Ron Paul talks on Glenn Beck about the dollar, gasoline prices, inflation, the Federal Reserve and bail outs from Congress

Friday, July 18, 2008

Ron Paul was on a ton of interviews today due to some recent news about inflation levels, and much of what he's been predicting for the past eight or so years seems to finally be coming true. On for example you can see that all of a sudden he is doing interview after interview on the subject.

A good way to get an intro into his view on the subject is to read this speech from a few days ago:

(here's about half of it)

The financial crisis, still in its early stages, is apparent to everyone: gasoline prices over $4 a gallon; skyrocketing education and medical-care costs; the collapse of the housing bubble; the bursting of the NASDAQ bubble; stock markets plunging; unemployment rising; massive underemployment; excessive government debt; and unmanageable personal debt. Little doubt exists as to whether we'll get stagflation. The question that will soon be asked is: When will the stagflation become an inflationary depression?

There are various reasons that the world economy has been globalized and the problems we face are worldwide. We cannot understand what we're facing without understanding fiat money and the long-developing dollar bubble.

There were several stages. From the inception of the Federal Reserve System in 1913 to 1933, the Central Bank established itself as the official dollar manager. By 1933, Americans could no longer own gold, thus removing restraint on the Federal Reserve to inflate for war and welfare.

By 1945, further restraints were removed by creating the Bretton-Woods Monetary System making the dollar the reserve currency of the world. This system lasted up until 1971. During the period between 1945 and 1971, some restraints on the Fed remained in place. Foreigners, but not Americans, could convert dollars to gold at $35 an ounce. Due to the excessive dollars being created, that system came to an end in 1971.

It's the post Bretton-Woods system that was responsible for globalizing inflation and markets and for generating a gigantic worldwide dollar bubble. That bubble is now bursting, and we're seeing what it's like to suffer the consequences of the many previous economic errors.

Ironically in these past 35 years, we have benefited from this very flawed system. Because the world accepted dollars as if they were gold, we only had to counterfeit more dollars, spend them overseas (indirectly encouraging our jobs to go overseas as well) and enjoy unearned prosperity. Those who took our dollars and gave us goods and services were only too anxious to loan those dollars back to us. This allowed us to export our inflation and delay the consequences we now are starting to see.

But it was never destined to last, and now we have to pay the piper. Our huge foreign debt must be paid or liquidated. Our entitlements are coming due just as the world has become more reluctant to hold dollars. The consequence of that decision is price inflation in this country--and that's what we are witnessing today. Already price inflation overseas is even higher than here at home as a consequence of foreign central banks' willingness to monetize our debt.

Printing dollars over long periods of time may not immediately push prices up--yet in time it always does. Now we're seeing catch-up for past inflating of the monetary supply. As bad as it is today with $4 a gallon gasoline, this is just the beginning. It's a gross distraction to hound away at “drill, drill, drill” as a solution to the dollar crisis and high gasoline prices. Its okay to let the market increase supplies and drill, but that issue is a gross distraction from the sins of deficits and Federal Reserve monetary shenanigans.

This bubble is different and bigger for another reason. The central banks of the world secretly collude to centrally plan the world economy. I'm convinced that agreements among central banks to “monetize” U.S. debt these past 15 years have existed, although secretly and out of the reach of any oversight of anyone--especially the U.S. Congress that doesn't care, or just flat doesn't understand. As this “gift” to us comes to an end, our problems worsen. The central banks and the various governments are very powerful, but eventually the markets overwhelm when the people who get stuck holding the bag (of bad dollars) catch on and spend the dollars into the economy with emotional zeal, thus igniting inflationary fever.

This time--since there are so many dollars and so many countries involved--the Fed has been able to “paper” over every approaching crisis for the past 15 years, especially with Alan Greenspan as Chairman of the Federal Reserve Board, which has allowed the bubble to become history's greatest.

The mistakes made with excessive credit at artificially low rates are huge, and the market is demanding a correction. This involves excessive debt, misdirected investments, over-investments, and all the other problems caused by the government when spending the money they should never have had. Foreign militarism, welfare handouts and $80 trillion entitlement promises are all coming to an end. We don't have the money or the wealth-creating capacity to catch up and care for all the needs that now exist because we rejected the market economy, sound money, self reliance and the principles of liberty.

Since the correction of all this misallocation of resources is necessary and must come, one can look for some good that may come as this “Big Event” unfolds.

There are two choices that people can make. The one choice that is unavailable to us is to limp along with the status quo and prop up the system with more debt, inflation and lies. That won't happen.

One of the two choices, and the one chosen so often by government in the past is that of rejecting the principles of liberty and resorting to even bigger and more authoritarian government. Some argue that giving dictatorial powers to the President, just as we have allowed him to run the American empire, is what we should do. That's the great danger, and in this post-911 atmosphere, too many Americans are seeking safety over freedom. We have already lost too many of our personal liberties already. Real fear of economic collapse could prompt central planners to act to such a degree that the New Deal of the 30's might look like Jefferson 's Declaration of Independence.

The more the government is allowed to do in taking over and running the economy, the deeper the depression gets and the longer it lasts. That was the story of the 30s and the early 40s, and the same mistakes are likely to be made again if we do not wake up.

But the good news is that it need not be so bad if we do the right thing. I saw “Something Big” happening in the past 18 months on the campaign trail. I was encouraged that we are capable of waking up and doing the right thing. I have literally met thousands of high school and college kids who are quite willing to accept the challenge and responsibility of a free society and reject the cradle-to-grave welfare that is promised them by so many do-good politicians.

If more hear the message of liberty, more will join in this effort. The failure of our foreign policy, welfare system, and monetary policies and virtually all government solutions are so readily apparent, it doesn't take that much convincing. But the positive message of how freedom works and why it's possible is what is urgently needed.

So that's it in a nutshell. As a result he's been doing a ton of interviews, and here's one of them:

I've typed up a transcript for this one as well to copy and paste and also for those learning/using English as a second language, because interviews like these are never fun to follow along with in another language. You'll notice that Glenn Beck cuts off in mid-sentence all the time and is pretty much impossible to follow (especially the last question).

Thank you very much, we gotta go to Ron Paul now. Republican congressman from Texas, former presidential candidate, you sir are looking more and more right every day. You have been ringing this bell for quite some time and I....what do we do?

Well, you know, what you do politically is you bail everybody out. If you want to do good economics, you let people who made mistakes fail, and cleanse the system, and go back to work again. But in this town, Washington, it's always bail out.

But you don't agree with that.

Oh no, I think it's the wrong thing to do. It just prolongs the agony. I tried to warn them a few years ago, and eliminate the line of credit to the treasury and predicting that this bubble was being built and blown up, and that this would come. But no, it should be allowed to be liquidated. You know, the bad investments should be disposed of, and the debt should be eliminated, and it would happen. It would be rough for about a year. But after that, everything would be okay again.

Do you feel like, I mean, I honestly, it's like if somebody has a brain tumour, they go to the doctor and they give them an aspirin, and then that stops working, they give him a percocet, and after that stops working they give him some morphine. The patient is going to die. The more band-aids we put on this system the worse it becomes in the long run.

You're absolutely right, because the patient here is the dollar, and every time we bail out, whether it's the Fed creating new credit or the Congress appropriating more money, it's putting pressure on the dollar, and it's the weakness of the dollar that is the real crisis. So yes, it's temporary, what they're going to do. But ultimately the patient can die, and that is the dollar, and that is dangerous because...

Do you think we'll see that? Do you think there's a chance if we don't change our ways we'll see that?

It's so hard for me to, you know, accept the idea that we're that stupid. But then there are days...

Well, how long do we have...let me ask you this. I feel the same way, I believe in America and I believe Americans are smart, and I think Americans feel this in their gut. They know. But how long do we have to wake up our politicians before it's...I mean, how close are we do you think?

Well, the time is running out, and nobody can predict the exact time, nobody knew exactly - see, I was worried about it five, six, seven years ago, and it took a long time and they said "Oh, you were worried about nothing." So right now I'm more worried than ever. But conceivably if we do the wrong things and there is an emergency crisis overseas, and there's a foreign policy crisis, this could end quickly. I mean, the world could dump dollars, and that is something that we are not prepared for.

Okay, how much do you think, and I hate to be conspiracy guy, but I mean I read enough history to know that at the turn of the century, and I don't trust the Fed, probably almost as much if much as you don't trust the Fed. How much of this is a power grab by the Fed?

Well, I think it is, and it's shared by the Congress. You know, Congress is going along with it, passing all new regulations and new appropriations, but yes, there are individuals who are both sincere in believing that they're supposed to manage the economy, and there are others who like to control natural resources and the financial industry, and they always bail out their friends, so there's a little bit of each.

Let me ask you a question that maybe you wouldn't want to answer. Are do you - let me rephrase it. How do you - how do you do it? You have been run through the mill. I don't agree with you on everything, but on finances I do agree on, and you've been right on finances, and America is just catching up to you. How, how do you do it? Are you, do you ever get so frustrated that you're just like - I can't say it, I just can't ring this bell anymore!

You know, I never use the word frustration, I tell people I just have real low expectations, and all of my job is is to try to point out the truth as I understand it, you know, according to our constitution and according to sound economic policy. And I've been a student of Austrian economics and I believe they're right, and I'm convinced they are, and I believe that you shouldn't have paper currencies, and I just argue from that case with the full conviction that it's the right issue. But you know, I don't worry about tomorrow, the next day, and whether people are going to believe, I'm matter of fact pretty pleased and surprised that in the last year or so that so many people have begun to listen, so I'm pleased about that.

There's more and more, and you give it another couple of years, and it's gonna be outrageous. Congressman Paul, thank you very much.

And just for fun I'll run it through Google's automatic translation system to see what kind of Spanish comes out...

Actually, not quite as bad as I expected, and changing a few words here and there seems to have made it mostly legible. Here it is:

Muchas gracias, hemos vaya a Ron Paul. Congresista Republicano de Texas, ex candidato presidencial, señor usted está buscando más y más cada día la derecha. Usted ha estado sonando esta campana desde hace bastante tiempo y yo ... ¿qué hacemos?

Bueno, usted sabe, hacer lo que políticamente es que todo el mundo la libertad bajo fianza. Si desea hacer el bien a la economía, le permite a las personas que no cometieron errores, y depurar el sistema, y regresar a trabajar de nuevo. Pero en esta ciudad, Washington, es siempre la libertad bajo fianza.

Pero usted no está de acuerdo con eso.

Oh no, creo que es el mal que hay que hacer. Tan sólo prolonga la agonía. Traté de advertir a ellos hace unos años, y eliminar la línea de crédito para la tesorería y la predicción de que esta burbuja se está construyendo y volado, y que esto vendría. Pero no, debe estar autorizada para su liquidación. Usted sabe, las malas inversiones deben ser eliminados, y la deuda deben ser eliminadas, y lo que sucedería. Sería aproximada de alrededor de un año. Pero después de eso, todo debería estar bien de nuevo.

¿Se siente como, quiero decir, honestamente, es como si alguien tiene un tumor cerebral, que ir al médico y les dan una aspirina y, a continuación, que deja de funcionar, se le dará un percocet, y que después de que deja de funcionar darle algunos morfina. El paciente va a morir. La banda más ayudas-que ponemos en este sistema el peor de lo que se convierte en el largo plazo.

Está absolutamente en lo cierto, porque el paciente es el dólar, y cada vez que la libertad bajo fianza, si se trata de la Reserva Federal la creación de nuevos créditos o el Congreso de apropiarse de más dinero, es ejercer presión sobre el dólar, y es la debilidad del dólar que es la verdadera crisis. Así que sí, es temporal, lo que vamos a hacer. Pero en última instancia, el paciente puede morir, y que es el dólar, y que es peligroso porque ...

¿Cree usted que veremos que? ¿Cree usted que hay una oportunidad si no cambiamos nuestra manera que vamos a ver que?

Es muy difícil para mí, usted sabe, aceptar la idea de que estamos que estúpido. Pero entonces hay días ...

Bueno, ¿Cuánto tiempo tenemos ... quiero pedirle que presente. Me siento la misma manera, creo en América y creo que los americanos son inteligentes, y creo que los estadounidenses cree que esta en su intestino. Ellos saben. Pero ¿Cuánto tiempo tenemos que despertar nuestros políticos antes de que sea ... quiero decir, ¿Cuán cerca estamos piensa usted?

Bueno, el tiempo se acaba, y nadie puede predecir la hora exacta, nadie sabía exactamente - ver, me preocupa que cinco, seis, siete años atrás, y tomó un largo tiempo y que dice "Oh, usted se preocupa acerca de nada ". Así que ahora estoy más preocupado que nunca. Pero concebible si lo hacemos mal las cosas y hay una crisis de emergencia en el exterior, y hay una crisis de política exterior, esto podría terminar rápidamente. Quiero decir, el mundo podría vertedero de dólares, y eso es algo que no estamos preparados para.

Bueno, ¿cuánto cree usted, y yo odio que se conspiración chico, pero quiero decir que leí suficiente historia para saber que a principios de siglo, y yo no confío en que la Reserva Federal, probablemente casi tanto si no ... todo lo que no confían en que la Reserva Federal. ¿Cuánto de esto es un poder agarrar por la Reserva Federal?

Bueno, creo que es, y es compartida por el Congreso. Usted sabe, el Congreso va junto con él, pasando todos los nuevos reglamentos y los nuevos créditos, pero sí, hay individuos que son a la vez sincero a creer que está supuesta a administrar la economía, y hay otros que al igual que para controlar los recursos naturales y el sector financiero, y siempre sacar de apuros a sus amigos, por lo que un poco de cada uno.

Permítame preguntarle una cuestión que quizás usted no quiera contestar. ¿Es usted ... ¿cómo - permítaseme reformular. ¿Cómo - ¿cómo hacerlo? Usted se han llevado a cabo a través de la fábrica. No estoy de acuerdo con usted en todo, pero en las finanzas Estoy de acuerdo con usted, y usted ha sido correcta en la hacienda, y América no es más que ponerse al día en usted. Cómo, ¿cómo hacerlo? ¿Es usted, ¿nunca siento tan frustrado que usted acaba de decir - No puedo decir esto, yo simplemente no puede anillo esta campana ya!

Usted sabe, yo nunca uso de la palabra frustración, yo decirle a la gente que acabo de tener bajas expectativas, y todos los de mi trabajo es es tratar de señalar la verdad como yo lo entiendo, usted sabe, de acuerdo con nuestra Constitución y de acuerdo con sonido la política económica. Y he sido un estudiante de economía austriaca y creo que tienes razón, y estoy convencido de que son, y creo que usted no debe tener el papel moneda, y que acabo de argumentar a partir de ese caso con la plena convicción de que es el derecho. Pero ustedes saben, yo no te preocupes por el día de mañana, al día siguiente, y si la gente va a creer, estoy de hecho muy contentos y sorprendidos de que en el último año, o que tantas personas han comenzado a escuchar, así que estoy satisfecho por ello.

Hay más y más, y esperar otro par de años, y es que va a ser indignante. El congresista Paul, muchas gracias.


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