question more. hungry for the we've got. the biggest issues get the human voice face to face with the news makers. who would ask you live. now about top stories a fifth priest speaking out against one of the world's most wanted terrorists and his country's tolerance of extremists is a question of by police following an arts who report. has been a longtime critic of the man behind the moscow metro and airport bombings and his mouth piece a website called the cost center. libyan rebels claim their forces have been hit

by a nato air strike a chord will be killing thirteen it's fueled local anger with the alliances tactics which are resulting in a growing number of casualties. in moscow hands a new files on the chechen massacre of one thousand four hundred over the warsaw comes a day after russia provided posed with detail documents into the plane crash that killed the country's president a year ago. ok now co-host stacy hope would look at the scandals behind the financial news headlines and explore the murky and links between the banking and the drugs trade because the report is no.

ties are this is the kaiser report you know a lot of people say love makes the world go round but saul's in fact what makes the world go round is cocaine stacy ever sky is there yes we're going to talk some torpedoes of truth today because it turns out that much of what we think is a rated or able isted is actually collateralized by a whole bunch of class a. first we're going to talk about charlie sheen's detroit disaster walk outs where the torpedo of truth or as one gentleman on you to put it charlie sheen and destroy torpedo. that's quite a review well charlie sheen is the embodiment of the american dream he thinks he's winning he's really that's the key isn't it there's a delusion out there there's a thought process thank those in the mind of the collective unconscious that

everybody in the us is a winning but in fact if you look at some of the numbers and you look at how they're doing competitive the around the world they're actually losing and like charlie sheen many americans have lost their job like charlie sheen many americans go on reality t.v. and make fools of themselves and they're not winning no no no they are losing well charlie sheen was the highest paid actor in all of hollywood just as on wall street warren buffett was the highest paid fund manager forget david sokol is the f.c.c. about to tell charlie monger to suck it in and i remember we covered this story charlie munger is warren buffett's right hand man and now david sokol who is supposed to be the heir apparent to warren buffett had to resign after it turned out that he could have been front running or insider. trading on lubrizol which he bought shares in this company prior to convincing warren buffett to buy huge chunk

of it well david sokol appeared on c n b c and said sure which i don't believe i did anything wrong charlie monger in my own three percent of b y d before he asked me to look at it for a while and this is that chinese are manufacturing of electric cars that charlie munger apparently owns before he convinced warren buffett to buy it said because warren buffett was really the last man in finance in america that had any moral authority whatsoever the oracle of omaha and he was constantly referenced as the quiet the studious graham following a good guy who would come in and see goldman sachs or before that it was solomon brothers and it turns out he's just a conniving backstabbing insider trading market manipulating schmucks like dick soiled or jamie diamond or lloyd blankfein or any of the other crooks i was treated

fact that he's in omaha doesn't make him any less of all street crook and charlie monger back needs to to excuse himself from the public forum and just disappear for a while because he's a total embarrassment i don't care how old the guy is they put on your depends and get out of dogs because your back your stinking up the joint charlie munger get out of here david sokol thinks that he will be able to get away with the same crimes that a guy like charlie monger can but i think remember the law only applies selectively to certain people some guys are just totally exempt from them and you see this in this following headline max how a big u.s. banks laundered billions from mexico's murderous drug gangs so this is the guardian news and they've done a deep investigation into the story that we've covered before which is what bank and they were. found to have laundered three hundred seventy eight billion dollars or thirty percent of mexico's g.d.p.

in this time of drug money the cocaine of cocaine yes three hundred seventy eight billion dollars three hundred seventy billion dollars loaded to our cobia which of course now is owned by warren buffett's company berkshire hathaway. and of course he's never talked about that either and it's a huge part of the mexican g.d.p. and the bank to pay the fine well it's three hundred seventy billion and money laundering through the cost can be zero and they paid one hundred ten million dollars fine or less than two percent of one year's profits from markovian while cobia is now owned by wells fargo warren buffett and six point five percent of it but from this article there's a very interesting point that i want to note that relates to this whole financial catastrophe first of all walk over here started really getting involved in these costs congo in two thousand and four just when the violence really started getting extreme and the mexican drug wars in april in may of two thousand and seven three

years later we're cobia as a result of increasing interest and pressure from the u.s. attorney general's office began to close its relationship with some of the process becomes you know and then in july of two thousand and seven all the park over years remaining ten mexican cosseted can be zero client operating through london suddenly stopped july two thousand and seven what happened to an august of two thousand and seven the world credit crunch the world credit crunch began so what we see here is that the global banking liquidity is funded from the mexican court came drug cartels when somebody decided to go after them they withdrew their liquid cash because remember the global economy it's all credit and paper money there's actually no cash except for the drug money they were they took

the drug money off the market and they crashed the global economy there is a bear stearns went bankrupt the reason lehman brothers went bankrupt is because a mexican drug cartel was drew their cash from the market as a protest against the investigation in other words. well cove you're following this correctly they had to pay a fine no further investigation was pursued presumably because if they want to after this story deeper the mexican drug cartel would threaten to withdraw the money again and throw the global economy back into a total standstill well i think they learned their lesson because let's go on to the next headline the bank run we knew so little about this is from the new york times gretchen morgenson and she looked at the federal reserve freedom of information documents that were released only last week this is based on the bloomberg news efforts to force the fed to release information that who they were loaning money to at the fed's discount window and it turns out according to

gretchen morgenson and august two thousand and seven as world financial markets were seizing up domestic and foreign banks began lining up for cash from the federal reserve bank of new york that august twentieth commerce bank of germany borrow three hundred fifty million at the fed discount window two days later citi group j.p. morgan chase bank of america and who are cobia each received five hundred million dollars now banks only go to the discount window when they're in serious crisis and they're facing a liquidity crunch thus began gretchen morgenson says the bank run that set off the financial crisis of two thousand and eight so in retrospect it was said are mexican drug gangs the ending of the money laundering via the banks without that access to liquid cash they froze up because that turns out it appears that drug money was the only cash in the system americans don't have jobs nobody wheeling and debt

brits only have get there is no cash there's no liquidity there's only crime all right so we covered the story that time and we've certainly talked about this it was so distracted it and we said to the crash of two thousand. thousand and eight the only way that the wheels of global banking system started turning again was that the money was released by the drug mexican drug lords but what we're saying today is that the reason why the crisis happened to begin with exactly yeah was that with it would be withholding of the cash and i remember let me tell you something stacey i remember just very vividly when i was working on wall street 1980's every friday we should have cocktails on park avenue and watch this parade of limousines travel down park avenue into the basement of citibank everyone knew this was money that was being loaded by citibank from drug money this was an open secret nobody got out of this so i'm glad to see now twenty at least twenty twenty five years later people begin to understand that the global finance community the

global banking system runs entirely on cocaine money so when they say well why is the war on drugs failing because they need the cash to run the banks why is the drug problem so rampant around the world because bankers need that money to pay their bonuses the bankers when we say bankers are terrorists they kill people and they have the moral equivalency of a mexican drug lord lopping the head off a baby to support their crimes and if that's what we need they're there they're the same those same two faces of the same coin they're terrorist blankfein diamond. jose whomever drug lord they're all terrorists they all revolve around cocaine and money laundering and we now we know it unequivocally based on the gretchen morgenson report and others are cobia back of course and our buffet style while that who knows of charlie munger is had it is a guy must be a horse at the time up until july two thousand and seven when money was.

circulating through the banking system from a class a drug dealing those c.d.o. backed by would be a bank j.p. morgan bank of america all these other banks that went the following month to the fed prior to that their c.e.o.'s may have been a rated following that all the downgrades happened now we first reported on this in two thousand and eight when antonia maria coast then head of the united nations office on drugs and crime said he had evidence to suggest that proceeds from drugs and crime were the only liquid investment capital of available to banks on the brink of collapse he said quote interbank loans were funded by money that originated from the drugs trade there were signs that some banks were rescued that way right and again there's another aspect to why do analysts give these studios a rating of aaa why does moody's s. and p. fitch give what is obviously garbage a aaa rating isn't it clear they're high on cocaine well it clear the people of

moody's executives of moody's pichon and s. and p. are need to be in rehab immediately because they're taking massive quantities of cocaine to support their delusion yes max what it suggests that now that walker has not been put in trouble nobody's there's no criminal sentence there's nothing but a tiny tiny tiny tiny minute little fine like pocket change they're saying it's aaa rated now because class a drugs are once again backing up the collateral that were often assets were selling i guess this is again why the federal reserve doesn't want an audit because if you open up the vaults there at the fed whether it's the fed in new york of the one in washington you're going to find pablo escobar sniffing twenty tons of blow yet you personally figure around the federal reserve is like so close to the federal reserve. you know charlie sheen type nostromo. that's rules. but i also. thank so much for that vestige of

journalistic on the cocaine trade. thank you max well will be coming back a lot more right after this don't go away that. will. bring you the latest in science and technology from around the world. we've got the future of coverage. plug in back to the kaiser report time now to go to upstate new york and talk with author and blogger james howard kunstler james welcome back to the kaiser report i

meant nice to be with you and i believe you have a phrase entropy made visible that's not all about you know entropy is that force in nature that drives us towards disorder and destruction it's the second law of thermodynamics and you know what it basically means is that things run down you know your coffee cup never warms oh more it always just cools off you know people don't go in the direction of being younger they go in the direction of being older and passing away you know things don't get better when you use them they break down or i guess this will also kind of play into what we're saying globally what the fukushima power plant destruction there's been a collapse and this just in time supply chain inventory methodology which when you

take what you take away one piece and entropy ensues and things suddenly get ugly which is the thought that's it in yes i think you know europe is really the reason why things prepared in the world but i have a special pet theory about japan these days i think they're going to be go over medieval i think they're going to at some point in the year or two ahead they're going to decide you know we've had the industrial adventure and we just can't do it anymore because we have to import over ninety five percent of our hydrocarbon fuels in energy and we really are going to be able to do that so let's go back to the eighteenth century i think that's going to happen over there i know it's going . an out of the box idea but there you have it both an interesting thought i'm we've talked about michel a lot about what we call neal feudalism where you've got modern societies breaking down and you've got the emergence of

a club takhar see who are pulling up the drawbridge you know all the assets are inside the club takhar seen everyone else is left outside of the in the wilderness so plighted japan as a whole is there enough of a vestige of society there to pick up on and i no i don't not an expert on japanese culture but it seems like they have clung to many of their medieval traditions is there just again thinking out the box is there enough of a vestige there to build out could they conceivably go this in this direction james howard kunstler well i don't think we really know that you have a very deep and fine culture. and it was kind of blasted away by this two hundred year venture less than two hundred you're very sure it industrialism on the really sure that the be sure you see the more you know one of the things speaking of feudalism that i do believe we're going to see is going to be a lot of desperate people in the industrial nations who you know really can't feed their families or to make as much money as they did before or are in some way or

other finding themselves in desperate trouble and i think what we will see is that they will sell their allegiance to some authority or person or group you know in order to have. security for food shelter and the basic necessities for life and that's the essence of feudalism when you're selling your allegiance to somebody for security or care i remember i used to live in it in the south of france in a town called bill from sir mer and this town got started something like eight hundred years ago by a local a pirate of arriving and selling people security saying let me pay a stipend to me every heir and i'll protect you from any forces that come about. so you see a return to this type of model where broken down locally so instead of let's say the u.s. being the world's global protectorate and extracting stipends from the world you

know the world has to pay its annual tribute to america and one form or another to keep them safe as the u.s. collapses the model is broken down and we see more of a medieval model merged so let me ask this about japan for a second the tomic energy industry the plants and japan they're used to essentially boil water and that's what that's what that all tonic energy configurational is all about to run turbines right now japan like iceland is sitting on huge geothermal resources i read somewhere recently that the geothermal resources could do everything supplies much power as the atomic energy industry can is have you heard about this is that true is it practical what are your thoughts on that there's a question that japan is located on the rio fire and they're part of the pacific or there's a lot of all comic activity a lot of earthquake activity you know what it will be that a lot of people don't understand about that kind of energy is that you could

actually run it down to local sweet spot we also don't know what happens when you think a lotta pipe into these fractures in. places where the the crest of the earth is disturbed and you know it may be that you can actually disturb it more by doing it ok you mentioned sticking pipes into the ground and not having a great idea how that how it all works now to stop radiation from leaking from the fukushima plant into the sea tepco has deployed a few kilos of diaper absorbent now reminds me of the cough balls thrown into the deep water horizon well during that catastrophe that b.p. catastrophe what are your thoughts on these again returning to medieval as on. primitive methods of responding to these high tech catastrophes people who people seem to do would be can't you know they when people are desperate they'll do strange and desperate things so sense of prizing you know they they just can't you

know sop up that radioactive liquid or keep it from going into the sea or getting into the ground so you know they're doing with the care i think three big pins in there yeah they're throwing diapers and garbage and whatever they can get their hands on like they did you know that the famous junk shot of the deep water trail so here out it's right symmetric and that's why they come up with these high tech brilliant multi controlling dollar schemes to do deep water drilling or have a comic energy plan of the ring of fire but nobody or invade iraq for that matter but there's no contingency plan if they thing goes wrong everyone's got their thumb up their strange tray and that's saying well i never thought it was possible the role is total garbage out it was a mentality that where were these politicians and engineers i want to so seen with this can't seem to ever imagine anything to ever do fails the human race is kind of a comical species and you know sometimes things don't work out for us so we we like to think magically that everything is going to work because for did you happen to

see mr obama's energy speech this week giving the highlights another example of our absolute inability to tell the truth to ourselves you know we just are just stuck in credible magical thinking that you know that there are huge undiscovered unexplored areas of north america that we're going to get huge amounts of oil out of it's complete nonsense and by the way larry kudlow got on t.v. last week and said we have one hundred years worth of shell shale gas and excuse me three hundred years of shale gas and president obama said we have a hundred years of shell gas and both of those statements are completely untrue we have probably about four to six years worth of. shale gas energy at the rate that we use it and maybe twelve years if you include all of the natural gas of any kind that we drill in north america you know we have these crazy ideas that we're going to run an electric car fleet well here's an interesting thing let's say by some

miracle we ripped out and electric car fleet of one hundred ten million electric cars in the usa and that's really optimistic we run over two hundred million cars ok so what do you think is going to be the political shot if only ten million people get to drive and all the rest of them are paying through the news for gasoline or katie even afford to own a car do you think they'll be any political repercussions of that because i do. these are the kinds of things we're not even thinking about well barack obama is putting south of me to charlie sheen of presidents and he spread out he's great on twitter he's got a great twitter following but when it comes to the levering he's going to ask if they are so and you were absolutely quoted as saying that you believe that industrial farming will soon and ok talk about this a little bit by industrial farming i mean what we take could be the normal way of

farming in america which is you know a huge acreage is with giant machines a lot of diesel fuel a lot of hydrocarbon based soil amendments herbicides pesticides fertilizers. you know we're going to get to a point where we're going to have trouble carrying that on and you know there's another part of the industrial farming picture that we don't think about at all there's another main thing that we use invest capital you know it takes a lot of borrowed money to run a pig. operation in the midwest and we're running out of capital and the reason we're running out of capital is because there's a huge amount of borrowed money out there credit or debt that isn't being paid back . and as that money is not. the money vanishes from the system and there's less and less money out there for people to. borrow to run their farms or even to do other

things like buy cars were buying houses or thirty year mortgages so we're facing a tremendous capital shortage that's every bit as severe as our energy problem and you know i don't really don't think we understand how it fits into the picture all right we're got about a minute left i want to talk about this a little more because it's very confusing for a lot of people because what you're describing is deflation we're describing is what happens when credit evaporates when when the ability to roll credit over evaporates and the credit simply disappears and you have inflation which is what's happening in the real estate market which is what's driving barack obama i'm sorry ben bernanke to continue his quantitative easing and his quantitative easing one two three and four but no matter how much of this credit he expands it doesn't seem to be enough to cover the black hole of debt that's emerging and the net result is deflation but at the same time you have rising energy and precious metals prices

which people point to and say aha that's inflation and the disconnect comes between having a system that's drawn on a gold standard where you could have inflation against something like gold at a system that's purely fee at money based where you have no collateral whatsoever at underlying this in this economy so we end up with what i think you would describe i know it is in you've described peak oil and they're talking about peak credit and these two things are coterminous correct that's kind of the point is it not james howard kunstler yeah and i think there are two things that are going on right now with with a good situation one is that we've used silly accounting tricks to hide the losses and hide defects. certificates in the vaults of the federal reserve and the big banks are worthless that we can't even determine what debt is not being paid back you know it's just not being recorded and the other thing is that you know as

a general principle when you introduce. distortions into a system you need a perverse producing perverse behavior in that system so right now you know the purse behavior is that the deflation just isn't being allowed to show up you know we're seeing these distortions like distortions in commodity prices and things like that but you know as this works out i think that we're going to see a whole lot more the place in and what that really boils down to is that nobody has any money when you have deflation if you get into a hyper inflation which seems to be a very sudden kind of a very it happens very quickly because people start spending money as best as they get it you know that that's having a lot of money that isn't worth anything so you can have a lot of money that's worthless or you could have no money but either way you're broke ok james howard kunstler thanks so much again for being on the kaiser report

it's nice to be here by remote control fantastic and that's going to do it for this edition of the kaiser report with me max kaiser and stacey herbert i want to thank my guests james howard kunstler if you want to send me an e-mail place this out at kaiser report at r t t v are you until next time this is max kaiser saying. home. from.

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