six by more than two and a half percent news the company was acquiring more assets in russia is a good quick reason apparently not encouraging investments rather than existing companies who are down around three percent after the company reported an eight billion dollars loss from the recent ice storm in moscow region oil and gas companies were on the rise with lukoil among the leaders gaining nearly two percent on the month sex. after a very strong two previous two days we see kind of consolidation or correction in fact what we see in. the stores which were lacking big growth so yesterday kitching up today for example is better but those who perform the stream you will see some correction maybe some profit taking again from small accounts i think big culture especially internationally cancer just started building the positions in the russian market and we also hear that also there are some locations relocation from turkey for example into russia and we think that these growth will continue

well they're going to make for him is promoting the fairest business new rules are being implemented to improve the gender balance at the annual meeting of movers and shakers in this with ski resort. delegations will now have to bring at least one woman in every five senior executives female delegates made up around seventeen percent in the for last year so we have time for now we'll be back in one hour's time headlines are next to stay with us.

very warm welcome back it's half past the hour a month davis is r t i learned that the majority of the responsibility for the plane crash which killed its president last april but also small scale to carry out

further investigations at a news conference the polish prime minister is that the incident won't spoil good relations with russia. signing the key arms reduction treaty with the u.s. and relations with the e.u. a naysayer was highlighted by russia's foreign minister so they gave up for office summed up the kremlin's international actions in twenty ten at a press conference in moscow. and of cholera outbreak which was the slow reconstruction group's hayseed a year after the earthquake but for many haitian immigrants in the u.s. also the future might hold for that as they face deportation up next matt skies and stacey herbert talk about the deepening crisis this chopping america's poor take away. for the full story we've got. the biggest issues getting voice face to face with the news makers.

i am max kaiser and this is the kaiser report boy lots going on states to talk to me max i have the first headline here greenspan challenges critics to prove him wrong really tell me about alan greenspan so this is him on wall street journal your career at this point almost mind me someone of brett farve who was america's best love quarterback and now in retrospect his legacy looks somewhat target tarnished and do you feel that that need to defend your like to see what do you

want to be remembered for. well on my bench and view. through a lot of the facts to forward your answer to. my critics. on basically some of the can prove that i am wrong that if my analysis of what the criticisms were are accurate. which i think they go for then i would prefer that people change their minds but. if they prove i'm wrong. which they would be as bipolar disease areas i'm still proving himself wrong were you wrong. in other words your view of the world. your ideology was not right it was not worth your precisely your that's precisely the reason i was shocked because i've been going for forty years or more we're very considerable over which were we were i

want to go over some headlines because we of course are critics of alan greenspan you know and i want to go over some just the headlines that prove him wrong china safe official warns fed monetary policies are creating inflationary bubbles stimulate global f.x. intervention so this is lew way of china's state administration of foreign exchange and he said that the fed's quantitative easing program may have some stimulus impact on the u.s. in the short term but also that it would add to global inflation pressure and fuel asset bubbles well let me explain something to you stacy what about the global financial situation you say you've got the central banks you've got the commercial banks you've got the global banking system as it is and this system is held together by various financial transference mechanisms trading markets that goes on in two thousand and eight it broke and since two thousand and eight central banks

have been flooding the globe with credit but because the basic plumbing of the global finance is broken the credit that they are expanding with goes into two places number one paper derivatives that are driving the cost of food higher and paper credit default swaps that are crashing the european bond market so people say well is it inflation or deflation it's not other inflation or deflation it's a bust and global finance system that's the central banks are responding to by flooding with more credit which is going into derivative market in such a way as to force food prices in india higher and bone prices derivatives credit fault swaps in europe lower that's should be plain to anyone watching this thing even to. believe the triangle. so it's what you might call schizo flay shannon or psycho fallacious it's cycle flow should. flow should it's a truck. oh it's

a beautiful ocean well it's broken so that's my point station i want a system is broken but you see you can't get up and say all the system's broken we need to fix the system because because it would mean that well who broke the system or bernanke you broke the system known greenspan broke the system then want to admit that they broke the system but you know what you broke it you won't it yes but perhaps alan greenspan is admitting it we don't know he speaks in fed speak and remember that's all code so always after the fact he could say well that's what i meant by the code words i used. he does speak and in fed speak another term for that would be he lives he speaks out of both sides of mouth here's an example in this next headline of inflation chen tayo tolls price your feet east so rising maize prices could force the price of tortillas up by fifty percent maize remains central to mexicans diet's each of them gets to ninety kilos of tortillas a year we've seen this movie before states ever in two thousand and eight there was

a huge spike in paper commodity prices that cause all kinds of dislocation again this is nothing to do with the sound policies that should be implemented to encourage equilibrium in the system this is a broken banking system and the more that they that they flood the system with credit thinking that's going to help the worse the situation becomes well that's exactly correct and alan greenspan as we were reporting at the top of the show he is saying that you know his policies of trickle down basically flood give the bankers as much money as they need and it will trickle down to everybody else what we're seeing is the exact opposite all that's trickling down to the people is inflation on the ground and asset. isis going out of control while wages remain the same paper inflation so food prices in india they're not going up because the demand for food in india is going up mexico or mexico either. anywhere you see

price food inflation is because the derivatives a trade inflation being fueled by burning same thing in europe there is to see bond prices crashing as at the current the fall swaps fed by all the currency and credit being put in the system is forcing traders to speculate more on crushing bone prices and the other important consequence of this inflation to know isn't the phrase common among mexicans it's called seeing maize no i saying there's no point in that one without corn there is no country without corn and nothing man then nothing with corn so we're going to see that in this next headline deepening crisis traps america's have nots so the u.s. is drifting from a financial crisis to a deeper and more insidious social crisis says the telegraph in the u.k. and to this they point out the economic not the actual sales numbers sales the cadillac cars have jumped to thirty five percent porsche sales are up twenty nine percent carty a louis ton have helped boost the luxury good stock index by almost fifty percent

since october in the meantime down below where the poor people in bottom ninety nine percent shop best buy target and walmart have languished doesn't again this is the result of a broken financial system let me give you the knowledge of when the water main in your town breaks and you look out your window in the street is flooded with water but you can't get any water on in your town. this is exactly what's going on the system is being flooded with credit at the top end with paper acid speculation and paper commodity inflation paper futures speculation which creates the collateral for the people who are manipulating and benefiting from the situation. gotten by leave it to all stuff meanwhile other people can't get anything out of town because it's broken and they're experiencing quote unquote de flay sion but it's cause both of deflation and the inflation are caused by the exact same thing broken plumbing

at the global financial level which is like a water main break this is a central bank mechanism break that has affected the entire global banking system is effectively broken since lehman collapsed in two thousand and eight we're living on borrowed time the system is completely fricken broken and none no central banker no government policymakers no leader in america anywhere in the world is stepping up to the plane saying this is them is broken we need to fundamentally fix the only guy who couldn't fix the system is paul volcker and he's being asked to leave so the article goes on to point out that fourteen percent of the population in america is on food stamps the u.s. conference of mayors is reporting that visits to soup kitchens are twenty four percent this year they telegraph says such as the blighted fruit a federal reserve policy at the fed no longer even denies that the purpose of its latest blast of bond purchases or q e two is to drive up wall street perhaps because it has so signally failed to achieve its other purpose of driving down

borrowing costs getting back to my water main break analogy the people who are being flooded by the problem are repackaging the water and marking it up in price and selling to the people who are now running out of water they're taking advantage of the situation that's fundamentally cracked and broken and wall street is that's what they're doing in the city of london as well system crashed and they're making a market like side bets like you find in any kind of disaster zone where suddenly the price of water skyrockets in a disaster zones all over the world and disaster strikes here the banking disaster has given folks like goldman sachs and j.p. morgan and wall street banks they're taking advantage of the situation reselling water or credit or money or liquidity that should be reasonably priced guaranteed as part of an equitable market and they are making a killing literally because. people are dying in the street what you mentioned that paul volcker was ousted the headline reads the truth comes out paul volcker was forced out because the white house is going more pro-business and we know it

pro-business means now nowadays and that means massive monetary inflation that helps them and destroys the purchasing power and quality of life for the bottom ninety nine percent volcker known for taming inflation in the one nine hundred eighty s. was disappointed with the way his advisory group became a public relations tool for the white house as its meetings with the president were televised live making honest discussion difficult to conduct the person familiar with his views said you know the first pro-business is code for corporate pro genocide we have to remember they're in fed speak everything is fed speak it's all code to communicate something just to these insiders while actually you know confusing the rest of the population that brings me to this final headline cash for gold offer bolsters h. and t. and this is in the united kingdom and this pawnbroker in the u.k. their profits are soaring their margins are now about thirty percent and the reason

is because there's been stunning gold purchasing volumes going on people are turning in their gold for cash do ransack the proles up the bottom suckers of course at the top it'll be reversed you'll really have the signal that gold or silver has reached the top of their price action and so the reverse is true until you start to see people hawking gold and silver on t.v. in this way and in the ghettos as we see and now we have a video that came in actually max from the ghetto and this is from big b. keller and he's responding to a flyer he received asking for him to send their gold for cash just watch this video this guy is on the ball. before a show. wasn't here to show you some else look it also came in the mail today. this little. brochure this little worthless brochure came to me from

some of the small had some little small had operation out of baltimore it's called precious metal liquidators trad. who agree with me into giving up my gold soon presses models for worthless k. . tell you what i'm won't do. only this one here back to the. some of its. already stay sara thanks so much again for being on the kaiser report thank you when we come back much more. don't go away. for the we've got. the biggest issues get a human voice ceased to face with the news makers.

will. you delete it and science. from. the future covered. welcome back to the kaiser report time now to go to denver and talk with steve keen steve king is a professor of finance and economics in australia he's also the author of debugging economics and blogs debt deflation dot com steve keener usually in australia today here in denver welcome back to the kaiser report thanks max great be back with you again so what brings you to denver well i've actually thought i could think of a title of an old tom hanks movie to say what i'm doing here you know video sleepless in seattle i've been down to join clueless a denver and i think there was a movie called eight things to do when you're dead in denver well

a lot of the dod told us to go in there is an economic association annual conference which is what i've just gone so i gave us a session with a lot of informed people about why the process occurred and whether it's over yet and i said to a lot of probably expression but economic morons noted it being what it was a crisis and neoclassical economics always began. the belief that capitalism is fundamentally stable is almost actually presume it always occurs in a. behavior in equilibrium and they continue to think that way after a financial process that made it extremely obvious that that's not the case and so what i did was go along to a number of sessions with their classical economists really giving their ideas about what caused the process. and in fact that they had no cause whatsoever or way they were saying would that change the way they thought because of the cross the fundamental answer was not. that familiar was. just not the remarkable

america to show which says it'll have a pop up on the screen i'll show you the tape that's what's on the camera this is a quote from tines back in not in thirty six when he wrote the general theory which none of these dollars of rich even if they call themselves kinds of them and what it says is that you can write about sight out loud the difficulty was not in the new ideas but escaping from the old ones and kinds continues a bit longer than a chain shook an adult to say the ramify for those of us have been brought up thinking this way into every corner down the line and that was clearly because of the new oppressor of the economist at this conference all right now when i listen to you speak i think a little bit about jim records i don't know if you follow jim records work or not but he is also calls himself a systems analyst and he looks at the economics as a systems in a way you look at various systems the did you know that's the best word for it and engineering is that that's the basis of engineering this dies seven four seven is

a system now one economist that seems to have gotten it is hyman minsky talk a little bit about minsky and in the minsky moment what that means and are we at one of those moments we've been one of the would have been another the moment i think we call that they've got nothing to miss came out of the closet minsky millennia because minsky talked about a series of financial sokal each of which led to. economy having a high level of did at the end of the socket and had at the beginning leading ultimately to one with as much to the system of the collapse under its own wife unable to finance the debt and that's exactly where we are that's been my whole theoretically reading of x. modeling miscues hypothesis putting into mathematical form which don't consider the cycle to regard work its fundamentally a system as it systems engineering model of the economy and yes it does have those characteristics and you contradict the future of this even they can say what's likely to happen when i look at it i can say it was certainly there in the regime where i mean ski breakdown is going to occur and that's why i came out publicly in

two thousand and five late two thousand and five and said we're in for the biggest process of pool so i've precious ill and of course the new kruskal economists who live in this will they see the system boys beings equilibrium and if it gets shocked or tune into equilibrium they would simply incapable of seeing this happen ok now the neoclassical economists and the typical way that economics is being reported in the mainstream press it works if you don't include the debt and what's key here is that the debt that you talk about building up over years for the most part is held off the balance sheet and is invisible to some degree because interest rates have been trending lower and have been kept low recently in last couple years through the machinations of the central banking system but this huge off balance sheet debt pile which no one really knows exactly

what the size of it is estimates come from are from five trillion to twenty trillion eclipsing in fact the size of the visible economy but this this is where a lot of this the permutations and the subtle convolutions of unpredictability are occurring and now they're bleeding in. in to this system in terms of the sun and crashes and flash crashes and economic events most of it's held off the balance sheet is there any way to get policy makers to force the banks to be transparent about the trillions of dollars that they're not disclosing. match i'd actually say that if the visible stuff. large enough to cause across us and the visible stuff in america's skies in terms of the profit sector at that level take that through just under three hundred percent of its shape in a snaffle and two hundred seventy percent of its g.d.p.

that's the on the books so that alone was enough to cause the process and the reason that the classical didn't see this coming fundamentally they do not include private debt in their modeling at all they don't even have the what we call them emitted variable problem that they've got the right variables in their equations even and their questions themselves are wrong but that stuff about the focus off of the cause is always worse than the record numbers this is what people like bill black or red brilliant at finding out you go back and do the forensics later you find that this much lying and a fraud going on and fundamentally putting stuff off the balance sheets is legal fraud that after fosamax situation was in the record numbers tell you that the only way to get the banks are caught that on the books is after the banks have already completely collapsed and of course if you keep on trying to prop the banks up what they're doing is a bit like the situation of the greek economy which of course the big help in the mendacious this five goldman sachs' they say oh now i thought this is a level that we can type with this and of course it's not that level of debt they

continue going down you try to revive them by somewhat that you're telling us their problem they continue collapsing and only falling off that really collapses say just how much they're carrying the cost in the name tom they've accumulated yet more debt so want to deny ing reality which is the i think that we call that in that the true profession of central bank has budget reality make the ultimate reality worse ok so just to review. the the actual debt in the u.s. is not the roughly one almost one hundred percent that they talk about when they raise the debt ceiling to fourteen trillion and this is equaling one to one the g.d.p. when it's closer to four hundred percent if you include private debt corporate debt but i want to move on to australia for a second now when you look at things like the floods that are going on in australia steve king which are expected to cost billions of dollars as it shuts down the mining industry what sort of impact does this have on a highly leveraged economy like australia we're not we liberals you're very fragile

and therefore a simple show that you can do easily handle when you're in a robust situation because when they can knock you over the edge now what's thing of the floods will do that but i think it's looking orchestrators getting close to extol because all the things that managed to make us shine through that process so now turning to the other direction and the floods are really one of those classic exoticness of in sicamous like to say that every every stock of in every every deviation from equilibrium is caused by an exhaustion of severe that's nonsense the system hasn't gotten this instability to it but of course if you're in don't initially unstable when you need the edge and there's something truly exultant it's luck but this wasn't because it wasn't caused by the economy come in and whack you then bang you can suddenly go from looking like american athlete being in intensive care but certainly that could be it's yet another factor which might make two thousand and eleven not the year the antibodies are there just to check in on the australian housing market famously housing market has resisted the global deflationary pressures that have sunk the housing market in the us and other places

because the government australia of course came in with a huge subsidy package to keep it afloat. and given the current stress now with the environmental impact were are we in the housing in australia market at the at this time is it still hanging in there are that started to turn or is it going to shut. everybody and just continue to go higher now so i decided to turn it's quite amusing watching the change of a trick by the property spruikers down here or as they property rather down there isn't a company in denver that was saying house prices go as raw as now the study so they might fall the month of rogers quickly. the classic i think fisher house prices for a what if you'd been a thief is to be a family high plateau that's that's pretty much summarizing what they're saying the stats are saying something different when that when the government was taken out of this game they called it the first time when they doubled the amount of money they gave to prospective boss to buy an established house from seven thousand australian

dollars which is roughly seven thousand us their size to fourteen thousand australian a twenty one thousand to somebody buying a new place that regarded the property bubble that was starting to burst back in two thousand and five and house prosperous twenty percent pretty much in one year and there are cycles there's no bubble where the government helped cause the bubble to close the financial sector found that the bubble so moby's did rise by another six percent of g.d.p. to be even higher as a proportion of to say than america now the process is twenty otherwise so the first quarter after the first time ventus came as i call it because of the vendors got the money not the boss after that expired house project as by five percent they're about to about three percent this quarter after that two percent last quarter zero point one percent op and that's all that because no been with the city still had a bubble dying on the other capital cities in this trailer all had negative about a modest two percent and now the news is coming through that when the nick said if it does come out at the beginning of february we should see

a negative figure for this train and housing market as a whole and ironically that's probably the worst in the mining states because and there is been doing far worse it seems than the rest of the country even though they are supposedly benefiting from the china stimulus so the housing market in australia is falling coming off the boil and i don't think the government can turn up the oven and the one small so in australia the environment is. proving to folks that it's unpredictable that environmental catastrophes happen in ways that you cannot fully be prepared for due to the fact that the environment part of a huge unstable system now in economics and of course going back to abse mithi to a lot of it's inspiration from observing nature when he wrote wealth of nations and during the enlightenment which brought us neoclassical economics to begin with it seems to have been ignored but he looked at nature he said systems need to be mimicked in certain way so he they mimic the systems except the part about the fact that they're highly unpredictable because these are very fluid systems so folks are

in denial about the ecology they're in denial about the economy my last question is if you were to do an arbitrage between denial in australia and denial in america now that you've been in denver a little bit where is the denial deepest about the ecological economic disasters of or and the ecological economic disasters in australia which population is deeper in denial oh astray without a doubt america is truly in a depression let's stop to call it what it is made as you and i both know the real what about employment america is closer to seventeen percent than it is to the recorded number because when somebody stopped looking who would the three would measure american publishers or sexual climate right to drop them off the list that's why they open up an item on point four percent most recently so about one in said one in six americans is out of a job and the mood of it is to prist even the economist about so.