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welcome back if you just joined us you're watching live from moscow and these are the top stories human rights groups claim international pharmaceutical giants are in danger in the lives of patients in india by using them as guinea pigs the cost of testing drugs is significantly lower in india but the human cost is increasing every year. it's fifty years since a saw the space program saw a pair of dogs becoming the first living things to survive an orbital flight spade the way for the first man to go to space eight months later. investigators say a chechen militant leader with links to al qaida is likely to behind a car bombing in russia's north caucasus authorities have stepped up security cross moscow fearing more attacks. also they have lines next max kaiser looks at the scandals behind the financial headlines and today is also questioning if the u.s. economy is on the brink of collapse.

oh yeah it's time once again for the kaiser report markets finance scandals and political scandals too barack obama appears to have lost his mind his spokesman and the white house recently classified his supporters he characterized as supporters of bloggers and activists and all the people put them into office he characterizes the mis nibbling greedy professional left this guy has a political suicide wish him or stacy remember what's happening for max actually in particular he identified dennis who senate as the political left and that the political left if they had their way would have a guy like dennis q senate as president now recall that the biggest debacle of obama's administration is the health care reform and it only went through because dennis q senate flew on the plane with barack obama and compromised his principles

and others consider signed on to it there is then it's just senate boarding air force one about just being hoodwinked by barack obama of course was a catastrophic failure they just was a huge another bailout for health care companies and insurance companies as part of the banking bailout is part of obama's mission to leave no billionaire behind but actually that's kind of the theme of the show today is the collapsing of the american empire and the first headline reads post anti-americanism europe can't even be bothered to hate america anymore this is howard fineman at newsweek and he's talking about being in europe and looking at the newspapers and magazines here and says that in these newspapers or magazines he finds that the u.s. is depicted as afraid empire of obesity ignorance debt gridlock stagnation and mindless war the stories are not angry accusatory or even ideological it's worse

they are condescendingly l.-a jr. yeah well i think the globe has care about america fatigue you know they they just can't give it up anymore for the u.s. i mean after katrina a big grave after scandal after scandal that the i saw obviously oligarchs are in charge that people are left to fend for themselves and the people don't seem to mind that they're being abandoned and left to rot by the roadside so why should the rest the world care but it's also you know in any bull market it was a bull market of american empire and barack obama was actually the last like spasm of you know as all bull and bull markets always and in a straight up vertical and a collapse so europe did have when we were here had an amazing amount of intensity and like passion and fear and hope for barack obama that he's already quickly disappointed that's all gone i think peak america that's the idea people are

thinking about now when was the moment america peaked for me i think was one nine hundred sixty nine man landing on the moon the new york jets won the super bowl in new york mets won the world series it was truly peak america and then in seventy one nixon took america off the gold standard effectively and it's been a straight downhill barack obama dead cat bounce followed by the with the denny mole followed by the oh it's gone. well then i'm going to take you to some headlines. basically dramatize in the entire collapse of the u.s. first one. harvard university fund sells all israel holdings so that harvard and down it fund one of the largest if not the largest of all universities in america has dumped all of their shares of all israeli companies there was over forty million dollars worth of shares well last week the last show i should say we interviewed some from crucell about the boycott campaign and for the divestment campaign was this was harvard responding to our show well or it could be

just harvard having lost so much money under larry summers by the way and now knowing that larry summers is with the rest of the collapsing empire maybe they're trying to say ok let's cut our losses now we rode this baby all the way down and in fact if you look at their f.c.c. report there they've increased their holdings in brazil and china and china is the next headline china's economy surpasses japan's capping three decade rise so remember last year they passed germany which like to pan is another occupied nation by america there are massive military bases all over japan and in particular . they can't every to the u.s. military germany still has the u.s. military but now the only thing between china and number one spot is the u.s. well been saying for years now the relationship with me between china and the us it's not

a symbiotic relationship where china makes all the goods america buys all the goods no china is basically at war with america it's a financial war and i think we're going to get into the guts of this financial war stacey tells us next story this is key well the headline is u.s. and china to clash over yuan fall yes that's right remember the u.s. has been pestering china to unpeg its currency from the dollar so lo and behold china has on pegged it dropped by one point eight percent against the dollar that's . because they're not. symbiotically working with america as bill clinton would have you believe in me brought china in during the reform of the world trade organization new new new they want to be number one and the u.s. is in the way. well between those two have lines i just read about china you also

have going along with them you have the u.s. conducting military exercises naval exercises with both vietnam and south korea right around chinese water is what they think that they control and in response to that you see tension between the u.s. and china is escalating on several fronts according to this article china has restricted exports of rare earth minerals by more than seventy percent and the second half of this year cutting off the world supply effectively because china produces ninety seven percent of rare earth minerals that are used in a wide range of high tech products including precision guided weapons so china not only do they have ninety seven percent of these rare earths that are part of not only defense industry but also those fanciful products over their novel computer and other gadgets that people love to buy but china of course is america's biggest creditor now unlike world war two when america was the world's biggest creditor and

now during world war three effectively america is the world's biggest debtor now who thing's going to win this war between the world's biggest creditor and the world's biggest debtor i wonder now of course the reason why the us empire is collapsing is the reason why many empires have collapse and that's afghanistan and why are they in afghanistan and iraq well according to the architects of those invasions dick cheney and donald rumsfeld their policy for a new american century document that they wrote pretty to thousand was exactly this they said we need to invade basically occupy iraq and afghanistan not to take their resources but to prevent china from taking their resources so this is a very long war and it's a very subtle one going on in the background no i think that actually bush and cheney and obama were honest with the american people and said look the reason we're in afghanistan and iraq is. to block china from access to these resources

that have become hard that they're fighting terrorism or some other trumped up reason that they think plays well on fox news to get the people you know why why what how about obama just be honest about that for a change forget about all the fancy rhetoric about just being honest it's not you're not capable of it ok well i guess we will hear any honesty from you and now also if you compare china and the u.s. number one and number two economies in the world now the u.s. is the number one economy and then we are told that the richest nation on earth however if you actually look at the ground the cities the towns you see absolute poverty bombed out cities detroit total wreck los angeles homeless people camped out all over the place the exact opposite is in china they always try to pretend that there is they're smaller than they are where we're you know we're a small economy are only making two thousand dollars a year per person and yet you see these gleaming cities of beijing and shanghai

gwangju and all these big cities bursting up all over the place that look really rich and high tech trains so this takes me to this next headline china's rich have one point one trillion in hidden income oh this is like a sequel hidden absent scratching g.d.p. growth. well in fact china's household hide as much as nine point three trillion yuan which is one point four trillion of income that is not reported in official figures this is eighty percent of it is a crude to the very wealthiest of the chinese so in fact also their wealth and income gap could be a lot bigger than what is stated as well. yeah well this is the key that we're talking about here is that there is debt on america's balance sheet that they're counting as an asset as their net worth america if the economy the described. so

you comes when you say america is the world's superpower in the world's wealthiest countries because they include on the balance sheet the debt but the debt is no longer serviceable and once you write that debt off which is bernanke is only choice at this point then you go from being in the first world to being in the fifth sixth or seventh world forget being in the second or third world america is going down to the bottom of the heap but that happens to empires those good it happens to empires and just to give one little fact from that finally from the article the average urban disposable income in china is ninety percent more than official figures so that's what could explain why shanghai and beijing and going to all the cities look like fantastically pristine cities but so collapsing empire max let's look at what happens they often descend into hysteria of superstition and panic and does that give up any hope of rational thinking hindu ohman why

equity investors should be very free this is a technical omen in the stock market indicators and every everybody is afraid that there is a big crash coming in september or october because the only ones told them yes the the the which is stirring up the bruno over there at the oracle uttered some incantations indicating omen on the way why do they need to look at such abstract esoteric while they just look at the front page of the financial they'll tell you right there goes a big collapse going yeah this is only this these numbers and these squiggles on these lines on this chart it's not all the fraud it's not all the printing of money it's not all the theft going on it's these numbers told. but this takes me then to our final section here dangerous gamble this is federal reserve bank of kansas city president thomas m. hoenig and he says that interest rates are far too low in the us and the fed is playing a very dangerous game

a gamble with this casino gulag economy he says of course the markets want to zero rates to continue indefinitely they are earning a guaranteed return on free money from the fed by lending it back to the government through securities purchases of course nobody mentions the citizens who are fighting and saying all of the whole gamble right you can't have capitalism without capital you can't have capital without savings and if the savings rate is zero no savings no capital no capitalism and you can't have any savings of course unless you have jobs and there are no jobs unless you sign to the military to go over to afghanistan to think fight a fake war that's really their position against china which by the way owns all of your government bonds all china has to do is pull the ripcord a few trillion and us government securities and and you know what job shows it's mexico all the way up to canada since herbert thanks so much for being on the kaiser report thank you max don't go away much more when we come back we're going

to iceland. all right welcome back to the cars are reports time now to go to iceland to talk with john thorson. who is on the front line of both the ecological and financial wars playing out in iceland today not only is john an assistant to eva jelly the iraq m.p. who is in charge of investigating the bankers behind the financial collapse of iceland he was also a co-sponsor with björk of

a petition to drive magma energy out of iceland john welcome to the kaiser report thank you john morris and tell us about your campaign to stop magma energy of the tell us a little more about this well this is a campaign not about much but about the ownership of fodor new sources and what rio germ fighting for is you know the first is to stop the privatization. and macmiller is on the verge of you know becoming the owner of some ninety eight percent of the shares in. our company here in iceland and we want to go in to stop this and we want to have a national referendum on the only future ownership of ordered city sources. ok so the national referendum in iceland so far you had one that i pushed out the

liabilities that were associated with the i save account you only successfully got the british and the dutch to step back from trying to impose onto the icelandic community fees and liabilities that were incurred in britain and in the netherlands so this national referendum process is alive and well in iceland now it's fascinating you say that this private company magma controls ninety eight percent of the geothermal energy that is that all the geothermal energy and i saw his own ninety percent of it by magma no no no no do you know who will become the owners of. one company ok what to what what percentage does that company control that total geothermal energy and i believe it's somebody don't go twenty percent. ok and the rest of the geothermal energy is in the hands of the country itself young does a public image of public utility companies so you're failing is that there's no

room for any private company to own any of the geothermal energy it's geothermal energy for i slanted only for icelanders is that correct yes i mean we don't see the point i'm selling off the golden goose to. drive good businesses and this is nothing to do with foreign investment i mean most been claiming and their supporters who nice down there been claiming that we need this investment because it's foreign investment but in typed it has come out that about seventy percent of the purchase price for it is a musical money is financed locally and the rest of the purchase price is paid by iceland in iceland according to. company bought in luxembourg not to a hugely. great to discount ok so what we see here are banking tricks and accounting tricks and of course iceland suffered enormously when foreign banks came in and cooperation with local banks and what has to be described as

a corrupt icelandic government to essentially bankrupt the company destroy the icelandic krona and cause the worst financial crisis and iceland's history going back probably. at least a hundred years if not more i mean they literally investor in the country of all its financial integrity so icelanders are now are they did the banking crisis give them some additional confidence to go after all of the private privateers and all of the a phony accounting and and the crony capitalists and the neoliberals that are basically to show up in a country and try to steal everything well i mean someone has to look to the summer two thousand and eight has been a very long year you know and that that the practices that we see you know don't do . privatization oh i'm more or less the same us resort when the banks were privatized you know leading up to the crash and there we simply want we don't want

to hear more of this we want a transparent government and we want to people of iceland to be able to decide you know on how how things are organized here what percentage of the g.d.p. of iceland is tied to aluminum smelting may i ask this because iceland has a campaign out of it of iceland it's a geological wonderland it's a beautiful landscape it's one of the most pristine environments in the world great people and rank event as a fun town i've been there myself but do you need to have any aluminum smelting at all what percentage of aluminum smelting contributes to g.d.p. in iceland overall actually i'm not quite sure but the fact is that i mean they are big you've got this renewable energy source which is different than let's say energy coming out of the ground in the middle east or elsewhere which is nonrenewable it's it's it's renewable it's clean it's why can't i slam use that to drive some other industry then the dirty aluminum smelting business my question

exactly and the point is also that the geothermal energy is not sustainable unless it is used with care i mean you can't just come. out of the ground without the need to go to to the area that you're using so it has to be harvested with clear to to keep it sustainable while there is a question for you wiki leaks dot org they are basically have safe harbor in iceland they were able to release ninety thousand documents into the public domain covering the activities of the pentagon in afghanistan this to me is in conjunction with another move going on in iceland which is to. create a free speech zone a political free speech zone talking i want to be a problem and terence about this has been involved what are your thoughts and the

reason i bring this up is because if in fact iceland becomes a global free speech sound maybe that geothermal energy can be is to drive the server farm but you will need as countries around the world to dump free speech documents into the free speech zone of iceland that energy can be used to drive an enormous server farm up in iceland but what are your thoughts about this wiki leaks dot org situation going on there's a lot of pressure now from the united states to declare iceland. an enemy combatant or an enemy of the state yeah i think this is all a bit of a misunderstanding the fact is that people from wiki leaks. are in iceland and they are you know cation li and they have contributed to the ideas of the icelandic modern media initiative which is the basic idea is to. implement the best practices of free speech laws and witness protection from around the world but it's a misunderstanding we can leave her has its headquarters in iceland and actually

the information that they have deposited on internet is kept in servers that i believe are stationed in sweetened and in belgium but i think they have made a great contribution to due to the debate here and one of the problems that we have in iceland is that there isn't much of a good press here i mean and one of the reasons i believe that the pressure actually happened was that we were not properly informed so we believe that the icelandic modern media initiative is a fantastic idea because it will support free speech and a better press. yes well definitely a need for that i was in iceland a year before the collapse that a film on the pending collapse of the crown of that would happen within a year and the bankers in iceland tell me that icelandic people have the super power strength of three americans for icelandic person and for this reason they could maintain a debt to g.d.p. ratio one thousand percent or more but all right let's let's go back to the magna

energy story and talk about that for the for that another couple of minutes that we have so the campaign essentially it doesn't have a great deal of public support at this point you know i believe we have we have a book patricia people can sign on the internet and we have to do more than seventeen. doesn't sound like a lot but i mean if this was in the u.s. that would be equivalent to seventy million signatures so i think we have considerable support and you know just look at population and what's the really the mood in iceland today now that this there the crisis is calm it's it's caused tremendous hardship and economic devastation but is there a feeling of of regrowth at this point and what are our people thinking about the

next five years what what will be their obviously they don't want to go back to the business as usual they want to try to go in a new direction is there some optimism coming on the scene or is there are you still very much in the throes of this depression well i think the crisis is ongoing . you know that doesn't seem to be you know that we have the problem and so the book an investigative committee that produced a report of two thousand six hundred pages describing the events leading up to the crash and the situation within the administration and the public of ministers and doesn't get you know it gets a c. minus or a b. even and there are no changes being made sense so i don't think people are very optimistic but it got to what's going on currently you know in in the in the administration but i think we're reaching a point where you know when you come to a point where you desist the shock treatment that you go through and i think we had

about two to get there were people are unwilling to. undergo all of these. economic. measures that we are being put through courtesy of the i.m.f. . and i think we're willing to fight there's an emotion on the table from people in greece who are now being forced to undergo severe austerity measures from the i.m.f. from the e.c.b. from the e.u. commission to try to ameliorate the crisis that was foisted upon them by bankers on wall street there is a move afoot to have some joining together of resistance as you put it between the people in iceland people of greece as a been any moment on this front. i haven't heard of complex being made but but i don't think it not that nothing has been to realized yet but i think it's a great idea you know if you know i mean europe is near is new territory for the

i.m.f. and they haven't been in europe since they went into with the u.k. in seventy six i believe so i think they are you know it's a surprise to the i.m.f. that we just don't accept all the messes that we are being. presented with kind intacta you know that mama case this is. linkage to the i.m.f. because what one of the policies should just seems to go with the government is that we should go to. the sources from an untreatable to attributable form which is a very nice technical description of you know decision so a delegation from reykjavik down to athens and vice versa seems to make a lot of sense both countries are being subjected to a kind of a harsher argentinians style austerity measures to try to bail out the overlords in the banking system and maybe

a coalition and some economies of scale to push back against the drug killing in a staring measures of satan's workshop over there at the international monetary fund all right well that's all the time we have for this week john thoreson thanks so much for being on the kaiser report thank you and that's going to do it for this edition of the kaiser report with max kaiser and stacy herbert i want to thank my guest john doris and if you want to send me an e-mail please do so at kaiser report at r t t v dot ru until next time this is max kaiser saying bio.