A former lawmaker warned that the US is "bankrupt" and that the Federal Reserve's strategy is "intended to create chaos."
2025-11-06 16:27:55
Former U.S. Congressman Ron Paul pointed out that the United States has fallen into "moral and fiscal bankruptcy." In an interview, he stated that the $1.9 trillion fiscal deficit is a "debt vortex" that will ultimately be repaid with "worthless paper money," and warned the public that "we must prepare for major changes."
In an interview on November 5, 2025, Dr. Paul provided an in-depth analysis of the intertwined impacts of multiple economic and political crises. This statement came at a time when the Federal Reserve injected $125 billion in liquidity into the repurchase market, while White House Treasury Secretary Scott Bessant publicly criticized the Fed's policies as triggering a "housing recession."
Dr. Paul suggests that these contradictory actions may have a deeper meaning. He analyzes, "Perhaps their strategy is to create chaos, ultimately forcing the public to submit and beg for our salvation."
Dr. Paul cited a series of contradictory economic data released on November 5th to corroborate this chaotic situation. Although the ADP report showed an unexpected increase of 42,000 private sector jobs in October, real economic indicators presented a different picture—McDonald's disclosed in its morning earnings call that "low-income customer traffic is declining by double-digit percentages," while the high-income customer base is still growing.
Dr. Paul emphasized that this "K-shaped" economic pattern confirms the falsity of the overall data, stating, "This simply cannot be the reality." He further cited the Institute for Supply Management (ISM) report released on the same day, pointing out that the price paid index surged to 70.0, while the employment index contracted for the fifth consecutive month to 48.2, fully confirming the existence of a stagflationary environment.
Dr. Paul points out that the core of the crisis lies in the U.S. balance sheet. According to the Congressional Budget Office, the federal government is facing a $1.9 trillion deficit, and the ongoing government shutdown is reportedly costing $15 billion per week.
He emphasized that the Fed's $125 billion injection was directly related to this—the Treasury issued huge amounts of debt to fill the deficit, forcing the Fed to provide corresponding liquidity to offset the deficit.
When asked about the Government Shutdown and Supply Management Association's report that listed most government functions as "non-essential," Dr. Paul bluntly stated, "That's a good thing. In my opinion, nearly 80% of government functions are non-essential."
He warned that this “debt vortex” would only lead to one end: “We will eventually have to pay this debt…there is no escaping it.”
Dr. Paul asserted: "The most likely way is to settle the debt by printing money excessively, you know, by simply turning on the printing press."
Dr. Paul’s allegations regarding the “moral bankruptcy” system were particularly sharp in discussions of a major case being heard by the Supreme Court.
The crux of the case lies in the president's invocation of the International Emergency Economic Powers Act of 1977 to impose comprehensive global tariffs, while critics point out that the Constitution explicitly grants the power to tax to Congress. Legal analysis shows that the Act itself does not mention the term "tariff," and no president has ever used it to impose broad import taxes.
The government argued that the authorization in the bill to "regulate imports" under a state of emergency was sufficient to cover tariff powers. However, Dr. Paul argued that this legal dispute reflects a deeper systemic flaw: Congress deliberately relinquishing constitutionally granted powers. He recalled initiating a declaration of war procedure based on constitutional provisions during his time on the Foreign Affairs Committee.
Dr. Paul recalled: "They suddenly became hysterical, and the chairman of the committee said...that part of the constitution is outdated, and we no longer abide by that clause. That's the root of the problem."
In response, Dr. Paul reiterated his belief in gold, but did not shy away from the real dilemmas faced by investors. When asked why he would allocate funds to gold when 10-year Treasury bonds offer a "risk-free" yield of 4.14%, he bluntly stated that the so-called "risk-free" yield is an illusion.
He issued a stern warning regarding the U.S. gold reserves. Speaking about the obstruction of the audit of the Fort Knox vault under the Gold Reserve Transparency Act, he said, "I have no way of knowing the truth because what they say is unreliable. Those limited audit procedures are all a charade."
He then made a startling deduction: "I suspect that even if the physical gold still exists, we have long since lost ownership—gold is often used as collateral leverage, and they lend it all out for cash flow."
Regarding the $4,000 per ounce gold price, he quoted a personal tweet from October 10th, issuing a final warning: "This is not the golden age the world has been hoping for." He emphasized that the high gold price is not a sign of victory, but rather a "thermometer-like alarm" for a rampant currency crisis.
(Spot gold daily chart, source: FX678)
At 16:26 Beijing time, spot gold was trading at $4013.10 per ounce.
In an interview on November 5, 2025, Dr. Paul provided an in-depth analysis of the intertwined impacts of multiple economic and political crises. This statement came at a time when the Federal Reserve injected $125 billion in liquidity into the repurchase market, while White House Treasury Secretary Scott Bessant publicly criticized the Fed's policies as triggering a "housing recession."
Dr. Paul suggests that these contradictory actions may have a deeper meaning. He analyzes, "Perhaps their strategy is to create chaos, ultimately forcing the public to submit and beg for our salvation."
K-type stagflation dilemma
Dr. Paul cited a series of contradictory economic data released on November 5th to corroborate this chaotic situation. Although the ADP report showed an unexpected increase of 42,000 private sector jobs in October, real economic indicators presented a different picture—McDonald's disclosed in its morning earnings call that "low-income customer traffic is declining by double-digit percentages," while the high-income customer base is still growing.
Dr. Paul emphasized that this "K-shaped" economic pattern confirms the falsity of the overall data, stating, "This simply cannot be the reality." He further cited the Institute for Supply Management (ISM) report released on the same day, pointing out that the price paid index surged to 70.0, while the employment index contracted for the fifth consecutive month to 48.2, fully confirming the existence of a stagflationary environment.
The debt vortex continues to escalate
Dr. Paul points out that the core of the crisis lies in the U.S. balance sheet. According to the Congressional Budget Office, the federal government is facing a $1.9 trillion deficit, and the ongoing government shutdown is reportedly costing $15 billion per week.
He emphasized that the Fed's $125 billion injection was directly related to this—the Treasury issued huge amounts of debt to fill the deficit, forcing the Fed to provide corresponding liquidity to offset the deficit.
When asked about the Government Shutdown and Supply Management Association's report that listed most government functions as "non-essential," Dr. Paul bluntly stated, "That's a good thing. In my opinion, nearly 80% of government functions are non-essential."
He warned that this “debt vortex” would only lead to one end: “We will eventually have to pay this debt…there is no escaping it.”
Dr. Paul asserted: "The most likely way is to settle the debt by printing money excessively, you know, by simply turning on the printing press."
The constitution is outdated
Dr. Paul’s allegations regarding the “moral bankruptcy” system were particularly sharp in discussions of a major case being heard by the Supreme Court.
The crux of the case lies in the president's invocation of the International Emergency Economic Powers Act of 1977 to impose comprehensive global tariffs, while critics point out that the Constitution explicitly grants the power to tax to Congress. Legal analysis shows that the Act itself does not mention the term "tariff," and no president has ever used it to impose broad import taxes.
The government argued that the authorization in the bill to "regulate imports" under a state of emergency was sufficient to cover tariff powers. However, Dr. Paul argued that this legal dispute reflects a deeper systemic flaw: Congress deliberately relinquishing constitutionally granted powers. He recalled initiating a declaration of war procedure based on constitutional provisions during his time on the Foreign Affairs Committee.
Dr. Paul recalled: "They suddenly became hysterical, and the chairman of the committee said...that part of the constitution is outdated, and we no longer abide by that clause. That's the root of the problem."
Gold Mystery: Doubts about not actually owning gold
In response, Dr. Paul reiterated his belief in gold, but did not shy away from the real dilemmas faced by investors. When asked why he would allocate funds to gold when 10-year Treasury bonds offer a "risk-free" yield of 4.14%, he bluntly stated that the so-called "risk-free" yield is an illusion.
He issued a stern warning regarding the U.S. gold reserves. Speaking about the obstruction of the audit of the Fort Knox vault under the Gold Reserve Transparency Act, he said, "I have no way of knowing the truth because what they say is unreliable. Those limited audit procedures are all a charade."
He then made a startling deduction: "I suspect that even if the physical gold still exists, we have long since lost ownership—gold is often used as collateral leverage, and they lend it all out for cash flow."
Regarding the $4,000 per ounce gold price, he quoted a personal tweet from October 10th, issuing a final warning: "This is not the golden age the world has been hoping for." He emphasized that the high gold price is not a sign of victory, but rather a "thermometer-like alarm" for a rampant currency crisis.
(Spot gold daily chart, source: FX678)
At 16:26 Beijing time, spot gold was trading at $4013.10 per ounce.
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