End the Fed

0:00Thank you. It's real nice to be here. It was nice I didn't have to drive too far and get on an airplane. That was nice, too. So, welcome to Houston. For those who've come from outside Houston, and it's good to be here, I would like to introduce my wife. My wife Carol is with me today. She had to show up because she played hooky a couple times this summer. And so she has to make up for that, but she's doing well, and I'm very pleased with that. But I am very pleased to come and speak, and Lew, he may have given me a topic, but he didn't announce it, so that means I can say anything I want, right?

0:48Well, you know, I do have some good news, though. and the good news is this, that it is very clear that when governments and government officials act, you know, outside the law, it's an encouragement for individuals to act outside the law. And if you're looking for a revolution, believe me, there's going to be a lot of activity going on. Just think about it. We could start with this little insurance, well-endowed insurance program called Social Security, run honestly and ethically and above board. But lo and behold, they complain with a guy like Madoff, Madoff goes and does the same thing, you know. But isn't it wonderful who's going to be Secretary of Treasury, you know, in this need? I mean, he doesn't believe And you're not even paying taxes? So what the heck? What is going to happen these days?

1:49I mean, we may truly see some exciting times ahead, but no, he believes in collecting taxes now, and he'll probably be very ruthless in collection of taxes, but obviously it does make a strong point. Now, a lot of you may have seen a bumper sticker that I have in my office, Because it's been on the internet, and yesterday I had some young kids in the office, not too unusual. And the students came in and they wanted to get their picture with the bumper sticker. Of course, he allowed me to be in the picture too. But this bumper sticker is very simple. It says, don't steal. The government hates competition. And they don't like competition. They don't like competition and running your life. They want to run your life for you.

2:37They don't want competition to run the economy, they want to run the economy and of course they don't like anybody to run their own affairs overseas. They think they're capable and have this obligation to run everybody's affairs overseas as well. So it boils down to a very simple philosophy of what we need. We need to get the government, you know, out of our lives, out of our bedrooms, out of our walls, off our back and out of foreign countries and, in the meantime, just get rid of the Federal Reserve.

3:12Over the many years of speaking out and speaking out against the Federal Reserve and sound money, it had to be a unique crowd, you know, those conspiracy nuts and these people to bring up the subject, yes, we should get out of the UN, and yes, we should get rid of the Federal Reserve. and in that special crowd you would get these cheers but something has happened something dramatic has happened and it's happening on the campuses of this country and some people give me credit I don't take the credit I tell I give credit to the academicians the many people you've heard speak here and groups like the Mises Institute have who have changed changed attitudes and it isn't isn't just a few anymore, isn't just a unique crowd that believes in the conspiracy.

4:01I mean, it's so dangerous now that it has infiltrated college campuses. I mean, I couldn't have possibly influenced these college kids. I mean, one person can't do that. So some of these ideas have infiltrated and it's getting to be very serious because you all know the story about what happened at the University of Michigan. I mean, that was startling. It scared me. because here I am it was after the debates over in Detroit we went over to Ann Arbor and I got there a little late there's a little bit of agitation and frustration but it was it was dark and but there was a large crowd there I couldn't see the crowd very well it was that dark but they said there were a lot of a lot of young people there so I went on and gave my talk and and alluded to the monetary system and the Federal Reserve and all of a sudden a bunch of And then they started chanting, end the Fed, end the Fed, you know, I mean, where did this

4:58all come from? So I'm on the receiving of that information and that message. They were telling me to end the Fed, so I said, well, that does sound like a good idea. So we have promptly introduced, once again, the bill to end the Fed. When we had our little rally up in Minneapolis, along with, I think it was another political party down the street had another rally and a convention, we had ours, and lo and behold Well, we had speakers there that had the audacity to mention Austrian economics.

5:46Believe it or not, they started cheering Austrian economics. I mean, what is going on? There is great progress going on. In Washington, you can see some progress. They're thinking seriously about what's happening because, guess what? They're scared, and rightfully so, and they don't understand what's happening. and Lew has alluded to it, the fact that other members do now ask questions. Before, it was usually chuckling and laughing and forgetting about it and say, there he goes again. But now they will. They will come up and they're very serious about asking it because frequently the people on the financial stations of all places, I mean, they'll come up And they'll say, well, you know, he predicted this and predicted that.

6:36It wasn't that I predicted it. I just read what a lot of you people write about and learn how Austrian economics work. So it isn't a great thing to predict. You know, it's like it takes a genius to predict that if you print a lot of money, it loses its value. You know, now that's really brilliant. So, and then this whole idea that a bubble is forming. A lot of you in this room probably remember the name and know the name Jim Grant. And Jim Grant is a good Austrian economist and a good writer. And I invited him down to talk to some members of Congress right after I went back into Congress in 1997. And he came and we had a small group.

7:231997, he took his whole time talking about the horrendous debt being built up by Fannie Mae and Freddie Mac. I mean, we all knew about it and talked about it, but it was really on his mind. But once again, that doesn't tell you that we know a whole lot about timing because things were bad in 1997 and 1998. There was a bubble, malinvestment, too much The financial system dates back to August 15, 1971, and then we might have been forced into a real serious monetary reform, but it didn't happen.

8:12The confidence in the dollar was restored. We had an adjustment. Prices went up and we went on. But in every crisis since, in every recession, they've always been able to do exactly what they had been doing, print, spend more money and run up more debt. And you've got to understand from where they're coming from because it worked to that degree. You know, the recession would go down and it would come back. This last go-around though, with Greenspan and Bernanke, I mean especially in the year 2000, that little recession that came, it's this anticipation, before they used to wait, oh well, the economy is getting too robust, the treatment for a robust economy is recession, of course, you know, a robust economy should be good, but anyway, they would bring on the recession, but this last year, In 10 years, they never allowed the recession to come.

9:11They anticipated in every time it takes more and more and more. I blow the bubble up bigger and bigger. So now, since we are the recipients of benefits of being able to issue the reserve currency of the world, all this paper manufacturing and issuing of paper has been a worldwide event. So this bubble is, I don't think it's overstating the point that this bubble is the biggest of all history. And there's been a greater trust placed in us, the American system, the paper money, our Federal Reserve, our great wealth, and unfortunately our great military because military can convey confidence in a currency.

9:57You know, if there's a war going on and one country's beating the other country, their Their currency goes up with a victory. So there's a lot of the perception of who will be victorious. So we came out, liberty didn't come out so well after World War I, but economically we came out pretty well, World War II has been on and on. So we've had this tremendous bubble build and even in the old days they had inflation, but it was regional. It was never so universal and so worldwide. I sense in Congress today that the members of Congress are very, very worried and frightened. But lo and behold, you know, they give $350 billion to Treasury, and it didn't seem to solve the problem.

10:50Markets haven't improved any, so they said, well, where did the money go? Well, we don't know where it went. Why would you ask this question like that? So what do you do now? What should we do now? Well give us another $350 billion. And what did the Congress do? I mean last week we had two bills we debated related to the TARP funds and the money, I mean the rubber stamp was put there, so the new administration will get that $350 billion. But obviously the spending and the borrowing and the inflating that created Our Problem is the only tool that they have left, and the only thing that's holding it together is a remnant, a small amount of confidence left in the system. Right now it's still the confidence in the dollar.

11:39I am reminded about, and a few of you in this room must, I'm sure remember, in the 1970s, John Exter, who had had some experience in central banking, he had this neat graph, or Demonstration where he had an inverted pyramid and of course at the bottom of the pyramid was gold and above that the different currencies but even then when he proposed that picture of how the economy inflates there weren't even any derivatives that existed and just think of what his concept was and his concern and then you put what 70 trillion dollars worth of derivatives up at the top and there's a tremendous rushing out of the lesser desired assets and that sort of rushing toward the bottom.

12:25But on days I just wonder exactly where we are in this gravitating down toward the peak and down to those very limited assets which would be gold and silver. But right above that still is the dollar, the dollar and treasury bills. I mean people, they don't know where to go. They don't understand it very well. So they have billions of dollars. You can't go and get a CD. You gotta buy treasury bills and you know, they're not hard to make. We can create those out of thin air, you know, rather easily, and you know, down at the bottom though, we would have several of the currencies that people still cling to, the yen isn't all that bad, the euro is holding its own, but I think the British pound isn't doing too well and may not hold it, so they'll be whittled away.

13:16they'll be whittled away but in the meantime the concept of central banking has not vanished yes we have these growing number of kids on the campuses and a lot of people like you out there studying have understood this for years but there's still a lot of people who believe very strongly in central banking so as our movement grows and makes an effort to get rid of the concept of central banking and the Federal Reserve we also have the group that have had the and the greatest deal of influence on our government, those who tend to have control over the Republican Party and the Democrat Party. You know, it seems like Goldman Sachs has an influence on government, whether they're Republicans or Democrats.

14:04But those individuals who know about it are making their plans. A week ago we were told, and I went back a day early because I was told that Bernanke would be before our committee on Monday for some hearings to go over the TARP funding issue. And when I got there he wasn't there and they said, oh no, he couldn't make it, he was elsewhere. But it turned out that was the day, if you remember, he gave a speech in London on a Monday morning and that was the news. But he was over there, that was the cover, giving a speech, the speech was broadcast, it was on our news, and you can get the script, and we had the vice chairman of the Fed come before the committee.

14:49But what they didn't tell you is the day before he was at, in Basel, Switzerland, at Bank of International Settlements, meeting with a few of his buddies, you know, and they were talking. But I asked the assistant to Bernanke whether or not we could have those minutes, but he said, no, you're not allowed. No, he didn't say that, and I closed my statement by saying, yes, I'm not allowed to have those because under the law, he doesn't have to tell us a thing. You know, we complain about $700 billion and the Treasury blowing $700 and we can't make them listen to us. That's peanuts compared to the trillions that the Federal Reserve has control of, but they know by now that this system is not viable.

15:39The way I see it in my mind is that the very weak system that came out of Bretton Woods was the fiat dollar standard and it's lasted up until now. and it built a financial pyramid of debt and it's worldwide. And that system has come to end because it's, it's, it's functioning. I mean, everything is collapsing and closing down and production is going down and all the things that we are witnessing. But the dollar is still existing, but they're still trying to revitalize what built the big bubble. And of course that is the creation of money and the creation of credit.

16:26But the one thing they don't have any control over is the restoration of confidence. Since the world has lost confidence in the dollar system, the only thing the politicians and the bankers have is to keep doing the same thing I'm convinced that in my mind I may be wrong... that they can't go back and pick up the pieces. It's sort of like going back to the British wanted to go back and restore the pound at the old gold standard, which obviously didn't work. We can't go back to the old gold standard. We can't go back to the Bretton Woods. We can't go back to the Venece B Voron Business School. and Restore the Pound at the Old Gold Standard, which obviously didn't work. We can't go back to the old gold standard. We can't go back to the Bretton Woods.

17:11We can't go back to the post-Bretton Woods standard. And therefore, something new has to come up. They're planning their, they're making their plans for what they think they should have. And I'm very confident that they would like to see, you know, a one world central bank. The dollar hasn't done the trick, that we were entrusted to run the system, but now they will have to take it away from us and take it away from the dollar. Which means, if they get away with it, they might be able to keep things going or get things started again, but I think we're going to be in charge. I think that we are destined to be a much poorer nation. is what the handwriting on the wall, of course the world is going to be poorer too, and the question is whether they can devise a system.

18:01So time is short and the arguments are very, very important and I think we're making great progress. But the battle is going to be on the campuses and just hopefully we have enough time to stimulate enough young minds and the minds that they can get in the right positions to give the right answers. This is one place where I've been tremendously encouraged on the campuses. During the campaign, there's a youth group, the Young Americans for Liberty has been an outgrowth of what we're doing and I'm helping to the best of my ability to have them get organized. And we will be testing that. We will be going to the campuses.

18:46If I enjoyed traveling more, I would do it more often, but traveling is a job for me. I've had a lot of nice invitations lately. I can't tell my wife all about these, but she might decide to take one. We had one from Hong Kong the other day, and just this week I had one from Italy and Turkey. We've had several in Eastern Europe. And the way I see this is, you know, with the Internet, they do hear and understand what we're talking about. But it must be like five or ten percent, maybe less, hopefully ten or fifteen or twenty percent. But obviously never a majority. But it isn't like it's just in Auburn, Alabama. This isn't where it is. I mean, it is out there.

19:32And the other day I was coming back from the Capitol and a bunch of men were all bundled up

20:08It's not a numbers game. It's not a numbers game. You don't say, when are we going to get 51%? Well, we just need influential people, and that is what's happening. And that's why the Mises Institute deserves support, because they are changing the numbers. I mean, all the people that have been helped to get their degrees and get teachers in the right places, that's where the future is. And right now, it hasn't had a reflection in Washington, but it's starting to. It's starting to. It's starting to have a reflection. They're starting to ask about Austrian economics and they're asking the right question. And believe me, you can't have any influence until they start asking the questions. They're asking the right questions. They're worried and they're concerned. They know this isn't working.

20:54And I am encouraged in that sense, but in the other sense, though, I am very concerned because it can get pretty rough. And my main goal is, of course, I want to live in a prosperous manner, peacefully, and have as much enjoyment as possible. But it isn't the prosperity that motivates me. I do know that if prosperity is my goal, the freer the society is, the better it is for us. I understand that. But my biggest concern, of course, when I see what's happening is a threat to our personal liberty. And I have always argued I would argue the case for liberty because for me it's a moral issue, it's not a pragmatic issue. I would argue the case for liberty because I just want to be left alone.

21:42That's what I want to be. But fortunately we don't have to take that case because not only can we be left alone, That is the philosophy that takes care of the maximum number of people with the maximum amount of prosperity. But today, we live in an age where I think it's really coming down to the wire. I mean, if we would have had this climax and dissolving of the system as we're having today around the world in 1971, we would have been in a lot worse shape, believe me. I just think we're in so much better shape now to argue our case. We have better methods of transmitting our information.

22:33We make fun and laugh sometimes at radio talk shows, but we've made a lot of use out of radio talk shows. But with the Internet and the communications that we have now, it's just fantastic. The fact that somebody in Italy might want Ron Paul again, that's pretty weird. This communication thing is fantastic. There's every reason to be encouraged. I don't think we have to worry about the philosophy. I believe that, you know, probably in this room we can agree on 99% of the things because, you know, you don't have to be real smart to tell other people how to live. You just have to be smart enough to lay off and leave them alone. I thought, you know, probably the most significant statement I made to undermine the campaign, the presidential campaign in this day and age, was telling people, well, I would be I serve as president. I want to be president. I said, but not because I want for what I want to do because I don't want to run your life. I don't want to run the economy and I don't want to police the world. I don't know how you want to do with your life. I don't know how to dictate to the economy. And I certainly don't want to be involved overseas. You know, you can turn that around and say not what you don't want to do. What do you want to do? Well, you want to preserve liberty. You want to preserve the greatness of this country. And in the meantime, we will protect the prosperity of this country.

23:55But if we concentrate on that ideal of liberty, I believe that we can find all our answers. Thank you very much.