Inflation is a deadly disease that is misunderstood by many. On this week’s Liberty Cafe, we discuss why conservatives ought to pay almost as much attention to the Federal Reserve as they do to our elected politicians–none of whom can resist the temptation of inflation.


This episode was transcribed by a robot called OtterAi. Please forgive any errors in the text, as robots still have a lot to learn:

America is suffering through economic malaise. Inflation right now is the highest it’s been in almost 50 years, and maybe even higher, and wages are not rising at nearly the same rate. As price increases, interest rates have increased dramatically, which has caused mortgage demand in new home construction to plummet. And a lot of commentators fear that 2023 may be the year that we fall into a real recession that even Biden and his group can’t ignore and call something else. I want to talk about these things. And more on this week’s episode 107 of the Liberty cafe. Hi, this is Bill Peacock, and welcome to episode 107 of the Liberty cafe. It’s a blessing to have you here with me today. And a blessing to be a part of your listening each week. Hopefully each week, when you when you get up and listen to podcasts about what’s going on in the world. Also a blessing to be part of the Texas scorecard network. They’re the sponsor, the Liberty Cafe, and we along with you, I know out there are fighting every day to take upon oppression and get it out of our governmental system. So thanks for being here. So that music we just heard the second round of music you heard today was just a little tune from Shelby Lynn. It’s called temptation. Here. Here’s just a little bit of the words that she was saying there for you. Should I give into this temptation, temptation? Temptation? That’s right. Should I give into this sweet temptation? Oh, yeah. The reason I had Miss Lin on today, briefly was because when we were talking about inflation, monetary policy, it also applies to a lot of other things related to this fiscal policy government spending, but particularly inflation leads to two real big areas of what we might call temptation. And the first one is, I think what we noticed more often is for politicians, the thing about inflation, when it comes for politicians is it’s it’s so easy to just go out and print more money, or have the people who work for you go print more money to get them out of their troubles. It’s really pretty simple. So the government is spending too much money. And they’re spending all they have plus more. But they start running into some problems. Where are they going to get more money? Well, one way is they can tax taxes more, but people start pushing back on that after a while. And so it makes it really hard. The other way, of course, they can do it as borrow more money. But the banks and the people who are lending money to the government start pushing back after a while as well. So what can they do with all that? Well, they can simply get the Federal Reserve, in this case in America to print more money. And of course, it’s not quite as simple as printing more money today. There’s all different kinds of ways that they can do this. But it basically has to do with the government, the federal reserve borrowing more money, or actually purchasing, purchasing things and then debt from other people and then turning around, and, and turning that into more money that can be borrowed from the Federal Reserve can go into the banks and people can borrow, it gets very complex. And we’re not going to get into that today. But but the result of all that is, is that we have higher inflation. And what higher inflation does is two things. It makes the money that the government has to pay back in the future, worth less. And so it doesn’t cost them as much to pay back the money that they’ve already borrowed, when the money was worth more. The second thing does that inflation dries up people into the next tax bracket. So if you’re earning so much money this year, and then you earn more money next year, but you’re not earning more money, because because you’re really being more productive. It’s just the government’s trying to keep up with inflation. All of a sudden, you’re driven into the next tax bracket and so you start paying more taxes, even though the government didn’t have to go out and raise your taxes where you could see it. And so it’s really tempting for politicians to push For more inflation, and of course, that’s been going on for a long, long 1000s of years that’s been going on. And for 100 plus years since the Federal Reserve was created here back in, I think 1913, or something like that. The other temptation is one that conservatives actually get into. We’re not going to talk about that too much today. But there’s this, this movement in the conservative circles, some conservative circles, that increases in the money supply, it’s not necessarily harmful at all, or it’s just not as harmful, as some people would say it is in terms of promoting inflation. And there’s a book out there by called Miss inflation by David Bahnson. And Douglas Wilson. And Douglas Wilson, is, I think, one of the most brilliant commentators of our age on both just general, what’s going on out there generally in the world, and also, of course, on his exposition of Scripture, and understanding what Scripture means and how to defend the faith. And he’s great. And so it’s kind of hard for me to point to something that he’s done and say, I think he’s got this wrong. But I think in the case of this book, I think he’s got it wrong. I think it’s mainly because of David Bronson’s view, and has influenced him on this. And so anyway, I’m not gonna spend a lot of time today talking about this. But But I think really what they’re under what they’re doing here is understating the damage, the devastating damage really caused by the Federal Reserve, which is the Bank of the United States, we don’t really think of it that way. But it’s really just the Bank of the United States. Not the first one is we’ll figure out in just a minute. And so I think what I want to do here is make the case really, that if we want to solve all a lot of our problems, when it comes to money in the economy, it’s not to print more money, but it’s to get rid of the Federal Reserve. So let’s move into this. As I pointed out at the opening, we’re having some really tough times here fiscally and monetarily in the United States. Inflation is rampant. You know, we’ve got the highest inflation in almost 50 years. And it could be because they’ve changed the way they they count inflation, and measure inflation, it could be that it’s the highest we’ve ever experienced, maybe back into the 20s, even something like that. It’s just It’s really high. Now. It’s it’s slowing down a little bit now. But it’s been really high in the past. And, of course, a lot of our problems today are is government spending, Congress spending, state spending, city spending, just tons and tons of money, right, stimulus programs, and all those kinds of things. But when we when it comes to inflation, it’s not government spending, that drives inflation. It’s the Federal Reserve printing more money, or borrowing more money or buying more goods in order to get more money out of their circulation. However, they want to do it quantitative easing, however you want to name it. It’s the Federal Reserve that causes inflation, not spending in Congress. So that’s what we’re going to focus on today. So what we have here is this this problem with the Federal Reserve that was created by fine Wall Street financiers, the you know, the Rockefellers and, and the folks back in those days, who made the Carnegie’s who made money off of borrowing a lot of money, and banking, the banking industry in those kinds of things. They created the Federal Reserve got Congress to create the Federal Reserve, because they had a problem. They couldn’t control what state banks were doing. And state banks often wanted money to count be hard and not be inflated. And that made money more expensive for these folks. So they wanted somebody to come along, who could control what the state banks were doing, and making money cheaper for them to get their hands on. And so that’s where the Federal Reserve came from. And then back in the 1970s, Congress put what is called the dual mandate in place, this went in 1977. So they were they were told to maintain maximum employment along with stable prices. But the problem is, monetary policy can’t do either one of those things that people think it can today but can’t, monetary policy can’t. Well, let me put it this way. It can’t. It doesn’t have anything to do with with real employment. And it doesn’t have anything to do with some prices in the sense of how much things will cost here and there in relationship to each other. What it does though is it erases through the monetary policy through inflation can raise the overall price levels and make everything more expensive. And so monetary policy won’t solve this. It can’t solve the new new, the dual mandate, and never has been able to do that. So let me let’s just look a little history lesson here to figure this out. In in 1977, for instance, when the Federal Reserve’s interest rate was about 555, point 5%. But then it skyrocketed about 20% in the 1980s. And then it hit a 20 year low of about 3%. In 1993, minute popped back up to 5%. And it’s plummeted to near zero for most the last 15 years or so before increasing to the current rate of nearly 4%. So it’s clear that the Federal Reserve hasn’t been able to mandate anything to do with like a stable interest rates in the economy. neither have they been able to do anything about an employment rate and keeping that stable. And it started out in 77, at 6.4%, then it went up the unemployment went up to 10.8% at two, and then nearly 10%, in 2009. before dropping to the current rate of about 3.7%, which is near 50, year low. The problem is it’s not really near 50 year low, because the again, the way they count This is a lot of people just given up looking for work. And so they’re taken once that happens, they’re out, they’re taken out of them the measurements, but real unemployment, if you measure it over time, it’s still much higher than this 3.7%, which Oh, so again, we have the situation where the Federal Reserve can’t maintain stable unemployment rates. And so if we see this on both sides of the dual mandate, you got to start figuring out that maybe the Federal Reserve can’t control these things, because they’re doing a bad job of it. And if they just worked harder, and did things better, they could they could solve this problem. Maybe instead, and after 50 years of failure, we should come to the conclusion that the Federal Reserve can’t maintain stable prices, through interest rates and stable unemployment. Because it’s impossible to control those things, ultimately, through the Federal Reserve, and through monetary policy. Actually, we don’t have to just look at the last 50 years in order to figure this out. And we have a lot more history than that. We can go all the way back to 1791. That’s in the first year of the George Washington administration. Right. He’s just been elected president 1790. takes office. Yeah, well, maybe he takes office and in late, late 1790. Back then now is March, I think, actually, right. So this is the very first year. He’s just been in office for a few months when Congress passes legislation to create the First National Bank, the First National Bank of the United States. And there was this big debate going on in the Washington administration, Alexander Hamilton, who was Washington’s Treasury Secretary, really wanted this first US National Bank. Why did he want that? Well, he was closely tied to the northern financial and commercial interest. And they wanted again, to be able to control the money supply themselves, particularly when it came to dealing with the South and agricultural part of the the American economy. Because they want a greater control over them through for trade and all the types of reasons, right, because they were manufacturers and they wanted to get their hands on the goods coming out of the south it good prices and one thing that way they could do that was controlling the monetary supply. Well, Thomas Jefferson was opposed to the bank. Because he felt like and he was right about this, that the bank would benefit these commercial interests up in the north than it would for the average American, particularly those in the south. But unfortunately, Jefferson lost the debate, Hamilton one and George Washington signed the bill. Well, eventually, the First National Bank Charter expired and so Congress came along and passed a charter for the Second National Bank, which was every bit as problematic, even more so because this bank was controlled by private investors and a lot of those investors in The Second National Bank in the United States were foreign investors. And a lot of this money was being earned in the United States and taken out and going overseas. It was it was corporate cronyism at its finest. Well, there came time, for the second the charter for the Second Bank of the United States that had had to be renewed or it would go away. And so that was during the term of Andrew Jackson, when he was president United States. This would have been in the late 3020s, I think it was early 30s, the 18th 1800s. And so Congress passed a renewal of the charter. But Jackson vetoed the charter renewal. In in his in his veto message, he wrote that the bank, the second bank was unauthorized by the Constitution, severe versus to the rights of states and dangerous to the liberties of the people. He saw clearly the corporate cronyism aspects of this, that a national bank, controlled by the federal government and by the private interest involved in that only benefited those private interests, not the average Americans. Again, because they got control the money, monetary supply, who was going to get it, what interest rates were all those types of things. And that was the end of national banks in the United States until, again, the Federal Reserve was adopted by Congress, back in 1913. But of course, things hadn’t changed. It was still a bad idea when that happened. And and we’ve got to, I’ve got a quote here from Murray Rothbard. He’s an economist in the Austrian School. And he writes a little bit about what the problems were with the Federal Reserve. So let me just put this in here and read it. The financial elites of this country, notably, the Morgan Rockefellers, and Kuhn, Loeb interest, were responsible for putting through the Federal Reserve System. Again, we see here that a fat financial elites just benefited from this, and they knew they would, and they put it into place. And that’s the same way it’s going on today. There are a lot of problems going on. In America today. Here in Texas, where I live, we’ve got a bunch of Republicans running the government who usually act or often act quite a bit like Democrats, even over in the Texas House of Representatives. The Republicans actually put Democrats in charge of some pretty important committees over there, right. Our governor won’t won’t secure the border for the state, he wants the state to spend more money, our lieutenant governor wants to revamp our electricity market by giving a bunch of $8 billion of Texas consumers electricity, consumers money over to Berkshire Hathaway, right to have them come build new generation, guaranteed new generation, so that it’s guaranteed that Dan Patrick, and the Texas Legislature won’t get in trouble for another blackout. And as it doesn’t matter how much money it costs to get there, as long as it’s not their money, it’s the taxpayers money, right. So we have all those kinds of problems. But that is compounded all the time. With inflation, and the printing of money, and the control of financial markets by a federal bank, which basically sets policies for all other banks, there’s no competition for money. There’s no competition for banks, which one’s the best one, which one will earn you the most money, the very little competition going on in that market. So we’ve got to deal with the political problems, the policy problems, the fiscal problems, all the government spending over here. But as long as we have the Federal Reserve, it just complicates those things quite a bit. Because it messes up our understanding of how bad these other problems are, and where to go fix them. So I’m just here to say that if we really want to deal effectively, with the problems our politicians are causing us in all the decisions they make, we really need to go in and first of all, and get Congress to abolish the Federal Reserve, if we’re willing to do that and take that on. It’ll give us much more clarity about how to fix our more political problems, or actually or more policy problems that are dealt with at the legislative issue levels, whether it’s at the federal level, the state level or the local level. Well, thanks for being here on the Liberty Cafe today. It’s been great to have you along been a blessing to have you along And also again, great to be part of the Texas scorecard network, the sponsor of the Liberty cafe. Thank you for listening to the Liberty cafe with Bill peacock. This show is produced by Texas scorecard. You can learn more about the show and find other shows at Texas Be sure you subscribe and rate the show on whatever platform you’re listening on. See you next time.

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