Tom Woods: We are in uncharted territory
Award-winning historian Tom Woods joins the podcast to debunk the myths we are taught about central banking and discuss how we can break free from the Fed’s economic mismanagement.
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Additional Resources
Earn 12% in our Silver Bond offering
Earn Interest on Gold and Silver
A Short History of Paper Money and Banking in the United States
Alan Greenspan’s “Syntax Destruction”
How to Earn Passive Income in Gold and Silver
The Economics and Ethics of Private Property
Podcast Chapters
00:00 Tom Woods
00:49 – Lessons from the Great Depression
02:49 – Conventional Wisdom and Economic Crises
04:05 – The Business Cycle and Artificially Low Interest Rates
07:50 – Soviet Central Planning vs. Free Market Economy
9:24 – Public Perception of the Federal Reserve
11:59 – Comparing US and Canadian Banking Systems
17:27 – The Impact of 1971
24:02 – Inflation and Its Impact on Savings
26:17 – Personal Strategies for Financial Independence
33:27 – Lessons from Uber and Bitcoin
36:58 – Deflation
38:13 – Breaking the Index Card of Allowable Opinion
43:06 – Lightning Round
43:49 – Voting with Your Feet
44:25 – Historians with Valuable but Disagreeable Views
44:54 – Must-Read Books for Libertarians
46:33 – Favorite Travel Destinations
48:00 – Memorable Tom Woods Show Episodes
49:14 – Changing Mainstream Narratives
50:01 – Unique Personal Opinions
51:41 – The Value of Print
51:57 – Questions for Future Podcast Guests
52:25 – Where to Find More Tom Woods
53:50 – Monetary Metals
Transcript
Ben Nadelstein:
Welcome back to the Gold Exchange podcast. My name is Ben Nadelstein of Monetary Metals. I am joined by Tom Woods, author, political commentator, historian, and the winner of the Hayek Lifetime Achievement Award. Tom, how are you doing today?
Tom Woods:
Ben, great to be here.
Ben Nadelstein:
Tom, you’re one of the few historians we’ve had on the podcast, so I want to jump in on what investors and our clients could potentially learn some economic insights from history. And obviously, the Fed has cut their interest rates recently. There’s been a lot of talk about depressions and recessions and all these things that could happen because of the way the Fed is manipulating interest rates. But what are some of the lessons that we should have learned from something like the Great Depression, which is, Hey, we got a lot of stimulus, and that saved our economy, basically. Should we be thinking about that Great Depression lessons when we’re now facing 2024? Or are all those historical lessons just the past.
Tom Woods:
Well, the problem is what lessons do you learn? Because the lessons they want us to take away from the Great Depression are not the correct ones. This will come as a giant surprise to everybody. Remember Ben Bernanke saying not too many years ago that Milton Friedman had explained what the Fed had done wrong, and we learned that lesson and we won’t do it again. But Milton Friedman is a wonderful man with many great insights, but this wasn’t one of them. He was not good on the subject of the Great Depression, because his argument was the Fed is to blame because it wasn’t activist enough. Now, that’s the thing that Kamala Harris would say. That’s not why the Fed is to blame. That’s not ever why it’s to blame. It’s because it did too much. So the problem is that what happens in American history, and probably in other countries, too, is that a conventional wisdom about some important event, some crisis in history, ossifies into a conventional wisdom that is very, very hard to crack once it dries, basically. And so whether it’s the 2008 financial crisis or even COVID, more recently, the conventional wisdom there is that wise public health officials tried to navigate us through this, but all these dumb-dums who won’t listen to science were standing in the way.
I mean, that’s the conventional wisdom. So the depression, the usual explanation, though, isn’t a monitorist one. The usual explanation is something like, well, there was a big divergence between rich and poor, and people couldn’t afford to buy products, and whatever, like a Keynesian under-consumption explanation. But if an under-consumption explanation were correct, then the correction should have been the most severe in consumer goods industries. But you can look at the statistics and see that it was… Like heavy machinery was the worst, all these things that no consumer buys. No consumer buys a steam shovel. No consumer buys all these things. So that was where it was getting hit. So our view, like the view, and when I say our, I mean, I’m implicitly including you. An Austrian school approach would be to say that the problem in the 1920s was actually that there was, as I think it was the chairman or president of the New York Fed said that we need to give a coup de whisky to the stock market, which, okay, well, you know what happens after you drink whiskey. You don’t stay happy all the There’s a reckoning after that. And so there was a reckoning for that.
So that what happens is that when the Fed is, as we euphemistically call it, accommodating, it’s true that you get what seems to be favorable business conditions. But we all, in the abstract, we would all love to have low interest rates. Who wouldn’t? But interest rates, like anything else in the market economy, are what they are for a reason. If you can’t understand what What’s the downside to artificially pushing interest rates down? If you don’t understand that there could be a downside, then you haven’t understood what’s going on. And there is a downside. And in effect, I could go on on this forever, as you know, but it sets the business cycle in motion, because it’s in effect, instead of bringing interest rates down because we have more saving, and therefore there are more resources available to use to undertake more long term projects, if instead the interest rates are coming down because we’ve basically given Red Bull to the economy, then that’s going to have a reckoning. And so, yes, so that is something that we need to understand. If we go back about 10 years earlier, if we go back to 1920 to ’21, we have a case there where we had a double-digit unemployment.
We had all terrible production numbers, just catastrophically bad. But then, Warren Harding got elected. And by the time Herbert Hoover was trying to convince him to do something, the thing had already reversed itself. Joseph Schumpeter, who was not an Austrian school economist, but I would say he’s broadly somebody we would benefit from listening to, he said that that episode really is a case study in how the market economy corrects itself. Sometimes there’s this false dichotomy, should we do something or not? We need to do something. The question is, who is the we? We do need to do things. Entrepreneurs, absolutely. After the government has screwed things up and misallocated resources through its central bank artificially lowering interest rates, entrepreneurs have to figure out, well, what really is sustainable? Which of these investments are sound? Which one should persist and even expand and which one should contract? Yeah, we need to do that. They don’t need to do anything. They’ve done enough. But what normally happens is they come along and say, well, we can’t just stand idly by. You should stand idly by. Let us sort out this mess. But what they’ll do is fiscal stimulus, monetary stimulus.
So again, you’re pushing along this Frankenstein economy that was created by a mad scientist instead of a Charles Atlas economy that was created by effort and real investment and sensible decisions. So I would say, yes, there is a lot that we can learn in history, and yet we are doomed to sit back and watch everybody else not learn it or learn the wrong things. And I’m telling you, what is in your textbook, what was in that textbook when you were in the seventh grade, is just not going to do you any good these days. If you’re relying on that, you’re not going to get very far.
Ben Nadelstein:
Yeah. One way to think about this is that one reason we all criticized, or most of us, criticized the Soviet economy was that they had central planning. They had a board and a Czar and, Okay, we’re going to have a five-year plan, and we’re going to check on wheat production, and we’ll have this much this much wheat and this much steel and this much oil, just by diktat, just by fiat, saying, Hey, we’re going to make this much. They didn’t ask, Okay, does the economy actually want that much steel? Do people actually need that much wheat? They just decided, Hey, we’re going to pick this number, and that’s what we’re aiming for. So sometimes you had people just going for the pure quantity instead of the actual quality. And so, of course, there’s these horror stories.
Tom Woods:
Yeah, absolutely. And things like, look at how much concrete we produced, citizen, when everybody else is producing computers by that point. And there was a point where, I forget how many millions and millions and millions of computers Americans had, like by maybe the mid ’80s or so, and the Soviet Union had about 150,000. But look at how much steel we produced, Comrade. I mean, it’s just cringe.
Ben Nadelstein:
And a lot of the reason for that was that they had picked certain targets to say, Well, we got to beat the Americans. In the 1960s, they made this much steel, so we got to make even more steel. But that’s not how economies run. It’s not some weird competition of egos to say who’s made more product X. But when you see central banks, those are the exact way that the Soviets centrally planned their prices. Instead of prices of weed or prices of steel, they just said, okay, we’re going to get a bunch of smart people into a room and we’re going to pick the best interest rate. But that’s not how we do anything in an economy. We don’t get a bunch of smart people in a room and say, We’re going to make the best poetry this year. That’s not how poetry comes about. It comes about in either an individual or a group making, Hey, we want to make some art or poetry, or whether it’s steel or cranberries. There’s no group that says, We need to make a thousand cranberries this year. Oh, we’re missing our cranberry quota. That’s for free market, personal entrepreneurs and individuals to do.
So why do you think people miss that lesson? They all agree that communism was bad and central planning was bad. But when it comes to the Fed, they’re like, Listen, we do need to smooth out the business cycle. What makes you think that would be the best tool for doing that?
Tom Woods:
That’s right. Well, but partly because they believe in a mythology about the Fed, that, yes, it is true the Fed was around during the Great Depression. But as George Selgin says, Well, we all know that was just practice. But after that, they think things got better, and, Don’t you know about the wild fluctuations we had before we had the Fed and this and that? But number one, all of those were caused by other kinds of interventions into the monetary system. That’s the first thing. Second thing, Canada did not have all those wild swings. Now, that’s an interesting question. Canada’s economy is not a million miles removed from ours, especially, let’s say, in the early 20th century or 19th century. It seems to demand explanation. Why would Canada have been so relatively smooth? It turns out that it was a number of factors that differentiated Canada’s banking system from our own that seems to account for why Canada could withstand certain shocks better than America could, or the US. Just one of the reasons is they didn’t have unit banking laws in Canada that said you can have only one branch. You cannot branch. Well, the problem with that is that one branch is going to be very, very vulnerable if some localized catastrophe occurs.
And so then you’re going to have suddenly this panic. Canada doesn’t have that. And so Canada doesn’t have any of these panics. If you look in the US, we have a panic of 1819, 1830, 1857, 1857, 1873. There’s some question about how bad that really was, but 1893, 1907. They haven’t got that. And so what we’re inclined to think, well, that must be because they had more regulation. It was actually because they had less. So there’s all sorts of stuff like that. And so I actually, I’ll say in parentheses, I was so tired when you’re a critic of the Fed, you get the same darn objections all the Well, we had problems before there was a Fed. Yeah, I know. But those are also caused by the same people. So I actually wrote a book called Our enemy, the Fed, which I give away for free at ourennemythefed. Com. But so I think some people are coming to this conclusion because that’s the history they have. They think it was a crazy Wild West situation, and now the Fed has it under control. But if you actually look at before the Fed and after the Fed, number of recessions, depth of recessions, the Fed’s record is actually worse.
Now, it took long time to understand this because people were not, they were misreading the numbers. But we now know the Fed’s record is actually not an improvement. But you’re right that it seems anomalous, right? And shouldn’t we come to the conclusion that this hubristic idea from the Soviet Union that somebody is going to plan the whole economy. We get that that’s a problem, but we still feel like, I don’t know, money is the bedrock of the whole thing, so we need somebody in charge of that. But Well, maybe we don’t, and especially these people, we have to understand that the economic theory on the basis of which the Fed is carrying out its policy is not very old. It’s not like this is the consensus of thousands of years. It is very recent. I would say there is, even without knowing anything about monetary theory, there’s got to be a good chance that maybe, given that this is still relatively speaking, over the span of human existence, very much in its infancy, There’s a big possibility this is wrong. This could be voodoo, and they’re telling you it’s modern medicine. But there’s a real chance that it’s voodoo, and they’re snowing us, that we know what to do.
There was no textbook that said in 2008 that you should do what the Fed did. There was none. There’s no theory that justifies that. But they’ve got the public bamboozled into thinking, well, they speak in this impenetrable jargon. It must mean something. They must be scientific. But at one point, former Fed chairman Alan Greenspan, I’m sorry, for your audience, I don’t need to use the descriptor. I know they know who he was. But Alan Greenspan was honest enough to say in an interview with Lesley Stahl that when he would speak to Congress, you couldn’t understand what he was talking about. And you would think, maybe I just don’t know enough monetary policy, which is what he was trying to get away with. I figured the congressmen, what do they know about it? He just snows them. And he called to Lesley Stahl because she would play clips of him. Like, what did that mean? And he would say, well, I was engaged in syntax destruction, was what he called. So he admits that he’s saying things that make no sense at all. Now, the financial press at the time was desperately trying to explain because they are sophisticated people.
Well, now they realized that he made foules of them because actually, no, that didn’t mean anything. I appreciate your op-ed trying to support me, but you just heard that didn’t mean anything. It is bizarre what the misplaced reverence people have been taught to have when it comes to central banks, and especially, by the way, so-called progressives. You remember back in the old days? I mean, this is before your time. You looked like a young whipper snapper. But I promise you, Ben, in the old days, the progressive slogan was question authority. And today, the idea that they would question whether we need a Federal Reserve or the policy of the federal would never dawn on them. 99% of it would never even occur to them. We need to defend our established institutions now.
Ben Nadelstein:
There’s a great video of Peter Schiff after the Wall Street crisis and after the 2008 crisis, and he’s at this big rally with a bunch of progressives and down with the big banks and all this stuff, which- Oh, it was the Occupy Wall Street movement.
Tom Woods:
He went down and talked to them.
Ben Nadelstein:
Yeah, and some of these protesters, he said, Hey, I’d like like to answer some questions about how you feel about the rich and capitalism and banking. And they said, Yeah, we’re against all these banks. He said, Great. I’m with you. Let’s go to the really big, scary bank, the big bank, the bank that runs all the banks called the Central Bank. They’re giving rich people free money. And these people are like, Oh, I’ve never heard of that. The reason is that it almost just goes in the wayside. I mean, of course, we have the FDA. Of course, we have a central bank. I mean, you don’t want just people dying in the streets, do you? For a lot of people, that just isn’t even on their radar that we might not need a central bank.
Tom Woods:
I will say parenthetically that, as I said, I remember this moment with Peter because either he or his colleague was holding a sign that said, I am the one %. Let’s talk or ask me anything. And it was so great because at one point, and I hope I’m not misremembering this, but I think he was asking them something like, How much do you think I should pay in taxes? Give me a dollar amount or give me a %. And they did. And he said, Well, I’m paying three times that. In In fact, he said something like that. So you already have what you want. You already got it.
Ben Nadelstein:
Right. And I think a lot of the anger is misplaced because they think, Well, if Elon Musk just paid his fair share, and sometimes I’ll say, Okay, listen, let’s say somehow Elon Musk just was transported to Mars and he gifted all of his networth, not just his income, not his wealth, his networth, which includes selling his Tesla stock, selling all his stock, which, of course, isn’t going to be the exact same price. But let’s just, in a hypothetical, forget all that. Not only did we get Elon’s wealth, Jeff Bezos’ wealth, Bill Gates’ wealth, that would fund the federal government for three months. So the question isn’t a funding problem or, Oh, they’re not chipping in. Oh, if you just chipped in a little bit more, That’s not the issue. We’ve got drunken sailors, and we’ve got debt that is just exponentially growing. So until you look at the actual issue, the actual problem, you’re maybe fighting an uphill battle that’s pointless.
Tom Woods:
Yeah. I mean, the top 10 % of income earners are paying 70 % of the income taxes. Top 1% is paying like 37 %. 1%. So that’s not their fair share? 37 times their share of the population is not enough? So I find it very frustrating talking to people like that because the thought never occurs to me that Elon Musk is the source of my difficulties. That thought never enters my mind because I’m not a loser. I don’t think that way.
Ben Nadelstein:
So can you take us through the history in 1971, that shake up there, right? A lot of the ways central banking worked before, they were tied to gold. They were tied to a different monetary standard. And so the way central banks operated, it had some shackles on it, right? It’s not like 1971, we went to a completely different system. There were still regulations and all these machinations happening behind the scenes on gold and redeemability. But 1971 feels like, oh, we’re in a new era of central banking. And surprise, surprise, things haven’t been so great. So where do you see the beginning of those machinations? If it’s before 1971, and then in 1971, how big of a deal do you see that when we’ve ended convertibility?
Tom Woods:
Wars were the enemy of sound money, because even when you had a reasonably sound money system, governments would be tempted to just chuck it for at least the duration of the war. But we had in this period a very tenuous connection to gold. In effect, the US dollar was being used by a great many countries as if it was gold. And then it would, in principle, be backed up by gold that foreign central banks had redeemability. I mean, Joe Blow didn’t, but foreign central banks could come to the US and demand conversion. And then Nixon decided that, well, we’re going to, we’ll be finished in a matter of weeks if this continues. So they, quote unquote, closed the gold window. And Ron Paul remembers this moment distinctly, August 15th, 1971, because he says that was the moment. That action is what got him thinking about getting into politics. Because a lot of people would be the Vietnam War, but it’s this nerdy thing that most people didn’t even realize the significance of. But the significance of it is that now you have a pure fiat system. Now there’s no anchor of any kind whatsoever. And since that time, we’ve seen the acceleration of the decline of the dollar’s value.
We’ve seen all kinds of other problems emerge. And yet this myth, this fairy tale, that gold was actually a bad thing. They’ve got to have us believe that. They got to have us believe that only a crank would think that there needs to be some tie to gold, because we all know that smart people can now adjust the money supply more effectively without gold getting in the way. But gold was a source of stability for hundreds and hundreds and hundreds of years, thousands of years, and that it held its value. If you had gold coins, they held or increased their value over time. That’s a fact. Now, today, gold is not circulating as a medium of exchange. So the gold price, quote unquote, can be a little bit all over the place sometimes. But when it circulated as money, gold and silver coins could be accumulated if you wanted to for your, quote unquote, retirement, which, okay, there wasn’t really retirement, as we understand it, really, until the 20th century. But in principle, you could save for the future that way because you knew it would hold or increase its value. Nowadays, if you hold dollar bills, even if we believe the official inflation figures, and even if you had, low inflation, let’s say 2% a year, that still means that in a couple of decades, when you go to retire, a third of the value is gone.
Even even at their, quote, unquote, low inflation rate. And not to mention, gold actually was not the… Gold has not been the cause of boom, bust business cycles or any of that. Now, that takes a longer conversation. And that’s why I wrote the book, because that way I go on a podcast like this and I can say I have all the evidence for you if you want to look at it. But this is the world we inhabit now, and it’s an unprecedented world. It’s a world where it’s revenge of the nerds right now. The nerds are running things, but they’re nerds who… It turns out that actually the nerdier nerds would be more reliable. The Ron Paul’s, the Murray Rothbard’s, the Ludwig von Mises’, they were the nerdier nerds. Have you ever seen that? It’s like a bell curve meme where you have a dumb guy who’s drooling, and then you have the genius on the other side, and they both have the same opinion because the midwit is the guy in the middle who thinks, I’m too sophisticated to have the opinion of the dumb guy because I’ve read a lot more books. But the really smart guy realizes, you know?
Sometimes the dumb guy’s instinct was right after all. And that’s never been more true than when it comes to sound money. Because the dumb guy would say, Yeah, this should be backed by something.
Ben Nadelstein:
And then in the middle, you have, Actually, if it isn’t, then we can smooth out the cycle.
Tom Woods:
And then the really smart guy says, Yeah, that doesn’t actually work.
Ben Nadelstein:
Yeah, it’s totally true. If you talk to the average person on the street and you say, What’s the value of a dollar bill? Almost 100% people, regardless of politics, will say, Oh, it’s backed by nothing. It has no value other than just the fact that we need it or we want it. And then these midwits, the people in the middle who think they’re smart and have read Stephanie Kelton’s book say, Well, actually, the real reason we need dollars and the real demand and the real value is because if you don’t give us dollars, we’ll kill you and put you in a cage. Yeah, we knew that the entire time. We know what taxes are. We know that taxes exist. And then the person who is actually well-read understands monetary economics says, no, there’s actually an economic reason as to why backing your currency with something hard or a sound asset like gold or silver actually has positive economic implications rather than just letting some centrally planned bureaucrats decide that they’re going to fuddle with the money. And I think one of your points, which is so powerful, is even in their best case scenario at 2% inflation.
Let’s just say they were perfect and they got it exactly where they wanted it. Why they want 2% inflation? Nobody knows. But this magic number, they decided, Okay, 2% inflation is really good for the economy. Okay, but your point is true, which is that if I just have a savings account, which, by the way, pays nothing, then if I just put my dollars into a safe, risk-free savings account, then I will never be able to retire off that, which means I either need to speculate or I’m never going to have a home of my own or the kids Potentially, I might have to live with my parents for longer. I can’t get the job that I wanted. I can’t become an entrepreneur because if I don’t make it, I’m homeless. So that actually has economic consequences. On the flip side, in a gold or a silver standard, when you know that your, let’s say, money stays the same, it can’t just be all of a sudden inflated in supply by a magic number because, well, Joe’s about to get in the office, so we need some more money. None of that can happen. Actually, just by pure technological advancement, okay, hey, we’ve created this new technology that makes engines a little bit better.
Okay, well, your gold coin didn’t change, but the actual goods that you can buy with them have become better. So simply by putting gold coins under your mattress, you could become much wealthier. Now, of course, you could invest them for more of a return.
Tom Woods:
And become even more wealthy, but you don’t have to.
Ben Nadelstein:
Totally. And this was a normal strategy, which is why people who are much older can say something like, well, save 15% of your paycheck and put it in the savings account and you’ll retire at 75. It’s like, no, I won’t. What? Have you checked savings rates? They’re like 0.001 %, and the inflation is 2 %. So just by the math that I can do in my head, I’m never going to retire. So where do you think that people should first put their brain on, put their thinking cap on and say, okay, how am I going to make this work in the irredeemable currency regime that right now the entire world is in? There’s no country that has a gold currency or a currency that they don’t inflate away. If anything, the US dollar is actually the strongest currency of all. So where should people start to think about this currency conundrum that we’ve been put in? And obviously, monetary metals, we pitch not only owning gold, but earning a yield on that gold so you can grow it over time. But what are some other avenues people should be thinking about when it comes to, wow, they’re really inflating away my savings?
Tom Woods:
Yeah. Well, I just want to be honest. I have an account with monetary metals. I’ve had one for a couple of years, and I am very pleased with it indeed. I think this is an absolutely brilliant idea, and I’ve been very, very happy to tell people about it. I was going to say just very quickly, just one quick note in my capacity as a historian. If you read like a, historians of, let’s say, the early Republic, one of the problems is they’re not, they’re not educated in, they’re barely educated in history, but certainly don’t know any economics. And what they don’t realize, actually, Thomas Jefferson was better read in financial economics than Alexander Hamilton was. It’s just that Hamilton was the guy. He was the Treasury Secretary, so everybody assumes the guy must know what he’s talking about, but not really. And it turns out that the laissez-faire people, because of course, we’re told that the reason that people were critical of Alexander Hamilton was that they were stupid country bumpkins, and they were suspicious of banks per se. No, if you look at the Jacksonians, let’s say, in the 1830s, these were very sophisticated economists.
There’s a guy named William Gouge who wrote a history of money and banking in the United States that is so sound and sophisticated, you could read it today very profitably. So we have this incredible tradition of really, really smart people who perceived the problems with unsound money, but nobody assigns them, nobody reads them, nobody’s ever heard of them.
Ben Nadelstein:
Or even knows that their arguments exist. They don’t even know the argument exists. It’s not even we’re right, and these idiots were wrong. It’s just that there There is no idiots. These people never existed. They never said anything. One example, I know Bob Murphy probably does this daily on Twitter, these monetary or modern monetary theorists who say, well, actually, all of the debt is what the money is. And then Bob Murphy will say, Okay, so if that’s possible, if all these US dollars come from the central bank, how is it possible that Andrew Jackson actually closed the country’s bank? Wouldn’t that mean there were zero dollars in existence? And their response, no joke, is, well, there was a recession after, or there’s a depression after. Okay, but even by your logic, you should think there’s no money in existence, let alone a depression. We should have all been dead because there was no medium of exchange by your logic. So shifting the gold post to, well, it was bad or something happened afterwards, it’s just completely ahistorical. You don’t even know that there was a point where there was no central bank, there was no national banking authority.
Tom Woods:
What followed that closure was the period known as the period of the independent treasury, and that was the best monetary period in American history. The most stable we’ve had was the period of the independent treasury. Now, in terms of your original question, so I was going to say Monetary Metals is the answer to your question. But you’re right that in this environment, I know I can’t pursue the saving strategy of, let’s say, my parents or my grandparents. So I have to think. So what a lot of people do is they say, well, I’ll just, I’ll find some index fund. And those seem to see people through by and large, and they perform well over time. And maybe that works. I don’t know. Maybe that works. I wonder if we are entering, possibly, though, unprecedented times, where things that we reflexively took for granted as sound strategies are now thrown back into doubt. I don’t know that. I don’t know that. Maybe people can just persist in what’s worked forever. I, myself, I’m a little skeptical. All I can tell I don’t want to give people advice, but I can tell you what I do, which is I rely on myself.
I don’t want to rely on other people’s companies. I would never know how their company as well as I know my own. I know if I were a full-time investor or broker. I would devote all my time to learning more than half the workers at that company even know about their own company. But I don’t have that time. I’m relying on myself. I’m just constantly learning, how can I build up more income streams for myself? And there are ways of doing that. And I have them. I have probably a dozen income streams so that even if three of them collapse tomorrow, woods won’t be out on the street. I’ll be okay. So I think about that. I personally have a bunch of dough in a fund that’s run by a guy I know. And I know that the first question you always want to ask people who have their fund is, how does your performance match up against the typical index fund? And they always want to run the other direction. Why would I use you when I could just find any average stockbroker? But this is a different case because I really do know a guy who performs really well, and it’s worked well for me.
But I have some, and I know that there’ll be people who have disagreements with me on this, but I have a decent amount of money tied up in Bitcoin, too. And I know that that has potential for wide swings, but so does the US dollar. And if this It doesn’t work out. I have other things. So that’s basically where I am.
Ben Nadelstein:
And I wanted to take actually some lessons. Obviously, I’m not a Bitcoin guy. I’m a gold bug. But I do want to say the movement that the Bitcoin people or the crypto people, I know they’re different, have created is really something. I mean, they are on Charles Payne. They are on Fox Business News. They’re on MSNBC, and they have Elizabeth Warren, Donald Trump, and Kamala Harris all talking about them. So I think this is something where either gold people or even just libertarians in general, liberty-minded people can think, Wow, I might not like crypto or Bitcoin or think it’s a scam or whatever, but at least the strategy that they have, their vocal supporters, are working. I mean, they’ve not only had trillions of dollars of market capital from something that is literally just a bunch of numbers. But they also have politicians. Donald Trump, I think this last two weeks, used Bitcoin to pay for a burger. Okay, is this a marketing stunt? Yeah. Is he trying to get the crypto people? But you’re in the conversation. I mean, the libertarian libertarian party could maybe learn something from this. Liberty-minded people could learn something from this.
Ben Nadelstein:
I think one example is Uber, which is most people would say, if you asked a libertarian, what is wrong with a taxi monopoly? They could go on for six hours about why monopolies are bad And the government is propping up the taxis, and you don’t understand. And we could have a free market in taxis. And people’s eyes would shut, their brains would melt, and no one would care. And nothing would get done. Even if you did convince someone, they would say, Yeah, okay, great. You’re right. We should have a free market in taxis. But, okay, what am I What am I going to do about that? But an entrepreneur, who’s probably not even a libertarian, decided, Hey, I’m going to come up with this ride sharing platform, this app. And next thing you know, your grandma uses Uber, your mom uses Uber, you use Uber, drunk college kids use Uber. It’s a global phenomenon. Now, of course, there’s regulations on Uber, and they try to stop it, but the Pandora’s box is open. The cat is out of the bag. Monetary Metals, I think, is trying to get that same platform, which is, Hey, listen, you can earn a yield on your gold.
Ben Nadelstein:
You can check out the whole dollar system and the savings rates of your banks. You don’t have to worry about that. You can own a sound asset and earn a yield on it. And so we can learn things from successful campaigns, whether that’s crypto and Bitcoin or Uber or platforms like Airbnb. There’s actually solid wins we can get here without talking about libertarian theory or bringing up human action, we can make a successful entrepreneurial company that actually moves things in the right direction. So do you see that that’s going to happen more now in 2024 as people say, Okay, politics, enough of I’m done with that. I want to learn how to not only generate income for myself, but also move the needle in the right direction.
Tom Woods:
Well, if people in 2024 aren’t curious about how to generate more income and try to do so in a way that doesn’t tether them so much to the man, then I don’t know. I’m not interested in dealing with people like that. I want to talk to people who already get… I mean, I spend a lot of time on the Tom Wood show that is directed at the general public, trying to persuade people. But then in my non Tom Wood Show capacity, I really want to do my work with people who already understand. They’ve read the books, they’ve read the articles, they know the theory, but now they want to know what practical steps steps can I take to navigate a hostile world? And so that’s what all the rest of my work is aimed at. Now, one area where the Bitcoin people and the gold people, and there are plenty of people, if we draw a Venn diagram, there are plenty of people who are in both of those.
But one area involves the issue of deflation, because the same criticism is leveled at Bitcoin as is leveled at gold. In fact, if anything, it’s leveled even more severely at Bitcoin, which is if the of it is fixed, whereas gold, the supply isn’t quite fixed, but it doesn’t grow nearly as fast as paper dollars do. So it is a constraint on the money creators. The argument is we can’t have a healthy economy if it were based on Bitcoin or gold because there’s not enough of it, and we can’t increase the supply fast enough to keep up with production or whatever. But you don’t need to increase the supply of the monetary unit to keep up with production. If we were on a desert island And we have 12 tomatoes, and let’s say we have 12 silver coins. And then suddenly we have 24 tomatoes. Is it, well, I guess we need 12 more coins to buy them? No, it just means now that you can get two for one. You know, like that’s That’s it. The price just adjusts. But they’re terrified of deflation because a lot of these people who are opinion molders are all deeply in debt, so they don’t want deflation.
But deflation just means prices fall. And prices fell pretty consistently for hundreds of years before we started being propagandized about the benefits of rising prices. Or rising prices mean the economy is really going strong. The United States became the world’s industrial powerhouse at a time when its consumer prices were consistently falling. But we’ve been taught, they gaslight us all the time. A clearly beneficial thing we’re being taught is a catastrophe. It is not all the arguments against deflation are all bogus and all self-interested and dumb. And that’s an area where the Bitcoiners and the gold people can join hands and go after the bad economists out there, of which there are a great many.
Ben Nadelstein:
Which, by the way, I don’t think I’ve ever seen as much discussion about the Fed, monetary policy, Austrian economics, as I’ve seen in this sound money bubble, whether it’s gold bugs or crypto people or Bitcoin people. It’s good to hear And at the end of the day, if we disagree, okay, should it be Bitcoin? Should it be gold? Should it be tokenized gold? Should it be some meshing of all three? We’re on the same team. We’re in the same direction. So if we can push the narrative in our direction, I think it’s great.
Tom Woods:
And at the end of the day- As long as we’re setting a metaphorical and rhetorical match to the current system, that is step one indeed.
Ben Nadelstein:
And Tom, I think you have popularized, if not coined, the three by five index card of allowable opinion And Bitcoin, at bare minimum, has completely broken that card. Gold has not done that. Obviously, monetary metals were working on putting gold into the conversation. But in general, gold is, oh, yeah, gold, gold. It’s just there. Or, of course, it makes all time highs. It is production. It can produce a yield. It’s used in jewelry and monetary assets. Central banks hold it. But, okay, I guess people just don’t have that same feeling about gold when… Oh, Bitcoin, right? So I think the fact that they shredded up that opinion of, should the the Fed raise rates or the Fed lower rates, they’re saying, Guys, we don’t need a Fed at all. We can have money that’s censorship resistant and supply constrained. Even if Bitcoin doesn’t work or you don’t like it, at least they’re trying something that’s outside the index card. And I think more businesses, more people, and more products need to start doing that.
Tom Woods:
As you say, even if you’re not inclined toward Bitcoin, talking about money, it has to be a net plus because as we all know, until Ron Paul came along, nobody, No presidential candidate talked about the Federal Reserve. Name me one. Name me one presidential candidate who said, If elected, I will constrain the Federal Reserve in its open market purchases or something. The thought would never, ever occur to anybody, and that was how they wanted it. Whereas in the 19th century, you had every Tom, Dick, and Harry writing a monetary treatise about silver coins or something. Now, some of these weren’t worth the paper they were printed on, but neither is the money we use today. I’d rather have people at least engaged in it, at least know that it’s a live issue. They, and we know who they are, the same people who want us to think that the official position has been decided on everything under the sun, they want us to feel like, Well, money is off the table. The experts are in charge of that now, so you can worry about other things. Okay, well, I’m concerned about health. Well, health, the experts have already resolved all the remaining questions about that, so don’t talk about that.
Well, I’m concerned about foreign policy. Look, we have a bipartisan consensus on foreign policy. Don’t you worry about that? At some point, we have to be entitled to an opinion on something.
Ben Nadelstein:
They would like it that, of course, you have no opinion and you just say, Well, the 2% inflation number, obviously, that makes sense. And honestly, they don’t even want you thinking about it. And I’m happy you brought up the Fed speak, which is literally meant to confuse you. It is literally meant to say, Oh, wow, that sounds pretty heavy. I don’t know if I can deal with that. But if you just ask yourself the questions in a basic format, hey, listen, why does the central bank hold gold if it’s just an old relic? Tradition. Tradition. No reason. Or, hey, if I lent you my car, I just want you to give it back to me 10 years from now, but no charge. No, that’s crazy. No one would say that. There’s a risk to that, right? And Jeff Deist often brings up, Would you rather have your dream home today or 20 years from now? Okay, today. So the laws of economics 100% apply. And the experts gaslighting you saying, Oh, money doesn’t need to have a backing effort. Actually, it’s better that we just stick a gun in your belly, and that’s where the demand comes from.
These people are totally crazy. And instead of arguing with them and saying, Oh, look at how… Let’s ridicule them on social media, which go for it if you want to, the better way is to have that income stream or have that reliance on yourself so that you’re healthy, that your income is resistant to their inflation or their recessions that they make so that you’re not worried, well, if my grocery store like progrurs or stop and shop shuts down, that I guess I’m just out of luck or I’m out of a job, making sure that you’re financially independent, but also economically independent in other ways, that you don’t need to get your food from someone or your medicine from someone else. I think that’s an important area where a lot of people, up till maybe 2020, have said, Well, listen, they’re the experts. What do I know about health? What do I know about economics? What do I know about all this stuff? And now people are saying, Well, maybe I’m not an expert, but I’m definitely not dumb.
Tom Woods:
I’m not dumb. I’m entitled to at least some rough opinion about these subjects. And I am capable of listening to different points of view and seeing which ring true, which sound better defended. And I’m increasingly unconvinced when I hear the official voices saying, We won’t dignify this other voice by responding to it. That is a sign of weakness. And so anybody who speaks like that is immediately suspect in in my mind and I think in the minds of people who aren’t completely part of the blob these days.
Ben Nadelstein:
Tom, before we go, I want to do a lightning round with you. So I’m going to fire off questions from all different areas, whether it’s economics or history or just even libertarian thought. And you don’t have to give a long answer. Actually, if you’d like, you can just give a one-word answer and leave the audience thinking. But these are going to be a lightning round questions. And of course, if you want, you can pass, which is also interesting as well. So you can give a thumbs up, a thumbs down. You can say over, under. You can say yes, no, maybe, great. Or you can go on a long tome on how you feel about these questions.
Tom Woods:
All right, I’ll do my best.
Ben Nadelstein:
So let’s start with the lightning round. How do you think the voting with your feet has been working since COVID, and which states do you think are going to gain the most?
Tom Woods:
An underdog state is Tennessee. I think a lot of people think about Florida, and Florida will probably continue to do well. But Tennessee was quiet during COVID. We didn’t hear that much about it. But apart from Blue, Nashville, Tennessee was actually not too bad. And I think it caused a number of people to take a second look or even a first look at Tennessee. I would have to I’ll take further on that, but that’s my initial instinct.
Ben Nadelstein:
Okay, next question. Which historian do you disagree with the most, but still respect?
Tom Woods:
There’s a historian of the American Empire named William Appleman-Williams, and he has a lot of valuable things to say about foreign policy, and a lot of them are right. But other than that, I just can’t jump on board. But he has more than redeemed himself with his foreign policy analysis.
Ben Nadelstein:
Okay, here’s a fun one. What’s one book you think every libertarian should read, but probably hasn’t?
Tom Woods:
Oh, does it have to be one book? Can I cheat?
Ben Nadelstein:
You can cheat.
Tom Woods:
All right. The first one is a big book which scares people away. But we’re talking about people who read The Creature from Jekyll Island, which isn’t exactly a pamphlet. So the book in question is by Paul Johnson, Modern Times, the World from the ’20s to the ’80s. And as I’ve said before, I prefer this edition over the expanded edition that includes the ’90s, because Johnson’s neoconservatism starts to show when he covers the 1990s. But it is a brilliant, brilliant book, brimming with insights all throughout. And Johnson wrote the the forward to a later edition of Murray Rothbard’s book, America’s Great Depression, on which he relied for his own coverage of the Depression. So he’s a pretty good guy, and maybe not a complete neocon. He’s much smarter than the neocons, but not good about the 1990s. The other book would be The Economics and Ethics of Private Property by Hans Hermann Hoppe, H-O-P-P-E. Everybody knows three quotations from Hans Hoppe, but they’ve never read any of his books, and certainly not that one, because that has to be the most God awful title I have ever heard for a book, The Economics and Ethics of Private Property.
But it is one of the most intellectually stimulating books you can imagine, and it absolutely does help you understand the world better.
Ben Nadelstein:
Tom, you’re going to be speaking at the Expat Money Summit. So here’s a question related to that. What’s your favorite place outside of the US that you’ve traveled to, one with your kids and one without your kids?
Tom Woods:
Well, it’s going to seem a little bit vanilla because I’m unfortunately not in a position right now to be able to travel for long periods of time. So I don’t travel to Asia, and I don’t travel to particularly exotic locations, but I fully intend to. As my 50s come to a close, I’m going to be flying all over the place. So I would say with my is Iceland because it’s so unusual. It’s so different from everywhere you’ve been. Reykjavik looks nothing like other European cities. It looks zero like Vienna. And even when you talk to progressives in Iceland, they have a real attachment to their particular place and to Icelandic history, which they all love. They don’t sit around talking about how terrible they all were in the old days. They love So I would say Iceland for that. But then on my own without them, well, I mean, I’ve enjoyed St. Lucia because of a resort we like to go to, but that’s not really much of an answer. Probably so far, but I have much, much more travel to do. Probably so far, it’s been Austria, particularly Vienna, because of the Old World charm.
Ben Nadelstein:
Okay, here’s an interesting question. You’ve done over 2000 of the Tom Wood Show?
Tom Woods:
Over 2,500.
Ben Nadelstein:
Incredible. So first of all, congratulations.
Tom Woods:
Of the Tom Wood Show. Yeah, thank you. Thank you very much.
Ben Nadelstein:
If you are not a listener of the Tom Wood Show, you got to go check it out. So Tom, what episode have you come in thinking, oh, I’m really going to disagree with this guest, but it should be interesting. But you left the episode going, wow, I think I totally agree.
Tom Woods:
I didn’t totally agree, but I had a feminist named Megan Murphy who had been absolutely unjustly attacked by crazier feminists than she was. And I was expecting to be talking to somebody borderline psychotic, but I just thought I’d give her a microphone. And she was very likable. And she admitted that, like me or like all of us, she had fallen into the pattern of thinking, well, if somebody supports this person or that person, I can’t ever talk to them, and I’ll never have any sources of agreement with them. She realized how poisonous that was. And we had a very fruitful, productive conversation.
Ben Nadelstein:
Okay, coming up near the end, if you could change one mainstream narrative that’s taught to kids in school and told to adults, what would that be?
Tom Woods:
That progressivism has been a source of progress against stupid and backward ways of living, and that the best way forward is constantly to discard the old ways and push boldly into the new.
Ben Nadelstein:
Tom, if I understand this correctly, you actually question students who want to become Harvard students, and you always ask them this question, what’s something that they think that nobody else they know things, not in the mainstream TV or their parents or their friends or their church? What’s something that they think that nobody else thinks? So I’m actually going to turn the question to you now, which is what’s something that you hold? What’s an opinion that you have that you think, yeah, I think I might be the only person on the planet who thinks that?
Tom Woods:
Oh, darn. Now, this one I needed some advanced notice on because that’s too hard for me to answer. I apologize. Because it’s one of these things where it’s going to be l’esprit de la scalaire. I walk away, and as I’m walking down the stairs, I’ll say, That’s what I should have said. I’m sorry I have to bail on that one. The thing is, I know if my wife were sitting here, she’d give you seven.
No, okay, wait.
Okay, this is cheating. This is It’s going to seem like self-promotion. But in this day and age, everybody has Substack. Everybody has a newsletter online. But I still feel like, and I’m absolutely alone in this in the libertarian world, absolutely alone. I don’t mean institutions. I mean individuals. I have a print newsletter that you get in the mail, in addition to my… It’s all different from my email newsletter. And yeah, the Mises Institute has a physical newsletter. But I’m talking about, I don’t think there is any podcaster in our world who, if you support them, I have supportinglistners.com and if you support me on that, one of the benefits you get is I physically mail you a newsletter because I feel like we’re looking at a God awful screen 24 hours a day. And how about for five seconds, you get in your recliner and you open up the current issue of the Tom Wood’s Elite letter that you can hold in your old fashioned hands and I still like that. And I think there is a certain badassery about in 2024, putting out a print newsletter that you get in your mailbox.
Ben Nadelstein:
Tom, awesome, awesome answer. No NFTs from Tom It’s coming anytime soon. Okay, Tom, final lightning round question, which is, what’s a question I should be asking all future guests of the Gold Exchange podcast?
Tom Woods:
The opinions you hold about money are very unpopular in our society. So how did you get drawn into them?
Ben Nadelstein:
That is a great question. Tom, you do so much from a podcast to the newsletter to the email. You do speaking tours. You’re going to be speaking at the Expat Money Summit. Can you just tell people, I want more Tom Woods? You’ve got books, you’ve got podcasts, you’ve got pretty much everything under the sun that someone could have. Where can people get more Tom Woods?
Tom Woods:
Well, I do have the Tom Wood Show, which you can get on Spotify, Apple podcast, wherever you listen, it’s there. So the Tom Wood Show. But in terms of a link, the book that I’ve been talking about that you can read in an hour, or maybe not an hour, a couple of hours, Our enemy, the Fed. That’s at ourennemythefed.com and one thing that differentiates me from others is that I have an email newsletter that I send for free. And a lot of people think, I don’t want any more email. I never want to read your email newsletter until they get mine. And then they are addicted to it and they read it. And then when they die in their will, they say, I leave my email account to my son so he can continue to read the Tom Wood’s letter. And you get that. If you don’t like it, you can click unsubscribed, then I’ll never write to you again. But you would have to have brain damage to do that. So you can actually hop on that for free at ourennemythefed.com
Ben Nadelstein:
No joke, Tom does have one of, if not the best email, not only subject lines, headlines, but the actual email itself is always incredible. And if you’re looking for some income-generating ideas, whether that’s about a website you want to start or a business that you’re interested in or even earning with Monetary Metals. There’s always a little nugget in there as well, which I like. It is an awesome, awesome newsletter. Tom, it has been a pleasure speaking with you, and hopefully, we’ll be able to get you back onto the show.
Tom Woods:
Ben, the pleasure was mine. Thank you.
Additional Resources for Earning Interest in Gold
If you’d like to learn more about how to earn interest on gold with Monetary Metals, check out the following resources:
In this paper, we look at how conventional gold holdings stack up to Monetary Metals Investments, which offer a Yield on Gold, Paid in Gold®. We compare retail coins, vault storage, the popular ETF – GLD, and mining stocks against Monetary Metals’ True Gold Leases.
The Case for Gold Yield in Investment Portfolios
Adding gold to a diversified portfolio of assets reduces volatility and increases returns. But how much and what about the ongoing costs? What changes when gold pays a yield? This paper answers those questions using data going back to 1972.
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