we are now four times more efficient sadly this story is an exception and not the rule russian lawmakers have been working with businessmen to try to stimulate innovation but there is a big gap between wards and action only the private business getting there to the modern era that nice russian government can only create conditions for this such a living there all from day one the president will put their rights of course going right back to let the private sector investment whether it's the businessmen welcome the government's talk about reform but much of the economy is still frozen after the crisis companies are unwilling to borrow and innovation wait for the upturn my new question of business antti. a look at how the markets are doing asian stock markets alone tokyo stocks ended almost flat after hitting a by which i asked again fails to weaken further began it tumbled off a fifteen year high against the dollar to two past intervention in six years hong

kong's hang seng was also low. european equities are mixed and morning trade for things that say is in the red ahead of another set of jobs data and news that british retail sales fell in august for the first time since january shows old dollar true percent on the foot say full of barrels towards. is over the sound on the taps. and in moscow the r.t.s. with my six up also in the red on the back of the downturn in asia all the blue chips a losing value dragged down by financial and to a communications stocks but was telecom setting one and a half percent energy a major trading of the right as well gas problem is dollars a quarter of the sentence pocock the trends on both. the world's no two point set. so we have time for novel you can get more new small website r.t. dot com slash business.

every month we give you the future to understand how we'll get there and what tomorrow brings the best in science and technology from across russia and around the world join us knology update on r g.

three in the afternoon here in moscow you're with we're going to your headlines now russia i'm kind of say they won't back down from territorial claims over a disputed part of the arctic seabed moscow says it will prove that the. continuation of russia's mainland areas believed to hold vast amounts of untapped and natural resources. as the u.k. tightens its budget belt defense spending could be a major victim of hefty cuts but experts warn the creation of a second rate military could be a disaster for national security the country's elite special forces unit the s.a.'s will undergo its because cut in history. americans are waiting for the economy to snap back in two years after the biggest bankruptcy in u.s. history their finances spiraling out of control they blame the collapse of investment bank lehman brothers for driving the country into debt sparking high

unemployment foreclosures. well a scandal behind every financial headline you bet. 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 kaiser first will start with the basil requirement shares that rise over delay in changes to banks capital so yes battle 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 through 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 meant the committee is correct but the lobbying effort by folks in the banking. 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 pm faces trial over

bank collapse so icelandic lawmakers have concluded after an eighteen month investigation that the country's former prime minister gare hard ought to be tried for economic negligence for his role in the banking collapse and the currency collapse that's right we learn from the number of trial that you 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 secured your i know or some was the icelandic banker that we were warned in solitude gold. if anyone found. it led to the arrest of this i slandered kleptocrat 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 currency collapsed by eighty percent the three banks the major banks collapsed 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 in 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 of auto craddick club craddick 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 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 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 write 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 completely wrong furthermore he's your 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 cliff to kratz what exactly and according to this article now forty five million people in america or more than 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 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 cut threat to special relationship apparently inflicting deep cuts on the armed services could threaten the special 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'd 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 warfare state is key and 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 were 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 running america take that defense money and they say to you follow lul you can go in the mud because they got bloody demoted going in for killing. 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 in 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 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 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 to a sonogram omf. stacey hammer thanks so much for being back on the call as a report thank you max don't go away much more after the break so stay right there .

brightening. from phones to. stone totty don't come. welcome back to the kaiser report time now it's out with a call foster writes under the name stone lake the automatic earth blog and a call is currently on the road in sunny detroit speaking to crowds about the coming day flesh unary depression and peak oil the call welcome

a kaiser report very nice to be here thank you for having me already mccall 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 of the us when we listen to folks like tim geithner or ben bernanke larry summers they seem to be mouthing platitudes of an orthodoxy economic arthur doxie a lot of it comes from milton freeman a lot of it comes from what's called the chicago school of economics but that mantra that repeating of the same orthodoxy it 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 problems with the financial contagion a sovereign debt risk. and it starting with greece but so many your caribbean per 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 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 in debt than any other kind you are likely to see demand for dollars created as soon as that the 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 are 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 crying 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 tending to take the human being out of the system to make it sound much more mechanistic than 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 problems that the broadening of money if you like further and further 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 to rise whereas the 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 big 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 extract and so you have to look at net energy energy return on energy invested which is falling off a cliff 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 a lot sooner than the down slope of cuts curves 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 council failed in mexico showing sharp decline

zero over year also parallel emergence of a narco state incredibly violent is there a connection between pig garlin mexico in the raw. as of is not the state of violence that's spilling over into the us all i'm quite sure there is and any 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 he has sucked out of the periphery in favor of the center and if you if you suck out more than than 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 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 is that there's a staggeringly large amount of corruption and there really isn't a separation between what passes for legitimate government and and the narco state if you like you know it's really tragic as that with the u.s. economy shrank thing so 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 ads and destroying the border towns in the u.s. because they can't afford 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 that all other societies prior to ours have prior to the industrial revolution have lived on. in 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 in heritance the simply fell in our laps in the form of fossil fuels and while you can 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 form your own expansion of 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 undiscovered 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 that threat yes however i would say that bubbles do not because bubbles do not require an energy subsidy they do have their own internal dynamics so i don't regard peak well 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 would. hard as a 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 people as the key driver at energy 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 and 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 get to is huge volatility and you're going to get huge swings that 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

the very short term but then falling demand and i think falling very sharply falling demand as we move into depression when the soviet union went. into its collapse i believe their 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 even as prices fall access to everything very much including oil becomes harder affordability gets worse even if prices fall ok that right there where you just said is the reason why the inflation is so-called seem to not get what you're saying because they're looking at a relative price rise for stuff where the supply is shrinking and there's points of that say.