Ron Paul: “It's The Largest Financial Bubble In History”
ron paul one of the great financial
minds in the united states he's been
speaking up
quite a bit lately i'm not sure if many
of you have been paying attention to
what he's saying
but it is interesting and i want to
catch you up to speed he thinks we're
currently in the biggest financial
bubble
in the history of monetary policy here's
the exact words
i happen to believe it's the biggest
financial bubble
in the history of monetary policy for
the whole world
and the correction is going to be very
very violent and it's already
pretty bad so the question becomes why
why does he think this
okay first thing he mentions is
inflation now generally the fed aims for
two percent inflation rate each year
recently the fed have come along and
change this
policy they now want to average a two
percent inflation rate
so that means that the fed is willing to
allow inflation to run
hotter than normal in order to support
the labor market
and the broader economy now this all
sounds well and good
but there are a lot of problems that
come with inflation
ron paul he doesn't like it one bit
because okay
let's look at the definition of
inflation inflation
is a general increase in prices and fall
in the purchasing value of money
basically meaning if you just hold on to
cash it becomes worth less over time
as ron paul says the policy of our
government
is to steal two percent of the value of
the dollar
on purpose and now they've become even
more desperate
towards inflation so do you think that
any sound investor
is going to want to have their money in
the bank no look at the type of interest
that you get on your
money it's terrible the average usa bank
savings rate
is 0.09 percent so
basically this means the money in your
bank is losing its worth for every
second
that you have it in there the mix
between inflation
and low interest rates kills savers
so they think no i'm not going to have
my money in the bank
let's look at the stock market and they
start buying stocks
and what this does is it causes prices
of stocks
to go up anyone who's done economics 101
will know this
as we can see the stock market has
recovered to almost full-time highs
up 45 over the past seven months
the economy however has been going
terrible but stocks have not seemed to
notice
and of course it's not just the stock
market house prices
are around all-time highs as well
because of this same notion
low interest rates which means you can
borrow more and there's no desire to
have your savings in the bank
the next thing that poor refers to as
being a driver of asset prices
is this new notion of unlimited
quantitative easing
so it was in march 2020 when the fed
announced
that they will essentially allow
unlimited quantitative easing
to help the economy except of course
they said it in a much more politically
correct way
they announced that they will continue
their asset purchasing program
in the amounts needed to support smooth
market functioning
and effective transmission of monetary
policy
to broader financial conditions and the
economy
basically there's no limit to the
amounts that they can now print
and this is something that we've never
seen before
unlimited qe so this has resulted in the
fed's balance sheet
blowing up it's now sold past seven
trillion dollars
it's almost doubled in size and we don't
know how much worse this will get
in the future they're not talking a
further one to two trillion
in printing now what does this unlimited
buying of financial assets
from the fed do well it lowers interest
rates of course
and this allows the government to borrow
even more money
because they pay less interest on their
debt because interest rates are low
therefore they can borrow more and this
is exactly what they've done
they've borrowed a lot in order to fund
these stimulus checks
that they have received as ron paul said
they created three trillion dollars to
bail out the first part of the downturn
and now they're talking about another
one to two trillion for the next episode
and it just means people need to get
prepared in many different ways
because okay if we look at the stimulus
checks where is it going
so forbes they wrote a great article in
which they did the research
and they found that 59.35 percent of
stimulus bills
was used to pay expenses 13.3 percent
was used to pay off debts
and 11.98 percent was used to add to
savings
slash investments but what you need to
remember about
all of this is it's all artificial money
those companies that are receiving that
stimulus money spent on expenses
in a normal economy would not have got
it those companies like banks who were
receiving debt
payments from the stimulus bills they
would not have got it
they would have been considered faulty
loans and the bank would have lost out a
lot
and those who invested in the stock
market would not normally have been able
to do so
but of course the stimulus checks allows
them to do so
you know it's all artificial it all
comes from debt
being used by the government which has
been helped by the fed
and of course this all adds to the
bubble that ron paul's been
talking about so the question now
becomes
what happens when this bubble bursts
what will this mean for americans
and what can we do about it i'll first
let ron paul
answer so what happens when this bubble
the biggest you've ever seen what
happens when this ex when this pops dr
paul
people are going to get a lot poorer we
have been able to convince the people
those who promote this type of a system
that wealth comes out of a printing
press
and the distortions have been so great
and it allows everybody to live beyond
their means uh you know
as it circulates and the individuals
you know can get low interest rates and
they get their houses and the stock
market's happy
but it's all all tied in with male
investment nobody talks much about
inflation and now investment
so it's it's a system that can't last
but
people who have and a society that has
lived way beyond their means i'm
convinced has to live beneath its means
i compare it to an individual
if you or i lived because somebody was
going to give us a million dollars every
month and we didn't have to work
we'd feel pretty good hey this is great
until maybe somebody calls the tune and
say oh
we have to stop loaning you any more
money because you have to pay your bills
and that's what's happening now the
bills have to be paid the economy is
going to turn down
and a lot of people have already gotten
a lot poorer but they're going to get
it's going to get a lot worse unless we
wake up and return to some sound
economic and monetary policies because
you see
we've been living beyond our means for
almost 50 years now
on august the 15th 1971 president nixon
made an announcement
that shook the usa he announced that the
united states will no longer convert
dollars to gold
at a fixed value thus completely
abandoning
the gold standard this meant we could
now print as much money as we possibly
desired because our money's not tied to
anything
we can go into as much debt and buy and
produce
more than ever before because of this
and this is what's been happening over
the past 50 years
but especially recently where we've
borrowed a lot
and we've lived well beyond our means
this has caused an artificial bubble and
artificial inflation in the economy
which isn't good ron paul thinks the way
we get out of this
is to start living below our means he
thinks people
are going to get a lot poorer and we're
going to have to get used to
not living like 21st century kings like
we do now
the other thing i did want to look at is
what is ron paul investing
in if he's so against the dollar if he
thinks that the stock market is in a
massive bubble
where does he have all of his money now
because he doesn't manage a mutual fund
or anything like that
he does not have to publicly disclose
what he invests in
however i've done a bit of digging and i
found that in 2011
he revealed to the wall street journal
what his portfolio looked like
okay so let me give it to you 64 of his
portfolio was in gold and silver miners
21 in real estate and 15
in cash and i'm sure as of 2020 that
cash position
is a lot smaller but gold and silver
there's no real surprise that he has
most of his money
in those positions he's a true currency
guy he's a true
analyst of the system and he thinks
precious metals
should be the formal use of money so
this is what his top
10 holdings were in 2011 i'm not sure
how much they've changed today
but even recently he's been talking
about buying more gold
so his number one position is gold corp
ticker symbol gg
valued anywhere between 500 000 to 1
million
second largest is barrick gold now
that's the same as warren buffett's
berkshire hathaway
buffett recently bought into this exact
same stock
uh and by the way buffett has long been
known
to avoid gold so it's very interesting
that he's been buying it recently
then number three is newmont mining the
largest gold mining company in the world
and the rest of the stocks are gold and
silver
miners so it's fair to assume he loves
precious metals as an investment as
paul says he says the question is would
you rather put 10 000
in a box for 20 years or a few gold
coins
the federal reserve has destroyed 98
of the purchasing power of the dollar
since 1913
and in the meantime they have financed
every war they couldn't have financed
if they were on the gold standard i
think what's going to happen to gold
as it's going to explode when they
realize that the economy is going down
that we're really in a recession so
in a way gold is his big hedge his big
investment to counteract
this massive bubble that he believes we
are in of course he owns silver and real
estate
on top of that as well but let me know
what you think is there anyone out there
who actually thinks this mass printing
of money is good
or are you on ron paul's side and you
think the dollar is going to be
destroyed
and we should be looking into the likes
of gold to prepare
ourselves for what may be to come
you
