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Speaker 1: I think it is very suspicious that they seem reluctant

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to allow an audit. They even seem reluctant to allow

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sitting US Senators to go into Ford Knox to see

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what's in there. So, I mean, it could be that

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all the gold is there and this is much ado

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about nothing, or it could be that they've been doing

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some sneaky things with the gold that we don't know about.

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Speaker 2: You are listening to Carrie Leutz's Financial Survival Network, where

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you get valuable information you just can't find anywhere else

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to thrive in today's trying times. You need the Financial

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Survival Network now more than ever. Go to Financial Survivalnetwork

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dot com and get your free newsletter and gift. Financial

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Survival Network now more than ever.

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Speaker 3: And welcome you are listening to and watching the Financial

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Survival Network. I'm your host, Carrie Lutz. Well, we got

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a couple of things to talk about.

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Speaker 1: Here.

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Speaker 3: Is the goal really in Fort Knox? And what about

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DOGE Is it going to make a difference. Well, Jonathan

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Newman is with us now from the Mesis Institute, and

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I highly urge everybody out there to go there. I've

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been going to that site since it went up probably

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twenty five clus to thirty years ago, and it's must

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reading if you're a libertarian or if you want to

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understand more about how the economy and how money really works.

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Jonathan Newman, research fellow at the Mesis Institute.

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Speaker 1: Great to have you on. And so, first thing is

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the golden Fort Knox? Yes or no? Your opinion? I'm

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not sure. I think it is very suspicious that they

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seem reluctant to allow an audit. They even seem reluctant

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to allow sitting US senators to go into Fort Knox

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to see what's in there. So I mean, it could

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be the all the gold is there and this is

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you know, much ado about nothing. Or it could be

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that they've been doing some sneaky things with the gold

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that we don't know about, possibly loans or sales to

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other countries, who knows, And they might be worried about

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the pr fallout that would occur if the Treasury and

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the US government had had this gold on their books

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for so long, and so they've been saying the gold

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is there, and if it turns out that it's not there,

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or at least a good proportion of it isn't there,

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then that would sort of make the US government look

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a whire. People wouldn't trust the US government and there'd be,

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you know, some bad pr fallout there. So I think

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it's I don't know for sure if the gold is

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there or not, but it would be very interesting to know.

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I'm all in favor of an audit. Yeah.

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Speaker 3: Well, the fact that they if it isn't there, and

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they've been lying about it for fifty years, is a

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big deal that anybody believes anything the government says anyway,

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But if they lied about the goal that's on the

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books and it has a market value many times, you know,

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almost seventy times what it's on the books for, and

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then for it to not be there, that would be

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the ultimate confidence killer in anything the government says or does.

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So my feeling is somehow they're going to find it there.

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Maybe they all those bars they're shipping from London, maybe

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they'll have window dressing, they'll have gold bars stacked up

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in front. But US and Trump are promising an audit,

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So I just don't believe that it can come up

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negative because I don't think they would they would go

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there if the gold wasn't there.

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Speaker 1: Yeah, I think obviously there's all sorts of things that

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they could do in this between times. So they've talked

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about an audit, they talked about going into Fort Knox

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to look at it, and so you're absolutely right. It

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could be that they're, you know, replacing gold that had

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already left Fort Knox. Who knows when? So I mean,

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I mean, that's another point on this is how true

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would the audit be if we if we're not even

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sure if the amount of gold has been stable across time.

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Of course we would only just see a one particular

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moment if the gold is there. One thing that people

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often talk about when they talk about the US's gold

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holdings is they talk about how it's a backing for

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the US dollar. I don't think that that's right. The

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dollar is this free floating piece of paper. It's not

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redeemable in gold. Not even US commercial banks can bring

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dollars to the Treasury or to the Federal Reserve and

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redeem it in gold. Four and central banks can't do that.

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Foreign governments can't do that. Of course, all of that

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ended or technically was suspended in nineteen seventy one by

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Richard Nixon. So we talked about this a little bit

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before we started recording, there's this question of like, what

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would happen in financial markets, what would happen to the

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demand for the US dollar if if it came to

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light that there's not as much gold as the government

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had been saying. And I think it really just depends

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on the circumstances. It depends on how much gold might

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be missing. If it's if it's huge, then there might

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be some serious concerns. We might see some change in

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people's demand, international demand for the US dollar. But if

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it's if it's something smaller, or if the US government

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is able to you know, handwave it away. This this

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transaction happened on this date and here's why. Then, I

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don't really see how this would severely diminish demand from

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the US dollar simply because the dollar isn't redeemable in

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gold anymore. Yeah, Christ, you might have it. You might

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have a different opinion.

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Speaker 3: Just the idea that that they they could be lying

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about it all this time. It's going to look really bad,

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you know, Yes, yes, so we will see I guess

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the proof of the pudding, right yeah? Yeah, so could

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you imagine the it'll be a big stink if if

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it isn't there is. It's just saying something that they

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know isn't true for all these years and then being

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exposed that could be that could be a real problem.

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Speaker 1: Yes, and that's why I think that the biggest risk

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from the government's perspective is sort of a pr nightmare,

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you know, being exposed for for the for a lie. Basically,

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a lot of this came up into into public conversation

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because the new Treasury secretary was talking about monetizing US assets,

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and so some people talked about, well, does that mean

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that the US is considering selling off its its gold

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assets are monetizing them in some other way, And so

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that's why people have taking a particular interest in the

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US's gold holdings, which are a big chunk of them

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are held in Fort Knox. You mentioned earlier that the

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value of the gold on the books is a lot

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lower than the actual market value, and that's because of

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this archaic rule that they set in place. The Treasury

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took the gold from the Central Bank from the Federal Reserve.

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In exchange, they gave the FED gold certificates, and those

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gold certificates are the ratio of the gold certificates to

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the amounts of gold It was based on I think

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forty two dollars and twenty two cents per ounce, and

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that was a further deterioration from the previous exchange ratio

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of thirty five dollars an ounce. And even before that,

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the dollar price dollar exchange ratio was even lower. So

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there were over the twentieth century there was this repeated

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devaluation of the US dollar uh in reference to gold.

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And of course that was that was because the US

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had been spending so much, they had been printing so

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much money, and in order for them to not have

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all of the gold flee under the breg Woods Agreement,

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they had to, you know, do these reevaluations. They and eventually,

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as I mentioned before, Nixon finally closed the gold window.

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And so now, like I said, we have just this

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piece of paper that's not redealable for anything. And so

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I think one thing that's you know, good about this

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story being in the news people are thinking about it

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is hopefully people will realize that the US government has

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co opted or taken over money. They've really monopolized money

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in banking in the United States. Uh So, here at

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the Mesa's Institute, we may teach and promote Austrian economics,

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and one of the main principles is that, you know,

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money is a creature of the market that people decide

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to you know, back in barter times, people were exchanging

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goods for direct use for goods for direct use, and

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then they eventually happened upon this great way to facilitate

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their exchanges actually get what they wanted out of the

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market by switching to a medium of exchange. And so

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the emergence of money came from the market. And so

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throughout really human history, not just us history, what we

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see is that governments they really covet the ability to

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manipulate money. They want the ability to inflate, They want

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the ability to print up as much money as they

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want to because it allows them to expropriate resources from

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the private market economy. And so if people are talking

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about this because this is in the news, I think

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it's a good thing.

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Speaker 3: You know, they say, the greatest power that a sovereign

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has is the ability to print money, because that controls everything.

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It gives them the ability to control everything through printing money.

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Rothbard often discussed competing currencies the ability to get the

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government out of it, and in effect that's what we had,

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like you always think back to the Wild West where

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they got all the gold in the vault, but nobody

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wants to carry it around, so they pass out warehouse

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receipts effectively, which becomes a negotiable currency.

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Speaker 1: All of that. So what do you think the idea.

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Speaker 3: Of letting cryptocurrencies battle it out against the US dollar.

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Speaker 1: I think that would be good. I mean, really, anything

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that removes government involvement in money in banking or anything

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that poses a threat to that is a good thing.

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If I had my way and I just deleted the

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Federal Reserve and deleted government involvement in money in banking overnight,

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I have no idea what would happen in terms of

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like what money people would settle on. Would they go

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back to gold, would they go to silver, would they

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go to cryptocurrencies. That's my answer to all of those

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sorts of questions is just let the market decide. Let

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the market decide what they think is the best medium

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of exchange for them to conduct their business. I'm glad

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you mentioned Rothbard. There's a great book, and the Mesa's

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Institute is running a promotion right now, and so your

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viewers might be interested in going to mesis dot org

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Slash my Money. And if you go there then you

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can get a free copy of Rothbard's book What Has

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Government Done to Our Money? And in that book, it's

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very accessible, very easy to read, and you can get

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a free copy and it explains explains how money originated

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on the market and how governments have taken it over

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and all of the horrible consequences of that, not just

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in the twentieth century, but like I said, throughout human history.

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So once again that link is mesas dot org, ses

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dot org slash my Money.

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Speaker 3: All right, excellent and okay, So the idea of letting

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the crypto is back out against the US dollar, getting

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the government out of the money printing business. It's going

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to take a disaster for that to happen. Let's face it,

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They're not just going to willingly relinquish their power over it,

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because then I would, you know, how would the Senate

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and the Congress be able to set up NGOs and

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get all this money they had no power to actually

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do things that were outside the constitution.

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Speaker 1: Yeah, I think if that sort of thing started happening,

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where there was some sort of crisis event and people

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started switching to crypto instead of the US dollar. I

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think what we would see is that the Federal Reserve

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would would finally roll out there their coup de gras

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US dollar, which is the central bank digital currency, and

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they would throw that out there is like this is

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this you know, government authorized, government backed. It's the same

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thing as the US dollar, but it's also crypto. But

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I think you we should reject that, We should oppose

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that with every biber of or being, because you know,

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that would that would truly be the death of sound money.

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That that because even in our current system, we have

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you know, a tiny little check on the banking system

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through the use of cash, physical cash. So if if

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everybody decided to run out and get you know, cash

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out of their checking accounts, then you know, that would

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bring the banking system to its knees obviously. And so

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that's just you know, one way that the population has

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this sort of check. But if we go to a

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cashless system with cbd c's where you can't you can't

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even withdraw it, you can't pull it out of the

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banking system. Uh, then you know, the we we've lost

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all semblance of of monetary's freedom. Yeah, I have a

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good point.

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Speaker 3: You know, basically the way things are now, though, bank

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runs are pretty much impossible because, uh, you know, basically

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you could go pull your money out of one bank

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that you think is in trouble, but all they're going

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to do is give you a check, not going to

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get currency, right because if you want to get more

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than like ten thousand dollars, you've got to make a

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reservation months in advance for it. I'm exaggerating a little bit,

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but you can't really get rid of this stuff. And

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this is a real problem. So because bank runs are

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always according to mesis, and historically we're a check on

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bank's recklessness of lending and of embezzling gold. Part of

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the problem why we got into this central banking is

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all these banks would get gold and they print their

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own money and then find out that you'd have an

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emperor has no close moment, right, So that was problematical.

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So government to the rescue.

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Speaker 1: Right Yeah, yeah, I mean that's the story that they

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like to tell, which is that really what happened with

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fractional reserve banking, which is this topic that we're discussing.

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People didn't like it, people didn't like the instability, the

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inherent instability of it, and so one way that the

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government realized that they can get a win win situation.

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Of course it's win for the government and win for

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the banking system is by cartializing the banking system. And

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of course that cartel is just the central bank. So

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now the central bank is in charge of regulating the

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banking system. They're the ones who set minimum reserve requirements, which,

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by the way, they've been pushed down to zero these days.

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They've replaced it with other monetary manipulation measures like paying

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interest on reserves, and so really the evolution of the

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banking system, it's the problems with it aren't because it's

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like this free market. The problem with the fractional reserve

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banking is not like, you know, there's all these you know,

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greedy bankers who who are you know, fleecing the American public.

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What happened was that the government monopolized it. And so

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now we've just institutionalized all of those inherent problems with

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fractional reserve banking. And the win for the government obviously

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is now they're the sole issuer of the money unit.

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So now that the US government can print up as

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much money as they want to finance all their spending

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which by the way, allows them to impose this subtle

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secret tax on everyone through price inflation. So, I mean,

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everybody knows that if you print up too much money,

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you cause price inflation. Well the people. What many people

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don't really realize is that's actually a tax. That that's

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a way for the government to spend money that they

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haven't collected, collected in taxes U and then you know,

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they sell the debt to primary dealers. Those primary dealers

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still to the Fed, and the Fed purchases the debt

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with newly printed money. That's just an expropriate and it's

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just removing real resources from the private economy and giving

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it to the government. So everybody, everybody understands that taxes

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are bad. You don't like taxes. Taxes are unpopular. Even

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politicians understand this, and that's why they really cove it,

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and they really love the ability to print money. It's

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because they're allowed to increase the size and scope of

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government without the necessary prerequisite of raising taxes. Exactly, it's

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this stealth tax.

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Speaker 3: Yes, we all feel it, but some of us feel

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it differently because the banks get the newly freshly printed

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money before it's filtered its way into the system, so

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they get the old the purchasing power, and then the

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money circulates and the rest of us get the inflation.

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But on the flip side of that, we get to

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pay back the banks in depreciated dollars.

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Speaker 1: Right, Well, that's true. Yeah, So, as you're pointing out,

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there are winners and losers, and of course one winner

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is the government and another winner is the banking system itself.

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But this is something that the Austrian school in particular

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is very good at explaining and emphasize when we talk

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about monetary theory. When we talk about the effects of inflation.

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It's not like there's just this level rise in all prices.

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What happens is that the new money enters into one

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00:18:23,319 --> 00:18:27,839
person's cash balance first, and they're able to acquire goods

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from the market at the same prices, or maybe just

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they slightly outbid other people. And then the people who

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sold the goods to that person they now have higher

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incomes than they otherwise would have without the money printing,

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and so you get this like rippling out effect where

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the money sort of spreads through as people are exchanging it,

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and they're bidding up prices as a result because they

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have more money in their pockets than they did without

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the money printing. And so that's the actual process by

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which prices rise. One thing that we talk about a lot,

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especially when we're contrasting the Austrian theory with the likes

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of the monitors theory from Milton Friedman, we talk about

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that very fact that there's not just this level rise

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and prices, and in fact, what happens is there's a

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total redistribution of resources towards the source of the new money,

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which explains why we have winners and losers, and it

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also explains why the government loves doing that sort of

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thing because they benefit obviously as a result totally.

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Speaker 3: And so finally, and one other thing I wanted to

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mention is Trump says I'm going to bring down prices

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by bringing down the cost of energy. And it's putting

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the cart before the horse, because the cost of energy

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is higher, its high because of inflation. Inflation isn't caused

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by the high price of energy. The high price of

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energy is caused by inflation by increase in the money supply.

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Speaker 1: Right, Yeah, you're exactly right. And this is something that

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it's been a really terrible phenomenon, especially over the course

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of the twentieth century, there was this change in the

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definition of inflation where people started to define or talk

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about inflation just like it's a level rise in prices,

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and in fact, even more recently people use the term

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inflation to describe any sort of rise in price. But

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of course the original definition and the one that accords

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with economic theory and monetary theory, is the one that

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00:20:34,279 --> 00:20:37,640
says inflation is an increase in the money supply. And

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so because of the change and the definition of inflation,

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you get people making errors like the one you just describe,

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where they say that the cause of price inflation is

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an increase in the price of some other good like energy.

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But that doesn't make any sense because then you're saying

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the cause of a rise in prices is rise in prices,

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but that doesn't make any sense at all. And in fact,

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there's nothing that could cause a general rise in prices

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except for an increase in the money supply.

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Speaker 3: Yeah, totally, totally, So it's a misconception and people don't

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really get it. Hey, finally, Doge, what's your take on, Doge?

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Is this like a noble effort or is it doomed

355
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to failure?

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Speaker 1: Oh? I don't know if it's a if it's a

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noble effort or not. I'd have to, you know, look

358
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inside the minds of the people who are who are

359
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running in But I'm cheering it on. I think it's

360
00:21:30,880 --> 00:21:35,960
it's wonderful, it's a it's a sorely needed restructuring, sorely needed,

361
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you know, a bit of chaos in Washington, d C.

362
00:21:40,200 --> 00:21:42,079
It's nice that they're finally getting a taste of the

363
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Roman medicine in terms of, you know, the destruction and

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chaos that they've been leashed on the rest of the economy.

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But like, if you think about it, we've had this,

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you know, steady rise in government spending, tons and tons

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of increases in waste, and all of that was through

368
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falling the political process. Status quo just keep going on

369
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as normal. And of course there's a big spike up

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during crisis periods, but the overarching trend is for government

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spending to keep increasing, and of course you get all

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these new agencies, you get all these new programs, grants

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for all sorts of things. And so the fact that

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you know, dog is it in there calling out all

375
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of these obviously wasteful programs, all of these obviously wasteful

376
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and nonsensical uses of taxpayer money. I think it is great.

377
00:22:32,039 --> 00:22:35,000
I think it's great for, like, in a pr sense,

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people are actually questioning the allocation of spending by the

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00:22:41,559 --> 00:22:44,039
US government. I think it's great in a in a

380
00:22:44,079 --> 00:22:46,960
practical sort of sense because like we would not have

381
00:22:47,000 --> 00:22:52,319
been able to achieve these decreases in spending without you know,

382
00:22:52,359 --> 00:22:56,720
sort of like the hammer that Elon Musk represents. And

383
00:22:56,759 --> 00:22:59,480
so it's great. Like, my only criticism of it is

384
00:22:59,480 --> 00:23:01,359
that it's not going far enough. I would like to

385
00:23:01,359 --> 00:23:05,960
see whole departments, whole agencies, you know, totally eliminated, and

386
00:23:06,039 --> 00:23:08,319
hopefully that's on the horizon. But you know, I'm true,

387
00:23:08,319 --> 00:23:08,599
I'm on.

388
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Speaker 3: I think it's coming usaid, you know, all the money

389
00:23:13,759 --> 00:23:16,960
going out to everybody one organization. I was disappointed that

390
00:23:17,000 --> 00:23:19,759
I didn't see on the list, and that was messas

391
00:23:19,759 --> 00:23:23,359
dot org and Messa's University. How come you guys didn't

392
00:23:23,359 --> 00:23:26,839
get any money. We don't accept any government money.

393
00:23:26,960 --> 00:23:30,519
Speaker 1: And of course, uh, the government wouldn't even want to

394
00:23:30,519 --> 00:23:33,559
give us any money because you know, we the message

395
00:23:33,640 --> 00:23:36,599
and our mission is totally contrary to the missions and

396
00:23:36,640 --> 00:23:39,880
the goals of the US government. But also you know,

397
00:23:39,960 --> 00:23:42,160
we don't we don't want the government's money because it

398
00:23:42,160 --> 00:23:45,039
comes with strings attached. You know, that would that would

399
00:23:45,079 --> 00:23:47,519
cause us to be able to uh that would cause

400
00:23:47,519 --> 00:23:50,640
people to think that, you know, we're somehow compromised. But

401
00:23:50,640 --> 00:23:53,039
one thing that the Mesa's Institute is great at is

402
00:23:53,200 --> 00:23:58,240
we have this uh you know, uncompromising stance on on

403
00:23:58,240 --> 00:24:01,839
on being anti government, you know, in favor of free markets,

404
00:24:02,359 --> 00:24:05,519
in favor of sound money. And so yeah, you're you're

405
00:24:05,519 --> 00:24:09,200
absolutely right. The Mesa's Institute was nowhere to be found

406
00:24:09,400 --> 00:24:11,440
in the USA documents and.

407
00:24:15,279 --> 00:24:18,640
Speaker 3: Yeah, yeah, obviously you don't just talk the talk, you

408
00:24:18,720 --> 00:24:21,400
walk the walk, and that's really important in this day

409
00:24:21,440 --> 00:24:21,839
and age.

410
00:24:22,160 --> 00:24:24,559
Speaker 1: Well, hey, appreciate you coming on.

411
00:24:25,240 --> 00:24:29,200
Speaker 3: And uh everyone from the thesis is always welcome on

412
00:24:29,240 --> 00:24:34,799
this show because, uh, these ideas like have just kind

413
00:24:34,799 --> 00:24:37,599
of been locked away. I found them. I went to

414
00:24:37,640 --> 00:24:40,480
Pace University in New York City, and I have this

415
00:24:40,519 --> 00:24:43,319
in my bio on my website that I kind of

416
00:24:43,359 --> 00:24:47,279
stumbled into this dark back alley of the library and

417
00:24:47,359 --> 00:24:51,880
there was like every single Austrian economics book from Human

418
00:24:52,000 --> 00:24:57,240
Action and all of Rothbard's books, and Percy Greaves.

419
00:24:56,920 --> 00:24:59,640
Speaker 1: And Hyek and you know, it was like an i

420
00:24:59,799 --> 00:25:00,559
op an herd to me.

421
00:25:01,119 --> 00:25:04,759
Speaker 3: And interestingly enough, the person that really got me into

422
00:25:04,799 --> 00:25:09,359
it all was Milton Friedman from his epic, uh epic

423
00:25:09,839 --> 00:25:17,279
work Free to Choose book and the the series on PBS.

424
00:25:17,279 --> 00:25:21,920
Interestingly enough, I wonder if PBS would ever broadcast that

425
00:25:22,079 --> 00:25:23,400
show in this day and age.

426
00:25:23,759 --> 00:25:25,720
Speaker 1: Yeah, it's a good question, of course. You know, I

427
00:25:26,039 --> 00:25:31,559
mentioned some some difference it is between Freedman night monetarism

428
00:25:31,680 --> 00:25:34,319
in the Austrian school earlier. But of course there's there's

429
00:25:34,359 --> 00:25:38,240
no denying that he was a great, uh, very articulate

430
00:25:38,319 --> 00:25:41,720
defender of free markets. There's there's a lot of agreement, uh,

431
00:25:42,400 --> 00:25:44,640
just you know broadly within you know, free the free

432
00:25:44,680 --> 00:25:47,319
market camp. So yeah, that's great that you were able

433
00:25:47,400 --> 00:25:49,480
to find that, you know, treasure trove of books from

434
00:25:49,920 --> 00:25:53,119
Thesis and Rothbard in Percy Greeves. Yeah, yep.

435
00:25:53,240 --> 00:25:56,640
Speaker 3: And I read Human Action and the you know, it

436
00:25:56,640 --> 00:25:58,759
would probably be easier to read it in this day

437
00:25:58,759 --> 00:26:01,440
and age because you have an online dictionary. You can

438
00:26:01,519 --> 00:26:04,799
just pop up all these words that you will not understand,

439
00:26:04,839 --> 00:26:08,880
and I have pretty good vocabulary, but things like praxeology,

440
00:26:09,200 --> 00:26:12,200
I had no idea what the heck that meant, but

441
00:26:12,799 --> 00:26:18,640
highly recommended, as is the site mesas dot org where you, Jonathan,

442
00:26:18,720 --> 00:26:22,599
and so many of your colleagues really work tirelessly to

443
00:26:23,079 --> 00:26:28,079
educate the public on what's really going on, and you

444
00:26:28,240 --> 00:26:32,000
to be applauded and appreciate everything you guys have done.

445
00:26:32,119 --> 00:26:35,160
If you got any questions, Jonathan myself, shoot me an email,

446
00:26:35,480 --> 00:26:40,079
Klatkerrie lets dot com sign up, free free newsletter, Financial

447
00:26:40,160 --> 00:26:43,480
Survival Network dot com sign up, and mesas dot org

448
00:26:43,839 --> 00:26:46,880
they send out daily missus. You can get a multiple

449
00:26:47,279 --> 00:26:51,559
mailing list, podcasts, et cetera. Highly highly recommended if you

450
00:26:51,680 --> 00:26:55,319
care about figuring out what's really going on here, not

451
00:26:55,400 --> 00:26:56,880
what the politicians are saying.

452
00:26:57,160 --> 00:27:00,160
Speaker 1: Jonathan, be well, thanks for coming on, Thanks for having me.

453
00:27:00,240 --> 00:27:04,359
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network, your

454
00:27:04,440 --> 00:27:08,279
solution to today's trying times. For the latest, go to

455
00:27:08,440 --> 00:27:14,680
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,