next financial pundit max keiser explains why investors remain skeptical a for america's plans to lower borrowing costs. max kaiser and this is the kaiser report let's twist again. this year we're we're doing the twist max this is operation twist i'm going to show you what operation twist is ok ben bernanke. ben bernanke i've got a pink i got

a monkey i got some chopsticks. some to a yeah the dice oh yeah this is apparently operation twist max tell us more headline reads operation twist fails to reinsure investors. mack somehow all this stuff did not. impress investors well the fed is failing ben bernanke is failing at his job in providing price stability and wage wage stability in america and he's trying to turn as you point out junk into something that will provide collateral for a banking system that's collapsing and the market is saying we recognize that you're a fool ben bernanke and we're crashing well this quote comes from alan blinder a professor at princeton university in the as a former vice chairman of the fed and he said through operation twist bernanke he

is throwing sticks and stones and peashooters and b.b. guns and whatever he's got at that weak economy in the effort to make marginal improvements i don't expect any miracles from it and frankly neither do they so max we see this that often we see this junk shot over and over in the last two or three years as the whole financial system collapses but as all of our systems class we saw the junk shot in the gulf of mexico with b.p. we saw the junk shot in fukushima the junk bonds have been replaced with actual junk from the junkyard and the problem is this operation twist which for viewers who may be joining us late this is an attempt by the fed to force down long term interest rates by selling the short term paper usually it's the other way around so that's why they give it the same twist why because interest rates are zero already so they're digging deep into their bag of tricks to try to keep rates at zero and of course rates at zero zero interest rate policy or zirp is the cause of the

problem so the very fact that bernanke is trying to exacerbate of the problem throw gasoline on the fire of artificially low rates by figuring out ways to keep rates even lower shows that either a he's a moron b. he's a tyrant see. both. well the fed itself said on their website that the program should help lower costs for home loans corporate bonds and other consumer and business lending the plan will provide additional stimulus to support the economic recovery but the effect is difficult to estimate precisely but we do share the problem station over here take one of your props here this red rubber ball best out of prop that's monetary policy oh ok so i go to e bay and i put this on e bay an auction this off i could get at most twenty cents for this on e bay if goldman sachs takes this down to the fed the fed will give them twenty

billion dollars for the same item that's inherent problem with the american global economy the banks privileges with these central banks where they can give them anything whether it has value or not and the fed gives them trillions and trillions of easy credit so yes we're in this position and the next headline reads max the fed disappointed the great collapse is here this is from phoenix capital research on their site gains pain and capital so the fed disappointed with this four hundred billion dollar q.e. . light it's not really q e three it's operation twist but the most striking thing the thing that upset the markets and sent everything down a wild spiral was that the fed downgraded its view of the economy stating that quote there are significant downside risks to the economic outlook and so for some reason the same guy with this piece shooters and b.b. guns and and all sorts of junk as we have here. some reason these people believe

his now prognosis that it's all looking bad as if the last three years as we've been saying it hasn't been all looking bad all this is the charlatan aspect that goes with austrade in the fed they're shamans there they're there you know snake oil salesman they they're they do a dance of deception and the american people in the global community false for every single time that's why the lottery business does so well or the casino business does so well there's a sucker born every minute and ben bernanke is the circus master who's just hinting at great things to come while stealing people's money all the while well phoenix capital says that many people will lose everything in this mass yes everything the us is going to be defaulting on its debt paper currencies around the world will fail it's going to be a dark dark time max up people are liquidating portfolios hedge funds are liquidating institutions of liquidating they're selling everything to raise cash

and they're throwing gold and silver out as well during this liquidation and this gives people who haven't participated yet in gold and silver a golden opportunity to load the boat with the only currency left standing when this should bank finally is over the dollar of course is something that people are running to but these are like the people on the shore of the indian ocean rural meaning into the tide as the tide pulls back not knowing that behind that is a tsunami of money in this case that is going to swamp them well let's turn to the original dr doom with this is do me prognosis here and his thoughts on gold not selling my gold because i think in the long run it will print money i saw it as markets in the world or about another twenty percent even the republicans were right there late that they're afraid you have to ease your eyes out now. they can sit back and say don't ease we have to earn enough but as soon as i said prices go

down and the economy's weak everybody will again applaud the faith if they print money right well mark. world class macro analyst the only ph d. in the economic space that i trust and he's got a track record of performance to back it up and he makes the same point i just made but in a really interesting accent but what about what he's saying because. isn't this the case that this is how markets this is how our economies have been hijacked the markets fall ten or twenty percent everything. and everybody says calls their congressmen and says do whatever it takes to get ben bernanke you to do whatever it takes to save the bankers and therefore save me and my four a one k. well it goes back to nine hundred eighty seven and the crash of eighty seven when reagan robert rubin and alan greenspan then chairman of the federal reserve got together and they started to buy the stock market the s. and p.

futures on the day after the famous crash of eighty seven and this was the beginning of the working group on markets or the plunge protection team as it's called and from then until now that fund that slush fund that the government uses to fix prices has grown exponentially sound the hundreds of trillions of dollars and most of it's in the shadow banking system and the result is no more legitimate price discovery all prices and all exchanges are now manufactured and they manufactured these prices largely for the effect of propaganda this is financial propaganda it's a new a park in the history of propaganda and it's conducted principle in the united states max actually i have another prop in this pile of junk on my table and that's this junk dollar yeah i notice one thing here it has the pyramid of course everybody knows about the pyramid on the back. well that's my next headline oh ok b.m.w.

town crashes and pyramid fraud yes ben bernanke used pyramid fraud scheme isn't the only one going for as long as anyone can remember she's a town in china has been poor the village is little more than a dusty grid of brick shacks and its residents live on an average of just a thousand pounds a year but this spring a miraculous transformation occurred the local suddenly noticed that they were rich we have become a b.m.w. town declared one shocked a villager in the local internet forum well it turns out that it was a guy named king claw and he returned to the village from beijing and he had a fantastic idea he took the villagers savings which amounted to fifty five million dollars and he promised them interest rates of ten percent on their savings what he did with it is lent out to thirty percent to property developers who built all these fantastic apartment developments which nobody could afford to buy so the whole pyramid frauds collapsed last run from john law. but i didn't this

is a classic example of a parent's game a ponzi scheme and of course it involves real estate which was the favored instrument of a ponzi scheme favored by alan greenspan and ben bernanke when they artificially dropped interest rates after the nine eleven attacks remember to prove to the world that america still had what it takes to be the biggest consumer and polluter in the world they drop rates down to one percent and this unleashed this real estate bubble people of course love the idea of buying real estate for no money down and that created the final stage of the final blow up of the final bubble that we're now living with the consequences today that will never ever be paid back unless there's a global cooperation reconfiguration other global currency grid and until that happens just expect this depression to get deeper you have a max how is king clause any different from. chairman ben bernanke because here's a guy who used this pyramid scheme in order to foster

a housing bubble in this remote town the same thing is happening in the u.s. and this is what operation twist is about this is what all of this junk is for them bernanke on the u.s. federal reserve website he says it's in order to encourage more housing lending mortgage lending that's what he wants how is it any different from king claw it is no different you're absolutely correct stacey herbert the number one concern of ben bernanke is to get the housing market reinflated and he's doing this by trying to expand the base of the pyramid scheme and ways finding is that there are no more suckers and they fail to admit that they've reached the end of the line for this particular chapter in the american pax americana pyramid nightmare and the world will continue to suffer and so there's a massive boy of us treasury bonds and the u.s. dollar which we're seeing right now in the price of gold and so on and then at the

heart of this always like the u.s. pyramid scheme and the chinese pyramid scheme at the heart of it lies a desire for german made goods that nobody can actually really afford because here's the woman's quote this a quote on the website that i said we have become a b.m.w. town in our county there are now eight hundred b.m.w.'s and six hundred mercedes five hundred audi's fifty porsches thirty jaguars and one ferrari one lamborghini and one monster adi precision engineering but that's again you know everybody wants with the their fake pyramid schemes to get real goods and services that only the germans apparently are the only people making anything everybody is turning to germany saying please you guys make stuff that we want please continue to accept their confetti or junk all our sticks and stones and and t.v. guns for your goods is one arrow the silver bullet of solution for america in the global economy apple opened the car manufacturing plant in detroit.

manufactured by americans. thank you states air america so much for being on the kaiser report you're welcome thanks don't go away much more coming your way don't even go to your flight it's been castle. twenty years ago or just country. seem to. be. began a journey. where did it take to. critique a three. three. three. three. three. three board video for your media

project free media. welcome back to the cause report i'm max kaiser i've got him he's here joe isn't all welcome the kaiser report all thanks for having me on this fantastic they are here in the studio i want to jump right to actually our last question from a tweeter who wants to know do you ever sleep. there's unfortunately i do i try not to but you know i have to do a few hours of work i try as hard as i can if you could you'd like to be tweeting are commenting twenty four seven ideally that would be an ideal situation ok fantastic so joe is that we just heard from alan blinder he's the former fed chairman he's talking about operation twist and he's saying if you think of sticks plastic pigs twigs b.b.

guns for monetary policy making fun of the whole thing saying the collateral is worth less your thoughts i mean i don't. really he's kind of he's right in the sense that i think operation twist isn't really going to do anything for anyone impaired will be pretty minimal and the idea that lowering interest rates is going to have a big impact at this point when they're already at record lows is you know kind of a joke so it's kind of it's a superficial thing and there's this expectation of the fed to act when things aren't going well so that that's kind of i guess a signal that the fed isn't totally out to lunch but in terms of i would be very surprised if it had a real positive impact well let's talk about that for a second to follow up on that point because he said that the expectation that the fed can do something is kind are running out now we go back historically to the greenspan put during the whole one nine hundred eighty s. and the time markets were faltering right alan greenspan would lower interest rates something markets would catch

a big trade higher bernanke inherited that legacy but it seemed as though the fed's ability to stimulate this these markets is finished is over is that kind of we're living to kind of seems like that own especially i mean certainly the markets reacted positively to q e two and q e one and therefore it too early to say verdict yet on operation twist but even bernanke himself seems to be kind of skeptical he gave it he gave a speech a few weeks ago which was basically saying if we're going to do anything needs to be fiscal policy spend more basically trying to kick it back over to congress so i think even he doubts that at this point monetary policy is a great tool well it's still possible that the fed could juice the stock market if that's all he has going for now your own role over there business insider dot com you're the deputy editor correct yeah now business insider is primarily focused on if i may be correct me if i'm wrong but there's

a big emphasis on technology oh it would kind of have and have there's a there's like a it's kind of there's a good tech side and then there's like the finance economy there's a huge risk. component and the tech component we know in the states it begins in the venture capital area it goes through financing rounds or then we end up on nasdaq with an i.p.o. hopefully this is the exit strategy for the d.c. investors the venture capital investors but i want to ask you specifically about one company and get your thoughts on it because there's a big debate out there group on the day it's pretty i.p.o. they turned out a six billion dollar offer from google they were tempted to go public at a twenty thirty billion dollars valuation there's one school of thought that is looking at groupon end the words ponzi scheme have been mentioned yeah is this a fair or unfair the most interesting argument in favor is that you know the original investors have taken a lot of money out of the company already they've already made tons of it and so

the company has never been profitable and yet you have early players including the c.e.o. who've already cashed not totally cashed out or anything would have been you know taken a lot of cash out and there's so now they're still cash hungry but it's not a ponzi scheme in less there is no business there and there is a business there and they're making more and more money from their existing customers have excellent customer loyalty growth is still crazy businesses generally still like it though there are issues in lots of competition so it's not a ponzi scheme because there's a real business and i think the what people are talking to when they mention ponzi scheme is the fact that the lack of really they repeat customers in other words they make a big splash think it's not. the it's not that bad actually they make their repeat customers aren't there but if that is the big controversy the question is do they need to just keep adding customers in order to make that that's right that would be if you will if they were to shut down customer acquisition right now and just you

know with the customers that they have would they be able to have a business in there's an argument today would actually it's not clear that they have to. keep spending like crazy but that is certainly their plan and their plan is to raise a lot of money from the i.p.o. and to and without that i.p.o. money is a company so whether it's a year from now. is it would be very dicey there bernie for a lot of money ok fair enough let's talk about french banks for a second morgan stanley hugely exposed to french banks is it too big to fail can u.s. banks survive a french banking collapse or the cross-currents there i would say all the morgan stanley is too big to fail in the sense that if it were to have a failure like lehman and i don't think it's going to our be surprised if it did. it would certainly have huge ramifications on the financial system you know there is this talk that it's exposed to french banks that might be overblown in the sense

that you know all kinds of banks have huge notional exposures to various things where the fact when you look at hedges and how what the actual risk is it's a lot less. i don't i haven't done too much in the morgan stanley but i do know that it's the fear of the stock it's really been getting hammered this week and stepping beyond you know stepping back from morgan stanley it's hard to imagine a situation which if you had failures of the big french banks b.n.p. par so as a general the rest of them it's hard to imagine the u.s. financial system not really getting hurt by that i mean and right this worked in teachin is what comes up all the banks are connected on the back and now gordon brown former prime minister of u.k. referred to formally in the record of the shadow banking system there's widespread understanding that there is this dark dark pools the shadow banking system multi-trillion dollar kind of back channels connecting all these banks for a lot of this debt is off balance sheet so to speak and the idea is that bernanke

is trying to shovel cash in the front door while the back room the off balance sheet accounts are blowing up and you can't seem to match the two is that a fair characterization yeah i mean i think the easiest way to think about it is that everyone wants cash right or you know when we're in times like these when people are you know people get nervous. sir things are actually going bust as they are in greece everyone just wants cash ok but joe isn't the role of the federal reserve bank historically it says the job to take the punch bowl away when the party gets too good now for twenty years for ten years they haven't taken that punch ball the way they keep throwing more they keep spiking it with more cheap money at what point do they get responsible you know obama of us talking of volcker when he came into office but he never there's a reason yeah i mean there's no question that well the tums haven't been good in a while and a rose has i mean the last couple years have been ok for the economy but certainly

i mean when they've let me talk about taking the ponderable way well that would have meant like prior to the housing crisis the feds should probably have been more proactive to see that there was too much bad lending going on because that's essentially what that means essentially means there's you know the fed needs to step in when. there's too much credit creation inflation but we really haven't been like that in a while and we certainly haven't been like anywhere near too much lending since the crisis or since the crisis hit it's not a solution to just keep rates low forever. it's certainly not going to fix the economy but it has kept the financial system alive which is i would argue pretty important isn't there a case to be made that as you point out the credit has been in short supply during this crisis but in do large part not to an economic slowdown necessarily or a business cycle trough but to outright bank fraud isn't there

a case to be made that maybe someone needs to step in and bring some justice to what are obviously some criminal activities going on in these too big to fail banks i mean this is different things i think the reason that there isn't much lending is because the private sector households have too much legacy debt and their main. the main goal at this point is not to take on more of it it but it's you know to pay down the old debts that they rang up there may be. role for more criminal more prosecutions of the fine and you know people who are involved in the bubble and the bust who say the book when you say others decided to write what you say the crowd well it was a little ugly when you say the private sector saying out too much debt and then here j.p. morgan jamie dimon are j.p. morgan saying that well you know basil three grammont is inconvenient for us we don't really want to comply to minimum capital requirements we just want to put on as much debt as we possibly can just coming his nose at the whole idea of

regulation the idea of sound banking i mean what who's going to stop it put to turn it in on this guy he's a rogue banker he makes jerome kerviel seem like mother teresa jamie dimon. you know i actually think. i'm going to skip that and i don't just do that i just give it a lot of option just. because you're a journalist here representing oh this was a source of the industry and i'm making a serious charge here were you guys and your business isn't is a flagrant law breaker per the basil through court why he knows he's not a flagrant lawbreaker he's made an argument in a newspaper that a certain aspect of the regulation favored european banks over american banks he's actually he's not been he's never made the argument that you're trying to say he made which is that he doesn't believe in capital requirements or regulation he actually made a pretty specific claim that the way bezel three treated this one kind of as that

fundamentally disadvantaged american banks and that's all he said so i don't compare him to rogue trader if it is a little dramatic but on this point of credit i think the key thing that people need to realize is that there's household debt and i and there's you know the supply side on the banks and there's government debt and people talk about them as though they're all the same don't they just say the word there's too much debt but specifically i think the problem is not that there's too much government at least in the u.s. but there's too much household debt and that the bottleneck for the whole economy all right we've got about a minute left on a go to facebook questions one from jason bishop he asks joe wiesenthal what possible reasons are there for investors to be buying u.s. bonds and when the u.s. is the one with all the debt what kind of investors are they the u.s. has a fantastic track record of always paying back its debt and times like this when people are panicking there is and you know you look there are things that are incredible

histories of preserving your money and and our liquid. which is i think why people are dumping gold right now and they're panicking now because because people worry about liquidity right now they want. ash they want the most liquid they're not worried about the u.s. dollar depreciating that's kind of like a secondary concern in times like these they just want the most liquid stable assets they exist on stockholm syndrome i don't believe that ok let me know that question karl e h i'm sorry carl it's tattooist and ask why did he joe wiesenthal a few months ago still say that the bad economy is exaggerated does he live in the real world or in a computer world i live in a computer world i live in a total bubble and i live in new york where the economy is pretty good and i don't see how the real world is joe wiesenthal thanks so much for being on the kaiser report thanks for having me all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i thank my guests joe

wiesenthal you want to send me an e-mail please do so at kaiser report r t t v dot ru until next time this is max catching fire you know.

tonight a nod to greece rushes to reassure investors that it's worthy of the next bailout but as the prime minister proposed to convince its main lender germany. bushehr is not the public can take as a state he met his prepays will be all the latest from syntagma square. also this hour as government forces storm would kill opposition town in syria moscow calls on both sides to talk while rejecting western sanctions. and violence flares between serbia and breakaway kossovo seven kosovan serbs are injured of the disputed border crossing. welcome you watching our team from moscow with me kevin owen our top story at eight pm greece says it's doing all.