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tv   [untitled]    October 13, 2011 5:30pm-6:00pm EDT

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america you should also follow me on twitter i'm at frowsy i want to thank you so much for watching and christine for the down. below to speak again clothes and history. she was trying to store. data. but sprung the traps they laid for. mobile radio we have the surge squawks around the. always from the always missing. one shot trying to take. the drug industry's gold from became the most want to trophy the world to see. how the escobar the great times car chase. down the official on t.n.t.
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keisha johnson on pulled touch from the shoes ops to. show you see life on the. video on demand on cheese money fuel costs and omissions feeds now in the palm of your. question. i have nice guys are welcome to the kaiser report before we get started i want to mention as per day sheffield wednesday big chesterfield i met john pearson he was so impressed with my prognosticating abilities he gave me his. that's right. say 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
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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 take in 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 miracle dog and pony show in order to do exactly as the fed says in their hand book is
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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 into a frothy frenzy based on a pack of lies which will put sort of cozy and merkel that's all they can talk about that's how you manage the economy because they're still on the line based foundations 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 in the world turned to fia currencies on mass but as charles who. here the problems of the global economy are not based on perception but in the reality of prices balance sheets and income statements and that's concentrations of wealth and power precarious systemic imbalances ruthless
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exploitation and 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 at the end game but the question is how long they can extend the game using computer trading algorithmic trading where they affectively seize the price discovery mechanism they make the prices they've got instant 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 patients 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 in and 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 the operating against the bankers as bankers versus the people the one percent versus the ninety nine percent but here's another takeaway headline from
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the merkel sarkozy meeting euro leaders will do all necessary to support banks they will not support the 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 bakley was not scaring the world the world is becoming empowered by their efforts to capitalize and get rid of these bankers they're not scared 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
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workable to manage the perceptions of the german population 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 not doing great no actions on hope it's a good balanced out well you know the previous announcement merkel and sarkozy made was that yes s.f. the european financial stability sick is that how you pronounce this so i see 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 half 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 what i need is a neutrino bank that allows us to go faster than light go backwards in time and
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undo this mess it's already been 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 coning in rent seeking banking cluster kratz fudging up the works with their 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 brands they versus chesterfield like everyone should emulate sheffield wednesday football club they're on a winning streak because they return to their roots as world class competitors. to the premiership so let's move to this next headline another bailout another break
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up another toxic banker cross 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 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 the managing perception rescuing dexia is absolutely necessary for the survival of human beings. the whole thing and brothers collapse in the various turn around they got the
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rescue we now know that would have been better off they allowed 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 is 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 bell about 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 reserve they were keeping it afloat in two thousand and eight well folks i got to hit you about a low legerdemain of grammar and syntax and word usage the word assets in this case
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refers to debt so whenever you see in the paper that says that one hundred eighteen billion dollars in assets no bets it's 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 strength training but 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 decks here for so long is that dexie is crucial they say to mean a simple 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 just the same way that dexia is crucial to the european
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voting system that's true but it doesn't mitigate the fact that they are fricken pirates well cutter is rumored to be picking up the best assets for fire sale price cutter right of course carter is going to be picking up the worst of the saudi guy he's always pick and things of the absolute top reason we're a 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 to vilify the word commodities commodities a ruthless mean well 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
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occupy wall street so i want to turn to this next head by max john huston there are four things that every wall street protester should know so this is a newsletter writer john houseman of hustlin 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 does it say the federal reserve purchases the fannie and freddie were illegal number three creating shell companies like me to lend to buy bad why. assets was illegal and for policies of balance only mr allocate capital and exacerbate the wealth skew what do
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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 that should be the rally kind of what are you saying on the fourth point the policies that balance only 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 are afforded a protected status that allows them to extract rents that don't reflect the cost they have imposed from that standpoint that occupy wall street protests are a welcome reflection of public prostration over washington slavish coddling of reckless financial institutions. great points but again you need to single rallying cry to win against the speculators there has to be a commies of scale there has to be a certain one this of purpose to defeat the speculators and so
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far they're getting a huge base but there is no rallying cry ok fine the base was continuing to grow which is useful but there is no single you 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 mass global protest can in a way in effect put risk back into the balance sheets of these banks where it came from and capitalized the banks you want to get rid of the cancer safety herbert thanks so much for being on the kaiser report thank you don't go away much more coming your way right after the.
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in a little. bugger magnetize a report imax ties are time now to go to los angeles and speak with helen brown author of web of debt eldorado welcome back to the kaiser report thanks max always a pleasure all right i'll round 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
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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 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 used as public utilities which is a good thing in fact the reason japan should carry debt to g.d.p. ratio of two hundred twenty four percent which is the highest of 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 you can squeeze them raise their rates etc now going back to germany for a second lend us banks this as. a basis of their describe glad its banks. germany believe this banks are public banks that every been around for two hundred years
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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 of texas and here they were global leader in exports will be said they're small or medium sized businesses which the latest banks the public banks accorded and i under me the latest banks are the head of this whole pyramid of local public thinks which are called spark as and they're all geared 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 and have all that access for it serves our 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
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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 into speculated derivatives and setter at all 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 things but that's the whole point of being at copley bank. you've got the public behind you and so you can make lower interest loans you can make a. longer term loans you don't always have to be left in a chair quarterly profits for your shareholders so that they're forcing him to fit
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into their private bank note which naturally they they then got into trouble but it's line is they were allowed to do the right thing they were highly successful ok so and presumably the lenders banks were caught up in buying to rid of some wall street that the rating agencies had rated 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 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 power to transfer our state funds to cronies for example and within the military industrial complex now what would stop a state bank or public bank from doing the same well we only have one public bank
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so we can use that for the gravel bank or 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 going to salary and their mandate is to serve the public so they have no motive to. to exploit it to things the politicians don't have control over the bank in that sense and that's in my melas there is no occupy north dakota campaign at this time is that your understanding of north dakotans are quite happy with that i mean the bankers at the crowd are quite happy with the banker next credit because it serves as the central bank for this day they make cheap liquidity available for the local banks they they partner with the local banks they do guarantee the local banks loans and then. allows local banks to make much bigger loans and were secured loans then they went
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out there right right well having a public bank doing it till the 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 proper credit class and we're seeing the result of that now on the federal level let's talk about 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 does serve many useful functions and it them in the biggest glenister clicks liquidity function this central bank is there to allow the money supply to expand its line is we have
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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 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 or money is ok given that it's very very. controlled the supply of money is controlled. versus let's say a gold standard where that would be a moral us implied however as you're saying here the. the loans made by any bank of course they not only create the money to circulate the family but they must also
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create money to pay the interest on the money that they've just created so there's a built in 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 a fee out money system correct i would predict cap and then the money that the banks create banks create credit in reste theoretically 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 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 year 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 ok only come in for a second so what about
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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 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 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 business mean only one currency or can there be more than one currency can competing currency can currencies are as big but i think the most efficient thing they have one great. 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 same
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yardstick but if if if you have a lake in the system right now where they say economy can't expand money supply can't expand then competing currencies serve a very useful for purpose for example i was just in switzerland where i went to a stock that was funded by a loan from the rear bank which is a community currency and it was a three million dollar loan and half a million swiss francs worth which is more than a dollar was in beer 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 drank now it's w i are here i think it's perhaps they are ok what is beer there is a community currency it's they're the most largest established well established
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european community currency so just to follow up on the beer tell us our work so there's a swiss franc and as a fear right so the fear is it countercyclical in other words when that when the. national currency shrinks as it has been doing now lately relative to 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 at one time they were on issuing beer but this spa 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 which mean a deterrence you 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. vir and then it was one percent interest on the next million swiss
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francs and then the rest is that three percent so the whole thing was a very low interest ok well sell the there is a currency chosen by other people so other people get to pick a car and say they have a plan to do their currencies or choose from that's the market right now let the market decide and that's what you're seeing 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 goes print money and expand the money supply as needed all right so it's all 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 uprising report with a max keiser and stacy her work i think my guest alan brown is going to send me mail please do so at kaiser reported r.t. t.v. dot argue until next time this is max guys are saying. to.
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put. a very warm welcome to you this is your news today protesters on the. streets they have. been canceling the chance to get. this is a big human experiment. because you'll see this one. looks really cool to me and it's on changelings. to maintain a confidence in markets and. wants to be seen as way to balance its risks to keep close to sing a song like the close one. it leaves a veil slick ole bumps again a field level like thing is a u.s.
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crash and even then smashed the ceiling seems to me just like i was missing the buses in athens three be i'm going to punch me i'm just programs increase the total economy. you know sometimes you see a story and it seems so for life you think you understand it and then you glimpse something else and you hear or see some other part of it and realized everything you thought you knew you don't know i'm charming welcome to the big picture. on. morning news today violence is once again flared up the film these are the images the world.


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