Time	Speaker	Text
00:33:11	>>	WINCHESTER, VIRGINIA, GO AHEAD.
00:33:13	>>	TELL ME, WHAT IS THE OFFICIAL U.S. GOVERNMENT VALUE OF GOLD NOW? IT'S HEARD IT'S 42, AND IF THEY WOULD CONFISCATE, IS THIS THE PRICE AT WHICH THEY'D CONFISCATE IS IT T?
00:41:47	>>	ON THE POINT, THE ASKING ABOUT THE SCHOOL OF ECONOMICS THAT HAS BEEN INCREASINGLY PREVALENT AMONG YOUNGER PEOPLE NOW. THE AUSTRIAN SCHOOL OF ECONOMICS, PEOPLE TAKING A BIGGER INTEREST IN THIS, AS THE U.S. HAS APPRECIATED. AND THERE WAS A WELL KNOWN MEMBER OF THE U.S.A. RE AN SCHOOL. HE DEFERED FROM SOME OTHER ECONOMIST AGREED. BUT HE AGREED THAT THE BANK IT WAS THE RULE OF THE PART. HE GOT RID OF THE INFLATION AIR CONTINUED AS OF THE CENTRAL BANK WAS TO ALLOW PRIVATE BANKS TO ISSUE THEIR OWN CURRENCIES. THAT NEED NOT BE KNOCKED BY GOLD. I THINK THAT'S BUT THE SPIRIT OF THE PROPOSAL I THINK IS CERTAINLY CORRECT, THE THRUST IS CONTRIBUTE AL. TO LOCAL LOU, THAT WAS NUMBER ONE. NUMBER TWO, A GOAL STANDARD IN THE 20TH CENTURY, AND AS MOST OF US WOULD BELIEVE THE LEADER OF THE AUSTRIAN SCHOOL OF ECONOMICS, MOST OF US TAKE OUR MAIN INFLUENCES FROM HIM. PEOPLE WHO CONSIDER THEMSELVES AUSTRIAN ECONOMICS, ECONOMISTS. I THINK HIS NAME NOW IS BECOMING MORE AND MORE WELL KNOWN, AND HE'S GETTING THE READY THAT IS DUE HIM, EVENING AMONG SOME ACADEMIC ECONOMISTS.
00:43:25	>>	WE'VE BEEN TALKING WITH JOSEPH SALERNO ABOUT 1968 AND ITS IMPACT ON THE GOAL STANDARD. THANK YOU VERY MUCH FOR BEING ON THE PROGRAM.
00:43:35	>>	WE WANT TO REMIND YOU THAT TODAY ON C-SPAN, WE ARE GOING TO BE COVERING THE D.N.C. RULES COMMITTEE MEETING TO SEE IF THEY DECIDE WHAT TO DO ABOUT THE DELEGATE VOICES IN MICHIGAN AND FLORIDA. RIGHT NOW THAT ARGERS OF EVERYCOUNTVOTES COUNTY COUNTY ARE IN FRONT OF THE HOTEL WHERE THE RULES COMMITTEINGLY IS HELD. THESE PEOPLE ARE TO LET THE PEOPLE ON THE EN SIDE, KNOWING WHAT THR DOING. THE FIRST IS ON WOODLEY SIDE. IN SPEAKER IS ON JUNCTION AVENUE AND CALVERT STREETS. THE ATTENDEES, THE PROTESTERS HAVE BEEN GATHERED OUTSIDE AT ABOUT 9:00, THE RALLIES AND ACTIVITIES WILL BEGIN SPEAKING. THEIR SPEAKERS INCLUDE STEPHANIE RUBSJOFFER JONES. REPRESENTATIVE FROM OHIO. SHE'S SCHEDULED AT ABOUT 1:00 THIS AFTERNOON. LATER ON THIS MORNING, THEY TEND TO HEAR FROM ERIC MASSA, WHO IS A NEW YORK STATE DEMOCRATIC CANDIDATE, AND KIM GANDY, THE PRESIDENT OF N.O.W., ONE OF THE COSPONSORS OF THE PROTEST AND RALLY THAT IS GOING ON OUTSIDE THE D.N.C. RULES AND BEST LAWS COMMITTEE MEETING HAPPENING HERE IN WASHINGTON, D.C. THE CAMPAIGN GOES ON TOMORROW IN PUERTO RICO. THEY ARE GOING TO BE GOING TO THE POLLS. ONE OF THE HEADLINES IN THIS MORNING'S PAPER COMES FROM "THE MIAMI HERALD", PARTIES EMBRACE PUERTO RICANS. CENTRAL FLORIDA'S PUERTO RICAN COMMUNITY COULD BE AN ELECTION BATTLEGROUND IS ON SUNDAY, IF ISLAND RESIDENTS HAVE THEIR SAY. ALSO, THIS MORNING FROM THE FRONT PAGE OF THE "BALTIMORE SUN." DEMOCRATS COMPETE TO AN ISLAND BEAT. THIS IS FROM SAM BRAWN, OHIO,
00:00:10	HOST	WE WRAP UP OUR DISCUSSION TODAY ABOUT 1968 AND ITS IMPACT ON VARIOUS ASPECTS OF OUR SOCIETY WITH JOSEPH SALERNO. HE HAS AN ECONOMICS PROFESSOR FROM PACE UNIVERSITY COMING FROM -- COMING TO US LIVE FROM MONTGOMERY, ALABAMA. HE WILL TALK ABOUT THE IMPACT ON THE GOLD STANDARD. FIRST, EXPLAIN TO US, WHAT IS THE GOLD STANDARD AND WHAT WAS 1968 SUCH A PIVOTAL YEAR FOR THE GOLD STANDARD IN THE UNITED STATES?
00:00:25	GUEST	AFTER WORLD WAR TWO, IT WAS REAL IMPLEMENTED. IT HAD BEEN ABOLISHED IN ALL MAJOR COUNTRIES IN THE 1930'S. HOWEVER, THE GOLD STANDARD THAT WAS IMPLEMENTED AFTER WORLD WAR II WAS KNOWN AS THE BRETTON WOODS SYSTEM. IT WAS NOT A CLASSICAL GOLD STANDARD. IT WAS A WATERED-DOWN GOLD EXCHANGE STANDARD. WHAT OCCURRED WAS THAT THE U.S. PLEDGED TO CONVERT GOLD WERE CONFERRED DOLLARS INTO GOLD AT THE FIXED PRICE OF $35 PER OUNCE. IT MADE A SOLEMN PLEDGE TO ALL OTHER COUNTRIES THAT IT WOULD DO SO IN 1944 DURING THE MEETINGS. FROM 1946 ONWARD, THERE WAS THIS LINK BETWEEN GOLD AND THE DOLLAR. ALL OTHER COUNTRIES THEN AFFIXED TO THEIR EXCHANGE RATES TO THE DOLLAR.
00:01:23	HOST	OF THE THEORY OF BASING THE DOLLAR RATE ON COLD -- ON A GOLD STANDARD WAS TO ESTABLISH WHAT? STABILITY IN GLOBAL ECONOMIES?
00:01:38	GUEST	A STABILITY OF THE MONEY SUPPLY IN THE SENSE THAT THE MONEY SUPPLY COULD INCREASE VERY SLOWLY AS IT DID DURING THE 19TH CENTURY AS NEW GOLD WAS MINED AND SOME OF ITS FOUND ITS WAY INTO MONETARY VIEWS. OTHER GOLD FOUND ITS WAY INTO THE INDUSTRY AND JEWELRY. WE HAD A FALL IN PRICES. THAT IS, THE CAPITALIST ECONOMY PROVIDED A CORNUCOPIA OF INCREASED SUPPLIES OF GOODS AFTER THE CIVIL WAR IN THE UNITED STATES AND OTHER INDUSTRIALIZED COUNTRIES. PRICES ACTUALLY FELL UP UNTIL WORLD WAR ROMAN ONE -- WORLD WAR I.
00:02:29	HOST	AND ALLOWED THEM TO INFLATE PRICES THROUGH THE EXCESSIVE ISSUANCE OF PAPER CURRENCY GRID EXPLAIN HOW THAT WORKS AND WHAT LED US UP TO THE 1968 REPEAL.
00:02:41	GUEST	THE GOLD STANDARD IS KNOWN IS -- KNOWN AS GOLDEN HANDCUFFS. IT TIES THE GOVERNMENT'S HANDS. THE GOVERNMENT WAS COMPELLED TO ONLY ISSUE DOLLARS WHEN AN OUNCE OF GOLD WOULD BE BROUGHT TO THE TREASURY OR THE BANKS. THE RATE DURING THE 1900S WAS $20 FOR AN OUNCE OF GOLD. A NEW $20 BILL COULD ONLY BE ISSUED IF AN OUNCE OF GOLD WOULD WOULD -- AN OUNCE OF GOLD WOULD FALL INTO THE TREASURY.
00:03:17	HOST	WHAT WAS THE GOLD STANDARD REPEALED IN 1968?
00:03:21	GUEST	THIS HAS TO DO WITH A WATERED-DOWN VERSION OF THE GOLD STANDARD. TO MAKE A LONG STORY SHORT, ONLY THE U.S. DOLLAR WAS CONVERTIBLE INTO GOLD, WHICH MEANT THAT OTHER EUROPEAN COUNTRIES WERE WILLING TO HOLD DOLLARS BECAUSE THEY BELIEVED THE DOLLARS WERE AS GOOD AS GOLD. AFTER WORLD WAR II, THE U.S. HAD TWICE THE AMOUNT OF GOLD THAN THE LIABILITIES THAT THE FOREIGN COUNTRIES HELD IN THE FORM OF DOLLARS. U.S. CITIZENS WERE NOT ALLOWED TO TURN IN THEIR DOLLARS FOR GOLD. THAT MEANT THE $25 BILLION WORTH OF GOLD THAT THE GOVERNMENT HELD COULD GO TO PAY OFF THE APPROXIMATELY $12 BILLION OF LIABILITIES THAT FOREIGN GOVERNMENTS AND FOREIGN CENTRAL BANKS WERE HOLDING. EVERYONE WAS VERY CONFIDENT AT THAT POINT THAT THE U.S. GOVERNMENT WOULD BE ABLE TO PAY OFF ITS GOLD LIABILITIES. AFTER 1958 FOR VARIOUS REASONS, THE U.S. GOVERNMENT BEGAN TO INFLATE THE MONEY SUPPLY AND THAT PARTICULARLY -- THAT PARTICULARLY ACCELERATED DURING THE WAR ON POVERTY. THE DOLLAR LIABILITIES PILED UP IN FOREIGN TREASURIES AND CENTRAL BANKS. THOSE LIABILITIES VERY SOON EXCEEDED BY GREAT AMOUNT, THE AMOUNT OF GOLD THAT THE U.S. HAD. THE U.S. GOLD STOCK HAD SHRUNK TO SOMETHING LIKE $12 BILLION IN 1968. WE LOST HALF OF OUR GOALS -- HALF OF OUR GOLD PAYING OUT THESE LIABILITIES. DOLLAR LIABILITIES HELD BY FOREIGN GOVERNMENTS AND CENTRAL BANKS HAVE THE RIGHT UNDER THE BRETTON WOODS SYSTEM TO TURN THESE DOLLARS INTO GOLD AT ANY POINT. THERE WERE FREE GOLD MARKETS OPERATING IN LONDON AND ZURICH. THE PRICE OF GOLD WENT ABOVE THE $30 PER OUNCE MARK. THAT MEANT THAT THE DOLLAR WAS LOSING VALUE IN TERMS OF GOLD. AT THAT POINT, THE U.S. GOVERNMENT AND SOME OTHER MAJOR INDUSTRIAL GOVERNMENTS GOT TOGETHER AND THE U.S. MORE OR LESS IMPOSED A SOLUTION. THAT IS TO SAY THAT THEY WOULD NO LONGER PROVIDE THE DOLLARS NECESSARY TO KEEP THE GOLD PRICE ON THE FREE MARKET AT $35 PER OUNCE. THE DOLLAR HAD DEPRECIATED. THE U.S. GOVERNMENT COULD AGREE TO CONVERT SMALL AMOUNTS OF DOLLARS FOR FOREIGN GOVERNMENT. THE REASON THAT FOREIGN GOVERNMENTS ACQUIESCED IN THIS IS BECAUSE IT WAS THE PROTECTOR RECANTS THE SOVIET UNION. WE BLACKMAILED GERMANY. WE HAD A LOT OF DOLLAR LIABILITIES INTO NOT CONVERTING THOSE INTO GOLD. WE SAID THAT IF YOU CONVERT THEM INTO GOLD, WE MAY BE FORCED TO REMOVE OUR NUCLEAR UMBRELLA FOR IT THAT WAS IMPLICIT. THEY DID NOT COME OUT AND SAY THAT. FRANCE HAD STARTED ITS OWN NUCLEAR FORCE BECAUSE IN THE MID-1960S, THIS WAS ALREADY BEING EXERTED BY THE U.S. GOVERNMENT. AT THAT POINT, THERE WAS WHAT WAS CALLED A TWO-TIERED GOLD MARKET. IT COULD FLUCTUATE ABOVE THE FIXED $35 PER OUNCE. ANY TIME THE PRICE OF ANYTHING GOES ABOVE THE FIXED PRICE, YOU HAVE A DEPRECIATION OF THE DOLLAR. SO, THE GOLD JUST BECAME A COUNTER AMONG CENTRAL BANKS. THERE WAS NO TRUE GOLD STANDARD.
00:07:03	HOST	WHOSE IDEA WAS IT TO REPEAL THE GOLD STANDARD?
00:07:07	GUEST	IT WAS THE TREASURY OFFICIALS AND BANK OFFICIALS HERE IN THE UNITED STATES. AS I SAID, THE U.S. HELD ALL THE CARDS. WE MORE OR LESS AND FORCED THIS NEW ARRANGEMENT ON OTHER GOVERNMENTS, PARTICULARLY GERMANY.
00:07:28	HOST	WE'RE TALKING ABOUT THE 1968 IMPACT OF THE GOLD STANDARD WITH JOSEPH SALERNO, AN ECONOMICS PROFESSOR FROM PACE UNIVERSITY. THE NUMBERS ARE ON YOUR SCREEN. YOU CAN ALSO EMAIL US A QUESTION OR COMMENT. TAKE US FROM 1968 TO WHERE WE ARE NOW. HOW HAS THE REPEAL OF THE GOLD STANDARD AFFECTED THE ECONOMY, BOTH HERE IN THE UNITED STATES AND AROUND THE WORLD.
00:08:09	HOST	IN 1971, WE OFFICIALLY CLOSED THE GOLD WINDOW. PRESIDENT RICHARD NIXON ANNOUNCED TO THE WORLD THAT IT WOULD RENEGED ON ITS SOLEMN PLEDGE TO CONVERT DOLLARS INTO GOLD AT ANY PRICE. WE CLOSED THE GOLD WINDOW. FROM 1971 ONWARD, WE HAD WHAT WAS CALLED THE GREAT INFLATION AS A RESULT. PRICES SKYROCKETED. PRICES FROM 1982 UNTIL TODAY'S PRICES, YOU WILL FIND THAT FROM 1982, IT HAS BEEN CLAIMED BY MOST MAINSTREAM ECONOMISTS AND FINANCIAL WRITERS THAT WHILE THE FED FINALLY LEARNED HOW TO OPERATE A SYSTEM THAT WAS NOT TIED TO GOLD, AFTER THE GREAT INFLATION OF THE 1970'S, THE FED CAME AROUND AND THEY UNDERSTOOD HOW TO MANIPULATE INTEREST RATES SO THAT PRICE STABILITY WAS MORE OR LESS AND SHORTS. IF YOU LOOK AT 1982 AND COMPARE PRICES TO TODAY, YOU'LL FIND THAT PRICES HAVE RISEN BY 4.5 TIMES. THE MY SUPPLY HAS INCREASED. MONEY SUPPLY HAS INCREASED BY FIVE TIMES. THERE HAS BEEN AN EXPLOSION IN THE MONEY SUPPLY. THE REASON BEING THAT THERE WAS NO RESTRAINT FROM GOLD. WE HAD A PURE PAPER MONEY. JUST TO MAKE THE POINT, ANYONE WHO HAS A MONOPOLY ON ANYTHING WILL USE THAT MONOPOLY TO THEIR OWN ADVANTAGE. THE U.S. GOVERNMENT, FOR EXAMPLE WILL ALWAYS WANT TO PRINT MORE MONEY BECAUSE INCREASING SPENDING WITHOUT RAISING TAXES GETS YOU MORE VOTES.
00:09:59	HOST	WE'RE TALKING ABOUT THE IMPACT OF THE REPEAL OF THE GOLD STANDARD. OUR FIRST CALL COMES FROM MOUNT PLEASANT, SOUTH CAROLINA OR ONE FOR REPUBLICANS. CALLER: GOOD MORNING. WE DEFINITELY LOVE MCCAIN OUT HERE IN SOUTH CAROLINA. I AM NOT VERY HAPPY WITH ANYBODY RUNNING FOR PRESIDENT GRID THAT IS NOT WHAT WE'RE TALKING ABOUT. THE GOLD STANDARD HERE -- I'VE READ SEVERAL YEARS AGO THAT GERMANY ACTUALLY HAS A GLUT OF GOLD AND WHAT SCARES ME ABOUT THAT IS WHAT WE MAINTAINED THIS GOLD SYSTEM, IT REALLY TAKES PEOPLE OUT OF THE PICTURE. THE PRIORITY SHOULD BE EVERYONE'S PRIORITY. IT PUTS US ON A FALSE SENSE THAT GOLD, MONEY, DOLLARS, BLOOD DIAMONDS, ALL OF THAT HAS VALUE TO IT. I WOULD LIKE TO SEE OUR NATION AND OUR WORLD IF WE ARE AND A GLOBAL ENTITY TO BE ABLE TO GET AWAY FROM THAT TYPE OF STANDARD AND GO WITH SOMETHING LIKE CARING FOR ONE ANOTHER AND LOVING ONE ANOTHER. PUTTING OUR PRIORITY ON A MINERAL IS OBSCENE.
00:11:11	GUEST	THE GOLD STANDARD WAS CHOSEN BY INDIVIDUAL PEOPLE OVER CENTURIES. MONEY CAME INTO BEING THROUGH FREE EXCHANGE AND VOLUNTARY EXCHANGE. PEOPLE WANTED TO FIND AN ITEM THAT EVERYONE WOULD EXCEPT FOR IT OVER THE YEARS AND ACROSS MANY CONTINENTS, GOLD AND SILVER, THE PRECIOUS-METALS EMERGED VOLUNTARILY FOR PEOPLE AS THE PREMIER MEDIUM OF EXCHANGE FOR MONEY. IN RESPONSE TO THE LAST CALLER, I THINK HAVING A MONOPOLY GOVERNMENT PRINT PAPER MONEY REMOVES MONEY MUCH FURTHER AWAY FROM PEOPLE. GOLD ITSELF IS ACCEPTABLE THROUGHOUT THE WORLD. IT WAS ACCEPTABLE THROUGHOUT THE WORLD. PEOPLE WHO FELT PERSECUTED COULD SIMPLY SELL OFF THEIR BELONGINGS, ACCUMULATE GOLD, AND LEAVE. GOLDEN SHORT A FREE CHOICE.
00:12:08	HOST	NEXT UP IS A CALLER FROM NEW YORK ON OUR LINE FOR DEMOCRATS. CALLER: I'M A FIRST-TIME CALLER. I WATCH C-SPAN AND I HAVE WATCHED IT SINCE THE LATE 1970'S. I LOVE IT. NOW MORE THAN EVER. I WANT TO SAY -- I WANTED TO ASK -- YOU MIGHT HAVE COVERED THIS -- WHAT IS A DOLLAR WORTH TODAY? WHAT IS THE DOLLAR WORTH? YOU HEAR THAT IT IS WORTH NOTHING. THAT IS ONE QUESTION. ANOTHER QUESTION IS, WHERE DO YOU SEE THE ECONOMY GOING AS FAR AS THE DOLLAR IS CONCERNED?
00:12:53	GUEST	A DOLLAR IS WORTH WHAT THE DOLLAR CAN BUY ON THE MARKET. A DOLLAR BUYS A LOT LESS THAN WHAT IT DID 25 YEARS AGO. 25 YEARS AGO, YOU COULD GET A NICE HOUSE FOR $75,000. TODAY, THAT SAME HOUSE WOULD COST USE HALF -- HALF A MILLION DOLLARS FOR IT THE DOLLAR HAS LOST A TREMENDOUS AMOUNT OF VALUE. IT IS STILL VALUABLE BECAUSE YOU CAN GO OUT AND BUY GOODS AND SERVICES THAT SATISFY YOUR WANTS AND NEEDS. THE SECOND PART OF YOUR QUESTION HAD TO DO WITH WHAT WE SEE HAPPENING TO THE DOLLAR. AGAIN, AS LONG AS THERE IS A CENTRAL BANK THAT HAS THE POWER TO LITERALLY CREATE MONEY OUT OF THIN AIR PRINTED UP AND CREATE RESERVES THROUGH A KEYSTROKE ON A COMPUTER, WHICH THE BANKS CAN THEN LOAN OUT BY THEMSELVES CREATING CHECKING ACCOUNTS FOR PEOPLE. MONEY IS CREATED OUT OF THIN AIR OR IN CYBERSPACE. THAT MONEY IS SPENT AND THAT DRIVES PRICES UP. IN TURN, INTRA -- IT RESULTS IN THE DROP IN THE VALUE OF THE DOLLAR. WHAT I SEE IS A CONTINUING DECLINE IN THE VALUE OF THE DOLLAR. USUALLY, PEOPLE WILL TURN TO A GOLD STANDARD WHEN THINGS BECOME SO BAD THAT THE DOLLAR IS LOSING BET -- LOSING VALUE DAY BY DAY. THAT IS CALLED HYPERINFLATION. I DO NOT FORESEE THAT IN THE NEAR FUTURE.
00:14:23	HOST	THERE ARE SOME ENTITIES THAT WOULD RATHER DO BUSINESS IN EUROS THAN DOLLARS. HOGUEST: THE DOLLAR HAS LOST VALUE ON FOREIGN-EXCHANGE MARKETS. EVEN DRUG DEALERS ARE BEGINNING TO MAKE THEIR EXCHANGES AND LARGE EURO BILLS RATHER THAN IN $100 BILLS. THEY'RE MOVING AWAY FROM THE DOLLAR AS WELL.
00:14:52	HOST	OUR NEXT CALL FOR JOSEPH SALERNO COMES FROM CLIFTON PARK, NEW YORK. GOOD MORNING. CALLER: GOOD MORNING. BY THE WHITE, YOU ARE THE BEST MODERATOR ON THIS SHOW. I HAVE ONLY TWO QUESTIONS. OUR GOLD IMPORT IN FORT KNOX, HOW COME WE NEVER HEAR ABOUT THAT? HOW COME WE STILL ARE NOT MINING GOLD TO KEEP OUR DOLLAR IS STABLE?
00:15:31	GUEST	FIRST OF ALL, THERE REALLY IS NO GOLD IN FORT KNOX. ALMOST ALL THE GOLD IS WHERE -- IS NEAR WHERE I WORK. IT IS A FEW BLOCKS AWAY AT THE FEDERAL RESERVE BANK. THERE IS REPORTED TO BE ABOUT TO UNDER 60 MILLION OUNCES OF GOLD. HOWEVER, THERE HAS BEEN NO AUDITING LATELY OF OUR GOLD STOCK. GOLD MINE IN RESPONSE TO PRICES. -- GOLD MINING RESPONDS TO PRICES. THE COST OF MINING GOLD WOULD FALL AND WE WOULD HAVE AN INCREASE IN THE MINING OF GOLD.
00:16:14	HOST	WHAT DOES AN OUNCE OF GOLD GO FOR TODAY AS OPPOSED TO 1968?
00:16:21	GUEST	TODAY, IT IS $1,000 PER OUNCE, IN 1968 IT WAS $35 PER OUNCE. IN 1968, MOST MAINSTREAM ECONOMISTS MADE THE STATEMENT THAT IF A DOLLAR WAS TO EVER BE DE-LINKED FROM GOLD, IT WOULD BE GOLD THAT WOULD LOSE VALUE. GOLD WOULD GO DOWN TO ABOUT $10 PER OUNCE. IT WAS ITS INDUSTRIAL VALUE. IN FACT, WE KNOW THE EXACT OPPOSITE HAPPENED. WE HAD COLD SHOOTING UP TO $800 FOR A WHILE. IT WENT DOWN AGAIN AND NOW IT IS BACK TO ABOUT A THOUSAND DOLLARS. THE WHOLE MAINSTREAM ECONOMICS PROFESSION HAD NOT ESTIMATE TO CORRECTLY HOW GOLD ITSELF WOULD MAINTAIN ITS VALUE. IT WAS THE DOLLAR THAT WAS LOSING VALUE.
00:17:13	HOST	NEXT OF THIS SOUTH CAROLINA. CALLER: ALL OF US HERE IN SOUTH CAROLINA WILL NOT BE VOTED FOR JOHN MCCAIN BECAUSE HE HAS BROKEN EVERY ONE OF GOD'S COMMANDMENTS. WHAT WAS DONE AT BRETTON WOODS WAS UNCONSTITUTIONAL. JUST ABOUT EVERYTHING OUR GOVERNMENT IS DOING TODAY IS UNCONSTITUTIONAL. I BELIEVE THESE MEN ARE NOT STUPID. THE CENTRAL BANK AND THE CONTRAS -- THE CONGRESSMAN AND THE SENATORS WHO ARE ALLOWING THESE THINGS TO HAPPEN ARE NOT STUPID. THIS IS BEING DONE SPECIFICALLY FOR THE PURPOSE OF DESTROYING THE DOLLAR THAT HAS NO VALUE ESSENTIALLY. FOR THE PURPOSE OF MERGING US WITH THE ECONOMIES OF THE OTHER NATIONS BECAUSE THERE ARE MANY OF US OUT HERE THAT NO THAT THE INTENT OF MANY IS TO TAKE US INTO ONE RULED GOVERNMENT. THAT IS NOT A POINT TO BE ACCOMPLISHED UNTIL OUR ECONOMY IS EQUAL TO THAT OF THE OTHER NATIONS. I WOULD LIKE YOUR COMMENT.
00:18:28	GUEST	I THINK YOU ARE QUITE RIGHT ABOUT BRETT WHAT. IT WAS UNCONSTITUTIONAL IN THE SENSE THAT -- IN THE CONSTITUTION, IT SAYS THAT CONGRESS HAS THE POWER TO MINT COINS. MOVING TO WHAT WAS REALLY A GOLD-PLATED PAPER STANDARD -- IT WAS REALLY A DOLLAR STANDARD. IT VIOLATED THE CONSTITUTION. BEYOND THAT, THE PEOPLE WHO WERE BEHIND THE PLAN FOR THE BRETTON WOODS SYSTEM, A LEFT-WING PROFESSOR FROM GREAT BRITAIN AND A TREASURY OFFICIAL FROM THE UNITED STATES WAS LATER FOUND OUT TO BE A SOVIET AGENT BOTH -- BOTH OF THEIR PLANS WERE ORIENTED TOWARD SETTING UP A WORLD CENTRAL BANK AT THAT POINT. THAT NEVER CAME ABOUT BECAUSE OF DISAGREEMENTS BETWEEN GREAT BRITAIN AND THE UNITED STATES. WE WOUND UP WITH SOME SUPRANATIONAL AGENCY HO.
00:19:36	HOST:GUEST	WE TALK A LITTLE BIT ABOUT THAT ALREADY. I AM NOT FOR TURNING A HE AND GETTING RID OF THE FEDERAL RESERVE. THAT WOULD BE VERY CHAOTIC. THE CONSTITUTION SAID THAT ONLY GOLD AND SILVER CAN BE LEGAL TENDER. WE SHOULD LEGALIZE THE CONSTITUTION AND ALLOW GOLD AND SILVER TO CIRCULATE AS MONEY AND ALLOW PEOPLE CHOICE. THERE IS NO REASON WHY YOU CANNOT HAVE COMPETING CURRENCIES. IF IT WANTED TO SAVE ON A GOLD STANDARD, THEY COULD. IT WOULD MAKE A LOT MORE SENSE. NOBODY SAVES FEDERAL RESERVE NOTES BECAUSE THEY LOSE THEIR VALUE. YOU COULD BUY GOLD BOND AND PLAN FOR SOME OF ITS FUTURE.
00:20:12	HOST	YOUR RESPONSE TO THE CONDUCT -- THE COMMENTS OF CANDIDATE RON PAUL?
00:20:18	GUEST	I AM IN AGREEMENT. GOOD SOUND POLICY IS TO REMOVE ALL TAXES ON GOLD. GET RID OF ANY CAPITAL GAINS TAXES, SALES TAXES, AND SO ON. ALSO, HAVE ENFORCEMENT OF GOLD CLAUSES IN CONTRACTS FOR -- IN CONTRACT. THESE PEOPLE HAVE ALTERNATIVE MONEY TO TURN TO. WE NEED NOT ABOLISH THE FEDERAL RESERVE RIGHT AWAY. I THINK THAT IS AND WHERE THE LONG RUN GOAL TO GET RID OF THE CENTRAL BANK. AS RON PAUL SAYS, I COMPLETELY AGREE THAT INTRODUCING COMPETING CURRENCIES IS SOMETHING THAT WILL BENEFIT ALL OF US HERE IN THE UNITED STATES.
00:21:15	HOST	OUR NEXT CALLER IS ON THE LINE FOR DEMOCRATS. CALLER: I APPRECIATE THIS DISCUSSION. I THINK THIS IS AT THE CORE OF THE NORTH AMERICAN UNION AND THE DISCUSSION AS IT RELATES TO THE EUROPEAN UNION. I WAS WONDERING IF YOU COULD SPEAK TO A COUPLE OF THINGS. WHO ACTUALLY OWNS THE GOLD THAT WE DO NOT USE NOW? I THINK YOU MENTIONED THAT. ALSO, THE RELATIONSHIP TO MAKE THE STRATEGY TO MAKE ONE MONETARY UNIT -- WHO ACTUALLY SITS ON THE FEDERAL RESERVE? WHO MONITORS THEM? I WILL WAIT FOR YOUR RESPONSE.
00:22:09	GUEST	FIRST, YOU SHOULD KNOW THAT GOLD WAS SEIZED BY THE U.S. CITIZENS IN 1933. U.S. CITIZENS WERE NOT PERMITTED TO OLD GOAL -- TO OWN GOLD UNLESS YOU HAD A LICENSE. THEY WERE NOT PERMITTED TO OWN ANYWHERE IN THE WORLD. YOU WERE NOT PERMITTED TO HOLD A GOAL ACCOUNT OUTSIDE OF THE U.S. UNTIL 1976. THE GOLD NOW SITS AND THE NEW YORK FEDERAL RESERVE BANK. WE DO NOT EXACTLY KNOW HOW MUCH IS THERE. THAT WAS THE MONEY THAT WAS SEIZED FROM AMERICANS. CAN YOU REFRESH MY MEMORY THERE? WAS THE SECOND QUESTION THAT WAS ASKED?
00:22:56	HOST	I THINK YOU COVER THE ESSENCE OF HIS QUESTION. LET US MOVE ON TO CLEVELAND, OHIO. CALLER: GOOD MORNING. MY CONCERN IS THAT -- THEY TALK ABOUT THE NATIONAL DEBT AS BEING SOMETHING LIKE THREE TRILLION DOLLARS. I HEARD ANOTHER " THAT THE ECONOMY GENERATES NINE TRILLION DOLLARS PER YEAR. IF THAT IS TRUE, AFTER THREE YEARS, NATURALLY THAT WOULD BE WIPED OUT. WHAT I NEED TO KNOW -- HOW MUCH DO WE ACTUALLY OWE THE REST OF THE WORLD, ESPECIALLY CHINA? IS IT REALLY POSSIBLE FOR US TO PAY IT OFF? IF SO, HOW LONG? CAN THEY CALL THEIR MARKERS IN AT ANY GIVEN TIME?
00:23:54	GUEST	I DO NOT KNOW THE EXACT STATISTICS. THE REST OF THE WORLD OWNS 20 OR 30% OF THE WAS NATURAL -- NATIONAL DEBT. IT CANNOT BE TURNED IN UNTIL IT MATURES. THEY CAN CAUSE REAL PROBLEMS FOR THE U.S. IF CHINA, FOR EXAMPLE, STARTS TO SELL U.S. BONDS TO GET RID OF DOLLAR DENOMINATED ASSETS. THEY BEGIN TO SELL THEM ON THE WORLD MARKET AND THEN IN EXCHANGE FOR DOLLARS AND SELL THOSE DOLLARS AGAINST EUROS IN OTHER CURRENCIES THAT ARE STRONGER BECAUSE THEY WANT TO SUBSTITUTE EURO ASSETS, THAT WOULD MEAN THAT THE DOLLAR WOULD LOSE VALUE AGAINST FOREIGN CURRENCIES EVEN MORE RAPIDLY. WE WOULD SEE IMPORT PRICES HERE AND EXPLODING AND GOING UP. WITH THE REAL INCOMES OF CITIZENS FALLING. IT WOULD ALSO MEAN VERY QUICKLY THAT AS SAVINGS WERE PULLED OUT OF THE U.S., WHICH IS IN EFFECT WHAT IS HAPPENING IF THEY SELL U.S. ASSETS, OUR INTEREST RATES WILL SKYROCKET. [CAPTIONING PERFORMED BY NATIONAL CAPTIONING INSTITUTE] [CAPTIONS COPYRIGHT NATIONAL CABLE SATELLITE CORP. 2008] .
00:25:34	HOST	OUR NEXT CALL FROM GALVESTON, TEXAS. GO AHEAD. CALLER: I'D LIKE TO TALK ABOUT HOW RON PAUL HAS GONE AFTER THE NEOCONSERVATIVES. THERE WAS AN ARTICLE YESTERDAY THAT TALKS ABOUT SCOTT MCCLELLAN AND HOW THE NEO CONSERVATIVE DOUGLAS FIFE AND COMPANY, RICHARD PEARL, AS WELL, HAD PUSHED FOR THE WAR IN IRAQ, AND THERE'S ALSO A REVELATION THERE WHERE ARNOLD WAS ACTUALLY AT A COCKTAIL PARTY THAT WAS IN HONOR OF LEWIS "SCOOTER" LIBBY.
00:26:05	HOST	WHAT DOES THIS HAVE TO BE WITH THE GOAL STANDARD? CALLER: SURE, THANKS FOR BRINGING ME BACK. I'M AN ARDENT RON PAUL SUPPORTER, AND HIS ADVISOR HAD WREN A BOOK, AND I WANTED TO GET YOUR GUESTS' TAKE ON THAT, AND I COMPLETELY AGREE WITH DR. PAUL. NOT ONLY IS THE FALLING DOLLAR CONTRIBUTING TO A RISE IN OIL PRICES, BUT WE'RE HEADING FOR A CRASH, AND WE BETTER GET READY FOR IT. THERE'S NO OTHER CANDIDATE WHO'S ADDRESSING THAT THAN RON PAUL.
00:26:35	HOST	THANK YOU VERY MUCH FOR YOUR CALL. ARE WE HEADING FOR A CRASH, AND WOULD A RETURN TO THE GOLD STANDARD MAKE US CRASH-PROOF?
00:26:44	GUEST	LET ME TALK ABOUT THE GOAL STANDARDS, FIRST. YES, UNDER THE GOAL STANDARD, ESPECIALLY A PURE 100% GOAL STANDARD, WHERE WE'RE ALL PAPER, DOLLARS, CHECKING ACCOUNTS WERE BACKED FULLY BY GOLD, THERE WOULDEN NO SCOPE FOR GOVERNMENT TO INCREASE THE MONEY SUPPLY OUT OF THIN AIR. THE WAY IT DOES IT TODAY, AS I MENTIONED, IS THROUGH INCREASED BANK RESERVES AND BANK LOANS. THOSE LOANS, THOSE ADDITIONAL LOANS THEN DEPRESS THE INTEREST RATE, CALLS THE INTEREST RATE TO FALL, TO GET PEOPLE TO BORROW THE EXTRA MONEY THAT'S CREATED. WHAT THAT THEN DOES IS LEAD ENTREPRENEURS AND BUSINESS PEOPLE INTO INVESTING IN CERTAIN PROJECTS THAT TURN OUT NOT TO BE PROFITABLE. IT'S AT THE POINTS WHERE INFLATION BEGINS TO HEAT UP AS THIS NEW MONEY CIRCULATES THROUGHOUT THE ECONOMY THAT THE FED USUALLY PANICS, STOPS INFLATING THE MONEY SUPPLY AS IT DID IN 1990-1991, AT THAT POINT, INTEREST RATES SHOOT UP AGAIN, AND MANY OF THESE INVESTMENT PROJECTS THAT HAD BEEN INITIATED UNDER THE FALSELY LOWER INTEREST RATES ARE THEN FOUND TO BE UNPROFITABLE, AND WE FOUND LAYOFFS AND PLANTS SHUTTING DOWN. UNDER THE GOAL STANDARD, YOU WOULD NOT HAVE THAT. AS I SAID, THE MONEY SUPPLY COULD ONLY INCREASE AS GOLD ENTERED INTO THE TREASURY AND BANKS.
00:28:07	HOST	NEXT UP, KINGS MOUNTAIN, NORTH CAROLINA, ON OUR LINE FOR DEMOCRATS. GOOD MORNING. CALLER: GOOD MORNING, GENTLEMEN. COULD YOU TELL ME IF THE NATIONAL FEDERAL RESERVE, RATHER, IS A GOVERNMENTAL INSTITUTION OR IF IT IS QUASI PRIVATE ENTITY THAT CONTRACTS OUT THE MONEY CAPACITY, AND IF SO, THE GOLD THAT WAS SEIZED IN 33, IS THAT THE PROPERTY OF THE U.S. CITIZENS WHO RECEIVED FROM, OR WAS IT BASICALLY GETCH OVER TO THE FEDERAL RESERVE? AND ALSO, I WOULD AGREE THAT THE FEDERAL RESERVE, IN MY OPINION, PROBABLY SHOULD BE RESOLVED, BUT THE ONLY THING THAT CONCERNS ME IS THAT YOU'RE GOING TO HAVE SOME GLOBAL POWERBROKERS, LIKE SAY THE ROTHSCHILD FAMILY, ET AL, THAT WERE VIGOROUSLY OPPOSED TO THAT, AND I DON'T KNOW WHAT KIND OF FEE THAT COULD CAUSE, YOU KNOW, IN THE ECONOMY AS A WHOLE.
00:29:14	HOST	THANKS FOR YOUR CALL. MR. SAL EARN OWE?
00:29:18	GUEST	YES, TECHNICALLY, LEGALLY, THE FEDERAL RESERVE IS SEMIPRIVATE, THAT IS, IT'S OWNED BY ITS MEMBER BANKS. THEY SUPPOSED HAVE THE STOCK IN IT, BUT OF COURSE, THERE'S NO DIVIDEND RETURN, THEY CAN'T VOTE ON THE POLICY OF THE FEDERAL RESERVE. SO DE FACTO, THE FEDERAL RESERVE IS A GOVERNMENT AGENCY. HOWEVER, VERY INTERESTING KIND OF GOVERNMENT AGENCY, CONGRESS CANNOT AUDIT IT, CONGRESS CANNOT CONTROL ITS BUDGET. THE VERY LARGE BUDGET FROM THE FEDERAL RESERVE COMES FROM ITS INTEREST EARNINGS ON ALL THE GOVERNMENT BONDS THAT IT HAS PURCHASED IN ISSUING MONEY. MUCH OF THAT IS REBAITED TO THE TREASURY, BUT IT MAINTAINS FOR HE WAS ITS OWN OPERATING BUDGET. SO ULTIMATELY, IT CAN BE ABOLISHED BY CONGRESS. IT IS IN THE VERY LONG RUN THAT IF IT DOES SOMETHING THAT CONGRESS DOESN'T LIKE, SINCE CONGRESS CREATED IT WITH A LAW IN 1913, IT CAN ABOLISH IT. BUT THERE IS NO DAY-TO-DAY OVERSIGHT BY CONGRESS OR ANY CONGRESSIONAL COMMITTEE ON THE FEDERAL RESERVE.
00:30:21	HOST	OUR NEXT CALL COMES FROM ALPINE, TEXAS, ON OUR LINE FOR INDEPENDENTS. GOOD MORNING. CALLER: GOOD MORNING, JOE. THIS IS LARRY SEACREST.
00:30:30	GUEST	HI, LARRY. CALLER: HI, JOE. I'M AN ECONOMICS PROFESSOR. I KNOW JOE SALERNO. AS JOE AND I BOTH KNOW, A GOOD NUMBER OF ECONOMISTS DO TAKE SERIOUSLY THE, AT LEAST LONG TERM, WHAT THEY SEE IS THE LONG-TERM BENEFITS, STABILITY BENEFITS, OF A GOLD STANDARD. BUT ALSO, AT THE SAME TIME, A GOOD NUMBER OF THEM ARGUE THAT IT'S INFEASIBLE TO RETURN TO GOLD. SO IN THEORY, IT'S MAYBE A GOOD IDEA, IT HAS SOME BENEFITS, BUT IT'S IMPRACTICAL, EXTREMELY IMPRACTICAL. INTERESTED TO HEAR WHAT YOU'D SAY, JOE, ABOUT HOW FEASIBLE IS IT TO RETURN TO A REAL, TRUE GOAL STANDARD, NOT THE GOLD EXCHANGE STANDARD, BUT WHAT ARE YOUR THOUGHTS ON THAT?
00:31:13	GUEST	WELL, I THINK POLITICALLY, RIGHT NOW, OF COURSE, IT'S NOT FEASIBLE. THE RULING ELITES, THE POWERS IN PARTY -- THAT EXCHANGE POWER EVERY FEW YEARS, REPUBLICANS AND DEMOCRATS, ARE NOT INTERESTED IN HAVING THEIR HANDS TIED IN THE WAY THAT THE GOLD STANDARD WOULD. THAT IS, THE GOLD STANDARD WOULD PREVENT BUDGET DEFICITS, OK? NORTH TO SPEND ADDITIONAL MONEY, TO INCREASE SPENDING UNDER THE GOLD STANDARD, YOU'D HAVE TO INCREASE TAXES, WHICH TEND TO BE POLITICALLY -- WHICH TENDS TO BE POLITICALLY UNPOPULAR. SO POLITICALLY, WE'RE NOT GOING TO GET -- SEEP ANY MOVEMENT BACK TOWARD THE GOLD STANDARD UNLESS CERTAIN VERY DIRE CIRCUMSTANCES OCCUR. BUT ECONOMICALLY, I THINK IT'S VERY FEASIBLE, I THINK. AS RON PAUL HAS POINTED OUT, THE FIRST STEP IS TO REMOVE ALL OBSTACLES ON THE USE OF GOLD IN EXCHANGE.
00:32:10	HOST	YOU MENTIONED IN THE 1930'S, OR AROUND 1968, THE GOLD WAS AT A FIXED PRICE OF $35 AN OUNCE F. WE WERE TO RETURN TO A GOLD STANDARD, HOW AND WHO WOULD FIX THE GOLD PRICE, AND HOW WOULD THAT BE DONE, OR WOULD IT BE ALLOWED TO FLUCTUATE?
00:32:26	GUEST	THERE ARE A NUMBER OF DIFFERENT PLANS FOR RETURNING TO THE GOLD STANDARD THAT WOULD JUMP BACK INTO A FIXED PRICE. YOU'D HAVE TO HAVE ACCIDENT STREAMLY HIGH FIXED PRICE IF YOU WANT TO BACK UP ALL OUR CURRENCIES AND ALL OUR ECONOMICALLY ACCOUNTS WITH GOLD. I THINK AT A MINIMUM YOU'D HAVE TO BACK THOSE. THE PRICE OF GOLD WOULD THEN BE $4,000 OR $5,000. YOU'D HAVE TO BASICALLY TAKE THE AMOUNT OF GOLD THAT WE HAVE, AND I'M NOT SURE HOW MUCH IT IS, IT'S 260 MILLION OUNCES AND DIVIDE THAT INTO THE TOTAL OUTSTANDING AMOUNT OF CURRENCY AND CHECKING DEPOSITS, WHICH HOVERS AROUND $1 TRILLION IN TODAY'S ECONOMY.
00:33:25	GUEST	IT'S $42.50. IT'S REALLY A NOMINAL PRICE. IT'S A PRICE THAT MEANS ABSOLUTELY NOTHING GIVEN WHAT THE MARKET PLACE IS. SO THE VALUE OF THE GOLD STOCK IS REALLY MUCH HIGHER THAN IT WOULD APPEAR ON THE GOVERNMENT BOOKS, WHICH USES THAT OFFICIAL PRICE OF $42.50 OR SO.
00:33:45	HOST	PENNSYLVANIA, YOU'RE ON THE "WASHINGTON JOURNAL." CALLER: GOOD MORNING, GENTLEMEN.
00:33:50	GUEST	GOOD MORNING. CALLER: FIRST OF ALL, I WONDER IF YOU COULD SPEAK A LITTLE BIT ABOUT THE SUPPRESSION IN THE PRICE OF GOLD, WHETHER OR NOT, INDEED, THAT'S HAPPENING. AND THE SECOND THING IS, AS AN ECONOMIST, OBVIOUSLY YOUR OPINION IS VERY -- IT VARIES GREAT WELL OTHER ECONOMISTS. IS IT REASONABLE TO BELIEVE THAT IN THIS AGE, WE ARE DEFINITELY NEAR ECONOMIC COLLAPSE, AND IS IT IN THE ADVANTAGE OF MAINSTREAM NEWS AND CERTAIN ECONOMISTS -- I'M NOT SAYING YOURSELF, BUT CERTAIN ECONOMISTS -- TO TRY TO QUELL WHAT WE PERCEIVE AS A FEAR OF ECONOMIC COLLAPSE?
00:34:42	GUEST	WELL, I THINK THE WHOLE IDEA OF ECONOMIC COLLAPSE IN THE MAIN STREAM IS THAT THE ECONOMIC COLLAPSE EMANATES FROM SOMETHING LIKE A FINANCIAL CRISIS, WHICH THEY DON'T REALLY EXPLAIN. SUDDENLY WE HAD THIS BUBBLE, THIS HOUSING BUBBLE. IT WAS DRIVEN BY MAYBE IRRESPONSIBLE LENDING ON SUBPRIME MORTGAGES, BUT THAT'S FAR FROM THE WHOLE STORY. THE STORY REALLY BEGINS IN THE 1990'S THAT CULMINATED FIRST IN THE HIGH TECH BUBBLE, THE FINANCIAL BUBBLE IN THE STOCK MARKET AND SO ON. AND AGAIN, LATER ON, IN THE HOUSING BUBBLE. BUT THAT WAS DRIVEN BY A TREMENDOUS INCREASE IN THE MONEY SUPPLY IN THE EARLY 1990'S. AND GOING ON, THROUGH 1998 OR SO, AND THEY BE STARTING UP AGAIN AFTER THE LATEST RECESSION IN 2001 TO PUMP US OUT OF THAT RECESSION. SO I THINK ALAN GREENSPAN AND NOW BERNACKE ARE RESPONSIBLE FOR BOTH THOSE BUBBLES. AGAIN, INFLATION AND MANIPULATION OF PAPER MONEY THAT IS AT THE ROOT CAUSE OF THIS FINANCIAL COLLAPSE THAT WE'VE HAD, WHICH COULD GET WORSE AND LEAD TO A VERY DEEP RECESSION IN THE U.S. ECONOMY.
00:36:03	HOST	WHAT ARE FED CHAIRMAN'S BERNACKE'S THOUGHTS REGARDING THE GOAL STANDARD? WOULD IT BE HIM THAT NEARBY ITS A RETURN TO THAT IF HE THOUGHT IT WAS NECESSARY TO MAINTAIN OUR ECONOMY?
00:36:12	GUEST	I THINK A RETURN TO THE GOLD STANDARD WOULD REALLY HAVE TO COME FROM AN INITIATIVE IN CONGRESS IN THAT SENSE. THE FED CHAIR COULD BE VERY, VERY INFLUENTIAL IN F THAT WAS HIS POSITION, BUT IS CERTAINLY IS NOT CHAIRMAN BERNACKE'S POSITION. BEN BERNACKE, BEFORE HE BECAME CHAIRMAN, WAS A VERY HE WILL NEBT AND WELL-KNOWN MACRO ECONOMISTS WHO DID A LOT OF WORK ON THE GREAT FREGS. TO SOME EXTENT, HE BLAMED THE DEPRESSION ON THE GOAL STANDARD. SO MY FEELING IS HE WOULD NOT WANT TO RETURN TO GOLD. THE OTHER THING ABOUT GOLD, PRICES FALL YEAR AFTER YEAR AS THE PRODUCTIVITY OF THE FREE ECONOMY PULLS FORTH IN A TREMENDOUS INCREASE OF GOODS, AND MONEY SUPPLY INCREASED VERY SUDDENLY. SO PRICES TEND TO FALL THROUGH THE YEARS, AS THEY HAVE ABOUT COMPUTERS. YOU WOULD SEE THAT HAPPENING WITH ALL WOODS UNDER A GOALTENDER. MOST OTHER MAIN STREAM ECONOMISTS ARE VERY AFRED OF FALLING PRODUCES.
00:37:29	HOST	NEXT UP, OUR LINE FOR INDEPENDENTS. CALLER: THE MONEY SYSTEM IN THIS COUNTRY FOR QUITE SOME TIME, AND PLEASE CORRECT ME IF I'M WRONG, BUT BECAUSE, YOU KNOW, EVERYBODY NEEDS MONEY, SO I TRY TO UNDERSTAND IT AS MUCH AS POSSIBLE, AND I FOUND OUT THAT THE PRIVATE, JUST LIKE YOU SAID, THE BANKING SYSTEM AND ONE OF THE MAJOR -- BOTH ON THE FEDERAL RESERVE ARE JEWISH. WHEN JEWISH PEOPLE ONLY MAKE UP 2% OF THE POPULATION, THEY'RE LIKE 85% TO 90% OF CHARMSE OF THE FEDERAL REPUBLICAN REV. I THIS ALSO FIND OUT THE UNITED STATES HAS DECLARED DECLARED BANKRUPTCY, WHICH IN TURNS TURNS THE UNITED STATES -- WHICH MADE THE UNITED STATES BE AFTER CORPORATE AMERICA. AND NOW, WHEN YOU TOOK -- I THINK IT WAS HAMILTON THAT TOOK -- THAT IMPLEMENTED THE RESERVE ILLEGALLY, BECAUSE IT DOESN'T HELP THE AMERICAN PEOPLE BECAUSE WE HAVE TO TAKE INTEREST TO USE THEIR MONEY. AND THEY DO THIS FRACTIONAL SYSTEM WHEREBY IT'S LIKE A FORM OF LEAGUE FRAUD, WHERE THEY DON'T HAVE THE RESERVES TO LOAN US THE MONEY, BUT THEY CAN JUST SAY THEY HAVE IT, BECAUSE LIKE YOU SAID, NO ONE CAN REGULATE OR LOCK INTO IT. SO THEY CAN SAY THEY HAVE A LOT OF MONEY, AND THEY'D LIKE MONEY THAT THEY DON'T HAVE, AND THEN THEY CHANGE US IN INTEREST RATES.
00:39:27	HOST	MR. SALERNO?
00:39:28	GUEST	I BELIEVE IN THE CALLER IN POINTING TO FRACTURED FEDERAL RESERVE BANKING. RIGHT NOW, BANKS ONLY NEED TO HOLD 10% OF THE MONEY THAT YOU DEPOSIT IN YOUR ECONOMICALLY ACCOUNT. THE OTHER 90% IS LOANED OUT. THAT'S WELL KNOWN. WHAT'S NOT SO WELL KNOWN IS THAT IS THAT MONEY IS THEN MULTIPLE, SO EVERY ADDITIONAL DOLLAR OF RESERVES THAT THE FED CREATES OUT OF THIN AIR, AND THEY DO THIS R WEIGH DURING THE WEEK OR THE FED OPEN MARKET. OR THEY WRITE CHECKS ON THIMS, AND THEN THEY BUY SECURITIES. THAT MONEY GOES TO BANKS THAT DEPOSIT THE MONEY TO DEPAFTS. FOR EVERY DOLLAR THAT'S DEPOSITED IN A BANK, 90% OF THAT DOLLAR CAN BE LOANED OUT. SO ONE DOLLAR CAN, AT A MAXIMUM CREATE NEW ECONOMICALLY MONEY IN THE ECONOMY MUCH THIS IS, FPKS, FEBRUARY YEAR. THIS IS DONE BETWEEN 9:00 AND 11:00 A.M. TIME. CALLER: PROFESSOR SALERNO, GOOD MORNING. I GOT A QUESTION. WELL, TWO QUESTIONS. ONE, WHY DO YOU SAY FREDERICK KIND OF DIFFERED WITH ROTHBARD ON THE GUARD STANDARD? HE WENT OFF ON THIS WHOLE RABBIT TRAIL ABOUT THE NATURALIZATION OF MONEY, WHICH WAS A VERY REPUTABLE SITUATION. SECONDLY, WITH RON PAUL'S SUCCESS, YOU'VE SOON A RATHER DRAMATIC -- ORDINARY PEOPLE KIND OF INTERESTED IN JOHN MIES' EYES. PEOPLE JUST THOUGHT OF HIM AS AN EXTREME ECONOMISTS THAT WAS KEEPED OF A 19TH SUPPORT ARE YOU DIE SORE. ED TO HE'S REALLY HELPFUL. THANKS.