more robust economic growth which ultimately will benefit this space even if in the short run they are negatively impacted by the increased cost of services or debt which is otherwise some of these values are safer to end up the falling on some of that that in order for it to be manageable i mean it just doesn't seem like everybody how much worse could it get it's already that bad i mean what you're calling for should get a lot a bit a lot worse i mean we really not that ye be yeah these things are bad people are having a hard time getting jobs but the people that still have jobs i mean yeah they are getting squeezed a little bit but not feel like it's going to be i think it's going to get a lot worse when you really see a precipitous decline in the by the dollar that's for you to kick in because that's going to lead to big big increases in consumer prices on basic necessities which are really good across american families and we see a big increase in interest rates i mean this is this is going to get much much worse i mean it's really still the calm before the war and that there are now have

a great night. wealthy british. market. come to. find out what's really happening to the global economy with much stronger for a no holds barred look at the global financial headlines tune into all kinds of reports on our keep. a charmer in here broadcasting live from washington d.c. coming up today on the big picture.

we'll. bring you the latest in science and technology from the realm for. the future of coverage. maximizer and this is the kaiser report let's twist i guess.

this year we're we're doing the twist max and this is operation twist i'm going to show you what operation twist is ok. but i am ben bernanke i've got a. i've got a monkey i guess and chopsticks. some twigs yanna dice oh yeah this is apparently operation twist max tell us more headline reads fades operation twist fails to reinsure investors. back somehow all this stuff did not. impress investors book and the fed is feeling ben bernanke is failing at his job in providing price stability and wage wage debility 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 and we're crashing well this quote comes from alan blinder a professor at princeton university and he's a former vice chairman of the fed and he said through operation twist bringing he is throwing sticks and stones and peashooters and b.b. guns and whatever he's got at that we could khana me in the effort to make marginal improvements i don't expect any miracles from it and frankly neither do they so max we see to set off and 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 and saw the junk shot and 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 junk yard 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 for 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 don't listen to the problem stated over there take one of your props or the red

rubber ball less than a proper smart attorney 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 first federal give them twenty billion dollars for the same item that's the inherent problem with the america the global economy the banks privileges with the 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 are in this position and the next headline reads max the fed disappointed the greek 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 that these people believe his now prognosis that it's all looking pad as if the last three years as we've been saying it hasn't been all looking bad oh this is the charlatan aspect that goes with wall street in effect their shamans their their their you know snake oil salesman they they're they do a dance of deception and the american people the global community falls for it 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 standing peoples' money all the while well phoenix capitol says that many people would lose everything in this mess yes everything the

u.s. 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 are 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 running into that side as the tide pulls back not knowing that behind that is a tsunami of the out money in this case that is going to swamp them well let's turn to the original doctor do with this is do me prognosis here and his thoughts on

gold not selling my gold because i think in the long run they will print money i saw as markets in the world are about on another train three percent even though republicans were right there late to their faith you have to ease yes' out and. now they can sit back and say don't east we have gone enough but as soon as i said prices go down and the economy's weak everybody will applaud their fate if they printed money mark or 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 it 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 i for a long a book 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 oil prices and all the exchanges are now manufactured and they manufacture 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 problem in this pile of junk on my table and this this junk dollar yeah i noticed one thing here it has the pyramid of course everybody knows about the pyramid on the back. well that's my next headline ok b.m.w. town crashes in pyramid fraud yes ben bernanke pyramid fraud scheme is of the only one going for as long as anyone can remember she's a town in china has been poor the villages 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 locals 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 of property developers who built all these fantastic apartment developments which nobody could afford to buy so the whole pyramid frauds collapsed again cause ranford john law. this is a classic example of a pyramid scheme a ponzi scheme and of course it involves real estate which was this favor 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 only east 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 into max how is king claw 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 where all of this junk is for them. 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 they say herbert the number one concern of ben bernanke he 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 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 boycott of u.s. treasury bonds and the u.s. dollar which we're seeing right now in the price of gold 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 is 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. christian 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 jump ball or 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 a car manufacturing plant in detroit. manufactured by americans. thank you states air america so much for being on the kaiser report you're welcome and thanks. much more coming your way don't even go to your flight it's been canceled.

marvin here broadcasting live from washington d.c. coming up today on the big picture. welcome back to the report i'm max keiser i've got him he's here. welcome to the kaiser report oh thanks for having me on spec task nick they are here in the studio

i want to jump right to actually our last question from a tweeter and wants to know do you ever sleep. years unfortunately i do i try not to but you know i have to do a few hours of work and i try as hard as i can if you could you'd like to be tweeting or commenting twenty four seven ideally that would be an ideal situation ok fantastic so we just heard from alan blinder he's the former fed chairman he's talking. operation twist any saying you think of sticks plastic pigs twigs b.b. guns for monetary policy is making fun of the whole thing saying the collateral is worthless your thoughts i mean i actually technically he's kind of he's right in the sense that i think operation twist isn't really going to do anything for anyone will be pretty minimal and the idea that lowering interest rates is going to have a big impact of this point we're already at record lows it was you know kind of a joke it's a superficial thing in there's this expectation of the fed to act when things

aren't going well so that it'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 but let's talk about that for a second to call 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 bit trade higher bernanke inherited that legacy but it seemed as though the fed's ability to stimulate these markets is finished is over is that kind of like your living to be kind of seems like that own especially i mean look certainly the markets reacted positively to q e two and q e one and therefore it's too early to say a 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 a 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 what was it still possible that the fed could juice the stock market if that's all it was going for now your own role over there business insider dot com you're the deputy editor correct yeah now business insider is primary. really focus on if maybe correct me if i'm wrong but there's a big emphasis on technology was kind of have and have there's a there's a kind of there's a good tech side and then there's like the finance economy there's a huge tech component and it's a 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 the c. investors the venture capital investors ok 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 are going to go public at a twenty thirty billion dollars valuation there's one school of thought that is looking at groupon in their words ponzi scheme have been mentioned yeah is this a fair or unfair the most interesting argument in 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 but have 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 les 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 are still crazy businesses generally still like it go there are issues and lots of competition so it's not

a ponzi scheme because there's a real business and i think the what people are pointing to when they mention ponzi scheme is the fact that they lack of really they repeat customers in other words they make a big splash they it's not yet it's not that bad actually they make their repeat customers aren't debit but that is that is the big controversy the question is do they need to just keep adding customers in order to make good. that's right that you need to feel like if they were to shut down customer acquisition right now yeah and just you know with the customers that they have to 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 it without i.p.o. money is a company so whether it's a year from now. is it would be very dicey there burning for a lot of money ok fair enough let's talk about the french banks for

a second for morgan stanley hugely exposed to french banks is it too big to fail can use banks survive a french banking collapse or the cross-currents there i would say all the you know morgan stanley is too big to fail in the sense that if it were to have a failure leg 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 in fact when you look at hedges and out 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 has really been getting hammered this week and it is 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 p.n.p.

par. there's a general the rest of them it's hard to imagine the u.s. financial system not really getting hurt but i mean. right this worked in teachin it is one comes up all the banks are connected on the back and now gordon brown former prime minister of u.k. refers 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 but i think he 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 we're in times like these when people or you know people get nervous. sir things are actually going bust as they are in greece everyone just wants cash but it 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 or ten years they haven't taken that punch bowl the way they keep throwing more they keep spiking it with more cheap money at what point do they get responsible we have you know obama was talking of volcker when he came into office but he never there's really no reason yet there's no question that well the times haven't been good in a lot in a rose i mean the last couple years have been ok for the economy but certainly i mean when you live in talk about taking the punchbowl away 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 it 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 two different things but i think the reason that there isn't much of lending is because 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. a role for more criminal more prosecutions of the vine and you know people who are involved in the bubble and a bust to save those. others decided rightly says right well it was a little ugly when you say the private sector is taking on too much debt and then here j.p. morgan jamie dimon or j.p. morgan saying that well you know basil three agreement 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 little who's going to stop and put the tricking on this guy he's a rogue banker he makes jerome kerviel seem like mother teresa jamie diamond. you know i actually think. i'm going to skip that. just because that is just about . just. because you're

a journalist here representing oh this is what i say first of the industry and i'm making a serious turn chair where you know i said your business is it is a flagrant lawbreaker person passing through court like. he's not a flipper or 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 for you treated this one kind of as it fundamentally disadvantage american banks and that's all he said so i don't compare him to a rogue trader i think it's a little dramatic but underscoring of credit i think what a 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 going to say the work 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 i want to 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 us is the one with all the debt what kind of investors are they the u.s. is a fantastic track record of always paying back its debt and times like this when people are panicking there isn't you know you look at things that are incredible histories of preserving your money and enter liquid. which is i think why people are jumping gold right now and are panicking now because because people worry about liquidity right now they want. they want the most liquid they're not worried about the u.s. dollar depreciating that's kind of like a secondary concern at times like these they just want the most stable assets they

exist on stockholm syndrome i don't believe it's ok let me go that's most of karl h. i'm sorry carl it's tattooist asked 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 is going to send me an email please do so at kaiser report at r t t v dot ru until next time this is back scratching.