here with r t why from moscow to headlines a sickness in society or a sickness in the system as u.k. authorities in the aftermath of the bryants locals ask the government to break down the crime and citing some still value it helps create but downing street is blaming gang inspired violence with young americans. paranoid and prepared and its economy teetering on the brink american stock up on supplies radios and guns to get them

through doomsday which growing numbers believe could be right around the corner some fear of the government from a collapse leaving them with no choice but to fend for themselves. and ethnic serbs in northern kosovo say they live in fear of having their land and property take him as tensions remain high following weeks of violence near the border between serbia and kosovo roadblocks were mounted after constant police took control of two disputed crossings. maxes the kaiser report here on our t.v. stand by. each. other this is the kaiser before check it out yet lol. we went to new york city and they downgraded america s. and p. did immediately as we told you they would others doubted us but we guaranteed

it and now we're back in france and guess what. tell us more well now so i'll tell you the headline as soon as the next kaiser arrives in france to pull a reeded france may be vulnerable to downgrade following cut to the u.s. yeah well there's a tremendous ripple effects are a thing with this downgrade because the u.s. dollar is course connected to the u.s. treasury bond market and it's connected to the five bone connected to the hip bone connected to the foot to the yeah it's all tonight it's only downgraded start to pull the thread on the u.s. dollar the whole kit and caboodle its own rival here you all might also say however that it's own relate it's s. and p. itself and moody's and fitch because the u.s. and france are in such bad shape due to all the so-called aaa rated collateralized

debt obligations and other credit derivatives that s. and p. allowed to be rated aaa and these country's banks bought these toxic debt so that's an interesting part of the history isn't it you know during the period leading up to the financial crisis the selling of collateralized debt obligations c.d.o. xah as they're known and other flora and fauna of the derivatives fear spawned by the which are self life masters. fish and moody's and s. and p. gave these cancer nations these abominations their aaa rating and it created this huge ponzi scheme now they pull the rug out from underneath well max another story related to this financial chaos going on at the moment bank of new york mellon charges depositors america's biggest bank has been forced to start charging

customers who have deposits of more than fifteen million dollars as more investors take cover from the ma. turmoil so they're saying that they're basically trying to force people out of cash and into somewhere else because they're receiving so many people coming in flooding the banking system with all this cash and this is something we've spoken to james turk about where he envisioned reverse capital control that instead of capital controls being on money being taken out of the u.s. it would be against money being brought into the u.s. in order to avoid the hyperinflation of all those dollars that are overseas yeah another great point trying to stop that money from coming in by charging especially negative interest rates people say you can take interest rates below zero which you can by charging people to hold their money at the bank they start off with these big fifty million dollar positives and then they work their way down to mom and pop are out there with

a couple of thousand dollars on deposit and you will be charged one or two percent or more at the end of the year you have that much less in your account as the bank is trying to pay off their bad loans that could or should have been ring fenced and dealt with back in two thousand and eight but instead will lead to metastasize and grow into this enormous economy killing tumor of debt and i mean this is another actual point for those who argue that there's deflation and there are some people who argue there's massive inflation so here is a bank is able to charge money for people to hold this amount of cash but it also the article points out that the news of the levy emerged as a sale by the u.s. treasury of twenty billion dollars of ten day bills offering zero yields further demonstrated investors have now become intent on preserving capital. yeah the trend is obviously toward negative interest rates and that's negative

purchasing power and oh by the way that's a good reason to buy gold again we come back to gold well let's move on to the other aaa rated securities about to be downgraded muni market prepares for a loss aaa ratings so the two point nine trillion dollars municipal bond market is preparing for hundreds and hundreds of downgrades after standard and poor's lowered the u.s. one level to double a plus the first ever reduction for the country so s. and p. is likely to cut its ratings i mean a simple debt secured by the federal government since just pre-funded bonds tax exams backed by u.s. agencies and credits that are most dependent on federal spending write the aaa rating of the u.s. treasury bond is a reference rating that is connected to all these other aspects of the economy like the newness of gold bond market also on the corporate side i was just looking at zero hedge they made a good point that institutions like options clearing corp or the group that

is responsible for clearing of shorts cells they're all being downgraded to so this is affecting the fundamental infrastructure of the entire system itself was being downgraded as the entire policy scheme unravels yes i also read while we were in the states that j.p. morgan is the next were downgraded by s. and p. and the reason why is they said that j.p. morgan relied so much on the u.s. government despite all their protestations despite every year when jamie diamond collects his tens of millions of dollars bonus he says because i deserve it nobody works as hard as i am i'm so clever i can print money but it's the u.s. government according to the rating agencies that give me morgan its rating quite well nobody works as hard at fraud. jamie diamond but as you point out all they do over there j.p. morgan is they take the risks on their. books and they stick it on the federal government's books that worked beautifully for years as long as america had

a aaa rating but now that america has a double a plus rating and interest rates are going to by definition creep higher that is going to be a huge wall of arbitrage agency arbitrage cock the nightmare bamboozlement that will no longer serve j.p. morgan in their quest to hide losses and that starts slowing down like a pile of bricks short j.p. morgan some of the facts sell it sure it may be good in fact it better naked short at this at this time would have been bankrupt america if you follow this next have imax bank of america getting smashed as ai g. johnson took a lawsuit for a in a big way so sure it american international group is expected to sue bank of america what might be the largest mortgage security related action filed by a single investor the suit seeks to recover more than ten billion dollars in losses and twenty eight billion dollars in investments in mortgage backed securities this

is again when the barrack obama came into office stacey by not shutting down the too big to fail banks and by letting a.i.g. live another day they're committing massive moral hazard on a incredible epic biblical scale now they're out suing everybody who's involved all the people all the counterparts are that are suing each other are bankrupt and they're suing each other for the right to drain the federal reserve of more of the citizens capital and noticed a key word in what he just said counterparty you know this extends to financial markets as well because when you go from got to play to double a plus suddenly when you start to downgrade all these decisions that are the intermediaries for all these north of manipulating fraud deals you have counterparty risk so when they say well look for example the sixteen trillion or six hundred trillion says me the riveters out there they say well it's not really a rest because they're all offset each. there through the counter-party obligations but if the intermediary that's responsible for making those obligations good goes

bankrupt then you don't have a good coverage there you actually have a six hundred trillion dollar wrist according to the report there's a growing trend of investors pursuing private lawsuits claiming banks misled them into purchasing risky securities the trend also stands from the lack of prosecutions on behalf of the justice department against the largest financial firms and their executives so there you go max you talk about barack obama refusing to prosecute these are these people that too big to fail so the banks toure's this is why we're still in the situation this lead says up to the biggest firms out there who can sue it because mom and pop joe baca donuts can't sue j.p. morgan and bank of america and all these other banks but you know the giant bankrupt organization. i think this is so important because at the time when they led a.i.g. get away with this massive fraud number they and when paulson of the congress of the extorted three quarters of

a trillion dollars it was all that we got to keep as markets open we can't afford them to go bankrupt for the counter party risk we can't afford the systemic risk and barack obama just put it. through. and now to have years later it doesn't matter barack obama by not enforcing goal law by not following the constitution it's going to blow up anyway well apparently a.i.g. is planning to file similar lawsuits against goldman sachs j.p. morgan and deutsche bank and of course after that will come the rating agencies because j.p. morgan goldman sachs and torture bank were selling products that were aaa rated by s. and p. but with all these things falling apart everybody losing their aaa america falling apart into a pocket of fraud and nothingness i want. bring up one final headline to think of another option another reality that we could be facing today what if barack obama

had been a leader the bull case for gold gold is rising because the world monetary system is being debased and there's no sign of stopping well what if barack obama instead of engaging in this elaborate stupid awful theater with john boehner what if he had just come out and said you know what forget all these negotiations we're just going to go back to a gold standard and we're going to value it at twenty five thousand dollars an ounce by and just left and that would have you valued all of their dad and they would be on the road to starting over again that's genius it's the reverse nixon it's the reverse nixon now nixon defaulted on the debts of america by dropping the gold standard when he owed all this money to foreign creditors well america is in the same position now and they could effectively do the same thing they could effectively default by devaluing it against gold. that's exactly what's going to

happen anyway and barack obama if he were a as you put say if he were a real leader and had that call an ace of was say richard nixon which i can't believe i'm saying that after having been dragged through watergate as a kid and be and been humiliated but comparative barack obama richard milhous nixon looks like a genius statesman compared to this no spine and leader list none nobody bagga nothing bag of worms and that's a genius idea simply and it's going to happen anyway they have to bring back the gold standard you know that the smartest guy out there in the punditry universe jim rickards you know he points out that those who criticize this idea say there's not enough gold and you know he would point out and i would point out that there's something called the price discovery mechanism you know markets reflect supply and demand that if you have six hundred trillion dollars worth of worthless derivatives well you some of that's going to end up being repurposed as a gold standard at twenty twenty five thirty thousand dollars an ounce that's just

the way markets work except market driven capitalism or go home. jason aaron thanks so much for being on the kaiser report thank you don't go away after the break i'll be speaking with peter chef. we'll. bring you the latest in science to take. from the realms of. the future coverage. welcome back to the kaiser report time now to go to connecticut and talk with money

manager radio show host all around nice guy peter schiff of euro pacific capital peter schiff welcome back to the kaiser report they sure have yat all right peter schiff as we have been talking about and as you have been talking about the u.s. has downgraded been downgraded by s. and p. their debt from aaa to double a plus did the s. and p. go far enough well of course not but at least they way so in the right direction you know in wall street parlance any downgrade means get the hell out you know they never like to put a sell out anything i say you have to look at it go from a strong body will buy it means you know look out below and so they did the minimum that they could do but really what s. and p. is saying as far as i'm concerned is get out u.s. debt eighty dollars debt because what they're really downgrading is not treasury bonds but the dollar because s. and p.

knows as alan greenspan said it warren buffett said they don't have to default they could print but that's worse especially if you're obama. and you get paid back with monopoly money and so what this means is that all debt in dollars should be downgraded whether it's treasuries uni's corporates you name it it's pay you back in dollars get rid of it all right now let's talk about the whole rating agency motif you know how they how they have the role that they've played in this crisis and what's been going on the last few years because during the lead up to the crisis they document very well in your book crash proof and crash proof two point zero you talk about how the rating agencies were remember that they gave the derivatives a collateralized debt obligations and these other cancer nations bastardizations the securitizations triple a rating so why suddenly did they get religion how did that how that happened because they were they were in ok it's funny that the obama

administration is saying well why should we listen to s. and p. after all they got it so wrong with the sub prime they think we should listen to duties it fish but they also got it wrong and what everybody got wrong was they rated stuff aaa it should've been aaa and they're still doing it at least he is learning from its mistakes whereas the other agencies are not and the obama administration is criticize again for learning from its mistakes that's interesting i'm looking today and the the unintended consequences i guess you could call it because now fannie mae and freddie macas being downgraded some of the institutions like the office clearing corp and other part of the infrastructure in the architecture of the markets are being downgraded and this bond markets are being downgraded because the aaa rating of the u.s. government is a reference range if you talk about how this is going to trickle through to these other pieces of the infrastructure and what consequences certainly because the u.s.

is not aaa and the u.s. is double weight loss that if you used to be a double a plus when you got to go down to double a because you're not on par with the trade. if you are somewhat rich let your receipt into treasury you're still more risky because the treasury can tax everybody to pay its bills and the treasury doesn't caxton prince and it debases the dollar better fixed all bonds not just its own bonds but you know it's also crazy about the rating system why is china the world's biggest creditor nation we owe china trillions how can they be rated double a minus and we're all and we're a double a plus and what kind of trial i guess on world is the world's biggest debtor a bigger risk than the world's biggest creditor now why what's kiters comments he says s. and p. is being irresponsible as an s. and p. being responsible like. sank it's big government this big you're responsible they're the ones that are racking up it and you know the a bomb administration is

all over s. and p. because they claim they got the math wrong but they didn't count his two trillion dollars of assumed savings over the next ten years why should they count it it's not going to happen and in fact the real math problem is with the administration using the c b o budget numbers all of these deficits assume a rapidly growing us economy for the next decade with low inflation low interest rates this exists only in a dream the reality is we're already going back to recession so you could take all those rosy scenarios and throw in the trash can where they belong good pledges deficit is going to be much worse then both the administration and this in p. believe so i mean they're all wrong about a map all right i want rico over that once more just because i want to talk about this two trillion dollars take this review that again why that's really a false canard in all this and also comment on warren buffett's remark that moody's

that s. and p. is somehow wrong and that his investment in mooney's their right yeah. people forget that he's got a dog in this hunt because he's a big shareholder in moody's and if s. and p. has got it right that means moody's has got it wrong so when he comes out of tax moody's he's got i mean s. and p. he's got it genda also business guy said that he would buy treasuries even if they had no yield so it was good i mean what good is his opinion if it's that moronic you automate maybe you have you know senility is catching up with warren because obviously he can't be a great has great investor as people think and he's saying he's willing to buy treasuries even if they pay zero you know if that's the case let's sell him some special treasuries it'll save the taxpayers a lot of money if warren buffett really buy our debt if we pay nothing and of course he also said at the federal government has a pretty impressed well you know what good is that to our creditors it's great for the government because it you know it inflates away its liabilities but it also

inflates away the public's assets including the asses of war and a warren buffett of course he's criticizing. s. and p. for missing some private housing bubble he missed it too he got it completely wrong in fact many of his companies might have gone bankrupt if the financial institutions were bailed out by by the u.s. government but the true trillion dollar mascara so-called is again based on s. and p. not calculating the full amount of the savings that congress claims are going to be made over the next ten years based on what they agreed to but almost all of the two trillion in cuts happen sometime after two thousand and seventeen will be a different president will be a different kind of threat congress badal not be bound by anything that was agreed to last week the only thing that counts are the custom were made to the two thousand and eleven budget and there are not in fact i just heard rock obama speak

and you know last night talking about the need for more tax cuts he wants to cut taxes for the middle class and for the poor any west. spend more money i government infrastructure means he is advocating for bigger increases in a deficit right now ok now you bring something up there it sounds similar to what was experienced during the lyndon johnson kind of guns and butter you know they want it all and this led to a huge over expenditures one to lead ultimately to nixon closing the gold one thousand nine hundred seventy one stacey herbert who i do the show with brilliantly asked me earlier in the show can obama if he was really a leader do a reverse nixon and just say we're going to reopen the goal window of twenty twenty five thousand dollars an ounce to inflate away these debts well that doesn't inflate away the debts i mean that that is it it's time to remodel ties gold put the u.s. back on the gold standard yes that's what we should do but there's no chance that

we're going to do that certainly not under obama oh you know that was the last time the u.s. government actually did default we default on our promise to pay gold and basically rendered a dollar off yacht with no real value but i think that the loss that you're going to see in the dollar in the decade ahead is going to be far greater than a loss in one nine hundred seventy s. because the dollar me changes reserve currency status despite the fact that we default on that promise the dollar now is going to lose that status right now the only thing that's standing between the dollar and complete collapse is the foolish actions of the bank of china the bank of japan the world is propping up the dollar because they believe foolishly debts in their political self-interest but as i said when they figure out it's no longer in their interest they will pull the plug and the dollar is going to collapse much worse than it did in one nine hundred seventy s. hopefully at some point we will go back on a gold standard but the price of gold will have to be much much higher for that to

happen talk about what's happening over there bank of mellon they're charging fees on deposits. over fifty million dollar deposits can you talk about what this charging of a fee on a deposit means in a negative interest rate will we see more of it other words banks charging people to death on their cash and i think i feed this is a byproduct of too big to fail because people that have a lot of money want to put it in the shoe gently because they feel that they're too big to fail and so they're but their deposits are safe but the reality is that of these deposits are safe because they're all bit outdated u.s. dollars so what people need to do is convert their their dollars into other currencies work or gold of a look at the swiss franc today this was frank is up almost three fold since you needed dollar thirty two to buy a swiss franc in fact with the euro dollar forty wanted to have a swiss franc is rapidly approaching parity with the euro and it just took parity

with the us dollar that happened very recently and now it's at thirty percent premium and look at the swiss right i mean the year and imagine where the yen would be at the big picture how did flush the it go to fifty billion dollars down the toilet last week to buy u.s. dollars and of course u.s. treasuries what is your pant doing with all those dollars that are by their blind treasuries not because they want to but because they think there's a gun to their head but they're mistaken so instead of paying somebody to hold your dollars sell your dollars and get into this was frank or get into gold but i've got about thirty seconds left i just want to go back and revisit the gold standard idea clearly as you point out what with the problem today is inflation and by returning to a gold standard you are coming back with something that will hopefully restrain government from spending and from the printing presses from rolling out of full speed so. what

clearly you know as we're saying before if you go back to gold standard got to find a price that weighed makes sense given the fact you had all this money. one thing going on for so long i know you've got a long term target on gold in the thousands but i thought about what i what price what i do because it depends on where we are now when we go back to the gold standard obviously if we go to the gold standard today the gold price will be lower but if we go to it two years from now when it's going to have to be that much higher so a lot of it depends on where we get religion and of course we have it all depends on how much gold we actually have you know relative to all of our notes that are in circulation because it's a relationship between the supply of dollars and a supply of gold that which jet would set. back and what we're able to give for each of our ious but once we do that then to be spending stops then to deficit stop we can't do it anymore if we actually go on

a gold standard by which real then we have to abide by it and so i don't think we're going to go to a to get in so we have a real crisis as long as the world is buying our bottoms we're going to keep selling them is why there's a world is gobbling up our paper we're going to keep pretty good as long as we can live beyond our means we'll do it a lot as long as politicians get elected by plunging us deeper into debt they will do it it's not until they can't it's not until there are real consequences like a collapse in the bond market a collapse of the dollar this sense interest rates soaring it sends consumer prices soaring that case the stock market that puts people in the streets protesting you know and that is not until all that happens we're not going to do the right thing all right peter schiff thanks again for being on the kaiser in part based you all right that's going to for this edition of the kaiser par with me max kaiser and stacy herbert everything my guest peter schiff is going to send an email please do so at kaiser report r t t v dot ru until next time this is next time for saying.