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

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)

The fall of Lehman Brothers in 2008 marked the largest bankruptcy filing in U.S. history and economic collapse was felt throughout the world. But now China's own version of Lehman Brothers, Evergrande, is teetering closer and closer to that edge, too. On the radio program Thursday, Glenn Beck gave the latest update and predicted how it will affect Asian markets and what it could mean for America's economy.

Glenn explained why he believes a major collapse that is happening now in China will have a cascading effect into a "controlled collapse," a managed decline that will dramatically change America's economy and the way we all live.

"You will not recognize your lifestyle. Hear me," Glenn warned. "And that's not a right-left thing. That's a right-wrong thing. We're on the wrong track. I'm telling you now, there's new information and you are not going to recognize the American lifestyle. ... It could happen tomorrow. It could happen in five years from now, but it will happen. We are headed for a very different country. One where you don't have the rights that you have. And you certainly don't have the economic privileges that Americans are used to."

"The same thing that happened in 2008 is now happening in China," Glenn continued. "This time, it's going to take everything down. When it collapses, it will take everything down."

Watch the video below to hear Glenn break down the details:

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Justin Haskins, editorial director of the Heartland Institute, joined Glenn Beck on the radio program to expose a shocking conversation between two Great Reset proponents — Klaus Schwab, chairman of the World Economic Forum, and Christine Lagarde, president of the European Central Bank (Europe's equivalent to the Fed).

The way Schwab and Lagarde discuss the role central banks should play in establishing societal norms, determining your way of life, and defending against potential crisis is proof that the Great Reset is upon us, Justin explained. And the scariest part is that they're not even trying to hide it. The entire, unbelievable conversation has been published on the WEF website, which you can read here.

Glenn read an excerpt from the conversation:

Christine Lagarde: At the ECB, we have now wrapped up and concluded our strategy review, which was the first one in 17 years. And I was blessed to have an entire Governing Council unanimously agree that the fight against climate change should be one of the considerations that we take when we determine monetary policy. So at least the European Central Bank is of the view that climate change is an important component in order to decide on monetary policy. ...

Can we arrive at that trade-off between fighting climate change, preserving biodiversity and yet securing enough growth to respond to legitimate demands of the population? And my first answer, Klaus, to be firm, is that to have a way of life, we need life. And in the medium term, we do have major threats on the horizon that could cause the death of hundreds of thousands of people. So we have to think life, first. We have to think way of life, second. ...

So we have to think life, first. We have to think way of life, second. How can we come together to make sure that we secure the first priority, which is life, and also protect the way of life that people have? And make sure that the cost of it is not so high for some people, that they just cannot tolerate it. I think that the trade-off that we reach will probably require some redistribution, because it is clear that the most exposed people, the less privileged people are those that are going to need some help.

"Do you understand, America, what that means?" Glenn exclaimed. "You have elites, that you never elected, that are having these meetings ... deciding what is a legitimate need for you. And telling you that your needs are going to go away in your lifetime. You may not see a time where you get wants again. Just your needs are going to be addressed. Am I reading this wrong?"

"This is absolutely what is being said here," Justin agreed. "She's very clear that we need to make sure that way of life is second to life. We have to save all these people, hundreds of thousands of people are going to die from this supposedly existential threat of climate change. And their wants, and their desires, and their quality of living, all of that has to come second."

"This is a central bank saying this. This is not an elected official, who is accountable directly to the people. This is a central bank saying, we're going to print money. We're going to use monetary policy, to impose these ideas, to rework society in order to accomplish our goals," Justin added, addressing Lagarde's call for "some redistribution."

Will Great Reset elites — not elected by the U.S. — soon be dictating to the rest of the world? Watch the video clip below to hear Glenn and Justin break it down:

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To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

First comes the "crisis," then comes the expansion. The federal government is seizing on the January 6 Capitol riot to take carte blanche to do whatever it wants and weaponize the event to further empower the new overlords of our country — the intelligence community.

On Glenn TV Wednesday, Glenn Beck reveals what's happening with the U.S. Capitol Police and argues they've morphed into a new arm of the intelligence apparatus, boosted by a massive increase in funding and surveillance equipment and new offices OUTSIDE the Capitol building. The Biden administration has also hidden basic details regarding January 6. Why did officials refuse to release the name of the officer who killed Ashli Babbitt? Where are the 14,000-plus hours of CCTV footage? As any intelligence organization knows, it's best to operate outside the realms of oversight.

Glenn exposes the hidden hand of government that could be used to punish and destroy innocent Americans who are only guilty of holding the "wrong" political view.

Watch the full episode of "Glenn TV" below:

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The conditions in Afghanistan under the Taliban rule — for Americans, allies, Christians, women and more — continue to deteriorate, and the people there continue to plead that we will not forget them. On the radio program Monday, Glenn Beck gave an emotional update on current evacuation efforts, including the tragic story of one girl — an American passport holder — who was not rescued in time.

"I have a pit in my stomach like I haven't had in a while. What is happening in Afghanistan is both miraculous and horrendous," Glenn began. "What's going on right now one of the most amazing things I've ever personally witnessed — the evacuation of Americans, those [Afghans] who helped us, Christians that are dying, women that are under incredible conditions. I see things that I can't show you. I see the pleadings from people who are in safe houses, 'Please, don't forget us.' I see what they're being sent by the Taliban.

"If I die today, my entire life will have been worth it for what you have helped get done, in just the last three weeks. You have saved well over 5,000 people," he continued.

Fighting back tears, Glenn added, "I ask that you pray for those in the Middle East, that are in the midst of doing work, that a Moses-style miracle will happen. ... There are several people that are in dire need of medical care. Friday, we told you — along with the congressman from Oklahoma [Rep. Markwayne Mullin] who had just returned — [about] a father and two daughters that were blue passport Americans, and a mother who had a permanent residence, a Green Card. The daughter was very ill. And they thought, that if we couldn't get her out of there, that she would lose her legs. I got a call on Saturday morning, that we were too late, that she didn't lose her legs. She lost her life, waiting. There are now two Americans, instead of three."

Glenn showered his audience with gratitude, repeating that "well over 5000" lives have already been saved because of their incredible generosity, but lamented that there are still thousands more people yet to be saved.

Watch the video clip below to hear more updates from Glenn:

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To donate to these rescue efforts, visit NazareneFund.org or MercuryOne.org.

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.