Lew Rockwell: Good morning. This is the Lew Rockwell Show, and what an honor it is to have Dr. Ron Paul as our guest this morning. What can we say about Ron Paul, he’s the leader of freedom not only in the United States, but also all over the world. Millions of young people, and some of us older-than-young people, look to him for clarity and truth in all kinds of areas involving economics, war and peace, the role of government, the economy, what the Fed is doing, and just a 101 different areas. But, Ron, I wanted to start off today to talk about some frustration. If we listen to the media, which impresses me as sort of a Soviet-like media because of the way they repeat this kind of stuff about why the world might come to an end if there’s a cut in the projected spending increases for the government.
Ron Paul: Yes, there have been statistics out, and nobody seems to agree on them. But I think on the principle, those of us who want honesty realize that there are no cuts. And this whole idea that there’s going to be a slash in the budget is nothing more than a farce. One side wants to increase the budget over the next ten years by 2.5 trillion dollars, the other side wants to increase it by 2.4 trillion dollars. So it’s a hundred billion dollars cut over ten years, and they’re hysterical over the whole thing. This frenzy is built with the media and the demagoguing by everybody who wants to spend. And you know darn well that the so-called conservatives on the Republican side won’t cut one penny out of the military. It’s just amazing how far this can go. But I think in one way you might look for more sanity in the marketplace. Not that that’s the final test, but the markets aren’t hysterical about this. On the short run, the markets are still saying the end of the world is not coming, and it’s a non-event. In the long term, the endless spending is a big event, I understand that. But as far as the end of the week comes, it’s not like everything is going to be slashed. I’m just amazed at how gullible the people are, but hopefully we’ll get to a lot more than we have over the years, and that’s where I am optimistic that more people are opening up their eyes and their ears.
Lew Rockwell: I noticed that Obama is making a trip to Israel where Netanyahu will be demanding that the U.S. attack Iran. Does that seem to you that that’s slightly less likely than it used to be, or is it more likely, or what do you see happening there?
Ron Paul: I think it’s less likely, and it might just be the economics of it all. Although there aren’t any real cuts, people actually realize that this isn’t going to last forever, so I’ve always argued that we’ll quit the nonsense overseas not because we have wised up and we have wise leaders, but because we won’t be able to afford it. So I think right now, I would say it’s less likely than it had been in the past, and let’s hope we move in that direction. But there is still a powerful influence by the neo-conservatives, they’re still ranting and raving about Hagel been appointed as the Secretary of Defense. But that in itself isn’t going to make a lot of difference, the spending is going to continue. There’s still going to be an influence, but the answer I would say is I think it’s a little less likely now that they’re about to, because they know they can’t really afford it nor run it. I think that our capabilities just aren’t there, because the type of war that would have to be fought would be completely different. They’re building more F-35s, and this is one thing that I hopefully can write something on. Because they talk about all this budgeting, but then when you look at the F-35s, if it lasted throughout its theoretical lifespan, according to the Pentagon, it would cost 1.5 trillion dollars to run these airplanes that have no use. And then they wonder, “How can we ever slash this defense”. Of course, there is no defense, this is just militarism at it’s worse, I think that everybody should refresh their memory about the warning that Eisenhower gave about building weapons like this and then worrying about the budget. I really get upset with conservatives who consider themselves free market people and condemn the liberals for Keynesian economics, and at the same time, they say they can’t cut the F-35S because there are some 40 states that make parts for it, and it would hurt those jobs. So it’s rather disgusting on how they look at it and pretend that they’re free market people
Lew Rockwell: Ron, I noticed that Obama opened up a new drone base in Niger the other day, and the U.S. has expanded its military footprint in some 35 countries in Africa, which is a huge number of countries. So that’s going on, even though they may be pulling back a little bit from wanting to murder everybody in Iran.
Ron Paul: Yea, they’re just moving about, and they’re moving further east into the Pacific and the Philippines, and they’re more likely to get involved in a squabble between Japan and China. They’re certainly not giving up. But you think we’d learn a lesson or be totally embarrassed that we’re going bankrupt, and we’re going over there, we have plans to get more involved in 35 countries in Africa because we have to protect our natural resources. We live in the old age of mercantilism, and we think that we have to have our military to protect the supply of natural resources. That’s what we’ve been doing in the Middle East as well. But who annoyed us the most at the official level? It’s the Chinese, because “they have a weak currency”, as though Americans have a real strong currency with 0% interest rates, and they get away with economic murder in the sense that they can pass this stuff out and the people still take it.
So the Chinese work hard and they save their money and they invest in these countries. They’re investing in Africa, investing in Iran and these different places. Before you know it, they can become more capitalistic than we are at the rate we’re going, it doesn’t make any sense for us to think that we’re an exceptional nation and we have this obligation to use force to promote our goodness around the world, and we’re not even good capitalist anymore. So it’s a sad story, but fortunately there are a lot of people waking up due to the work the Mises Institute is doing and due to the interest the young people have. So I do believe we live in transitional times and revolutionary times, where these views are changing. And the best news as far as I’m concerned, and I hope I’m right, is that Keynesianism isn’t dead, but it’s dying quickly, and it has to be replaced by something.
Lew Rockwell: Well, there’s no question about that, you’ve attracted millions of young people around the world to question Keynesianism and be interested in Austrian Economics, to question the role of the Fed. And right now there’s a little bit of debate about this alleged exit strategy when the Fed will stop keeping interest rates at 0%. Is there a little bit of dissent within the Fed, and what about the markets and the people in Wall Street and the banking system, because we know the Fed exists to especially promote them, as well as the government? What’s happening in those areas?
Ron Paul: I think there’s a little more dissent because they realized how insane the policy is and they can’t go on forever. But I don’t believe that anybody except Bernanke has any call, and what he says counts. A lot of people ask me about it, and they get their directions from conspiracy theories and they say they’re going to do this to create chaos and buy up the world. But I see it slightly differently. I think the Bernankes of the world are very similar to the Paul Krugmans of the world. They believe this stuff, they really truly believe that they can print money for ever and it’s going to work, because, in a way, they survived it since the breakdown of the Bretton-Woods Agreement with a lot of ups and down, so they believe they can pull this out again. And if things don’t do well, they just print more and more, so I think the dissent is outside, I don’t think the other members of the board have much to do about it, but I think there are a few who are absolute Keynesians in that they can regulate the economy through central economic policy and monetary policy. They’re still very much in charge, but I think the reality of the economy will stop them, and not because all of a sudden we’re going to get a wise Federal Reserve board chairman, or because Bernanke is going to say that we have to wind down. Because he must know, he cannot be naive enough to think that he can start withdrawing some of those funds, or even slow up on buying some of these. They buy 85 million dollars a month with mortgage securities and treasury securities, you think they’d slow up. It’s going to panic the whole country. It’s an addiction, and they can’t live without it. The patient, which is the economy, is going to collapse, and they’re not going to save the patient. I often use the analogy with drugs, the drug addict or alcoholic doesn’t like to leave that stuff, and the political alcoholic is much more difficult to treat than an ordinary alcoholic. Some of them can finally get the motivation to get off that stuff.
Lew Rockwell: Ron, you’ve been the pioneer in asking what gold is there in Fort Knox, or what gold is there in the vaults of the New York Fed, and who owns it? Are you encouraged by the fact that there seems to be and international movement now, with the people in Germany forcing the German government to ask for some of their gold back, and Mexico, Austria and many other countries asking not to have the bank of England, or especially the New York Fed, hold their gold? Do you think we’ll ever get an audit of what’s exactly there and how owns it?
Ron Paul: Probably indirectly. If the Germans want their gold and they can’t get it back, then that will be the audit that will count, I don’t think the politicians will actually do it. I heard somebody on a business station this week talking about this whole mess. He was claiming that it will come to an end, he was defending it, but he was making fun. He said the central banks were actually buying gold at this terrible time. And, interestingly enough, he compared it to the stupidity of the bank of England selling gold when it Washington 250 dollars/ounce. Now there are some central banks buying gold, which are actually in the Far East, and I don’t think they’re stupid. I think for Russia and these other countries, buying gold and putting it in a central bank … he said, “Well, they sold when it was too low, and now they’re buying when it’s too high”. But I guess time will tell which is correct. But fortunately the markets even work with tyrants, there’s always a market out there to tell us what’s going on. Even in the soviet system they had the true market, and sometimes they called it the black market, but there’s always a market out there. So I think that’s what’s going to happen with gold. And you actually helped me many years ago in trying to get an audit, you even backed me with the Gold Commission. And they wouldn’t even accept this, so I don’t think that’s going to happen, but I’m looking for the day when there’ll be more foreign countries saying, “Hey, we want our gold back”. And we do not know whether our gold has been committed or whether it’s there or whatever. So it will probably take runaway inflation for us to all wake up.
Lew Rockwell: I’m assuming it’s not a bunch of wooden bricks painted in gold, maybe we’ll find out some day.
Ron Paul: Yes, that’s for sure. People say, “Why don’t you go and look at it?” What good would me walking down and looking at the do, that’s not an analysis, although it might be entertaining. But if you could have a true analysis, it’s going to be a lot different than a commitment, has the gold been loaned out, who actually has ownership. But we shouldn’t worry about this, Lew, we have been assured by the top money-guy that gold is not money, so why do we really care about this, this is just a useless commodity. If we had the true marketplace, remember it was going to go down to $5/ounce.
Lew Rockwell: It’s just a “barbarous relic”, as Keynes pretended to give us a judgment. Ron, I noticed some of it the other day, and I think this is typical of the mainstream media: they referred to you as ‘retired’. Now maybe they’re just mistaken, or maybe they’re attempting to do damage. Not only are you not retired, but it seems to me that you’ve stepped up your work, thank goodness, since you left Congress. You retired from the world of politics, but you’re not retired. You’ve got this new radio show you’re doing with Charles Goyette, you’ve got your website that you’re building, you’re going to continue working in the areas that you’ve always worked in, whether it’s question of war and peace or the Federal Reserve and all other related areas. You’re talking about how you’re going to be working in communications and reaching out to people in all kinds of new and different ways that accord with what young people are interested in, because they’re not interested in a lot of dinosaur media, they’re interested in the new media. You’ve always had a special connection to young people, so I must say I’m opposed to retirement anyway, it’s an invention of Bismarck and FDR and, I think economically and in every other way it’s a bad idea. But you’re not retired, you’re working a lot harder, you’re working longer days than when you were in Congress.
Ron Paul: The opportunities are fantastic, I never believed there would be so much available that I could do. But I don’t think the word ‘retired’ is right, I think they got it mixed up, they must has misheard. I think it was ‘tired of DC’, not ‘retired’. I do go back and forth on occasions, and I especially go to George Washington University, so I will go in to that area for special reasons, but I was sort of tired of it. But I have been fascinated about how much opportunity has been available, there are so many opportunities, I can’t even take advantage of them all. But it allows me to do the things I have been trying to do for so many years, but it’s more or less on my time and my picking and choosing and. Like I’ve told so many people in the speeches that I give – and I guess I say this to reassure myself as well – if we’re doing this and it’s not a labor of love and it’s not much fun, why even do it. And I enjoy it and I think it’s important and I get satisfaction from it and I’m sure you’ve had the same experience keeping the Mises Institute going, getting the satisfaction of seeing so much good come from it. So I look forward to all the opportunities and I’m going to enjoy it.
Lew Rockwell: Well, you are, and of course, you’re continuing to be very much in demand in college campuses, you’re writing books, and there’s an exciting new era of Ron Paul coming up for all the people who follow you. So, folks, wait for the big announcements. Thank you, Ron, very much for coming on the show today.
Ron Paul: Thank you, Lew.
Lew Rockwell: Bye, bye. Well, thanks so much for listening to the Lew Rockwell Show today. Take a look at all the podcasts, they’ve been hundreds of them. There’s a link on the upper right-hand corner of the LRC front page. Thank you.