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tv   [untitled]    September 16, 2010 7:00pm-7:30pm EDT

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feel. as. if. you. took on the internet. this history still keeps its secrets but now it's time to reveal the hidden in the soviet files house on the embankment and odyssey. fixed for. fifty ft just. a key committee on capitol hill approves the start treaty to cut nuclear arms clearing the way for a full senate vote on ratification but despite being
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a top priority for obama administration some republican senators say the treaty will hinder plans for a u.s. missile defense system. a chechen man. who is wanted by russia on terror charges is said to have arrived in poland despite a warning he could face arrest if he sets foot in the country russia wants him extradited but he's been sheltered by political asylum in britain where the courts have rejected moscow's request. the u.n. is to decide on a russian canadian territorial dispute in the arctic with ownership of the areas rich resources at stake moscow says it has scientific evidence to back its claims. coming up next it's the kaiser report with max kaiser and co-host stacy herbert today our financial experts are looking at japan a huge economy with big problems too that's next right here on our.
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and this is the kaiser report you know those bankers they're getting squeezed from two sides number one the basel committee wants to raise the reserve requirements thus putting a lot of the ponzi scheme ing out of business they are resisting that reform and then you've got the law you've got into or paul trying to chase down some of these corrupt bankers principly in iceland of course at the beginning of the whole deflationary collapse around the world and iceland's bankers introduced to the world the poster children for craddick banking banks are nightmarish thieving larcenous take no good mix let's get all the political angles political analyst day see herbert max keiser well first will start with the
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basil requirements shares that rise over delay in changes to banks capital so yes basil has gone easy on the poor bankers they won't need to meet these alleged reserve requirements until twenty nineteen but as we know max there will be no financial system left by then anyway well the battle committee is right to raise the reserve requirements for the global banking system that's the only way to restore integrity into the global banking system effectively what that means is that banks that engage in fraudulent derivatives packaging and fraudulent arbitraging between zero percent interest rates and the free money given to them by the government won't be able to steal as much money as they're currently stealing the balance of committee is correct but the lobbying effort by folks in the banking
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. industry that have taken control of the u.s. government the u.k. government the western european government is very strong so the basil committee if they really want to introduce some reform they're going to have to maybe bring in tony soprano or some other mafia like mafioso to break some legs because they're not going to willfully shut down their club talk or see just because the battle committee thinks well maybe you guys should play fair for once. and you also mention interpol after bankers now we on this program issued a reward offered a reward to find this cow thing bank former chairman who's on the run hiding out in london but today former iceland p m faces trial over bank collapse so icelandic lawmakers have concluded after an eighteen month investigation that the country's former prime minister garrett hard ought to be tried for economic negligence for his role in the banking collapse and the currency
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collapse that's right we learn from the number of trial that he can use as your defense simply that you are taking orders the fact the prime minister was simply taking orders from goldman sachs and j.p. morgan in the wall street bankers does not exempt them from the law the banker you talked about i believe sigurd your i know arson was the icelandic banker that we rewarded solid gold. if anyone found. it led to the arrest of this icelandic club to crash i'm hoping that now today if you send us a video of him getting a cream pie in the face he's believed to be somewhere in the u.k. i'm upping it to two gold drew grounds if you send me that video for an exclusive here on the cause report icelandic banker getting cream pie in the face in iceland the currency collapsed by eighty percent the three banks the major banks collapsed
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and this committee was just being called in iceland that the truth commission found that the three billionaire owners of the three icelandic banks. banking couch thing were so close to the politicians that the politicians and the regulators failed to regulate them. well you know the icelandic banking scandals really beautiful you know as far as ponzi schemes go i mean the. three billion our bankers use to speak about they got the banks to lend them billions of dollars to buy shares in the banks and the stock price of these banks one higher and then they use the stock price as collateral to borrow more billions to buy more of the bank shares and the current of this virtuous cycle or daisy chain or ponzi scheme or pyramid scheme where you want to describe it it's fraud and of course they're right to want these guys to face justice because after all they've totally destroyed the chroma they destroyed the economy and the economy is facing severe austerity measures because
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of auto craddick club crowding banks are criminal shysters well that the economy the government did have to borrow ten billion dollars from the i.m.f. and it's a population of three hundred thousand now for his part the headline reads iceland's x. premier defends his innocence in two thousand and eight bank crisis gary hart says an innocent person isn't afraid of having his affairs reviewed by an independent and impartial court my official acts as prime minister didn't cause the banking collapse it wasn't in my power or in the power of other ministers to prevent it but like i said just following orders is no defense i mean just because the goldman sachs bankers and the wall street bankers told you to to rape and pillage the finances of your country doesn't make you innocent now hopefully and we know some parliamentarians up there in iceland they will get to this guy be front you know
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a tribunal and eke out onto him the punishment that he fully deserves well then let's go over to the u.s. from whence all of these banking crimes start don't repeat history so this is timothy geithner who oversaw the whole collapse of the u.s. banking system but let's look at the situation overall in america where they stand now after their banking collapse where nothing has been done to. pursue the banking criminals u.s. poverty on track to post record gain in two thousand and nine the number of people in the u.s. who are in poverty is on track for a record increase on president barack obama's watch with the ranks of working age poor approaching one thousand nine hundred sixty s levels that led to the national war on poverty well geithner is saying is completely incorrect in his assessment of the problem and his remedies are completely counterproductive he believes that he
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can keep flooding the system with more money credit and that they're going to fake it until they make it that some point if they keep flooding the system with more of this fake debt based money that it'll catch a big ride up on some new fangled technological innovative swing in g.d.p. and that they're going to be able to pay off all their debts over time and that's exactly the kind of thinking that got them into this current crisis geithner bernanke obama have to bite the bullet they've got to realize that the real estate market is really priced at about sixty percent higher than a really is worth the banking system needs to throw up some real failures like city citi group is a prime example that is a technically walking dead zombie bank they need to basically let that dead corpse die bury it take the head take look the economy take the hit and move on there's there's no way they're going to massage their way out of this dilemma geithner is
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completely wrong furthermore easy responsible he's condemning the economy to a nation as you point out the unemployment rates are skyrocketing the poverty rates are skyrocketing because geithner simply refuses to accept the fact that the economy needs to purge itself of the kleptocrats well exactly and according to this article now forty five million people in america or more the one inside. seven was in poverty last year that's almost fifteen percent of the population so. you know the example of iceland is that immediately these guys the country stood up forced their government out then said the entire banking system is fraud and we've talked about that for the us example it's one hundred percent fraud you have to say let's shut the entire banking system down because it's all fraud there's no fixing it it's fraud and now they're prosecuting there is no exemption you're the prime
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minister you're going to jail if you help these guys get away with destroying our banking system you're going to jail so the same with bush the same with hank paulson all the people that aided and abetted the criminals in america timothy geithner and larry summers all of these people should be potentially facing their own investigations oh absolutely summers and geithner certainly they were carried over from the bush administration barack obama gave those those cancerous lecherous kleptocrats oxygen to keep breathing to keep breeding to keep performing mellow and actions against the economy against the folks in america and as a result obama's a one term president i make that prediction right here now the one thing that is not being spoken about in america is all so you have all of these poor people you are not allowed to help them however the one thing that you can always keep on spending on is the warfare state defense cuts threat to special relationship apparently inflicting deep cuts on the armed services could threaten the special
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relationship between britain and the us this is president barack obama's defense department has issued warnings to the defense department of david cameron's government saying they better not cut their defense spending because they're threatening to cut it from two percent of g.d.p. to about one point seven percent. well the war for our state is now let's talk about poetry in the news space the day after. the nine eleven recognition of the anniversary of nine eleven nineteen of the hijackers of course for saudi the news comes out that obama sells tens of billions of dollars worth of defense contracts of weapons of mass destruction to saudi arabia now that's a beautiful juxtaposition all that's really all you need to know about this global economy obama and the folks run america take that defense money and they say to you follow lul you can go in the mud because they got blue demoed going in for killing
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. that's pretty much the entire economy in a nutshell well here's a possible answer to helping the u.s. economy and that's looking to japan the other zombie economy that has been a deflationary spiral but if you look at the next headline you see that actually could have been a whole lot worse over the last twenty years if it were not for real zombies thousands of japanese centenarians may have died decades ago so remember the deflationary collapse in japan started twenty years ago well according to a new information from the japanese government more than two hundred thirty thousand japanese people listed as one hundred years old cannot be located and may have died decades ago according to government survey more than seventy seven thousand people currently listed as still alive in japan are actually aged over one hundred twenty and there's eight hundred eighty four listed as over one hundred
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fifty so these people are still collecting pensions and they think that that could be a big pension scam where you know families are still claiming the pensions for these people but imagine you know this legendary savings culture of japan of course is a savings culture because these people are collecting pensions but they're dead can't spend it my mind this sushi sure tastes like grandma. stacey hammer thanks so much for being back on the cause i report thank you max don't go away much more after the break so stay right there. and discover it's easy to. lose. communicate with the wild and. test yourself and become. nature can give you.
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the. this. is paradise and. we're known for the military presence which occupies to serve the audience temperature and overshadows of people's everyday life. when all the sounds so people could use or less busy with. his words there really.
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welcome back to the kaiser reports i'm now it's awkward to call foster writes under the name stone late at the automatic earth blog and a call is currently on the road in sunny detroit speaking to crowds about the coming day place unary depression and peak oil the call welcome to kaiser report very nice to be here thank you for having me already in a call to tell us about the deflationary collapse you see coming how is it different to what we have already seen oh i think what we've seen is really only the opening salvo if you like at phase one of the credit crunch and there is so much more to come to the downside and we really haven't begun to see what's going to happen although to some extent people where i am now have begun to see an awful lot more of it and then in some other parts when we listen to folks like tim geithner or ben bernanke larry summers they seem to be mouthing platitudes of an orthodoxy economic are the doxy a lot of it comes from milton freeman a lot of it comes from what's called the chicago school of economics but that
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montreaux that repeating of the same orthodoxy is not is not working i mean they they want the crisis to fit their orthodoxy but let's talk about this deflationary collapse you see it as being a global collapse and will it be more severe in other areas versus you know in different areas i think it will vary enormously in fact i think europe will be hard hit sooner than then the states because there are so many probably. with the financial contagion of sovereign debt risk and it starting with greece but so many your could be in perth for all countries are in just as bad a state and i think it's entirely possible that you could see the be euro zone get a lot smaller than it is if that happens what i think you're very likely to see is actually a capital flight from europe and the states might benefit from that for for a year or two on a kneejerk flight to safety as being the least worst option and also with that the dollar denominated debt deflation because there is more dollars and get than any other kind you are likely to see demand for dollars created as soon as that the
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flight so i think the u.s. dollar could actually do quite well and the u.s. may have no trouble selling its bonds for a period of time after that however all bets are off we're talking about economic orthodoxy and yes there monetarists that really is that the problem monetarists don't recognize the critical role of credit in credit expansion that creates excess crime to underlying real wealth and that really is the source of the problem if you're looking at it only in terms of conventional money supply measures and treating an economy i think it was a machine if you push this button or pull that lever and this will happen they're attempting to take the human being out of the system to make it sound much more mechanistic then it is and that is absolutely not how markets work at any time markets are messy and irrational and emotionally driven giant swings of human herding behavior and giant expansion really our credit expansion is the expansion of human problem states the broadening of money if you like further and further
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away from anything that constitutes underlying real wealth and if you really look at the role of credit that tells you where deflation is going to come from could be flesh and it's be messy and chaotic extinguishing of x. that claims to underlying real wealth are let's move on the. international energy agency has called the i.a.e.a. they recently are talking about global demand for oil continuing. the rise whereas production of oil seems a peaked out certainly the cheap oil the oil that's relatively cost effective to get out of the ground we've gone past that point and now all the oil to be found going forward is going to be considerably more expensive by then blow the answer there but big oil. is a working definition of peak oil and talk talk a little bit about it well essentially peak oil is the production maximum it's not a reflection of how much oil is or is not under the ground it's what can you
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extract and so you have to look at net energy energy return on energy invested which is falling off a cliff intially if you get to the point where the energy return on energy invested is one now which you put a barrel of oil in and you recover a barrel of oil so with that energy at that point you no longer have an energy source it doesn't matter how much oil is left under the ground you can't get it and the reason that energy return on energy invested is falling so sharply is that we cherry picked the easy cheap things to get at and we have now left the difficult and expensive fraction where people are working in the deep offshore and looking to work in the arctic and working in a iceberg alley off newfoundland for instance these are areas where the costs of production are very high not just in financial terms but absolutely in in energy terms so the amount of energy it takes to put in compared to what you get out for these much smaller fields we're discovering today than we did previously that that is not looking good in terms of a return on investment in energy terms that and the net energy crisis comes
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a lot sooner than the down slope of hubbert's curve would suggest for growth energy production net energy decline is a very sharp in comparison now one of the biggest fields in the world one of the three biggest fields in the world cancer l failed in mexico showing sharp decline zero over year also parallel emergence of a narco state incredibly violent. connection between pig garlin mexico and the rise of does not go state in violence that's now spilling over into the us oh i'm quite sure there is and in a number of places where states are are failing this you would have to you have to have a certain amount of energy in in a system in order to maintain a level of socio economic complexity and i think failed states are a reflection of the wealth that if sucked out of the periphery in favor of the center and if you if you suck out more than then a certain amount you leave that state with too little energy to to actually maintain the socio economic complexity that it currently has and i think they're
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moving towards a system that's even more elitist than than it already was and mexico is extreme elitist beforehand but a lot of the power is ending up in the hands of the drug dealers and things rather than any kind anything that could be regarded as a legitimate power structure although i must say the definition of legitimate power structure is rather more flexible shall we say in in mexico than it is in many other places anyway i think there's there's a staggeringly large amount of corruption and there really isn't separation between what passes for legitimate government and and the narco state if you like you know what's really tragic as that with the us economy shrank things are rapidly when it comes to trade let's say selling the guns and involved in the gun trade to mexico they can't afford not to support the narco state that's having a web soft bags and destroying the border towns in the us because they can't afford
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to take themselves off the you know the free money that they're getting from supporting all the gun sales now you recently said that we have lived in an era of the largest energy subsidies in the history of the world so talk a little bit about this well fossil fuels are a massive energy steps the if it's free energy at the windfall we happened to discover this all other societies prior to ours have. prior to the industrial revolution i have lived on an energy income there is some capacity for energy storage in the form of grain and firewood but there is nothing remotely comparable to the energy inheritance the simply fell in our laps in the form of fossil fuels and well you can't have a financial bubble without a massive energy subsidy for the reason that bubbles are virtual wealth and doesn't create takes much energy to create something that isn't really there as to create something that is nevertheless if you have a massive energy subsidy energy does become a very powerful driver for socio economic complexity and and for me an expansion of
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credit and the likelihood of a bubble increases significantly if you have an energy subsidy as a powerful driver so we lived through the largest financial bubble in history and i don't find it remotely surprising that that coincides with discovery and utilize ation of a massive energy subsidy right so again something that people don't really understand is that the credit bubble is tied directly to this massive energy subsidy the free income from fossil fuels and as we now experience peak oil the collateral essentially that a support of this huge ponzi scheme of credit is diminishing in real time so no amount of extra fee out turns the creation is going to re-inflate the bubble because it's impossible to recreate that fossil fuel cycle is a threat yes however i would say that bubbles do not because bubbles do not require
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an energy subsidy they do have their own internal dynamics so i don't regard peak oil as the driver to the downside i think it was it kedar driver of expansion that if you bail ability of that key driver of expansion but because bubbles are ponzi schemes and the the timeframe for changes in the financial system is so much shorter than for changes in energy. supply in any case finance i regard as the key driver to the downside so i think that actually buys us time in energy terms it at the expense of making it worse later on in energy terms but i really regard bubbles are simply self limiting structures that have to come down they are a house of cards that reach a point where the debt that's created in in a credit expansion is no longer serviceable and at that point you are going to get be extinguishing of excess claims to underlying real well anyway so a lot of people who work in peak oil really regard because the key driver at energy
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supply is a key driver at all times i would say because finance has a shorter timeframe there are periods of time for instance during cascading collapses in the credit market where it is finance that is the key driver and people who are only looking at peak oil and it tend to miss that they look at at say the fundamentals and assume that the fundamentals are driving prices and i would argue that's absolutely not the case because prices are driven by perception not by reality and i mean you saw an enormous run up in the price of oil and i was trying to point out at that time that oil prices were about to fall off a cliff and people were saying what you must not believe in the case for people and that was not the case it's simply that i was looking at what the price drivers are and what was happening in finance to my mind was going to be the key price driver was going to rewrite the energy debate and people who were assuming it was purely the fundamentals that were driving that debate were seaming oil prices could their only ever go up i would say when supply and demand are tight what you're going to
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get to is huge well attilla team you're going to get huge swings of a boom and bust and that's really what we're looking at we've had a recovery in oil prices but i think we're going to have another very sharp fall first on the perception of having having peaked and moved moved away from that in a very short term but then falling demand and i think falling very sharply falling demand as we. merged into depression when the soviet union went into its collapse i believe there is economy fell by about twenty five percent in one year and so if we experience something like that then that's going to actually create a temporary glut because production is geared to the previous level of demand that is a recipe for sharply falling prices however i would also argue that because purchasing power will be falling faster than price in a deep place and even as prices fall access to everything very much including oil becomes harder.


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