tv Keiser Report RT April 10, 2021 3:30am-4:01am EDT
median sales price though it's you know perhaps higher priced homes are coming on the market as people flee the cities like wealthy people flee san francisco and new york but again this is just demonstrating that those who hold the assets are benefiting the most right right so you make the point about the actual money drops that they did something like $2500.00 or something versus the $50000.00 in house appreciation right that's very starkly demonstrated the inequality here right last year around this time i believe it was $1600.00 they gave every most americans and then recently they gave every american or close to every american $1400.00 so that's about $3000.00 in total over the past year some families have more because some families have children and they got money so just to put that into context like on the $1.00 hand that's the headline grabbing thing everybody is like wow all these families are getting this money well those that own assets as well as
receiving all that free money made a whole bunch more $50000.00 more in the year i know just where we live all of the house prices have gone up at least $50000.00 you can look on zillow and on paper it's all a $50000.00 of course if everybody were try to capture that gain it would probably decline rapidly but nevertheless it's just selling you on paper at least you can borrow against it you don't need to sell that property to borrow it $50000.00 more equity at your disposal to borrow against and borrow buy the 2nd homes as we were covering in the last episode you can buy more stocks * you can continue to run away from the bottom 8090 percent of the population i mean this is really a stark indication of this inequality in the economy so the the house is going up at a rate that's commensurate with the money supply increase right the 5th. to 20 percent
that their money supply is increasing but because of the way the economy is set up here in the united states that does not get reflected in the wages because when it comes to adjust wages the government will say well there's only one or 2 percent inflation so we're not going to adjust wages more than one or 2 percent. because they don't include housing in their inflation calculation not to the extent that it would be truly reflective of this incredible wealth and income gap that's engineer by the money printers of the banks of the politicians and what we've been saying now for a long time is that the labor market should always try to tie wages to actual money supply growth and actual inflation have been doing that says the $7.00 days the minimum wage in america would be $50.00 an hour just to keep up to where the true inflation numbers been that would have achieved some kind of equality but this joke
about one flesh and 2 percent but the house prices are skyrocketing 15 to 20 percent that's such about an egregious the rages ripoff well we're going to go into the point that it's basically the messenger has been shot over and over for the past few decades thousands of years and so is that who where where does that phrase even comes from to shoot the messenger it was when you know geopolitics in medieval times like the messenger from one king would go to another king and say deliver some bad news we're going to start a war or whatever and they'd shoot the messenger well the same thing as the signals to the fia empire has it get shot right the bond vigilantes the gold bugs we're going to go into the gold bug thang because the empire sees or doesn't want to hear bad news right and because of that. it's you see the disintegration we saw in the end of the roman empire and we see it now where people go under so it's hard when you lose the signal says hearts know what season it is what time it is what part of
the cycle we're actually en with the property market i also must add that the actual volume of mortgages is down because banks are being stricter of who gets these who gets enjoy these low rates right now they're being stricter in terms of your credit quality so there are fewer homes on the market because of the moratoriums and also because of the mortgages available are only available right now to have very very high credit worthy people right. it's another. situation where because the banks are getting so much free money from the government they don't want to take even any risk on any small to medium sized enterprise or anyone looking to buy a house because why take any risk at all if the government's just going to stuff chileans of dollars on your balance sheet right so it's another huge discussed thing. destruction of the of the is of the economy essentially right and i think
the official inflation numbers are somewhere around 1.2 percent again like it's hard to know is that the 15 percent increase in housing costs which are a basic need is that the increase in education which isn't necessarily in you know urgent but you have to get a college degree to get even basic jobs in america health care costs like which ones you count and if they only count some and you know it's a gaslighting through manipulation had donek adjustment of these sort of data like ok house prices are 15 percent but they'll say hey donna play the buy hamburger instead because hamburgers went down in price or they'll buy you know some electronic equipment from from well cars are going down in price. they they didn't go down in price until recently. so they just dominantly adjust and bizarre increasingly bizarre ways but i talked about. you know the geopolitics and geo
economics and how empires through out the centuries was shoot the messenger and it was all you know war is back then used to matter how much gold you had because you would go bankrupt when you started a war and you would do everything to try to avoid a war. but that price signal gold has been an important one for 5000 years it was an important signal about what the price of gold was doing and terms of how long that empire or that system had to hang around especially post 971 of the early days in 1971 paul volcker had to step in and try to you know fight the the gold bugs because the gold bugs were a threat to the establishment of the u.s. dollar as a world's reserve currency when we went off the gold standard but today now the likes of bloomberg joe wiesenthal is declaring gold bug macro is dead i'm officially calling it gold bugs have had enough time to make their case they failed
it's over he does cheat a bit here because he shows the 10 year chart of gold and so obviously the gold bull market started back in 2003 when gordon brown sold half of britain's gold supply at the all time like 5000 year low so he's starting from like 2011 when the price was very high as you know the chart looks like from that 2011 high of 1900 of around 1800 fell and then went back up so in that time he's saying here's a chart of gold over the last 10 years it's up about 10 percent during this period we've run large deficits the entire time and in fact over the last year some of the biggest fiscal stimulus of all time during this time the size of the fed's balance sheet roast in the oven 8 trillion dollars from under 3 trillion not on. they have gold performed poorly the dollar is still dominant right well that's only in dollar terms joe is over bloomberg it's a u.s. news service and it's for a u.s. audience but if you look at golden just about any other currency around the world
it's doing fantastically well particularly in currencies that are collapsing like the turkish lira obviously gold is skyrocketing against all other you know various other currencies us doing it's doing well and even against the dollar it's still maintaining this outpace the official inflation array so it's never stopped doing that has never stopped doing what it supposed to be doing number one number 2 you know the dollar is key right the dollar is we're all reserve currency and the u.s. will do anything that they possibly can to avoid countries dropping the dollar from their mix of how they do global trade and that would include an enormous amount of pressure on the bullion dealers and gold banks to do some hanky panky with those numbers as been proven over and over and over and over again with many billions of fines being paid for manipulation well a few things joeys and fall is of course that's how he gets engaged meant is is
targeting for trolling certain you know very passionate communities as a goal but community online there's a big clean community on line in the engages them by saying something outrageous about their ideology or position or a philosophy then. you know we're talking about price signals failing and they are through manipulation and brute force and some cases during that time he fails to mention of course that all his friends at j.p. morgan and other banks have been fined hundreds of millions of dollars well $1000000000.00 just at the end of 2020 j.p. morgan paid a $1000000000.00 fine from ministry late in precious metals prices whether or not that kept it down i hardly doubt it but in. certainly gas lip participants investors in that community when prices don't act as they should they believe but it's also like the equivalent of what we're talking about the hit donek adjustment
so he selects a time frame and says look it's only our temper son of course if you scale back to when it was $250.00 back in 2003 so in 20 years it's up. 600 percent so it's you know that's the same thing that's equivalent to what central banks do is they try to reframe the move move the graph where where you're looking to to to make you feel like actually things are better. right joe is a bond bloomberg engage in pure softness tree. you know that says job. not unlike a lawyer for example might know their client guilty but their job is to engage in a sufis tree professional fallacious statements too but that their profile professional liars in effect and so this is essentially with what his job is there to as you say do to get attracting gauge when by making fallacious arguments and
that's that's officer and that's what he does for a living so the price signals what i'm saying is like people people used to be able to understand price signals they used to indicate you know what the next phase of a business cycle was going to be what the how if the government had to mice death to the trillions and trillions and trillions of dollars as he points out should have driven gold higher in the old days in the seventy's in the eighty's and then even in the ninety's you wouldn't have been able to rack up this much debt without either the bond vigilantes or the gold bugs. basically claiming all the headlines with the dramatic price moves that and price signals that the news was forced to cover and then the cost of the investors to look at the government so they have succeeded i believe in destroying this price signals and that's why people are going to bitcoin in my opinion look outside the dollar joe. i know my back right
after this don't go away. but i can. you give us the 1st one to the finish we just finished are looking at hundreds of leads. that shows you just sort of do want to catch. the thing i was national guard. the little. bits on wolf blitzer from the typical. lead up little support scoop what are these critics one of the biggest musical you put in your beliefs because they've been. shamed into my previous me a. little bit you knew those who. opposed
the corporations international markets import export do you imagine the number of printing diseases that are out in every community today it is new due to new viruses all new microbes facts not true so it is due to environment. not going to say either the moment all discipline or the sort of muscles of really just accumulate could only come in to be seen to be so in the list that. the plexus of the sky if the so food industry is successful it will create more jobs it will create more value added it will create more growth so i don't see why we shouldn't also fight for the interest something into street products at that we have regulation we want regulation i was the industry any freedom behaved zaniest penalty just fine.
welcome back to the kaiser report imax keyser time now to continue with our conversation with wolf rector of wall street dot com a must read web site every day check it out wolf welcome back my pleasure max now i want to pick up on something from our previous segment about inflation versus deflation and how we've got potentially an inflation being driven by things like chip shortages or what we just recently saw in the suez canal total blockage of the canal for 12 days and the supply chains are interrupted mightily and you know people say well inflation is always a monetary event that's a. phrase you hear and people accept that to be the story but there is another side of this if you have these shortages and disruptions in the supply chain crashes
everywhere you get a different kind of inflation and it's just as pernicious and just as i believe right wolf if there is shortages have generally a temporary impact if stay like this is canal saying you know when it goes back on track to be a delay and it is ok prevention and it will get the car really fast will get the parts. when the psychology said that this is now a common for a mint condition that we need to expect higher prices and there goes from sort fires all the way through to consumers yes. and this arcology indicates then that people are willing to pay higher prices. and then actually turn out to be willing to pay our prices you know that's $1.00 price increases become unstoppable when it becomes not a monetary thing but as i can logical sense and is a big psychological. component of inflation and when that starts taking
off it's very hard to stop when when everybody is expecting price increases and it's building in this bill. those price increases into the models and consumers a willing to pay higher prices every time that's when inflation really takes off and people stop trusting their currency and argentina you know they're trying to get rid of their currency as fast as they ass down there and. which causes that this is distressed in their currency causes major bouts of inflation so he have a whole nother component there and i think the shortages can intriguer those kinds of things. quite rapidly addict only when i say things like ameri a brother's gaming console the little handheld device from decades ago piece of plastic essentially selling for $600000.00 as a collectible people in these new n.f.t. is comparing these artists to leonardo da vinci and that the prices could surpass
those of the vinci addict ottilie speaking this to me suggests they are in a crack up and that seems like what you're talking about psychologically people are now just basically have gone insane the word i use is mania. there's a lot of terms for this is in many places that's exactly what it would we're looking at is some kind of mania or rationality has gone out the window and now things are just going a wireless to right essentially the bond market of course usually cost time and the bond vigilantes were always there for decades selling off the bond market when it looked like there needed to be some discipline imposed on the fed and interest rates but recently the bond vigilantes have been euthanized by things like quantitative easing and other actions by the fed but the 1st quarter of 2021 we had the worst bond market in many decades i think of going all the way back to 1980 so
is the bond market reimposing. itself on these markets in other words interest rates are starting to go up now is this for real or yet another head fake because i need a lot of the janet yellen and these other central bankers they say we've got yield control. you know spring management we're going to buy everything the 10 to 20 to 30 year bond there's nothing we can't buy but have they run out of ammunition i think this the beginning of the collapse of the bond market wealth tell me it is you know. in theory central banks can buy whatever they want to i mean that is something that we know. has. discussed you curve controls on buying long term bonds to bring down long term yields in the fall last year and decided not to do that and now they're essentially letting wrong to view on streisand they're saying it's
a sign of economic growth and higher inflation expectations or that kind of. supporting it and. they date they see this is a sign of victory for their policies and also i think the fed is good leery of all the main is out there and rising the wrong term interest rates will tamp down on some of these so i think that this is a miniscule little form of tightening that they allowed to have. instead of to rule tightening the higher short term interest rates and and. stopping the key. demand and the e.c.b. they're on in europe so they're on another track and they they're trying to keep. slow by the united states it hasn't happened so we've had. we've had a surge in long term interest rates and the high quality corporate sector interest
reveals junk bonds are entirely different and and there have been. importers. so this high risk and people are still chasing you down there. quality bonds or tears or securities and high grade corporate debt and a horrible quarter meeting rising yields. you know that i don't know how far this can go down with the short term us being at 0 but in some point you know i don't run into a ceiling but if obama who is this is this is a very tough situation now he's still looking at much higher inflation rates in the purchasing power of their to insist you know 20 year bonds is just getting crushed by an flourish so that's why bondholders now oh or worried about inflation next year suggesting that as all is that it's all rhetoric and signaling about where. i'm not worried about these rising rates that were the position it as
a triumph in some way but they can always come back and print as many challenges they need to to go to yield curve management they can buy the 30 year bond now for all the states keep going of course it relies on coordination all central banks around the world have to coordinate that none of them can break ranks and decide like you know we're going to we're going to destroy this cartel and we're going to kill the u.s. dollar and the us treasury market make a killing doing and then he any central bank in the world would make a many many trillions of dollars if they broke from the u.s. dollar gemini and they would be number one economy in the world within 6 months but as long as the dollar is the lubricant bank keeps all these central banks together in one hot tub of interest rates everything is continuing status quo but this is so it cannot just continue on forever or is there any central bank in the world that is threatening to maybe take on the cartel and break away anything i
think the inflation will be. one thing that nobody. and see how there is a certain amount of inflation that everybody feels comfortable with when he gets to be higher then. the interest that are represented by the central banks are no longer being served in the whole economy will suffer as well asset holders so when it comes to inflation getting close to the discomfort level or spiraling out of control the central banks will start cracking down and and i'm convinced of that i mean that there. yes it is specially the set when you think about what it represents you know it will not crash to ask if oldest. inflation to go to 15 percent or something and so i think that's one risk out there. however if if tolerance for for inflation is very high you know back to deflation just out of
control and they could keep buying long term bonds and you know their own divine who was there or lester or you know the central banks then you know i don't see that as a possibility as a real possibility because central banks are just too worried when inflation gets out of whack their primary clientele is going to get hurt badly by inflation and i think that that's an issue that they're going to have to face while the one standout there would be china obviously so we've we've had a period of globalization we have a relationship where a china was exporting all the goods and they were importing lots of dollars and the quid pro quo is continuing on what china now the sole real true winner of the post kovac global economy do you think they would break away and say you know what we're we're not going to keep this u.s. economy afloat anymore we're going to go our own way is and they say
a lot of geopolitical a there's a lot of skirmishes out there if you know hot spots as they're called people are scrambling jets there and there is this tension. brewing then are the markets adequately discounting for that or the have the markets gone to sleep in the face of what could be interesting geo political. contest wealth the market served on this labor vote a lot of risk in that being one of them john. as you know the world's largest exporter. and benefit it's usually from the stimulus right in. the united states and other countries for work and seem as if bought massive amounts of terrible goods that were manufactured in china has components for manufactured in china so their manufacturing boom is taking off over there. and you have a consumer demand has come back and jonna to and you have to have housing bubble
like everybody else and. it out john is there were you know they're trying to play this game that they cannot afford to lose to exports to the developing to the developed world like the united states and europe so they they have to be able to export to these countries that's part of their economy and. it's the same time you have they've got their own social issues their track and and so this very complex what they're trying to play there and achieving the economy economy humming over there keeping their people from revolting and at the same time dealing with all the international pressures and. you know added. optimist and i am that nobody is going to. yes each mistake to came fear verst i've done you know that they're just lying on the margin with issues and. if this intention was john it won't will stay with us
a long time but neither side can afford to completely rupture that relationship it's just going to be. asking why nobody can even imagine if that happened quick question though the work from home era do you think it's permanent or go back to the way i was going back the way it was a were seeing more and more companies going to hybrid system or are the time people can work at home and for the time after he tosses that itself well after a huge impact i think that is one of the major changes coming maybe the most important change coming out of the endemic to the right while threats are from all faith dot com thanks reg on the kaiserin for thanks for having me max and that's going to do it for this edition of kaiser report with me max kaiser and stacey arutt want to thank our guest rector of wall street dot com fee and so i stand by all.
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