it's like russia and china and ford artsy washington d.c. and that's an idea for now for more on the stories we covered visit our team dot com slash usa and check out our you tube page you tube dot com slash r t america i'm lauren lyster i'll see you right back here in an hour and a half for more news. wealthy british style. market dynamics come to. find out what's really happening to the global economy with a much stronger or a no holds barred look at the global financial headlines tune in to the report on our keep. a timer here broadcasting live from washington d.c.

coming up today on the big picture. he. gets to. see.

the world. bringing you the latest in science and technology from the realm for. the future of coverage. max kaiser this is the kaiser report you know a lot of people say love makes the world go round but false in fact what makes the world go round is cocaine stays there ever 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 eight listed 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. but that's quite a review well charlie sheen is the embodiment of the american dream he thinks he's winning he's really losing that's the key isn't it there's a delusion out there there's a thought process that goes in the mind of the collective unconscious that everybody in the u.s. is 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 america has gone reality t.v. and make fools of themselves and there are no women no no no they are losers 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. 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 runner 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 m p c and said to 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 this is that chinese are manufacturing of electric cars that charlie munger apparently owned before he convinced warren buffett to buy this earth because warren buffett was really the last man in finance

in america that had any moral authority whatsoever of the oracle of omaha and he was constantly referenced as the quiet a 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 schmuck like dick fold or jamie diamond or lloyd blankfein or any of the other crooks on wall street the fact that he's an almost doesn't make him any less a little all street crook and charlie monger back needs to to excuse of 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 he 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 there longly apply selectively to certain people from guys are just totally exempt from them and you see this in this following headline max how a big u.s. bank wandered billions from mexico. 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 walkover your 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 lawyers who are 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. thing and the bank paid a fine well it's three hundred seventy billion in 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 walk 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 our walk over here started really getting involved in these costs can be zero 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 to come you know and then in july of two thousand and seven ball up our code years remaining ten mexican cosseted cambio clients operating through london suddenly

stopped july two thousand and seven what happened to our guest 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 cocaine drug cartels when somebody decided to go after them they withdrew their liquid cast because remember the global economy it's all credit 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 one program is because a mexican drug cartel was drew their cash from the market as a protest against the investigation in other words. but 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 question morgan 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 borrowed three hundred fifty million at the fed discount window two days later citi group j.p. morgan chase bank of america and walker 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 set off by mexican drug the ending of the money laundering via the banks without that access to liquid cash they froze up because it perturbs out it appears that drug money was the only cash in the system americans don't have jobs nobody we'll have debt brits only have debt there is no cash there's no liquidity there's only crime alright so we covered the story at the time and we've certainly talked about this and we suspect it and we said that the 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 worth 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 doubted this so i'm glad to see now twenty at least twenty twenty five years later people are beginning 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 lop in the head of

a baby to support their crimes and they get that's what we need they're there they're the same those same two faces of the same coin they're terrorists blankfein diamond owes a whomever drug lord they're all terrorists they all revolve around cocaine and money laundering and we now we know. only quickly based on the gretchen morgenson report and others like colby of bank of course warren buffet's who know that charlie munger had it is a guy must be a horse after 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 antonio maria coast then head of the united nations

office on drugs and crime said he had evidence to suggest the proceeds from drugs and crime were the only liquid investment capital 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 but 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 that they're high on cocaine well equipped the people of moody's executives of moody's pension and. pete are need to be in rehab immediately because they're taking massive quantities of cocaine to support their delusion about max what it's suggesting 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 of the fed whether it's the fed in new york of the one in washington or going to find pablo escobar stiffing twenty tons of blow yet sniffing around the federal reserve is like the. reserve. you know charlie sheen type nostromo. all right well thank you very much thanks so much for that best journalistic piece on the cocaine trade like oh yeah thank you max well we'll be coming back a lot more right after this don't go away. we

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welcome back to the kaiserin for 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 mean that's nice to be with you now believe you have a phrase entropy made visible that's not all about you know a trippy is that force in nature. that drives us towards disorder and death and destruction it's the second law of thermodynamics and you know what it basically needs is that things run down you know your coffee cup never warms up 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 and say what we're seeing the lordly what the fukushima power plant destruction there's been a collapse in 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 when you think that fit in yes i think you know injury is really the the reason why things great there in the world but i i.v. special kits period pay these days i think they're going to be golden maybe more i think they're going to exim point in the year or two ahead they're going to decide you know we 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 kind of an out of the box idea but there you have it both an interesting thought i mean talk about michelle not about let me call neal feudalism where you've got modern societies breaking down and you've got the emergence of a cup soccer see who are pulling up the drawbridge you know all the assets are inside the club doctor scene everyone else is left outside of the in the wilderness so apply to japan as a hall is there enough of a vestige of society. the there to pick up on and i know 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 of boxes are enough of a vestige narrative to build out of could they conceivably go this in this direction james howard kunstler well i don't think we really know they do have a very deep and fine culture. and it was kind of glass that away by this two hundred year venture less than two hundred you're just realism i'm

not really sure that the choice anymore you know one of the speaking or feudalism that i do believe we're going to see is there going to be a lot of desperate people in the industrial nations who you know really kids feed their families or kids 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 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 a town called hill from sioux mare and this town got started something like eight hundred years ago by a lowball a pirate 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 i've broken down locally some stead of let's say the us 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 merge but let me ask this about japan first. i can see 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 configuration is all about to run turbines right now in 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 have you heard about this is that true

is a practical what are your thoughts on that there's no question that japan is located on the rio fire and they're part of the pacific and there's a lot of volcanic activity a lot of earthquake activity you know what one thing that a lot of people don't understand about that kind of energy is that you can actually really been down in a local sweet spot and we also don't know what happens when you sink a lot of pipe into these fractures in. places where the the crest of the earth is disturbed and you know it is me that you can actually disturb it more by doing here ok imagine 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 i catastrophe that b.p.

catastrophe what are your thoughts on these again returning to medieval is on these primitive methods i'm responding to these high tech catastrophes could people be who seem to do with the cadence you know the when people are desperate filk strange and desperate things so a sense of privacy you know they just can't you know sop up that radioactive liquid or keep it from going into the sea or getting into that room so you know they're doing with the here are the three dippin is 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 drill so here are it's very asymmetric and that's why they come up with these high tech brilliant multi could trillion dollar schemes to do. so. i mean they are invading iraq for that matter but there's no contingency plan and they thing goes wrong everyone's got their thumb up their strange saying that saying well we never thought it could possibly go wrong let's post garbage out it was

a mentality that where were these politicians and engineers i want to sociate with this they can't seem to ever imagine that anything they ever do fails the human race is kind of a comical species and you know sometimes things don't work out for us we're we like to think magically that everything is going to work just fine 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 and incredible 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 shale gas in 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 an 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 nose for gasoline or case even afford to own a car do you think they'll be any police. will repercussions of that because i do. like these because if these were not even thinking about well barack obama is putting in something new to charlie sheen of presidents and he's crapped on he's

great on twitter he's got a great twitter following but when it comes to the levering he's a catastrophe guy so and you were recently 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 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 herbicide pesticides fertilizers. you know we're going to get to a point where we're we're going to have trouble carrying that on you know there's another part of the industrial farming picture that we don't think about at all is another main thing that we use and that's 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 or credit or debt that isn't being paid back and as that money is not paid back the money vanishes from the system and there's less and less money out there for people to you know borrow to run their farms or even to do other things like buy cars or buy houses or thirty year mortgages so that 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 bit more because it's very confusing for a lot of people because what you're describing is deflation i mean just what you're describing is what happens when credit evaporates and when the ability to roll credit over. evaporates and the credit simply disappears and you have deflation which is what's happening in the real estate market which is what's driving barack obama i'm sorry ben bernanke ing 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 the flay ssion 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 fiat's money based where you have no collateral whatsoever 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 are 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 the fact that certificates in the vaults of the federal reserve and the 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 are the preferred producing perverse behavior in that system so right now 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 these like that but you know as this works out i think that we're going to see the whole. a lot more inflation and what that really boils down to is that nobody has any money when you have deflation if you get into a hyperinflation of it which tends to be a very sudden kind of

a very good 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 stacy herbert i want to thank my guests james howard kunstler if you want to send me an e-mail please do so at kaiser report at r t t v are you until next time this is max keiser saying.