The Fed | What Is the Fed? What Is the History of the Fed? What Is the Purpose of the Fed? Why Was the Fed Created? Is the Federal Reserve Not Federal? Does the Federal Reserve Not Have Any Reserves?

Audio Transcription

Transcribed with Cockatoo

(Speaker 1)
The law, as written by Congress, the implementation legislation of the Fed, says that the president can fire a Federal Reserve Board governor with cause. In this episode, Jeffrey Tucker unpacks the recent controversy surrounding the Federal Reserve. He’s the founder and president of the Brownstone Institute and senior economics columnist at the Epoch Times. No president since 1913 has taken on the Fed the way Trump is taking it on now. And the Supreme Court, I think, is going to have to decide.

(Speaker 2)
How did the creation of the Federal Reserve change America? Does President Trump have the authority to fire a Federal Reserve governor for alleged mortgage fraud? And what does it really mean to be an independent federal agency?

(Speaker 1)
What’s striking to me about this, for all these years, This question has never really been asked at this level, much less answered.

(Speaker 2)
This is American Thought Leaders, and I’m Jan Jekielek. Jeffrey Tucker, so good to have you back on American Thought Leaders.

(Speaker 1)
My pleasure. Good to be here, Jan. Let’s start with this recent firing of the Federal Reserve Governor, Lisa Cook. Is this something that can happen? This is something that’s wildly contentious seemingly in our society, and people are coming in on either side.

(Speaker 7)
What’s your take?

(Speaker 1)
Well, she refuses to resign. believing that it can’t happen, that she’s untouchable in some sense, that the President cannot do this. The problem is that the law, as written by Congress, the implementation legislation of the Fed, says that the President can fire a Federal Reserve Board Governor with cause.

(Speaker 47)
Right?

(Speaker 1)
That’s what it says. Which implies that the President is in charge. The President is what keeps the Fed accountable. Now, Trump believes this, and so he found somebody on the board that he can fire with cause. Now, the allegation, I have to say allegation because that’s the way we talk, but actually it’s true. She named two separate primary residences in her mortgage applications.

(Speaker 1)
You can’t have two primary residences. The advantage for doing that is that you get favorable interest rates, because on your primary residence, there’s less risk. So you get a more favorable loan rate. So she got two favorable loan rates. And then you’ve got really interesting problems concerning the deductibility of interest. You can only deduct the interest that you pay on a loan from your primary residence.

(Speaker 1)
If you buy the second, third, and fourth house, that’s on you. So actually, this is a federal crime to do this. And maybe it’s common. Maybe it goes on all the time. We don’t really know. Maybe there’s a certain class of borrowers who just do this routinely.

(Speaker 1)
Lisa Cook treats it like it’s no big deal, like a parking ticket or something like that, but it’s actually a federal crime. So if you’re looking for some reason to go after a Fed board governor with cause, this is a good cause. So I think Trump will prevail in this particular case, but it will have to be decided most likely by the Supreme Court. What’s important here, Jan, is there’s a lot more at stake than just this one regulation about residences and mortgages, it has to do with whether and to what extent the Fed is actually accountable to the President of the United States. That’s what’s at issue. What’s striking to me about this is that the Fed has been around since 1913.

(Speaker 1)
This question has never really been asked at this level, much less answered. For all these years, this country, we’ve pretended as if there’s such a thing as an independent central bank. And everybody knows what that is. Well, there’s another word for independence.

(Speaker 50)
That is unaccountable, right?

(Speaker 1)
Independence sounds great. Unaccountable sounds bad. Well, the Fed’s unaccountable. They’ve not been held to account for any outside audits in its entire history. Any political intervention is widely seen by financial markets as something like a catastrophe. You’re risking the nation’s financial stability, and so on and so on.

(Speaker 1)
But in the end, we are governed by this document called the Constitution, and we’re a nation of laws. And the Constitution has three buckets. It has judiciary, it has a legislative branch, and an executive branch. In the org chart of the federal government, printed by the federal government, that everybody agrees is true, the Federal Reserve is under the executive branch and reports to the president. You can see it. The org chart is very clear about that.

(Speaker 1)
You can say it’s independent. Well, is that just sort of a norm that we just have a hands -off policy? Well, this is what I was going to ask, because certainly in the judiciary, precedent as is hugely important. It impacts a great many things.

(Speaker 2)
Is that the case here?

(Speaker 1)
Because clearly, as you’ve outlined, the precedent has been independence. So we don’t really need to in a constitutional sense what that means. You’d think that we would know, but we don’t actually know what it means for there to be an independent agency under the Executive Department. What’s exciting about the times in which we live is that we’re finally getting answers to these questions. The Supreme Court’s been very clear up to now, that the president is in charge of the agencies, executive agencies.

(Speaker 1)
So let’s just say the Department of Labor or USAID or Department of Energy or Department of Agriculture or HHS, they can, in fact, fire employees. Now, five years ago, we didn’t know the answer to this question, right? I mean, I think we’ve had these discussions for a while. We didn’t actually know whether the president was really in charge of executive agencies. The Supreme Court, in a series of cases, has been very clear the president is in charge of executive agencies. Trump.

(Speaker 1)
That’s great, but now Trump is taking on the great question of American life, which is the status of the Federal Reserve under the law. That is an unanswered question. So this is a taboo topic. We’ve never been here before. No president since 1913 has taken on the Fed the way Trump is taking it on now.

(Speaker 7)
And the Supreme Court, I think, is going to have to decide that this is an executive agency. Thank you for tuning in to American Thought Leaders. In a world where spin and agendas dominate the headlines, I’m proud to bring you unfiltered insights from the brightest minds in America from a relative outsider Canadian perspective. To keep this possible and to access even more exclusive content, in -depth documentaries, and our daily digital newspaper, consider subscribing to the Epoch Times today. It’s your way to support independent journalism. Just hit the link in the

(Speaker 7)
below to subscribe and unlock the full American Thought Leaders experience and so much more. You can try it today for just $1 a week. So just hit the link in the description below. And now back to the interview.

(Speaker 1)
Maybe give me a little background here. For those that are uninitiated, why would the president feel right now that he needs to take on the Fed? Well, President Trump’s annoyed at the Fed because he thinks that they’re keeping interest rates too high. Now, you can agree or disagree with that. I happen not really to agree with that. But I do agree that you need some accountability for the central bank.

(Speaker 1)
I mean, you can’t just have this floating financial institution, arguably the most important institution in the United States, the most impactful institution in the United States.

(Speaker 49)
And by extension, the world.

(Speaker 1)
Yeah, that’s right. The globe, because we’re on a world dollar standard. So the Federal Reserve is the most powerful institution, yeah, arguably in the world. And it’s just this free -floating institution. agent out there that nobody knows to whom it reports, if it reports to anybody. But under the Constitution, the Founding Fathers were not idiots.

(Speaker 1)
They knew the monetary issue was an important issue for any in a country. But they addressed a lot of things in specifics in the Constitution. They addressed copyrights and patents. They addressed even the post office. They address all sorts of specific issues, but trade, for example, is in there. But one of the issues they address in Article 1, Section 8 is the money power.

(Speaker 1)
And they specifically grant to Congress the job of coining currency, to managing currency and coining money. So that belonged to Congress. And that’s for a reason. Because they understood that monetary power is quite frequently abused by the executive kings. coin clipping, hundreds, thousands of years of abuse of the monetary and financial system by big shot executives, whether it’s pharaohs or kings or princes, whatever. So they wanted it to belong to the Congress, which is, say, the people.

(Speaker 1)
That was a specific decision made for a specific reason. Very wise. And they also even restricted the states from making anything other than gold and silver as money. because they wanted to mitigate against the problems of inflation, depreciating currency, because they knew this had led to upheavals in the past. You can read the Founding Fathers on money. They had a lot of views on this topic.

(Speaker 1)
Thomas Paine’s most famous famous for having written Common Sense and railing against the urban robes of King George or whatever, but actually he has a lot of writing on the monetary question, too. He hated paper money. He said paper money was the source of great evil that leads to inflation and business cycles, trade cycles of booms and busts. He had a very sophisticated economic understanding. And I’m not saying that Tom Paine was some sort of unique figure. This whole generation understood that bad money can ruin a country and a society and send the entire culture into upheaval.

(Speaker 1)
So they wanted sound money and they wanted hard money and they wanted the money to belong to the people, guarded by the people for the people. That’s why they had in Article 1, Section 8, they granted to Congress the power to claim it. and restricted even the states. Now, we had a Tenth Amendment, so states have a lot of rights, but they did not have the right to create paper money. That’s in the Constitution. So that’s how serious they were about this topic.

(Speaker 1)
Now, soon after the founding, there was an effort to create a national bank, and it didn’t last long. Now, keep in mind, when we say, so we had the first national bank and the second national bank throughout the 19th century, in the first half of the 19th century. Keep in mind, a national bank is different from a central bank in important respects. A national bank is really a bank for the government. It’s like Congress makes debt, the national bank buys it and holds it. maybe prints money to buy the debt.

(Speaker 1)
And so they have this relationship between the bank for the government and the government has its own bank. I mean, that’s the National Bank. Now, famously subject to all sorts of corruption, as even from my description. bond rackets, debt scams, profligate spending. There’s bad stuff associated with national banks. And so it was kind of inconsistent with the American ethos.

(Speaker 1)
This was not a central bank. It was just a bank for the government. That’s what it was. And so it went away. Then it came back. Then it went away again.

(Speaker 1)
Andrew Jackson famously railed against it. It’s a monster. So a lot of the debates about money in the first half of the 19th century surrounded this issue of the National Bank. So then we had a long period of what’s called free banking. It lasted for many years and there were changes in the kind of regime that the relationship of the treasury to the money, what we’re going to have money, we’re going to have a gold standard, a silver standard, bimetallism. There are all sorts of acts coming up from Congress regularly.

(Speaker 1)
this stuff. But during the 1870s and the 1880s and 1890s, we had a growing outrage against what was called wildcat banking. So we had the railroads going through the country, and everywhere the railroads went, property values would rise, and business would start popping up. And of course, banks popped up in that area too. And they started lending money to everybody, and that if the railroad failed or didn’t actually show up at all, the banks would go belly up and take everybody’s deposits, and people would get angry. So that was called wildcat banking.

(Speaker 1)
Lots of booms and busts. Banks were regarded as normal institutions, like grocery stores or newspapers or just another market institution. They could fail, they could succeed, but it was determined by the markets. Now, that’s a little fraught from the depositors’ point of view, you know?

(Speaker 48)
You can’t know for sure.

(Speaker 1)
You’ve got to pick well. Yeah, you’ve got to pick well. But there was competition between banks, and bad bankers went out of business, good bankers thrived. I mean, it’s kind of a decent system overall, but maybe not you know, incredibly popular for people who’ve lost their deposits, that sort of thing. But there’s a lot of pressure during this period to stabilize the institution. You know, something that just strikes me, Jeffrey, you know, I can’t help but think that In a society that’s very focused on safety, that prioritizes safety, this is something that really wouldn’t work in the kind of society that we’re in today, for example.

(Speaker 1)
Yeah, even in the world, it was an unusual situation. America had a uniquely free system. There were other examples of free banking in this period. of history, but America had a pretty darn free system. It was imperfect, but it was pretty good. No real guarantees, at least not from the center.

(Speaker 1)
So it was a pretty good system. And look, you have to grant that whatever, you can complain about the system, but it actually was a kind of handmaiden or shepherd of the greatest period of growth. and industrial history, really. What happened to the American economic structures between 1860 and, say, 1910 was a marvel for all the world. You know, it was during this period where we got the commercialization of steel. We created new cities with skyscrapers.

(Speaker 1)
We had sound recording and photography and flight and electricity lighting up buildings. homes and cities and communication, telephones. It was just the most marvelous period of invention and expansion of incomes, a democratization of prosperity that we saw in America, made America famous all over the world. I mean, in the second half of the 19th century, there was a growing sense in the entire planet Earth that whatever America was doing, they were doing it the right way. The democratization of prosperity, I love that term. Well, all the incomes are rising across all classes.

(Speaker 40)
It’s not like the tales that you hear from the Gilded Age, where it’s the rich got richer and the poor got poorer.

(Speaker 1)
Nope. I mean, all the data shows that everybody was growing wealthier systematically. Yes, some more than others, but everybody was better off. And the monetary system we had was free banking at first, and then we had a codified gold standard after the Civil War. And that was a government imposition. The beautiful thing about the gold standard is it restrained congressional

(Speaker 1)
spending. There was no ability to print. The existence of physical gold restrained credit expansion. It put money in the hands of the people. Gold and silver circulated among the people. So this was a hard money country, gold coins dangling in your pockets.

(Speaker 1)
And banks, if they were issuing notes, which they did, they would print. keep gold in their vaults, you know. And it was a good system. It was a brilliant system. Remarkably, during this period, between after the gold standard and then all the way up to, say, 1910 or so, what happened to prices? Well, the value of the money gradually grew.

(Speaker 1)
I mean, imagine that.

(Speaker 44)
You save money, and then after five years, you go back to that money that’s in your mattress, and you find that it’s more valuable than it was when you put it in.

(Speaker 1)
Right? That’s a remarkable thing. We call that deflation now.

(Speaker 47)
But at least under the gold standard, it meant that the propensity to save was even apart from the interest you earn, you would be rewarded for your prudence, for your frugality.

(Speaker 1)
Right? And so America became a country of frugality and saving. Saving was always rewarded. Prosperity, invention, creation. I mean, it was glorious. It’s no wonder, you know, by the 1890s, almost all of European politics said, you know, we’ve tried the aristocracies, we’ve tried our monarchies, we’ve tried our Our kings and queens and multinational big shots running everything in our empires.

(Speaker 1)
But let’s face it, we’re all going to eventually be Americans. Look at what they’re doing over there. And so this experience really did inspire the entire planet Earth. And America was never more confident than it was under the gold standard in those years. It was also in those years that we developed all of our civic pride, our stories of the founding fathers, our national holidays, the music that we associated with the marches, The flags and the signs and symbols, American pride, and you could say even patriotism, was born during this period, and for good reason. And I guess my point is that this is all very interesting, but that the monetary regime, being hard money, money belonging to and controlled by the people and by independent enterprises, was a major reason for that.

(Speaker 7)
So now we have to fast forward to the Fed because that’s where things really began to change. And so, you know, this is now we’re talking about 1913.

(Speaker 1)
And so what, just very briefly, why? Well, a lot of it had to do with the panic of 1907. But like in all politics, sometimes the crisis is exaggerated for a reason. But there was something like a frenzy after 1907. We can’t stand this system anymore. Ups and downs and bank failures and panics and oh, we don’t know if the money is there.

(Speaker 1)
This is a problem. We don’t know if the debt holders are even going to be paid. We need to bring science. to monetary policy. So one of the things that was part of the ethos of the time You could look at the prosperity that unfolded over those 30 or 40 years and say, that’s a miracle of entrepreneurship, enterprise, and freedom.

(Speaker 1)
Or you could look at that and say, wow, this is a consequence of good managers, excellent engineers, excellent science, the primacy of rationality, over randomness, right? There’s two interpretations you could give. So as time went on, that second interpretation prevailed. So there’s a growing sort of valorization of expertise. and management. And they said, look, we should bring this spirit that’s given us all these great inventions in the private sector to government itself.

(Speaker 1)
Let’s put the experts to work on banking and money. And the experts did come together, famously at Jekyll Island, and put together this new institution. It’s a funny institution with a funny name, because it’s actually not a national bank. Yes, it is a national bank, but it was more than that. It became a kind of regulatory cartel owner of all banks in the country. So you could not be a bank unless you were a member of the Federal Reserve.

(Speaker 1)
The Federal Reserve was going to be responsible for all clearing systems. how we got paid, when you finally get the thing that you’re going for them, when the money arrives at the institution that it’s intended for. That’s called clearing. And that was going to be entirely charged by the Fed. That was entirely managed by the Fed. And so there wasn’t going to be any, no more wildcat banking, no more independent banking.

(Speaker 1)
Banks were not going to be. this free enterprise operation, this pop up and go away. No, no. It was all going to be controlled by the Fed. So it was both a national bank and a private banking cartel granted special rights by the federal government. So it exists in this strange place.

(Speaker 7)
And that was in 1913.

(Speaker 1)
How is it private? Well, it’s entirely privately owned. I mean, these are privately owned banks.

(Speaker 2)
They’re privately owned banks with a federal charter from the government.

(Speaker 1)
The banks being all the members? Yeah, well, all the banks are privately owned. And so it’s a private cartel. It’s like the banks, the biggest banks, leaned on Congress to codify a centralized system that would retain their private status while forbidding competition from outsiders, from wildcat banks and random people. The system itself is privately owned, or you could say it’s quasi -public -public -private. I don’t know what to compare it to.

(Speaker 1)
I’m sure there’s a good comparison there. Clearly, the Board of Governors is not private. Right, that’s right. And this is where we get into a lot of ambiguity. This is where it gets really interesting. Is it public or is it private?

(Speaker 1)
And if it is public, who controls it? The voters? Congress? Supreme Court?

(Speaker 34)
The president?

(Speaker 1)
Who? What does it mean to be an independent agency? We know from the Supreme Court that these don’t really exist in other areas of federal bureaucracy. We know now that the president’s in charge of them. Well, what about the Fed? That was always ambiguous in the law.

(Speaker 1)
So what happened was That’s the way it’s normally described. Congress decided, in its wisdom, to take its powers over monetary matters, Article 1, Section 8, and delegate those to this new institution called the Federal Reserve. Now, you should just reflect for just two seconds. You and I are both interested in words. The word Federal Reserve is by itself funny, because it doesn’t say Central Bank. Americans hated the idea of a Central Bank, because that was more like Germany and Bismarck or whatever.

(Speaker 1)
They didn’t want that. The Central Bank is not an American institution, so they called it something completely different. It’s actually kind of genius. They called it first the word Federal, Federal meaning decentralized, consistent with the Tenth Amendment. We’re these United States. We don’t have a central government.

(Speaker 1)
We have a federal system. And so to accomplish that federal piece, The new central bank had branches, you know, had some Minneapolis Fed, Atlanta Fed, Dallas Fed, Chicago Fed, San Francisco Fed, so there’s many Federal Reserve Banks around the country for no apparent reason, really, except to create the illusion of decentralization. Okay, so there was that. And even now they’re gigantic and they employ all these researchers and they say interesting things. But really, there’s no reason for all these feds around the country. The second part, this word reserve, is funny when you think about it, because it implies that they have something.

(Speaker 1)
They’re in the possession. We have the reserves, just in case we need them. We have the reserves. If there’s a crisis, we’re going to be there to help you. You can have confidence in the system, because we reserves, you know, whatever.

(Speaker 1)
In those days it was gold, yeah? You don’t need to worry. Finally, we have a system that’s stable and functioning and scientific. Now, the science part of this thing is also interesting because it comes along at the same time that macroeconomic theory was sort of developing. And the idea was that the Fed eventually, not initially, but eventually, the Fed would guarantee would seek low inflation and high employment, or at least low unemployment, and some sort of economic stability. So they had this sort of mission, a big broad mission, managerial mission over the whole country.

(Speaker 1)
The original Fed, keep in mind, The founders of the Fed and the ethos of the time was they’re tired of the chaos. They’re tired of the chaos of the markets. They’re tired of the bank failures. We’re going to stop that. But we’re also going to guarantee low inflation. I mean that this is widely believed.

(Speaker 1)
Now there’s plenty of people out there think the Fed is just a big demonic conspiracy. racketeers, maybe there’s an element of that or whatever, but what I see in the founding of the Fed is a sincere and authentic desire to stabilize the system, bring intelligence, rationality, managerial prowess and expertise to a sector of society that had long been subject to waves of chaos. I think they had every intention of doing good work. The founders of the Fed weren’t They weren’t bad guys. Many of them wanted sound money. In fact, some of them wanted to stop the credit expansion.

(Speaker 1)
They didn’t like the way these wildcat banks, you know, you’d have a bank pop up, Bob’s Bank, oh, the railroad’s coming along, here’s your money, here’s your money, it’ll lend the money, I’ll collect the money, and then the bank goes belly up and people lose their deposits, you know? And then the bandits would be on the run. They didn’t like that. They were kind of stodgy old -timers, in a way. Let’s have gold and a frugal bank. thrifty middle class and stop with all this nonsense, right?

(Speaker 1)
So this is sort of the ethos of the first Federal Reserve. But the problem is that in the end, despite its name, despite the intentions of the founders, it was a central bank. And if I may just, you know, talking about words and words changing meaning, you know, even growing up, you know, hearing about Federal Reserve or Federal anything, It never occurred to me, and of course I grew up in Canada, I wasn’t taught these things, that federal meant decentralized. thought precisely the opposite, that federal meant centralized, that it’s a function of the federal government. Yeah, well, this, this traces to an ambiguity in American history over the word. Well, and, and, and it’s just, it’s very interesting, because that may be that the shift in the understanding of that word, maybe reflects, you know, the shift of how at least some aspects of our society, think about how we should be governed.

(Speaker 1)
Yeah, you know, even in the founding period before the Constitution, there was a lot of mix -up about these words because they were the federalists, you know. And a lot of people looked at the federalists and said, you’re not federalists. You don’t believe in a federation of states. You’re centralists. You want a central government. The people who objected to the Constitution came to be called the anti -federalists.

(Speaker 1)
Now, that’s funny because, of course, they were the real Federalists. I mean, if you believe the anti -federalists, they believed themselves to be the real federalists. And what was called the federalists were really centralists. So this is where the ambiguity comes from. But I think, generally, we use the word federalism to mean a decentralized system. And in American history, that means granting to states rights.

(Speaker 1)
And we still have many, many states’ rights. We still have a federalist system. a federalist style system. Lord Acton said that federalism was the only true great innovation of American political life. The idea that you would have an overseen kind of structure. that was severely restricted in its power.

(Speaker 1)
But most of the powers belonged to the historical political units called the states. Lord Acton said that was the great achievement of American history. The famous term is that they’re the laboratories of democracy. And indeed, I’m just thinking right now about Dr. Joe Latipo in Florida, declaring that he’s going to get rid of all mandates in Florida law, vaccine mandates. And there’ll be other states that you know, you could call them super mandate to believe, you know, this is kind of the kind of the opposite of that. And in fact, some have even declared that in response to this, something, something in that vein.

(Speaker 1)
But there you go. There’s that opportunity. You can see how does this play out.

(Speaker 2)
Right.

(Speaker 46)
Yeah.

(Speaker 1)
It’s a great example. We’re deviating here. Let’s go back. But it’s important. It’s important. And it connects to our topic because of the very name Federal Reserve.

(Speaker 1)
I mean, this thing never would have gotten to under any circumstances with under a different name if it had been called the Third National Bank. It would have been dead in Congress at that time, but because it was called a Federal Reserve. Or the Central Reserve. Or the Central Reserve. or the Central Bank, or the Bundesbank, or the Bank of England. These were central banks, but in America we didn’t have that.

(Speaker 1)
We had a Federal Reserve. reserve. And they created all these branches around the country just to underscore the point. And in those days, you know, progressivism, what came to be called progressivism, was an ethos alive in the country. The belief that we would take the tools of science and apply them to public policy, to engineer progress. This was the essence of progressivism.

(Speaker 1)
And that That revealed itself in a number of ways which we now, I think, find regrettable, like eugenics policy was a progressive kind of policy. Prohibition. of alcohol was kind of this mandatory uplifting the population, a consequence of progressivism. But 1913 was a remarkable year because you had another aspect of progressivism was the income tax. I mean, before 1913, I mean, just imagine, every penny you earned, you got to keep. It didn’t belong to the federal government at all.

(Speaker 1)
I mean, they had no access to any of your income before 1913. And so we had the constitutional amendment that enabled the income tax. really a shocking amendment to the Constitution that eliminated the bicameral Congress and forced the Senate to be elected by the people in the states instead of being appointed by the state legislature. It’s fundamentally changed the structure of the U . S. Senate and eliminated the bicameral structure of the founding fathers and replaced it with what was essentially an experiment.

(Speaker 1)
Well, what I’m saying is that the Federal Reserve was the same kind of experiment. It was a progressivist experiment in the application of expertise and science to the sound management of the monetary system of the country. But what’s interesting is that, of course, of course, and anybody would have predicted this. I mean, Thomas Jefferson certainly would have. Thomas Paine, this whole generation would have predicted. If you get anything like a central bank, a national bank, a central bank, it will be abused.

(Speaker 1)
It’ll be abused immediately. But no matter the intentions, whatever, it’ll be abused. So what presented itself soon after the Fed was founded? The war in Europe, the Great War. It was a mess, a terrible mess. And the Americans wanted nothing to do with it.

(Speaker 1)
But at some point, what kept America out of wars for the most part was, well, we just didn’t want to afford it. We didn’t have the money. Solve your own problems. We’re over here on the other side of the world. We can mind our own business over here. We don’t have the money.

(Speaker 1)
Well, now with the Fed, you have the money.

(Speaker 7)
You’ve got a printing press.

(Speaker 1)
You’ve got this weird power of this one institution to buy and hold government -created debt with money that didn’t previously exist. A check. You know, the nation had a credit card with an infinite a balance on it, an infinitely high limit. What could go wrong? What could go wrong, right? And again, I think the founders of the Fed didn’t really imagine this.

(Speaker 1)
They thought, well, look at us. We’re responsible guys. We know what’s what. We would never do something like that. Well, they lost control of it right away. And so the Fed was probably the reason why the US entered the Great War.

(Speaker 1)
That was probably the reason. And certainly, and there’s been a lot of empirical research about this, the Great War would never have happened without central banks in Europe funding it. The entire Great War was the central bank funded fiat money, debt financed project made possible by central banks, among which the Fed. didn’t invest itself as heavily in war as say the Bundesbank or the Bank of England or something like that or the Russian Central Bank, but still, I don’t think the U . S. would have ever entered that war were it not for the Federal Reserve.

(Speaker 1)
And then the problems began, you know. People don’t understand this, but soon after the war ended, the U . S.

(Speaker 45)
experienced one of the worst inflations.

(Speaker 1)
between 1918 and 1921, the dollar lost. Now, the data is a little unclear on this, but as best we can tell, the data lost as much as half its value. The dollar lost half of its value. Yeah. Yeah, and this was not entirely because the Fed was going into the open market and buying government debt and printing money, because we were under its gold standard, but because the U . S.

(Speaker 1)
had involved itself so much in lending to foreign governments, they paid back We experienced a huge influx of gold to the country, which did two things. It reduced the value of all existing stock of money. That’s the way inflation works. A huge importation of gold from abroad led, just like it did in the Spanish empire, an importation of gold leads to inflation. So we experienced this big inflation, in part because of the war. and then a big business boom that resulted in a huge business cycle bust in 1921.

(Speaker 1)
Now fortunately in those days we weren’t yet disciples of John Maynard Keynes and we weren’t using the power of the federal government to try to reverse the economic downturn. There was a complete laissez -faire hands -off policy. Who cares? And the thing corrected itself in 18 months. We were back again. That was the very first crisis of the Federal Reserve.

(Speaker 1)
It happened very, very quickly afterwards, inevitably. Now, at that point, they should have said, you know what, let’s unplug this stupid money machine. For all the problems with the wildcat banks, it’s better than this. Better than total war. conscription, mass death, and upheaval all over Europe that the central banks caused, but they didn’t do that. The Fed went back to trying to run a sound business policy, but five years later, they couldn’t fix the problem, and the credit expansion extended, it continued.

(Speaker 1)
And then the Fed faced another problem. Every president wants lower interest rates. We have four years, we get a new president in, He inhabits this sort of world. He gets annoyed. He wants to see rising prosperity. He wants to see economic growth so he can get credit for that.

(Speaker 1)
And a major inhibitor of that always is the limitations of the financial system. And if the Federal Reserve has the power to determine the lending rates between itself and its member banks, which it does, it can set any rate it wants, then the Fed bears responsibility for the interest rates all the way up and down the yield curve throughout the entire country and can drive growth or it can drive pullback on growth. Well, that’s the president taking a big issue with that right now. And again, I don’t I don’t I’m not here to agree with with Trump’s evaluation of this, although, you know, in his defense, you know, he’s a businessman and he’s he’s worked with in debt and banks all of his life, you know, raising, you know, huge empires, you know, all over the place, a business and dealt with banks. And he always wants the best rate.

(Speaker 1)
Like, as a businessman, he’s not going to accept the rate that’s given to the hoi polloi. He wants the best rate for the money that he’s getting. He believes in debt. He believes in leverage as a businessman. He came of age in the age of leverage. So he believes in leverage, and he believes in low rates.

(Speaker 1)
So he’s using that model and applying it to the entire country. So I get it. I think it’s reckless, but I get it.

(Speaker 44)
So this may not be the ideal conditions under which to challenge the Fed’s so -called independence, but I am nonetheless delighted about it.

(Speaker 1)
I think this is a reckoning we have to have. Who’s in charge of this thing that we call the Federal Reserve? There’s a great number of institutions in this country that are involved in finance, private, public, and we do have this astonishingly large debt in America right now that’s been accelerating through the interest payments and so forth. How much of a responsibility does the Fed have for this reality in your mind, in the grand scheme? Big question. I

(Speaker 1)
recall that when I was a sophomore in college as an economics major, when I discovered the power of the central bank in terms of its capacity to drive prosperity, drive inflation, send whole societies into upheaval. French Revolution, the Bolshevik Revolution. I mean, you go through it, you look at the Weimar inflation of Germany, arguably without which we would never have seen a Hitler. You realize that the monetary piece of public policy is huge. It’s gigantic. It’s something that once you start looking into it, you become obsessed with it.

(Speaker 1)
And I did. I did. I wrote my undergraduate thesis on the Federal Reserve, in fact, and on the gold standard. And it was the longest thesis in the history of the academy where I attended, because I just got obsessed with it, because I think it is really important. Lots of people argue for a constitutional amendment to balance the budget. A lot of people want the Congress to cut spending and so on and so on.

(Speaker 1)
But until you unplug the Fed’s capacity to just print money and cover up for all the proficacy of Congress, we’re never going to get there. We need sound money or we’re never going to get anything remotely like a balanced budget. It’s the Fed that makes it all possible. The Fed provides a moral hazard that results in ever bigger government, ever more debt, forever. And, you know, I’m cautious about people who always want to paint the chairman of the Federal Reserve as some sort of demonic devil guy. I don’t think that’s really true.

(Speaker 1)
A lot of these guys have every aspiration to to run a good policy. I mean I think Jerome Powell, let me phrase this, I think Jerome Powell knows what’s right and I think he wanted to run a a sound policy. He inherited Ben Bernanke’s policy of zero interest rates, which is a grotesquely irresponsible policy. It never should have been imposed after 2008. And it bloomed up the assets of the Federal Reserve.

(Speaker 1)
They wanted to normalize the balance sheet, and Jerome Powell had every intention of doing that. And that’s what he did do. He started cranking up interest rates a little bit at a time, wanted to normalize Federal Reserve policy, make it more responsible, clean up the Fed’s balance sheet, get all these bad mortgages off the books, and set us back on a good policy. He is a sensible, reasonable human being. But they came to him in early 2020 and said, Mr. Powell, you may be a good manager of the monetary system. You may be a good and respected head of the banking system.

(Speaker 1)
You also have responsibilities to larger issues, like the priorities of the federal government, too. And we’ve got a virus on the way. And we’re going to have to deal with this in a big way. This campaign you have to raising interest rates has got to stop. Right now, starting now, I don’t have a transcript. I don’t know for a fact this happened.

(Speaker 1)
You can look at it in the data. They got to him and said, you have to serve the cause right now. You are federally chartered. You have a responsibility to the government here. We want these interest rates to fit and match what’s about to happen. So sure enough, I think it was about March 12th, maybe March 10th, he slammed the rates back down to flat zero and accommodated trillions and trillions of dollars of congressional spending for the coronavirus.

(Speaker 1)
And created more money in those 18 months to two years than we’d ever seen, really, in American history, certainly since World War II. I mean, it was an unbelievable thing. This is not what Powell wanted, but it’s what he had to do, because he was being pushed from every end. We don’t know who did it. And because the structure existed to actually do it. Because it was possible.

(Speaker 1)
You can send your college kid off with a credit card with an unlimited balance on it and tell him to be frugal and be careful about his spending. But he’s probably not going to be. That’s essentially what we’re dealing with with the Federal Reserve. We’ve got the whole federal government on this Fed credit card, and they just can’t stop. They can’t stop it. And it also just strikes me that the way, and just please comment on this, but the way it’s structured strikes me that The locus of responsibility seems to be diffuse or unclear.

(Speaker 1)
Yeah. So this is right. And this is what I think we’re going to have to get settled. And this is why I admire what Trump’s done so much with this. I think what Trump’s done here with this Lisa Cook thing is just brilliant. I mean, he found a way in to test the powers of the people’s elected leader over this central bank that has lived for more than 110 years in this kind of absurd

(Speaker 1)
floating realm of independence. And, you know, we don’t really have access to their books. We don’t really know what goes on at the Fed. Yet they have to present reports to Congress. The government can audit them like they audit the Pentagon or anybody else. But they’ve never been exposed to an outside audit like any big company would be.

(Speaker 1)
They’ve never been outside. Even the Rand Paul’s interest legislation, his father before him, going back decades to audit this thing. It still has not been audited. So there’s weird stuff going.

(Speaker 2)
It’s an unaccountable It’s really a beast.

(Speaker 1)
It’s responsible for the financialization of the U . S. economy, the explosion of the capital goods sector at the expense of the consumer goods sector. It’s arguably been the reason for the blowup of the managerial state and for the puffiness and frothiness of the corporate world, the centralization of business. the persistence and rise of the media. It’s like a lot of things.

(Speaker 1)
What’s the frothiness of the business world exactly? Oh, well, just like ever since Zerp. Since 2008, we have a whole sector of society of people inhabiting high -level corporate positions getting paid very high salaries because of their resumes and don’t actually do anything. OK, that’s the frothiness. This is well -documented, and it’s a shock, really. And I think the Fed bears most responsibility for that.

(Speaker 1)
That was zero -interest rate policy. When money is free, you’d be crazy not to carry debt. You’re crazy. If you make any money at all, you’re going to be making more than it costs you to borrow money. Right. But that only works for people who have the ability to access that money.

(Speaker 1)
That’s right. So it’s a very specific group of big players. Big business. That’s the reason why big box stores are taking over everything. We’ve got a weird situation in this country. We don’t have small businesses that are happy to do small businesses.

(Speaker 40)
Most businesses started these days to be acquired by another business.

(Speaker 1)
And those businesses are acquired in hopes of being acquired again. It’s a crazy thing. And this is especially true in the world of finance.

(Speaker 7)
You know, you would never start a fund with the expectation to hand that fund off to your kids, or their kids.

(Speaker 1)
No. Your goal is to impress buyers who buy you, and their goal is to impress even higher buyers. Everybody wants to be Goldman Sachs. It’s terrible. Well, and just on that note, I know a number of scenarios where people who understand exactly how this works have built small businesses so that those numbers look just right for the people that are going to be doing the acquisitions. It’s astonishing, right?

(Speaker 1)
But the actual sort of the inherent value is not very interesting, if that makes sense. It creates this weird world. It’s very strange. A lot of it is because of the leverage and the debt finance and the financialization that’s taken place. There’s so much fakery in the world. because of the central bank.

(Speaker 1)
So we’re at a very interesting time, because we are maybe on the verge of solving this problem. What is the central bank? To whom is it accountable? Is it an executive agency, like the org chart of the federal government says? Or is it somehow, I don’t know, independent? I don’t know.

(Speaker 1)
By the way, can Congress really give up its powers? It was given control in Article 1, Section 8, over the money and the coinage. That’s what the Constitution said. This is your job, Congress. Can they really just write a legislation that goes, yeah, we don’t like this so much? and toss it over to the executive department?

(Speaker 1)
Can they really do that? Can you just delegate whatever you want? I mean, how do we know that the Federal Reserve Act was even constitutional? Do we know that? Has it ever been tested? It’s never been tested.

(Speaker 1)
I’m not sure they can really do that. And if they’re going to do that, then they have to expect that the head of the executive departments, the head of the executive branch, will expect to have some sort of managerial control. over the central bank, because Article 2, Section 1 says the U . S. president is the head of the executive branch. The Federal Reserve lives under the executive branch.

(Speaker 1)
It’s not complicated. Okay, the Constitution says this power belongs to Congress. Congress punted, gave it to the president. Well, now the president’s going to be in charge. I think that’s the way it’s going to be. Is the Supreme Court really going to say, yeah, I know there are three branches of government and all that kind of stuff, but That’s central bank, we’re just going to let that floater out.

(Speaker 1)
You can’t say that. There’s nothing in law that would seem to make it possible for the Federal Reserve to forever claim to be some independent, floating, all -powerful hegemon. If I may comment, I’m just thinking through here everything that you’re saying.

(Speaker 2)
It’s not entirely clear to me. I’m always thinking of what Alan Dershowitz calls, the shoe is on the other foot test.

(Speaker 43)
Just think, what are the ramifications of a decision in the future with different people with different ideologies, different approaches dealing with it?

(Speaker 1)
It’s not clear to me which of these solutions actually is the one that makes most sense.

(Speaker 7)
I suppose the independent floating one is one you really don’t need.

(Speaker 1)
because you end up with this situation where you have, for example, in the UK, these independent NGOs kind of making decisions for the executive, in effect. That’s what the founders feared the most. They feared an unaccountable central bank. That’s why it never really gained traction. So that’s an unlikely route. Let’s leave that one out.

(Speaker 1)
I think it’s unlikely. What does it look like, Congress taking control of monetary policy? What would that even look like? I don’t really have an answer to that. Part of the problem is, and I wrote an article for the Epoch Times a couple days ago. Thank you, by the way, for publishing that.

(Speaker 1)
I, at the outset of the article, warned everybody, it’s the most boring article you will ever read. I did a taxonomy of monetary regimes, like 10 possible policy priorities and systems that you could have in this country. as systems and also possible routes of reform, paths to reform. So I can map out to you right now what I think is the ideal system. And I think we had that in this country. It was free banking combined with a congressionally established and presidentially enforced gold standard.

(Speaker 1)
I think that was beautiful. It’s not so simple. to say, let’s go back to that. I don’t know how you would do that. I don’t know how you get from here to there. But look, we have what we have right now.

(Speaker 1)
We’re going to get something different soon. Right? Probably as a result of that. a court decision over this very, very provocative, but I think quite brilliant move by Trump to go after a Fed Reserve Board governor, fire her for cause, and then just see what happens. I don’t know. I don’t know how it’s going to end up.

(Speaker 1)
I can see dangers in all directions. I will tell you this, I think it’s time for some accountability, and it’s time for some clarity about what this thing we call the Federal Reserve is, to whom it’s accountable, and whether and to what extent the voters have any place or role in oversight and controlling it. If we don’t, you know, we’re going to continue to lose our economic freedom, our independence, our aspirations for an enterprising economy with frugal people who can save money and be rewarded for doing so. There has to be a change. We live in times of great nostalgia. People want to recapture what we’ve lost as a nation.

(Speaker 1)
Freedom, independence, frugality, prosperity, families that can live off one income and so on. None of this is going to be possible. unless we can figure out a way to restrain the Federal Reserve. I think in a circuitous and sometimes familiar way, President Trump gets that.

(Speaker 2)
Intuitively, he understands that. This institution must be held to account. It must be accountable to the people and to the people’s representatives. And I think that’s a good decision. I think it’s a good step. We’ll see how it turns out.

(Speaker 7)
Well, Jeffrey Tucker, it’s such a pleasure to have had you on.

(Speaker 2)
My pleasure. Thank you, Jan. So everyone, before we finish, I want to try something a little different. I met a new friend, Andrew Sorcini, over at Beverly Hills Precious Metals. He’s been working with someone I trust very well on purchasing gold, silver, other things.

(Speaker 1)
And It’s actually a huge opportunity to learn about what’s happening.

(Speaker 2)
I’ve been watching the gold market, and I think it’s the highest price ever, actually, that it’s at right now.

(Speaker 25)
Can you just tell me what is going on and what does that mean for investment?

(Speaker 2)
And by the way, just as a caveat, I am myself deeply invested in gold, not with Andrew’s company, but I see that as an excellent place to put wealth these days. Oh yes. So so for the past five years or so the BRICS nations which are Brazil Russia India China South Africa and now a whole slew of other countries there they’re trying to do dollar rise the globe meaning they don’t want the world’s trade to work on the dollar. And what this has done is they’ve been hoarding the earth’s gold in record amounts. And with the idea of coming out with some sort of a central bank digital currency that’s gold -backed. That’s been the single driving force on why gold has been blasting off recently, and really, it feels like there’s no end in sight.

(Speaker 2)
Well, that’s interesting, but isn’t this sort of working? Are you basically saying if I’m investing in gold and silver and precious metals that I’m actually working against the United States here? No. So what happens is that When Donald Trump actually gave his inauguration speech the first words out of his mouth were the golden era of America begins right now. And he keeps throwing out these these gold innuendos. And a recent one actually ties into what’s happened this week.

(Speaker 2)
So a little while back he actually tweeted out X, it said, he who holds the gold makes the rules. And on that day, gold went to $3 ,500 an ounce.

(Speaker 7)
Then over the next couple of months, it did go down below 3 ,300.

(Speaker 2)
Today, it’s sitting at $3 ,550 per ounce. And I believe that we are going to one up what the BRICS nations are doing. with our own gold holdings, there’s a good chance that gold could be revalued. meaning it could have a new spot price significantly higher, almost overnight. And for people out there that might be watching, you can Google that. Not that everything on Google is true, but you can get a general consensus as to whether or not this is possible and why it would benefit countries.

(Speaker 2)
And just to close out this thought, here in the United States, this would be a way that we could wipe out the national debt by re -evaluating the gold spot price. It could happen, because if we’re not doing that, there’s no way for us to ever eliminate that $30 -something trillion debt. Well, right. Gold is kind of fascinating. One of the big theories I remember back in the day was when basically America went off the gold standard. There was this kind of weird expectation among people that gold was just going to bottom out to industrial prices.

(Speaker 2)
But frankly, that didn’t happen. It went in the exact opposite direction. So gold has this very strange staying power. I don’t know if this is the reason for President Trump’s particular fascination with it, but what do you think? I agree with it 100 percent. And just talking about the Fed Reserve for people out there that might be seeing that Trump’s been battling with the Fed Reserve chairman trying to get him out of there.

(Speaker 2)
It’s not a reserve. So all it is is something that was put in place when we went off of the gold standard which has been a little bit over 50 years ago. And actually it was last

(Speaker 1)
July that we really took a big big hit in America. And this didn’t hit the so -called mainstream media.

(Speaker 2)
We went off of the petro dollar in July of last year. Saudi Arabia’s 50 year contract on the petro dollar ended in July and they just chose to not renew it. So technically our dollar is not backed by anything real at this point. I mean we’ve sort of known that for a while. And also it a news article came out this week where where the the foreign bank holdings now for gold exceed their Treasury holdings. That means that the foreign banks are no longer investing in the dollar.

(Speaker 2)
They would prefer to invest in gold right now. Well, no, and in fact, I was just actually looking at a graph that actually speaks to this. I mean, there isn’t a ton of trust in the euro either, or even less, but there is this increased interest in gold as the place where people store value. Yeah it’s all the currencies out there for pretty much every country. Many of these countries are like America where where they do have a big national debt or their currency just doesn’t have the value anywhere close to other countries currencies. So I believe that that the way that we spend money is about to change forever.

(Speaker 2)
So we’re probably going to go to something digital like for me. I like sports. I go. I live in Los Angeles. I go to Dodger games. they don’t take cash there. People want to use their phone to pay for things.

(Speaker 2)
If we’re going to be doing that, why don’t we have some sort of currency that is digital, that’s based on something that’s real, like gold and or silver. For people like us that own gold or silver, you’re in on the ground floor on something that could really only go up in value if the whole world is using it as a currency again. The reason that I share the holdings that I have into gold mostly is because I view it as a safe store. This is what’s interesting. It is at a record high price right now, but generally, you don’t hear that you want to buy high.

(Speaker 2)
Generally, you hear buy low, sell high, that kind of thing. I’m not looking to buy and sell. I’m looking to have a place where I have safety. Yeah absolutely. So so I’m talking about the idea of buying high. OK. I talk about gold a lot.

(Speaker 2)
But when I say that something when I talk about gold what’s good for gold is great for silver and silver something that’s been heavily manipulated for years meaning that that the big banks out there would not allow silver to break out of a 20 to 25 dollar per ounce range.

(Speaker 1)
So it would literally go from $20 an ounce to $25, back down to $20, up to $25, and just continue. And all these people were investing in silver, hoping that it could get back up to $50 an ounce, which is the all -time high, and exceed that at some point. Even in 2011, silver hit $49 an ounce. Gold was $1 ,900 an ounce.

(Speaker 7)
Today, gold is at $3 ,550 an ounce, and silver is at $41 an ounce.

(Speaker 30)
If you look at the ratio, silver should be a lot higher right now than it is.

(Speaker 2)
But the good news for silver is that it has broken out of that $20 to $25 range and that the odds of it going past $50 an ounce and into an area that we’ve never seen it go before are very strong. So at this point, I do like investing in silver with it being at a higher spot price. than say before, because people have waited years for it to break out of that $20 to $25 range. So I think that for precious metals, it’s now. Well, no, and I appreciate you clarifying around silver because I always had this question in my mind. Why would I do silver, you know, at all?

(Speaker 2)
Right. I mean, I’m very simple in this respect. OK, you have to forgive me here. Yeah. Yeah. It’s one thing that people can do to own gold and silver is people oftentimes will do a cash purchase.

(Speaker 1)
And when they contact us for a cash purchase, they go on our website. They fill out an online form, and they ask us to contact them. And we do.

(Speaker 2)
And we’re not super pushy. We give people time to be able to speak with their family members, financial advisor, or even pray about it. So we’re not going to berate somebody because they can’t make a decision to make a purchase on a 10 -minute phone call. So we’ve been doing this for a very long time. But people should reach out to us because they can roll over a portion of their retirement account to hold physical gold and silver that started at a third party depository where it’s fully insured. It’s not stored at our office and and it’s not a taxable event.

(Speaker 2)
And these rollovers, that’s what they’re called, they only take about 10 days to get going. We’re having more people contact us now than in any time in the 40 years that I’ve been doing this. Tell me a little bit more about this retirement aspect because I’m Canadian. We have our own system of how things work. Give me the nuance of the distinction if you’re putting it into a retirement type account versus just buying casually. OK, so it really it only works for the U .

(Speaker 2)
S. based retirement accounts. But if you have an IRA say at Fidelity, OK, I’m just using them as an example. And let’s say you have one hundred thousand dollars in that retirement account and you want to own gold and silver in that retirement account, then you would reach out to us. We’ll help you do a rollover. What happens is, is we do an onboarding appointment with our IRA custodian.

(Speaker 2)
which is not Fidelity, and our custodian will ask Fidelity to send, let’s say if you’re doing $20 ,000, they would send $20 ,000 over to our custodian. Once it funds, okay, then we contact you and we say, hey, the $20 ,000’s there, now it’s time to get you some gold and silver. Then we do the gold and silver purchase and it’s not considered a distribution. It’s not a taxable event. And now you have physical gold and silver that you can see on a quarterly statement or daily online at any given point. If you live off of your retirement account or you pull from it regularly you’re able to do that.

(Speaker 2)
All you have to do is either leave enough cash in it to do it. or sell us back a little bit at a time. People do both options. And it does. It’s not just IRAs. If you have a 401k from a company that you no longer work at or if you’re currently working at a company that you do have a 401k and you’re over fifty nine and a half those can be rolled over.

(Speaker 2)
You might have a government TSP account. an inherited IRA. You can have a simple IRA. Those can all be rolled over into precious metals IRAs. And so but you know what what what is let’s say everybody were to listen to you. What would that look like.

(Speaker 2)
I love that question. It’s so earlier I mentioned that really only one to one to two percent of Americans understand this and understand how gold and silver can help their portfolio. It’s my estimate that if that were to somehow bump up to 10 percent that that would probably wipe out all of the physical gold and silver that’s available. And it would probably drive the price sky high. It’s the people here don’t really get it. But it’s I’m trying.

(Speaker 2)
I’m out there spreading the word. And it’s great because it’s it’s helped so many people over over time. I mean I’ve had Beverly Hills precious metals since 2010. And so for for more than 15 full years I’ve been helping people with retirement accounts and in like a call center format. But prior to that, since 1985, it was my first job working in the coin business.

(Speaker 2)
And I remember early on, I couldn’t understand why these men would walk in with wads of cash, trade cash for stacks of gold. And I just remember asking the boss there, like, Why would they want gold more than cash? And he told me, he said, the cash isn’t worth anything. It’s just paper with numbers on it.

(Speaker 7)
The gold is worth something. And ever since then, I got it.

(Speaker 1)
Well, I was chatting with Jeffrey Tucker, and one of the things we were talking about is coin stores.

(Speaker 2)
And something amazing about coin stores is that these coins are a physical representation of freedom, of people’s freedom, of people being able to hold wealth themselves.

(Speaker 42)
They’re in their own in their own hand in their own way.

(Speaker 2)
There was a time when owning an actual ten dollar gold note or a ten dollar gold coin were the same because that the coins back the note.

(Speaker 22)
But now that is no longer the case.

(Speaker 41)
So it’s to me When you invest in gold and silver, you are investing in history.

(Speaker 22)
You’re investing in part of what made America such a great country, and we’re still a great country. We just need to revamp how we spend money.

(Speaker 10)
To me, gold and silver is where it’s at.

(Speaker 40)
Wonderful. Listen, I appreciate you taking the time.

(Speaker 22)
As I said, you’ve come very, very well -recommended, and I hope some of our viewers will have the chance to work with you.

(Speaker 10)
Oh me too. Me too. So hope to be back. Just out now foreign central banks now officially hold more gold than U . S. Treasuries for the first time since 1996.

(Speaker 10)
So I’m letting that sink in. But what is that telling us, Chris? Well, global central banks have been buying gold pretty aggressively for the past 10 years. It has accelerated with the arrival of Donald Trump in the White House.

(Speaker 39)
Chris Whelan, he’s a titan in the world of finance.

(Speaker 21)
He’s the chairman of Whelan Global Advisors. For the past couple of days, all eyes have been on the Shanghai Cooperation Organization, or SEO, summit that took place from August 31 to September 1. The annual summit has brought together leaders from more than 20 nations, representing half the world’s population, believe it or not, to discuss not only regional cooperation, but also the very future of global governance.

(Speaker 38)
Western mainstream media still can’t get over the fact that Russian President Putin and Indian Prime Minister Mr. Modi were seen walking hand in hand.

(Speaker 21)
Well, just a day prior to that, Bodi and Xi Jinping announced that it is time for the dragon and the elephant to dance.

(Speaker 6)
In the media, we already see reports indicating that the SEO ushered in a new world order.

(Speaker 37)
And it is a quite challenging task to argue with that because it is true.

(Speaker 36)
According to experts, the scale and the vision of this year’s SEO summit marked an unprecedented achievement for the organization.

(Speaker 6)
It brought together over 20 world leaders and delegations from more than 30 countries.

(Speaker 5)
Many now acknowledge The BRICS Group is set to introduce a new currency backed by gold in contrast to the credit -backed US dollar with countries like up to join the growing initiative. The Russians backed up what Warren’s been saying. A lot of people are going, oh, this currency is not going to be anything. They said it’s going to be gold -backed. Hello.

(Speaker 5)
It’s going to be gold back. I know you’re saying that China is globalizing the one using Enbridge as a settlement system but that gold is a layer securing this and adding that element of trust which as we said has been missing from the other currencies in the other countries and also expanding the Shanghai gold exchange. And I believe you’re saying but building volts around the world. So yes. Break that whole system down for us. It is to internationalize the ability for traders or clients, I guess you could call them clients, which would be central banks, other countries in the Middle East, in Africa, in Asia.

(Speaker 5)
Let’s call it the Belt Road. The idea is to internationalize the yuan for trade amongst the Belt Road, which is all throughout this area, in particular Asia and Africa, eventually into South America. to facilitate trade over the Enbridge system, which is instant settlement free from SWIFT intervention. and settle any and all imbalances in gold, which will be built amongst a series of multi -jurisdictional vaults. The first vault built by the Shanghai Gold Exchange, operated by the Bank of China, will be in Hong Kong. Whenever there is deliveries out of China, it has to come out of Hong Kong.

(Speaker 6)
So it would be deliverable right now in China for any country that’s doing business with China and accepting yuan in payment.

(Speaker 35)
They can deliver that directly to the Shanghai Metals Exchange in Hong Kong and take delivery off of the exchange if they want or store it there if they want.

(Speaker 5)
The next one that is going to be built will be in Saudi Arabia. And then from there on, it will be sprinkled throughout the Belt Road, eventually throughout Asia, Africa and South America. as a way to disintermediate, if you will, or to break up from having one player hold all of the metal. It will be sprinkled amongst all of these jurisdictions to even establish more trust so that it’s not jurisdictional, that everybody has some gold amongst all of these jurisdictions. And it makes it much easier rather than, say, the COMEX or the Bank of England holding everyone’s gold. it will be spread around this entire new ecosystem to not only provide the legitimacy that gold does and the settlement and authenticity that the blockchain does, but to have it spread amongst various jurisdictions.

(Speaker 5)
So you don’t get the moment like the Bank of England saying to Venezuela, yeah, it’s your gold, but we’re not giving it back to you. Sorry, we don’t want to see that.

(Speaker 9)
And this is, I think, a way to really make it more foolproof in terms of its acceptance and of its legitimacy. Other countries that China does trade with will also be putting their gold in these vaults. Absolutely. Absolutely.

(Speaker 34)
And it won’t be the country’s vaults the country’s gold rather it won’t be the People’s Bank of China’s gold or Saudi Arabia’s gold per se.

(Speaker 9)
What it will be gold that will allow these countries to facilitate trade.

(Speaker 2)
Right.

(Speaker 33)
It’s not the gold that’s owned by the People’s Bank of China or the gold that would be owned by in this case the Central Bank of Saudi Arabia.

(Speaker 32)
It would be more along the lines of the gold that they want to facilitate trade through probably a series of their largest commercial banks.

(Speaker 19)
It’s a way to trade and settle in gold not to post your own country sovereign gold.

(Speaker 9)
So there’s a little bit of a distinction there. But nonetheless it’s using gold as the in essence as the reserve or as the authenticity of a system that is trying to find trust in a world that seems to have gone astray from trust. Something big is happening with the dollar and they’re counting on you not understanding until it’s too late. Stablecoins. programmable, controllable digital currencies backed by U .

(Speaker 9)
S. debt are now being built into the core of America’s monetary system. It is a big week for the crypto industry. Stable coins could be the solution because they’re backed by real world assets like dollars. I think that’ll give regulatory clarity to stable coins. This is not an auto pen, by the way.

(Speaker 9)
Depending on who you ask, some believe they’re a solution, a bridge to a crypto future and the answer to America’s because debt disaster, while others believe they’re a Trojan horse, a CBDC by another name, not built to free you, but designed to control you. But no matter where you stand, one thing is clear. Stablecoins are about to change the future of the dollar and therefore your savings, your privacy, and your freedom. But what exactly are stablecoins? How are they tied to U .

(Speaker 31)
S.

(Speaker 9)
debt and federal power? And is it really about innovation or is it about control? Let’s get into it. Last week, the Genius Act was signed into law, which gave a regulatory green light to private companies issuing their own U . S. dollar -pegged digital currencies, otherwise known as stablecoins.

(Speaker 9)
Now, stablecoins fall under the cryptocurrency umbrella, but what makes them stable is that they are pegged one -to -one with an asset. That asset could be anything. But in today’s video we’re going to be focusing on U . S. dollar stable coins because nothing says stable and true store value like the U . S.

(Speaker 9)
dollar. Am I right. Well maybe not exactly. But sarcasm aside this big shift to embrace stable coins isn’t just about innovation or crypto adoption. There is a major strategic reason that the government is rushing

(Speaker 4)
to adopt stable coins.

(Speaker 30)
See under the Genius Act, the Federal Reserve now plays a major role.

(Speaker 12)
They determine who gets licensed. They control who has access to the Fedmaster accounts. And they can audit monitor and shut down reserve access as needed. So just because they’re not the ones issuing the token doesn’t mean that they don’t control the infrastructure that these private companies rely on. And that is just how it’s set up. today.

(Speaker 12)
Imagine how it’s going to be in a couple of months a year from now as new legislation or new boundary pushing gets tested. Think about it.

(Speaker 4)
What happens the next time you speak out against the government with something you don’t agree with or you attend a protest that they don’t like.

(Speaker 14)
What happens when your money can suddenly be programmable frozen. Is that freedom. But it looks to me like stable coin and tether in particular is going to be the future of the U . S. dollar. payments and this is where a lot of people on the right certainly are very afraid of control grid, you know, because a stable coin is not necessarily like Bitcoin.

(Speaker 14)
You can stop it. You can control it.

(Speaker 11)
You can see who sent what to whom. There’s a lot of fear about this. And particularly, although I don’t see any maliciousness, this fear that Elon and the PayPal mafia and Peter Thiel, all guys you’ve met, all guys you’ve had on the show, I think are actually quite nice people, that they’re going to bring in the new with AI and we’re all going to be locked in and, you know, Stargate will bring cancer mRNA vaccines that will be mandated. I mean, people are spinning up over this stuff. And I’m not saying that they’re necessarily wrong or there should be no concern, but we are moving towards a digital dollar and it will have aspects of control. In 2012, Ripple XRP is released to the public and today it is being considered for its new stablecoin.

(Speaker 11)
Stablecoins such as Ripple’s RLUSD are digital versions of fiat currencies. While Bitcoin may arguably be a decentralized currency, stablecoins can be programmed and tracked as easy as any CBDC can. It’s the same thing, just a different name.

(Speaker 15)
In 2012, Ripple XRP is released to the public, and today it is being considered for its new stablecoin. Stablecoins, such as Ripple’s RLUSD, are digital versions of fiat currencies. While Bitcoin may arguably be a decentralized currency, stablecoins can be programmed and tracked as easy as any CBDC can. It’s the same thing, just a different name.

(Speaker 11)
Immediate reaction is, I think there’s some more education needed in the marketplace.

(Speaker 27)
I think There’s a lot of discussion around a CBDC, what it is, what it isn’t, you know, is it the government that is spying on citizens, all this kind of thing.

(Speaker 15)
So I think there’s an education required. At the end of the day, you know, I think the federal government, you know, trumps the state governments in this. But I think really, I don’t think the citizens have anything to be concerned about. You know, CBDC is a digital representation of fiat currency. It’s likely to get implemented in pretty much every country around the world, it’s coming. There are going to be some great advantages to it, great use cases that will, you know, people will get benefit from.

(Speaker 29)
So I see news like that, I think, okay, well, this will probably disappear when people get a bit smarter, a bit more educated about what’s really going to happen.

(Speaker 15)
Crypto people aren’t just in it to make a buck. They’re in it to change the world forever.

(Speaker 28)
These are not shallow people.

(Speaker 6)
These are people who can answer every single question except who was Satoshi, which they don’t answer. Someone should answer that. Nope. I think we know. Anyway, in fact, I have a friend who’s probably sitting here who told me he did know, but I don’t believe him. And I don’t care if it was the CIA.

(Speaker 6)
It doesn’t matter. The idea is still a great idea. Obviously, it was the CIA. I think we all know that. It’s like Signal.

(Speaker 13)
They got there first. It’s a honey trap. You have this balance of power between the people and the bankers. And now what is happening under the guise of COVID -19 is the bankers have decided they no longer want to, they no longer want to… The head of the Bank of International Settlements is the Central Bank of Central Banks. And it’s been running the process to implement basically an all digital monetary system.

(Speaker 13)
And they have innovation hubs all over the world. They’ve been running this process for a long time.

(Speaker 8)
And in 2020, when the pandemic started, or it was October, 2020, so the pandemic was underway, the general manager of the Bank of International Settlements was on an IMF panel. And in one minute, first time in my life I ever saw a central banker tell the truth, I fell off my chair. And he said, You know, the beauty of this is we can set the rules on how your money works and we have the technology to enforce them. And what he was saying is literally from one place in, you know, anywhere in the world where the technology exists, you can track each person individually. You can set a complex list of rules, you know, like legislation, regulation, and administrative policy, and you can enforce them all with the technology, with AI and software. We tend to establish

(Speaker 8)
equivalence with cash. And there is a huge difference there. For example, in cash, we don’t know, for example, who’s using a $100 bill today.

(Speaker 6)
We don’t know who is using a $1 ,000 bill today. A key difference with the CBDC is that central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability. And also we will have the technology to enforce that.

(Speaker 15)
Those are those two issues are extremely important and that makes a huge difference with respect to what to what cash is.

(Speaker 6)
The nature of money is going to change quite dramatically.

(Speaker 15)
The old systems of of trust and of ownership will have to adapt radically.

(Speaker 6)
Maybe the financial system will become so complicated as AI takes over more and more of the action that no it will be just too complicated for the human mind.

(Speaker 27)
Money itself is just a cultural idea.

(Speaker 6)
And we learn it in the last few months.

(Speaker 27)
You know Putin has accumulated these hundreds of billions of dollars as a war chest preparing for this war for years.

(Speaker 6)
And it was astounding to see how the financial system can just freeze this money.

(Speaker 27)
And it makes you think what is money.

(Speaker 6)
I mean, he thought he had all this money and apparently he doesn’t. And it has 63 of the most powerful central banks as its members. And the New York Fed and the Fed are both shareholders. They became shareholders in 1994. In one sentence, what’s the purpose of the Bank of International Settlements? Okay, so there are two things you need to know about the Bank of International Settlements.

(Speaker 6)
I’m not sure my brain’s big enough for this, but keep going. It is.

(Speaker 15)
Okay. It has sovereign immunity.

(Speaker 6)
What does that mean? It’s above the law. It’s its own country. Right. It’s its own country. It has its own police force.

(Speaker 6)
And essentially, other than one of its staff being in a car accident or, you know, minor things, no one has the legal authority to move against it. Okay.

(Speaker 13)
And a sovereign immunity. That’s number one. Number two, it can move money and hold it on its bank, uh, on its balance sheet and manage money secretly. So if I wanna, and I’m grossly oversimplifying, if I wanna steal 21 trillion from the US government and park it on the balance sheet of the BIS, it can move it anywhere in the world and it can keep it on its balance sheet secretly.

(Speaker 4)
Why would there be an organizational? First of all, where does its power, like who empowered it to have sovereign immunity and the right to? It was created after World War I and sort of collected its powers and got going in the 30s. And it was created in theory to manage the reparations of the German government.

(Speaker 26)
But if you read the real history, it was because the Bank of England and the central bankers wanted an entity that had sovereign immunity.

(Speaker 8)
They wanted to be able to move money secretly. So, for example, if you look at what happened during World War II and all the money that was moving back and forth between the Germans and Americans, you know, Dulles was over in Switzerland helping to match these, all these transfers back and forth. So, there’s a wonderful book called The Tower of Basel by a wonderful Hungarian

(Speaker 13)
where he documents and describes the whole history of the Bank of International Settlements.

(Speaker 8)
And if you want to understand power in this world, understanding how the Bank of International Settlements and the plumbing of the central banking system works is very, very important. As Yuval Noah Harari, whom you will have the pleasure to listen to in this conference, said, Money is the most universal and most efficient system of mutual trust ever devised. The unified ledger system would build on the trust of the two tier system of today’s financial system. All transactions are carried in commercial bank money. Both their final settlement happens in central bank money. People need to understand finance.

(Speaker 8)
At the present moment I think that maybe 1 percent of the population really understands how the financial system works. What happens if this number goes down to zero. No human being no president no prime minister no nobody in the central bank understand finance anymore because A . I. has made it too complicated. This could lead to a political and social crisis of the kind we’ve never encountered before.

(Speaker 18)
It could lead to power shifting from humans to algorithms to alien forms of intelligence. I believe that sometimes we need giant leaps that deliver a fundamental rethink of the financial system and foster the development of entirely new architectures. Now A . I. is the first tool that we created that can actually understand thought.

(Speaker 19)
better than us. Because finance in the end, it’s the easiest thing for an AI to really understand. It’s only data.

(Speaker 14)
It’s only information.

(Speaker 6)
I think maybe in a couple of decades when people look back, the thing they will remember from the COVID crisis is this is the moment when everything went digital. And this was the moment when everything became monitored, that we agreed to be surveyed all the time, not just in authoritarian regimes, but even in democracies. And maybe most importantly at all, this was the moment when surveillance started going under the skin.

(Speaker 17)
Nature of money is going to change quite dramatically. The old systems of trust and of ownership will have to adapt radically. What we’re seeing in the world today I think is we are on the brink of a dramatic change where we are about to and I’ll say this boldly we’re about to abandon the traditional system of money and accounting. and introduce a new one. And the new one the new accounting is what we call block chain.

(Speaker 25)
It means digital.

(Speaker 4)
It means having a almost perfect record of every single transaction that happens in the economy. Folks I’ve been warning you about this for months. Years of my podcast digital ideas are coming. It’s only a matter of time. If you thought vaccine passports were bad digital ideas would be even worse to be the worst surveillance nightmare you can imagine. This is Richard Werner, the top academic scholar in the world on central banking.

(Speaker 4)
He wrote the book and did the documentary, The Princes of the Yen, about the Japanese central bank. Here he is in Malmö, Sweden in May. The nature of this CVDC. What is it actually going to look like. They never talk about that. But I heard one European central banker tell me what it’s going to look like.

(Speaker 4)
He saw it and he was around this this large and would be implanted on the U . S. case. So look, I’ve been in the financial industry since 9 -11, the day before 9 -11, and I’ve owned stocks, bonds, mutual funds, real estate, crypto, gold, you name it, I’ve owned it. But the one thing that’s a very important part of my portfolio all these years is gold. I love having a percentage of my network in gold that I have access to in case of many different things.

(Speaker 3)
A few facts you need to know about gold. Number one, The gold market cap is $11 .8 trillion. Since 2000, the compound annual growth rate for gold has been 9 .24%. And during times of high inflation, 3 % plus has been 15 .35%. Now, those are just some numbers for you, but there’s some other benefits to add gold to your portfolio. Number one, hedge against inflation.

(Speaker 3)
Number two, results showed recently that 93 % of central banks are working on ACBDC. So this means what? That could be a manipulated currency that they own. If you own gold, it’s a non -duplicatable asset. You’re now hedging against CBDC taking place. Number three, a potential cyber threat.

(Speaker 3)
If it happens, you don’t have access to your money, you don’t have access to your accounts, but you have access to your hard, physical gold. Number four is anonymous. No one knows you have that gold. And last but not least, diversification. This is fake money. It looks like a Kennedy half dollar, but if you lift it up this way, it’s fake.

(Speaker 3)
It’s copper. This started in 1964.

(Speaker 24)
This little fake half dollar is now worth $10.

(Speaker 20)
But it’s fake. This here is real silver. It’s about $35.

(Speaker 16)
Not that much. Everybody can afford $35. And this here is real gold. And I strongly, we don’t give investment advice. But right now, I would strongly Do my best to get your head out of, you know what, and stop working hard and saving this stuff here.

(Speaker 23)
This is fake. This is fake.

(Speaker 7)
This is real. And this is real. Good luck to you all. Start going for real money, not fake money. Thank you. General Mike Flynn, and I want everyone to know that I stand fully behind Beverly Hills Precious Metals and its owner, Andrew Sorcini, a great friend of mine.

We are facing one of the greatest periods of financial uncertainty in American history. And now is the time to organize your finances, seriously consider how you can take care of yourself and your family, and start making some serious decisions. Since my name is Cash, I’m constantly worried about inflation. But to secure your cash going forward, buy into gold and silver today. Go to bh -pm . com today so you can go buy in gold and silver and secure your family’s future.

Bh -pm . com. Call Beverly Hills Precious Metals, get your consultation, buy into gold and silver just like I’m doing today and help secure your family’s future.

Transcribed with Cockatoo