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tv   [untitled]    May 17, 2011 11:30am-12:00pm EDT

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so half past the hour here in the russian capital with r.t. the headlines now thought of colonel gadhafi is envoys comes to moscow to meet russia's foreign minister. to the fighting and to observe the un resolution in libya itself a fresh nato airstrike hit several government buildings including an unseen corruption agent of. russian attacks officials are accused of a massive investment linked rather linked sees me to a lawyer who died in custody over a year ago sort of a minute ski's death caused a public outcry amid speculation he was refused medical treatment while in confined
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. and china is planning an ambitious plan to build its own space station and to put mankind on mars within decades beijing's adamant that it wants cooperation with the two current space superpowers but there's a worry it could lead to new and stella right. next door in our kaiser a poor digs deep into the murkier side of big business thanks for watching. for . something there is. nothing there. there is no alternative let's bring in stacy or oh man they wait a minute were you so long this close location where was that some bunker somewhere
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or what's going on max i had to do is read the strap and see that i was in connecticut you had a strap on and. listen when you talk about silver we're going to talk about commodities and inflation in general today the first headline max is starbucks chief howard schultz attacks coffee speculators so howard schultz the president of starbucks the world's largest coffee chain has attacked speculators for pushing up the price of coffee to a thirty four year high he said quote through financial speculation hedge funds index funds and other ways to manipulate the market the commodities market is in a very unfortunate position this is resulted in every coffee company having to pay extraordinary high prices for coffee ourselves if you want to stop the price of coffee from going on there don't let any of your customers use credit cards every time the cost of their goes into your store and use a credit card they're creating three out debt and of zero out of nothing that's why
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the price of coffee futures are higher if you knew anything about economics you would know that but instead you blaming the speculators because your dunderhead yes is the expansion of money supply and banks create it through people borrowing money from them and you still see that at the starbucks all over the place people using their credit cards to buy right on is loaned into existence less than five percent of the money in existence is actually printed by a government the other ninety five percent is loan into existence from banks and every time somebody uses their credit card they're increasing the money supply those diluting their purchasing power in fact he says this in his statement as well without any real supply or demand issues we are. witness to the fact that most agricultural food commodities are record highs at once and coffee is that a thirty four year high of course he forgets to mention the supply and demand for
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currency the supply demand for crude yeah that's what's driving this market again howard schultz a guy who figured out one day that people in america might want to enjoy a cup of coffee like people in europe is not the guy to ask the micro economic considerations that are driving the price of coffee itself no howard just stay there and do your barrister thing and don't talk about economics because you're obviously completely financially illiterate so inflation is also in the next headline china inflation spreading beyond food adds pressure so china's inflation is spreading beyond food as the headline says signalling premier wen jiabao its strategy of quarter point interest rate increases every two months has yet to contain consumer prices right while this is part of the global currency war isn't why this time i have so much inflation is because of all of the money that's being sent to them visa v. walmart that's right but also the u.s.
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has been engaged in two rounds of quantitative easing trillions of dollars printed the u.s. and their currency in china now do you remember he is pegged to the dollar so every time the u.s. prints money every time ben bernanke the prints money china has to print money who's a currency manipulator china or the u.s. that's the big question here are you going well obviously this is a tale of legs a dog or vice versa you can't really say china is the currency manipulator of their peg into the dollar which is being manipulated but it's the world reserve currency so they say walk if you possibly manipulated because they live in a snow globe of denial they're in a world with a three hundred sixty degrees of fraud they don't see that there is a currency manipulator tim geithner you're the currency manipulator max the central banks around the world i would disagree that if anyone unique when i'm we're in disagreement on that one because china's empty. it was up fifteen point three percent in april alone so they're doing a darn good job printing money and in response to this limit down regulators
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expanded the range in which gasoline and oil futures control. but again they're they're appeasing the speculators going back to the year two thousand the commodity futures modernization act when they remove position limits which are there for a good reason to prevent any one bank from dominating the entire market in manipulating prices but there remove that piece of the regulation and every time now that the markets get out of control they simply remove all manner of regulation or framework or any any way to buffer rampant in its relations so the response of regulators should be to regulate not to continuously deregulate well but it's also not a free market they have a specific outcome they prefer so they don't mind if the dow continues to go up or the s. and p. goes out and they don't mind of gasoline prices fall so they'll allow extreme moves in those directions that they prefer but they're micromanaging which direction they
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want but the stock market is in a bubble and it should have margin rates increase to prevent the stock market from reaching in the apex of a nother huge gargantuan bubble in bust but that's being left alone because it's capitalized by the banks themselves that own the regulators whereas precious metals which are the competition to corrupt bankers they are being subjected to onerous margin rate increases in a selective prosecution of various markets what has been called violent currency moves is resulting in a violent precious metal moves but it's also resulting in the spread of radicalized precious metals buyers around the world well max listen you know the beginning of the whole financial crisis began with a of violence currency move and that was the. moving the u.s. dollar which started by the treasury using a euro swap remember in two thousand and seven and thus began the move silver and
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gold are also currencies and so violent moves in this we could see that we are what we are seeing the knock on effects in all the markets around the world but look they intervened in the in the gasoline and oil futures markets they are they're introducing all sorts of margin rate hikes first take a look at this picture i took in connecticut last week you see that prices are well over four dollars there for the average price of gasoline so the headline following this crude plunges but someone tell the gas stations and refiners average price of regular rises by two point two cents overnight so following that collapse in the gasoline futures we saw gasoline prices rise exactly right because there's a disconnect between the paper market and the physical market because there are seven hundred trillion in paper around the world on a fifty trillion dollar global g.d.p. and when you drill down to markets like gas you've got oil collapsing in price well
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guess prices at the pump are increasing because that's the actual physical market is actually going up but the paper mark is being manipulated in all manner of violent manipulated to. go path ology being practiced by these psycho pathologically insane or betrothed yours and clones of places like wall street and goldman and j.p. morgan were you by the way during the period you know you just kind of disappear there for a few days you sent an errant reading in the orders are you know the other end you put you had gone yes you got a gun to look like a banker in one of those fish that can only come out and talk like a fish fish fish fish i mean where were you exactly i mean you want the grid actually somebody in the comments section said they've never seen such a redneck room. but we're talking about all the margin. rate hikes that we see well shanghai also joined in a member you seem to differentiate you think tim geithner and ben bernanke you are somehow more powerful and uniquely corrupt than the rest of the world but if you
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look at china they're doing the same thing money supply a fifteen point two percent in one month alone and then we see this headline shanghai and third silver margin hike in month right and what what's happening is things you have heard is that the margin it's going to go up to one hundred percent which means that you've got people owning the precious metal for one hundred percent cash which is the same as having a gold or silver standard so the c.m.e. in trying to dissuade people from precious metals by raising the marginal rate is actually creating a de facto global precious metal standard that's why i say there is the alternative you talk to me about the price of silver but i say to you there is no alternative paper is complete nonsense there is. i think this is the second amendment issue because you talk about all those guns behind me in connecticut but i think this is the second amendment issue you know the second amendment gives you the right to bear arms to defend yourself well i think bearing arms in the currency financial
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war is gold and silver those are protection against the financial work if silver bullets i have a silver bullet five gold bullets two those are chavez of the gold gold is good for wearable stuff and ben bernanke you but i mean gold us a little expensive ok but let's move on to this headline because i'm going to prove to you that they're trying to keep you from defending yourself against currency collapse dollar engraver danger than the euro so this is axel merckx in the financial times and he says imagine a country that spends and prints trillions to patch up any problem now imagine another country where there is no central treasury meaning that bailouts are less easy and which has a central bank that is mopped up liquidity over the past year rather than engage in quantitative easing of course is comparing. and us and their dollar tree european area and their euro but only let me explain something about the dollar enjoying
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a bit of a balance recently tied exactly to the moment when i've been logged in and spectacle a stand simply guy pakistan shot violence film little love and huge american state sanctioned terrorist blood guts pentagon armed military conflict the military industrial complex. are you d s it's a huge splatter fest that we've seen which is the basis for the rally in the dollar there's no jobs there there's no manufacturing there good thing back in the dollar this frickin states tension terrorist acts that's what the goal is all about china there's not a dollar more any of us love the older more fragile this is one of the more but it was only more so in fact because if you buy the gold you're buying voluntary is the alter the books over and gold there is no alternative bangladesh and a little blip it's not a rally in the dollar max there's a lot of gold listen we don't have that much time left and i want to show you
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another headline banks driving people to suicide so this is from ireland and this comes from one of ireland's most senior high court officials and he's spoken out about banks hounding people over debt some of which has already been written off and they're still hounding people to their death he said quote we know which banks were the cheerleaders for the celtic tiger yet some banks are reverting to type to come to court assuming that the banker always wins anyway that's not how the law sees it it has for the last few years of course bankers always win but this guy this judge in ireland is saying no no no not here not on my watch. this is a trend you see first in india of course the bankers go after the farmers and there is the indian farmer commit suicide every thirty minutes thanks to you now to clean my modified currency seed the monsanto that is the genetically modified seed which acts as an agricultural currency and you see suicides in india one every half hour
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now in ireland people are committing suicide to escape the credits are bankers you see this all over the world and to escape to debtors prison the bankers prison there has to be what robespierre said many years ago if the social contract is broken the people must revolt well my final word is that gold and silver are a second amendment issue there is no alternative thanks so much stacey thank you max oh right you don't know where there is more coming your way. we'll. remind you the latest in science and technology from around the world. we've got the huge earth coverage. the official t. help location you'll find the link called talk from the top story.
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on the. road. rash feature now in the palm of your. i welcome back to the kaiser report i'm max kaiser time now to go to new york speak with the reggie middleton of boom bust blog dot com reggie milton welcome back to the kaiser report it's good if you get regimentals the last time you're on the kaiser report you tell us how zero zero zero percent interest rates are starving the banks that it was designed to say that the time you were the only analyst in the world to mention that it would starve the banks and even proven correct so tell us more about this what's the current status of the current status is the. same as
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before the banks are not making and the real economic profit off of their interest bearing assets and they are taking a losses on the liabilities. on the assets that have become my abilities. i think also in the last time i want to show i discussed something that was relatively contrarian and unique as well and that's banks that were actually walk away from foreclosures well. we're going to story this morning that head cities are these flood cities that were. suing banks for keeping care and maintenance on foreclosed properties so now you have banks actually have collateral that have a negative value to it it's actually costing them money so the collateral is actually proving to be the antithesis of what the in to support it instead of backing a loan it's creating a deeper hole for the said loan so not only would they probably never get the money back they have to dump more money and. it's also difficult to see how they get out
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of that if they see these are the become aggressive and i can see cities and it's a path it's becoming a question because hard times are all over everybody needs the money and if the city see the money they're probably going to go after it runs are going to last let's focus on this a little bit more so you've got a situation now where the banks recently it seemed as though they were getting washington to pass the new laws to absolve them from their mortgage fraud the mortgage selling problems or to cut a deal and get it behind them and do some accounting tricks on their balance sheets but what you're saying now is the states are stepping in and they're actually suing these banks as to how how much teeth to these lawsuits have you think reggie i don't know i'm not a lawyer and as far as i know we're in. uncharted waters but the banks or legal sinkholes. the banking industry is a new tobacco industry now only on municipalities and cities suing the banks and
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you have the banks m.b.a. and mortgage backed security investors interest suing the banks for you know forgery practices misrepresentation you have the mortgagees suing the banks the people who have been project for close upon and that is like a bottomless pit think about the amount of market is taken down that been taken out during the boom time just think about two percent of those people suing events you know it's a limited liability so. if you think it's a battle company's going to be bills you probably haven't seen anything yet and example companies didn't run at thirty times leverage by the way right the pack of companies that run a three times leverage let's go back to two thousand and eight for a second we know that hank paulson went to congress to negotiate in some bailout money and this was augmented by further bailout money do we know what the total price tag was for the bailout money and my second question is based on what you're saying here can we anticipate another round of bank bailout money and will it be
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approximately the same size or less or more but i do if you don't know what the total price tag for god is i could give you a number that's not. you know not of every medical number and the price of a gal out is the economic future of the country if you let be insolvent fail be the fish crash at the bottom or if you and i we back up we have economic productivity. at a brisk level. we decided not to do that and decide if you go across in place and now ridge dragging along so i have absolutely no idea what they're going to a number is but the actual true economic cost is future growth now as for any other bailouts also ran another article this morning oh yesterday stating that the banks are considering settling their own fraudulent foreclosure issues with attorneys
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generals etc it out for five billion dollars if they get away with that that is in essence a girl out because we're talking at least twenty twenty five billion dollars of potential liability at minimum from a realistic economic perspective so if you could if you could take twenty thirty billion dollars of your problems and you can buy them sell them off for five billion dollars you can build up to two hundred fifty billion dollars let me get your comments on something that's in the newest talk about goldman sachs for a loan. two stories have come out s. and p. just downgraded goldman sachs and we've also got a downgrade from the wall street guy go they who came in and said that based on matt taibbi exposé in rolling stone magazine that the stock's price target was lowered substantially by more than forty dollars and goldman sachs case the stock is down six billion dollars already today and making reference to this matt i.e.d.
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article did you read the matt taibbi article you're an analyst or a financial analyst analyst did he get anything wrong in any of his analysis or is not tied me you know he's a primate he's a journalist an investigative journalist he's not a last great guy some people might question his analysis but reggie middleton what do you say about his analysis is it accurate to be honest i didn't get to read the latest. article by teddy but i can tell you i been attempted to alert those who felt the goldman sachs guys. have excrement it does not smell the goldman sachs has been overvalued for quite some time starting in two thousand in the spring of two thousand and eight i made it very clear that the amount of risk in the sex tapes and running its business in the risk of the assets are now covered by the profits of doing business from an economic perspective you know they're covered from an accounting perspective and they make a bunch of accounting earnings in the price goes up but they take significant risk
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. for less just because of an over the last few four years it's come the pipe and they're basically. i'm going to watch my tongue here for the first time in quite some time but goldman sachs' business model is basically to take advantage of his clients that's where the excess spread comes from and that's where they could have a. training quarter with not one loss an insider trading statistically having a quarter without one day of trading losses as was the case of dawn and j.p. morgan and bank of america i think between the three of them they had one down day in trading losses statistically is that really possible is this is possible is jumping off the empire state building in london somewhere in california which is a broken. it's a possibility but the chances of good ever happening you know very slim you know in general you know i have children and i tell my kids very simply when it sounds too good to be true chances are it's too good to be true i wouldn't want to do business
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with somebody one trading loss. of three quarters you know i i wouldn't it's not worth the chance is just not worth the risk are let's talk about the stock market for a second it appears almost as if washington and particular ben bernanke and working through this thing at me and other regulators they're trying to corral people into equities they keep raising the margin requirements on commodities but they don't raise margin requirements on training on equity futures and this based on all the economic indicators you've just discussed being a horrible shape stock markets trading near all time highs is that is our disconnect there of course there's a disconnect that i believe that they are the market has been significant overvalued you know if those who follow my blog know that the crash of two thousand and eight and first quarter of two thousand and nine has never finished the government is attempting to blow and we inflate the bubble which they succeeded and
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now move in the u.s. equity markets the problem is bubbles and i cannot make progress you know you draw a bubble pops going to tops usually values you go below the trend line and that's. not the way to do it that's the way their policies has been conducted in this country i disagree with it but both you'll see from from correct if i'm correct then you're going to see a pretty tice's drop significantly and if i'm wrong then you're going to keep going up despite the fact learnings that revenues in margins are going to opposite direction and this but in fact the input costs are going up despite the fact employment is going down. that doesn't sound like investing it sounds more like you know chase bernanke and do overnight he does that's not enough and best mate and that's not true the market was compressed discovered right centrally planned by market and century parameters to the fair all right last question pertaining to the dollar folks say that the dollar is stronger than the early look at the periphery
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countries in europe and suggest that the euro is an errant lee structurally weak as a result of these peripheral nations in the us however they have quite a bit of trouble based on what we've been saying right here what is your take on the dollar versus the euro both have significant flaws that have significant issues i think there to be able to triumph or it of. super economic superpowers the e.u. the us and you have china and. each each of each one of them have a fairly unique problems but tabulated in the correlation between the problems of basically the bubble and how they handled it the e.u. is in a highly indebted stare face in every state so is the us the e.u. has the too many chiefs and one of india's problems where they have. separation of strong economic countries and a very weak economic countries that are pulling other countries down and they're
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going to default to restructure you've heard it from me it's guaranteed to happen it may be called something different but it's guaranteed to happen that's going to do significant damage to euro because rates spike the u.s. has too much debt and basically running a ponzi scheme which treasuries there's no way in the world that treasuries should be increasing in price and that which will not go well and then you have china which. anecdotally appears to have avoided all this because they simply ran a bubble they open their banks pay gets it to everybody and then include anything that could be considered transaction in g.d.p. and it looks like they're doing well they're going to crash and fail it's going to be inefficient every crash one way or the other but i think the three powers are basically waiting for the other to blow up the blows of westminster will. happen flies in a direction that's the best that i can surmise you know it might not be the case but i see the case that the u.s. is on its be unsustainable i see the case of the e.u. is guaranteed destruction serial destruction in several countries and china is
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rampant inflation there's absolutely no way to tonight so if china and the u.k. you go before us to us benefits if the u.s. and china go even if it's in sara i don't think it's a very good way to run the country's finances but from what i'm seeing from the outside looking in as an outsider. can't see them doing anything else besides that because each step they each. of the three and cities are taking don't seem to be fundamentally sustainable in just the five politically just fundamentally just all right it sounds like what some call a currency war and the world war three being fought on the currency peds is exactly what's going on reggie melton thanks again for being on the kaiser report ok well you're very welcome for coming back again and that's going to do it for this edition of the kaiser report with me max kaiser and stacey everett our thank my guests reggie middleton of boom bust blog dot com if you want to send me an email
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please do this at kaiser report at r t t v dot ru until next time next guys are saying.
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