Inflation Reduction...Or Inflation PRODUCTION? With Guest Phillip Patrick
Birch Gold's Phillip Patrick is again joining today's Liberty Report to discuss the just-passed Inflation Reduction Act, which spends massively on "green" energy and more drug benefits. Will more spending curb inflation? Is there anything we can do ourselves to blunt the sting of higher prices?
Be sure to visit https://www.birchgold.com/ron
Birch Gold's Phillip Patrick is again joining today's Liberty Report to discuss the just-passed Inflation Reduction Act, which spends massively on "green" energy and more drug benefits. Will more spending curb inflation? Is there anything we can do ourselves to blunt the sting of higher prices?
Be sure to visit https://www.birchgold.com/ron
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today as co-host Daniel McAdams.
Daniel, good to see you.
Happy Thursday, Dr. Paul.
How are you?
Very well, thank you.
We have a special guest today.
We have a good friend, yeah.
He's been on our program before.
He works at the Birch Gold Company.
I've heard of that.
He's somebody that we sort of do work with.
So that's good.
But Philip, Philip's worked with him for a lot longer than I have.
He's been with Birch for over 10 years.
Wow.
And he's known as the in-house economist.
So today we want to, you know, pick his brain and we want to know what's going to happen tomorrow.
Should we buy gold today or gold tomorrow?
Philip, it's great to have you with us again.
Thank you so much for having me, guys.
It's an honor, as always.
Very, very good.
You know, we do want to concentrate on inflation because, you know, I noticed that there's some discrepancies in some of the messages we get in some of the reports.
So we might have to hurry up and talk about the inflation because I read one report yesterday coming from high places that we had a we're down to 0% inflation.
So what are we going to do about that?
We could try and straighten that out and I hope you'll do that.
But you know, I worry about the information that we get from our government.
More and more people are not believing in it and they're not going to rely on this FBI to get the right information.
But they also have told us there's no recession.
You know, people don't like recession.
So we'll change the definition of that.
Why don't you help us straighten some of that out?
Yeah, I mean, look, as we learn about the government, they try and change the information to suit their needs.
You're absolutely correct, of course, in saying that the Biden administration has tried to change the term of or the definition of a recession, right?
We've technically had two quarters of negative GDP growth, which has always been considered a recession.
They're now trying to change the definition to say, hey, we haven't actually got a recession.
Same with inflation, right?
In the 80s, the government's definition of inflation was much broader than it is today.
They've been narrowing that scope by weighting out key metrics to, of course, lower the number and make things a little rosier.
But inflation numbers did come out yesterday.
They were down marginally, predominantly driven by falling energy prices.
But the key for me is that core inflation over the last 12 months has stayed fairly static.
So really the only metric to reduce was energy prices.
What that tells me is this isn't on the back of successful Federal Reserve policy or successful policy coming out of the White House.
It's simply on the back of demand going down on the back of high prices.
So, you know, the fact that inflation is slowing a little bit, it's definitely good news.
My big concern, though, is the direction the administration is going.
Now they're pushing through massive spending packages, which of course, in large part, is how we're in the situation we are today.
So there appears to be a lack of understanding from the administration as to what causes inflation, and that's concerning.
Right.
Daniel, glad to have you with us again.
I'd hate to be a spinmeister for this administration.
I mean, there's not a lot of good news to tell.
We did a little segment on our show the other day about how the media was talking about these great victories that Biden was chalking up.
Meanwhile, he's still hiding in his basement.
I think he's just out now.
But I thought it was funny that when the gas goes up three bucks, that's Putin's fault.
When it comes down a buck, that's Biden's, to his credit.
So it's funny.
But, you know, We do want to talk a little bit about some of the spending that you mentioned, you suggested.
And I'll just throw out one of Dr. Paul's rules, which is any bill in Congress, any name of any bill in Congress, in fact, does the opposite.
So let's talk a little bit about the Inflation Reduction Act.
That's why we named this show today Inflation Reduction or Inflation Production.
As always, the spot on from Dr. Paul, of course.
You know what I find interesting, though?
This Inflation Reduction Act is basically build back better, just rebranded with slightly smaller price tag.
But the question you've got to ask yourself, and it sort of touches upon what you mentioned, is why rebrand it, right?
Why rebrand it?
And for me, it's very obvious.
Inflation right now is the biggest political, economic concern for most Americans.
So I think for them, they thought, okay, let's rebrand it.
Let's give it an anti-inflation title.
And that'll give them cover to essentially pass a bunch of special interest spending under the guise of lowering inflation.
But again, you know, it's like they're missing the point.
We ended up in the position we are today with 40-year high inflation, and it was in large part on the back of massive spending packages.
This COVID stimulus package, where we printed essentially three centuries' worth of money in two years, the San Francisco Federal Reserve came out with the report and said that alone increased inflation by 3%.
Now more spending is the solution to fighting inflation.
It's nonsense.
And quite frankly, it's starting to get very frustrating to have to deal with administration that are constantly playing games with the truth.
It's getting really frustrating.
You know, they have talked a lot about changing the policy, and they call it modern monetary theory.
And there's a lot of people who have more common sense than the administration.
And they say, well, there's nothing real modern about that.
And when I think about my own experience about thinking about this issue, you know, there is always going to be something modern, something changed, something new.
Whether it was in 1934 when they took in the gold, whether it was, you know, the Bretton Woods when it was set up in 1945, whether it was the breakdown of Bretton Woods, it's always modernizing and making it more efficient.
And they tend to limp along, and sometimes people barely notice this.
But what do you think there is a difference?
Do you think this is pure propaganda done poorly?
Or have you discovered anything that would be significantly different?
Is there any possibility, is there anything in that theory about monetary policy that could help?
Or is this just a gimmick that will soon fade away because it doesn't make any sense?
Look, it feels like a gimmick.
And you're right.
There's nothing new about this, right?
We've seen over the last 300 years about 700 different currencies.
The majority of them, over 80%, have failed.
And in large part, it's on the back of aggressive money printing, essentially.
So this is nothing new.
My concern is that it is a gimmick.
They're trying to buy votes.
And if you look at the contents of the spending bill, it's garbled, it's confused, and it seems like a desperate attempt, right?
A large part of it is sort of this Green New Deal, right?
Tax credits for renewable energy projects, tax credit for electric vehicles, $27 billion to establish a green bank to hand out money for clean energy technology.
But just to highlight how absurd the whole thing is, the same bill promotes fossil fuel production on public lands and additional offshore drilling.
So for me, the question is, what are they trying to accomplish here?
Are we trying to transition to renewable energy?
Great in theory.
Maybe feasible someday, but I think it'll take decades.
Or are we trying to drill now, drill here, and pay less?
What's the plan?
There isn't one.
Right and and for me this is an attempt to appease as many people as possible.
The question I ask is, how many votes can you buy for 790 billion dollars?
I'd imagine quite a lot, and that for me it.
I think it's a little more nefarious than than we may be thinking here.
Well, we're willing to sell our vote for much less than that.
If the Biden people want to contact us, you can take a couple zeros off that and you can have whatever you know.
One of the things that you mentioned, a couple of the specifics in the bill, but one of the things that really struck me as hilarious is this $7,500 tax credit for electric vehicles, because a couple days later, a news article came out saying that electric vehicles are now costing $8,500 more $7,500.
Now you've got to pay $8,500 more for it.
What else did you see in there that really you mentioned the Green BANK?
What else did you see in there that just really threw you off?
Something out about that, something else about that electric vehicle thing.
Essentially, the batteries have to be made in the U.S. As well, and they are very few, if any, electric vehicles whose batteries are made in the U.S.
So it's nonsensical.
Look, the other concerning part for me was sort of taxation, right?
15% minimum tax on corporate incomes, $80 billion to the IRS to audit, limitations on tax-deductible business loans.
Look, for me, again, it's not well thought out.
When you raise taxes on businesses, does that lead to tighter profit margins for those businesses?
Education Matters00:08:44
No, it doesn't.
What it ultimately leads to is either lower wages for workers or higher prices on store shelves.
For me, a large part of this bill is actually inflationary, even outside of spending alone.
So, you know, I don't think there is, I think, well, let me rephrase, I think there is a lack of understanding just generally from this administration, right?
They've been telling us that spending money will lower inflation.
They think that raising producer prices will, you know, punish producers.
But it doesn't.
Ultimately, what this will do and is doing is just punishing American families.
And that's the opposite of what we're trying to achieve here.
It's a disaster, I hate to say it.
It really is.
You know, under the conditions we have today, and we've had off and on throughout our history, but especially bad today, and I refer frequently back to the 70s because it became very chaotic because they put on wage and price controls.
And they do have a lot of controls now.
They control the interest rates, and they're always manipulating.
They're not quite like what they did in the 70s.
They put on wage and price controls.
But it really was confusing then.
And that was when gold finally became legal again and interest rates jumped all over the place.
And gold went from $35 an ounce up to $800 and then down.
And it was sort of in a very weak market for a long time.
And then it comes alive again.
You know, I have to empathize with, I didn't start off in interesting gold for the investment and the protection.
It was mainly through New Mismatics.
And then a lot of people who got interested in coinage, you know, finally became, you know, understanding what the currencies really mean.
But the big question of this chaos that we saw in the 70s, you even mentioned off and on, we've had a lot of this over a long period of time.
But the people who are supposed to be held by a friendly government, they're supposed to protect our liberties and not a whole lot more.
But if they get involved with money, they're supposed to protect it with a sound currency.
Well, that's what we don't have because even those of us who believe in sound money, it's not easy to snap our fingers and say, you do this today and tomorrow you're going to really protect yourself when some other idea came up and shifted the funds.
But you work for a gold company and you're an economist.
What do you tell people when they, especially, you know, somebody in the middle class, not real wealthy, and they're trying to get along and they believe in this old-fashioned thing about saving money.
And I feel so badly that all those things that I learned about frugality and saving money, even when it was back a dollar at a time, you save money.
Now it's a negative.
What do you tell people to do if they're really, they really, they want to continue to work, they want to continue to save, they want to continue to take care of themselves.
And the biggest threat to them now is their inability to plan and protect themselves.
Look, it's a very, very difficult climate to navigate.
And I think, you know, in many ways, more difficult even than the 70s, right?
For a number of reasons.
So number one, just the nature of our problems, right?
We have inflation, as we've mentioned, at 40-year highs.
We still have a very big bubble in the stock market, right?
Cyclically adjusted price-to-earning ratios today are almost 32 when the historical average is 16.
So people are struggling to get a reprieve.
Stocks were traditionally a very good hedge on inflation.
When there's such a bubble, it doesn't work.
Bonds, cash, usually a safe haven, right?
Even in the 70s when inflation was raging, people had the ability at least to put money in the bank and get 15% on it.
Today they can't, right?
Interest rates are too low.
I think the government are going, well, the Federal Reserve, sorry, are going to be limited in how much they can raise rates.
So I think options for people today are more limited than at least any other time that I can remember.
So for me, the key is, number one, to stay educated, right?
Which is why shows like this are so important because you really start to understand the issues.
Once you understand the issues, solutions start to present themselves.
And as you know, I certainly don't need to tell you, but precious metals are very conducive for climates like this.
They're safe haven assets.
So when we do see aggressive declines in the stock market, they can go up, just like they did in 2008, just like they did in 2020 when we saw that flash crash in the markets.
Again, as you know well, better than me, gold and silver being commodities keep pace with inflation.
So as inflation rises, they move to keep pace with it.
So I think for individuals, just to summarize, it's a case of staying educated, being preemptive, and just hedging your exposure.
And as long as you do, you can get through tough times, just as those who had gold in the 70s did, right?
It's the same thing.
Very good.
Philip, I'm going to ask a question as if you and I are sitting in a pub having a drink, right?
And my situation, I'm the wage earner for the family.
We don't have a lot of money, obviously, left over.
I'm worried about inflation.
And this is absolutely true.
I don't know a lot about precious metals or gold.
I say, hey, Phil, what am I going to do?
How do I get started?
What's a good way to get going on this?
I'm not an expert on it.
What would you say to me?
The first thing you do is you give us a call at Birch Gold Group.
Our job is education primarily.
So we have a lot of good information out there.
We have a free information kit for your listeners and everybody else.
It's there to provide information.
From there, it's just a case of getting comfortable, getting educated, and taking that step.
Look, should somebody take every penny they have and put it into gold and silver?
It's never the solution.
But to hedge your exposure, to make sure that if one part of your portfolio is losing to inflation or coming down in the stock market, if you have a portion of your portfolio in a contrarian outset that can grow in that climate and mitigate those losses, that for me is the key, right?
Hedge your exposure, make sure that you're protected and be preemptive.
But education first is what we always say.
Thanks.
Well, I owe you a beer.
Next Thursday.
Philip, I'm delighted that you emphasize the education because I think that is so important.
You know, even over and above it, because the principle of liberties applies to monetary policy.
It applies to our First Amendment and the rest of it.
And right now, we live in an age where there's no trust whatsoever.
And it's so disgusting to see that we have crooked police in the system.
Not the local police.
There are certainly some there.
But I'm talking about the federal police.
There are way too many.
You know, our Constitution never authorized a federal police force.
So that's the kind of thing that we have to do when people have an understanding and have an out.
But you know, the one thing, you mentioned the education, but I really super emphasize that because you have to contribute to it, not only yourself learning, but to participate in it out of your own self-interest.
Because the more people that know and understand what money is all about and more that are protected and believe in liberty, the better off we'll all be if we have the worst case scenario where this whole system falls apart, which many people have predicted and I worry about because I think it's conceivable.
But I think there's a lot to be offered and the fact that Birch Gold is in part of this and can provide the information and they can get this information and help in making those decisions.
But if you want to close with a comment, we're about ready to finish.
Look, how can I beat that?
You're absolutely correct.
Look, history is not a determination of the future, but there are a lot of lessons one can learn from history.
So that's what I would say.
Everyone get educated.
We're here at Birch to help with that process.
Philip, thanks for being with us again.
And I want to thank our viewers today once again for joining in with us.