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HS 216 – Inflation and Economic Woes with Charles Goyette

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Charles Goyette is the Host of “Ron Paul’s America” radio show. He joins the podcast to give his dramatic solution to prevent the coming financial ruin. Goyette believes the longstanding practice of crony capitalism strangles our economy. He thinks we need to reign in overseas spending and end American interventionism. Goyette then explains whether it is fair for younger people to subsidize older people.

New York Times bestselling author Charles Goyette spent many years as an award-winning and popular Phoenix radio personality. Admired for his “Fearless Talk Radio,” Charles was named Best Phoenix Talk Show Host by the New Times. Because of his insistence on holding all politicians – regardless of party – accountable to the same strict standards, Charles was widely known as “America’s Most Independent Talk Show Host.” His years of experience as a financial professional have served his listeners well as he sounded the alarm about the mortgage bubble well in advance of the calamity and described the consequences of the governments reckless economic behavior in his clear, easy to understand manner.

Charles is no newcomer to the national economic debate. In fact, more than 25 years ago Charles arranged for a then little-known Texas Congressman named Ron Paul to be the keynote speaker at a series of monetary conferences he hosted. Goyette has often been called on to share his views with television audiences nationally on Fox News, CNN, MSNBC, PBS, CNBC and Fox Business Channel, including on the Glenn Beck Show and The O’Reilly Factor with Bill O’Reilly on Fox News; NOW with Bill Moyers on PBS; and on Lou Dobbs Tonight on CNN, where he repeatedly warned before the current turmoil the “economic calamity the Republicans and Democrats” were creating. He has written for a number of magazines including The American Conservative and Gannett magazines, and for LewRockwell.com, CNBC.com, WorldNetDaily.com, and TheStreet.com.

Listen to “Ron Paul’s America” at www.ronpaulsamerica.info.

Narrator: Welcome to the Holistic Survival Show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary for you to survive and prosper? The Holistic Survival Show is your family’s insurance for a better life. Jason will teach you to think independently, to understand threats and how to create the ultimate action plan. Sudden change or worst case scenario, you’ll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

Jason Hartman: Welcome to the Holistic Survival Show. This is your host Jason Hartman, where we talk about protecting the people places and profits you care about in these uncertain times. We have a great interview for you today. And we will be back with that in less than 60 seconds on the Holistic Survival Show. And by the way, be sure to visit our website at HolisticSurvival.com. You can subscribe to our blog, which is totally free, has loads of great information, and there’s just a lot of good content for you on the site, so make sure you take advantage of that at HolisticSurvival.com. We’ll be right back.

Start of Interview with Charles Goyette

Jason Hartman: Hey, it’s my pleasure to welcome Charles Goyette back to the show. He is the host of “Ron Paul’s America” radio show and podcast. And he’s got a great background with a whole bunch of other awesome things on his resume. And I’ll let him maybe tell you about a few of those. Charles, welcome, how are you?

Charles Goyette: Jason, great to speak with you. Please don’t make me talk about them all.

Jason Hartman: Oh, okay. You can give a Reader’s Digest version then. How’s that sound?

Charles Goyette: Well, I’m the author of a couple of I think timely books, one called The Dollar Meltdown which is an international bestseller. And my latest book is called Red and Blue and Broke All Over: How to Restore America’s Freed Economy. And the main impact I suppose of the book is that I’m not sure that anybody really wants to restore American prosperity, restore the American dream. Oh, you individually and your listeners individually and many other people individually, if you ask them, yes, we would like to restore our prosperity, yes we would like to restore the American dream, then these are the sorts of things that we would need to do to do so.

But if you ask the people in this country in a corporate or collective level through their elected representative to do the things that need to be done to restore American prosperity, to make sure the American dream is alive for not only ourselves in the golden years as we call them and our retirements and our kids and their aspirations to own homes and have a long lifetime and their kids to have a better future than they themselves had and so on, I’m not sure that collectively or in the political body we’re really willing to do what’s necessary. So, that’s that.

But the main thing I’m really proud of now because it reaches so many people is the Ron Paul radio show. We’re on about 125 radio stations across the country twice a day with commentaries of things going on in the news. And the big one is a long form podcast that anybody could veil themselves up and simply download it at PodcastOne.com or at my website CharlesGoyette.com. But it’s a chance to hear Ron at lengths on the big issues of the day that are affecting people’s lives in America, their prosperity in America, their futures in America. . .

Jason Hartman: I’ll tell you something, Charles. If our electorate listened to podcasts rather than the lamestream media, we would have a much better government. Because what you’re saying, you mentioned it a couple of times, you said long form podcast, and television is truly the idiot’s medium because it’s always a sound bite. And it’s like we have elections that are won or lost on these dumb flipping sound bites. It is absurd. I mean, are the American people really this shallow that they’re gonna let a thing like “Read my lips – no new taxes” determine the next president? I mean there’s a lot more complexity than that. Or hope and change or binders of women, I mean, this is silliness, right?

Charles Goyette: I agree with you, yeah. And it is a lot more complex, but you know, the political debate has been dumbed down by the two parties. I mean, they have turned it into an advanced auction on stolen goods. They have turned America into what I call the American piñata in which all they do, the political parties and their chosen candidates are involved in passing the big stick around and making sure everybody in their demographic group and their ethnic group and their regional group, whatever group they may be members of, make sure they get a crack at the American piñata with the stick. And they hope of course they bust loose some goodies for each other.

And the real reasons that we never solve it is that the republicans don’t think that they do it. And the democrats think it’s all the republicans that want to fortify the military industrial complex or whatever it may be. Each party wants to blame the other one and both are certainly fully deserving the blame, but until they clean up their own houses, the democrats clean up their house and the republicans clean up their house, then this situation will go on until. . .You know what happens at the end of the piñata party. The piñata itself is busted up beyond repair and unrecognizable. And they’ve turned America, this great mobile idea, into a piñata. And all they do is pass the big stick around.

And you’re right, too – the media plays the part of like the mariachi band. They’re there just to keep the festive spirits high and persuade everybody that this party is the normal sorts of things. Here, take a whack at the American piñata, get yourself some goodies, vote for the candidate that promises the most. Oh, you get more goodies from the Rs or more goodies from the Ds? Why would you go for the Ds if you’re gonna get more from the Rs? Why would you vote for the Rs if you get more from the Ds? Yadda yadda yadda, it’s all absolute nonsense. It leaves America poorer.

And in the course of doing this, you’re right – they make slogans out of these issues that certainly divide the people. No question, the people could be divided about these headlines or bumper sticker issues, but the fundamental things that impact America’s freedom and prosperity going forward, the things that I care about and I suspect you care about, too, are the things they never talk about.

They never talk about the American military empire and the reach of it and the way it’s bankrupting the country. They never talk about the destruction of the monetary system by the central bank. You can go through an entire presidential campaign, and we just did a year or so ago, and you never hear for example the federal reserve even mentioned. Isn’t that peculiar, Jason?
Jason Hartman: Except by Ron Paul, let’s audit the fed which is like this crazy idea. It’s just unbelievable. It’s because these mainstream candidates are bought and owned by Rothschild family and everybody else. But we don’t need to go there and get too far afield because people just kind of get funny when I start talking about that stuff.

Charles Goyette: You don’t even have to go far afield. I mean, I think it’s all right there in the open.

Jason Hartman: It is.

Charles Goyette: Since 2008, think about this, the fed has created well over 3 trillion dollars out of thin air. And where did the money go? The money went to re-liquefy the money center banks, the crony banks, the influential banksters. They went to take toxic mortgages and broken down securities off of their books and put them on the books of the federal reserve and effectively on the books of the American dollar or the American people as a proxy. So, they transferred bad risks, toxic assets onto the books of the people and they bail out the influential cronies with $3 trillion in money printing that nobody ever voted for, that never get audited, nobody really understands how this is happening and how it works.

Jason Hartman: It is literally mind boggling. It is in so many ways. But hey, no need to comment on it. We all know it’s ridiculous, it’s crazy, it’s absurd, and it really gets us all hot under the collar. I want to ask you about something a little more current, though, Charles. There’s a lot going on in foreign policy right now. And it has wide ranging effects for us economically. One of the things I was discussing with you when we talked for like 2 minutes off air before we started today, and I said foreign policy, that’s interesting, but unless you can bring it back to how it’s gonna hit someone in the pocket book, it’s more like a big theory instead of something that’s real but it is real, isn’t it?

Charles Goyette: It is so real. And let me give you an example of just how real it is. I mean, if you peel the onion back, the thing starts to look a little bit like the product of an insane asylum. Here, John Kerry arrives in Kiev the other day with all the problems in the Kiev, in Ukraine, and he’s waving around a taxpayer guarantee – effectively a check from the American people of a billion dollars to throw into the mix to help them out for whatever purposes.

Now, wait a minute. The United States is virtually insolvent. We have a $17 trillion plus invisible national debt, well over $100 trillion in hidden national debt, so for us to give a billion dollars away, where do we get it? Money being fudgable, effectively we have to go out and borrow it. We don’t have an excess. We don’t have a reserve account, so we have to go out and borrow it.
So, when we borrow a billion dollars to give to Ukraine, where do we get it? Well, we borrow it from foreign lenders like, well, let me surprise everybody, like Russia. Do people know that Russia is a major creditor of The United States Treasury just the same way that say China is, yes Russia is. So, the little children of the future that are out on the playgrounds of the school today, having a good time, are being loaded down with additional debt by The United States government, additional treasury debt that will burden them the rest of their lives so that the established parties, the governing classes in America, can go deliver a billion dollar check. And, by the way, they promised that Obama would have more money where that came from for Ukraine. So you give a billion dollars to Ukraine.

But wait a minute – when the money shows up in Ukraine, what does Ukraine do with it? Well, the billion dollars, it doesn’t go to the Ukranian people – it doesn’t make them richer. The billion dollars is used to pay Gazprom which is the major Russian gas company which is owed $2 billion by Ukraine. So, wait a minute. Let’s think this thing through now step by step. The American people borrow money from places like Russia so we can give it to places like Ukraine so that they can pay back places like Russia. And the bankers that have provided loans to Ukraine, risky loans that they didn’t have to worry about being defaulted upon by Ukraine even though Ukraine has defaulted twice in the last 10 years, they didn’t have to worry about those defaults because they know that they can get a better interest rate return than Americans can by investing in crazy places like Ukraine and then if something goes wrong and the debts can’t be repaid like the Greek debt, that somebody like the IMF or The United States government or the European Union will step in and make them whole.

So, this is a little bit of insanity but if you peel the onion back another layer, you see that it’s all the business of the banksters.

Jason Hartman: But, you know, Charles, I really don’t understand why you’re complaining. Now, this is a sarcastic comment. . .
Charles Goyette: Sure it is. I can tell in the sound of your voice.

Jason Hartman: Yeah, okay, good. I just wanted to make sure you caught my tone here. I don’t really understand why you’re complaining and here’s why. Because isn’t this just increasing the velocity of money?

Charles Goyette: Well, there you go. That’s good. We’re going to increase our velocity of money right into national bankruptcy is what we’re gonna do. It’s actually the biggest wealth transfer scheme in the history of mankind.

Jason Hartman: So, go into that a little bit more. So, what specifically is the biggest wealth transfer scheme in the history of mankind? Central banking?

Charles Goyette: Well, sure, central banking and fiat money. So, the central banks depreciate the value of the currency the people hold in their piggy banks and their wallets and their banks that they get their retirement income paid in, anything denominated in dollars. The central bank depreciates that by inflating the currency, by destroying the purchasing power of the dollar over time. So, I guess to describe it in a different way is to say in America the founders set up a perfectly reasonable system for the government to pay for things that it wants.

And the system is appropriations, money bills. We have a congress, we have a legislature, we have money bills that the constitution says money bills have to originate in the House, that is the people’s representatives, that is the people closest to the people that are up for election every 2 years. So, spending bills have to originate there. They come from there and then they go through the process and they have to pass both bodies of the legislature, and then they go to the president and he has to sign and then he executes them or carries out the intention of the legislature. But you have this huge, massive monetary operation that runs to trillions, nay tens of trillions of dollars to pay for things, to buy things, to enable things, to transfer wealth to benefit cronies that never sees the legislative process. It never sees a vote of appropriations.

The Federal Reserve extended $16 trillion during the 2008-2009 meltdown. $16 trillion to foreign companies, domestic banks, foreign banks, foreign governments a the risk of the solvency or the value of The United States paper dollar, $16 trillion without so much as a single vote, without so much as exposure to public debate.

And all of this is done at the expense of the American people because, look, the fed doesn’t create any wealth. The people listening to your show right now create wealth. A waitress that delivers the sandwich and pours coffee, that’s creating wealth. Somebody puts tires on your car, that’s creating wealth. Somebody grows food, that’s creating wealth. Somebody delivers a package, that’s creating wealth. All the things that people do are creating wealth and they earn money. Nothing the federal reserve does creates wealth. They don’t have any money. The only money they have is the money that they take from the people. Yet they do it by subterfuge. They do it rather than legislative process or at least we know how we’re being fleeced, they just do it on the QT. It’s not compatible with the nature of a free people.

Jason Hartman: So, are you saying that because of all this silly spending – silly is just my cue word for it – it’s of course aggravating as hell – because of all of this massively destructive spending that we have an inflationary future? I mean, that’s the only way out, right? Is to inflate our way out? Or do you have another theory?

Charles Goyette: No, it’s clearly the only way out. And it means the destruction of the currency. Somebody asked me one time how many paper currencies like ours have been destroyed over the course of history and the answer is all of them. Ours hasn’t quite happened yet, the trajectory of ours, too. And so the people are impoverished in these things, people that save. All the things that make capitalism work, all the savings and investing and prudence and so on, it makes capitalism work and created the remarkable prosperity that America created to display to the world, all of those values are undermined in this process.

And so it’s true that the fed has gotten away with increasing its balance sheet with made up money, printing money, from about $800 billion when the mortgage meltdown hit and the recession started in let’s say 2008. But it was about $800 billion. There it was – it rolled along – if you look through the chart, it’s about $800 billion, $800 billion, $800 billion, shazam! Straight up like a hockey stick. And it goes from $800 billion to $1.6 trillion. And then shazam! It doubles again from $1.6 trillion to $3.2 trillion and, shazam, now it’s over $4 trillion.

This represents money that they just made to buy things off of the hands of the banks as we talked about earlier or to buy the downgraded debt in The United States. Yes, to enable the reckless spending in members of Congress who are there to do nothing more than to give things away, American piñata, to give things away to buy the votes of their constituents so that they can get reelected.

So, the balance sheet of the fed has grown by well over $3 trillion in a couple years with money they just printed and everybody says, well, what are the consequences of that? We don’t see any consequences. And the answer to that story is the consequences aren’t apparent yet because the money has yet to enter the commercial loaning activity of the banks. And when it does, then it starts getting multiplied many times over in the fractional reserve banking system. So, to make all of this understandable in one little burrito, let me wrap the thought up. The fed has printed a lot of money but it’s kind of like it’s just been sitting there and it’s been humming like a nuclear reactor. It’s just humming and it’s wobbling and you know there’s something there.

All of a sudden it starts to leak this fissionable material. Well, that money is starting to leak out now into the commercial banking system and want a recovery but a recovery means that the banks are going to begin making loans. And they make loans to businesses to hire people and so on and so forth. And those loans are what really not only injects that money into the currency, in the circulated currency and monetary system of the country, but it’s multiplied many times over by a process I’m sure you discussed many times called fractional reserve lending. And that’s when our trouble starts.

Jason Hartman: The magic of money creation, fractional reserve lending.

Charles Goyette: The process is starting right now. It’s starting right now. With 2014, the amount of commercial bank leasing and loaning activity is starting to turn up.

Jason Hartman: No question about it. So, Charles, the question is is all this bad? I mean, logically, empirically, it would seem like it’s bad. So, the answer to my question about inflation, yes we’ve got inflation coming – is that your answer?

Charles Goyette: Massive.

Jason Hartman: Okay, massive inflation. Can you define massive? I mean, I know nobody knows. You don’t know, nobody knows, it’s all a prediction. But what do you think? I mean, just take a gander.

Charles Goyette: Well, it’s destructive enough at 2% or 5% or 10%. But really, as it approaches double digits and we go to double digits many times in the lives of most baby boomers. . .

Jason Hartman: Yeah. I mean, in the 70s we were in double digits, true.

Charles Goyette: Yeah, 4 or 5 times. So, when it starts to get to that level, the problem is bad for any country, but it’s much worse for The United States because we have persuaded the rest of the world to use our dollars. And when our dollars start using value at that rate, the rest of the world will reject them. They will not finance our debt. In other words, why should they loan money to The United States government when they loan a dollar they know they’re gonna get paid back 90 cents in value?

Jason Hartman: Because we inflate away the value of the debt which is exactly the strategy I recommended our investors use.

Charles Goyette: And they know this.

Jason Hartman: But Charles, look, here’s the problem. You’re right about all of this. I agree. The only thing is, though, we’ve been inflating the value of our debt away for a long time and they’re still buying it. What’s going on behind the scenes? What really makes you think that in the future our treasury auctions are suddenly gonna be boycotted and nobody’s gonna buy them when they’ve been buying them all along. It’s not like we weren’t doing this 10 years ago. It’s not like we weren’t doing it 20-30 years ago. It’s not new. We’ve been doing this for decades.

Charles Goyette: Yes, you’re right. We’ve been doing this for decades and there’s never been a real viable alternative. The problem is at some point. . .

Jason Hartman: Wait. A viable alternative for other countries to invest in, is that what you’re saying?

Charles Goyette: Yeah, more or less. And I’m maybe not even clear about that. Let me put the dollar in different terms for your listeners to say that in the case of when you have Europe go through a crisis and the value of a dollar comes up and people start clamoring to buy more dollars and dollar dominated assets and dollar bonds and so on and so forth. I think it of it like you take your employees, you have a company picnic and you go to the park and you play some volleyball or softball and have a big picnic and then all of a sudden it starts to sprinkle and everybody runs under the Ramada for cover for a few minutes. And you get out of the rain and you still have a good time, you’re still having hot dogs and stuff but you’re out of the rain and if it continues to rain, at some point people suddenly start to go home.

The United States is like the Ramada. And it’s a good place for people to bail out of problems in foreign countries elsewhere in the world when there’s a crisis and come to The United States where they know at least, when push comes to shove, at least the money will be printed to pay back the money that they loaned.

Jason Hartman: The United States has always had the reputation – not always, but as long as we can remember or care about – of being the Brinks truck of the world, the safe place to put your money because it’s a stable government theoretically.

Charles Goyette: But that Ramada that I’m talking about is becoming a short term instrument rather than a long term. IN other words, it’s fine to get out of the sprinkle or the rain when you’re at the ballpark, get under the cover of the Ramada, but nobody wants to live there. Nobody wants to weather a hurricane in a place like that because it’s not sound.

Jason Hartman: So where else are they gonna go to weather it?

Charles Goyette: Here’s the brilliance of markets. The brilliance of markets is that necessity is the mother of invention. And when people reach the point of being fleeced and they don’t want to be fleeced any longer, they start developing alternatives, looking for alternatives, coming up with new novel things that cannot be imagined today. But you see this going on, Jason, all over the world right now.

Jason Hartman: Charles, I just want to understand something. And when you say fleeced, you’re talking about the investors in US treasuries being fleeced because the value of the debt that they’re essentially buying from us, loaning us the money to finance our drunken sailor spending habits, they are fleeced through inflation because they get paid back in cheaper dollars. That’s the fleecing you’re talking about.

Charles Goyette: Right. That is right.

Jason Hartman: And so far they’ve been willing to give fleece because there’s no other Ramada as you put it. There’s no other place to run. So, yeah, go ahead now. That’s where you left off.

Charles Goyette: Yeah, because we’re seeing these alternatives begin to develop now before our very eyes.

Jason Hartman: Like crypto currencies.

Charles Goyette: Somebody like me that watches this all the time, it seems to be happening at a breakneck speed but it’s not just crypto currencies. It’s the remarkable move we’ve had this millennium in the price of gold. It’s this multilateral and bilateral relationships that are being created all over the world. You saw one the other day. It was kind of the outcropping of the sanctions we imposed on Russia, that Russian and Iran are forming up their trading relationship.

Let’s see – Turkey has been trading gold for oil from Iran and now Russia. And oil of Russia and Iran have created a non-dollar denominated trading structure to settle deals instead of in dollars of the reserve currency of the world to settle deals in their own currencies. Russia and China are doing this. The Gulf Cooperation Council is doing this. This is going on all over the world that people are arranging bilateral multinational deals to create trading structures that will insulate them from the dollar. So, this actually might be happening very fast.

Jason Hartman: So you know my theory on that is it’s kind of like. . .And I’m not a parent but I did have a parent, so I understand the concept here. When you’re doing something bad, maybe you’re in high school and you go out drinking – of course you shouldn’t be drinking in high school – and mom kind of knows about it but she sort of looks the other way so as not to put too much parental pressure on you but she’s gonna watch it and monitor it. And if it gets to be a problem, she’s gonna come down on you like a ton of bricks.

And so maybe this The US sort of looks at this like, okay, we’ve got our little rebellious teenagers and they’re doing some stuff, they got their little club going with Gulf Cooperation and Iran and Russia. But if any of this stuff starts to really take hold, The US is going to use its extremely huge advantage. And it’s unfair, it’s a bully pulpit, no question, of having the largest economy, having the largest military most importantly, having the economic hit men all over the world. The dollar is probably the most valuable power The US exerts over the world having reserve currency status. I mean, we’re not gonna give that up. We’re not gonna just let that go free.

Charles Goyette: It’s not for us to decide whether we give it up or not.

Jason Hartman: You sure about that?

Charles Goyette: Yeah. Actually, I’m quite sure because we’re in the unfortunate situation of being dependent on the kindness of strangers. We have to have foreigners willing to buy our debt. They have to be willing to buy our debt.

Jason Hartman: Hey, if you put a gun to somebody’s head, they will do what you say. And that’s what we do. My theory is a lot of these wars are really fake. They’re fake wars to exert power in other domains. And I don’t understand it well enough. I just had a bunch of people on my show just talking about it. It’s just something I’ve listened to and read about and learned. But I’ve heard the theory about the only two countries that really don’t participate in the global central banking cartel are Iran and North Korea and that’s why we hate them. Maybe you have some comment or you can educate me further on that. But these kinds of things, the war, we didn’t go there for what the media told us. There were other things going on like maybe pulling away from our reserve currency power.

Charles Goyette: There are certainly a lot of components of that to figure in. In fact, to get a war, you’ve got to get a coalition of a lot of different. . .I’m not talking about coalition of other countries, but you’ve got to get a lot of interest groups in The United States. The war in Iraq was a good example. You had to have a lot of different interest groups. There would people that thought it would be good for the stock market or people that thought it would be good for the defense industry. There were people that thought it would be good for the republicans in the midterm election. There were people that thought it would be good for banking, there were people who thought it would be good for oil, there were people that thought it would be good for their geopolitical interests overseas. And all of these coalitions came together, they all thought it would be good for their own reasons. So, sure, when you get a war, there are reasons like that. And of course maintaining the dollar standard is one of them.

But in my view, if you look between the pages of the government’s behavior, we are a government that is spending beyond our means and we are beginning to have to live beneath our means. And you see almost the capitulation of the federal government revealing how weak it is now, not only domestically in things that it resisted with a fervor before about marijuana laws into several states, medical marijuana and things. T8he range war standoff the other day. . .

Jason Hartman: New Mexico? I don’t know where that even was.

Charles Goyette: But you’re seeing this all over the place, the reluctance of The United States to push its advantage because it knows it doesn’t have what it had to back it up. I mean, we were talking about geopolitics. You have forces clamoring for us. To do something in Ukraine, you have senators McCain and Lindsey Graham that want us to start arming these people. I think I saw a guy at the American Enterprise Institute, wants more permanent forces in central Asia. Oh my god, does he realize how big central Asia is? I mean, you have all kinds of people who want to get it at the same time.

We have issued security, guarantees around the world. Look, issuing guarantees is no cost to the politicians. When they guarantee your mortgage, when they guarantee your education loan, they’re heroes. They get applauded. You made home affordable. You made college affordable to my kids. We’re gonna re-elect. There’s no cost. When those loans are defaulted upon, there is a huge cost to the nation and to the people as we experienced, for example, in the savings and loan crisis. By then, the politicians are gone – it’s long since forgotten that they gave away these guarantees. Well, they do this in foreign affairs as well. They have given away guarantees all over the world that act as a trip wire to make sure that The United States is deeply involved in future conflagrations that have nothing to do with our interest to protecting the liberty and prosperity of the American people.

So while we’re watching Ukraine, the current government of China is growing more and more belligerent and more and more outspoken about places like the Senkaku Islands. And just this past weekend they were shaking their fists, warning Japan and the Philippines and others that any provocation is gonna be met with severe force.

When Deng Xiaoping, the great reformer of China, was running things, his advice was stay low in the geopolitics of the world and paint a low profile and build our own prosperity. Transform China into a rich country. That advice now has gone out the window. Maybe they think they’re rich enough. But it was their prevailing advice there for a long time. This current premier [00:31:22] is more militant than anything that we have seen there. So, you see The United States making security guarantees all over the world, people clamoring for us to get involved in things everywhere including treaties that date back to before the cold war that obligate us to protect some rocky outcropping in the South China Sea with a couple of goats on it.

So this is the sort of thing that bankrupts the nation. And that’s one of the reasons that we’re indebted for the extent that we are. So, at some point, once you become dependent on the kindness of others to fund your spending, you’re no longer your own master.

Jason Hartman: Yep. Well, that certainly is a scary truth, no question about it. And my only claim with all of that, Charles, is that The US finds itself in a unique position with its military power that can bully its way into forcing other countries to buy its debt and to do its bidding. It’s not fair, it’s not right. I’m just saying it is.

Charles Goyette: Dr. Paul has thought about this. I think it’s actually very profound. And that is, yes, we have been successful in doing a lot of things like that for a very long time. And the consequences of that are that when we do have a problem, there’s gonna be a lot of piling on. We’ve developed a great deal of enmity and there’s a lot of resentment now for our having done that for a long time. And so when we are in a moment of peril. . .

Jason Hartman: We don’t have so many friends.

Charles Goyette: You are exactly right.

Jason Hartman: Yeah, no question about it. Well, very interesting talk. So, on your inflation thoughts there, any double digits, maybe worse you think? And any timeframe ideas?

Charles Goyette: Yeah, I think it’s clear – certainly the double digits. And of course the future can’t be told entirely because it depends on decisions that are yet to be made. I mean, there will be decisions made as we move into the crisis. The cake is baked to the extent that we will have a crisis. I mean, the money has already been spent. T he debts are very real, the resources to pay them are not there. So somebody will eat those debts and the most time honored way for governments is to try to deflate them or devalue them through inflation in one manner or another. So, that’s a very real prospect. And certainly double digits are no high barrier for the extent of the crisis that we’ve got in.

Jason Hartman: And double digits historically, when you look at the entire world, I mean double digits are nothing. I had Martin Armstrong on the show the other day from Armstrong Economics, you may know of him. He said that his definition of hyperinflation is – get this, I hope you’re sitting down – is 400% per month or more.

Charles Goyette: Well, let me give you a different one. Because it’s very subjective, but the great economist [00:34:21] said it results at some point in what he calls the crackup boom and that’s more descriptive than numerical. But the crackup boom is when suddenly a realization comes upon the people seemingly at once. Like, you’ve seen a flock of birds turn at once or if you’ve ever scuba dived around the tropical fish, they’re going in one direction and suddenly they all turn simultaneously – he said it’s a moment at which suddenly the consciousness is clear to everybody in the country that it’s not just a question of prices going up but that the currency is losing value. And when that realization dawns on them seemingly at some moment, it’s what he calls the crackup boom and people become desperate to exchange the currency for anything of value.

What have you got? You’ve got a fax machine that doesn’t work anymore? I’ll take it. You got a hairbrush? I’ll buy your hairbrush. I mean, literally, anything to get rid of the paper money that is losing value and turn it into something real, something tangible. To me, that hyperinflation when you reach the crackup boom and certainly bad enough decisions are made in the future and we have a cast and crew of characters that are capable of making a lot more bad decisions.

Jason Hartman: They’re all beholden to their constituents of the independent vote buyers basically. This whole thing has become this iron triangle – it’s ridiculous of course.

Charles Goyette: Yeah, it is. It’s pretty bad and there are, I suppose, a few that know better but they think that the most important objective is to get themselves reelected to retain their hold on power.

Jason Hartman: They’re just greedy pigs.

Charles Goyette: And there are others that really don’t know. They’re really not that bright. I suppose you saw congressman Jim Moran the other day complaining that American members of Congress are paid too little money.

Jason Hartman: Yeah, unbelievable.

Charles Goyette: $164,000, it’s too little.

Jason Hartman: The troops in the trenches make like $22,000 or something.

Charles Goyette: And Congressman Paul said, well, if they think they’re paid too little money, let them go out in the free market and see what they can earn.

Jason Hartman: Exactly.

Charles Goyette: The truth is that very few of them can do that well in the free market because they’re not as bright. My old friend was a libertarian – a republican but a real libertarian congressman named Sam Steiger for many years. And Sam Steiger used to say. . .In fact, got himself in trouble with his colleagues when he said on national TV that most of these people that he serves with he wouldn’t hire them to push a wheelbarrow.

Jason Hartman: Oh, of course he wouldn’t. Yeah, they’re just lazy. They’re just on the take. And we should tell that poor congressman, look, with all your kickbacks and perks and illegal influence from the lobbyists and so forth, you really make about triple that so you should be okay.

Charles Goyette: I think they do alright.

Jason Hartman: Yeah, they sure do. Hey, one last thing I want to just ask you before you go, Charles, and I appreciate you staying on a little longer, but you alluded to it earlier and we talked about crypto currencies, cyber currencies, bitcoin, what do you make of all things? Do you think these things are gonna last? Or are these just an interesting anomaly.

Charles Goyette: Well, I’m in favor of the experiment. I agree with the Nobel Prizewinning economist Friedrich Hayek who said that we should have competing currencies and let people separate the weak from the chaff and decide which ones are of value and which ones they want to use. So, I’m glad that this experiment is taking place. It is an experiment and so I’m happy that people are experimenting, for example, with bitcoin with their money, not with mine. I don’t understand the architecture of it, but if it proves to last for a couple of thousand years like gold has, then it will capture my attention. In the meantime, a number of its components are making fewer and fewer claims for it that it’s a payment system. Well, if it’s a payment system, I could pay on my computer, I could pay with PayPal, I could pay with MasterCard and Visa. I’ve got a lot of other payment alternatives. So, if that’s all it is, it’s not particularly interesting.

Jason Hartman: Yeah, that’s just a payment system.

Charles Goyette: If it were money – if it were money in a store of value and so on and so forth, that might be something else but it would take time to prove that. And, in the meantime, I’m not sure what advantage that has over gold because gold, physical gold, you’re insulated from counterparty risk. We know from the Mt. Gox experiment and from many others that when you have exchanges that you have to deal with and they hold this and you hold that and you hope to redeem it here and there, there’s a great deal of counterparty risk, the risk of fraud, embezzlement and so on and so forth. So, I don’t see what advantage it has really over gold for my needs. There are people listening to show that have different needs.

Jason Hartman: I think it’s got huge disadvantages over gold. At least gold’s something real. All of these crypto currencies, including Kanye Coin. Let’s not forget Kanye West has his own crypto currency, too. Oh, yeah, let’s run out and buy that. I mean do people really fall for this stupidity? I got a Nigerian bill for you. . .

Charles Goyette: Yeah, sure. They started circulating the Ron Paul bitcoin. And I asked Dr. Paul, I said do you think they’re honoring you by naming this coin in your name or are they just exploiting your name and hoping that they can lure people to trust you and what you represented into using their coin? He says “Probably a little of both”. As long as they don’t defraud anybody and they operate honestly, then he wasn’t gonna raise a problem about it.

Jason Hartman: I know. But I’ll tell you something. The central banking cartels and the governments that are in cahoots with them, there’s no way they’re gonna let any crypto currency or competing currency gain any real traction. And the stupid argument I hear from. . .Instead of calling them gold bugs, I’m gonna call them bitcoin bugs, from the bitcoin bugs are “Well, the government can’t control it. It’s decentralized.” No, they can control it.

Listen, cocaine is decentralized and we’re not allowed to trade in cocaine, right? That’s not a currency. It’s just silly. The stuff is gonna be attacked, it’s gonna be destroyed, it’s gonna be squashed by the powers that be, and all for our own good of course because people will use it for illicit things like prostitution, drugs, and terrorism, and then there will be scams and the government will make the case and then they will just come down on it.

Charles Goyette: There will be all the same things that there are with US dollars. But I take your point very seriously that they will not let it persist if it becomes a threat to the government’s money monopoly. They simply will not.

Jason Hartman: Which is my argument about competing alternative currencies outside of reserve currency of the dollar. So it’s kind of like the same argument in a slightly different way.

Charles Goyette: They will certainly come down with both feet. They’ve already done that. We have legal tender laws here in this country that the courts won’t enforce your contracts denominated in gold the same wayh they will one denominated in dollars. And they will charge you – and this is what they’ve done with bitcoins too – you buy bitcoins. Well, who ever heard of taxing money? You change your quarters for dollars, your dollars for dimes, they don’t tax you. But if you change your dollars for gold they tax the transaction or when you trade your gold back for dollars, the same with bitcoin. They want to treat the property in the same manner. So, they have all the apparatus of the tax structure to use in their benefit, but when they get really desperate, the more they crack down, the more heavy handed they become, the more severe the restrictions are, the penalties, the greater the police state grows to investigate your every financial transaction, then you know that we’re kind of in the end days because they grow very, very desperate when they’re losing their grip on power.

Jason Hartman: That is true. And we see police departments around the country arming themselves with insane military tools. Who are they fighting? I mean, we’ve got Sheriff departments with tanks? Why do they need tanks?

Charles Goyette: In my county where I live, Maricopa County, Arizona, Phoenix, world’s toughest Sherriff, they used a tank to serve a warrant on somebody for cockfighting. They used a tank!

Jason Hartman: This is insanity.

Charles Goyette: It’s insanity.

Jason Hartman: It really is. America, the police state, here we are. We’ve got to do another show on that, Charles. Hey, but it’s always good to have you back my friend. Give out any websites you want people to know about. Tell them where they can find you talking with Ron Paul.

Charles Goyette: Sure. Well, by all means, the Ron Paul podcast is worth downloading and listening to. It’s become enormously popular – we’re really proud of it. And it covers the topics in depth that you’re interested in. Not only Dr. Paul on every issue, but also interesting people with unique insights and experiences. It’s available at PodcastOne.com. It’s called Ron Paul and

Charles Goyette – The Weekly Podcast. It’s available at podcast site PodcastOne.com or on my webpage at CharlesGoyette.com. And that’s about it.

Jason Hartman: Charles, I bet that show is going to continue to grow in popularity. And I’ll tell you something that is so amazing. As much as the mainstream media tried to push Ron Paul out, not cover him and malign him, the people spoke and you cannot deny the man’s popularity. I mean, it is truly incredible, even without the tools of the mainstream establishment.

Charles Goyette: It is really something. And having worked with them, I’m still amazed. We’re having a recording session – I’m driving back to the airport. Some guy pulls up in a car alongside and practically going berserk rolling down his window, taking cell phone cameras, because he just happened, in traffic, to see Ron sitting in the passenger side of my car and he’s waving and thumbs up, “I’m one of your supporters”. And we see this everywhere, especially among young people, college age and older. It’s really amazing.

Jason Hartman: No question about it. Well, Charles Goyette, keep getting the word out there and letting people know about this very, very important stuff.

Charles Goyette: Sounds good. I thank you, Jason, so much.

Narrator: Have you listened to the Creating Wealth series? I mean from the beginning. If not, you can go ahead and get Book I, that’s shows 1 through 20 in digital download. These are advanced strategies for wealth creation. For more information, go to JasonHartman.com.

Narrator: Thank you for joining us today for the Holistic Survival Show, protecting the people, places and profits you care about in uncertain times. Be sure to listen to our Creating Wealth Show which focuses on exploiting the financial and wealth creation opportunities in today’s economy. Learn more at www.JasonHartman.com or search “Jason Hartman” on iTunes. This show is produced by The Hartman Media Company, offering very general guidelines and information. Opinions of guests are their own and none of the content should be considered individual advice. If you require personalized advice, please consult an appropriate professional. Information deemed reliable, but not guaranteed.

Transcribed by Ralph

The Holistic Survival Team


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Episode: 216

Guest: Charles Goyette

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