tv [untitled] April 3, 2012 4:30pm-5:00pm EDT
three three. three . good afternoon and welcome to capital account time moore and mr here in washington d.c. your headlines for april third two thousand and twelve u.s. president barack obama gave a speech accusing republicans of social darwinism with the budget in its cars that they passed in the u.s. house of representatives last week. is antithetical to or turn history as a land of opportunity and upward mobility for everybody who's going to work for it how much opportunity is there really left exactly in the u.s. we speak to dr marc father a publisher of the gloom boom and doom report who says well destruction and social
unrest may be on the way for western economies and yesterday wall street had a strong start to the second quarter with the s. and p. five hundred marking its highest closed since mid may of two thousand and eight and then today we saw that come down as absalom three minutes came out and revealed that the federal reserve is holding off on more monetary easing unless u.s. economic growth falters or inflation goes below two percent so why is this risk gone where it's gone and what does it mean for the economy that this is the way we're always looking at things and we've heard talk of the possible student loan bubble a more than one trillion dollar debt problem appears some senior citizens are on the hook for it along with kindergartners we'll explain let's get to today's capital account.
now as we've seen stocks rise to their highest level since two thousand and eight and then fall a day later as f o n c minutes indicate hey maybe the fed isn't looking at more quantitative easing at this point it brings us back to one of the pool running all debates we've had on the show before the inflation deflation debate so you have traders basing decisions on whether they think central banks are going to be successful in inflating asset prices or risk on or unsuccessful and we see deflation of asset prices or a soft now you could also say that this is a battle between the market economy and the economy desired by policymakers and their models now earlier i had the pleasure of speaking with dr mark fogger he's down there of mark farmer limited publisher of the gloom and doom report also author of many books including our producer dimitris favorite one this one
tomorrow's gold asia's age of discovery now dr farber told me the issue of inflation and deflation isn't that simple exactly because inflation is the increase in the quantity of money and credit and there are symptoms of it they can show up it's higher wages or food prices cetera but the problem of printing money is that no one knows exactly where it will flow so in the ninety's you saw it flowing to the nasdaq and then there was a collapse and then it went into real estate and when that collapsed later it went into emerging economies so where does he think the money has flown now and isn't. even. the big release. for last year. or. so. to earn good money for those who were.
that they are all at the same time with the same intensity and bottles of pills and can beat the flame the issue of inflation and inflation should be essentially a question which surprises are going to be inflated and then collapse what do you think we are right now what do you think has been inflated and what do you think is going to collapse well equal mr bernanke has been badly inflated. but that's a side and by the way all sort of mr obama or the side of i would say government is badly inflated and also if you look at the income and wealth distribution in the world we have. inflation among the so-called one percent they're not even one percent of the population maybe a quarter of
a percent of the population. people we've got a million and more and these people become the manes the rich we are very good road billionaires but i started work in one nine hundred seventy in the seventy's it was one billionaire in the world. and in ninety eight it was a gross creation we are eight billion years now officially a quote from hundred million years or actually. are. not known for four years but there are at least fifteen hundred billion or so in the world and you know my question since you did mention a seventy's i want to compare to when you were coming up as an investor in that time and terms of how much people were guessing and questioning what impact government policy and central bank policy would be in the way that we see it today
with you know every time you turn on the t.v. it's this discussion of respond risc os people guessing and betting on government policy and its impact how similar or different is this from when you were coming up as an investor for example during the stagflation of the seventies when you're asking a very important question be crossed. the central bankers. who . were necessary. if you look at the origin of the crisis colby they were actually. given notice. by central banks by keeping interest rates artificially low create bills in the first place and don't forget one of the big policy mistakes was
. quality made. including. two for alderman organizations. so-called government. bankrupt like no other company before it would be expected whatever the government does it does that much worse than the private sector. so it sounds like you are saying that it's gotten worse my question is we live under that assumption that the us is a free market economy where do you think we are do you think it's fair to say that we live in a market economy anymore or is it mostly market driven or is it worse than that where are we what i think is a question we have more chrysis in the west and the world. free when i travel through the u.s. and through immigration. airports i don't feel like
a free individual at all. so i think that. by governments in the marketplace have actually destroyed the market and if you think about it we have zero interest rates we have cost of living increase of say five percent ten percent so people who are being saved. in million dollars on presents are people. that live of interest. because it's and now they get. frustrated not because of cost of living increase or five percent of their purchasing power is diminishing by france and percent per annum in other words they are faced with an expropriation government but it doesn't sound that way it's not obvious to everybody. this expect creation but it's
like if you were privately in a. hundred thousand dollars or you can think of the year end of the year you only get ninety five thousand if there was zero inflation. and states having say five percent inflation and zero interest rates your purchasing power loses five percent and it's basically killing decent people and it's forcing actually people to speculate in something yeah or forcing people to just be financially plastic you're a saver in the u.s. and you don't want to take that risk and you've been hearing clear as far as what you think the fed is going to do that it's going to print money as far as the eye can see in that central range then general will continue to print so given the fact that we've already seen a massive amount of money printing any u.s. it's really only been a package of paper over a lot of problems in the economy my question is given the monetary system in the way that it works is it even possible for central banks to achieve what they're trying to no matter how much money they pump out. that is
a very good question you know it is money printing work. on t.v. anymore and but the difficult piece to know on which day all we cheer it won't work anymore basically whoever believes central banks can control economic it would be like someone who would drive a car and press on the accelerator and on the brakes. that is not case for central banks nor were any planned economy and we know now after the experiment actually some and probably some and apparently current work a complete disaster government interventions in the marketplace i mean this is precisely what the federal reserve and the treasury are trying to do and for sure it will fail over time but it may work in the same stock the stock market goes up for a while and could go up massively i mean i've seen how humans ration countries like
brazil or argentina next to call preserve really and if you're into money printing or face stocks some kinds went up like five hundred or thousand times was in this lot or two years and then the whole system collapsed the whole system and this thing will happen and will what do you think it will translate can politically when you say that as i know you said eventually we'll see social i rest of politicians will take us to war so let's war as it has been in the fighting. i wish really all i was seeing right here is you know the us the us has been very good at finding enemies anywhere in the world when they wanted to find someone. but i would say my kind table is like this if you look at the last twenty years. money printing. the mistake to narrow
group of people the so-called one for. i think one percent it's a quarter percent of the population and because a large part of the population of the fifty percent lower income groups. middle class or lower middle class and the working class their standards of living haven't increased in twenty years. and they are more invested twenty years ago the u.s. is more in big years ago you just have to look at the. loans. dollars. they will be. doing so. they will continue to print money not for ike the way we get to be at forty nine but say the s. and p. drops a hundred or two hundred points for fear it will be money for sure there will be the story broke and be dropped thousand be q.e.
for buying stakes whatever i. want to help me really and it won't help boost percent of the reading of the middle class and the lower classes. and gold and maybe some real estate areas but this country and among the population will grow and expand our. nation so tired of the minority groups we've seen now repeat of the. goldman i think that one just to fight because what's goldman sachs all the others have also done no expection and. go to war private enemy and. we have to kind of hold together and fight the enemy and for that eventually the whole
financial bubble will be for aig the whole the river this market. i don't know. about. imagine but trillion is the thousand trillion and it's all bubbles will be. happy that there will be mass destruction. still ahead at one time about a decade ago dr mark barber's advice for young people involved moving to asia and i want you by well you will not believe what he says now as part of then by how times have changed you'll hear it after the break but first our closing market numbers.
we just put a picture of me when i was like nine years old i like to tell the truth. i'm obsessed and i am in total ghetto friends that i love rob and get coffee is a planned trip. but he was kind of the guest today. i'm very proud of the role without you it's a place. you know sometimes you see a story and it seems so silly you think you understand it and then something else hears you some of the part of it and realize that everything is or you don't know i'm charged is a big. what
drives the world the fear mongering used by politicians who makes decisions. made who can you trust no one who is you know view with a global missionary see where we had a state controlled catholic. those school sessions when nobody dares to ask we do our t. question morning. welcome back our guest is dr marc father fund manager also publisher of the gloom boom and doom report now before the break he was talking with me about the political consequences of the wealth destruction that he predicts is coming and
these include growing discontent and attempts at times to distract the discontented in his view and also the prospect of war so i followed up the bullshit revolution happened during world war one is there a threat there could be some kind of major revolt similar that in countries like greece or spain for example where the public debt will jump to its highest level since one thousand nine hundred as year as their economy sinks into recession and the country is under intense pressure to cut its deficit and repay its debt without outside help or even the us you know could we see social unrest become an even bigger force for change than war europe's. reads. arts and so we're. going to go. who.
really needs. yours and you know you suggested that rural real estate might be a good buy because hey at least people are on your route so is this why you've recently been suggesting buying real estate in southern u.s. areas like florida and georgia outside of major cities of course. yes i think if i look at the future i think for the last five thousand years. of port security the cost fifty wold essentially fortresses. so the people in cities were actually better protected than the countries in the. countries where say we're only herds of i personally or. through and just clean. but i think that.
oregon washington d.c. . your. mobile phone you have a major problem with you without if you're living. in your. so that what you've been suggesting at some of these real estate opportunities and that are in us. if you buy you. you have to. find. concubine there are new words saying you know that's not the only time you've projected it the popular time you've suggested that interim are gold you had an interesting recommendation for young people that involved moving to asia starting a business in asia i think it involved in concubines perhaps some other colors or
things so what recommendations would you give to young people now in their twenty's and thirty's well i mean. very common. in the rest of the world the generation i belong to. postponing. forty takes and. maybe even. everything got better for us you know salaries went up when i. could choose many different jobs not not the problem to find a job but with the breakdown of the company and socially that idea about three billion people got. the economy and because of the. people can be educated quickly. they can learn without having to buy a book to save you're born in a small bridge and you have to buy. all your just called the forty. she
read everything on the computer. you have among young people much more competition. i think. the. world. com i think the majority. of huge competition. never had anything new that. is the rating in the western world they want to achieve that and they're prepared to work every day that week. right before our. hundred sixty five days a year and that is a huge competition and so i. think young have to lower their expectations and i believe that in the western world these different type human society where
everybody says. we have a free market and a trampoline but when something goes wrong. the work. that you. so he's basically saying lower your expectations or be hungrier and either case a little more bleak than moving to asia and getting some concubines i'll leave you on that no doubt was dr mark fogger fund manager also publisher of the gloom boom and doom report. we. are i don't know how we can come after that but we're going to try to wrap it up with
some loose change we have dimitri and shannon. mentioned student loans we know they're more than a trillion dollars he doesn't think they can be repaid look at this it's not just college students people in their twenty's thirty's that are going money and need to pay these loans due to sticks just released by the federal reserve bank of new york say that americans aged sixty and older still owe thirty six billion dollars in student loans these are sitting in senior citizens ok and it also seems that some parents are saying bring on the debt and lining up for it just like these competitive kindergarten parents take a look. as you normally would see can't we just like would like try to you try to get deals here big deal year is just trying to get the children into the kiddie garden because kindergarten. so they're camping out for their kids to get it to kindergarten and you've heard how competitive parents are in new york i know
particularly when our parents are getting student loans for their children as young as five according to smart money which is one of the largest providers for loans for k. through twelve education they're on track to buy ads twenty million dollars in loans for the two thousand and twelve two thousand and thirteen school year and just to give you context of how that compares in march the dollar amount of these loans was up ten percent compared to a year ago so is this student debt bubble going to encompass the entire population from kindergartners to senior citizens and for what the jobs that are available aren't necessarily jobs that require a college education right and it's not just that there is just the student loan bubble the american education system is a joke some of the dumbest people in the world will come out of this is that system ok yeah you have some good colleges but the reality is people who got all this that to get education that ultimately the pot and getting wasted and don't remember
ninety five percent of college time they're out there are no two things b. i don't know about being someone who did value education and did very much value my education and benefit from it with student debt though i should say i think that the bigger picture here is evaluating what your coming out of school in order to do and kind of an ally is get more on a cost benefit basis more of a risk analysis basis you need to really look at it that way as a business because you're not going to necessarily get some high paying job to pay back these loans especially not of mark five years predictions are right now i'm saying that people actually go to school have they have no real. they're entitled to their college experience of america our ability to actually see the education they don't like i want to learn i'm hungry i want to succeed know that i want to go spend four years and hang around the door and have phone go from door to door. and drink some out all the must my qualification and force of the code anymore i don't
want to go whining about it was a good time jobs but that should be spending more time learning in school as opposed to racking up that for a worthless education i do think you're on to something with kind of a middle class entitlement to a college education that doesn't necessarily value the classroom experience every day shannon you want to jump in here jumping off as i think the lower you go for each i feel like these are helicopter parents thinking that their children are entitled to a private education and the best primary schools and high schools where you never know if your child. is two and l. and it's better that children. know they will end up saddled with a debt for taking out a lot of your kind of garden i hope they can or gardeners not on the hook for that are very much let's move on because the hope of revitalization for atlantic city is in the air their brand new casino the rabble is the first to open in a city in twelve years two point four billion dollars it was halted during the recession but the governor chris christie put all of his chips in offered two
hundred fifty one bucks in tax credits to be used for economic redevelopment so will the house plan well here's how gaming is going in atlantic city gaming revenue for this city is down thirty six percent and this year as leonard city is forecast to see its second ranked ranking in the country as the nation's second largest gambling destination i should say to pennsylvania. so is this essentially the only hope for the u.s. economy is to bank on vice right now this is the american business model it's a person's right it's kaiser's casino gulag state so you have lots of prisons and lots of casinos are and this is the casino version you basically build up people's hopes all right and if they win they get a chance to be a part of the reality t.v. show or i'm going to see you know if i lose the gold and it's not just vice in the us i should mention that in canada a recent court ruling made major moves to decriminalize laws over prostitution so maybe this is more widespread we're going to leave that for another day but you can decide for yourself and let us know on our web site you can give us feedback at
youtube dot com slash capital account and that's all we have time for thanks for tuning in don't forget to follow me on twitter at lauren lester and from everyone here at capital account thanks so much for watching and have a great night. wealthy british style. sometimes. market. find out what's really happening to the global economy with much stronger no holds barred look at the global financial headlines tune into cars report.