author of journey into the whirlwind later adapted it will play the performance always attracts a full house each time the actors receive a standing ovation. but it should hardly comes a surprise nearly every russian family had to endure the force of stalin's repressions.

new more to say russia defends its reporting to 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 if no consensus ten thousand would moscow but both sides hope that bilateral relations will not be harmed by being best to

gay friends. from arms reduction to a reset in u.s. relations russia's foreign minister gives his rondout of twenty intensive treatments certainly enough love is confident that russia and nato will find common ground over a joint missile defense project in europe. and at the ballot turn at the u.s. refuse depredations to haiti despite the humanitarian crisis still unfolding in the caribbean state officials estimate that around seven hundred haitians with criminal records have been set back this year alone human rights activists say the deportees could be facing death and the country is still recovering from an earthquake and a call in or out. and coming up very shortly max cars are and stacy herbert talk about the deepening crisis that stropping america's poor.

i am max kaiser and this is the kaiser report boy lots going on stacy herbert 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 is 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 my been some view that.

you know a lot of the facts to fall with your i have answered. my critics i've put those on basically said that if those can prove that i am wrong that if my analysis of what the criticisms were. accurate. which i think they were then i would prefer that people turn to 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 exceptionally well i want to go over some headlines because we 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 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 still together by various financial transference mechanisms trading markets that goes on in two thousand and eight it broke 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 as of inflation or deflation it's not either 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 bond prices derivatives korda fault swaps in europe lower that's should be plain to anyone watching this thing even to. believe. go. so it's what you might call schizo flake or psycho fallacious it's cycle flow should. flow should it's a truck. oh it's a beautiful. well that's broken so that's my point is you know what the 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 i 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 you know speak and in fed speak another term for that would be the law is he speaking out of both sides of mouth here's an example in this next headline of inflation ken tayo tolls price your feet just so rising maize prices could force the price of tortillas up by fifty percent maize remains central to mexicans diets each of them gets to ninety kilos of tortillas a year we've seen this movie before stacy ever in two thousand and eight there was a huge spike in paper a 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 that people is inflation on the ground and asset. i says 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 are trade inflation being fueled by burning the same thing in europe there is to see bond prices crashing is that the current the false swaps fed by all the currency in 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 eyepiece seen maise no point in that what 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 of cadillac cars have jumped to thirty five percent porsche sales are up twenty nine percent carty a louis tahn 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 ok 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 to. 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 flée 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 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 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 not. 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 where you 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. 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 some of the small. some little small roshon out of baltimore it's called precious metal liquidate it's

. trying to. me it's a given of my gold soon presses models for worthless k. . i tell you what i'm want do only assume this right here back to them. with a letter. telling me to. stay sarah thanks so much again for being on the kaiser report thank you when we come back much more. don't go away.

we've gone to. the biggest issues get a human voice ceased to face with the news makers. you believe just in science to. the future ever heard. 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 deep bonking economics and blogs debt deflation dot com steve keener usually in australia today you're 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 could think of a title of an old tom hanks movie to say what i'm doing here you know the old

sleepless in seattle i've been down enjoying clueless and denver and i think there was a movie called eight things to do when you're dead in denver would not have been not thought of as a good in urban economic association annual conference which is what i'm just 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 decide to a lot of. the expression but economic morons noted it in being aware that it was a crisis and near possible economics always began with the belief that capitalism is fundamentally stable is almost they actually presumed it always occurs and it. has its behavior in equilibrium and they continue to think that way after a financial process we've made it extremely obvious that that's not the case and so what i did was go along to a number of sessions where they had possible economists really giving their ideas about what caused the process. and in fact that had no cause whatsoever or way they were saying would they change the way they thought because of the cross and the

fundamental answer was not. so that to me was just not that remarkable i'm wearing it to show which says it all is of a pop up of a screen i'll show you the two should have worked well on the camera this is a quote from campaigns back in not in thirty six when he wrote the general theory which none of these dogs have writ even if they call themselves kinds and what it says is that if you can read of all sight out aloud the difficulty was not in the new ideas but escaping from the old ones and kinds continues because given in to show and all to say that ramify for those of us have been brought up thinking this way into every corner of down the line and that was clearly the case of the new across 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 rickards work or not but he is also calls himself a systems analyst and he looks at economics as a systems in a way you look at various systems you know that's the best word for it and

engineering is that that's the basis of engineering these days so a whole seven is a system now one economist that seems to have gotten it is i mean minsky that's not going about minsky and are in the minsky moment what that means and are we at one of those moments we've been one of them would have been in not in the moment they were called though the commitments came out of the close of the miscue millennia because minsky talked about a series of financial sock holes each of 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 of the collapses under its own white and i will to finance the debt and that's exactly where we are that's been my whole theoretically or you know max modeling miscues hypothesis but in the mathematical form which includes it in a cycle that regard work it's 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 though you can say

what's likely to happen. when i look at it i can say it was certainly in the 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 going to the biggest process of full time precious so and of course today across the economists who live in this world where they see the system boys beings librium and it shocks are tuning to equilibrium they simply incapable of seeing this happen ok now the neo classical 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 to the system in terms of these sudden crashes and flass crashes and economic events most of it's held off the balance you deserve anyway to get policymakers to force the banks to be transparent about the trillions of dollars that they're not disclosing well so i'd actually say that if the visible stuff a. large enough to cause across us and visible stuff in america's case in

terms of the private sector debt level pigott. 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 a lot 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 so they don't even have that it would call them emitted variable problem that 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 you go back and do the forensics later you find that this so much lying and a fraud going on and fundamentally putting stuff off the balance sheets is legal fraud that africa was in my situation was in the recorded 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 hope and the

mendacious this by 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 tried or of often by somewhat telling us their problem they continue collapsing and only falling off that i really collapses see just how much they're carrying the cost in the name time they've accumulated yet no debt so what does the gnawing reality which is the i think that we call that the net the true profession of central bankers by denying reality you make the ultimate reality worse ok so just to review the actual debt in the us is not the roughly 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. but 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 cane which are expected to cause billions of dollars as it shuts down the mining industry what sort of impact does this have on

a highly. lever's economy like australia when you hardly labor you very fragile and therefore a simple shop 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 the process of soap and now turning in the other direction and the floods are really one of those classic exoticness of insecure all of us 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 indonesian asli unstable when you need the age and then something truly exoticness luckless wasn't because that was when 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 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 more 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 shock everybody and just continue to go higher now it's good it's not a turn it's quite amusing watching the change of rhetoric by the appropriate spruikers down here or as they property rather than down there simply calmly and into the as saying that house prices always ra's now the saudis are they much will the money rises quickly they were the big question fisher house process rich what it could have been a p.p.p. used to be of the middle the high plateau that's that's pretty much summarizing what they're saying the stats are saying something different when that boost from the government was taken out of this this game they've 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 dollar 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 rose twenty percent pretty much in one year and there was no bubble where the government helped cause the bubble to close the financial sector funded the bubble so moses did rise by another six percent of g.d.p. to be even higher as a reporter to pay than america now the process is turning the otherwise so the first quarter to the first time then this game as i call it was a the vendors got the money not the cause that expired house project was by five percent they're about two to three percent this quarter after that two percent last quarter of 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

modest percent and now the news is coming through that with an excited because come out at the beginning of february we should see a negative figure for this trade in housing market as a whole and ironically that's probably the worst in the mining sites because there is been doing was it seems that the rest of the country even though they are supposedly benefiting from the china stimulus so the housing market in australia is folly coming off the boil and i don't think the intent of 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 adam smith you do a lot of inspiration from observing nature when you run the 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 and he said systems need to be mimicked

in certain way. 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 of america is truly in a depression let's stop to call it what it is made as you know you and i both know the real of unemployment america is closer to seventeen percent than it is to the record now because when somebody stopped looking who would the three would measure american publishers actually plummet right drops of off the list that's why they've opened up an item on point four percent most recently.