now at three thirty in the afternoon here in the russian capital you would not see the headlines now about failure after launch emergency crews are searching for the unmanned russian space freighter which crashed on wednesday in siberia so use a rocket was ferrying of food and fuel to the international space station when it fell back down to. rebels in libya promise of the bounty of two million dollars for colonel gadhafi dead or alive that's as western nations wasted no time in jostling for a slice of the country's oil under the new government. and the u.s. the e.u. are pushing for more sanctions against syria after the crackdown there against

protesters meanwhile journalists on the ground say there's a lack of objective coverage coming out of the country i will those are the headlines for an hour to do stay with us though up next and see how about trying to awaken the people who live day to day unaware they're being used and abused by the world's leading financial organizations because report is now. we've got. the biggest issues good human voice ceased to say so with the news makers. skies are stacy herbert this is the kaiser report let's talk about my own tony jenour. you know that is we're going to find stacy ever exactly max i officially have

a diagnosis for the fainting traders of wall street the same thing traders of wall street do continue you know the markets open up and down up and down up and down while the over the last two weeks well it made me think of the fainting goats of tennessee domestic griese of goats in america which have a genetic disorder called my attorney a congenital which is when startled younger goats will stiffen and fall over as you see from this image here they just fall over and freeze for ten seconds leave because they don't care when they get up and start walking again like normal like nothing happens but this is what we see in the markets how do you apply a fainting goats of north carolina to what we see in the marketplace well i think it's a genetic disorder so i think it we see you in greeting in the financial markets this is the first have imax wall street aristocracy got one point two trillion in fed's secret loans so as you know one of the consequences of aristocracy is often

you see in britain so i thought this is what you're seeing is that the fed is breeding. a class of bankers who freeze and start on fall over because that it generates attention from their own or central bank and they like fall in the sell button stocks collapse and then their wake. up with a quick buy everything back now also i might add that the so idea of inbreeding as it relates to wall street aristocracy that was gifted over a trillion dollars by the fed it also reminds me of the word to refer to as the of the rivet is our referential they refer to itself after generation upon generation of trading algorithms that have created this kind of inbred ogre like monster on wall street that only refers to itself and not the general economy or anything anyone is saying in washington so let's turn to the story here so the wall

street aristocracy fed carom ben bernanke used unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as one point two trillion of public money and max this is the most important part of the sentence that goes on about the same amount u.s. homeowners currently zero and six point five million to link when can foreclosed mortgages break the numbers worked out here banks made over a trillion dollars in loans that they knew could never be repaid because they were lending it to people who had no income no assets no job but they knew that they would be bailed out by the fed to that exact amount of money and let's be honest this isn't a one point two trillion dollar loan this is a one point two trillion dollar gift on wall street they call it forgivable loan which is code for gift. so the largest par was morgan stanley and they got as much as one hundred seven point three billion which was three times as much as the

company's total profits over the previous decade these are the companies profits there wasn't for the gifting from the fed to these banks their profits would be zero their start valuations by the way are crashing their liabilities are skyrocketing that's why most people in the know will tell you that banks particularly in france right now and i'm thinking of society in general are about to declare bankruptcy because they are beyond insolvent their insolvent times forty the other thing max is now when it comes to this matter of compensation by a lot of these bailed out banks they're saying it's the free market we have to allow the free market to reign because otherwise we become socialist marxist and blah blah blah but according to the bloomberg article even as the firms asserted in news releases or earnings calls that they had ample cash they drew fed funding in secret avoiding the stigma of weakness so i ask you max where is the price

discovery in there while you make an excellent point price discovery of course being at the heart of free market capitalism the nexus between supply and demand if it's all in secret and it's without bloomberg request for information for oil a freedom of information act request we would even know about this one point two trillion dollars gift and i'm sure that there's a tens of twenty times more of the gifts behind the vet but there is no price discovery there is price fixing and that's what we're discovering here that we're discovering price fixing and we're not discovering price discovery and now if my math is correct you know in the u.k. the royalty they're often fell's themselves to the public saying that the queen only cost sixty nine p. per taxpayer for to keep the one household so the royal households in america however i figure that one point to kill. divided by three hundred million equals four thousand dollars per american so i think that's like four thousand pints of

milk rather than one pint of milk at the queen cost well the point being the the average american is subsidizing wall street aristocracy and it's curious that they use the word aristocracy because it goes right back to the whole point of america to begin with was presumably to stage a freedom a revolution of independence against aristocracy and here we are two hundred forty years later back in the jaws of an entrenched aristocratic class that treats the entire economy as rent seeking tribal addiction mark aka. the new world of just invented another nearly all jews i'm for america guys are on the show the other thing that is important or we've just spent discussing recently how the population in the u.k. doesn't seem to mind so much the wholesale looting of the economy by the top but the looting by the bottom they go crazy and you see this again in this story as well about the aristocracy in america the one point two trillion dollar peak

understand her fifth two thousand and eight the combined outstanding balance under the seven programs cali by bloomberg was almost three times the size of the us federal budget deficit that year so again federal budget deficit huge story riling up the masses well where is it about the banks where to buy and i don't care about it but if the debt ceiling debate is washington for weeks compared to one point two trillion dollars in looting and then yes the point you make is a good one you can. castigate looters on the street in london can point to them as being morally reprehensible while at the same time being accommodating for the looting going on in the banking system in the city of london and i don't understand what this is such a stretch for david cameron and i see tony blair opened this pile i haul last week and sort of to moralize now that he's good friends with to prove about what really

should be done in a society that respects human rights while he think guy who oversaw the transformation of the city of london into a looting economy not to mention the human rights abuses and genocide that player committed in iraq well so you know tony blair was good friends with the guy with the farting camels are typically what the forty camels of tripoli back on the show well now blair is of course wanted he's painting bankers of wall street so this also brings me to continue with this my own tonic markets theme and these guys have my own tonia this is a state herbert original tanith markets theme. headline reads max bernanke he under pressure to calm markets so you know ben bernanke he is speaking at jackson hole tomorrow and he's under pressure to calm these markets remember i said these printing goats they faint when they're startled so these

these goats these banking goats are threatening to pass out again but i want to bring up one thing about these feints and goats according to the wikipedia older goethe learn to spread their legs or lean against something when startled and often they continue to run about in an awkward stiff legged shuffle so you don't need to faint if these bankers can just come up with an awkward stiff legged shuffle they can still stay standing you know the awkward stiff legged shuffle could be the dance craze of the season remember under good buffy's recent x x three asian they have the. it was a call to the jenkins i think advance this is the awkward standing baker dance so if you see the words ben bernanke leaning up against a wall with his gold like beard you know ok q three q three q four q five. you know that he's trying to stop himself from fainting due to

market my own tonia. yeah i imagine this is what we'll be seeing tomorrow in jackson hole ben bernanke leading up against the wall a whole bunch of younger bankers passed out on the ground startled like frozen it's a good time to round them all up and come up with a nice recipe for shish kabob. but want to secure some x. yes he's being asked to calm the markets because there's something like eight trillion has been wiped off the global markets in the last two weeks and he's why don't you. know well speaking of a bag of shells u.k. population barely has that if you look at this headline u.k. household finances are worse than during the height of the recession again while these the fainting bankers of wall street are out there in jackson hole begging for money the actual population who is that out there banging on the drums asking people to lock up the little poor people well their household budgets are deteriorating at a faster rate than during the height of the recession in early two thousand and

nine and according to an analysis of consumers' finances this was my message to the middle classes in britain who are. you know all upset about the young looters out there on the street you need to join them you need to talk to them you need to join them you know and understand what they're talking about there because your next financial apartheid only grows if there's nobody willing to shut down financial part time so all of you middle class brit people take all the marmalade off your naked bodies put your clothes on go out in the street stop dogging and start talking and then finally with this whole you know a shift in wealth that's happening around the world as part of the financial collapse that's what it's really about india gold imports may reach zero zero record so as gold prices are soaring we find that the biggest buyers in the world are indians they're increasing their consumption of gold purchases by india the world's biggest user surged sixty percent to two hundred sixty seven tons in the

three months ended june thirtieth from one hundred sixty seven tons a year earlier investment demand max jumped seventy eight percent to one hundred eight point five tons o. because let me tell you something analysts confuse us all indian gold buying phenomenon of course for years they buy during a wedding season and they buy it as a gift a store of value etc so people assume that when the price of a tire but this would be a deterrent to buying gold at these higher prices but indians are not stupid they realize that all five currencies around the world are being debased they've already had the experience of buying gold they've already seen their gold double triple hitting new all time record against the root pay so there's been an. installed customer base of gold buyers is a reason to think paul's going to triple again if people say oh no there are going to blow up as to why there's like saying you know wow that first to the era when

they told me so why i'm never going to do it again is that make any sense. say sarah thanks so much for being on the gas report thank you thanks that's going to do it states we'll be right back with much more of stay there. twenty years ago largest country. but how did. you get it your. way or did it's take the. real you the latest in science and technology from the realm. of the future covered. in the.

back to the kaiser report imax kaiser time now to go to massachusetts talk with chris martenson chris martenson welcome back to the kaiser it for us thank you max good to be here all right chris martenson markets have been extremely volatile for the last two weeks is this the resumption of all we saw two thousand and eight or something new well exposed i think if it's a lot like two thousand and eight we have critics for this blowing out a little bit please if we keep our eye on the ball remember this is a monetary crisis at its heart but we you know mostly weaknesses as a fiscal crisis or financial crisis so i'm looking at the financial sector you look at the u.k. x. or are some of the indicators that are around maybe the insurance sector is and you're seeing a lot of distress they are peaking ex-pro to lower the former lows in this rundown and so that's where we're seeing the stress i mean obviously when you have credits for that one out you know you're huge debt crisis so those are the echoes of two thousand and eight what's different this time is gold gold and silver i was signaling that maybe this time i think people are understanding that this is

a monetary crisis too it's not just some weakness in the financial sector right chris martenson i saw an interesting statistic. a couple of days ago that all of the market capitalizations of the something like the twenty eight biggest banks and continental europe the add them together they still wouldn't equal all the market capitalization of one company apple computer i think that's certainly a lot about apple computer but more importantly it says a lot about the european banking system their market capitalization and these banks in the europe and in the u.s. same awfully thin when you look at the amount of debt they're carrying the bottom line here is that this is fundamentally a craze to have insolvency it always has been to insolvency the big banks are trying to treat it as a crisis of liquidity you see the big federal reserve liquidity you saw the federal reserve wonderful work for you out you should the writer trillion dollars of actual cash we quickly and even that wasn't sufficient to crash the wall in the

ship it's really fundamentally insolvency situation that's what we're going to happen for the stock to i think that's where we're going in this next leg of this downturn and i'll get to that one point two trillion dollars gift from the fed in a second but i want to go back to what you just said talking about the intercon activity or the the basie chain aspect of these banks i'm thinking back to two thousand and eight it was revealed that lehman brothers had their own little pet bank that they would hide their debts before each reporting quarter was needed this is part of what you could look up and find out the repo one zero five scandal they have this bank they were hiding debts and they were shuttling back and forth to avoid the regulatory scrutiny and to avoid the disclosure of other that it seemed to me that that particular scam peekaboo accounting or debt shuttling is done on a huge global scale it didn't play into what you're saying how much of that is

incidental how much of that is more so has more of a nefarious twist to it i think it's much more widespread. and commonly believe anybody who thinks that report one of the five began and ended with the minute we got that one bad apple out of the barrel really needs to have their head examined this is clearly common practice there's all kinds of accounting tricks and shenanigans that can be done let's face it wall street can afford the best in the greatest and they were just outgunning it out manning. government regulators at every turn and that's not even including the revolving door where sometimes was very same perpetrators of these scams go through a revolving door into the regulatory apparatus would it be wrong to say that when people talk about the shadow banking system as gordon brown former prime minister bretton called it the percentage of the shadow banking system what accounts for this type of fraudulent that shuttling to avoid regulatory starting would you guess on a percentage basis it's hard to say that but here's one number i go by you know we

look at the number of mortgages that are either delinquent or in default and it's over one in ten at this point in time so we look at the total size of the mortgage market we find that over ten trillion dollars so rounding vigorously here we find there's a trillion dollars in losses somewhere where our dollars if we go back through all of an awesome could have been reported so far to be punitive solar's of those same mortgages we don't find a trillion dollars missing anywhere we find a fraction of that and so without the ability to have real regulators come in and force this mark to market which we have banned and by the way quite willing they don't only you know we banded mark to the market and allowed them to do markets and the and that the world we live in and this is the important point our markets are really really driven by confidence they require confidence people investors have to have the sense that they know where they were in risks are people don't know where the risks are at this point and for good reason because every time we scratch under the surface we find another huge example of where things have been hidden ok so you can't hide

a pay as massive multi-trillion dollar debt forever however the federal reserve bank under ben bernanke and sames that their solution is to try to kid. interest rates bad zero percent for add her so that the liability is an interest cost associated with these debts will never have to be paid there's a jackson hole meeting coming up he's being you know asked by the market to do something in the face of all this calamity number one kenny dealing with bank number so am i right to say that these arrows percent interest rate policy is an attempt to keep a multi-trillion dollar debt burden permanently head in a closet somewhere it's certainly an attempt at the entire rescue such as it was starting in two thousand and eight to current it really has to be called by its proper name which was the rescue the big bank balance sheet act of two thousand and eight and this is always been about repairing the balance sheets of the big financial institutions i've picked on big banks there but it's really the whole financial network oh in which the shadow banking system is one part of it we've got

pension funds we've got insurance plans we've got the entire fire secor finance you know insurance real estate the whole sector everything bernanke is going to tempt me to do is to get credit flowing again because that was going to diagnosis we had . too little credit flowing through the system and he's done everything we can to get the credit flowing again and i think every step he's taken has been right if that was your diagnosis but from my diagnosis that patient was suffering from too much debt not too little credit and so what we have to do is recognize that those debts can't be paid back under current dollar terms and there is no possible way to get out from this using crude production and somebody is going to have to eat those losses politicians step into the fray every step of the politicians with the exception of maybe iceland have so far come forward and said we want the taxpayers to eat those losses here's what people are starting to catch i would have a story we look at europe a lot of period happy people who are expressing themselves in the street saying this doesn't feel right and there's

a good reason for that it's just it's not correct and i think the central banks have fundamentally failed to look at this problem in the right way ok my. in iceland so let's use iceland as an example of a policy of letting their bags tom what picking up the pieces they're after and moving forward and on the other extreme i guess you have to point to a country like japan that has supported their banking system now for twenty years through the zombie banking period i'm not realizing the losses and eating up their entire country savings and they're going through a period of rapid decline so those are the two choices and first of all for those who argue that it would be impossible for america to have experience icelandic repudiation of the debts and simply allow banks to fall that's too big to fail banks where you say to them and second of all are you saying basically that we're stuck and edge of pan like a zombie economy well first of all we are absolutely getting ourselves stuck in

a japanese zombie like connelly and to those who would say listen these banks were too big to fail what would have been to confront do if you don't think about the deflationary impacts that would have happened this could have led to all kinds of things potentially uncontrolled you know hank paulson of the time back in two thousand and eight walking into congress mentioning things like martial law and very scary things that everybody wanted to avoid at the same time we're having was too big to fail discussions we've had too little of the discussion around the idea of too big to see if something is just too large to save everything we're doing in attempting to avoid too big to fail what we're doing this time we still resources chauvelin trillions we're actually can we just disappear into iraq or we're not getting any bridges out of the deal or energy infrastructure isn't being or all we have no new educational initiatives we don't have any investments back all we're doing is taking sunk cost that is wrecked debt with joseph schumpeter we call creative destruction shouldn't been happening isn't happening because it can't be

hidden forever it's going to come out in the meantime what we've done is on here unfortunately we're used to the odd time in a lot of resources and a ten. to sustain the unsustainable that's the story i work at it and i think the markets are starting to confirm that view and more people are coming around to doubt which means we may still have a very destructive wave of financial instability in front of us what's actually going on i think is most likely at this point in time and we have in our fiscal situation which is to. refer it started to deteriorate towards the center of a very visible in europe at this point in time but it's going to come to the u.s. we're going to yeah i mean the really that. the entering the u.s. on top of all the spending trillions fighting tyrants overseas and doing nothing about fighting the tyrants on wall street now you mention this one point two trillion dollars that we talked about briefly this gift that was disclosed through the freedom of information act that bloomberg put forward and this secret loans

that went to the banks and their individuals at these banks and the c.e.o.'s of these banks and this is really the emergence of what some are now calling an aristocracy in the u.s. is the public now beginning to understand that they're living under the the the an heiress to craddock monarchical system again that they the whole revolutionary war for independence was basically now we've got a round trip back to feudalism i'd like to say yes but it's not clear to me that we really have cracked one percent barrier in terms of awareness of what's really going on here not only do we don't really want to recapture we have media capture all of this is very predictable the fact of what happens when you have high concentration moneyed interests they're allowed to own all sorts of things from politicians to cable news stations to newspapers so i think a lot of people are starting to in my want to find more and more people who are voting with their feet as it were trying to find ways to protect their assets pull

the assets out of a system that they see is fundamentally you symmetrical corrupt and you can one that favors one party over. now there that is there at the advantage to party over everybody else and so we're starting to see that you look at retail money flows into mutual funds and i think that's telling part of the story look at the price of gold we're seeing the story told again there were clues all over the place that people are fundamentally walking away from what they see as a rigged game and they were very unhappy about having to do that because we don't have any alternative currencies in the u.s. there isn't a war we can go across we're not like zimbabwe where we can use u.s. dollar if we choose or we could hire savings and ran's or whatever the poor currency happens to be even united states we're really captive over here and so this is the thing i'm experiencing most people asking the question how do i dodge what seems to be a very giant bullet that i can't control there's nothing i can do about it so you know here we are facing you know the prospect of q e three or you know some other

big bailout or another series of bailouts and we don't even have any faith that when we announce it but look they told us about a q e two that was nice but that was a fraction of the size of the secret bailout that was happening behind closed doors so people get the sense that yes there's huge amounts of money is flowing all over the place but not to them it's going to be well connected and this is really unfortunate dynamic because our markets again require confidence in order to stay and who can have confidence in these markets watching the volatility seeing where the money is flowing not understanding where the risks really knowing in art of hearts that there are balance sheet disasters just squirreled away it's intense it's very very profound period of instability right now right below the press forks i guess of the mess as chris lawrence of thanks so much for being on the kaiser report my pleasure all right that's going to do it for this edition of the kaiser report with me max kaiser and stacey however i thank my guests chris martin said if you want to send me an e-mail place to sell at kaiser report at r t t v are you

until next time this is back guys are saying.