hot money inflows russian economic growth has been slower than expected in two thousand and ten while inflation has been higher and the ruble hasn't appreciated as much as it could given the current oil prices but economists believe the country is well placed for instance predict g.d.p. growth of five percent in two thousand and eleven significant ruble appreciation and higher capital inflows the taliban took over business. and that's all you're up to for this hour you can always find more business stories on our website that dot com slash business stay with us.

wealthy british style. is not on the title. market why not. come to. find out what's really happening to the global economy with max cause or for a no holds barred look at the global financial headlines tune into cars a report. he

. it is easy to. see. a reminder valve on top stories here on tonight. deep freeze. in the country's far east. the border. rescue operation. is in full swing. and three more still wait. in the united states republicans step in to take control of congress where they now outnumber

democrats want to change could make life more difficult for the president. for the first time in years. and the palestinians in the west bank. critics say the scheme is. a lot on the. streets. of israel. a scandal behind every financial headline you name it he's got it is next with his latest report to stay with us. max keiser this is the kaiser report oh boy it's already two thousand and eleven time to look back and look forward and time to bring in stores are overseas as i thought you were going to mention the two thousand and eleven we already see silver

spiking it didn't take long for so over to bust out of the gate what else what else well we have the two thousand and ten asset performance numbers they are in number one played am number two in but number of three performer of last year so over up eighty three point five percent so remember the played him club back in new york city in the eighty's some serious dancing. when max gold was only up twenty nine point five percent just up leggers laggard laggard but with the silver and gold up these much of course we've been talking about these as currencies and it takes me to the next headline georgia g.o.p. or pushes bill for taxes to be paid in gold and silver this is from talking points memo dot com and it's a relatively progressive left wing website in the u.s. and if you can call anybody there left wing and they're talking about georgia state representative bobby franklin republican who has sponsored legislation to force the

state to conduct all monetary transactions with us gold or silver coins yes well the fact is that the u.s. has never been off the gold standard in one way or another it's hard coded in the constitution and now they're just slowly recognizing this eventuality that they must return to hard money to prevent the sly into the fear money abyss well the most interesting thing about this article is. the comments this is an excellent idea however why stop at gold i suggest that the proposed legislation be expanded to include polished stones beads blankets and trinkets eureka more ignorant g.o.p. politicians are the dupes who vote against their own interests and then finally g.o.p. and their nutty unhinged ways well yeah it's amazing that the so called left so-called

progressive in america have bought hook line and sinker this idea that a federal reserve note that has no collateral value whatsoever that's exchangeable into nothing is somehow of value in an economy like the u.s. at the same time of course we're talking about raising the debt ceiling in the us to fourteen fifteen sixteen twenty trillion dollars why do they have to keep raising the debt level because they keep flooding the the economy with these worthless bogus. us dollars silver is up eighty three point five percent last year gold is up twenty nine point five percent the dollar is up one percent i remember the dollar is allegedly a safe haven in these you know tumultuous times and here are these people holding onto the dollar for dear life inside and laughing at anybody who would dare buy silver or gold that just shows you that you're nowhere near

a bubble doodle kentucky bourbon that's a good currency to use in terms of harshness yes bourbon bullets go back to the pioneering days of america bourbon bullets and pork bellies pork bellies did a lot better than the us dollar as well but speaking of not unhinged max kaiser obama aide throws down gauntlet in debt showdown with g.o.p. hitting debt ceiling with the first us default caused purely by insanity so this is austin goolsbee the chairman of the council of economic advisors speaking to a.b.c.'s jake take tapper. and he talked about the debt ceiling which now stands at fourteen point two nine four trillion and we're the national debt is now only four hundred twenty three billion away from it now there democrats want to raise it to fifteen point five trillion and to put that into context look at this chart this is the g.d.p. of the usa in two thousand and nine that's fourteen point one one nine trillion

they want to raise the debt ceiling to fifteen point five trillion and i think the key phrase here is insanity to raise the debt ceiling is a tacit admission of default in other words the u.s. has bonds they can't pay off the bonds to people like china so instead they're simply going to move the goalposts they're going to lower the bar they're going to raise the debt ceiling which is a defacto default which i think is a good way to look at it and i think the world has got to realize that at some point probably this year two thousand and eleven the u.s. will definitely loses aaa rating on its u.s. government bonds and probably default what you mentioned the aaa rating that's in the headlines today on t.v. we saw one huge reason the u.s. should lose its aaa rating now this is a paper bug joey isn't all from business insider and he's pointing out that lindsey graham spoke on meet the press and he was basically playing chicken with austin

goolsbee on the president's council of economic advisors barack obama wants to raise the debt ceiling lindsey graham the senator the republican senator in the u.s. senate doesn't want to raise the debt ceiling unless we cut social security payments and they believe that they have the power to maintain that ship lay rating simply my jaw jaw boning the market simply by stating on television that these these bonds are worth aaa therefore they are aaa they're not going to take into consideration at all that china's got something like two two and a half trillion of these. bonds and might at one point this year decide to dump them as they move into precious metals aggressively to disconnect this relationship with the u.s. while we now know china is got that pipeline that they're just open going right with russia so they don't need the petro dollar anymore well going back to this article it's joe wiesenthal he's a paper by he's arguing that why is hasn't moody's downgraded the u.s.

when these two insane people these two insane parties are just like playing chicken over the debt but that takes us back to the precious metals because of course you don't have to rely on crazy insane people and politics to decide whether or not the value of your currency is worth something moody's is corrupt you know the movies are corrupt there's the movies was corrupt all the rating agencies are corrupt the fund managers corrupt wall street corrupt barack obama's corrupt golems corrupt they're all corrupt it's all part of the corrupt since the kid i mean to say that's just a moody's is so now acting in the good faith is is ludicrous but they also work hand in hand with the u.s. government i am the only garc so let's go on to the next headline along the same lines wiki leaks us diplomats acted as boeing salespeople buried in the wiki leaks documents they're not really buried they're just not exposed to the u.s. audience because they don't need to know this kind of stuff but apparently wiki

leaks cables describe letters from presidents state visit as bargaining chips and a number of leaders making big purchases based at least in part on how much the companies will dress up private planes they're like used car salesman to go around the world hillary clinton being the used car salesman of the mall use jets you know going around the world saying hey buddy you know buy some jets and we'll get you some face time with barack obama a bus from boeing jets and splash out on the number c. in your hometown and give you some kick back money is totally corrupt this is the american empire still. fire based on guns and tanks and invasions and grabbing property it's an it's an empire based on flooding the globe with these diplomatic sales people spending the us corporations and their tentacles into various corners of the us world for that massive global income coming their way yes but we've also been covering this fact that the left wing hates the right wing and the republicans versus the democrats in the red states versus blue states and everybody's going to

be better in some way but these documents reveal that on both sides of the equation none of the politicians believe in capitalism they they don't believe in free markets they only believe in rigged markets for their all of arcs going around the world who is the competition to boeing they're not allowing it because they're going in there strong arming these people and the documents also suggest that demands for bribes or at least payment to suspicious intermediaries who offer to serve as agents still take place boeing says it is committed to avoiding any such corrupt practices of a corrupt boeing but their competition of course airbus and airbus is a consortium of european countries and of course the u.s. is constantly pointing the finger at airbus and saying all the euro president policy that there is some to die zing air bus and that it's unfair competition meanwhile the you've got the u.s. with the world reserve currency and four hundred. m.

to seize and what we call them there are military bases in with those things spread out all over the world using that leverage to sell the boeing plane and by the way if you look at the exports in the u.s. that they will look at and say well market does export stuff it's not just don't it's and guns they always point to boeing planes although if you took away all of the salesmanship going on by the diplomats are being underwritten by all these countries who are supporting the flying around of these diplomats to put them in these five star hotels to get them in a position to sell all this junk to u.s. diplomatic counter parties you'd end up with boeing stock. in the past and the entire export myth of america completely obliterated as it should be because a country can't export a fricken paper bag much less a jet without being undermined and subsidized by the fricken government but speaking of corruption here are some headlines on this and this this collapsing empire of america hoops bribing nigeria for cheney's freedom not legal well this is

according to nigeria's anti-corruption watchdog they sent a letter to the nigerian government saying that the thirty five million dollars that how burton has paid the government of nigeria in order to make the case against dick cheney go away you know he's implicated in this corruption scandal paying huge kickbacks to the government well apparently the nigerian government responded to the end watchdog by saying the u.s. and the u.k. governments are practicing it where you cannot successfully sustain a charge in court and you want to recover then instead of losing the case losing the money then you offer plea bargaining. dick cheney. this is the shining light on the hill of america but i have a headline from the very first week of the new year as well which thing which proves that nigeria is correct in making this argument for steve rattner u.s. cars are pays ten million dollars over bribery cling. so this is the banker who

advised the u.s. government on the auto industry bailout he's settled allegations he paid kickbacks to win state pension fund invest he settled with andrew cuomo he's paying these fines and penalties and he's banned from appearing in any capacity before any public pension fund in new york for five years that's a big punishment yeah well the tragedy is simply if you got rid of all these kleptocratic boogieman you let the people of america compete on. global markets and they could do a fine job competing but they'll never have that chance because all the roads to competition are blocked by obama's kleptocratic could ray yeah why aren't these people sent to the private prisons like let the prisons compete for these customers and these are high profile guys who want to be in there into your private prison drive up competition good point stacy ever thanks again for being on the cars report thank you matt all right when i come back i'll be going to bangkok to speak

with jay as kim find what's going on there so stay tuned. we'll be. bringing you the latest in science and technology from around the world. we. covered. welcome back to the kaiser report time now to go to bangkok and talk with j.s. cam of smart knowledge you dot com or you find his blog about the state of the

economy and precious metals james kim welcome to the kaiser report thank you max and happy new year to you oh thanks so much yes i was just surfing over to smart knowledge you dot com and there are some fantastic stories on there in articles and especially about education going forward in the next few years i think a lot of people find very interesting now jay is kim so are ended the two thousand and ten eighty three and a half percent it's rocketed in the first few days already of two thousand and eleven what's going on when we see in two thousand and eleven well hey a few thousand of it you'll see progression of sober you know rise higher again what we have going on also thanks to your campaign about what are also what are. you on by now sober and crashed your mortgage as i think you are to have some of this over the persons. in two thousand and eleven or at least have. you have to be

more get run for the exits because you know the shorts will be getting killed so i think you know right now thirty thirty one and how silver is still i we undervalue i don't like to make you know predictions because they're so are so are to you know predict where sobers going to go in the next six months the next twelve months next two years i do think it will head bowl zero multiples higher or it is right now all right now let's move over to something you wrote recently jay asked. him explains why the sample superstore disaster provides a good analogy for the u.s. economy tell us more you know basically in seoul there was a department store structurally appeared to be very sound you know no one was aware of it at the time but it was structurally very very weak because what had happened was during construction the structural with columns of a cut forty five percent load have been increased about four times the original blueprint and even though you had you know city officials had to prove you know the

blueprints there are projects and so you know they took money basically to look the other way to bill this crappy apartment building them up on the mantle you know from a structural standpoint eventually collapsed killing a lot of people so i think you know what we have with the. pretty significant rise a u.s. stock markets for the last or months or the last quarter of two thousand and ten it's you know the same thing structurally there's nothing to support that i mean the retail investors led we had a belief now thirty three consecutive weeks of outflows from usual. if not for the u.s. that reserve pomo operations i think you know the stock market would be crashing also on the surface everything looks ok and just like the same whom departments are disaster we have you know the regulators that basically you know taking bribes to look the other way ok so structural laying the u.s.

economy is wait and you mentioned something in there i want to go back to it for a second pomo or permanent open market operations so explain a little bit how this works cuomo operations are basically designed to recapitalize u.s. banks so what happens is the u.s. but reserve they just print money out there and they buy u.s. treasury bonds maturing u.s. shirty bonds otherwise the church the bomber it will collapse as well and therefore the banks are recapitalized and. i soon they take a lot of money and put it back into the stock market because certain to be told busters not buying so. the market there's been a lot of questions asked who is actually buying u.s. stocks to make the stock market go up now this is a of course completely and a theme of the idea of free market capitalism in america which relies on something called price discovery which means that you've got folks in the market buyers and sellers interested in making transactions in a way that's outside of central planning command and control economics and all

the government interference that is associated with other styles of economics and governing such as quote socialism or quote communism so how does it how does the american administration get away with being labeled as a communist dictatorship if they're ins in the market every day buying and selling securities at the expense of the citizens who are getting ripped off yeah exactly describe it it's of doubts you know we have a lot of pundits or people who are looked at upon as experts say such as alan greenspan right the passes late free markets or what is going on today so you have a lot of disapprobation because certainly where social banks meddle so much with markets and bias all securities that are new markets so you know i think that the people the public are really misled by you know social bankers and by you know

c.e.o.'s and executives all wall street so that's why i think there's a misunderstanding of exactly how the market operates alright let's talk about a genuine financial political dictatorship china et albert edwards who is over there to cite a general calls china quote a freak economy. that will collapse soon so jay ask him is this similar to what you're saying in the us in terms of a structural instability or is it slightly different to walk us through how this might occur sure i also think yeah there certainly bubbles in china you know certainly in the rose a stock market but that's due to you know basically every central bank i think is a. game of chicken right because social banks values their deep their currency their domestic garcia the other social backstop to follow otherwise their

exports suffer so nobody wants you know basically to be the first to be physically responsible do the right thing because it's kind of like a domino effect so everyone's following so that's why a big a massive bowls everywhere whether it's in europe whether it's in the u.s. or whether it's in you know the major markets and in asia ok let's expand on this game of chicken analogy that you're using so otherwise known you could call it game theory or the prisoner's dilemma or the national equilibrium and any number of ways in other words you've got two players and they're careening towards each other china and the u.s. and they're both looking to extract rent from each other so assuming that these two collide and they collide pretty quickly possibly this year who is going to be the winner at the end of the day is a pond who what the true gold reserves are what the big

china is certainly are cognizant of what's going on and i don't you ever get the truth from a central banker so emmys are types you know so his official spokespeople said oh do you support you know the u.s. dollar which i don't think they're doing i think it's they're going in by a commodity so you can see that certainly there go research i don't know the exact numbers it's on my head but they certainly made a conscious effort. gold reserves a bigger sovereign well on which our public also or a lot of commodities a lot of our assets and i think that's the way to protect themselves now the flip side with us you know since we haven't had a audit of our historical research since i don't know what it is you're sure was but it was you know many many decades ago no one really knows of us the us is official gold reserves are actually correct so i think it added a day it depends on you know who has the most precious metals and hard assets of ours who will survive you know the currency game of chicken that we're seeing ok

well in those terms clearly the u.s. has an advantage if the gall that they say that they have in fort knox is actually there approximately eight thousand tons versus john us supply i believe it's somewhere in the area of three thousand tons they have said that they want to increase that level by four or five thousand tons but i want to ask you something you know you're over there and smart knowledge you dot com so let me ask you a question theoretical what if what if china. decides to play this game of chicken and by announcing that they're going to monetize their gold supply and be the first country in the world to monetize their gold supply what effect would this have the fact that they have less gold to monetise would actually work in their favor because it would therefore equal a concurrent devaluation of their currency if you know what i'm driving at you

given this any thought j.s. kim yeah i think the first country to do that. because everyone what it will once own their currency and everyone will get rid of all the other views are basically backed by no way or credit or governments which is basically nothing right so a paper purse. actually. you know accomplished back all was certainly you know strip in their domestic country a strength in their economy great right and the fact that they actually have less gold than the us would work as a simultaneous devaluation of their currency which would help their export market so it's a double one two punch if they were to monetize their gold so now looking at a two thousand and eleven j.s. camp what are your predictions some of the two or three trends you see going forward for the rest of the air now easy tries to go it's overall continue to rise . because of the getting. greater bouts of volatility

both that upside and downside but oh. you know a hundred dollar moves a goal about the economy by are you surprised to see it always on her dollars so her moves up to two dollars a day i wouldn't be surprised to see that perhaps towards the latter part of two thousand and eleven maybe not so much to get it but i do big that we're going to move out of. a which is basically you know we saw stock markets are calm even though you have on. women rising in the united states and much of the western world even though it is you know about. ever not the most all sixty minutes oh most ago it's either place in the us was what eight percent or we all knows about eighty percent or so. you know transit are you going to see more volatility you did stock markets because obviously the years you know as much as broad cause a short term. rise in the stock markets that sort of the some point in time that

brought those break down you know that meddling in the market so what is surprise me see another flash crash you know happened in two thousand and eleven again right and getting over to this inflation number that bernanke is talking about of course the way to get to the quote unquote real interest rates is to take the current discount rate subtract the c.p.i. number the real c.p.i. number and you end up with the real interest rates going forward and of course that number currently is negative which means everyone's losing purchasing power which means again people are looking to revive their fortunes in the precious metals markets is that what would you say is well yeah. because i can't understand how anyone in the us a because i still talk to a lot of people in america that they believe that there's actually economic recovery out and you know they believe all the propaganda because certainly update

people were introspective enough to take a look at their quality of life i think it was see that their quality of life and their lifestyle is decreasing just because of what you said because certainly the crease that is certainly for corporate america increasing. you know basically because the living adjustment they get certainly does not a tree does not equate with the devaluation of the dollar so we have much more places and we have more taxes now so i think that american. all across the board maybe the richest top one percent of america as lost a great deal of your life all right j.s. kim thanks again for being on the kaiser report ok. and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i want to thank my guest j.s. kim of smart knowledge you dot com if you want to send me an e-mail please do so at kaiser report at art.