months ago. financial woes go from bad to worse as interest rates on the state's cost to borat soften near unsustainable levels despite prime minister silvio berlusconi's promised resignation the markets fear the country's having put their best despite pleas from broke it plans to adopt austerity cuts and whole fill all of legations to the need to try and tackle its debt crisis. up next max keiser and stacy hobbit discuss european gold was on the brokers at the chicago board of trade telling others to get a job while they can't even do their own so all that in the kaiser report up next.

i am max kaiser this is the kaiser report i finally made it to the house of commons to give david cameron a piece of my mind herbert yes indeed max keiser david cameron gets s t f used by max kaiser and to a lot of minority the criminals who have taken what they can get i say this we will track you down we will find you we will charge you we will punish you will pay for what you have done s t f u s t f you david cameron because you're completely off base here you are a total product and a leader school banking shmucks there is blatantly obvious that your own bankers are financially ruined your people all right oh their government then i'll be in london soon enough you know i just got back from ireland are doing a world tour to visit all the hot spots around the world owes me

a push back against the criminal banking class warming up for the great inquisition part numerous double o. twelve yeah well the put their heads on spikes looking forward through it what else well speaking of the global financial name computes they of course were meeting down a nice last week and one of the talks to emerge was in this next headline bundesbank central bank reserves will not help fund the f s f so g twenty leaders in cannes discussed the idea that the european system of central banks could pull on their total foreign exchange reserves. fifty to sixty billion euros to a trust of the european crisis fund in the form of special drawing rights from the international monetary fund gold is in play this is what we've been warning you about for a long long time that gold is going to be in play now it's definitely in play

because all of the banks with all of these debts when you add them all up you realize that all of the banks are insolvent the counterparty risk as it's called doesn't exist because there is no possibility of any of these counter parties making good on any of these bets there's only one currency in the world without a counterparty risk that's gold it's in play now people want germany's gold but of course most of it's in new york and the gold thing continues as we've been telling you now the buddhist bank itself said regarding this plan for germany poland fifteen billion dollars for the germans gold he said we know this plan and we reject it good luck good luck rejecting it sixty percent tell the new york and you're not allowed to have a military after we crushed you after world war two so good luck with that germany the luck cluck cluck cluck well you did pre-warn them in two thousand and nine you were in frankfurt and here's

a little clip of you there telling them exactly this plan don't do it german people hold on to your gold gold has value the u.s. dollar has no value it's the devil's currency. hold on to the german people as you see max nobody was listening to you they should have no i mean when central banks were net sellers of gold including the federal reserve bank and bank of england that's when germany should have said oh by the way give us back our gold but now the goals of play and all the global banks are collapsing it's too late you screwed up germany no gold for you buddy ok well at least max germany. it is not a serious debt or like italy. crisis italian borrowing costs soar to bailout territory so we know italian debt is that two point six trillion dollars was dwarfs that of greece and the yield on the italian ten year bond went up to six

point six six percent as you can see from the start spiked illy is now on go to take the hot seat away from grace who took the hot seat away from ireland but the whole crisis will revisit ireland again they just found an incredible new realized liability and their bank's balance sheet that will require another bailout in ireland and more austerity measures speaking of arlen stacey i was just in limerick at limerick university they gave me this award the limerick university debating team this is for contributions to financial journalism one of the say stacey says honorary life membership according to max keiser for his contribution to debate and discourse they must've seen your discourse at the dispatch box with david cameron yes well the contributions i made apparently to the art of discourse and debating is my use of props. of the props and i like props like this like here's a fifty euro roll of toilet currency all of your fifty euro toilet paper currency

will soon be about as valuable as the store the paper itself this is all available nightly printed up in this beautiful display case that you can show in your house and tell your kids all about what happened in europe at the end of the beginning when it was all turned into one big pile of feces. now regarding italy max feisal islam who is the economics editor for channel four news in the u.k. i said a fortnight ago f s f equals end for silvio's fiefdom germany will not create italy sized bazooka for use by berlusconi now. remember germany has a lot of say in what happens in the eurozone particularly when it comes to monetary or any fiscal policy and now remember silvio berlusconi in the investigation into one of the various crimes he's involved with the phone transcripts from his

conversation with the journalists said that he had called german chancellor angela merkel. will lard. so it's coming back to bite him now well this is the amazing thing because ultimately there are going to. world war three. in europe and around the world as part of the currency war and we'll be talking about that with james records after the break but it's already started that europe is now in a war they're conducting a currency war and germany can all was pull out of the euro completely but it'll be a reunified germany were three thousand tons of gold oh yeah that's right that's the whole point it was a good well speaking of the gold ok now angela merkel's party suggested italian gold sale raised by c d u lawmaker ryan nish post says so italy according to good third greek a lawmaker in german chancellor angela merkel's party says italy can

lower its debt by selling gold reserves so this is again over and over we see this brought up in this european debt crisis that somebody should get rid of their gold and now they're trying to use this as a weapon their excusing each other that they have to get rid of their gold get take his gold take their gold but italy has twenty seven hundred tons of gold it's a really big position and i make this prediction china never really came to the a grace they have not come to the aid of anyone in the aero zone but they will come to the aid of italy in exchange for gold i make that prediction but before where. next week that will be definitely in play china to say italy for gold according to this c m b c chart from september italy's gold reserves with the fourth largest in the world they held two thousand seven hundred one tons which was valued at one hundred fifty seven billion dollars now if you add that into the two point six

trillion in debt that means that gold would have to be revalued to between twenty five thousand and thirty thousand dollars an ounce to clear their debts completely and i think that's something that you and and democrats have come up with as a number that's that's where gold is headed to clear the global debts is going to be north of twenty thousand dollars old dollars an ounce but the thing about china and italy is that china will come in and before the i.m.f. sinks their claws into italy and gets them to sign a memorandum giving away their constitutional rights as they did with ireland and as they did with greece italy will preempt the i.m.f. and they'll do a deal directly bilateral deal with china i predict that you'll see this is going to happen but speaking of buffoons max let's move on to this traders from chicago board of trade don't mcdonald's applications on occupy chicago protesters so last week in the middle of an occupy chicago teachin traders at the chicago board of

trade don't employment applications from mcdonald's on the protesters now to let people know what the chicago board of trade is i looked it up and we keep and they say it was established in eighteen forty eight as the world's oldest futures and options exchange now in two thousand and seven it merged with the chicago mercantile exchange to form the c m group know and the c.m.a. group is also the largest regulator of the futures markets in the us but it's also the largest player in the futures markets in the us and they fall under the heading of self regulated body that conducts business according to the rules that they themselves regulating them so. else and what we know about the c.m.e. is that they've been caught now several times breaking the law and the c b o e the chicago board of options exchange in the chicago board of futures exchange there at the heart of the fraudulent derivatives trading and at the fraudulent frame that goes on every single day the leg the law breaking that goes on but the c.m.a.

for its tell more about this is really shocking well we're going to move on to this headline so they're saying to the protesters get a job but they can't even do their job m.f. global customers say money safeguards failed them c.m.e. group the world's largest futures exchange is responsible for auditing its clearing members such as m.f. global under its authority as a self regulating organization now c.m.e. group is losing the trust of investors according to this article in bloomberg business week who uses the exchange and expect their money to be protected said a trader with five hundred thousand dollars in an m.f. global account that has been frozen since october thirty first and who asked not to be named because he fears reprisals he also said the c.m.e. group told him to expect not to get his money back for years as it's held up in litigation well when you do business with the commodity markets in chicago

regulated by the c.m.a. group when you give them your money to be investing in various accounts they put that money in their own pocket and then they put up a set of false accounts to the regulators that they themselves regulate and that's how they based their quarterly performance numbers and their filings is based on a completely fictitious reports they they they falsify accounts they commit massive fraud they commit massive counterfeiting this is the closest to a memory on twitter that moment we've had because it was the royal family of france that caused the country to be bankrupt at the time and perhaps marie antoinette thought she wasn't taunting the population. intentionally like these guys are yeah but these guys at this derivatives exchange the largest derivatives market in the world they are responsible more than almost anybody else for the global financial crisis that we see before us but it is only question is where can i go to start

insurrections i mean as a chicago is it grace i'm thinking in belfast because you know there they know what it takes to start an insurrection and get a lot of requests to go up to belfast to start a new country called the independent republic of max kaiser and i got to go after the baxters so belfast i'm coming to your town soon get to declare this in parliament we need to speak to david cameron again there won't be any parliament left by the time i get there i'm pursuing a scorched earth policy head of when i arrive that's. all right stacy ehrman thanks so much for bring on the kaiser report thank you max don't go away after the break i'll be talking with currency wars writer james records. and discover it.

communicate with the wind. and become. nature can give you. i am x. times or welcome back to the kaiser report don't walk run to your nearest candle and pick up a copy of this book currency wars this is the result of stone of the entire

financial situation. don't be read this book let's talk to the author james g. records jam welcome to the kaiser report thank you max thanks for inviting me all right jim records your book is very timely with the suggestion emerging from the g twenty that german gold reserves should be pawned to the f.s.f. in order to increase the leverage available to the fund explain what's happening here in regards to the currency wars well max as we've said all along and as i say in the book you know currency wars are about competing devaluation so the fed the treasury have been working very hard to cheapen the dollar really trashed the dollar relative to china and europe but china does not want to strong currency either because they want to promote exports. and europe has the same problem that's the essence of currency wars not everybody can cheap and all it wants somebody has got to win the somebody has got to lose right now by the way the the big loser is europe because the euro is done is very strong well people are surprised that they've heard their europe's falling apart it's in crisis the sovereign bonds are

you know trash and cetera but the problem is china and the u.s. both want a strong euro because they want to sell their goods to europe europe's a larger export market for china than the united states is so if china in the u.s. one the strong euro you're going to get a strong your own germany is on board with that so that really explains that conundrum but at the end of the day not everyone can win a currency war unless you go to gold gold is the one thing where everybody can devalue it once again scold they can't devalue against each other but they can devalue again school so that's where these things end up but there's a joker in the deck max the joker is the s.t.r. i know it makes people's head hurt but it's a special drawing rights the easiest way to think of it this is the i.m.f. printing press the fed has a printing press they crank out dollars the e.c.b. has a printing press they crank out euro's and known to very few people the i.m.f. has a printing press and they crank out s.t.r. s. so i see the entire international monetary system as a foot race between s.t. r.'s and gold because those are the only things left i want to repeat that point

because it is quite critical going forward especially in your thesis as you laid out a currency wars the e.c.b. campaign you're out as the fed can print dollars and the i.m.f. can print these s d r's which is another currency a global currency now in response to this ingestion about the selling or collateral zation of germany's gold germany countered with a suggestion that instead they suggest that italy since they sell their gold to pay down the debt now of course italy's got a big gold position in all of this just of walk us through that little counter response from italy and their position in the gold right now you know i've described. i've actually studied the entire world in gold space and what i mean by that people you know geo strategy or study of the world an oil space they say who's got the oil who needs the oil where the chokepoints like the straits of hormuz how is it shipped to cetera well think of the world in gold space and ask yourself who has the gold who needs the gold and where's it come from as the very revealing

picture of the gold superpowers in the world are actually the united states and europe they may have they may be trying to charge the paper currencies but the u.s. is a thousand times the euro system as a whole all sixteen members have ten thousand tons so that's what the pushing shoving is about but there's one big problem which is that gold that we just talked about is not in europe it's in new york it's about you know half a mile from where i'm sitting i'm doing the interview for new york and it's in the basement of the federal reserve bank of new york and good luck to the europeans trying to get it back to me the problem with all this gold pledging is the gold actually in new york and the u.s. is in a position to confiscate it when the time comes right jim i wanted to spend some time now on in the book currency wars this is just out this wake your book in the first couple of chapters you go through an actual pentagon sponsored exercise of a currency war and these chapters read like a thriller this is

a fantastic read as well as being incredibly informative but you were participating in the pentagon's exercise of a currency war and i'd like you to summarize those first couple of chapters for viewers because i really think they need to understand that this term currency war is not just a metaphor this is really happening walk us through it sure that's correct this was what you're describing max that is the first two chapters of the book is the first ever financial word game conducted by the pentagon over the pentagon's conduct of war games forever and they are very you know there's the red team in the blue team kind of bad guys and good guys and they do these all the time in the certain centers where these are conducted but this is the pentagon decided. two thousand and nine that they should do a financial war game to see where that would look like it was conducted at a top secret weapons laboratory halfway between washington and baltimore called the applied physics laboratory but it was the first time they'd ever done finance so i was actually invited in as a as an expert consultant on how to write the rules of the game and it was they

knew how to use aircraft carriers and b. two bombers and amphibious invasions but no one knew how to use stocks bonds and derivatives to fight a war so the rules where you could not use and the kinetic weapons means nothing that would shoot or explode you could only use stocks bonds currencies and derivatives and we had teams there was a russia team a china team a united states team and then we had sort of europe and switzerland the hedge funds all lumped in together and then they were referees so you would we were given certain scenarios you would make a move you would announce it the other teams would react we have separate rooms for our capital so we could go back i was on the china team so we went back to beijing which was a certain room the that was our capital we played it over two days and it was fascinating my object was to help the united states i actually wanted to attack the united states as hard as we could in order to teach our own military and intelligence community what the threats were you trying to trying to help america by showing the vulnerabilities of america so that's what we did and i actually

cooked up a little plot with a friend of mine who was on the russia team and china and russia combined forces and combined their gold and announced a new gold backed currency using u.k. banks and swiss depositories and what they said is from now on if you want chinese exports or russian natural resources we will no longer accept dollars you must pay us in this new gold backed currency that we sponsor as a way to kind of get the united states to think hard about the vulnerabilities of the dollar is a fascinating exercise it's all describe the book i hope the readers enjoy it but it was it was a deadly serious gambit by the pentagon to understand how financial war could play out you also mentioned i want to talk about a tweet they. you've left in the last day or so again on the special drawing rights you said you tweeted that the g twenty will go to the special drawing right before they go to gold and then gold is the last resort walk us through that you sure i mean the thing is central banks and the international monetary elite represented by

the g. twenty leaders the i.m.f. and then the central bank as the finance ministers around the world just to be clear they hate gold now they have it you know the u.s. has not sold any gold since one nine hundred eighty europe's been holding on to the gold so the people with gold are hanging on to it but they actually hated they would prefer currency because they can manipulate expectations they can manipulate people people who are kind of in on the game can hedge themselves with you know things like gold land fine art other types of hard assets warren buffett bought a railroad that's the ultimate hard assets so the insiders can protect themselves the people who lose are average citizens so people saving in a bank account people with their retirement savings in new adiz insurance policies anything that's sort of denominated in nominal dollars that's not going to go up with inflation they're the victim so this is a sort of organized theft from taking money from average people giving it to the elites who know how the game is played so that's why they like paper money and when they get over in debt it which they are now europe cannot pay its debt there's not

enough money in the world to fill the hole in the european balance sheet but what you can do is print some s.t. r.'s and hand them out just like candy hall when you know here comes china here comes italy here comes france here's some s.t.r. as kids and go you know go have a good time that's actually be frivolous maxim being very serious that is how as the hours worked are not backed up by anything they are handed out by the i.m.f. they do count as reserves you know when they came out in the late sixty's in the seventy's they were actually called paper gold now it's one of the great oxymorons of all time but that was the nickname for them when they came out they were called paper go so that would be the elites preferred route but my view is that you'll be able to keep going a little longer with us d.r.s. but eventually it will go critical piece. confidence across the board at that point they will go to gold not because they want to but because they have to write in the book currency wars by james j. records there's also some great analysis of systems analysis because we're kind of almost in a post economics world we're in

a world run by systems theory and systems analysis and if you bring in an n.s.t. are for example you try to roll up all the existing debt into a new currency and a new bond market you're just adding exponentially more debt to the system which actually increases the risk of chaos exponentially above that but in the minute left i wanted to cover something here which is i just came back from the token omics economics festival in ireland and we're talking about gold and of course they think here all the time is well there's not enough gold to be for there to be a gold standard and i know you have some thoughts on that jim records sure i've actually we're working on a piece called the you know the ten the ten things that everybody believes about gold they were not true in other words or so many sort of false so is or can ours are sort of cliche responses from the answer go people but but look people say there's not enough gold to support world trade there's always enough gold is just a question of price there is not enough gold at seven hundred dollars an ounce but there's plenty of gold at seven thousand dollars an ounce so the point is it's not

about the quantity of gold it's about the price you choose to back up the money supply and this is another very serious point this was the blunder in one thousand nine hundred five in one thousand nine hundred five in the wake of world war one and the one more hyperinflation of reparations and all the problems the world wanted to go back on to the gold standard now whiston churchill insisted that they go back at the pre world war one price which was about twenty dollars to sixty seven cents and now it's in u.s. dollars and four pounds a little more than four pounds in terms of u.k. sterling it was the honorable thing to do probably as motivations were right but it was an enormous blunder because so much paper money had been printed during a world war one that to go back on the gold standard at the. world war one price you had to take the money supply in england down by fifty percent well it was in the depression ten years before the rest of the world that was highly deflationary later in his memoirs churchill said that was the worst mistake he ever made and this is the guy who were destroyed it deliberately so he had a couple mistakes in addition to all his great achievements so the answer is it's

not just when you go back on the gold standard you have to think really hard about the price in one thousand twenty five if they had said maybe fifty dollars an ounce instead of twenty dollars an ounce that might have been mildly inflationary and we might have avoided the great depression now ever since economists have disparaged gold and marginalise gold so we'll just look at the one nine hundred twenty s. you can see it failed well it did fail in the one nine hundred twenty s. but not because of gold but because of the price so when you go back to the gold standard you've got to get the price right that's why i recommend actually a commission to study this and make some recommendations i give a range of values in the book i don't want to put a stake in the ground over a certain value max i've got the low end about three thousand dollars an ounce at the high end forty four thousand dollars an ounce and these are not you know made up numbers they're all just very simple math ratios of gold quantities to money quantities for example do you use them zero do you use and one do you use them to do you use all the gold the world or just the official gold if you're using

official gold is it just e.c.b. chon in the us or do we count other countries as well these are important questions i don't pretend to have all the right answers but i know the questions and they have to be studied so getting the pressure is really important so people say there's not enough gold that's nonsense it's a question of price i jim records thanks so much for being on the kaiser report thank you max all right that's going to do it for this edition of the kaiser reply with me max kaiser and stacy herbert and one thing my guest james g. records to book is called currency wars you can follow mr rickard on twitter james g. records as well pick up this book and they can follow me on twitter a cause or report or on facebook and you can send me an e-mail at kaiser reported r t t v are you until next time. it's a matter saying by all. wealthy british style.

markets why not. come to. find out what's really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines tune into kinds a report. more news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. showing up for a shelter all today. you

know watching all see is great to have you with this headline. rusher jack says unacceptable calls for further sanctions against iran in the wake of we do on atomic bush the report which claims that tehran is building nuclear weapons president ahmadinejad is ridiculous delegations say his country's nuclear program is peaceful but some fear this time he is just a pretext for a preemptive a time do us any zero on iran. sanctions of students have protested in london against rising tuition fees and higher education cuts with a huge was four thousand strong police operation to prevent a repeat of writing together go to mass ration pasta in the city of london with those taking part saying they should not be paying for the mistakes of mine. and so at least three sides have been wounded in a shootout between local some.