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tv   [untitled]    October 13, 2011 11:30am-12:00pm EDT

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touch from the. life. video on demand oxys mind. this feeds in the palm of your. machine on the t.v. george comb. welcome back a lot see the headlines for you know syrian activists sound the alarm over new crackdowns despite loyalist crowds in the capital of president assad is battling global pressure over its role. in the us protesters took the time and to stamp out corporate greed take their grievances to the doors of the wealthy as they accuse big business of trying to buy elections. and ukraine's former prime minister faces a new charges two days after she got seven years behind bars for abusing power
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while signing gas contracts with moscow. dollars here in half an hour's time for now it's because her.
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i have nice kaiser walk with a kaiser report before we get started i want to mention as protected sheffield wednesday chesterfield i met john pierce and he was so impressed with my prognosticating abilities he gave me his time that's right. think 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 tense when merkel announced we're 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 i finally figured out one thing it's not the government that's the problem but the banks recurring theme i'm sure but tell us more well i maintain there is no
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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 he said but 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 is that we 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 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 card 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
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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 smith said. 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 that end game of managed perception and work for quite a few decades sure at the end game but the question is how long they can extend the end game using computer trading algorithmic trading where they effectively seize the price discovery mechanism they make the prices they've got infinite credit they're disenfranchised 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
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insurrection against bank right to patients savers versus speculators we call 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 merkel 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 any 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 and scaring the bankers bakley was not scaring the world the
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world is becoming empowered by their efforts to capitalize and get rid of these bankers they're not scare the bankers or scare exactly why do they have merkel the chancellor of germany have to state piece facts 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 merkel to manage the perceptions of the german population right and any leader who defends the interest of the banks is clearly the interest of the people running a second second place in that equation so i mean she's doing great no elections i'm hopeful to get balanced out well you know the previous announcement merkel and sarkozy made was that yes f. the european financial stability so sick is that how you pronounce s s a c it's not a financial stability but it's they call it that anyway so let's look at this
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headline max greece activates rescue fund to save proton bank yes the first bank bailed out by the f.s.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 us to go faster than light backwards and and undo this mess before it 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 gage their 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 believe 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 cluster kratz fudging up the works with their
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algorithmic trading in. outright larceny you don't have competition do you you know one for competition let's see some competition just like the wrens the vs chesterfield like everyone should emulate sheffield lives play football club they're on a winning streak because they return to their roots as world class competitors. the premiership ok so let's move to this next headline another bailout another break up another toxic bank across europe dexie a 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 but managing perception angle of this rescuing dexia the first victim of the debt
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crisis at the core of europe has become critical to preventing contagion in the region's banking industry again but managing perception rescuing dexia is absolutely necessary for the survival of human beings. to whole thing and brothers collapse in the best sort of got the rescue we now know that would have been better off a lot of 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 as 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
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greece. a 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 but always there they were keeping it afloat in two thousand and eight well folks i 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's he's got one hundred eighteen billion dollars in assets now but it's assets for the bankers because it's debt that they're calling thing rent from you in the form of austerity measures but it's not an asset in the sense that is 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 us federal reserve was propping up debts here for so long is that dexie is crucial they say to the municipal bond market so it
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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 broken system that's true but it doesn't negate the fact that they are pirates well cutter is rumored to be picking up the best assets for. her right of course carter is going to be picking up any worse that other certain saudi guy he's always pick and things of the absolute top reason worst stock broker that ever lived know but this is what's happening throughout we've seen throughout the european crisis is real assets real genuine good quality assets get handed a fire sale prices to insiders to the elite the bad assets which are not actually
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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 and at the same time they vilify the word commodities commodities are 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 headline max john crossman there are four things that every wall street protester should know so this is a newsletter writer john huston 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
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existence and he said that's fake because depositors are protected when a bank fails it's the bondholders and stockholders to lose. ok what else does it say the federal reserve purchases of fannie and freddie were illegal number three creating shell companies like needling to buy bad wine. assets was illegal and for policies of balance only missed allocate capital and exacerbate the wealth skew anything 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 that 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 that should be the rally kind of what are you saying on the fourth point the policies of balance only miss allocate capital so he goes on to write in his own letter despite inflicting massive damage on the economy too big to fail is are afforded a protected status that allows them to extract rents they don't reflect the cost
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they have imposed from that standpoint the occupy wall street protests are a welcome reflection of public frustration 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 one this of purpose to defeat the speculators and so far they're getting a huge base but there is no rallying cry ok fine the grace is continuing to grow which is useful but there is no single rallying cry yet and you know i believe this is where they are going they will eventually figure this out and they will figure out that their mass global protest in a way in effect put risk back into the balance sheets of these banks where it came from and capitalized banks who want to get rid of the cancer say so herbert thanks
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so much for being on the kaiser report thank you don't go away much more coming your way right after the. we'll. bring you the latest in science and technology from around russia. we've got the future covered. the little. bugger magnetize a report on max kaiser time now to go to los angeles and speak with ellen brown
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author of wed of debt l a brown welcome back to the kaiser recourse thanks max always a pleasure all right all around 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 they probably have the strongest european tradition of publicly owned banks but they're 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 you know the way they were use this public utilities which is a good thing and in fact the reason japan could cherry debt to g.d.p. ratio of two hundred twenty four percent which is the highest of any of the major
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countries is that their debt is actually own by their own bank so so it's internal debt it's not debt owed to foreign creditors you 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 lattice banks and germany lend this banks are public based that every 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 it they're 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 they're half the size. texas and where they were global leader in exports will be said they're small and medium size businesses which the latest banks the public banks accorded and i never need the latest banks are they head of this whole pyramid of local public
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beings which are called start and they're all geared towards serving the public interest and basically serving the local businesses so where our dates are not lending to local businesses particularly the big wall street banks that have all that excess reserves or books. in germany that their mandate to serve their local business all right let's go back to two thousand and eight for a second here of course the lantus banks in germany were some of the first banks or the first banks actually to get the big bailout from wall street from the u.s. so how does that play into the story well the reason they had they had to get in to speculate it derivatives and cetera at all was that in two thousand and one they were no longer allowed to the 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
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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 banks but that's the whole point of being at company bank but 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 left in a chair quarterly profits for your shareholders so therefore see him to fit into the 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 derivative some wall street that the rating agencies had a right. aaa so they were unaware that the rating agencies were corrupt in applying these ratings as part of a quid pro quo scam of under underhanded dealings and kickbacks so while the
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american public ended up bailing out german banks again to pay for the fraud it moody's fitch and s. and p. so let me ask you something we see over and over again across the us you say in europe governments use their authority and power to transfer our state funds to cronies for example with and within the military industrial complex now what would stop a state bank or public back from doing the same well we only have one probably thinks that we can use that for the gravel that's baker night and day they operate very honestly and the reason is first of all they have no motive to they're not getting bonuses these commissions are just on the salary and their mandate is to serve the public so they have no motive to. do exploited things the politicians don't have control over in that sense and that's in my melas there
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is no occupied north dakota campaign at this time is that your understanding that night the parents are quite happy with it i mean the bankers in south dakota are quite happy with the banker knight rider because it serves as the central bank for the state they meet cheaply quiddity available for the local banks they they 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 secured loans then they went out it runs 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 nice healthy 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 to crowd a class and we're seeing the result of that now on a federal level let's talk about the federal reserve for
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a second the idea of putting it underneath the treasury reporting to the treasury a suggestion made by dennis considerate 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 does so many useful functions and it them in the biggest glenister 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 banks are always want more money back and they put 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
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a second because we've talked about this before and you've talked about the existence of paper money or money is ok given that it's very very is controlled the supply of money is controlled. versus let's say a gold standard that would be a moral us implied however as you're saying here the loans made by any bank of course they not only create the money to circulate they found me 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 the. the out money system correct i would predict cap and then the money that the base create banks create credit interests the radically banks create credit in response to the demand of the people for credit so it's
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a very fluid organic system it's a good system the only thing wrong it is the interest the only thing that's not mathematically sustainable but it should be that anybody who's credit where they 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 great 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 put in for a second so what about a cap on the interest rate when you have a public 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 out in the early part of the eighteenth century where the bank could create they created money in the form of paper scrip you know pennsylvania paper scrip it would issue say one hundred dollars in loans at five
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percent interest and then it could issue another five dollars and spend that it's the economy so let's talk about the currency for a 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 can competing currents the currencies i was being 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 same same yardstick but if you if you if you have like the e.u. system right now where this economy can't expand many splay 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 drinker 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
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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 and materials half a million swiss francs in viewer and it worked out so are you saying you saying beer as in the stuff you drink you know it's w i are here i think it's ok what is beer beer is it community currency it's there the most largest established well established european community currency so just to follow up on the beer tells our work so there's a swiss franc and there's a fear right so the fear is it countercyclical in other words when they when that. national currency shrinks as it has been doing now lately relative to those in services. then that the local currency comes in and fills fills in the gap and the local currency is issued by the fear bank now it is she's both the local currency beer and the swiss franc but it one time they were on the issue in beer but the spa
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that we went to was very elaborate i mean there's nothing like that in the u.s. in fact that you could get a loan from unity permits a bank. to do to do a large infrastructure project like that it was quite remarkable so it was zero percent interest and then half a million of the year and then it was one percent interest on the next million swiss francs and then the rest is that three percent so the whole thing was a very low interest loan ok well serve the there is a currency chosen by the people so other people got to pick a currency they have a plentitude of currency to choose from that's the market why i love the market decide. and that's 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 military and it's there because they don't have a safety valve we have the federal reserve which can print money and goes print
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money and expand the money supply is needed all right but it's all the time we have thanks so much 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 me max kaiser and stacy herbert i would like my guest alan brown if you want to send me mail please do so at kaiser reported r t t v are you until next time this of nice guys are saying. home. from.
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