This is a rush transcript from "Glenn Beck," March 16, 2009. This copy may not be in its final form and may be updated.
GLENN BECK, HOST: One of the most accurate things that any candidate from either party said during the campaign came from Joe Biden. Just some of the possible tests that President Obama could face over the next several months.
We got Russia looking to build bases in Venezuela and Cuba, adding to the evidence that the Cold War didn't end. The tactics just changed. China has indicated that it may stop buying our debt. Boy, that would be really bad if they would do that. And they're getting more aggressive about international waters in recent days. They got bold enough to just start harassing American ships.
Iran has denied a U.N. report that it said it was slowing down its nuclear program. They now say, "We're looking to become a nuclear power as soon as we can."
North Korea is moving forward with a planned satellite launch that Secretary of State Hillary Clinton says amounts to a long-range missile test. So, where is our president? What is he doing?
(BEGIN AUDIO CLIP)
JOE BIDEN, UNITED STATES VICE PRESIDENT: Mark my words, it will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We're about to elect a brilliant 47-year-old president of the United States of America.
Remember I said it standing here if you don't remember anything else I said. Watch, we're going to have an international crisis, a generated crisis, to test the mettle of this guy. And he's going to have to make some really tough — I don't know what the decision is going to be, but I promise you it will occur. As a student of history and having served with seven presidents, I guarantee you it is going to happen.
(END AUDIO CLIP)
BECK: You know, he also went on in that same speech to say, "He's going to make what looks like the wrong decision, but I ask you to stand with him." It's going to look wrong, but it will be right in the end, so stand with him. What does that even mean?
The Obama administration has been trying to reassure China of the safety of their $1 trillion investment in new U.S. debt.
Steven Mosher is president of Population Research Institute, human rights organization that supports free market principles.
Boy, we're about a million miles away from a free market here, Steven. I saw this line from the president of China. This was — I think he came out on Friday and he said, "Of course, we're concerned about the safety of our assets. To be honest, I'm a little bit worried. I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China's assets." Why did the premier of China say that?
STEVEN MOSHER, PRESIDENT, POPULATION RESEARCH INSTITUTE: Well, the premier of China says that because we and China are joined at the hip. We have been joined at the hip now for the last 30 years since we bought into the idea that if we traded with China, if we invested in China, if we bought a lot of Chinese-made goods, that they would become like us.
Instead, of course, they're becoming less like us and we're becoming more like them in the sense that the government is increasing its role in the economic sector and appears ready to assault us on the cultural front as well.
So we have bought into the idea that we can somehow change China, and, in fact, that's not happening. What we have on the Chinese part is this giant vendor export scheme, where the Chinese government keeps its wages down for its own workers and sends over tens of billions of dollars of manufactured goods to the United States, which we buy, sending those tens of billions of dollars to China, which, in turn, buys U.S. treasury bonds and securities, propping up the U.S. dollar, depressing the value of the Yuan and keeping the wages in China low, so they're funding their exports.
BECK: OK. So Steven, here is the problem. I mean, help me explain this or make this fear go away. You have Germany, you have France — I think Tony Blair has said it, you have had China say it, the G-20 is coming up. They're all talking about having a new reserve currency, a new global currency to replace the current global reserve currency, which would be the dollar.
If that would happen, it would just destroy the United States. Are we seriously — is this some sort of game that everybody is playing? What is the end-game here? What is really going on?
MOSHER: Well, look. First of all, I do think we face fairly substantial inflation over the next couple of years, because we're spending beyond our means, right?
BECK: Wait, wait —
MOSHER: We're running up the bill on the national credit card and we keep going back, not to the Bank of America or AIG — we own it. But we go back to China and say, "Lend us more money. Lend us money."
BECK: OK. What does it mean "substantial inflation"? We're already in inflation. What does "substantial inflation" mean to you?
MOSHER: Well, if the world starts cashing in its dollars, and remember there are at least as many dollars overseas as there are in the United States, we're going to see the dollar lose 20 percent, 30 percent, 40 percent of its value over the next few years.
That can happen faster or slower. It depends on how much more money we spend that we don't have. And as far as I can see, the spending spree in Washington is by no means over. Now, will China tomorrow try to sell its $800 billion in U.S. treasury bonds? Not really. It can't, because if it tries to sell them, the rest of the bonds will become more and more worthless and it will lose money.
MOSHER: But will it buy more in the future? I don't think so. Who is going to pay for the hundreds of billions of dollars that we're borrowing? Who is going to lend it to you? That is the question.
BECK: So, but that means that we would have to make interest rates go — help me out on this. We would have to have a higher return to get people to buy our debt, which means that interest rates have to go up, right? Which means the fed would have to make money harder to get, which would collapse the whole thing, right?
MOSHER: Well, think about your own credit card, you know. You spend money over your limit, which we're doing now as a country, and the bank raises the interest rate on you, from 15 percent to 20 percent, to 25 percent. We're going to see the interest rates on the treasury bonds spike up in the years to come.
MOSHER: A new worldwide currency that would replace the U.S. dollar would destroy the dollar. And of course, they're not talking about gold as a reserve currency. They're talking about another confetti currency that they will be then free to manipulate and of course inflate as they see the need.
BECK: I hope we can have Al Gore in the center or somebody with a blue helmet. Wouldn't that be great, America? Thanks very much. I appreciate it.
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