a new battle is going on. will the history be protected. return to terra was julian cooper story on our t.v. . with our two year recap of the headlines now with intensified nato bombardments claiming civilian lives and alleged atrocities committed by rebel forces some libyans feel betrayed after what initially started as a nation wide across the. obama announces the withdrawal of over thirty thousand u.s. troops deadly drone strikes the stepped up it's sparking fears of more civilian casualties . accused of inciting hatred and discrimination against muslims such far right politician the hurt of killed as was freed from a court in amsterdam. and bringing the best of russia at its heart and soul to

a global audience twenty four hours a day because he's a brand new documentary channel goes live with the help of oppressed. in my colleague bill daughters here in half an hour's time but for now it's because a report. for the we've got. the biggest issues get the human voice face to face with the news makers. kaiser this is the kaiser report we are back from athens where we were able to

stand up to an onslaught of tear gas from provocative jurors what's a provocative or that's a cop dressed up like an anarchist hastings here or what's next in fact i believe they were i.m.f. agents stress that has anarchists and they are tear gas canisters and c.d.'s written alongside collateralized debt swap on a tour of. this financial terrorism i think it's called credit default swaps that there are so many different names for these derivatives these days and that's actually the big topic of the day is all the debt circulating around the economy but first i want to show you this little image because we return from greece bearing gifts and this is artwork colonel pop and dry oh the people love me those who are causing all the trouble are terrorists the people hate them you know they're outside of the parliament building and screaming. brought up all the

people of race hate the parliamentarians they hate george. and i noticed you're showing him the palm of your going in the palm of my hand this is for you george as a cadet. little george as they call him so well the i.m.f. . it is in the news and you were speaking to the crowds in some thomas square constitution square and you told them that after greece would come to us lo and behold and our first headline i.m.f. downgrades us after raping and pillaging much of the world the i.m.f. bankers come home to smash and grab what they can from america i was in constitution square speaking to hundreds of folks gathered the day after the big tear gas festival and i told them point blank in my own self-interest the people of greece need to stand up to financial terrorism because greece goes down our of goes down portugal's goes down spain goes down and they're going to come to the us the us is going down by the same financial terror so please people of greece don't let

papa jails and those new computers in your country steal all of your wealth well remember as this article describes the i imagine the international monetary fund. they are the global lender they're a lender so they're pushing debt that's the product they push on to people so in fact they're warning the u.s. that a gross domestic product will grow and in ne make two point five percent this year and two point seven percent in two thousand and twelve of course those numbers are fake yet anyway but that's right the g.d.p. numbers are cooked they're fake you can't get growth by increasing the debt you could fake it for decades for every dollar and debt they created a dollar g.d.p. after world war two that has been going downhill ever since then it takes six seven eight dollars of debt to create one dollars of g.d.p. but at some point it becomes like blood transfusions you could say technically the

patient has a pulse but that's completely due to the transfusion of the blood you're not really alive there on the table there's blood circulating the patient is in fact dead but here's the i am out warning america that they've got to get there. situation in under control and remember only a few years ago two thousand and six two thousand and seven the i.m.f. was bankrupt itself and they were out of business so. stop right there let's digress a bit about the son left situation they are completely bankrupt that's why they go into a country like greece they take greece is that they use that as collateral to borrow money from other corrupt bankers to take over greece but what the i.m.f. is doing now is pulling hate paulson on a global scale but these guys are just a construct an artificial construct out of nowhere they are hold up the world economy and and act like we owe them money and people pay them and it seems to work because who are they who are these people just go away that's what you have to tell

them because right now they're saying the problem why they're threatening the u.s. is because the political drama going on where the republicans are refusing to raise the debt ceiling and they have to do this by august or early august and then the i.m.f. warns you cannot afford to have a world economy where these important decisions are postponed because you're really playing with fire well there we go again putting a gun to people said saying make a decision quick you know give us your money or your life it's a stick up because this kid saying this over and over again claiming this is the emergency give us all your money at some point you actually have to step in with some blood dislocation some kind of government functionality you've got to actually have a functioning economy this kind of bandits of the i.m.f. constantly holding people up and saying we were killing dollars actually they're not even actually demanding any real wealth what they are demanding the american people do is they're not saying you guys need to do something to sort out your g.d.p. growth to build real wages and real wealth and real productivity they're saying

increase your debt ceiling that's what we want you to do and if you do that then we will no longer downgrade you said all they want is more debt onto the american population it's a tough alison. wonder live through the looking glass for cock the nightmare or the i.m.f. is saying the path to economic glory is by increasing your debt ceiling. well ok so the i.m.f. is not threatening us politicians but let's look at what the u.s. consumer stroke citizen what their position is and how zombie us consumers menace the world and that's actually from here i don't have a picture of the headline to turn to because stephen roach and that's in the financial times and the line hey you know talking about zombies and people dead getting a blood transfusion a debt that's the same thing with these consumers is that they're designed because simmers is the walking dead they're shopping but they're dead they're dead shopping

well this is where he says the global economy is being hobbled by a new generation of zombies the economic walking dead the u.s. consumer is in the early stages of an unprecedented retrenchment deal leveraging has barely begun however he says the u.s. consumer is only down to one hundred fifteen percent of personal income is now debt down from one thirty but it needs to get down to historical averages of seventy five percent of debt to personal income they've got to continue to deal leverage which means they've got to continue to save which raise i've got to stop shopping but what do you see there you see the zombie shopping at wal-mart must buy a dog food must buy plastic crap from china but he points out that the fed and the u.s. government are actually causing the zombies they're keeping the zombies alive they keep on trying to put electrodes into zombies and make them go take on more debt just like the i.m.f. is doing to the u.s.

government now and they're saying reserve debt ceiling this is what the fed and the u.s. government are doing to the consumer stephen roach contends here they're just trying to force them to go shopping by keeping low rates and trying to encourage them to get. back into the housing market you know they offering all sorts of incentives to go into the house and mark they should install cattle prods into staring wheels of all new general motors cars then you turn on the ignition to get a huge jolt of electricity and it gets you one hundred miles an hour to the nearest shop and you start spending beyond your means wildly out of the u.s. economy to actually you know what they should also do at the same time is have george bush is what he's come on and say go shopping standing on the rubble after nine eleven but judging shoppers don't look behind me at the bottom of rubble to go back to the store put your credit cards or risk well so i have these final few headlines regarding the housing market and as i said the u.s. fed and the government are trying to force the american consumers to take on more mortgages that and the i.m.f.

is trying to force them to force those consumers to take on more mortgage debt housing crisis worse than great depression seven shocking facts about the u.s. housing market well number one is the low has announced that the average price of a home in the u.s. is about eight percent lower than it was a year ago and that it continues to fall about one percent per month look the house price of two ation is not going to get any better as long as incomes keep deteriorating i just saw an interesting statistic that one percent of americans own the same wealth as the bottom ninety percent of americans and income in america is collapsing because remember the global banks hers and glueing the i.m.f. they want income levels in china in america to be about the same which would equal about two thousand dollars a year so marriage has got a long way to go in terms of income parity which means the house prices are set to crash even case shiller index says house prices will crash another twenty five

percent and i guarantee you if they do crash another twenty five percent case shiller will come out again and say house prices will grow another twenty five percent well as you brought up income i'll go to the next headline on this because this involved income as well and its relation to. housing crisis when the economy becomes a financial circus based on debt fuelled acrobatics lessons from the great depression part thirty four tracking housing values from one thousand nine hundred to two thousand and eleven this is dr housing bubble and he looks at house prices going back to nine hundred forty all the way up to two thousand there was a direct link between house prices and us income but then from two thousand to two thousand and eleven the first time household incomes fell over a decade since the great depression we saw the largest housing bubble ever and then he shows this g.d.p. per capita in the us and that is in the blue and then you see the median household income in red that you see from two thousand as well g.d.p. per capita in the u.s.

grew straight up income went down. so americans were earning less and less every year as the housing bubble took off to historic proportions you've never seen anything like this at all in the united states but for the debt levels increased income went down yet at the top of the cycle the banks worked and they took all the equity out that they had extracted using derivatives they left the consumer with all the debt then barack obama was elected president and he came into office and the first thing you did was he matched the wealth confiscation of the creditors by giving them twenty trillion dollars more in belo money so they doubled their evil legal bets and put the consumer into twice the income impairment by now having hundreds of trillions of dollars worth of debt hanging over their head and you mention circus days you know over and you can't have a circus without

a contortionist and this is what ben bernanke he does when he gets on t.v. he's trying to convince people or hurt the economy it's actually not sure if it is the users contortion very language does. lumiere my. i don't care what mike says about ok well max finally and reading on the airplane back here from athens i did read speaking of barack obama and his policies towards america and zombies is his biggest campaign contributions come from exelon nuclear energy firm and there are serious questions about why america is not warning its citizens about the nuclear fallout happening with along the upper northwest coast northwest coast citizens are getting fried well they have called hot particles which are radioactive little particles of success human strong cmin plutonium going

falling into their lungs or turning the services of the hot pockets because there are all those things are put on micro and. microwave and his own people well the population already zombie fied from toxic debts right and on top of them you're putting radioactive waste this is like a genuine situation where you could see real lives on these emerge relock cancers all bees in the pacific northwest was like washington oregon kurt cobain's already dead so somebody knows you may see him again soon they may be coming back beautiful all right so you're over thank so much for being on the house report thank you right don't go away much more coming away so stay right there. really do you believe this is something that stems. from. the future of

coverage. i welcome back to the kaiser report all right this is a treat we've got the non-economist non-economist steve welcome back to the kaiser report it. next i say are non-economist because of course you're known for your classic text did groan king economics which you pretty much tear apart all the assumptions that people have been using to guide them through the past let's say post-war era and i would say that if you're a stock you'd be trading at all time highs because what you've been saying is all these classical models don't work and they have to take a different approach to kind of get a handle on understanding the forces that are shaping the economy and let's talk about a basket case in the world today greece and i think also mention that you're a professor of economics at the university of western sydney and you're an expert on debt deflation so clearly and grace that is

a test case example walk us through what's happening well the whole good versus an unfortunate instance of what's happening in the whole globe the whole always c d economies and the real cause of this is being a huge hit all of which is being driven by the financial sector that is knows it can only make money by creating did it but it has to find a wife persuading us to go and get into more debt than we actually want to take on values the knowledge is a bit like going to a dentist and in this want to take out more teeth it was a multi takeover more money max and you want to go through that action needs to be removed but he's persuasion would have more traits removed will be sexier so you fulfil them all to its removal and that's what's happened globally so we have final private and we should ever of had and that's what's driving the entire process now greece i don't know enough about greece to say that greece went through the same double is america or england or australia or canada or portugal or spain it's a trickster trip but they certainly had one of the right proviso a bit because

a lot of bossing them what to do in hiding this situation to get them into the c.d.o. goldman sachs so we have a process called but you much that what's a solution is put forward by the kinds of invention i think has cut wages it wasn't high wages that caused the process. ok we'll get to that a second on this debt mode keeping this in mind now of course one of the big pushers of the debt most let's say is cain's keynesian thinking but wasn't it when it came to us saying that you can go into debt during the slow times but during the good times you try to pay down that debt well it's actually kinds kind of talking about public that is really what's happened with private ok and i think what you get in reverse is that when you when you look at the financial system we're in and it's a system driven by privately created it and is also which was they feel creates credit money but you also have a government system which can create government and in the process creates fit money so there's two sources of money flowing into the economy and the

a classical economist the goals that i pillory in the banking economics mistakenly believe that the government system controls the private good like a having a you know a centrally controlled system making sure that all the cars move at the right speed on a freeway in fact what you've got is rather more like you got a whole bunch out of control cars being driven by out in the center on too many dozens of stimulants and the government's coming along in an ambulance chasing the wreckage so profit created credit drives the economy government money comes along later on and what tends to happen is when is a private crosses the way that manifest is the right of growth of gets slows down and therefore the growth of the economy slows down so the government comes in and spins are running a deficit and down once is that out now if you had a will functioning economy they need to have you know profit down sing along like this and government didn't bounce in the opposite direction and in my first modeling miscues financial instability hypothesis that's precisely what i had happening what i didn't cover in daytona paper though i did cover in

a later one in two thousand was that they can be a situation with rather than the private debt doing this new government at their own net good profit doing this and so for the government to balance it it's going to be doing the same thing in the opposite direction that's what you have what. i mean scheme and some much profit it's been taken on but the only way out of it is to take on a never ending amounts of public debt as well so you go down that route you know you've got to japan has had private stable laws is perhaps the thoughts of little public that it continues rausing trying to balance the deflationary effect of reducing private the real solution to say a gause we shouldn't have had this product in the first place and if you want to solve the process somehow abolish will reduce the real burden of the private and ironically the best way to do it and kinds made similar to the not quite as frankly as all make it now is to increase wages. increase wages ok let's get back in threes wages now this goes against

a lot of the so-called was them out there so by increasing wages you're actually helping to solve the problem you will then cause inflation which have been ages ago made this printing press argument that if you have a process it's quite simple that we haven't had to run its printing press that's where you got the helicopter been nickname from and print the money and it will cause inflation and everything will be solved well he printed money faster than anybody has ever printed government on the planet in two thousand and eight and two thousand and on literally more than doubling the level of bias money in america and what you had was a when you went into the process inflation americans running about thought percent it filled the monist true so we had the fleischmann and been literally more than doubled based money and inflation went from modest to cluster and then said heading down again so with an enormous injection of money giving it to the banks almost nothing in inflation some inflation was called but not enough to devalue the debt and fix the whole process up if you really wanted to cause inflation and therefore reduce the effective burden of that bit the way to do it is to increase wages

because then firms about no choice but to increase their process which is about no choice but to spin because costs have gone up you actually get effective inflation that one didn't henry ford figured that out he raised the wages of his workers so they could buy the. yeah yeah and again like a result though a large part of the new deal is getting decent wages to workers so when you cut the wages it looks like it's sensible to do this the whole inability to think in the feedback sense that the actual economy operates in if you cut wages you will therefore have a deflationary impact on the economy when it's already in a deflection so by driving across a little down you increase the value in norman in real terms of the outstanding debt and making a process worse what you have to do is reduce the value of that and the easiest way is to reverse the trend of the last forty years which has been trying for for the wages both in real in terms of the proportion of g.d.p. so you cause a bit you put the wages up not to actually get a much larger share of g.d.p. because you expect the inflation to come along and eroded but by reading the by the

inflation eroding with value of the dead you'll draw down the bankers share and that's the section that should be reduced why do people who rely on a way to. subsistence don't seem to be arguing this case and then america for example is the wage earner is out there demanding higher wages yeah because we don't sit in complex systems that cause the real economic behavior and we tend to think about things in a household fashion and this is actually when the a classical economics has been marvelously useful to people who want to screw up the economy actually really wants to do that but that's the impact of the theory because what it tries to get you to believe is that what applause few as an individual can be extrapolated to the social level so if you're in a household and you're running a deficit you've got to cut back the spending which means the kids come by the nintendo game going you know that's makes sense the household budget balancing budget you've got to do that because you face what i can call a budget constraint. and that works if you're at your individual level but you

would extract related to the national level that's not how the national economy functions we have banks which give a soft budget constraint so if you actually run out if you actually want more spending in the economy you borrow money from the banks and that should change and it's stimulate side. it gets them at a spot of eckert them right and they borrow money from the banks on the household level means putting your house up as collateral so you put your house up as collateral you borrow money money you've got the a.t.m. created inflation that in that way what we're saying is that. if you step away and just look at the wage earner divorced from the household and house yeah you get a much clearer picture of the problem and the solution will you what you see is that you would you're talking about there is a pleasure to feedback system because the process was all this extra debt being taken out to buy houses and that means that house process rausing because they were people who take on more debt to buy a house across houses so you get a spiral pushing it up and that's bad it has

a sort of debt we shouldn't allow in the system and in the wages remain stagnant right of men study if they go to income remaining static get going up compared to incomes because everybody thinks they're making a profit by buying a house and using leverage and rewriting the leverage of the house across increases the really the only people who make money a house of rising in value over time real estate agents and banks even now with the crash in housing and the obvious wealth confiscation of banks and manipulating the system people are still not arguing for higher wages because they're not thinking about what's actually caused the problem so easy to look at the moment you measure in this whole process is called by government study government that we didn't have a government interest process in two thousand and seven and government get in america and everyone in the world and one after was to patch up what actually went wrong with the system if you want an analogy it's a bit like having a person who struck their own arm off and then you put a tornado. and it's one of those now blamed for the fact that the arm fell off race because there's

a huge disconnect now then all this vilification didn't quite honest in the u.s. for example unions which are there to hopefully support some kind of wage growth vilified antibusiness anti-growth the real anti growth of the the bankers. bankers have given the money for speculation and not for investment they don't even finance investment anymore particularly they sit in finance working capital that's what they finance speculation if they fund a speculation and we're convinced that that's good that's non-selling and trouble then they seek bail out and they get risky but if they get austerity measures pushed down to the wage earners and let me ask you professor here's an idea if i'm representing wage earners. what about the idea because typically wage earners will ask for a wage increases tied to g.d.p. d.d.p. is another one of these economic statistics they point out in your work debunking economics one and the sequel coming out i believe this fall economics pumping economics part two which is the venerable soon but professor if i came to you in

your class i said well would it be an interesting idea if let's say cops and firemen and teachers and negotiated wage increases not tied to g.d.p. growth but tied to money supply growth. that's an interesting one i hadn't thought about i got to get a grade on this really get a grade on that that's a good idea that would this is so that would stop me in my tracks in my class you say because the money supply growth is how bankers pay themselves get paid by the how much free out money they inject into the system of they get a fee based on that the i mean i can see here is what i actually back far no that's what actually what happened back in one chain montane in england which caused the depression in the beginning of the twentieth not the going on in twenty's there was that the two you see it negotiated the cost of living adjustment so they actually got close to living changes not not manageable as you were talking about however what the government can do is go back on the gold standard which caused a message devaluation and wages had to fall by twenty percent and that caused the

progression at the beginning of the twentieth not in twenty's in england so it can backfire and you should know you have all you know in the bank and then your head. well sort of here have your say i have a two pronged attack now we've conrad out of time so i want you to tell us the final thoughts on the global debt crisis based on what is being prescribed by governments of the i.m.f. you can do that standard process even further austerity is not what europe needs if it's the private system is not producing the credit which it won't do in this level of debt and the government's got to come in and produce the money supply to keep growth going over rather than austerity you need prosperity from the public sector which means i said wage wage rises you've got to reduce the deprived of anything that doesn't do that is not going to work all right steve king thanks again for being on the cars report thank you and that's going to do it for this other guys report me max geyser and stacy herbert and i thank my guests steve king author of the soon to be released. an ominous part if you want to send me an e-mail pleased

to report at r t t v dot are you until next time this is nice guys are saying bye you know.