Is the Fed's $125B Injection a Mistake? Ron Paul Says ‘Maybe Their Strategy is to Cause Chaos’
Summary
Market Outlook: The Fed’s $125B liquidity injection amid conflicting ADP and ISM data signals fragility and the risk of a larger market dislocation.
Inflation: Dr. Paul argues persistent price and monetary inflation will continue due to deficits, policy inertia, and debt liquidation via money printing.
Gold: Strongly favorable view on gold as a hedge; concerns over US gold reserve transparency, central banks’ ongoing gold purchases, and proposals for gold-redeemable Treasury bonds.
Policy Risks: Supreme Court review of executive tariff powers and potential pivots to older trade laws heighten uncertainty and economic distortion.
Companies Mentioned: McDonald’s (MCD) cited weaker low-income traffic; Amazon (AMZN) layoffs noted—both as signs of a K-shaped economy, not as investment pitches.
Debt and Yields: Rising Treasury auction sizes and a 10-year yield around 4.14% align with a debt spiral narrative and ongoing fiscal strain.
Geopolitics: Interventionism and the military-industrial complex are linked to higher spending and inflation, with Argentina and Venezuela cited as current flashpoints.
Investment Perspective: Emphasis on wealth preservation via sound money principles and gold exposure while remaining skeptical of government interventions and data.
Transcript
Welcome back to Kiko News. I'm [music] Jeremy Saffron. The Federal Reserve has just injected 125 billion dollars into the US banking system over the past 5 days. Now, this is the largest short-term liquidity operation since the 2020 crisis. And it comes as bank reserves have fallen to a 4-year low of just $2.8 trillion. Yet, as the Fed is adding liquidity, the president's own Treasury Secretary, Scott Bessant, is on the record, blaming the Fed for what he's calling a housing recession, arguing its rate policy is just too high. Now, on the economy, the data is up in the air again. The ADP report showed private jobs grew by 42,000, beating expectations. Yet, the new ISM report uh reports employment index just contracted for the first for the fifth straight month, rather. And inside the same ISM report, the price index soared to 70. Now, this economic turmoil has had a massive political impact in the recent elections with voters citing the economy sweeping Democrats into key offices and electing a self-described Democratic socialist as mayor of New York City. Now, to make sense of all this, we're joined by someone you recognize, of course. He's the host of the Liberty Report, former Congressman Dr. Ron Paul. Thank you for joining us and making the time today. >> Jeremy, nice to be with you today. I want to talk to you a little bit about this core conflict at the Fed. I mean, we had the Treasury Secretary blaming the Fed uh for being too tight. We had the repo market, which just required, as I mentioned, that $125 billion injection, signaling that the system was way too tight. Uh if the Fed is forced to add liquidity at the same time that ADP shows 42,000 new jobs, what does this do to their inflation fight? Well, one thing it proves is they don't have the biggest idea what they're doing [laughter] >> because because they even if they were trying to be accurate, they're not able to. It's information uh they're they're s searching around to try to figure out what the interest rates ought to be. And then we have this major debate between Pal and the president and neither neither one of them know. So they have this is and and then they make mistakes. they they can't even get their intervention together again. They contradict each other. So, I've been trained by myself over the many many years and I'm very skeptical of anything I hear from the government and from the Federal Reserve. Uh and yet you can't ignore it because markets respond and they can't sort out which is right or wrong. But that's why I think the dislocation of uh capital is so bad and that they don't they don't have a chance of ever planning accurately exactly what to do because I think that these stats you just gave indicate they don't know what they're doing. One person wants to raise it, the other person wants to lower it. And maybe they don't know what they're doing or maybe they have a strategy. Maybe their strategy is to cause chaos in order for the people, you know, to just roll over and say, "Hey, save us." I had somebody once come to my office with a concern about inflation. And uh the lady was talking, she says, "Well, the grocery prices are going up, going up. You do something about it." I said, "What do you want me to do?" They say, "Send us more money. We can't afford it." I mean, it's really crazy. And uh I I think that uh I I I think the the stats that you just gave indicate that it is chaos and it's very fragile and we should be on our toes for something very very big to happen. Uh you know in a stock market or or wherever because I think I think of debt uh needing to be liquidated. It's too much debt. We we can't pay the interest on that. and also the malinvestment, all all this money with the government, especially the current administration. They're always involved either with tariffs or subsidies or sanctions, all these things. So, a lot of money goes out there, but they're never short. And then if the government needs more and you know, we expected that this uh this administration would tighten its belt a little bit. Doesn't turn out that it will be. So, we better be prepared for the worst. >> Yeah. Dr. Paul, I mean, you just talked a little bit about somebody visiting your office and and we keep hearing, you know, that that take on on the real economy, the difference between Main Street and Wall Street, because the data is telling two different stories. I mean, that headline ADP report just came in, positive 42,000 jobs, and the main ISM number was 52.4, the highest in eight months. Now, that sounds like resilience in the economy, but yet the CEO of McDonald's was on Bloomberg this morning and he said that his lower income consumer traffic is declining by double digits. So, how can both of these be true? Is the headline data hiding a K-shaped recession? >> Well, well, but it can't be true. And didn't Amazon lay off thousands of people? And I don't even think we hear all the smaller companies that are laying people off. But it's amazing how they can uh prop up the information where if you're a a an investor or if you're a financial advisor >> that you you can't ignore it because what if what if it's a halftruth? What if it's true and you didn't respond? Then you might lose your job. So it's impossible for them to know. is so far removed from market forces because if the market was able to uh be used that the the market is telling the truth and we know what it is I mean I would think the correction would come well we don't want that we can't put up with that but you know there's always a struggle with this the market wants deflation and liquidation the people never want it and I think the new administration and the current uh Fed They always want to try to prevent things like they know what's going to happen. But uh that that's just a game they play and I think it'll get those those statistics and promises and analysis will will get much worse. So uh I I uh I don't think I'd want to be the financial advisor that uh depended on daily changes in in our attitude. uh my approach to understanding preservation of wealth is a lot different. >> Yeah. Yeah. Well said and I want to get into that but uh you know let's talk about the reason for this stress. I mean the US balance sheet I mean the CBO is projecting a $ 1.9 trillion deficit for this year alone. The government is also in the longest shutdown in new history reporting uh reportedly costing about $15 billion a week. Of course, the US Treasury just signaled that it'll need to increase auction sizes, pushing the 10-year up to 4.14%. I mean, we talked about that bubble, but I mean, is is the US now in a classic debt spiral? And is there any political will at the top at all to stop it? >> No, there's no there's no will to it because some don't understand, but those who do it are going to cover it up as as long as possible. That's why [clears throat] that's why people should bet on the continuation of price inflation and monetary inflation. They're not going to do it. The people in Washington will not change. And guess what? There's more involved than just those people up there running the show and messing it up. It's all the people who depend on it. Everybody from food stamps up to corporatism and warfarism and the military industrial complex. I mean it is it is real big. I see this as an example of extreme democracy. You know what do the what do the people want? they get piled together. They're like a gang that comes in and uh and I that's why you know pure pure democracy is not so good because a majority rules and they do what the majority wants and if they want inflation and they they might say well we know it isn't very good but not doing it is immediately bad so they will always opt for covering it up. I'm amazing how good they are at doing this, but I happen to have a strong belief that they can't do it forever. And I think some of the things you've just talked about are showing, you know, the cracks in this whole system and uh they're not going to be able to patch it up. >> Yeah. Uh, you know, it's it's interesting. I mean, on the shutdown, let's pick up on that. It's been revealed according to one executive in that ISM report that many non-essential functions are are shuttered. As you know, a libertarian, what does it say to you that we're borrowing 1.9 trillion a year while the government itself classified so much of its own work as non-essential? [laughter] >> That's good. I would put that up about 80% as being non non-essential. So yeah, that's uh that's that's how the system works because the pain I I I so often compare it to trying to treat a drug addict and a drug addict is begging for another shot, another uh another bit of drugs and they feel better, but if they don't take it, it's tremendous pain and the only way they can maybe save their lives if they quit. And that's the dilemma the financial markets have because it will not be tolerated. I I think if uh people say, "Well, Ron, if you were there and you were the Fed, you'd stop immediately monetizing the debt." Well, that would that would be that would be the bell ringing for the revolution to become very violent. And just think about it. The uh the violence is out there. And I most of these incidents where we're seeing more and more anger and violence, I say this is the this [clears throat] is the result of the country being totally bankrupt morally and financially. They won't admit the truth and they just go on and on and so some in in a a more subtle way. They get angry at somebody else. Somebody else caused it and they do not go look to the real cause. this bad economic policy, bad monetary policy and people wanting something for nothing. It is this desire that the war machete. What a disappointment it has been for some of us who thought maybe they would spend quite so much money but that keeps going up and uh even when they closed down the government, you know, everything is accumulating. Sometimes they withhold reports for a week or so because they didn't want to do it before this. Then they report it and then they oh it's bigger than it was supposed to be. So uh so I don't try to try to uh [clears throat] figure out exactly what they're trying to do because I don't think they know what they're doing either. >> Yeah. And I mean the political fallout from the economy is now bleeding into what you just called that extreme democracy where frustration with inflation and inequality is driving voters towards candidates prom promising the sweeping government control. Uh we just saw that in New York where Zoran Mani is a self-described so democratic socialist. He won the mayor's race on a platform of rent freezes, cityrun services. I think he even talked about a city-run grocery store. His victory reflects that growing belief that the system itself from wages to housing is obviously broken. I mean, when you when you see a surge of of what's being called extreme democracy, voters demanding the state take over the market as a natural backlash to a broken monetary system that's destroyed faith in capitalism. Talk to me about this. >> Well, I I I'm very cautious about how to use the word capitalism and free markets. We don't have free markets and we don't have free market capitalism because we have we have crony capitalism. We have corporatism and to for somebody to move along and move a communist into a major position in this country. It's all by deceit because they're running against uh you know capitalism and freedom and look at what it's given us. Well, unless you have intellectual leaders and a universities teaching, this is the reason it's happening. It's because they're uh they're they're doing this and they're spending the money and they're not telling people that it's very very dangerous. So, yes, you blame these leaders, the the the change in the mayor in New York City. Yes, you have to blame it. But I blame the people and I blame the the people by by being willing to bend over and and believe anything. you know the far left and the m they control the media and they bel they control our our our universities I think that's the basic deep flaw has been going on for 100 years and that is the shift from uh true markets uh uh you know with sound money there they've disappeared but they didn't do it at one night they've done it gradually and they just have convinced the people don't worry we can always handle the debt and uh this and and I think why there's so much concern right now and rightfully so is that people know this can't continue can't do it. So even if you had 50 new members of Congress that believe the way we do uh it [clears throat] won't won't change anything. Uh it would change it if they say the right thing and vote and do the things only the right things. May maybe people will get the message. But now we have two or three doing the right thing, voting the way Republicans said they would go and they're the enemy who who stand on their stand on their beliefs and what they said they would do and that we're supposed to balance the budget. So that that's where it I think it's a philosophic problem and people some people are so conditioned they're not even interested in listening to this but uh they'll have an opportunity. But where I really worry about is the uh is the cultural cultural Marxism and pure Marxism. Their their goal is chaos because they they believe and they they write it. They've they've written this and teach taught it for a long time and that is cause they cause the chaos and then then they rush in with more socialism and welfareism, communism and that's what's happened because people are frightened about the violence in the street. So, and New York is not the uh uh you know the example of a wonderful free enterprise cities and yet chaos breaks out. So, what do they do? They uh they elect somebody that really believes in it says there's not enough of that. That list of things they're going to do in New York. The only way I can help can it can can be a little bit helpful is people do finally wake up and in some areas they are waking up. Some of the people now the numbers are growing but we're not in the majority saying why are we sending and spending all that money in the Middle East and Ukraine and now we have these millions and millions of dollars being spent on a pretense tomorrow we might inve [clears throat] uh it's just just ridiculous but I think it's an educational system and I go back not only generally speaking but precisely the monetary system. >> Yeah. If you saw I saw a tweet this morning >> I saw a tweet this morning saying that this this Zoran won because money is broken. I mean is this election just about politics? Is it a kind of a symptom of of a broken monetary and economic system that's pushed the populace to vote against the status quo? I mean there is this contradiction. There's reports that are surfacing that his campaign was heavily funded by billionaire, you know, packs, including George Soros, the very class of people who he's running against. I mean, how do you explain this? >> Well, there's there's no good explanation for it. And uh and and [clears throat] yet the people go along because they see that they can get temporarily. If they just want one more shot, then I then I will they'll go for treatment and and weaned get weaned off the spending. And so that that's the only option. That's why we have to be very prepared. But my preparation isn't say, well, I I need more bottled water or something like that type of preparation. We have to prepare it by changing people's attitudes. It to me the the biggest issue. I started in 1971 uh you know when Nixon closed the gold winner of being involved in economics and speaking out and accidentally ended up in Congress. I don't know how that happened. And uh and yet that to me is the biggest issue because it's the lifeblood of a whole economy and it involves it involves personal liberty the whole works and it just multiplied our problems. But uh people well outside of that scheme I think people are waking up and the best example I can use recently is how the people woke up over COVID. Think how terrible that thing was. It w it was a simple solution simple problem of how it happened. Government took over the practice of medicine and told everybody that they would they had to get an inoculation that was killing people. So that that's that has to stop and and the people did wake up. They started rebelling and people are very more much more cautious now about vaccine and that's what more people need awaken. But time is running short and we have to be aware of the fact that violence I believe is going to increase. >> Yeah. Interesting. You and I have talked about what that looks like before. I mean, you know, this this whole internal debate within the US, I mean, it seems so divided. It's not really coming together here. >> No, it it isn't. And uh I I don't see any easy easy thing. But the one thing is uh I a best friend or a good friend was Leonard Reid who had fee foundation and don't get don't get too discouraged because you don't have 51% and have the majority and they shift over. What you need is a hardcore people who are in leadership position because you know quite frankly most people who have ushered in this age of Marxism taking over the uh the commercial city of of the world New York City. I mean that that doesn't come because everybody understood the issues. Uh they they did it because they went along. It was the leadership. It was the education. And that's where we're making progress. There are educational groups that will say what we have to do is we have to believe that the there's a [clears throat] there's there's changes that we can make. The young people would ask me so what would you do? WHAT WHAT SHOULD WE DO? I said that if if you had to better people no matter what you're doing teaching or just conversation you just have to you just have to accept the fact why don't you start by reading the constitution. Everybody there takes the oath of office. But if you follow the Constitution and if you're a congressman or a senator, expect trouble. You'll be ridiculed to no end. And the people don't come to they don't understand that they're leading the charge for, you know, a decent recovery. >> Yeah. You know, of course, there's this major story on this theme developing in Washington at the time of taping. Now, it's important to say we don't have a decision yet, but the Supreme Court is hearing arguments on the president's use of the International Emergencies Economic Powers Act to impose tariffs. I mean, you know a thing or two about this. The core of the case is a constitutional question. The administration is arguing that the power to regulate importation includes the power to set tariffs. I mean, the challengers argue that the Constitution gives a power to tax exclusively to Congress and that the EA law never explicitly mentioned tariffs at all. As someone who served in Congress for decades, as you just mentioned, I mean, where do you see the constitutional line between the executives's emergency powers and Congress's specific power to tax? Well, my my assumption would be if we had an opportunity that uh you'd practically ban most executive orders because they the presidents, no matter Republican or Democrat, they they were always uh you know taken away the responsibility of the Congress. But that uh that's not going to happen. They're going to do it. And and I think this administration has has you know uh you know taken shortcuts more than any other. They've all done it. I mean, just think there's never been a declaration of war since uh 1941. Uh and [clears throat] uh that that that is a just think wars we how many people died over that. How much money have we spent? So just that one thing. And uh I brought when we were when the government our government was uh getting organized to go into the Middle East war back in the early part of this century that I was on the foreign affairs committee and I offered I offered an amendment to declare war. And I said I'm not going to vote for it but you guys are going to vote for this money. So you all you have to vote for the declaration of war. They became hysterical. and uh he they they chairman of the committee, you know, knocked me down. They said that that that part of the constitution is anacronistic. We don't even follow that part anymore. That's that's where the problem is. >> You know, it's interesting because obviously for the for the audience, I'm keeping an eye on this is but as we tape, we're watching, you know, some of the arguments go back. We don't have a ruling, but if that authority gets struck down, the president's team is reportedly ready to pivot to section 122 uh of something called the 1974 Trade Act, which allows a 15% tariff for 150 days to fix trade imbalances or section 338 of this 1930 tariff act, which permits tariffs up to 50% against nations that discriminate against US goods. I mean, the Court of International Trade has even suggested that section 122 may offer a firmer legal footing for global tariffs. But I guess the question is, Dr. Paul, if the administration turns to these older laws to keep tariffs alive, does that restore legitimacy to the policy or does that prove Washington is simply hunting for any statute that that lets the executive tax by fiat? >> They're just looking around to think that it's going to help. And uh [clears throat] they they don't know. They think that every executive order or every tariff will have the same result, but people don't know. It's sort of like inflation. When the government prints the money, you don't know exactly where the money is going to go. Some prices might even go down. Some but the system will be ruined and debt will go up. It gets real confused. But it's not a neat package. That's why casianism doesn't work is you can't you don't know. Mises says this is human action. Human beings are doing this and they and they don't know the answer. So they keep doing this but this this whole thing you know on on tariffs I think I think it's a horror and uh it's going to come apart even when it looks good. People say well things are good. Well the elections just recently it looks like a lot of people don't think things are going as going as well as they would but uh the price will be paid. We will eventually have to pay you, you know, uh uh the debt one way or the other. The debt is yet liquidated. Most of the likely it'll be liquidated by being paid off with uh funny money. You know, just print the money. Oh, we owe you $10 billion. Here it is. It's worth 10 cents, but they pay it off. That's that's what they're in the process of doing. >> Yeah. Interesting. Uh you've been vocal on X. I was just going through your Rex feed this morning before the interview. We've been highly critical of the administration calling the Argentina's bailout empire first, not America first. Of course, that happened over on October 24th, November 3rd. You warned about this covert war in Venezuela. How do you connect these foreign policy decisions to the stagflation and the debt that we're seeing back home? >> Well, there is a connection because the money is being spent, but that's all the military-industrial complex and and some of them don't even think it through. All they think about is profits. uh weapons uh manufacturing and profits and but the but they they say well we'll threaten people but we're not really going to invade them. Just think of the threats in the surrounding of Venezuela right now and then the president said we're not going to invade. We're not going to do this. It's back and forth back and forth. It's it's that type of thing because even if there's a ruling today by the Supreme Court uh you don't know exactly what will happen. What will the reaction be? And what will people say? See, uh, the people who said you shouldn't have done it, they're going to say, maybe people will be converted and they will say, well, you know, this is a terrible thing that we're doing. And others will say, well, you just didn't do it the right way. Be on and on. Interventionism, whether it's a foreign policy intervention or [clears throat] intervention in economic policy, it's it's wrong the wrong decisions. It's not made based on what is best for the economy. and uh and that that is the supply and demand and profits and these things like that but that's considered evil and uh that what they have to do is let the government make these decision and I if I argue the case for more or less a fair they say well the people are too dumb you know if we didn't give them food stamps and educate them they wouldn't be educated and they wouldn't get medical care or whatever and uh and they they said some people will do that And I said, "Yeah, but you but what do you do? Take some that believe the way you do. You put them in government. Everybody has to suffer the consequence of somebody else, you know, making a mistake." Yeah. Freedom isn't perfect. Matter of fact, freedom is intended to be, you know, rewarding and you have to pay the price if you're doing something stupid or illegal and immoral. But it should be handled in a much different way than preempting and using as an excuse to just build build be build up more power. And uh this is this whole thing if they don't have that much difference why are they fighting so power political power is what they want and uh and then that's that's what's going on now and it's going to end badly. [clears throat] >> Yeah. Yeah. I mean, some some supporters would obviously argue that this America first, you know, they would say that projecting strength in Venezuela against Russia is putting Americans interest first. I mean, they would say that bailing out Argentina prevents that financial collapse that could spread to the US. I mean, you and I and everyone on the mainstream media now it seems has been talking about this debasement trade. How do you respond to the argument that a strong foreign policy like this president seems to be showing and his team kind of is necessary to pro protect the US economy? >> [clears throat] >> Well, it it doesn't work and it's wrong and you know to hire up and to enslave the people uh taking their money and spending it on this because they think that's going to help. But it's it's designed to help the very wealthy, the people who own these companies because we don't we don't have free markets. What we have is corporatism. We we have crony capitalism and the corporations. And yet if you look at the statistics of the people that are very very wealthy, they benefit from the inflation, you know, the inflation goes to the very wealthy and they get it and they get more wealthy day in and day out. Uh where if if if these uh if if if you need more more money and more wealth, you have to work and earn it in a free market. But they uh they keep they keep doing the same thing over again. And it's all based on the fact that there's too much intervention in our personal lives, our per privacy, too much intervention in all economic activity and too much intervention in us dictating to the world because we think we know how. And I'm sure there's a lot of people say they have good reason for doing this. We want to bring peace to the world. Well, it hasn't worked before. All they have to do is look at the statistics. We didn't follow the Constitution since 1945. And millions of people, billions of dollars have been spent. And uh even now, just last week or so, we talked on the program about another hundred billion dollars that will be spent. It it just goes on and on and uh that's why that's why uh this can't last. >> Yeah. Yeah. I mean, you've been warning for decades that inflation isn't an accident. It's a transfer of wealth from the working class to the political and financial elite. are what we're seeing now is that playing out in real time? I mean, where the the very policies that are meant to stimulate the economy are entrenching a two-tiered system? >> Well, I don't know exactly how they would do it, but I think a two-tiered system operates. You know, the wealthy gets wealthier and and they uh control and then they get control of the media, then they get control of the political system. and they're trillionaires that you know probably sent money to that communist that became mayor of New York City. So, but they're they're on the inside. But even even the people that have on the surface a very very wicked type of a philosophy to try to uh hoodwake the people to get the votes that is there but they also participate. You hear some occasions that so and so is a communist socialist and and they have three houses. I mean it's so hypocritical and uh the market the market handles that because the one thing you can't do is you can't commit fraud. I happen to believe in natural law that says that you can't lie, cheat, steal, or kill. And yet we allow our government to do it, but on a personal basis that's right. You know, you you can't do it uh because it's wrong. Uh, and if we spent more time for local people to make sure that those things didn't happen, we'd be all better off. >> Yeah. And there's another twist to all of this. Of course, President Trump has long been a vocal admirer of gold. He's praised it as real money, has reportedly discussed ways to link US reserves to Treasury policy. That stance sets him apart from most modern presidents who treated gold as a a relic rather than a gauge of trust in the dollar. I mean, with prices holding near $4,000 an ounce, the symbolism doesn't seem like it's lost anymore. Let's talk about that solution. You've been asking for decades, where's our gold? I mean, earlier this year, Representative Thomas Massie introduced that HR uh that gold uh reserve transparency act. Yet, the bill is stalled in the Treasury's official books, according to their own data, still values that 8,100 tons of gold at around $42. Uh why has this audit went silent again? And and do you sitting here today believe that that 8,100 tons of gold are secure and you know unencumbered in Fort Knox? >> Well, personally what I believe is I have no idea because you can't believe what they tell us. >> And the little bit of auditing is all fake and my just because I'm uh a little bit ler of almost all government. My guess is that that the gold if it's there we don't own it because [clears throat] gold is a lot of times used as leverage and loan out and this sort of thing. So it's it's not being used properly. So we might as well have to assume that it's not there. Now if uh if [clears throat] I think the uh that's one thing that might be working for our favor. It looks like other countries are buying gold and uh that would have to if they continue to do that and they do it the correct way, they would dethrone the dollar. Uh and uh because we're not going to all of a sudden save enough gold to go back on the gold standard. That that's not going to happen. But uh the other countries might get together and uh and have enough, but they are systematically buying the gold and I think it's a good sign. So there's other things that has happened. I said that I got involved and talked about money after [clears throat] after Nixon closed the gold window. But pretty soon after that we we weren't even allowed to own gold that time by that time because Roosevelt took us we you know made it illegal. But by 1975 you know gold was made legal. The Americans couldn't own it. So we've moved in that direction. We can buy gold now. So in a way an individual can go on to gold standard if they uh [clears throat] if they invest and they put away maybe a certain amount of money each time as a reserve against the investments they make they can go. So that that is a a good sign and it's a good sign now that some of the central banks are saying maybe to restore confidence maybe we ought to use it. It's worked for a couple years like a couple thousand years it's worked. So maybe they'll wake up. >> Yeah. Yeah. And that concern, I mean, it ties directly to this debate inside the Treasury itself. Economist Dr. Judy Shelton, longtime advocate of sound money, we've had her on this show, I know you know her. Uh she's proposed this issuing of a new Treasury uh trust bonds that that could be redeemed in either dollars or in gold. The idea is to restore credibility to US debt without abandoning the dollar entirely. I mean, supporters call it kind of a modern bridge back to discipline. Critics warned that it could expose how little gold actually backs the system. Um on this proposal in theory, I mean, you know, it gives investors the option to redeem in gold. Could that be a first step towards restoring confidence in in US debt or does it simply repackage the same fiat problem under a new label? >> It depends on how the final rules are made. I think the [clears throat] maybe the most practical way to gradually get into it is maybe issue bonds that were backed by gold, but to back the whole currency and all, but but even if you backed the bonds, people would rush there. They want the security and uh it uh but anything that would emphasize the importance of it I' I'd be for but you know I I I can't quite visualize exactly how some of these proposals will work. We've gone so far. uh you know the founders did find it complicated because they didn't think the federal government had the authority to mess around with the currency and they had u and they also said oh they said the states must use they could only use gold and silver as legal tender. So they assumed that would take care of everybody, you know. So, but they said they simplified it, but we're a long way off from that. But, uh, fortunately, you know, uh, people can try to protect themselves with gold. But I still say, you know, governments will do anything they want to do and they don't obey the law. We have to obey the law, but the government doesn't have to. So if if they have the if they if they obey the law that means they have to you you know have the gold there but they that they don't. So it's not easy. I still think that we have a lot more understanding to be ahead before [clears throat] the people will move in the right direction. I'm afraid that Marxists can win uh by uh causing chaos and then taking over. But I also think there's a growing number of people in this country that if you give them the option and a little bit of understanding that uh if they would opt for you you know a system of individual liberty as found in the constitution and uh that that to me would be a the proper way to go but right now we're facing up a major crisis. >> Yeah. And on that crisis I'll leave the viewers with this Dr. Paul because I know our time's almost done. I mean, I know it was just recently your 90th birthday. Congratulations. Happy birthday. You know, you've been in Congress a long time, whether it was by accident, as you said, or not. Um, you know, taking a look at where we're at right now, just talk to me about libertarianism. I mean, where are we with independence? >> Well, I [clears throat] think people are all born libertarian in a way. You know, even a small baby is independent-minded. And I [clears throat] think that most people like to be left alone. Teenagers in many ways like to be left alone. But uh it it uh the the the uh media the people who control the opinions are very much opposed to you know uh libertarianism uh because you know empires are built by lies. You have to lie to keep the empires going. And we have an empire. That's something that people we have to admit. We don't have like the United States or individual states that bring came together that we uh we have a you know uh [clears throat] been after we've been doing this for a long time and we're not moving in the right direction. >> Yeah. I mean, it's it's funny about that because I was going to say, I mean, if we start to look at the markets right now, it feels like the public agrees with libertarian principles, right? Less control, more freedom, yet this voting for bigger governments from both parties. I mean, does that mean that libertarianism has has to evolve or just outlast the collapse of the current order? >> Oh, [clears throat] it has to grow. And I think that's where I see it. I was uh given an opportunity to talk to a lot of young people during the presidential campaign and I would I was very pleased and I go to very liberal universities and I tried to simplify the message and and they were very positive. They like the idea of what civil liberties meant. And even when I said that, you know, we wouldn't have an income tax and uh and and uh they they they [clears throat] uh they would applaud that and they they were very positive. I said, "But you wouldn't have any welfare. The government can't take care of you. You can't keep what you earn." And and I said, you know, and they they they still maybe they didn't think it through, but they thought that sounded like a pretty good idea. So they don't understand the benefits because the greatest benefits in society has been the more liberty you have uh the more likely you'll have peace and prosperity and I work on that assumption. >> Yeah, nicely said. Uh what's your message to the next generation, the ones inheriting the debt, the inflation and and the loss of trust in institutions? How can they live freely and build real independence in a system that feels stacked against them? What would you say to them today? >> Well, unfortunately, they're going to have to go through the ringer. They're going to have to see the correction. The bills have to be paid. >> And it won't be paid by hard work and paying all the money that they owe. It's going to be paid by by chaos and getting paid on if anything off with uh money of no value. And it pretend. I mean, there's too many examples throughout history where that has happened. But so far people are so optimistic and even today people are still pretty optimistic about America you know they uh like this morning I thought news is terrible but the dollar run up in value you know which is which it seems contradictory but that's how strong the emotions are and also the people who control the media. >> Yeah. So >> that's it. >> Yeah. Good. We'll leave it at that. Dr. Ron Paul, host of the Liberty Report. Uh, thank you for this analysis. I appreciate your time today, of course, and and happy birthday again, doctor. >> Thank you very much. Nice being with you. >> Appreciate your time. All right, that was former Congressman Dr. Ron Paul, host of the Liberty Report. Now, we covered the Fed's $125 billion liquidity injection, the conflicting data on jobs and inflation, the constitutional questions before the Supreme Court. Once again, that is happening now. We're going to continue to keep an eye on that ruling. Clearly a critical moment for the US economy. What do you think? Is the Fed trapped? Is this stagflation? Is there a take on the future of gold here? Let us know your thoughts in the comments section. And if you want more interviews like this, make sure to like this video. Subscribe right here to Kiko News channel. Hit that bell icon so you never miss an update. I'm Jeremy Saffron. We're going to continue to keep an eye on these breaking stories. [music] Thank you for watching. We'll see you next time. >> [music] >> Heat. Heat.
Is the Fed's $125B Injection a Mistake? Ron Paul Says ‘Maybe Their Strategy is to Cause Chaos’
Summary
Transcript
Welcome back to Kiko News. I'm [music] Jeremy Saffron. The Federal Reserve has just injected 125 billion dollars into the US banking system over the past 5 days. Now, this is the largest short-term liquidity operation since the 2020 crisis. And it comes as bank reserves have fallen to a 4-year low of just $2.8 trillion. Yet, as the Fed is adding liquidity, the president's own Treasury Secretary, Scott Bessant, is on the record, blaming the Fed for what he's calling a housing recession, arguing its rate policy is just too high. Now, on the economy, the data is up in the air again. The ADP report showed private jobs grew by 42,000, beating expectations. Yet, the new ISM report uh reports employment index just contracted for the first for the fifth straight month, rather. And inside the same ISM report, the price index soared to 70. Now, this economic turmoil has had a massive political impact in the recent elections with voters citing the economy sweeping Democrats into key offices and electing a self-described Democratic socialist as mayor of New York City. Now, to make sense of all this, we're joined by someone you recognize, of course. He's the host of the Liberty Report, former Congressman Dr. Ron Paul. Thank you for joining us and making the time today. >> Jeremy, nice to be with you today. I want to talk to you a little bit about this core conflict at the Fed. I mean, we had the Treasury Secretary blaming the Fed uh for being too tight. We had the repo market, which just required, as I mentioned, that $125 billion injection, signaling that the system was way too tight. Uh if the Fed is forced to add liquidity at the same time that ADP shows 42,000 new jobs, what does this do to their inflation fight? Well, one thing it proves is they don't have the biggest idea what they're doing [laughter] >> because because they even if they were trying to be accurate, they're not able to. It's information uh they're they're s searching around to try to figure out what the interest rates ought to be. And then we have this major debate between Pal and the president and neither neither one of them know. So they have this is and and then they make mistakes. they they can't even get their intervention together again. They contradict each other. So, I've been trained by myself over the many many years and I'm very skeptical of anything I hear from the government and from the Federal Reserve. Uh and yet you can't ignore it because markets respond and they can't sort out which is right or wrong. But that's why I think the dislocation of uh capital is so bad and that they don't they don't have a chance of ever planning accurately exactly what to do because I think that these stats you just gave indicate they don't know what they're doing. One person wants to raise it, the other person wants to lower it. And maybe they don't know what they're doing or maybe they have a strategy. Maybe their strategy is to cause chaos in order for the people, you know, to just roll over and say, "Hey, save us." I had somebody once come to my office with a concern about inflation. And uh the lady was talking, she says, "Well, the grocery prices are going up, going up. You do something about it." I said, "What do you want me to do?" They say, "Send us more money. We can't afford it." I mean, it's really crazy. And uh I I think that uh I I I think the the stats that you just gave indicate that it is chaos and it's very fragile and we should be on our toes for something very very big to happen. Uh you know in a stock market or or wherever because I think I think of debt uh needing to be liquidated. It's too much debt. We we can't pay the interest on that. and also the malinvestment, all all this money with the government, especially the current administration. They're always involved either with tariffs or subsidies or sanctions, all these things. So, a lot of money goes out there, but they're never short. And then if the government needs more and you know, we expected that this uh this administration would tighten its belt a little bit. Doesn't turn out that it will be. So, we better be prepared for the worst. >> Yeah. Dr. Paul, I mean, you just talked a little bit about somebody visiting your office and and we keep hearing, you know, that that take on on the real economy, the difference between Main Street and Wall Street, because the data is telling two different stories. I mean, that headline ADP report just came in, positive 42,000 jobs, and the main ISM number was 52.4, the highest in eight months. Now, that sounds like resilience in the economy, but yet the CEO of McDonald's was on Bloomberg this morning and he said that his lower income consumer traffic is declining by double digits. So, how can both of these be true? Is the headline data hiding a K-shaped recession? >> Well, well, but it can't be true. And didn't Amazon lay off thousands of people? And I don't even think we hear all the smaller companies that are laying people off. But it's amazing how they can uh prop up the information where if you're a a an investor or if you're a financial advisor >> that you you can't ignore it because what if what if it's a halftruth? What if it's true and you didn't respond? Then you might lose your job. So it's impossible for them to know. is so far removed from market forces because if the market was able to uh be used that the the market is telling the truth and we know what it is I mean I would think the correction would come well we don't want that we can't put up with that but you know there's always a struggle with this the market wants deflation and liquidation the people never want it and I think the new administration and the current uh Fed They always want to try to prevent things like they know what's going to happen. But uh that that's just a game they play and I think it'll get those those statistics and promises and analysis will will get much worse. So uh I I uh I don't think I'd want to be the financial advisor that uh depended on daily changes in in our attitude. uh my approach to understanding preservation of wealth is a lot different. >> Yeah. Yeah. Well said and I want to get into that but uh you know let's talk about the reason for this stress. I mean the US balance sheet I mean the CBO is projecting a $ 1.9 trillion deficit for this year alone. The government is also in the longest shutdown in new history reporting uh reportedly costing about $15 billion a week. Of course, the US Treasury just signaled that it'll need to increase auction sizes, pushing the 10-year up to 4.14%. I mean, we talked about that bubble, but I mean, is is the US now in a classic debt spiral? And is there any political will at the top at all to stop it? >> No, there's no there's no will to it because some don't understand, but those who do it are going to cover it up as as long as possible. That's why [clears throat] that's why people should bet on the continuation of price inflation and monetary inflation. They're not going to do it. The people in Washington will not change. And guess what? There's more involved than just those people up there running the show and messing it up. It's all the people who depend on it. Everybody from food stamps up to corporatism and warfarism and the military industrial complex. I mean it is it is real big. I see this as an example of extreme democracy. You know what do the what do the people want? they get piled together. They're like a gang that comes in and uh and I that's why you know pure pure democracy is not so good because a majority rules and they do what the majority wants and if they want inflation and they they might say well we know it isn't very good but not doing it is immediately bad so they will always opt for covering it up. I'm amazing how good they are at doing this, but I happen to have a strong belief that they can't do it forever. And I think some of the things you've just talked about are showing, you know, the cracks in this whole system and uh they're not going to be able to patch it up. >> Yeah. Uh, you know, it's it's interesting. I mean, on the shutdown, let's pick up on that. It's been revealed according to one executive in that ISM report that many non-essential functions are are shuttered. As you know, a libertarian, what does it say to you that we're borrowing 1.9 trillion a year while the government itself classified so much of its own work as non-essential? [laughter] >> That's good. I would put that up about 80% as being non non-essential. So yeah, that's uh that's that's how the system works because the pain I I I so often compare it to trying to treat a drug addict and a drug addict is begging for another shot, another uh another bit of drugs and they feel better, but if they don't take it, it's tremendous pain and the only way they can maybe save their lives if they quit. And that's the dilemma the financial markets have because it will not be tolerated. I I think if uh people say, "Well, Ron, if you were there and you were the Fed, you'd stop immediately monetizing the debt." Well, that would that would be that would be the bell ringing for the revolution to become very violent. And just think about it. The uh the violence is out there. And I most of these incidents where we're seeing more and more anger and violence, I say this is the this [clears throat] is the result of the country being totally bankrupt morally and financially. They won't admit the truth and they just go on and on and so some in in a a more subtle way. They get angry at somebody else. Somebody else caused it and they do not go look to the real cause. this bad economic policy, bad monetary policy and people wanting something for nothing. It is this desire that the war machete. What a disappointment it has been for some of us who thought maybe they would spend quite so much money but that keeps going up and uh even when they closed down the government, you know, everything is accumulating. Sometimes they withhold reports for a week or so because they didn't want to do it before this. Then they report it and then they oh it's bigger than it was supposed to be. So uh so I don't try to try to uh [clears throat] figure out exactly what they're trying to do because I don't think they know what they're doing either. >> Yeah. And I mean the political fallout from the economy is now bleeding into what you just called that extreme democracy where frustration with inflation and inequality is driving voters towards candidates prom promising the sweeping government control. Uh we just saw that in New York where Zoran Mani is a self-described so democratic socialist. He won the mayor's race on a platform of rent freezes, cityrun services. I think he even talked about a city-run grocery store. His victory reflects that growing belief that the system itself from wages to housing is obviously broken. I mean, when you when you see a surge of of what's being called extreme democracy, voters demanding the state take over the market as a natural backlash to a broken monetary system that's destroyed faith in capitalism. Talk to me about this. >> Well, I I I'm very cautious about how to use the word capitalism and free markets. We don't have free markets and we don't have free market capitalism because we have we have crony capitalism. We have corporatism and to for somebody to move along and move a communist into a major position in this country. It's all by deceit because they're running against uh you know capitalism and freedom and look at what it's given us. Well, unless you have intellectual leaders and a universities teaching, this is the reason it's happening. It's because they're uh they're they're doing this and they're spending the money and they're not telling people that it's very very dangerous. So, yes, you blame these leaders, the the the change in the mayor in New York City. Yes, you have to blame it. But I blame the people and I blame the the people by by being willing to bend over and and believe anything. you know the far left and the m they control the media and they bel they control our our our universities I think that's the basic deep flaw has been going on for 100 years and that is the shift from uh true markets uh uh you know with sound money there they've disappeared but they didn't do it at one night they've done it gradually and they just have convinced the people don't worry we can always handle the debt and uh this and and I think why there's so much concern right now and rightfully so is that people know this can't continue can't do it. So even if you had 50 new members of Congress that believe the way we do uh it [clears throat] won't won't change anything. Uh it would change it if they say the right thing and vote and do the things only the right things. May maybe people will get the message. But now we have two or three doing the right thing, voting the way Republicans said they would go and they're the enemy who who stand on their stand on their beliefs and what they said they would do and that we're supposed to balance the budget. So that that's where it I think it's a philosophic problem and people some people are so conditioned they're not even interested in listening to this but uh they'll have an opportunity. But where I really worry about is the uh is the cultural cultural Marxism and pure Marxism. Their their goal is chaos because they they believe and they they write it. They've they've written this and teach taught it for a long time and that is cause they cause the chaos and then then they rush in with more socialism and welfareism, communism and that's what's happened because people are frightened about the violence in the street. So, and New York is not the uh uh you know the example of a wonderful free enterprise cities and yet chaos breaks out. So, what do they do? They uh they elect somebody that really believes in it says there's not enough of that. That list of things they're going to do in New York. The only way I can help can it can can be a little bit helpful is people do finally wake up and in some areas they are waking up. Some of the people now the numbers are growing but we're not in the majority saying why are we sending and spending all that money in the Middle East and Ukraine and now we have these millions and millions of dollars being spent on a pretense tomorrow we might inve [clears throat] uh it's just just ridiculous but I think it's an educational system and I go back not only generally speaking but precisely the monetary system. >> Yeah. If you saw I saw a tweet this morning >> I saw a tweet this morning saying that this this Zoran won because money is broken. I mean is this election just about politics? Is it a kind of a symptom of of a broken monetary and economic system that's pushed the populace to vote against the status quo? I mean there is this contradiction. There's reports that are surfacing that his campaign was heavily funded by billionaire, you know, packs, including George Soros, the very class of people who he's running against. I mean, how do you explain this? >> Well, there's there's no good explanation for it. And uh and and [clears throat] yet the people go along because they see that they can get temporarily. If they just want one more shot, then I then I will they'll go for treatment and and weaned get weaned off the spending. And so that that's the only option. That's why we have to be very prepared. But my preparation isn't say, well, I I need more bottled water or something like that type of preparation. We have to prepare it by changing people's attitudes. It to me the the biggest issue. I started in 1971 uh you know when Nixon closed the gold winner of being involved in economics and speaking out and accidentally ended up in Congress. I don't know how that happened. And uh and yet that to me is the biggest issue because it's the lifeblood of a whole economy and it involves it involves personal liberty the whole works and it just multiplied our problems. But uh people well outside of that scheme I think people are waking up and the best example I can use recently is how the people woke up over COVID. Think how terrible that thing was. It w it was a simple solution simple problem of how it happened. Government took over the practice of medicine and told everybody that they would they had to get an inoculation that was killing people. So that that's that has to stop and and the people did wake up. They started rebelling and people are very more much more cautious now about vaccine and that's what more people need awaken. But time is running short and we have to be aware of the fact that violence I believe is going to increase. >> Yeah. Interesting. You and I have talked about what that looks like before. I mean, you know, this this whole internal debate within the US, I mean, it seems so divided. It's not really coming together here. >> No, it it isn't. And uh I I don't see any easy easy thing. But the one thing is uh I a best friend or a good friend was Leonard Reid who had fee foundation and don't get don't get too discouraged because you don't have 51% and have the majority and they shift over. What you need is a hardcore people who are in leadership position because you know quite frankly most people who have ushered in this age of Marxism taking over the uh the commercial city of of the world New York City. I mean that that doesn't come because everybody understood the issues. Uh they they did it because they went along. It was the leadership. It was the education. And that's where we're making progress. There are educational groups that will say what we have to do is we have to believe that the there's a [clears throat] there's there's changes that we can make. The young people would ask me so what would you do? WHAT WHAT SHOULD WE DO? I said that if if you had to better people no matter what you're doing teaching or just conversation you just have to you just have to accept the fact why don't you start by reading the constitution. Everybody there takes the oath of office. But if you follow the Constitution and if you're a congressman or a senator, expect trouble. You'll be ridiculed to no end. And the people don't come to they don't understand that they're leading the charge for, you know, a decent recovery. >> Yeah. You know, of course, there's this major story on this theme developing in Washington at the time of taping. Now, it's important to say we don't have a decision yet, but the Supreme Court is hearing arguments on the president's use of the International Emergencies Economic Powers Act to impose tariffs. I mean, you know a thing or two about this. The core of the case is a constitutional question. The administration is arguing that the power to regulate importation includes the power to set tariffs. I mean, the challengers argue that the Constitution gives a power to tax exclusively to Congress and that the EA law never explicitly mentioned tariffs at all. As someone who served in Congress for decades, as you just mentioned, I mean, where do you see the constitutional line between the executives's emergency powers and Congress's specific power to tax? Well, my my assumption would be if we had an opportunity that uh you'd practically ban most executive orders because they the presidents, no matter Republican or Democrat, they they were always uh you know taken away the responsibility of the Congress. But that uh that's not going to happen. They're going to do it. And and I think this administration has has you know uh you know taken shortcuts more than any other. They've all done it. I mean, just think there's never been a declaration of war since uh 1941. Uh and [clears throat] uh that that that is a just think wars we how many people died over that. How much money have we spent? So just that one thing. And uh I brought when we were when the government our government was uh getting organized to go into the Middle East war back in the early part of this century that I was on the foreign affairs committee and I offered I offered an amendment to declare war. And I said I'm not going to vote for it but you guys are going to vote for this money. So you all you have to vote for the declaration of war. They became hysterical. and uh he they they chairman of the committee, you know, knocked me down. They said that that that part of the constitution is anacronistic. We don't even follow that part anymore. That's that's where the problem is. >> You know, it's interesting because obviously for the for the audience, I'm keeping an eye on this is but as we tape, we're watching, you know, some of the arguments go back. We don't have a ruling, but if that authority gets struck down, the president's team is reportedly ready to pivot to section 122 uh of something called the 1974 Trade Act, which allows a 15% tariff for 150 days to fix trade imbalances or section 338 of this 1930 tariff act, which permits tariffs up to 50% against nations that discriminate against US goods. I mean, the Court of International Trade has even suggested that section 122 may offer a firmer legal footing for global tariffs. But I guess the question is, Dr. Paul, if the administration turns to these older laws to keep tariffs alive, does that restore legitimacy to the policy or does that prove Washington is simply hunting for any statute that that lets the executive tax by fiat? >> They're just looking around to think that it's going to help. And uh [clears throat] they they don't know. They think that every executive order or every tariff will have the same result, but people don't know. It's sort of like inflation. When the government prints the money, you don't know exactly where the money is going to go. Some prices might even go down. Some but the system will be ruined and debt will go up. It gets real confused. But it's not a neat package. That's why casianism doesn't work is you can't you don't know. Mises says this is human action. Human beings are doing this and they and they don't know the answer. So they keep doing this but this this whole thing you know on on tariffs I think I think it's a horror and uh it's going to come apart even when it looks good. People say well things are good. Well the elections just recently it looks like a lot of people don't think things are going as going as well as they would but uh the price will be paid. We will eventually have to pay you, you know, uh uh the debt one way or the other. The debt is yet liquidated. Most of the likely it'll be liquidated by being paid off with uh funny money. You know, just print the money. Oh, we owe you $10 billion. Here it is. It's worth 10 cents, but they pay it off. That's that's what they're in the process of doing. >> Yeah. Interesting. Uh you've been vocal on X. I was just going through your Rex feed this morning before the interview. We've been highly critical of the administration calling the Argentina's bailout empire first, not America first. Of course, that happened over on October 24th, November 3rd. You warned about this covert war in Venezuela. How do you connect these foreign policy decisions to the stagflation and the debt that we're seeing back home? >> Well, there is a connection because the money is being spent, but that's all the military-industrial complex and and some of them don't even think it through. All they think about is profits. uh weapons uh manufacturing and profits and but the but they they say well we'll threaten people but we're not really going to invade them. Just think of the threats in the surrounding of Venezuela right now and then the president said we're not going to invade. We're not going to do this. It's back and forth back and forth. It's it's that type of thing because even if there's a ruling today by the Supreme Court uh you don't know exactly what will happen. What will the reaction be? And what will people say? See, uh, the people who said you shouldn't have done it, they're going to say, maybe people will be converted and they will say, well, you know, this is a terrible thing that we're doing. And others will say, well, you just didn't do it the right way. Be on and on. Interventionism, whether it's a foreign policy intervention or [clears throat] intervention in economic policy, it's it's wrong the wrong decisions. It's not made based on what is best for the economy. and uh and that that is the supply and demand and profits and these things like that but that's considered evil and uh that what they have to do is let the government make these decision and I if I argue the case for more or less a fair they say well the people are too dumb you know if we didn't give them food stamps and educate them they wouldn't be educated and they wouldn't get medical care or whatever and uh and they they said some people will do that And I said, "Yeah, but you but what do you do? Take some that believe the way you do. You put them in government. Everybody has to suffer the consequence of somebody else, you know, making a mistake." Yeah. Freedom isn't perfect. Matter of fact, freedom is intended to be, you know, rewarding and you have to pay the price if you're doing something stupid or illegal and immoral. But it should be handled in a much different way than preempting and using as an excuse to just build build be build up more power. And uh this is this whole thing if they don't have that much difference why are they fighting so power political power is what they want and uh and then that's that's what's going on now and it's going to end badly. [clears throat] >> Yeah. Yeah. I mean, some some supporters would obviously argue that this America first, you know, they would say that projecting strength in Venezuela against Russia is putting Americans interest first. I mean, they would say that bailing out Argentina prevents that financial collapse that could spread to the US. I mean, you and I and everyone on the mainstream media now it seems has been talking about this debasement trade. How do you respond to the argument that a strong foreign policy like this president seems to be showing and his team kind of is necessary to pro protect the US economy? >> [clears throat] >> Well, it it doesn't work and it's wrong and you know to hire up and to enslave the people uh taking their money and spending it on this because they think that's going to help. But it's it's designed to help the very wealthy, the people who own these companies because we don't we don't have free markets. What we have is corporatism. We we have crony capitalism and the corporations. And yet if you look at the statistics of the people that are very very wealthy, they benefit from the inflation, you know, the inflation goes to the very wealthy and they get it and they get more wealthy day in and day out. Uh where if if if these uh if if if you need more more money and more wealth, you have to work and earn it in a free market. But they uh they keep they keep doing the same thing over again. And it's all based on the fact that there's too much intervention in our personal lives, our per privacy, too much intervention in all economic activity and too much intervention in us dictating to the world because we think we know how. And I'm sure there's a lot of people say they have good reason for doing this. We want to bring peace to the world. Well, it hasn't worked before. All they have to do is look at the statistics. We didn't follow the Constitution since 1945. And millions of people, billions of dollars have been spent. And uh even now, just last week or so, we talked on the program about another hundred billion dollars that will be spent. It it just goes on and on and uh that's why that's why uh this can't last. >> Yeah. Yeah. I mean, you've been warning for decades that inflation isn't an accident. It's a transfer of wealth from the working class to the political and financial elite. are what we're seeing now is that playing out in real time? I mean, where the the very policies that are meant to stimulate the economy are entrenching a two-tiered system? >> Well, I don't know exactly how they would do it, but I think a two-tiered system operates. You know, the wealthy gets wealthier and and they uh control and then they get control of the media, then they get control of the political system. and they're trillionaires that you know probably sent money to that communist that became mayor of New York City. So, but they're they're on the inside. But even even the people that have on the surface a very very wicked type of a philosophy to try to uh hoodwake the people to get the votes that is there but they also participate. You hear some occasions that so and so is a communist socialist and and they have three houses. I mean it's so hypocritical and uh the market the market handles that because the one thing you can't do is you can't commit fraud. I happen to believe in natural law that says that you can't lie, cheat, steal, or kill. And yet we allow our government to do it, but on a personal basis that's right. You know, you you can't do it uh because it's wrong. Uh, and if we spent more time for local people to make sure that those things didn't happen, we'd be all better off. >> Yeah. And there's another twist to all of this. Of course, President Trump has long been a vocal admirer of gold. He's praised it as real money, has reportedly discussed ways to link US reserves to Treasury policy. That stance sets him apart from most modern presidents who treated gold as a a relic rather than a gauge of trust in the dollar. I mean, with prices holding near $4,000 an ounce, the symbolism doesn't seem like it's lost anymore. Let's talk about that solution. You've been asking for decades, where's our gold? I mean, earlier this year, Representative Thomas Massie introduced that HR uh that gold uh reserve transparency act. Yet, the bill is stalled in the Treasury's official books, according to their own data, still values that 8,100 tons of gold at around $42. Uh why has this audit went silent again? And and do you sitting here today believe that that 8,100 tons of gold are secure and you know unencumbered in Fort Knox? >> Well, personally what I believe is I have no idea because you can't believe what they tell us. >> And the little bit of auditing is all fake and my just because I'm uh a little bit ler of almost all government. My guess is that that the gold if it's there we don't own it because [clears throat] gold is a lot of times used as leverage and loan out and this sort of thing. So it's it's not being used properly. So we might as well have to assume that it's not there. Now if uh if [clears throat] I think the uh that's one thing that might be working for our favor. It looks like other countries are buying gold and uh that would have to if they continue to do that and they do it the correct way, they would dethrone the dollar. Uh and uh because we're not going to all of a sudden save enough gold to go back on the gold standard. That that's not going to happen. But uh the other countries might get together and uh and have enough, but they are systematically buying the gold and I think it's a good sign. So there's other things that has happened. I said that I got involved and talked about money after [clears throat] after Nixon closed the gold window. But pretty soon after that we we weren't even allowed to own gold that time by that time because Roosevelt took us we you know made it illegal. But by 1975 you know gold was made legal. The Americans couldn't own it. So we've moved in that direction. We can buy gold now. So in a way an individual can go on to gold standard if they uh [clears throat] if they invest and they put away maybe a certain amount of money each time as a reserve against the investments they make they can go. So that that is a a good sign and it's a good sign now that some of the central banks are saying maybe to restore confidence maybe we ought to use it. It's worked for a couple years like a couple thousand years it's worked. So maybe they'll wake up. >> Yeah. Yeah. And that concern, I mean, it ties directly to this debate inside the Treasury itself. Economist Dr. Judy Shelton, longtime advocate of sound money, we've had her on this show, I know you know her. Uh she's proposed this issuing of a new Treasury uh trust bonds that that could be redeemed in either dollars or in gold. The idea is to restore credibility to US debt without abandoning the dollar entirely. I mean, supporters call it kind of a modern bridge back to discipline. Critics warned that it could expose how little gold actually backs the system. Um on this proposal in theory, I mean, you know, it gives investors the option to redeem in gold. Could that be a first step towards restoring confidence in in US debt or does it simply repackage the same fiat problem under a new label? >> It depends on how the final rules are made. I think the [clears throat] maybe the most practical way to gradually get into it is maybe issue bonds that were backed by gold, but to back the whole currency and all, but but even if you backed the bonds, people would rush there. They want the security and uh it uh but anything that would emphasize the importance of it I' I'd be for but you know I I I can't quite visualize exactly how some of these proposals will work. We've gone so far. uh you know the founders did find it complicated because they didn't think the federal government had the authority to mess around with the currency and they had u and they also said oh they said the states must use they could only use gold and silver as legal tender. So they assumed that would take care of everybody, you know. So, but they said they simplified it, but we're a long way off from that. But, uh, fortunately, you know, uh, people can try to protect themselves with gold. But I still say, you know, governments will do anything they want to do and they don't obey the law. We have to obey the law, but the government doesn't have to. So if if they have the if they if they obey the law that means they have to you you know have the gold there but they that they don't. So it's not easy. I still think that we have a lot more understanding to be ahead before [clears throat] the people will move in the right direction. I'm afraid that Marxists can win uh by uh causing chaos and then taking over. But I also think there's a growing number of people in this country that if you give them the option and a little bit of understanding that uh if they would opt for you you know a system of individual liberty as found in the constitution and uh that that to me would be a the proper way to go but right now we're facing up a major crisis. >> Yeah. And on that crisis I'll leave the viewers with this Dr. Paul because I know our time's almost done. I mean, I know it was just recently your 90th birthday. Congratulations. Happy birthday. You know, you've been in Congress a long time, whether it was by accident, as you said, or not. Um, you know, taking a look at where we're at right now, just talk to me about libertarianism. I mean, where are we with independence? >> Well, I [clears throat] think people are all born libertarian in a way. You know, even a small baby is independent-minded. And I [clears throat] think that most people like to be left alone. Teenagers in many ways like to be left alone. But uh it it uh the the the uh media the people who control the opinions are very much opposed to you know uh libertarianism uh because you know empires are built by lies. You have to lie to keep the empires going. And we have an empire. That's something that people we have to admit. We don't have like the United States or individual states that bring came together that we uh we have a you know uh [clears throat] been after we've been doing this for a long time and we're not moving in the right direction. >> Yeah. I mean, it's it's funny about that because I was going to say, I mean, if we start to look at the markets right now, it feels like the public agrees with libertarian principles, right? Less control, more freedom, yet this voting for bigger governments from both parties. I mean, does that mean that libertarianism has has to evolve or just outlast the collapse of the current order? >> Oh, [clears throat] it has to grow. And I think that's where I see it. I was uh given an opportunity to talk to a lot of young people during the presidential campaign and I would I was very pleased and I go to very liberal universities and I tried to simplify the message and and they were very positive. They like the idea of what civil liberties meant. And even when I said that, you know, we wouldn't have an income tax and uh and and uh they they they [clears throat] uh they would applaud that and they they were very positive. I said, "But you wouldn't have any welfare. The government can't take care of you. You can't keep what you earn." And and I said, you know, and they they they still maybe they didn't think it through, but they thought that sounded like a pretty good idea. So they don't understand the benefits because the greatest benefits in society has been the more liberty you have uh the more likely you'll have peace and prosperity and I work on that assumption. >> Yeah, nicely said. Uh what's your message to the next generation, the ones inheriting the debt, the inflation and and the loss of trust in institutions? How can they live freely and build real independence in a system that feels stacked against them? What would you say to them today? >> Well, unfortunately, they're going to have to go through the ringer. They're going to have to see the correction. The bills have to be paid. >> And it won't be paid by hard work and paying all the money that they owe. It's going to be paid by by chaos and getting paid on if anything off with uh money of no value. And it pretend. I mean, there's too many examples throughout history where that has happened. But so far people are so optimistic and even today people are still pretty optimistic about America you know they uh like this morning I thought news is terrible but the dollar run up in value you know which is which it seems contradictory but that's how strong the emotions are and also the people who control the media. >> Yeah. So >> that's it. >> Yeah. Good. We'll leave it at that. Dr. Ron Paul, host of the Liberty Report. Uh, thank you for this analysis. I appreciate your time today, of course, and and happy birthday again, doctor. >> Thank you very much. Nice being with you. >> Appreciate your time. All right, that was former Congressman Dr. Ron Paul, host of the Liberty Report. Now, we covered the Fed's $125 billion liquidity injection, the conflicting data on jobs and inflation, the constitutional questions before the Supreme Court. Once again, that is happening now. We're going to continue to keep an eye on that ruling. Clearly a critical moment for the US economy. What do you think? Is the Fed trapped? Is this stagflation? Is there a take on the future of gold here? Let us know your thoughts in the comments section. And if you want more interviews like this, make sure to like this video. Subscribe right here to Kiko News channel. Hit that bell icon so you never miss an update. I'm Jeremy Saffron. We're going to continue to keep an eye on these breaking stories. [music] Thank you for watching. We'll see you next time. >> [music] >> Heat. Heat.