The Reality Report – April 25, 2009 – The Economy

For a Free & Independent Media



Here is a 10-15 minute hard-driving Internet news program, the Reality Report embedded above, anchored by Gary Franchi. The news program covers issues not given much attention in the opposition media (ABC, AP, CBS, CNN, MSNBC, NBC, PBS, etc.). I have watched several of the Reality Report Shows and have found them to be very educational, timely and useful.

IS THE UNITED STATES ECONOMY IN COLLAPSE?

Where are we today in the economic collapse? Are we in a depression?

Gary Franchi interviews Peter Schiff, the President of Euro-Pacific Capital, author of Bold Moves in a Bear Market and Crash Proof, for this week’s Reality Report. The following is a response of Mr. Schiff to the question from Mr. Franchi of whether he thought we are in a DEPRESSION today.

Mr. Schiff answered that he did not think we are in a DEPRESSION yet, he stated, “There is going to be a DEPRESSION,” he predicted. “Historians,” he goes on to say, “Will ultimately look back at this time period as a DEPRESSION, because the politicians are in the process of creating it. I suppose the “Depression” was not the Depression in 1930 or 1931. It only became the Depression maybe half way through the 1930s, when people began to refer to it that way. They did not learn they were in a depression as it began to unfold . . .

“All depressions are going to begin as a RECESSION. It is not a depression until it has lasted longer and it has been more severe . . . I don’t think it had to be a depression because of all the misguided general policy, which ironically is designed to prevent the depression. It’s that policy that is going to guarantee a depression.

“Except what is going to make the depression so painful for average American it is going to be an INFLATIONARY DEPRESSION.

Mr. Franchi then asked, “So are we gong to see HYPER-INFLATION in this country?

Schiff: “I don’t know if we are going to see hyper-inflation. I hope not. That is the worst case scenario. But I think we are going to just see a period of time where the economy shrinks dramatically over a number of years and consumer prices rise very substantially during that time period.

“Whether it becomes hyper inflation, that is still, I think, not a guarantee. I think it is still the worst case scenario, and let’s hope we avoid it. But I think we are going to definitely have hyper-inflation . . . double digit inflation . . . where the first digit is may be north of a one, but it may not be triple digit inflation or something to the time that would may it HYPER INFLATION.

“But if we had a couple of years of 20% inflation, that would not be hyper inflation, it would be HIGH INFLATION.

Franchi: The Weimar Republic (after World War I) – during that time period – Germany was printing money to support striking German workers . . . who were being handed money from the government . . .Now with the extension of the unemployment benefits for American right now to stave off (possible) bread lines . . . Do you think the extension of unemployment benefits could be a direct parallel to what Germany did?

Schiff: If the government is printing money and giving it to people who are not producing goods then that is INFLATION. You can’t substitute production with money printing.

“. . . Another reason Weimar Republic Germany was printing so much more was because they were trying to pay off their war reparations. So they were using printed money to pay their debts. Well, the US Government is doing the same thing – we are deeply in debt – and even more deeply in debt than Germany was . . ."

Similarly Schiff made this comparison, “Paying interest on the National Debt . . paying the Chinese and Japanese and Saudis, the money we owe them . . . We have to make interest payments to our foreign creditors. Just like Germany had to make payments to the allies. They had to pay the British.

CURRENCY AND THE FEDERAL RESERVE

The two men also discussed currency related issues including regional and global currencies, fiat money, returning to a gold standard, the Federal Reserve and Congressman Ron Paul’s sponsored legislation, HR 1207, which requires an audit of the Federal Reserve System.

Franchi concluded the program raised the question, “Is it time to reel in the power of the Federal Reserve bankers by limiting the amount of printed currency by returning to the gold standard? . . . Yes, he stated emphatically . . .

“The economy is teetering on the brink of total collapse. There is only one way to solve the crisis. Introduce competing currencies and phase out Federal Reserve notes. This will strengthen the value of the dollar and return real wealth to the American people. This transition will not happen overnight, but the masses are gathering and support is there . . .”

CONCLUSION

The economy is in bad shape. It was bad when the alleged President Soetoro (a/k/a Obama) took over in January. However, he has made it worse by his ouT-of-control spending. The Federal Reserve has not helped by printing money that has nothing to back it up. I hope that HR 1207 passes in Congress so we can take a real step toward solving the economic crisis that faces our nation.