Stagflation Arrives Unemployment & Inflation Are Rising Together
Throughout all of human history, central planning has a perfect 100% failure rate. Yet, there is never a shortage of central planners. Even America, which began with a very limited government, has morphed into a web of planners, and agencies, and red tape, and unelected bureaucrats galore. Prices are manipulated to such an extreme degree that rational decision-making and investment become near impossible. Forget consumers. The goal is to get in charge of the state, and force your will onto everyone else. Eventually, this all falls to pieces; and everyone is forced to re-learn what freedom and limited government means again ... That is, until the next batch of central planners arrive on the scene.
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today, we have Chris Rossetti, our co-host.
Chris, welcome to the program.
Great to be with you, Dr. Paul.
Good.
We're going to be talking about money today, real money, that stuff, gold, that the government hates because it restrains government power.
We'll be talking a bit about gold, but we will also be talking about the release of some information to the economic releases.
And it wasn't too shocking to a lot of people, but still the markets reacted because it means that it looks to me like Trump is going to come out of this by saying, see, I told you, I told you, lower the interest rate.
And he wanted to do that months ago because bad trouble was coming.
We got to prevent them.
But now they finally had some bad news.
The economic report is not so good.
And what do they do?
They think all it needs is to solve the problems of a weakening economy for all the monstrosities that our government creates is just to lower interest rates.
That's going to solve all the problems.
Well, how do they do that?
Well, they print more money and the money becomes worthless.
The dollar goes down in value and inflation is stimulated.
But that's the answer to all their mistakes is to compound the mistakes.
So that big argument that has been going on between Trump and Powell has been just a lot of nonsense.
But in a way, I keep thinking that Trump as a businessman might be looking at this in a very superficial, narrow way of saying, you know, the recession is coming.
Why wait until it's bad and I get blamed for it?
So right now, it's coming.
We're in the middle of it.
We're starting to see the economy turned on.
But there's something weird going on.
The prices are still going up.
The economy going down.
That's what they do to the economy when prices are going up too fast.
They've crashed the economy to destroy the supply and demand, destroy economic policy.
And everybody has to lower their prices.
Well, it isn't quite so simple.
They discovered in the 70s there was something else that they coined is the word stagflation.
You can have a weak economy which demands one type of monetary reform.
At the same time, prices still go up.
Oh, that requires another form.
They're in this horrible dilemma.
And if they don't solve it, guess what, Chris?
I'll bet you already know.
It can lead to a deflationary depression, you know, with runaway inflation and a depression like Zimbabwe or Venezuela.
Inflation plus a weak economy, the onset of that is usually stagflation.
Mises talked about that, and he says it's a bad sign.
So there's lots of things that we can dissect.
But I want to start off, Chris, by I'm sure you took a look at some of the report today.
Do you have any wisdom for us?
Yeah, well, wisdom, I don't know.
But yeah, the numbers are bad.
Inflation is rising.
Unemployment is rising.
At the same time, that's called stagflation.
So as the economy worsens, we have to remember what happened over these last few months because the change was so drastic.
What Trump campaigned on, what Americans voted for.
He was supposed to come in to drastically shrink the government, Doge.
And it actually started to happen.
Stuff was being exposed that was never exposed before.
Trend Of Trillion Dollar Spending00:11:38
Things were being cut.
Wars were supposed to stop.
Fort Knox was going to be looked at.
The Fed was going to be looked at.
Ron Paul was being talked about to look over the Fed, then it was all reversed.
And I don't think it was all fake because you don't just bring Ron Paul into the spotlight.
You ignore Ron Paul.
There's no benefit to them.
It was all reversed.
Doge was stopped.
The wars are still going.
All these days and months later, no Fort Knox, no Fed, all of that.
And the opposite happened.
Bigger government, big, beautiful bills, big bankruptcy bills, what we call it.
The wars are continuing.
And now we're getting unemployment, which is the highest since 2021.
Prices are going through the roof.
And they're going to now print more money.
I mean, what a massive, massive turnaround.
I don't know what happened to cause this turnaround, but something happened, and we are heading in a very bad direction.
You know, the conditions we have today have been known, and we alluded to the fact that we've experienced this.
Many other countries have as well.
And right now, I think it's a safe statement to say that a lot of people in America, average people trying to survive, and business people trying to survive, people trying to buy houses and all the economic problems that we face.
And they're worried, and there's indication this is big time.
And people are getting, you know, more than just casually worried, quite worried about it.
But then there's a group of people who just doesn't, they just don't want to think about it.
They're rather complacent about it, complacent enough to not even deal with the problem.
And I would say that's infectious in Washington.
Yes, they talk about it, you know, about how terrible these things are, and yet they don't do anything.
If it's caused by the government spending too much money, they might do more than just talk about it.
It might cut something.
But that hasn't happened.
So what is a sign for the people to look for?
Well, you know, the initial problem starts, I think, with an appetite for government spending and belief that the government can make us wealthy and make us safe.
Well, I don't believe in that.
I don't believe that should be the role of government.
The Pago Royal government ought to do their best to provide an environment of liberty for the people to solve their problem.
But right now, under these conditions, one thing comes to a fold.
It becomes very apparent that something has to be done.
And if you look at it at this subject, that is the subject of gold.
Gold today hit another record high.
It is still, although even in the early 70s when they closed the gold window, there was an anticipation on my part and many others that this is bad news and gold, who knows where it's going to go.
But still, when it happened, it still is bewildering.
And gold is at a record high.
It's up to over $3,500.
And it doesn't look like it's going to stop.
So this is one of the reasons that we get the advice and work with a company called Birch Gold because they specialize in trying to let the people know there are alternatives to try to protect, but there's no magic to all this because the problem is so big and the government is always changing the rules.
But anyway, there is information.
There's ways that people can make a sincere effort in trying to protect their assets when an oncoming crisis is approaching and people realize that.
And so they offer some information on what one might do if they have regular stocks and think maybe, well, I should be more in gold or want to understand this issue better, that they will provide some information for you if you want to request it.
And all you have to do is look at the screen and look at the number.
And if you text Ron 98989A, they'll send you some material.
They will charge you for it and explain to you how you can transfer the stock without any immediate taxation or over-regulation because it's tedious and you have to, once again, follow the rules.
And so if you're interested in learning more about it, to try to get Boolean, be able to have Boolean in an IRA account, this is important because if it's in a regular IRA account, it doesn't follow all the rules and regulations.
So this is an opportunity to get started because quite frankly, people say, oh, I'm way too late.
I'm way too late.
Gold has to stop.
And, you know, next week it might go down sharply, but believe me, the system hasn't changed.
The spending is going to continue.
And we realize that.
And Chris just made the point of how this spending continues and there's no signs of success.
So if a person is complacent about it and say, it's too late, just think long term, because I'll tell you what, if this goes, nobody knows how and when it's going to end.
I just, I always kept being hopeful that the country would wake up and quit the nonsense because it's so dangerous.
But earlier on, you know, last year and after the election, we thought, well, there are some people waking up.
I think a few more people have awakened and they're scared, but now they're wondering what to do.
But once again, the number is Ron, 989898 to get the information if you so desire.
But Chris, we need to talk a little bit more about this report today.
I think the one, the biggest issue was the employment rate is going down.
It looks bad.
You know, you could look at it.
It doesn't look that overwhelming.
But from a financial viewpoint, it's the trend.
And the trend is sharply down.
I think today people recognize the economy is weak and that all the hype given to it, that people, you know, want to say everything is rosy.
I think today there's a lot of new realization that this economy is in trouble.
That's right, Dr. Paul.
And the weaker it gets, the more intense the propaganda gets on how great it is from the Trump administration.
They're talking about how this is the greatest growth economy in six months to a year.
You're going to see trillions of dollars in plants and factories.
You know, the White House put out an ex-post saying that $8 trillion in tariff revenues.
Tariff revenues are $180 billion, less than what has been wasted in Ukraine.
And now they're saying, oh, no, they mean investments.
There's $8 trillion today.
I saw Howard Luttnick say $10 trillion, way over $10 trillion of investment.
There's $10 trillion just sitting around there.
Now, until it's done, they're acting as if it's done.
You know, President Trump says, I'll end the Ukraine war on day one.
It would be really weird if all of us Americans walked around and said, yeah, Trump ended the Ukraine war on day one, because that's what he said.
No, he hasn't ended it at all.
It's 200 days later.
So you can't say that $10 trillion are taken in as if it's a done deal until it's actually done.
And that's the thing.
Will it be done?
I don't know.
It'd be great.
I would love to see that.
But I don't see any factories.
I don't know one person, not one, that manufactures anything.
Me and my friends were out the other day.
We talked about, you know, one person that makes an actual thing.
Nobody did.
But they're talking about that there's trillions of dollars just falling from the heavens into America, and we just can't appreciate it yet.
Again, I would love to see it, but they're talking about it as if it already happened, and it hasn't.
And there's no reason that it actually should happen.
People change their minds all the time.
So, you know, as bad as it gets, the Trump administration always counters with now they're up to $10 trillion has been brought in.
You know, the one number that the markets watch today was the one on unemployment.
And they make estimates and predictions.
And it was supposed to be that there would be a certain number of unemployed announced, but there were a lot more than they had just, that had recognized.
And it was, you know, it was a significant number for finances, but it doesn't seem so much.
And the unemployment rate went from 4.2 up to 4.3.
Well, it's a trend.
The trends don't look good.
But it sort of solidified, you know, Trumpism about what to do with the interest rates, because now the markets are always anticipating.
That's what's so wicked about, you know, monopoly control, secretly controlling interest rates of the businessman loses his most important instrument to make a decision for the future.
And that is the manipulation of interest rates.
So it's been, Trump has wanted the interest rates lowered for a long time.
And Powell says, no, no, no.
Then he said, well, we better talk seriously about lowering rates 25%.
But with this announcement today, what it said was the markets are saying, well, they're going to lower at 50%.
The trouble is, is you don't know what the Fed's going to do or what's going to happen tomorrow.
And they're talking about it a week or two now when they have to make a decision.
But the whole thing is, is this manipulation is all a force.
It's all playing to the people.
But if you were a businessman and you were a trader in stocks and bonds and a businessman, you had to make big purchases.
They're very important decisions to make.
It's not a game that they're playing.
But I'll tell you what, it's a serious manipulation.
And I see so many business people, let's say you do have laissez-faire on a free market.
Does that mean everything would be rosy?
No, there'd be a lot of mistakes made.
But guess what?
The people who made the mistakes would be the ones who would suffer and they would have to make the adjustment.
When the Fed makes a mistake or a president makes a mistake and they pretend they know, well, this is what interest rates should be, what they're doing, they're making everybody suffer.
That's what's so wrong about the socialistic approach to the economy and all this intervention and telling people how to live, what medicines they have to take.
Because when governments make the decision, they have a bunch of bureaucrats who are there for very personal, selfish reasons, and they become dictators.
And they like it.
Government Bureaucrats as Dictators00:03:46
I think they're psychologically bent on having that type of power.
And it's so dangerous.
But the big difference is when they mess around in Congress, whether it's one individual or one committee or one Federal Reserve Board chairman or whatever, it is really a big deal.
But if in a free society on a personal level or an economic level or a religious level, if you make decisions, you're only making them for yourself.
And you have to assume the responsibility and make the correction.
That is the part that they don't understand and don't want to deal.
They don't want to accept the responsibility that it's our fault.
We have a responsibility.
They also have a responsibility of getting rid of those people.
The democracy is there.
But unfortunately and tragically, the dependency on democracy ironing out the differences, I personally believe that obsession with democracy is the problem because it just allows the majority to dictate and control the minority.
It's a good way for 51% of the people or less, as long as they can control the media, to punish and suffer and pass on the penalties to the lower income and middle-class people.
Chris.
Very good, Dr. Paul.
I'll finish up my last statement.
When presidents are cornered, as they often are, by their own bad policies, they often look for war to change the subject.
They messed everything up at home.
Let's go point the fingers at some bad guy out there.
This is how it's, this is how it works.
Okay, it's a shame, but it's how it works.
And I'm going to tell you, and we all know this, that Israel and Ukraine would love for the Americans to come and start dying for them in their wars.
And this is despite the fact that Trump kept saying he's the only one that could keep us out of World War III and this and that.
But, you know, FDR and Wilson both said the same thing.
They're not going to send your kids to Europe.
Your kids are not going to go die.
They both campaigned that way and they both did the world wars.
So Trump could be the third.
Let's hope to God that never happens because that would be a war that nobody would win.
But governments do dumb things.
You know, power corrupts and it corrupts their mind.
They will do the wrong thing if they can.
You know, where you have this empire that is supposed to come home.
You got to close the bases, bring all the troops home.
Trump is doing none of that.
He's instead going to call the Department of Defense the Department of War, which, in a sense, makes it a more accurate name because our military has not been for defense.
The last time we were invaded was 1812 by the British.
Nobody comes here to harm us.
Yet he wants to have a Department of War.
It has not been defense for the last hundred years, so it'll be accurate.
But if he's thinking it's going to be the Department of War to go to war, then we're in big trouble.
The economy is in big trouble and our lives are in big trouble because the government closes the iron fist when they go to war.
So Americans better speak up against this.
Trump supporters are as blind as ever.
You know, anything he says goes.
That better change or we're going to be in big trouble.
Very good.
You know, I want to finish by sort of talking about and thinking about how we get ourselves into this mess.
The Mess We Created00:06:32
Because philosophically, we have some clear-cut philosophies that people can know and understand.
They've been tried throughout history.
Everything from free markets, all degrees of that, as well as all degrees of authoritarianism from fascism, socialism, communism, and the rest, where people are totally controlled and they sacrifice their lives, deliver their sovereignty to a bunch of people who are just looking for an opportunity to be dominant over other people.
But you have the two of the extremes.
Socialism of one sort or another, where the government controls everything, is one extreme.
The other extreme that is in contrast is laissez-faire.
Let the market work.
Let it go.
People are free.
And like I said, if they make mistakes, they have to be their own.
So there are those two things.
But they're really both of them are generally rejected outright.
And when they get out of control, you end up like with World War II and so many other wars.
But the substitute for this is when socialism gives in, say, well, we don't want to be authoritarian.
Sometimes it raises its ugly head like it's doing right now.
But they give up on it and they modify it and make it softer and that they're humanitarians.
And that's why they're redistributing the wealth to help the people who are poor.
It ends up helping the rich.
We all know that.
But laissez-faire, people just afraid, you may just let the people do what they want.
Let them spend their money the way they want.
Would they get medical care?
Would they buy their food?
Would they go to work?
Would they save their money if they had honest money?
All these things.
So they give up on that.
So there's a consensus, especially in Washington, that, you know, it might be not easy to believe, but it's an obsession with bipartisanship.
See, all this argument and fussing that's going on is sort of, you know, personalities going against each other and the sort of some of the minor issues that become major issues.
But they get together and they say, well, what we need to solve all this problem is bipartisanship.
And I think that is completely wrong.
Bipartisanship means if you are a dedicated socialist, you have to give up what you believe in.
But what about the people who believe in liberty?
To be bipartisan, you have to give up half of the good things that are all for our freedoms and the Constitution.
Well, we could constitute, we could compromise on the Constitution.
So they come together and it becomes a mishmash.
Well, how do you solve the problem?
Majority vote.
We'll have a vote on it and decide.
The majority always win, the dictatorship of the majority.
And it's the worst thing in the world for the minority.
It's the worst thing in the world for people wanting a system that have incentives to take care of themselves.
And that's where we are.
But people are afraid to say that.
Well, at times I say, people would ask me, Ron, do you think we ought to have a third party?
I said, no, we really ought to have a second problem.
And, you know, to compete with them, because the authoritarians are mixed up in there, not as clean cut as they seem on the appearance.
But they are, you know, on the big issue.
They don't really, we're getting there, really a serious discussion on the Federal Reserve.
Foreign interventionism, it's always supported by bipartisan spending money.
They've done that, and it always goes up, even though we're not in any wars.
We've been fighting wars continuously.
So it's always the big issues that deals with the finances that benefit the very wealthy.
Then we have a whole monetary system.
Not many people until recently, they're talking about maybe there's something wrong with us having the Federal Reserve because all of a sudden they think, well, maybe the banks are making a bigger deal.
Maybe the big corporations, maybe the trillionaires are benefiting from this.
And maybe that's just true.
That is, and that is very unequal.
It is unfair when you have fiat money because it doesn't work like it does if you have honest money.
And we have not had honest, even a hint of honest money since 1971.
And that is why the rich do get richer.
And it isn't the way the far left pronounces it that they just design it and pass laws doing this.
No, it's the way the money is distributed.
They keep the rich get richer, the poor get poorer.
And they do not have a goal such as we have here at the Liberty Report.
And that is to look at this as a personal thing.
It's personal liberty, personal choices, personal responsibilities, and that you do everything by voluntarism.
Both sides have to agree on something before you have a contract or an agreement.
Both sides.
And all of a sudden, things just fade away.
And we should do that with countries too.
Both sides agree with it instead of wanting somebody else coming in.
Just think of how many times the Middle East has been remade and re done in World War I, World War II, and here we are doing it again.
And, you know, in the last couple of decades, it's on and on that some small group wants to dictate to others rather than accepting the principle that let people make their own choices with one big rule that people don't like.
And that is you can't use any force.
You can't lie, cheat, steal, or kill.
Well, nobody believes in lie, cheat, steal, and kill.
But guess who lies, cheats, steals, and kills the most?
Governments.
And they get us into the wars and they're stealing from us by fraudulent money, counterfeiting money, on and on.
So it's not a complicated problem.
It's just a temptation that the people can't resist and an ignorance that is put upon them that intervention is the only way to help people.
And that is wrong.
The only way to help people is leave them alone and they'll take care of themselves.
I want to thank everybody for tuning in today to the Liberty Report.