product of the river or of the the better. good afternoon welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for friday october nineteenth the qs federal reserve bomb plotter is in the headlines today as home country of bangladesh reportedly wants details on his case while this may make headlines we'll talk about one aspect of the federal reserve that does not will as if the fed may arguably be making war easier and more prevalent we'll hear from lou rockwell of the ludwig von mises institute and we keep hearing about the middle class from the two main contenders

for u.s. president. that's how we built the world's greatest middle class this is about bringing good jobs back for the middle class of america. in these candidates these candidates talk about supporting the middle class in terms of tax cuts loopholes regulation but they leave out the money in the middle classes pockets pockets that are being picked every second of every day what happens to the middle class if you don't address this aspect will discuss and it is the twenty five year anniversary of black monday it is also the one year anniversary of this show's launch. thank you fake applause would respond to your birthday wishes and more and your feedback let's get to today's capital account.

this coming monday barack obama and mitt romney are scheduled to face off in a foreign policy debate and we pretty much guarantee in fact i'm willing to bet any amount of money that when the subject of u.s. wars comes up you won't hear anything like the following which comes by way of a presidential contender no longer in the race ron paul he said this if every american taxpayer had to submit an extra five or ten thousand dollars to the i.r.s. this april to pay for the war i'm quite certain it would and very quickly the problem is that government finances war by borrowing and printing money rather than presenting a bill directly in the form of higher taxes when the costs are obscured the question of whether any war is worth it becomes distorted and this government

borrowing and printing of money is enabled by the federal reserve of course so back to the debates no you are not likely to hear about any of this at all but lou rockwell president of the ludwig von mises institute recently gave a speech on this topic so he's here now to discuss it with us so first lou rockwell thanks so much for being on the show it's always so great to have you on laura thank you and happy first anniversary thank you so very much thank you for being a great fantastic guest and supporter over the last year i appreciate it so let's get to the federal reserve and war are you know we often hear from these candidates in the debates or anywhere you hear from politicians that the u.s. put two wars on a credit card and this doesn't even acknowledge libya or the warmongering over iran so maybe four wars syria i mean none of this is even included but what is really mentioned and the credit card analogy is who is issuing that credit card and enabling this war and you argue that the federal reserve is the issuer and the

enabler so care to explain how. and it's not you know and it's not quite a credit card that would be the borrowing that they might do because with a credit card you have to be in the you know you have to pay it back what they're doing is again they're you know as you say they're simply printing up the money so ever since central banking it. fastened on every single country or a single advanced country in the world beginning and. though the beginning of the last century we've had the world of central banking it's meant that governments can spend vastly more on all their favorite projects and the what is their first favorite project of all governments all throughout history making war all of a sudden any dissent questioning the government makes you a traitor all of a sudden if you're opposing what the government is doing it's police state it's spying it's it's killing of people it's drones what it whatever it's doing well you can't question that because you must be you know pro some of the loddon or whoever is the the enemy of the moment so governments love wars they've always loved wars

but it's central banking of the vast amount of money really the infinite amount of money that is made available to governments to fight wars means you have no none of the normal discussions at least in the past congress would have to debate before going to war how we're going to pay for it now that's not even a question they just call up the fed and say hey boys print us up another trillion dollars and the fed is happy to do that in cahoots with the banking system and of course the banks are here as in europe the key and most important private sector are caused by private sector special interest along with the military industrial complex so they all benefit from this vast creation of money companies that get to make more bombs and planes and cruise missiles and longer busters and all the rest of the things that kill people blow up whole cities destroyed whole countries so yes absolutely the central bank enabled government to take warfare to

a whole new level. world wars and the use of atomic weapons and so forth now of course they're threatening the use of atomic weapons against iran that's what that's what both bush and obama for that matter are romney mean when they say nothing is off the table when it comes to dealing with iran they're threatening the use of atomic weapons well the thing that would be able to do this without the central bank and let's back up for a moment a couple things you said mary do you are you suggesting that actually there is. collusion and that the central bank gives accommodative monetary policy to the government during times of war when the government wants to go to war or is always again or. i mean this is the center bank takes the orders of the government the late arthur burns who is nixon's chairman of the of the fed said in answer to a question in a press conference right once after he was out of office he said well you know the the chairman of the fed has to do what the president wants or otherwise we lose our

independence one of the funniest answers ever given by a public official what he meant was the right to print their own money for their own budget and i'll live it up everybody at the fed leaves it up i don't know if you're concerned about their standard of living at the fed they all do very very well but they take the president's orders so when the president wants to start a war he calls up bernanke he asked for the cash and bernanke prints it up chris just creates it yes just adds digits through various mechanisms into the government's accounts that they can then spend so then i would say it's not a coincidence that the fed exists to inflate that's why the fed exists not to not to fight inflation not to help the economy whatever the fed is just a giant printing press invented to create new money so they love doing it whatever the purpose and it would be empowers them the more the fed is printing money the more powerful institution it is and when you have the iraq war the afghanistan war . the libyan war the syrian war there's like the iranian war many other you know.

cold war against china the cold war against russia maybe they'd be hot wars and they just love war the governments of governments love war the us government is of course the biggest warmonger in the world and enabled by the central and you're saying that the central bank and feel money printing distorts all kinds of spending for the government the war being the thing that the government likes most to spend on so then what if if central banks are the problem and currency allows for unbridled money printing would a gold standard that constrains the money supply be enough to first strain this type of going to war enabling of war if you're for peace if you want more peace and less killing in the world list destruction absolutely you'd be for something that restrains the central bank preferably as ron paul of yours getting rid of the central bank whether it's a gold standard whether it's competitive currencies whatever anything that restrains the government's ability to create new money is is the greatest thing for

the cause of peace you also would prevent the business cycle the business cycle of recessions and depressions is caused by the fed's creation of new money and what it does to the interest rate so if we're concerned about economic progress economic prosperity peace instead of murdering people absolutely want to rein in or the best thing of course would be to put the federal reserve out of business some bernanke you get a job at mcdonald's. i think it would be interesting to see bernanke you flipping burgers i wonder if you know how to do that but you say you do think that would actually be enough a gold standard that we know you still have no you still have of course although you still have lockheed martin marietta and general and amex and all the big the big military contracts the merchants of death because they were called back at the time of war one and you still have the military itself the pentagon you have the unfortunate bloodthirstiness of so many people in america in another country that would love love war love killing so you still have that sort of thing going on and

war can still benefit governor. they still love war but the scope of war the massive nature of war these world wars these wars the kill millions and millions of people those would be much more difficult with without a central bank that's interesting and short of that when we talk about it like what ron paul said that i quoted the beginning of the show that you quoted in a recent speech you gave when he's talking about if there was a direct tax that citizens said you know that we're told you need to pay five or ten thousand extra dollars for a war that if that happened that the war would and pretty quickly is that because this is it will be up in arms or there wouldn't be money to fund it will add to this is happening throughout history what happens is because of those people's taxes have to be raised and they're otherwise badly affected by massive government borrowing so at some point this sets and what the government calls war fatigue but it's actually of the people's reluctance and then refusal to keep paying these high taxes and keep being affected by all the government borrowing so the government is

actually forced us to cut down maybe even stop the war so that's what happens in the absence of a central bank they can star wars they can carry on wars but there's a real limit to what they can do a limited number of people they can kill a limit to the amount of money they can spend because again what they describe hilariously as war fatigue is actually people being sick and tired of being ripped off to go kill people in other countries they don't you know at some point they don't like it so ron paul is exactly right if we all had to pay for these endless wars that they wage and want to wage many more wars of course to that it would be the greatest thing and it would dramatically cut down the mountains of skulls that the government u.s. government especially at the present time builds up all over the world and quickly it's hard to it's hard for me to remember an era before central banking because i certainly wasn't alive and i had not as a student scholar as you and was there at a time that you can cite where that happened the war fatigue and that would be a good example of of how that does impact the government's ability to continue

fighting a war you know i mean it was all the war. that took place before the establishment in the case of noted states before the establishment of the federal reserve in other words quite as i've said. things in operation before the fed the national banking system abraham lincoln's greenbacks were printed up literally printed up greenbacks. but yes there are many wars throughout american history where there was the again this war fatigue and where the government actually had to cut back and they couldn't go on there were some people for example of were looking at the us war on spain who wanted to conquer spain and conquer all of the spanish colonies but it was some point american people much of maybe they liked war and they liked conquering the philippines like conquering puerto rico and go on and so forth that came about when they don't want to pay for it anymore so yeah they were forced to cut back and there are hundreds and hundreds of examples like this not only in american history in english history in the history of other countries we're going

people get sick and tired of paying for the wars getting these massive additional tax bills presented to them and they refuse to pay him any more and when that happens with all the government propaganda stops working they have to cut back well there you go it's a very interesting view and little rock when we get back i want to talk about the middle class and the role of the fed that's not being talked about in this election so we'll be back with you in just a moment and still ahead do not miss our very special capital account birthday celebration in today's least change will respond to your birthday wish and some other stuff but first your closing market numbers. what's the strangest to take. u.s.

president trying to overthrow a foreign country's government to teach. and america recognized to see. if cuba to cope with its victory. i live here. live here the cuban missile crisis games and reality.

good. welcome back before the break we were asking if the federal reserve enables us wars now let's talk about the impact of the federal reserve repressing savers especially as we hear so much about the middle class in this presidential campaign lou rockwell is back let's ask him because there is no one better to talk about fed's repression that's for sure so. what we're talking about the fed so the presidential candidates at least the lead contenders mitt romney and barack obama they keep talking about the middle class they keep talking about what needs to happen to restore the middle class to save the middle class all of these things but they

never talk about the fed mitt romney talks about abolishing tax on on interest for savings for the middle class he fails to mention that there might not be very much interest because they're being financially for press so what does that mean for an economy in the state that the u.s. is in and for the middle class when they can't save first of all you're right to point out the sort of sociological baloney of both these guys talking about the middle class there's only there are only two classes in society that matter one is the tax payers one is the tax eaters both these guys are candidates of the tax eaters of various sorts of of the people who who who are able to by force of arms take money from the vast majority of americans and spend it on themselves and their friends so it's a question of middle class the poor the rich whatever those are all extraneous things but of course the tax payers are being hit on their head not only by everything else the government does but by the federal reserve so they're as you

mentioned the unbelievably horrendous and so damaging to the economy in the future of the economy suppression of interest rates taking the craziness i do that john maynard keynes had of pushing interest rates to zero so now you get people who've been savers and investors all their lives they were tired and you know they were able to earn a quarter or a quarter of a percent on their money so it's just it's. an atrocity it's entirely a creation of the federal reserve is not a natural situation probably people ought to be getting sixteen seventeen eighteen percent of the money. if we if we actually took good if we didn't have the federal reserve holding down interest rates so this hurts every single saver hurts the future of the economy both of these guys represent the fed and the big banks there's no essential difference between them on these issues and so they talk about something else so they have nothing to say about the middle class although they've both backed practices that actively hurt every taxpayer whether they're middle class or poor people or a rich people who are not connected to the government they're all hurt by the by

the government and again the people the government itself and its interests are living it up off the rest of us looting the rest of us in those are all of the two classes the taxpayers the tax eaters if you think about that enables you would analyze everything the government is doing everything you might read about in the media and understand what's actually going on it's and it's certainly an interesting lens to look there are just quickly before we go does it really matter at a point when so many in the middle class don't have jobs they have stagnant wages they can't even afford to save so at a time like this do savings really matter and we just have a quick minute savings matter everything for the future of the county but again why should people save if they're getting a quarter of a percent and also they're otherwise in very deep trouble probably the average american working family has not advanced economically since the days when richard nixon closed the gold window and they're the gold standard i mean this is been a terrible period for for most american families the government has gotten rich take a look at washington d.c. it's the babylon on the on the potomac they all live very well there the rest of us

are being crushed and you know if we want to if we want to change we need we need to change what we do so we don't need a bomb or romney it's whoever not going to get ron paul i hear you on those points thank you so much lou rockwell for being on the show on our one year anniversary with a great analysis of the fadel iraq while president of the ludwig von mises institute . let's wrap up with loose change a special loose change because we're going to do some viewer feedback too so one of the more memorable exchanges in tuesday's presidential debates and for the talk and presidential election show was the back and forth over pension plans.

mr president if you look at your pension have you looked at your pension. mr president you look at your pension you know i don't look at my friends as about as big as yours we're going to get. well maybe obama should have taken a look at his pension because as it turns out he holds shares it does of the las vegas sands corporation owned by sheldon adelson a major of romney backer this is according to the illinois hedge fund their pension fund excuse me that he earned as a state senator as reported by the huffington post so. there are other things in there today that aren't exactly where obama would support domino's exxon marlboro i think. it's fair it's the president he's a smoker smoker sort of you are deadly but like you know what i don't really care what he has i don't think you should have any of that stuff in there i think you should have only t. bills now if it's a huge you point and that's really if you're going to be thinking on such

a huge amount of that put your money where your mouth is if you think that the u.s. government solvent is going to have good finances going out and you know what you should be forced to stay invested in those treasuries all the way through maturity can't sell them. that is a great plan for any federal pensions i wonder how they break down we're going to look into that as well that's a great point and it would force us to be a little more careful with our money that's a great point ok let's let's move on keep this moving because even jamie dimon claims to know the importance of corporate responsibility ok here he is touting the importance of the corner store and community involvement. but quarter to a participant in the community to help the little league of the local church the participate to give people summer jobs they have a little bit of philanthropies sometimes and we do the everywhere we do with through a foundation we'd be the seventh largest number of america we do with two hundred million dollars a year. well there is jamie dimon doing his best john d. rockefeller and our view but now it is easier for

a businessman to combine their philanthropic goals with business through social impact bonds ok a social impact on is known as paper success bond it's a partnership between governments private investors and non-profits the bond is a loan made to it by investors to pay for social programs and then they require government to pay the investors of return on their principal investment only if the program meets its agreed upon goals dimitris it's like a market incentive for philanthropy good thing bad thing interesting a person first saw this i thought this was some comic scam by the financial sector is still maybe i don't know but it seemed kind of interesting after i read about it for the good the guy who wrote about it on the phone i could reach them it's all complicated but it looks like essentially what it is is it's a way to infuse public enterprise public institutions or philanthropic institutions with certain market incentives to the people they're giving it to so for example to try to support this at rikers island and in fact jamie's buddy lloyd blankfein was involved with goldman sachs involved with that it's no. wonder if there's

a way to short them and then you're betting on the program. you know i can't but we're going to have to imagine because we want to move on and get all this your feedback because it is friday and so we want to address it we talked about high frequency trading yesterday in light of the twenty fifth anniversary of black monday because now twenty five years later of course the factors and crashes are that algos in the high frequency trades and steve two three two three zero x. that capital account is the only finance news show that deserves high frequency viewing something you and our guest actually air con satre of next himself commented on you tube saying thanks again for having me lauren and to meet your wonderful to work with profession and first class all the way thank you so much to eric for coming on and he tells us he's more of a phone interview guys so we appreciate him making the leap to t.v. for us now on twitter a dissenter tweeted me saying. see isn't killing a false killing small market players and global and p.f.g. failures have caused the retail client to bail i don't disagree but i don't see how

you can see any one factor is or is it driving small players out of the financial markets i think frequency as well as m.s.g. and p.s.g. have played a role along with other issues and the g.n.p. if these impacts are something we've talked about with so many customers of these firms and industry professionals and so this is actually a great opportunity for me to give a shout out to one and give an example not in the u.s. actually but this gives a broader perspective so andrew perrott a fund manager and financial advisor an m.f. global customer in australia has been keeping me up to speed with what's going on with customers there they're supposed to get seventy percent of their money pretty soon in a few weeks last time i talked and they hadn't gotten any but what's interesting is he said australian futures traders are setting up canadian l.o.l. sees because they've lost faith in the regulators in the us and australia but the canadian regulators they have kind of the deposit insurance and those m.s.g.

customers got their money right back so i meant to give andrew props for that because i brought it up in an interview with james cook to les so andrew thank you now dimitri reference the book world lit only by fire by manchester and a loose change we were talking about feudalism bam-bam twelve said no offense but be careful when reading history it's so full of fairy tales it's nearly impossible distinguished to distinguish reality from bologna the main criticism of manchester was that secondary and tertiary sources never rely on them rely only upon a regional source documents i love some of manchester books darkness at noon for example but history is a very tricky subject so dimitri that one's for you taking away. your tell me of the amazon. this book going to sixty five zero a large one has like eighty. five stores and so forth so it's not a book i wrote. like that but also the thing about fairy tales is the middle ages all fairy tales that's why we got fairy tales of these people they were impenetrably ignorant they like knew nothing and they died at age twenty five so

that's why we got elves and flying you know corners from and also the literacy rate there weren't that many primary source documents charlemagne the first place roman emperor was illiterate so basically my point is. but almost a book like that i read it when i was in college in high school senior like a lot of a good club was a good grade maybe it was. the rejoinder i liked it was a good book. it's a good book all right. well we didn't have time to get to the criticising comment about me too bad because we want to get to this it is our birthday as in this show is birthday to me tree capital account launched a year ago today thank you to our viewers for watching thank you to all of our twitter followers here's a sampling of some of those here who are called dunning or. the c.e.o. of our t.v. . and great loyal viewers to have been with us since the beginning just

have voiced their support and. they're really it's nice it's all now pouring the support it was was great to see you what a funny tweet you're so the labor was whoa well i wrote that a year ago dimitri and i birthed a baby and let me tell you a labor it was hell. there was no no it was for everybody. it's been a pleasure and we didn't get a girl in the first year with you yeah no epidurals all natural natural birth yeah so they were they to us thank you for watching that is all we have time for but be sure to come back next week and in the meantime you know you can follow me on twitter at lauren this farrago like our facebook page which is happy birthday it's right there you can see any shows you missed give us more feedback will keep responding at youtube dot com slash capitally i've counted. on hulu and from everyone here thank you for making our first year great and have a fantastic weekend.

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