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a common theme emerging all roads are pointing to one culpable source of the catastrophe a big big i'm not talking about brigitte bardot but ben bernanke stacey herbert please elaborate yes mag's we're going to talk about the root cause of our financial catastrophe being the chairman of the command and control federal reserve committee greece impact small for u.s. banks bernanke so this is ben bernanke speaking to the press he says we have asked the banks to essentially do stress tests. and i ask looking at all of their positions all their hedges what would the effect on their capital be if if greece defaulted the answer is that the effects are very small right now this is going to be a recurring theme throughout this entire portion of our program the fact that ben bernanke the law is i mean this is the beginning of all law because he doesn't mention the

shadow banking system as it was described by former prime minister gordon brown when he says that the effects are minimal he's talking about the effects of what these banks report to regulators as being of their balance sheet but we know now going back to two thousand and eight that they simply don't report trillions of dollars of liabilities on their balance sheet and then when these blow up they claim the market did it we had no idea and bernanke knows this that's why bernanke at the end of the day because he's sheltering financial terrorists he should be waterboarding i mean he actually says they're even looking at the hedges that this will be a small negligible impact of greece defaulting but we know from the bank of international settlements recent release that there's one hundred fifty nine billion in credit default swaps written by u.s. banks against the european sovereign debt holdings of greece ireland and

spain and portugal so again he he's he's lying when he makes that statement in front of congress he is telling a lie that's causing incredible global financial damage again i suggest waterboarding ok well let's look at this video here and this is jim grant being interviewed on bloomberg news and he was asked about ben bernanke lying to the audience there about monetary policy and the causes of it getting and which to do he mentions the money markets so the said. pushed interest rates to zero it has flooded the system with dollar bills pity the poor saver who wants to get something some little taste of interest income on his or her balance so that they invest in money market mutual funds the money work mutual funds having nothing to do in this country is richard's euro go to europe so money market mutual fund investors are

taking. ponderable risks for about zero percent return or you'll be. dealing a few basis points only to get those few basis points these funds are crossing the atlantic right smack dab in the middle of the european banking crisis to try to take some measure of yield this is a prime example of the unintended consequences of this massive intervention by our central bank that's right and let's not forget that in two thousand and eight there was a five trillion dollar iran on the money markets because they're totally exposed to this crisis and as jim grant points out the returns people are getting on their money markets are less than one sample of one per cent it's like trying to pick up nickels in front of a steamroller is that a good risk reward ratio now edge of ground also points out that if the fed who's forcing the zero percent rates he's and he's penalizing savers he says so the bad

is the one forcing people to lend more than is necessary to other countries who care there but they're forcing them to be predatory lenders for a little tiny nickel in front of a steamroller right at the command and control concept is that the fed is command and control and interest rates and taking a position outside of the supply and demand of what people think is going on in america free market capitalism that's not what's going on it's a command and control type economy of centrally planned bureaucrats like bernanke they are causing the global economy to collapse ben bernanke is. isn't a factor cause for greece's problems because that's the model used by the e.c.b. in the bank of england and the bank of japan again i suggest water board play max so he's also saying that the greeks are not the problem it's not the people of greece that caused this problem it's the monetary system that is the principal agent and the fact that this is true you could see in the price of gold the point

since that takes me to the next headline greeks turn savings to gold and perth mint silver coin sales surge to record on haven demand so the financial times this article points out is reporting that greek citizens are emptying savings accounts and buying gold as they brace themselves for the possibility of a sovereign default and a run on the banks so sales of gold coins have soared in recent weeks and people are converting all their savings into gold that's not gold and silver and you know we were not and recently writing a new documentary down there and had a chance to speak before thousands of people have been on the national television since and translated into greek and the message to the greek people is clear to buy gold and silver to protect yourself against a financial hole cost provokers like o'byrne i can remember back to the occupation days in one nine hundred thirty nine greece was occupied now greece is being reoccupied by bernanke he and his central banker and whole cause provokers well one

person interviewed in the financial times does say that he converted his entire savings to gold coins he said quote i keep them at home just like my grandmother did in the second world war so it is like in back to the global world war but speaking of the whole the cost i guess the entire destruction of financial wealth we have in this next headline here which also proves that ben bernanke is lying about the impact of a greek default greek crisis could cost u.k. three hundred thirty six billion pounds british expose. are significantly under estimated so the bank of england alleges that like ben bernanke. the u.k. banking system is justifying the exposure to greek debt is only eight billion pounds but it has emerged that britain could actually be hit with losses of three hundred sixty six billion pounds which is equal to twenty four percent of annual

g.d.p. and this is based on complicated derivatives an insurance deal again mervyn king is ben bernanke he is counterpart in the u.k. he should be water boarded as well he is lying he's talking about the risks to the economy in the visible economy not talking about the whole of graham economy of credit default swaps that go bust due to the fact that they're manufactured in a faulty way that part of the problem is you know if you had tainted meat and it was making people sick you go and you do something about it and hopefully there will be some redress if you're buying toys that are painted with lead paint and they're making children sick and you would have some redress you would go to the manufacturer here the world is being flooded with all of the credit default swaps these products don't work they're completely in congress with any notion of a capitalist system they're used only to destroy as they weaponize financial

instruments as a credit default swap c.d.'s and blitz on these economy causing financial hole cost as the result of this financial hole the ground. well let's talk more about that let's go back to the u.s. because there's a hysterical video here this is an ad for a guy named mark only day he's running for congress from nevada as a dad to our floor and that is homeowner greed and groans again well. he already is too late to the party that already the chinese came in through wal-mart ten fifteen years ago but where if you ben he's talking about the u.s. debt being the cause of the wealth of china but listen isn't the us doing the same thing to europe aren't they occupying greece at the moment in order that greece doesn't default on their debt so that american bankers like jamie diamond white blankfein don't have to pay out on these insurance products that they haven't any

reserves or that's right it's a cause and effect problem and this is propaganda as we see in this t.v. commercial just like the problems of greece ultimately come from bernanke is a loose monetary policies and corrupt monetary policies the problems of china as america perceives them that they are quote unquote currency manipulators is also the result of america's loose monetary policies america has the world's reserve currency and there's huge benefits on having the world reserve currency if your economy starts to collapse because you use your privileges as for having a world reserve currency don't blame people like john in greece for your sins but let's look at what the state of the united states is that looks like a land war already scrapyards of the new pawnshops so remember everybody was saying oh gold and silver are going to sink because everybody's going to the pawn shop and cashing in all their family still wearing stuff like that well apparently they've run out of that now people are going around snatching copper wires from electrical

transformer it's actually taking the entire transformer risking death. rip up the copper of the zinc and the lead is the basis for the infrastructure. it is the platform upon which the economy is operating of course to satisfy that problem the fed will do what they'll increase the money supply which of course will drive the prices of lead copper and zinc ever higher which will incentivize people to read more of it out of the ground the other point here is max that we're talking about here's a congressman saying oh it's the chinese who will invade us and what do people do when they invade which is nations do when they invade a country they wipe out the infrastructure we've seen the us do that in iraq we see them doing it in libya now they wipe out the infrastructure and what you're seeing here a train derailed in toronto in massachusetts yesterday after thieves apparently used a blowtorch to steal two eight foot nine hundred pound chunks of solid steel track so the american population themselves are at war because of bernanke yes crazy

policies yes there are no it isn't something as an american citizens to rip up their own infrastructure. is that reason yes it is work should he be gone thought about what you to be experiencing. and then why i think we're having here because this i know we're talking to somebody in the oil speculation market an expert on oil speculation french president compare speculators to mafia once again it goes back to the top of the show ben bernanke he is the cause he's the root cause the central banks are the root cause of the financial chaos around the world and here nicholas sarkozy is saying that it's speculators who are the mafia not the guy who is causing people to speculate on oil and other products he does exactly and the capital dicaprio ultimately is the bank of international settlements in switzerland there of the head of the mafia family and then the fed and the new york fed and e.c.b. and bank of japan and bank of england are regional mafia captains and their techniques

are the same they lend money you can't possibly pay back and then we don't pay back they steal everything you've got and then they crush you with rampant inflation and food another thing well he blames financialization for bringing the world to the edge of a precipice and it is true i mean that's part and parcel of a u.s. federal reserve system it's the private bankers it's jamie dimon lloyd blankfein who are the fed and they've created this financialization as a way to occupy our economies and the people in our revolving it's a global insurrection against ben bernanke the occupation all right ses never thank so much for being other guys report thank you max though i was more coming away so stay right there.

welcome back to the kaiser report on maximizer it's time now to go to new york to talk with william mcgrath goodman she's the author of this gripping new border siloam if you haven't got your copy yet i insist that you get it. all about

the run against a hijacked the world's oil market and later what will cause a report i how are you doing today max all right so who are the renegades how they hijack the world's oil world's biggest oil market these are the boulder is in the original oil market i can one hundred eighty three reagan lifted oil price controls and when that happens some traders who had destroyed their own exchange which had traded potatoes this was called the new york mercantile exchange decided they were going to try to trade oil and when reagan left to those controls in one thousand nine hundred three that had been imposed by nixon they went ahead and said it was effectively deregulation of the market it became a true free market not big oil setting prices or behind closed doors this is when you had bids and offers that were freely exchanging hands and that was the beginning of it all this is the oral history really of these traders instead of not knowing who they are we know their names then we find out exactly what they were thinking how it happened all the way up to the present day right now at some point lead what you call the transformation of the market into a more of

a free market system away from the control the oil companies and opec at some point another patient. this is when these markets start to become dominated by those folks who are gaining the system why did the transition become apparent and talk to us a little bit about that puts interesting is if you look at the history of this market because we need fuel it's the life blood of this world oil and gas this is time has always been good and there have been different evolutionary at or ations of how it's games but often it's the same thing and that is cornering supply or creating panic about supply running out to make price go up or dropping lots of hope supply to meet the price go down but really it's about being able to predict what's going to happen by. moving a few things around really just ponds on the on the chessboard and a lot of that is in terms of of oil supply and perception of demand and that is

very much james and it is to this day and it was done as well but when you say predict which way things are going on it's easier to predict which way prices may go if in fact you are manipulating prices correct yes and the biggest players in this market own huge amounts of oil and huge amounts of fuel and we are not really allowed to know how much everyone has but we do know that increasing oklahoma where most of the oil stored in this country are there it's the largest onshore oil storage facility in the world this is a black box we are not to know who owns oil there who is doing why there are a couple big companies but they lease out tank farms to go in and sachs morgan stanley large banks large oil companies and then these groups also trade oil and it's very good to have a supply ship as well trading in the paper market but if you can put them together there you have a lot of that's covered and that's what

a lot of these groups do you talk about the eighty three period of deregulation there was of course another major wave of deregulation i believe it was in two thousand when the commodity futures modernization. it was passed and how did this transform the market with this codified congress literally voted to add to take away any anti-fraud powers that might have been implied by the regulator of the oil market so that they could not do very much about the kind of trading that was going on off exchanges while the exchanges do seva global transparent global price most of the training actually takes place off exchange and they just use the price set on the exchange as a way of your pegging what they're doing but at the end of the do to take place off exchange and this basically made arena which is now worth about six hundred billion dollars a day a free for all and to this day it's so free for all what we're seeing now with the frank dodd frank i taking so long to be put into into a fact has a lot to do with the war between austria and washington over how are we going to

rein in this thing when we threw it a key and shut the door all right so this idea of price discovery the idea of supply and demand meaning in the exchange and the result of price setting the market as giving away price discovery happening off the market and then what we see quoted in the the exchange is actually just a kind of a shadow of what's really going on in the forces that are really shaping the prices are completely invisible and unregulated and as you just said they took away the anti-fraud powers which imply that there is nothing but fraud yet if you want to look at a global price on the new york mercantile exchange for oil it's like the tail that wags the dog you want to look at a valet it represents a small piece only piece people can see so let's say you and i offer exchange or making a deal if you try it out if you try to mislead me about price i can say ok and i'm x. is trading at x.

today you just offered me why you have that kind of thing so it is used as a benchmark but at the end of the day the big trades take place off exchange and this is where a lot of the gaming to. i don't know if you noticed that b.p. trader recently who are now being pursued by the c f t c this is going to three year and the making. of charges and yet if i want to take three years to go after these guys will because they were doing this over the counter and it's very hard to piece together what happened because there's really no paper chair all right so over the counter another one another way to say off the market and that b.p. standard of course comes after the enron scandal and so the energy market has quite a history of this type of shadowy dealing so what degree does the manipulation the futures markets and through the transmission of moral hazard creating executives of oil companies who also are completely insensitive to committing fraud the biggest problem here is that it's still more rewarding to game the system buying into the

culture of corruption is still more financially rewarding for you whether you're a regulator whether a politician whether an executive unoiled company or whether you're a lost or a cheater if you engage in this culture on the level it's now playing out you're going to do better than if you john those who stood up and resist and i talk a lot and talk about different people from different walks of life who tried to stop this out of control train and they were broken just as badly as the system is broken and it's very sad and to this day what's happening now is we see traders who enjoy anything wrong who are you who are being prosecuted because the regulators are sort of found about not having done anything before they pick a fall guy and vice versa you see traders who you know feel that they're actually trying to make a better system but they're not getting any help i get letters from more traders than anyone else saying disaster awaits the scandal on price discovery is broken ok well in order for all the smart manipulation to go on and all this huge volume of trading to happen off market over the counter it requires

a lot of money to be borrowed from wall street banks to what degree are c.e.o.'s like lloyd blankfein. jamie diamond culpable in committing massive fraud on the futures exchanges i would be very surprised if they don't understand how this works but at the other end of the spectrum. has been investing very diligently and to creating loopholes in this market creating the legal openings to allow an unsolved to do these things if their best investment ever is to be able to manipulate the financial system and be able to do it legally and that is what we're seeing over trying to fix that now but when you when you've done this for decades and this is been going on and getting if you look at the history since the great depression of the loosening of the rules in the chipping away of the regulations it's a very. sordid path that we're going to have to cross over again to fix in the meantime many people will try to present it as hurting business and in a way it is hurting business but if is this corrupt and should it be allowed to

thrive well. the question this way if you take a major wall street bank and you were to eliminate all the training profits gleaned through corruption what percentage of their profits would remain quiet guess it depends on how you define corruption and unfortunately a lot of things that might have been considered corrupt before the one nine hundred ninety s. are no longer considered in our regulatory and legal system crofts well let's define corruption as a false price signal generated through market manipulation we just agreed that most of the price signals coming out of the system are in fact false or corrupt if the prices work to represent true supply and demand and not fake supply and demand how much of profits would be impacted on these major wall street banks and their profits would be impacted enormously if these rules were to change and to make it much more onerous and that is why you see this battle going on and on and that's

why you see one with our financial crisis right start to see things happen in zero six it came to a head in a way and here we are it's going to be. twenty eleven and we haven't done anything that's made any material difference and we're not going to if we haven't now we're not going through ok there is one industry however that has done something just last year cantor fitzgerald was going to launch box office futures contracts they were shut out of the motion picture association of america once a washington think about washington outlaw box office he just got trashed correctly asserting that it would destroy their industry so how can people who are being destroyed with the gas price manipulation oil price manipulation commodity price manipulation can get a lobbyist for them to go to washington to save them from the financial terrorists well as the sad fact that the lobbyists are strongest for those who have money and consumers aren't united enough and moneyed enough to fight this battle so. you have

corn soybeans all that continue to be traded anything though we might need to eat or just to survive continue to trade in the futures market and the bar is very low i mean if you're in a train or in this market you don't have to put any money down to trade not ice time and when you're talking about hollywood these are people who are very aware very aware of the effects their futures on the price and the value of something and you're going to see a lot more battles going on for those who are trying to modify things like movies like box office or see we're going to see a lot more pushback because the cat's out of it by this is not fundamentally a good thing how do you decide how speculator should be governed that has to be a discussion we have but certainly they need to be governor. bush in the flash crash of natural gas eight percent drop in seconds is being blamed on high frequency trading energy markets are now being co-opted by this new kid in

town high frequency trading what's happening here. we're seeing a lot of cases where the equipment is superior to the operator but being sad sometimes a great deal ok. our i don't know if you remember no nine but there was a russian american computer programmer who was apprehended you probably covered that max and goldman sachs literally engaged in a manhunt and a u.s. assistant attorney here in new york side goldman systems can easily manipulate stock and quantities prices in this trade are all rather he was the quote here's a programmer he had taken from the code and he had quit and he was presumably starting his job somewhere else goldman was so a fad that they went after him very publicly and also rest exposing their own computer programming and it was not good for calm and it wasn't good obviously for the programmer but at the end of the day it exposed that these systems are very very dangerous and also very expensive but they give a huge ads to banks like goldman and thousand revealed and we moved on right what's

amazing is our own law enforcement didn't find it alarming that goldman had systems that could manipulate our markets if not enough studying a programmer to code ok well the book is called the asylum but limit graft goodman is a must read thanks so much for being on the cars report lay out thank you max all right nothing to do it for this edition of the kaiser record with me max kaiser and stacy herbert i want to thank my guests liam mcgrath goodman if you want to send me an email please do so as reported r t t v are you until next time this is nice guys are saying.