All Episodes
Previous Next
Jan. 11, 2024 - Ron Paul Liberty Report
26:24
Prices Are Soaring! Why Is The Gold Price Going Down?

The Fed counterfeited trillions and prices are skyrocketing -- cause and effect. Yet, the price of gold is falling! Shouldn't gold be skyrocketing too? Is it as simple as that? Or are there more variables involved, making things more complex? After all, gold, like oil, is an extremely politicized commodity.

|

Time Text
Why Gold Matters Now 00:10:59
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.
Great to be with you again, Dr. Paul.
Very good.
You know, Fridays, generally, we speak and talk a lot about economics, and a lot of times about monetary policy, a lot of times about gold.
But this last week, matter of fact, even longer than that, there's been a lot of interest in gold.
There's been a lot of interest in gold in the marketplace.
And the stock market had been going down sharply.
Today it's going up rapidly.
So predicting these events is not all that easy.
And I guess that's what a lot of people involved in.
Our program here certainly talks about investments to a degree.
And that's why we are associated with the Birch Gold Group.
But there's more to that than just investing, because investing in many ways is a way to try to protect.
I think sometimes it's insurance that we have to deal with.
But it's getting chaotic because I've had more people call, Ron, what's going on here?
I thought you said that if they printed a lot of money and run up a lot of debt, gold was going to do real well.
Well, compared to when, you know, compared to when I started thinking about this, you know, gold was $35 an ounce.
So there are a lot of reasons why gold goes up and gold goes down.
And people think about investing and taking a position in gold.
Do you buy and hold the metal?
Do you buy and hold the paper and speculate in the commodities market or whatever?
But that's one of the reasons why we're trying to make it as convenient as possible for our viewers to get hold of somebody that might be able to answer those questions to a greater degree about when do you invest, when do you buy, should you wait, and just what is happening.
So Birch Gold is a company we've been working with, and I believe that individuals who are looking for more information, if they use the number at the bottom of the screen, that they can get a free booklet giving you more information on what is happening and what you might be doing about it.
But in the meantime, we'll keep doing what we try to do our best, and that is sort all this out and why it is happening.
The first thing I would want to start off with, Chris, is this whole idea of inflation and deflation.
Governments always want to inflate, no matter what the conditions are.
They want to inflate because they believe that new money, more money, even when prices are going up, they see this as a benefit.
As long as it's controlled, they think it's a benefit.
And that deflation is always very, very bad.
Now, when things get out of control, there's a contest that goes on.
Right now, that contest is lively.
The federal government, the Federal Reserve, the big spenders and the Congress, they want to have, you know, they want to maintain inflation.
Some people want to quit the inflation and try to return to a sound currency.
But governments always win out, especially under today's conditions.
They will print the money and deficits they don't think matter too much.
But the markets are very powerful because they want to get rid of the bad mistakes made when there was a bubble, an artificial bubble.
Bad information coming from the Fed who manipulates the interest rates and distorts the savings rates and confuses the businessmen.
And that's why there's a lot of fluctuation that goes on.
But the contest is that the inflation and the deflation, and sometimes you get a mixture of it.
And we have a little bit of that, and that's usually called stagflation or an inflationary depression.
So it isn't so simple.
I will look at the money supply figures all the time, and that's about all they ever looked at in the 1970s.
Printing money, you have the prices go up, and it's as simple as that.
It isn't that simple.
For instance, even in a much calmer market, if the government is suspending and have debt and they're printing money, and it's not extraordinary, and there may be a market working pretty well because they aren't over-regulating.
If the productivity could change the prices to the positive side, so increased positivity with productivity, prices may stabilize or even go down.
And they say, oh, see, there's nothing to worry about.
But still, it's a detriment when the investments are done with false information, the false information being interest rates that are not market-oriented.
So right now, there's this contest.
The government is absolutely obsessed with not allowing deflation.
Good reason, because it's very dangerous.
But they ought to be concerned about inflation, because that's dangerous too, because both of it, both are the goal is to liquidate debt.
Inflation, right now, the Fed is trying to inflate or to calm the inflation down and raise interest rates and calm the markets down.
There's a debate going on on when to stop tightening.
The tightening is just nothing to what's going to be required.
It required 21% interest rates in the 1970s.
So we're just tinkering on the edges to try to solve all the mistakes made with all the QE created and all the debt, the $30 trillion worth of debt.
And when you think the malinvestment and the debt has to be liquidated, you can expect a lot of trouble ahead and a lot of worrying about it.
But Chris, I think that it's exciting times.
I'm just a little bit concerned that it's not only exciting, but it can get pretty scary because a lot of harm.
And tragically, it harms usually the innocent people more than the people on the inside because it's the middle class that generally gets wiped out on conditions like this.
And the very wealthy tend to accumulate greater amounts of wealth.
Right, Dr. Paul.
And, you know, a common question that you tend to see when gold doesn't act like you think it should act is, well, are the gold markets rigged?
Well, I mean, the entire earth is peppered with central banks.
So the question kind of answers itself.
And we have to remember that gold, like oil, is a very, very politicized economy.
And the authorities do not want people to think about gold.
As far as you're concerned, you know, gold is the color of a crayon, and that's it.
Now, while the public is not supposed to think about gold, they have to think about it all the time.
Because if the public ever starts to think about gold, they're in big, big trouble.
So, you know, there are people out there who explain how all these rigging schemes are very good at it.
They get into the weeds of how all these schemes work.
But the point we want to make here on this show is that rigging can only happen for so long.
The truth always has the final say in the end.
And you could just think about the last few years of COVID with the distancing, the lockdowns, the mass.
That was rigging.
That was the rigging of our social lives.
And they started it and they kept it going, even when people were like, hey, this is not only not working, this is only making things worse.
But they kept it going, kept it going, and two full years had to go by when they finally couldn't keep it going anymore.
The rigging had to stop.
And the people that were doing the rigging were very upset.
They wanted to keep it going.
The lockdown's a mess, but it was over.
So the same thing will happen with gold rigging.
They'll keep it going as long as they can, but the point will be reached where the real market price of gold will assert itself, and the people that are doing the rigging will be upset.
You know, one of the things that has been going on recently has been the Fed is trying to turn off this inflation by bringing on a recession, a modest one.
They won't admit that, but that's what they think will lower prices, have a weaker economy, and prices will drop.
They don't say, well, what we have to do is quit the spending and quit printing the money.
But in the process of doing this, they had to raise interest rates.
And the competition isn't, you know, with other sound currencies.
Most of the world currencies are weak.
So as soon as the reserve currency, which is the dollar, when the interest rates started rising, this was a benefit.
People shifted to dollars, at least on the short term.
And that strength in the dollar meant that, oh, that's a better deal than buying gold for six months or a year or whatever.
So they get turned off and they get more cautious about the gold.
So that's one of the reasons because the dollar has been very strong.
But the truth is, is the dollar, it depends on what you measure it against.
If you measure it against the purchasing power of the dollar by the average housewife going to the grocery store, you know, it's very weak because, you know, the prices are going up.
Or if you're going to the gas station, you're dealing with a weaker dollar because the gasoline prices are so high.
So that is something we have to contend with because it isn't so simple as saying, well, we're going to have a little recession here and it's going to take care of it.
No, it's going to be a bigger deal than that.
But that's one of the reasons why gold will go down because of manipulation of interest rate.
But as I recall the 1970s, at the beginning, you know, gold did not go up dramatically, but as the recession, depression type of thing in the 70s lasted, by the end of the 70s, after they got Volcker in, he had the interest rates up to 21%.
Well, if that was the case, why wasn't everybody buying the dollar?
But it was a lack of confidence in the dollar.
So gold was, interest rates were up around 21%.
That's when gold got up to $700, $800.
So that's why you can't just say that you couldn't make these predictions.
Matter of fact, it's very hard to make these predictions with a currency that is fiat.
And that means it's whatever the government wants to make it from day to day because they can't define the dollar.
Why Gold Could Skyrocket 00:12:21
And they just have to go along with this and see if they can eventually come around with a better policy, which means deregulation of the economy.
Look at a mess we have in the oil industry.
So we have the inflation that pushes the price of crude oil up, but we also have additionally to that because people say, well, no, Biden is at fault because of all the way he's mismanaged the oil industry.
And that did play a part in it.
But it's different than if it went up just for that reason.
But it also goes up because of inflation.
That is a printing of too much money.
And it's being discounted by the rise of prices and weakness in the economy.
And of course, there's dozens of places where you can find, because right now, I don't think the evidence has been exposed on just how much danger that we're in, the small businessman and others, and how they're going to handle this debt.
So they've been able to manage it.
And, you know, if deflation gets out of hand, people will ask, well, won't that overwhelm the tendency for the market to want to, the government want to inflate?
Possibly, because you can't control every bankruptcy and the shrinkage of the economy and the decrease of productivity.
But what you can do, though, is if you don't have the currencies going up and the prices going up, Bernanke had the answer.
Helicopters.
Turn it into a cash.
A cash economy where you just print the money and dump it on a helicopter.
But they've already done that already.
I think the helicopters were flying as soon as COVID hit.
And they sent out trillions and trillions of dollars.
And short-term it helped, but then they had to back off a little bit.
But no, that will not work.
It might give an edge to the inflationary factors to counteract against deflation, which is a higher priority of the managers, but it's not going to solve the problem.
They have to deal with the real problem.
That is, you know, big government, for the many, many reasons why they want to keep spending and the facilitation by the Federal Reserve willing to buy that debt.
That's where the problems are.
And right now, the world is being run on that system.
And every day, I think it's getting messier.
And of course, it's dangerous too.
Of course, Dr. Paul.
And as we've been pointing out over the weeks and months, you know, all this money printing, the Fed has cornered itself.
I mean, will it destroy the dollar by continuing to destroy its purchasing power?
Or will they pop the biggest bubble that they have ever created ever?
You know, and none of this should exist.
For people to have this kind of power with their decisions over hundreds of millions and billions of lives is insane, but it does exist.
And investors, at least at the moment, seem to believe that the Fed will not destroy the dollar, but instead will pop the biggest bubble.
And we see the dollar strengthening, and that's why it's almost counterintuitive.
You printed all these dollars.
Why is the dollar strengthening?
Why is gold flat to down?
But if the Fed follows through and they do pop this bubble and the market collapses, what are they likely to do?
They're going to start counterfeiting again.
Stimulate, stimulate.
And the question we have to ask is, are we just doomed to be in this roller coaster of constant up and down of bubbles and pops and stimulate?
And the answer is no, because the time will come, and I do not have the answer of when that will be, where the stimulants will not work anymore, where the markets will collapse, and no matter how much they print, it won't work.
And you could think of it like a person who is trying to stay awake and he's taking stimulants to stay awake.
And 24 hours goes by, 48 hours goes by.
Eventually, the point will be reached where he is going to sleep no matter how many stimulants he takes.
So that is what is ultimately going to happen in the Fed will be, who knows what they'll be able to do at that point.
So we are in for some historic times, nevertheless.
And all of it in the long term is a positive for gold.
Very good.
You know, as I said before, a lot of people call in and want to ask why, why, why?
Why isn't the price of gold going up?
You know, when all these things are happening, they have all that debt and all this money, and the conditions are very rocky.
And people will ask, well, does the government rig the price?
What about the rig price rigging?
We've had a lot of stories and a lot of evidence and a lot of challenges, especially in the silver market.
And they found out that, yes, a lot of people were outside of the Federal Reserve.
But sometimes getting outside the Federal Reserve and separating yourself from the big banks, that's not easily done.
But they had evidence where there was rigging of the prices of silver.
I think that continues.
But some people who are in the business of the precious metals will say, well, I think you people who worry about and say somebody's rigging the price, you just don't understand the market, and you're just a gold bug.
And you just think you can look at a money supply and know what gold prices ought to be.
Well, there's probably a little bit of that, but I think there's a lot of gold price rigging because that's what governments do.
I think the power of central banks throughout all of history is that once there's a government that wants to stay powerful and expand their role, they take charge of the money.
That's why there's always a monopoly control of the monetary system.
But even in our country, you know, we had a lot of monetary inflation by the Federal Reserve, the newly created Fed, inflated for World War I and inflated in the 20s to keep the economy perking along.
But then the bubble that had formed, it was predicted it would burst.
It did in the 1930s and 1929 with the stock market crash.
And then by 1932, the election occurred and they changed parties and FDR was elected.
And although he ran on the gold standard, he said, oh, we've got to maintain the gold standard of silence of the dollar.
First thing he did was confiscate the gold.
You know, total control.
Not only was it a price fixing, it was a physical control of the gold.
That was in 1934.
And the American people lost their right to own gold and really participate in the protection of their savings.
And yet, what did it do?
It prolonged that type of activity, prolonged the agony of the Depression.
So it was only until 1975 when the gold was re-legalized, where the American people could own gold.
But they very much rig and control the price of gold.
I can recall when Paul Volcker came to a breakfast that it was a private breakfast with Volcker.
And his number one thing that was on his mind, because it was 1979, his main interest was what was the price of gold.
Gold is a big deal, you know, for them, even though they pretend it's not even money.
When I asked Bernanke, is gold money?
No, it's not money.
But it is money because the market has dictated money, and it's been around for a long, long time.
But they've been rigging the price of gold for a long time.
They suspended a lot.
They suspended the gold standard, of course, in the Civil War.
And in other periods of time, they have suspended the free flow of gold.
But they do rig the price of gold.
And I think they do it often.
I think they have right now.
I think the big bullion banks participate.
I think the central banks participate.
The Bang of International Settlement, they participate.
And since we're the reserve currency of the world, we participate.
So they'll move things along.
If they have to dampen things, that doesn't mean they just say, well, the price of gold is going to be this, and that's where we're going to do it.
If there's a move on, and the move is that it's going to show a weakness in the dollar, because they know that if gold was released from all controls and efforts and rigging and it was released to the marketplace, gold could jump hundreds of dollars in one day, and that would cause a panic in the whole system.
And it would no longer be orderly.
The price of gold will go up because if the price of gold in 1971 was $35 an ounce, and it's been up and down and all over the place, but there were a lot of factors involved.
But eventually we get up here to where we are: $1,700, $1,800.
And believe me, they have not resolved that.
And they're moving rapidly to the time when they will lose control of the whole system.
I think what they're trying to do right now is tighten, raise interest rates.
It has affected the dollar, has affected the stock market, but it's going to affect the markets to such a point, they're going to give up on that.
They will give up onto it, and they will relinquish, and they're going to print the money that's necessary.
And believe me, they'll get the helicopters out and they will pass it out because right now, if the money won't circulate like they think it should, they're going to pass the money out to the individuals.
That's exactly what they did under COVID, and they'll do it again if they think it's necessary.
Because as bad as the inflation is, and as much as they know there's a danger, deflation to governments is much worse.
So that is their dilemma, but it's also our dilemma, you know, and the people have trouble.
How do they adjust to this?
Very good, Dr. Paul.
I will finish up my closing statement by saying that gold is different for everyone.
We are all different.
There are people out there who hate it and they refuse to own any.
Perhaps they had a college professor that told them it was no longer money.
Who knows?
There are others who are just looking to make a quick buck.
You know, what do you mean?
Why isn't gold going up?
I thought because X, Y, and Z that I'm supposed to make money now.
They want to make money right now, next month, this year, to next year.
Then there are others who do not think in those terms.
They just methodically buy and think that and will hold it for the rest of their lives for their children, for their children's children.
So everyone is different, and you can't say one is better than another.
But no matter what your view is on gold, one thing is certain.
It's not as simple as we tried to point out on the show as if A happens, then B will happen.
Life is not that simple.
Look at what happened with the sanctions on Russia.
I mean, think back a couple of months, how all these sanctions and all the corporations are pulling out.
You think that Russia was going to fall into the ocean.
That would be the end of the country.
And look what happened.
The exact opposite.
The ruble was the best currency of the year.
The Russian economy, they're selling more oil than ever.
So it turned out not to be so.
That all these sanctions that you thought they were going to punish Russia actually ended up benefiting them more than ever.
Life Is Not That Simple 00:03:02
So the main lesson is there are so many variables to life, to the economy.
There are lots of interests, and interests change.
People will think one thing now and then change their mind.
So, the good part about this is all those people, those globalists and the WEF, it's too complex.
They'll never figure it out.
They'll never be in control of everything.
So, that's the good part.
The tough part is getting to the truth because we live in a time where the media is constantly lying, politicians are constantly lying.
So, it's very hard to get to the truth.
That's where we hope that we add some value of pointing out timeless principles and truths to at least help you navigate through this tough world.
Very, very good, Chris.
And I do want to mention that this is not being ignored by Biden.
He's decided to become the monetary expert.
He sees there's a problem out there.
So, it's very simple.
He's going to join in this effort to expand the number of SDRs at the IMF.
And these were fiat international currency units.
They're not used in exchange.
They're not used as money.
But that is the ultimate goal when they have a single currency.
If they can crash everything and they need it, what they think they can do is take the SDR special drawing rights and use that as the international currency.
And he's proposing and he's willing to go along with $650 billion for us to subsidize IMF.
And everybody that belongs to the IMF will participate and get a little bit of it.
It goes into their coffers and they will increase their reserves, which allows them to do more inflation, is what it is.
It's an inflationary aspect.
And for years now, ever since 1944, since they had the special drawing rights, people have wanted to make use of this.
So every time things get tough, but it's not as simple as that.
To get confidence in the SDRs as the currency of the world, I don't think that's going to work.
They can play games with it, but if it worked, it would be only for a short period of time.
Now, I do want to just mention once again about our partnership with Birch Gold, because there are so many things going on, and the numbers should be at the bottom of the screen where you can get there's a free package that you can get if you call in there that has these explanations of so much and the difficulty and trying to sort it all out.
Because an event like an SDR is going to have an effect, you know, with wage and price controls, what's going to happen in the oil industry, all very important.
So if you call there, you can get this material, and there's no cost to that.
But I do want to thank everybody for tuning in today to the Liberty Report.
Export Selection