tv [untitled] October 13, 2011 3:30pm-4:00pm EDT
good to talk to push coromandel. civility to go and grow this in the kennel was such a treat. if you just joined us for a welcome all t. live here in moscow top stories now at huff post the syrian activists have a new crackdowns despite loyalist crowds in the capital president assad battles global pressure on his rule. in the us protesters determined to stump up corporate greed to take their grievances to the doors of the wealthy as they choose big business of trying to buy elections. and ukraine's former prime minister faces new charges two days after she got seven years behind bars for abusing power cast contracts with moscow. so that they do and i'll be back with more news for you more
developments in this one half an hour from now in the meantime max and stacy delve into the current global financial turmoil and expose the consumers to details of a new plan to rebuild european union economies because the report is next for you. guys are a lot of the kaiser report before we get started i want to mention as per sheffield wednesday. i met john pearce and he was so impressed of my prognosticating ability he gave me. that's right. see server max well 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 i'm sure but tell us more well i mean 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 if you just get them to go into off the frenzy based on a pack of lies which was what sort 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 fluff you know but that worked for the past thirty something years since the u.s. went off the gold standard and the world turned to fear currencies on mass but as charles who smith says. here the problems of the global economy are not based on perception but in the reality of prices balance sheets and income statements that concentrations of wealth and power precarious the systemic imbalances ruthless exploitation in command economies mismanaged by central bank policy and
manipulation so we're at the end game of manage perception and work for quite a few decades sure we're at the endgame but the question is how long they can extend this 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 inside the global insurrection against bank right to 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 all and then 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 as bankers versus the people of the one percent versus the ninety nine percent but here's another takeaway headline from the merkel sarkozy meeting were told 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 it's scaring the bankers. some staring the world of the world as it is becoming powered by their efforts to capitalize and get rid of these bankers they're not scare the bankers are scared exactly why do they have merkel the chancellor of germany have to state these 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 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 and elections on hope so good balanced out well you know the previous announcement merkel and sarkozy me was the f.s.f. the european financial stability sick is that how you pronounce as i say it's not financial stability but it's they call it that anyway so let's look at this headline 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 a 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 go backwards in time 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 gauged 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 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 kleptocrats fudging up the works with their algorithmic training in. outright larceny you don't have competition do you you know one for competition let's see some competition just like programs the versus chesterfield like everyone should emulate sheffield wednesday football club they're on a winning streak because they returned to their roots as world class competitors. to the premiership 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 thrown 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 and the region's banking industry again the managing perception rescuing dexia is absolutely necessary for the survival of human beings right. the whole thing and brothers collapse in the various turn collapse and they've 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 that c.s. 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. a larger than the combined assets of financial institutions belled out in ireland in the last two and a half years it's also remember dexia was the number one receives federal reserve funds from the u.s. federal reserve 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 x.
is about one hundred eighteen billion dollars in assets well that's its assets for the bankers because it's 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 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 holds the assets of many municipal bonds including new york city on its books like the pirates off the somali coast are critical for the economy of somalia but it's true if you remove the pirates the economy in somalia would collapse. that's true john 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 frickin pirates well cutter is
rumored to be picking up the best assets for fire sale price cutter right of course cutter is going to be putting up the worst of the saudi guy he's always picking things of the absolute top reason worst stock broker that ever lived you 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 out fire sale prices to insiders to the elite 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 and at the same time they vilify the word commodities commodities are worthless meanwhile they're taking the assets that is nothing but. 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 persimmon there
are four things that every wall street protester should know so this is a newsletter writer jon huntsman 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 that's fake because depositors are protected when a bank fails it's the bondholders and stockholders who lose. ok what else do they say the federal reserve 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 miss allocate capital and exacerbate the wealth skew what do you think of those four demands i mean in my pin it doesn't get that not 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 that should be the rallying was kind of what are you saying on the fourth point the policies that bell actually missed allocate capital so he goes on to write in his own letter despite inflicting massive damage on the economy too big to fail is our forty two protected status that allows them to extract rents that don't reflect the cost they have imposed from that standpoint the occupy wall street protests are a welcome reflection of public trust ration over washington slavish coddling of reckless financial institutions sure great points but again you need to single rallying cry to win against the speculators the rest of the economies of scale there has to be a certain one of purpose to defeat the speculators and so far they're getting a huge base but there is no rallying cry ok fine their base is continuing to grow
which is useful but there is no single rallying cry yet and you know i believe that this is where they are going they will eventually figure this out and they will figure out that their mess global protest in a way 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 so herman thanks so much for being on the kaiser report thank you don't go away much more coming your way right after the. discovery. please. communicate with the wyoming.
test yourself and become free to be seen what nature can give you see the. the little. bugger magnetize a report i'm max kaiser time now to go to los angeles and speak with helen brown author of web of debt l. and round up and back to the kaiser report thanks max always a pleasure all right ella 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 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 but say in japan there 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 utilities which is a good thing and in fact the reason japan can carry debt to g.d.p. ratio of two hundred twenty four percent which is their highest of any of the major countries is that their debt is actually own by their own banks 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 as. a basis of their so describe let us banks in
germany lend this banks are public banks 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 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 they're half the size. texas and you know they were global leader in exports will these are they're small or medium sized businesses which they lend us banks the public banks accorded and i under need the latest rains are the head of this whole pyramid of local public thinks which are called start and they're on here toward 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 banks that have all the excess reserves and their 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 in to speculate it through evidence etc at all was that in two thousand and one they were no longer allowed to be e.u. rules no longer allowed 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 and pose supposedly to make them competitive with private banks but that's the whole point of being at public bank guarantee you get 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 to cheer quarterly profits for your shareholders so they're forcing him to fit into the private bank not which naturally they they then got into trouble but as long as they were allowed to do the public think then they were highly successful ok so and presumably the lenders banks were caught up in buying derivatives some wall street that the rating agencies had a 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 while the 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 u.s. you in europe governments use their authority and power to transfer our state funds
to cronies for example and within the military industrial complex now what would start a state bank or public back from doing the same well we only have one public bank so we can use that for the bridle that's being from north dakota and they they are very honestly and the reason is first of all they have no motive to it they're not getting bonuses these commissions are just under starry and their mandate is to serve the public so they have no motive to. to be exploited to think said politicians don't have control over the bank in that sense and that's where my knowledge there is no occupy north dakota campaign at the time is that your understanding the north koreans are quite happy with it i mean the baker. crowd are right happy with the danger because it serves as the central bank for the state they make cheap liquidity available for the local banks 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 more secure loans then they went out there 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 a rent seeking and the monopoly profits of a club to crowd a class and we're seeing the result of that now on the federal level side where the federal reserve for 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 venture a limited federal reserve just because a central bank goes so many useful functions and it them in the biggest when it's
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 in 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 the 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 money oh 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 our fear of 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 more or less imply however as you're saying here of
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 the. money system correct i would predict cap on their money to debase create banks create credit interests there 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 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 a big complaint a small business can act at the onset but they only cut it 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 pick up a principal and interest that the ideal model was in the bank of pennsylvania set or any 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 strip 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 can put competing currency can perseus i was being i think the most
efficient thing would be to have one crazy 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 state saying yardstick but if if if you have the e.u. system right now where this economy can't expand my display 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 of your 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 and materials half a million swiss francs in here and it worked out so are you saying you saying beer as in the stuff you drink you know it's w i our dear i think it's ok what is beer
beer is a community currency it's that 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 beer right so the beer is it countercyclical in other words when that when that. national currency shrinks as it has been doing mc 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 vir bank now it is used both the local currency beer and the swiss franc but at one time they were on the issue of beer but the spa that we went to was very elaborate i mean there's nothing like that in the u.s. in fact if you could get a loan from unity parents again. 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 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 serve the there is a currency tales of other people so other people got to pick a currency they have a plan to to have currencies 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 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 print money and expands money supply is needed all right well that's all the time we have thanks so much for being back on the carson 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 will take my guest alan brown is going to send me well please do so at kaiser reported r.t. t.v. dot ru until next time this of max guys are saying.
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