tv Sino Tv Early Evening News PBS February 24, 2011 6:00pm-6:59pm PST
loyalists have been attacking civilians. this shows a hospital treating the wounded. some witnesses say that the city was attacked by rockets. hundreds are thought to have been killed or wounded in recent days. >> you see only destruction here. shootings, people, and fear. even doctors don't know how many people have been injured. -- shooting, dying people. >> the rebels have control of the border to egypt. the situation -- much of the rest of the country. there are reports of clashes and casualties in the area around tripoli and the west. many egyptians and other initiatives are trying to escape the fighting in libya. gadhafi are blaming them for
importing the revolution to libya and are dealing with them restlessly -- ruthlessly. many people died and central tripoli, many people from tunisia and egypt. they just leave the wounded on the streets and let them die. five of my friends were also killed. >> as a growing stream of refugees is fleeing the violence in libya, the power struggle between will list at opposition forces continues. >> so much of what we know about the situation that libya is coming to us through social networks such as facebook and twitter. we're joined by an internet group that has been a rallying point for opposition groups in libya. thank you for joining us. >> thanks, good evening. >> you are from libya, what is
the latest situation? >> libya is completely liberated. the media should focus on tripoli. we are thinking now that the media is playing into the hands of colonel gadhafi. the west might try to make up their own state. one thing i have seen inside and outside of the country is unity. people are chanting on the streets. tripoli is our capital. we will save her. libya is being chanted at the moment in the streets. >> you say that there is a rift but the rift we are get getting is that gadhafi is firmly in control of tripoli. is that not the case? >> that is not the case. people are coming out onto the
street. he has brought in his loyalists, revolutionary guards and packed the city of tripoli. there are snipers and all streets. it is impossible for the people to have the support and that is what they will get. >> are you telling us that tripoli is going to be the last stand for moammar gadhafi? >> of course. without tripoli, he really does not have libya. he currently has his home right in the center of tripoli as well. without tripoli, he does not have libya. >> thank you very much for joining us. >> thank you. >> we will be taking a look at the situation in libya coming up following the break. thousands of foreigners continued to flee libya, there
are reports of chaos at the airports and ports. a german military plane was able to land in malta on thursday. national's leaving say that they're forced to pay bribes. some people tried to steal their suitcases. what to do it if libya's decide to flee their country en masse and head for europe? italy would like a special refugee fund set up and promises from all 27 countries to take in refugees. northern european countries have said that a mass exodus will not happen. they say that europe should focus on helping libyans rebuild their nation. >> the european interior ministers are discussing how they should respond to the offense and libya but have not agreed on a common strategy.
italy is calling on the solidarity of other states. >> we estimate not 100 but 1 million refugees at least. >> to date, more than 5000 people, mainly from tunisia, have arrived on a tiny italian island. rome expects other countries to take some of the refugees. >> last year, germany took in about 40,000 people. sweden, 30,000, belgium, 20,000. italy took 7000. this is a long way from being overwhelmed. >> the pressure on europe is increasing. the u.n. is warning of a humanitarian crisis and they plan to start airlifting supplies to tunisia this weekend. >> my appeal to your kids to fully support the countries that are emerging from dictatorships
and are in transition. -- my appeal to europeans is to fully support the countries. we would like to have inclusions through the mediterranean and europe. i hope that europe will live up to its commitments and offer protection and assistance to are fleeing a war. >> as debate continues, the consensus on assistance for those affected still seems a long way away. >> germany has lifted his travel warning for egypt. this comes as berlin moves to normalize relations with the transitional government in cairo. the minister paid a visit to the capital with promises of more economic and development aid. >> the german foreign minister visited tahrir square. only two weeks earlier, it had been the focal point of the country's resolution --
revolution. now, they enthusiastically received their german guests. there are offers of assistance. >> this is unacceptable for a leader to use violence against his own people in this way. we welcome the clear line taken by the international community. >> he called for sanctions to be imposed on the gadhafi regime. egypt can look forward to german assistance on their path to democracy. >> we will closely coordinate economic cooperation. this also applies to investment in egypt. this democratic revolution will also bear fruit for the egyptian people. >> in the cairo branch of the -- institute, the foreign minister met with activist and internet blogger who played an important role in the revolution. their work is not over. now he is keen to assist in the
rebuilding of their country. >> steve is here with a business. words to calm the oil mess. >> the white house says that they have the capacity to act if on rest in the middle east and threatens to disrupt oil supplies. the russian prime minister was in town with half of his cabinet. 25% of the eu's energy demands are met by russia. the reality is that of the relations between europe and russia are strained. >> the european commission president gave his russian guest a warm welcome. the eu is heavily dependent on their giant neighbor to meet their hunger for energy, especially in times like these. >> the russian energy is key to keep your going. our industries, our households are very much linked to russian
energy. >> that is the kind of talk that gives the russian prime minister reason to be confident. >> the european prosperity depends on our energy. said, wheat express confidence right now. >> things are not quite as simple as lederer putin would like to think. the eu and russia are in dispute about a pipeline. -- things are not quite as simple as putin would like to think. >> the projects are already up and running. >> there is more sources of conflict. a gas giant would like to deliver its gas through a pipeline run exclusively through their company. the eu says this speech is competition rules and would like to out like -- outlaw this. >> this is not an action against our partners, this is an action for the market and european companies who have to stick to
the rules. >> the eu hopes that the dispute will be settled soon but if russia turns off the gas supply, europe could be left out in the cold. >> before the libyan crisis, the company was pumping 1.6 million barrels of oil a day. the price of crude oil is at $120 a barrel before retreating. italian oil executives say the production has fallen by more than half since violence broke out a week ago. other oil producing countries, notably saudi arabia, said they would expand production to make up for shortfalls. general motors is back in the black. they posted profits of $4.7 billion in 2010 just a year after they filed for bankruptcy protection. they receive billions in federal bailout funds and underwent drastic reorganization. 2010 was their most profitable year in over a decade.
the european operations are concerned. incurred losses of $1.8 billion. -- opel incurred losses of $1.8 billion. sales rose by 9% to $106 billion. they are putting their success on increase profitability in their core business which is to help fund life insurgents -- life insurance. the libyan crisis is weighing on share prices again on thursday. let's look at the figures starting with the close in frankfurt. the blue-chip finished 9/10 lower. across the atlantic, the dow jones industrials also lower at 12,067.
the ongoing unrest in libya has been driving up demand for gold. the price went up before declining. investors have been flocking to the precious metal among concerned that the violence could escalate. they expect the price to increase if the political and social tensions in northern africa continues. >> the wikileaks founder who rocked the u.s. by publishing a classified diplomatic memos has lost a legal fight to stop his extradition. a british court ruled that julian assange must be extradited from london to sweden to face allegations of rape. he has 10 days to appeal. >> the ruling did not come as a surprise to julian assange. the judge to approve his extradition to sweden where he could stand trial.
however, julian assange said that current law makes it too easy for people to be extradited within the eu. >> we have always known that in all likelihood we would have to appeal. 95% of european arrest warrants are successful. that is something that a fair trials international has rightly condemned. >> the basis for the extradition is a european arrest warrant issued by swedish authorities. the legal team is not convinced that he will receive a fair trial in sweden and it tends to appeal the decision. the wikileaks founder and his supporters are also concerned that he could be extradited from sweden to the u.s. which might see to try him for releasing thousands of classified military and diplomatic documents. >> three days after the
earthquake struck christchurch, new zealand, the death toll has risen. hundreds of foreign search and rescue efforts -- experts have joined the efforts. over 100 people are feared buried in the rubble of a local television building. the international media turned out in droves to witness the first joint public appearance of the british royal couple to be. prince william and his fiancee perform to their first official engagement as an engage couple launching a new life boat near their home on the west island of -- afterwards, middleton poured champagne. they will be doing a lot of that. >> they sang the welsh national anthem. >> we will be back with our "in
>> the reports coming out of libya it indicate a massive battle for tripoli in the near future. moammar gadhafi is fortifying his grip on the capital. the rest of the country appears to be in control of anti- government forces. gadhafi has vowed not to give up power voluntarily. our next report on the nation and the fight to own it. >> the images of libyans protesting might be reminiscent of those from egypt and tunisia but gadhafi has turned to extreme measures. he is using warplanes and artillery. the regime is proving its reputation as one of the most repressive in north africa.
this is not just a design for democracy that has driven libyans to risk their lives to maturity. people have simply had enough of gadhafi's eccentric and despotic rule. his power rests on the one headed for the tribes. the most influential tribe has called for an end to the violence. two others have turned against the regime. his own tribe is a minor force. one group has threatened to disrupt oil production in their area if the violence continues. the specter of unrest has raised fears about supply security pushing up prices. until now, gadhafi has been able to use income from his oil sales to buy the loyalty of the military and tribal leaders. he has also tried to placate the people with social programs.
unlike in neighboring tunisia, poverty is not fueling the result -- the revolt. they have built a cheap housing and urban areas. he has subsidized basic food and fuel. education is universally free in libya and literacy rates are at almost the%. libyan law guarantees equality for women and gadhafi abolished the compulsory wearing of the muslim head scarf. his style is one of carrot and stick rules. he threatened to protest is with a death sentence. his green book is a kind of unofficial constitution. written by the leader, it prescribes rules for life in libya. the rules governing life will change forever. >> let's bring in our expert on the middle east. is this a given in your opinion
that gadhafi will fall? >> yes, there is no way that he can exert control over libya. he is still trying to hold his grip upon tripoli, the capital, and the surrounding areas. >> how much life does he have left in him? >> he is really convinced. he has convinced himself that he will fight to the very end. he has missed the chanced to leave his country and dignity. he would like to fight to the bitter end and unfortunately, he is drawing the whole country towards this. >> when you have followed this, how is the managing to hold onto power in tripoli when the rest of the country is now out of his control? >> basically, by handing out money to his immediate followers which are smaller tribes and parts of the army. these people who are close and loyal to him, that is the small tribes. the army are very fearful that
after the toppling of gadhafi, they will face a difficult time. maybe they will be killed themselves. they have a strong desire to continue fighting on his side. >> talk to me about the oil industry. is it to the rule that the man who owns the oil, rules the country? >> yes, that is the way it works. gadhafi decided how these billions of dollars that the country earns every year were spent. unfortunately, much of this money has simply been wasted in financing revolutions all over the world and by building huge senseless projects in the desert. >> stay with us, we want to talk to you more in a couple of minutes. the stakes are high for europe and much of the world if libya disintegrates. the interest goes far beyond the shores of tripoli. the european union's most
important member states have made hefty investments in libya in the past few years and they don't want to see their money go up in flames. gadhafi has spent a lot of time reprinting himself and his country as a reliable business partner. we take a look at who he has pressed the flesh with the most. >> for decades, moammar gadhafi has used his oil billions to become a global player in the world of business. libya's trade volume with china recently jumped 80%. the chinese corporations are involved in numerous major projects from afar is in the streets to oil drilling. the trade volume is an estimated 12 billion euros. now beijing is putting on the brakes and has evacuated more than 30,000 laborers and engineers. angstrussia also had close tieso
the dictator. when gadhafi sat down with putin, the main business talk was arms deals. in 2010, gadhafi ordered weapons to the tune of 1.5 billion euro from russia. gadhafi also enjoyed a strong bond with the italian prime minister. italy depends on libya for oil and gas, it was gadhafi's efforts in preventing illegal immigration that secured their relationship. he ran up the security on the border.
in 2004, and gerhard schroeder became the first chancellor to visit gadhafi in tripoli. they are on imported energy supplier for germany. they have been an important market for exports for decades. currently, 40 german companies operate in libya with a combined trade volume of 4 billion euros annually. >> when you look at that report, it is safe to say that this is economic interests that are motivating the interests of western countries when they dictate policies? >> i have the impression that there is no mind setting at all going on when formulating policies. europe is really very astonished as to what is going on in libya. no one has an idea of what to do. there is a lot of talk about the refugee crisis. so far, we have not seen too many refugees. the italians are fearful of an
influx of refugees. >> oil is the most important asset right now in libya, it has been. is it enough to lead the west to go in militarily? >> no, i did not see nato going in militarily. that would be quite insane to start a third investment on the military front that will not really yield benefits. >> are you surprised that the white house is considering a no- fly zone? >> this is a positive development because the opposition has set correctly that this line into libya allows moammar gadhafi to get more and more people in from black africa. a no-fly zone means that mercenaries cannot reach libya any longer. that means it will topple earlier. >> thank you for being here with us and helping us to understand what is going on in libya. that will wrap up our "in depth
still in subscription. but he's also known as a brilliant money manager and, i would say, as a great analyst of the economy as a whole. he tells you where the money went, where does it all go, what's happening. he's just written the great reflation, talking about deflation, inflation, all these buzzwords that are so present in the newspapers nowadays, but he does it in a way that is absolutely crystal clear and, i would say, hard to contradict. here, then, is my guest, tony boeckh. tony boeckh, i loved the great reflation. i'm going to quote from it to start, and i want to pay you again the compliment i paid you before the interview. it's rare that you learn a lot--i mean, you learn more information, but you don't get an education usually--from a business book, but i certainly did with this, and i'm going to quote from your first chapter, page 24: "we have always agreed with this concept that inflation and deflation are two sides of the same coin with the difference being in the timing--too much inflation always ends in deflation, and deflation paves the way for the next inflation,
so long as the central bank is able to reflate. the great flaw in the world monetary system is that the united states, the main reserve currency country of the world, runs unlimited deficits that inflate foreign economies while at the same time progressively undermining confidence in the dollar's future value. it is a system that is unsustainable and dangerous. if not reformed, it will ultimately end in a very big crisis that the united states and the rest of the world may not be able to reflate their way out of." i'm just going to skip to the next page. one more paragraph: "it feels like we are travelling down a narrowing road, with inflation on one side and deflation on the other. we keep bouncing from one side to the other with increasing force. the implication is that eventually we will get to an endpoint, and experience both inflation and deflation together. the monetary and fiscal levers won't be able to pull us out. at that point, some prices may be going up, but living standards and wealth will be falling." so, a sobering message, but what interested me here was, for instance, understanding inflation in a different way.
we think of it, as you point out, as a consumer price index, and if that's not going up, we say, "hey, no inflation! we're okay!" but you say, no, money's being pumped in-- that's inflation. later you'll get the consequence. - right. well, yeah, there's a whole lot of different ideas all involved there, but let's just take the inflation/deflation being two sides of the same coin. at the heart of it all is the central bank. the central banks create liquidity, they create reserves for the banking system, and the banking system creates credit, and so we've always looked at what we call money and credit-- the two of them combined-- and when you pump a lot of money and credit into the economy and the financial system with a time lag, then you get higher rates of inflation. consumer prices tend to go up. it's all part of the cycle. and then after it runs for a while, people have incurred too much debt, and the higher the debt goes, which is the counterpart of credit, the more potentially deflationary it comes, and when the central
bank is finally forced into having to deal with inflation by raising interest rates, then all of a sudden a lot of people can't afford to carry the debt they've incurred. you get a recession, the collateral behind the debt falls, and you go into a deflation. and so that's why they're really absolutely related, and the example we have of the crash, 2008-2009, where we saw the debts before the crash had reached an extraordinary level, never before seen. and then when the whole system started to crumble, we got into what could have been a classic 1930s kind of a debt/deflation. and so you can see that we got into a situation where the central bank, the federal reserve, other central banks, the bank of canada, had to pump a lot of money into the system to try to prevent it from collapsing. and so we're out now almost two years from the bottom
of the crash, and we're in a situation where some prices are still falling and other prices are rising. and in fact we just did a recalculation of the consumer price index recently, and we said, "what does it look like if you take all the housing-related deflation out of the calculations?" and the inflation rate was running at about five percent a year. - not what we hear, though, on the news. - not what you hear, but if you look at the headline cpi, it's close to zero, and it has the federal reserve terrified that we're going to go into a debt deflation like japan has been in for 20 years, or like the whole world was in the 1930s. so it's a very complex thing, and it's very hard for people to get their mind around this deflation/inflation discussion. - yes, and we're maybe looking at the wrong things. we're, like, sticking a thermometer under the tongue, looking, and saying, "oh, the temperature's okay". meanwhile, all kinds of stuff is going on. we should be
doing blood tests on the economy to see what's really going on. and i was interested in the phrase, "bouncing harder and harder from one to the other". that too is scary. oh-eight may not have been 1929, but it was damn close, and, i mean, you yourself are worried. you think this could spin out of control. - well, that's why i keep saying there's a lot of unfinished business, because... well, the title of the book, the great relfation, was all about the federal reserve and other central banks rescuing what looked like a death spiral in the economy and the financial sense. i mean, really it was very grim and scary for a while. so they threw everything at it-- all kinds of money, the federal reserve doubled its balance sheet, fiscal deficits like we've never seen before... - they pumped up general motors. i mean, they... aig... - and they bailed out the banks, and the did everything they could, and in fact i even heard it said that paulson, the secretary of the treasury, in a private conversation said, "we're going everything we can". this was when it was collapsing. "we're not even sure if it's legal or not. we're just doing
it because we've got to stop the system from crashing". - they were scared too. - so now they've pumped all this money back in again, and they've got the stock market going, they've got commodity prices going. it looks like we're at the beginning of possibly another boom-bust cycle, so we've got the rollercoaster going again. but if you go back over the last 30 years, we've had a whole series of these boom-busts, and the point i make in the book--and i've been worried about it for years--is that each cycle gets to be more dangerous, scarier and scarier, debt levels get to be higher and higher, and the central bank and the fiscal authorities have a harder and harder time bailing it out and getting it turned around again. and this is very true over the last couple of years. they're still worried that it's going to go into relapse again. and so it looks like we're back into the boom- bust thing. and to go back to this analogy of going down this tapering wedge, bouncing off both sides... - like a bobsleigh. - at some point, they won't be able to bail it out. i don't know when that point is. i don't think it's this cycle. maybe it's the next cycle.
maybe it's the one after. - but are we fated to do that? of course, human nature is at work here--the greed. i mean, when the boom is high, you want to make it higher, you want to leverage it even more. but you do go back to not a golden age, but an innocent age before: 1914. and you say governments were smaller, they were fiscally responsible, unions, of course, could not jack up wages with the very great power that they enjoy in some countries now. but is that gone forever? is there no way to recapture that? - well, there may be, but i don't know that there is, and i haven't seen anything that's convinced me that we can sort of get back to a period of sustainable stability. we might get back to stability for a while, while we're sort of crossing the curve on the way back up again, heading towards more instability, inflation of prices... by the way, another complication when people talk about inflation/deflation is that inflation is not just the things we buy day to day-- consumer goods, cars, radios, etc.--but it's assets.
and that's another aspect of inflation that, uh-- - bubbles. - this is bubbles, where you get, uh, like we're seeing now with the gold price, commodity prices, etc. - you're predicting a "mania", as you call it, and you give us a good history of some of the famous manias throughout history. you're saying from now in the next few years, with all this cash sloshing around that's got to go somewhere, expect a mania. but it's hard to think that people won't recognize it, but they never do. - people never recognize a mania, that's for sure, because there are several ingredients that you need for a mania. one is what kindelberger calls a "displacement", which means that you've got to have some event or something that's happened that captures people's imaginations, so they think, "this is fantastic; this is going to go on forever", like the railroads, like the canals-- - the internet. - the internet in the '90s. now it's china and india growing at nine percent a year forever. and somebody did some calculations recently: if the
united states grows at the same rate that japan has for the last 20 years, and china grows at the same rate that it has been doing for the last ten or 15 years, which is like nine percent a year, china will be larger than the united states, europe, and japan combined. so you know that can't happen, but-- - because they need a market? we're the market, so... - yeah, they need a market, and, you know, nothing grows to the sky forever. but this is the kind of psychology that is out there now. people are thinking this, so they think, you know, buy anything that people sell to china--commodities, for example. gold. the chinese are buying, so therefore everybody should buy gold. - well, a mania can be a speculative bonanza on the way up, but it's when you believe it--the problem is there's a lot of greater fools that believe it, get stuck with it. - well, all true manias have something real behind it, like the railroads and the canals were classic in the 19th and 18th centuries. they were real. the internet was real. the problem was that people
just took the evaluations to ridiculous levels, thinking that money was going to come out of everywhere, and, you know, the money will eventually, but... - can you predict? do you have a hunch about where the next mania could be? - well, i think we're seeing the beginnings of it already. gold, i think, is a classic case, and gold makes the perfect asset for a mania, because you can't put a value on it; it can be anything you want it to be, whereas... - and it looks anti-inflationary, of course. it looks solid, it looks permanent. they'd go to the old gold standard... but you're not a fan. you say the gold standard, for instance, cannot be returned to. - we're never going to go back to the gold standard. the gold bugs, many people dream of it, they think we're going to go back to some magic period of stability, but the reality is nobody wants to go back to stability, in terms of authority. they want the power to keep bailing things out, they want the power to buy off political vested interests. for example, like the tax cut recently in the united states. i mean, that was just, like, throwaway money for the republicans so they'll support
obama. and all it does it add to the budget deficit. i mean, the rich hardly need tax cuts in the united states, but they're going to get them. - is there any way an american politician could get elected today saying, "well, it's time to pay some taxes, here, to put our house in order"? is that doable? and if it's not doable, what will happen? - it's absolutely not doable, and that's why i've said i think the americans need a fiscal pearl harbour to really get their act together. it was winston churchill that said, "you can count on the americans to ultimately do the right thing, but only after they've exhausted all the other possibilities". [bob laughing] and so i think they'll get there eventually, but the question is what kind of a mess will force them into doing it? how big will the crisis have to be? is it going to have to be like greece and ireland, where the living standards are collapsing? - but it's too big to be... you know, you can't have the imf involved with the us. i mean, the us is much bigger. it's the reserve currency. it can't go to wheelbarrows of dollars
like in germany in the '20s. or can it? - oh, sure it could. absolutely. it could. it's not likely. i think there are a lot of sensible people in the united states; they're just not very visible these days. but they'll emerge when things really get bad. but certainly there's no pressure on the americans to do anything about their deficit now. interest rates are really low, the dollar's fairly firm, inflation is low--published inflation--and so the americans are able to finance these gargantuan deficits and spiralling debt ratios relatively easily, so, you know, they can say, "where's the pressure to change?" - and should we go back--if we're going back, maybe we can't find the age of innocence again, but some basic principles, it seems to me, would be good: having less of a consumer-driven economy, more of a production and export-driven economy--the us was once a great exporter, and so on, and ran huge trade surpluses. is that doable though now, with india and china and all those competitors in the picture?
- i think it's theoretically doable, but what's happened to the united states is sort of the classic third-generation effect, i think--the profligate son that's got the family inheritance, and then he's gone and blown it, spending and borrowing. and the united states has got addicted to debt and spending--consumer spending. and i don't think there's any real evidence that's changed fundamentally--it's certainly changed a bit because of the crisis, but philosophically in the united states, i don't think there's any basic change. - there is a work ethic in the us. it's not a mañana country. people do want to work, and it has a great entrepreneurial culture, so it's not just a third-generation effect. and you look at germany, which has high wages, and they're exporters. i mean, there must be a way to make it click. - yeah, it's always hard to generalize about the united states, because it's a huge country with many, many different ethnic groups. there's
new immigrants arriving all the time, and typically immigrants that come work hard, want to get ahead, and that's been one of the great strengths of the united states, this wave of immigrants, which is where all the great entrepreneurs have come from, whether it was the scots and the english in the 18th century, and the germans in the 19ths century. - the germans and the dutch, yeah. - so the us is the greatest entrepreneurial country in the world. that's where every entrepreneur outside the us wants to go. they want to come to the states and build a business. - so that could click, but it would have to click big. - well, yeah, it's a question of quantitatively how important is it? because there's still many tens of millions of americans that all they know is how to get credit cards and max the debt, and then they're lead into a sort of nice gentle bankruptcy, and then they start over again, and there's no real penalty for going bust in the united states. and people buy houses they can't afford. the lenders lend them money, knowing they can't afford
it, can't pay it back. i mean, it's a crazy, debt-driven society, and so theoretically it could change, but i don't think we're there yet. this crisis wasn't bad enough. - incredible, eh? incredible! - i mean, we think it was pretty bad, but it didn't last long enough. the '30s lasted for, you know, more than ten years. - and they had a bump in '37, actually. yeah, it was a very long one. - but even in the '20s it was pretty rough too. there was a deflation in the us in the '20s. most people didn't participate in the stock market boom in the '20s, so, you know, people's attitudes changed. people used to, after the war, they'd change a 100-watt light bulb for a 40-watt to save money on electricity. whereas now, you don't have that attitude anymore. nobody cares. - another important point that you make is the stock market. we misread--we think the stock market follows the economy. we think we're being very wise when we say that, but you say, no, no, no, the stock market precedes the economy.
- yeah, that's a very key point, i think, for investors. there's so many people that try to figure out where the market's going by looking at the economy and all the stuff they read on the economy in the newspapers, but it works the other way-- the stock market is a very good forecaster of the economy. it's not perfect, but, you know, people were amazed in march 2009. out of the ashes, the stock market started going up, and people said, "how can the stock market go up? companies are going bust, the banks are going bust, unemployment's so high, but the stock market's looking ahead". they said, "the federal reserve's going to bail everything out, the government's going to run deficits, the money's going to go into financial assets, and you'd better own stocks". - but when stocks stall,undamens look good, then we don't pay attention. we say, "ah, that's just the stock market". - yeah. - we should be thinking, "okay, this must be the next stage". - yeah, well, i think the stock market's a very important thing to follow right now, because the key part of federal reserve policy--and i think it's the right thing--is to try to repair
balance sheets, because that's how we, i think, prevented ourselves from going into a death spiral--by what the central bank did, which was to get asset prices up, because collapsing balance sheets is really what causes that debt deflation where you go into the downward spiral. and so the federal reserve, they don't directly target the stock market, but indirectly they want that stock market higher. - and how about collapsing countries? because we're seeing that on the other side of the pond. will the euro survive? i've heard theories that maybe all the mediterranean countries can't pull out, but germany could flip it around and say, "okay, i'm leaving". what will happen, do you think? - well, i don't have a firm conviction on it. i think it's a very, very difficult, dangerous situation. and it's really... what europe is facing is--the countries that are in the euro--it's like being in the gold standard back in the '30's. the only way they can correct their situation--countries like the so-called "club-med piigs"--
portugal, ireland, etc.--is to deflate internally, and the problem is their debts are so high that the more they deflate, the more the gdp goes down, the incomes go down, and the higher the level of debt--the gdp-- the higher it is to service the debt, so they can't get out of it. they're in a vicious circle, and ultimately the only way for them to get out of it is to devalue their currency, and they can't devalue if they're in the euro. so either germany is going to wave goodbye to the piigs, or the piigs, i think, are going to have to wave goodbye to the euro. - oh, so you do think it could go that far. - it could, absolutely, yeah. i think it's an open question, because ultimately it comes down to politics in germany. the germans' worst nightmare has come true, having to bail out greeks so that they can retire at age 60. you know, bailing out stupid lenders in ireland that finance the biggest-- - but those are all their customers, though, because they export--it's funny. and the chinese, when they look at america's woes, but smile
a little bit, because they were saving and so on. but in the end, they're saving what? dollars they got from selling us stuff, and they won't be able to sell us stuff. i mean, they must worry about that. - well, that's an excellent point, and it's, you know, i use the word, "the balance of financial terror", mainly because of, vis-à-vis, the united states and china. i mean, china is sort of stuck with this situation with the us. the chinese want a cheap currency so they can export to the us, but they hold all these dollars, and they're terrified the americans are going to print too many dollars and devalue. but the chinese are afraid to dump all the dollars because what would happen is the chinese rnb would go up. it's the same thing in europe. if germany pulled out of the euro and created a new deutschmark, the deutschmark would go up so much that they'd lose all their customers-- the point you were making. so there's sort of a balance of financial terror in europe as well. so the germans keep reluctantly bailing out ireland and greece and portugal and... - and something we see in europe
that is reminiscent of the '30s that i don't think we've seen in north america is violence in the streets. so people are dying now through riots, protests, and so on, but that was true in the '30s here, too. in winnipeg... ...in new york city, in ludlow, and... - sure, there was violence, there were strikes, a lot of people forget. - could we, if we play it wrong, have some of that here? - well, i think the politics are ultimately where the tire meets the pavement on this thing, because if the public won't stand for deflation in areas that are being forced to deflate, then the governments don't have any... they can't sustain the situation, so they're going to have to go to plan b, which is controls, defaulting on debt, pulling out of the euro in the case of countries like greece... but, yeah, people forget there was a lot of violence. the nazis came out of the 1930s. communism was really powerful in saskatchewan and manitoba
in the '30s in canada. in the us, the communist movement was really pretty powerful. democracy was really under attack in the 1930s. - but, there again, as you say, this crisis wasn't bad enough to remind us, to give us the discipline. it's not bad enough to lead to that. but we're, what, one, two steps away? - so that goes back... ...to the tapering wedge. how many more times can we bounce off this tapering wedge as it gets narrow? and i don't have the answer to that. - and wall street, of course, is not described very favourably in the book. i mean, they are marketers, and they're very clever at enriching themselves, but basically nothing else, right? that's what they're there for, and therefore to give them any credibility is to waste your own time, or am i being too... - what, to give wall street credibility? [bob laughs] no, i think that's... i think there's a lot of shameless, pretty crooked people on wall street--pretty ruthless. they're basically in the game to make money for themselves, and make as much as they can as fast
as they can, and then go do something else. but there's a lot of pretty good people on wall street too--they do finance real businesses, they do finance real entrepreneurs, they're trying to create businesses. it's just i think there's a minority that really give wall street a bad name. but the culture certainly leaves a lot to be desired. - and the greater discipline on basic, basic things--well, the volcker rule, collateral, and so on--the old fashioned stuff. if political will ever got behind that, could that not do some good? - yeah, i think it could, but i think the american political system, really, has got a lot of huge problems. just the way the whole constitution is structured, having an election every two years in the house of representatives, the lobbyist system... i think the parliamentary system that we have here is probably a lot more stable--like in the uk and canada. in the us the whole thing is so tremendously politicized,
and regulation is fragmented among many different sources, many different places. it's all political--a lot of the people are political appointments that are running it, and i think they should be very non-political. the lobbyists have got way too much power in the united states. - now let me just throw one last one at you, and it is a bit of a zinger. mr. obama, as you know, has got to face re- election; he didn't do so well at the midterms. so you are king for a day. you are the chairman of the council of economic advisors, you're in the white house, but you've only got a day to drill one lesson into him. what is it? - well, i don't think there's any one thing that obama can do that's going to fix his fate, because of the whole political situation. - all right, one thing he could do to help the economy. the one thing he could do. - if he had one thing to do? um... if there was one thing to fix the system? i don't think there is one thing that is going to, quote, "fix" the system. the system is broken in too many different places. - but the priority should be what?
- the united states is so over-extended... - but should it be--i mean, most people would say jobs. they don't know what they mean when they say that, but... - but then, yeah, jobs. i mean, everybody would like to get unemployment down, but do you want to give people a bunch of shovels and pay them money to dig dirt and fill up holes? or do you want to create real jobs, which means educating people, educating this great underclass of the united states, which is going to take years and years? but that's the sort of thing you need to do for the us to pull itself out of the hole. and the americans are so short- term oriented that they never really want to spend the money and bite the bullet and do the stuff that has a payoff over 15 or 20 years, because the politicians aren't around to get the benefit from that. - well, tony boeckh, i have an easier job than you, because if i was king for a day, i'd tell him, "try to talk turkey like this man. read this book and try to talk more like him". thank you so much. - yeah, well, thank you for having me. that was great. - tony boeckh on entrepreneurs: the dobson series of the world show. once again, his book,
welcome to nhk world "newsline." i'm shery ahn. rescuers continue their desperate search for survivors after the earthquake in christchurch, new zealand. but with more than 72 hours since a deadly tremendous more hit, experts say the chances of finding anyone alive under the debris are slim. new zealand police have confirmed 113 people died and more than 200 remain missing after the 6.3-magnitude quake.
more than 500 rescuers from countries including japan, singapore, and australia have been working around the clock to save victims trapped under collapsed buildings. relief teams will continue working through friday. >> 47 bodies have been recovered from the collapsed ctv building, where many people including japanese are believed to be trapped. the building housed an english language school for foreign students. the japanese government has set
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