05/12/10 – Rep. Ron Paul – The Scott Horton Show

Alright y'all, welcome back to the show, it's Antiwar Radio on Chaos 95.9 FM in Austin, Texas.
And our next guest is Antiwar.com's man in the House of Representatives.
He makes Thomas Jefferson look like James Madison.
It's Dr. Ron Paul from District 14 on Texas Gulf Coast.
Welcome back to the show, Ron.
Good afternoon, good to be with you.
Well, I'm happy to talk to you again.
So, sort of bad news with the watered-down version of the Audit Amendment passing the Senate.
But I thought I would start this interview off with a little bit of positivity, which is that, well, six months ago in the House of Representatives, Mel Watt and others were more than happy to carry Ben Bernanke's water and oppose your real Audit Amendment.
And yet in the Senate, not one senator dared to really come out against this audit.
And you get all the credit, you did it.
You have the whole country against the Federal Reserve now, and you have the Senate and the entire government running scared, Ron.
Congratulations.
Well, let's hope so.
So now this watered-down version of the amendment, the Audit Amendment, what exactly does it mandate?
Could you explain to us the difference between what your amendment had and what this does?
Well, I guess the best way to describe it, this does require disclosure of what they did in the last two years in the bailout.
So it's not a true full audit, and it's not ongoing.
It won't last into the next year.
It's just to disclose which companies and where the money went during that scramble to bail out our economy.
So it's a minor victory.
The biggest victory is a PR victory in that we have the American people now very much more knowledgeable about the Federal Reserve than ever before.
They know the Federal Reserve is powerful.
They create money, and they bail out their friends.
And I think that's the most important thing.
But the whole story about having a real audit is not quite over because it looks like it will not be put in the Senate bill.
It is in the House bill, the financial reform bill.
And they might have to have a conference.
If they do, then there'll be an argument over which version to use, the watered-down version.
Actually, they could use both because what was passed in the sentence, although it wasn't a true audit, it was worthwhile.
I wouldn't have been able to vote against it.
I just didn't like the process because some of the senators are already saying when supporters call in and ask the senator, why didn't you vote for Vitter's amendment?
Vitter introduced 1207, our bill, and they said, oh, well, we voted for Sanders' bill.
See, it sort of gave them political cover, and it made people feel better about it, and it confused the public.
But you don't have to get rid of what Sanders did, but it would be nice if in the conference we could get the House side of the full audit.
We still have a ways to go on that because they can avoid a conference if they want, and that raises other questions.
Yeah.
Well, I'm happy to hear you say that.
I guess I would have thought that if both houses had passed your version, then they would have ruined it in the conference.
But you're saying there's actually a possibility that the Senate version could be improved in the conference committee, huh?
Yeah, theoretically it is.
No, if Vitter's amendment, which is our bill, would have passed, it would have been harder, much harder.
They could, but it would have been harder to start messing around in the conference because it has such a high profile by knows what's going on.
Sometimes what they'll do in a conference is they will change things or add things that nobody knows about until a year later or something.
But this is being well watched.
But I think right now, let's say the conference was going on right now, we could raise a lot of fuss and get a lot of attention.
I think we wouldn't do any better than we did in the Senate and probably couldn't win the vote.
But once again, the important issue is putting the blame where it's deserved, and that is on the Federal Reserve for all the mischief they cause.
Well, you know, in your TV appearances lately, in your House floor speeches, you've been really emphasizing the currency crisis, as you call it, and you're saying we're already in one.
This is not we're in danger of having one.
Am I reading that right?
Yeah.
What does that really mean?
Well, I say the dollar is being devalued rather rapidly.
And the only long term traditional way of measuring the value of a currency is by gold.
And so, you know, we had the Fed come in in 1913, and the dollar gold ratio was 20 to 1, $20 could buy an ounce of gold.
And now it takes almost $1,250, you know, dollars to buy one ounce of gold.
So it's been devalued.
It's been devalued over 98%.
A devaluation means each dollar is worth less.
Actually, they're not dollars anymore.
Their Federal Reserve notes means promised to pay nothing.
Dollars have long been lost because dollars mean actually a way in silver.
But I draw the analogy to the early 1970s, when the Bretton Woods broke down, we devalued against gold.
But at that time, it wasn't done on a daily basis.
It was done deliberately by governments because they had fixed exchange rate.
But they devalued in 71 and 73 twice for a total of 18% devaluation.
And that ushered in that horrendous inflation of the late 70s, where prices were going up 15% a year.
Interest rates had to go up to 21% to really save the dollar.
My argument now is just in the last 10 years, we've devalued the dollar by 80%.
And that, to me, means that people, you know, in terms of the real measurement of the gold, they're rejecting the dollar, which if history proves is correct, history says this will translate into much higher prices in the not too distant future.
Well now, is it brilliant of Ben Bernanke to create all this money, to give it to the banks to fill up all their bad debts and cover all their losses, but then pay them to keep the money and not loan it out?
Because it seems like there's a little Ron Paul on his shoulders screaming about inflation and he's kind of taking it seriously.
He's going along this policy of creating all this money, but he's really not letting it all get out into circulation, if I understand right.
I think, I don't think he has a policy that said to the banks, do not let it go out.
I think the conditions are such that it doesn't go out.
Some people don't want to borrow money under these conditions.
Bankers have lost a lot of money, so they are much more cautious.
Regulators, especially in housing and other things where governments are involved, they've been stung too, because they were very, very loose.
All these things add up that it's much better for the banks to just take the money, which is practically free from the Federal Reserve, and then they go and they make money just by buying treasury bills or doing other things and make just a couple percentage points, but you can make billions and billions of dollars, and these banks are making a lot of money.
They're paying back these debts.
Even General Motors is paying back their debt by us giving them more money.
We buy their stocks and give them money, and then they pay back the loans, so it's all a gimmick, but it fits the benefits of banks to run this program.
It's funny, the way you talk about the way the money is going around, GM bailing out, it sounds like America giving all that money to the Germans to repay the French and the British after World War I, and then they ended up hyperinflating trying to pay everybody back.
Well, what about what we're doing right now?
We're bailing out Europe, but the market, and the reason I've been talking more about the currency is we did the bailouts for two years.
Now we're embarking on the bailout of Europe, and usually the dollar price of gold would just move with the stock market or the dollar, but now it moves totally independently.
It moves like it's a currency in itself.
It's always been a currency, but it was sort of in limbo for the last several decades.
It was only moving as strictly a commodity, but gold is both money and a commodity.
Now it's proving itself.
It's not moving up just because the dollar is going down.
As a matter of fact, the dollar is going up ordinarily.
That should make the price of gold go down, but people are buying gold because it's the ultimate currency, and people are getting frightened enough.
It doesn't take very much because there are trillions and trillions of dollars and other currencies around the world.
If you had just three or four or five percent of that saying, hey, we're getting a little bit nervous.
Why don't we buy a hard asset?
That's why I expect all the currencies of the world to depreciate against gold in the very near future, which means it's going to usher in a panic situation where prices are going to start to soar.
All right.
One last question.
I know you're in a hurry.
How would the U.S. government pay for its endless warfare without the Federal Reserve?
They can't do it.
They monetize that debt.
The next week, we have a supplemental coming up.
I don't know if you recall, but when Bush was fighting those wars, the Democrats condemned them because it was always emergency funding.
It was never through the budget resolution, but Obama is doing the same thing.
It's going to be sort of as a supplemental emergency, and then we'll pay for it, but there's no money in the bank.
Even if we raise taxes, there's no revenues to collect.
Revenues are actually going down because of the economy, so it has to be paid for by the Federal Reserve.
The Federal Reserve, directly or indirectly, will create money and credit and pay these bills, which just puts more pressure on the dollar.
We've gotten away with it for a long, long time, and the dollar's still better than the other paper currencies, but we're entering the stage now where all the currencies, especially the dollar now, is being devalued on a daily basis.
All right.
Thank you very much for your time on the show today.
Thank you very much.
I really appreciate it.
Bye-bye.
Everybody, that is Dr. Ron Paul, District 14 in South Texas.