tv [untitled] September 11, 2012 9:30pm-10:00pm EDT
max kaiser now that the global banking system is entering is endgame of collapse states are going to london do enter the belly of the beast as it were we want front row seats as london the epicenter of global banking for finally ultimately collapses under the weight of its own fraud states there are max that's right we're heading into london where we'll try out some new ideas will put max keiser in the street where he might encounter some of these bank stars well have some more in studio guess we're going to try some new stuff with william bonzai seven all new studio but of course we will bring some protection from the london disease well we're actually we're launching a new cell retires or in a couple of weeks as well so that'll be great to fight the bank's jurors face to face so this london disease features in this first headline max opinion bailed out
banks facilitate twenty one trillion dollars of offshore cash hoard so this is investigative economist james henry in a report price of offshore revisited and this came out in july but it's really important to us as we head in to london because he found that between twenty one and thirty two trillion dollars of financial assets owned by high net worth individuals or i like to call them and we are in tax havens and it doesn't include real estate art or jewels right now this is just money that's parked in various accounts of the visible system is part of what they call the shadow banking system the dark matter and dark energy of the global financial system it's where the global multi hundred trillion. drug money is active as well but
again it's all roads lead to london that's the crossroads this is what the next bit here says is that most of the money is actually held in this the center of this offshore world is actually the u.k. and that includes jersey isle of man cayman islands british virgin island of course the cayman islands is the favorite of perhaps the next president of the united states mitt romney and the article says quote the u.k. is arguably the center of the offshore world now it says a lot of this facilitation of this debt to these offshore tax haven is helped by the too big to fail banks they're the ones that move this money for the likes of mitt romney it's the too big to fail banks that were bailed out but the article calls them a unique thing here i think it says that they're so too big to fail that they're actually too big to be true. right this is the interesting point the banks it's not that they're too big to fail is that they're too big to exist and there's
no business model that they could be involved with that would support that size that they claim to be they are all flow no assets they are kind of like sasquatch the big foot of the forest they're cited occasionally at a nul meeting vaguely through the shadows and fog of trumped up quarterly reports or come like paul bunyan is an american myth as the the giant lumberjack these are the giant banks that actually are mythical they don't exist because they couldn't possibly exist you know you can't physically impossible economically impossible there are six hundred trillion of derivatives around the world that they're gazing over a quadrillion in transactions of their earth itself only has fifty trillion in g.d.p. so clearly these things are part of the imaginary banking hola graham that exists only in the minds of a few ideologues crackpots they're too big to be true in a real economy that most people live in if they were really doing just ordinary
banking they would not be so big they would not have thirty two trillion dollars in offshore assets if they were just minding their business about being a bank they're not however they're part of a cartel they're laundering money as you say drug money terrorist money all sorts of money from the black economy in the black market well not only are these banks then entering the final phase of their destruction as you know in star wars of course the death star ultimately blew up in it but it's also the collapse of the fee out money system which has been part of the growth of these imaginary paul bunyan type sasquatch banks to don't really exist in reality and again this is why we see evidence of this again in gold and over that. we're beginning to discount now not only total failure in the banking system but total failure in the global
fee money system so this report calls that the london disease as well so not only is the u.k. the square mile of the city of london but also all of their various islands island man jersey and the cayman islands the center of all this wealth being laundered but quote it has not gone unnoticed that many of the financial scandals in recent years have a square mile connection. just know this is dub salut leave this to bermuda triangle of global fraud billions of dollars go into this square mile of the city of london and poof disappear we don't know where it all goes and they call it the london disease but i think there's have some stiff competition from alcoholism on that one went to go over a few of the big scandals of just the last three or four years a i g eighty billion dollars of u.s. taxpayer money thrown into that black hole in the city of london lehman brothers.
made off the london whale j.p. morgan london whale m.f. global all of these happened london they couldn't happen elsewhere that's exactly right we've been saying this for months for years now finally people are beginning to realize i think the m.f. global was really that what tripped it off finally they said you know why are all the major bank frauds always in the city of london you know in the city of london of course is the only place in the world in the banking world we can really hypothecate to infinity even in the west which is corrupt you could only read hypothecate one hundred forty percent say underlying marginal bull security like the u.s. government treasury bond but in london you can do it infinity you can sell the same bond in london infinite number of times gee i wonder if that could lead to fraud and you know by the way regarding the london disease. and acting as a sort of haven for all sorts of ill gotten gains from around the world i do notice
in the f.t. recently luxury homes boom in london. that of course is the way to launder your cash in and keep it safe from your own governments back home well this is the great thing about this particular heist that's gone on with the help of the central bankers they have been able to boost asset prices through the inflation that comes with massive money printing to bail out the banks while simultaneously avoiding any wage growth in the past cycles of inflation you had both asset prices and wages increase but the financial engineers in the city of london principly and in new york they figured out how to use derivatives to change the course of the flow of funds so that it only goes into luxury homes aren't work yachts and other stuff and completely avoids the labor markets.
genius now speaking of flow of funds on the london disease the meat in this headline from the private eye where max kaiser was first discovered. we were discovered in the private eye five or six years ago they picked up on a campaign we were doing and that's set in motion our television enterprise it was actually seven or eight years ago but they have a headline right now made off men its private eye issue one three two one and the article is obviously about the london unable multibillion dollar ponzi scheme operator bernie mean to boil in a certain london with thankful that they aided and abetted him. and their noting that there's a new lawsuit in america which is showing that h.s.b.c. funneled one third of all of bernard made off ponzi scheme funds that eight point nine billion dollars without proper checks or balances you know the uses sophisticated network of feeder funds so if you give your private banker you have
clients and the private bank will say put your money into our new strategic advantage by oh do x. so facto fun time and they don't tell you that it's just a label white label you could call it put to the bernie made off enterprise of posies scheming and they do this many many many many many times they're all feeding into this one main river of fraud called bernie made off the reason why they have so many different funds and so many different names or so many different phones and so many different feeder funds and so they can sell the same customer the same thing over and over again so the same high net worth individual be saying oh i've got fifteen funds and they name them all their statement ten of those funds could be just different names for the same fund which is called the bernie medo fraud fund in this particular case so the feeder funds feeding through h.s.b.c. were actually marketing their material to high net worth individuals henley's across europe were using the h.s.b.c.
logo was emblazoned on their marketing material so of course they're thinking here's a bank from eight hundred sixty five form during the original opium wars so maybe you know maybe they're able to launder my cash. risk free for the next few hundred years of drug war is just b.c. name and logo is used to legitimize fraud the bank knows it the bank knew it it's the same way that moody's s. and p. and fitch used a aaa rating bond rating to legitimize the bonds that were sold to greece that were worthless that bond sold all over europe that will work close bond sold all over america collateralized debt obligations mortgage backed security bonds they knew were worthless but they put the aaa rating on it to their part of a fraud or part of a syndicate they're part of a racket just b.c. is a racketeer for one hundred fifty years this is one of the dirtiest banks of them all well you say they knew and this is what they're charging in this lawsuit in america that kay p.m.g. actually wrote two reports for h.s.b.c.
one in two thousand and six and one in two thousand and eight the title of the report's quote review of fraud risk and related operational risks bernard l. made off investment securities so pretty clear what there are who looking at one of the report warned that allowing bernie to be a custodian of the funds while also managing them created potential that the trades were quote a sham in order to divert client cash worth there's a broker dealer conflict in other words he's both making a market as well as he's also brokering interest in the market that he's a principal in the market is the same thing when you go to one of these money exchange boots anywhere in the world at a say no commission no commission well because they're acting as a broker and a principal they say well we're mark to get up to you by twenty percent but we're as a dealer you say we don't have to declare that markup as a commission because we're a dealer we're
a market maker and lloyd blankfein use this excuse all the time to hide the fraud of goldman sachs they'll say lloyd blankfein why did you commit that massive fraud and they'll say well we're market maker or market maker what you're saying is saying that. we don't have to declare how to the extent of our fraud because we're in this completely and perfectly conflicted position of being both a broker and a dealer ok stacy ever thanks so much for being on the kaiser thank you rex don't go away much more coming your way. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else and you hear or see some other part of it and realize everything you thought you knew you don't know i'm targeting welcome to the big picture.
welcome back to the cause report i'm max kaiser time now to go to new york and talk to author historian and investigative journalist leah mcgrath goodman is author of the asylum the renegade to hijack the world oil market leah welcome back to the kaiser report thanks for having me max so william a graph goodman you've been banned from entering the u.k. due to your investigative reporting interest sex crimes in jersey that before we
get to that story let's talk about jersey what exactly is jersey go. well jersey is an island the largest island in the channel islands and it's a peculiar possession of the british crown it is the largest offshore tax center in the world has more money in it than any other and it's a very secretive island it runs itself as a parliamentary democracy under a constitutional monarchy it's very complicated but technically britain has legal ties to it but it runs itself right now it's recently been estimated that up to thirty trillion or more is held off shore by various entities any idea what percentage of that runs through the runs through jersey. jersey a great deal of money but nobody knows exactly how much in all of these are k. it's two trillion and jersey is the leading territory so i think conservatively it's about five billion per square mile in jersey it's a four by nine mile island it's very small. now or later we've seen switzerland
bombarded with investigations and financial threats from the u.s. does jersey receive similar treatment now actually. so really officially the swiss star and the u.k. is sort of becoming a lot more prominent in terms of being a tax shelter destination i'm not sure if that's part of the special relationship between the u.s. and the u.k. that the u.k. will be more favored than the swiss but switzerland has really suffered and the u.k. has been doing better and better in relation and they both have about two trillion dollars so they're neck and neck now well you know no matter how rich a crime the elites always circle the wagons when there is an income stream at stake we saw that during the sex scandal at penn state university we see this live for so tell us about the way i get in which you were encircled what happened when you arrived at heathrow airport well i was researching jersey for a while
a couple years and at the time that i got property over there i met with immigration to just make sure that my affairs were in order and they said they were but when they found out what i was researching their flags me they didn't tell me and the next time across the border i was imprisoned underneath heathrow airport and they went through all of my things they refused to give me a lawyer or let me call my consulate i was taking all my rights were taken away from me and then they sent me back to the united states i still have not gotten a straight answer as to why right now and then i was taught about the story so basically the story that you're covering such crimes in jersey correct to talk a little bit about this. probably to be more accurate jersey had to see has a really polish international reputation as as a taxi event but internally it has a lot of political problems of her son's scandals involving an orphanage in two thousand and eight where it seems that for decades children were allegedly tortured
raped murdered and there were many victims who are still alive who can tell their stories very clearly they're being completely ignored and so my feeling is that it does need to be investigated. more thoroughly and they need to be able to speak their truth everyone who has come near this particular scandal to look into it from the policeman to the health minister have all been either driven off the island or thrown out of their jobs it's been very bad and it seems like there is a big effort to try to keep eyes away ok so this is shaping up to be really quite a scandal that was all of the underhanded disgusting sex crimes of a penn state football team story combined with the underhanded market rigging of libel now how high up does this cover up go and if there was somebody or an entity or an authority in place to stop the crimes both the child abuse and the financial abuse. who would be that entity what's the jurisdiction there in jersey
well jersey is really interesting it's almost like a special purpose vehicle of the crown so the crown can be more or less as associated as it wants to be with jersey or as not. so effectively the queen could step in but of course just really doesn't ever do that and so jersey runs itself more or less that's the head of the police all of the police in jersey and the sort of the diplomatic kind of he was told while he was investigating this orphanage by those running the government's chief minister in particular said you don't understand this could bring the entire british government down so i assume it goes very high and that there are strong reasons why they don't want people looking into it but again until i am allowed back into your kid investigated i'm not going to know in the world is going to really know whatever happened to these poor children you know it's interesting in terms of the jurisdiction in terms of regulators
covering these various jurisdictions we know that the city of london for example like washington d.c. about again is its own city state which really answers to authorities that are tied to. regimes that are outside of the countries and in which these entities exist here jersey sounds like it's an even more. embedded. within the system where it's sounds virtually impossible for any kind of of regulatory imposition at all it was out of their statement it's so. it's a strange place in the sense that the people it's just to be clear it's a little island about told by france so it's right in the english channel between england and france and to get there you have to fly to call their cost like five dollars a minute to call they're from north america the people on the island are very closed off and a lot of them don't even know a lot of what's going on books are banned on this democratic island materials are
kept away the press is more or less controlled by the government there are bloggers on the island to try to keep people informed but they are starting to go after the bloggers under what they're calling the data protection act and it's a way to basically gag to keep them from being able to talk about what's happening so there's a huge onus on trying to make sure that information is not revealed even to the people who live there and for democracy i think in a western democracy it's unprecedented they have spare no expense and trying to keep things very very under wraps right while the british media establishment and their relationship to restrictions on journalists in their own country and in other countries this seems to be a growing issue that shipping geopolitics certainly you have a journalist like julia saunders caught in the u.k. but it now is reverberating throughout the entire world with countries convening meetings to discuss what's happening with his curtailment of freedom of speech here
you are down in the jersey island you're being basically shut out from covering any kind of story the british establishment seems to be. split they don't really. want any kind of investigative journalism at all anymore is that your perception oh well it's been a very strange. it's hard to see exactly what's happening i know that when the b.b.c. interviewed me about this recently in the guardian this summer when they found out i was and what ended up happening was jersey said ms goodman we invite you to come back to the island. they have not removed my band but they are publicly stating that i am welcome to come back even though i'm still banned and the u.k. says jersey's not letting me jersey says u.k. it's not letting me come so you can see how they can kind of toss it back and forth and try to create confusion for someone who's just trying to do the right thing right and one of the investigation stands today so right now the investigation into
the orphanage was shut down very abruptly the police were moved from the island one of them was suspended twice and the senator who has tried to stick up for the victims has been jailed twice he's destitute and he's still fighting he's trying to take the case to london and see if maybe he can get the u.k. to get more involved in the affairs of the island some of the people involved here feel the rule of law has completely broken down where the judicial system and the legislative system of more or less been hijacked really to carry out the will of just a few people at the very top of the islanders themselves are very nice people a lot of memory devastated by what's happening but they feel powerless to do anything the voting rate on the island is very low and it's a small very sleepy sort of farming culture with this financial services overlay so when you're there it almost feels like there's nothing happening it's just yachts and diamonds and champagne lounges it's it's it's a very deceiving place with
a dark side so i think you know until a journalist can come in and look at the facts or someone else in england is going to do more things will just continue. i now live in mcgrath goodman of course your book the asylum the renegades you hijacked the world oil market really went into depth discussing how the essentially oil futures markets in new york were taken over by a band of rogue traders and this is what is driving the global market now since that book has come out we have seen revelations about similar types of behavior by rogue participants in things like the live or scandal or in the london whale that was supposed to be trading a hedge position but was trading on hedge position caused a massive loss for j.p. morgan the culture would solve it is it in any way being curtailed this
kind of psychotic driven rogue trading mentality that's destroying the global financial world or is it increasing your thoughts. that's a good question and the main thing is we're looking at what i specialize in and all the things that you and i usually talk about max there are more or less institutionalized cultures of corruption right so there is usually a culture of of wealthy people that are trying to defend that culture of corruption and then they're the victims and so it's spreading i think the problem is we're seeing a lot more shoring up of wealth amongst those who already have a lot of well so as long as they can throw infinite amounts of money in particular jersey with all of its money and the ability to throw infinite amounts of money at defending their own actions no matter how awful so if you have all that money it's very hard for me have a journalist like you and i can do things but we really need to get the word out when these things are happening when it's a very broad thing would with lots of damage in this case this case with jersey
we're dealing with some of the most appalling crimes and to humanity you know the torture and rape of children and that the fact that an entire government would just look the other way. instead of dealing with it is very sad but what you're describing here it sounds like jersey has become like a medieval fortress rounded by a moat run by a mad king who's been torturing and raping while looting the country and this is a model we seeing replicated throughout the world now is that as the global financial system cracks apart austerity is being imposed countries like greece are on the verge of open revolt and civil war so we're seeing kind of a return some call a return to feudalism and neil feudalism or your thoughts here that's an interesting concept is this a return to feudalism in the case of the channel islands which is you know they're
all still very few and all the way they are run so in a way they never stop being feudal but in terms of you know other parts of the world where we're seeing the great concentrations of wealth resulting in a really large underclass developing yes there's a possibility that we can start to see more than fair and it's something people should at least be talking about ok well lou mcgrath goodman run its own time thanks so much for being on the kaiser report thanks for having me back all right and that's going to do it for this edition of the kaiser report with me max kaiser and stacey herbert want to thank my guests lee mcgrath goodman she's the author of the asylum the renegades who hijacked the world oil market just i mean email please do so at kaiser report at r t t v are you until next time you're saying.