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Jan. 11, 2024 - Ron Paul Liberty Report
31:42
Crack-Up Boom? Has The Fed Lost Control Of Inflation?

Markets always have the final say. They ultimately overrule the incessant schemes of politicians and central bankers. There are no man-made "policies" that have the capability of revoking economic laws. There are no shortcuts, loopholes, or free lunches. "Narratives" get squashed by the truth. Free Markets and Sound Money are the truth. We'd be wise to return to both of them.

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Manipulation and Monetary Madness 00:14:39
Hello everybody and thank you for tuning into the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, nice to have you with us today.
It's great to be with you, Dr. Paul.
Wonderful, wonderful.
We have a lot of things we can talk about, but we're going to talk about what we always talk about usually, and that is the monetary system and why people suffer and why the manipulation by the Federal Reserve deserves our attention.
They deserve to be audited and they deserve to disappear.
Other than that, nothing serious going on.
But this week was sort of exciting.
I like to watch the marketplaces and try to interpret by just looking at the markets what's going on.
And the market moves rapidly and discounts events and it's pretty significant.
At other times, if you look at certain investments and in long term and what the trends are and how to protect wealth, that's a different story.
But in a way, I see the markets as a news station too, because that is telling us something big is going on, at least for an hour or two.
People think it's serious.
But there was a little bit of that going on, like a lot was going on on Thursday.
Because I'm sure that there are other days that have been very, very variable, up and down and up and down.
But I never personally paid any attention to it to see what happened in the markets on Thursday.
Because before the CPI was being released, the markets said, oh, it must be going to be a little bit better.
And the market was up like 500 points.
And yet, as soon as the markets open, I mean, the numbers were terrible.
There was a lot more inflation.
Statistically, it was beating a lot of records.
So what happened to the stock market?
It went crashing down.
I think it was down like 500 points.
But that didn't stop them.
Certain events occurred.
Certain manipulations occurred.
The plunge protection team got active.
And all of a sudden, I think it closed well over 500.
So it was back up 1,000 points.
Now, that's a lot of movement.
And a lot of movement is purposeful in that people, you know, speculate.
They have shorts and longs.
And some people win and some people lose.
It isn't like they're just flipping a coin, but it's almost worse than that because they're flipping the coin of so many other variables.
What's the Fed going to do?
What's the Congress going to do?
What's the SEC going to do?
And on and on.
So anyway, it went on for continuously because there were a lot of people fooled.
Not exactly fooled, but a little surprised.
You're like, boy, this is a hot day for gold.
And at one time, gold was up sharply.
And there's more inflation.
Well, that usually indicates, well, there's a lot of inflation.
The value of the dollar is going down and gold is going to go up.
Well, that didn't happen and gold actually was hit.
And people do wonder about that.
But I think there's an explanation for that because, you know, there's a lot of rigging going on in the various markets.
But there's also an item that Mises talked about, and that is the subjective theory of value.
Value, the prices of a thing, have a subjective element to it.
So you can't do like a KG and say, well, if we print umpteen trillions of dollars and we do ABC and tell people what to do and run COVID and run wars, if we put it in the computer, we'll say, we know what will happen.
And sometimes your perceptions are, you might say, well, that's going to weaken the dollar and the prices are going to go up and the people aren't going to like it.
But then all of a sudden, different things happen because it's what people are thinking of immediately in what the prices are.
The price of money fluctuates a whole lot.
But I think during that one day, I'll bet there was a lot of manipulation going on, you know, making sure the dollar appears to be strong, and it is compared to the other currencies.
It showed that the real value of gold and silver, which some people would have anticipated, as I do, that these policies are going to, long term, raise the price in silver, but not that immediate hour.
So there's a lot of interference that can occur that can change and bankrupt some people.
And then you have the government involved, spending money, and the wars that are going on.
So there's a lot of variables.
So it's not that I would have predicted what happened on Thursday because, and I don't think anybody had absolute, there's a people fast adjusting to it, but long term, it's explainable.
It's not like this is something that is impossible because with all the variables, you can see days like this.
And quite frankly, I think we're going to have a lot more.
And Chris, one of the reasons I've been working with as a partner with Birch Gold is the fact that, you know, on days like that, I already just admitted that I wouldn't be involved in that market.
And I think advice is good.
And that's why I work with Birch because, you know, they're available and people can decide to work with them and learn more about how you invest in gold because things change within minutes, which they also change within months.
But if you're going to invest to raise your kids and pay for this education, you have to have a little bit more stability.
You know, you can't depend on hitting it right when the stock market might go up a thousand and down a thousand, this sort of thing.
Same way with gold, gold going way down when technically on the surface, they'll look, well, gold should be going up here.
So this is one of the reasons I work with Birch is so that our viewers have an opportunity to go somewhere if they want to get more involved in gold.
People say, well, it's been terrible last month.
I don't know.
Well, you know, there's some people who say that's exactly the time we have to get involved or should get involved because of the variables and it's a long-term decision making.
So this is the reason we have on our screen there a text number, a text number.
We'll get you in touch with Birch Gold and they will send a free package of information to get you started or help you along if you have any questions.
I tell you, I always have questions about what's going on.
I try to understand it and coordinate all what's going on in foreign policy and domestic policy as well as monetary policy.
So this would be one place where you could take a look at it and see if it's helpful.
And just because there was a week of chaos, that's not the reason to steer away from thinking about the precious metal.
It might be the reason you really should pay close attention.
So Chris, this activity this week, I'm sure you were watching it and finding it interesting.
I sort of have the attitude, I wished it weren't so serious.
I wished it wasn't a cause, a result of war and inflation and the destruction of wealth of so many people.
But it is a puzzle.
It's a puzzle that comes together and anticipating some people do it only for minute to minute to use puts and calls and make a bucka like every few minutes.
And then there are others who are seeking, as I had over the years, seeking to put away the money because I was raised in an age where you worked hard and you were frugal and you were taught to save.
And even as a young person, I'll tell you how long ago that was because I started one of my first jobs at 35 cents an hour and I was able to save money.
So things are different now, but this is the reason that I do associate with a gold company and that is Birch Gold.
So you might take a look at that text number and text them and see if you can get a hold of that free information.
But Chris, I think that you may just have an update on your opinion about what was going on and what could happen in the future.
Of course, the big picture is we're very interested in the gold and the markets and all, but ultimate, we're interested in peace and prosperity with liberty being the leading charge.
That's to me the number one investment we should have is investing in freedom.
And the more people who can protect against the chaos that we're in in the middle now and that is coming, the better.
So that's the kind of activity that I think about every day, Chris.
That's right, Dr. Paul.
I mean, our purpose here is to help people, because we live in a world where the blind lead the blind, and you know the central planners are blind and then they just put out propaganda and all their followers blindly follow them.
And you know our, what we consider our job is to teach principles, and that'll help you to see.
You know, in this tough world that we live in, and you have to feel for the people that watch TV or listen to so-called public figures.
You know, we know from the covet experience, the statements of the public figures was of no help to the American people.
And it's the same with the financial world.
You know we were told initially that inflation was transitory and then, a few months ago, you even did a show about it how the Biden administration said that inflation was 0% and multiple people in the administration couldn't believe it.
They were, they were saying it.
Yeah, it was 0% in July, I believe it was.
And then the definition of recession was ignored after two down quarters of GDP.
And now Biden says there might be a slight recession.
He he recently said the pandemic was over and yet yesterday I saw he extended the public health emergency for another 90 days.
So the public figures are of no help to the American people.
It's constant contradiction.
Same thing with Fauci.
So you have to wonder who are they working for?
Obviously this is not serving the public in any sense whatsoever.
They just want the public to obey.
What is what they're told, and you know it's a real shame.
So that's why it's so important to learn principles.
And when you understand principles, it doesn't matter what any of them say.
You know, you know this is what is true, and we can then prepare yourself, and that's why we mentioned Birch Gold, to navigate through all of their lies.
Very good, Chris.
And, you know, the things that we're looking at now, I frequently compare it to what the country went through and the monetary system went through in the 70s.
Because I had gotten interested in Austrian economics as we were witnessing the breakdown of the Bretton Woods and witnessing the disappearance of the pseudo-partial gold standard, which was Bretton Woods, and the predictions that were made.
But I was deeply influenced by that.
And then, so it was really a big issue and a big time when I personally listened to and just was wow when Nixon gave his speech of getting off the gold standard and all the things that followed.
But you know, that ushered in a terrible decade.
There was a lot of price inflation, a lot of unemployment.
They introduced a term which some of the Keynesians say, we don't know much about that stagflation stuff, but that's been around for a long time.
Stagflation and inflationary depressions, they've been around a long time.
You can have inflation.
Our system now says get inflation, that'll boost the economy, which was a crazy idea.
But you can have inflation.
An example would be Zimbabwe.
And then as a way, the prices are going up, but there's still a big depression going on.
But in the 70s, there wasn't as many items to watch and all the statistics as now.
There's so many variables.
There's more variables.
I think we're in a lot worse shape than we were in the 70s.
And that was a bad decade.
And the variables back then, though, I recall that the one thing that all of us would watch would be the Fed release of the money supply.
And they would come out once a week and what was it doing?
Because they never have control.
They have manipulation and they can affect interest rate.
But they really can't control exactly the supply or money or where the money is going.
And they can't control the spending either because that's a congressional thing.
And that's why it is.
But as I recall, the statistic that was most impressive to everybody interested in that, especially gold, because gold went from $35 an ounce up to $800 an ounce.
So that was a very important decade.
And there's one other thing that occurs, whether it was the conditions of the 70s or now or in between.
We don't talk about a whole lot, but Austrian economists talk a lot about it.
And the idea is banking, instead of having a banking system where you put your money and the bank then holds the money and pays you for it, and then they loan it out again.
But they don't do anything else.
They don't speculate with it.
They don't take, if you put $100 in, they don't have a gimmick where they can turn it into $700 or $800.
And that's called fractional reserve banking.
So fractional reserve banking generates probably more actual money in the money supply going up than just the monetizing of debt.
Banking System Controls 00:06:24
But they go together.
They're the same thing.
So it's a system that works where if they monetize some debt and a lot of it, and it's getting bigger all the time, and then that gets into the system, there was Just a rife estimate, a rough estimate of what that might generate.
So, if you put a billion dollars out there, it might turn into eight, nine, or ten billion dollars.
It was unpredictable because it depends on what the people do with their money.
And that's why, you know, we pumped in trillions of dollars after COVID and the recession was starting.
And sometimes things didn't do exactly as they thought because they don't know.
It's human actions, it's human activity.
It's unpredictable.
And that's why economic planning is so bad.
And then this whole idea, oh, well, we can regulate it because we can control the interest rate.
Yeah, they really control it very well.
Well, we want interest rates to be somewhere between zero and 20, and we'll keep working at it.
And literally, you know, it had been done there to zero, and credit card interest rates could get up to 20%.
But they can't control it and pretend it, and yet they are supposed to be our saviors.
They know how to regulate.
They're economic planners.
They can finance wars.
They can take care of the banking system.
It's a morally corrupt system that festers.
And eventually, though, we have to look out for the big bust.
And that ends in what they call a crackup boom because people get so nervous they don't know what to do.
They just get me out of here.
Sort of an exaggeration of what happened on Thursday.
Get me out of here.
Let me in it.
Get me back out of it again.
And that is just a hint of what a crackup boom might look like.
And it's been known, it's in there, and Mises has written about it.
And it really concludes an era when that happens.
You don't just repair the crackup boom easily.
And right now, if we did all the right things, we could repair it.
If it were a depression like in 1921, that was repairable.
But we're not able to do that now because it's politically unacceptable.
But if we did the right things, cut spending and get out of the way and get rid of the Fed and live within our means and don't steal our liberties away with lockdowns like they did with COVID and fighting all these wars.
Yes, we could get out of it.
But that's how much chance we have of doing that in a political, calm, cool, collected way.
It's not going to happen.
That's why we have this program.
We talk about bad times are coming.
We all should start to prepare for it or continue to prepare for it.
Right, Dr. Paul.
And one of the ways is understanding just some basic economic principles.
Obviously, nobody should be shocked that the Inflation Reduction Act did nothing to bring down inflation.
But one thing that we have to be alert for is if they start talking about price controls, because price controls lead to shortages.
And, you know, the government's going to pretend like it's the white knight coming in, be like, we're going to stop these businesses from charging so much.
But that just messes things up even further.
I mean, if, let's say the market price of eggs is $5 and the government says you can't charge more than $2.
Well, what happens?
What happens when there's any type of sale?
People will rush to buy more eggs at $2.
It's a sale.
But the producers of the eggs, because of inflation, their costs are still rising and they can't sell for more than two bucks.
So they can't make a profit.
So what ends up happening?
They pause production.
They stop production.
Nobody else goes into the business because you can't sell eggs for more than two bucks.
Government says.
And that's how price controls lead to shortages.
But, you know, even though that is so basic, there's an angle from people that like power.
And that's because when there's empty shelves, then they start rationing.
And we could think of COVID, of all the stupid rules that they created.
Imagine them rationing food.
You know, if your Social Security number ends in an odd number, you can get eggs on Monday, Wednesday, and Friday.
And I have a short story because my grandparents lived in Poland during World War II under the Nazis first and then the Soviets.
So I know a bunch of stories.
One story, my grandmother said she was coming home from somewhere and she had some meat and she's hiding it in a bag.
And on her way home, she notices, you know, a busybody following her.
So she quickly runs in the house, takes the meat out of the bag, throws it into like a hole that they had near the attic.
So this person comes in to check, make sure what's going on in this house, didn't find any meat.
So that's the level that government can make people sink to with price controls, with shortages, with rationing.
And that's why it has to be nipped in the bud, because if they start talking about price controls, people should rise up against it immediately.
Chris, that's a very important subject because we did witness that in the 70s.
And I was impressed with how quickly they had a bad effect.
Like 24 hours or 48 hours, everybody's prices were raised.
And they thought, well, people say, well, they can't raise the price.
Their tank is full of gasoline, and they only paid such and such for it.
So they should sell it to us for that.
Yes, but they have to replace it at the new price.
And they won't be able to.
So it is immediately effective, and it's very destructive.
It just has, what has happened, I used to think about that back in the 70s.
I thought, this is, when you ruin the pricing structure, you're in a socialist system.
Even though they don't declare the government owns it, it's very socialistic if they're controlling all the prices.
And that's what happened.
But, you know, the one thing that happens is the more failure there is with economic intervention and the tyrants get worried about it, the more lies they have to tell.
Lies and Domination 00:09:57
They only can, they lie to get in office, but when they start, when their system crumbles, they even lie more so than they use force too.
And that's what we were seeing in the COVID thing.
And it was deadly.
They had to violate liberty to pretend that they cared about the people.
Now we're finding out all the treatment the government was paying for, and they continue to do it, actually made the conditions worse.
Let alone the economic conditions were made worse as well.
But the medical conditions were made worse.
And, you know, the groups that get involved in this, one thing they have a little bit of a problem with, I think most people agree with me, at least those who are listening and viewing today, and that is that a lot of lying is going on.
And Chris, I think, already mentioned, they can't even define a recession or an inflation.
They can't define it.
They've lost contact with reality.
And some of them, it's not a moral issue with them.
It's a utilitarian issue that if we can lie enough to them, we might get elected.
We're hoping that the lies are being more identifiable right now and things will change.
And we always have to keep doing that.
But that is what they resort to is telling lies.
And it's based on the lies.
And, you know, they live in a weird world.
They get on the air running for high offices.
And they get, like the Supreme Court, and they say, you know, this is a tough question.
So I hope you can answer this one.
What is a woman?
Oh, we don't know what a woman is.
What do you expect from us?
That's the kind of craziness that's going on.
And a lot of people recognize that, but they're still out there doing the same thing.
They lie through their teeth because they're not capable of the comprehension of what the truth is, and they have no desire, and they don't believe it's possible that anybody can have access to truth.
So they are challenging something that has been known since the beginning of time, and that is that people have a sense that there is a moral higher law.
That if you have, if all you have to do is open your eyes and ears, you will be aware of it.
But we have a system now which is based on lies and is based on the intellectual rejection of a moral code, you know, and they feel very comfortable.
So they have no guilt, no guilt, no shame, and they just march on and on.
And hopefully, the one thing Daniel and I use, when we're talking about, I usually say, Daniel, don't worry too much because we're waking up people.
They're going to look at us and say, this is a horrible thing.
And I think some people did wake up, did wake up with the COVID.
A lot of people now, they're not buying into the booster shot.
The government has them handy just in case, but they bought it billions and billions of dollars, but people aren't taking it.
So truth is very dangerous to those who depend on tyranny.
And we hope we can encourage that effort.
Excellent, Dr. Paul.
I will finish up along with what you were saying.
What you're talking about is this lust to dominate that exists.
I believe the Latin term is libido dominanti.
You know, there are people throughout all time, this is nothing new that we're going through, that they have this lust to dominate, and they're willing to ditch reality if it furthers what they believe to be their cause.
They try to control the uncontrollable.
That's what politicians in modern times and central bankers do.
But they do fail.
They failed in COVID in the sense that they didn't get their passports and to monitor every movement that we have.
The empire is losing control.
Daniel pointed it out this week.
The U.S. is used to bossing everyone around.
And one country after another, they're starting to gain the confidence to say, no, we're not going to listen to you anymore.
And the Fed is losing control of money.
And that's what this inflation episode that we're going through is proving.
They're trying to control the market.
The market cannot be controlled by human beings.
This is very basic, but again, that lust to dominate overrides the truth.
So they continue to do what they do.
We have to just keep pushing the ideas of liberty and non-intervention in the economy, non-intervention overseas.
The Fed should not even exist.
But even if we get these things, it is important to realize that we're not going to create a free market utopia either.
At the most, our ideas would dominate someday, and I believe they will.
But the interventionists that libido dominanti will still exist.
The people out there will still exist.
They may not have as much influence, but they will work night and day to get that influence back.
So they just have to be kept at bay.
Right now, they run the show, and that's why everything is falling apart.
But that lust to dominate has to be kept at bay.
The U.S. Constitution was meant to do that.
It failed.
So again, something will have to be done to keep these people at bay.
Very good.
You know, and what we're talking about, I want to apply as I have my closing statement to the issue of money, or whether they've lied to us about our money, whether they lied to us about the Federal Reserve and whatnot.
But money for it to have worked for thousands of years, they had a unit of account and they had something of real value like gold and silver.
It's all the way back to biblical times.
This was a known issue that you were supposed to have honest weights and measures.
And that's the way it has been.
But we have drifted away from that a long time before even the Bretton Woods broke down, because it was when we had the Federal Reserve established that was designed to take care of the bankers and the people who want more spending and you camouflage this with monetizing debt and this sort of thing.
And that's why the definition of a monetary unit is very important.
The unit of account should be a weight of something.
If it is, then the government has a lot of more trouble, you know, going into a fiat system and passing out the money to their favorite people.
Right now, all this inflation, monetary inflation, is going to the wealthy.
They benefit.
But the average person gets stuck with the higher cost of living.
The people who have any complaint at all about the higher cost of living, higher prices for food and all, should say, you know, they're taxing us to death.
They're doing this, and we're paying the bills for the wars and the COVID and all this economic planning.
But it is amazing that, well, one thing now I think that's amazing and good is more and more people are saying, why are we sending $67 billion to Ukraine to fight a war?
I thought we learned a lesson in Vietnam.
Well, that was short-lived.
I thought we learned a lesson in Iraq.
Well, they did that for 20 years.
They finally got tired of that.
Oh, Afghanistan.
That's where the real were.
That's the important war.
Well, after 20 years there, they had to give up on that.
So they continue to do it.
People enrich themselves, and it's all because of the definition of what money is.
But it's part of that system.
If you can't define a woman and you can't define truth, how are you going to define money?
And people end up saying, well, we'll tell you what it is, and we'll do, like Chris warned us against, oh, if people charge too much, we'll put them in prison for it because they charge too much.
And it was a death sentence in some of the tyrannical countries if you violated these rules, whether it was fascism, Nazism, communism, whatever, because you could not point out that the officials have no clothes and that they're just lying through their teeth.
So it really boils down to what the founders warned about, yes, we're giving you a pretty good constitution, and it is and was a pretty good constitution.
But they warned us that if there is not a moral society that can work within the moral bounds, and it's all done by lying and scheming and conniving and rewarding the special interest, it won't work.
So we're at a crossroads right now.
If this condition continues where you can't even define anything or you might get canceled for, you might lose your jobs and these other things.
If that lasts, we're in bigger trouble than we think.
I keep thinking and believing that can be reversed.
And we do see signs of that.
And we see signs that the parents are waking up about maybe we should pay more attention to the government teaching our kids how to live and letting them set the moral standard.
So there's a place, and the one thing is, is we have a philosophy of government built on the principles of morality that should be able, be used to convince people of it.
The other side, why people go along with this, why should they bow to Nancy Pelosi?
People's Decisions Matter 00:00:39
You know, that blows my mind.
So I think that people have to wake up.
Ultimately, it's the people that make the decisions.
Governments are a reflection of an attitude of the people right now.
The attitude of the people have been conditioned and it's a sickness.
And just take, for instance, when did a lot of this stop?
The Progressive Era, 1913.
We ought to cancel 1913, get rid of the income tax and get rid of the Federal Reserve and get rid of the foreign policy that was established at that time.
Believe me, we would all be better off and a lot happier.
I want to thank everybody for tuning in today to the Liberty Report.
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