i brought you back a wonderful gift from new york which is your cold yes fags but it's really great next time i go to california and i can bring back maybe a hash brownies that takes me to my first headline yeah california prepares to issue marijuana bonds if prop nineteen passes 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 assets 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 treasuries yes at a time when governments around the world are facing growing debt china us 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 poster. the

war to bretton woods u.s. dollar reserve currency strangle hold 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 but nobody wants to sell to him because they realize the dollar is a dying currency actually drone head of research ashmore 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 this 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 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 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 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 a. country assad's nation as well as everybody's getting worried about their rebalancing. shifting away from the u.s.

empire over to something in asia and remember geithner 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 ghastly 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 these are 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 left corporate side of the equation losing the house of representatives 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 openly. 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 the as 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 used the i.m.f. to stillwell 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 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 they are a match is encouraging all the sovereign nations of the west to bail out these bankers who have attacked the economies you know suicide bankers but 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 elka it is well of course those neo liberal. economic introduced into america was called by george bush sr voodoo economics and we do and which is are often

scary they come out of hollowing which is this 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 not cerny 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 it 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. a

psychopath 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 yeah those corrupt us sister yeah and it offers a new max keiser prediction ok to leave many of your soap come true most. oh most 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 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. forged documents they forged documents i mean i worked on wall street a long time and all the documents are fords 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 the bag of worms all these banks especially in europe they're holding these collateralized debt obligations these toshiba's 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. as you are lacking in all self-interest whatsoever well

stacey thanks again for being on the kaiser report thank you max when we come back i'll be speaking with the famed economist over there i tulip dot com eric jansen. seventy years of the red machine would show me and people wanted to believe in the power. to make changes.

but was it possible to change the country's machine so quickly. with. the calls of the fundamental changes in the state people's minds on a. line . which brightened if you need some from feinstein christian. tante don't come.

back 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 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 pose catastrophe economy rebuilding america in avoiding the next bubble i just finished reading this for my second eric watching the kaiser report. 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. that's raul this ongoing economic collapse of 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 of living one of debt behind 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 an interest rates and or a good deal to put the economy through cavalry assassins and cut up a massive inflation spiral which is threatening to turn into ivory and force and are now in the book here 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 out 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 con we really have two countries where this finance based economy and we have what we think of as the economy the producer is in consumer's 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 that's what we think of 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 that runs up the fees and interest and on capital gains from asset price inflation all right now in the book you do a great job and describing how the way it's set up to says. them. and it helps asset prices go up to reward those in the fire economy while simultaneously keeping a wages low which is completely against of course the mandate of the fed it 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 explain 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 is economy is primarily to maintain low wage inflation because that's the transmission mechanism of inflation in commodities into you know only 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 asset 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 quotes like a good thing and you can course play back any of the things it means ben was saying during both dot com and the housing bubble justifying. his policies in photographs of prices or just out to crashes then the policy as a ship pretty quickly to preventing asset prices from crashing because then what happens is that the class and fire economy spills over into the so called real time in their production consumption which happened in a really serious way that the theories. somewhat in japan since there are midnight in ninety eight 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 wealth and income 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 a 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 planck scale 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 behavior it is so operation depends on the guys who are running it and the ideas in their heads

and i think that both are a 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 any one being necessarily being a good guy or a bad guy what happened when these interest rates roll out in the start to come down we use his hands he spread that 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 it actually 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 when big money the came more profitable interesting things so rationally within in the operation of any economy interest is going to tend to go for the end. it's the most 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 began you know for needs to be

a car company that wanted money on the side and 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 circle 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 it did back in the early days of this inflation deflation debate. in and out argue with guys like. carl down during. much a lot and they would tell me you know i see what i was classes was wrecking havoc deflations far what you guys are are forecasting this is the fed'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 their balance sheet as an asset and then decide as a liability to go about such as thirty five billion other of their balances to expand by a trillion or two or whatever it takes it toll it was drivers that can't possibly happen you can surcharge and love love love and of course that's exactly what happened and so now we have all the stuff in the balances that addition is not going to get mark to market if you go look at the record market process that

securities it's class from i think 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 in a 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 in a country that has a central bank that's operating this way is well says for it this way in the long term it's going to really cause people to question whether the central bank really is putting in any or not all right so in the book what's the post 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 venture out increased and i came up with is

there an economical complain there in basically the idea is that we don't need to print one of money to have high inflation 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 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 when he does the back try to take the money out in the bank does class nation do that because they're afraid the bank is going to collapse because the event that they're afraid of so that that dynamic could result was a potential for that dynamic. and the one thing that many good. is that all over a guess or on dollars and that the political. quote says of that of the crash in

china in the u.k. and europe and other creditors is is very very bad and so the way the system works a come back in two thousand six hundred dollars nutrition destruction that's essentially 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 be the united states anyway ok tell us about the other side of this catastrophe what you call the g.c.i. account of a transfer tension energy communication and infrastructure what the f.s.s. energy the backbone for all that it is that we're going to have a second energy crisis and the first one was in two thousand eight. hundred forty seven dollars a call the peak oil cycle so i don't know the big spike in oil prices now preserve

the day probably another another recession. to get ahead of three of these cycles of crisis we need to vastly reduce our need for oil for transportation this country and we do that through various kinds of conservation. and. away. our. energy. problem. what. are the biggest. economy your favorite books. quick and. a report. already and that's going to do it for this edition of the car. with a cold and stacy harbor. are you until next time this is nice guys are saying bye.

for the full story we've got. the biggest issues voice face to face with the news makers. in. the imperial. hotel. beach hotel.

in israel. five thirty am in moscow good to have you with us here on our teeth easier headlines who go chavez once again puts the boot to the u.s. but offers a russia for eternal friendship as the flamboyant latin american leader arrives in moscow on the first day of a state visit energy defense and financial affairs all on the table when the venezuelan leader meets president medvedev and prime minister putin. female politicians hitting the headlines in the u.s. under the right wing tea party banner but critics say conservatism with a feminine face is getting plenty of press for questionable reasons. hand in

hand with hezbollah the iranian leader wraps up his visit to lebanon on a trip called deliberately provocative by the u.s. and israel they accuse mahmoud ahmadinejad of seeking to launch a proxy war against israel through radical elements in the country but critics say the israeli and american arms deals and military activity in the region pose a greater threat. and are revving up not content with just staging the olympics sochi signed a six year deal to hold formula one motor racing giving it the checkered flag in the race to host russia's first ever grand prix. up next our interview show spotlight this time host al gore and of speaks to the newly appointed head of the russian council on civil society and human rights stay with us. for sure is that so much about me and let me mention you can see the amount of people that carry and watch what you.