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Feb. 9, 2024 - Ron Paul Liberty Report
26:49
"Shrinkflation" -- A Result of The Shrinking Value of The Dollar

When politicians spend money that they don't have ($34 trillion+) the Fed has to counterfeit money into existence. Everyone then has to adapt to the dollar losing value. Companies too have to adapt, by cutting costs and via "shrinkflation" (i.e., charging the same amount for less product). The companies aren't being "greedy." They're just adapting to actual greed -- politicians spending money that they do not have.

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Real Cause of Inflation 00:07:00
Hello everybody and thank you for tuning in to the Liberty Report.
With us today we have Chris Rossini as co-host.
Chris, welcome to the program.
Great to be with you Dr. Paul.
Very good.
We're going to talk a little bit about inflation.
We've talked about inflation in the past and there's still a little bit of misunderstanding.
We came across, actually you came across, a statement made by not our favorite senator and the senator that we're going to quote is Elizabeth, Elizabeth Warren.
And she puts, you know, she talks a lot about monetary policy and she's talking about the dollar and the banks aren't behaving and that there's way too much problems in the country and that people, it's all due to because people are greedy, you know, greedy business people, greedy bankers, everybody's greedy.
Nobody's greedy in Washington.
They're a different type of greed.
They're greedy for power.
Then they use their power to make their money.
But no, that's the preference I have.
But she's been complaining about that.
So we will be talking a little bit more about that.
But the one thing this subject she brought up, and I know we've mentioned this once before because one of the symbols, a bad symbol of what goes on when a country destroys its currency is they try to hide it.
You know, wage and price controls and what they do.
But before that happens, they try a market phenomenon.
Well, take, if you have a cereal box, just cut off 5% or 10% of the cereal.
People will never notice.
Well, sometimes they don't notice, but eventually they do.
Because the one thing is, it isn't the corporations shrinking the substance they're selling is the main problem.
It's the government and the big spender and the liberals who want to print money at will and get involved with so much economic planning and welfarism and wars overseas.
And that gives shrinkage of the dollar.
So that is the point we emphasize.
And we don't have any trouble finding information, especially the misinformation, because, you know, probably 90-some percent of everybody in Washington, especially in the Congress, have been indoctrinated in our university, our government universities.
We know where they're coming from.
They've exposed themselves just recently.
And that is a problem that they believe these ways and they come up with these cockamandi answers to it.
And the one thing is they do not want to look at the real cause.
Of course, the real cause is spending and printing money.
And we'll talk a little bit more about that.
But in the meantime, I know most of our viewers are already very attuned to the problems of inflation.
And most people say, well, inflation, that's when your bread costs more money.
And that's why prices are going up.
And that's when they use these terms, shrinkflation, you know, as a distraction.
So they distort that, but they don't want to talk about the real cause.
And the real cause, of course, comes from government spending.
And the Federal Reserve accommodates by just printing the money and the value of the dollar goes down.
It's really not a whole lot more complicated than that.
There are variables because one of the biggest variables that makes it more difficult for people to invest and protect themselves is the fact that The sound money people emphasize the fact of increasing the supply of money.
It's important.
But it's not as simple answer as it may seem.
Because if you doubled the size of money in circulation, prices might double, but they might not.
And everything doesn't go up together.
Commodity prices don't go up the same.
Welfare benefits don't go up the same.
Wages don't go up the same.
They're up and done, and they vary because prices are set in a different fashion.
So that is one problem.
So some people do benefit more than others.
And I think we've made the point so often that the people who are really being taxed by the inflation tax are the middle class and the poor because they're living on the edge of economic harm.
And price increases for them is much more damaging than if you're very, very wealthy.
The wealthy don't say, oh, I wonder how much bread is going to cost me today.
So it's an unfair system.
It's a political system and it's an evil system.
It's immoral to print money.
It's equivalent to having a person coming in and fudging and printing the money and becoming a counterfeiter.
So that is the problem.
But we work closely with Birch Gold Group because one thing that is emphasized in times like this, and it's in the news, and people are talking about it a lot, and they're nervous about a skyrocketing stock market right now because everybody knows it's not going to keep skyrocketing.
And people know that the government's in bankruptcy that we have $34 trillion worth of debt and we don't have the resources to pay for it other than printing more money.
So people know this and they're looking for things to do and take care of it.
And one thing they do is they look for preservation of wealth and they will look at the gold issue.
That's something that I started looking at carefully even before 1971 when it was predicted that we would go bankrupt and we would not honor our dollar with gold behind a dollar for foreign holders of dollars.
And that was an eye-opener for me.
But it's continued.
They're still doing it.
They're getting away with economic murder, so to speak.
And that's why we work with Birch Gold Group, because they're involved in helping people protect against what's coming and what we're already involved in.
So that means that they have information and suggestions on what to do.
Now, if you'd like to get some more information, it's not complicated.
What you do is you text the message at the bottom of the page, and if you say, text Ron at 989898, that will take you to Birch Gold, and they will send you some material, and the material will not cost anything.
Fiat Money's Hidden Costs 00:14:32
Then you can be helped along in making your decisions about it.
So that's not difficult.
It is a bit of help.
And it's a job because, like I said, it's not magic.
You can't say, oh, they doubled the money supply.
Everything's going to double.
My salary is going to go up.
No, it's a little more complicated now.
But eventually, everybody is equally hurt because it does spread throughout the whole economy.
So once again, if you're interested in getting the free information from Birch, just text Ron at 989898.
And you can get this free information to help you plan for the future in your finances.
And Chris, we want to do, you know, I mentioned already that I wanted to talk about Elizabeth Warren.
And you spotted this quote that she had.
And she was off the track, but I think she must have gone to all the government schools because she has a government understanding of it.
And she's instrumental.
She must be on the financial committee because she's always talking about banking.
But her suggestion now is that we should really regulate the banks, do something to quit making so much money and get the big corporations because they're greedy.
And this is the reason she's acting today.
But I think she's off track.
I think she is representative of so many fallacies.
And she's in a place where she has political clout and has something to say.
But the market's against her.
It's not going to work.
And eventually people will recognize it.
I think they're starting to recognize the fallacy of Keynesian economics and fiat money.
And they're looking for alternatives.
So, Chris, I'm sure you're not putting a lot of confidence in Senator Warren to solving our problems.
No, not at all, Dr. Paul.
And as a consumer, I too am not crazy about shrinkflation, but I understand why it happens.
You know, you're paying the same amount for less of a product.
Elizabeth Warren's, you know, their corporations are greedy.
That's just not good enough.
I mean, they're all greedy at the same time.
And who isn't greedy?
Elizabeth Warren?
I mean, we all have to battle greed.
That's a human trait.
So it's a little bit more complex than that.
It actually has to do with Elizabeth Warren and what she does in the government.
The government spends $34 trillion more than it has.
I mean, that sounds like greed to me.
And the Fed ends up printing lots of dollars in order to make that happen.
When you print lots of dollars, the dollars that you have lose value.
It's just like anything else.
If you collect baseball cards, you like them because they're the more valuable ones or the ones that there's less of.
But if the company prints another trillion of them, what's going to happen to your cards?
They're going to lose value.
So it's the same thing with the U.S. dollar.
And companies, like I said, I understand why they do what they do because they, too, have rising costs.
So how are they supposed to deal with it?
Are they supposed to go and explain to all their customers, each and every one, it's the government did this, the Fed printed the money?
You can't do that.
And even if they did, the government would somehow find a reason to come after them.
And many times the companies like Doritos, she mentioned, and Oreos, they don't even deal with the consumer directly.
They deal with all their distributors.
So what are they supposed to do?
The only other option they have is to adapt.
They have to cut costs.
And one of the ways is shrinkflation.
You pay the same amount for less.
So no matter what the companies choose, the politicians are going to smear them.
There's no way out of it.
So they have to choose what they believe is the best choice.
And so they choose shrinkflation, cutting costs.
And here come the politicians.
Oh, you're greedy.
You're greedy.
You know, it's nonsense.
You know, the politicians are the kings of greed in our society, especially in our modern government, where they go in with nothing and come out with multi-multi-millions being so-called public servants.
So unfortunately, in this case, the companies are not to blame.
It rests squarely on the overspending politicians and the counterfeiting Fed.
Very good.
You know, people who observe others in their community and they're doing well and they're wealthier, you know, to look at that and say, you know what, that's pretty good.
And I want it.
And I want the government to take it from me and give it to me.
Now, that's envy and its use of force to redistribute wealth.
But to look at them and say, I want to be like that, and I am motivated, you know, then to work hard and save and do those things.
There's nothing wrong with that.
And that's generally the way the world works.
But so often, though, people reject the notion that you're not allowed to use force and fraud and all the things that go on.
Unfortunately, that's what they do.
The real greed in Washington is indirect.
It's financial.
But the real greed is for power.
They want power.
They want to be a chairman of a committee, you know, and they are going to have cloud.
They can get the money from the lobbyists, and they can be in the right position, and they can trade their stocks in a sneaky way.
And they can become, and most of them get very wealthy in the Congress.
So that type of greed is wrong because they get wealthy by getting wealth transferred to them by illegal means.
And that's been around for a long time, but we need to have a system which makes it more difficult.
Of course, nothing will be solved unless you have a standard of morality that when the people go to Washington, they're not inclined to steal from somebody else.
But governments are by nature, you know, redistributors of wealth.
They steal from one and give it to another, and they get political benefits from it.
It's been going on for a long time.
And when you have a welfare state, it gets out of control.
When you have an empire, it really gets out of control.
And of course, that's where we are right now.
And I think that people realize that if they don't participate, you know, well, they're not going to get ahead.
So the political power thing is the worst kind of greed you can have because they'll basically do anything.
But if, you know, to be a leader or to have influence and teach people, you know, how the economy works and maybe teach them by sound money, you know, I think that would be a blessing.
But there were very few in Washington that had much of an understanding about monetary policy.
They don't know the term Austrian economics.
They know the term fiat money, but that to them is don't challenge fiat money.
We live by that.
So they don't want to hear that nonsense.
They want to take care of these things.
Now, a person like Warren, who's involved in a banking issue, knows there are problems and there are plenty.
But does she say, well, it's the system.
It's the lack of the backing of the currency and the restraints that are placed naturally on the spenders because they can't print gold out of thin air.
They say, what we do, yes, we do recognize, and Warren would be one, we recognize there are problems.
That's why she's complaining.
And there's shrinkflation out there and all.
But what she wants to do is get more regulations.
The Federal Reserve has been notorious in causing and creating problems, but they're also notorious in coming up with a regulation to have more control over the banks, which means they actually believe in an economic system that is not authorized in the Constitution.
Matter of fact, only gold and silver is authorized as legal tunder in the Constitution.
But that is totally ignored.
But this is something that I think people should realize that there is an answer to this mess, but it's not going to come by the likes of these members of Congress who want to just regulate and not deal with the spending because there is a collusion.
Some people say, oh, well, the Fed does, the Fed blames Congress for spending much money, and then we have to print the money.
Now it's a collusion.
The Congress knows if they have a big debt, the Federal Reserve is under the gun and they will.
And a lot of people, the big guys are still dependent on what the Fed does temporarily.
So that is the reason they go and do that.
And they do not want to hear what the real answer is because it would be for the politician to be cutting political power.
And it would also mean cutting spending, cutting the welfare of the state, cut the intervention overseas.
It would cut into the empire that we have.
And we would also require that people can't go to war without declaring it.
So the spending is endless.
They're not open to those ideas, but they are becoming a little more open because things are deteriorating.
And I truly believe that the principles of liberty can provide many answers for those problems.
That's absolutely true, Dr. Paul.
And, you know, one thing I wanted to point out also is, you know, we are not entitled as consumers to buy anything from anyone.
So when you listen to Elizabeth Warren, you almost get this sense of the Doritos, you know, I should be buying them cheaper.
Well, no, there's no right to that.
You have no right to Doritos or Oreos.
In fact, they could close down their factories and go to the Caribbean and live, you know, but they don't.
You know, so and somebody might think, well, that's not fair.
You know, they have too much power.
Well, it goes both ways.
You also have the power never to buy any of these things, and they can't force you to.
So it goes both ways.
They don't have, there's no, you know, there's no right to their product, and they don't have a right to any consumers.
That's what market prices are all about, where you come voluntarily and agree on prices.
You know, you may not like what they're selling it for, but too bad.
That's the way it works.
They may not like how cheap you want to buy it.
So everybody has the right to say no.
The problem becomes when a consumer goes to the government.
Go force them.
Force them to sell this cheaper to me.
Force them.
Gas is too high.
Force them to sell it cheaper.
That messes things up.
On the other side, and we know this all too often, the corporations do the same thing.
They go to government, force them to buy our product, force them to take this vaccine that we made.
So this is where all the problems come.
When the voluntary market is discarded and people run to the state to try to gain an advantage for themselves.
And once this is acceptable, and in our society it is acceptable, the state will be used against you far more than it is used for you.
It will be used for the people with the bucks.
And that's why the lawmakers are so rich, because the people with the bucks make sure that they're taken care of.
So the best of all of this is to just accept that the market is sometimes ugly, but it's much better than trying to gain advantage from the state.
Very good.
You know, the efforts of Elizabeth Warren and her expression of we have to start this greed and profits are really bad.
But the whole truth is, is a lot of people, in spite of the problems that we have out there, a lot of them, you know, were able to manage to work hard and overcome all the obstacles.
So today, to achieve economic success, sometimes it's competing with all the regulations and fiat money that the government produces.
But when she talks about we have to do something about all this greed, she does not talk about the greed that I talked about a minute, the greed and the use of political power that leads to even more money for them.
They don't want that touched.
That is one thing.
That is sacred.
They're the saviors that we have.
They're solving problems.
So they don't want that to happen.
But one thing that gets to me on these people that, you know, we saw this especially in lockdown when government became very, very much more excessive, still is and still threatened out there.
But it is the hypocrisy of it all.
You know, they talk about the Constitution and they even talk about sound money and all, but they're not anywhere close to what they should be really talking about, and that is a whole different monetary system where you don't have fiat money.
It's this idea that you have a secret body of people that you can't audit.
They can get together and decide who's going to get bailed out next week.
And right now, I don't believe there's going to be many people go bankrupt in the banking industry because I think the banks are going to be continually bailed out.
And that's the fiat.
They create the money.
So that is what so many people like that system.
And so to me, it's a hypocrisy that is expressed across the board when it comes to the big government people that want to spend because the big government people, the authoritarians now, are frequently on both sides.
Domestic spending, welfare spending, and foreign policy spending and warmongering spending, all that.
It's thrown together.
So there's not much separation of the two.
You don't find many progressives who all of a sudden say, well, maybe we're spending too much money on the military.
That sort of has been gone.
Hypocrisy In Policy Making 00:03:52
But you have the hypocrisy how they protect themselves.
One thing during the lockdown, some of the people who were writing the horrible laws didn't obey the laws and they'd be caught.
They weren't following the rules and putting their mask on and doing all the nonsense that they required.
But they were the ones that wrote the laws, but they would avoid it and then get caught.
But I think that's the case in environmentalism.
Just think of the people that have their private jets and they don't want you to drive an electric, or no, they don't want you to drive a gasoline car or have a gasoline lawnmower.
So they're such hypocrites.
And I think that the whole effort should be exposed because people don't like hypocrisy, especially when it favors one group over the other.
And this is why the bad times should be a wake-up call for a lot of people.
And I still believe that is the case.
I'm certainly hoping that we never have anything quite like the COVID lockdown.
But there are people who are planning for it.
Oh, there's another virus coming.
There's another foreign policy adventure.
There'll be another crash.
We can't have a balanced budget.
We've got to keep going after it.
And the people that promote this most, they have a ritual that they go through.
Because if they want to control personal activity, they follow these DEI rules and regulations telling people who to hire and fire and all the diversity and all this stuff.
And then regulating business, the ESG group.
This is so horrible because it's all authoritarianism.
It's all by people who want to help the poor.
And look at, are we having more street people now than ever before?
We sure have.
But it's authoritarianism that is right now running the show in Washington.
And eventually something has to happen.
That's why we work hard here at trying to prevent, you know, the principles of liberty, believing that they will be an answer, not a problem.
Excellent, Dr. Paul.
And you hit it on the head.
It's no surprise why our economy, our country is in the shambles that it's in.
We're not competitive around the world.
Our government is just, it's so involved in every aspect of our lives, economically and even beyond economically, down to what you're even allowed to think or say.
And in the economy, they have it wrapped up.
I mean, if you're a company, they could come after you, this state, for if you charge too low prices.
They'll accuse you of dumping.
And if you charge too high of prices, they could accuse you of gouging.
Well, then you may think to yourself, well, I'll charge what everybody else charges.
No, they could come at you with collusion.
So they can come at you for any price that you sell for, if they want to.
Okay, so that gives them an upper hand on them telling you what you can do.
So this is all throughout our whole economy, and that's why it's being choked to death.
Now, there is no perfect system.
We obviously advocate free markets, private property, voluntary exchange.
That's not going to be perfect because there's no perfect people.
So there's always going to be theft.
There's always going to be fraud, always people cheating.
But that's what the government is for, to punish those things.
So we're not advocating something that's impossible.
There is no perfect.
But the free market is much, much better than a politician that could come at you for any price that you sell, tell you who to hire, how to hire, what you can advertise, tell you all this LGBT and woke stuff.
I mean, it's, you know, this is Sovietism through the back door is what we ended up with here.
Nihilism's Spread 00:01:18
And we really have a lot of changes to make to get back on our feet.
Very good.
And you mentioned the business about the information, and there's a bit of lying that goes on.
And I think there's a lot of lying going on.
And I think we've been infected with a principle of nihilism.
And the people that I met so often, they did not have a conscience.
They didn't have any remorse if they supported a war that went badly and millions of people died or people suffered from the consequence of this bad policy.
They don't have the remorse on that.
And I think that is something that tells you that they become nihilistic rather than thinking that overriding even the wonderful part about our Constitution, there still is a higher natural law that people should, in a moral society, be cognizant of that.
But that is not the case.
But I still think the conditions are ripe for changes in the positive because every time there's a bad thing happens or there's hypocrisy exposed, people will say enough is enough.
So we have to keep moving that right along.
Now, I do want to thank all our viewers for tuning in today to the Liberty Report.
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