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Aug. 5, 2024 - Ron Paul Liberty Report
33:29
End To The Lies: Market Crash And World War Three

Years of relentless lies - from "Russiagate" to "we fixed the economy" - have finally come home to roost in this morning's worldwide market crash. Dr. Paul analyzes what happened and what we can expect to happen in the short-term.

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Time Text
Attention to the Bubble 00:14:31
Hello everybody and thank you for tuning in to the Liberty Report.
With us today we have Daniel McAdams, our co-host.
Daniel, good to see you.
Good to see you, Dr. Paul.
We did some traveling last week, huh?
Right.
Was that a lot of fun?
And look what we came back to.
It was okay.
It was a good trip.
And we were at the YAL conference and we went to the Mises Institute, of course.
We got some good friends there, yeah.
And, you know, I have stock in the, no, real stock.
But I've done my best to expose the Mises Institute to the public when people are looking for good literature.
We have a little bit, but when you look at what the Mises Institute had, I mean, they have really fulfilled their expectations, you know, by having so much literature, a lot from Murray Rothbard, of course.
But today we're going to be talking about what's going on in current events.
I imagine the thing that got our attention about a week ago or so, because we kept watching for the signals after the bombing by the Israelis of some Iranians, that the Iranians would retaliate.
And there's an anticipation.
This is going on for a week.
It was happened all weekend.
Today, tomorrow, next day, when's it going to happen?
And quite frankly, I thought that and I think now that that did have a part.
That isn't the reason we had a stock market.
But there's a lot of, there's a cause, but there's also a lot of things that precipitates and exaggerates the crash when it finally comes.
So I think the foreign policy certainly plays a part in it because part of the bubble is formed with the military-industrial complex because the bubble, of course, comes from debt.
And we have a lot of that.
And the debt that is there.
And that prompts the people to tide themselves over and tide the country over, whether it's welfare at home, military-industrial complex, or whatever, or foreign policy where we waste so much money, except the military-industrial complex.
A lot of those people are quite satisfied with our expenditures because they're the ones who are profiting from it.
So this has been going on.
I think the, obviously people will now say, I guess maybe there was a bubble.
And it was huge.
And this particular bubble I see having started in 2008 with a bad recession and what they called the super recession.
Some people could have called it a depression.
But anyway, they didn't want it to get worse.
And so they did something we had not done in history.
The size of the bailout and they're trying to calm the markets with, I didn't think they'd be able to do it, but they in a way did.
They tied it over trillions and trillions of dollars.
They had QE, zero raise interest.
And people say, well, how did you know there was a crash going?
So it finally came here.
And I think in many ways, a lot of people think, and I always make this point about when we were in a presidential debate, they wanted to designate the debates on what subjects you're going to talk about.
And they always separated domestic spending and the economy and foreign policy.
And I say it's pretty hard to distinguish the two if you look at deficits in the Federal Reserve and all this activity.
So this is something that people maybe didn't pay attention to.
They did in 08, but they drifted away and the markets have been delighted.
Matter of fact, they've been debating these last month or two or three.
When's the Fed going to raise interest rates and pretending they're acting responsibly?
But they couldn't do that.
That might hurt the Democrats, all that ballooning that goes on.
So they held back.
But now, all of a sudden, they were talking about raising it because the market was too strong, stocks were too high, and various factors came together.
And there was a decision for the marketplace.
I mean, the Fed said, let's have a run of the market tomorrow.
But the Fed is responsible for the conditions that cause a crisis like this and ups and downs.
And according to Austrian economics, you can tell when there is a bubble, have a good understanding of it, but you can't, of course, decide the date.
But it looks like, well, the show would happen tomorrow.
It's all over.
And now they've already started, people starting to buy stocks again.
Well, that remains to be seen.
We'll see how much inflating they have to do to really calm because there will be bankruptcies.
And of course, there's currency disturbance, especially with the Japanese and the American dollar.
And I think the Fed is going to be very busy, but I don't think they are going to be very good at this rabbit.
I don't think they're going to be able to pull the rabbit out like they did in 08.
But what they do, the one thing is, is they probably don't know themselves.
Because if they knew what was absolutely necessary, it would be intolerated because that would mean you'd have to reorganize the monetary system and quit spending money on balance of budget.
Well, we don't have to anticipate what that date will be.
What we have to do is watch and see what happens.
And maybe, and I've talked about this a lot over the years, that if the people are resistant to the spending, start with militarism.
Stop the foreign giveaway.
Start a foreign aid.
And you probably could get people to at least start it.
Starting it and moving a direction would be helpful.
But it doesn't happen that way.
The lobbyists are too strong to challenge them.
Yeah.
Well, let's look at a few of the headlines to show what we're talking about.
Not that anyone doesn't know, but I grabbed a few at random.
Here's the first one, and it's an apt title.
Wall Street Bloodbath.
Down NASDAQ plummet as renewed recession fears trigger global sell-off.
That's from the New York Post.
Go to the next one.
This is a tweet by DD Geopolitics.
They write that over $1.9 trillion was wiped off the U.S. stock market today since the market opened this morning.
Stock markets around the globe are facing disaster.
But we think Lockheed, Raytheon, and Northrop will be just fine.
They're probably right over there.
And one more.
This is Lord Bebo, actually two more.
This is Lord Bebo writing market sell-off.
And this is a quote.
We have never been down 1,000 plus points, not even intraday on the NASDAQ.
Well, that was broken today.
And in the midst of the bloodbath, well, something happened.
If you go to the next one, the trading platforms crashed.
And they are having Fidelity, Ameritrade, City, and all the others, E-Trade, whatever.
They crashed as well.
A real, real weird Monday.
Now, I remember 2008 very well.
I wasn't involved in that side of your business on the hill, but I do remember very well you saying, this has got to be liquidated.
This malinvestment, this debt's got to be liquidated.
And they said, no, one, we have a better plan.
We're going to print money.
We're going to get more.
We'll get more and more and more.
Well, you've mentioned before the show that this, to you, looks like a continuation of 08.
That's right.
I think it is.
And what followed when they had the Great Depression or recession, they went to zero rates, and that lasted for several years.
But it's this quantitative easement which was pumping in trillions and trillions.
And you know which party is responsible for that, don't you?
The bipartisan party.
They both spent the money, and there's no serious attempt to try to change this because it's too difficult to get anybody.
Oh, there's a lot of people for it, and knowing we have to cut, but they always want the other guy to cut.
Don't make us cut.
So this, I want to quote one paragraph that deals with what you already did.
Your statement you found was over a trillion dollars to start.
Almost two trillion, yeah.
You know, and here's one to emphasize it.
But you have to remember, these numbers are very, very flexible.
You know, you wait an hour, and it might be a trillion and a half or move them around.
But this one was written when somebody did an estimate.
And it says, as the total market value of the magnificent seven, this is the big point, the rich guys, seven big American tech companies, Amazon, Apple, Facebook, and Meta, Google Parent of Alphabet, Microsoft, NVIDIA, and Tesla.
Just those seven, down to a trillion dollars.
But when you went and looked, and they gave the numbers of the individuals involved, and you have to really feel sorry for like Bezos.
We better help.
I wonder if he's taking donations.
Bezos' fortune slipped a little by $8 billion.
Wow.
$8 billion.
So that shows the size of the bubble.
And this is just the leakage and the hole is just getting bigger and bigger because, like he used to say, it has to be liquidated.
The debt and the malinvestment because they were made with mistakes.
And this is why people should pay a lot of attention.
They pay a lot of attention to it, but they don't realize how important prices means in the marketplace of any commodity.
But the most important price, I think, in the carrying out of an economy is the price of interest, interest rates, because that tells you that is set by the people, supply and demand, and what they do.
But that is interfered with because, you know, well, we'll give the kids, we'll give the kids a loan and we'll charge them a little interest.
Then we cancel this one.
And there's always a deal going on.
So it just confuses everybody, especially the market.
The market gets confused.
But ultimately, I believe the market wins out.
And when they win out, the consequence of that is political chaos.
And of course, we see it.
Some people even use this as an opportunity to have more foreign adventurism.
People, one of the most annoying arguments I've heard by conservatives is, you know, that's how you get out of recession.
You have a war.
That's how Roosevelt got us out of the depression.
That's total nonsense.
But this will call attention to people.
I would say that if nobody's thought about it, the best thing to do is find some good literature to read about there.
And one who's been very good on this and the need for sound money is Murray Rothbard and many others.
So I think it's critical that the people understand this because I know people who accidentally or conveniently got very, very low interest rates on buying a house, like 2% or 3%.
But that's not the way you grow an economy.
That doesn't work that way.
Well, you mentioned interest rates, and some people have said, the Bank of Japan, after so many years of zero interest rates, they raised it by 0.25%.
It almost reminds me of that old phrase about the sneezing.
Japan sneezed and we caught pneumonia.
I mean, how would you, if someone were to ask, well, you knew this was inevitable, but why do you think it happened today, if indeed this is the big one?
Well, I don't think, I think it's all coming together.
I just wonder if that Warren Prophet might have helped.
You know, when I read that, you know, he got rid of a little bit of stock.
But people wanted to ignore him.
So if he wanted to advise people, if his personal advice might have been, you know, one week or two weeks ago, sell your crypto or something like that.
I think that has something to do with it.
But the whole thing is there's all these factors.
I concentrate on why do we have the bubble?
And why do they do this?
And it's deceiving themselves and everybody else that it's beneficial to the economy and beneficial to the politician, beneficial to all the lobbyists.
And then you get together like this.
And it also represents one of the biggest obstacles we have is the total destruction of the unit of account.
And that is of money that you can define, convertible into something.
And that was removed on August 15th, 1971.
And I can remember the moment that was accomplished by Nixon on a Sunday night.
And I said, the world is going to be different.
And it continued.
I couldn't have said exactly what would happen and how many ups and downs there would be.
But, you know, going from $35 on to thousands of dollars for gold, it still baffles me, astounding.
But, you know, gold has doubled and tripled a lot of times since back then.
But now when it's a couple thousand dollars, is it going to double and triple and quadruple again?
Yeah.
I mean, the pattern is that.
That's why there will be even more.
Israelis Planning Response 00:14:35
This might be an opening salvo of some really big stuff.
And sure, if you're real smart and real astute and nimble, there's going to be people who make money off this because they were patient and they understood the economics of it all.
But I don't like to do that speculating.
I'm a sort of a conservative investor.
Well, I would have to say we never know when it'll happen, but I would think that there are signs.
And here's a sign that we saw six days ago.
If you put on that clip, here's a sign that things were coming to an end six days ago.
Here is President Joe Biden.
Six days ago, his quote was, I've cured the economy.
So there's an indication we should have seen it coming listening to good old Joe.
You mentioned Warren Buffett and Berkshire Hathaway.
Go to the next one.
is interesting because he is a legend.
Buffett foresaw the crash and now we'll buy it all up at the low price.
And you can see this graph of how much stock and how much the cash pile has increased massively.
So very interesting, very interesting.
He must know something about investing.
A little bit probably, yeah.
He's never been a hard money person.
He's never been a gold person.
His logic is that you have to have a little bit of wisdom if you're trying to pretend you can run the Federal Reserve.
So he's there.
But he also has a soft spot and it's hard for it because he doesn't bash it.
And I think he actually has been involved a little bit in silver.
But he's not what you'd call a gold bug.
But I don't think he'd be endorsing the type of spending we have.
I bet you on that.
He probably thinks that we should be more frugal.
He's frugal.
He's and he's a good timer.
Exactly.
Well, you mentioned when we started that things are connected.
You can't point to one factor.
It wasn't just Japan.
It wasn't just the spending, what have you.
But one important factor, which you also mentioned in your opening, is the things that have happened, the world events that have happened in the past week.
And we had a show on it last week where Israel assassinated a Hamas official inside Tehran, in his hotel room in Tehran, which is obviously violating the sovereignty of Iran.
And Iran promised retaliation.
And we keep waiting to see what that retaliation is.
They keep promising something big is coming and it is having a big effect.
And I think it's causing a lot of panic, not only in the Middle East, but elsewhere, including in Washington.
Well, this is just something from Zero Heads that we picked up this morning.
Iran says it must punish Israel, begins clearing airspace.
Biden to hold situation room meeting.
I'm sure that's interesting.
So they're going to, Biden's in the situation room.
Everyone's ready.
They're waiting on pins and needles.
And here's Israel's reaction, of course.
This is really something.
So they're the ones that assassinated inside Iran, assassinated someone during the inauguration of the new Iranian president.
And the president of Israel comes on and says, the axis of evil has announced its intention to attack us, and we're ready to deal with this threat.
We do not want war, but we have no other option.
We'll defend ourselves.
Well, guess what?
If you didn't want war, President Herzog, maybe you shouldn't be bombing Iran.
And there's some who have argued that Yahoo's been on this journey for a long time, and he's still at it.
But, you know, what will the consensus with the American people be?
Sometimes they get tired of war.
They got tired of a little bit of that money going to Israel alone and seeing the damage being done to the Palestinians and a lot of killing.
But if they wanted to go to a senator who might speak for the status quo and what the American people are thinking, they can do this.
And unfortunately, he shouldn't be the spokesman for anything.
For anything.
And that is, they go to somebody that they've tolerated, especially, I bet you he gets support from the military industrial complex.
A little bit.
All right.
This is Graham.
Pushes senators to commit to war on Iran if Israel attacks.
So that's, you know, it's not so much that's brand new, but he blurts it out because that's his policy.
You know, if he was positively against it and think it's a danger, he'd be phrasing that a little different.
He's just trying to tip people off.
So that is bad.
But I still, and we have tried our best to show that, yes, the noisy people, the people in control of the media and so much else and the high places in the judicial system and the Congress are people who do not really represent the average person in this country, especially when the wars go bad.
But that's the tragedy, and that's the point I hope we continue and finally have some success.
Warn the American people to don't get involved in the wars.
Don't wait till you look for getting out of the war, because even by the time you do it, nothing has been gained.
And the first thought came to my mind, mine, is Afghanistan.
Of course, I watched what was going on in the 60s getting out of the, and actually the slaughter was much worse even with Vietnam.
And that is so, so useless.
And that is the reason that we talk so much about the policy, the overriding policy, which comports with natural law, it comports with our Constitution.
And that is that you have a non-interventionist foreign policy.
You're friends with all nations who are willing to be friends.
You trade with people.
You negotiate and talk with people who are willing to talk.
But that's not the way it is now.
Because right now, if you talk a little bit too much with the Iranians or the Russians, then you hate America.
And I think the opposite is true.
If you keep fighting with people, that's a lot more dangerous than the people that would give us some credit for wanting to have decent diplomacy.
Well, Senator Graham is the poster child for why we should ignore everything the neocons say, because he's been on the wrong side of every single foreign policy misadventure for 20 years at least.
And so what he's done is he's introduced a res, he's preempting things.
He's introduced a resolution authorizing the president to use military force against Iran if Iran retaliates against Israel for Israel's attack on Iran.
So it's just like this whole thing, and this is what the world is getting sick of.
Israel lashes out and bombs the country.
And when the country says, hey, you can't bomb us, we're going to bomb you back.
Everyone says, oh my gosh, Israel's the victim.
You know, we never should have been.
That's good news.
Iranians are all out war.
Yeah, that's the problem.
If you don't want this to happen, stop bombing other people.
But here are a couple of things that I think, and I'll call this gathering clouds or warning signs.
And these are just a few things you can see it in tweets.
If you can get the next one up, yeah, go back, go to the next one.
And so this is air transport, Dr. Paul.
This is Will Scriver, a friend of mine who I think is a very astute analyst.
And he's pointing out the flight info for big transports.
He said, more Russia-heavy airlift to Iran.
Of course, only a fraction of these flights can be tracked via OSINT sources, such as Flight Radar 24.
Anyone who doesn't believe the Russians are aiding the Iranians in meaningful ways does not appreciate the current strategic realities.
Now, we don't know what's on those planes, but we do know that there seems to have been an uptick in cargo planes from Russia into Iran in the last couple of days.
Here's another warning sign, which is interesting.
If you go to the next one, now this is Sergei Shoyu, who used to be the defense minister in Russia.
He's now essentially the head of their strategic forces or their security forces.
Breaking Sergei Shoygu arrived in Iran on the brink of an escalation with Israel.
It's big news.
Is it about mediation or weapons deliveries?
And we don't know, but we know that he was there for meetings.
But so in the meantime, when the Russian former defense minister and national security advisor is in Iran, go to the next one.
Sorry, Dr. Paul, but at the same time, literally at the same moment, the commander of the U.S. Central Command, General Michael Karilia, has been in Israel since earlier this morning.
That's today, meeting with Israeli military and defense officials, including Defense Minister Gallant and Chief of General Staff Herzl Halevi to finalize defensive trials.
So we are literally meeting, Dr. Paul, literally meeting with the Israelis, planning our joint response to the Russia, Iran, maybe just Iran, but Russia seems involved in retaliation.
That doesn't sound good.
Well, I wonder what the Republican platform says about this.
I have a suspicion, and I think we know that it's not going in an opposite direction.
It is to support exactly that position, to be there.
And it's bipartisan.
It's not just a Republican.
Yeah, and then if we don't do it, if we come out against it, which we do, then they want to dismiss us by saying, you guys are un-American.
Don't you care about America?
We're for America first.
Well, it doesn't sound to me like we're for America first.
If what we do is go look for wars that are useless and wrong morally and wrong constitutionally.
If not wanting to have a nuclear weapon land on our soil makes us un-American, then okay, we're guilty.
We're guilty.
We're guilty.
But here's a couple more storm clouds, Dr. Paul, because all these things are now coming together in the past 24 hours.
And here's the next one, which is very interesting.
Now, this is just a reminder, if you put that next one up.
Here we go.
So here's the U.S. military Navy assets in the Middle East.
And you always say, Dr. Paul, these are sitting ducks.
We've got these huge carriers.
We know that the Yemenis are not afraid to fire a missile or two.
We've got a bunch of, we've got the Roosevelt Carrier Strike Group just off of Iran's shores.
Iran has apparently hypersonic missiles.
They could probably hit them in a couple minutes.
So we have everything there just waiting, I guess, to protect Israel or is it to serve as a tripwire?
But that is ominous.
Now go to the next one.
This might explain something.
Iran has reportedly warned Arab countries, including Jordan, Saudi Arabia, Kuwait, and the United Arab Emirates, and others, that if they attempt to intervene in Iran's response against Israel, they will be targeted as well.
And that's something new, Dr. Paul, because if you remember last time, at least Jordan, they facilitated U.S. missiles shooting down the Iranian missile retaliation against Israel.
So Iran is saying, if you do that again, we're going to hit you too.
You know, in the age of missiles, and you think about the ships and the navy that's out there and show how powerful they are.
But, you know, the capability of various countries now, Russia and others, they're capable of probably, you know, within a day, sinking most of those vessels.
Yeah, easy.
Much bigger than Pearl Harbor.
They can do that.
Because I'm sure that we can pinpoint them on a map and know when they move an inch.
So it's a real shame.
It is.
I think they're a World War II thing operative.
To depend on ships and aircraft carriers in the age of missiles.
Yeah.
And what else has happened in the last 24 hours is something that you don't see very often because Jordan and Iran do not have good relations.
Jordan is considered an American colony, you know, essentially.
We give them a lot of money and they behave themselves.
But this is something that's happened, if you put that next one up.
So Jordan's foreign minister, Dr. Paul, he traveled to Tehran.
The first official visit by a senior official in two decades.
Two decades, 20 years, the first time Jordan senior official has gone to Tehran.
That's a big deal.
And I'll just close the storm clouds section by saying Elijah Manjane, who is, I think, one of the best journalists in the region, he has some good analysis.
And I think this is very simple, but sometimes, Dr. Paul, the most complex things are best explained in a simple way.
He said, what should we expect in the difficult days ahead?
Because Iran will retaliate for Israel's aggression against an Iranian guest in Tehran.
Then Israel would hit back hard as expected.
Then Iran will hit back even harder.
And I highlight this part.
There is no sign that this exchange will stop.
And I highlighted that, Dr. Paul, because the U.S. could do something to mitigate this, and it's not.
In fact, it is pushing this forward.
Someone could step in and say, this is going to spin out of control.
We need to stop now.
But no one is doing that.
And maybe they could stop with a signature.
And maybe that type of executive order we could tolerate.
Just quit funding and stop the money for national defense purposes.
Yeah, literally, literally for national security purposes.
So the other, the final thing is we talked about the waiting and waiting.
This is the Tel Aviv Stock Exchange right when Iran announced it was going to retaliate.
And this, I think, and you talked about it earlier, Dr. Paul, maybe the Iranians are just going to wait because look, the stock market in Israel is tanking.
Their economy really is in tatters, actually.
So who knows what this means, but it's going to keep getting worse.
They're down 5%, at least at this reporting.
So big problems.
Well, I'm going to close out really quick by reminding people, it is Monday.
We are getting so close to the Liberty platform.
The Liberty Platform is our August 31st conference.
The Case for Liberty 00:04:05
Tickets are selling very well.
I'm very happy to mention that.
It couldn't be a better time, Dr. Paul.
We have Professor John Mearsheimer.
He's going to explain what's going on in the world.
One of the premier intellectuals of our time with regard to a realist foreign policy.
We have Judge Andrew Napolitano.
We've got our good friend Jeff Deist.
We've got a lot of great people who are going to make sense of what's happening and provide the liberty answer to the opposite of liberty, which is what they're bringing us.
And I'll have a link in the description to how you can get your tickets today for the conference.
Over to you, Dr. Paul.
Very good.
You know, I want to just talk in generalities about what motivates and gets people to endorse wars and violate the Constitution and all common sense.
Frequently, justification for going to war, they build it up with propaganda and the American people go along with it.
And they also tolerate too much violation of their civil liberties because it's always in wartime, you have to give up your freedoms and this sort of thing.
But there's another thing that causes chaos and conflict within a country or within the, in this case, United States.
And that is the distribution of wealth.
When the rich get richer, the poor get poorer.
And the rich have all these talents.
And no matter what the war is happening, the war, the civil liberties, they thrive.
But this is not something that's strange.
And how did they do it?
Did they steal the money?
Well, in a way, they do.
They steal the money through the process of inflation.
But that's just the nature of inflation because it's counterfeit money and the way you distribute it.
And the special interests get the money spent on them.
And that's how the budget runs up these huge deficits.
And the government just prints the money and they get away with it.
But the nature of that, as it goes on, the longer it goes on, the more often you end up with a lot of rich people.
And we do have billionaires now.
Somebody probably has this trillionaire by now.
And the poor people are still getting more numerous.
And then we have a policy on our immigration policy, compounding it.
But this, it is going to be the distribution of wealth and the chaos caused by the borders being wide open, that the American people are going to get sick and tired of it.
And if we don't get control of this, history shows that violence can break out.
But, you know, I should be careful in saying that because if you look at the TV, you'll say, well, Ron, there already is violence breaking out.
Some people are seen robbing and breaking up a store.
And so an employee goes to stop them and say, hey, you just stole this stuff.
And the employee that stops the people from robbing the place get into trouble.
And the police are called on them.
I mean, that's the insanity of all this.
But it's going to be the distribution of wealth.
And it will always be unfair to a large degree as long as you don't have a unit of account and you have the distribution of money by the political system and have a central bank that manages all these things.
So these problems are gigantic, but they're not solvable.
It's really pretty simple.
If we have a sound currency, they couldn't do any of this.
You know, they could borrow a little bit of money, but there wouldn't be the printing of money that benefits all these special interests.
So I vote for sound money, and I think that would help solve all these other problems that we talked about.
And that is the case because unfortunately, we could move away from it gradually and steadily, but unfortunately, it'll be picking up the pieces where we'll have to make our case for having personal liberty and sound money once again.
I want to thank everybody for tuning in today to the Liberty Report.
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