tv [untitled] February 6, 2014 4:30pm-5:01pm EST
what. over there i marinate this is boom bust and these are the stories we're tracking for you today. prolific businessman investor and author jim rogers is on today's show you won't want to miss that he's giving us his views on everything from trade agreements to emerging markets to farming you definitely want to miss that then plus do you think business in europe is squeaky squeaky clean think again we'll tell you why coming up and finally in today's big deal ed harris and i discussed what those pieces of paper in your wallet what they're actually worth yeah you know the things as dollar bills or pounds or whatever it is wherever you're watching from you want to miss a moment of it and it all starts right now. our
lead story today the price of corruption specifically in the european union now a recent report published by the european commission revealed that corruption cost the e.u. roughly one hundred twenty billion dollars a year now that's around one percent of economic output overall forty three percent of firms in europe see corruption as a problem and almost top of all companies doing business on the continent say that corruption is an issue for them the report now is a major blow to the e.u. which is often portrayed as one of the world's cleanest regions however encounters with corruption vary widely across the blocs now the recent report says that
citizens believe greece italy lithuania spain and the chest the public are the most corrupt the corruption is can. it was rare in denmark finland and sweden in fact in two thousand and twelve the corruption of perception index ranks finland as the least corrupt country on the planet and in twenty thirteen denmark was ranked least corrupt however for the same year greece greece came in at eighty tied with china not good and the e.u. commissioner of home affairs she said quote corruption undermines citizens confidence in democratic institutions and the rule of law it hurts the european economy and deprive states of much needed tax revenue bottom line keep it clean keep in the green at least in theory it should be that way.
investor and all sorts jim rogers is a bull on china and asia now he sees a shift in the economic importance of asia and has even relocated his family to singapore to be a part of it but right now the emerging markets are a big concern for many people now working to get jim's views on the crisis in emerging markets as well as his view on the u.s. european and chinese economies check it out. now jim i want to start off by asking you about the u.s. and specifically its propensity to rebuild after it destroys now the u.s. they spent one hundred billion dollars in today's money on the marshall plan to rebuild europe and in total the u.s. has spent about the same on afghanistan a country with a g.d.p. that's estimated to be about twenty billion by the i.m.f. now the question is is this an example of how america's militarism is wasting money that could be spent investing in the domestic economy. there is no question that we're wasting
a huge amount of money here and one hundred billion dollars on afghanistan most americans don't know where it is afghanistan is a very little consequence to the us and yet we have said a hundred billion dollars and lost a lot of lives of american and afghan what is this can you know you know how much a hundred billion dollars is now when we could do a lot of stuff with one hundred billion dollars schools highways lots of things a lot and i mean it is a tremendous amount of money we're talking billions with a b. here not millions so there's a lot that can be done now i want to ask you about trade agreements and there's a lot of talk lately about the trans-pacific partnership here in america want to what's your view on it and would tepee the deal be good for growth well open markets and free trade is good for everybody it makes everybody have a higher standard of living yet some people suffer as they get dislocated but overall in america three hundred twenty five million americans we're all better off
some people some people will be much better oh so i'm less better all put overall we're better off so cheap free trade and t p p assuming the conditions are more equitable in the horrible would be wonderful for everybody there's no question that opening markets is great do you want to go back and buy expensive t. these again of course you don't you want to go back and buy expensive cellphones again of course you don't you want to buy cheap of fish and cellphones and products and that's what you get when there's open markets and free trade now i want to ask though as a follow up is it really free trade when there's these multilateral trade agreements there between countries and now have to specifically that didn't turn out to be great until about twenty years later and you know where do we stand today what about free trade just free trade no trade agreements just the whole global trade market being free. well if i did it my way that's what it they would be no no restrictions no tariffs no no customs duties or anything else people just do you
know hundred years ago two hundred years ago that's what it was you think if you wanted to send something from europe to the middle east or something a hundred years ago you had to go through all these trade regulations and agreements of course not people if they had something good they sewed up you remember marco polo you went to a bar all kinds of stuff brought it back it was all kind of trade on the what's it called of. the trade route between china and europe was huge amounts of trade in there were no it was no restrictions government controls or anything else that's the way the world would be better off the silk road that's what i was trying to remember the silk route. i mean what are your ties made out of what do we know that . buys from somewhere in there you know jim we spoke with george magnus last week it's kind of a non sequitur but he told us the emerging markets crisis that it has only just begun and i want to play you a clip from that interview so here it is. people are calling the volatility in
these markets and emerging markets crisis is it an emerging markets crisis. well i think it is ok because i think every crisis needs who knows a lot and he wrote. it down jim do you agree with george that an emerging market crisis is only just beginning. well the problems in the emerging market and first for lots of emerging markets some better than others but there are some serious serious problems out there and they are going to get worse turkey indonesia india this is not over yet brazil plenty of them that have serious serious problems and it's not they're not being resolved part of the problem of course the major problem is the federal reserve in america has interest rates at such a time in the low level that people can borrow lots of money and that america is printing a lot of money so there's plenty of money and the quidditch a lot of money to be borrowed and so
a lot of countries have borrowed the money which cover it cheap rates which covers up their problems they haven't addressed their problems and so now now we've got a huge problem facing us and it's going to get worse this is not over yet you should be worried and be careful and be prepared now what i want to ask you now about a lot of markets that seem turmoil places like south africa turkey india argentina where do you see trouble being the most warranted and why were the debtor nations are the ones that are going to suffer the most because they've been they have the ability of a lot of money at very cheap rates america is going to have a lot of problems in the ones you mentioned are all going to have problems it's a countries a big balance of trade deficits that need to borrow a lot of money such as america some in europe and mainly america mainly the countries you mentioned that's where you're going to have the that's where the crisis is going to get worse but everybody's going to be affected when america and europe have problems have anybody has problems those of the largest economies in
the world yes and last time we spoke you actually said that the fed printing money it was causing a wave of liquidity to spread out but that someone presumably awesome is going to dry up when that wave receded now the question is the fed is tapering out of the way of the liquidity is receding do you think this is what's triggering the crisis . of course it is that's part well the main problem is the huge debt that keeps building higher and higher and higher second is many countries did not take advantage of the good times to restructure themselves get rid of restrictions and controls and thirdly now the u.s. is pulling in its money. a lot of people been relying on that money so now you're going to it's going to snowball and get worse and worse and worse but what's going to happen aaron is you're going to see the pain get worse eventually the people in washington are going to panic you've got to remember these of bureaucrats these are academics they never had
a that's why they work for the government because they can't get a real job so they're going to panic they're going to say oh we're sorry we're sorry they're going to stop maybe even print money again some more then people are going to heave a sigh of relief markets will rally and then we're going to have the real crisis because the next time it when the money starts receding there's nobody to bail us out jim in your opinion what's your emerging market share the most promise for investors right now. the best of places like me and mar north korea china to some some parts of the chinese economy they have said that they're going to give incentives and spend a lot of money on some parts of their economy you should to russia russia is in good shape i mean this is astonishing to me russia doesn't have exchange controls russia has huge international reserves vast natural resources totally disliked by everybody i mean russia's i'm sorry to put money in russia. was very sure russia
for forty six years even i even i am putting money in russia now. time now for a very quick break but stay tuned because coming up more with my interview from more from my interview with jim rogers he's giving us his thoughts on europe china and agriculture farming you won't want to miss it plus in today's big deal ed harris and i break down the cryptic messages living inside your wallet and definitely not going to want to miss that.
we're back with more from investor jim rogers and author of the recent book street smarts now jim was recommending investing in russia before the break and i asked him though if he thought his country recommendations were insulated from the crisis or they too will feel the pain. everybody's going to feel the pain america's the largest economy in the world it's also the largest debtor nation in the history of the world so when those problems come it's going to be it's going to affect everybody europe as a whole is an even larger economy would cause serious problems facing them too many potential problems and you should be worried i'm trying to get you worried i am terrified i have no doubt that they don't keep me up at night and nightmares over this i'm glad you brought up europe there because you know in greece spain italy and portugal government bonds are all on the rise what's going on over there tell
me. things things have calmed down things are not getting dramatically worse and falling off a cliff at the moment the bonds fell off a cliff a year or two ago cult totally collapse the world didn't come to an end so now they're rallying but when the crisis comes next time. a crisis whatever comes next they will go back down the problems of the world are not over greece is not solved its problems spain is nobody nobody has solve their problems yet. i mean it seems pretty clear now now japan japan is engaged in massive quantitative easing and deficit spending as the government debt to g.d.p. the level has reached its i want to go straight it's two hundred thirty percent do you think this. wealth confiscation how could it possibly and otherwise other ways . it's a terrible shame because i love japan a great deal but you just pointed out japan is staggering internal debts they do
have a lot of international reserves but internally they've got very very high did mr abbate and you guys printing huge what he has said i will print unlimited that's his word unlimited amounts of money and he is borrowing even more money i own japanese stocks at the moment because of all that all this money that's going to be pushed into the economy but twenty years from now or even sooner maybe three who are all going to look back and say you know mr roy in japan that was the final death row of japan when they just went over the cliff having a declining populations there's a you know i'm sorry i interrupted you are saying continue please obviously they have declining population staggering debts increases debasing the currency i mean it's going to be a nightmare in the end he's going to go down in history as the disaster you know on the other side of the argument people say that japan it can't afford it because they can print their own currency what do you say to this. because they can you
know the currency goes to nothing. you may get paid but you get paid and worthless currency every country in the world it's done that there aren't as ended up in the tank this is this is never worked in the long never as it works in the long term never has it worked in the medium term i said sometimes it works in the short term i own japanese shares i even own the japanese currency as we speak today but but twenty years from now can you imagine i want to own this stuff in five years to pay and it's going to be going over the cliff now let's talk about china last time you were here we talked about china as well the third up plan i made it clear during that time that the chinese is going to move towards a consumer led growth economy in your view jim will that shift lead to further slowing in the growth of china. some places will slow down yes when you shift your economy from one place to another the people you shift away from the slowdown the people that you shift to grow in the meantime the whole
overall may slow down so but yes this but nothing goes straight up forever ever in american in one thousand nine hundred three as we were on the rise we had fifteen depressions with a d. and yet we came out of the one thousand nine hundred three is the most successful country in the world in the twentieth century this is just a normal transition that china is going through some people will suffer some will benefit if you look at the plan in which you mention you will see they say we're going to help these industries aaron if the chinese government which has vast amounts of money and a great track record is going to put a lot of money into some industries i him to invoke because i know that somehow he's going to make a lot of money and i hope i'm one of them. now what about the bad debt in china there are in twenty thirty non-performing loans that banks in china they increased in for an eighth straight quarter then in december we saw this mini funding crisis and the chinese government is now letting banks roll over all of this debt roll
roll the debt over are the chinese doing what the americans and japanese did before them and putting off the inevitable write downs like we spoke about. absolutely some mistake when people go bankrupt you doesn't go bankrupt and you start over you know kicking the can down the road or denying reality is never good for anybody china will certainly have problems everybody has problems as they rise including china who's done a brilliant job in the past thirty years but there and i'm not going to stop getting involved with china just because problems start developing in the plenum they said we're going to help these industries are going to do well those industries are going to continue to do with the people will suffer i'm not sure the chinese stock market has made its bottom yet but i do know that some industries going to come out of all this making huge amounts of money ok now. i know that you're keen on china the future's bright in the long term and all that but here in the u.s. a lot of our guests they're very troubled and they've been talking
a lot about the financialization of the u.s. economy driven by wall street instead of main street now do you think this financialization is key to why the u.s. is having problems today of course it is i mean people wall street are making fortunes right now they think died and gone to heaven i won the lottery is something but aaron unemployment in america is higher now than it was before two thousand and eight this hasn't solved any problems yes if you they're printing a lot of money obama spending a lot of money that people are getting all this money in there for is a very happy they think things are great but they're all the overall situation underneath is deteriorating more and more more and. now i have one last question for you i want to ask about commodities because i like commodities and i like talking about them i know that you were really really long on sugar for a while but that ended what are you looking at in the commodity market today well go it up came back down you should be high sugar i'm very keen on sugar right now
agriculture is what i'm most most interested the moment you know you look around the world most financial assets are down agricultural products are up in two thousand and fourteen and i'm very optimistic about the future of agriculture in america worldwide you should become a farmer and i should become the front was i me specifically what in as an adult you know i and you just gave it to me you said to become a farmer about i'll side of i like my job i love being a reporter but what do you mean specifically if i'm going to pass what would you say. first i would as you know how to drive a tractor i can drive a stick shift car does that count. all of the help anyway if you don't want to become a farmer farmers have been a terrible terrible business for thirty years that's about to change in the form or is it going to be driving the lamborghinis in the future the stockbrokers who will be driving tractors or taxis perhaps even the good ones will learn how to drive a tractor so they can work for the rich farmers the world is in the process of
changing the financial center has had its thirty years now it's going to be the people who produce real goods you should buy become a farmer bio farm you could become a tractor salesman so for the seed for lots of ways to get involved you could become the agricultural correspondent you love being a reporter be the farm car reporter got it thank you i'm not i'm glad that i found my new mentor and this is awesome jim thank you so much we always love having you on your end say your comedy for lack of a better word sad comedy but comedy nonetheless and we love hearing from you thank you so much please come back on very soon. it is my delight let's do it again. that was famed investor and my buddy jim rogers time now for today's big deal.
mr edward harrison joins me now to discuss cash flows wrong jealous because then there are loots quid what is the what is the most money d.m.g. and bling you know all the good stuff all that stuff all of the stuff i'm over here now now well plastic is becoming more prevalent every year physical money is still very much alive and well and while many of us use it every day we rarely take the time to examine the bills we're handling however the u.s. dollar notes along with many other physical currencies contains that information on them now there are twelve different reserve banks in the u.s. responsible for printing money and you can quickly figure out what your bank your bucking from by looking at thank you for that handoff i mean no one's looking at this little guy right here this is the letter right there. see that little number there now basically atlanta let's see if you're right and i am
a little she cheated here is atlanta you know the other one. this day can you do it you know if you did this when he got it right oh my god you got it right let's. k. that san francisco wrong. answer is that if you're never wrong which is why this is a massive moment here on your bus ok now paul and i point out that they're seizing and i will point out there were not numismatic experts that's actually if you're one of us that word means it is a person who likes currency we're not experts in we are curious people which got us wondering about what the words inscribed on money actually mean specifically the british pound in fact now check this out on a ten pound note written right under the bank of england in big letters that reads i promise to pay the bearer on demand the sum of ten pounds ok if i was to write you and i are you on
a piece of paper just now got me pizza or something i would probably scribble down these same exact words just to make it sound legitimate what does it actually mean well that's a good question because what does it mean. promise to pay you this. i mean that's what this is saying this but it's just very proud here so basically what it's saying is that this is the money that this money is we've created this money and whoever has the money within the system will be able to pay ten whatever that's going to be mean but from the british government's perspective basically because if you have a currency issue what they're saying is that we have a claim on future productivity on future productive wealth within the british realm and as a result of that we can tax on that wealth and the money that's created in british pounds is an iou claim on that wealth that we were able to tap it's now i know this
question seems really sophomore but the idea is like. ten pounds ten pounds of what the shells rocks gold to ten pounds i understand you know us twelve dollars that's called there's all different names for what that is but what do they mean pounds ten pounds of what we do i think that's the thing in this is what the scary thing for people with in terms of going away from the gold standard or something that's connected to it because basically it's not there's no intrinsic value it's you can think of it as a token almost a ticket you know it's really the the government has created this money and that they have a claim on productive wealth going forward and that they are the steward if you will of the economy as a whole and therefore because of their stewardship they're able to increase wealth in the economy and tax it and therefore the money will maintain some value no claim
on productive wealth what do you mean by that i mean you know g.d.p. goes up over tonn and as a result of that the economy will grow and people become richer but they're not really that's. no we were you were just talking to jim rogers about the financialization of the of the economy now obviously if you're if you're blowing asset bubbles and you're basically trying to use that in order to create wealth then when those bubbles pop you have a huge amount of what australians would call mal investment and that needs to be cleaned up and over the longer term you know that's actually destructive to well so you're actually decreasing the the growth in real wealth and over time that's going to be a very negative factor for the economy so do you think these words inscribed on all these different currencies there mr levy do i think that you know like ironically very straightforward an interesting thing is in the u.s. dollar at the top here it's this note is legal tender for all debts public and
private so basically what it's saying is that you know if you try to use your rows that say that you're right about that matter of reserve member. oh no not you're going to i'm going to use your rose in my grocery store i'll accept them to the u.s. government would say no when it come in and we're going to put you in jail because the u.s. dollar is legal tender so not only do we have a claim on the productive wealth of the united states and that wealth but also we can make sure that our money that we are creating at is the only money that is usable in the realm that we control all that's private and public thank you so much interesting stuff that's all for now but you can see all segments featured in today's show on you tube at you tube dot com slash boom bust r.t. we also love hearing from you so please check out our facebook page facebook dot com slash boom bust r.t. you can also tweet us at aaron aid at edward n.h. that's all for now from all of us here bus thank you for watching and have a great night and i.
where am i supposed to go. the for. play. i got a quote for you. it's pretty tough. if they were it's not story. let's get this guy like you but smear that guy stead of working for the people most missions the mainstream media were for each other bribery station. they did rather. well. it's technology innovations all these developments
around russia we've got the future coverage. coming up on our team was one con bally's power grid under attack a former federal regulator claimed sniper shot off of power substation while the f.b.i. denies that it was an act of terror we'll have more on those details ahead and just one day until the start of the sochi olympics athletes representing nations from around the world are warming up before the events begin a report from the resort city coming up. and the birth rate in the u.s. continues to drop on americans in a romantic recession will answer that later in the show. it's thursday february sixth five pm in washington d.c. i mean you're.