market finance 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 in to cause a report on our cheap. this is our team moscow our top stories tonight new york police get tough on thousands of occupy wall street activists furious that their taxes are being used to prop up corporate america protesters staged the biggest rally in three weeks after being joined by unions now. a syrian woman seen as the symbol of the regime's brutal attack against its own people reappears alive and well after forty having been beheaded has forced several media outlets to backtrack up to giving a supposed death such a ration coverage. eurozone finance chiefs of look to helping out banks that may

suffer a blow from greece's burgeoning debt crisis meanwhile in athens violent protests erupted against the ever tough thing austerity measures. more updates or stories with me kevin zero in thirty minutes next the artes you know unique insight into the world's financial fallout in the latest kaiser report just a few moments away. she. finished first. first. there this is the kaiser report yeah we started the global insurrection against banker occupation it takes many names now revolutions internists cairo occupy wall

street but it started right here on this show the global insurrection against banker occupation ses ever tell us more max in fact today is occupy keiser where i am occupying the set today to occupy me worth are the handcuffs actually max you have been drugged yes report made it to the front page of the drudge report. had bankers rich who won't give up well now i want to point out that this is also a right wing site that was celebrated when a black man was killed in georgia recently they would tell when a muslim guy an american citizen was assassinated without any due process no evidence ever even presented yeah well those people didn't have the advantage of being white did it and you know last week we covered a lesser stonily who broke through the matrix broke through the mainstream media and caused an uproar when he said that goldman sachs rules the world well he was

invited on to i.t.v. news and he was there this week and here's a video of him where he's asked first a show this little clip where he says goldman sachs rules the world the audience booed him and this is what he says if you're thinking that your government out there hey mr cameron mr obama was in control guess what they're nothing more than slaves to the capitalist gang there is some kind of listing to say that this was that is true yeah this is fascinating that this were standing on the b.b.c. and british television is simply stating some simple truths about the bad. making industry and has become suddenly us a call celeb like oh my gosh what do we do about these rogue bankers these banking terrorists and as if it's something new but of course it's the reason why david cameron is finding it very difficult to manage the country's affairs along with george osborne is because it's been infiltrated by banking terrorists in the city

who support him and he simply there is a positive or a salesman trying to show up the strange thing of the british people lies concocted by the banking industry well again going back to drudge being soft on crime in america a gang bang would get you the electric chair in many red states that's right but not in britain or in america if you're a gang banging banker then you get a reality t.v. show now let's move on to occupy wall street because we have said that one of the shortcomings of this movement is that they haven't targeted towards those responsible big gangbangers behind it all i want to show you this little video from occupy wall street san francisco.

jamie diamond well i'd say that time is running out for jamie diamond and the other thing is that she said all she's concerned about is that he doesn't take her house but the fact is he will take her house they will get away with taking all of americans properties because they are protected now let's turn to this headline j.p. morgan chase and why peavy the way forward so jason morgan chase recently donated an unprecedented four point six million dollars to the new york city police foundation the gift was the largest in the history of the foundation and will enable the new york city police department to strengthen security in the big out. well you just find more leg breakers and head crackers to go down there and beat up protesters and children well ok he's saying it's going to strengthen security in the big apple the big apple is the financial center of the united states and therefore the world do you see as this fourth quarter begins max do you see more

security in the financial system is there more stability in the financial system yes well they need more security in wall street especially look take a firm like goldman sachs for example it now looks like they won't be paying their bankers any bonuses at all this year so lloyd blankfein insecurity from his own gregor's well but it also there were many i saw on twitter all the bankers and brokers i follow and they were saying oh all the conspiracy theories are going to start all that jamie diamond and j.p. morgan paying off the n.y.p.d. it's a big conspiracy blah blah blah but remember we covered liam a graph goodman who wrote the asylum the renegades who hijacked the world oil markets and she said in no uncertain terms on the nine max there is why scale drug dealing happening there and that because they pay the new york city police department so much they never ever look for drugs there of course that's another

truism on wall street new york times wrote a story when i was working there in the eighty's speculating that ninety eight percent of the people working on wall street were either trafficking or doing cocaine that hasn't changed at all but again you know this this mocking this cynicism this ridiculing by the likes of drugs by the likes of bill maher across the culture in america where it's ok to assassinate a us citizen because he said he's obviously a bad guy because the president doesn't like him or that this is ok for j.p. morgan a private corporation to pay your police department a huge sum of money the largest in the history of new york this is something that we saw in the mubarak regime so mubarak tried the same thing. hired more late breakers and it didn't really help in the end you know but again max this notion that there's some sort of exceptionalism and that we can. you know dance at the edge of of tyranny and not ever for some reason because we're superior americans fall over into a corrupt system first madonna dancing on the edge of tyranny that sounds like

a dance if i ever heard one so again ok here's j.p. morgan and we're told by all our fellow americans to worry about them paying off the new york police department here's another headline regarding j.p. morgan the anglo american precious metals three of it is due awfully quarterly o.c.c. report so this is from the u.s. office of currency comptroller and they've just issued their quarterly report on the derivatives exposure of u.s. banks and trust and lo and behold very poor it shows that j.p. morgan has about eighty percent of the gold derivatives the other twenty percent is held by h.s.b.c. you know they manipulate that market and it's been proven over and over and over again and any time they get into a court of law they claim that it's for national security that they need to manipulate his markets and meanwhile capitalism and economics in america is crashing on the rocks and cerny and a huge embarrassment for everyone who lives there this is why many people are

trying to get out. and again bringing this back to j.p. morgan and occupy wall street and the cultural crisis in america michael moore famously said oh we would need to end capitalism as there outside of occupy wall street but is this capitalism that one of the most important markets in the world when the most important currency markets in the world gold is controlled by two entities one hundred percent of all the derivatives are controlled by two entities yeah well and why do they control gold and silver why do they monopolize gold and silver why do they all of the buys in the cells on these markets and manipulate these prices every single day because the axiomatic flip side of gold and silver is the u.s. dollar and to have the u.s. dollar as world reserve currency which is the foundation of the american policy scheme which gives america the right to charge rent from six billion humans on planet earth as part of their song empire requires dollar currency printing willy

nilly and for the price of gold and silver to remain oprah asked this is the true battle because as the american empire collapses do their own stupidity mind you not because it's simply the time for them to go away they're to shooting themselves in the head gold and silver vigilantes are saying ok well it's a new era a new century we've got to take gold up to five six seven thousand dollars an ounce and see who out there wants to compete who wants to be a world leader not america they've abdicated that position they just want to rely on you know her crimes and cheap guns and wal mart burger king whacking homeless people sloshing about on food stamps lookin for some crack pipe that's all they got so who else can take over well the report also notes that j.p. morgan's derivatives outstanding now stands at a notional seventy eight trillion dollars seventy eight trillion dollars this is what j.p. morgan has in derivatives yes the total global. the d.p.

is approximately fifty trillion dollars there's one bank controls more derivatives than the entire globe's g.d.p. why do they do that they need that amount of firepower to keep prices manipulated there are the presidency quoted every day on c n b c those are the prices that j.p. morgan goldman sachs allowed to be printed those are not derived from price discovery from free market buys and sells those are propaganda american style they print prices that they produce through american version of prompter c n b c and from there they take it shrieked out into the gutter well for those who are going to try to press the propaganda that oh these are just notional values and it's all hedged since netted out of course the counter party risk as we saw with a.i.g. or lehman brothers it could disappear like that the counter party risk is austerity

measures in greece all over europe all over the world that's the hedge against abuse of the derivative markets and this is what's driving the global insurrection against banker occupation this is driving fear of money the curve this is driving the moves in gold and silver this is why jamie diamond has a higher cost protect him against his own bankers who are not getting bonuses because he's a pig and then finally on this so we're talking about these giant amounts of seventy eight trillion and derivatives that j.p. morgan has and this is one of the banks that the biggest in terms of how many how much derivatives exposure they have but it's very hard to get that through to the people out on occupy wall street or occupy america all across america there for focus on little things because these numbers are just so big headline from the f.t. reads why fourteen thousand billion no longer scares us so this is gillian tett and she's saying that money has basically gone virtual because there's so much of it so our brains are no longer able to even compute these numbers or you could say that

money has become completely class to say. and able to be shaped by propaganda meisters and that's what we're talking about in the old days they used to shape the news and these to flood the news of the law i encounter for the truth by by counterfeiting lives and just lying twenty four hours a day this would be create a new normal that people have to adjust to and that's the secret of prayer of propaganda from the old days now they just issue billions and billions of mis pricing non existing securities and they use that tickertape of lies of propaganda financial propaganda to say orals doing this for the dollars doing that or the medals or doing something else then drawing conclusions based on a lie to legitimize their policies and at the end of the day only accomplish two things make the top one percent richer and make everyone else suffer austerity she no it's one fascinating cultural twists of this money meaning nothing she said that

it deals with the funds that deal with e.t.s. handling gold have now installed webcams in their vaults to prove that these funds are backed by tangible bully on investors it seems want to watch those gold bars they don't trust the idea of zero is flying about in cyberspace it's. like you can't be full of darkness all those who were all right so sarah thanks so much for being on the guy's report thank you don't go away much more coming away so stay right there.

but imagine the kaiser report i'm max kaiser what a treat this is the book if you don't have this book already you've got to get this book the author saw das is with us here welcome the kaiser report's very nice to be with you nice of you to ask me all right so this is the book extreme money and it's a fantastic book because a lot of people say the problem is you've got all these weapons of mass financial destruction but that's a very choose phrase or not sure what that means and yet here is a multiple hundred page book that describes exactly this is it not the financial ization of everything has created this bizarro world of extreme

money i think you're going to go back in time money has to be something really simple it is basically have mechanism for exchange you know you wanted me to do something for you paid me i wanted you to do something. second it was sort of that . i saved that money where it could consume a future to somebody in the seventy's the eighty's completely who were right but we know what happened in the seventy's they black shoals option pricing formula came around that the option pricing formula for volatility was invented so that risk or volatility could be treated separately from rewards so to speak that they kind of split the atom of capitalism but where am i wrong in that thinking i think you're right but i think the risk of second is the first one she stripped money away from this idea of real thing when it became was like a strange world which went round and round and round and round and i'll give you a very good example of that if you take seniors collateralized debt obligations. the most interesting thing about them was by two thousand and five reusing that not

real things were using get to buy other thing which the other did change the second but you've hit the nail on the hit the second part of financial ization was interesting it was risky now originally when you had risk it was kind of simple but somewhere in the people found a way to fictive least strip it apart and trade it now i believe greatly in what i call the law of conservation of risk which is risk cannot be lost or you can do is shovel it around and give it to somebody else the point here is some people might be able to bid the risk better because they've got offsetting positions but like shows and i'm sending black shoulder the whole option pricing framework is we now understand risk and more importantly we can dynamically hit it so banks and everybody else get into the idea that we understand risk we know exactly what it is and we can laid off and that insight about risk created this cult that we actually got rid of uncertainty we could make things and everything in finance was not

driven by warren would it if you don't have uncertainty then you can take on more dick because the problem of not paying it back is a way to some degree and that was the key they said something very interesting conservation of debt and hedging now people are curious why this wealth of wealth and income gap keeps spreading more and more can we say that those who are controlling the capital they are creating the volatility and yet they're completely hedged but the crashing markets the policy reactions the panicked policy reactions end up where the masses are being asked to absorb the austerity all bankers the capitalists when they make money the moment they lose money they become socialists and line up with a tin cups along with everybody else gets taxpayer pay when you hit the nail on the head in terms of a very interesting interaction between the average person and finance and everybody has conspiracy theories everybody assumes that doc somewhere people sat down and plugged. down to the last tee it wasn't it was accidental hoping series of things

fell into line and while these developments and risk were going on parallel to that there was a problem which is an incoming. really poor and so what did we do when people got poorer we basically democratize credit and said hey you know you want that you're not earn enough but we'll enjoy the money and that led down this path of basically creating income equal inequality and there's a social element to this it's about slavery because you can make people slaves in different ways one is you want to give the borrower and there you money they become slaves as well so this bunch of people finance he is now what propelled into the center stage of all of this where they control this entire crisis purely accidentally but the one thing about finance is this month when they see something which has advantages they take advantage of it so they propel themselves into the sense he's the only thing that you mention which i think is really fascinating about the whole period of history is what was really going on is a reaction to a whole budget things like for instance in the one nine hundred seventy s.

we had speculation you know keane's in mixed economy was and were a case of people said well what can we try let's try a bit of deregulation nobody actually knows whether it worked ramon i mean growing regular is a beatified a person on the far right it's a pyramid because difference it's up to lead poured into people forget that on the outside bill clinton is supposed to be left of center and he ran the most drives are said to financial policies known to mankind so there was just mixtures essentially we had this guy loot of process with political ideology became unhinged because nobody really knew what to do and the finances said hey efficient markets and we are the answer so they were able to almost combine political power economic power financial power in this one person which of course now we know has been talking about this historical a over the past few decades and says the creation of a modern derivative era now after options a list of options chicago board of options exchange work created you had a. few years of high level inflation paul volcker came in he raised interest rates

to sixty percent today or prime pre to twenty one i remember the dairy and it peaked around one thousand nine hundred and then out then reagan came in now from one nine hundred eighty and saul very recently you've had of the longest bond market rally in the history so the people who for twenty thirty years who have become death slaves but they did so on the back of all of of a rising bond market or lowering interest rates absolutely so they were unaware of the fact that even though they were spending lots of money and they were taking loans out against their house they were actually going broke then suddenly two or three years ago the party ended suddenly houses are underwater suddenly people are now find themselves as debt slaves but this was not something that just happened oh no it's thirty thirty forty years but the point you make is is interesting there's nothing wrong with it per se did assumes

a couple of very important things firstly what you bought with it produces income so basically you have the income to pay back the interest and the principal but also what you have is what are you bored with it did keeps its value you hit the nail on the head houses were the key thing here and when houses fall in value you're never going to earn anything your principal residence isn't actually a source of income so basically we're never going to pay the price in fact it was negative income because all the subsidies absolutely and all the subsidies gradually are an affordable now so under those circumstances you get into a problem what do you make of the current interest rate policy federal reserve banks around the world zero interest rate policy it seems forced quantitative easing one to force heaping interest rates artificially low is not just perpetuating the ponzi well down to some degree but the ponzi now is the government's because the government actually took over the debt from the private sector because they had to through the banking system of the banking system became literally insolvent and now what we seeing is a concerted effort by the central banks to keep interest rates low because they know for instance that japan is going to. percent debt to g.d.p. that's gross did not net but he pushed up interest rates from one percent to three

percent while japan basically goes out the back door quicker than you can blink so everybody actually has to keep interest rates are the most interesting recent example has been ak and the twist are basically what he's doing is pulling down the long into he saying all sorts of things like mortgage refinancing mortgages refinancing he wants to create greater capacity for the federal government to basically spend more money on a stick on the spent thing for a second because the fed under greenspan and now it has been completely politicized and yet they're supposed to be independent occupy wall street is now beginning to be a protest against the fed first they realize you know what it's not politics is the bankers and then they realize you know who's behind the bankers is the fed bankers they know that they're moving in that direction and you've got a big uptick and promptly all is made as a nation is lately so they're not independent it's become politicized and yet they say they're independent so how do we rectify that problem but i think first we go to break the finance government complex you've got to break the same is the defense

industrial complex from the night he pitches or break that which is going to change campaign finance and go to basically look at the banks and make sure the banks can influence politicians in the way they do their cut out of the lobby heavily finance law being which actually weakens all the station and the other thing is i'm not sure that you want an entirely independent federal reserve board anywhere but you want one which makes decisions early on the economics of the case not on the politics of the case and the crucial thing was greenspan you're absolutely correct because greenspan more than anybody politicize the process because he was basically at the end of the day a political person because he was a very poor economist everybody agrees that it was a very poor economist and he basically knew how to keep the bankers happy his constituency was always the bankers from eighty seven on with every time the banks had a problem because interest rates implode the system with money and that created this huge debt burden to a large degree so you can't get off that but i think you've got to break that makes i agree with that the seething i was thinking of the wall street protest oppressor . would like to go there or join them because remember he was the one railing about

the fact that the fed was basically should be tried for treason production should be tried for treason and perhaps he should lead the charge on that but there has been a lot of chatter along those lines is there a role for a federal reserve bank it's a relatively in america carlos really started as a way to get away from the bank of england ben bernanke on made this case you know one reason we started america was to get rid of the bank of england get away from them it was created by german strangely enough to pull good and when they introduced in one thousand perching they brought in the income tax that's ok so now is there a case for a federal reserve bank at all i suspect you would need it because among more than one treat comics you cannot get away from a central bank somebody has to print money somebody has to control the money supply somebody has to control the debt issues if you look at a state like north dakota in america yet they owns the bank they have a very tight control on the money supply and they didn't have any of these banking probably just going back to hike and basically say you have a rule based system where you're basically saying look there's a series of rules you just follow the rules in which case is a mechanical process you need

a mechanic and mechanical process of doing that rather than a bank itself because there's no decision making so you're going to hike solutions to some degree and that's possible but it's not a bad become especially utility now they are going against it is that well what these investment banks and i have so much money flowing through the system you're feeding the entrepreneurial economy you're feeding nasdaq you're feeding the loans you're feeding risk taking. so there's the there's a give and take right there however are what we're saying is there a way to get out of this conundrum that the fed finds itself in they've got more debt on their books they can possibly grow their way out of they're going to have to do something radical is there any solution that's going to be less than a radical very painful solution the answer is no otherwise you lock yourself into a plan like solution of twenty years of nothing you basically try to grind out of japan still can't get out the other side simply because there is no answer to that the fallacious under those circumstances that's what they've locked themselves into to break the nexus in some way. i mean there are other solutions as well which are equally radical why don't you withdraw all the money supply completely and replace

it with notes which have to be spread within two years right so you have a time value on your notes. which under an internet based technology driven society very. tight group on and i have a question for you why is the group on the up of course people are crazy about getting a group discounts on social yeah or nail polish ink but if you tell them you know what we're going to create a nationwide groupon and get a discount on health care they say no that's socialism oh basically now care and socialism go together it's health care and socialism i've never understood the american psyche i mean i have i have completely rational friends who the verbiage we raise the issue of health care accuse me of being a communist but like with every discussion we had a discussion i don't really understand that sort of jump in the logic like that groupon is exactly the same as you say it's all of socialism to some degree that's not so much rain as report nice to be with you are and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert if you want

to buy this book i suggest you do so by our good buddy 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 max keiser saying by our. own home. home.