kaiser the bad who's not afraid to take a whack at wall street. because of the report if you'd like a copy of storm still blowing is now available at max keiser dot com records and tapes for ninety nine for a christmas special hopefully bleeped out all the offensive bits hey let's get to the news stacy herbert you're looking fetching tell me something good or bad exists only bad news these days you know that i'm going to start with this headline hind capitals ben davies global debt has peaked and there is no exit so the title of his report ben hind and of course you can see in this photo here that it's a still from which show our show we make the news and then to report the news that

we made. but here is the title of his report debt there is no jubilee and of course he's talking about the fact that like in biblical times when debt became too big. there used to be a debt jubilee l. debts would be written off so now we're not allowed the debt to billie's no no no where in forced into slavery so he's saying how do you get rid of debt without jubilee you can only do it for three or four things grow your way out belt tightening currency devaluation or for explicit default however if you look at the headlines that you and i have been talking about max there is no exit obviously for the ninety nine point nine nine percent of the world's population that are peasants however if you recall our last headline in our last episode warren buffett has an exit he's got uncle sam hello net jets warren buffett's company i need an exit i need a vector i need a vector now help me well look at this exit plan for the corrupt global money

printers the debt pushers here's a tweet from james g. records as we predicted i.m.f. has devalued the dollar inside the s.d.r. basket so doull are now loosing to gold and s.t.r. is to of course nobody else you and i joe baca donuts pierre bag of begets has no option to get to trade in the s.t.r. you have to pay all your debts and the dollar these people get to pay and devalued dollars via the s.t.r. and rickards is really a guy you've got to watch he's got he's an insider on all things financial and he's absolutely right the s.d.r. currency of fabricated new global currency is the shadow banking system attempting to give a lots of folks an exit strategy to swap their dollars for something else on their way to buying precious metals and other assets that are moving up in price from for these folks they see nothing but inflation for people trying to work for

a living they ceased isolation they see prices for food and energy going up their wages are going down for economists like ben bernanke the easy pay deflation missed all the seasons deflation which means that all these ever. the to do is increase the money supply and the money supply only ever goes to the rich and never goes down into the real economy and this is obvious because we never see wages going up you say that's the point anybody is watching this like frickin obama just read the newspaper so here they are the top of the pyramid this global money class now next line down you have the national politician who defrauded bankrupt their own nations for these people let's look at the exit for the politically corrupt class recession proof congress got richer during the worst downturn since the great depression two hundred sixty one members of congress are millionaires nearly one in two lawmakers pigs well partly the reason for this of course it is the exception to the rule for

congress is insider trading they're allowed to trade on insider information and what has been going on but congress has been providing stimulus packages bailouts tarp programs so these guys have been able to front run every single bailout they're about to provide yet let's repeat that congress by law is free to trade on inside information that's a law there they're free free to trade on inside information oh gee i wonder how they get to make so much money i guess because they're really good politicians yeah that must be it there is also an exit for the corrupt global speculator class the kind of leech on the side of this global debt printers and central bankers class and that is shorting obama exclusive george soros tells top progressive donors to give elsewhere if this president can't do what we need no shorting obama so he has that exit he's allowed to just exit the bet that he's made. who we're stuck

yeah whatever policy didn't do is due diligence he put money into obama without really looking up under the hood to see what this guy was all about he financed campaigns get elected now you. lies he made a mistake and he's out the door and he's leaving the public with the smart a guy behind the lectern mimicking whatever jamie diamond dels i'm and he's not there he's a robot he's a robot of trauma he's a some kind of dictaphone he's a eugenic lee created genetically you know stores buying last quarter of course was monsanto talk about your medical genetically modified hell ok this guy soros is a plague on society soros also leads into the next headline which is the exit for global monarchs because if you look at george soros his portfolio thirty percent of it is an oil headline reads opec is set to pocket an extra one hundred seventy seven billion dollars by years and so opec's export earnings from crude oil are

already up by one hundred sixty one billion dollars year over year according to the u.s. energy information administration this is as it was insider trading charges as well that he's dealing with you know and he'll buy his way into expunging his record and make it all go away is of no never happened even though take the bank of england he busted the bank of england for a quick billion dollars pure market manipulation he wrote a book called the alchemy of finance you could have retitled a book how to manipulate a market he's a master market manipulator he's a fraudulent no good mc who has no skill but he has a lot of votes but that's about it but you know tying into the other stories that we're talking about here max opec is headed by saudi arabia they are the biggest member of opec now dick cheney and george bush set up this situation for them where they're not only do they have dick cheney's zombies across america who who basically will shout and scream if you dare try to get them off the you know the

umbilical cord of saudi arabian kings giving them a whale no i mean one thing bush said that was kind of interesting he said america's addicted to oil as i recall what yeah give me some are bound to give me some more i mean other than that what i'm. so and of course the reason why the dollar is devaluing so fast and therefore oil prices are rising is of course from the money printing going on by the global banking class as we said in the beginning of the show headline reads gap wal-mart clothing costs rise and terrifying cotton price oh my q oh go ahead go down to her and pick up mail in general pick up mail it to you see i predict within a few years the biggest employer in america will be cotton pickers and of course will shop at the company's store wal-mart an amazing thing is if you haven't shopped at wal-mart for the past twenty years you wouldn't be out there pick and sucker so cotton futures in china have surged by more than seventy percent this

year high going higher baby is something you just can't live without who wants to go out the front door without a clean pair of underwear you can read in the quotes in this article the very definition of hyperinflation in this quote from a chinese supplier of cotton we can give clients a price now but it will only be valid for a week that goes back to the beginning of our show where we talked about ben davies hind capital he's saying that there's hyperinflation warning of this happening in japan us and the rest of the world right and that time the time frame will continue to shrink so you will give you a price but it's only good for three days we'll give you a price it's only good for three hours we'll give you price is only good for three minutes because that's what hyperinflation is all about that's why i get two three four five trillion us dollars worthless nothing paper tango idiocy printed on the backside of a baseball card fed through a shredder and amalgamated with a chicken mcnutt gate and served up on

a plate called hyperinflation and now use or are bankrupt well and then here is another sign of hyperinflation which is giving no exit for the people down below as . he said we had all those exits for all of the big money class fears of a new food crisis as prices soar so the u.n. said that the bill for global food imports will top one trillion this year for the second time ever put in the world dangerously close to a new food crisis countable as i'm going along well the thing is that china is now introducing price controls and certain foods so of course this again brings us back to make a great depression well you know during the global great depression you had same sort of currency wars going on devaluations devaluations against gold as you're seeing in the s.t.r. you're seeing a price fixing and tariffs will be i guess the next step and let's be clear about

something first of all america is not the currency manipulator should say china is not the currency manipulator that america would like the world to believe america is the currency manipulator it's got the world reserve currency and why is there such a problem in america in the global economy is because americans basically have become too lazy they don't want to work anymore they just want to borrow money and consume from china and china recycles my money back to america to keep interest rates low and therefore they never have to actually get a job and they go to wal-mart and prices have gone down for thirty five years and they never actually have to work but now the whole thing is reversing the people are like oh my god i don't get it prices are going up i thought i was my birthright was to shop for ever wal-mart never have to pay and they get out of that conundrum their fall back to jesus and they're saying no more religious than the mood to listen i've got a birthright to shop for cheap at wal-mart don't you get it jesus gave me that run the rest of world saying oh my god i thought you were separation of church and state oh much to my gay i give so much goes the go grows so much goes bush uncles

america will go because well that brings me to this final little bit here because you know we've been running this viral campaign crash j.p. morgan by silver and i noted a comment on one of these viral videos which is from tell you. rod and he says max what is certain tony going to do if j.p. morgan goes bust tony blair. he's not to serve course but he really is he's a he's part of the oligarchies aristocrat sort of class dominating the world with their fraudulent schemes of ponzi schemes and defrauding us he's a surreptitiously stealing money from people kind of a server. well of course because he consults for a j.p. morgan at two million dollars a year and that goes back to that exit plan for the politically corrupt class as we talked about there like the insider trade and in the u.k. they're allowed to walk out of downing street walk across the street and walk into j.p. morgan say give me two million dollars

a year and tony blair converted to catholicism as well he's got the double play he's got the j.p. morgan bonus and the jesus play good work tony you're a war criminal and you should be hanging from a rope somewhere all right say sarah thanks so much for being on the kaiser report thank you max go away much more coming your way so stay right there. close. to the times. where rich academic life gives birth to. archie goes to the area which together with blue steel jewel developments. first to make a journey into russia's history. and to enjoy the cultural life. well to the pair and rejoin russia. on archie.

yeah i am walking back to the kaiser report you know it's all on the money times inflation inflation hyper inflation we don't talk about deflation so much so i'm very pleased to bring on the show nicole boss who amongst other things i would say is a prominent deflationists is that a fair characterization very much so yes now the calls your work you come into this economic field coming through geology coming through oil and being

a systems analyst and this is very important because your work really focuses on credit and credit systems give us a little you know ten thousand yard looked down at the credit. what essentially what we had is an enormous ponzi scheme development enormous quantity of ponzi finance this is what happens when you have an enormous credit expansion you you build excess claims to underlying real wealth so this is one kind of inflation because inflation is an increase in the supply of money and credit relative to available goods and services so you can produce inflation through increasing the money or increasing the credit but there are significant distinctions between those two if you produce them increase the money supply the money fraction of that then you maybe buy margera money or zimbabwe but you could increase the credit side instead so if you have gone the money route what you have is your underlying wealth pie that you then cut him to smaller and smaller and smaller pieces. if you have

a credit expansion you don't cut the pieces into smaller pieces you create multiple and mutually exclusive claims to the same pieces of pie very similar you probably looked at the work of steve game yes ok now he makes the point that it's in a fractional reserve banking system that we have come to know somebody puts money in the bank and the bank lends out maybe ten times that deposit as a loans and then you have a multiplicity according to steve king says and i gather what you're also saying is to point out no you have to realize that the whole system begins not with a deposit but it begins with a loan essentially it's talking about a system that's built on debt translating from the beginning that there really is no reserve at all and the reserve requirements have been whittled away write the number of accounts the kind of accounts you have to hold any reserves on a tall have been whittled away the then reserve requirement on the accounts you still need to reduce reserve on are much less than they used to be each one of these increases the multiplier effect so you have the multiplier effect of

a fractional reserve banking you also have enormous amounts of credit creation in the shadow banking system everything has acted to increase credit and the multiplier effect here is a multiplying of claims yes against the same asset exactly now it's a similar for example if i were to sell the same house to ten twenty or thirty different people they can claim to have an ownership of that house yes however that can't possibly be the case yes then what you what you have is that excess claims to underlying real wealth so we're all playing the giant game of musical chairs only there's perhaps one chair for every hundred people and you can imagine what happens when the music stops that's the flesh and everyone grabs for a chair right so ultimately when you end up with as i guess who said that all debts that can't be paid won't be paid i believe it was dr michael hudson links that point often so now we're at a point i guess in two thousand and seven we get what's called peak credit. ponzi

scheme. venice there is no more dumb money to come in there is the last trailer park has been turned into an asset to be monetized and securitized and sold on wall street now you've got the credit crunch and this is happening in parallel with another phenomenon which is the oil crunch so part of the deflation story is also you see your view as well going forward is on the slippery slope down yes i mean essentially what happened in two thousand and seven you had the stock market peak money that was leaving the stock market flooded into the commodity market gave us the two thousand and eight oil price peak and i was trying to explain to what i was working energy at the time that the next step for oil prices was going to be off a cliff because whenever you get speculative flows of money flooding into a sector which creates a ponzi scheme a small scale ponzi scheme you are going to have that money coming in take profits and leave again and then speculation goes into reverse the prices fall very sharply

which is exactly what happened in two thousand and eight if you look at the the oil price pattern like this that's exactly the same as the tulip bulb mania in holland or the south sea bubble it's a classic bubble pattern is that only that was on a smaller scale than than the entirety of the bubble the entire credit bubble that we're looking at so money was going out of stocks into commodities i think we're going to see possibly the same dynamic again but i think we are going to see oil prices fall again money is once again moving into the oil sector on speculation. and this is just the theory that there will always be a greater fool doesn't matter how much you pay for something someone else will always pay more later and i think we are seeing speculation in oil at the moment not to the same extent as in two thousand and eight but i think what we're going to see in the oil sector is speculation goes into reverse prices fall and then as we move into further into the credit crunch then demand starts to fall as well because a depression involves a fall in aggregate demand and that will undercut price support so then you end up

with a temporary oversupply. and that really pushes prices very fairly far down perhaps the lowest cost producer talked a little bit about the hard sailing and the supply glut in other words as the economy shrinks demand falls there is the infrastructure to generate supply quickly gobbled up but because of the low prices there's the incentive to bring more production on stream so you've got this ratcheting down effect in the hard ceilings so unlike a speculative chart of these wild swings up and down here you've got this hard ceiling big due to lack of production due to the lack of infrastructure investment that is permanent the systemic permanence of this because of the cost associated in the talk about the hard feelings more well essentially what you have with the credit bubble first it will buy you time because you get this temporary overproduction until you crash supply and you crash supply as he was saying because

if prices are low nobody invests in exploration or drilling or production you get the capital coming out of the sector you set up an almighty supply crunch down the line because not only have you not brought on anything new in a credit crunch you don't even maintain what you already have and a lot of the oil production infrastructure is already not in a particularly good state of repair there's an enormous amount of investment that would have to go into this infrastructure just to continue to allow it to do what it does now so when we start to find that the infrastructure is decaying we haven't brought in any more production at that point you have a supply crunch if the economy is trying to recover again as she was saying it hit so hard energy ceiling at a much lower level than before and because energy is the physical capacity to do work if you do not have enough of an energy supply you're not going to be engaging in economic activity in anything like the way that we currently do ok let me take the bull case for a second because you know prices are set at the margin in the paper market in the

future. and these markets are driven by folks with enormous pools of capital and they're able to overwhelm the normal supply and demand curve and they can take a price as we saw you know back a couple years ago two hundred forty seven or so most of that move was driven by speculators with huge funds able to overwhelm the normal supply and demand and create a price fabricate a price manipulator prize so as this money that's being created right now to try to combat the economic large slowdown it's bypassing the real economy we know that it is going into the pockets of these fund managers are being greedy armed if you will with more and more cash and they like oil as a play they like other assets as a play as a way to game that system so is it that i think as i understand the bullish case is that as the central banks continue to flood the market with more credit more cash

but basically as we know it's credits more debt this will be the favorite place for that is in these markets so where where does that argument fail well i do think that you are going to see that kind of driver effect but speculative bubbles do not go on forever you can't simply blow in an infinite bubble so what the speculators do they do flood the market with with hot money essentially and then but they will make their money and then they will take that out they will chase momentum to the point where they don't think there are any more profits to be made and then they will leave that sector for the designated empty bag holders of that particular situation and then you find that prices will fall let's talk about this infrastructure we hear u.s. politicians say the u.s. needs to focus on energy and replacement for oil. are the plants credible what's happening they're not remotely credible not even vaguely credible and what they're

talking about is energy independence through biofuels primarily. although very southern forms of renewable energy as well but the emphasis in the plants that you hear most about are in things like ethanol and from things like switch grass it's absolutely not going to work the energy returned on energy invested for these is incredibly low right so the amount of energy it takes to get the energy out yes is greater than. exactly not for every one of them they do vary from one technique to the next bio diesel is slightly better than an ethanol and it depends what you're getting the ethanol from as to what the net energy out is ethanol from corn is energy negative the net energy is below one energy which return on energy invested is less than what right now the reason we have that is because it's enormous subsidies at the exact word industry receives agricultural industry from the us so it's the money generating system not an energy generating system right and the various other ones if you were doing ethanol from sugar cane in brazil you have

a decent net energy return on that somebody eight to one it makes no sense for corn ethanol quite frankly makes no sense for cellulosic ethanol either it's never going to scale up what you could do with this material if you could put it in say an anaerobic digester and turn it into by a gas if you don't mind having a gaseous fuel instead of a liquid one you would certainly get a higher energy would turn in energy invested if you did that you wouldn't come close to replacing the energy we get from oil though really absolutely not even close even if you used every inch of the land surface purely for growing crops for that purpose even if there are generating energy in this way you still have to move it to central distribution areas which would roads and once again rely on the infrastructure exam which is in decay exactly and to some extent you may have to expand infrastructure there are two ways you can use but there's no money there's not going be any money that's exactly the thing right so when there are two ways you can you can do it you can either use the liquid fuels as liquid fuels or you

can generate electricity with them which is is one of the ways that people deal with this but again you get an infrastructure issue because then you have a problem with power grids an awful lot of the power grid infrastructure is at or near the end of its design life as well as let me tell you it's yours are first like that because i think we get the picture infrastructure collapse you've got supply collapse and you've got credit collapse. you've just come back from detroit yet no detroit is a post modernist american city post-industrial american city and you see the true green shoots i would say of some hope tell us about detroit we have about a minute and a half ago it's an absolutely fascinating place these people have completely given up expecting anyone to do anything for them they are just decided we have to do this ourselves and they are and where i was staying there were vacant lots there were houses falling down there were houses in a state of incredible disrepair and in between the houses that were falling down they were perma culture gardens and they are growing potatoes in stacks of old

tires they are setting up herb gardens with the bricks from the houses that are falling down as as the structure and they're doing this with no money whatsoever and nobody comes in and trashes these gardens i mean theory you hear that places like this are no go areas they had saluted not i'd walk where i was in detroit i'd walk down that street at night people would politely come and ask if they could pick a tomato from the garden and these were truly lovely people who completely taken their future into their own hands to the extent that they could they don't have much purchasing power so they don't have as much freedom as other people would but . i think the fact that they have stopped looking for anyone else to help them under doing a tremendous amount for themselves it is a hugely positive aspect of what's going on there all right a call fos thanks so much for being on the kaiser report and very welcome and that's going to do it for this edition of the cars a report with me max kaiser and stacy herbert and i want to thank my guest nicole foss if you want i mean email please do so at kaiser reported r t t v are you until

next time this is nice guys are saying bye off. seventy six hours of intense fighting. six thousand dead. beach front battle field several kilometers long. and now there is only one person who cares. if we are surrounded by garbage everywhere but also there are. on this beach which of course is where most appropriate signification a symbol of everything that's wrong with our goddamn government allowing not only garbage but torture way where so many guys died. a new battle is going on. will the history be protected. return

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