Crisis They Can’t Avoid-Paul Craig Roberts

1By Greg Hunter’s USAWatchdog.com 

Former Assistant Treasury Secretary Dr. Paul Craig Roberts says there is another financial calamity coming to the U.S.  Dr. Roberts says, “It is a crisis they can’t avoid.  One way or another it’s going to bite very hard, whether it comes through the dollar or the bonds.”   Dr. Roberts says all the ongoing financial problems we face today are a result of little or no regulation.  Dr. Roberts makes his case in a book titled “The Failure of Laissez Faire Capitalism and Economic Dissolution of the West.”  Dr. Roberts contends, “What you are looking at is a deregulated financial system, and the result was fraud, crisis and collapse. . . . The end result of financial deregulation is crony capitalism.”  Look no further than the continuing bank bailouts with massive money printing and zero percent interest rates as the reason for the coming catastrophe of spiking interest rates.  Roberts asks, “How can the dollar be anything but a bubble because the Fed is creating a trillion new dollars every year, but the demand for dollars is not growing by a trillion dollars a year.”  Roberts goes on to predict, “Sooner or later, the printing has to affect the dollar’s value.  If the dollar drops . . . we have inflation . . . you can’t have inflation and zero percent interest rates.”  Join Greg Hunter as he goes One-on-One with economist Paul Craig Roberts.

Comments
  1. justin king

    The new book is NOT a compilation of previous essays.- It’s on Kindle and is a MUST.

  2. justin king

    The distillation of this interview is that the world has painted itself into an economic DILEMMA. – Therefore the various world leaders have painted themselves into SILENT desperation.

    • maria oceanna

      No, the world did NOT create this situation….it’s the product of the mobster bankster cartels, Jamie Dimon and friends.

      We haven’t had open capitalism, the entire global economy shifted into economic fascism with the rise of the multi-nationals and the central banking systems. It is crashing due to bankster greed.

      But, hey, we the people will live on. They can’t get the money out us. We are turning the tables right now by removing our money from banks and allowing ourselves to find new wealth solutions. Game over for the central banks.

      • peter

        Roberts is wrong about deregulation–we have millions of regulations about banking. The problem is deposit insurance and taxpayer bailouts. Back when insolvent banks simply failed, and often their officers went to jail (during the gold standard period) we didn’t have any of these problems.

        • John Dark

          Deposit insurance does not save the bad banks from going out of business. The small depositors are protected, but not the bad bank. Bailouts do keep bad banks in business. And people can go to jail, as we saw in the S&L washout of 1980s.

  3. Charles H.

    Hey Greg,

    The US, and the ECB print money – this is the Western World playing money games. Japan is between a rock and a hard place – buying US treasuries BUT forging a direct deal with the ascending world production powerhouse, China. Lots, if not most of the available physical gold is going east by the ton. And the coming September WORLD financial summit to “discuss” a world currency IN CHINA. LaGuarde and the IMF just tried to stiff Russia with the Cyprus bank’s depositor’s money grab, now on hold. It sure looks like China , and Russia, and the Far East economic consortium may just put it’s foot down on the irresponsible shenanigans of the Western World. Chance are a lot of BRICs will join into that too! Looks the the Democrat/Republican (Liberal/Conservative) divisiveness is being exported to the world stage. Since “the Buck” won’t stop in the Oval Office: good chance it will in China. The kind of financial fraud and corruption going on in the Western World style governments won’t fly any more – in a world paradigm cultural shift in civilization (Western irresponsibility to Eastern responsibility). Poor Canada: so far from God, and close to the United States. (What Mexico used to lament.) Keep up the good work.

    • Greg

      Thank you Charles H.

    • justin king

      It will be fascinating to see how the IMF-German decision on Cyprus works itself out.- Has a myriad of implications.

    • Russian Insight

      The end game to this is much bigger and wider that Germany imposing its muscle on the rest of Europe.

      The goal here is to marginalize Russia as an energy and financial power. Cyprus just had the dumb luck to find lots of oil and gas, making it a pawn in the Euro/Energy chess match.

      Russia wants to keep its control of energy flows into Europe. Rumors have it that Gazprom offered a deal to the Cypriot gov’t to aligned with Russia and solve its economic problems once and for all, in turn for such assistance, forfeiting its gas findings to Russia and turning away from the EU deal.

      The “other powers” (including Germany) want to make Turkey the central distribution hub of energy and gas. Read and Google: Turkish airlines purchase of over 80 airbus planes and Turkish announcements of a massive $2.6 billion financial center development in Istanbul.

      Via Israel and through Cyprus, gas and oil can be routed up to Turkey where it will later be distributed throughout mainland Europe, lessening the EU’s dependance on Russian energy.

      This whole thing has nothing to do with economics and everything to do with Geo Political positioning and energy distribution. Balancing out Russian oil wealth is the end game goal.

      • Greg

        This is very nice analysis!! Thank you for posting it here!

  4. jc davis

    Great interview Greg. I can see our donations have gone to good use. The sound, and video was perfect.
    The dollar has become a hangman,s noose around the necks of the other currencies. The more they resist the tighter the noose becomes. China is the changing factor to the dollar with 1.3 billion people. When they make a new currency those being hung by the dollar,(the euro) will turn on the hangman. The game is clearly seen to be rigged, and soon to be changed.
    As I see it all out war will be used to distract from the real hangman. that is the banksters. Thanks as always.

  5. J Grosvenor

    Does a bank theft like this thing in Cyprus effect food prices?

    • Greg

      Yes, for the simple fact it can disrupt the financial system.

  6. Speakyourmind

    At the end he says if all countries are printing then there is nowhere to go. He is wrong, you go into PM’s, farm land, etc.

  7. Brian

    The banks are having their cake and eating it to! Deregulated AND protected with public money, is there any limit to what these clowns will get away with…….only time will tell.

  8. montanarancher

    Hello Greg
    I’ve been watching you for a couple years now, and you really shined today.

    I’m not a big fan of Mr. Roberts, he blogs quite a bit and I often take some offense to his comments. It almost happened here when he started into a pro government regulation bent.

    But IMO you save the interview about 5:30 in and got him to specify ” financial deregulation” was the problem and even that was fine as long as the deregulated companies were made to take the consequences for their actions. After that the interview got more interesting, not a lot of new info but at least relevant.

    I’m still on the fence with Mr. Roberts as to weather he believes in free markets or not, I just don’t know what he thinks but the way he was talking it sounded like he believes the guvment should be involved is some industries.

    • Greg

      montanarancher,
      I think he does but there must be some regulation. You have to admit when Glass-Steagall was trashed in 1999 that was a mistake. It want FDIC deposit insurance you must be conservative with investments. Now the taxpayer insures everything from “London Whale ” trades to massive amounts of derivatives. What a mess.

      • Darren

        Hi Greg,

        Thanks for all you do.

        “Some regulation” ensures the creation and inevitable expansion of an elite class of regulators. One problem with modern society is that those who desire the freedom to interact voluntarily with others are prevented from doing so while those who eschew responsibility demand to be coddled to the detriment of all. Time for folks to man up and accept responsibility for their own actions while also looking out for their loved ones as friends and neighbors rather than as supplicants of government.

        For example did you know that fewer traffic regulations make roads safer? See:

        Roads Gone Wild
        No street signs. No crosswalks. No accidents. Surprise: Making driving seem more dangerous could make it safer

        http://www.wired.com/wired/archive/12.12/traffic.html

        • Liquid Motion

          We all know what unregulated banks get up to …don’t we ?
          Regulation only exists in the eyes of those not participating.
          Friends in high/right places doing favours for friends in the interest of….themselves = CRONY CAPITALISM.
          You cannot leave markets / corporates to regulate themselves.
          Especially when the motivation for existence is MONEY.
          Trouble is the wealth is not spread fairly or evenly even where they are supposedly regulated. It becomes very narrow and acute and concentrated at the top. The Central Planners know this and use it to their advantage. Small percentage of players having the greater portion of power and wealth distribution, control the majority. Sounds like a great reason to put Socialism on the agenda.
          Ah ..what a beautiful EUTOPIA !!!

          • Darren

            LM siad, “Friends in high/right places doing favours for friends in the interest of….themselves = CRONY CAPITALISM.
            You cannot leave markets / corporates to regulate themselves.
            Especially when the motivation for existence is MONEY.”

            Government regulation or elite corporations and self regulation of elite corporations is exactly the same thing. Ever notice how the legislators and regulators work directly on behalf of the elite corporations or even have a revolving door relationship with their corporate and regulator employers?

            Letting the market regulate means letting the individuals who are actually involved in an activity make the best possible choices for themselves. That’s the only thing that can work. For example, TARP was an act of government regulation. It was unpopular, unjust and made the situation worse in the long run. If the market (that’s you and me and 300 million other Americans) had been asked, “Do you want to give $1 trillion to the banks?” the answer would have been, “No!”

            Yo can either have an elite class tell you and everyone else how to live (supposedly for your own good but actually for the good of the elite) or you can demand that you be free to live your life and spend your money as you see fit and let all other individuals do the same. Take your pick.

          • Darren

            For clarity’s sake the first paragraph of my post should read:

            Government regulation of elite corporations and self regulation of elite corporations is exactly the same thing. Ever notice how the legislators and regulators work directly on behalf of the elite corporations or even have a revolving door relationship with their corporate and regulatory employers?

  9. JP111

    Is this an interview? When is PCR going to get the chance to talk? The first 2 or 3 minutes is consumed by your rant against JPM’s latest skullduggery. You know — last week’s news.

    Greg, you consistently talk too much. Ask questions. Let your guest do the talking. Thnx.

    • Greg

      It was set up for the point of his book as in a real life example of what’s gong wrong. Thank you for your feedback and comments. By the way, if you want to critique please use your real name and not something like JP111.

    • Henry

      Great interview, Greg! I’ve been a follower of PCR for quite a while. He too knows that 9-11 was an inside job.
      His comment, when everyone is printing, there’s no place to run, left me wondering what he thinks of investing in land, real estate, and precious metals. I’m kinda nervous about my retirement fund…

      • Greg

        Henry,
        You should have as many of your assets under your direct control as possible. Even “Bond King” Bill Gross (PIMCO http://www.pimco.com/EN/Insights/Pages/Credit-Supernova.aspx) is telling his clients to buy “things you can sink your teeth into.” He even mentioned gold. Look no further than Cypress to see what might happen here. You should be worried very worried. You do realize the Fed id printing $85 billion a month to prop it all up don’t you? How the hell do you price stocks into the future with $1 trillion in Fed funny money?
        Greg

  10. JP111

    Listened to the rest of the discussion. Good stuff. Insightful.

    The last thing Roberts said, “If they are all printing money, where do you run to? There’s no place to go.” Obviously, the answer is “to precious metals”. Wonder why he didn’t say it?

    • jc davis

      jp111: Oh come on! Gold, land, ect… can not supply the needs of 7 billion people. there are just to many people in the world to create a gold standard. You have good points in your postings. Greg talks. as a good reporter that (believes in what he is doing would). The new currency is in the progress. hopefully it will be one that has P.M. in the mix otherwise…you are correct mam/sir.

      • Darren

        jc davis said, “there are just to many people in the world to create a gold standard.”

        This simply isn’t true. When gold was first used as money roughly 5,000 years ago the population of the Earth was 25 million. By the time FDR ended gold circulation in the US the world’s population was over two billion. When Nixon closed the gold window in 1971 the world’s population was 3.7 billion people. Gold served well through the entire term until it was debased by paper. Dishonest paper is the problem.

        One of the things that has made gold real money for thousands of years is its divisibility. An honest and transparent issuance of notes backed by redeemable gold would make the passing of nanograms between those who transact business a non-issue. Gold serves those who respect it well. Paper fails time and again.

        That being said, I believe that Ron Paul’s call for an end to legal tender laws which would usher in an era of competing currencies is the most reasonable solution to our monetary problems. Let the market (that’s you and me and about 7 billion other people) decide what works best for each of us.

        • jc davis

          Darren:
          You, and Ron Paul may be right. In my mind I don’t see it ever happening.. If it could function better, many other countries would be trying it.ie china. You do make a good correction to my post. One to consider.

          • Darren

            Hi jc,

            As always reality will intrude and the schemes of the so-called mighty will come to nothing. They’ve had a good run with imaginary money and they have scraped an unbelievable amount of wealth off the top of ever single transaction for a hundred years.

            But in the end folks won’t produce in an economy that doesn’t reward their efforts. Only sound money and free markets can reliably provide those rewards to the actual producers in the long run. Some form of sound money will have to be brought into existence. The closer that money is to the being the choice of the individuals involved the better the system will run. In the meantime the oligarchy will continue to screw us (even in China) but as Shakespeare said, “at the length truth will out.”

  11. Big M

    Do not forget that although the banksters are the worst criminals on Earth, they couldn’t have gotten away with what they’ve done in the last decade or so if the slimy s***stains in DC hadn’t deliberately passed legislation allowing them to do ALL of it. You can count on one hand the number of them that aren’t owned lock, stock and barrel by the banksters, and that’s why not one bankster has been charged with ANYTHING, much less taken into court, convicted or had their ticket punched.

    • jc davis

      Greg im sorry for over posting again. I love this post. so true. America ,s elected poll loving aticians need to prosecute the M.f. banksters like Iceland is doing. Or id rather them be hung for treason under N.D.A.A. if possible.

      • Greg

        JC,
        Don’t be sorry. Post away.

    • stephen d

      Good points and true. I love how these corrupt politicians get on a soap-box and lecture these evil businessmen as if they didn’t create and profit from all of it. They should be the primary targets, not the bankers (well, both). How quickly we forget how these criminals trade the stock market while making decisions favoring one industry or another. They do not have to put their investments in blind trusts as some in the executive branch are required to do.

      For some reason, Dr. Roberts covers for government corruption and specifically for the malfeasance of the democrat party. He’s become more and more strident in this direction.

      I’m not going to argue for zero regulation, it’s not practical or a good idea. But to argue the converse, that we should support this increasingly authoritarian central government is pure insanity. Crony capitalism is NOT the result of deregulation (Mussolina anyone?) but the governments interference in a free market by choosing winners and losers. This can be done through regulation or deregulation.

      Sorry, Dr. Roberts, it’s the unbridled and unconstitutional growth of the central government that places us in this mess.

  12. BB

    What an economic illiterate. Laissez Faire capitalism? Where? Please, tell me because it sure as heck isn’t in the US. The deregulation canard again? Sheesh, what an idiot.

    • Greg

      Hey BB,
      You want to criticize Dr. Roberts, no problem. Use a real name and own your comment.
      Greg

      • Darren

        Greg,

        While I more or less agree with the point BB attempts to make I fully support your judgement in asking for qualified criticism from those who use your site. I recently stopped posting on a popular economics forum due to a lack of moderation which let mindless diatribes crowd out rational debate. I applaud your efforts to police your own property. Consider that your ability to maintain your own private property as you see fit is an excellent example of how laissez-faire succeeds where it is given a true test.

        Thanks again for your efforts, your wonderful guests and a well maintained comment section.

        • Greg

          Darren,
          I have no problem with opposing views. In fact, I think it is healthy. Youn made some good points man!!

  13. Mike K

    Obviously, a truly free market is one that is devoid of all manipulation and extraneous exploitation. Regulation and free-market capitalism are not mutually exclusive. They are not anathema to one another. Regulation of the market place, however, should be there to insure that markets remain free of manipulation by those who would abuse the system for their own greedy purposes at the expense of others. Regulation should not be there to enable banksters and politicians to extract wealth from taxpayers.

    I consider myself to be a libertarian, and I have no problem with any regulation that will keep the markets honest and free. I only wish that our elected officials would bring back the Glass-Steagall, and rid us of the abomination that is the Banking Reform and Consumer Protection Act.

  14. Hans Wienhold

    I think Dr. Roberts is way off base here. I have always enjoyed reading him but to blame this mess upon laissez-faire is bizarre. I also find his claim that “social control” is needed. What, other than consumers making decisions in the market, constitutes “social control?” In short, there is no such thing as “social control.” There are only markets or politicians.

  15. Mo

    What’s with the concerted, chant-like effort to pretend there was anything like laissez-faire going on in the financials or any other market? There were/are reams and reams of financial regulations that distorted the markets. He’s arguing that removing any of the thousands of regulations in a hyper-regulatory state has catastrophic consequences and that the cure is to never let a regulation die.

    If we let people distort the meaning of Capitalism and thereby destroy it, what rights-protecting system will they offer up in her stead?

    • Greg

      Mo,
      You have to admit we way deregulated the markets and look how many trillions of dollars we have spent bailing these folks out. I agree there can be too much regulation but repealing Glass-Steagall (1999) was a giant mistake. If you want to be an investment bank fine–no insurance. If you make a mistake then bankruptcy for you. If you want FDIC insurance then you follow rules. Now, all banks have FDIC insurance and taxpayers are back-stopping all the markets. Deregulation on this scale is the reason why we have the mess and calamity we face now. You think even less regulation would have prevented this?

      • Darren

        Greg,

        The bank bailouts, auto bailouts and green technology bankruptcies were all acts of government regulation. That’s what regulation is and does.

        Here’s an example of how government regulators and their corporate cronies employ regulatory powers specifically to screw the little guy. Note how the regulatory official quoted demeans Jesse White, the sole state representative who acted on behalf of the effected citizens, by stating that his vote against state regulatory policy proves that he is opposed to the Marcellus Shale drilling industry. In other words, the Pennsylvania Depart of Environmental Protection sees its role as that of facilitator to industry at the expense of citizens with polluted wells. It couldn’t be any clearer than that.

        “The Pennsylvania Department of Environmental Protection produces incomplete lab reports and uses them to dismiss complaints that Marcellus Shale gas development operations have contaminated residential water supplies and made people sick, according to court documents.

        The DEP responded in an email, noting its water testing lab received a “glowing” peer review last year from the Association of Public Health Laboratories, and saying, “Jesse White is ideologically opposed to responsible drilling regulations which is evidenced by, among other things, his vote against Act 13,” a state law that regulates Marcellus Shale drilling and gas production.”

        http://www.post-gazette.com/stories/local/state/lawmaker-challenges-pa-deps-reporting-of-gas-well-water-safety-660238/#ixzz2CWopH38P

      • Mo

        Greg,

        The error lies in government insurance and bailouts. If you take those as part and parcel of “Laissez-Faire Capitalism” then what are we to call the type of system where government involves itself only in the protection of property rights and prosecution against the initiation of force and fraud? The government fails to enforce laws against fraud (in the financial sector, for example) and then grows exponentially, birthing new regulators for every type of fraudulent scheme one can dream up. The fraud grows and louder come the calls for more government intervention. Government involvement in the economy distorts. Regulations beget regulations. Laissez-Faire Capitalism has a definition and we’ve had nothing of the sort in our lifetimes.

  16. Mo

    Here’s a good article contradicting the idea that financial markets were deregulated over the past decades.

    http://www.forbes.com/sites/objectivist/2012/11/12/why-the-glass-steagall-myth-persists/

    • Greg

      Mo,
      This is word play Stieglitz, for instance, in a lengthy piece for Vanity Fair, could only muster two examples of the deregulation he thinks bears primary responsibility for the crisis: the repeal of Glass-Steagall and the SEC’s 2004 decision to raise banks’ debt-to-capital ratio from 12:1 to 30:1. The latter, of course was not deregulation, but re-regulation. Yeah they’were “re-regulated” to allow the banks to lever up and they got implicit backing from taxpayers. These are 2 very big points. In some cases the banks were allowed 40 to 50 to one leverage because the regulations were changed to allow massive risk taking and IT BLEW UP. What would have happened if Goldman, JP Morgan and the rest of the banks would not have gotten FDIC backing or government guarantees and would have been kept in check so as not to require a massive taxpayer bailout for their reckless trades? Oh we didn’t regulated OTC derivatives either and not we have $70 trillion in some dark hole waiting to blow again. These guys all should have been taken to receivership, but the bailout continues at our expense. Let’s cut off the $40 billion each and every month the banks are getting to prop them up? Why are we talking about that? Your story about zero regulation does not wash and we are seeing the results unfolding infront of our eyes. Thank you for your comment and link.

  17. David V

    I have been reading PC Roberts for years. Lately, he has more & more been coming around to recognizing the true source of our problems, which is the Israelites. I agree that there must be some regulation in place. Letting unfettered capitalism run wild results in exactly the situation we have today. Banks and corporations get so big that they can buy off any politician, judge or prosecutor they need to. China at least has the stones to execute people for financial or corporate malfeasance.

    • Greg

      David the “Israelites” reference is horse hooey. Thain, Mozilo, Lewis, Paulson and Pandit are just a few of the big bankers that screwed things up and all are NOT Jewish. Now, if you said the bankers are the problem I would agree 100%. Thank you.
      Greg

  18. Kelly Kitchens

    I really enjoy much that Paul Craig Roberts writes and speaks about however the idea that we need the government intrusion and regulation plays to the whole idea that we as mere men are wiser than the market and really is no different than Bernanke’s meddling – just a different kind. No the market is self regulating if you get government out of it altogether the system would work. Let the buyer beware is key. Pragmatism is a flawed philosophy.

    • Kelly Kitchens

      You should interview Tom Woods on this issue – He is far better on the subject and wrote about the Glass-Steagall dereg issue in his book – Rollback. You should visit his thoughts on the mattter. Here’s an article he wrote on it. The Libertarians really do have it right. http://www.tomwoods.com/blog/repeal-of-glass-steagall-had-nothing-to-do-with-the-crisis/

    • Greg

      Kelly,
      We had dramatically declining regulation starting right after Glass-Steagall was done away with. You can see how that turned out. I agree we can over regulate, but we have obviously way under-regulated this mess. Thank you for your comments.
      Greg

      • Darren

        Greg,

        Through the Gramm–Leach–Bliley Act the banks which own the government gave themselves freer reign while continuing to block a free market in banking. TARP was an example of regulation which benefited those in power at the expense of the little guy. Hank Paulson, formerly of Goldman Sachs, did exactly what he was expected to do as a regulator. The problem is the lack of true deregulation. When you or I can set up a bank and attract or repel customers by virtue of our integrity and the services which we offer rather than a Too Big to Fail pedigree which we do not possess deregulation will have arrived. In short, if banking was really deregulated then why can’t I open a bank?

    • Mo

      Yay!

  19. Ken Chiarella

    Greg,
    Another fantastic interview. I could watch these all day. What are you thoughts on the EU tax on Cyprus bank accounts? Do you think this may be the catalyst that starts the next crisis? I think that if the EU follows through and then tries this in Greece, Italy and Spain that we may see a run on banks that will cause some major strain. It makes me fear for my good ole American 401k for sure.
    Thanks.
    Ken

    • Greg

      Ken,
      Run Forest run!

      • art barnes

        Isn’t it amazing that little old Cyprus is being used by the bankers to find out if people will stand for having their banking accounts raided for larger countries IOU’s. Hope the people of Cyprus will stand up but, if they are anything like our American lambs all they will do is cry for mother and go back to work after lunch.

  20. Liquid Motion

    Greg,
    I listened to PCR on KWN last week and he repeats his theme here.
    It takes big kahunas for a man of his standing and background to come forward and literally tear shreds off of the FED and the Government.
    Have to agree with his thoughts though…in fact I said exactly the same thing about the “Crony Capitalism” and “lack of regulation” some time ago, as being the culprits in this fiasco. Alan Greenspan was the one who thought that the markets were mature enough to self- regulate. He admitted last year …that he was wrong on that call…DUH… !!!
    FYI……In subdued testimony before Congress on October 23rd, the 18-year Chairman of the U.S. Federal Reserve Bank said that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending. He also said his belief in deregulation had been “shaken.”
    For an amazingly astute fellow as he was(hand selected by President Reagan nonetheless)….it’s clear that being human you are susceptible to brain fades….and to closing one or both eyes simultaneously while someone loads up the truck parked underground.
    Who gave permission for the Banks to create those nasty little things called MBS (especially the toxic variety called Subprime). It was a licence to spread an uncontrollable virus around the globe.
    Then whose brilliant concept was it that allowed for the creation of derivatives in an UNREGULATED market….hmmmmmm !!!
    When you mix the two (as did happen) you have a concoction that is capable of shifting the Globe off its axis. The ripple effects gather momentum and culminate in the dispersion of energy which as yet, we are still to feel the full repercussions of.
    I can think of many expletives that would describe the idiocy of the bureaucracy.
    Are we any closer to a resolution of this diabolical mess.
    YES. And PCR correctly blows the cover on where / how that will arrive.
    The world may be full of psychopaths, maniacs and liars. These central planners are just plain D & D (Dumb and Destructive).
    I’ve got to go, the truck’s waiting for me….off to the Bullion Dealer ….taking delivery of my remaining order.
    Will someone turn the fan on….something smells rotten.

  21. Todd

    I disagree with Dr Roberts on the issue of regulation as a social control to keep banks from taking these ridiculous risks on derivatives. The social control in a free market is the risk of default and insolvency. With de-regulation the banks also solidified the backstop of federal bailouts to mitigate any and all losses as a result unreasonable risk. A de-regulated market will work if the enterprises are allowed to fail as a result of unreasonable risk and subsequent losses.
    Laissez-faire capitalism has not failed since it hasn’t been in place in recent history.

  22. stephen d

    Oh boy, Dr. Roberts on his anti-deregulation tirade again. No, Dr. Roberts, the Fed is not printing a trillion dollars a year to help the banks, he’s printing it to fund Obama.

    • Greg

      Stephen D,
      Fact is the Fed is printing $40 billion each and every month to buy mortgage-backed securities from the banks and $45 billion each and every month to buy U.S. Treasuries. The economy is not imploding because of the $1 trillion a year in Fed action. So, yes it helps Obama, (or any other president that would be in office) but it is not funding him.

      • stephen d

        Sorry to disagree Greg, but the US Central Government deficit amounts to around $1 trillion per year under OBAMA (less under previous regimes). It was Obama who has doubled the yearly deficit or increased it dramatically as all figures clearly show. Yes, the Fed is buying MBS as well as US Treasuries (which they are — that IS funding Obama). Without the Fed bond purchases (or the bond purchases made by the primary dealers for the Fed), the US Government doesn’t operate.

  23. Simon

    It was beyond the banks making bad bets. What took place and remains in place today via monetary and fiscal policymakers in collusion with the banks is, outright FRAUD.

    • Greg

      Bingo!!!

  24. Shayne

    Hi Greg

    Great interview and I have bought Dr Roberts book. His suggestion that unregulated markets don’t work because of hwat has happened is correct but not neccwessariuly because of the unregulation. In all activities by the banks (investment, bullion etc) the governments, through policy and through central banks have been complicit in creating an environment where banks can create mayhem in the markets with government (and ultimately tax payer support) and have no consequences.
    “Too big to fail and too big to jail” is not free markets. If the markets were free, this charade would have been over a long time ago, Lehman’s would have been just the first and gold and silver would much much higher.

    Yes it would have been ugly but instead of dealing with a big problem in 2008, we now have a much bigger issue. Whilst it may have kicked the debt issue can down the road, the “unintended” consequence is that it has essentially hastened the transfer of power and wealth from the west to east.

  25. RUSS SMITH

    Hi!, Patrons Of USAWatchdog.com Et Al:

    Please allow me to bring on the intellectul dissolution of all the various bubbles past present and future; by stating that the US Constitution in Article 1; Section 10 calls for gold and silver coins as OUR US money only. So, if anyone sells their home for gold and siler coins only, by following OUR Constitutional mandates in Article 1; Section 10, how many such gold/silver coins would the buye have to purchse the home? Whatever amounts of gold and silver coins the buyer would have, it would be so small an amount that it would break the real estate bubble by what percetage points? How about bonds, T
    Bills/Notes, the grocery bill, the PG&E Bill, Automobile purchases etc.? Is there anyone in this world today ready to face such music in opposition to the present inflationary expansions posed as the answers to OUR statist problems?

    RUSS SMITH, CA.(One Of Our Broke Fiat Money States)
    resmith@wcisp.com

  26. Malibu

    Greg,

    As a working stiff heavily invested in silver, can you explain to me how bitcoin can exploned after the Cyprus event and silver do nothing. I must admit I know nothing of bitcoin.

    • Greg

      Malibu,
      I know nothing about Bitcoin. Sorry. I would hang on to my real money though–silver.

  27. Tyler

    Malibu,

    Maybe because Bitcoin is still a thinly traded currency and the Cypriots could set up bitcoins accounts rather quickly and buy electronically, so it may have been a wave of buyers that could only be dealt with by rising Bitcoin prices.

    Greg,

    Paul Craig Roberts blames laissez capitalism for our problems. If we have a free market in banking why do we have the Federal Reserve or for that matter FDIC??

    In addition fractional reserve banking is a major problem…it’s fraud. When you take your suit to the dry cleaners do they lend it out during the time you leave it there. When you park your car at the airport do they rent it out while you’re on holiday? Why not?? because it’s a fraud…but in banking it’s considered being efficient.

    • Greg

      Tyler,
      The “fraud” is legal because there is no regulation to stop it. There has to be some regulation, especially when it come to FDIC (read taxpayer) insurance. All of these big banks are backed by FDIC insurance and that’s why they are TBTF or Jail.

  28. Jimmy

    what so many people fail to mention when they talk about the shtf sometime soon that i never fail to think about, thanks to the creature from jekyll island, is that the ‘money trust’ running the fed and bis/imf/worldbank has been the same ‘money trust’ throughout the course of american history…

    it has been here to preside over all of the previous attempts at establishing a central bank in the states.. the same monied interests that Jefferson and Hamilton fought over… and that Jackson fought…

    just because they ruin the dollar they aren’t going to go away. they most definitely are going to be eye-hole deep in trying to steer us in the wrong direction, again… through force, deceit and coercion… if not through outright evil…

    keep that in mind!

  29. Austin

    If you understand what an economy is you will realize that we do not have an economic crisis or economic problem, we have a political problem. Unless you are one of the idiots incapable of doing something for yourself. There is nothing wrong with the free market economy, it is working just fine between the cracks. The problem is that the political economy is being gamed by the political class. There will be no economic collapse, but there will be a political upheaval/collapse. The political class is the problem not capitalism.
    An economy is the natural outpouring of the basic nature of humankind. Capitalism is nothing but human nature and God given talent and ability in action. You can’t impose capitalism on a society. All other models were designed to repress capitalism. Capitialism =’s economic freedom. Those welfare state/Socialists systems have to be enforced on the people by the tyranny of the state. Just get out of the way and remove the obstacles and capitalism will thrive. As long as there are two people on earth there will be a free market economy. If you want an up to date example to illustrate how fast capitalism can spring to life just look at the current political situation regarding banning assault weapons. All the guns sold out, all the ammo sold out, all the components to make ammo sold out and all the equipment to reload ammo sold out. Go to any online retailer and look for bullets, powder, cases, reloading equipment and you will find all is sold out except a few odd size items. Now go to Youtube and search ammo reloading and casting bullets. Within one year we have a new cottage industry making all of these items. How to make your own is taught right there on Youtube. If you do another Webb search you will find that the reason all the above items are sold out is due to speculators buying most of it up and it is for sale privately on line at 3X the retail price. (A weapons bubble.) The Government is selling M-1 assualt rifles through private contractors. I have a friend, retired bank CEO, who just drove from Virginia to Alabama to purchase one. He also purchased 400 rounds of 7.62 Nato rounds from the same source. US government surplus. You can purchase up to 200 rounds of government surplus ammo per day so his wife purchase the other 200. Yesterday he purchased an M-1 carbine on line at an auction and 200 rounds of ammo from a private seller online at 3X the retail price. Capitalism at work. The old system is in its death throws and the new beginning is springing to life all around us. The government is even in on the action!! The left hand is trying to out law it all and the right hand is working in the free market selling surplus.

  30. John Howard

    Suppose you are government and in the name of managing the economy, you blindfold your victims, and put leg shackles on them. Then, the promoters of liberty persuade you to remove the leg shackles and your victim – still blind – wanders into traffic and is run over.
    Paul Craig Roberts then declares that this proves that Laissez-faire doesn’t work, that the free market ideologues and libertarians are fools, and that leg shackle deregulation caused the accident. He would not discuss the blindfolds, since he is a statist who deeply believes that if regulations causes problems, the solution is further regulations, never complete freedom or complete property rights. He’s made his living off the extortion racket called taxation for much of his life and property rights and freedom are not things he has much of a feel for.

  31. Jeremy Horne, Ph.D.

    Greg Hunter made one error – he said he had only a generalist’s degree and didn’t feel himself all that qualified to comment. Wrong – Hunter is on target with keen analytical ability here, and we surely appreciate his sharing his interview with Dr. Roberts.

    • Greg

      Thank you Dr. Horne!!
      Greg

  32. Rosver

    I think, the problem is “the not-allowed-to-fail” regulations or deregulations or actions of the government when it comes to banks and other financial institutions. When banks and others makes mistakes that could bring them down, the USA Government of Perpetual Rescue comes and bail them out or something. While these actions stop these mistakes from creating “failure”, the causes for the failure remains and even worsen. Thus the mistakes happen again and again in escallating manner. The fallout becomes increasingly dire.

    If the government have let them fail and fall early on in the first place. The problem faced would not have been that potentially devastating.

    That is what I believed is wrong in here.

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