August 15, 1971: The Day We Wanted a Life We Couldn't Afford

December 12, 2016

WRITER

Chris Martenson with PeakProsperity.com joined The Glenn Beck Program today to talk about the federal reserve raising interest rates and its primary concern: its own credibility.

"Everybody I talked to says, Look, I like falling prices. That's not what the fed is targeting when it's worried about deflation. They have a different thing they're worried about, where prices rising or falling is the symptom, but the cause is what they're concerned about. And the cause is either our credit markets are expanding, or they're contracting," Martenson said.

To put the problem into context, Martenson quoted Austrian economist Ludwig von Mises:

There's no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved.

"These things have all been building for a really long time, Glenn. And I think if we had to, if we wanted to put our finger on something, we would say August 15th, 1971, when the United States abandoned the gold standard for the world, that's really where all of this started. And these imbalances are enormous now," Martenson said.

For fundamentals on the dangers of manipulating credit markets and currencies, read Martenson article, Money Under Fire: A Reminder of the Great Wealth Transfer Underway.

Listen to this segment from The Glenn Beck Program:

Below is a rush transcript of this segment, it might contain errors:

GLENN: Well, as I'm reading the news, China is being negotiated. I mean, I want to put the good spin on this. Donald Trump is obviously negotiating with China. And China has responded saying it's -- the One-China policy will not be a part of any negotiation. And if you want to threaten us with that, all negotiations and future partnership will be over. They're taking a hard-lined stand, and so is Donald Trump. It's kind of a white knuckle kind of thing, quite honestly.

Russia is now our new best friend, and the Russian ruble is going through the roof. Oil is starting to go up. And this week, we are expecting the fed to raise interest rates. And Christmas Martenson is here. He is with peakprosperity.com. He is a guy who I think really understands the economy and understands the history of the currency war and the gold standard and trade and can kind of help explain -- because I think we're going to need a real basis of -- of history and knowledge to be able to talk our friends down from crazy tree in the coming months and years.

Chris, welcome to the program. How are you?

CHRIS: Glenn, I'm doing really well. It's a real pleasure to be back with you and all your listeners.

GLENN: So tell me, Chris, what you're thinking the fed will do this week and how it's going to affect us.

CHRIS: Well, they're going to have to raise rates because they're behind the curve here. The fed cares about their credibility, as much as everything. Remember, we have a lot of academics sort of at the helm of the fed. And, of course, to them, credibility is like the most important thing to preserve.

So they have to raise. And it's a very weird environment to be raising rates in. It's certainly created a lot of boost to the dollar. The dollar strengthened a lot lately. But we're seeing a lot of strengthening in the price of oil as well. And a lot of signs, Glenn, of weakening in the overall global economy. The stock market, notwithstanding. The trade data is looking iffy.

GLENN: Okay. So if the dollar -- if we raise the interest rates, that will boost the dollar. And if we boost the dollar, that actually hurts the job front at home and hurts prices at home. Right?

CHRIS: Yes. Except for the prices at home. Typically if the dollar is stronger, we'd be able to buy the BMWs cheaper.

GLENN: Okay.

CHRIS: But a rising dollar is not good for corporate profits in the United States. A little over 40 percent of all revenues from US companies are derived not in the United States. From overseas. So --

GLENN: And it makes -- it makes it harder for other countries to buy our products because our dollar is stronger. And them coming over here and buying our products is, it's more expensive.

CHRIS: Right. So typically what happens when your currency gets stronger, your trade, your exports go down, and your imports start to go up. Because you can afford more from other people. They can afford less of your stuff. That is the substance of the charge that Donald Trump has put against China, that they're a currency manipulator, by which he means they're keeping their currency much weaker than it should be because if the Chinese currency strengthened, then their exports would slow down. Their imports would rise. That would help to balance things.

STU: Right.

CHRIS: So that's his charge there.

GLENN: And it would be good if we didn't have an imbalance and everything else, you know, what it cost to employ people in America. If we could even get close on that level with China, which we could never -- they employ slaves -- but it's good for the person that's walking into Walmart and buying their stuff for the Chinese dollar to be -- or the Chinese yuan to be low and have them devalue. But it's really bad on jobs because they're not buying any of our stuff.

CHRIS: Very little of it.

GLENN: So it's a -- so it's a balance. What I'm trying to get to is, trade and the devaluing or the raising of interest rates especially in an economy as fragile as ours is, is really a very nuanced and delicate dance. And you play it wrong, and the thing spirals out of control.

CHRIS: Well, and that's exactly right. And this should be termed I think as much as anything, the age of imbalances.

So we're talking about an imbalance of trade between China and the United States, but there are similar imbalances that exist within the Eurozone with Italy needing a lot more money than it's got and Germany sort of providing it. And then, air quotes here, balancing it out by creating these massive imbalances in their central banking system inside the country.

These things have all been building for a really long time, Glenn. And I think if we had to, if we wanted to put our finger on something, we would say August 15th, 1971, when the United States abandoned the gold standard for the world, that's really where all of this started. And these imbalances are enormous now.

GLENN: Well, that's when we all started we wanted a life we couldn't afford.

So the United States did that. But we convinced the rest of the world that we'll continue to buy your stuff. So it will be good for you. But we all said -- all of us -- we want more stuff than we can afford if we base our dollar or our currencies on gold. Is that accurate?

CHRIS: It is. Because gold provides a set of restraints that you just can't get around. And if you can't get around those restraints, well, sometimes you get to live beyond your means. But very soon thereafter, you have to live below your means. The world collectively kind of said, "We don't like that below our means part. How can we just forever live above our means?" That's how these imbalances got started. And it's a very human thing, Glenn. We've seen this so many times in history. And here we are again.

GLENN: So we are worried now, if the fed raises their interest rates, that would indicate that they are worried more about inflation than deflation. And deflation is -- is bad. Because everything is -- is worthless. And becomes so cheap, you would think that this is really good. But I'm trying to figure out why it is really bad. And it is. Why is deflation something that they're trying to stay away from, at the fed?

CHRIS: Well, this is a more subtle argument because the way that it's presented to us in the newspapers is that inflation is rising prices and deflation is falling prices. And I can't find anybody who -- well, what's wrong with falling prices? I love buying stuff cheaper. Right?

GLENN: Unless you're selling your house.

CHRIS: Well, unless you're selling your house. Of course.

GLENN: Yeah.

CHRIS: But generally speaking, if you're buying a house, you would prefer to buy one that's cheaper rather than more expensive.

GLENN: Yes, yes.

CHRIS: So everybody I talked to says, "Look, I like falling prices." That's not what the fed is targeting when it's worried about deflation. They have a different thing they're worried about, where prices rising or falling is the symptom, but the cause is what they're concerned about. And the cause is either our credit markets are expanding, or they're contracting.

When they're expanding, which gives us inflation, everything kind of works. You know, governments can continue to run deficits and big banks can do crazy dumb things. And it all seems to work out the opposite though, Glenn, when credit is falling. That's also known as 2009 in the United States. It is deeply scary. What works in forward doesn't work at all in reverse. The whole system shudders and threatens to collapse. It's a really scary moment. So we have a system that either expands --

GLENN: Wait. Wait. Wait. Is that because what I have as collateral is no longer worth as much so I can't get credit, or why is that?

CHRIS: Well, let's take a simple example. We just have a bank, you and I, and all we're doing is making real estate loans. And, you know, we're taking in one dollar and basically loaning nine more dollars back out because that's how our symptom operates. And we loan those $9 out to somebody who's bought a house. And if that house goes up in value, that person will be able to sell their house, service that mortgage before they do, and maybe buy a bigger house, and we'll loan them nine more dollars. Expanding is easy. But as soon as that person can't sell that house for what we've loaned the money them to, then lest all they have to lose is one dollar out of that nine that we loan them, and our entire capital stock of our business, our bank, is now wiped out.

So you can't have even tiny, tiny contractions in the credit system without really impairing and sometimes destroying the banking system itself. And that's what the fed cares about. Because let's remember, the federal reserve is not really federal. It's a private entity. It's got a charter from the US government. And it operates a very nice monopoly. But its first set of clients always is the banks. So if the banking system is happy and expanding, the fed is happy.

GLENN: Okay. So they're not worried about deflation. They're worried about the bank. But by doing what they've done, they are throwing caution to the wind by printing 7 trillion dollars' worth of currency. Never been done before in the history of the world. And expecting that hyperinflation won't happen. How can we have printed that much money and not had the problem of the Weimar Republic? What's the difference?

CHRIS: The difference is that today we have these really so-called robust financial markets. So I was just at a wealth conference on Monday of last weekend. That question was asked: Hey, where is this inflation? Well, it's in the financial markets. We see highly, highly inflated stock and bond markets. We see inflated real estate markets, especially on the top end.

Now, Glenn, who got that money when the fed printed all those trillions? Well, it kind of went to the upper .1 percent. So guess what, buying a Gulfstream 650 is a very expensive proposition. High-end art, very large diamonds, these all went up extraordinarily in price. So we have seen the beginnings of inflation. It just didn't show up in eggs and milk this time because the fed didn't print and give it to people. They printed and gave it to a financial system.

GLENN: So is that a savior for us?

CHRIS: Well, it's -- I think it's provided temporary appearance of relief. But when those rich people, when those concentrations of money decide, "I don't want another Gulfstream 650, I'm worried about the value of the currency," all of that currency rushes through what are very tiny little doors trying to get into real stuff again and away from paper stuff.

GLENN: And that's why real estate -- that's why art -- I mean, I've looked at the art -- we just sold I think one of the most expensive paintings I think ever. Again, was like $85 million for one piece of art. And I explained that as the people at the very top have so much money, they don't know what to do with it. They know that everything is overvalued. But it's like looking at a -- looking at a -- at a -- at a bill at a very nice restaurant that didn't have any prices on the -- on the menu. And you're looking at the bill, and you're thinking, "How the hell did we get here?" Well, I've got to make the broccoli now $35 a head because I've already priced the meat so far out, that the broccoli is looking like a deal. So the art is looking like a deal, even at $85 million, compared to where everything else is priced. Is that accurate, do you think?

CHRIS: It is. It's what happens when too much money is printed and put into a market. Things get crazy priced. And we saw that for tulips in the 1600s in Holland. And we've seen it with pieces of swampland in Florida. We've seen it over and over again. And the bubbles always have the same self-reinforcing mental map on the way up. It makes sense.

People go, "Well, the last guy paid 79 million. I paid 85. Somebody surely is going to pay me 100 million for this piece of art." That's all self-reinforcing on the way up, and we don't know why. But eventually, there's a pin that that bubble finds. And when it bursts, then you discover what the true value of things is, and things go down very quickly at that point.

GLENN: Chris, you talk to people in your business -- and I have -- this is the reason you work for me on these things now because I couldn't find somebody like you.

Everybody in your business will say, "It's -- no, we have systems now, and it's not going to be that way. And you don't to have worry about those things." No one will tell you what you're saying to me, that this is going to burst and it's going to be you will.

CHRIS: Well, you know, if it's not going to burst, we have to believe in the four most dangerous words in human investing history, which is, "This time it's different."

GLENN: It's different.

CHRIS: It's not different. It's never different. I'm seeing the exact same psychology. Rationalizations. Post-facto rationalizations that people make. "Oh, here's why that -- here's why we had this Trump rally." You know.

To me, it's much easier to understand where we are if you see that we've got a very scared set of central planners. They've worked themselves into a multi-decade corner. They don't know what to do. So they print.

And you can find this story in Roman times. You can find it in the first --

GLENN: Every time.

CHRIS: -- paper money in China. You can find it all throughout history. And it boils down through this, Glenn, it's very simple, humans would rather take a little risk today, instead of some pain today, in the hopes that things turn out better in the future. But we always go down the same path.

GLENN: Real quick, I only have 30 seconds: Are we going to see a hyperinflation situation like the Weimar Republic? Do you think we're going to see that? If so, are we going to see it in the next four years?

CHRIS: We're going to see it at some point. It could come at any time. It will happen at some point. And I think that the best quote on this comes from Ludwig von Mises. He's an Austrian economist. And he said, "There's no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved."

GLENN: Chris, thank you very much.

Peakprosperity.com. And Chris explains all of this and can help you through it and everything else. Peakprosperity.com. Chris Martenson, thank you for being on. And we'll have Chris in the studio with us hopefully several times next year to kind of really lay things out. Because I -- I want to show you what's coming and show you how the whole system works. And Chris is going to be instrumental in that.

Featured Image: Fine standard 400 oz gold bars. Photo Credit: Andrzej Barabasz (Chepry)

Shocking Christian massacres unveiled

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Is a Christian Genocide unfolding overseas?

Recent reports suggest an alarming escalation in violence against Christians, raising questions about whether these acts constitute genocide under international law. Recently, Glenn hosted former U.S. Army Special Forces Sniper Tim Kennedy, who discussed a predictive model that forecasts a surge in global Christian persecution for the summer of 2025.

From Africa to Asia and the Middle East, extreme actions—some described as genocidal—have intensified over the past year. Over 380 million Christians worldwide face high levels of persecution, a number that continues to climb. With rising international concern, the United Nations and human rights groups are urging protective measures by the global community. Is a Christian genocide being waged in the far corners of the globe? Where are they taking place, and what is being done?

India: Hindu Extremist Violence Escalates

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In India, attacks on Christians have surged as Hindu extremist groups gain influence within the country. In February 2025, Hindu nationalist leader Aadesh Soni organized a 50,000-person rally in Chhattisgarh, where he called for the rape and murder of all Christians in nearby villages and demanded the execution of Christian leaders to erase Christianity. Other incidents include forced conversions, such as a June 2024 attack in Chhattisgarh, where a Hindu mob gave Christian families a 10-day ultimatum to convert to Hinduism. In December 2024, a Christian man in Uttar Pradesh was attacked, forcibly converted, and paraded while the mob chanted "Death to Jesus."

The United States Commission on International Religious Freedom (USCIRF) recommends designating India a "Country of Particular Concern" and imposing targeted sanctions on those perpetrating these attacks. The international community is increasingly alarmed by the rising tide of religious violence in India.

Syria: Sectarian Violence Post-Regime Change

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Following the collapse of the Assad regime in December 2024, Syria has seen a wave of sectarian violence targeting religious minorities, including Christians, with over 1,000 killed in early 2025. It remains unclear whether Christians are deliberately targeted or caught in broader conflicts, but many fear persecution by the new regime or extremist groups. Hayat Tahrir al-Sham (HTS), a dominant rebel group and known al-Qaeda splinter group now in power, is known for anti-Christian sentiments, heightening fears of increased persecution.

Christians, especially converts from Islam, face severe risks in the unstable post-regime environment. The international community is calling for humanitarian aid and protection for Syria’s vulnerable minority communities.

Democratic Republic of Congo: A "Silent Genocide"

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In February 2025, the Allied Democratic Forces (ADF), an ISIS-affiliated group, beheaded 70 Christians—men, women, and children—in a Protestant church in North Kivu, Democratic Republic of Congo, after tying their hands. This horrific massacre, described as a "silent genocide" reminiscent of the 1994 Rwandan genocide, has shocked the global community.

Since 1996, the ADF and other militias have killed over six million people, with Christians frequently targeted. A Christmas 2024 attack killed 46, further decimating churches in the region. With violence escalating, humanitarian organizations are urging immediate international intervention to address the crisis.

POLL: Starbase exposed: Musk’s vision or corporate takeover?

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Is Starbase the future of innovation or a step too far?

Elon Musk’s ambitious Starbase project in South Texas is reshaping Boca Chica into a cutting-edge hub for SpaceX’s Starship program, promising thousands of jobs and a leap toward Mars colonization. Supporters see Musk as a visionary, driving economic growth and innovation in a historically underserved region. However, local critics, including Brownsville residents and activists, argue that SpaceX’s presence raises rents, restricts beach access, and threatens environmental harm, with Starbase’s potential incorporation as a city sparking fears of unchecked corporate control. As pro-Musk advocates clash with anti-Musk skeptics, will Starbase unite the community or deepen the divide?

Let us know what you think in the poll below:

Is Starbase’s development a big win for South Texas?

Should Starbase become its own city?

Is Elon Musk’s vision more of a benefit than a burden for the region?

Shocking truth behind Trump-Zelenskyy mineral deal unveiled

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President Donald Trump and Ukrainian President Volodymyr Zelenskyy have finalized a landmark agreement that will shape the future of U.S.-Ukraine relations. The agreement focuses on mineral access and war recovery.

After a tense March meeting, Trump and Zelenskyy signed a deal on Wednesday, April 30, 2025, granting the U.S. preferential mineral rights in Ukraine in exchange for continued military support. Glenn analyzed an earlier version of the agreement in March, when Zelenskyy rejected it, highlighting its potential benefits for America, Ukraine, and Europe. Glenn praised the deal’s strategic alignment with U.S. interests, including reducing reliance on China for critical minerals and fostering regional peace.

However, the agreement signed this week differs from the March proposal Glenn praised. Negotiations led to significant revisions, reflecting compromises on both sides. What changes were made? What did each leader seek, and what did they achieve? How will this deal impact the future of U.S.-Ukraine relations and global geopolitics? Below, we break down the key aspects of the agreement.

What did Trump want?

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Trump aimed to curb what many perceive as Ukraine’s overreliance on U.S. aid while securing strategic advantages for America. His primary goals included obtaining reimbursement for the billions in military aid provided to Ukraine, gaining exclusive access to Ukraine’s valuable minerals (such as titanium, uranium, and lithium), and reducing Western dependence on China for critical resources. These minerals are essential for aerospace, energy, and technology sectors, and Trump saw their acquisition as a way to bolster U.S. national security and economic competitiveness. Additionally, he sought to advance peace talks to end the Russia-Ukraine war, positioning the U.S. as a key mediator.

Ultimately, Trump secured preferential—but not exclusive—rights to extract Ukraine’s minerals through the United States-Ukraine Reconstruction Investment Fund, as outlined in the agreement. The U.S. will not receive reimbursement for past aid, but future military contributions will count toward the joint fund, designed to support Ukraine’s post-war recovery. Zelenskyy’s commitment to peace negotiations under U.S. leadership aligns with Trump’s goal of resolving the conflict, giving him leverage in discussions with Russia.

These outcomes partially meet Trump’s objectives. The preferential mineral rights strengthen U.S. access to critical resources, but the lack of exclusivity and reimbursement limits the deal’s financial benefits. The peace commitment, however, positions Trump as a central figure in shaping the war’s resolution, potentially enhancing his diplomatic influence.

What did Zelenskyy want?

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Zelenskyy sought to sustain U.S. military and economic support without the burden of repaying past aid, which has been critical for Ukraine’s defense against Russia. He also prioritized reconstruction funds to rebuild Ukraine’s war-torn economy and infrastructure. Security guarantees from the U.S. to deter future Russian aggression were a key demand, though controversial, as they risked entangling America in long-term commitments. Additionally, Zelenskyy aimed to retain control over Ukraine’s mineral wealth to safeguard national sovereignty and align with the country’s European Union membership aspirations.

The final deal delivered several of Zelenskyy’s priorities. The reconstruction fund, supported by future U.S. aid, provides a financial lifeline for Ukraine’s recovery without requiring repayment of past assistance. Ukraine retained ownership of its subsoil and decision-making authority over mineral extraction, granting only preferential access to the U.S. However, Zelenskyy conceded on security guarantees, a significant compromise, and agreed to pursue peace talks under Trump’s leadership, which may involve territorial or political concessions to Russia.

Zelenskyy’s outcomes reflect a delicate balance. The reconstruction fund and retained mineral control bolster Ukraine’s economic and sovereign interests, but the absence of security guarantees and pressure to negotiate peace could strain domestic support and challenge Ukraine’s long-term stability.

What does this mean for the future?

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While Trump didn’t secure all his demands, the deal advances several of his broader strategic goals. By gaining access to Ukraine’s mineral riches, the U.S. undermines China’s dominance over critical elements like lithium and graphite, essential for technology and energy industries. This shift reduces American and European dependence on Chinese supply chains, strengthening Western industrial and tech sectors. Most significantly, the agreement marks a pivotal step toward peace in Europe. Ending the Russia-Ukraine war, which has claimed thousands of lives, is a top priority for Trump, and Zelenskyy’s commitment to U.S.-led peace talks enhances Trump’s leverage in negotiations with Russia. Notably, the deal avoids binding U.S. commitments to Ukraine’s long-term defense, preserving flexibility for future administrations.

The deal’s broader implications align with the vision Glenn outlined in March, when he praised its potential to benefit America, Ukraine, and Europe by securing resources and creating peace. While the final agreement differs from Glenn's hopes, it still achieves key goals he outlined.

Did Trump's '51st state' jab just cost Canada its independence?

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Did Canadians just vote in their doom?

On April 28, 2025, Canada held its federal election, and what began as a promising conservative revival ended in a Liberal Party regroup, fueled by an anti-Trump narrative. This outcome is troubling for Canada, as Glenn revealed when he exposed the globalist tendencies of the new Prime Minister, Mark Carney. On a recent episode of his podcast, Glenn hosted former UK Prime Minister Liz Truss, who provided insight into Carney’s history. She revealed that, as governor of the Bank of England, Carney contributed to the 2022 pension crisis through policies that triggered excessive money printing, leading to rampant inflation.

Carney’s election and the Liberal Party’s fourth consecutive victory spell trouble for a Canada already straining under globalist policies. Many believed Canadians were fed up with the progressive agenda when former Prime Minister Justin Trudeau resigned amid plummeting public approval. Pierre Poilievre, the Conservative Party leader, started 2025 with a 25-point lead over his Liberal rivals, fueling optimism about his inevitable victory.

So, what went wrong? How did Poilievre go from predicted Prime Minister to losing his own parliamentary seat? And what details of this election could cost Canada dearly?

A Costly Election

Mark Carney (left) and Pierre Poilievre (right)

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The election defied the expectations of many analysts who anticipated a Conservative win earlier this year.

For Americans unfamiliar with parliamentary systems, here’s a brief overview of Canada’s federal election process. Unlike U.S. presidential elections, Canadians do not directly vote for their Prime Minister. Instead, they vote for a political party. Each Canadian resides in a "riding," similar to a U.S. congressional district, and during the election, each riding elects a Member of Parliament (MP). The party that secures the majority of MPs forms the government and appoints its leader as Prime Minister.

At the time of writing, the Liberal Party has secured 169 of the 172 seats needed for a majority, all but ensuring their victory. In contrast, the Conservative Party holds 144 seats, indicating that the Liberal Party will win by a solid margin, which will make passing legislation easier. This outcome is a far cry from the landslide Conservative victory many had anticipated.

Poilievre's Downfall

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What caused Poilievre’s dramatic fall from front-runner to losing his parliamentary seat?

Despite his surge in popularity earlier this year, which coincided with enthusiasm surrounding Trump’s inauguration, many attribute the Conservative loss to Trump’s influence. Commentators argue that Trump’s repeated references to Canada as the "51st state" gave Liberals a rallying cry: Canadian sovereignty. The Liberal Party framed a vote for Poilievre as a vote to surrender Canada to U.S. influence, positioning Carney as the defender of national independence.

Others argue that Poilievre’s lackluster campaign was to blame. Critics suggest he should have embraced a Trump-style, Canada-first message, emphasizing a balanced relationship with the U.S. rather than distancing himself from Trump’s annexation remarks. By failing to counter the Liberal narrative effectively, Poilievre lost momentum and voter confidence.

This election marks a pivotal moment for Canada, with far-reaching implications for its sovereignty and economic stability. As Glenn has warned, Carney’s globalist leanings could align Canada more closely with international agendas, potentially at the expense of its national interests. Canadians now face the challenge of navigating this new political landscape under a leader with a controversial track record.

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