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The top of the stack you've heard about the financial problems in the European Union but what does it mean and how does it affect you.
The headlines this week all about the European currency the Euro possibly collapsing the -- -- Federal Reserve says they're gonna help.
The Fed helping countries or is the Fed really going in this bailout European banks and should we even held -- -- now.
Senator Rand Paul.
You know this is this hearkens back to the great debate about.
Should we have done TARP should we -- -- -- -- -- there's two schools of thought about all that are we are we back into that same situation where work.
Possibly using our Federal Reserve to bail out European banks.
-- yeah and how are they bailing them out they're bailing them out by creating new money that will potentially damage the value of the existing money so.
I see great ramifications not only to what's been done through TARP.
But in addition to TARP the Federal Reserve already bailed out many European banks in US banks to the tune of seven trillion dollars we now discover.
So I'm quite concerned about having.
All of Europe the Euro and all that on the line and somehow the US taxpayer through our Federal Reserve is going to be paying for it.
I think it makes a system weaker and ultimately.
Leads that calamity in Europe and draws it even quicker to the United States well it's.
It certainly is is another.
Leg in the moral hazard has been blown out of -- water completely on all of this but.
A lot of people don't you know they're busy they're going to work you don't have euros in their pocket they have dollars they don't they don't put -- -- -- together on this thing.
But it could could you connect the dots for is because if if the Fed has to print more dollars the dollar goes down in value.
It's a dollar goes down in value.
At least gasoline will go up if not everything now.
The other thing and we have to do is link that when a government runs a debt it's financed in a couple of ways taxes borrowing.
Or simply printing the money or monetizing it -- the Central Bank.
So in the Federal Reserve creates money to monetize our -- -- now it sounds like we may be monetizing the Europeans debt.
It steals from those who -- on fixed income.
So the people that hurts the worse when you get inflation -- rising prices are senior citizens and the working class.
And this needs to be driven home to people.
That when -- government runs a debt ultimately leads to higher prices.
And it is true when you read your local newspaper when I read my local newspaper in -- people are always unhappy about rising guys.
Gas prices but they're not connecting the dots your prices are rising because the value of your dollar is shrinking.
Is there anybody I mean I heard the president yesterday he met with European leaders.
European Union leaders I -- say he came out of it he said we're willing to help paraphrasing what -- had to say we're willing to help is there is there any.
Is there anybody besides you I know there are others but I mean is there any real movement in Washington to try to reach -- In any way this does continue bailing out of other people.
Where there's been some discussion with the IMF the international monetary time.
Many of the conservatives in congress worried about unlimited exposure to the US taxpayer.
Did the IMF and that's another vehicle use the Federal Reserve probably even bigger but there's potential for them to use the IMF as well.
But alternately there are repercussions.
There are repercussions as we destroy that I of our currency.
I'm still concerned about the seven trillion dollars we created in the last banking crisis.
Not -- the ramifications of that have come forward.
But it's an illusion I know the stock market went up yesterday but it's an illusion if you talk to people who are watching the European situation.
They were very worried about their being a calamity over there.
They're very worried about that contagion coming here.
Erskine Bowles has said the number one most predictable crisis in our country's history probably is the coming.
Fiscal crisis becoming debt crisis and so I'm very concerned at all has to do was an imbalance -- spending.
And borrowing 40% of every dollar we're borrowing 40000 dollars a second.
I don't think you can go on.
All right but how do you -- the the other side of the argument is that well we do a lot of business about 20% of our export business -- Europe.
If if they are not able to buy as many products -- -- then it's gonna hurt our economy how do you respond to that.
Where will the when your fiscally irresponsible and you spend more money than you bring in there are repercussions.
We can delay those repercussions they can Paper over them by -- money in bailing out all the banks.
But really it's unfair today -- working class in the senior citizens who absorbed the punishment of rising prices.
And he really is what's on both the Tea Party and somewhat the Occupy.
Wall Street movement.
That people -- in -- -- -- bankers making a hundred million dollars a year run their bank into the ground to bankruptcy in bad decisions.
And then they don't miss a beat they get a hundred million dollar bonus the next year.
All of -- guaranteed by the US tax prepare.
-- -- running out of money and we're running out of time.
And I think this is a temporary fix like a fix for a junkie.
We may feel well for a month or two but there's a coming crisis there's -- coming calamity -- coming.
Sovereign debt crisis worldwide.
And it would be better to try to fix it now rather than waiting -- we're in a chaotic situation.
Let last question I mean we can debate all day long about whether or not we should have bailed out the banks here in the US.
But they did pay back the about that we we gave them that's another whole story here.
But Europe isn't the same story at all Europe they're talking about maybe December ninth is kind of a deviate from whether the -- even -- have survived.
-- Well the other thing is if we reward and bail out bad behavior do you get more bad behavior.
Gives the control of a country or of the control of -- company to someone who can run the place better.
If you don't allow that to happen -- the same people keep making the same decisions.
That's true and our country and also around the world says -- -- should reward the bad behavior you should let the market clean those people out.
And get a new group of people to run those countries.
All right dinner Rand Paul always good to -- thank you very much.
Here and joining.
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