Former President Trump had a few scathing words for The Federal Reserve, suggesting that The President should at least have a say in setting interest rates. While it’s understandable that the president would desire such a thing, it’s absolutely not a solution to our corrupt and unconstitutional monetary system. It would certainly make our economic problems much worse, depending on who the president happens to be. The problem that we face is not a matter of who does the price fixing, but that anyone does it at all. No one should fix prices or counterfeit money! That’s the argument that former President Trump should be making against The Fed.
Hello everybody and thank you for tuning in to the Liberty Report.
With us today we have Chris Rossini who is our co-host.
Chris, good to see you.
Happy Friday Dr. Paul.
Very good.
You know this week's been an exciting week for the financial markets.
They've been up down real sharp and up real sharp.
It's a typical thing that one would predict would happen when you have a monetary system that is just chaotic.
And so it's hard to measure things because we don't have a measuring rod.
We don't have a definition for the unit of account.
So you get an economy that's built in a very rocky state.
And that's why there's going to be the ups and downs.
And the people that are in the markets and doing hourly trading and figuring the futures market, they have a challenge.
And I don't envy them.
Some of them make a lot of money and some of them go broke.
But that's not what we've been interested in generally.
The program is, our program is not designed just for investments, but we talk about policy.
One thing that we do is we have partnered with Birch Gold Group because I believe in gold.
I've looked at that for a lot of years, even when it was illegal.
A lot of people probably listen to this.
When was it illegal?
Well, it was illegal from 1933 up until 1971.
So we were really in limbo.
It was a half of a gold standard because we were on gold for overseas, could buy the gold until we printed so much money and passed it out around the world.
And then they started taking our gold.
Nixon decided, no more gold.
We have to hang on to a little bit we kept for ourselves.
So that's one reason why you can't ignore the value of gold.
You don't have to be a gold bug to recognize it.
See, some people probably invest and they look at gold prices looking for signals and might not even buy gold.
But I think for the average person, you should give serious consideration to holding it.
But the one thing is, is holding it isn't all that easy.
If you have an IRA account, you just can't put it in there.
You have some rules.
The government, believe it or not, have rules.
They have rules all over the place about money.
So it's a challenge to get the gold in the right places and not invite problems from the IRS.
So this is one thing that I advise people to check into.
And one way you can get in contact with Birch Gold is texting in the number on the screen.
That's Ron 989898.
And that will connect you to Birch Gold.
And they will send you something.
They'll send you information.
They don't charge for this information, but they'll try to find out or explain something about how you can do investment in gold and not get into problems with the government.
So if you do this, if you call, they'll send you this material.
Once again, Ron 989898.
And a lot of people say, oh, you can't buy gold now.
It's too high.
Well, I remember when it first broke loose in the 70s, it was $35.
And I was like, it went to $100.
And I thought, holy man, that's tripling the price of gold.
How can it keep going up?
And here it is at $2,500 now, you know, $2,500.
And there's nothing that shows that this trend is going to change.
And the simplest thing to look at to find out what do you think will happen to gold long term, not short term, not next month or anything else.
But long term, deficits do lead.
Deficits aren't inflation, but they lead to inflation because we don't have any money in the bank.
If an individual wants to buy something, they don't have any money in the bank, they either have to give up on what they buy it or they'll print the money.
And the individual doesn't have the privilege of printing money, but our government does.
So that's why the special interests, even though they question the system, they say, well, this is the only way I can do it.
I want to be involved.
I need my food stamps.
I need to fight those terrorists coming after us.
And we have to save ABC countries because they're in trouble.
And so they justify it and say it's patriotic.
It's believing in the military.
It's believing in America.
So they go along with it.
So all you'd have to believe in order to continue thinking about the possibilities of the important value of gold is, are the deficits going to continue?
A trillion dollars now.
It's incomprehensible.
And it's going to go up.
There's no sign that no matter what happens in the next election, election coming up, that all of a sudden we're going to have a change in the Congress and the presidency.
And there probably are some changes, and probably some tensions will be good.
But will it cut spending?
Will it reduce the deficit?
Will it reduce government borrowing?
No way.
So that's why this is important.
Once again, I'll give you that number.
Ron, 989898, and seek the material.
They'll send it to you without a charge.
But today, guess what we want to talk about?
Money in the Federal Reserve.
There's been some news about the Fed and Donald Trump.
Everybody knows who Donald Trump is.
And I'm anxious to know what his position is on the Federal Reserve.
And he's given some hints, but sometimes they are ambivalent.
I can't quite figure it out.
But he will, you know, I think at times he leaned to saying, yeah, the Fed ought to be audited, but not with a whole lot of excitement.
So this is something now, but he's made some comments recently that I thought were very important that he was going after the Fed.
He's saying that the presidents have a right to influence Fed policy.
Of course, I don't like to use that they have a right to presidents to influence.
They have an obligation under the Constitution.
And the obligation is there shouldn't be a Fed and that only gold and silver should be illegal.
So that's a little bit different than saying, I'm going to go after these guys.
And if I need their interest rates down for political reasons, he's literally putting it out on the table.
He's more honest than the rest because they do it all the time.
And the Fed is usually compliant with it.
They go along with what the politicians want.
But influence is something that is sought after, and the Fed is totally resistant.
I've had a little experience trying to get the Fed to open up their books and let us know exactly what they're doing.
And they say, oh, we have audits, we do this and all.
But that is not really true.
The important stuff, we never know about.
There's regulatory stuff goes on and there's special interests.
There's political things that go on.
So all these things have given us this monetary system that has No definition of what money is, and you know, and also that policies are arbitrary and they're very political, and nobody really wants to admit that.
So, I have worked on it, and we try to do it on this program to call attention to this, the importance of the Fed.
The Fed is a regulatory agency, it's a tax collector.
The Argument Against Political Money00:06:54
Because if they print money, they devalue your money.
They can get your money without even coming to the door, without even threatening you.
But they threaten you and they give you inflation and they give you the prices going up.
And so, who suffers the most?
Well, the poor, the middle class have the biggest problem with all the prices going up.
But it's so rare, in spite of our trying to get people to realize deficits when they print the money will hurt the poor people, and it shouldn't happen.
We should have an honest monetary system.
So, that is to me so important.
And it requires education and understanding because you can't just say, Oh, yeah, they're gouging.
They're gouging our business people.
The unions demand too much money.
They might say, Well, we're paying too much for illegal immigration.
Now, there's a connection for that because when you print the money to benefit the illegals and take benefits away from Americans, if it runs up the deficit and it's printed by the government, so indirectly, it is inflationary.
That's why I emphasize deficits, deficit, debt.
Debt is bad, and that it's hard to be optimistic and say it's going to be cut.
But the huge debt that we have, I argue the case that it will be liquidated.
The market demands that it be liquidated.
And when you print money, you're really liquidating real debt.
So, if you double the money size and prices go way high, you're lowering the real debt, and the value of the currency goes way down.
I mean, since 1971, we've lost 98% of the value of the dollar.
And that, of course, is why we're facing this crisis right now.
So, Chris, it's a big deal, and I know you've spent your time studying the Fed.
So, we have to be first willing to alert people to the great danger, but also to leave it with a positive: if we do the right thing and give them constitutional money, things would get so much better.
You could say that again, Dr. Paul.
Yes, yesterday at a press conference that the president gave, it caught our attention when he talked about the Fed.
He said, quote, the president should have at least a say in there, and he's talking about on setting interest rates.
He goes, I feel strongly about that, end quote.
And, you know, I understand the sentiment, even though I disagree.
We're dealing with a monopoly bank that was created by the government in 1913.
They created this monster.
It's unconstitutional, corrupt, immoral.
It should not exist, but it has existed for over 100 years.
They're secretive.
You can't see what they're doing.
So, if Trump and his administration wants to do, say, XYZ for his administration, and the Fed moves interest rates in a direction that opposes XYZ, well, then what the Fed does prevails.
So, the Fed and control of money is the power.
But as we've, and as Dr. Paul has pointed out decade after decade, no one should have this power.
No one should set interest rates.
That's price fixing.
Nobody knows what interest rates should be.
Not the Fed, not Donald Trump, not myself.
Nobody can say, you know, what's the price of these Nike sneakers?
I don't know.
Depends on what the seller wants to sell them for and what the buyer wants to buy them for.
Same thing with interest rates.
What should loans, what's the interest on the loan?
Well, it depends on the lender and the borrower, the individuals, not a third party that will arbitrarily fix the prices.
Nobody should be doing this.
And especially not the president, too.
I mean, could you imagine a radical leftist president with the power to counterfeit money and set interest rates?
We'll get to hyperinflation in no time.
And the right is no better on this.
In fact, in Trump's first administration, financially, when it comes to money printing in debt, it was horrendous.
So no president should be setting interest rates, along with the Fed should not be doing it.
So it's not a matter of who.
It's a matter of nobody should be doing it.
There you go.
And if we had denationalization and currency competition, in a free market libertarian society, you don't need a central bank.
You don't need the banks.
But you have to have a moral system.
So you have to have a definition and you can't defraud the people.
But our system is designed to defraud the people by counterfeit and secretly taxing people.
And one of the worst things that happens is there is subtly a redistribution of real wealth.
So it is true, the wealthy get wealthier and the poor get poorer under these conditions.
But back to Trump's argument that presidents should have the right to influence Fed policy.
And they really don't.
In a free market, that would be like saying we have a right to where the money's going to go and what Chris just explained about the interest rates, how they manipulate by regulating interest rates.
And presidents don't do this.
But it's been notoriously known that presidents have always put pressure on the Fed chairman.
And to be realistic, frequently over the years, you can identify very clearly that the presidents do capitulate and try to satisfy the incumbent president unless they don't like him.
And I think just recently it's been charged that they were doing their best to save Biden, but that didn't quite work.
But they have an obligation, though, to an obligation to pursue sound money.
And the Constitution is very good.
Only gold and silver can be legal tender.
And there's no authority for a central bank.
The argument's going on since the beginning of our country because Jefferson and Hamilton argued bitterly over this.
And of course, Jefferson argued for sound money.
And others argue that, oh, no, you have to have more flexibility and more flexibility.
But the argument the Fed gives on this is you can't do this.
The politicians shouldn't be in charge because we, we, the Federal Reserve, we have to have independence.
Sound Money Independence00:13:33
They can't know what we're doing and what we're saying.
And so we have to have them, not the politicians getting involved.
What about the marketplace?
What about all the people getting involved deciding interest rates?
So, no, they don't, they call that independence.
It sounds pretty good.
A lot of people buy into that.
Well, they should be.
Can you imagine the Congress and the Speaker of the House, Pelosi, calling up and saying, I'm the Speaker of the House, and this is what you better do, and try to get the interest rates change.
And if they had proper, if they thought they had proper authority to do that, it would be a little bit crazy.
But once I realize when they use the word independence, what they're really saying, we want secrecy.
That's what it's all about.
Because that's why they very strongly opposed me all the time on just having an audit of the Fed.
How do they make these decisions?
Because the secret would be, it would be over.
We'd know what is happening.
And the people would turn against the Fed.
But people are already turning against the Fed.
You know, 30 years ago when I first got involved around, you know, when Bretton Woods broke down, that's more than 30 years, closer to 50.
I know that the average person now knows a lot more about the Federal Reserve, and there's more in Washington talking about it.
And there's a proposal right now that Trump has said that he'd probably support, and that is using crypto to be an asset to use back up the dollar.
Now, there's a lot of good people, a lot of good people are my strong supporters that think this is a good idea.
Having crypto, it's going up in pricing will back the dollar.
Well, if you think that through and ask more questions, I don't know how that's going to work.
You know, we can have sudden shifts.
We have them in gold, but sudden shifts in gold.
So if either gold or crypto, that's a threat to the dollar, the value of the dollar.
So it's not easy to come up with a substitute.
But I think the market and the people are smart enough how to do it.
And one thing on emergencies like worldwide crisis after a world war or something, and there are no currencies that are circulating, you know, people pick up different things that they use.
Even before gold and silver were used, there was always something intermediary that they would use.
So the market would pick it up, but quite frankly, it's been convenient for 6,000 years under the freedom of choice position.
They have almost always, especially if it's a significant economy, chosen gold and silver as the money of choice.
Chris?
Absolutely, Dr. Paul.
Yes.
In making his case for the president, helping to set interest rates, President Trump said the following.
In my case, I made a lot of money.
I was very successful.
And I think I have a better instinct than in many cases people that would be on the Federal Reserve or the chairman, end quote.
I'm sorry to say that this is just not true.
During Trump's presidency, he passed the record $6 trillion CARES Act, the money printing that has never been seen before, that Representative Massey opposed.
And under Trump's administration, the national debt increased by a whopping $7.8 trillion.
So I do not think President Trump has the instincts that are any better than the feds based on that.
Now, the Trump supporters will immediately come.
No, no, no, this was COVID.
This was COVID.
And I would say, no, no, no, during unusual times, out of the ordinary times, government burden on the population should be less.
They should lessen their burden on us.
And in modern times, this is unheard of.
If you had limited government, those people would think this way.
But not in modern times.
In modern times, people say, no, government has to fix the problem.
And I would say, no.
Government fixed nothing during COVID.
They made every single thing worse.
And at the end, they were furiously trying to keep it going.
But the people had enough and weren't obeying anything, so they had to finally give up.
And during this time, this is when President Trump added trillions in debt, drove up prices, and now we're still paying for these inflated prices.
When there's a problem, government burden on our backs has to decrease.
It has to shrink.
But that's not what politicians want.
And sadly to say, in today's America, that's not what the American people want.
They want government to fix the problem, no matter how many times government proves to them that they can't fix anything.
And that's why we end up with these huge problems that otherwise wouldn't be.
So once again, nobody should be fixing interest rates.
President Trump does not make a case that he's the guy to do it.
Very good.
You know, back in the early 80s, when the Republicans were in charge, they were in charge of the Treasury.
There was a Treasury official.
He was not the Secretary of Treasury, but he was before the banking committee.
And I held up a $1 bill.
I said, this is called a note.
Notes are something that you have to pay.
If you have a note, it's worth a dollar or $10 or whatever.
And it used to be that if you had an ounce of gold, if you had a unit kind of, you'd get a dollar which was made of silver.
And that's how you paid the obligation.
So I held up this note and I said, if I take this to the Treasury now and I want to cash this in, this is my note.
How are you going to pay me?
He stopped for a minute.
He said, I'll just give you another Federal Reserve note.
That's the most they could do.
I mean, because the whole thing is so silly.
But they do work through the interest rates and not define the unit of account.
And it leads to the catastrophic economic systems that we have right now.
But the president, his recent press conference, I have a quote, and it sort of demonstrates what I'm trying to say: that it's hard to define things when nobody wants to define things.
And I'm trying to figure out what should we expect.
Can we get the president on our side to really work hard to let the cat out of the bag and find out exactly what the Fed's doing and how do they make these loans, how they bail out people, and all this?
And he said, you know, this is a quote from Trump.
I used to have it out with him.
Him is Powell.
I had it out with him a couple of times, very strongly.
I fought him very hard.
Trump said to Powell during the press conference, we get along fine.
So that's it.
So I hope they get along fine, but that's irrelevant.
And I don't think it's very relevant, you know, trying to paper this over.
And that's what they do.
Getting along with them.
How about getting along with the people wanting to have a sound currency?
And they say, oh, no, but we do have clear mandate.
We have to, the Fed has to carry, we have to have stable prices and we have to have maximum employment.
I say, are prices stable right now?
No, I think they're going up a little bit.
I think the budgets are in horrendous shape by most Americans right now.
And so the Fed will retort and they say, well, our responsibility is stable prices and maximum employment.
How do they get maximum employment?
Well, they hire a lot of people into the government.
And when employment goes up and the government raises more deficit, then they say, oh, employment is doing very well.
So the one thing is, it's back to how much can you believe on government reports?
And I start off with saying, I don't, I'll look at it, I'll read it, and I'll decide.
But most of the time, there's always a political notion about what they're doing and what they're talking about, or out of total ignorance about economics, they will do this.
So, this is something that people have to realize.
And the monetary issue is so important.
So, I still talk about it so long because it had such an impact on me because I got involved in Austrian economics in the 60s, and there were a lot of good people understanding exactly what Bretton Woods was doing.
And they said, it can't work.
Henry Hazlitt was involved in that in 1944.
He says, It can't work.
You can't have this.
And it'll fail.
And it did.
It failed.
And they said the person who has the reserve currency guaranteeing the gold, they're going to spend so much money.
There'll be so much debt they're going to run out of gold.
And that's what 1971, August 15th, was all about.
They were running out of gold and they had to stop the honoring dollars with gold.
And of course, that has led to this tremendous devaluation of the dollar.
But one thing is, governments are powerful.
Foreign policy has a lot of powerful influence in Washington, the welfare state of all sorts, the pharmaceutical industry.
And they're not going to stop.
The market, though, is very powerful, slow and tedious, cumbersome, hard to understand.
But the market sorts all this out.
And one thing, when prices go up, what the market is saying, the money is going down in value, and we have to do something about it.
And unfortunately, the people say, yeah, we do.
We have to put on price control.
And that's what they try to do with interest rate.
And Chris mentioned that.
The interest rates is a price.
It's one of the most important, if not the most important, in economics of how the system should work.
But we don't even know what it should be.
So they just, I don't know, I wonder if we had an audit where we could sneak in a room.
Maybe they flip a coin.
Oh, yeah, okay.
Up two points.
That's about the equality of it.
So the thing, but the market's going to prove that this system doesn't work.
And it happens all the time.
And if you go back of all the history, the empires usually end by spending too much money and advancing their influence by force outside of their own country and expanding in places where they shouldn't be.
Chris.
Fantastic.
Dr. Paul.
I'll finish up.
Yes, the only solution, of course, is to end the Federal Reserve.
But until that day comes, everybody involved will try to push it off, kick the can as long as they possibly can until it's so bad that you have no other choice but to end the Fed.
It's a shame.
This is human nature.
But, you know, it doesn't have to be that way.
Trump has a massive podium.
Many people, if he says jump, they say how high.
That's what politics has become in America.
It's on both sides.
It's a shame, but that's how it is.
He should use that for good.
Explain to the American people why the Fed should not exist.
You know, how it prohibits, you know, you're not going to have America first if you have a central bank like the Federal Reserve.
You can't have both.
You should point out how immoral it is, how corrupt, how unconstitutional.
But it must be accompanied with the solution, which is sound money.
Not another version of the Fed, not another, well, we could counterfeit in this situation and in that situation, but nothing else.
Those will be the rules.
Nothing like that.
Sound money that government cannot counterfeit.
If he does those things, even if it doesn't happen in the next 5, 10, 20 years, he has the ability to reach so many people that he could use his podium for good.
Now, I know this is daydreaming, that it's unlikely, but I feel that President Trump, one of his things that the deep state does not like is his unpredictability.
He is not a puppet.
So if he's not a puppet, use the podium for good, Mr. President.
You've come this far.
You've battled all the right enemies.
Explain to America why there shouldn't be a Federal Reserve.
Yes, and what you mentioned there, I think, indicates that even though we can't predict what Trump is doing, and he has miscellaneous ideas, and he comes and goes with his people he hires, he does change his mind on some issues.
And I think we can hope and pray that his attitude toward foreign policy might significantly change from these useless wars that are going on.
Bipartisan Effort on Fed Process00:01:52
And that would be worthwhile.
But no, we're trying to figure out what to anticipate.
Everybody is right now.
There's an election coming out.
The business people, especially, the bankers are doing it, the international community.
But it's impossible.
It's impossible to do it because the people who work so hard to set interest rates and decide on how much money should be created, they don't know themselves, and they'll just react for the moment.
And the politics of it all will be very, very important.
And the politicians will have a lot of control.
But listening to the politicians, I mean, I already read some quotes here that I didn't get a clear answer on exactly what to expect.
But the one thing is, is we don't have anybody on the verge of joining Thomas Massey in his efforts to help straighten this thing out.
No, I think it's bipartisan.
The spending is bipartisan.
Everybody needs that money.
There's no serious cuts.
And there's already many coalitions trying to build and overcome this confusion.
So we have to be bipartisan on this.
Yes, bipartisanship is a good way to get more money.
They never have a bipartisan way of stopping the spending.
No, that's not right.
But anyway, it's an important issue.
We talk about it a lot.
And I think that we're grateful that so many people have joined us in this effort to bring about the whole process of what's going on with the Fed.
And guess what?
I go to various places, college campuses, the various freedom groups, and guess what?