but it should hardly becomes a surprise nearly every russian family. of stalin for oppression. thank you.

leave. no more to say russia defends its report into the plane crash that killed poland's president as warsaw continues with its own probe the polish prime minister says he may call on international experts no consensus going around with moscow but both sides hope that bilateral relations will not be called by the investigations. arms

reduction to a reset in u.s. relations russia's foreign minister did say his rundown of twenty tons of change that's sergei lavrov was called to run for at nato will find common ground overjoyed to solve defense project in europe. and a valid target at the last few weeks deputations to haiti despite the humanitarian crisis still unfolding in the caribbean state officials estimate that around seven hundred haitians with criminal records will be sent back this year alone and human rights activists say the deportees could be facing death in the country still recovering from an earthquake and a calder outbreak coming up very shortly box cars are at stacy herbert talk about the deepening crisis that's trapping america's poor.

i am max kaiser and this is the kaiser report boy lots going on stacy herbert talk to me well 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 that. through a lot of the facts to fall with your i have answered. my critics. on

basic lucetta but if those can prove that i am wrong that if my analysis of what the criticisms were are accurate. which i think they were then i would prefer the people to manage their minds but. if they prove i'm wrong. which they would be as bipolar disease areas i'm still proving himself wrong where you are wrong. partially in other words your view of the world your ideology was not right it was not worth your precisely you're right that's precisely the reason i was shocked because i've been going for forty years or more where the very considerable evidence that it was working really well i want to go over some headlines because we are. of course our critics have 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 here but about the global financial situation you see 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 under inflation or deflation it's a busted global finance system that's the central banks are responding to by flooding with more credit which is going into the 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 are true goal. so it's what you might call schizo flay shannon or psycho fallacious it's side cycle flow should. flow should it's a truck. oh it's a beautiful. well that's broken so that's my point station i want a system is broken but you see benbrika 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 won't permit you broke the system and alan greenspan broke the system

letter 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 those code words i used. these he does speak and in fed speak another term for that would be he lives he speak of out of both sides of mouth here's an example in this next headline of inflation ken teo tolls price your feet east so rising maize prices could force the price of tortillas up by fifty percent maize remains central to mexico's diets 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 it's where 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 is that the current the fall swaps fed by all the currency in credit being put into 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 without 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 car to a louis time on 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 home stuff meanwhile other people can't get anything out of town because it's broken and they're experiencing quote unquote de fleishman but it's cause both a deflation and the inflation are caused by the exact same thing a 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 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 of federal reserve policy 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 going 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 them

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 in a 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 no. people are dying on the street when you mention 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 what 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 trial to to. well see here so some else look it also came in the middle of the day. brochure this will worthless brochure came to me from someone small. some little small roshon out of baltimore it's called precious no liquid day. trying to.

me it's a given out my gold soon presses models for worthless k. . so you would. only assume this right here back to them. with a letter. telling me to. stay sara thanks so much again for being on the kaiser report thank you when we come back much more south doug go away.

it's filled with joy. with parades and. inspiring people with insouciance. but it was everything really good. to. go she shared with her diary it became evidence in the trial. activity. the evidence which condemned to

a label. the diary of a. welcome back to the kaiser report time now to go to denver and talk with steve keen steve keen is a professor of finance and economics in australia he's also the author of debugging economics and blogs debt deflation dot com steve keen are usually in australia today or in denver welcome back to the kaiser report thanks max as our great be back on with you again so what brings you to denver well i've actually thought i couldn't figure the title of an old out tom hanks movie to say what i'm doing here you know video sleepless in seattle i've been down to join clovis and denver and i think there was a movie called eight things to do when you're dead in denver well a lot of the god both of us to go to the american economic association annual conference which is what i've just so i gave us a session. with a lot of informed people about why the cross is

a couldn't whether it's either yet and i disagree a lot of. pressure but economic morons know that if it was a process and near classical economics or was again for the place 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 it 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 are either getting their ideas about what caused the process. and the fact that they had no cause whatsoever or way they were saying with the change the way they thought because of the cross a fundamental answer was not. that to me it 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. on the camera this is a quote from taliban's back in not in thirty six when he wrote the general theory

which none of these guys are great even if they call themselves kinds of them and what it says is that if you can raise a ball say it 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 that ramify for those of us have been brought up thinking this way into every corner down the line and that was clearly the cries of the nay oppressor the economists 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's also calls himself a systems analyst and he looks at 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 these guys seven four seven is a system now one economist that seems to have gotten it is hyman minsky i thought a little bit about minsky and all in the minsky moment what that. means and i we at

one of those moments when i've been one of them would have been in not in the moment they would call though they believe i go meet them in scheme and at the close of the miscue millennia because minsky talked about a series of financial stock old age which led to the economy having a high level of did at the end of the socket it had at the beginning leading ultimately to one with as much to the system that it collapses under its own wife and i want to finance the debt and that's exactly where we are but that's been my whole theoretically reading of x. modeling miscues hypothesis putting in a mathematical form which can put it in a cycle to regard with its fundamentally a systems 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 full time rush distills and of course the new crustal economists who live in this will they see the system boys beings equilibrium and if it shocks are

tuning to 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 unpredictability are occurring and now they're bleeding in to the system in terms of the sun and crashes and flash crashes and economic events most of it's held off the balance you know is there any way to get policymakers to force the banks to be transparent about the trillions of dollars that they're not disclosing. max i should say that say the digital stuff to. a large enough to cause across us and the visible stuff in america's case in terms of the profit sector at that level take that through just under three hundred percent of its shape is now holding two hundred seventy percent of its g.d.p. that's the on the books so that a lot was enough to cause the process and not the reason that the classical didn't see this coming fundamentally they do not include private debt in their modeling at all so they don't even have the buy call them emitted variable problem that they've

got the right variables in their equations even and their question themselves are wrong but that stuff about the focus off of the cause is always worse than the recorded numbers this is what people like bill black or red brilliant at finding out if you go back and do the forensics later you find that this so much lying and fraud going on and fundamentally putting stuff off the balance sheets is legal fraud that that africa was in my 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 help in the mendacious this by goldman sachs they say oh now i thought this is a little bit that we can type with this and of course it's not that level of debt they continue going down you tried to revive them by somewhat that you're telling us their problem they continue collapsing and only falling off that really collection say just how much they're carrying the coast. the meantime they've accumulated get more dead so why do denying reality which is i think that equal but

they know the true profession of central bankers by denying reality you make the ultimate reality worse ok so just to review the the actual debt in the us 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 when you hardly labor you 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 like a story is getting close to extol because all the things that managed to make us

shine through that process of soap and now turning in 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 then something truly exoticness luckless wasn't because that was what caused by the economy come in and whack you then bang you can suddenly go from looking like a marathon athlete to being in intensive care but certainly that could be it's yet another factor which might make two thousand and eleven not the year of 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 where are we in the housing in australia market at this time is it still hanging in there are that started to turn or is it going to shock 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 is a property rather down there isn't a company in denver that was saying house prices go is ra's now the saudis so they much will the money rogers quickly. the classic fish house process rich what if you'd been a thief is to be a payment of the high plateau that's that's pretty much summarizing what they're saying the sets are saying something different when that when the government was taken out of this state and they called it the first time when they doubled the amount of money they gave to prospective boz 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 six and house project rise twenty percent pretty much in one year and they're also because there's no bubble where the government helped cause the bubble to close the financial sector funded the bubble so moby's did rise by another six percent of it they to be even higher as a proportion of to pay than america now the process is attorney otherwise so the first quarter to the first time ventas game as i call it was a the vendor's got the money not the boss so that expired house project was by five percent there about two to 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 the stray old had negative about modesty at the cent 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 tray and housing market as a whole and ironically that's probably the worst in the mining sites because there is been doing that same. but the rest of the country even though they are

supposedly benefiting from the charge of stimulus so the housing market industry respond by coming off the boil and i don't think you can turn up the oven and the bistro once more 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 is part of a huge unstable system now in economics and of course going back to abse mithi to a lot of its 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.