It's Supernatural

SID: Hello, Sid Roth here with Dr. Larry Bates, and Larry that is not a very optimistic painting, you just told us that, you said I know what is going to happen to the future of America, it is going to be one of two things, it is either going to be a collapse or it is going to be printing of money, which means big inflation.

LARRY: No doubt about it.

SID: Well what can the President of the United States do?

LARRY: Well the President can do very little, the only thing any president can do to help the economy is reduce your taxes. Now the recent Nobel Prize winner in economics at the University of Arizona, or Arizona State University in Tempe, criticized President Bush because he said he didn’t ask for enough tax cuts, and I agree with him. Now we are in the political season all the time, we’ve had one of the longest presidential races we’ve ever seen in history, and we have all of these candidates that many of them are illiterates when it comes to the economy, we have one candidate that is saying I am going to lower taxes for 95 percent of the American people, well forty to forty-five percent of the American people pay no taxes, so mathematically that is impossible to lower taxes. So is the candidate talking about additional welfare programs? That’s the question that I would have for that particular candidate. But in all reality the only thing the president can do is reduce the size and scope of government and reduce your taxes because here is the fundamental question for the individual, who can better spend the money in your wallet, you or some bureaucrat in Washington D.C.? Now I think that is fundamentally a no-brainer, but for those that are looking for a national nanny then perhaps there is another answer to that. But let’s go back to who really runs the country. The Chairman of the Federal Reserve, whether he be Alan Greenspan or Ben Bernanke, is more powerful than any president of the United States, he determines what the average persons car payment is going to be, what their house payment is going to be, even whether they have a job or not. Sid, I submit that is total control.

SID: Let’s get a little practical right now, real estate, they say that we are near bottom and things are going to get better, what do you think?

LARRY: Well they will get better, you pump enough money into the economy again, the economic equivalent of crack cocaine, you put enough for even a seasoned drug addict, and this economy is a drug addict for money infusion. See every succeeding cycle, the bubble gets bigger, a drug addict has to get a little bit bigger fix as time goes along, same thing with the economy, eventually what happens is we will have real estate prices will stabilize, I think real estate prices will stabilize in maybe twelve to eighteen months, but after that again we have a monumental task.

SID: It is a false stabilization is what you are saying.

LARRY: Oh no doubt about it.

SID: A temporary fix.

LARRY: A temporary fix.

SID: What about HUD and organizations like that who have been taken over by the Federal government, is that good or bad?

LARRY: Well you have Fannie Mae and Freddie Mac, again we forecast in our book, “The New Economic Disorder” four years ago, and our publication “Monetary and Economic Review” we said there will have to be a bailout of Fannie Mae and Freddie Mac, and we predicted that a lot of investment houses would go down. We also predicted that we would see money market funds drop below one dollar par value in the money funds. Sid, we are in a crisis, we are in one big mess. But that is the bad news. But here is the good news.

SID: I’m waiting.

LARRY: Okay, see none of what is happening here has caught God by surprise, he is not having an anxiety attack, he knew exactly what was going to happen on planet earth. What has happened is we have not pressed into his wisdom, and since we haven’t pressed into his wisdom we have gone by our own manufactured wisdom thinking that we could continue to spend, tax and borrow and not face any consequences, but now the chickens are coming home to roost.

SID: Let me ask you a couple more practical type questions, people that have money in banks, it is guaranteed, FDIC insurance, to what, a hundred thousand dollars?

LARRY: That’s right, two hundred fifty thousand for retirement plans.

SID: Okay, how safe is that guarantee?

LARRY: Well the FDIC can cover roughly one and a half cents on the dollar of all –

SID: That doesn’t sound safe, one and a half cents on the dollar?

LARRY: When we confront the FDIC with this fact they say well that is true but don’t worry about it, we have direct borrowing authority from the United States Treasury, so where does the Treasury get the money? Either tax the money, borrow the money, or print the money, you pay the cost of your own bailout. So you see this is the thing we have to understand, that when you get into a fiat money, meaning “no thing,” see this is a planned situation.

SID: Planned?

LARRY: It is planned.

SID: Who planned it?

LARRY: Well let’s go back, John Maynard Keynes, the architect of our current economic system, and anybody who studies economics at the high school, college, post graduate level will study Keynes in Economics. John Maynard Keynes wrote a book back in 1920 called, “The Economic Consequences of the Peace.” Think about that title. He said by continuing process of inflation, governments can confiscate secretly and unobserved an important part of the wealth of its citizens. He said there is no more sure; no more subtle way to overturn the existing basis of society than to debouch or destroy the currency. Now listen to this, he said it engages all of the products of economic law that come down on the side of destruction and does it in a manner that not one person in a million can diagnose.

SID: Are we going to have a brand-new money system?

LARRY: Very, very possibly, because if you look throughout history when currencies have failed in other parts of the world, you know the all mighty dollar, the greenback, has been for many years the reserve currency of every central bank around the world, but now a lot of people are dumping dollars, going to other currencies, dumping dollars, going to precious metals.

SID: So are there solutions to this crisis?

LARRY: Oh absolutely.

SID: And as a matter of fact, here is a Bible scripture that says, “The wealth of the sinner is stored up for the righteous.” I want to find out what we should be doing, we see what is happening right now, be right back after this word.