March 25, 2011 Beck: Do We Need the Fed? | Glenn Beck

March 25, 2011 Beck: Do We Need the Fed? | Glenn Beck With: Glenn Beck Special Guests | G. Edward Griffin, Mike Calabria This is a rush transcript from "Glenn Beck," March 24, 2011. This copy may not be in its final form and may be updated.   (APPLAUSE) GLENN BECK, HOST: Hello, America. Welcome to Friday. Tonight is a special show. I mean, every time we do a Friday show, it's always like, "Hey, let's talk about something really depressing where we all want to hang ourselves." Tonight, it's the Fed! Oh, it's going to be spooky. During the financial crisis, most Americans have heard a lot about the Federal Reserve, but most Americans don't know anything about it -- how it works, what it is, who even runs it or how it's run. They know that it buys our debt. It sets up interest rate. It has a lot to do with the economic well-being of our nation. What did you say? Where did it come from? Tonight, as part of the E4 focus, we're going to delve into E2 and get educated on the Fed. G. Edward Griffin, he is author of this book. And if one more person hands me this book -- I really, I'm going to snap because I get this from so many -- I go out and people are, like, have you read this book? Yes, I have. May I recommend -- have you read this book? If not, read it. It is "The Creature from Jekyll Island." It is a fascinating book on the Fed. The author is one of our guests tonight. We're going to start at the beginning. We're going to talk a little bit about what they're doing now, but I want you to know, we're just going to start at the beginning and, really, we're going to give the history of the Fed as told by the Fed -- the happy tale on their own Web site. Are you ready for this? It's great. Here we are. Here it is. Watch this. Quote -- on their Web site -- "After Alex Sander Hamilton spearheaded a movement advocating the creation of a central bank, the first bank of the United States was established in 1971." You see how great this is? The Fed was started by a Founding Father. No. No. No, it wasn't. No. The first bank isn't the fed. So, what does it have to do with anything? Well, nothing. But they just wanted to throw a Founding Father's name in there. The bank's charter ran for 20 years and because it took about 20 years before Americans realized, hey, that Bank of America thing, that's not working out. They've got way too much power and influence, just like all the other Founders said, a proposal to renew it failed. Now, back to happy story from the Fed's Web site. Quote, "The situation deteriorated to such an extent in 1860, a bill to charter a second bank of the United States was introduced in Congress." Second bank was very much like the first, except bigger -- about 3.5 times bigger. It's always that way, isn't it? Anyway, the charter lasted 20 years before people went, what are we doing? Americans realized it wielded too much power and influence and proposal to renew it also failed. Then according to the Fed Web site, they got rid of the nasty charter thing and will of the people. Quote, "In 1907, a severe financial panic jolted Wall Street and forced several banks into failure. Many Americans thought their banking structure was sadly out of date and needed major reform." The first draft of the Federal Reserve Act was called the Aldrich bill because of the guy who wrote it was named Aldrich and it failed. President Taft refused to support it. He was so fat they had to have a special bathtub for him. And then it underwent some surgery and reemission as the Glass-Owen bill and, of course, got a signature from progressive Woodrow Wilson in 1913. Well, that's the Fed's story. It was introduced in 1907. And in 1913, it finally came to be. Isn't everything great in sunshine and lollipop world? The Federal Reserve Act wasn't drafted in Congress. It was drafted on a private island off the coast of Georgia in 1910. Here is the island, Jekyll Island. And it was drafted under great secrecy. Jekyll Island was retreat for billionaires like William Rockefeller and J.P. Morgan. And in 1910, Senator Nelson Aldrich, the Republican whip in the Senate and the chair of the National Monetary Commission, sent his private railroad car to the New Jersey railroad station where he and five other men were instructed to come one at a time and everybody pretend they just didn't know each other. Aldrich who was the guy -- remember, he, wrote the original bill -- he was a business associate of J.P. Morgan -- oh, and the father-in-law to John D. Rockefeller, Jr. So, there is no special interest happening there. There was also Abraham Piatt Andrew, assistant secretary of the treasury, and Frank Vanderlip representing William Rockefeller. Henry Davidson and Benjamin Strong with J.P. Morgan. And Paul Warburg --he is a partner -- he was a partner at Kuhn, Loeb & Company. He was representing the Rothschild banking family. Oh, he's going to talk about the Rothschild now. He actually is an interesting character. If you ever saw little orphan Annie, Daddy Warbucks was named after Warburg. These are the men that represented one-fourth of the entire wealth of the world. You think we've got a problem with wealth now? Those guys -- one quarter of all the money in the world. The Morgans, the Rockefellers, Warburgs, and Rothschild all in one room. Yes. But when do they start sacrificing chicken? No, it doesn't happen. That I'll tell you. These guys were all competitors. According to G. Edward Griffin, who we will talk to in a minute, they all came together to form a banking cartel so they didn't have to compete against each other. He says it was like an oil cartel or a sugar cartel, but this cartel actually went in partnership with the government. I mean, how great is that, huh? It's kind of like the drug cartels in Mexico. Wait, I didn't say that out loud, did I? So, for more than a week, these men sat around there. And they sat around this big table and they hammered out all the details of what became the Federal Reserve System with five objectives. How many of these do you agree with? One -- to stop the growing competition from the nation's newer banks. That doesn't sound good. Two -- to obtain franchise to create money out of nothing for the purpose of lending. That one doesn't sound good either. Three -- to get control of the reserves of all of the banks so the reckless ones wouldn't exposed to currency drains or bank runs. Oh, that's the charity part. Oh, gee, Beave, thank you so much. Then to shift the losses from the bank owners to the taxpayers. It just gets better and better for you and me, doesn't it? No. Again, the answer is no. And then, finally -- to convince Congress the purpose was to protect the public. Well, they started the Federal Reserve with no money, just a checkbook. The government could go to the Fed and obtain instant money without having to consult the taxpayer. What a country! Money is created out of nothing and then given to the government. It's loaned by the banks to you and me and then we pay interest on it and it goes to them -- interest on nothing. Again, the Fed is nothing more than a cartel like OPEC, except it's a money cartel. And this cartel brought the federal government in to a partnership, where you and I have to answer to it. And it's only to enforce the rules of the cartel, you know, to bring those into agreement with the federal laws to protect you. It operates under the protection of the federal government and the government has virtually given a monopoly to create the nation's money supply. There are no elected officials. There's virtually no accountability to anyone. The president doesn't get to say, I'm going to name Glenn Beck as the head of the Fed, which -- oh, please! Sarah, when you're in, I'm available. Oh, did I say that one out loud, too? You can't do that. The Fed gives the president a list to choose from. Really? Well, thank you, Chairman Mao. The Fed is privately owned but by whom? Good question no one knows. We can't open their books and we don't know who owns them. Really? Now, here's an interesting spin from the Federal Reserve board Web site. "Although they're set up like private corporations and member banks hold their stock, the Federal Reserve banks owe their resistance to act of Congress and have a mandate to serve the public." Therefore, they're not really private companies, but rather owned by the citizens of the United States. Well, that's fantastic. Let's all go to the bank and make a withdrawal. Or how about we lower interest rates at the bank we own. Yes. The next question and the answer on the site is -- are Federal Bank employees considered government employees? Answer? No. Employees of the Federal Reserve Bank are not government employees. They're paid as part of their expenses. They're employee and reserve bank. Also, it's like charity. That's interesting. So, it's not really private. It's not really public. It's just this mysterious, magic money dispenser that buys all of our own debt, sets our interest rate, sets our economic policy, loans billions of dollars to other countries, helps us borrow billions of dollars from other countries and then prints money out of free -- just out of thin air and there's no drive- thru window, but everything else sounds magical, doesn't it? Yes. I have news for you -- there is a lot of people when you start talking about the Federal Reserve, they start going into -- and then, the Bilderbergs, along with Colonel Sanders, got together and they start going down crazy roads. There's no reason to do it. It's crazy enough. Let's talk about just the facts, shall we? Let me introduce you to a couple of guests because I think we have -- I think we have some interesting times ahead. And I have a feeling the audience is waiting. G. Edward Griffin is the author of the "Creature from Jekyll Island." And Mike Calabria is the director of financial regulation at the Cato Institute. How are you, sir? MARK CALABRIA, CATO INSTITUTE: I'm doing well. Thank you, Glenn. BECK: Did I get it right as far as you're concerned? CALABRIA: Mark, but -- BECK: Oh, did I say -- what did I say? CALABRIA: I think you said Michael. BECK: Oh, I'm sorry, Mark. CALABRIA: My brother will be -- BECK: So, Mark, did I get it right? CALABRIA: Yes, you did. BECK: OK. Let me go -- I want to make sure I get G. -- do I call you Edward, or G. Ed? G. EDWARD GRIFFIN, "CREATURE FROM JEKYLL ISLAND" AUTHOR: Edward will work just fine. BECK: OK. How about G. Money? (LAUGHTER) BECK: Edward, did I get the story right? And what did I miss? GRIFFIN: You got the story very, very right. A lot of very interesting details, of course, we don't have time for in a program like this, but the essence of it, you got exactly right. BECK: OK. What did I miss that is important? In fact, let me go here. Let me go here. I'm going to show you this time line. And this time line shows all of the crashes, not the panics, but the crashes in the United States -- a crash in '35, one in 1880. And then it kind of picks up, 1880, 1896, 1900, 1903, 1907. And then nothing until 1929, '37, '38, '46,' 62, '87. There seems to be this clump of crashes here. Is there anything nefarious about those crashes or is this just bad policy and everything else? GRIFFIN: Well, there are two things. First of all, you asked if there was anything that was left out. As I said, the important items were there but there's one thing that you might want to explain to the audience. And the reason for the secrecy that you mentioned, why were they concealing their identities? Why did they deny they went to this meeting? And the answer is because if the American people had known that this bill, which was supposed to protect the American people from the big bad bankers, was actually written by those same bankers, well then the scam would have been out in the open. And that's why they had to keep the whole thing secret so many years after the meeting took place. BECK: OK. So, Edward, hang on just a second. We just did a story this week where the unions and all of these people are saying the big bad banks are getting all of our money. And I thought to myself, wait a minute, the unions are the ones that racked up all this debt. And then the government takes the money from the taxpayers and then has given it to the banks -- the banks that are, through the central bank, causing all of this problem. Mark, can help me on this? I mean, it's -- CALABRIA: Very much so. I mean, what we've seen is the central bank pushing all of this money in the system. The Federal Reserve very much played a key role in creating the housing bubble to begin with. And you might remember, after the dot-com bubble burst -- BECK: Right. CALABRIA: -- after 9/11, we cut rates, the Fed cut rates. Greenspan took them to historic lows. The mortgage market, the housing market took off. And eventually, that bubble was going to burst. And it burst in 2006 when the Fed started raising rates. So, they played a very big role in this. And they're trying to create bubbles today. If you look at what the quantitative easing is doing. You look at the interest rates you're seeing now. BECK: Would you agree with me, it's the last one -- it's the last bubble? I think I dubbed this -- maybe in 2005, I said housing bubble, and then we're going to have the last one, the money bubble. CALABRIA: Yes. BECK: It is the last one, too. CALABRIA: Well, let's hope it's the last one. I suspect that after this bubble burst, the Fed is going to look for ways to try to create another bubble, to try to make us forget about the last bubble. And that's really the way they were doing it. There's a very conscious attitude in 2003, 2004, to say, OK, we're coming in the off the recession across the dot-com bubble. What do we do to make people feel wealthier? What do we do to get people to go out and spend? And what they decided to do was, let's gin up the housing market. Everybody will feel like they have a lot of money, put a lot of people to work. And so, what are they trying to do now? Let's gin up the stock market. And so, they're really is creating one bubble to try to offset the effect of the last bubble. BECK: OK. So, Edward, let me go back to you. We see the way they're working the bubbles now. But let me go back into the past. We see this clump of crashes here. And I know -- correct me, if I'm wrong. I think it's like a panic in the 1890s, 1892, or 1896, where I believe it was J.P. Morgan that loaned money to the United States. He came in and personally bailed out and said, I'll lend you money. Then another one happened in like '03. And he said, you know, I can't do this anymore. You guys are on your own. But I'll get my friends together and bail you guys out one more time. And they did. And that's what kind of led to this. Correct? GRIFFIN: Well, that's exactly the historic origin of it. But I think underlying this, we have to recognize the principle of the Ponzi scheme. The system really is a Ponzi scheme as we're living through it right now. It works as long as the money supply continues to expand and expand and expand. Like any Ponzi scheme, you pay off the first investors so that they're very happy. They bring in the new investors. As long as it expands it works. But when it finally stops, the whole thing comes to an end. That's why they have to keep expanding the money supply. Well, when you create money out of nothing, you also face the fact that money goes back into nothing. So, this kind of a system makes the expansion and contraction inevitable. The booms and the bust are inevitable. If the money were backed by something solid, like gold or silver that you just couldn't create out of thin air, well, then there wouldn't these contractions or expansions. It would be a nice, even a playing field. BECK: Most people think our money is kind of backed by something in Fort Knox. And I have talked to several congressmen who have asked to go see the gold in Fort Knox and they can't go see the gold in Fort Knox. It is -- I mean -- CALABRIA: You know, sort of surprising, because one would think that congressmen -- I can understand why they wouldn't let me see it. I might want to take it out with me. BECK: Well, the largest collection of gold is here at the Federal Reserve, right? CALABRIA: Exactly. BECK: And that's not American money. That's the Fed's. CALABRIA: That's the Fed's and a lot of what the Fed -- the New York Federal Reserve keeps is gold for other people. BECK: Right. CALABRIA: Like they might be gold for the Bank of England here in New York that they're keeping. And they quite often just put it on a cart and move it from one person's account to another. BECK: Edward, do you believe we have a lot of gold in Fort Knox? I mean, a lot of gold in Fort Knox? Is it still there? GRIFFIN: I think it's very naive to think that we have any gold there for the reason you said. If they had it, they would show it. It's as simple as that. BECK: OK. GRIFFIN: We don't have any gold there. BECK: Back in just a second. (APPLAUSE) (COMMERCIAL BREAK) (APPLAUSE) BECK: All right. I want to go -- I want to introduce you to our guest. G. Edward Griffin, the author of the "Creature from Jekyll Island," which is a book you must read. And then Mark Calabria, he is the director of financial regulations studies at the Cato Institute. Let me go to Edward here for this question. Whenever you go and talk about the Fed, it immediately goes into crazy town talk. It immediately goes to -- and then Rothschild took a bottle of wine and kept little orphan children in there while they were sacrificing virgins in volcanoes. (LAUGHTER) BECK: And you hear this crazy stuff when the truth is scary enough. Where does it come from? Or why do people feel compelled to go down into crazy town when just sticking to these facts alone should petrify people? Or do you -- do you believe it is crazy? GRIFFIN: I don't know the answer to that. Well, I don't know the answer to that. I do know that what you say is true, although I find it less and less true. I think in the beginning, when I first began to research this, the reliable information on the Fed was pretty hard to find. So, all you really had was this kind of garbage to choose from -- a lot of speculation, a lot of theory, a lot of fantasy. But now, there's quite a bit of hardcore information out there and I see that less and less of that is in the way after they record (ph) that. BECK: Do you think -- do you think -- I remember, you are talking to the chief conspiracy theorist on Planet Earth, I believe I've been dubbed now. Do you believe that this actually kind of works to their advantage? You can just dismiss people? Oh, that's crazy. When you say I want to look at the books of the Fed, I want to know who owns them -- explain to me who is the owner of the Fed? Who is issuing all of this debt? Who's making all these decision or money? And show me your books. They immediately can say -- oh, really, yes, you don't know who owns this, right? They're like, well, no, that one was a fact. Don't you think it works to their advantage? Either of you thought of that? CALABRIA: I think it very much does. What they're trying to give you the perception is, I mean, it's monetary policy. I mean, we need to have a bunch of PhDs around the table. BECK: Right. CALABRIA: But this is just too complicated for you to understand. Don't worry yourself, trust us. You know, we'll get it right. We are -- you know, we've got the public interest at heart. BECK: How frightened were you when you heard Greenspan in an interview say there is stuff in the CDOs and everything else that I don't even understand. And I'm like, what? CALABRIA: Well, that's one of the reasons for the secrecy. I -- they're I think scared to death that we will figure out that they don't know what they're doing, and the whole gang -- the whole show will be up. We will figure out that they don't know how to run the economy. They don't know how to run monetary policy. BECK: Oh, I don't think it's all a secret. CALABRIA: No, it's not. They haven't figured out that. They still think they got us snowed. BECK: Edward, when you look at the Fed -- any idea who's getting rich? Do they walk away at the end with piles of money? If we all lose, do they -- are they still -- they're fine? Who's walking away with this? GRIFFIN: I don't see it that way. I think these people already have about as much money as they could possibly spend. They started off with so much wealth and another mansion, another jet, another yacht, it doesn't make that much difference. I think what these people are doing, Glenn, is they're taking the leverage of this power, this financial power, and they're converting that into political power. Their vision now is much bigger than just making money. Their vision is really in terms of controlling nations and in controlling society and controlling the world. We've all heard that famous phrase, "a new world order." They use this phrase over and over again. It's their phrase and they're really serious about it. They are taking the money and they are buying up political leaders, they're buying up media outlets. They're buying up larger organizations, influence labor unions and so forth. BECK: Wait, wait, wait. Show me how that -- give an example of where they are buying up the media organizations or labor unions. GRIFFIN: Well -- all right, here's how it works. You know, the human being is a herd animal. We follow in groups. We follow leaders. And so, all that anybody needs to do to control the society is to control leadership of that society through what these people call the power centers. Those are the large organizations -- you know, the things that people belong to when they have leaders and they follow. They respect leaders. We're talking about political parties, labor unions, church organizations, obvious things. BECK: Got it. GRIFFIN: So, they know that if they can dominate just the heads of these organizations, half of 1 percent of the population that is in control of the power centers, they've got the masses in line. BECK: OK. GRIFFIN: And so, when you look at the tops of these organizations, they're all in line with the Federal Reserve, with the new world order, and that sort of thing. BECK: OK. GRIFFIN: Not the membership, but the top. BECK: It's the Saul Alinsky principle of organize the organized. Let me come back. Audience questions and then I want to ask you, Mark, about Ronald Reagan. The story is that Ronald Reagan was kind of taking on the Fed and rattling the cages and the Fed taught him a lesson. And he kind of went back into line. We'll get into that in a second. (APPLAUSE) (COMMERCIAL BREAK) BECK: We're back now with D. Edward Griffin and Mark Calabria. Edward is the author of "Creature from Jekyll Island." If you haven't read this book, you should. Are you surprised, Edward, on how many people are reading this book now? It's got -- I mean, how long ago did you write this? GRIFFIN: How long ago? BECK: Yes. GRIFFIN: Well, it was published in 1994 -- 1994 was the first year. And I'm totally surprised because it's a big, thick book, as you know. I thought it would be good for a doorstop. (LAUGHTER) But amazingly, people really have taken an interest in it. BECK: Yes, it's got to be flying off the shelves because, I mean this sincerely, I probably have 100 copies of this myself because people come up to me all the time and say, you got to read this book. And I'm like, no, I have it. They're like, no, you got to read this book. Then I'm like, no, I have -- and so I just -- now I just take it. And it's an -- it's an amazing read that, you know, most people have never taken this journey down. I want to go to Ronald Reagan here for a second with you, Mark, and ask you because I've always heard that Ronald Reagan, you know, after the 1970s and Jimmy Carter, which was kind of a mild version of what I think we're -- we're in now. Wow, that's scary, isn't it? He came in and he wanted to change some things and the Fed -- the story is is that the Fed taught him a lesson. True? CALABRIA: There was a lot of push back on the regulatory side and that's the reason, if you remember, that Reagan reappointed Volcker one time, but he did not reappoint him the second time and -- because at that point they were not getting along all that well and there were pretty big differences in policy. And this is despite Reagan was supportive of Volcker's efforts to bring inflation down. Most of the disagreements were really on the regulatory side. Reagan and his treasury department wanted to redo banking regulation in a way that Volcker did not agree with as well as, you may or may not know, that the regional presidents have to be approved by the Federal Reserve here in Washington. And so there were a number of people that -- that Reagan wanted to get appointed to regional Federal Reserve Banks and these were hard money people. These were people who were inflation fighters. And Volcker vetoed them. So he kept pushing Reagan's people out of the Federal Reserve System. BECK: OK. Edward, if people had to know one story of the Federal Reserve that would turn their hair the color of mine, what would it be? GRIFFIN: That would be what I call the Mandrake Mechanism. That's the process by which money is created out of nothing and put into the economy and withdrawn from the economy. If that doesn't cause your hair to turn white, I don't know what it is. BECK: When they said -- when they on Capitol Hill -- when Bernanke said, we will not monetize our debt. I got on the air that night and said, he's already lying, but -- GRIFFIN: That's all they know how to do. BECK: Pardon me? GRIFFIN: That's all they know how to do. BECK: Right. And they monetized the debt, but they're still claiming -- I don't know if they are now, but they were a few months back that they're -- they are still claiming. CALABRIA: They're still saying we're not going to monetize -- BECK: But they are. But they get away with saying, we're not printing money, we're just digitizing it. CALABRIA: Yes. You might remember there was that big interview with Bernanke and he said there right out, well, you know, we're not creating new money. I mean, they physically weren't printing money, but, of course, if I took something -- a bank account and just here we are on the computer and putting my money in your account, you'd feel like you have more money. So they were creating money electronically. So he very narrowly said, we're not printing more money. I mean, it was absolutely disingenuous. I mean, of course they were creating more money, they -- BECK: Do you believe that we are headed for real tough times? CALABRIA: I think we -- I think we are headed for a real tough time and I think we could potentially -- you mentioned, you know, a bad version of Carter -- we have the potential to be back in the '70s sort of situation. Remember the word "stagflation" went away for a while, but we might be looking at a situation again where you're happy with high inflation and high unemployment. BECK: How many -- how many people here would just -- well, would be like the manna from heaven if we only hit the 1970s? (LAUGHTER) BECK: We'd be like, oh, wow, it's only as bad as Jimmy Carter years. That's fantastic. Edward, your opinion on can we get rid of the Fed? Is it possible? GRIFFIN: It's technically possible because the Federal Reserve was created by an act of Congress and it can be abolished by an act of Congress. But what must happen before Congress has the backbone to do that? There has to be a complete change in Washington because, by and large, the people that are in office today are very much beholden to this creature that are not going to do it. BECK: Well, but -- GRIFFIN: Political agenda here. BECK: If you have people who, like you say, can -- can control through monetary policy, you'll never get those people. You'll never make that change because they would control too much of the money. I mean, they could make the pain enormous. Am I wrong in that? GRIFFIN: Well -- that -- no, you're quite right. In fact, we have the precedent for that during the -- the fight between President Jackson and the Second Bank of the United States. The head of the Central Bank, which was that version of the Federal Reserve today, his name was Nicholas Biddle. And he fought back exactly that way. When Jackson tried to generate support for getting rid of the Second Bank, he said, "I will pull the country down." He said, "The nation will fall, the people will fall, but the bank will not fall." That was his exact quote. And he practically succeeded in doing that. So you can be sure in a contest of this kind where we're challenging the Federal Reserve power, there's no question in my mind that they will pull out all the stops and try and ruin the economy and then blame it on the fact that we were challenging the Federal Reserve. BECK: Let me ask this one question from you, Mark, and then we have to take a break. And that is, how much of -- how connected are the central banks? How connected -- I mean, how much -- when I saw them say, you know what, we're going to devalue everybody's money here for a while to help Japan out. I thought, wait, wait, hold it. Don't you really -- shouldn't you talk to maybe, I don't know, the people of the world? And they're just moving together as one, central bank to central bank. CALABRIA: There really is a bankers' club that's been there since the beginning. For instance -- I mean, even among mainstream economists, it's only recognized that the Federal Reserve of New York's efforts to support British pound and support the Bank of England in the 1920s helped cause the stock market bubble here. And you see that it's been continued ever since. I mean, we went (ph) of money during the crisis to other central banks and this is the problem. It's that they talk to each other. You know, so their constituency is protecting each other and making each other look good, not essentially listen to the what the American public wants. So I do think there's a real problem that they're not looking out for our interest as much as they're looking out for the interest of each other. BECK: Back in just a second. (COMMERCIAL BREAK) BECK: We're talking about the Federal Reserve System, and we're back with G. Edward Griffin and Mark Calabria. And we want to go to the audience here who has sat patiently, and I want to start with Nicole and your question about the Fed. NICOLE: OK. In the Weimar Republic, they flooded the economy with currency to like jumpstart it. How much money would have to be flooded into our economy, either in like dollars or percent of the GDP, to have that same situation as they had in the Weimar Republic? CALABRIA: The inflation rates you saw in Germany in the 20s were off the charts. I mean, literally people were getting paid twice a day so that you could go to the grocery store before prices doubled. And you know, literally, you'd be there and get a cup of coffee and by the time you got your next cup of coffee it was more expensive than the last cup of coffee. So we're talking, you know, interest rates, inflation, double digits over the course of a day. BECK: You have Zimbabwe. CALABRIA: Yes. Zimbabwe. BECK: You have Hungary. CALABRIA: So it's very feasible, but we are a long ways away from that. You know, I think worst case scenario for the United States is we're going to start to see inflation in the high single digits. Now, I think that that's important because even at a two percent rate of inflation, which the Federal Reserve tells us is price stability -- at a two percent rate of inflation over 30 years half of the value of any asset is wiped out. So you know, this slowly erode over time. Now, obviously, when you get to something like 10 or 20 percent inflation, you're just running to stay ahead and keep -- protect the wealth you have. BECK: Edward, do you -- do you have any point of context here on the printing of money? They're now talking seriously about printing money as a way out of this unsustainable debt. GRIFFIN: Well, that's always been their theory. They're just talking about it more openly now. And that's -- as I said a moment ago, that's their only trick. And so we can anticipate that's the trick they're going to play. But in terms of inflation, I am not quite as optimistic about the inflation rate or as impressed by this two percent or three percent figure. I believe that the government is not telling us the truth about the true inflation rate. BECK: You think? (LAUGHTER) GRIFFIN: I don't think I'm alone in this, obviously. But what is the true rate? I believe, from what I can see, that it's up -- it's pushing up to about 20 percent right now. It may be not that high, but that certainly is the rate at which gold is expanding and, historically, that's always been a very accurate measure over a long period of time of true inflation. BECK: Well, here's the -- GRIFFIN: But how far can that go? I don't know. BECK: Well, here's the -- here's the thing. Everybody -- all the experts will tell me because they digitize the money, that they -- and most of the money is sitting in banks that -- you know, these people who are trying to collapse our economy, they say, they got -- the banks have the money, we want that money. What the experts will tell you is, well, no, we're not -- we're not going to cause inflation because banks -- the banks have that money and so it's not in the system. It only is a problem when it's pushed out into the system. Well, the problem is not just inflation, but if you want to pull all the money back, you have to pull it back by higher interest rates. So how high do the interest rates have to be? Let's not talk about inflation. Let's talk about I'm going in to get a loan. How high do the interest rates have to be to pull and suck all of that money back in to the Federal Reserve? CALABRIA: Well, you remember -- GRIFFIN: I don't know the answer to that. CALABRIA: -- during the early 80s, the prime rate got over by 21 percent. BECK: Right. CALABRIA: And so, one should start with we're going to see higher interest rates either because of inflation and/or the Fed having to raise rates to fight inflation. BECK: I will tell you that I talked to Art Laffer -- this is two years ago -- and I said, Art, how high do they have to be? And he said, Glenn, I'm not going to give you a number. He said, substantially higher than what we saw in the 1970s and 80s. My question to him was, how do you not stop the heart of the economy if you've got, let's just say, 25 percent interest rate? But nobody has an answer on that one. So how would you stop -- how would you -- CALABRIA: You throw the economy into a recession. That's what happened in the early 80s. We had a very deep -- fortunately, it was a relatively short recession, but it was a very deep and painful recession we had in the early 80s, and that was with the federal funds rate of just around 21 percent. BECK: It only works if you have a free market system and people who know -- who are willing to experience the pain and know how to go out and start business. Back in just a second. (COMMERCIAL BREAK) BECK: We were just having an interesting conversation here with Morgan. How old are you, Morgan? MORGAN: I'm 23. BECK: You're 23. And you just asked the question during the break, I don't have anything. MORGAN: Right. BECK: What do I do? Right? MORGAN: What do you do when it all comes crashing down if you haven't -- if you don't have anything because you're just starting out? CALABRIA: I do think you need to be concerned. I mean, fortunately, for good or bad, you're not in as bad shape as people who are savers. I mean, the people who are really getting hit the worst by this are people who have been saving all their lives, who are near retirement. You, hopefully, have enough time to plan against this. You need to put yourself -- I mean, the first, most immediate thing you can do is build your own human capital because labor will always be worth something and brains will always be worth something. And, hopefully, they can't inflate that away. But any physical wealth is going to be something that you got to find a way to protect yourself and hedge it. You can look at a variety of commodities, whether it's silver or gold or whether it's even food (INAUDIBLE) even if it's land because all of those things tend to hold their value in inflation. BECK: And then buckle up. CALABRIA: Yes. BECK: And then buckle up. Who was it? Was it Alex or -- it was Steve. Yes, Steve. STEVE: But there really is gold that backs the ETFs? (LAUGHTER) BECK: That's the electronic transfer, right? That's gold -- that's paper gold. CALABRIA: The operative word, I guess, here is backs. You know, when the Federal Reserve started out 1913, you had to have 40 cents of gold for every dollar that they issued. We're not even at one cents for every dollar that's issued. So in no way could you go and get gold for your dollar bills. Now I think an important part -- we talked earlier about what would make people change their mind about the Fed. I think a lot of people have forgotten that up until 1971, when Nixon took us off the International Gold Standard, there was an anchor that kept -- that kept the dollar somewhat stable. And you really didn't see a burst of inflation in history until after that happened. So if we did nothing but went back on a gold some sort of standard, internationally, you get a really big concern on the Federal -- BECK: OK. Let's go back there because Ed -- Ed had a question here about the gold standard. Right? ED: I understand there is a bill in the North Carolina House HR301 to create a state-based currency backed by gold and silver. BECK: And Utah just backed -- just passed a bill and the governor signed it saying, we'll accept gold now or U.S. dollars. I don't know how they're going to get away with it. But I want to go there and even get back to a gold standard without massive pain next. (COMMERCIAL BREAK) BECK: Can gold -- the states that want a gold standard, like Utah, good idea, bad idea? CALABRIA: I think it's absolutely a great idea. I mean, when you can't trust and you can't wait on the federal government to fix this, the answer's going to come from somewhere, it will come from the states. BECK: And let me give you this answer. I think it's even smaller than that. The answer's going to come from you. Somebody in the audience said, well, geez, if we don't have anything, what are we going to do? Look at our pioneers, look at the pilgrims on the Mayflower. They had nothing. They not only survived, they thrived because they had each other and they had God. Look to somebody who actually has some answers for the answer. Not the Federal Reserve. From New York, good night, America. Content and Programming Copyright 2011 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.   Carl Ray Louk "FRIENDSHIP NEVER ENDS" SG-1996 "LET LOVE LEAD THE WAY" SG-2000 "THE PHOENIX SHALL RISE" SD "EVEN A MAN WHO IS PURE IN HEART AND SAYS HIS PRAYERS BY NIGHT, MAY BECOME A WOLF WHEN THE WOLFBANE BLOOMS AND THE AUTUMN MOON IS BRIGHT." 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