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tv   [untitled]    October 13, 2011 8:30pm-9:00pm EDT

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very the without you see there's a place. for . the official. i pod touch from the.
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child's life on the. video. keys money comes. and says feed now in the palm of your. i have nice keyser walk with a prize or a car before we get started i want to mention. sheffield wednesday chesterfield i met john pears to me was so impressive my prognosticating abilities he gave me his tie 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 chancellor merkel announced we're not going
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into the details today the whole package will be ready by the end of the month but 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 just a 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
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don't need to have a plan they just need to manage perception well 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 cards just manage perceptions if you just get them to go into a frothy frenzy based on a pack of lies which of that 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 stuff 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 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 systemic imbalances ruthless exploitation and command economies mismanaged by central bank policy manipulation
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so grab 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 this 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 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 insurrection against banker active patient savers versus speculators we call that years ago it's not only 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 as 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
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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. 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 scare the bankers or scare 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
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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 doing great elections on hope to get bounced out well you know the previous announcement merkel and sarkozy made was that yes s.f. and european financial stability sick is that how you pronounce s s i said it's not a 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 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 but then it is a neutrino bank that allows them to go faster than light go backwards and sign and undo this mess before it even starts well but it's so symbolic that the very first
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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 algorithm and training in. outright larceny you don't have competition do you know one for competition let's see some competition just like the wednesday 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. of 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
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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 throw an 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 right. the whole thing the brothers collapse of the varistor they got the rescue we now know that would have been better off they allow the bad banks to go bust they
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were more attentive to the needs of the underlying competitive economy but now europe is making exact same mistakes rescuing dexia at the expense of their competitive economy well max bloomberg goes on to say that c.e.o.'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 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 reserve 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
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eighteen billion dollars in assets now 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 john the same way that dexia is crucial to the european voting system that's true but it doesn't negate the fact that they are pirates well custer is rumored to be picking up the best assets for.
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her right of course carter is going to be. any worse that other frickin saudi guy he's always pick and things of the absolute top reason worst stockbroker than ever lived 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 a 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. worthless meanwhile they're taking the essence 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 have imax john custom and there are four
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things that every wall street protester should know so this is a newsletter writer john huston of hussman 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 the positives are protected when a bank fails it's the card holders and stockholders who lose. ok what else is the federal reserve's purchases of fannie and freddie were illegal number three creating shell companies like me to buy bad. 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
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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 missed allocate capital so he goes on to write in his own letter despite inflicting massive damage on the economy too big to fail are afforded a 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 frustration over washington slavish coddling of reckless financial institutions. 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 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
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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 school will protest in a way in effect put risk back into the balance sheets of these banks where it came from and capitalized the banks they 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. real you believe the signs and signals from the rooms. we. covered. sometimes you see a story and it seems. you think you understand it and then something else you hear
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or see some other part of it and realize that everything you thought you. had time for was a big picture. but a magnetize a report on max kaiser a time now to go to los angeles and speak with alan brown author of web of the telegraph and welcome back to the kaiser report thanks max always a pleasure all right ellen 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 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
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the private banks so their legs are being taken out from under them in the form of government guarantees great 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 and in fact the reason japan could cherry debt to g.d.p. ratio of two hundred twenty four percent which is their highest ever any of their major countries is that their debt is actually own their own base 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 landis banks this. a basis of their service crowd led us banks in germany the latest 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
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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 these are their small or medium sized businesses which the lenders banks the public banks accorded and i need the latest banks are the head of this whole pyramid of local public things which are called start 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 banks that have all the excess reserves or books. in germany that's 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 line of spanx 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 cetera 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 their 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 things but that's the whole point of being at probably bank that guarantees you've got the public behind you and so. so you can make lower interest loans you can make longer term loans you don't always have to be let in it your quarterly profits for your shareholders so therefore so you knew she fit into their private bank mold which naturally they
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they then got into trouble but as long as they were allowed to do the public think they were highly successful ok so a presumably the lenders banks were caught up in buying the rivet of some all 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 to tax so 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 play 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 thinks
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that we can use that for the bridle baker 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 giese commissions they're just going to salary and their mandate is to serve the public so they have no motive to. to be exploited to things the politicians don't have control of the bank in that sense and that's in my knowledge there is no occupy north dakota campaign at the time is that your understanding that north koreans are quite happy with that i mean the bankers themselves in north dakota are quite happy with the danger not spread it because it serves as the central bank for the state be they make cheap liquidity available for the local banks they they partner with a look. 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 went out there right right well having
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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 kleptocratic class and we're seeing the result of that now on a federal level. rather federal reserve for a second the idea of putting it underneath the treasury reporting to the treasury a suggestion made by dennis to senator 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 there i mean the biggest glenister clicks 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
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banks in the form of loans except recordings 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. be tried as they go to allow their central banks to actually create money over 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 as controlled the supply of money is controlled. versus let's say a gold standard that would be a moral us employer. however as you're saying here 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
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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 a fee out money system correct i would predict cap and then the money to the base create a base create credit interests 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 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 here great credit where the businesses are all over california and that's complaint of small business they cannot get the loans they used to get ok only got in for a second so what about a cap on the interest rates when you have
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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 a bank in 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 scrip it would issue say one hundred dollars in loans at five 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 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 compete in currency can currencies. well 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 are dealing with the same same
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yardstick but if you if you have the system right now where this 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 spa 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 at 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 end it worked out so are you saying you saying beer as in the stuff you drank now is w.i. are here i think it's ok what is near here is a community currency that's there the most largest established well established european community currency so just to follow up on the fear it tells our work so
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there's a swiss franc and there's a fear right so the fear is it countercyclical in other words when that when that. national currency shrinks as it has been doing net lately relative to those in services. then then 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 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 it's you can get a loan from its unity transfer bank. to do to do a large infrastructure project that was quite remarkable so now. it was zero percent interest and then half a million year and then it was one percent interest on the next million swiss francs and then the rest is at three percent so the whole thing was
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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 their currencies to choose from that's the market why not 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 guys print money and expands money supply as needed all right but on its own behalf 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 geyser and stacey herbert i think my guest alan brown is going to send me mail please do so at kaiser report of r t t v are you until next time this is nice guys are saying by all.
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a very warm welcome to you this is your news today protesters on the. streets they have. been canceling the chance to get the stance of the human spirit it's good to. see we've seen this rush to build a sense of really cool and it's all came claims of this financial temple. to me tito confidence in long kids and. wants to be seen trade imbalances risk steve inskeep. to see a sub prime loans to close her. some fail circle a balance against the level of the us crash seven. team something this is like send
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us an. e-mail just programs increase the total economy. download the official policy of location giong phone the i pod touch from the i choose option. cianci on the go. video on demand r.t.s. mine comes and says features now in the palm of your. machine. called. more news today violence is once again flared up the phone these are the images the world.


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