so california issue these new marijuana bonds backed by other state taxes on marijuana that's a security yeah i mean it's about time i think it makes sense to issue these marijuana pot bons you know we've been recommending gold for really for ten years to put it into perspective the timeline actually now if you ballads or folia with some marijuana bonds i think a golden gunja would make a really good well balanced portfolio you've got the slacker play you've got the welfare bomb play you've got the inability of america to compete in the global market play with your guns or bombs and then you've got the rest of the world dumping the u.s. dollar and going into precious metals on the gold side so you're going to be making money on both sides of this portfolio i like it so previously you were recommending hard assets and now you're recommending high asset that's right heart of high assets keep it hard enough. well speaking of this rebalancing of the global economy

and dumping of u.s. dollars that you were referring to headline reads swaps show who's in towel bonds approaching treasury yes at a time when governments around the world are facing growing debt china us bonds are becoming almost the safe as the u.s. treasuries in the market for insuring against defaults well those that u.s. treasury bond market looks really weak the global investment community the governments around the world they are trying desperately to get out of their u.s. dollar bomb positions they want to escape the nightmare that has banned post world war two brand woods u.s. dollar reserve currency stranglehold and as peter schiff our friend peter schiff says often the u.s. is the caboose that's holding the rest of the world economy back and the the world wants to cut themselves loose of the caboose the u.s. dollar even warren buffett was in europe trying to buy into euro. other denominated

assets but nobody wants to sell to him because they realize a dollar is a dying currency actually drone head of research i asked for investment management in london in this article in bloomberg says chinese policymakers want to be seen as a stabilizing factor they want to become a reserve currency and they will become a reserve currency so this is the one story that you and i have been talking about since the beginning of the fear is that something to look for for two thousand and ten is the currency war that's right that was a major theme we identified at the beginning of the year currency wars as the global economy has shifted out of manufacturing and away from. export import and judging each other's currency based on things like trade balance and savings rates and has moved into a purely financial ization type of economy where it's algorithmic trading computer

trading robot trading to go with drone you know it's a fantastic analogy in america these drone warfare to go and strike people and many times civilians you know the america kill civilians in pakistan every day now as part of their need to blow up bombs to enhance their g.d.p. that now they have drone computer programs that go in there to try to scout pennies from their own workforce i mean america is openly committing what's what is it when the your country commits suicide the. country aside it's nations as well as everybody's getting worried about their rebalancing to shifting away from the u.s. empire over to something in asia and remember geitner is coming out tomorrow with his report about whether or not the chinese are manipulating their currency headline reads suddenly everyone wants to know what the plaza accord is so this is from joe wiesenthal a business insider and he. referring to people searching and this is the chart you

see here is google trends they're searching for plaza accord which is the one thousand nine hundred five intervention in the currency markets but if you look at who's searching it's mostly from hong kong and singapore where all of the world's wealth and capital and savings reside well look the us is going to wake up one day in the very near future and find that ghastly the two or three times higher and prize food is already skyrocketing in price and they'll have nowhere to turn their government is not controlled by corporations barack obama is a puppet of the corporations he is completely an empty suit these a manchurian candidate up there representing monsanto and exxon and coca-cola he has he has no connection to the people whatsoever is going to be defeated this you know looking at in trade they have a chart which determines the probability of the democrats the last corporate side of the equation losing the house of representatives in this upcoming election

that's about eighty percent now a probability they're going to lose well it'll be better for our show because of course barack obama is dull as dull as gordon brown was yeah at least with the republicans you know you had george bush falling off a segway and choking on pretzels you have christine o'donnell i don't know if you saw this the senate candidate for the republican party in delaware this is just the first two seconds of her recent political ad her first ever i'm not a witch wow that's a lot she's not a witch. if you have to deny it of course only for america however they may just need a way so it might be good news if she is because look everybody is relying on magical thinking and you see that in the headline global finance chiefs task i.m.f. with calming currency tensions so all these you know american and european countries are seeking help from the i.m.f. here's the. first thing that i am left comes out with the past week and i.m.f.

calls for a new round of huge bank bailouts shock that's a new sudden and magical thinking that happens lenders across europe in the u.s. according to the i.m.f. are facing a four trillion dollar refinancing hurdle in the coming twenty four months and may still need to recapitalize particularly they say in spain germany and the u.s. yeah well that's true that's right you know because all these national governments are deferring now to the i.m.f. and the world bank so you are having the emergence of a post this is one of boils down to it's post america world people can say what is this new world order it just means that america is no longer the force that it was they were moving into a post america world you know a configuration of the economics and politics and that's the new world order to post america and you know america has done anything to distinguish itself in the

past twenty or thirty years to keep the whole of the reins of power and they've done everything to let go of the reins of power and the people inside the united states especially after nine eleven you saw basically the rich just confiscate all the wealth that they possibly could knowing that the end was not the rich have always use the i.m.f. to still wealth from mostly the developing third world if you read the quote from the i.m.f. you'll see that this is exactly what they have a mind and what they've banned doing over the last two or three years progress toward the global financial stability has experienced a setback since april due to the recent turmoil in sovereign debt markets so they're saying it's the sovereign debt that's causing the crisis to continue and the sovereign debt of course is because that i am after is encouraging all the sovereign nations of the west to bail out these bankers who have attacked the economy as suicide bankers that's the best the root of the problem and they follow this. corrupt ideology of free market fundamentalism and so you break the spell and

christine o'donnell and me maybe she we need a witch break the spell of the indoctrination of free market capitalist ideology which is the most radical extremist view of any group in the world these neo liberals in washington and on wall street are the most radical extremist suicide banking group in the world causing much more damage than ten thousand ellicott as well of course those neo liberal. economics introduced into america was called by george bush sr due to economics and we're doing now which is are often scary they come out of hollowing was just coming up greenspan says us creating scary deficit as borrowing rises there's a warlock for you. were at rock to crawl out from under greenspan i mean seriously here's a guy who threw the entire u.s.

economy under the bus so they could win you know a knighthood from the queen of england i mean if that's tyranny for american i don't know what is and now he's saying you know what actually i did cause this catastrophe and i want to buy more of my books well his quote is we're involved in a dangerous game where increasing the debt held by the public at a pace that is closing the gap between our debt and the measures of borrowing capacity will stop borrowing just like he acts like it's the public doing its these bankers his cronies his friends yeah again that is the ideology of a psychopath that and we need witches and government to break the spell of the economics is exactly right christine o'donnell should play out that she's away and not try to distance herself that she's away from her witchcraft past and the final headline now those corrupt us sister yeah and it offers a new max keiser prediction ok. believe many of yours have come true most. almost

all of my predictions invariably come true because i like here it is why i have no need for a national foreclosure moratorium a top white house adviser questioned the need for a blanket stoppage of all home foreclosures even as pressure grows on the obama administration to do something about mounting evidence that banks have used in accurate documents to event toe more well forged documents they forged documents i mean i worked on wall street a long time and all the documents are forged for expediency sick and then they packer's all these fraudulent mortgages into bundles into securitizations into mortgage backed securities and they sold wanted banks frauds of the money so they sold them a bag of worms all these banks especially in europe they're holding these collateralized debt obligations these true of high yield mortgages debt that is not you know worth anything so my prediction is that this will have to lead to

a bank holiday but we saw in the one nine hundred thirty s. we're going to have to close the banks to sort this all out and oh by the way while we're closing the banks to sort out the mortgage mess let's reconfigure the global currency grid and oh by the way the u.s. dollar will be fifty percent cheaper versus other currencies when this whole thing reopens again oh i guess that means in the u.s. your energy and food costs just go up by sixty or seventy percent overnight and that's the way it goes and to pay for it we're going to have to take back all your social security benefits but have a nice day and vote for whoever else is running behalf of the corporations so you too can drive yourself into an early grave over there in the u.s. because you are lacking in all self-interest whatsoever well stacey herman thanks again for being on the cars are really poor thank you max when we come back i'll be speaking with the famed economist over there i tulip dot com. eric jensen.

the close up team has been to the saucily in regions where the biggest russian salmon caviar processing factories located. argy goes to northern paradise where many still live off the land. new ways are being found to fight the comic. book shows the first free elections read. thousand years ago. to the most good region in russia close up. forty two thousand americans die each year from car accidents only a thousand. seven hundred thousand people. and thirty two thousand will kill themselves cancer in all its forms kills five hundred sixty thousand of us here participants is even more devastating it kills over eight hundred seventy thousand

americans every year. welcome back to the kaiser report time now to go to massachusetts to talk to author and blogger eric johnson eric blogs at i dot com where he has written about the pending global debt collapse years before it happened eric's latest book is called the post catastrophe economy i'm all in a copy right here. post catastrophe economy rebuilding america and avoiding the

next bubble i just finished touring this for my second time eric walking the kaiser report you know next our air dance and introduce your book with a vivid description of the modern day dystopia that is an america of abandoned housing projects millions of unemployed tell us what is the fire economy how big is it what's its role in this ongoing economic collapse well the fire economy is a term used to refer to an economy that is overly dependent on the finance insurance and real estate sectors of the economy and this is an economy that's developed in stages since the early eight hundred seventy s. but the most significant growth in terms will be one of debt bond happened since ninety eight the biggest managed to do to create it was the walker fed in the late one nine hundred seventy s.

and basically what happened was we had this huge spread notice rates in oregon to put the economy through a couple recessions and cut up a massive inflation spiral which is threatening to turn into ip and fortune are now in the book you describe the inflation deflation debate which is raging in the blogosphere there you come down on the side if i understand correctly of what in the old dr doolittle story was the push me pull you the two headed. camel that is both inflation and deflation pulling at each other simultaneously with the resulting stagflation well i think you understand mrs up that the hardest part for people to wrap their heads around is the well i want to con me really to countries where this finance based economy and we have what we think of as the economy appreciation consumers right to the producer and consumer economy is employers are the people salaries in the. salary wage earners become consumers you go buy stuff

from producers and the less older they get the economy is this cycle of payments between producers and consumers but then you have this fire economy that operates in a very different principle it runs up the fees and interest and on capital gains from asset present places are now in the book to do a great job and describing how the way it's set up the system and it it helps asset prices go up to reward those in the fire economy while simultaneously keeping the wages low which is completely against of course the mandate of the fed was a supposed to keep you know prices stable and full employment but their way it's constructed and it just gets worse is that the one side of the equation they enjoy rising asset prices whereas workers and savers are continuously getting. pushed to the side and that gap is opening up wider and wider view is that

a fair characterization well it is a feeling to explore that there are these two economies and from a low monetary policy standpoint they're managed independently so the objective of monetary policy for the producer consumer is this economy is primarily to maintain low wage inflation because that's the transmission mechanism of inflation in commodities into the real economy and that's again the cycle that we had no conception is this mission is not what that happen simultaneously the fed's mission and this is unstable it is to provide continuous as a price inflation and that's generally done through a low interest rates lack of regulation. and also as we go along with subsidies and supporting these from a standpoint of orthodoxy. that so the what's like a good thing to do and you can course play back and. things mean spam saying during

both dot com and the housing bubble justifying. these policies including asset prices or just out to classes then the policy to the ship pretty quickly to preventing asset prices from crashing because then what happens is that the class and fire economy spills over into the circle result on the production consumption which happened in a really serious way that the theories have been somewhat in japan since the mid one nine hundred ninety s. and is playing itself out in its own water now so those are the people the folks in the united states are a gassed up this growing off the neck and gap and the growing problems did they did the industrialization of the economy and we'll get to your your second half or your part in a minute here we're talking about how to you know rebuild the u.s. economy but the folks are getting paralyzed by the way that the set up is now is it correct to say that their biggest enemy is the fed because the fed is really the

source of all the spier economy and by getting rid of the fed isn't it wouldn't that kind of start to really level the playing field a bit where i can download this get rid of the fed argument is and replace it with what i mean i i strongly suspect that if we were to get rid of the fed the fed the role that the fed plays would be replaced with something even worse than that the problem is that it's an institution and like any institution it is its feet havior it is so operation depends on the guys who are running it and the ideas in their heads and i think that both our problem right now we have the wrong guys and the principles that they're operating on are the wrong principles so the real the fundamental problem here is not anyone being necessarily being a good guy or a bad guy what happened when these interest rates really are in the study come down we use his hands he spread that this call a fat spread on says what richard who calls it into. because what was happening was

the wholesale price of money that it actually borrowing that was falling rapidly but the retail price of that unit was not and so that spread between what they pay what they charge for money get bigger and bigger and what happened was when the money the came more profitable interesting things so rationally within the operation of any economy industry is going to tend to go for the it's the most profitable and the most that's why a car company is in the words of one ford executive i talked to when i was running we beat him you know for a nice to be a car company that wanted money on the side and then it became a bank it made cars on the side because it was more profitable so final problem was that the incentives in the economy got completely reversed. and the more. the more money that was being made in this financial part of the economy more influence that part of the county had a financial over the political system really became

a self reinforcing cycle are now during the two thousand and eight crisis the ongoing crisis trillions of private bank debts were transferred to the federal reserve bank now ok i understand that your point is that the federal reserve as an institution can function in a way that is as per designed a benefit to the economy currently is not being managed to that extent tell us what happened to those trillions of dollars that the fed now are they are going to be able to exit this situation where they do with these loans are they what the current policies are they as crazy as some believe that they are you know he did that in the early days of this inflation deflation debate. in and out argue with guys like. carl down. much a lot and they would tell me you know i see what. in all those classes when i can

have a deflation spiral what you guys are are forecasting this is the fed's going to take all this bad debt and put it on its own balance see through the day the magic of double entry bookkeeping is going to show up one side of their balance sheet as an asset and the other side is a liability to get about such as thirty five billion other of their balances to expand by a trillion or two or whatever it takes they're told it was garbage that can't possibly happen the goods are charted love and of course that's exactly what happened and so now we have all the stuff in the galaxy that obvious it is that going to get mark to market if you go look at the current market for us at that securities it's class from i think one point six to eight hundred billion dollars and the difference is that sitting on on the fed's balance c unmarketable they can't sell it. there's no market for you no market there's no private market for any of this stuff so the question is how do they exit what happens if they

don't and i suspect that's one of the reasons why we're seeing gold prices go up because there's a general concern that the currency of a country that has a central bank that's operating this way is well says for this way in the long term it's going to really cause people to question whether the central bank really is pulling in any or not all right so in the book what's the policy catastrophe khana me the idea of a guest on early currency crisis and hyperinflation is given a low probability sense the book has come out it's been on now for a few months as the probability of that eventuality increased and i came up with is there an economical kicking there in basically the idea is that we don't need to print a lot of money to have high inflation in this country on the dollars that we'd ever need to produce high inflation is going to have already been printed and residing in central banks and private accounts over there all over the world and all that has to happen is for the cycle never goes to come on to get repatriated because

people are worried about. you know the dollar depreciating any disorder away in the process is like a run on the bank that causes the outcome that everybody hears so that really gives the back because taking money out in the bank does collapse when you do that because or for the bank it's going to collapse because the event that their credit so that that dynamic could result is always a potential for that dynamic. and the one thing that many get and it's a is that all over a gas are on dollars and that the full. quotes is of that of a crash in china in the u.k. and europe and other creditors is is very very bad and so the way the system works occurred back in two thousand and six at all the nutrition the destruction that's essentially that the dynamic of our global monetary system that there that everyone is motivated to not what that happen because it would be a political disaster for everyone so they're trying to work out

a process of decommissioning the dollar as the primary reserve currency and that's what we're seeing today is a lot of pushing and shoving because the obvious big loser is going to the united states anyway ok tell us about the other side of this catastrophe what you call the g.c.i. account of a transportation energy communication and infrastructure what the f.s.s. energy the backlog for all that it is that we're going to have a second energy crisis and the first one was in two thousand and eight it was all over us it's got a hundred forty seven dollars a call the peak oil cycle so i don't know the big spike in oil prices now preserve today probably another not a recession. to get ahead of. these cycles of places we need to vastly reduce our need for oil for transportation is going to and we do that too well various times of conservation and this to me is a way for us to focus our own spiritual energies in just solve that problem and go

shifting economies focus away from finance to back to production all right the book is called polish catastrophe economy pick it up at your favorite bookseller amazon dot com guy was obliged to get a quick and eric as a thanks for being on the kaiser report actually already and that's going to do it for this edition of the kaiser report with me back skies are here with a cold and stacey harbor and if you want to send me an e-mail please do this at kaiser report at our. dot ru until next time this is nice guys are saying bye. to. discover it.

with the wind. and become. almost seventy years of the red. people wanted to leave the power. to make changes. but was it possible to regime so quickly. one occasionally fundamental change in the state.

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