tv [untitled] October 25, 2011 3:31pm-4:01pm EDT
i am asked as to welcome the kaiser report if heard about fiscal policy what about a physical policy since you never next kaiser you're looking at this first headline here aren't you man jailed after trying to turn feces into gold a man from northern ireland has been jailed after an experiment in which he attempted to turn his own feces into gold went wrong and he started a fire on the block of flats in which he was living in his ruling judgement farland told paul moran rather bizarrely you were attempting to make gold from human feces and waste products it was an interesting experiment to fulfill the alchemies dream but wasn't going to succeed this is surely an amazing turn of events because if you look back into the recent history of the wall street scandals this
fecal matter element has come up a few times but really looking at the other end of the telescope or the or the alimentary canal as it may it may be elaborate and i know we talked about it briefly before it elaborate on this a little bit stacey however when max think about it what did goldman sachs do but turned mortgages into fecal matter as they themselves said and it emerged in congressional testimony so how this man tried instead to turn gold into fecal matter perhaps he would now now be doing jail time yeah this is the whole problem of the global financial crisis is that the majority of people are trying to turn junk into gold or is the big money on wall street in the round the world is by turning mortgages in the some other stuff that is already representative of physical assets. you could say it's gold to begin with it's
a mortgage representing a house they turned that into physical matter if you think this guy's got it all wrong you see if you want to get a job at goldman sachs yes learn how to turn gold into fecal matter that's so jamie diamond in lloyd blankfein make their money not the other way we're making fecal matter into gold that's a losing proposition especially since the price of gold is so heavily manipulated other downside but even this judge was able to recognize that it was a fool's alchemies dream that it wasn't ever going to work so why is it that our regulators the so-called judges and referees of capitalism and banking they can't see that it was obviously never going to work despite their pleas of ignorance that the likes of lloyd blankfein and jamie diamond say that they couldn't have possibly known that their alchemy would not have turned into an explosion in this case this man cost three thousand pounds and damages to the apartment building as i say the whole point of the global derivatives market anything about the gritters market is
a six hundred trillion dollar paper. faecal ball that circles the globe in worthless paper and that was derived from initially something of value a mortgage or a population as a whole the productive asset labor jobs stuff that has that has tended to work as all been turned into trillions and hundreds and trillions of dollars of worthless derivative and matter that is circling the globe threatening the very existence of our of our of our lives right here. well speaking of fecal alchemy max city agrees to pay two hundred eighty five million dollars after defrauding investors in a one billion dollar derivatives deal banking giant never admitted any wrongdoing oh another major billion dollar fraud this is just in the past couple of weeks i've been trying to keep score i mean we had bank of new york admit to
a multi hundred billion dollars pensions fraud where they stole three tenths of a penny on every transaction going back thirty years the what cobia wells fargo deal it's a for nearly four hundred billion dollar money laundering scam the supreme court just said the mirrors are ass mortgage scam would be allowed to be ok by the wall street banks that puts another a multi hundred billion dollar scam beyond the reach of the law now citibank's got another billion dollar scam trillions and trillions of scams every week yes but look at the man in northern ireland he gets sentenced to prison time here city gets to agree to pay two hundred fifty million dollars as if somehow they have the upper hand in the situation fraud as william k. black constantly tells us is a crime these people should be doing time it's amazing this legal
convention that they don't have to admit wrongdoing they pay. fine so obviously they did wrong but they don't have to admit to doing wrong is this why is this because they're afraid that if they had to admit doing wrong at citigroup had a compound say we committed fraud that the depositors would there would be a run of the bank and this would cause systemically systemic instability well i think though isn't there that is that the fact that by allowing a major corporation to pretend as if they haven't committed fraud representing systemic risk to the system isn't that something that maybe the justice department should figure out that by perpetuating allowing banks to say to steal money and then they don't have to admit guilt and they pay a one or two percent fine of the money they stole then maybe this is contributing to systemic uncertainty systemic. potential liability systemic injustice this causes revolution and you saw that in libya and i
want to turn to this image here max from sirte following the murder of. today libya tomorrow wall street and as you see this is a surrounded by some rebels that the american military industrial complex and the people are cheering in their bread and circuses but once they show up on wall street and they join the occupy wall street it will probably be a different story if if moammar gadhafi had. got nona jet landed on wall street so at some point the last three months he would have been immediately put on the board of directors of j.p. morgan they would have given him a multi-billion dollar bonus and he would be doing fantastic he would be on all the talk shows talking about his plan to monetize his country's assets in the greater good of a global oil kleptocratic dream state of never ending gusher
of profits for the top one tenth of one percent now the occupy wall street movement and the global insurrection against banker occupation have to ask themselves why justice was selectively served against gadhafi and not tony blair or jamie diamond or lloyd blankfein how come those guys are not hiding in a spider hole somewhere and then pulled out you know in a blood so rag i actually have some more headlines on libya coming up but first i want to bring your on the matter paine webber into the story x. wall street banker identified as key figure in the limpness scandal no it is not you max but it is a former coworker how zeman jim said he said the japanese american he worked at paine webber where you started your career sure he also worked at drexel burnham and then he went to no more a bank and then after nomura he went to advise japanese blue chip firm olympus corp and lo and behold he advised them on
a two billion dollars merger and his fee it turns out was six hundred eighty seven million dollars this scandal has now caused the limpness shares to fall by half i think that's more than even kate moss banks. well yeah that's of them remarkable. larcenous to move again by a banker from my all matter paine webber you know there's a comedy park occupy wall street protests happen right in front of one forty broadway that's right i started my career on wall street one nine hundred eighty. two was right in that building the i think is the eighteenth floor of that building where paine webber at that time before they got taken over by united u.b.s. of switzerland another firm that's been caught in massive fraud well the sum was equal to a third of the two thousand and eight takeover deal to which it related compared with the one to two percent bankers usually charge so you see this acceleration of the fraud because they're allowed to get away with that on all of these other deals
on this deal on the countrywide deal and the goldman sachs deal repeatedly they're allowed to get away with it so it doesn't make any sense for them to go small time and only charge one point or two percent for this if there's not going to penalties then what's the what's the message being sent take more take more there's no penalties it's a wash we're just opening the safe take all you want we'll just impose austerity measures and if we did do was throw the door to your dad. people don't like your well stolen well there's two more tear gas. well this is forwarded to pricewaterhouse coopers who looked at the deal to see if there was any wrongdoing they said quote based on the review we have undertaken to date we were unable to confirm that there has been improper conduct however given the sums of money involved in some of the unusual decisions that have been made it cannot be ruled out at this stage oh. price waterhouse coopers one of the big accounting firms.
this is not talked about much they talk about the corruption in the rating agencies you talk about the corruption on wall street you talk about the corruption in the money management business but not a lot of people talk about the corruption in the accounting business remember arthur andersen was enron's accountant they didn't survive they were put out of business and that business was sucked up by the remaining accountancy of which pricewaterhouse is one of them but we have these too big to fail and the reading agencies in the in these accounting agencies and the banks and you also have at max in the other key element of the global financial fraud going on and that's the military industrial complex fraudulent defense contractors paid one trillion dollars hundreds of defense contractors that defrauded the u.s. military received more than one point one trillion in pentagon contracts during the past decade according to a department of defense report prepared for senator bernie sanders he said the ugly
truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior while receiving hundreds of billions of dollars of taxpayer money that's another big dimension of the banking scandal somebody pointed out it's not bread and circuses it's just circuses without bread you know they're just doing the public assassinations. for people's titillation like the porn associated with the gadaffi murder is titillating for the people who are being asked to suffer austerity measures because it keeps things their mind off the fact that they're starving to death for a few minutes but other than that there's a function to this and then this final headline for those two rebels there in that photo today libya tomorrow wall street well here's a headline for them max british businessman told. bags for a libya oh. yeah so this is from defense secretary phil.
and he told the b.b.c. now that the campaign is over i would expect british companies to be even today packing their suitcases and looking to get out to libya to take part in the reconstruction of that country as soon as they cap. the over ten yeah well i guess more money for britain exactly but it's also the exact same con that the bankers did they destroyed the infrastructure of the global banking system and that said here let us fix it let us loan money to the fed let us loan money to the treasury and one final quote from this article max is one m.p. daniel kaczynski from the u.k. all party group for libya said in the past freedom has been paid for with blood and gold in these difficult economic times it should not be too much to ask a country with libya's wealth and resources to pay their share of gold and i am still more goal all right thanks ever thanks so much for being on the kaiser report
growing prosperity for. the american way of life stephen believe welcome to the kaiser report thank you so much i really appreciate being here all right great steven lee what is the american way of life that china's growing prosperity threatens break it down a little bit for us well i mean it's already happening max i mean if you just look at the last let's say decade or so what you'll see is that you've had a protracted steady up trend in commodity prices i mean there have been interruptions along the way we've had a little bit of an interruption this year but i think you know maybe one of the best ways of phrasing it is if you had gone back to let's say in a time machine to one thousand nine hundred ninety nine ninety eight and told let's say the top twenty economists in the world that u.s. unemployment is going to climb to nine point one percent and that europe is going to be on the brink of a major recession with virtually no growth what would you expect the price of oil
and copper to be well i think those economists would look at the prices of oil and copper in the one nine hundred ninety s. and they would say certainly at the low end of those ranges and that would be maybe sixty cents or fifty cents or maybe even thirty cents for the price of copper and maybe fifteen or ten dollars for the price of oil today in this world we're sitting with oil at one hundred ten dollars in terms of how it's priced in europe and we're sitting with copper well over three dollars a pound i mean these are prices that are possibly ten times higher than we could have a reason reasonably expected based on current economic conditions in europe and in the united states you know therefore you have to conclude that you know this rampage his appetite for commodities that china now has and will continue to have
has really been a massive massive headwind. in terms of how americans live and it's not going to let up if anything it's going to get worse because part of this appetite that china has for commodities comes from the fact that they see the writing on the wall and they probably saw twenty years ago that you're not going to build a sustaining me on hydrocarbons it's just that simple i don't know whether we're at peak oil or peak this or peak bad but sooner or later you're going to get to the point where you're not going to have enough for oil or even enough coal to supply the needs of a world that's going to continue to grow and you know a china right now is preparing for those days they're not trying to deliberately hurt us but they're trying to basically prepare the infrastructure for the twenty first century and that infrastructure is going to include massive amounts of renewal energy solar wind etc china has an iron like grip on wind
because they control about ninety seven percent of rare earths and rare earths are absolutely critical for making wind turbines so when the us finally wakes up and says well we also need renewables guess what where are we going to get the resources for them how are we going to enter this market china probably has a massive position in silver which is vital for solar and mean and it goes on and on and copper the united states is fighting a war in afghanistan where we're spending billions of dollars china is spending billions of dollars in afghanistan to set their mining for copper i mean it's you know it's sort of like this we're at war with china right now not a shooting war but we're really at war for the critical resources that we're going to need to build the infrastructure for this next century we don't know we're war
china does know that we're at war and they're doing everything they can to win it. right now china is spending in the neighborhood of half a trillion dollars a year half a trillion a year in new technologies and new industries mostly devoted to new energies that means that by two thousand and fifteen china will have spent about two and a half trillion dollars about as much as the united states bent in the second world war winning that war and you know so china is on a wartime footing if you will if you measure wartime footing sinne terms of dollars you're spending on industries you need to win the war let's take a look at the geopolitics for a second because the u.s. is now sitting on top of a lot of the world's oil supply they're sitting on top of iraq's oil supply they're now sitting on top of libya's oil supply they're all over africa starting wars to secure that oil so at what point is there a confrontation between the u.s.
the toilet hungry and china and their oil angry the u.s. has taken a very militarized approach to it of standing oil sitting on oil china needs that oil is there are we headed toward a conflict there number one and number two is china's alternative energy approach as you as you are talking about here with wind and solar is that going to be able to leapfrog them you know beyond hydrocarbon steven lee well yeah i think it already is i mean solar right now is in many cases competitive with hydrocarbon and so is wind. and china is the one that can produce the lowest cost when the lowest cost solar is so yeah i think that they are leapfrogging to some extent you know there's a lot of work to be done that's why they're spending you know trillions literally trillions of dollars you know developing smart grids etc as far as the oriel that the u.s. may be sitting on right now that's not conventional oil that's non conventional oil and it really is not clear that we're going to be able to get significant and by
significant i mean twenty or thirty. barrels a day from those that say shale deposits i mean we'll be lucky to get two or three million barrels a day from those shale deposits that's really the proverbial drop in the bucket as far as they're concerned you know conventional oil is kind of peaking right now i mean we're again i come back to you know instead of arguing about how much oil this that i mean you know there's a lot of different opinions about bad but what you can't argue with max is the price of brant it's one hundred ten dollars a barrel despite all of the aura we may or may not be sitting on we're looking at brant crude one hundred ten dollars a barrel you still fit pay nearly one hundred dollars to fill up your gas tank in the united states maybe it's eighty dollars and that's how china is already starting to affect us they've been accumulating the resources that have allowed the prices of these essential to continue to go up you know i don't think this is
really such an academic argument about you know or elvis or all bad i mean one hundred ten dollars speaks for itself ok so you're talking about oil and the price signal of oil and you know you go on the price signal and are drawing some conclusions from that and you're setting up this scenario where china is basically eating up the global g.d.p. in america is the big loser let's talk about another commodity and another pricing gulf the price signal for gold and solver are they telling us the true story or is there a story that stop being told here well yeah i think they're telling us the true story i mean you know i think that you know you've had a correction in both gold and silver but from a you know a several your perspective i mean these are you know been commodities have made a lot of money for a lot of people i mean gold's been in what eleven year bull market. i think my question is really in terms of a lot of folks are speculating that the price of precious metals has been kept art
. officially cheap. stipulate on wall street where there's a sense of to support the dollar versus precious metals so going forward the question stephen leeb is how do you see the dollar versus precious metals going forward i think you know i don't want to sound like a not because i don't believe i am and i have spent most of my life not liking gold at all but i think gold's going to go dramatically higher and you know when people say favorite investments i think you just have to own gold basically you know max it comes down to this we live in a world of scarce commodities that are becoming scarcer and in those kinds of conditions you can't ration these commodities by using something that you can just print you can everybody can print their own currencies as much as they want gold is something that's relatively fixed yes we have a little bit every year to the supply but right now china and india incidentally
are buying all the incremental supply of gold everything all the ad gold that all the new gold that's mind is being purchased by chime in india so gold is really just kind of fixed and you need something that's fixed and something happens that gold has a long history as a monetary metal and i think it's becoming a de facto currency just as we speak and i think that trend is going to continue and if you look at it from the perspective of inflation i mean eventually you're going to get inflation and when that starts i think you see you know another leg in this kind of bull market that we've had in gold i really i mean i hate to sound i hope i don't sound crazy. but i think you could almost look at the bull market that we've had in gold and silver is kind of a warm up for what we're going to have over the next ten fifteen years because you know there's no way around it in my opinion you cannot use paper currency as a reserve currency when commodities are scarce now if there's some sort of
technological miracle if someone comes up with an analog to cold fusion and becomes very very cheap again all bets are off and i'll be the happiest man in the world but as we stand and talk right now that's not on the horizon at least in my opinion and as long as these commodities remain scarce gold is going to be the only reasonable. reserve currency in the world and i think the chinese see this incidentally and i think they're headed for a gold blag gold back won i mean you know in china. well back to back up their body stimulate you are you think you're talking about you're saying that china could come forth with think gold back you want now this would be. because a lot of people are making the speculation and they're saying that whoever or whatever country does come up with the first gold backed currency is going to win the global currency war people have read for example jim records to book currency
war now you're suggesting that china could make that move is that talk a little bit about that we've got one minute left ok they're not going to make it overnight i think china thinks in terms of ten and twenty years and i think over the next ten or twenty years they want to really control the gold market the greatest extent possible that will lead to some form of a gold back one right now in china max you can put a debit card and get one hundred and fifty thousand dollars worth of gold out of a machine i mean they're on their way they want their public to own as much gold as possible they're probably going to be accumulating as much gold as possible now whether that leads to literally. goal back one are some facsimile i think it's going to happen it's not going to happen tomorrow probably not by in the next five years but again china thinks in ten and twenty year increments and it will happen within the next ten or fifteen years in my opinion the right stephen leeb thanks so
much for being on the kaiser report thanks max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i want to thank my guests steven levy he's the author of red alert how china's growing prosperity threatens the american way of life you can tweet us at kaiser report or visit our facebook page at facebook dot com kaiser report you can send me an e-mail and kaiser report at r t t v dot ru until next time this is max keiser saying.
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