little george as they call him so well the i.m.f. is in the news and you were speaking to the crowds in st thomas square constitution square and you told them that after greece would come the u.s. low 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 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 public jails and those nincompoops in your country steal all of your wealth well remember as this article describes the i.m.f.

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 gross domestic product will grow and in me mc two point five percent this year and two point seven percent in two thousand and twelve of course those numbers are fake yet anyway 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 in 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 those blood circulating but the patient is in fact dead

but here's the i.m.f. warning america that they've got to get their debt 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 of out of business so. stop right there let's digress a bit about the sign of situation they are completely bankrupt that's why they go into a country like greece they take greece's assets 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 a hey 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 the political drama going on where the republicans are refusing to

raise the debt ceiling and they have to do this by august early on. august and 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 give us your money or your life it's a stick up big kid just 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 to slay sions some kind of government functionality you've got to actually have a functioning economy you just can't have bandits at the i.m.f. constantly holding people up and saying leave the children dollars won't look to 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 use of all they want is more debt onto the american

population it's a topsy turvy alice in wonderland through the looking glass macaque the nightmare or the i.m.f. is saying the path to economic glory is by increasing your debt ceiling hey i.m.f. . well case so the i.m.f. is now threatening u.s. 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 on 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 just zombie consumers the walking dead they're shopping but they're dead they're dead shopping well this is why 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 d.l.s.

. bridging 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 do leverage which means they have got to continue to save which means they've got to stop shopping but what do you see there you see the zombie shopping at walmart must be dog food must be plastic crap from china but he points out that the fed and the u.s. government are actually causing those 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 raise your 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're offering all sorts of incentives to go into the housing market should install cattle prods into staring wheels of all new general motors cars when 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 that's what the u.s. economy needs actually you know what they should also do at the same time is have george bush's voice come on and say go shopping standing on the rubble after nine eleven a judge and shoppers don't look behind me at the pile of rubble to go back to the store or put your credit cards or risk well so i have these final two headlines regarding the housing market and as i said the u.s. fed and the government are trying to force american consumers to take on more mortgage debt 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 zillow has announced that the average price of

a home in the u.s. is about. 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 cheery you're raiding 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 to put in the i.m.f. they want income levels in china and america to be about the same which would be 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 cash over will come out again and say house prices will crash another twenty five percent well as you brought up income i'll go to the next headline on this because this

involves income as well and its relation to housing prices 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 and this is dr housing bubble and he looks at house prices going back to one 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 and as 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 those are the debt levels increased income went down here at the top of the cycle the banks whooped 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 he did was he matched the wealth confiscation of the creditors by giving them twenty trillion dollars more in bailout money so they doubled their eagle 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 any mention circus stacy herbert and you can have a circus without a contortionist and this is what ben bernanke does when he gets on t.v. is trying to convince people that the economy it's actually not sure if it is the

users contortion gary language does they. do they are 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 along the upper northwest coast northwest coast citizens are getting fried well they have called hot particles which are radioactive little particles of success c.m.n. strong cmin plutonium going falling into their lungs or turning the citizens in the hot pockets because a lot of those things are put in a micro way that obama's microwave and his own people well it's a population already zombie fied from toxic debt and on top of them you're putting

radioactive waste. this is like a genuine situation where you could see real live zombies a real life pass or zombies in the pacific northwest was like washington oregon kurt cobain's already dead so was on one of those you may see him again soon he may be coming back beautiful all right stacy ever thank so much for being on the kaiser report thank you i don't go away much more coming away so stay right there. more than a month. one of the most extreme environments on the planet this is antarctica and people have to be aware that they are far away from civilization. so special and attractive for the wildlife in antarctica. and the sun's.

expedition to the bottom of the earth. i welcome back to the kaiser report all right this is a treat we've got the non-economist non-economist steve kane welcome back to the kaiser report it backs max i say you're a non economist because of course you're known for your classic text debunking economics which you pretty much tear apart all the assumptions that people have

been using to guide. 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 should 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 this is a test case example walk us through what's happening well the whole universe is an unfortunate instance of what's happening in the whole globe the whole always. economies and the real cause of this has been a huge debt bubble 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 or so ago it get into more debt than we actually want to take on i'll use the analogy is a bit like going to

a dentist and then this wants to take out more teeth because the multi take up the more money max and you want to go onto that actually needs to be removed you know but he's persuasion would have more teeth removed will be six. so you fulfil them all to it's removal and that's what's happened globalise we have private debt that 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 debt bubble as america or england or australia or canada or portugal or spain eccentrics their trip but they certainly had one of the great provisos of debt because watching of them what to do and hiding this situation to get them into the sea the old goldman sachs so we have a process called but too much debt what's the solution is put forward by the conservative thinkers cut wages it wasn't high wages that caused the cross' ok we're going to get to a second on this debt mode keeping this in mind now of course one of the big pushers of the debt let's. came keynesian thinking but wasn't

it when it came to us saying that you can go into debt during this low times but during the good times you try to pay down that well it's actually kind of kind of talking about public debt because it's really what's happened with private and what you get in reverse is that when you when you mean look at a financial system we're in it's a system driven by privately created it and this which was therefore creates credit money but you also have a government system which can create government debt and in the process creates fit money for those two sources of money flowing into the economy neoclassical economists the gods that i pillory in the banking economics mistakenly believe that the government system controls the private bit like a having 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 ambulance chasing the

wreckage so private created credit draws the economy government money comes along and what tends to happen is when there's a private crosses the way that it's manifest is the right of growth of debt slows down and therefore the growth of the economy slows down so the government comes in and spins are running a deficit and balances it out now if you had a well functioning economy then you'd have you know private debt bouncing along like this and government didn't bouncing in the opposite direction and. modeling miscues financial instability hypothesis that's precisely what i had happening what i didn't cover in daytona paper though i did cover and all they wanted two thousand was that they can be a situation with rather than the private debt doing this and the government doing that you know the private doing this and so for the government to balance it it's got to be doing the same thing in the opposite direction that's what you have what people now call the minsky moment when some much profit it's been taken on that the only way out of it is to take on neverending amounts of public debt as well so if you go down that route you know you've got the pandas had private stable. is

perhaps a little public that the continues rausing trying to balance the deflationary effect of reducing private the real solution is say hey gause we shouldn't have had this private in the first place if you want to solve the cross is somehow abolish or reduce the real burden of the private and ironically the best way to do it and kinds made similar chis the not quite as frankly as all make it now is to increase wages. increase wages ok let's get back in trees wages that 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 would have been ages ago made this printing press argument that if you have a cross as it's quite simple that the uk would have run its printing press that's where you got the helicopter bin nickname from and print the money and that will cause inflation and everything will be solved well he printed money faster than anybody has ever printed govern money on the planet in two thousand and eight and two thousand and one literally more than doubling the level of bias money in

america and what you had was a when you went into the process inflation america is running about thought percent it filled the monist true so we had to fleishman and been literally more than double bass money and inflation went from modest to cluster and then sided heading down again so with an enormous injection of money giving it to the banks almost nothing in inflation some inflation was called but setting up 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 they in terms of got no choice but to increase that process work is about no choice but to spin because costs have gone up you actually get effective inflation that way didn't henry ford figured that out he raised the wages of his workers so they could buy the car yeah yeah and again like the result though a large part of the new deal was given decent wages to work as so when you cut the wages it looks like a sensible this is the whole inability to think in the feedback sense that the

actual economy operates in if you cut wages. you will they will have a deflationary impact on the economy when it's already in a day fleishman so by driving the process level down you increase the value in norman in real terms of the outstanding debt making across the swiss what you have to do is reduce the value of that bit and the is just way is to reverse the trend of the last forty years which has been trimmed for falling 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 them much larger share of g.d.p. because you expecting inflation to come along and eroded but by running the by the inflation eroding the value of the dead you'll drive down the bank a share and that's the section that should be reduced why do people who rely on a wages for a sub subsistence don't seem to be arguing this case and then america for example is a wage earner is out there demanding higher wages because we don't see a 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 have 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 for you 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 made the kids can't buy the nintendo games anymore you know that's makes sense a household balancing budget you've got to do that because you face what i can call a budget constraint. and that works at your and your individual level but you would extrapolate it 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 change and it stimulates arbor gets him at a spot of aggregate demand 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 much money you've got the a.t.m.

created inflation the. 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 the house. you get a much clearer picture of the problem and the solution well you what you see is that you would you're talking about there is a positive feedback system because the process starts to ra's old is extra debt being taken out to buy houses and that means that house process rausing because they rose people are willing to take on more debt to buy a house across houses so you get a spiral pushing it up and that's bad that's the sort of debt we shouldn't allow in the system in a way does remain stagnant right of main statics they've got to incomes remaining static debt going up compared to incomes because everybody thinks they're making a profit by buying a house using leverage and rewriting the leverage of the house crossing courses the really the only people who make money on a house of rising in value over time real estate agents and banks even though what the crash in housing and the obvious wealth confiscation of banks manipulating the

system people are still not arguing for higher wages because they're not thinking about what's actually caused the problem it's so easy to look at the moment you imagine this whole process is caused by a government study government that we didn't have a government interest process in two thousand and seven the government debt in america and every else in the world came along afterwards to patch up what actually went wrong with the system if you want an analogy it's a bit like having a person who's chopped their own arm off and then you put a taunt to over the and the twenty guys now blame for the fact that the on fell off race because there's a huge disconnect now then all this vilification didn't quite honest in the us for example unions which are there to hopefully support some kind of wage growth vilified and anti business anti-growth the real anti growth of the bank has the 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 not. when they get in trouble then they seek bail out and they get rescued by the us austerity measures pushed down of 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 increase is tied to g.d.p. but g.d.p. is another one of these economic statistics the point out in your work debunking economics one and the sequel coming out i believe this fall economics debunking economics part two which is the available 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 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 of what i got to i got a grade on this that we get a grade on 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 money they inject into the system of they get a fee based on that the mean i can see here is what i actually back far no that's why actually what happened back in one chain in england which caused the depression in the beginning of the twentieth not that we're not in twenty's there was that the two you see had negotiated the cost of living adjustment so they actually got close to living changes not money suppose you were talking about how if what the government then does go back on the gold standard which caused a massive devaluation and wages had to fall by twenty percent and that caused the depression at the beginning of the twentieth not in twenty's in england so it can backfire on your show as you have all you know in the bank and then your hedge. well sort of say or have you say i have a two pronged attack now we've kind of went 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 and the i.m.f. people can do to extend across this even further austerity is not what europe needs

if it's the private system is not producing the credit which you want doing this level of debt in the government's got to come in and produce money supply to keep growth going over rather than austerity you need prosperity from the public sector which means i said wage reply wage rises you've got to reduce the deprive a debt burden 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 is on the kaiser report me max kaiser and stacy herbert and i thank my guests steve king author of the soon to be released debunking economics part two if you want to send me an e-mail please at kaiser report at r t t v dot ru until next time this is nice guys are saying bye you know. hungry for the full stop. we've got it first hand the biggest issues get a human voice face to face with the news makers on r t.

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in this. news and. hundreds have been killed by the. government. to. thirty thousand troops.

security over the last twenty four. within the boundaries of the political debate. and president dmitri. stories on. the world twenty four hours a day. in the spotlight where host. of the program director of the moscow international film festival hosting for the first time a world premiere of a hollywood blockbuster. spotlight

. on i'm. kidding. there's a famous actors and directors have gathered in moscow today at the opening of the moscow international film fest for the first time it's a world premiere of a hollywood blog. post does this say it's a sign of recognition so do commercial movies really bring the festival to a new level we're asking. the program director.