wealthy british science. sometimes. markets why no. one knows what's really happening to the global economy is because reports on our. media mogul rupert murdoch is on the offensive claiming the news corps made only one minor mistakes even as the f.b.i. moves in over the possible phone hacking of nine eleven victims. and the e.u. scrambles to cut spending that whole sweeping the globe threatens to sink italy it's the greatest test yet for the leadership specimens to keep the wavering currency of. america's a two faced torture tactics rising uproar over the us training and exporting of brutal interrogators preaching human rights to the rest of the world. more on the

eurozone debt drain next to his people and i'll ask his guests whether the e.u. has enough financial firepower to save it from ruin without. you can. start. a low and welcome to crossfire peter lavelle a currency in crisis european finance ministers central bankers and politicians remain at odds on how to rescue the euro as pressure mounts for another greek bailout and investors worry about italy is the hero of dysfunctional currency and who will ultimately foot the bill. can. start. the process not the eurozone crisis i'm joined by in his garden in virginia he is editor of the garment letter in singapore we go to jim

rogers he's an author and financial commentator and in washington we go to sherry's odd raymond she is professor of international business finance and international affairs at the george washington university or i focus is crossed i'm going to as you can jump any time you want there are different points of view here like here dinny and then if i go to you first i asked the question before we go to the the facts of that are at hand with the euro i posed the question is it a dysfunctional currency what do you think about that. i've always thought it was a dysfunctional currency i thought quite honestly that the only reason the only rationale for the euro to begin with was was to do something on the part of the northern european countries to tie the great german giants down with as many bureaucratic ropes as they possibly could they have done it to this point i think it is an eminently unsuccessful attempt i cannot imagine that that german is working as hard as they do as many hours as they do saving as much money as they do find anything. out of equal nature with the greeks who simply don't work as hard as

they do don't save as much as they do and avoid taxes like they do so quite honestly i think at the core at the edges of this cloth the thread is being ripped and the cloth is finally coming apart jim singapore. is going to go to you anyway go to the. heat it is the concept of a unified european currency is fabulous and the world needs something to replace or to compete with the u.s. dollar unfortunately execution has not been very good they brought in people like greece and and portugal and ireland who weren't paying their aren't paying their bills and who weren't paying their bills and that's led to the problem i'm like dennis i cannot conceive of why honest hard working our screens and dutch and friends should have to pay for a bunch of greeks are sitting on the beach drinking too so i and greek banks i find this is outrageous. to find you in washington ok we have to euro skeptics are you going to bounce around a little bit. i'll try to the bottom line is this this this is

a good project to begin with if the membership had been correct greece portugal ireland spain were never supposed to join and if it was a reasonable six countries bedded down we would have had a pretty successful project but in the you know we've got some in the eurozone at this point this is not healthy and i agree with them that this situation is now but it's done it's legalized and no one can step out and no other people can you know sort of change the rules at this point so the germans have to pay the piper they really in this document and this is the repercussions if you know. they want to do it and the individual. has to say go for the german the german germans don't have to pay the piper let the greece cool break ropey would be good for greece it would be good for the europe it'd be good for the world if greece went bankrupt and rose to the heart of pay their bills or stop

a lie then you would have everybody would know it's a strong sound currency based on a strong sound economy well why not let him go bankrupt listen you know you're in america we've had stage for here in cities go bankrupt we've had counties go bankrupt it didn't in the united states and it didn't in the us start ok shares and you're right i'll tell you why because of the four hundred billion dollars of debt that greece has fifty percent is held by german and french banks and those countries don't want to take a second hit in the financial markets it's that simple. it's a why should why should taxpayers bail out banks since when the taxpayers have to bail out mistakes made by banks that taxpayers didn't make those mistakes when i make a mistake shares are i can i come to you and let you bail me out next time i start losing money all right dennis go ahead jump in but you should know u.s. government. well i absolutely agree with jim on

this in this instance why can't they allow them to go to go bankrupt we in virginia understand our rights as virginians compared to anybody else i think that you have the right if you are a country to opt out of that circumstance i think the germans have absolute the right to say we have given up we have watched this for a decade it has proven to be unworthy we are simply stopping the payments of the greeks we're going to stop payment to portugal they have to get their own act in order let them go greece will be far better off allow them to go back to the drachma make their economy stronger again let tourists move that go back to greece again we were talking about this beforehand it's too expensive to go and nobody is they are greek is a tourist spot and no tourists are there let them become a tourist but by going back to a devalued drive might tell you look a serious side to it is what i think you brought up a very interesting point i think we have to go with it still here is that if this president is saying with greece then you have this is a knock on effect of this contagion and it is about banks here i mean we can all we

can all criticize the banks but i mean the banking system in germany and france wants to survive this is well i mean it's damned if you do damned if you don't that's the problem absolutely you are greatly serious you know sara sidner you're first going to go bankrupt shares i'll go ahead. ok well the problem is that if you let them go bankrupt and default and this conclusion spreads is probably going to see people respond in heart right into italy where we still grapple with it today then you've got a real problem this is not a domino effect in the eurozone this is a break for the rest of the world that's been thrown and it's definitely an effect on markets the europeans can make up their minds hang on the europeans can make up their minds over a two day conference we took a eleven trillion dollars hit in the global capital markets for that i don't think we will get him here if he gets it and it's too big to fail at this point chip and used shares o'hara's are thirty years you may have been going with a star hundreds of years when it is time gerri before i get this share it thanks

again going bankrupt one hundred shares our banks have been going bankrupt a hundreds of years we have made horrible mistakes over the past thirty or forty years in the united states we have made unbelievable mistakes in our financial situation so we've got to pay the piper a visually as dennis says when do you stop you're going to run this down for another five years of initially the market's going to say you know they're you going to have a major crisis that you and i deal with at least if you have a crisis now you can organize it and let some people go bankrupt and by the way get as i wouldn't pull out of the euro of i would greece i just go bankrupt and reorganize i think the euro is good for greece if they reorganize to stop the craziness ok cher is right if i can ask you. if you want to achieve your head jurors are going. no i just wanted to say you know clearly i think i agree. with jim that clearly greece's future is within the eurozone but i like the answer and

an unspoken one i think as americans if the u.s. government had not stepped in and then our one trillion dollar bailout where would you be right now you were so grateful that these guys step then because we were hemorrhaging and rockets have frozen and everybody no. no no no no i was never a player of any of this bailout what are you talking about i would have let them all go bankrupt and in two thousand and eight in two thousand and nine it is outrageous what we're doing people who tried to such as the japanese have now have lost two decades the japanese refused to let anybody fail they have zombie banks and zombie companies and twenty years later their stock market is down seventy percent this approach doesn't work americans already had one last decade we're going to have two or three at the rate they're going. to want to jump in there one of the things i'd like to ask everyone here is that all these governments are going through austerity i mean including the the italians as we speak right now and but can the austerity create growth then he's can you can you do you agree with

everything i can't think of too many examples where a spirit is because if you want to pay back these loans you're not generating enough wealth i mean again it's a damned if you do damned if you don't approach inside the eurozone austerity austerity doesn't create growth governments don't create growth low taxes getting government out of the way letting markets work that creates growth my favorite example of this is what happened in new zealand in the early one nine hundred eighty s. when they turned their back on everything that the i.m.f. had said they cut taxes across the board they did what they could to strengthen the new zealand dollar and the next thing you knew you were running budget surpluses you had to. trade surpluses they went there for the proper way of allowing the market to freely function if we would do that we would do with many of these problems simply subside. i didn't go away so austerity i'm afraid that's not the problem is not the problem it's a government is the problem getting in the way putting too many blocks in the way

of people doing the things that in their own best interests serve everybody else ok well you think about that germany's austerity list and you go ahead and are in the early and the early in the early one nine hundred ninety s. scandinavia had the same problem huge problems and in scandinavia a lot of people went bankrupt they reorganize they had a hard or two or three years but since this candidate has been one of the great growth region so the country sweden is probably better off than most nations you know as we speak in two thousand and one south korea had the problem of the end of the ninety's people went bankrupt they had horrible pain but since then they've had a booming economy the list goes on and on people who've taken the pain accepted reality done something about it and then started over this idea of doing what the japanese did doesn't work doing what the americans have done doesn't work ok shares i don't think everyone's talking about a selective default i mean is that just double speak for when it comes to

a country like greece i mean you just don't want to call what you're told is this selective i mean is because it's not built into the euro zone you can't have it happen are they just trying to kind of fake it in say it's a default but it's not a default. you know we're very close to the line the bottom line is if the restructure will happen and it's going to happen you can call it a default if a restructuring actually does happen the credit agencies have a different view on this they believe of private participants are involved they will consider default but it's a step back for one second. austerity needs to happen in a lot of these countries obviously too much austerity will stifle growth has got to be some balance or some some mechanism to grow down the road or there's no hope and you know unfortunately both examples jim and dennis are giving are in the past in the eighty's in the ninety's when two thousand and eleven the financial markets have mutated we're in a very different environment right now we have a crisis of fear and fear has no economic logic to it and once it spreads it

spreads like wildfire and everybody looks like greece portugal ireland spain italy now and the consequences are quite devastating we destroyed the american middle class wealth right here is an average and then here and we break and go back to adventure back after a pretty contributor discussion of yours. ok . if you want. first creepy remove old cold the clear cutting of the. second the explosives are used to blast in a deeper than the fear that. hurt the remains are removed by machinery.

finally unwanted soil is deposited in valley feel. relief on. morning news today violence is once again flared up. and these are the images the world has been seeing from the streets of canada. china corporations or the day. will come to them what needs to be splashed in the world of hi-tech business questions advance science into high gear cheap products they don't understand oh

he's he's got he followed russian invaders to ensure bidders and brought in their big breakthrough back sunlight on stone on technology update here on. we've got the future covered. you. feel. you. need. to know for. welcome back to our computable remind you we're talking about the eurozone crisis. ok jim i'd like to go to you is the is it too expensive to lead the euro or is it

too expensive to keep it going well first of all i should tell you i own the euro for a variety of reasons but we'll come back to come back to that that in a minute i want to go to share point. for hundreds of hears hundreds of years we've had bear markets and when you have a long period of excess somebody has to clean out that he says you cannot just keep going and going and going and going and pouring money down a rat hole the world doesn't work that way nothing wrong with a bear market their markets have been going on for hundreds of years they clean out the excesses in the system and you start over it's usually like a forest fire when you have a forest fire it's terrible it but it cleans out the underbrush it cleans out the dead wood and then the forest can grow even better the same way with recessions the pressure well the pressure and then and even the bear market ok but it sure isn't but it's very interesting i mean the analogy of the fall of the forest fire is nice

but we're talking about people and governments and elected officials and this is where it gets really really sticky doesn't it. ok absolutely are you going to record heat i don't want to taste and i'm very happy with my situation right now. the bottom line is you know a crisis is different than a bear market in a crisis you know it's like a victim that has just been hit by a bus and is hemorrhaging through a major artery on the road what you want to do is stem the hemorrhaging and then decide you know then take it to hospital and then decide what you want to do but you've got to stem the hemorrhaging because in that hemorrhaging you lose your middle class and you lose your middle class you have decades and decades of pain ok did you see i could see he wanted to jump in there to help the. yes i did want to jump in shares i brought up the idea that jim and i supported what happened in the united states and that's just not true and jim and i may argue about one thing i think that what the united states government did in october of two thousand and eight when when the financial system really was about to seize up the central bank

acted as central banks are supposed to do through history supply reserves in excess in order to accommodate that circumstance and get you past that two or three week or two month period of time what we've done since then however by continuously allowing the central bank to expand its balance sheet and supporting that expansion of those monetary observes i take issue with that i think we needed to have stopped quite some time ago we did the right thing in in october two thousand and eight applying liquidity to the system but continuously doing it and supporting industries that probably shouldn't be supported by supporting businesses that probably should have been supported gets in the way of progress gets in the way of all allowing those businesses that really need that new capital that will be created to move forward so i take exception we need to do the right thing at a at a that a period of time of panic panic has ended panic as is done now you need to tell the greeks greeks steady i think just pay the taxes i think is right is actually just

beginning and it's coming back with a fury right now shirzad if i can ask you a question well no if we look at what's going on with easily and then we can look at spain and then it gets worse and worse and worse and it's perceptions it's a very important shares and if i can ask you this monetary union it's monetary there's no fiscal side to it is that what's needs to be done to fix this because i think well maybe all of us would agree but you just can't keep pouring money into a system that isn't structurally change it's not fixing the problem you're just dealing with the element of the of the moment and it's called fear. that's right and i think that what you've got you hit it on the head right here it's about perception the problem has been that the european leadership has been so bad that they have mangled the process for the last eighteen months clear decisive action would have calmed the markets a long time ago and we wouldn't be talking about second bailouts in ireland or in portugal and talking about financial crisis hitting italy at this point so the problem is there's no decisive action lot of domestic politics going on and when

you have a union like this you can't behave like this it's that simple oh you invite disaster to your shores now you're right this is not a fiscal union but they have fiscal constraints when you join this union and i think that they're now coming aware that the fiscal part of this is what critical the martini part at this point ok jim you want to look like you are here is our job work jim go first i want to ask peter as sure as i want to ask peter ensure who's going to pay for all of this who's going to pay you know america's the largest debtor nation in the history of the world right now who's going to pay for europe to be bailed out all of the west who's going to pay for all of this are you sure are you peter germans with the germans you can see the germans giving. you all the time so that brings up a very interesting point and look at the dentist i mean at one point the germans are going to say enough is enough and i think everyone would feel that's justified turnout's of the dangers we have here.

yeah it sure is a when you say decisive action what sort of decisive action should have been undertaken decisive action on the part of government always frightens me what sort of decisive action would you have said would have been proper. if the clear message is that clear message to the market that a fund has been created the bailout will happen the restructuring will happen everybody's aware they agree to not pay the money back instead of saying you know what one year from now they're going to go back in the private markets that was not going to happen even today the european central bank is not talking about restructuring they do want private investors involved in this plan but the bottom line is everyone knows it has to go that way so they delay the confusion the different talking heads are not helping the situation and creating more confusion in the market when the market is confused it starts to panic when you think about that jim is it shares i mean everyone can jam. every one of the

italy greece portugal spain or of belgium arlan all of their debts are going up over the next few years none of those countries have declining deads. deficit this is just getting worse it's not getting better there and five years from now we're going to look at each other to say my god now the world is coming to an end because the debts are too staggering for anybody to deal with you know here's one of the biggest problems that one of the biggest criticisms of the of the euro zone is that it doesn't really promote a lot of fiscal responsibility because you can there's moral hazard out there or you could just you know just wait for the but the lifeboat to be you know to rescue you because you don't have to be responsible i mean is this something that needs to be changed where people are meeting held accountable because like you said when the middle class is gone who's going to be paying taxes. look you're absolutely right you know they they believe that peer pressure and public pressure could keep these countries in line but it didn't work and i had no idea it was as presumptious there

that we thought it would work and if this market failure the markets believe it could work and you know what possessed the markets to believe that greek risk would be the same as german risk that it was market failure clearly now there are calls for example the european central bank is calling for a european finance minister and the purpose of this finance minister is really not to represent all of the eurozone countries but the basically watch over the bailed out countries so it would be like a mini i.m.f. within the euro zone folk initials attached to countries that have bailed out and that's coming there's no question ok jim how much that's what role should i mean one of the things the germans are saying for more bailouts are looking at greece particularly their most private sector has to get involved in this the i.m.f. is agreeing with that but there's not a lot of other there's not a lot of consensus across the eurozone on the how much should a private sector be involved in dealing out these governments i happen to agree with the private or private sector made mistakes the private sectors made the loans

to the greece and made the loans to all these people take your losses i mean you made the mistakes for taxpayers and then when that austria didn't make mistakes why should they have to pay for all of this i mean this is our right this is terrible economics and it's horrible morality and not that politicians care about morality that's for sure but do you think about that how much of the private sector i mean all of this i mean a bad. well i made a bad trade yesterday in crude oil shares i would you help bail me out please oh no i think i'll go to the germans and ask them to bail you know i don't have a legal agreement it's the same it's the same where you and i had a legal agreement if you and i been married that i didn't hear us on that we're not sure is are you bring up an interesting way to reduce your chances are this is a this is a very different kind of leader address of the euro zone is ok go ahead jim go ahead hold on that's exactly what i meant hold on guys there is a link there was a legal agreement with the european union is called a mastery treaty you were supposed to keep your debts with your deficits under

three percent you were supposed to run a sound too rich a contract a sound economy these guys violated the law they violated the treaty and now you expect me to bail them out oh please are you going to let they are you know you're going to bail me out of here i have a right it's yours i'll go ahead but bottom line is you're absolutely right they're violated there's no question they violated the cheated on the books they did all sorts of things that were not kosher but here's the catch a legal contract was signed between the seventeen countries and now it's a catholic marriage they can get out of things ok it's interesting i mean where you met where you know jim let me ask you question here i mean again you know we focus on these national economies ok but really it's go back to really where it goes it's the banks that want these bailouts they want they want governments to bail out these countries so they can pay banks money that owe them so it's really not about people is it it's about making sure banks get their money back private individuals in many cases. peter maybe abu mazen is still clear i would make the banks take

their losses i would make them suffer they're the ones who made the mistakes that made you jim a devastating quake there was a consistent wall street was bailed out because everyone we were all told that we need a banking system so that we're getting the same thing will play now we will be the banking system that's the rationale i'm not saying i agree with it. you said the operative words we were told yes you know who told us that the banks the banks were panicking they called i had said save me save me save it come on let them i want to repeat banks have been going bankrupt one hundred fifty years it's not the end of the world it may be a depression but you know if we let more people go bankrupt in one thousand and two thousand and eight we probably did have it behind this by now other countries have it's been three years we would have had a hard of three years perhaps but you know and i in two thousand and eight out there in oklahoma in texas they were doing fine it was only on wall street that you

had these staggering problems ok shares i'm going to give you the last word what's the future of the euro five years from now five years from now i think you've had a two tier euro zone there has been the have nots ok going to what do you think should be you would you would you like to see it around in five years. i think it will disappear in five years i think shares out his right i think will be a northern fiscally responsible euro and i think in the southern states that have proven themselves to be fiscally irresponsible they will all go their own way and we'll be back in the eschewed oh we're back to the drachma we'll be back to the era of the right let's see what the future holds for the euro many thanks and i guess a day in virginia washington and in singapore and thanks to our viewers for watching us here are to see you next time and remember of cross talk meals. we can still.

from. the.

beginning.