we first requested from treasury interviews of these former treasury officials in may 2011. months later, treasury told us that the individuals would not meet with sig-t.a.r.p. while other members of the auto team would. we contacted these individuals directly while reviewing documents and interviewing other witnesses. we asked treasury to speak to these former treasury officials about the importance of cooperating with sig-t.a.r.p. when it became clear that the individuals would not agree to be interviewed, we informed this committee. the lack of cooperation by these former treasury officials has significantly protracted sig-t.a.r.p.'s review. we were forced to look elsewhere for the information. while we continued to request their cooperation, we reviewed more than 100,000 pages of documents but those documents do not provide a complete picture. we often find in our audits a lack of detailed and complete documentation of decision making related to t.a.r.p. many discussions and decisions are made in meetings and telephone calls. interviews of government officials are essent

nevertheless, according to the records and treasury officials, treasury agreed with gm's assessment that the company could not afford the potential costs of sponsoring the delphi hourly plan itself upon emerging from bankruptcy. treasury also agreed with gm's rationale not to assume the delphi salaried plan since that plan had been fully funded when gm transferred it to delphi in 1999. as for the top-ups, treasury officials said that while treasury did not explicitly approve or disapprove of gm's agreement to honor previously negotiated top-up agreements with some unions, it agreed with gm's conclusion that it had solid commercial reasons to enter into such agreement. in particular, treasury stated that its aim was to ensure that new gm would only assume the liabilities of old gm that were commercially necessary, and that due to new gm's continued dependency on the uaw work force and the work force of other unions, treasury officials felt gm had solid commercial reasons to agree to the top-ups for these retirees. also, treasury stated that gm was never obligated to provide top-ups to the

force being part of the treasury and of course, new gm receiving from the treasury its capital infusion. did you ever have a discussion at the auto task force the actual or potential conflicts within treasury and the auto task force with respect to this bankruptcy proceeding and the delphied salary pensions and what was the subject of those discussions? >> i do not recall a conversation in treasury about whether or not the issues you raised would pose a conflict of interest. i do not recall such a discussion. >> do you believe now they do? >> i don't see where a conflict of interest would have been. no, sir. >> in the termination of the delphi salaried pension plans, a significant issue of dispute are the foreign assets held by delphi and the liens that pbgc either asserted or might have asserted against those liens. ultimately, pbgc released these liens as part of a settlement in exchange for payments by new gm that did not include the delphied salaried pension plans and the liens did. do you recall any discussions of the auto task force concerning delphi's foreign aspects with the lie

treasury the ten year the two year book could this be the biggest bubble we have ever seen well here to talk about this is someone who was said he thinks as much famed investor dr marc father a publisher of the gloom and doom report and author of many books including the one you see here tomorrow is gold asia's age of discovery and he joins us from a gore a financial symposium in vancouver and dr father let me first say that it is a real pleasure to have you on the show today welcome back to capital account. of the pleasures of carly murray oh it really is all mine because i am dying to hear what you have to say about treasuries because you've said before and explaining why people are willing to buy u.s. treasuries that offer a negative real yield or even invest in interim instruments with a negative nominal yield that people think if i give my money to the u.s. government for example at least i know how much i'm losing if i give it to a fund manager i may lose a thirty percent i'd rather lose two to three how long do you think this trend can or will continue we're investors are will

he identified himself as a treasury employee and was found to be in violation of treasury policy. >> reporter: as i go through the report myself, 1 that stood out was this 1, treasury credit cards being used for personal purchases. that was substantiated as well? >> there was one where a government employee was using fedex mailing resources to mail personal bills over an eight- year period and there were improper use of government resources for a variety of things including the mail. >> reporter: have to ask you anyone fired or disciplined over this? >> the employee was fired who was a career employee. i asked the treasury department whether any of the other employees are still employed by the treasury department and i did not get a clear answer on. that. >> reporter: final few seconds here, bob, in wake of the gsa scandal we all know about, another black eye here for the federal government. >> it is. the treasury department employs more than 100,000 employees and these were a handful of cases, but this was criminal conduct. even though they weren't prosecuted, obviously when you're

treasury the ten year the two year book could this be the biggest bubble we have ever seen well here to talk about this is someone who was said he thinks as much famed investor dr mark. of the gloom and doom report and author of many books including the one you see here tomorrow is gold asia's age of discovery and he joins us from a tour of financial symposium in vancouver and dr father let me first say that it is a real pleasure to have you on the show today welcome back to capital account. well the pleasure is entirely mine really is all mine because i'm dying to hear what you have to say about treasuries because you've said before and explaining why people are willing to buy u.s. treasuries that offer a negative real yield or even invest in interim instruments with a negative nominal yield that people think if i give my money to the u.s. government for example at least i know how much i'm losing if i give it to a fund manager i may lose thirty percent i'd rather lose two to three how long do you think this trend can or will continue where investors are willing to lose money just i

and even potentially treasury bill rates exist. and so those are his ideas now central bankers from around the world will reportedly join bank of england governor mervyn king in september to meet about the future of life or so what would happen if a hundred trillion dollar indicator was simply switched by the central banking cobol overnight what happens to old live war and library based contracts what room is created for major power plays which are probably trying to figure all that out and here to help us do that is bob english contributing editor for a zero hedge and economic policy journal dot com and he has really been looking into all of this and has some really really interesting insights so first of all bob english thank you so much for being on the show thanks it's great to be back here again and yes we are going to be discussing. all right that's not going away anytime soon first bob i want to ask you about bernanke you broadly he talked about switching to a market based indicator possibly but please decode for us because

the first requested from treasury interviews of the former treasury officials in may, 2011. much later the tool list the individuals wouldn't meet with sigtarp while other members what we. we contacted the individuals quickly while reviewing the documents and have their witnesses. we ask the treasury to speak to the former treasury officials about the importance of cooperating with sigtarp. when it became clear that the and vegetables would not agree to be interviewed be informed this committee. the lack of cooperation by these former treasury officials had significantly protected sigtarp's review. we were forced to look elsewhere for the information. while we continue to request their cooperation we reviewed more than 100,000 pages of documents but the documents didn't complete the picture. we often find in the audits a lack of detailed and complete documentation of the decision making completed to t.a.r.p.. many discussions and decisions are made in the telephone calls. interviews of government officials are essentials to gain a complete picture. documents such as the e-ma

twenty nine ninety which is to say that the fed finally had to be brought under treasury wipe out the effect of the one nine hundred thirteenth fed act which what it did was give the money power to the private banks stright to. put the fed under the treasury and give the government the power to spend money into circulation to create jobs lower the debt lower taxes and by the way there is a big conference on that coming up if you can go to a website monetary dot org and there's a conference on september twenty first but tell me this looking at the current treasury department that we have the current treasury secretary secretary that we have and tim geithner some of the scandals that have been popping up if you just want to live or as one of them the fact that we haven't seen a criminal investigations really after the you know after the crash why would we want to give the treasury even more power well it's not just it's about making and fixing accountability within the government right now the accountability for managing the monetary system is put with the fed which lacks transparency w

>> again, the court filings, treasury officials, pbgc officials, gm officials stated that treasury played an advisory role. i would note however in conducting our work we coordinated with sig-t.a.r.p. and our report focused on a broad range of things including the events that leading to determination of treasury's role but we did not conduct an investigation as sig-t.a.r.p. was doing and we did not interview the former officials here today. >> is there anything else you want to add related to the gm decision making process and the questions i've asked? >> no, sir. >> all right. thank you. i yield back. >> i thank the ranking member and certainly appreciate his line of questioning as well. we'll now recognize mr. kelly of pennsylvania for five minutes. >> thank you, mr. chairman. thank you for holding the hearing and allowing me to participate. i have a question. mr. bloom, i've been with you before and other hearings. when we talk about the boards and we talk about gm making decisions, is the consensus that these are gm board decisions that were made involving the uaw? >> i think it would

i was in the legal department of treasury and so i did keep mr. madison updated and he was the general council of treasury, but in terms of the white house the only people i ever spoke to at the white house was brian deiss and larry summers. okay. we're going to turn to e-mails now. we have a july 6th, mail from joseph house at pbgc. this one we don't have on the top. it's a july 6th e-mail, 9:45 p.m. and he's mailing late and i just spoke with matt feldman who relayed the following. quote, we agreed that any settlement discussions would be best saved for direct coordination between u.s. treasury and pbgc. at this point rather than a subject of group coordination. now he's saying that the settlement discussions were at that point as a result of his conversation with you a direct coordination between treasury and pbgc. he does not mention general motors. do you disagree with his e-mail? >> you would have to ask mr. house what he meant by that e-mail and i interpret what he meant to men mean that we were going to talk to the pbgc and then that wield

treasury yields today eric they fell to an all time record low on all ends of the spectrum the ten year traded below one point four percent the thirty year below two point four eight percent but instead of being able to sleep you do not think the u.s. should be a slave you think that the u.s. should learn from a cautionary tale from the extinction of the irish elk first eric what happened to the irish elf. well the irish elk was a was a maladaptive species ultimately so the irish elk. had enormous antlers and the antlers were according to one theory of its others to its extinction were a major component of the sexual attraction of the males so it was a big part of sexual selection the apparently the female irish elk dug male alex with beginners. as as that process that preceded. the the large antlered elk would have large antlered offspring and they would grow a larger and larger which is such a generation's. ultimately you ended up with that had one hundred pound antlers and they were ill suited to to forage they were could have to work even their heads up and according to the leading

plus, treasury's response. not exactly a warm welcome for the secretary of state hillary clinton in egypt. [chanting] >> shepard: protesters pelting her motorcade with tomatoes and shoes. [chanting] >> shepard: were they really chanting about monica lewenski >> everything you buy online could soon get more expensive. tonight, why more states are forcing web sites to start collecting sales tax. but, first from fox this monday night, a u.s. navy ship in a deadly encounter in the persian gulf. in the same waterways at the center of a tense war of words between iran and the west. according to sources at the pentagon, sailors on the navy oil tanker rapahanak ownershipped fire on a smaller boat. officials say it was rapidly approaching the navy ship. its captain ignoring repeated twoorntion turn back. in the end, one person dead in the gunfire. three others hurt and we're told it lasted 15 tense minutes. it happened they tell us right off the coast of the europe nighted arab emirates south of dubai and strait of horm

twenty nine ninety which is to say that the fed finally had to be brought under treasury wipe out the effect of the one nine hundred thirteen fed act which what it did was give the money part of the private banks strike to. put the fed under the treasury and give the government the power to spend money into circulation to create jobs lower the debt lower taxes and by the way there is a big conference on that coming up if you can go to a web site monetary dot org and there's a conference on september twenty first but tell me this looking at the current treasury department that we have the current treasury secretary secretary that we have and tim geitner some of the scandals that have been popping up if you just want to live for as one of them the fact that we haven't seen criminal investigations really after the you know after the crash why would we want to give the treasury even more power well it's not just it's about making and fixing accountability within the government right now the accountability for managing the monetary system is put with the fed which lacks transparency which

so how much did the treasury want to borrow? when salmon chase took over of in march 1861, his immediate predecessors had tried floating a total of $18 million worth of federal bonds within the previous five months but were unsuccessful. before congress convened in july, chase attempted to sell close to $40 million in treasury bonds and notes and a special session authorized him to borrow another $250 million with the act of july 17th permitting him to immediately issue $50 million in treasury notes payable on demand. and there were several additional tranches of bonds that were scheduled for later issue in the fall. recall that commercial banks only held $100 million in speesy. 0 this was a big problem. it wouldn't have been a problem if the treasury had quickly spent the speesy paid by the banks for bonds and then people put their money, the speesy, back in the banks or if banks quickly sold the treasury bonds to the public for speesy. and abraham lincoln provided another way to grease the skids. he signed a bill in august to

national banks were capitalized with treasury bonds. they could issue national currency if it was backed by treasury securities. and so the federal government issued debt and then that debt was monetized. late in the war to reinforce the power of the federal currency, the federal government actually taxed state bank notes out of existence. so we don't have those anymore. so the u.s. emerged from the war with a far different financial system when the conflict began. perhaps most important by defining the banks via mandatory capitalization with treasury obligations, it bound the bankers to the fortunes of the union. but it also tied the federal government to the fortunes of the financial sector, which is, you know, today, can have significant economy-wide effects. this shows the dominance of the banks by wars and they became, basically, the only game in town. now, i want to talk just a little more about the experiment with fiat money. one potential cost of issuing money that's not backed by anything is inflation. and this slide shows what

so how much did the treasury want to borrow? when salmon chase took over of in march 1861, his immediate predecessors had tried floating a total of $18 million worth of federal bonds within the previous five months but were unsuccessful. before congress convened in july, chase attempted to sell close to $40 million in treasury bonds and notes and a special session authorized him to borrow another $250 million with the act of july 17th permitting him to immediately issue $50 million in treasury notes payable on demand. and there were several additional tranches of bonds that were scheduled for later issue in the fall. recall that commercial banks only held $100 million in specie. this was a big problem. it wouldn't have been a problem if the treasury had quickly spent the specie paid by the banks for bonds and then people put their money, the specie, back in the banks or if banks quickly sold the treasury bonds to the public for specie. and abraham lincoln provided another way to grease the skids. he signed a bill in august to al

although acknowledging the significant role that treasury plays in gm's restructuring, gm and treasury officials stated that treasury's role was advisory. concerning gm's decision, and not to take on additional delphi pension liabilities, but to honor the top up agreements with some unions. .. financial services i had to attend, and i didn't hear all of it, but i read the testimony. i want to know what was your overall mission of members of the auto task force delphi is just one piece of the situation and you were facing and was a major part supplier to gm that had been experiencing some financial troubles for some time if you say gm, but delphi failed is that correct? your answer? >> i think i would echo what mr. wilson said earlier. our mission was sent to save general motors. our mission was to see if they would facilitate the restructuring of the companies said that the american automobile industry in its entirety would continue to function of the least possible cost of taxpayers. it was general motors judgmental we didn't disagree with that if delphi had liquidated the general mot

treasury yields today eric they fell to an all time record low on all ends of the spectrum the ten year traded below one point four percent the thirty year below two point four eight percent but instead of being lulled to sleep you do not think the u.s. should be a slave you think that the u.s. should learn from a cautionary tale from the extinction of the irish elk first eric what happened to the irish. well the irish elk was a was a maladaptive species ultimately so the irish elk. had enormous antlers and the antlers were according to one theory of its other except its extinction were a major component of the sexual attraction of the males so it was a big part of sexual selection the apparently the female irish elk dug male alex with beginners. as as that process that preceded. the the large antlered elk would have large antlered offspring and they would grow larger and larger which is just a generations. ultimately who ended up with that had one hundred pound antlers and they were ill suited to to forage they were could have to work even their heads up and according to the leading th

so how much did the treasury want to borrow? when salmon chase took over, his immediate predecessors had tried floating a total of $18 million worth of federal bonds, but were unsuccessful. before congress convened in july, chase attempted to sell close to $40 million in treasury bonds and notes. and a specialized session authorized him to borrow another $250 million permitting him to immediately issue $250 million in treasury notes payable on demand. and there were several bonds scheduled for later issue in the fall. now, recall that commercial banks only held a hundred million in specie. this was a big problem. it wouldn't have been a problem if the quickly spent the specie and then people put their plun back, the specie back in the banks or if banks quickly sold the treasury bonds to the public for spee si. rather than into the sub treasuries. which tended to lock the funds up and close the doors. unfortunately, chase refused to deposit the specie into the banks. instead, letting the gold accumulate in the sub treasuries wher

treasury bonds the treasury bonds are our national debt that's what we have to put a treasury bond is a promise from the u.s. government and whatever treasury it is around the world is a promise from that government to tax its population in the future so they're they're promising us that they're going to extract taxes from us in the future that's what deficit spending does they sell this bond the federal reserve acquires it and they buy that bond they write a check here's a trillion bucks and they buy those bonds that checking account they had has there is no account there's no balance there they're writing a fraudulent counterfeit check to buy this thing and then so then the banks have they do this through open marc. now the banks have that one point five trillion dollars they're talking about in their accounts at the federal reserve and then the federal reserve is going to pay interest on it which we have to pay in future taxation. that's very easy if it's causing all the money around mike i'm going to stop you for just one moment and if you hold that thought i can get to it right a

treasury yields today eric they fell to an all time record low on all ends of the spectrum the ten year traded below one point four percent to thirty or below two point four eight percent but instead of being lulled to sleep you do not think the u.s. should be asleep if you think that the u.s. should learn from a cautionary tale from the extinction of the irish elk first eric what happened to the irish. well the irish elk was a was a maladaptive species ultimately so the irish elk. had enormous antlers and the antlers were according to one theory of its other expect its extinction were a major component of the sexual attraction of the males so it was a big part of sexual selection the apparently the female irish elk dug male alex with beginners. as as that process that preceded. the the large antlered elk would have large antlered offspring and they would grow a larger and larger which is such a generation's. ultimately who you ended up with that had one hundred pound antlers and they were ill suited to to forage they were could have to work even their heads up and according to the lead

and the treasury enabled. they were afraid that the bang could leave the program which gives you a sense of where the power is and how they are pulling on washington. and another excuse not to get tough with the bank. it was about protecting the banks when secretary geithner was confronted he explained that his view of the housing program was to foam the runway not banks. the program that was to help main street --. >>neil: he does not seem to flip over you or the notion that he wasted taxpayers' money. this is from treasury secretary geithner. >> people were deeply misled about the basic choices we face and the alternatives we con front in that context. a lot of people including many of my critics said we gave, and lost, trillions of dollars of the american taxpayers' money. deeply misleading and damaging to the confidence and the cost has been damaging to the president and the integrity of the effort. >>guest: glad you showed that. >>neil: he was ripping you. >>guest: i am glad you showed that. the question

treasury secretary. we'll take some parting shots at him too. >> tomorrow on "squawk box" our guest host peter fisher will tell us where black rock is investing more than $3.5 trillion. we'll get analyst reaction from facebook's first quarterly report as a public company. plus, closely watched economic data. first look at u.s. economic growth in the second quarter. you can't afford to miss "squawk box" tomorrow starting at 6:00 a.m. eastern. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. olaf's pizza palace gets the most rewards of any small business credit card! pizza!!!!! [ garth ] olaf's small business earns 2% cash back on every purchase, every day! put it on my spark card! [ high-pitched ] nice doin' business with you! [ garth ] why settle for less? great businesses deserve the most rewards! awesome!!! [ male announcer ] the spark business card from capital one. choose unlimited rewards with 2% cash back or double mil

let's go to larry kudlow and the treasury secretary, tim geithner. >> the treasury, tim geithner and his questioner this hour, larry kudlow, anchor of ""the kudlow report."" please welcome him. >> secretary geithner, as always, welcome. we appreciate your time and your efforts. let me begin with the subject everybody is talking about, and that is the faltering economy. of course, ben bernanke was especially bleak yesterday. some people are talking about a new recession threat. the jobs have come slow. the retail sales have come slow. i want to ask you in your judgment what has gone wrong? why are we facing this? >> larry, you're right. the economy is definitely slower. slower than it was the end of last year. why is it slower? it's slower mostly because of the trauma from europe, the after effects of the rise in oil prices earlier this year and because government spending is actually falling now quite significantly. those three things are a pretty significant drag on a recovery. i think if you listen to most business economists or people in the markets now, i'd say most people still

in treasuries and u.s. stocks may look better when europe starts to look worse again. >> look at the deep cyclicals. even a guy like me can get pulled into a caterpillar. people don't understand the aven avalanche of money coming. >> if global growth is slowing, caterpillar is the last stock you want to own, especially if china slows. to play deep cyclicals is the wrong call. >> china is always discounted. it's 20% or 30% cheaper. >> sometimes cheap stocks get cheaper, right? >> i think if you're in a value trap, and you look at standard deviation, the valuation historically, one can make the case, clearly not a hedger, we have that extreme reading right now. three or four months ago i would not have touched china. now i'm into it and like it. people know that china is lying about growth, but that's news from three months ago, not today. >> you better hope they get their infrastructure project going because it's not looking particularly great right now. >> thank you, we'll see you soon. investors are awaiti

national banks were capitalized with treasury bonds. they could issue national currency if it was backed by treasury securities. and so the federal government issued debt and then that debt was mono tiezed via the backing of it in the federal banks. late in the war to reinforce the power of the federal currency, the federal government actually taxed state bank notes out of existence so we don't have those anymore. so the u.s. emerged from the war with a far different financial system than it had when the conflict began. perhaps most important by binding the banks to the federal borrowing via mandatory capitalization it bound the bankers to the fortunes of the union. but it also tied the federal government to the fortunes of the financial sector, which as we know today can have significant economywide effects. this shows the dominance of the national banks by war's end. they became basically the only game in town. now, i want to talk just a little more about the experiment with fiat money. one potential cost of issuing money that's not b

plus, treasury's response. not exactly a warm welcome for the secretary of state hillary clinton in egypt. [chanting] >> shepard: protesters pelting her motorcade with tomatoes and shoes. [chanting] >> shepard: were they really chanting about monica lewenski >> everything you buy online could soon get more expsive. tonight, why more states are forcing web sites to start collecting sales tax. but, first from fox this monday night, a u.s. navy ship in a deadly encounter in the persian gulf. in the same waterways at the center of a tense war of words between iran and the west. according to sources at the pentagon, sailors on the navy oil tanker rapahanak ownershipped fire on a smaller boat. officials say it was rapidly approaching the navy ship. its captain ignoring repeated twoorntion turn back. in the end, one person dead in the gunfire. three others hurt and we're told it lasted 15 tense minutes. it happened they tell us right off the coast of the europe nighted arab

as long as our own central bank is in there supporting our treasury markets, then treasury rates will stay down, possibly go lower. they're already lower than i would have ever thought possible a year ago or even six months ago. they can -- they can pretty much handle the market for a period of time. the give in this normally would be the currency. but since the other major parts of the world are doing the very same thing, you don't have that kid so secondarily then you watch the price level on other things, and that has a long lag time. so direct answer, i think the fed will do something to support the treasury market. and we'll have to wait and see what it is. if not, if they don't, then rates go higher, as, you know, this week. >> understood. great to have you on the show. thanks so much for spending some time with us. >> thank you. thanks for having me. >> you bet. >> it's been interesting we've seen treasuries rally as well as stocks. could you have a scenario, sort of throwing this out for viewers, where stocks go down, and end yields go higher, treasuries go lower. that might b

and the treasury enabled. they were afraid that the bang could leave the program which gives you a sense of where the power is and how they are pulling on washington. and another ex tough with the bank. it was about protecting the banks when secretary geithner was confronted he explained that his view of the housing program was to foam the runway not banks. the program that was to help main street --. >>neil: he does not seem to flip over you or the notion that he wasted taxpayers' money. this is from treasury secretary geithner. >> people were deeply misled about the basic choices we face and the alternatives we con front in that context. a lot of people including many of my critics said we gave, and lost, trillions of dollars of the american taxpayers' money. deeply misleading and damaging to the confidence and the cost has been damaging to the president and the integrity of the effort. >>guest: glad you showed that. >>neil: he was ripping you. >>guest: i am glad you showed that. the question before that was

treasury inflation protected securities yielding less than nothing are safe i submit that less than nothing is not a promising place to start the best but. i mean you once investments all too frequently wind up delivering less than nothing but you don't sit out that way right that is the same with the support of the value proposition even passed muster with a two year old that was you know they know that they're not supposed to give their money to someone they want to get money but is there our role or is there a part that property rights play and this because we've seen m.f. global we've seen i've heard many stories of customers of m.f. global who had their money taken they put it in care and financial group and now the money has been taken from there so is there a role that people are more willing to put their money somewhere they at least perceive not to be safe because they're more afraid of it being taken. out of the mess that is certainly that's part of it i think there's a overarching fear of something terrible yet not strictly definable. and yet this is such a very a gated f

that's puts a first fact check on the congress and the treasury for financing, and as a result, it ties right to the first gentleman's question about, in a democratic republic like the united states, governed by a supreme law of the constitution, the money supply should be in the hands of the people. it should not be in the hands of the elite. that is to say it should be in the people. the governing board at the fmoc decides in camera what it sees at the end of the day. of course convertible currency put it is control of the money back in the hands of the people. that's precisely why the first coinage act of america defined the dollar as a weight unit of gold. if people simply do not desire to hold the dollars which are being issued by the banks in general or by the central bank, if there be one, or by the treasury if it is issuing paper dollars, and it also did before the federal reserve, they had the privilege of returning those dollars to the banks or the treasury and demanding the gold which is, in fact, the dollar itself. that ends -- that ends the discretion of money printing and

british treasury debt and american treasury debt so in a way the bailed out banks or helping the bank of england and the federal reserve to keep the bond prices high despite the continual outpouring of massive amounts of debt so the central banks and these big banks are working together and they've got the system rigged before i want to touch upon wired what you're saying in terms of government debt but first i want to go back to what you're saying about what this does to the assets on banks' balance sheet and what we can infer that or possibly you do in your view does this mean that some of the too big to fail banks aren't healthy enough to engage in traditional lending really and they're more worried about their own borrowing costs because their balance sheets are still so impaired that they need to continue repairing the holes in their hole before they can worry about building armaments and expanding the fleet. well you know yes to yes that what you're saying is true but the point the point the most important point is that when interest rates fall the prices of the assets on their

british treasury debt and american treasury debt so in a way the bailed out banks or helping the bank of england and the federal reserve to keep the bond prices high despite the continual outpouring of massive amounts of debt so the central banks and these big banks are working together and they've got to sustain rigged before i want to touch upon wired what you're saying in terms of government debt but first i want to go back to what you're saying about what this does to the assets on banks' balance sheet and what we can infer that or possibly you do in your view does this mean that some of the too big to fail banks aren't healthy enough to engage in traditional lending really and they're more worried about their own borrowing costs because their balance sheets are still so impaired that they need to continue repairing the holes in their hole before they can worry about building armaments and expanding the fleet. well you know yes to yes that what you're saying is true but the point the point the most important point is that when interest rates fall the prices of the assets on their

i'm not sure it's the it's the traders the money market or treasury desk or these banks say ah if they do it will do that i think what free traders are saying is i think we can get away with this great write yeah those e-mails now and those are just some fun fodder for at least outrage in themselves but i want to ask you know you have said before that living in a central bank world is like living in a hall of mirrors or living under a central bank it's like being in a hall of mirrors and then more recently i heard you compare it to the truman show that movie where we're truman is in a fake world but he doesn't realize it until he's going along in his rowboat any hits actually on the campus and this is the limits of his fake world i think you said we're already there so does this mean we're at the end to arrange things can continue to manipulate the fake world that they want. i think that we exit the fake world when people decide that they are living in it the jim carey character and in the true insured made this discovery when the proud of his rowboat five member right. tore through th

you report that treasury secretary tim geithner's epic tantrum in 2009. neil, i have been the most [ bleep ] transparent secretary of the treasury in this country's entire [ bleep ] history. end quote. is that a true quote? >> absolutely. >> what were you rg aing about? >> when i got to washington i was shocked to see how much control a handful of the giant wall street banks have over washington and regulation. when i saw the bailout unfold, time and again the officials would be differential to wall street interests. they fought the efforts for transparency. in this meeting i was trying to convince geithner to be more open about what the banks were doing. >> more open about his language. that was a joke. more open about what he was doing to the bank. but did t.a.r.p. fail in your opinion? that's what i want to get at? >> yeah. i mean t.a.r.p. failed to achieve many goals. it helped prevent a giant economic collapse which was important. but it was supposed to reinvigorate the economy. banks were supposed to take the money and deploy it in the economy. it w

british treasury debt and american treasury debt so in a way the bailed out banks or helping the bank of england and the federal reserve to keep the bond prices high despite the continual outpouring of massive amounts of debt so the central banks and these big banks are working together and they've got the system rigged before i want to touch upon wired what you're saying in terms of government debt but first i want to go back to what you're saying about what this does to the assets on banks' balance sheet and what we can and further than a or possibly you do in your view does this mean that some of the too big to fail banks aren't healthy enough to engage in traditional lending really and they're more worried about their own borrowing costs because their balance sheets are still so impaired that they need to continue repairing the holes in their hole before they can worry about building armaments and expanding the fleet. well you know yes to yes that what you're saying is true but the point the point the most important point is that when interest rates fall the prices of the assets o

i'm not sure it's the it's the traders the money market or treasury desk or these banks say ah if they do it will do that i think what free traders are saying is i think we can get away with this great write yeah those e-mails now and those are just some fun fodder for at least outrage in themselves but i want to ask you know you have said before that living in a central bank world is like living in a hall of mirrors or living under a central bank is like being in a hall of mirrors and then more recently i heard you compare it to the truman show that movie where we're truman is in a fake world but he doesn't realize it until he's going along in his rowboat any hits actually on the campus and this is the limits of his fake world i think you said were already there so does this mean we're at the end to arrange things can continue to manipulate the fake world that they want. i think that we exit the fake world when people decide that they are living in it the jim carey character and in the truman show do made this discovery when the proud of his rowboat five member right. tore through the

national banks were capitalized with treasury bonds. they could issue national currency if it was backed by treasury securities. and so the federal government issued debt and then that debt was monetized via the backing of it in the federal banks. late in the war to reinforce the power of the federal currency, the federal government actually taxed state bank notes out of existence so we don't have those anymore. so the u.s. emerged from the war with a far different financial system than it had when the conflict began. perhaps most important by binding the banks to the federal borrowing via mandatory capitalization it bound the bankers to the fortunes of the union. but it also tied the federal government to the fortunes of the financial sector, which as we know today can have significant economywide effects. this shows the dominance of the national banks by war's end. they became basically the only game in town. now, i want to talk just a little more about the experiment with fiat money. one potential cost of issuing money that's not bac

assistant secretary of treasury. this is one of the letters we were just talking about in response to questions that were raised some time earlier. it says, i am writing in response to your recent letter to secretary dite mayor -- secretary timothy geithner. we're writing in response to employees of the delphi corporation. mr. ron bloom has since left his position. please allow me to respond on behalf of the secretary. we recognize that the bankruptcy of the delphi has been extremely difficult and challenging for all of its employees. we are aware of significant hardships of the entire united states auto industry over recent years. the issues that you have raised pertain to certain agreements by the general motors corp. in 1999, when the old gm spun off into separate companies following the bankruptcy. around the time of the delphi spin off from the old gm, they entered agreements and commitments to pay supplemental benefits in the delphi pension plan, represented by three unions. united auto workers, the internation

we already have negative yields on many treasury securities. at this point i would say. >> i'm sorry? >> does this sort of put a floor under -- support the trade that we have been working on all along. corporate bonds and high yields? >> i don't know that it's necessarily supportive of lows trades. it has been about the most effective diversifier against the equity component of the overall portfolio. they still make sense. >> brian kelly? got a question? >> part of the treasury trade is that there are fewer and fewer safe assets out there. are you seeing new buyers coming in that may have been buying european bonds coming into the us strezy markets? >> i think there have been flows from the other types of bonds. >> i would just ask this seems to be like a one way trade. if you were look iing not on yields with total returns. >> just consider, the general consensus has been a rising yield environment. and again and again, that perspective was turned out to be wrong. i think we are in a very low yield environment given the low yield environments

that's puts a first fact check on the congress and the treasury for financing, and as a result, it ties right to the first gentleman's question about, in a democratic republic like the united states, governed by asupreme law of the constitution, the money supply should be in the hands of the people. it should not be in the hands of the elite. that is to say it should be in the people. the governing board at the fmoc decides in camera what it sees at the end of the date. it puts the control of the money supply back in the hands of the people. that's precisely why the first coinage act of america defined the dollar as a weight unit of gold. if people simply do not desire toled how the dollars that are being issued by the banks in general or by the central bank, if there be one, or by the treasury, if it issues paper dollars, and it also did before the federal reserve, they have the privilege of returning those dollars to the banks or the treasury and demanding the gold which is, in fact, a dollar itself. that ends -- that ends the discretion of money printing and it ends the -- the system

treasury yields below 1.6%. second half playbook on treasuries just after the break. treasury yields below 1.6%. second half playbook on treasuries just after the break. . treasury yields below 1.6%. second half playbook on treasuries just after the break. . [ tires squeal, engine revs ] ♪ ♪ ♪ [ male announcer ] not everything powerful has to guzzle fuel. the 2012 e-class bluetec from mercedes-benz. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck tdd# 1-800-345-2550 because when it comes to talking, there is no fee. >>> all right. >>> all right. welcome back to the halftime show. we continue to trade the high end v

treasury yields to keep sinking. join the conversation here on "worldwide exchange" and you know how. send us an e-mail to worldwide @cnbc.com or tweet us @cnbcwex. you can reach us directly at. >>> credit suisse, investors cheered a plan to raise extra capital. >>> welcome to the program this morning. these are your headline. chris swiss unveils plans to raise capital base by over 15 billion francs. disappointing earnings from intel. >>> and ben bernanke heads back up to capitol hill today after sketching a gloomy outlook for the u.s. economy. >>> a number of earnings in focus in europe. ericsson reported lower than second quarter. on the other side, asml, dutch equipment maker beat estimates in the second quarter. mainly thanks to growing demand for gadgets such as tablets and smartphones. contrast with intel a little bit. and nordea getting a boost, swedish bank posted a larger than expected increase. it warned eurozone financial crisis may weigh on the area and demand. swedbank, up 1.15%, results better than expe

three and six-month treasury bills. it was at 2.56% for the three months' bill, and that's 3.23% for the six p months, which is extremely high for such a short-term maturity. we're expecting the spanish treasury to pay higher than this price aat this morning's auction. we have the results in about 10 to 15 minutes time. yesterday we saw the yield on the spanish ten-year hitting a record level of 7.51%. that's on the spanish -- on spain also hit aa record level at 652 basis points, which is good. of course, unsustainable on the long term and raising the question about possible bailouts, a full bailout for the spanish economy despite what a finance minister said yesterday. >> it's an extraordinary backdrop for the meeting taking place today between the finance minister and the finance minister of germany. what's the point of this meeting? what are we expected to hear out of it, if anything? >> it was hard to get some information from the spanish finance minister, to be honest. they're not very talkative about the meeting.

and now treasury. greg jarrett is live in our new york city newsroom. the treasury department. what did they have going on? >> well, you know what, shep? hooking up with hookers has never been easier. it's just a click away while you are crunching numbers over at the treasury department. one employee there surfed the web for erotic services every single week, soliciting ladies of the night during the day. whispering sweet nothings into their ears and setting up sexual rendezvouses. when the guy got busted the case was sent to the u.s. attorney who refused to prosecute even though it's criminal behavior on your taxpayer dime. and then there is the case of the golfing bank examiner. >> this bank examiner was on inspection of this bank, and while during the workweek he accepted greens fees from corporate executives that he was in charge of, inspecting. he was the regulator. yet, golfing with corporate executives and they were buying him golf as well as meals at the golf course. and that happened on more than one occasion. >> sumptuous meals by the way. when he got nabbed, the trea

the fed reserve can only buy treasuries agencies. and it isn't just the current fed chairman expressing concerns about the limits of monetary policy prominent former chairman of the federal reserve paul volcker has had this to say. mr bernanke you can talk i'm sure he's warning people about that but he hasn't as i say you can get a magic bullet to solve all these real problems to. so what should we make of this is this a come to jesus moment for the fed chairman has he actually been humbled by reality or is he just holding his best hand from last that's the big question and here to answer it is our guest lou rockwell the or excuse me according to our guest i should mention a little bit about of the rockwell the monetary control act of one thousand nine hundred gives the fed the authority to buy much more than just treasuries and agency debt so that's a key point and he joins us now to discuss the chairman's latest statements as well as the usual brew of financial to cannery lou rockwell chairman of the ludwig von mises institute and

i was told point blank by a senior treasury official that because my tone was too harsh towards wall street and the administration, that was doing myself real harm in my career, harm for my family. but if i softened my tone, was upbeat and positive about wall street, then good things could happen to me. like a good pot of gold at the end of the rainbow. that corruption is also a major problem. >> let moo ask you about some of the policies. this is the second anniversary of the dodd-frank bill which reformed financial regulation. supposed to limb indication too big to fail and provide protection for consumers. is it doing what it's supposed to do? >> no. in many ways, it's unlikely it will ever do what it's supposed to do in its current form. it's a process that has so many rules and regulations, so many loopholes baked into it p ultimately when dodd-frank didn't break up the banks as it potentially could have, it cemented a status quo that continues the implicit government guarantee. look at the credit ratings agency of the big banks and they still benefit from that presum shun the g

. >> you stood up for those who often did not have a voice down in the halls of the treasury department. i want to begin with libor, bank call lewd and regulators do >> it is absolutely the case. it is depressing to see how much it confirms the problems we have with our financial system, and how they haven't been fixed. now we're learning what we suspected just a few weeks ago. this is a global international conspiracy to fix the most important interest rate imaginable in the world, and our regulators knew about it in 2007 and the spring of 2008. and the reaction is nothing short of pathetic. tim geithner sends an email, and had a meeting with some speculators in washington, but where is the oh, my god, we just found out about an international conspiracy and we have one of the banks confessing on tape. where was that outrage? where was telling the markets what was going on? >> i think i have heard this perspective before sitting right here every night saying the same thing. but it is dÉjÀ vu all over again. this is not the first time regulators have failed. and they take credit and pa

treasuries today. pushing the yields to 5, 10 and 130-year treasuries to record lows. as we were saying, another monday, another sell-off. major averages off their session lows but the dow still down about 90 points or so. heading into the close. >> with today's sell-off in mind should investors take more money off the table ahead of friday's key second quarter gdp report. with us today sam from s&p capital iq. kathy jones from charles schaub. good to have you today. kathy, i can't find anybody today who likes equities. you don't either well, i'm a fixed income strategist. i always love bonds. >> talking your book. you really think there is more room to go here? >> look, i think rates could drift a bit lower. but the value isn't in long-term treasuries. value would be much better in shorter term, say, corporate rapt bonds. other sectors in the market right now. >> we were talking a moment ago with bill and he was talking about how we were seeing certain countries in europe like switzerland, germany, holland, fland, growing number of countries here seeing negative yield