De-Dollarization: Has The U.S. Empire Reached Its Limits?
The U.S. government has been able to expand way beyond its means for over century. In one of history’s greatest ironies, the government in the “land of the free,” turned itself into the biggest government in the history of the world. This was largely possible because other nations have used the U.S. dollar (often reluctantly) as a reserve currency. That reluctance has turned to outright rejection. De-dollarization has become a significant trend against the globe-trotting U.S. government.
Hello everybody and thank you for tuning in to the Liberty Report.
With us today we have Chris Rossini, co-host.
Chris, nice to have you with us today.
Great to be with you again, Dr. Paul.
Very good.
In a few minutes we'll talk a lot more about dollar dealerization and that's a big issue and we've talked about it a lot before but things are moving along there.
But before we do that I want to just talk about some of the things going on in the economy.
You know, the gold has been very, very strong, but in the last week or so it's gone down.
But that's sort of market activity, but it's still overall.
The direction is the dollar is going to get weak, weaker as it gets on, which means that prices are going to go up and the people are going to be very annoyed and some people think that it's a shortage of money, not realizing that it's too much money.
So we have, we have, we have a job cut out for us to get people to understand that what needs to be done is spending needs to be reduced.
They need to turn off the printing presses, which I have argued is will not likely happen because of the political pressure on doing that.
But a lot of people are worried about it and they're saying, well, how do you protect against it?
If you guys can't get this stuff straightened out and have sound money and reduce the size of the scope of government, what are you going to do?
Well, it's tough and the one thing that most people, or a lot of people, right now are thinking about is how to protect under these conditions, because these conditions repeat itself.
They certainly were somewhat similar to what was going on in the 70s and people want to know how to protect.
Back then, in the 70s, you know, just in less than a decade, gold went from 35 an ounce to over 800 dollars.
People became very frightened, but they did resort and go to the metals.
And, of course, when the Brenton Woods broke down, that means they severed all relationship to gold and the dollar, which meant bad things ahead and the bad things that we have witnessed over all this period of time.
It's sort of been contained where we haven't had the really, really big bust and and have the whole thing cave in.
It's been steady, it's been erosion.
It makes people poorer.
It causes more malinvestment.
Money is spent.
Interest rates are too low.
Business people can't make wise choices.
Governments don't make wise choices anyway.
But they really do when they know they have unlimited supply of money and they can talk about taxes or whatever, but they know that as long as they have the FED on their side, they can go ahead and spend whatever they want, which leads to the point where we are today.
People are scared, they don't know what to do and I think the The statistics, those favorable statistics we so often hear coming from the government, especially this administration, are false.
The governments generally do that, and both parties have done it.
But right now, people are told there are no real problems there.
Just go back to work, and unemployment numbers are okay, and inflation numbers aren't too bad, and it's something under control.
But most people now are getting at a point where they are believing the government less and less, and they understand that bad times not only are here, but could get worse.
So, this is one of the major reasons why we partner with Birch Gold Group, because they offer an opportunity to help protect your assets and the wealth people have.
And I worry about the loss of liberty making that all difficult.
But in the meantime, we are.
There was a time when we couldn't even buy gold, and that didn't happen.
It wasn't re-legalized until 1975 after having been made illegal in 1933.
So, things have moved.
Where are options?
And one of them is to look at the metals.
And this is what Birch Gold Group does.
They offer you information on how you can get a gold IRA and put the money that you have in there can buy directly and own precious metals because there are still regulations, unfortunately.
That's always going to be the case when we have an inept government and a government overblown with power.
And of course, we have to remember that gold, as good as it is for protecting, governments confiscate gold and overtax.
So, I combine my efforts to have sound monetary policy, encourage people to have gold.
And, you know, in the short run, which is the short run for me since 1971, because it dawned on me, this is a big deal.
You know, going bankrupt, we couldn't pay off our, you know, the people we owed the money to.
They turned into dollars, and instead of getting 35, at one time, $20, $35, $100, now it's up to over $2,000.
So that's why I think being able to get gold and put it in there is important.
It's also the reason why Birch Gold offers a chance to get more information.
And all you have to do is look at the number on the screen, which is a text number.
And it's text Ron at 98-9898.
And Birch Gold will send you material on how you can do it if you don't have the account set up and the value of investing in and protecting.
And I wished it were perfect, and that would be the answer.
But no government is perfect, and no economic policy is perfect, especially when you waiver and leave sound money and free markets and free trade.
And that's what we have done, and that's why we're in trouble.
And that's also the reason, Chris, you and I are going to be talking about what else does it lead to.
It leads to, you know, the consequence of the dollar weakening internationally and their attack on the dollar as the reserve currency of the world.
And the evidence is there that there's a significant shift in people relying on the dollar for settlement of international payments.
And that is a sign, even though the dollar percentage-wise is still significant.
The dollar is thought to be very necessary.
But the trend is a great big warning about what is going to happen.
And it can go slowly for a long time, but it can also go rapidly when more and more people lose confidence in the dollar.
And I sort of sense that is the direction that we're moving.
And people say, well, is there going to be a big bust?
Yeah, there's going to be a big bus.
I don't think it's going to be next week or next month.
But I tell you what, I think it could come because you can't predict these things due to the philosophy understood by Mises that there is a subjective theory of value.
So subjectivity, the mood of the people, the thoughts of the people play a big role.
International events and all kinds of things affect it.
So that's why it can happen, especially with the erosion of what is going on right now.
Our liberties have been under attack.
So we also want to continue to talk about that.
But today we wanted to visit Chris with this whole idea of dollar de-dollarization and why people are frightened and what we might do about it.
Chris?
Very good, Dr. Paul.
Yes, we're talking about the dollarization.
The use of the dollar around the world has been very important for the growth of the U.S. Empire, you know, because our government spends trillions and trillions that it doesn't have, that the Fed prints.
But if those dollars were confined just to the United States, we would have had hyperinflation a long time ago.
We wouldn't even be talking about a dollar today.
But those dollars are not confined to the United States.
They go all over the world like a release valve for all this inflation.
So it allows our government to grow because all these other countries are accepting our dollars.
And they have to play along because if you don't play along, good things don't happen for your nations.
There were a few people that didn't want to play along.
Saddam Hussein was one.
Gaddafi was one.
And you see what happens when you don't want to play anymore.
So other nations seeing this, they reluctantly use the U.S. dollar.
But this has allowed our government, the government in the land of the free, to become the biggest government in history, in the history of the world.
So it's now reached the point where major countries, not little countries, have had enough, like China, like Russia, nuclear powers.
They don't want to play anymore.
And that's why this week Vladimir Putin said 90% of Russia-China trade is now not done with dollars anymore.
It's done with rubles and won.
And other nations are also jumping on board.
They want out too of this U.S. Empire dollar domination.
And they're now doing so with confidence because these major nuclear powers are doing it.
You know, so if the U.S. wasn't a war state, constant, endless wars, perhaps, you know, other countries would play along still.
But we are on everybody's doorstep getting involved in everybody's internal problems or internal situations.
So they're acting accordingly.
They've had enough.
You know, in 2010, China, in their payments back and forth, or what they were dealing with, they used the renminbi, the Chinese won, less than 1% of the time.
It was just so more normal and natural and seemed to be in their best interest.
Maybe they had no choices, but they didn't use dollars.
They didn't use pounds.
They were using other things than not their own currency.
Today, they're using the renminbi 50% of the time.
So that's the kind of sign that you see, although there's still a lot of people using the dollar, but that's a shift.
And also, at the same time, this is happening, They gain on the supply of dollars.
I remember asking a Federal Reserve Board chairman once, gold has unusually had a dip down to $200 not too long ago, but it was fantastically low in Britain, I think it was Britain anyway, that sold a lot of gold at $200.
I remember Bernecki was at the committee that day, and I asked him, That doesn't sound like so smart to me, you know, for them.
And he seemed to be very annoyed.
No, they know what they're doing.
And I keep thinking, I don't think central bankers do know what they're doing, even the ones that might have known a lot more about gold at one other time.
But they're increasing their holdings.
And I think we haven't increased our holdings in a long time.
We reduced them compared to what it was at one time.
So this is something that I think is very, very significant.
And I think we have to realize that these numbers are important and that markets move at their own, no matter how much planning is done.
The markets eventually win out on these things, even though a lot of people have to suffer in the meantime and sometimes even suffer after it comes.
But you can sense that when the market says we're giving up more on the dollar and they get to worrying about it, and now not only are they being challenged by other currencies, but they're talking about central bank digital currencies.
And even we, United States, are thinking about that.
There was a vote recently on that in the Congress, and it was rejected.
People are waking up, and it was a very close vote, but people are worried about it.
But there's, believe me, there are people there at the Fed and other places because they will have more control of the financial system, especially if there's a transition from the system that we have where we're using Federal Reserve notes and the dollar, they'll have a digital currency that will be called a dollar.
People will be shifted into that, and they will be a lot more surveillance on the people.
I think this whole idea of taking this mess and using it as an excuse for making sure we know what the people are doing, we don't want anybody cheating.
And it's the kind of thing that has been known.
And Assange has warned us about that and still keeps an eye on this, that they know exactly.
Ed Snowden knew the same thing.
And that is a big issue.
You know, Assange has been in prison all this time because of the United States, but they don't want to have one iota of return to sound money or reducing the whole effort of the Congress.
They said that the vote the other day was that it was anti-central bank digital currency.
But I got to thinking, well, they're going to try to prevent that.
What they ought to be working on is how are they going to get rid of the fiat dollar?
Because it's going to self-destruct.
Not completely.
It won't be wiped off the map.
But its influence, I think, will be wiped off the map and won't be nearly as important as it's already started.
Chris?
Absolutely, Dr. Paul.
And, you know, it's sad for me to say, because I am an American and I love my country, but we are, as Americans, the most propagandized people in the world.
Differences in Global Influence00:05:37
The most lied-to people in the world because we have the biggest government in the world that has the resources to get us from every direction with lies.
And that's exactly what they do.
And so, you know, we need to stop projecting.
You know, we're told that Russia is going to conquer all of Europe.
What would they want to do?
Europe is in bad shape.
Why would they even want to bother with something like that?
Or China wants to take over the world.
You know, this is the stuff that we're fed.
But we have to remember these countries are not like us.
They do not think like us.
And when I say us, I mean our government.
These are civilizations, both of them.
that are thousands of years old.
We're a tiny little startup that started a couple hundred years ago that we had great, amazing founding principles.
But those principles are gone.
They're thrown away.
So now we're a 200-year startup with a massive ego that is trying to take over the world.
And China and Russia, even if they wanted to take over, they don't have the means.
They don't have the world reserve currency that they could print that the entire world just sucks up and takes and that they can grow.
They don't have military bases all over the world.
China has one in Africa.
We have like 800 that are surrounding Russia, that are surrounding China, that are surrounding Iran.
We are surrounding them.
We don't go out and see military bases surrounding us.
There are none.
They're not trying to take over the world.
But think of what you see when you go on TV and this.
You think that we're about to get conquered by someone.
And China hasn't been in war since, what, Vietnam?
They have built up their nation, and I'm no fan of their form of government.
But when you look at what has been built there, because they haven't been at war.
And look at us.
We've been at war forever, and our country is literally falling apart.
They preserve their cultures.
They preserve their, they have borders.
They don't allow anybody in.
They're not woke.
And we're all three of those things.
Our culture is getting decimated because our borders are open.
We're woke as a joke.
And we're destroying our culture.
But we are so propagandized that in this situation, we're supposed to fear that they are going to take over the world, and it is total nonsense.
Very good.
Chris, you make some good points there about what China's doing versus what we're doing and annoying our partners in trade and our friends and our allies and part of NATO and all this other stuff.
But this breakdown that we're witnessing, and I think the empire is going to dissipate as time goes on.
We're going to lose this influence because I think we have become known as the world's leading military bully, even though there's noise coming from places like China and Russia.
And you made some points where some of that is noise and has nothing to do with really seeking an answer to the problems that we have in the world.
But we've been a military bully and we've been an economic bully.
If they don't do what we tell them, I say that we give them two choice.
If you do it, we're going to give you all the money you want and we're going to subsidize you to the hill.
And if you're not, we're going to bomb you and we're going to fight you and we're going to put sanctions on you.
So it's a thing that creates the resentment where countries will always have differences.
A lot of times people work their differences out and there's not this hostility.
But we have right now a hostility built in the way we have thrown our weight around it ever since we got the weight placed on our shoulders to police the world and run the economy and be in charge of the world currency.
And instead of cooperation, there's a lot of resentment that gets attention.
And there's the economic laws that are inevitable.
When you inflate or put on regulation, there's economic penalties which come about naturally.
But it's also the delight that some of these countries, I would think both Russia and China, in spite of all the differences that we have, even justifiably, that they are right now not getting along, and they would like to punish us.
And they are.
They're eventually just that number I used to open up with how much more the Chinese are using their own currency for trade.
And that exists.
And when it comes to Russia and China, I think their exchanges are like 90% of everything they do is done in their own currencies.
So, yes, there is a systematic attack.
And it isn't like all of a sudden we hate America and we want to do this.
It's a systematic response to times that are not as fruitful for them, but also not very annoying because they resent the fact that we as a nation believe that we have this moral responsibility.
And when you think of where we have been just in the last 30 years, since Vietnam and on up and where we are now, we're in Ukraine and we're in the Middle East.
And even today, the news is not good about the friction that we have with Taiwan.
Resentment and Economic Sanctions00:02:49
And if they can, they're not going to invade us and take over, but they're going to punish us if they can, and it will be through economic sanctions.
And in a way, when they do better than us, Chris made a good point about they don't waste their money on all this militarism.
They invest it to a large degree, and then they undersell us, and then we yell and scream, unfair, unfair, slave labor.
We have to stop them.
And at the same time, maybe we're just not competing as well when we spend all this money overseas and we create inflation for all the people and people are unhappy.
But guess what?
The military industrial complex is doing well.
You know, they have a general movement where their businesses go up and Boeing has given in the last 22 years, they've collected a lot of money.
Every year they get increased dividends.
Their stock is good.
So that is resented, especially when we're involved in all this militarism.
And that, I believe, will come to an end.
I'm not saying next month the dollar is going to disappear and that'll be it.
No, the dollar is just going to get weaker and weaker.
But the resentment is going to be maintained unless we as a people decide that we can do a better job at having a better foreign policy relationship.
The founders advise that, friendship and trade with all the countries willing to have friendship and trade.
That's not the way it's been, but we could do that again if the people decided that's a good idea.
Chris?
Absolutely, Dr. Paul, and hopefully someday that will be the case.
We do need to get back to our founding principles of our non-interventionist roots that seems far away now.
It's been a long time.
And it's getting harder because our country has been flooded with people who have no affinity for America.
They're just walking in.
And kids are not learning about our founding principles.
So it's getting harder.
We need constitutional money again.
Local government, you know, when our country was founded, the states were considered nations.
You know, Virginia, that was his nation.
You know, nobody from outside is going to tell him what to do.
Look at now, though.
Somebody sneezes, and you have to know what does Biden think about this.
You know, that's how far we've gone from local government.
It's now everything is Washington, D.C., and literally everything.
Debt's Warning Signal00:04:15
Every crazy idea you can think of, they have to have an opinion and a policy for.
So that's how far we've gone.
So we need some momentum to go in the other direction.
We really, it doesn't seem like we have very much, even with Donald Trump, unfortunately.
Today he's talking about how Nikki Haley's going, to be on the Steve.
I mean, that's no momentum.
You know, who else?
John Bolton will come back to?
I mean, so we have our work cut out for us, even with the Trump presidency again.
But we have the internet.
The show is on the internet.
If you find ideas that you agree with that you like, please don't let what we say stop at you.
Let it go out to other people.
That's how ideas spread.
And, you know, hopefully things can turn around someday.
Very good.
You know, the whole thing about why the people put up with this.
And I think it's not without reason.
The reason is that most people think they're going to benefit from it.
You know, whether it's a military industrial complex, a pharmaceutical industry, whether it's the medical industry, and it's on and on that they believe they will have benefit.
The same way with people who want subsidies, the welfare state.
And people believe there are benefits, and they quite frequently see the benefit.
You know, I imagine for decades, as long as that student loan program was around, people thought, well, this is a pretty good deal.
I'm getting to go to college, you know, and I'll start paying things back.
And then all of a sudden it's found that people quit paying back and the whole thing was a boondoggle and didn't solve much of a problem.
But the one thing that they do not talk about in a serious manner and why it is symbolic of the need for us to look at what's happening.
And that is the debt.
The debt right now, if you add up the debt that the military-industrial complex has run up, we can't even pay the interest on that debt.
We have to borrow the money to pay the interest on it.
And that's the way it's going to be for Social Security.
And as long as the world accepts the dollars, which they're accepting more reluctantly than ever before, it's going to continue.
But the debt tells us a lot and is giving us a hint when this thing is going to end.
And right now, if you had somebody in Washington that had the authority to do it and say, I'm not going to issue any more treasury bills.
We're not going to buy any more debt.
I mean, it would be an immediate economic calamity.
It would bring the whole House of Cards down.
So it's a big, big problem.
But people don't pay attention to the debt.
If they looked at the debt, sometimes they can do that with their own budget.
And many times they just ignore it.
Oh, I can get another credit card.
I can do this and that.
But if they could just borrow more money, and when you have the reserve currency of the world and you have the biggest military in the world and you have the most control of the financial system, people say, oh, they're in charge.
Maybe it's wrong and maybe it'll collapse, but not today.
So we'll just go back to it again.
And this is the reason why it'll continue.
Too many people think that they can get benefit and they place a higher value on that, thinking their welfare, their personal wealth, and their living conditions are going to always be better that way.
And they give up on this whole idea, no, I'd like to be my own man.
I want to be the only person that I want to work hard and I am allowed to keep it.
I'm not going to have to give any money to the government.
Nobody's going to steal the value of that currency, no more inflation, and I'll be in charge of my life.
But people can't think about it because it's such a dream.
But it's a dream that we ought to work on and make sure people know that it is available if the people would just endorse that position.