tv Prime Interest RT July 23, 2013 12:29am-1:01am EDT
markets are being manipulated you already knew that but when it makes the top fold of the old gray lady m.s.m. really be egregious an investigation by the new york times reveals that goldman sachs has been manipulating the aluminum market per year coca-cola and other and you know you there is have complained that waiting times for shipments has gone from weeks to months in the meantime are goldman trying to charge the needless storage fees and the same thing and again saying this in the copper in crude oil thanks to jamie dimon have to forget and we'll be covering this story in depth with this week today we expose another mysterious event with a former federal reserve economist he was fired from the fed for exposing billions in suspicious cash transfers just prior to nine eleven and perry will dig into the fine print of gold to educate our beloved chairman about that which he admitted before congress he knows nothing never mind his new york fed holds tons of gold bars on behalf of other countries at least germany things and this saga in detroit
continues they are being basically pleaded for a federal bailout citing the beneficial moral hazard this would engender for other struggling that he just and we quote not yet let me behind we're no marie antoinette's but when it comes to haircuts every year seems that we choose the former later in the show up bob wills detroit native and breaking news that producer mary david honestly terry it failed finally according to the government's latest calculations on who's buying and holding its own dead foreign holders of slow down purchases to the lowest rate since two thousand and six they now listen fifty percent of treasuries so as long as the fed keeps buying no problem except all this talk of tapering means the fed wants to exit the market oh and speaking of those eighty five billion dollars per month purchases by the fed guess where that printed money is going to mostly to pour in because you don't want to miss just being under hills exposé of this. later in the show. and here's one thing your
prime interest. last month senator bob corker question the obama administration over alleged cash transfers to president karzai of afghanistan earlier i spoke with william bergman director of research for the truth in accounting and he was actually a former federal reserve economist i asked him about the tens of billions of dollars in cash payments abroad and his role at the federal reserve. well i started working there in one nine hundred ninety as an economist doing current economic
analysis for about five or six years or so and i wrote the chicago contribution to the federal reserve's beige book during that time frame in the last five years while i was working at the fed i was in and very interesting area of financial markets and payment system risk looking at the plumbing in the financial system it's interesting it or bank and wholesale banking arrangements and payment systems was in very dry stuff on the surface but interesting underneath my last project going well it's around in august two thousand and one i had developed a paper that was about eighty percent complete examining the relationships between the federal reserve and other elements of government during a declared national emergency or a time of war and in that paper it was i delivered that paper at the congressional research service in november two thousand and one and was updating it in late two thousand and three i was invited to work in the area of money laundering at the but a reserve bank in chicago and the supervision and regulation that apartment and that's that's the area in which i was working when i noticed
a couple of things including a surge in currency shipments in the billions of dollars in july and august two thousand and one and a letter that was written from the board of governors of the reserve banks dated august second two thousand and one that urged them to scrutinize suspicious activity reports older reports that banks are required to file they suspect criminal or other activities are associated with banking transaction. and the letter didn't mention terrorism words by nancy but they were known to be part of a. well i want to get to i want to get to that in a second but first just for so our viewers can see we have a graph of the increase in u.s. federal reserve notes which i shared with you that our reserve notes are u.s. dollars in circulation just prior to september two thousand and eleven and this is compared to an average of the same period five years prior and basically this includes all the money injection that was prior to the y2k thing so what we saw in august and september of two thousand and eleven was definitely
a large increase and so i'd like to ask you about these this guidance that came out is this still published on the federal reserve website it's not on the website anymore it had it was on the website but it's no longer on the website and why do you think that might be and what is what was the explanation given for this large increase in currency. and in a letter that we received. the banking crisis in argentina which may still completely innocently explain this it's also possible or is the. precise types of explanations that we haven't seen investigated it really don't matter it could have been completely innocently explained by a banking crisis in argentina however that's not the only possible reason and even in recent weeks we've had some more news stories suggesting that the areas that i was concerned about were still operating at that time and still need to be investigated and you were you were terminated in your position were you given
a reason why. well when i when i asked the question regarding the august second two thousand and one supervisor letter a week later my assignment in that area was terminated my credentials for confidential information were taken away and i was told i committed an egregious breach of protocol. a month later my position in the bankers eliminated i was told that time it had nothing to do with me personally it was an organizational matter and you mentioned some additional evidence that surfaced recently could you explain what that is well it in two areas i think. help to highlight the fact that this is an area that should of erse it and should and still receive some good investigation first the senator corker robert corker and the senate foreign relations committee has been asking some very good questions about shipments of cash to how many cars i in and over the last ten years even and you mentioned two thousand and eleven of course our viewers are interested in knowing that this was
august two thousand and one specifically that i'm talking about now two thousand and eleven. and senator corker. i'm going to the station for explanations about the shipments of cash how many cards i and even just five days ago or so and some comments on the senate or candidate corker raised the possibility that these this type of support for comment cards and the potential for the corruption of these types of shipments of cash were something that was operating or how many cards i became president which was a couple of months after nine eleven and in turn in recent years there's been a there's a great book out there invisible history by. paul that's gerald and most of it ruled a history of afghanistan and there's a very good discussion in there about how u.s. and u.s. entities were possibly supporting and doing some interesting things in afghanistan in the months before nine eleven and it's those type we've got a currency had a long history of using covert operations in the united states for instance in iran
back in one thousand. and one it just the recent interest of senator corker on the history of those cash shipments behind bars i helped emphasize the possibility that the nine eleven currency shipments in covert operations were already under way in afghanistan while cash was it was just going to add there's actually a guardian article that we found in in the year after the invasion in iraq in two thousand two thousand and three nearly two hundred eighty one million federal reserve notes hundred dollar bills weighing three hundred sixty three tons were sent from the new york to baghdad for disbursement to iraq ministries and u.s. contractors and they use c. one thirty planes the deliveries took place once or twice a month and we're talking about billions of dollars and it's just simply been unaccounted for and what is what is how is it possible that so much cash is shipped abroad into these war torn nations and there is no oversight of it. while there is some oversight and hopefully congress will be exercising more of that. in the
future as well it's looking at history and it's possible you know for instance if we were shipping large amounts. and support record operations in afghanistan before nine eleven before any you know that's that's something that probably needs to be investigated and. that was my interview with william bergman director of research for the truth in the county now following up on our discussion about federal reserve cash flows as we all know take a look at fed payments on excess reserves that's the digital money that the fed has printed that banks decide to just leave out the earn a little interest for more on this we turn to prime interest producer justin underhill justin can you give us an update on the trends we're seeing and where this fed money printing is going well as we've talked about before banks that are members of the federal reserve are required to keep a certain amount of cash on hand and on reserve to ensure solvency in two thousand and eight during the crisis the federal reserve started paying interest on these bankers serves in order to encourage banks to keep cash parked at the fed and of
this incentive work to banks started keeping reserves well above the minimum amount required called access through service and this graph goes from two thousand to today and we have serves in the billions of dollars ranging from zero to two trillion and here we have two thousand and eight when the fed started its interest payments and you can see the immediate dramatic response and these reserves continue to climb until today when they total about two trillion dollars banks are being paid to do nothing with their money so who are the biggest beneficiaries of these access reserved payments well here is a chart of bank cash balances which is a proxy for access reserves starting in august of two thousand and eight going through april of this year and again we have billions of dollars ranging from zero to one point two trillion dollars the federal reserve breaks banks into three
different groups in silver we have small u.s. banks in green we have large u.s. banks and in. hello we have foreign banks over the past two years the largest increase in excess reserve holdings has been by foreign banks in other words this is u.b.s. deutsche bank and barclays all major foreign banks have reserve accounts at the fed right now the fed is paying two point two five percent interest on these reserves a total of five billion dollars per year to banks and of that about two point five billion dollars is going to foreign banks if the purpose of excess reserves payments is to ensure that banks or u.s. banks are stable then more than half of these payments are going to foreign banks and that's pretty poor cost benefit but on the other hand it's a pretty good deal for foreign banks sounds like that so is that why they've increased their holdings why are they doing this these foreign banks well this is
a fairly stable and safe investment for a lot of these banks for now and for now and they're not going to lose money on it and if the fed is paying above market rates they're paying double the general collateral report rate right now right and i think general collateral repo rate it sounds kind of scary but it basically is like point eleven percent point twelve percent the fed is paying zero point two five percent which means it's almost double that just like you said does the fed carry a lot of this money is and is ending up in the u.s. branches of foreign banks do you think when the fed started its quantitative easing program and now pump more than two trillion dollars into the economy that would normally cause massive amounts of inflation but what they've done is this is been sort of a sterilization process they've been taking money liquidity out of the economy through these interest on accessories or payments and that sort of balanced out the amount of money that they've pumped into the economy ok but what happens when short term rates go up to say five percent so if interest rates were to go up to five percent then the fed would also have to increase interest payments on these excess
reserves and you can imagine what would happen because they don't want all this money suddenly going out into the economy. so they need to increase that payment and if it goes up to five percent then they would be paying foreign banks more than fifty billion dollars over here that's just the current levels and that's the way that it should be going to the u.s. taxpayers putatively yes that is correct well let me we have this guy alan grayson and he was a member of congress and he raised the riot act in front of bernanke and he basically said there were five hundred billion dollars half a trillion dollars in foreign bank liquidity stops swaps that went to these foreign banks and this was in two thousand and eight we don't have a lot of time here but i just want to the viewers to know that this has been an ongoing problem and it looks like we don't have any resolution we have agree and congress probably isn't going to pay attention to that until interest rates live thank you so much justin thank you. stay tuned because parea and will expose ben bernanke is ignorance of gold then breaking the producer in detroit native american
dollars in the nation's largest city bankruptcy. i've seen the perception of the cross many times it doesn't matter if there's snow a heat wave or hail stones people keep on going i didn't expect anything just one i told myself i keep on going as long as my heart told me to that's all i want to get the moment i can send so mind she see i'm carrying these sayings on my shoulder. do you want me to put a bandage here no that's fine a lot of people were so exhausted they could barely walk their feet hurt and some of them fainted we will bring you back to it three two wanted to keep going i don't know what tomorrow will bring.
may not have only been the last to choose should never be but there are also do different closures that never should have. last week chairman bernanke he made an interesting confession at a senate hearing he told lawmakers that he doesn't understand the price of gold. nobody really understands gold prices and i don't pretend to really understand him
either. then as senator warren pointed out secretary lew made and just in common as well as a panel discussion in new york last week he said if we get to the end of this year and we can know it with an honest straight face that we have ended too thick to fail we are going to have to look at other options what is being me. face it this is our treasury secretary whatever face what he uses poker face is this an admission that he lied to the public before we actually found an obscure photo taken a secretary who is at a senate conferees and and lucky crossed his fingers behind his back when he took the oath of office i'm just kidding but really to me this statement was shocking just as shocking as saying he doesn't understand the price of gold so since we can't trust our treasury secretary to explain gold prices to us i'm going to break down gold just for you. by definition gold is
a precious yellow metallic element highly malleable and duct tile and not subject to oxidation or corrosion for thousands of years people have used gold as money that's because gold means what aristotle defined two thousand years ago as the four characteristics of money they are one durable two portable three divisible and four must have intrinsic value today we are on a very complicated monetary system that no longer is going to gold we are completely on paper currency but gold is still plays a very important role in the economy he said that people use it as disaster insurance in the case of a major problem the major problem he's alluding to is hyper inflation but don't expect you to understand that either since he doesn't understand the price of gold peter schiff said a central banker not understanding the price of gold is like driving a car and not understanding the rules of the road the price of gold has been
a volatile recently and it's important to note that gold is sold in two forms electronically and blue on the spot price on gold coins is one price the gold can also be sold electronically and these prices closely mirror each other in addition there is speculation that electronic prices of gold is used to manipulate the price of physical gold the federal reserve and other central banks have. they're gold to commercial banks like j.p. morgan chase when they do this the gold isn't actually transferred to the banks it stays with the fed and everything is done electronically or paper the bank then turns around and sell it the paper promised gold for a profit this market is called the gold carry trade and it's leverage so there is more paper promise gold than what physically available and we can't say that the price of gold is manipulated by any institution but we do know that the banks have the ability to end fluence prices of other commodities a lawsuit alleging j.p.
morgan was manipulating the price of silver on the comex was thrown out in march but the district judge and knowledge j.p. morgan had the ability to influence prices and the bank did not dispute that also as we mentioned earlier in the show goldman sachs has been manipulating the aluminum market for year and response to bring a few comments jim rickards the author of currency wars tweeted if i were one of those manipulating the gold markets i'd be really embarrassed now just because it's just so obvious for the federal reserve chairman to tell congress he doesn't understand the price of gold is absolutely ridiculous this institution he oversees holds us gold and the gold of other nations but the fed won't actually tell us how much they have there are a large to have large holdings but their accounting is very opaque gold is listed as gold and gold receivables which one is if they can answer the fed also won't tell us how much unencumbered gold there and what type of leasing arrangements they
have with other central banks or the boy on banks not to mention that germany has asked to repatriate their gold i wonder why and general the price of gold is a measure of the stability of the economy and inflation is up gold to go up to however we have changed the way we measure inflation twenty times since one thousand nine hundred eighty and we measure inflation how we did in one nine hundred eighty. would be over eight percent the government claims it's only one point eight percent now so you can bring ten to hide behind that beard but jack lew already sold you guys out the economy is not in as good a shape as they want you to think the price of gold is volatile just like this fake bubble recovery but it's probably subject to market manipulation by the big players and that's the breakdown of gold let's get to today's daily deal.
oberoi joining me today for the daily dool is mary david thank you so much we talked about a little we talked about this on the news yesterday a little bit so this subject to stay. around about the weekend anyway we're going to talk some more detroit because you're a native so just fifty years ago detroit had the highest per capita income in the us now detroit has one of the highest poverty rates in the nation detroit is also facing twenty billion dollars and unfunded liabilities the city's recent bankruptcy filing that sparked a battle of months creditors so i ask you is what is going to happen with the troika in these pension obligations you know this is a really unfortunate situation you know what they're saying is that they are going to be most likely cut significantly of course they cannot afford to pay these out right now right you know a lot of pensioners are looking at this is some kind of betrayal i mean you have to
remember they're given promises they were given promises right this is a contract so i mean you have police officers nine eleven operators people that work for the detroit public library that put in thirty to forty years of service and jokes to work in the surely do you think it was a little bit naive even people who are living that are your age and my age who are paying in social security do you think it's a little bit naive to think that we're going to get paid out in full some day when we know of all these financial problems perhaps it would be you don't think about when you invest you know in a city you invest in your career you don't think about it the same way that you think about investing in a company right now it's really interesting that you know now these people are sort of you know not getting a return on their investment and it's something that you know a lot of people take for granted so how likely do you think it is that the feds will simply step in and bail out that's. kind of the question i don't think it's very likely it's a big precedent it would because it's of course never happened before but you know
there is talk of that happening but i think snyder is saying that it's not a good deal that it's not a good idea that it's not going to solve the problem so they're not going to solve the problem but we've seen the federal reserve step in and save the financial system so no one that you and i just gave everybody and i think it wouldn't hurt anybody for i don't think it would hurt to explore it as an option but knowing that in order to to have a bailout of the city you have to get it passed by congress no way the curve of the road a lot of the environment there are a lot of legal and political issues here it might be against the state supreme might be get the state's constitution goes into i've got to ask you who's next are there any. apologies so you know in trouble it's interesting when i was doing my research i found that there was already so many cities that have filed bankruptcy already i mean there are i think eight i think detroit was not the eighth to file for bankruptcy but in terms of who's next i mean i think if you just look at other cities to drastically drop their population i might give you a hint ok but are not some of the people some of the cities on that list were
chicago. st louis these are not yeah these are big city is a loss of pension or obligation is there any it may not happen but i think you know you have to remember you're using tax revenue when you're when you're losing all these people when you have high and unemployment so yeah i mean it's definitely a good idea to keep our eyes on those other cities in detroit right now is in the spotlight you know to see what their next move is going to be well if so the next move is in fact a bankruptcy and unfortunately these pensioners they get pennies on the dollar maybe forty cents on the dollar who knows how much who knows what the city assets are is that actually a force for good i mean do we need a cleaning process just to wipe out some of this so there is more certainty get rid of the uncertainty so we can rebuild businesses could be a force for good possibly i would do you think about that do you think you could be . and i just i just kind of phrased my my question in a way that it was loaded i think i think it could be a good idea i think any group see is
a good thing as long as the rule of law is followed now what i did not like about the bankruptcy of g.m. and chrysler in two thousand and eight was the rule of law was not followed and preference was given to the united auto workers and there were other people who should have got more money like the indiana state pension fund right i didn't say it was as long as a rule of law is followed i'm all for it i think it needs to happen i agree i absolutely agree i think that you know something needs to happen unfortunately you know it's come to this but you have to look at whatever options are on the table and if it is bankruptcy is it i think it's one of those things where you have to rip the band-aid off but only if it's the only thing that can happen in order to move forward i think it might just have to happen real quick what's the future of detroit who's coming in lots of hipsters lots of young people and i was actually talking to other people in the newsroom telling them believe it or not a lot of young people are moving back to the city i have a lot of friends that have moved that is cheap rent is great so we got this than
washington d.c. we've got to close out here but this is been great if you want to weigh in in today's show be sure to like use on facebook at facebook dot com slash prime interest you can follow a mirror at a very david and you can follow me at english p. i thank you for joining me on today's daily dual thank you. it was a day of manipulation here our prime interest we learned well we were reminded of the big banks are the big game in town when it comes to controlling our crude and metals market precious or otherwise. without bond buying manasseh be we simply wouldn't have a bond market for uncle sam's debt because the rest of the world is falling and
what can we say about the troika a federal bailout really what a president and that would set bill bergman show to the manipulation and the federal reserve note markets would be dollars before nine eleven and just saying and i expose the shenanigans in the gold and bond markets i'm still fired up thanks for watching come back tomorrow from everyone at prime interest i'm perry i'm boring have a great night. wealthy british style. time to write for.
well but i will only react to situations as i have read the reports and let the players know i will leave them to the state department to comment on your latter point a month or so it's six am a car is on the docket. no more weasel words. when you made a direct question be prepared for a change when you run should be ready for a battle for the top speeds and down the street into question. he. says.
millions of sim cards are at risk of being hacked in mere minutes thanks to a bug which could leave personal data on phones wide open to anybody who wants it. every fifth victim of u.s. drone strikes in pakistan is a civilian a leaker paul deals another blow to america's claims that only militants are being targeted. and the think tank in britain is sounding be alert over the widening gap between the rich and poor welfare cuts and leading to speeded up.
Uploaded by TV Archive on