must have been trying. to get a jury. where did it take. looking back you would all see life from moscow a quick summary of the headlines. the recovery operation is underway in siberia for resupply craft but never reach the international space station the russian space agency faces a major overhaul after the progress vehicle broke into pieces five minutes off the launch on wednesday. rebels claim colonel gadhafi and his sons are trapped in tripoli just to transfer a billion dollars of the deposed libyan leader's assets to his opponents. western states. as against the syrian regime but journalists on the ground say much of

footage used as evidence of the government crackdown it's hard to bear. and a superstar striker samuel eto has arrived in russia to join a north caucasus club. the cameroonian has agreed to a salary of ten million euros per season recently become the highest paid player in russia. are to my colleague off now it's time but for now. wake up call for the millions being used by the world's leading financial organizations because report is now. so the. we've got it's. the biggest issues get a human voice ceased to face with the news makers on the. kaiser

stacy herbert this is the kaiser report let's talk about my own tony jenour. you know that is we're going to find out stacy ever exactly max i officially have a diagnosis for the fainting traders of wall street the fainting 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 breeze of goats in america with cabbage genetic disorder called my attorney a congenital which is when startled younger goats diffidence all over

a soup see from this image here and they just fall over and freeze for ten seconds because they don't care if they get up and start walking again like normal like nothing happened but this is what we see in the markets how do you apply the 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 inbreeding 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 consequence. aristocracy is obviously inbreeding so i thought this is what you're seeing is that the fed is breeding. a class of bankers who freeze and start on all over because they it generates attention from their own or central bank and they like for the sell button and stocks collapse and then they wake up when they quit everything back also might add

that the saw idea of in-breeding as relates to wall street aristocracy that was gifted over a trillion dollars by the fed it also reminds me of the words riveters into the river to our referential they refer to itself after generation upon generation of training 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 chairman ben bernanke is 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 you asked homeowners currently zero and six point five million to wink wink and poor closed mortgages

write the numbers work 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 called it forgivable loan which is code for gift. so the largest bar 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 company's profits if there wasn't for this gifting from the fed to these banks their profits would be zero their stock 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 generale 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 gloom berg 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 well 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 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 ten to twenty times more of the gifts behind that but there is no price discovery

there is price fixing that's what we're discovering here that we're discovering price fixing and we're not discovering price discovery and now if i map is correct you know in the u.k. the royalty there often sells themselves to the public saying that the queen only cost sixty nine p. per taxpayer to keep the well household so the royal households in america however i figured at one point to try. 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 a queen cost well the point being that the average american is subsidizing wall street aristocracy and it's curious that they used 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 and

forty years later back in the jaws of an entrenched aristocratic class that treats the entire economy as rent seeking tribal did it. that's a new order just invented another helio just for america guys run 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 under center fifth two thousand and eight the combined outstanding balance under the seven programs tallied 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 where is it about the banks where do they why don't they care about it it's a debt ceiling debate but denies 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 and 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 i don't understand what this is such a stretch for david cameron and i see tony blair opened this ploy hall last week and so on it's a moralize now that he's good friends with the probe about what really should be done in a society that respects human rights while he is the guy who oversaw the transformation of the city of london into a looting economy not to mention the human rights abuses and genocide that blair committed in iraq well so you know tony blair was good friends with the guy with the farting camels the aaa what the foreign camels of tripoli back on the show well

now blair is of course one of the fainting bankers of wall street so this also brings me to continue with this my own tonic markets theme i mean these guys have my attorney and this is a statement herbert original tonic markets theme. headline reads max bernanke he under pressure to calm the markets so you know ben bernanke is speaking at jackson hole tomorrow and he's under pressure to calm these markets remember i said these fainting 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 are fainting 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 you spankers can just come up with an awkward stiff legged shuffle they

can still stay standing you know the awkward stuff like a shuffle could be the dance craze of the season remember under good duffy's recent x. ray expatriation they have the. it was a call the symbolism of the jane is aimed at those into saying good dance this is the awkward standing break or dance so if you see the word ben bernanke you're leaning up against a wall with his goat like beard you know about an. q three q three q four q five penn you know that he's trying to stop himself from fainting due to market my own tonia congenital yeah i can imagine this is what we'll be seeing tomorrow in jackson hole ben bernanke you cleaning up a gift of a whole bunch of younger bankers passed out on the ground startled like frozen that's a good time to round them all up and come up with a nice recipe for shish kabob. but i want to secure so max yes he's being asked to calm the markets because there's something like eight trillion is nine lights off

global markets in the last two weeks in these why don't you. know well speaking of a bag of shells the 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 while 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 consumer's 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

apartheid so all of you middle class 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 shift in wealth that's happening around the world as part of this financial collapse is 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 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 to mad max jumped seventy eight percent to one hundred eight point five tonnes well because. the. confuse let's 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 attire that this would be a deterrent to buying gold at these high 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 rue k. so there's an. installed customer base of gold buyers it's a reason to think all it's going to triple again if people say oh no they're all going to blow up as to why that's like saying you know wow that first to the era when they call me so i am never going to do it again is that make any sense you know say sarah thanks so much for being on the kaiser report thank you max that's going to do it stay tuned we'll be right back with much more so stay there.

you believe the science and. the rest. of the future of coverage. welcome back to the kaiser report i'm max keiser time now to go to massachusetts talked with chris. martin so chris martenson welcome back to the kaiser reports thank you max good to be here all right chris lawrence and markets have been

extremely volatile for the last two weeks is this the resumption of what we started two thousand and eight or something new well it's both i think it's a lot like two thousand and eight we have created spreads blowing out all over the place if we keep our eye on the ball remember this is a monetary crisis at its heart we you know mostly weaknesses and as a fiscal crisis or financial crisis so i'm looking at the financial sector you look at b.k. x. or are some of the indicators that are around maybe the insurance sector is and you're seeing a lot of this. peaking expropriate load of former lows in this rundown and so that's what we see in the press i mean obviously when you have credit spreads going out you know europe huge debt crisis so those are the echoes of two thousand and eight what's different this time is gold gold and silver are signaling that maybe this time i think people are understanding that this is a monetary crisis too and it's not just some weakness in the financial sector 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

sell what 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 of the europe in the u.s. same day also the fed when you look at the amount of debt they're carrying the bottom line here is that this is fundamentally a crisis of insolvency it always has been a crisis of insolvency that big banks were trying to treat it as a crisis with liquidity they were betting that you see the big federal reserve chose to give us liquidity you saw the federal reserve wonderful report by bloomberg came out you know showed that the federal reserve supplied over a trillion dollars of actual cash we quickly and even that was insufficient of cash but hole in the ship it's really fundamentally an insolvency situation that's what we're going to have to face up to i think that's where we're going in this next leg up. counter 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 daisy 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 deaths 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 all their debt it seems 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 has more of a nefarious twist to it i did use much more widespread then is commonly believed anybody who thinks that report one of five began and ended with lehman and got that one bad apple out of the bureau really needs to have their head examined you know

this is clearly common practice there's all kinds of accounting tricks and shenanigans that can be done look space that wall street can afford that goes to the greatest and the richest and counting you know manning. good government regulators a good return and that's part of even including the revolving door where sometimes those 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 of britain call that what percentage of us and our banking system what accounts for this type of fraudulent that shuttling to avoid regulatory scrutiny would you guess on a percentage basis it's hard to say but here is one number i go by you know we look at the number of our mortgages that are i would think when we're in default and it's you know over one in ten at this point in time so we look at the total size of oh the mortgages. it's over ten trillion dollars surrounding bigger asli year we find there's a trillion dollars in losses somewhere where our goods if we go back through all

the lawsuits that have been reported so far through punitive dollars 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 more to market which we abandoned by the way quite willingly openly we banded mark to the market and allowed them to do market fantasy and that's the world we live in and this is the important point our markets are really great we can buy confidence they require confidence people investors have to have the sense that they know where they were getting risks are people don't know where the risks are at this point and for good reason because every time we scratch on the surface we find another huge example of where things have been hidden ok so they can't hide these massive multi-trillion dollar bets forever however the federal reserve bank under ben bernanke it seems that their solution is to try to keep interest rates at zero percent for ever 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 is number one kenny deal anything number so am i right to say that this is their own percent interest rate policy as an attempt to keep the multi-trillion dollar debt burden permanently head in a closet somewhere certainly to tell the entire rescue such as it was starting in two thousand and eight to current really has to be called by its proper name which was the rescue the big bank balance sheet act of two thousand and eight i mean this is always been about repairing the balance sheets of the big financial institutions like i'm going to banks that were just really built for the interim network over which the shadow banking system is one part that we've got pension fund we've got sure of spawn's we've got the entire fire circle financed you know insurance real estate the whole stack. they are everything bernanke is going to do is to get credit flowing again because that was the most this we had. to work really flowing

through the system and he's done everything we can to get credit flowing again and i think every step you take in has been right if that was your diagnosis or my diagnosis and patient was suffering from too much debt 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 dig 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 and so far come forward and say if we want the taxpayers to eat those losses here's what people are starting to catch on and have a story look at europe a lot of here you unhappy people that 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 you want people central banks fundamentally feel to look at this problem in the right way ok imagine iceland. here's iceland as an example of a policy of letting their banks fail come what may picking up the pieces thereafter

and moving forward and then the other extreme i guess you'd have to point to a country like japan that as 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 now going to 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 i simply allow banks to fall the too big to fail banks what do you say to them and second of all are you saying basically that we're stuck and edge of panda like a zombie economy well first of all we're absolutely getting ourselves stuck in a japanese zombie like comedy and to those who would say listen these banks were too big to fail it would have been too just from. if you don't think about the deflationary impacts of what happened this could have led to all kinds of things potentially uncontrolled and 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 were having was too big to fail discussions we've had too little of the discussion around the idea of too big to save if something is just too large to save and everything we're doing in attempting to avoid too big to fail what we're doing is we seem time wasting resources show the intro where they're actually doing no good just disappearing into a black hole we're not getting any bridges out of the deal our energy infrastructure isn't being or we have no new educational initiatives we don't have any investments back all we're doing is taking sunk cost that is wrecked yet well joseph schumpeter we call it creative destruction should have been happening isn't happening but guess what it can't be hidden forever it's going to come out in the meantime what we've done is on very unfortunately wasted a lot of time and a lot of resources attempting to sustain the unsustainable that's that's the way i look at it and i think the markets are starting to confirm that view and more people are coming around to that which means we may still have

a very destructive wave of financial instability in front of us that's actually what i am i think is most likely at this point in time and we have been our fiscal situation which is to cure you read it at the periphery and it started to deteriorate towards the center very visible in europe at this point in time but it's going to come to the us eventually yeah i mean the really there. to enter a the u.s. on top of all the suspending trillions fighting tyrants overseeing and doing nothing about the tyrants on wall street now you mention this one point two trillion dollars so we talked about it briefly this gift that was disclosed through the freedom of information act that bloomberg put forward and these secret loans that went to. the banks and their individuals at these banks and the c.e.o.'s that these banks. and this is really the emergence of what some are now calling an aristocracy in the us is

a public bad beginning to understand that they're living under the they the the and aras to craddock monarchy all system again that they the whole revolutionary war for independence was basically now they've got a round trip back to fill as i would like to say yes but it's not clear to me that we really have cracked the one percent barrier in terms of awareness of what's really going on here not only do we operate with three cats we have media capture all of this is very predictable exactly what happens when you have a high concentration of moneyed interests that are allowed to own all sorts of things freedom from politicians to cable news stations to newspapers so i think a lot of people are starting to in my line of work i find more and more people who are voting with their feet as it were trying to find ways to protect their assets pull their assets out of a system that they see is fundamentally asymmetrical corrupt and even one that favors one party over another that is to 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 are clues all over the place that people are fundamentally walking away from what they see is a rigged game and they are 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 border currency happens to be the 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 and 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 when we announce it but look they told us about q.e. two that was nice but that was a fraction of the side. of the secret below it was happening behind closed doors to people get the sense that yes there is huge amounts of money is flowing all over the place but not to them it's going to the well connected and this is really

unfortunate dynamic because our markets again require confidence in order to stay you know who can have confidence in these markets watching volatility seeing where the money is flowing not understanding where the risks really knowing in our balance sheet disasters just screw we're going to make it in some sense it's very very profound period of instability one of the old pitchforks i guess is the message chris martenson thanks so much for being on the kaiser report it's my pleasure and that's going to do it for this edition of the kaiser report with me max kaiser and stacey however i thank my guests pressed martin saying if you want to send me an e-mail please do so at kaiser report at r t t v are you until next time there's a black guys are saying goodbye oh eliminating the.

bright. sun from the sun still. stands on t.v. don't succumb. to. the elite. of the earth the you. just saw. the least some. period.