 Their money was issued by private enterprises, private banks, and the private banks would exchange the paper money, the money substitute, the cash that you have, for gold anytime you wanted to, because gold was the real money. Gold was the real money. Those days, money meant something. It had a stable value. It had a value determined by private markets. The supply of gold rose steadily, slowly, but steadily, and to a large extent was correlated with productivity, so that prices generally were stable to declining. So you actually didn't have inflation, but price deflation, where the amount of stuff you could buy with an ounce of gold increased over time, whereas today with paper money, the amount of stuff you can buy generally decreases over time. That's what inflation means. So money used to be an objective value. It used to have a reality to it. It used to be private, and it reflected values. It reflected what you produced, what you created, what you built, what you made, what people were willing to pay you in exchange for your production. But once money can just be printed, just be created out of thin air. It loses any anchor to reality. It loses any objective value. It's only value is that what the government says it is. And it's not clear that money is now linked to production. Money is now redistributed. Money is now handed out in bailouts. It is handed out to buy all kinds of assets. It is used by the government on a massive scale, on an unprecedented scale today, to redistribute wealth. And I'm here, I'm not talking about welfare. Not always to redistribute wealth from, let's say, rich to poor. But today, we're redistributing wealth from middle class to rich. We're redistributing wealth from savers to borrowers. We're redistributing wealth today from old to young. The tirees, the first-time home buyers. We're redistributing wealth in all directions. Redistributing wealth all over the place. And it's not wealth, it's money. We're redistributing money everywhere. And money has become delinked from production. Interest rates have become delinked from the demand and supply for money. They're complete creations of central planners. Our financial markets are basically becoming socialist financial markets, and the government, through the Federal Reserve, is basically setting prices, setting the allocation of capital, choosing winners and losers. Now this all started, I remember the first time I heard this idea, was in 1987. I mean it started well before this, but it came to my awareness and maybe to the market's awareness for the first time in full force. In October of 1987, what was called Black Monday, a day in which the stock market dropped 25 percent. And we won't get into the reason why it dropped 25 percent, but in one day, the stock market dropped in 25 percent. Now in that day, Alan Greenspan happened to be the Federal Reserve Chairman. He was a new Federal Reserve Chairman. He had taken the position earlier that year in 1987. And Alan Greenspan was, I think, in Dallas. He was away from the Federal Reserve. He was away from Washington, D.C. And on that day, he basically got on the phone and let everybody know that the Fed was there to provide as much liquidity as markets needed, that they would not allow the stock market to crash any further, that anybody who needed money, the Fed would lend their money, and that they would make sure that markets did not go any further down. And indeed, markets bounced around a little bit at those lows and quickly rebounded. And that 25 percent was regained within, I can't remember, I think within a year. It was known, came to be known as the Greenspan put. In other words, it came to be known that the Federal Reserve, at least under Greenspan, and under every Federal Reserve Chairman's sense, would not allow financial markets to collapse. They would not allow bad outcomes in financial markets. That they would do what they could to supply liquidity to participants. Now, originally, this might have been done innocently. The idea was that the decline of 25 percent was some technical aspects of computerized trading. It's not clear that that's real, but let's assume that's true. And that people who wanted to buy and prop the market back up couldn't because it was not off liquidity. So the Fed would lend their money, short-term, just none of them went default, none of them were going back up. Just they needed the money to be able to go and support the markets. And the money would return quickly, and it would have no long-term effect on the markets. And that was the original idea. And Greenspan used this put on several occasions following that. In 1991, actually January of 1992, Allen Greenspan engineered the sharpest drop of short-term interest rates in United States history, basically to save the banking industry because he feared that the banking industry was going to be bankrupt. He created a sharp difference between long and short-term interest rates so that banks could borrow low interest rate and lend out at a high interest rate and make some money. Another example of Greenspan put bailing out the banks. He continued to increase the money supply aggressively throughout the 1990s to the point where at some point he called the stock market, thought there was irrational exuberance in the stock market. And threatened to raise interest rates. But then when he threatened that and the markets went down, he immediately reversed the threat and we saw the dot-com bubble grow to absurdities in 1999 and implode in 2000. You guys are probably too young to remember the complete implosion of the Nasdaq and tech stocks in 2000 and 2001. Then in 2002, after 9-11 as the U.S. economy because the dot-com bubble in 9-11 was teetering on the verge of a recession, Allen Greenspan engineered another massive reduction in interest rates. Indeed kept interest rates so low for two and a half years that interest rates, real interest rates, inflation adjusted interest rates were negative, thus creating the famous infamous housing bubble, money fluid to housing, creating a housing bubble which you all know Allen Greenspan retired a couple of years later, the housing bubble imploded in 2008 causing the great financial crisis, the great recession, blamed on capitalism but should be blamed on Allen Greenspan and the Greenspan put. Now here was the great financial crisis. Now what does the Fed do? Well, it does the Greenspan put on steroids. Why? Only just provide a little bit of liquidity to hold up markets. Why not flood the market with money? And indeed many economists claim that the Fed didn't do enough to flood the markets with money. But they flooded the markets with money, they bought everything in sight. Later rather than earlier, these economists are right that the Fed did what they did too late, if you will, to even help these markets. They built companies out instead of the normal responsibility of kind of lending to banks in distress. They suddenly were sending to everybody in distress and the Federal Reserve suddenly became arbitrary of who wins and who loses, not just in American banking, in European banking, among corporate America. And it's not clear that what they were doing was even legal. Nobody cares, nobody wants to look at it, nobody wants to examine it, they just accept it. The Federal Reserve is lending to people that they shouldn't be lending money to or at least they never had a mandate to lend money to. And then if you remember, after the financial crisis, once the financial crisis was over, they did a very poor job during the financial crisis, created massive uncertainty, massive fear, massive panic for no good reason. Benenki was an awful Federal Reserve chief. After the financial crisis, as the economy is coming out of it, they engaged in QE2, QE3, which was massive programs to buy bonds. And when you buy bonds, you bring bonds in, you send cash out. It's a huge amount of money flooding into the system. But all the bonds, the bonds were two types of bonds. Historically, the government, the Fed has bought government bonds. Historically, short-term government bonds. What happened in the financial crisis that was unique and special and different was they suddenly started to buy long-term government bonds, less lowering long-term interest rates artificially. And at the same time, they started buying on a massive scale, mortgage-backed securities, some mortgages, thus lowering interest rates on mortgages. In other words, tell the market, tell the market to determining interest rates, tell the market participants evaluating risk and return, evaluating the future of the economy, setting prices. No, the Federal Reserve was not setting prices. Central plan is when I'm setting prices based on models, more sophisticated but as incompetent as the coronavirus models. And now the government has been, the Federal Reserve has been full-fledged into buying securities in security markets, manipulating those markets, increasing the money supply. It didn't cause inflation. Prices didn't go way up. So everybody assumes that they had no impact. But of course, they had an impact. Keeping interest rates out officially low, flooding the market with money, money that went into the stock market that caused the stock market to go at officially high, money that went into projects that nobody needs, went into investments that wouldn't be profitable in normal conditions. What the Federal Reserve did for over 10 years, I mean, it's been doing it to some extent since it was founded. But what it has done in steroids over the last 10, 12 years, actually 12 years. Well, and if you count the housing bubble, maybe 8, 20 years, and if you count the dot com bubble, maybe 30 years, what the government has been doing is manipulating markets, causing massive malinvestments, causing bubble after bubble after bubble that then bursts, choosing winners and losers, reducing premiums on risk, encouraging risk taking, screwing savers by reducing interest rates, and then encouraging pension plans and insurance companies and other people who need a return on their bonds and can't get it because they've squeezed interest rates so low, encouraging them to take on massive risks, which when the market turns, they lose a lot of money on like they probably have in the last six months, and basically messing up the most important aspect of a marketplace, the pricing mechanism, the signals that prices send, the signals that interest rates send, and whether people want to borrow or lend, and whether people are willing to take on more risk or less risk, who knows what interest rate mean today. Oh, I know what interest rate mean today. They mean they reflect not the marketplace, not supply and demand, not what the market is willing to bear, but they reflect what the central planners want. They reflect the desires of central planners. They reflect the interests of central planners, and central planners we know. They can't even set the price of bread right. Whoops. Did video just go? Oh, came back. They can't even set the price back. You saw bread lines in the Soviet Union, and there was no way they could set the price of interest rates, set the price of bonds, set the price of other financial institutions. During this crisis, the government has, the Federal Reserve in other words, has put everything on steroids. Obviously, what they did during the financial crisis was too mild, too moderate. So now they're spending trillions of dollars on buying assets, and it's not just government bonds, long-term, short-term, medium-term. It's not just mortgage-backed securities. They're buying ton of those. There's a reason why interest rates on mortgages right now are the lowest they've ever been, not because there's no risk in mortgages, not because mortgages for somebody issuing them are great investment. No, but because I can sell them, I issue a mortgage, the bank can issue a mortgage, and sell it to the Fed. The Fed is driving those interest rates lower and lower and lower, decoupling completely. The interest rate on their mortgage from any risk, for any long-term risk. So it wouldn't surprise me they're holding up real estate prices in some places, encouraging people to take on debt in order to buy homes, but it's not just mortgage-backed securities. Now, the Fed reserves buying corporate bonds, bonds issued by corporations. And since this crisis has began, something like $1.3 trillion of new debt has been created by corporations. Corporations are going on a massive borrowing scheme. Why? You think that during a crisis like this, interest rates would go up because uncertainty is going up, because risk has gone up, because we don't know what the future holds. We're in an economic recession, depression that we've never experienced before because of the virus and the lockdowns. But no, interest rates have come down. It's become easier and easier and easier for corporation to borrow money. Why? Because the Fed is buying it. The Fed has purchased billions of dollars in corporate debt. And now recently, they've announced that they've been doing this using what they call exchange-traded funds. These are indexes, so they don't buy any particular bond. They just buy an index of bonds. Now they've announced that they're starting to buy specific bonds. And they're not going to require any kind of certification of those bonds. They're not going to require that the companies say that, for example, they can't raise debt anywhere else. To hell with that, the Fed will just buy their debt no matter what. They're not going to say that the solvent, not bankrupt, to hell with that, the Fed's going to buy their debt anyway. The Fed is gobbling up, gobbling up debt, bonds, risky bonds. They don't care. Companies that should have failed during the financial crisis, during this crisis, and some companies should fail are not going to fail because they can borrow so cheaply. Not only are they buying corporate bonds, but they're buying high-yield bonds. High-yield bonds used to be called junk bonds. These are bonds of companies whose future suspect doesn't matter. We're going to buy their bonds too and lower their interest rates too, so that risky assets are now really cheap. The government is, the Federal Reserve is basically taking over the credit markets. More than that, it is establishing a program that is going to lend directly to small businesses, medium-sized businesses, not small, medium-sized businesses. $600 billion of direct lending. I mean, not direct, it's going to go through the banks, but the loans are going to sit at the Fed. The Fed basically is going to fund mid-sized businesses around the United States. In other words, and we know already that small businesses got the PPP loans directly from the Treasury. In other words, government now is by far the largest lender in the marketplace. It has just lent $660 billion to small businesses. It's about to lend $600 billion to medium-sized businesses, and it is buying billions and billions of dollars of securities, of bonds, of large businesses. Does anybody think we have any semblance of capitalism left? Our financial markets, which used to be the freest, most flexible, most dynamic financial markets in the world, are now shells of themselves. They are now completely controlled by the Federal Reserve, by central bank. They are now completely under the thumb of the Treasury Department. Freedom in the United States and the financial sector is out the window. It is gone. It is history, and we are granting the Federal Reserve more and more and more and more power. Indeed, there is rampant speculation on Wall Street that if the stock market declined significantly in the near future, the Federal Reserve would actually start buying stocks, which central banks, other places in the world, have already started doing. In other words, the central bank would now become an owner of the means of production. Not just a lender to the means of production, but an owner of the means of production. You're waiting for Democrats to bring you socialism? We already have socialism, and Donald Trump would like the Federal Reserve to do more, not less, to lower interest rates so much that they become negative. Like Europe, and Europe is doing so well, we should emulate them. So we have today a system through the Federal Reserve, which is basically turning this country into a socialist, fascist country. And there's no real difference between socialism and fascism. It's government control of the economy, and the Federal Reserve is facilitating it on a scale we have never seen in American history. It is destroying, destroying the meaning of the dollar, destroying the meaning of our money. And in some sense more importantly than that, it is destroying the meaning of debt. When everybody owes the government, the government gets to call the shots. The government becomes the owner. The government becomes the central planner of the entire economy. Never in American history have we seen the nationalization of so much of American assets, so much of American treasure, as we're seeing right now through the Federal Reserve, and through the Treasury Department. They've hooded on to that because what they're doing is they're bailing on companies, they have lending facilities, and they're helping the Fed do what they're doing. So government and the Fed, Fed is just one branch of government, but the executive branch and the Fed are working hand in hand basically to control the US economy. Never thought, and under the radar. It's not like they're going out there and buying whole chunks and taking equity stakes and whole chunks of the economy explicitly. This is all subvertly, under the table, without anybody noticing, without anybody seemingly caring. Indeed, if anything, financial markets are chewing this on. One of the reasons the stock market is going up and up and up in spite of the disaster that is the US economy right now, is because, what? It's because they've got a, the Greenspan put. If something goes bad in the market, the feds will just step in and buy. What can they lose? As long as the Fed is there to print money as much as they want, why not keep pricing stocks up? It is insanity. It is short-term. It is absurd. It is the delinking of our financial markets from any reality. But that is what central planning does. That's what statism does. That's what socialism does. And man, I never thought it would happen this fast in America. So not only are we falling apart culturally, not only is the government shutting us down through lockdowns, but on the side, where we're not watching, the Fed reserve is basically taking over whole markets and destroying the economy of this country. I don't care who gets elected in November, the economy of the United States is going to struggle for a long time. The distortions, the provisions created by the feds and the Treasury over the last few months are going to live with us for at least a decade. We are power in decline, not because China is rising, not because of competition, but because we've embraced socialism, we've embraced statism, we've embraced central planning. And we've done so again, just like in 2008, under a Republican president. Just want to point that out. Just like George Bush wanted to save capitalism by obliterating it. Well, I don't think Trump cares about capitalism, but Trump is basically given the Fed, given the Treasury Department carte blanche, spend as much money as you want. In order to make the American people think, feel, feel is better thinking is not acceptable, feel as if the economy is rebounding so that he can get reelected. Well, that's a little cynical, not only so he can get reelected, but just because that's how he functions, short term, unprincipled thinking. And to do that, flood the market with money, get the Fed buying everything, drive up asset prices. Everybody feels like they're richer, but it's fake. It's not real. It's insanity, insanity. And of course, the long term is slowly economic growth, no economic growth, high unemployment, or even low unemployment, but no economic growth, no wealth addition, no mobility, no social mobility, very little entrepreneurship, very new, little innovation. That is our future, sadly. That is our future. Sad and depressing. Sad and depressing. And of course, there is an alternative. The alternative is to return to an improved free banking system, to a gold standard that is fixed on manipulatable by government. And you would have to go to stages dissolving the Fed, shifting monetary powers to banks, getting rid of all the regulations and controls that the Fed has. But that is science fiction today. Nobody's even talking about that. Another alternative would be to prohibit the Federal Reserve from buying all these assets, prohibit the Federal Reserve from acting a central planning in chief, limiting the scope of what they can do, maybe to government bonds, and then giving them a rule, like a computer, where they respond in foreseeable ways. And there are all kinds of rules proposed out there. Now, that's not ideal, still central planning, still government manipulation, still going to cause problems, but far better than giving a bunch of economists complete discretion over our lives, complete discretion of central planners, do whatever the hell they feel like doing in times of crisis. It's just an unmitigated disaster and cannot be easily reversed. Cannot be easily reversed. We are so far away from free banking. We are so far away from private banking. We're so far away from getting rid of the Federal Reserve. It's almost not worth mentioning, and yet it's the only ultimate alternative to what we have today. Somebody says, Paul wants to get into the junk bomb market. He already is in the junk bomb market. He's buying indexes. He's buying exchange-traded indexes, index funds of high-yield bonds, which are junk bonds. Capitalism in America is dead. I'm announcing it here now. There is nothing left. I mean, there's a little bit left, but it's slowly dying. It's slowly dying. What we need today, what I call the new intellectual, would be any man or woman who is willing to think, meaning any man or woman who knows that man's life must be guided by reason, by the intellect, not by feelings, wishes, whims, or mystic revelations. Any man or woman who values his life and who does not want to give in to today's cult of despair, cynicism, and impotence, and does not intend to give up the world to the dark ages and to the role of the collectivist. Using the super chat, and I noticed yesterday when I appealed for support for the show, many of you stepped forward and actually supported the show for the first time, so I'll do it again. Maybe we'll get some more today. If you like what you're hearing, if you appreciate what I'm doing, then I appreciate your support. Those of you who don't yet support the show, please take this opportunity, go to uranbrookshow.com, slash support, or go to subscribestar.com, uranbrookshow, and make a kind of a monthly contribution to keep this going. I'm not sure when the next