ok this is all about the importation of dried beef that's right like a beef jerky type thing i guess it's got a got the giggles that's yes that's a good way to put it he's got the giggles i think this is indicative of the global state of finances around the world but i think all these guys who are in charge of government finances in one way or another are having a collective nervous breakdown finance ministers on the verge of a nervous breakdown and switzerland of course is in the center of this global currency war going on and they're one of the most active in terms of intervening and trying to manipulate the value of their currency which is soaring because it's considered a safe haven currency and of course they're trying to stop everything well the swiss franc is also soaring because of unwinding of the swiss franc carry trade lot of folks in eastern europe use a swiss franc to speculate the real estate market they're getting blown out that money is going back in a swiss francs which is driving the price higher which is increasing the cost of

these speculators in eastern europe and there's a vicious feedback mechanism forcing the swiss franc higher but the other point i think needs to be made is that the bank of international settlements also located in switzerland they have taken a look at their vaults and they're taking a look at what they own for collateral that is the basis for the global currency markets and global central banking system and what they see is a mountain of beef jerky. it's all collateralized by beef jerky beef jerky is the defacto global currency today that's what this guy knows that's why he's laughing much of international finance monetary and fiscal policy and economic policy are as hysterical as his dry beef is first headline as evidence china proudly demolishing buildings before completed in pursuit of the great housing bubble perpetual engine these are all photos. from china and there as you can see

some very brand new buildings just being demolished because a random property developer decides he doesn't want an exhibition hall he wants a luxury hotel there or you know they government policy i guess yeah it's creative destruction isn't it terry i'm concept of creative destruction there applying it there in china why wait even to finish the project just blow it up before it before you even finish it and point all that to your balance sheet and call it g.d.p. growth i want to point out this building in particular is in building a one jew city and it was only six years old it was built in two thousand and four and it was never put to use because a soon as it was built it was considered so unsafe to enter that it was known as the local corruption building because something like forty three suspects were sentenced for basically corrupt building practices but one of the statements at this site says that the solving all of the building safety problems would demand

more than the cost of building a new one so the authorities blew it up i thought that's a great way this is exactly what ben bernanke or hank paulson. bush obama all these people should have done it was so expensive to fix this corrupt banking and financial system they should have just blown the whole thing up well i mean that's what a lot of people proposed another words put all those bad banks ringfence them essentially nationalize them which is the same thing as blowing it all up and then start a few new banks that are clean of any of these toxic debts and hire managers who are not tied in with robert rubin larry summers tim geithner and anybody who has been responsible for corrupting and destroying the u.s. banking system the global banking system for the past twenty years i mean that's a. they could obama could have done that that was an option that he had but because

he's got larry summers and tim geithner whispering and duis there he did the absolute worst thing speaking of funny dried beef sort of moments here's another dried beef moment e.u. set secret group to save the euro. two months after the collapse of lehman brothers in the fall of two thousand and eight apparently a small group of european leaders set up a secret task force to save the euro this information only came to light when the french treasury official exile be a moose was stepping down as chairman of the economic and financial committee which is an important body and the e.u. structure and he left a memo to his successor and at the end of a long list of things he had to do he added one more thing incidentally there's a group that doesn't exist well remember gordon brown he called it the shadow

banking system you know there is a global shadow banking system and the money that they control in the shadow banking system is much more than what is reported in the visible banking system and these bureaucrats and technocrats and folks like they try to maneuver this shadow banking system in ways to help manage the economy completely outside of the tenants of free market capitalism that's the biggest joke of all play the laughing man. that's the biggest joke of all we haven't lived in a free market capitalist system for forty years not since the us went off the gold standard and the federal reserve the central banks are managing the economy like this massive you know centralized command and control. committee and this is just another example of well the other thing that's so funny about it is it might as well be a group that doesn't exist because it's impossible to say if these currencies these currency. as the next headline would attest to brazil's central bank president says

no country can hold dollar up so this is a brazilian central bank president enrique meireles and i guess he was he's being asked to intervene and lower the value of the brazilian right now which is up thirty four percent in the past year against the dollar and of course there's a lot of pressure from you know special interests within your own country to do something as the race to the bottom of the currency market happens well it's competitive devaluation like we saw in the one nine hundred thirty s. because these countries don't have much of an export market in the us i should say the mean there's no way to export your way into g.d.p. growth the only way to do it is through currency devaluations so it's like shooting yourself in the head it's a suicide banker maneuver as i've been talking about on the show for months the country is run by suicide bankers they follow an outdated ideology of free market capitalism which is the misinterpretation of the works of adam smith and they're

basically banking jihadi blowing themselves up for who knows what nobody can tell maybe for beef jerky but he's also pointing out that think their reality is that he's says that the problem of the dollar falling to value what tumbling in value again is that the u.s. economy is a black hole of debt and disaster he said there's nothing we can't print money we can't buy more dollars then the dollar is that the economy of the united states is crashing yes remarkable over the past couple interstates you herbert you've seen this unwinding of different currencies as part of the unwinding of the carry trade whether it's the japanese yen the reason the so strong is in part due to the unwinding of the japanese yen carry trade the same thing for the swiss franc when you have zero interest rates here's the key when you have zero interest rates like you do all over the world it doesn't spur g.d.p. growth it's spurs speculation and you're talking about speculation committed by the most. irresponsible bankers in the history of the world who often make mistakes and

then go to government put a gun to their head as paulson did in the end of two thousand and eight and say give us three quarters of a trillion dollars or we're going to blow your head off and that was his message well zero percent interest rates also discourages capital formation which one needs for capitalism to function because if you can't save where are you going to go now the other problem with this why it's a beef jerky thing to try to stop the u.s. dollar from collapsing is indicated in this headline bush tax cuts reduced total income by two point seven trillion dollars now this is about where the joseph stiglitz estimated the cost of bush's wars was about between two and three trillion dollars so he cut income by two point seven trillion and then decided to spend about that much on a war you know this is what i never understood i mean the u.s. could have simply done a leveraged buyout of iraq for real i mean they should have some henry kravis down

there or at or shorts to do it he wouldn't be complaining the right he's all complaining about bush's you know tax programs i'm sorry obama i get those two confused. and saying that it's you know it's quite an affront to his sensibilities as a private equity manager but going back to the bush years you simply couldn't offer a rock at this point it didn't offer them one or two trillion dollars in cash taken over the country could have been the fifty first american state and had a play on the oil reserves and no no no debts would have ensued and i don't understand what about all the cost benefit analysis would have been it goes back to the story about the chinese blowing up the buildings before they're even finished in other words if you're going to have a model based on warfare and the warfare is tied to blow you know blow exploding bombs and having soldiers killed and having an outdated veteran. administration

which is a money pit for a lot of a lot of senators and congressmen getting a lot of kick backs and other dirty deals you can't have a logical free market approach to around pyar building and then finally here is the headline that is. a dried beef story businessman furious at banks refusal to lend bricks up barclays branch and protests so this is cameron hope a property developer down in bournemouth in the u.k. and he built an eight foot by four foot wall directly in front of the entrance of a barclays bank in bournemouth he was joined by other local business owners who say they have had trouble getting money out of banks in order to run their companies the protesters waved placards and banners proclaiming robbed by the banks we own barclays is partly owned by the taxpayer and make the banks lend. well good on you may have got a lot of beef jerky and there to survive. it all right stacy armored thanks so much

for being once again on the kaiser report thank you max don't go away much more after the break so stay right there. live. pictures that so much. a lot of people a curious readers in the rights opinions more than venezuelan president hugo chavez he was denounced by critics as a dictator what does the future. i. just

. live. showbiz the entertainment value of the insult to lease presentation high production. graphics. all of this is a way focus people's attention by using techniques that are so. see the same thing now during this war we had the military have to take.

a moment to welcome back to the kaiser report time now to go to north carolina to welcome back to the shall william b. j. lawson the republican candidate for congress of north carolina's fourth district is receive the backing of ron paul b.j. lawson welcome back to the kaiser report thanks max great to be with you all right b.j. lawson first i want to talk about china it seems that there is a brewing train and currency war between the u.s. and china last year north carolina your state exported one point nine billion in goods to china a business insider lists north carolina as one of the top ten states to be harmed

by a trade war with china your thoughts b.j. lawson well i think that's a great point and when you look at where we are in this global economy we need to be restoring honest capitalism and trying to build build walls instead of building bridges at the same time china is an easy target because for about one well what we may be exporting a lot we've also been exporting a lot of jobs but i lay the blame for much of that on our own domestic policies we're taxing and regulating our companies out of business to the point where the nicest building in most small towns in north carolina today is you the jailor city hall and you've got a bunch of boarded up factories and people just milling around outside drinking out of paper bags at high noon is that we're in a pretty rough spot here and i think that the folks i talked to are just just frustrated about what's been what's been done to our local economies are you mention the phrase honest presumably that means that we are currently experience. being dishonest capitalism what's the difference well i think at the end of the day

capitalism for me is where you do well by doing good it's where you profit by serving your customers and what we have allowed is we've allowed our economic system and not over the past two years or four years but this has been generations in the making to degenerate into this crony capitalism or this this corporatism where really what determines your profitability is how well you access the leverage of power in washington and your own selfish benefit all right a loss let's continue on to china question the financial times recently referred to low interest rates on savings accounts and china as financial repression what can be done to keep the u.s. federal reserve from financially repressing the american population of savers through zero percent interest rates and endless quantitative easing there that's a great point max and i think people are beginning to realize that not only do we have a war on capitalism emanating from washington we also have a war on savings and investment and these people who buy into that keane's in

claptrap of sort of the paradox of thrift they really don't understand where jobs come from jobs and jobs come from investment and don't write savings should be investment so when you take a surplus in one area of the economy and reinvest it and put it to profitable use those are the seed to turn into new jobs and businesses and with the federal reserve punishing savers right now and basically pushing us further down the road towards an eventual currency crisis and we're not doing anyone any favors with the exception of the too big to fail who are trying to profit from this game of extending for ten and now going back to the seventy's and early eighty's the u.s. was in a somewhat similar situation paul volcker was the fed chairman he raised interest rates aggressively and it works you could say in a lot of in a lot of different ways why not sampling. paul volcker is then i devising obama now he's around why not simply remember the solution back then and use it again well

obviously there are some different forces at play right now our financial system is in a deflationary spiral and we've suspended reality by suspending mark to market accounting we're trying desperately to prop up asset values so that we can pretend like our financial system is solvent and this zero interest rate policy is but further it's but a temporizing measure to try to pretend like we are going to be able to remain solvent when the debt in our overall economic system is well beyond our ability to service it. it's unfortunate volcker is not being respected as a voice of reason because he has been extremely honest throughout this crisis about the need to recognize the true causes of what's going on so we don't need necessarily eighteen percent interest rates but i think at the end of the day what people are realizing is that the crisis we're experiencing today represents the ultimate failure of central planning as it's applied to our monetary system and

people are beginning to ask some really good questions about the role of the federal reserve both in creating this crisis and now in extending it all right so clearly as these midterm elections approach the u.s. economy is going to take center stage and probably be a main determinant in who gets and who gets thrown out so let's talk about some other solutions you might have between loss and other than a revisiting interest rate scenario possibly raising interest rates to encourage capital formation what else well the one thing that i've come to realize over my life of dealing with our economy is that we have a cancer within our economic system and that cancer is full of the internal revenue service and that manifests in the april fifteenth ritual of the income tax we have got to get rid of the i.r.s. and the income tax and at this point i am a strong proponent of the fair tax as a replacement for the income tax because he wanted more. jobs productivity and income it doesn't make sense for us to be taxing jobs productivity and income

especially with a tax code that is so complicated so convoluted and so frankly abused by special interests in trying to carve out their own favors that we just basically criminalize capitalism interned everyone who tries to start a business or grown up grow business into an unindicted criminal tell me a little more about what you see as the fair tax is that like a value added tax what exactly is a fair tax not at all a value added tax and this is it's actually very straightforward it's been promulgated by a number of faults most prominently neal boortz has written a couple books on it but is there a complete replacement of the income tax estate taxes and capital gains taxes with a single national uniform consumption tax it's a retail sales tax that is applied once at the point of sale just as you currently experience in states that have state sales taxes and what it does is it makes the cost of government transparent puts it out in front of the american people and it

stops punishing jobs productivity and income so as a trade off you know i think we can all agree that our government spends way too much money but in terms of trying to really redirect our tax system towards encouraging us to move from an economy where seventy percent of our g.d.p. is consumer spending we need to start building again we need to start producing again the way to do that is to get people focused on the rewards of production as opposed to just stimulating the economy if you're analysts consumption right now other choices before us the three bang and come tax property tax and the way you're describing a fair tax which is a tax on consumption it sounds similar to a value added tax but clearly you're not including the idea of increasing taxes on property ownership which you guys like economists like my. hudson would put forth as one of the solutions that he's advocating yes i've looked into that

a little bit i think the key point for me is having a way of funding the government that is transparent and a system where frankly everybody pays something we've got to the point now in the u.s. where fully half of americans don't pay any income tax and then the vast majority of the tax burden is paid by those in the highest income tax brackets and it's getting to the point where it's just being conscious guitar to the point where capital is fleeing our shores and that goes for corporate as well as as well as personal income tax rate so i think that the key difference between the value added tax and the fair tax is the value added tax is applied at every stage of production so it really is a tax on the creation of value throughout the economy the retail sales tax or the fair tax is a retail sales tax or consumption tax is just exactly it's just levied at the point of sale it only applies to new goods and services so it doesn't attempt to say for

example target sale of used items on craigslist and things like that is just a retail sales tax on new goods that people will then be paying tax on to the federal government as well as to the state government ok well i guess the emphasis there should not even be on the word tax on minds but on the word as you use it transparency because much of the system has become all pank and this is created hundreds of billions of not trillions of dollars of the problems ok let's ask you about the banking system specifically b.j. lawson any ideas in terms of fixes there well i think the most important thing we need to restore confidence in our economy is to restore confidence in our financial system and where we've gone with this so-called financial innovation and financial engineering over the past couple of decades you know my opponent david price voted for the repeal of go and allow the largest too big to fail banks to gamble on the. taxpayers' dime this is the kind of corporatism that is absolutely working against

the american people so not only do we allow this idea of too big to fail and do we reward failure through endless bailouts which engender tremendous moral hazard but then at the end of the day we're further encouraging this lack of transparency by suspending mark to market accounting and just lying about the value of assets on balance sheets and allowing banks to the largest ones to stash assets on and off balance sheet vehicles we have no idea what's out there that's got to stop if we want to have banks that are confident enough in their position to make loans and if we want businesses to be confident enough to borrow based upon expectations of further future economic growth we've got to have honesty and transparency in the financial system and we have to stop legalizing the accounting fraud in many cases of very same accounting fraud that brought down enron you know on the subject of mortgage fraud. there is allegedly some mortgage fraud by all the major banks foreclosing on homes they don't own how do you stop this ongoing crime way it is

a crime wave and i'm excited at least to see the judicial system stepping up a little bit and pushing back against this just this immense flood of paper and again this financial engineering happened with a lot of shortcuts being taken through the systems of the chain of custody was required to happen legally and expected documents and titles all of that had been short cut in the need for speed and securitizing these loans that's a bad policy besides being illegal and the fact that we've allowed the banking industry to get away with this for so long as i think you know kind of endemic of a problem it really tells you who really doesn't washington but at the same time i do think that there is hope that the judicial system is stepping up and saying you know what you can't just claim that you're that you have a title over this or this property when in fact you haven't followed the proper legal requirements to maintain the chain of control over that. now what about something really remarkable here forma time ninety nine requirement that was

slipped into the health care bill this is just a shocking piece. a legislative leasure to remain where those who have the special interests serving the banking industry simply slip something into the health care bill tell us a little bit about that absolutely well that's one more reason that i am a strong proponent of the one subject at a time act which says that congress can't just show unrelated provisions in the health care the joke here is that they actually were considering this is a measure that would help pay for health care reform which has tremendous cost that it adds into the system but the way they're going to pay for health care reform is by requiring all businesses to file ten ninety nine forms for any expenses over six hundred dollars in a year and think about the burden that's going to place on businesses of everything he can be an attorney that spends six hundred dollars an office supplies at your local office supply store and you haven't asked them for a w. nine at the checkout so you can fill out your ten ninety nine it's absurd but at

the same time i think this has been an illustration to more people in our district that washington is simply out of control it's just a bunch of career politicians in washington insiders who are serving their own interests at the expense of the american people and ultimately what they're trying to do is literally trying to trust the united states' economy it's pretty bold faced when you say look we're going to raise money by requiring you to document all of your purchases over six hundred dollars a year you're not actually encouraging economic growth and job creation there you are crushing the economy are adhered to and lawson running for congress in north carolina thanks once again for being on the kaiser report my pleasure of a people to visit lawson for congress dot com and we look forward to victory in november and that's going to do it for this edition of the kaiser report with max kaiser and stacy herbert and i thank my guests b.j. lawson if you want to send me an e-mail please do so at kaiser report of our tickets. are you until next time this is max keiser saying.

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