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Nov. 29, 2011 - Freedomain Radio - Stefan Molyneux

20:44

2046 Mad Markets, Paper Money and the End of Economics

Stefan Molyneux, host of Freedomain Radio, is interviewed about current market conditions on Blacklisted News - http://www.freedomainradio.com

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	And welcome back. This is Blacklisted News Radio right here on the Oracle Broadcasting Radio Network.
	My name is Doug Owen and tonight is the 2nd of December 2011.
	We're joined tonight by Stefan Molyneux.
	He is the host of Free Domain Radio, his podcast.
	You can find it at freedomainradio.com.
	He's a lecturer, speaker.
	He is a man that knows a lot about markets and of course philosophy.
	So that's why we brought him onto the program tonight as an economic pundit.
	Stefan, welcome to the program.
	Thank you so much. It's great to be here.
	Great to be back, I should say.
	Yeah, it's been a while and you've been traveling the world and speaking to lots of people that are interested in free market philosophy.
	That excites me that people actually find this not only interesting but also entertaining.
	So you've definitely found your niche.
	Oh, I appreciate it. And I would say, if you've got a niche, scratch it.
	And that's what I'm all about. There you go.
	Yeah. So, over the last five days this week, we've seen some pretty interesting revelations coming out of the political establishment, of course.
	The Santa Rally. I love the name of it.
	They've called it the Santa Rally, the 400-point-plus spike that we saw in the markets.
	The central bank's Working in collusion, in tandem, to save the world.
	So everybody's happy, and it's looking great, right?
	Well, what people are doing, in my opinion, is they're just taking short-term profits on the hope that the central bank's going to print a bunch of money and hand it out like candy.
	And of course, it's going to be 12 to 18 to 24 months until the inflation really hits.
	So this is not a turnaround.
	This is not things are better.
	This is a brief updraft as you're falling off a cliff.
	So it's not to be taken for any kind of fundamental market turnaround.
	You'll know when the market is really turning around when every public sector employee on the planet is screaming blue murder at the capitalist pig dogs snuffling in their trough.
	So until there's just a massive class warfare between the productive classes and the government classes, nothing is really going to turn around.
	There's just a little brief respite as people imagine that magic money fiat creation is going to at least provide some short-term profits to investors.
	So you are lacking on optimism as far as what we saw this week, as am I. I like to think of it as I'm long on realism, not optimism.
	I love to be optimistic, but, you know, you look at the facts and the data about what's happening in England, say, or in Europe as a whole, and, you know, math is math.
	You can't magic your way out of that which is impossible to sustain.
	Well, sure, sure. And I think that most people know this.
	You know, the hype is really just a creation of words.
	I mean, that's what just blows me away about this, Stefan.
	And it shows you how delicate these situations have become, especially with the banks.
	I mean, you know... It just seems that if the wrong rumor comes out in Bloomberg, that they just blow up.
	I think it was Jon Stewart who said, you know, what are these things made out of?
	Paper mache, balsa wood?
	And I think it's apropos considering that, you know, this fear that these banks could have failed.
	And that's what they were saying, that the central banks had to come together.
	There's this massive rumor that's being...
	Purported by USA Today and others that there was going to be a European bank, a major one, that would fail.
	And so the U.S. Federal Reserve, alongside the European Central Bank and others, Japan, Germany, have basically said that they're going to extend more credit to the European Central Bank for redistribution of wealth or debt or whatever you want to call it.
	And there's three simple words that bring that whole house of cards down.
	And actually calling the modern banking system a house of cards is an insult to cards because cards at least have some value.
	You can play strip poker with them and get some breezes on you.
	But all you have to do is ask, with whose money?
	With whose money are they going to bail out these banks?
	They have no money. They're going to print it.
	They're going to magic it into existence.
	They're going to basically deflate the value of every dollar that's out there and produce inflation.
	Whose money? Oh, the central bank's going to go and bail out this bank.
	Have they loaned money to this bank?
	Whose money? Where is this money?
	Where is this money coming from?
	And nobody, of course, can ask that question because that's the one thread that unravels the whole crappy sweater.
	Yeah, well, when you have...
	It reminds me of that Weezer song.
	If you want to unravel my sweater, just pull the string and walk away.
	You know, I'm entirely disappointed that you didn't sing that.
	But perhaps in the commercial break, you can treat me to a rendition.
	Yes, yes. During the commercial break.
	You make some salient points here.
	I mean, all of this is about perception.
	And basically, we are just prolonging the pain.
	We are pushing it away.
	And I think it really does signify the...
	The American and Europeans' inability to take responsibility and start moving forward.
	Well, that's a pretty generic term.
	What would that look like more specifically?
	Well, I don't know. I mean, it just seems to me that everyone knows that it's going to fall, that it's going to implode upon itself.
	It's just, well, it's not going to happen today.
	We'll just push it off another six months and we'll devalue the currency again and we'll buy bonds.
	Now they're even talking about doing some pretty interesting things, actually attaching gold and other assets to To these bonds, to give them weight, because the bonds themselves are pretty worthless.
	Speak to that. I mean, there's a lot of people that are losing money if they're invested in bonds and how all of this is happening, what the calamity is in the markets.
	Well, I mean, but there's not enough gold in the world to cover the unfunded liabilities of these predatory Civil War Western democracies.
	I mean, there's just not enough gold in the world to cover this.
	What if the unfunded liabilities in the U.S. are over $100 trillion, $80 trillion?
	I mean, it doesn't matter. I mean, the numbers just become so ridiculous.
	You can stick more or fewer zeros on.
	It makes no difference in the final destination.
	But there's not enough gold.
	And so what they'll do is they'll attach a little bit of gold here and there just to prop these things up.
	But all that again, it's just...
	It's taking cocaine for a toothache.
	You know, you might feel better briefly, but the rot just goes deeper and deeper.
	Alright, so where do we go from here?
	Well, we go into the wall, you know, at high speed.
	There's simply no way to turn this thing around.
	What's going to happen, this is sort of my prediction, and I've said this for some years, what's going to happen, Doug, I think, is the government is simply going to turn on the dependent classes.
	So once they realize that there's simply no way To sustain the economics of the dependent classes.
	And by that I mean, you know, the Social Security dependents, the welfare recipients, the corporate welfare recipients.
	Let's not forget about welfare to the rich, which is everything from the military-industrial complex all the way through to sports.
	There's the subsidies for the rich.
	There's subsidies to farmers.
	There's, you know, the bribe-ocracy of the modern democracy.
	They're simply going to have to turn on these people and the media, you know, they'll start talking about shared sacrifice and the media will start echo that there's a war on waste, there's a war on profligacy, there's a war on dependence.
	And the, you know, hysterical herd will simply turn on that and people are going to have to make do with half or less of what they've been used to receiving from the state.
	And that will do something to slow it down.
	But there's no way it's going to be sustainable.
	And these people who are in charge, the same class, been running things for about 10,000 years, they're not going to just make it all go away, and they're not going to break it in any permanent way.
	They're simply going to change the narrative so that the people who we were supposed to help before, and now the people who are dragging us down, and we need to cut them loose.
	And that's the narrative, and it's going to be completely brutal.
	And then, of course, all of the people who've been free market, who've been voluntarist, who've been libertarian, who've been Ron Paul people, all the people who've been warning about this for years are going to be the ones who take the blame, because the free market and voluntarism are going to take the fall, and the government is once more going to ride into saving a problem that it itself and the government is once more going to ride into saving a That seems to be almost inevitable.
	Yes, problem, reaction, solution, the herofication of the state, and all of those things usually speak to what's happening or speak to the game that's as old as empire.
	Just keep putting ourselves out there and make ourselves look like heroes.
	People write books about Ben Bernanke and how he saved the economy.
	I find it to be repulsive, but people really do buy it.
	They're buying into all of this.
	Let's talk about Occupy Wall Street for a moment because this movement has transcended beyond the United States.
	It's really global, and I think that it's a symptom of the economy and more and more people, Stefan.
	I'm glad are starting to look at the culprits of what's plaguing our society.
	Unfortunately, so many people out there are really quick to blame the Occupy people for all the horrible things they're doing, but yet these are the only people I see in the United States that are standing up and speaking for the majority.
	Do you have any thoughts on that? Well, I mean, it's anybody who has any doubts or questions about the way that state, quote, justice trends, just look at the numbers.
	What have there been? 26, 2700 arrests of the Occupy Wall Streeters for sitting in public parks largely peacefully.
	And how many arrests for bankers have there been or financial executives or, you know, the criminal heads of the Federal Reserve?
	Zero. There have been zero prosecutions for banking fraud despite admitted fraud by the banks with these robo-signing things and so on.
	So, you know, of course, they're going to pick on the most vulnerable.
	They're going to pick on the weakest. They're going to pick on the people they depend on least, which are the poor students and the young people without a lot of future.
	And they're going to arrest those, and they're going to call that law and order, whereas, of course, the big crimes get you a crown, the little crimes get you a sell.
	And that is the way the system works, and I hope, I hope that the Wall Street people are going to wake up to that.
	What troubles me, of course, is that they're talking about monopolies and how bad monopolies are, but they're not talking, again, about the public sector unions, which have a stranglehold on essential areas of the economy.
	It's illegal to compete with them.
	It's illegal to not Pay for their services.
	And nobody's talking about that.
	All they're talking about is the usual suspects.
	You know, the banks, the big corporations, evil Starbucks.
	Oh, yeah. Hold right there, Stefan.
	We're going to take a quick break. One more segment with Stefan Molyneux right here on Blacklisted Newsradio.
	This is Blacklisted Newsradio right here on the Oracle Broadcasting Radio Network.
	Stefan Molyneux. Is our guest.
	Freedomainradio.com is his website.
	And we were just briefly talking about the Occupy movement during the break.
	And I'm glad to see people out there that are at least raging against the machine.
	I think a lot of them are misguided.
	And of course, there's always going to be those elements of socialism and communism.
	And of course, whenever there is any kind of rally, it doesn't matter.
	You're always going to have a lot of communists come out of the woodwork.
	Yeah. I don't know if they're all just government provocateurs, but there's a lot of those guys there too.
	It's always a dangerous situation when you look at that.
	These people out there getting rounded up in California, 300 of them.
	The government's more than happy to use its sticks against the downtrodden and the...
	The little people.
	But when it comes to the grand crimes that are really bankrupting this country, and the reason that all these people are out there, it's quite simple, I think.
	And that's because the economy sucks, Stephan.
	People are loaded down with debt, especially these students.
	I mean, their debt is the next big bubble.
	And now, I've heard this talk about more and more, and that is Jubilee.
	What are your thoughts on debt absolutionism, or absolvement rather?
	Oh, it's wretched what is going on for these students.
	And again, they confuse this with the free market.
	This basic pattern has happened where governments give lots of money to universities.
	And the reason they do that is to gain control of the narrative, so that they can't be really anti-government if you're taking a big paycheck from the government.
	Now, unfortunately, when the government gives a lot of money to colleges and universities all around the world, what happens is they expand their administration, they expand their hiring, they buy lots of new buildings and land, and they expand and they expand and they expand.
	And then what happens is the government funding begins to dry up.
	This is the natural deal with the devil.
	This is, you know, the Tony Soprano big hug that people get involved in when they get involved with this beast called the state.
	And then, as the government funding begins to dry up, they begin to lean on the students for more and more money, so they're raising tuition and raising tuition, and you can see that directly.
	Money goes in, expansion occurs, and then the money contracts, and in order to continue to fund the expansion, they start to hit the students.
	And it's just brutal.
	I mean, people are coming out with massive amounts of debt, which they can't even escape through bankruptcy.
	I think it's completely brutal.
	I would have absolutely nothing against, you know, if the money is going to be spent, I would rather it go to students than it go to fat cat bankers.
	Frankly, if there's going to be a bailout, if there's going to be debt forgiveness, let's forgive the debt of the students, except for those who took basket weaving and like purely, purely liberal arts stuff.
	These people should have known better. Well, yeah.
	Of course, you're going to need that government bureaucracy to decide who gets the debt relief and who doesn't, and that could be a whole other bureaucracy in itself.
	Well, I mean, we already have the Department of Education here in the United States, and they have their own task force.
	Imagine that. So don't try to defraud your student loans because they will send a task force.
	You're not going to be negotiating your terms to come in like Lloyd Blankfein or one of these other criminals that I would like to see behind bars, but You know, I think what you're saying there is very true.
	I mean, when you look at the students, I mean, they are the ones that will be buying homes.
	They're going to be buying cars, goods, creating businesses.
	I mean, you know, the children are the future.
	And so when they come out of school completely...
	Chained by debt, $100,000 in debt, and having to pay, if you're a doctor or maybe a lawyer, excessive amounts of insurance.
	There's no incentive for these people to buy the products that we sell.
	I always look at myself.
	I'm 33 years old.
	I'm in a demographic of people that don't want to spend money.
	I'm paying off my car. I'm not trying to buy stuff.
	I'm not trying to court women and do that kind of stuff.
	But to have a vibrant economy, you have to have jobs for those kids.
	Unfortunately, one of the sad things is that the only thing that's really paying right now is war.
	War is still highly profitable.
	Yeah, war and finance, which of course are two sides of the same coin, you can't have war without fiat currency because then you've got to raise taxes on people to pay for the war immediately, which tends to cool their war fever quite a little bit.
	But I think one of the pluses that can come out of it is, you know, people are still going to be taking the hardcore degrees for money, right?
	So like engineering and, as you say, doctors and lawyers and so on, and those licensed occupations and so on, they're still going to be going in and doing that kind of stuff because they're still going to be cash positive over the course of their life.
	What it is doing, though, is it's driving a lot of people away from the loosey-goosey liberal arts stuff.
	And it's my... I mean, I went all the way through.
	I got a master's in history from an Ivy League college up here in Canada.
	And it's my belief that, in my experience, that you can get a much better education online now for free than you can through any kind of college.
	And so I hope, I hope, that people are going to start veering away from liberal arts stuff.
	They're going to start veering more towards online education because, I mean, the stuff that goes on in colleges, in my experience in particular, I mean, it's almost pure propaganda, top to bottom, back to front.
	It's almost, and the longer you expose yourself to it, the more toxic it becomes for your thinking processes.
	So if people veer away from the software disciplines, from the liberal arts stuff, and start getting into conversations and education online, you know, through Mises.org, through tons of others, through the Khan Academy, through my own little humble contributions at freedomainradio.com, I think people can get a better, more objective, more consistent, more philosophical, more rigorous, more rational, more true education in how to think online than they can getting into $50,000 or $75,000 or $100,000 in debt.
	And so I think it's going to be a renaissance in human thought as fewer and fewer people want to do that debt for worthless piece of paper transaction at colleges.
	Well, sure. I think when you look at the political sciences, some of these things that are unnecessary, I wish they didn't have as much profit behind them, but you're speaking a lot of truth to power there, and that's why I went ahead and just bought my doctorate online, because you don't even spend any time.
	Why spend $100,000? You can get a doctorate for a few hundred bucks.
	I get emails all the time, Stephan, offering me that.
	Yeah. And you wouldn't believe the size of my dong since I stopped emptying my junk box.
	It's astounding. It's astounding.
	They call me the tripod now.
	Oh, wow. Wow. I'm telling you, they're all true.
	It's amazing. I'm totally impressed.
	Of course, I can't feel anything below my chest.
	But other than that, I think there's been no side effects.
	Well, look at Pfizer's products.
	We were talking about the ability of the state, gene patenting the state and other corporations to be able to patent your genes.
	And you look at Pfizer. They sell a product that helps male enhancement.
	And if you look at the side effects, blindness, loss of color, your vision to color, you see everything blue.
	I mean, it just goes on and on and on and on and on, all these side effects.
	But you can have sex.
	And people are like... They're lining up.
	They're buying it. Do you know what's ironic is that these were actually all of the threats that priests used to tell children for masturbation, and none of those came true, but now we've got the pharmaceutical equivalent for getting an erection, and it's really tragic how this has come full circle.
	Yeah, but it really shows you what people's priorities are, though.
	I mean, it's telling. Well, you know, I mean, exercise, eat well, don't get overweight, don't get lazy, and then you won't have so much problem with circulation.
	You know, not all of it, but, you know, I would say for the most part.
	But, you know, I mean, Americans, God bless you all, but there is a little bit of a, I got a problem, take a pill.
	I'm not going to change my lifestyle, I'm just going to medicate myself.
	Yeah, well, I think it transcends throughout the Western society now.
	I mean, you look over in the UK and throughout your land, it's just as bad.
	I mean, we have psychotropic drugs.
	I mean, we've now gotten to the point where drugs that are supposed to remap your mind and change the chemical makeup of your mind are being prescribed for temporary treatment.
	Bad decisions, divorces and such.
	I'm depressed. Well, here's some chemical happiness.
	But if you think about how unethical that is, here's a drug that is for clinical depression or chemical depression, and you just feel bummed out about life.
	And that's why we have, I think it's 47 million people in this country now on psychotropic drugs.
	I mean, it really does speak Yeah, those things, they remap your brain like setting fire to a globe.
	And I said this in a recent video.
	I just did a video examining the case that there is no such thing as mental illness.
	And one of the things that I said that I think is valid and useful is that what's really being diagnosed here is not the individual.
	But society. Because if somebody's out of step with society or somebody's depressed by the state of society or anxious about the state of society, if you give that person a pill because they're, quote, ill, what you're doing is not so much calling them ill as you are calling society healthy.
	And I don't think that there's a sane person looking objectively at the world and the, you know, onrushing catastrophes of economics, of environmentalism, of politics.
	And war, and it's not looking at that saying, man, there's some bad stuff coming down the pipe and I'm pretty helpless to stop it.
	And anybody who doesn't feel bad about that, Is crazy or a sociopath or, well, might I repeat myself, they're a politician, right?
	So to say that people shouldn't be anxious given the state of the world, to say that people don't have a right to be sad or depressed or angry or out of step with the world.
	I mean, the world is like a truck going off a cliff.
	You're striving to get out.
	You're chewing at the door handle to get out.
	And people say, well, that seems quite manic.
	It's like, but they're going off the cliff.
	We've got to get out. So, yeah, I can understand why people want to drug people who are stressed or unhappy and anxious rather than figure out why objectively they might be that way.
	Yeah. Yeah, absolutely.
	Well, I think we are definitely going through a phase and hopefully humanity will see its way through it.
	It's the chemical revolution that Attalus Huxley warned us about.
	Stephan, thanks for joining us on the program.
	Thank you for spending your time with us.

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