california prepares to issue marijuana bonds if prop nineteen passes so california issued 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 balance that 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 bum play 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 is bonds are becoming almost a safe as the u.s. treasuries and 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 bretton 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 and other denominated assets with nobody wants to sell to him because they realize the dollar is a dire currency actually drone boofhead of research i asked more investment management in london in this article in bloomberg says chinese policy makers 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 wars that's right that was a major theme we identified had 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 qana be 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 the what is it when the your country commits suicide. countrysides 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's 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 u.s. is going to wake up one day in the very near future and find that gasoline this 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 he's a mensch candidate up there representing monsanto and exxon and coca-cola he is 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 in 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 as 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. 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 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 used the i.m.f. to stillwell for 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 towards 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 there i am aphorism courage ing all the sovereign nations of the west to bail out these bankers who. attacks the economy.

suicide bankers that's the best the root of the problem and they follow the corrupt ideology of free market fundamentalism and so you break the spell and christine o'donnell i mean 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 elka it is well of course those neoliberal. economics introduced into america was called by george bush sr to do 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. right 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 on tyranny for an 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 what is quo 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 any measures of borrowing capacity will stop borrowing just like he acts like it's the public doing it's these bankers his cronies his friends yeah again this is the ideology of a psychopath that and we need which is in 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. final

headline yeah those corrupt us sr yeah and it offers a new max keiser prediction to leave many of your state coach through most. almost all 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 question 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 try of high yield mortgage 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 on 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 it thank you max.

when we come back i'll be speaking with the famed economist over there i tulip dot com eric jansen. i'm discovering. the wine. and become. the. great for the food we've got. the biggest issues get voice face to face with the news makers. welcome back to the kaiser report time now to go to massachusetts to talk to author

and blogger eric johnson eric blogs at i tulip dot com or 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 pose catastrophe economy rebuilding america and avoiding the next bubble i just finished reading this for my second eric walking the kaiser report thanks for having me on next right eric jansen 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 this ongoing economic collapse well the fire economy is a term well used to refer to an economy that is overly dependent on finance insurance and real estate sectors. me and this is an economy that's

developed in stages since the early eight hundred seventy s. but the most significant growth in terms of living one of debt bond happened since ninety eight the biggest donor to to 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 our profession are now in the book here describe the inflation deflation debate which is raging in the blogosphere 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 i understand this is up to the hardest part for people to

wrap their heads around as well i want to continue really to countries where the spine is based economy and we have what we think of as the economy a pretty decent consumer right to the producer and consumer economy is employers are the people salaries in the salary wage earners become consumers to go buy stuff from producers and that's the way they get in the economy is this cycle of payments between producers and consumers but then you have this fire economy that operates in a data principle that runs off 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 that 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 it was a supposed to. you know prices stable and full employment but there's no way it's

constructed and it just gets worse as that than 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 is that a fair characterization well ok so a feeling to explore that there are these two economies and from a from a monetary policy standpoint they're managed independently so the objective of monetary policy for the producer consumer 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 unstated 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 what a good thing to do and you can of course play back any of the things that means then saying during both dot com and the housing bubble justifying. his policies including asset prices or just out to crashes then the policy of the ship pretty quickly to preventing asset prices from crashing because then what happens is that the class in fire economy spills over into the so-called real time in the production consumption which happened in a really serious way that the thirty's happened somewhat in japan since the midnight in 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. second 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 they're you know rebuild the u.s. economy but the folks are getting paralyzed by the way that the setup is now is it correct to say that their biggest anime is the fat because the fat is really the source of all the spier economy and by getting rid of the fat isn't it wouldn't that kind of start to really level applying fail 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 it's be a viewer 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 or the wrong principles so the real the fundamental problem here is not any one being necessarily being a good guy or a bad guy what happened when these interest rates really high in the start to come down we a this is there is huge spread to this call a fat spread on such that richard can cause i don't think it's a good term because it was happening was the wholesale price of money that can dance or borrowing that was falling rapidly but the retail price that united was not and so that spread between what they pay what they charge for money get bigger and bigger and what happened was wondering money they came more profitable than producing things so rationally within in the operation of any economy industries going to tend to go for the incident profitable and the most that's why a car company is in the words of one ford executive i got to when i would rather that we beat him you know for nice to be a car company that wanted money on the side and then it became

a bank that made cars on the side because it was more profitable so final problem was that the incentives in the economy got completely perverse. and the more. the more money that was being made in this financial part of the economy the more influence that part of the economy had over the financial over the political system really became a self reinforcing cycle all right 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 back in the early days of this inflation deflation debate. in and out argue with guys like. carl down journey. much a lot and they would tell me you know i see what all those classes. were knocking out of deflation spiral what you guys are forecasting is that that's going to take all this bad debt and put it on its own downstream to the to the magic of double entry bookkeeping it's going to show up one side of the balance sheet is an asset and the other side is a liability to get about such as thirty five billion or the other of the balance is to expand by a trillion or two or whatever it takes it toll it was garbage that can't possibly happen you could surcharge it love love love and of course that's exactly what happened and so now we have all the stuff in the galaxy that addition is that going to get mark to market if you go look at the record market wasn't that securities

it's class from a thing one point six to eight hundred billion dollars and the difference is now sitting on on the fed's balance. unmarketable they can't sell it there's no market for the new market there's no private market for any 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 or not all right so in the book what's the catastrophe khana me the idea of a distilling currency crisis and hyperinflation is given a low probability sense the book has come out it's been on now for a few months and has a probability of that eventuality and praised and i came up with is there an

economical keeping there in basically the idea is that we don't need to print one of money to have a high inflation this country on the dollars that we that we need to produce high inflation is going to have already been printed and are residing in central banks and private accounts over there all over the world and all that has that is for the sizable number of those to come on to get repatriated because people are worried about. you know the dollar depreciating in a disorder away and the process is like a run on the bank that causes the outcome that everybody fears so that really does the back trust take the money out in the bank does class when you do that because you're for the bank it's going to go so because the that there are so that that dynamic could result is that the potential for that dynamic. and the one thing that many get it's a. is that all over a guess or on dollars. that the political close 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 wars

occurred back in two thousand and six at all the nutrition good structure that's essentially that the dynamic of our global monetary system that they're not everyone is motivated to not what that happen because it would be a total 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 be the united states anyway ok tell us about the other side of this catastrophe what you call the g.c.i. economy trafford tension energy communication and infrastructure with the f.s.s. energy the backlog for all that it is that we're going to have a second energy crisis in the first one was in two thousand eight. hundred forty seven dollars a call to p.g.p. oil cycle so i don't know the big spike in oil prices now perceptor they probably

another another recession. to get ahead of three of these cycles of crisis we need to vastly reduced our need for oil for transportation this country and we do that through various kinds of conservation. and this to me is a way to focus our entrepreneurial energy interests into solving a problem and shifting the understudies way from finance and back to production are the biggest cause of pasta tacitly economy pick it up at your favorite bookseller amazon dot com comes to mind to get its hands quick and that eric has a thanks for being on the kaiser report it's ready and it's already and that's going to do it for this edition of the kaiser report with me back kaiser with a cold and stacy herbert 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 nice guys are saying bye ya'll. are going to.

this is amigo's russia new zealand seeks to reinforce their partnership as president hugo chavez is this must go on the first leg of the diplomatic tour. the female brain in the u.s. midterms why critics accuse women candidates so playing on emotions instead of policies to belittle voters. and the russia close-up team travels to one of the country's oldest cities to be the birthplace of russia's democracy. and russia's central bank says it will allow for more volatile ruble by widening the trading bonds against the u.s. dollar figure i'll have much more in the business but it's in in twenty minutes.

it's twelve noon here in the russian capital no two to watch here and it's go straight to our top story this hour russia and venezuela two countries set on shaking up the system so that the global balance of power is more evenly spread the two are now set to get close as president chavez arrives in moscow on the first leg of a diplomatic tour we're going to follow his visit for r.t. . this is the ninth and says all of it is a president who go chavez to moscow it looks like russian as well and never run out of things to talk about our you have to remember that a lot of political pundits world over probably will be watching closely this is it considering the fact that russia is an already established political heavyweights especially in this part of the world with its immense natural resources and a lot of economic capacity and.