tv [untitled] October 13, 2011 3:30am-4:00am EDT
hutto country house holiday is the blue pill bottles to remember the creamy it used to be the accuser to the world pull the reuben switch on. welcome back you're watching our t.v. and here's a look at the top stories of the syrian capital host a massive show of support for president assad with calls for him to be given more time to make a promise to reform areality that's as activist reported violent clashes with police outside damascus during opposition rallies. angry anti-corporate activists knock on the doors of some of america's richest as the wave of demonstrations critical of washington's loyalty to big business gathers momentum nationwide washington's approval ratings taking a hit with the public demanding accountability over the corporate lobbies and
influence. and while some celebrate germany's move from nuclear power to renewable energy others fear it could lead to higher i would trust city costs and blackouts so we have lines now on our team axis daisy delve in the current global financial turmoil and expose the dark details of a new plan to rebuild european union economies kaiser report is next. with a kaiser report before we get started i want to mention. sheffield wednesday. i met john pierce and he was so impressed with my prognosticating abilities he gave me his. that's right. but the server maxwell you may have been too busy at the sheffield wednesday game to have noticed that angela merkel and nicolas
sarkozy have been photographed standing together and you know what that means that means another conning plan only this one chancellor merkel announced we are not going into the details today the whole package will be ready by the end of the month there are no details other than desperate money printing as the banking system implodes at least those occupy wall street people have finally figured out one thing it's not the government that's the problem but the banks recurring theme on shore but tell us more well i mean taking there is no difference between banks and government they are the same thing but let's move on to covering this angela merkel and nicolas sarkozy meeting the un credible dog and pony show merkel and sarkozy so this is our guest from last week charles hugh smith and he said that every time the ugly truth of systemic insolvency rears its frightening head once again out comes the psycho's the merkel dog and pony show in order to do exactly as
the fed says in their handbook is manage perception they don't need to have a plan they just need to manage perception well and if you have currency world all you need to do is perception because you're managing consumers the people who are seventy percent of the u.s. economy are trigger happy drug addled consumer hollings who are wed to their food stamp card and their credit card and debit cards just manage perceptions that if you just get them to go to or from the frenzy based on a pack of lies which was what sort of cozy and merkel that's all they can talk about that's how you manage the economy because there's no underlying base foundation for the economy it's all based on thought yeah but that worked for the past thirty something years since the u.s. went off the gold standard in the world turned to feed currencies on mass but as charles who. here the problems of the global economy are not based on perception but in the reality of crisis balance sheets and income statements that
concentrations of wealth and power precarious the systemic imbalances ruthless exploitation and command economies mismanaged by central bank policy manipulation so we're at the end game of manage perception and work for quite a few decades sure we're at the end game but the question is how long they can expand the and again using computer trading algorithmic trading where they effectively seize the price discovery mechanism they make the prices they've got infinite credit they're disenfranchising and stealing hundreds of billions of dollars every month that it goes on and on the occupy wall street crowd is growing in size the global insurrection against bankrupted patient savers versus speculators recall that years ago it's finally getting a foothold it's working its way into the mainstream media where will it end well it ends when they take the ability to create prices out of computer algorithmic trading is taken away that's when it ends well you talk about this occupy wall street and of course they're operating against the bankers and bankers versus the
people the one percent versus the ninety nine percent but here's another takeaway headline from the merkel sarkozy meeting were called euro leaders will do all necessary to support banks they will not support their populations they will continue to support the banks they have not learned the lesson this is what they are saying european leaders are coming under increasing pressure from international counterparts to end the debt contagion that president barack obama said last month was scaring the world it's scaring the bankers in fact it's not scaring the world the world is becoming empowered by their efforts to capitalize and get rid of these bankers they're not scared of bankers or scared exactly why do they have merkel the chancellor of germany have to state these facts that the bankers are afraid mostly . of the german population because they know that the german population is the one
with all of the cash and the savings and that's what they want to bail them out so it's up to recall to manage the perceptions of the german population and any leader who defends the interest of the banks is clearly got the interests of the people running a second second place in that equation so i mean she's not doing great elections on hope to get bounced out well you know the previous announcement merkel and sarkozy made was that s.f. and european financial stability sick is that how you pronounce it it's not financial stability but it's they call it that anyway so let's look at this have i max greece activates rescue fund to save proton bank yes the first bank bailed out by that yes f. greece's central bank said on monday it activated the bank rescue fund to save proton bank effectively nationalizing the small lender that is under investigation for possible violation of the country's money laundering laws opening is a neutrino bank that allows it to go faster than light go backwards in time and
undo this mess it's already even starts well but it's so symbolic that the very first bank rescued by the f.s.f. is engaged in money laundering out now why are we rescuing a bank that is engaged in money laundering just like we rescued what covielle why not just let these drug dealers and money launderers go out of business because they don't live in competition they don't believe in competition i'm all for free market competition but the operative word there is competition if you've got drug kone in rent seeking banking kleptocrats fudging up the works with their algorithm and training in. outright larceny you don't have competition do you you know one for competition let's see some competition just like the wednesday versus chesterfield like everyone should emulate suffield lives play football club there on a winning streak because they returned to their roots as world class competitors toward
the premiership ok so let's move to this next headline another bailout another break up another toxic bank across europe dexia board meets us france belgium tussle over troubled assets so you know belgium has bailed out the belgian arm of dexia which is now threatening a downgrade of belgium so again throwing the population prone entire nation the existence and credit of a nation to save a group of bankers but i want to quote from this headline from bloomberg just the managing perception angle of this rescuing dexia the first victim of the debt crisis at the core of europe has become critical to preventing contagion in the region's banking industry again managing perception rescuing dexia is absolutely necessary for the survival of human beings.
to help something the brothers collapse in the various turn around they got the rescue we now know that would have been better off. the bad banks to go bust they were more attentive to the needs of the underlying competitive economy but now europe is making the exact same mistakes rescuing dexia at the expense of their competitive economy well max bloomberg goes on to say dexie its balance sheet with total assets of about five hundred eighteen billion euros at the end of june is about the size of the entire banking system in greece. and larger than the combined assets of financial institutions bailed out in ireland in the last two and a half years it's also remember dexia was the number one receive a federal reserve funds from the us federal is that they were keeping it afloat in two thousand and eight well folks i've got to hit you about
a little legerdemain of grammar and syntax and word usage the word assets in this case refers to debt so whenever you see in the paper that she has got one hundred eighteen billion dollars in assets you know about it's assets for the bankers because it's debt that they're collecting rent from you in the form of austerity measures but it's not an asset in the sense that it's worth anything it's debt pulled out of their strange thing that has an interest bearing coupon that you've got to pay for through austerity measures yes it's an asset for them but it's a pain for you now the reason why the u.s. federal reserve was propping up debts here for so long is that dexie is crucial they say to the municipal bond market so it holds the assets of many municipal bonds including new york city on its books look the pirates off the somali coast are critical for the economy of somalia that's true if you remove the pirates the economy in somalia would collapse. that's true jim the same way that dexia is
crucial to the european voting system that's true but it doesn't mitigate the fact that they are pretty good pirates well cutter is rumored to be picking up the best assets for. right now of course carter is going to be picking up any worse that other friggin saudi guy he's always pick and things of the absolute top reason were stockbroker of the never left no but this is what's happening throughout we've seen throughout the european crisis is real assets real genuine good quality assets get handed out fire sale prices to insiders to the elites the bad assets which are not actually assets but debts that will never be paid back and so therefore are just black holes of nothingness they get handed to the taxpayer so it's confusing like you said the word assets is a confusing term right and at the same time to vilify the word commodities. is a worthless meanwhile they're taking the assets that is nothing but dead to buy the
good stuff that they think stinks so again fighting this banker occupation is occupy wall street so i want to turn to this next head by max john koskinen there are four things that every wall street protester should know so this is a newsletter writer john houseman of housman funds and the four points he says that all occupy wall street protesters should know when they speak to the media is one failure means bondholders shouldn't be guaranteed every penny and he's in fact referring to the managed perception that somehow banks are too big to fail that if they fail you fail you ninety nine percent you must we are crucial to your existence and he said best fake because depositors are protected when a bank fails is the card holders and stockholders who lose. ok what else to say the federal reserve's purchases the fannie and freddie were illegal number three creating shell companies like me to buy bad one. assets was illegal and for
policies of balance only missed allocate capital and exacerbate the wealth skew what do you think of those four demands i mean in my pin it doesn't get at the net all of the problem clearly the one thing that these protesters want is higher interest rates and i should be what their rallying cry is we want higher interest rates which would bankrupt the speculators and give us the savers a greater return on our jobs and our savings should be the rallying kind of what are you saying on the fourth point the policies that balance willingness allocate capital so he goes on to write in his own letter despite inflicting massive damage on the economy too big to fail as our forty two protected status that allows them to extract rents they don't reflect the cost they have imposed from that standpoint that occupy wall street protests are a welcome reflection of public trust ration over washington slavish coddling of reckless financial institutions. great points but again you need a single rallying cry to win against the speculators the rest of the economies of scale there has to be
a certain oneness of purpose to defeat the speculators and so far they're getting a huge base but there is no rallying cry ok fine good braces continuing to grow which is useful but there is no single rallying cry yet and you know i believe that this is where they're going they will eventually figure this out and they will figure out that their mess global protest in a what and in effect put risk back onto the balance sheets of these banks where it came from and capitalized banks you want to get rid of the cancer say herbert thanks so much for being on the kaiser report thank you don't go away much more coming your way right after the. discovery.
communicate with the why don't. test yourself and become free to. see what nature can give you the. world. bringing you the latest in science and technology from around the world. we've got the future covered. a little. bugger magnetize a report on max kaiser time now to go to los angeles and speak with ellen brown author of web of debt ellen brown welcome back to the kaiser report thanks max oh it's a great you're right alan brown european banks are being nationalized left and right as the ongoing global financial crisis continues to wreck havoc so what were once private banks are now becoming publicly owned banks but we already have
a model of publicly owned banks how do these two compare well germany for example half their commercial loans are through publicly owned banks incredibly has the strongest european tradition of publicly against their being attacked by the private banks so their legs are being taken out from under them in the form of government guarantees great say in japan their their banks are nationalized in the ninety's and then as nationalized banks they had to do things for the public in other words they were use this public utility which is a good thing and in fact the reason japan should carry a debt to g.d.p. ratio of two hundred twenty four percent which is their high yes there are any of the major countries is that their debt is actually owned by their own bank so so it's internal debt it's not debt owed to foreign creditors who can squeeze them raise their rates etc now going back to germany for
a second lend us banks this is. a big system there so describe let us banks in germany lend this banks are public banks that have been around for two hundred years it's a very solid tradition in germany it is how they funded their small and medium sized businesses which are the businesses that were responsible for their very strong export business in that in the second half of the twentieth century they were the leader in exports and their relatively small country like their have to say. texas and here they were global leader in exports will be there they're small and medium size businesses which the latest banks the public banks accorded and i don't need the latest banks are they head of this whole pyramid of local public being soldier called start and their own year towards serving the public interest and basically serving the local businesses so where our banks are not lending to local businesses particularly the big wall street takes that have all the excess
reserves or books. in germany that's their mandate to serve their local businesses all right let's go back to two thousand and eight for a second here of course the lenders banks in germany were some of the first banks or the first banks actually to get the big bell out from wall street from the u.s. so how does that play into the story well the reason they had they had to get into speculation is there evidence etc better are was that in two thousand and one they were no longer allowed to be e.u. rules no longer allowed them to count their government guarantees as part of their capital and so so that and they had to compete with the other banks to turn a profit for their shareholders or the shareholders are the public the local governments who don't really didn't really want the profits but that was the rule imposed supposedly to make them competitive with private meetings but that's a whole quite of being at public bank year and you've got the public behind you and
so you can make lower interest loans you can make longer term loans you don't always have to be let in a chair quarterly profits for your shareholders so they're forcing them to fit into their private bank mold which naturally they they then got into trouble but as long as they were allowed to do the public think think they were highly successful ok so presumably the lenders banks were caught up in buying derivatives some wall street that the rating agencies are right. aaa so they were unaware that the rating agencies were corrupt and applying these ratings as part of a quid pro quo scam of under underhanded dealings and kickbacks so the american public ended up bailing out german banks again to pay for the fraud that moody's fitch and s. and p. so let me ask you something we see over and over again across the u.s. you say in europe governments use their authority and power to transfer our state
funds to cronies for example in within the military industrial complex now what would start a state bank or public bank and doing the same well we only have one public bank so we can use that for the bottle that night to try to and they they operate very honestly and the reason is first of all they have no motive to it they're not getting bonuses fees commissions they're just on the salary and their mandate is to serve the public so they have no motive to. to exploit it to things that politicians don't have control over the bank in that sense not to my knowledge there is no occupy north dakota campaign at the time is that your understanding of north dakotans are quite happy i mean the bankers in south dakota are quite happy with the danger not go to because it serves the central bank for the state they meet cheap liquidity available for the local banks they
a partner with the local banks they do guarantee the local banks loans and that allows local banks to make a much bigger loans and were secure loans then they would have that right right well having a public bank doing utility functions in the banking sector. would of course increase the competition in that sector and it would create a by southey competitive economy but america and the u.k. for the most part hate competition. and they preserve they rather have the rent seeking and the monopoly profits of a club the credit class and we're seeing the result of that now on the federal level side while the federal reserve for a second the idea of putting it underneath the treasury reporting to the treasury a suggestion made by dennis considered recently what are your thoughts on this i think it's better to nationalize the federal reserve then to eliminate the federal reserve just because a central bank goes so many useful functions and it them in the biggest when it's
conflicts liquidity function this central bank is there to allow the money supply to expand its line is we have a system where banks create our money basically all of our money is created by banks in the form of loans except for coins which are the only thing issued by the government and the banks are always want more money back and they get out there in other words they create their principal but they don't create interest necessary to pay off their loans you have to have an expanding money supply or somebody is going to go bankrupt which is what's happening in the e.u. because they don't allow their central banks to actually create the money flow just kind of looking at this banking model for a second because we've talked about this before and you've talked about the existence of paper money or fee up money is ok given that it's very very it's controlled the supply of money is controlled. versus let's say a gold standard that would be
a moral us supply however as you're saying here the the loans made by any bank of course they not only create the money to circulate the economy but they must also create money to pay the interest on the money that they've just created so there's a built in need to perpetually create money but you're saying that there if you put a cap on that money creation and very vigorously oppose that cap you can do fine with us. money system correct i would predict cap and then the money that the base create banks create credit interests at the radically banks create credit in response to the demand of the people for credit so it's a very fluid organic system it's a good system the only thing wrong with it is the interest the only thing that's not mathematically sustainable but it should be that anybody who's credit worthy can go to a bank and get a loan and that's not true right now right now the banks won't lend even if i under
the old standards you're right credit where the businesses are all over california and that's the big complaint of small business they cannot get the loans they used to get that they only got in for a second so what about a cap on the interest rates when you have a public bank interest goes back to the public so there is a sustainable system in the sense that you are feeding that interest back into the economy where it is available to pay principal and interest that the ideal model was in the bank of pennsylvania set up near early part of the eighteenth century where the bank could create they created the money in the form of paper scrip you know pennsylvania paper it would issue say one hundred dollars in loans at five percent interest and then it could issue another five dollars and spend that into the economy so let's talk about the currency for the second using your your ideas and we see this playing out in germany and other places this is only one currency or can there be more than one currency competing currency currencies are as big but
i think the most efficient thing would be to have one currency if everybody agreed and this whole system where credit was a public utility because it's just easier to i'll be dealing with the states same yardstick but if if you if you have the e.u. system right now where this economy can't expand many play can't expand then competing currencies serve a very useful for purpose for example i was just in switzerland where. i went to a spot that was funded by a loan from the beer bank which is a community currency and it was a three million dollar loan and half a million swiss francs worth which is valued more than a dollar was in fear interest free this is actually a community currency and that currency is so well accepted in switzerland that they could actually pay workers materials half a million swiss francs in rear and it worked out so are you saying same beer as in the stuff and right now it's w.i.
are dear i think it's ok but is dear dear is a community currency is suspect the most largest established well established european community currency so just to follow up on the beer tell us our work so there's a swiss franc and there's a beer right so the beer is it countercyclical in other words when they win the. national currency shrinks as it has been doing lately relative to goods and services. then that the local currency comes in and fills fills in the gap and the local currency is issued by the vir bank now it is used both the local currency beer and the swiss franc but it one time they were on the issuing beer but the spa that we went to was very elaborate i mean there's nothing like that in the u.s. the fact that you could get a loan from unity currency bank. to do to do a large infrastructure project like that was quite remarkable so it was zero
percent interest and then half a million of year and then it was one percent interest on the next million swiss francs and then the rest was at three percent so the whole thing was a very low interest loan ok well some of the the very is a currency chosen by the people so other people get to pick a currency they have a plan to do their currency to choose from that's the market why not let the market decide. this is what you're saying in europe but i guess it's growing throughout europe alan brown is that's your perception yeah well they definitely need some alternatives there because they don't have a safety valve we have the federal reserve which can print money and does print money and expand the money supply is needed all right so it's all we have thanks so much all around for being back on the casa report thank you max and that's going to do it for this edition of the kaiser report with a max keiser and stacy herbert i would think my guest alan brown is going to send me well please do so at kaiser reported r.t. t.v.
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