hosts of the cream of the aviation business and fast jet fans from around the world it's russia's showcase of the very latest and the best of modern flight. and up next the kaiser report with max and his co-host stacy herbert discussing the absence of justice for banking crimes and whether ordinary people really can make a difference. max kaiser stacy herbert you know a lot of people ask what is the root cause behind all these riots. herber tell us more the riots in the street i might add and the riots in the markets headline reads quantitative easing is good for the rich bad for the poor quantitative easing the bank of england's recession busting policy of buying of

billions of pounds of bonds may have contributed to social unrest by exacerbating inequality according to one city economist because they missed diagnose the problem back in two thousand and eight they felt that there was a liquidity problem in the markets instead of an insolvency problem at the big banks max they misdiagnosed it to the public this is what they told the public because the evidence suggests that q.e. cash ends up overwhelmingly in profits thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it and you also point out that real wages adjusted for inflation have fallen in both the u.s. and u.k. they've risen in germany which has not applied any quantitative easing that is core wrecked and it's incorrect to talk about this in terms of inflation because inflation implies that wages are going higher that there's

a lot of demand and the prices are being pulled higher this is about prices being pushed higher by an infusion of trillions of dollars worth of more debt on top of the existing debt and it's the interest cost now that's causing these bankers to issue more debt to pay off. the interest expense it's exactly like a household paying off one credit card with another credit card so mervyn king of the bank of england or over there the federal reserve bank ben bernanke they're simply borrowing more to pay off the existing debt they're borrowing from peter to pay paul yes but it's like the same household members borrowing from each other's credit card but one gets to borrow at zero percent the other has to borrow thirty percent so essentially they're making just one of the family or the household to pay for it all because as he says quote real wages and salaries have fallen by four billion pounds profits are up by eleven billion pounds since the recession this is

because over the past ten to fifteen years the banks that were once the intermediary force to match buyers and sellers of loans they are now subsumed into the structural components of the government itself so they take the cream off the top and claim it's their prerogative as government functionaries and they don't actually do standard banking anymore no one does banking anymore it's just a matter of siphoning cash that's true and also again remember this quantitative easing is the central bank buying up assets from who from bankers who get to sell these assets in a deflationary spiral at the previous one hundred cents on the dollar price to the central bank the rest of the population has to live in the deflationary spiral world in which their incomes are deflating right basically the people who are rioting they've seen their house prices crash because they've been cut out of the

ponzi scheme whereas the major banks as you point out they're buying and selling assets from each other these are bonds a link to real estate but they are not marking to market the value of those loans quote unquote assets and they simply swap them back and forth for huge fees and they claim this is needed to maintain liquidity and. it's a liquidity issue instead of the truth is that it's an insolvency issue and you've got a bunch of captive regulators allowing for the larceny at the top and therefore it circles down to the bought a home well in our last episode of kaiser report we spoke to william k. black and he called this a crime janet environment in which the regulators and the politicians create an environment in which crime will happen so let's look at this headline here following on the first headline where we know quantitative easing causes wealth and income gaps sterling no refuge as king stimulus bank of england governor

mervyn king signaled on aug tenth that he may resume pumping cash into the economy in order to boost growth he have no choice because the debt monster both visible and on the shadow banking system is gordon brown himself called it is this huge out of control monster that requires zero percent interest rates there is no risk of rates going higher that won't happen in anyone's near future interest rates will be kept at zero indefinitely and this is another way to disenfranchise the poor who are rioting as an example of trickle down larceny the other thing i might add is that you could have predicted this in the price of gold because of course the price signal from gold has told us that this crime identical atmosphere

environment of the u.k. would not stop as the price of gold to soared over eleven hundred pounds an ounce that was only six or seven years ago two hundred pounds well you measure something the price signal in an environment where prices are manipulated the bond prices are totally manipulated the governments are buying their own bonds so you can look to them for her. price discovery stock markets are bought seventy percent bought and sold by computers there's no price discovery there either so you're still in place you have a real price discoveries in gold and silver and gold and silver for eight nine ten years has been saying that it's not a commodity it's a currency and it's going to go higher as the crime or genic wave increases and gets bigger and bigger speaking of price signals the most important price signal in our economy is of course oil. saudi need for oil eighty five dollars may speed cut back so this is

a cutback in saudi oil production being predicted if the price of oil which is now at about eighty five if it goes below that that's saudi breakeven point due to the financial disaster happening in the west of course the saudi royal family has had to spend over one hundred billion dollars placating their population to keep it from looking like london so the same machinations in the markets we see work keeping interest rates at zero that is the cowtown to the banking terrorists and their need to foster a larceny at the top end of society is at work in the middle east in that we now have a floor on oil and eighty five dollars a barrel because this is the price needed to placate the riding population for them they are just buying off the riding population with cash as a result of selling oil of course the u.k. is running out of oil due to peak oil so it's implementing other solutions which

are going to be dead on arrival you can also see how we are at the peak system that we have at the moment because we have a petro dollar basically dollar backed by oil but they're in a death grip saudi arabia can't do with less than eighty five dollars because of the disaster of the us based debt system which is never which is clearly not been fixed so but because of that the us can't ever grow out of those debts the western world because oil cannot go below eighty five dollars right and you also will never have the demand for a credit to keep the credit ponzi scheme going like it has been because of the felde europe to find new significant oil discoveries that would require a massive draw on credit so this is peak credit working along with peak oil and peak everything else peak globalization peak financialization so things are falling

apart and they're falling apart in different countries in different ways. now speaking of resources i want to go to the headline for an interesting quote in this story is jeremy grantham the world's most powerful environmentalist so jeremy grantham is the head of asset management for g.m. . and he's talking about global warming and he says global warming is bad news finite resources as investment advice therefore that you should pitch the global warming story as an investment story but the interesting thing is i think he's he's really wrong here when he says that is americans are just about the worst dealing with long term problems down there with us. but they respond to a market signal better than almost anyone they roll the dice bigger and quicker than most i think is referring to things like the threat during the sixty's of sputnik which got a response right away to put a man on the moon and america won the space race. so he's saying that if you could

position this in such a frame as this that it were to acquire this type of gung ho attitude and it's an investment device or there's an urgency behind it that people would get behind it but you see the problem here as i see it is that that would require leadership i think it's kind of the opposite max i see it as a population who is dumbed down through everything being taken care of them so they see the price signal the price signal on oil has been there for the last five years we've seen it at one hundred dollars consistently over one hundred dollars they've done nothing fuel efficiency standards have not increased they are not responding to prices they're just sitting there dumb thinking that well our government will go invade libya and we'll be taken care of our government invaded iraq won't they take care of us always on this issue. while the price of gas which is independent really

the price of oil per se is the price signal that tells americans that everything is ok now the other reason why people might be failing to respond to a price signal is that we live in a crime adenike environment where crime goes unpunished it happens without any sort of regulation so we don't know what prices are real lord miners calls for inquiry black box trading lord minors the former city minister has called on the government to launch a focused inquiry into so-called black box computerized trading in the wake of extreme volatility in the u.k.'s biggest companies so he alleges that the three hundred billion pounds knocked off the footsie in london is due to high frequency trading it is so is the downgrade of u.s. treasury to create volatility to make it easier for high frequency trading and black box trading to extract more wealth from the exchanges that's why they put the servers next to the exchanges. themselves to siphon the cash off more quickly and

more efficiently and this is without a doubt and the instance a looting by wall street banks by the banks in the city they're looting hundred million dollars a day by some one estimate and they get no punishment whatsoever then you go to london riots and somebody is caught stealing a pack of gum and they get six months in the clinker again i asked david cameron about this i mean i mean he's not a stupid man but when he fails to see the problem here what has to ask oneself is seen in fact oh moron well look at this fifty percent of trading in london is high frequency trading. and people are saying that is putting ordinary investors at a disadvantage due to the speed which with such trades are placed so they're stealing from ordinary investors david cameron in parliament last week stated that he would investigate whether social networking sites should be shut down if they

helped to plot crime so what are these how high frequency trading algorithms but plotting crime it's plotting crime they know when they write these algorithms that they are going to steal with it they're plotting crime they've mechanize crime it's an assembly line of crime they're extracting wealth and as a result trickle down larceny kicks and you have kids stealing at the corner shop and riding caused by larceny at the top people who can't see that are obviously in bed with the larcenous pts and they should stop looking at the arsonists and start looking at themselves as they larcenous they see her thanks so much for being on the gaza report thank you max stay tuned don't go away much more coming your way. for the full story we've gone to. the biggest issues get the human voice face to face with

the news makers. will. remain you believe just in science and technology from around the world. we. covered. the official delegation. from the. video. feeds now in the palm of your. question on the ati dot com. the kaiser report i'm max keiser time now to go to san francisco and talk with richard heinberg author of many box including his latest the end of growth richard

welcome to the kaiser report good to be with you max all right richard heinberg markets around the world are once again volatile once again credit is a vapid reigning tell south energy place and to have a chaotic peak debt scenario well you know economic activity ultimately depends on energy and raw materials we tend to forget that we think money makes the world go round but really when you get right down to it it's it's energy and raw materials so we've benefited from extraordinarily cheap concentrated energy sources for many decades really since the start of the industrial revolution but we have been extracting them using the low hanging fruit principle so even though there's still lots of oil coal and natural gas left in the ground. we're going toward lower and lower grade resources all the time that means more and more investment capital is needed in exploration and production. and that means the cost

is increasing that's one of the main reasons that oil is one hundred dollars a barrel today instead of twenty dollars which is what was being forecast a decade ago. so that has real impacts all through the economy it increases the cost of shipping which hurts globalization it increases the cost of running automobiles which hurts consumers so they have less in their pocketbooks to spend and in a economy like the us that depends on seventy percent consumer activity for its its economic growth. that's a real problem in effect i think high oil prices or a cap on world economic activity right now all right so although people talk about the economy slowing down around the world price of oil is still strong trending higher due to that scarcity now kicking in in this peak oil scenario

but getting back to the question of debt. and peak credit over the past fifty years the growth of the banking industry the growth of the growth the financialization the growth of the bernie madoff ponzi scheme like wall street layer upon layer upon layer of the rivet of the debt and murder of of has been contingent on the growth of credit as a relates to. and talk about the interactivity between peak debt and peak oil debt has become the lifeblood of the society and in many ways we have a debt based currency. the way we create money these days is through bank loans so in order to grow the economy in order to grow the money supply we have to have ever more debt so we've done that over the past several decades particularly the last couple of decades consumer debt has grown of course we we suffered in the

early part of the twentieth century from over production with cheap oil we could make stuff faster than people could buy it so we created the advertising industry in the consumer credit industry. and afternoon in the early one nine hundred seventy s. when u.s. wages started to stagnate. people continued to buy more stuff because they were being talked into it by the advertising industry but the only way they could do it was by taking on more consumer debt so with credit cards and of course they were encouraged to do this by the banking industry so with credit cards and cheap home loans people got loaned up to their eyeballs and this is one of the problems with the u.s. economy right now why a recovery is almost impossible because the levels of consumer debt are just you know intolerable there's no way the average american can take on more debt and there is no way that the banks will loan them more money because they're not credit

worthy at this point with very high unemployment and stagnant wages. so we're we're at this fundamental turning point where we've we've reached the limits both to our energy supplies and to debt both consumer debt and now government debt as we're seeing not only in washington but also in europe ok a report out of the u.k. this week says that quantitative easing is making the right threats are and the poor are poor are by driving up prices of assets including commodities like oil what do you think the role of the fed is in terms of the price of oil well you know by creating liquidity for the banks that does encourage speculation in oil but you know i don't think there is there is that much of an effect what we're really looking at is higher oil prices being driven first of all by higher

costs within the industry and second by higher demand in china and other asian countries. what the fed is doing with quantitative easing is it's kind of a desperate measure there is there's some understanding there that. you know the government is kind of the the the last resort for keeping. the economy growing and government spending and borrowing have have have really paid for the recent u.s. recovery but now politically in the u.s. more government borrowing is really impossible you know there's a it's a political orphan neither democrats europe republicans want to claim it so the fed is left with it's very small tool box of solutions and quantitative easing is basically what's what's left on the table it doesn't work in fact none of the policy solutions that are on the table in washington will really work to get

the country back into economic growth but the fed is going to try the one thing it knows. i would expect to see more quantitative easing in the future even though it's not going to work they'll stick on the fed for a second. thing now ed miliband who leads the opposition labor party in the u.k. make a direct attack on david cameron saying look if you want to get to the root causes of these riots and london you need to let's talk about the looting that's going on being enabled by the bank of england in the central banking system also in the us you've got ron paul who's now the front runner the only serious front runner in the republican camp running for president suddenly his campaign has taken on some urgency he's been running on this audit the fed and the fed is the problem issue are we have we turned a corner richard heinberg do you think you know that finally people are putting the pieces together and see the role of the fat money fractional reserve banking and

this failure to address economics in try to replace it with what bush sr used to call the do economics you think people finally get it. well you know i think people on the far left in the far right are getting it and that leaves the great majority of people in the in the middle who are being led you know primarily by the mainstream media who still don't really see what's going on they feel very uneasy they had this sense that you know neither more stimulus will work nor will austerity and they're and they're absolutely right but that leaves them with nothing ok so if i'm hearing a correct way you are saying that the role of speculators who are emboldened by a lot of this cheap money and cheap credit that's unable let's put that out there by the fed that's really not the key factor in when we're talking about eighty five dollars oil hundred dollars oil it's the supply and demand having to do with rising

demand in the east versus shrinking supply in. ground and he also said something interesting there and that even believe that the saudi oil field galois is in decline along with berg and can throw out that is that a fair statement to make. yeah i mean the saudis have been managing their oil fields with all the latest technology in doing it i think probably as responsibly as as they could but the reality is you know go water isn't all that oil field it was discovered back in the late one nine hundred forty s. . it we can expect even the world's largest oil field to keep producing at national rate forever and there's every sign that that that will field is has reached its it's the end of its glory days so the saudis are bringing on other oil fields there and they've been drilling like crazy the

last few years and they claim to have. up to four million barrels a day of spare production capacity. that doesn't seem realistic. what they're talking about is the possibility of absolute emergency measures they could perhaps bring on another two and a half three maybe even four million barrels a day over a short term but that would damage their oil fields if you if you produce an oil field absolutely flat out maximum rate it tends to reduce the ultimately recoverable amount from that field so the saudis don't want to do that they want to continue managing their fields responsibly which means that they're probably never going to produce any more than they are right no richard heinberg so i was speaking with herbert in the first half an hour i am discussing pricing on earth as it relates to health and the question as one oil generating a pricing on one hundred dollars a barrel you would think in

a capitalist society that relies on pricing all to to communicate to the mark. it what should be done that this would be a glaring price and know that either as a alternative energy needs to be explored more thoroughly or there needs to be some preparation for what is obviously a supply problem in coming not through the pipeline why has there been such a failure for normally rational capitalists in america to respect the price that it's oil is telling us you know well you know in the in capitalism one o one there is the notion of substitution that you know when any commodity suggest more expensive that the market starts going looking for substitutes well that's fine in theory but what's the substitute what do we use instead of oil you know biofuels have been around for years and and there's been enormous government subsidy for ethanol production here in the u.s.

something like forty percent of the total corn harvest goes to making ethanol and that forty percent of all the corn grown in the u.s. going to make ethanol still only replaces you know three or four percent of the gasoline that we're using so. there's there is no substitute out on the horizon immediately now of course everyone's talking about electric cars and the government is offering some subsidies for electric cars but how long will it take before electric cars make up even ten percent of the total u.s. fleet well you know nobody knows the exact answer to that question but it's going to be at current rates well over twenty years so you know yes the sic the price signal is there but there's no no obvious response that's going to do it for this edition of the kaiser report thanks so much richard heinberg for being our guest it's been a pleasure max thank you all right and that's going to do it for this edition of

the kaiser report with me max kaiser and stacey harmer my guest richard heinberg if you want to send me an e-mail please do so at kaiser report r t t v are you at all next time with a mask guys are saying by all. fifteen to twenty million years for the planet to recover from a major extinction event but the planet has time we don't. it's been going on for months twenty twenty five years and since the eco terrorists before there was even islamic fundamentalist terrorist in this country when a nine eleven happened the bush administration could not find any terrorists because the feds couldn't find any real terrorists they decided to take these young people who were accused of property sabotage and label them as terrorists someone he'll destroy his property. with absolutely zero intention of harming

a single human being. in my mind is not. real people who work in this country are the housewives who recycle. and the children who plant trees on the weekend with their. troops that's the. sound. of. mission. couldn't take free. free. free. free. free. free. free media.

groups a boycott of british. u.k. security agencies were complicit in the. overseas there was anger from opposition groups after the government said they wouldn't make the findings public raising fears that the investigation will be little more than a farce. for incitement. to four years each. call for civil unrest even though no one showed up for the riot meanwhile concerns are raised their punishment. still.