the ski lift you can see it on this column if you visit and go you. past the hour you're watching our team here's a recap of the main stories we're covering today two men are locked up in britain for attempting suicide brides using facebook but human rights groups accuse judges of weighing down a disproportionate trust just to score popularity points. the syrian army reportedly fires at thousands of anti-government protesters across the country but some syrians say they're glad to see tanks moving into their towns residents claim they see security forces as protection from armed gangs. and top flight trade

at the international air show in moscow and the nerves of steel for russia's premier pilots among those stealing the limelight is the latest russian stealth fighter the fifty state on the next day. and up next we'll look at how quantitative easing is good for the rich bad for the poor and how the sterling is offered no refuge the kaiser report do stay with us. you know how to ask what is the root cause behind all these riots things to her so it's 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 or

quantitative easing the bank of england's recession busting policy of buying up 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 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 exacerbate an already extreme income inequality and the consequent social tensions that arise from it and you also point out the 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 is core wrecked and it's incorrect to talk about this in terms of inflation because

inflation implies that wages are going higher but there's a lot of demand and the prices are being pulled higher this is about prices being pushed or 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 there is simply borrowing more to pay off existing that they're borrowing from peter to pay paul is but it's like the same household members borrowing from each other's credit card but one gets the 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 of poland 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 goes 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 but the rest of the population has to live in the deflationary spiral world and which their incomes are down 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 gone 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 a 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 there's a larceny at the top and therefore it circles down to the bottom home well in our last episode of kaiser report we spoke to william k. black and he called this a crime of jenin 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 august 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. definitely 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 agenda atmosphere environment of the u.k. would not stop as the price of gold has soared over eleven hundred pounds and ounce that was only six or seven years ago two hundred pounds well imagine something the price signal in an environment where prices are manipulated the bond prices are totally manipulated the governments are buying their own bones so you can look to them for good. price discovery stock markets are bought seventy percent bought and sold by computers there's no price discovery there either so you still in place you have a real price discoveries in gold and silver and gold and silver for eight nine ten years it's 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 machinations of the markets we see more of keeping interest rates at zero that is the countdown to the banking terrorists and their need to foster a larceny at the top end of society is that 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 was cash as a result of selling oil 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 do with less than eighty five dollars because of the disaster of the us based debt system which is now 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 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 you know speaking of resources i want to go to this 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 this investment advice therefore that you should pitch the global warming story as an investment sori but the interesting thing is i think he's he's really wrong here when he says this americans are just about the worst they're dealing with long term problems down there with us pakistan 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 thread 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 would require this type of gung ho attitude and it's an investment advice 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 think 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 will be taken care of our government invaded iraq well 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 a genic environment where crime goes unpunished it happens without any sort of regulation so we don't know what prices are real lord minor's calls for inquiry on black box trading board 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 the 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. changes themselves to siphon the cash off more quickly and more efficiently and this is what out of doubt and instance the looting. 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 one has to ask oneself is seen fact all moron well look at this fifty percent of trading in london is high frequency trading and people are saying that it's 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 hold high frequency trading algorithms but plotting crime it's plotting crime they know when they write these algorithms that they're 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 in 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 and they should stop looking at the arsonists and start looking at themselves as they larcenous stacey herman thanks so much for being on the last report thank you max stay tuned don't go away much more coming your way.

i'm going to. shape the future flights. large sea tanks to the max airshow. amanda kaiser report i'm max keiser time now to go to san francisco in part with richard heinberg author of many bots including his latest the and our 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 reading tells out energy play with enter the chaotic peak debt scenario well you know economic activity alternately 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 we've been extracting them using the low hanging fruit principle so even though there are 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 there has real impacts all through the economy that increases the cost of shipping which hurts globalization it increases the cost of running automobiles which hurts consumers so. they have less than their pocketbooks to spend in an economy like the u.s. that depends on seventy percent consumer activity for its its economic growth. that's a real problem in effect i think high oil prices are a cattle and world economic activity right now all right so although people talk about the economy slowing down around the world price of oil still stand trending higher due to that scarcity now kicking in in this peak oil scenario but getting back to the question of debt. n.p.

credit over the past fifty years the growth of the banking industry to growth the growth of financialization the growth of the bernie made our pint the theme white wall street layer upon layer upon layer of the riveting and debt and murder end of as main contention on the growth of credit as a relates to oil and talk about the interactivity between people that end peak oil debt has become the lifeblood of the society and in many ways we have a debt based currency we 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 head 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 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 baking industry so with credit cards. cheap home loans people got loans 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 and 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 reference are and the poor poor are by driving up prices of assets including commodities like oil what do you think the role of the fair is and terms are the price of oil well you know by 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 the there's there's some understanding there that the you know the government is kind of the the the last resort for tipping. 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 is really impossible you know there's a it's a political orphan neither democrats or republicans want to claim it so the fed is left with its spoke very small tool box of solutions and quantitative easing is basically. 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. and i

would expect to see more quantitative easing in the future even though it's not going to work elsewhere on the fair for a second. thing now ed miliband who leaves out position 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 in 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 is taking out an urgent saying 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 fair 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 getting where 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 well you know primarily by the mainstream media who still don't really see what's going on they feel very uneasy they have 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 you correctly you are saying that the role of speculators who are emboldened by a lot love is cheap money and cheap credit that's enabled 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. the ground and he also said

something interesting era and that evil is that the saudi oil field our army is in decline along with bergen and camp throughout is 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 war isn't all that will feel it was discovered back in the late one nine hundred forty s. we it we can expect even the world's largest oil field to keep producing at maximum rate forever and there's every sign that that that will feel this has reached its it's the end of its glory days so the saudis are bringing oil and 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 naxal agree 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 matter how thorough i was speaking with the herbert in the first half an hour discussing pricing on earth as it relates to oil and the questionnaires what oil generating a pricing on one hundred dollars a barrel you would think in a capital of the side that relies on price signal to to communicate to the mark. it

what should be done that this would be a glaring price signal that either as a alternative energy needs to be explored more thoroughly or there needs to be some proper ration for what is obviously a supply problem coming not through the pipeline why has there been such a failure for our normally rational of capitalists in america to respect the price signal that it. 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 still gets more expensive that the market starts going looking for substitutes well that's fine in theory but let's the substitute what we use instead of oil you know biofuels have been around for years 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 coroner 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 is there is no substitute out on the horizon immediately now of course everyone's talking about electric cars and the government's 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 sick 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 now going to do it and as a veteran of the kaiser report with me max kaiser and stacey harmer our thank my guests richard heinberg if you want to send me an e-mail please do so because they

reported r t t v that are you at all next time that the math guys are saying they are.