the this is, boom god thorn business show you can't afford to miss. i'm rachel 11. and i bridge word washington coming up with the us debt deadline, rapidly approaching treasury secretary genet, yellen has warned of catastrophe of the nation. where did default sure. had we speak with former us representative ron paul to discuss the date of the national debt and the looming follow what tracks are forming and trying to as well and wrote initiative will new revelations endanger the infrastructure project will discuss the enormous and controversial projects coming up we have a great show it has to, let's get started. we leave the program with a strong warning from treasury secretary janet gallon. she says the u. s. is facing a financial crisis if congress does not take action to raise the debt feeling before october 18th, that would mean the u. s. could be just a few weeks away from

a federal debt default, as it is days away from the government, shutdown yellow and noted that if congress allows this to happen, it would be the 1st time in us history. and if the did ceiling were not raised, i think the would be a financial crisis and a calamity. and absolutely, it's true that the interest payments on the government debt would increase. i would be concerned that the dollar and treasury, yes, it's which are regarded as the most secure in the world in serve is the basis for the dollar to be the reserve currency that it will undermine confidence in the dollar. is your reserve currency? the house did pass a measure that would both funding the government and suspend the debt ceiling, but it was rejected by republicans in the senate while democrats are relying on the promise of additional funding to cover the $3.00 trillion dollar package for they referred to as human structure,

republicans are pushing back against suspending the debt ceiling, arguing it would give their colleagues a blank check, but it just so happens that congress has changed the definition of the debt feeling 78 times the last 60 years. the majority of this one are republican, was in the white house. so how long will the stand off last and what does it mean for a federal reserve that continues to defend the ongoing use of its easy money policies? for joining us now to discuss it, dr. ron paul, former us congressmen and the new york times best selling author of and the fed. dr . paul, it's great to have you back on the show today. now i notice is an area that you know very well. so what do you make the claim from janet yellow and that the u. s. is facing a catastrophe. if it doesn't raise the debt feeling once again, the same old same or is it as my thought because they've gone through that. and i think you mentioned that this has happened a lot of times. they always enough raising it because there is

a coalition in washington that nobody wants to admit to. and as a combination of democrats and republicans, and they like the same thing, they're locked in, they can't do anything other than raise it that limit. keep spending, keep turning the money. it's just a matter of who's doing it and who gets so half the dough they say, well, part of this thing that we're talking about now is infrastructure. everybody sure infrastructure that even that part is not just the infrastructure has all these other they and they're not talking about a couple 1000000 or a 100000000 here. there's no, i truly isn't trillions of dollars now, but i know i've. ready while i was there for so many years, it would come up almost annually or, you know, quite frequently, but they always change and tell you the truth. i don't think it matters because, you know, like when kobe heads are these other crises here in the stock market and their financial crises, the fred is in a, in a position where you pay a lot of money just extent that credit and to the people they lie, you know,

the business people, the banking people, the foreign government. so they can do so much, but they still play this game that we have this debt limit that we have to pass and in order to write them right next as just grandstanding no matter what. even if they were trying to follow the rules, what they would do is after about a month or 2, they'd be coming up short and they have an emergency appropriation and pass it. and just just think of how easy it is for them to suspend efforts like as like impeachment for us, our processes in order for everybody to get together and vote to keep the government going. so that's what's gonna happen. it will keep going. they have a printing press running constantly. they are not going to shrink the size of god were destined to have the end of this in a very difficult way. there will be a major economic catastrophe in order to stop this mess. dr. paul, i mean,

i guess the big question here is, especially for, for those throughout the world as we have a global audience here on boom. but, i mean, the question remains, what happens if we truly don't raise the debt ceiling? we do default, it seems like in the united states and deficits, and that doesn't really matter anymore. well, it does, but the default is out of their control. there's always a default. the only question is, how do they default, you know, if they, oh, they ran out of checks, they don't have any money and treasury, what are we going to do for social security and our send our foreign aid and all these things and, and take care of our military, the checks will always go out. just think of the crisis we just got ourselves involved in, i mean, trillions of dollars. i was amazed at how, how efficient they were. they had checked every house in this country. it was faster than helicopters. bernacki promise, you ask them, ask money,

i with hillock offered, well it was much faster, was through a computer, but the default is always there. there has to be a liquidation of the bad standing. the mal investment and the debt. so therefore, they will always inflate. they will always send that check and they have the liquidation because real death goes down. you know, it's just a simplified if you double the money supply and the value the dollars, you know, goes in half your half as much in real value. they always do it that way, and they always use the share tactics to get people to play the political game of who are the saints and who will do will, who will spend the money properly. and they go and argue district, but eventually it's going to come to and then, and i smell that it's getting closer because what they're doing is so our just and they, but they will not, they will not the fall and quit sending checks. there tends to be a little bit of political grants, and you mentioned that yourself, as you know, one party is always against what the other party is doing and it seems to be

whatever party can hold it up. want to do that. so is this really just a political moment that, like you said, it will eventually be just resolved? well, it is political, all. i argue there's too much bipartisanship, but most of them are a lot of the fan pharaoh is real overpower and personalities. but if they have to have a bill where they would cut our military budget in the side, we spend too much money overseas. there is not going to be many dissenters sometimes where you get 5 people to agree to that. now it will continue. are they going to ever do what they have to do? they have to cut spending if they want to have a correction. but both parties are for the welfare state, some like corporate welfare, more than the other kind of welfare. they're all for the welfare state. they're all for the federal reserve. they're all for deficits don't matter. and, and the rest of it is free and fair. but the important thing that there are,

you know, who gets to make the final decision to where the checks are sent and the which protect your particular special interest that will get, get the benefits. and that goes on all the time. so it's a big deal. but there are certain things, the foreign policy won't change overall. yeah. even though they're fighting about, you know, bond is being annexed in foreign policy. believe me, we're not bringing our troops home. it's not going to happen. we're going to be interventionist. we have an empire the found and there is no real opposition to that. there's no real opposition to welfare ism. and of course, i think the worst kind of welfare ism is, is the corporate welfare ism, which is very much involved in the financial system and engage us by the federal reserve. yeah, and that's a great way to describe it to you was, i know, were washing democrats and republicans claim that they are just fighting back and forth over this yet they have come together so many other time. not only to raise the debt feeling,

but at the same time last week we watch as they came together to pass the national defense authorization act, which this year came in and a whopping 770000000000 dollars. and i mean, when they say that they're fighting on one hand, but then on the other hand, they go through and they pass bills like that. why should that be telling the american people? well, the american people should wake up and realize that this is coming to an end, and there are solutions that are not difficult. if an individual does the us, they know that, wow, you know, that's real bankruptcy, i have to pay the bills. yeah. maybe i can get a bill from, from the government or something will happen, but we have to realize it's bankruptcy is. you know, the corruption is in the destruction of the money. and if people don't understand that they will never say, well, you ought to cut spending isn't that's a solution. now they're never going to accept that. so that's why people should be prepared for a lot more inflation. and right now,

price inflation is raising is go ahead and the other, the, what they refer to is, you know, the cpi and the p, p i as, as telling us how much inflation we have. but they're looking in the wrong place. that's a consequence of the inflation, the inflation little bit a chart. so what happened to the money supply? just in these well shifts $971.00. but it also a year and a half ago since we've had over the charts are just sky rocketing and they can only be sustained by amplifying that and doing more and more and more. and till the people lose confidence in the dollar. right now there's a lot of confidence still remaining with the dollar, and people will still take our dollars. but eventually the confidence in the got in government right now is going down. the confidence in the dollar is last. we are not as strong. we don't have a, an international currency is a strong was,

it was had the, the earth's the anyway. but that was going to am. and people have to realize that. so i'm, i'm concerned about what happens to that because we've already seen the breakdown of society here, you know, with it, with the co, the riot on the streets and a breakdown of law and order. well, how do we solve the problem? fire the police, get rid of the police, we don't want them meddling. so it. ready doesn't matter, as soon as they have a problem that they create it, they just do more of it. it has certainly been a year all around and i'm glad that you bring up confidence. because as we've seen, the markets are really relied on just about anything they hear from chairman jerome powell and when we bring it back to the federal reserve. i mean, we're watching it continue to keep interest rates near 0. continue to purchase 120000000000 dollars each month in bonds. and yet we're not seeing any movement with that. they keep saying, oh, we'll get to it,

we'll get to it. we're just going to talk about talking about it. why don't you think that the fed has actually made some move, especially in the last few months as we see prices skyrocket? well they, they, they pretend they know they know what they're doing is dangerous. yeah. 2019, you know, they, they decided to shrink the balance sheet and i did that for a few months. and the stock market in like it. and the federal reserve number one's sure is to keep stock market high and friday. and that's their number, one constituent has nothing to do with a healthy economy. and the real truth is, is well, is being transferred under this system. and it goes from the more socialistic and thor, tara, you get the, the greater the attack is on. the middle class in the middle class is shrinking. there are a lot more poor people who have more people out on the streets than ever before. but they're doing the same thing, but that is a predictable event. the hard thing is, is how do you get a majority of the people say, you know what?

i think i think that may just be right on this. i think we have to cut back on our own budget at home and they have to pay off the dad and go back to work. but countries don't do that. we're not unique in this aspect. it was just getting caught up because we haven't assess spinning way over our heads. and i really put the blame when it really got out of hand as 1971. when bretton woods broke down. and there was no restraints whatsoever in the creation of new money, and they're not going to slow up. it's an addiction. and if they do, the same thing happened a half a light in $192019.00 is a stock, so start down and they will panic. but eventually, just printing the money will not settle anybody's confidence. a matter of fact, it would be doing the opposite. eventually every time they say, well, what do you need more money? more money is going to more, you know,

a salary. they lack of confidence. and so they're, they're in a difficult position, but right now they're limping along and getting away with it because anybody who complain, i'll send you a check, i'll send you jack. but eventually the check is going to bounce because it will lose its value. but they will keep sending the checks that i can guarantee you, they won't stop sending the checks to everybody who demands it. yeah, those history lessons are all too important, especially when you have a government that just continues to raise that, that feeling as they go along. great. and so i was privileged to have you on the show today, dr. on paul. thank you so much for your time. thank you. the time now for a quick greg, but when we come back, a new report, the china's belton road initiative has created hundreds of billions of dollars and hidden debt for low and middle income nation. we have analysts analysis on the other side. there's going to break here the numbers at the clothes.

shoes. oh, i join me every 1st on the alex summon show and i'll be speaking to guess in the world, the politics sport. business. i'm show business. i'll see you then. me back either financial survive. no, they came, i did the girl, i want to do the central park support on the problem. i know they stopped me. ah

ah ah. i will. i will as angela merkel makes her exit from german politics, voters have made it clear. they are looking for new ideas and directions. wrinkles party suffered electoral defeat with smaller parties in the mix to form a new governing coalition. will this be called the merkel inheritance

the welcome back. a new report published tuesday claims china's belton road initiative has burned many lower and middle income countries with quote hidden debt, with hundreds of billions of dollars. the report comes from aid data, a research center at the college of william and mary and virginia, which dug into more than $13000.00 debt finance projects worth more than $840000000000.00 across the 165 countries. the findings covered 18 years to the end of 2017, but a lot of the focus has been put on the belt and road initiative. the massive infrastructure project adopted by the chinese government in 2013, with the intention to invest in as many as 70 nations international organizations. a data says $42.00 of these low and middle income countries have debt exposure to china, which exceeds 10 percent of their g d p. it also found $385000000000.00 in so called

hidden debt to china, which are not included in these countries. official borrowing record adding that many have under reported repayment obligation. so what does all of this mean for the future of those involved with belton road? well, joining us now discusses boom bus, co host, chris, the i, and professor richard wolf, host of economic update and author of the sick. this is the system when capitalism failed to save us from pandemic or itself. thank you both for being here. christy. i want to start with you. the report mentioned the chinese lending had previously been directed mostly to the sovereign bobbitt borrowers like center banks, but now a 70 percent is issued across state own company, the bank, joint ventures, and private institution. what's the take away from all of it? well, there's actually a couple takeaways. the vast majority of china finance portfolio included semi concessional loans and export credits compared to the u. s, which mostly provides its financing through grants. so under the belt and road,

china's overseas funding has been a bigger and therefore a riskier venture. as such, most of the state own commercial banks that are taking part in this lending have relied on tools such as collateral. they should and using an acid to secure a load in order to mitigate risk. now this is standard practice. we see that in things like credit today, where if you're scores in high enough, you need to put a collateral. so this isn't anything new. however, the result is a greater depth burden for countries along the belgium road. and as you mentioned, 44 countries owed more than 10 percent of their g d, p to the chinese government. but this isn't surprising, considering that these countries want to be a part of this initiative and therefore reap the benefits of trade and comment that they get. you can't reap the benefits for free without putting anything up. and that being said, the report also claims that there are now these so called hit in debt traps, which may end in beijing seizing belongings and properties and infrastructure where

money is owed and not repaid there by spreading apparently, chinese influence and soft power. these issues have been wildly overblown, because let's talk about another study in 2020 by john hop in college. it was discovered that between 202019 china actually cancel $3400000000.00 of debt in africa. and an additional $15000000000.00 was restructured or refinanced. no belongings has been seized. so a lot of this report is fear mongering to show china and bad light and may countries viewed as a threat. it's going to take over everything as part of this master plan. no, it's actually a very fair agreement, which is a risky joint venture with mutually agreed upon terms. and the risks are taking account in the form of collateral stake. same as how we do business here in the states. and know when we talk about that specifically to china, we hear this analysis that these debt traps could result in beijing, seizing assets if they were not repaid. but i,

she noted that doesn't always seem to be the case. in fact, that study published last year by the trying to africa research initiative found that between $22019.00 china had cancelled about $3500000000.00 in debt in africa and restructured another 15000000000. so would you also say that these concerns are also overblown. look at, we have 300 years of colonialism during which europe ian countries regularly made loans of various kinds to 3rd world countries. let's remember alone is only the 1st step in a complicated relationship. the benefits to china, of giving a loan or not just on the particular project alone is for it opens up trade relations and opens up investment opportunities. the chinese are very sophisticated, understand that the payoff to pay back from making alone is far greater than whatever the percentage of debt is. so of course, if the country can't pay back,

they will work out an arrangement because they don't want to lose all the other benefits. nor is that in any way unusual, the whole world just worked out. the greatest one of these arrangements with argentina. more than once in the last 10 years with argentina because of the importance of that economy for lenders around the world. so yeah, this is fear mongering with some statistics that takes it out of context because again, as chris incorrectly said, the chinese are doing what is a logical growth for them with their economy. and they're working out in a very typical and reasonable way with the 3rd world countries. it looks better the kinds of deals they're making than the ones that in the old colonial days were imposed on these countries by their colonial masters. and professor wolfe, i want to point out something else here because in the 5 years covered in the report since the implementation of belt road, china spent an average of $85000000000.00 per year in development finance. more

than doubling the us at $37000000000.00 per year, the world's 2 largest academies had been spending similar amounts for the decade prior. why is china spending so much more on this than the united states? well, let me be very blunt and very honest in answering, i know this is difficult, particularly for americans to wrap their heads around. but the united states now has for the 1st time in a century, a major powerful beka nomic competitor. and the united states is having a hard time maintaining its dominance, in part because the chinese are a real challenge. you see it everywhere. the number you just quoted, the greater role of china in helping africa develop is one. if you take a look, for example, at high speed trains the chinese or decades of the united states, sooner or later we as a nation are going to have to decide between pretending it isn't happening,

being militaristic, aggressive, and hostile on the one hand, or working out of coexistence, we can both live with, which is for me, the obvious better choice. certainly very interesting to see if the united states gets there. no. christy, another aspect to this is that the a data report also estimates the 35 percent overseas projects had face problems like corruption, labor violations, and environmental hazards. does this say anything about the projects, or is this kind of to be expected as part of massive global investment? i mean, i think it's an figure no matter if it was china leading the project or the u. s. lee in the project. i mean, look at the u. s. as attempts in africa and all the billions spend on african development programs. they have all failed due to corruption. it's kind of just the nature of things when dealing with undeveloped nations. because an undeveloped nation lacks rule of law or structure and to them,

it's not so much as corruption. it's more so a way of life and a constant power struggle dynamic. there isn't a stable government, a stable governing body stable currencies, no checks and balances or authority to look over your shoulder and make sure people aren't taking bribes. the fact is that if you're going to go to work with an undeveloped nation, yes, you can attempt to change it and put some structure around it, but it won't be easy until they pull themselves up and they'll change on the inside . then there will be corruption because the strong will always up on the weak. so china is trying to facilitate more trade. do more business attempt to build some sort of infrastructure around these nations and boom bus, chris, the i a professor, richard wolf, unfortunately, have to leave it there. thank you so much for your time. did it? thank you. and that's it. for this time, you can catch boom bus on demand and the portable tv app available on smartphones and tablets through google play in the apple app store by searching portable tv. portable tv can also be downloaded on samsung, smart tv, and roku devices, or simply check it out at portable dot tv. well see you next sent

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