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Aug. 25, 2011 - Freedomain Radio - Stefan Molyneux

24:25

1985 Death by the Paper Cuts of Fiat Currency! Stefan Molyneux on Free Talk Live

Stefan Molyneux, host of Freedomain Radio, talks about the quick deaths of fiat currencies worldwide, and throughout history, on Free Talk Live! http://www.freetalklive.com

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	3TALK Live, 855-450-3733.
	That's the SACL toll-free call-in line.
	And right now, we've got an interview on the line.
	We've got Stefan Molyneux, FreeDomainRadio.com.
	Stefan, are you there? All is well.
	You're here with Mark and Dale.
	Normally, we don't do interviews on Free Talk Live, but I did ask you to call in because I heard something on LRN.FM, Liberty Radio Network, and you can find it at LRN.FM. It's, I guess, a podcast that you did, and it's called The Short Unhappy Lives of Fiat Currencies.
	I thought it was just so good and delivered so well that I really wanted to talk to you about it because I felt like Even though there's probably some crossover between our listenership and yours, there's certainly quite a bit that don't cross over and I want to make sure people hear this stuff.
	Well, I appreciate that.
	I just really want to be clear.
	I pillaged this work, though I do think it's really, really important.
	Same here. The basic idea behind it is fascinating, and it's something that I've never seen presented in this concise way before.
	Basically, the idea is that people have done studies of fiat currencies throughout the world and throughout history and found that the average life expectancy for a fiat currency is 27 years, with the shortest lifespan being one Count them, one month.
	The only one that's lasted any kind of time is the British pound sterling.
	It's 317 years old.
	However, in those three centuries, it's lost 99.5% of its value.
	I think it's even worse than the U.S. dollars.
	The pound is worth what a half a penny was when it was started.
	Yeah, so the British pound was originally defined as 12 ounces of silver.
	Now it's worth less than 1,200 of that.
	So, you know, to paraphrase Fight Club, on a long enough time frame, the survival rate of all fiat currencies drops to zero.
	And there's lots of examples of this.
	What's the next closest?
	I mean, you know, is the pound sterling the one fiat currency that's made it this long?
	I mean, the D.O.S. dollar...
	Do they count it from 1913?
	Do they count it from 1970 or 69 or whatever?
	Yeah, I was wondering that because I know there's various stages that the dollar has gone through being separated further and further away from being backed by anything at all of value.
	Well, that's interesting. And there's two ways of measuring it.
	Of course, in the 19th century, there were lots of competing currencies.
	The U.S. flirted with the central bank and then ditched it and then flirted with it again.
	But I think that you would most accurately characterize the American fiat currency system as really being from 1971.
	When Nixon decoupled the U.S. dollar from gold, I think that's when you would count the real, you know, airy-fairy, tied-to-nothing fantasy camp of paper money.
	That would be about 40 years.
	I tend to agree.
	That's what I was thinking, too, is that's when it really just stops having any meaning at all in terms of real assets.
	Yeah, I mean, they messed around with it in the 30s and they broke the convertibility and so on.
	But yeah, it's really only 40 years.
	So the U.S. has lasted a long time.
	And I would really argue that's only because of the astounding growth in the productivity of certain sectors of the American economy has propped up the fiat currency.
	And I mean, I think really around the computer industry and so on.
	Imagine how wealthy it would be. If the computer industry gains had been allowed to accrue to the general population rather than being eaten up by inflation and debt and government predation, I think we'd all have at least double the income that we had in the 70s, which would be significant.
	Right. When the government has a meaningful income in terms of spending power is what you mean, I'm sure.
	Yeah, yeah, yeah. Sorry. Not Zimbabwe income, but gold-based income.
	So what is the second closest currency behind the pound sterling?
	Is there anything that's even close to this thing in its 200 years of existence?
	You know, they don't mention that, but I got to think it would be, I mean, certainly it's nothing in Europe because they've replaced all their currencies with the euro, which is now currently eating itself very nicely.
	I can't think of any other currency.
	Yeah, it's just about, so I think the US is second.
	And, you know, when you're second and the US dollar is doing what it's doing, that is not a good race to be in.
	Well, I mean, it doesn't look like the dollar is going to get anywhere near to where the pound sterling is.
	Well, the US economy is committing suicide so aggressively.
	Not the economy, it's the politicians.
	Well, right. Sorry. If you look at the actions they're taking, they're so dramatic.
	And the mistakes they're making are of exponential proportions to the past.
	And so people who are looking to the past to try and predict the future, I don't think it's relevant.
	Things have changed so much.
	They try to look at these trends in the economy to predict what's going to happen in the future.
	But, for instance, what happened in 1971 and what changed the currency to pure fiat is, as you're pointing out, significant.
	And you can't just look at the past and assume the future is going to keep behaving the same way.
	Right, so let's play a little game here.
	Maybe your listeners can chime in and we can maybe play some bets with some paper currency, right?
	So they did a study of 775 fiat currencies, and isn't that a depressing number of paper currencies?
	A lot of fiat currencies.
	Yeah, well, they're all pretty much fiat now, I think.
	Yeah, and so 20% of them failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, and 24% were monetarily reformed, and 23% were still in circulation approaching one of the other outcomes.
	We've got hyperinflation, war, independence, or a reform where they just rejig all the numbers, they slash off a couple of zeros, they issue new currency, and they just start the whole thing all over again.
	Where do you think U.S. dollars are going to end up?
	I would love to hear your opinion on it, but if you're asking mine, I'm going to say reformed.
	I think that they're going to probably trot out the new improved dollar or the Amero or whatever term they're going to use.
	I think it's going to be attempted, certainly.
	I don't know. It's hard to imagine what will result.
	Well, they'll probably tie it to something early on and then untie it at that point.
	Stefan, you got an idea? Well, I tell you, the reform is pretty tricky because it's one thing to reform your currency when you're not enmeshed in the world currency, of course, as America is.
	And also, it's not so difficult to reform your currency when you don't owe the world, say, three generations of your offspring.
	And so I think that's the real challenge.
	I mean, if they try to reform the U.S. currency, in other words, if they cancel the U.S. dollar and issue the dollar version 2.0, what is going to happen to all of the existing debt that's owed to people?
	I don't think that they're going to be all too happy.
	And so I think that would be pretty tricky.
	I think what they'd probably do, I mean, if I was evil and I was in charge of printing money, but I repeat myself, they...
	I would probably print all the dollars, pay everybody off, and then bring out the $2.0 and start all over with a clean slate and a bunch of mad people.
	But you can't...
	I mean, what is the US debt is now 90% of GDP or some monstrous Mediterranean-style number?
	I mean, you can't just get...
	I mean, you're going to have to...
	What they could do, I guess, is they could print money and pay off as much debt as they could.
	And then before the hyperinflation hits, they could pull the rug out and start again.
	But I think that the reason that's not happening in the Western countries is that trick is so old and tired now that...
	Yeah, I think everyone's aware of it.
	And I think that people would know pretty quickly.
	Of course, the US has doubled the production of monies in the last couple of years.
	And they're looking at QE3, which sounds like a fun cruise, but it really has just fallen off the edge of the world economically.
	So I think they're really low on options at the moment.
	It's the equivalent of just saying, and they may as well if they're going to do that, just saying to these other countries, we're just not going to pay you back.
	Just never mind. What are you going to do about it?
	Printing out a shipload of dollars and sending it over to China on the same day that you trot out the new currency is the equivalent of saying, hey, go screw yourself.
	And they may very well get themselves a war of aggression or retaliation out of something like that.
	Oh, I can't. I mean, the U.S. has got such a ridiculously overgrown military and such massive capacity.
	I mean, the only way that you can take on the U.S. military is this insurgent style.
	I mean, nobody can face them head on.
	So I don't think there's going to be any government-to-government wars involving the U.S. But I think that there is going to...
	I mean, in my opinion, I think the U.S. is going to turn on its own population before it's going to turn on its creditors, because the creditors are propping up the ruling class.
	You have to wonder.
	I always try to think of economy by taking out the money of it.
	It sounds odd, but money can be a distraction when the money doesn't really mean anything.
	The money just seems to follow the resources in a way.
	And so I kind of wonder if America can maintain the military the way it is with fake money.
	Stefan, can you hold the line here for one more segment, and then we'll get back to calls.
	It's free talk live.com.
	855-450-3733 if you've got any calls for Stefan Molyneux.
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	We are on with Stefan Molyneux of freedomainradio.com, which is, Stefan, like an incredibly listened to podcast.
	There's some superlative that surrounds it, something like the most listened to philosophical conversation on the Internet.
	Is that right?
	Yeah.
	I mean, the technical phrase is somewhere around the world.
	I'm always talking.
	I never, ever shut up.
	In fact, I barely even take a breath, and I think that's the technical way of putting it.
	Yeah, it's the biggest philosophy show.
	I mean, I was voted one of the top ten in alternate media.
	Hopefully, that doesn't mean alternate to truth and value.
	And yeah, like 30, 35 million downloads over the years, and we're chugging along.
	35 million? I thought it was 25 million.
	I'm sorry. If you count YouTube, I think I just topped 7 or 8 million YouTube views.
	So if you count YouTube plus podcasts, it's a lot.
	That's a lot of views.
	It sure is a lot of views.
	Well, it's good news for the message.
	I am sure glad the message is getting out there.
	But you have to remember that I also have about 35 million podcasts, so it's really only one listen per podcast, because I'm all about quantity, not quality.
	There's one really hardcore fan out there. That's right, one guy, it's my mom, who just listens and really, really helps boost my numbers.
	We were talking about fiat currencies and their short, ignoble lives in here, and you'd suggest that there are a few different options, and many of them we've sort of discounted You think that replacing the dollar with something else is going to be tricky and difficult.
	Frankly, I don't know how they would go about doing it, although the banker types have probably done this in the past.
	It seems like, at the very least, the second most likely thing to happen.
	There's revolution. That doesn't seem likely here in America, frankly.
	And war, that doesn't seem likely.
	I was just thinking the other option is hyperinflation.
	Is that what you're putting your money on?
	I don't think hyperinflation is going to work.
	I really don't. My guess as to what's going to happen, and obviously this is just a guess, but my guess is what's going to happen is when you look at people in power and how they're going to solve problems, always look to those they have the most power over.
	And those are the ones who are going to get messed up.
	And so in America, there have been a lot of rumblings in the political classes about the dependent classes.
	There was some guy high up in the Republican Party talking about You know, tens or hundreds of millions of dependents on the US government.
	They're all getting kind of tired of that up at the top.
	And so I think you're going to start hearing a lot of talk of sacrifice and a war on dependents and all that kind of stuff.
	The declaration of independence from dependents or something like that.
	Are the politicians completely dependent on the government?
	Well, yeah, but they actually, I would say the politicians are more dependent upon the creditors around the world.
	So they sell off the unborn to get money in the here and now to bribe voters in return for votes.
	And that scam is coming to an end.
	So I think they're going to continue to pay off the creditors because if the creditors pull the rug...
	The whole thing's going to come down like a house, a car.
	So they're going to continue to pay off the creditors, but what they're going to do is start to put the squeeze on the dependent classes on Social Security, on Medicare, Medicaid, welfare, even the public sector unions, which have massive unfunded liabilities in their pension schemes.
	They're really going to start turning the screws on those guys, and they're going to...
	Create some sort of patriotic fervor called, let's outgrow dependence on the state.
	Let's stand up. Let's be strong together and all that.
	And I think that's the scam that they're going to try and pull because they're the people they have the most power over.
	And what are people fundamentally going to say to the state that they're dependent on if they start getting cutbacks?
	They can't do much, so they're the ones who are going to get the short end.
	They will wait. But they're not going to be able to do anything because they've depended on this undependable organization.
	And I think that makes perfectly good sense, but you're not predicting the government will actually shrink, right?
	Well, no, I think government expenditures are going to have to shrink.
	I mean, government expenditures on the domestic population are going to have to shrink because they owe more and more to creditors.
	So they're going to take money away from the gen pop and send it off to the creditors.
	And I think at some point they're going to have to pull back.
	I mean, they're going to, you know, at some point, you know, even the heroin addict who's 20 years into the gig, at some point looks at all the tracks and marks on his arms and looks at, I don't know, the dead hooker at the foot of his bed and says, man, you know, maybe I better change something here.
	And I think... I think we're getting pretty close to that as a culture, both in Europe and in North America.
	It's hard to look at a dead hooker as a good thing, but I, at the very least, like to see a reduction in the amount of spending.
	What are your thoughts, Stefan, about the idea of our military, as big as it is and as unstoppable as it is at the moment, maintaining that with this monopoly money?
	Yeah, well, that can't happen.
	I mean, there's no question that, I mean, the death of the empire has already occurred, right?
	I mean, the goal of the enemies of America was to get it to spend itself into oblivion through pointless wars of attrition in foreign countries with huge supply lines and the general exhaustion of the personnel.
	And that has all been magnificently and perfectly achieved.
	I mean, talk about a war on terror.
	I mean, how about not doing everything that the terrorists actually want?
	That, to me, would be a real victory of a war on terror.
	But no, they have to wind it down.
	It's the same thing that happened to England after the Second World War, when its economy was in complete shambles and it spent all of its gold in World War I and World War II.
	They just wind down the empire and they come home.
	That's what happened to Europe after Europe destroyed itself through war.
	And it's going to happen to the American empire now that America has destroyed itself through spending and through war.
	So, yeah, they're going to wind all this stuff down, bring the troops home.
	And then, of course, there's all these problems of getting these shell-shocked victims to readjust to civilian life.
	But, yeah, there's no question this is going to be a big boon for liberty in the world.
	Now, you were talking about politicians selling the third generation.
	Not my children, not my grandchildren, but my great-grandchildren.
	And you have done some podcasts on this idea that The citizens are livestock for the government.
	And I think that this is just absolutely true.
	These people believe they own your labor.
	If they didn't believe they owned your labor, then they wouldn't be able to tax you upon it.
	Yeah, it's more than a belief.
	I mean, what do they not own?
	I mean, if you don't pay your property tax, you very quickly will find out who owns your house.
	If you don't pay your gasoline tax, you will very quickly find out who owns your car.
	If you don't pay your income tax, you will very quickly find out Who owns you?
	And, of course, once you own something, it's an asset, and you can sell off the future earnings of that, the future value of that.
	And, you know, it's amazing.
	I was reading this thing the other day, a minor tangent, I promise, and very brief.
	But somebody was getting real mad in the media about the fact that if you have some terminal illness, someone will give you some percentage value of your life insurance so that you can go and blow a lot of money and have a lot of fun before you die.
	And someone said, "Oh, that's so creditory.
	That's morbid.
	That's terrible." And so on.
	Well, first of all, that's a free transaction and I would rather have the money before I'm dead because what good is it going to do me afterwards?
	And secondly, I mean, if you're really, really upset, what about all the kids who are being sold off down to three or four generations from now?
	I mean, where's people's outrage about that?
	I mean, if we love our children enough, the world will become free, and we have to get outraged about national debts.
	We have to get outraged about the Terrible quality, the ridiculously bad quality of government education.
	We have to get outraged about the fact that taxes are so high that very few parents can stay home with their children.
	They ship them off to government-run daycares where they're raised by strangers, and badly.
	So until we get really mad about this stuff, it's just going to get worse.
	And I'm always quick to point out that, you know, someone will say, well, if they're taking 40% of your income, they own 40% of you.
	I'm like, no, no, they own 100% of you.
	They're allowing you to keep that 60% right now.
	They could change it at any time because they own all of it.
	Another aspect of this is that, you know, anytime the slaves run, and I'm not talking about just chattel slavery in the United States, but you had to care for them, you had to clothe them, you had to house them, you had to do all kinds of things in order to care for this person.
	So you never got, at no point, We're a heck of a lot more productive than we would be if we were, in fact, working to give money directly to the government because we have the perception of being able to keep some of it.
	Well, and also, I call it free-range slavery, right?
	So we're allowed to choose our own occupations, which gives us enthusiasm for our careers, which makes us work that much harder.
	The freedoms that we're granted are not granted out of any fundamental principle, like we should be free.
	They're granted because they found out that if you give the livestock a little more room, they produce ten times as many eggs.
	It's really for the eggs.
	It's got nothing to do with wanting to set the chickens free.
	It's true. You know, they found that certain livestock, if you keep it in too small of an area, will become unhealthy and die.
	And this is just really, you know, humans need freedom.
	They yearn for it and they struggle for it.
	And, you know, those that believe they own us act that way.
	I'm a cow, not a chicken. Thanks very much for the interview.

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