04/21/14 – Charles Goyette – The Scott Horton Show

by | Apr 21, 2014 | Interviews

Charles Goyette, radio host and NY Times bestselling author, discusses his regular podcast program with Ron Paul; the risk of monetary failure from the unsustainable welfare-warfare state; how trillions in excess bank reserves are causing consumer price inflation; and why we need to repeal legal tender laws before the dollar collapses.

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All right, y'all, welcome back to the show.
I'm Scott Horton.
This is my show, Scott Horton Show.
Our first guest on the show today is Charles Goyette.
He is still America's most independent talk show host.
His website is charlesgoyette.com, and he's the author of The Dollar Meltdown and also Red and Blue and Broke All Over, which both of those things are exactly the things I really want to talk about on the show today.
Welcome back, Charles.
How are you doing?
Scott, it's great to talk to you, my friend.
Well, very happy to have you here.
And it's really great to hear your well, to hear you back on the radio at all.
And then the bonus is you're interviewing Ron Paul all the time.
I guess you guys do a short thing every day that plays on AM radios across the country and then the 15 minute or now half hour podcast every Friday, right?
That's basically it.
We actually do twice a day radio commentaries on about 125 stations around the country.
So most stations, they run them when they want, but usually they run one in morning drive and one in afternoon drive.
So just short packages that we do commentary on the things that are going on in the news.
It's a great deal of fun.
We do 10 of those a week, twice a day, five days a week.
And then we do the longer podcast, which is a chance to talk to Ron at length about the issues that are on the news.
And we just expanded that to add other guests in there as well.
So we spend 15 minutes or so with Ron and then 15 minutes or so with somebody else.
Most recently, people like David Stockman, former Reagan budget director, or Pat Buchanan is the current one that's up and available now.
And so it's a good opportunity to get, you know, to get more people in under Ron's umbrella and let them get heard.
Yeah, absolutely.
I mean, for me, it's so exciting, just kind of vicarious knowing that, I mean, it's the magic of AM radio.
I've always loved radio, you know, ever since I was a little kid.
And it's this is exactly why the vicarious thing about knowing somebody else just heard the thing that I just also heard that I thought was so important.
And I wish everybody else had heard too.
And then some people did and in that great.
And that's why I love about Ron Paul so much is that even though he's not perfect on everything, by my standards, I mean, 99.999 times out of 100, you know, you throw the dart at the board, he's going to get it right on virtually everything.
And with all this stuff going on, and then of course, you're no CNN, you know, hairdo either, you know, is what you're talking about, as well as he does.
So and just to imagine all the people, the strangers who accidentally are flipping through their dial, turn off the iPad, iPod for a minute and see what's on the AM radio for a moment and and hear you and Ron Paul twice a day, every day across the country like that.
I just think it's so great.
And we're so we're so proud of it.
You know, you're recruiting libertarians moment by moment.
I mean, it's, it's, you know, most of these most of these people, you can go through an entire American life and never hear, you know, the perspective of somebody that's interested in, you know, in protecting human freedom and advancing human prosperity.
Among free people, you never really hear that you just get, you know, the same, you know, the same status talking points everywhere you go from the left and the right status talking points all day all throughout the media.
And so now for, I guess the first time, and I mean, it's not as though we couldn't catch Ron Paul, but it was always just luck if you happen to see him on, I don't know, Neil Cavuto, if you were watching that, or if you happen to hear him someplace, you know, that's great.
And it was, it was fortunate.
It was lucky.
And during the presidential primaries in 2008, 2012, it was a lot easier to catch him.
But now you've got people that go through their daily routine.
You know, a guy gets up in the morning, he shaves at the same time, he goes to work at the same time, wife comes home, picks up the kids on our way home, whatever it may be day after day, after day on the issues that are that, you know, people are talking about are concerned about in the world.
On that day, they get a chance to hear a non statist, non, you know, non big government freedom oriented commentary, the sort of take on things that they just never hear.
So I think, you know, I think it's, it's tremendously effective, I think.
Hey, listen, so here's the other thing about it is that now the podcasts are running at antiwar.com on the blog there, and very happy to see you back there at antiwar.com.
And, and I do hope that that gives you extra little incentive to make sure and always cover some foreign policy on the show.
And you know, put foreign policy first, because it is the most important thing.
And one of the things you were talking about with Ron, in the last interview there, it started out about the Bundy Ranch and all of that.
But one of the things he said at the end was, at the end, toward the end of the interview, y'all were talking about just people's beliefs and attitudes about what to do in crisis.
Because as he put it, our current foreign policy and our current domestic policy, they're just not sustainable.
And pretty much everybody knows that nobody really knows exactly how the end is going to come or when it's going to come to the current system.
But we're pretty much everybody agrees where you know, a car with no brakes going downhill kind of a thing right now.
And, and so then the real question is, you know, what all we've got to do about it, or what to do when the crisis comes in order to prevent everybody from just making things worse.
And I guess I'll set up the point one more way.
And that is something that Pat Buchanan, who you just mentioned, is included in that next interview, you know, with Ron there, something he wrote about recently, is about the rise of ethno nationalism around the world, especially in response to the economic crisis, when people are more or less doing okay, or it seems like they're, they're on the ups, their resentments kind of subside.
But now the them and those and days and all the different people who are part of some other group, not us now, all of a sudden, they're the problem decide many billions of people around the world, apparently, start, you know, and also, it's a lot easier to pick on people who don't have power, like the minority group in your local country where you live.
And so people fall for that kind of thing a lot.
So I was hoping that you would have better recommendations for us than where it looks like we're going.
And maybe, you know, first of all, if you could convince the people, maybe just how bad the situation is that we need to be talking along these lines, if I can ask the question backwards.
Sure.
Well, I mean, clearly, there are so many fronts to talk about foreign policy, and so on.
But let me talk about the monetary front, because it is very clear, the monetary system is failing.
And for those that don't watch it, it may seem as though, well, Charles, if you say it's failing, it must be in slow motion, because I see little changes dated.
But for those of us that track this thing carefully, it's moving at, it's really moving at light speed.
And you see signs of it within the defiance of the rest of the world of America's monetary hegemony.
You know, you see, for example, in the sanctions on Russia, you see other strange bedfellows being brought together.
I mean, who would ever believe the close bilateral relationships and monetary relationships that are being developed between ancient enemies like China and Russia.
And yet they are as a defensive posture, since they both have a nervous eye cast over their shoulder at the United States and its military hegemony and the fraudulent monetary system that the world is up to its eyeballs in.
And, you know, none of these countries mind, you know, deceiving and defrauding their own people with their own fiat money, but they just ultimately don't want to be stuck too badly with ours.
And so you see, you know, we pass out sanctions willy-nilly as though it's the first tool of foreign diplomacy is to slap sanctions on somebody.
And so the countries that are the recipients of our sanctions are starting to find one another.
And you see, you know, you see bilateral multilateral deals, you see trading relationships between Iran and Russia that escape or in run the dollar.
It's hard to believe that anybody with any real knowledge of the importance of the dollar to what we have left of our prosperity would be in a hurry like our diplomats are to hasten its demise.
But the surest way, I mean, necessity is the mother of invention.
The surest way to accelerate the development of global alternatives to the dollar standard is to slap sanctions on, you know, major countries and major producers so that they have to find, they have to invent alternatives and whether they're, you know, primitive barter arrangements and we'll give you grain and you give us gold or we'll give you gold and you give us oil or whatever it may be, they will find solutions.
And those solutions are being developed under our eyes now.
So it's spelled, it's spelled the end of the dollar standard.
And you know what, just to harken back to what you've described earlier, the failure of the dollar standard is already baked into events.
I mean, the promises to pay that can't be met are very, very real.
There are people depending on governmental promises for their power bill, to pay their water bill, to pay their doctor, to buy their medicine, to pay their mortgage, to keep food on the table.
And those promises cannot be fulfilled.
I mean, it's just, you know, unless the laws of mathematics have been repealed, it's just impossible for the government to fulfill the exorbitant promises that it's made, yet people are depending on it.
So this spells the end of the current monetary regime, the current monetary situation.
And the question that you've asked is, then how do we emerge on the other side?
And it's not guaranteed.
It'd be very nice to think that, you know, we would see the failure of this statist failed monetary system, the failure of, you know, our costly, our bankrupting foreign policy and emerge on the other side with sound money and free people and a non-interventionist nation or a non-interventionist people that don't go interfering around the rest of the world.
But to tell you the truth, you've also dangled a hint in front of us, too, that, you know, that when trouble strikes, when a crisis occurs, that governments begin to look for, they begin to search for a scapegoat that they can blame for problems of their own making.
And this is a very dangerous period when a system breaks down like this.
Well, blame it on me, like this lousy outro.
We got to go to break.
We'll be right back with Charles Goyette, y'all.
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We got Charles Goyette on the line.
And I'm sorry, I asked a big, dumb, stupid, clumsy question at the beginning there about just how bad it is financial-wise, and just how bad it could be after the next big economic collapse, and then what we got to do about it, and how we're going to set about doing the right thing.
You know, Scott, it's my view that it's way too late, and I think this is what you're alluding to in the thread that you've identified in both the conversations with Dr. Paul and Pat Buchanan, that it's far too late after the crisis to build a group of people that really understand the nature of the crisis, how we got into it, that it didn't just happen because of the phase of the moon, or Jupiter transiting the 10th house, or whatever it was, that this is the consequence of bad policies.
It is far too late after the crisis to begin to educate people, because something else begins to evolve to take its place immediately.
And that has to be the work of your listeners and people that understand the nature of the problem before it collapses.
And so this puts a heavy burden, I think, on all of us that are concerned with human freedom and human prosperity.
It puts a heavy burden on us to improve our own understanding of the way liberty works, and to share this understanding with as many people as possible as quickly as we can.
We don't have to have a majority, but we have to have people of clear insight that understand the underlying principles so they aren't dissuaded or they aren't susceptible to the sleight of hand of the next status that comes along with the magic solution to all of our problems if we just turn all of the power of our lives over to him.
So the job now, during the decay, is to awaken people to what we need to do in the aftermath of the decay that is already set in process.
In other words, it can't be redeemed.
American foreign policy can't be redeemed.
America's monetary recklessness.
It's too late.
This is the hangover.
We're headed into the hangover.
The problem could have been solved if we didn't drink as much last night, but it's too late when you get into the hangover phase.
Well, that's where we are.
That's why our economy has been so broken and so crippled.
We're in the hangover phase, and so we need to know what to do and why freedom works, why free markets work, why central planning always fails, why control of prices and price interference always makes situations worse, because these are the first tools of the status.
On the other side of this, we will be presented the opportunity to have more statism, more price controls, price intervention, central economic planning by the very same kind of authorities that got us into this mess to begin with.
So we really need people to begin to learn to understand why the principles of freedom service well.
Well, this is one good thing about having the Democrats win in 08, just a couple of weeks after the stock market crash there, was that if McCain had won, they were already trying to push the myth that George Bush was somehow Ron Paul, and that we had had eight years of small government libertarianism, and that was what had caused the crash.
But the election of Obama really killed that fake narrative, because you just can't get away with that at the same time you're calling him FDR, that you're going to say that this is still the free market when everything is going the way that it is.
And yet, you know that it's kind of hard for people to get over that on the right and the left, too.
I mean, it's just the assumption is that whatever went wrong, it was the unregulated part that got away.
I mean, in Charles, seriously, think about what you're saying.
When you say what we need is free markets, you got to understand why free markets work.
You're asking people to believe that if you give corporate chieftains morally way to get away with murder, they'll get away with less murder somehow magically.
That's what they hear you say on the right and the left.
So what about that?
What about accountability for the people who create these terrible crises for us?
Well, I mean, I think they should be accountable.
And when they make reckless decisions, they should go bankrupt.
And their shareholders should suffer severe pain because they put, you know, incompetence in charge of their affairs.
But instead, since it's not a free market economy, we, you know, we ride to their rescue with your money in mind.
They dip into your wallet and your listeners' wallets and my wallets to bail these people out from their mistakes.
Now, how does any organism improve if it's insulated from the consequences of its very own mistakes?
But of course, that's what the Fed does in the economy and what Congress does.
They let boneheads make mistakes because, look, you know, Scott, it's exactly like people investing in Greek debt or Ukrainian debt.
They don't care that the risk is too high.
They don't care that the return is high, the interest return is high, because it reflects the untenable risk involved in loaning to governments like Ukraine that have already defaulted a couple of times to the IMF.
They don't care.
The interest return is high, and then if Ukraine can't pay back its bankers, it's okay because the IMF will use money laundered from the American people through the IMF to pay the banks back themselves.
So there is no risk to them.
So they have erected a monetary and investment, a political and business system of corporate fascism in which, you know, the profits are privatized.
When they make a profit, they keep it.
But the losses and the risks are socialized, and you pay for the losses.
All right.
Now, I saw this Doug Casey video that was supposed to scare the crap out of me, and it kind of did.
And it was along the lines of what you write in your book, The Dollar Meltdown, that, you know, yeah, we have our bubble crash, bubble crash, bubble crash because of the Fed, the boom and bust.
But you can only abuse that for so long before actually people just quit believing in your phony, crappy paper money at all.
And then you have a situation like Weimar Germany or perennial Argentina or Zimbabwe or something where all markets and contracts are broken in every way because the money just becomes worthless.
And so that's a lot different than a dotcom crash or 2008 crash where, hey, at least they can inflate another bubble, if not let us have a sound economy.
At that point, there is no inflate another bubble.
At that point, it's kind of start over from scratch.
But you think that that's the danger that we're really in here, not that we're facing another stock market bubble crash, but that we're facing a dollar bubble crash and that really not just the end of hegemony.
What you're saying that means is basically hyperinflation, the end of the greenback.
It is.
This is the biggest of all bubbles.
I mean, it's one thing to have a dotcom bubble and the damage is more or less limited.
I suppose you could say it's limited.
The dotcom bubble cost Americans trillions, five trillion dollars roughly just in the stock market.
The housing bubble cost them seven trillion.
But the cost is much bigger than that.
I mean, millions of unemployed.
You have depression era levels of unemployment to this day.
You had millions, what, four million homes foreclosed on.
I saw the other day that over nine million homes are still seriously underwater.
People use the savings of a lifetime to keep afloat.
There goes what hope for retirement they had.
So it's more than just the loss.
But this bubble is the biggest of all.
This is a global bubble.
It's not just the United States that is printing money willy nilly.
It's all the central banks of the world that have blown up their balance sheets to extraordinary heights.
And so it is a systemic crisis of the monetary system.
And we see the evidence that it's going to break in.
Well, I'll tell you, since you're coming up on a break, I guess I won't tell you.
But it is a couple of minutes here, two and a half, three minutes.
OK, well, very vaguely or just generally, all of this money printing has been has been more or less inert.
In other words, it is the money has been printed.
It has had it.
It's not just shrink wrapped and sitting in the basements of the Fed.
It's been used to buy things, buy mortgage securities, take these mortgage securities that are troubled off the balance sheet of the bank.
So great for them and put it onto the balance sheet of the U.S. dollar to buy the downgraded debt of the U.S. Treasury.
All of that money, though, has been sitting in just humming about ready.
You know, it's been in a containment unit.
But now we see the signs of it leaking out.
Loans, bank loans, commercial loans, commercial leases are beginning to grow.
And when those things happen, that's a sign of that money beginning to enter the general consumer economy and to begin to bid up prices.
That's why you see prices of virtually everything starting to move.
Beef really high.
Oh, it's just the drought.
OK.
Coffee really high.
Oh, it's just the drought or it's the coffee.
OK.
That's just OK.
Rent prices.
Oh, rent.
That's the freeze.
It's always something.
But prices are beginning to start to tick up now.
And we're in the very, very earliest stages of this money beginning to work its way of the trillions of dollars of the two and a half trillion dollars of adjusted bank reserves beginning to find their way into the consumer economy now to bid up the prices of things that we all purchase every day.
And then so you think it's already a done deal that it's going to come to that where the dollar will just break and we'll have to start using alternative currencies and start from scratch with the economy?
I mean, obviously, there are a lot of factories that will still be sitting on their foundation.
So it's not like we'll have nothing.
Yeah.
Yeah.
And, you know, Social Security recipients may still get their, you know, eight hundred or twelve hundred dollar check, but it won't be enough to buy them what it bought last year.
And so the crisis gets more severe.
The living standards of the people will decline very, very clearly.
And yes, it's true that some people can continue to still use the dollar, even if we conform.
And this has been the case in prior inflations of the country.
People still continue to use the dollar.
But, you know, we have all the the elements of a police state, all the infrastructure in place already.
And so what happens is when people begin to try to find a more sound, a more dependable alternative to a failing currency.
And that's when the elements of the police state kick in to force people to to use the state's currency.
Look, there's no point in the state inflating anymore.
There's no point in the state printing funny money if people refuse to use it.
It's only the people begin holding that money and letting it depreciate, letting the purchasing power evaporate while it's in their pocket or in their bank account or in their piggy bank that makes it worthwhile for the state to engage in this activity.
So at some point, as people begin to evacuate the state's money, as they begin to leave, the state has to begin to implement police state powers to force people to continue to use its currency rather than an alternative.
This could be a very ugly period in the in the affairs of a culture.
Yeah, well, and that's where it goes back to, you know, when it's really a crisis, you know, what are people going to think?
That prices keep rising, so they better keep printing even more money so they can give some to me so I can afford these incredibly rising prices.
They better use their power to put a cap on prices.
It's unfair to charge them more than ten dollars for a loaf of bread.
And you know how people are when, you know, especially when it comes in a crisis.
Like you're saying, we've got to have people, you know, a bit inoculated from from that kind of that kind of fear based thinking in a crisis like that.
But so now here's where I'm really going with this, though, is, you know, if everybody turns on the state and the Wall Street bankers, that's fine by me, the militarists and all that.
But what I'm really worried about is people turning on each other.
And, you know, think back to 2006.
That was supposedly the height of the bubble, right?
That was the good times.
And yet the good times meant extra Mexican immigrants coming to frame houses.
And so, you know, Lou Dobbs and all of those guys and I mean, the entire right wing went on a holy jihad against Mexican immigrants.
I mean, they're so easy to pick on.
Nobody can even understand a thing that they say, you know, and just they're just and it's so easy for them to to act just like that.
Nobody even really calls them on it or they do.
But to no effect, they get to just, you know, completely run rampant, scapegoating the weak.
And I just wonder whether, you know, you think we got a prayer or whether, you know, this dollar breaks, this society is going to tear itself apart, too.
Oh, sure.
It's inevitable that it will tear itself apart and they will probably, you know, there'll be a lot of anger and resentment at the wealthy.
So instead of targeting the people that are the cronies that are the beneficiaries of illicit, of ill-gotten gains, they'll target people that have, you know, real real wealth that they actually created, that they deserve, that they saved, begin to deplete it so they could distribute it to the large populous numbers where the electoral support lies.
So, yeah, it becomes, listen, this becomes a this becomes a war of all against all.
And, you know, the world has gone through this so many times before you see it.
You know, we have living laboratory experiments of this going on in places in South America right now, like, you know, Venezuela and Argentina.
And, you know, before long, you know, then thugs start beating up other thugs in the street and people go out and protest and they demand the government give them something.
But the government doesn't have anything to give.
The only things the government ever gives away are things that it steals from somebody else.
So the more severe the crisis gets, the more desperate the political actors, the governing classes become to, you know, to keep the mobs on their side, to buy their affection.
So they have to go out and start stealing, you know, more and more.
And all of a sudden, all the things that make for a prosperous economy, like the ability to save, are endangered, are threatened.
The stability of the currency is threatened.
The options for alternatives to an unstable or irresponsible, irresponsibly managed currency threatened.
Also, all the things that produce wealth come under attack.
And, you know, the state can certainly divide wealth, they have the bigger, they have the most guns, they can divide the wealth.
But once the wealth is all divided, the pot is empty.
All right, so what would you do then?
Just pull the e-brake and that's it.
No more Pentagon.
No more inflation.
Abolish the central bank.
Everybody's got to have a hundred percent gold standard from now on or you go to jail.
And I don't want to do that.
I mean, I don't, I don't want, I don't want to impose a monetary system on the people.
Look, we know from the economic behavior of people over the course of thousands of years, we know from principles like Gresham's law, that bad money drives out good when, when there's a failed or an inferior money.
Yeah, we know that people act in their own self-interest.
Get rid of the, the legal tender laws.
Let people use what they want to trade in.
And then Paul Krugman and Ben Bernanke and Janet Yellen could trade in special drawing rights of the IMF if they want to.
I don't think their grocer's going to want to take it.
I don't think anybody's going to want to write a contract in those terms because it's just another fiat, another made up money.
But let alternative currencies begin to thrive.
And believe you me, the wheat gets separated from the chaff very, very fast.
But the legal tender laws are an impediment to that right now.
And so they badly need to be repealed.
Or what happens is we find that in the failure of the monetary system, in the failure of the dollar standard, there is no alternative that enables commerce to keep on ticking.
Other inflations that we've talked about, you know, inflations in the banana republics and so on, at least the people have, for all of its failings, have had the dollar in the background so they could somehow keep, you know, they keep commerce going.
That was in the Weimar Republic, you know, there was the pound sterling that people were able to use to keep commerce going to some extent.
In the United States, it's almost, it's virtually illegal to try to use another standard for commerce.
So the courts will not, you know, will not enforce contracts in non-dollar denominated terms, the way or gold terms, the way they will dollar contracts.
So the legal tender laws make it very hard for a robust alternative to a failing currency to develop.
Yeah, and you know, I don't know whether Bitcoin is the most saleable commodity in any given market or not, but they didn't really get a chance to see in the market up against the Federal Reserve note because the government ruled, right, a court upheld the IRS or the, at least the IRS regulation is that it's not a currency, it's a commodity, and it's taxed like all the rest.
Yeah, and some commodities are taxed even worse, you know, the taxation on gold is even extra punitive.
I mean, they say it's a commodity like, I don't know, cotton balls from Johnson & Johnson in your medicine chest.
They say it's a commodity like any other, but for some reason, this particular commodity has to be treated to extra severe taxation.
So you can see the war against the, you know, sound currency, sound monetary alternatives already in development in this.
Right.
All right.
Hey, listen, I've already kept you away over time.
Thanks so much for your time, Charles.
I'll let you go.
Scott, great to talk to you.
You do great work.
Appreciate it.
See you.
All right, everybody.
That is the great Charles Goyette.
CharlesGoyette.com is his website, and you can sign up for his financial newsletter and also read his great books, and they're really great too.
The Dollar Meltdown and Red, Blue, and Broke all over.
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Hey, y'all.
Scott Horton here.
Are you a libertarian and or a peacenik?
Live in North America?
If you want, you can hire me to come and give a speech to your group.
I'm good on the terror war and intervention, civil liberty stuff, blaming Woodrow Wilson for everything bad in the world, Iran, central banking, political realignment, and, well, you know, everything.
I can teach markets to liberals and peace to the right.
Just watch me.
Check out scotthorton.org slash speeches for some examples and email me, scott at scotthorton.org for more information.
See you there.

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