Ron Paul: U.S. "totally bankrupt," warns fed strategy "is to cause chaos"Former U.S. Congressman Ron Paul declared the United States is "totally bankrupt morally and financially," arguing in a wide-ranging interview with Kitco News that the nation's $1.9 trillion deficit is a "debt spiral" that will be "paid off with funny money" and that citizens should be "on our toes for something very, very big to happen."
Speaking on November 5, 2025, Dr. Paul analyzed a series of colliding economic and political crises. His comments came as the Federal Reserve injected $125 billion in emergency liquidity into the repo market, while simultaneously facing public criticism from the President's own Treasury Secretary, Scott Bessent, over a "housing recession."
Dr. Paul suggested the conflicting moves may be intentional.
"Maybe their strategy is to cause chaos," he said. "And in order for the people, you know, to just roll over and say, 'Hey, save us.'"
A "K-Shaped" Stagflation
Dr. Paul pointed to a slew of conflicting economic data released today as proof of this chaos.
While a report from ADP showed private payrolls unexpectedly grew by 42,000 in October, data from the real economy told a different story. According to a McDonald's earnings call this morning, "lower-income consumer traffic is declining by double digits," even as higher-income traffic grows.
Dr. Paul said this "K-shaped" economy is proof the headline data is a lie. "It can't be true," he said.
He argued that the Institute for Supply Management (ISM) report, also released today, confirms a stagflationary environment. According to that report, the Prices Paid Index soared to 70.0 while the Employment Index contracted for the fifth straight month to 48.2.
"That's the dilemma the financial markets have," Dr. Paul said, comparing the economy to a "drug addict... begging for another shot" of liquidity.
The "Debt Spiral" in Action
At the core of the crisis, Dr. Paul said, is the U.S. balance sheet. The nation is facing a $1.9 trillion deficit, according to projections from the Congressional Budget Office, while the ongoing government shutdown costs a reported $15 billion per week.
He argued that the Fed's $125 billion injection is not independent of this, but a consequence of the Treasury issuing massive debt to fund the deficit, which forces the Fed to provide the offsetting liquidity..............
https://www.kitco.com/news/article/2025-11-05/ron-paul-us-totally-bankrupt-warns-fed-strategy-cause-chaos
