please. could have you with us this hour this is our t.v. here in moscow top stories now in the fog of war in libya rebels claim they've surrounded moammar gadhafi may his compound in tripoli but his spokesman insists the colonel is still fighting on the front line. a search and recovery operation is underway in siberia for an unmanned resupply craft that never reach the international space station the russian space agency faces a major overhaul to the progress being called broke into pieces five minutes after launch on wednesday. western states call for tougher sanctions against the syrian regime for journalists on the ground there say that amateur footage used as

evidence of the government crackdown is hard to verify. and super star struck a samuel eto has arrived in russia to join a north caucasus club angie crouch color the cameroonian has agreed a reported salary of ten million euros per season and will become easily the highest paid player in russia. but i'll be back with more developments for you more news stories in less than thirty minutes from now in the meantime max keiser and stacy herbert swill wake up call for the millions being used by the world's leading financial organizations kaiser report is next on our team.

max kaiser stacy herbert this is a kaiser report let's talk about my old tony a janitor you know that is going to find stacy however 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 have been up and down up and down up and down while the last two weeks well it made me think of the fainting goats of tennessee domestic agrees of goats in america which i'm a genetic disorder called my attorney a congenital which is when startled younger goats different all over a soup seed from this image here they just fall over and freeze for ten seconds leaving that they don't care but 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 painting goats of north carolina to what we see in the marketplace well i think

it's a genetic disorder so i think it we 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 greed 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. like for on the sell button then stocks collapse and then they wake up with a quick buy everything back also i might add that this all idea of in-breeding 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 the riveted our referential they refer to itself after generation upon

generation of trading algorithms that have created this kind of 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 u.s. homeowners currently zero and six point five million to link went and foreclosed 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 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 company's profits there wasn't for this 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 that 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 and marxism blah blah blah but according to bloomberg article even as the firms asserted in news releases or earnings calls that they had ample cash they drew fed funding in secret awarding the stigma of weakness so i ask you max where is the price discovery on our well you make an excellent point price discovery of course being at the heart of free market capitalism the nexus between supply and demand it's all in secret and it's without bloomberg request for information for lawyer freedom of information act requests 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 vest 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'm out that's 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 to keep the one household so the royal household in america however i figure that 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 a queen costs well the point being that 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. 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. that's a new order just invented another new only for max kaiser 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 peek 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 but it's a debt ceiling debate that 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 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 that understand why this is such a stretch for david cameron and i see tony blair opened his party hall last week and sort of demoralized now that he's good friends with to quote about what really should be done in a society that respects human rights while he ends 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 a tripling of courting camels of purply back on the show well now blair is of course one of these 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. erm 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 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 coat according to the wikipedia older both 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 like it's tough or they can stay standing you know do the awkward stuff like a shuffle could be the dance craze of the season remember under could go fees the recent x. expatriation they have the. what was it called as the jenkins i got into saying to advance this is the upward standing figure advance so if you see the words ben

bernanke you leaning up against a wall with his gold like beer you know. he's three q three q four q. you know that he's trying to stop himself from fainting due to market my own tonia congenital ok i imagine this is what we'll be seeing tomorrow in jackson hole ben bernanke leading up against the wall the whole bunch of younger bankers passed out on the ground startled like frozen i think it's time to round them all up and come up with a nice recipe for sure. but want to skewer some x. yes he's being asked to calm the markets because there's something like eight trillion has been wiped off global markets in the last two weeks and 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 well

these are 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 their 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 partite only grows if there's nobody willing to shut down financial apartheid so all of you middle class british people take all them are made 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 x. jumped seventy eight percent to one hundred eight point five tonnes won't because let me tell you something lists confuse us all indian gold buying phenomenon of course for years they buy during a wedding season and they buy as a gift as a store of value etc so people assume that when the price of a tire that this would be a deterrent to buying gold these high prices but indians are not stupid they realize that all forgot currencies around the world are being debased they've already had the experience of buying gold they've already seen their gold doubled

tripled hitting new all time record against the root pay so there's an. installed customer base of gold buyers is a reason to think ball is going to triple again if people say oh no there are going to pull out as to why this like saying you know well that first to the era when they told me so i i'm never going to do it again this is make any sense you know. hey sarah thanks so much rain on the guys report thank you thanks that's going to do it states will be right back with much more of stay there. for the full story we've got it's. the biggest issues get a human voice ceased to face with the news makers. bringing you the latest in science and technology from the realms. of the future

covered. welcome back to the kaiser report imax kaiser time now to go to massachusetts to talk with chris martenson chris martenson welcome back to the kaiser report thank you max good to be here all right chris lawrence and markets have been extremely volatile for the last two weeks is the the resumption of what we saw in 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 scripts blowing out all over the place if we keep our eye on the ball remember this is that monetary craziness that it's hard 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 b.k. x. or some of the indicators that are around you sure inspectors and you're seeing a lot of distress they are deeply ex-pro below before lows in this run down and so that's what we see in the stress i mean obviously when you have credit spreads more when i don't you know europe huge debt crisis so those are the echoes of two

thousand and eight what's different this time is go all the silver i was signaling that maybe this time i think people are understanding that this is a monetary crisis too it's not just one weakness in the financial sector right chris martin i saw an interesting statistic a couple of days ago that all of the market capitalizations of something like that twenty eight biggest banks and continental europe the add them together they sell what. 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 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 crisis of insolvency it always has been a crisis of insolvency the big banks are trying to treat it as a crisis with liquidity it being the e.c.b. big federal reserve liquidity you saw the federal reserve wonderful report coming

out you showed the the reserves the right who were trillion dollars of actual cash we quickly and even that wasn't sufficient to crash the hole in the ship it's really fundamentally an insolvency situation that's what we're going to happen it's up 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 interconnectivity 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 dad speak for each reporting quarter was needed this is part of what you could look up and find out the repo one l 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 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 is so has more of a nefarious twist to it i think it's much more widespread then is commonly believed anybody who thinks that began and ended with the moon and got that one bad apple out of the bureau really needs to have that 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 are just out going in out manning. the government regulators at every turn and that's part of even including the revolving door where sometimes those very same perpetrators of new scams go through 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 the shadow banking system what accounts for this type of fraudulent debt shuttling to avoid regulatory

scrutiny would you guess on a percentage basis it's hard to say that it was going on right go by you know we look at the number of our mortgages that are are going to link when or in default and it's you know over one in ten at this point in time so we look at the total size of the mortgage market we find it's over ten trillion dollars so rounding rigorously year we find there's a trillion dollars in losses somewhere where our goods if we go back through our losses that have been reported so putative fuller'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 abandoned by the way quite willingly and openly and we'd be in mark to market and allow them to do market fantasy and that's the world we live in and this is the important point our markets are really really been driven by confidence that require confidence people investors have to have a sense that they know where they were hidden risks are people all know what 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 they can hide these massive multi-trillion dollar bets forever however the federal reserve back under bad bernanke its aims at their solution is to try to keep interest rates at zero percent for as her so that the liability is an interest cost associated with these debts will never have to be pay there's a jackson hole. coming up he's being you know asked by the market to do something in the face of all this calamity is number one can we 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 but it is certainly an attempt at 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 and this is always been about repairing to balance sheets of the big

financial institutions i've picked and the banks that are with us really but all financial network oh in which the shadow banking system is one part that we've got from we've got sure as far as we've got the entire fire circle finance insurance real estate the whole sector everything bernanke is going to do is to get credit flowing again because that was his guy you know since we had. too little credit flowing through the system and he's done everything we can to get that credit flowing again and i think every step is taken has been right if that was your diagnosis but from my diagnosis the 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 with 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's have so far come forward and say no we want the taxpayers to eat those losses because what people are starting to try to have

a story we look at europe a lot of theory unhappy people that are expressing themselves in the street saying this doesn't feel right anderson the reason for that it's just it's not correct and i think the central banks have fundamentally of the able to look at this problem the right way but they imagine iceland so let's use iceland as an example of a policy of letting their bags come what may picking up the pieces there. 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 perry had a mad realizing the losses 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 experienced icelandic repudiation of the debts and 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 in a japan like a zombie economy well first of all we're absolutely getting ourselves stuck in a japanese zombie like carney and to those who would say listen these banks were too big to fail it would have been too disruptive you don't think about the deflationary impacts it would have happened which 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 save if something is just too large to statement everything we're doing in attempting to avoid it too big to fail what we're doing is we think time wasting resources shuttling trillions we're actually doing no good they're just disappearing into iraq or we're not getting any bridges out of the deal or energy infrastructure isn't doing or we have no new educational initiatives we don't have any investments that all we're doing is taking sunk cost that is wrecked debt we're

just trying to recall creative destruction shouldn't been happening isn't happening we just thought it can't be hidden forever it's going to come out in the meantime what we've done is on very unfortunately we still are the time in a lot of resources attempting to sustain the unsustainable that's the story i look at it and i think the markets are starting to confirm that view and working people are coming around to that which means we may still have. very destructive wave of financial instability in front of us it's actually one i don't think is most likely at this point in time and we have a fiscal situation which is deteriorating at apple periphery and starting to deteriorate towards the center very difficult with europe at this point in time but it's going to come to the us we're going to surely yeah i mean the really that. salta entering the u.s. top of all the suspending 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 a greatly 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 they're individuals that 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 the an heiress to craddock monarchial 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 hyperion that we really have cracked the one percent barrier in terms of awareness of what's really going on here not only do we are able to recapture we have media capture all of this is very predictable exactly what happens when you have high concentration moneyed interests that are 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 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 we see is fundamentally asymmetrical corrupt and human one that favors one party over another that is the 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 we see is 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 in rands 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 from 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 with it and we don't even have any faith that when they announce it but look they told us about 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 it's flowing all over the place but not to them it's going to be well connected and this is really an unfortunate dynamic because our markets again require confidence in order to stay in them who can have confidence in these markets watching the volatility so you are the money is flowing not understanding where the risks really mike knowing in your heart of hearts that there are balance sheet disasters just squirreled away it's insensitive it's very very profound period of instability where am i right below the pitchforks i guess of the masses crest learned some thanks so much for being on the kaiser report my pleasure and that's going to do it for this edition of the kaiser report with may max kaiser and stacy herbert and i thank my guests

chris martin said 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 this is my father saying. mom. them.

good.