video. omission st now in the palm of your. welcome back you're watching our t.v. live from moscow the top story lot of gadhafi sons considered by many as his father's successor appears in tripoli in front of supporters despised rebel claims he had been detained on the storm to see a day and go the information about his arrest was also confirmed by the international criminal court this is added to the confusion over who's in control of the capital as both government and insurgent forces insist they have the upper hand. also doubts are cast over whether the rebel victory would actually leave the people in control their destiny as experts points to egypt or those who fought for

the revolution and up with the government they didn't choose and that's why the media still rages on western oil companies have already started circling around the violence to one country once again sparse concerning the so-called battle for democracy was a war for blad gold all along. but more on the situation in libya and half an hour's time first though as a cash crisis rages across united states and europe financial guru max kaiser analyzes the situation because a report is coming up next. because there's because a record. stacy herbert apparently the vampire squid is back to devour us and only an alien invasion force can save us stacy herbert yes

max well the global financial deflationary collapse that continues to this day almost three years later apparently only inflation can save us and placed in is impossible by the central banks the only thing that could stop it is here's paul krugman if we discovered the space aliens were planning to attack and we needed a massive build up to counter the space alien threat and really inflation and budget cuts took secondary place to that. this slump would be over in eighteen months twilight zone economics so paul krugman over there the new york times all of the stimulus package the work ready shovel ready keynesian solutions have all failed and he's calling an invasion from outer space to rally the economy to overcome what is essentially still bad behavior in the banks

yeah and max you know the front page of the financial times and there's no more than an alien invasion as a possible call krugman hopes of an alien invasion are no more daft than people believing that central bankers might save us that they might save our economy move to curb swiss francs rise backfires as you see there. so trader shrugged off new measures by the swiss authorities to stem demand for their currency sending the swiss franc sharply higher the franc jumped by two percent in just a matter of minutes as traders ignored the swiss national banks decision to almost double the amount of liquidity available to the money market well look the central bank is a force that resides outside of the economy and it's there to provide theoretically speaking price stability and full employment that's their charter but they got

sucked into the bank they got sucked into the parasite that is the banking system so now a sense earth is no longer available as a location to create a central bank policymakers and keynesians brainiacs are saying well let's just create a central bank outside of earth or depend on an invasion from outer space aliens from abroad of course some would also argue that this is a thinly veiled reference for the need to create more war because people often say well world war two got america out of the depression so having failed to stimulate the economy by let's say imposing the rule of law and by eliminating parasite bankers and imposing true accountability they want to go and send us servicemen and servicemen from other countries to the front line and get slaughtered so that paul krugman doesn't look like an intellectual pig being well speaking of war an act of

war has of course spent a clarity over the past week chavez orders eleven billion dollars of gold home then as well as finance minister jorge do your debt donny said that the weakening u.s. dollar and near default by the u.s. government and the european sovereign debt crisis threaten venezuela's savings and they will be more secure at home and in allied countries yeah that's right the veriest goal. old hordes by various countries are not held in those various countries we've talked at length on this show about germany sixty percent of their goal the seld in america now hugo chavez in venezuela is saying we want our gold two hundred tons of it to be brought home and held in the bank of england and of course the bank of england is not the only person holding that gold because tony and also include banks such as j.p. morgan so it's as if you go chavez watches our show realize that the crash j.p. morgan by summer campaign could be applied to gold is demanding physical delivery

of his gold because you know that j.p. morgan and the other banks don't actually have the physical gold they have to go into the market to buy that gold but they're bankrupt to begin with that means they have to incur more debt which means that they're going he's trying to collapse j.p. morgan just like we're trying to collapse j.p. morgan so you go chavez welcome to the gold liberation army yeah but the point is whether or not he'll ever get to school with back because he's put in a request but is this going to trigger other people demanding their gold back other nations demanding their sovereign gold back their thousands of tons held by germany in at the new york fed all countries around the world story in the u.s. will the u.s. give that back that's the big question what do you think well i think no i think jim rickards is correct i would i would agree with both you engine records that these countries that he's made a big story out of this he believes that america should commandeer the world's gold which would give them something like fourteen thousand tons in toto and make them

on the glide path toward having a post keynesian post free i've earned see economy based on having the most gold but you're right this is a huge set up for a global conflict. so hugo chavez says this max quote we've held ninety nine tons of gold at the bank of england since one thousand nine hundred eighty i agree with bringing that home it's a healthy decision max the only way to go chavez is getting that back if he comes back to with an alien invasion force hugo chavez well he's good friends of course all over stone and sean penn and noam chomsky maybe they can put together an invasion force go into the vaults in the bank of england and liberate venezuela's gold at the least it could be a great moving but max is not the only one seeking gold gold equals treasuries the evidence a stunningly high correlation of gold to twenty year treasuries from july twenty

first to august sixteenth is point eight nine over that period gold is that twelve point three percent and treasuries are up eleven point eight percent i was so result of the conundrum that people are talking about right now on this show people say that bonds and gold cannot both be hitting new all time highs simultaneously because that would mean that inflation and deflation are happening simultaneously let me break it down for you a bustling the bond market is being bought up by computers. the gold market is being bought up by people who are fearful that the bond market is being bought up by computers that are sent i'm saying one is real the people in the governments are buying gold the other one is fake a bunch of computers are buying treasuries to make it look like the u.s. economy is not as catastrophic as it really is and that can only last so long well the reason why people are going to gold instead of the treasury according to this

article and really holds dot com gold does not carry a downgrade risk as do treasuries so this is the beginning just like i said hugo chavez pulling his gold out of the bank of england this could set a bank run on the bank of england and all their gold this is also the same thing they downgraded the s. and p. this is the beginning of the rush out of treasuries and into gold it is it is a run on the bank answer mask the collapse they instructed the computers to buy more treasuries using borrowed money which is only making people buying gold want to buy more gold like i said treasuries carry the downgrade risk or at least they did until last week d.o.j. probing s. and p. the investigation centers on the alleged cases in which the company's analyst sought to award lower ratings a mortgage bonds but had other s.n.p. managers overrule them the department of justice in america alleges that they began the probe of s. and p. before the downgrade of us that they're going to rewrite the story of the boy who

pointed out that the king had no clothes in this version the king investigates the boy for having faulty eyesight. well so i mean yes s. and p. did faulty grade these things but our fifteen logo and world goals go vote no no they didn't fall asleep great these things but two trillion dollar error supposedly according to our body peter schiff this was an assumption that certain growth parameters would be met that there's no way in heck any of the growth parameters will be met this is a straight up and straightforward honest to goodness report there is no true trillion dollar error s. and p. made the right call the fact that they're now being vilified by the people that they made the call against doesn't invalidate the call well i'm talking about the mortgage securities when they raided the mortgage securities that have exploded and across the entire global economy the s. and p. rated all of those goldman sachs c.d.o. as they read of them aaa they redid all of those things aaa that they sort of

french banks german banks swiss banks italian banks all those things blowing up economies are rated aaa by s. and p. they were they were also rated aaa by moody's they were rated aaa by fitch those two are not being investigated as far as we know at the moment because it's only s. and p. that has downgraded u.s. government debt now this is the question people are going into gold because treasuries carry downgraded risk or at least they did until the department of justice said come message to those who dare to downgrade i get it ok well so let's look at where this message is going mattei e.b. a whistleblower claims that over the past two decades the agency has destroyed records of thousands of investigations by white washing the files of some of the nation's worst financial criminals the f.c.c. has kept an entire generation of federal investigators in the dark about past inquiries into insider trading fraud and market manipulation he gets companies like goldman sachs which a bank in a i.g. so what do you think about this story here that the f.c.c.

is the one that was through has deleted files that is breaking the law by the way because according to the law they're supposed to save these files. for twenty five years you write in. substance to the idea that there is a criminal racket because the f.c.c. and the investment banks and the fund managers and the rating agencies and other aspects of government are called looting to create this on the whole the racket of price manipulation and price fixing and extraction and siphoning of wealth for their own anger at the jeopardy of destroying society was their doing and only it also part partially explains max lie obama keeps on saying we have to look forward because in fact there is no way to look back because all the records have been destroyed as dorsey flynn the the whistleblower in this case said it paints a startling picture of a federal police force that is effectively been conquered by the financial criminals it is charged with investigating you know it's also remarkable is that

the crash in interest rates you would think it would spur a refinancing boom for homes but what they're finding is that there's so much of a mess in the mortgage market that people who could normally refinance and spur the economy because all the paperwork was fraud fraudulently signed and induced the big this normal machinations of lower rates to spur the economy is not working either so fraud is just totally blocked any potential growth in the u.s. economy max not tight because danny says as one former s.e.c. staffer describes it the agency is now filled with so many wall street hot shots from often best to good bank that it has been and infected with the goldman mindset from within and the golden mindset max what is the golden mindset greed and suicide banking and bank until you kill yourself. that's the goldman mindset their suicide bankers the goldman sachs could be the aliens from outer space they could have spawned

a banking parasite they're eighty five broad street before they moved uptown and now they're they've they've made their way into all these right. three agencies there though they're the night of the living dead or i should say night of the living death all right state terror thanks so much for being on the kaiser report thank you max don't go away stay tuned much more coming away so stay right there. live. from studio. please please don't. come. with a. review of the latest in science technology from the realm. we'll

go to the future of coverage. i welcome back to the kaiser report i'm max kaiser let's go to tennessee and talk with catherine austin fits who served in the george h.w. bush administration catheters also a former banker and is now an investment advisor and blogger at the solari com catherine fitts welcome back to the kaiser report it's great to be back all right captain awesome french first matt taibbi in the latest rolling stone asks is the f.c.c. covering up wall street crimes and your thoughts. yes because they actually know mcdonnell is a criminal no no so of course they have to ok so he said the economic model is a criminal model explored out

a little bit in other words the banking system itself is basically a glorified part of these game correct well we have an economy that's again unworn organized crime and and you know part of the profits that organized crime is part of with keeping the whole economy going in search of the banking system or it's every community in america so just let me get it this way if the united nations says we're competing for four hundred billion dollars a year of global money laundering then then this financial centers to attract money and wondering are the leaders ok let me follow up on this money laundering theme because. i now owned by wells fargo which is owned in large part by warren buffett has just been fined two percent of one year's property for laundering three hundred seventy eight billion dollars in drug money for the mexican drug cartels what about the startlement is an adequate deterrent first of all you know absolutely none if you're if your business model is ended on

attracting those further news who processing is where it really is there's no way of finally this can get to turn to something that you know is something is part of what i do you an essential part of the business model of a sign like this will stop it ok let's talk about the proportion of these banks first of all the banks in the u.s. and in the u.k. because i would kind of talk about the u.k. a little bit the g.d.p. numbers that are quoted in both of these economies as their relationship to what comes out of the banking sector it has grown fantastically over the past twenty five years and over the past ten years and particular from five or six percent twenty five years ago to twenty five thirty forty depending on how you make the calculation fifty percent sixty. g.d.p. directly tied to financial leisure der main in the banking system so it's a fair to say that the g.d.p. numbers that come out of the u.s. and the u.k.

are tied directly to banking fraud well i think i think you know they include banking fraud but things lose truth to securitization it's the economy so we're shifting much much much more of the economy in to financial instruments that can be traded you represented and and you know there's no doubt that the fraud is very significant and part of the reason it's very significant is. it a lot of the fraud is turn with the instruments of corporate involvement of government so you really have the government banking model and a lot of that is done under the national security law ok i talked about securitization more and more of the economy move into securitization more corporations who are reporting profits are reporting profits as a result of transferring themselves into companies that get into the security securitization presidents but let's take an example for it goldman sachs for example in the mortgage business we now know that the mortgages when they were

originally offered there was fraudulent inducement then we know that they took the mortgages that they sold they repackage them or securitized them and fraudulently marketed them to funds around the world and then we know that they went into the foreclosure process and goldman and bank of america these other corporations and banks engaged in fraud on foreclosures so there's that so if you take away all the fraud associated with securitization it's a carrot a session itself is now proven to be an inherently fraudulent business i mean the word ok first of all so what it what your thoughts are of thought on that but i think it's much worse than you're describing max. because you describe the region were teachers were fraudulently induced to let me use an example of one house let's say we had a fraudulently induce mortgage on their house but let's say we also clean. and you know ten mortgages that were completely fraudulent so so i think the collateral fraud you know if you take the description you you described in you ads letter of

fraud. you know i think it was much worse and then when you lose the derivatives on top of something that's full of collateral fraud you know you're getting sued exponential for this i think the fundamental through across this was for worse than you just described right so you have on top of the three phases a fraud that i just described the private inducement fraudulent securitization and of course the fraudulent placement of those. securities and to funds around the world and you also have the securities that to be the rim events that were created on top of the fraudulent securities on top of that so that adds to the ponzi scheme i mean we keep coming back to this were technically illegal it's technically legal but in a in a country like america or the u.k. where the banking lobby has effectively taken over and change the laws to repeal glass steagall brought in the securities modernization act and made fraud legal i mean if you make fraud illegal is it enough to say well technically legal i mean at

what point do we say enough is enough we need to take stronger measures. well i think i think at the heart of the matter max it's not so banks out of control i think at the heart of the matter is physical violence because a lot of what has happened particularly and you know that i understand in the united states is is you have people who are afraid to say no because the results are saying no is physical violence directed at them or their families i mean we've had lots of people murdered in assassinated etc etc so the question is you know yes we have to say no to the question is how do we say no and that's why you know sort of it comes down to shifting our money but the reality is is is we have a force operating in the world that is completely operating outside of the law and and now when yet has come up with a way to stop it we're talking about my only violent mobster operations. i think of an example he was a personal example but i was a i was. you know i was

a former assistant secretary of housing and i had my own business in washington and i i was helping the department of housing and urban development essentially run things clean and we had to get rid of the clean team to to run the housing bubble and i was targeted i was poisoned a dead animals left on my doorstep my house was broken into people tried to run me off the road you know it was very very violent and it went on for years so you know so people who try and run the government clean up were or run while street cleaner targeted and literally you know have to fear for their lives i mean people have been dying so. you know it's a very very dangerous this is a situation in there and the challenge is if you have people who can kill and physically harass with impunity how do you you know how do you run a governance process just for people who are unfamiliar what your role with the

bush family are going to straighten it was what exactly i was assistant secretary of housing so i was the lead break in later for the housing area and it you know it's very interesting max is that at washington in one thousand nine hundred eighty eight and i kept saying to people look you know their engine area housing bubble this is going to destroy the country and in back of the country and literally i'll never forget it in about two thousand and two thousand two thousand and one the sopranos t.v. show had a whole series on a night for on and my own college roommate called me up and said well fitz you must be telling the truth it's on the sopranos and i said why is it that the soprano t.v. sure isn't but it shows more credible than the former assistant secretary of housing but literally max i lectured in skokie in london in in wellington new zealand all over the world in sweden trying to warn people about the housing bubble and the investment community in all those places simply just to do. seen when fannie mae

went down in two thousand and eight i have been on the radio show in outside of san francisco explaining about the housing bubble. you know for years and one of the biggest investors in san francisco lost over a billion dollars on failing make going down in pursuit of the thing on their website and put it up and said you know we had no idea there was a problem well i was on the radio for years to solicit sensor truth and housing saying you know just driving a problem in created you know ok imagine fannie mae freddie mac. they were caught committing fraud they were bailed out by the government there are liabilities are now taxpayers liabilities we've talked about are curvy are we talk about our fargo we talk about bank of america all the banks committing master fraud securities fraud accounting fraud and. what role in the global accounting and securities fraud that you see in the banks how central is

that the city of london factor into this that mess clearly the city of london is very important. and i would say the united states european investment interests have been controlling since the revolutionary war through everything i can tell but you know the other thing i would say is we're talking about a model which is is is not just from hard it's he's the model it's the clan it's the governance model it's the way things are so there's the fischel reality that has a lot as you and i were brought up to believe it and then we have a system which believes it's above the law i mean i literally have the secretary of heard once say to me look you know i don't have to pay attention or i don't have to be able or i report to a higher moral authority so we have the planet run under a model here's our printing on. different set of rules and laws that we believe the

law to be now if you look at how much money's been pulled out of the economy globally whether it's by the united states mine or whatever we're talking about trains the trillions of dollars and you know what i refer to a lot of it. but the fundamental question is where is all this money going because we're talking about truly trillions and trillions of dollars that have been pulled out and managed to courting tourists that you know i call it a financial could it tara but the question is who's running the financial couldn't tell and weirs all the money go on because it's very very significant and it's a system that doesn't consider itself to have to obey the laws that you and i are talking about now ok let me ask you a question about the europe and the european debt crisis french president sarkozy and german chancellor merkel have proposed a core collective government headed by e.u. president for your thoughts so essentially what we're watching is this is the

academic failure essential essential ization the more essential eyes that we could be economies get going to get at so where they just said is socialisation has just racked europe so what we're going to do is we need you more essential is a shell of course that's the worst thing you can do so you know i hate to say this because i don't think europe has a debt crisis i think europe's governance is being really engineer in debt is being used to do it so we go into a place we encourage them to take on more debt than they can ever afford then we do a series of things that bullion then we say we have a debt crisis and then we start to creating them terms by which they will start being run as a senator and government and instead report it up to the top of the financial system so that's why i call it a financial could retire because. you know it's not a debt crisis it's a plan all right catherine art and fair thanks so much for. the kaiser report.

right now is going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i guess catherine austin fits if you want to send me an e-mail please just add kaiser report at r t t v dot or us all next time this is backscatter saying by.