of another sound currency.
And it's so ironic to me that we're going to force them to hold on to a real asset.
Somebody should have done that to the United States when we were through the 60s and early 70s, giving away our gold at $35 an ounce until we were running out and we had to close the gold window.
But anyway, that's their idea.
They're there to do that.
And it's economic planning gone bizarre.
But this one just happens to be a little sillier than the rest.
And I vote against those sanctions.
Excellent, Dr. Paul.
I'm going to finish up.
You know, Dr. Paul mentioned the absurdity of all this build back better and great reset.
And you see that politicians are all walking around with these pins on, and they're very blunt.
They're going to remake the economy, the world economy.
They're going to remake human beings.
And you almost have to feel bad for them.
How could they have been so delusional?
Because it's impossible to do these things.
You can't possibly know all of the variables involved.
They didn't make human beings to begin with.
They didn't make the economy to begin with.
So you can't remake something that you never made to begin with.
It's as if I was to say, you know, to our audience today, you know, I have a wild imagination.
I want to reset the oceans.
I'm dissatisfied with the way the oceans are in the world.
I didn't make the oceans.
And in fact, 95% of it, maybe even more, is unknown, unexplored, unknown to my mind.
But would it matter if I wore pins or if I had the whole media, you know, just propagandizing this idea?
Or would it matter if I was in control of all these government agencies?
It wouldn't matter one bit.
You can't remake the oceans.
They can't remake humans and the economy.
It's, you know, it's a problem of not knowing your place in the world.
And this problem goes back.
And if you look at the ideas that drove the Hitlers and the Stalins and the Lenins and the Mao's, it's this type of thing.
They didn't know their place in the world.
They thought that they were there to remake it.
And if they just had enough power, they would get it done.
Unfortunately, what happens in the wake of these people is very, very nasty and disgusting.
So it's very important for people not to go along with this stuff and just do the best to search for the truth and not believe in these things that they say.
Very good, Chris.
You know, this whole statement of Bowes about we had been wrong.
He wasn't saying that at the last meeting we said the wrong thing or we put the wrong sanctions on somebody.
What he was saying is that the policy of the past 40 years has been wrong, but they still don't ever even consider, you know, a couple things.
The morality of money.
Inflationism and central banking is corrupt and it's equivalent to fraud.
And it's compatible with counterfeiting.
It's an economic system that doesn't work, which we talk about all the time, and they know it doesn't work.
And they don't have authority to do it because it's not in the Constitution.
Matter of fact, it's in the Constitution.
They shouldn't be doing it.
They should only accept gold and silver as legal tender.
So you'd think they'd wake up.
And maybe again, looking for an opening.
After 40 years and the failure that we're in the middle of, and it's going to get worse, if the people get the information, and I do believe that when they get the information, just like when they got more information about the lockdown over COVID, they said, no more, this is for nonsense.
So I think that is going to be the case, and it's been that way in history.
The people finally wake up, and the inflators, the individual who's the most responsible for the runaway inflation when everybody agrees, yeah, like in Zimbabwe or Venezuela, very often the individual who identifies with that can get into big trouble and the people turn against them.
So this is something that it's a shame that we just can't say, you know, why don't you consider this?
And look at the Constitution, look at the moral argument for this.
And I think there's a growing number.
I certainly had a good reception on the college campuses where all the garbage is spilled out about, you know, Keynesianism and computers solving all these problems.
We have a computer, we can calculate human actions and explain what people will do if we give them free money or if we lower interest rates a point or two or let the market work, which they have no knowledge whatsoever.
It doesn't work.
So I think that the evidence is growing of how terrible of a job our Congress has done, our executive branch has done, our Federal Reserve has done.
So it's an opportunity to precisely give them the answers of what a sound monetary system would look like and why there would be an automatic control.
If you don't have a secret body of special interest people who benefit from all this, if you get rid of that program and that ability to do that, how are they going to finance these wars?
How are they going to finance this welfareism and wokeism and all the nonsense that goes on?
Because they'd have to earn the money.
And if they wanted the program, they'd have to tax the people.
Right now, the tax goes through printing money and that becomes a tax.
Every time people spend money today, if prices are higher than they were last year, they should think in their mind, that's a tax.
That's a tax.
It's a tax on me.
And why am I being taxed?
And that's middle class.
The very wealthy who have been the beneficiaries of like the military-industrial complex, they get a little bit worried, but they're always looking for the next war to start so that they can build a weapon.
They don't worry when we send billions of dollars of weapons over to the various countries, and if they're either stolen or blown up, the military-industrial complex, I'm sure what they sit around and say, aha, get out the order season.
We're going to have to build more airplanes and more tanks.
Even if it is World War II equipment, we can still keep building them.
But that would have to be addressed if we would have enough people in this country to wake up and say we need to see a change.
And I quoted something the other day where somebody did some studies and said that if you have 3% or 4% of the people willing to stand up for a principle, they can change the system.
And I think we saw a little bit of that activity during the lockdown over COVID.
But the most important thing, in order to get to that point where we get enough people to stand up and say enough is enough, we have to get enough people to understand actually why we're on the right track about the morality and the economic value of a sound monetary system.
Thanking Listeners00:00:03
I want to thank everybody for tuning in today to the Liberty Report.