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July 13, 2019 - Freedomain Radio - Stefan Molyneux

12:49

Stefan Molyneux on the Keiser Report - The Federal Reserve is a Crime!

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	Welcome back to the Kaiser Report.
	I'm I'm Max Kaiser.
	Time now to go up to Canada and speak with Stéphane Molyneux of the free domain Radio.com.
	Stéphane, welcome back to the Kaiser Report.
	Thanks, Max.
	Great to be here.
	So, Stefan Molyneux, the U.S.
	Deficit Theater of the Absurd.
	They're on the brink of chaos.
	Every leader of the free world is talking about more debt, the euro ceiling and euro tarp, plus the shenanigans in the U.S.
	What is going on?
	Well, China says, or at least a private Chinese rating agency says, or makes the argument that the U.S.
	has already defaulted through devaluing of the U.S.
	against other currencies, and that has been enormous and significant.
	Just over the past 10 years, the U.S.
	dollar has lost 40% or more.
	The Dow, in its real returns since New Year's Day 2000, has lost almost 34%.
	And so what's happened is a devaluing of the dollar against other currencies.
	That, as we know, is a result of two things, which are closely related to U.S. debt.
	The first is keeping interest rates artificially low.
	And the second is just printing money.
	And how is the Fed printing money?
	Well, as we all know, they're aiming to buy or have bought over $2 trillion of U.S. debt, and they've become pretty much the entire holder of the U.S. mortgage industry.
	And so if you're paying your visa with your MasterCard, it's pretty clear that you have already shown that you're unable to pay your debts.
	So the U.S.
	is functionally in default.
	It just has these Federal Reserve tricks and shenanigans to prop up the beast a little longer.
	And so what everybody's talking about are minor tweaks.
	You know, it's, as they say, arranging the deck chairs on the Titanic long after the iceberg was hit.
	Now, you talk about the rise of the debt versus growth, and going back a few decades, the amount of debt that was increased would generate some appreciable growth in GDP.
	Going back 30 or 35 years, you had a dollar of debt, you got a dollar's worth of GDP growth.
	And then as the economy began to suffer from over-indebtedness, and as the banks started to crowd their way into the General economy or the real economy.
	It took seven or eight dollars of debt to create one dollar of GDP and then around 2007-2008 you hit this debt saturation level where no amount of debt creation will ever create another unit of growth because you can't, you know, put ten pounds of garbage into a five pound garbage bag.
	They just can't absorb more debt.
	So this message seems pretty clear.
	You can't absorb more debt.
	So why do these policy makers insist on attacking this problem?
	Like I'm talking to Paul Krugman of the New York Times famously.
	His solution is to add more debt.
	Why do they keep talking about it?
	There's no more room, no more debt!
	Well, look, expecting sane fiscal policy out of the Federal Reserve and state-sponsored and state-supported economists like Paul Krugman is like expecting gambling addicts to suddenly walk away from the table.
	What is the only solution that the government has when it faces a crisis caused by its own corruption and decadence and thievery?
	Double down, baby!
	Double down!
	Double down!
	That's all it can do is continue to do the same thing.
	Now, I think it's important to remember that the political class, like the ruling oligarchs, they're fine I mean, they've got their holdings probably in Swiss francs and gold, and they're all set.
	They can do whatever they want.
	It's the average person, and particularly the poor person and the retired person, who is going to face the real calamity when this mess hits the fan.
	So they're sort of secure.
	They've got their escape hatch.
	They've got their golden parachutes.
	It's everybody else.
	So they can continue to mess around without any particular fear of their own finances going in the toilet.
	All right, you mentioned double down, double down, and it immediately got me thinking of the Martingale betting system.
	Are you familiar with the Martingale betting system?
	I am not.
	Okay, the Martingale betting system is the gambling system where you go to the roulette wheel and you bet on red.
	If you lose, you double up.
	And if you lose again, you double up.
	And you keep doubling up on every bet until you eventually hit red, and then you make a lot of money.
	Now, the problem is you can go broke before you hit red.
	Now, on Wall Street, they engage in this Martingale betting system because the money that they get to make the bets is free from the Federal Reserve at 0% interest rate, and they never have to pay off any of their losing bets.
	Meanwhile, the average person who's in the stock market, any time they suffer a loss, they actually have to suffer a loss!
	So you've got this diametric, you know, opposition in the investing world where people are saying, well, there's a lot of opportunity in the stock market, but it's different if you On Wall Street, and you have unlimited credit, and you never suffer a loss.
	So, why do the average people out there, whether it's Canada, America, or anywhere else in Europe, why do they insist on always getting the short end of the stick?
	Either they get the worst rates on their credit cards, they get the worst gambling percentage in the stock market, they get the worst jobs, they get the worst of everything.
	Why are they settling for the worst of everything?
	Well, I think that most people are very afraid... I mean, this is going to be a long-term historical perspective, but I'll keep it short.
	Most people are very afraid to change the fundamental social order, and what we're talking about here is a fundamental social order that is much closer to fascism than it is to the free market.
	You do not have a free market when government controls the currency.
	You do not have democracy when government controls the currency.
	What you have is a bribeocracy, where government prints money and steals from the unborn in order to bribe voters for power in the here and now.
	So the fundamental system has to be gotten rid of.
	You have to get rid of government control of currency.
	Currency has to be privatized.
	That way you can't run deficits.
	You can't fund these god-awful wars with fiat currency and debt.
	The whole system is going to change fundamentally.
	You have to get the government out of currency, and you have to get the government to stop manipulating the market with interest rates.
	We all know that the reason that the government is driving down interest rates so much is to bribe its friends, to give them basically free loans at the taxpayer's expense, and also to cut down its own cost of having to repay its debt.
	I mean, if the government had to repay its debt at any kind of reasonable mortgage loan, we'd be in default already.
	So fundamentally you have to change the system and it has to be a very fundamental change in the system.
	People are very afraid of that.
	Sometimes it goes the American Revolutionary Way.
	Sometimes it goes the Russian Revolutionary Way or the French Revolutionary Way.
	And so people are very scared.
	They're just going to kind of huddle and hope things blow over and hope things get better as they have in the past.
	Remember?
	Bailed out the savings and loan banks in the 1980s.
	Bailed out long-term capital management in 1998.
	The bailouts will be going on for a long time.
	People think It's going to get better, it's going to get better.
	This time, it's just not.
	And until people realize that, they're not going to get off their couches, stop watching TV, take to the streets, take to the blogosphere, confront their neighbors with the falsehoods that they believe.
	Until people recognize that the system is dead, done, and buried, they're not going to really advocate for change, and it's taking a while for that to sink in for people.
	Right.
	Well, savings and loan crisis was bailed out.
	Also, 1,500 bankers went to jail.
	Long-term capital management, not only did no bankers go to jail, but Greenspan lowered interest rates, thus having savers and retirees subsidize the bailout and the yacht payments for a few guys in Greenwich, Connecticut.
	And when you talk about the stealing from the unborn, of course, I've always My contention's always been that this is why the Tea Party is against abortion.
	It's because they need new folks to inherit the debts and to go to prison.
	And let me ask you this.
	The prison system in America costs $600 billion a year.
	Is it possible to have a small government in the highest prison population in the world, other than what I just mentioned, that the Tea Party need to justify their religious extremism?
	Well, the prison system has become just another handout.
	It's become just another subsidized industry, which is one of the reasons why you can't get rid of these crazy, ridiculous laws like drug laws and Sarbanes-Oxley and all of these regulations which add up to precisely nothing.
	I mean, people say, oh, well, the current crisis was brought about by deregulation when regulations vastly increased under the two Bush Jr.
	presidencies.
	No, the prison industry is counted in GDP.
	Of all the insane things to count in GDP, you count people getting sick in GDP.
	You count the prison system in GDP.
	This is complete nonsense.
	It's totally pernicious because the people in prison are working for 16 cents an hour, but the prison builders and operators are making fabulous wealth on the stock exchange, so they're saying, you see, the economy is growing.
	Yeah, because, you know, slave labor is such a positive aspect of capitalist economic growth.
	Of course you'd want to count that.
	I mean, the statistics are completely meaningless.
	We're living in this sort of profter house of cards, you know, like the Soviet statistics, the five-year production plans that are going beautifully.
	I mean, this is all complete nonsense.
	We're living in a propaganda delusion, and it's not going to take long for this to come crushing down and for people to wake up.
	The only danger, the only danger, Max, and it is a significant danger, which is I think why it's so important that we take to the airwaves and yell the truth as much as humanly possible, the great danger, Is that people are going to think that freedom is the problem.
	The problem is coercion.
	The problem is monopoly.
	The problem is the violent counterfeiting of currency, the selling off of people's future through the coercive power of the state.
	It is violence that is causing all of these problems.
	It is not peace.
	It is not trade.
	It is not property rights.
	It is not freedom.
	And it certainly is not the free market.
	All right, now, talking about counterfeiting.
	The Fed had a little audit thanks to Bernie Sanders, and they revealed $16 trillion in loans that were made to foreign banks, and JPMorgan and Goldman Sachs, and Jamie Dimon got an exemption as part of this bailout money and loan program to add to his other nefarious activities.
	Have you been following that $16 trillion bailout figure?
	And why is America so concerned about bailing out these foreign banks?
	Unless, of course, America reports to foreign entities.
	I think America as a whole is pretty clueless about the Fed.
	It's really complicated.
	It's pretty abstract.
	And of course, it's the last thing they're going to teach you in government schools.
	In government schools, they're going to teach you how the government ended slavery, and the government saved us from Nazism and the Great Depression, and the government helps the poor and the sick and the old.
	You're going to get all that propaganda.
	You're not going to get the actual basis of government power, which is counterfeiting and theft.
	So yeah, it's monstrous.
	And what is truly astounding about this is the way they're handing out these waivers for conflict of interest.
	CEO of JPMorgan Chase served on the New York Fed's Board of Directors at the same time that his bank received almost $400 billion in financial assistance from the Fed.
	William Dudley, now the New York Fed president, granted a waiver to keep his investments in AIG and General Electric at the same time that they're given bailout funds.
	And the reason that the Fed gave for not making this guy sell his holdings is because they did not want to create the appearance of a conflict of interest.
	I mean, so it's okay to have a conflict of interest.
	You just don't want to create an appearance of it.
	The Fed outsourced almost all of its operations for these emergency lending programs to private contractors.
	JPMorgan Chase, Morgan Stanley, Wells Fargo, the usual suspects.
	These guys all got trillions of dollars in Fed loans at near zero interest rates.
	And two-thirds of these contracts were no-bid contracts.
	Morgan Stanley got over $100 billion to help manage the Fed bailout of AIG.
	This is complete pig feeding, shark attack, trough feeding at the taxpayer's expense.
	And it just shows you that the government doesn't have rules.
	The government is an exemption from rules.
	It is an exemption from the rule of theft through taxation.
	It is an exemption of the rule of counterfeiting through the Federal Reserve.
	And it is an exemption of any reasonable rules of conflict of interest by just handing out, hey, get a waiver, get a waiver, you're fine.
	It's madness.
	All right, one last question.
	Finally, the latest polls show that Ron Paul could possibly beat Barack Obama in 2012.
	Is it too late for Ron Paul and his promise to end the Fed, IRS, CIA, foreign military bases, etc.? ?
	Yes.
	Let me give you a short answer and then a very slightly longer one, which is... No, I don't think we have time for the longer one.
	No, no, very quick!
	Don't go anywhere near the government.
	You don't want to be promoted to captain of the Titanic after the ship is just about to go down, because then all anyone will remember is the Libertarian was in power when everything went down and it will discredit freedom for another thousand years.
	So I say steer clear of the mess, stand back, speak the truth, don't get involved.
	All right, Stephen Molyneux, thanks so much again for being back on the Kaiser Report.
	Thanks.
	Well, that's all the time we have for this week of the Kaiser Report with me, Max Keiser.
	I want to thank my guest, Stefan Molyneux.
	If you want to send me an email, please do so at kaiserreport at rttv.ru.

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