good afternoon and welcome to calcutta account i'm lauren lyster here in washington d.c. and more than one point two billion dollars could be missing from customer accounts at m.f. global that is twice the amount the regulators originally predicted supporting the bankruptcy trustee now failing to separate customer money from house funds i don't have to tell you that twice this is breaking the law not to mention breaking m.f. global's word.

such a bomb are we're going to have to show you that later because it is a great ad showing that m.f. global really got it wrong so the big question is where is the indictment for john poor design is he simply too big to jail along with other wall street c.e.o.'s who some believe should have faced criminal charges for the financial crisis during the s. and l. crisis for example regulators made over ten thousand criminal referrals guess how many in the two thousand a financial crisis zero but hey martha stewart was fair game remember that in recent years just five months for insider trading so we'll talk about why meanwhile some federal reserve policymakers said the fed should consider doing more that's according to the minutes from the federal reserve meeting that just came out here in washington today but is the best already doing q e three and just not telling us about it well that's what famed investor jim rogers thinks so tell us why and as technocrats need to hatch the euro zone's future protests on. the streets and

investors dumping the show more people may be betting on its belly or we'll tell you why and we'll get to the capital account. all right well as we predicted and talked about on the show yesterday the super committee did in fact fail to do its job meanwhile the president bailed to captivate a crowd at a speech that he gave selling his jobs bill today at least he failed with the contingency of occupy protesters who interrupted actually have a florida school. so

you can see for various reasons leaders are failing to enact economic policies out the same time are they failing to enforce laws against those who are breaking the economy i spoke about this earlier with jim rogers he's famed investor and author of this book i get to my children a father's lessons for life and investing i asked him first about the super committee being what many would widely consider a super failure unable to come up with the one point two trillion dollars in cuts that they were supposed to and you know i asked a lot of times on this show we talk about the power of k.-street of lobbying of special interests we know they are in full force here i asked if this shows that hey maybe even special interests are unable to cut through political paralysis these days take a look. now we know that log yes is that corporations and special interest two hundred of them had been lobbying the super committee so my question

to you if campaign contributions have been in a secular bull market does this show that essentially buying politicians the bubble in doing so has burst. but. you can continue to buy productions are getting more expensive but you can still. i mean hundred years ago you could buy three or four for the price of one of these days. the same system is still in effect i don't know why you're surprised they're going to do the same thing they're going to come out eventually and say ok we've solved the problem and they're going to continue to do the same thing i'm not surprised they just seem to disagree more these days and b. and more stalemates one after another but then said ok sticking to your thoughts because i hear what you're saying. let's look at newt gingrich because he was paid it's come out you know one point eight million dollars over ten years consulting for freddie mac. helping them make friends in you know on capitol hill and that's

a pretty good return on investment considering that one hundred forty one billion dollars that fannie and freddie got together in the bailouts not to mention the multimillion dollar salaries that their executives get so in this low interest rate economy that we're in as low interest rate situation where investors are chasing yield is there may be no better return on investment then investing in politicians . well it's probably is a good thing that he and freddie were the largest political contributors in the world. of chile went bankrupt and for all i know they're still still with her contributions all everybody in capitol hill that's huge amounts of money from fannie and freddie it's disgusting it's horrendous they were bankrupt they were manipulating their numbers and what's amazing to me miss this through is not a single one of those guys is in jail i just found out about them. tens scores of millions of dollars out of the company for themselves they use phony bookkeeping to

get a huge to all the congressman and then they all walked away with millions and millions of dollars and you and i and the rest of the american public are stuck with billions and perhaps even trillions of obligations from fannie and freddie yeah absolutely so then just sticking with that would you say that that's a pretty high return on investment for our campaign contributors. sure that me they they all got millions and millions of the management of fannie mae got billions of kids of millions of dollars and they're not i'm going to jail yeah it's great it's a great return for them unfortunately this list that you and i who paid those contributions and it's you and i who paid off those those guys who should be in jail right those crooks who should be in jail right now yeah meanwhile interest rates are extremely low the fed says that they will keep them there for the next two years when this interview airs the fed's minutes will be released for their last meeting i'm curious you know last time we talked you said that it would be

more than just low interest rates that we would see q e three and maybe they wouldn't call it bad maybe they would call it that case probably now but that we would see that do you still think that we're going to see q e three. we have seen it mr the mr what's his name bernanke you know the first week of august that they were going to keep interest rates low for two more years promises that you've got to do some you can't just say those words he went into the market immediately and started manipulating the market if you get the numbers the money supply numbers for him to starting the first day he said it you'll see that the mtu numbers skyrocketed have been skyrocketing ever since they're in they're there they're lying to us again mr wright you can't just say interest rates are going to stay low for two years got to do something i mean this is a huge market ease in there he's lying about it i hear what you're saying but as far as a large scale asset purchases like we saw during the first two rounds of quantitative

easing do you think we're going to see that again. this is the let me try this again get out the mtu know the money supply numbers you will see that they've been in there pumping money into the system and the only way you can do that is to buy something you buy bonds or treasury bills you've got to buy something to put money out into the system he's doing it. they're available every week from the federal reserve just look at it you'll see that story in the first week of august the money supply. there and the only way you can through that news there's just a buy something i mean that's how the money supply works ok he's in there so if he's lying about it he's lying to us about it saying there's no q e three but there is q e three he's calling it he's calling it cupcakes i'm going to go check those numbers then bring them out for our viewers and i can see what you're talking about so as. a large scale asset purchases to athens losses i know you're in singapore

but i'm sure you've heard what's been going on with them after lobel they've declared bankruptcy now the wall street journal is reporting that the trustee that's overseeing all of this thinks that actually it's not six hundred million dollars that's possibly been lost by customers one point two billion dollars that customers may be losing so i'm curious we know investors have been concerned about losing money through inflation now are investors going to be more concerned about flat out losing money fast and bankruptcy. well it's it looks as though it's happening one of the cardinal pound nations of the commodities market says when you have a segregated account it's a segregated account it looks like mr corazon and his friends going and if the trustees right have stolen a billion to customers accounts i don't know why he's not in jail if you go into a bank and taken hundred two out of the teller he would be in jail right now i don't know why he's not already in jail but back to the fannie and freddie situation it doesn't look like anybody goes to get goes to jail anymore in the us

no well no matter how big your theft is totally out rate it's really unbelievable given that rev co did the same sort of thing just a few years ago at least those guys are in jail ok believe cores on something like tried something like this what do you think has really changed that people don't get prosecuted going to jail now i don't know you know when we had the s. and l. crisis in the early ninety's a lot of the hundreds of people went to jail back in the thirty's lots of people went to jail the president of the new york stock exchange went to yale mr whitney back in the back in the thirty's but this time around nobody seems to care it's just mind boggling and the numbers are even more staggering this time around mr. they share are and anyone that listen to this and after a little commercial is a really upset actually a tiny bit sometimes people don't agree with you all the time. we tell you what. yeah i don't think i knew what was best for those customers that are possibly

losing all of this money that was now of course jim rogers weighing in he's investor and author. time for the fun part this is word the day where i break down a financial term or concept for our very smart viewer but perhaps not the financial experts so it is to today that we want to explain to you because we want to fully explain what jim rogers our guest was talking about when he was besieging me to look at these m two numbers and it's more than jen rogers talking about it let me give you an example a seeking alpha contributor who was recently writing about it in a column saying this is a broad money supply and two is up at an unprecedented annualized pace of fifteen point seven percent over the past three months so what exactly is this and two that has risen so much and why does it matter well let's take

a look at the definition first of all it's a category within the money supply that includes an one which is a narrow measure of the money supply in addition to some other things related deposits savings deposits and non institutional money market funds now of congress use and to we're looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions and just in case if you're wondering and one is currency plus demand of posits which for example is checking account so now why does and two matter so much well this is the broadest measure of money the federal reserve has so let's take a look at it and what it has done so you can see it went up right around here so this is why jim rogers is suggesting that it's an indication that the fed is doing q e three by buying things and increasing the money supply because you can see that with this increase it started around the summer of two thousand and eleven and this is when the fed announced that it would be keeping interest rates near zero until

two thousand and thirteen so that's why john rogers says this shows. the fed is going into the market and doing q e three now some people would disagree because c m e two can grow because of other things that can grow in contracts irrespective of what the fed does because for example banks make loans and bars defaults on loans and all of that is measured in the money supply also there's other things we should pay attention to it is because if the money supply is increasing it could be a sign that inflation is on the way so that isn't too and i gave you a few reasons why it should be on your radar. and still ahead right here on capital count don't go away if your money isn't safe with an answer all firms like m.f. global in the u.s. where is it safe in asia and bars the physical gold and what about the euro the general has answers all of that for us after the break but first period closing stop numbers.

we just put a picture of the need when i was like nine years old like if you told the truth. i mean i am in total ghetto i love driving hip hop music and pretty. but it was kind of the jester. i'm very proud of the world without you it's played. you know sometimes you see a story and it seems so easy to understand it and then you glimpse something else

here's some other part of it and realized everything you saw you don't know i'm charged is a big. what drives the world the fear mongering used by politicians who makes decisions break through it's already made who can you trust no one who is you know with a global missionary zeal where we had a state controlled capitalism. school sessions when nobody dares to ask we do our t.v. question more. welcome back so with interest rates near zero that means it's hard to make money

and m.f. global's missing one point two billion dollars in customer money shows that maybe hey your money isn't safe in a trading account either it could be lost in bankruptcy or to theft so where is it safe that's a big question right so is it asia is it gold and what's happening to the euro earlier i asked him rogers all of that he again of course is investor and author and he lives in asia so i asked him with a vice premier of china this week saying that essentially he predicts the global economy will slump into a long term recession and also warning that china will need to deepen financial reforms and order to cope with the fallout i asked him rogers if he's still confident china is where the money is as you said so many times before. china is the largest creditor nation in the world they have over three trillion with a t o's in reserve for. even number two so yes that's where the energy is that's where the future is. if the world goes into more economic slowdown

which i expect if europe and america go into everybody's going to back the chinese will not be able to escape that nobody would be able to take that and you have the two largest economies in the world having trouble everybody's going to have trouble now i have somebody in charge of these banks so much yet i know. i actually want to bring our producer jimmy trick afghanistan into conversation because he wants to ask if i believe on the chinese banking system hey mr i just how you doing my question has to do with with exactly that with the possibility of china going into depression because you've compared the boom that we've seen in china over the past twenty thirty years to sort of what happened the united states after the civil war and the industrial boom there however at that time the banking system the united states had not yet been as fully consolidated as it is today and it certainly wasn't anything like china and the kind of loan growth that we've seen in china has been tremendous so that has the potential for a lot of misallocation in terms of resources and goods and services and so are you

concerned at all in terms of what kind of bad loans could potentially be hiding inside of the system and how that could be affected if we were to see a slowdown in china. surely going to be plenty of bad loans coming out of chinese banks after all the chinese authorities are doing their best to slow things down doing to best their best to draw real estate prices down they've raised interest rates six times grace reserve requirements twelve times i mean i wish the us was doing what china is doing and trying to kill inflation so sure you're going to have some people going bankrupt you can have plenty of real estate speculators in china going bankrupt is that the end of the chinese story no i mean look if you watch the american banks to see someone believe it will bankrupt is coming out of the us in the next few years to the chinese banking system by the way it's not nearly as all pervasive is in the us there are lots of chinese who still don't have bank accounts and this is a. new industry but it's certainly not

a mature industry yet in china but to your question yes it could be plenty of plenty of bankruptcies in china just as there are going to be in america in europe and the rest of the world where you should be very careful because some difficult times ahead of us and you know one of the things that people think when set off bankruptcy in u.s. banks is exposure to european sovereign debt through credit default swaps u.s. banks have right now a lot of that you as far as the euro is concerned i believe as of like the recent things that i've read you own it still but long term you think it's a disaster and you were saying that back in two thousand and four you were very bearish on the euro looking long term i saw that in an interview where you're alongside mark bob are talking about that now of course a lot of people are bearish on the year along toward charm saying it may not even survive what do you foresee back then that other people didn't including your friend mark avar. oh i own some euro still but i have since you and i spoke

last actually own more u.s. dollars even though i'm wildly bearish on the u.s. dollar long term as well what i saw back in and still see is the euro unfortunately has become a political currency rather than an economic current sea and politicians are trying to make their names and reputations by taking potshots at the euro or threatening to pull out of the euro unfortunately euro when they started they should have put together a few sound countries and then let the people in in a very slow and methodical basis only the people who knew they had run sound economies but the bureaucrats in brussels like bureaucrats everywhere power on going to start saying let's bring in everybody in town us are here and have a party and they let him use phony books everybody knew that the people using phony bookkeeping so now the euro zone forces this integrate sometime in the next decade or so it's a shame because the world needs some things you compete with the u.s.

on paper the euro is perfect it's not a big debtor entity like the us as a whole i mean they've got greece which is bankrupt but as a whole euro has got a balance of trade doesn't have a big balance of trade it's not a gigantic better nation. it should be be wonderful and unfortunately it's going to fall apart not this year i hope i still own some year olds but maybe in this case and speaking of the next decade why do you think a challenge the dollar could it be called could it be there are many. it couldn't really remember any time soon because the rim is still a blocked currency and you know you can't i can't i have world trade with blah blah currency i mean the chinese are opening it up more every quarter they do something every month they do something to make it more and more international if you will the only thing on the horizon if there were if america fell into the sea today i guess people would have to use the euro because there's nothing else but i just

said part two in the next decade i guess if america fell into the sea right now they try the euro they probably try go out of desperation go it was not going to work either and it never has in the long term anyway so we're going to be in a bun ten years from now it might be there in mini i don't see anything else on the horizon longer term. or maybe build in desperation if we have to. and just very quickly i know that aig in the next ten years to you said that you believe they called will hit a thousand dollars an ounce we've seen recently and get pretty darn close are you prepared to revise that number and do you think gold is due for a correction coming at. you know miss this to go on is going up eleven years in a row which is extremely unusual for any asset to go up eleven years in a row so gold is overdue for a correct my own gold i'm not selling any gold if it goes down a lot i hope i'm smart enough and brave enough to to buy more i certainly still

expect go to go up to two thousand and probably higher over the next decade but it needs a very nice correction right now and speaking of the m.f. global that's causing a lot of selling in the commodities markets at the moment for selling artificial artificial liquidation so who knows it happened in the one nine hundred seventy s. gold went up six hundred percent then go turn around and went down fifty percent of reason scared everybody to death many people jumped out said it was a fluke and then turned around and went up eight hundred fifty percent so this is these kind of corrections and consolidations and all markets are enormous not unusual. and he said longer term he did not want to go ahead and revise that number that two thousand dollars an ounce number for gold a word so we left it at that i was jen rogers investor and author.

all right so we talk to jim rogers our guest about why is it junk or design the head of m.f. global hasn't been indicted despite his customer money missing one point two billion dollars possibly he talked about why aren't fannie and freddie executives facing charges or in jail so i want to bring in our producer dimitri and i want to bring in shannon donahoe in a controller into to talk about why wall street big wigs executives are too big to jail but looking at other people they're not so what about martha stewart for example she spent five months in prison back in two thousand and four because of that insider trading case she was accused of lying found guilty of it about a stock sale she never lived it down watch. and i mean just worth your sure sauce

and some salt and some pepper. she never lives it down so the bigger question though is dimitri shannon why is martha stewart a game or fair game you know she's a big name i'm sure she has plenty of people she can call but wall street executives are not there are many who believe that they should be held responsible for overseeing what many would consider criminal actions during the financial crisis but i think i don't know because she's a woman i mean obviously that the film is the only thing i could think of why did they go after martha stewart she's rich she might have been heavily disliked maybe that was a she made a call up and get her but. what i mean what comes up to see me as this is kind of outside of the kind of political i was through evolving door that's kind of the only thing i can think of i don't understand as i think about you all i know is she's great with cooking it's honestly i don't understand it's kind of weird to

see. no pictures but our. regulars not the bakers not bankers bakers are fair game but not bankers but that wasn't always the case because looking back to the savings and loan crisis during the eighty's bill black who was a major regulator during that time has said many times that they've regulators more than ten thousand criminal referrals during the s. and l. crisis that resulted in more than one thousand delany convictions more than eight hundred went to jail in this included big exacts like famously charles keating who was the chairman of lincoln's savings and loan he served five years in prison because of corrupt mismanagement so why do we see this during the s. and l. crisis with a thousand or more felony convictions and during the financial crisis there has been zero criminal referrals and was this less criminal no i would like to see john corazon took money out of customers accounts to meet margin calls because you'd be in jail for life and i'm sick and tired of seeing bankers get away with this crap

right now if they can get away with in the eighty's and i'm tired and this is ridiculous you have martha stewart going to jail for insider trading. for one point two billion dollars we're going to go where you don't know we don't know yet we don't know that still remains to be seen of course the investor investigation is going on but i'm just really curious about what you think has fundamentally changed between the eighty's and now what has become so different about the system i just i don't have an answer for that i mean i don't either i don't think anyone really. corruption just become part of the game it's become more allowed it's there's no there that it is rigged we have told the workers or central bank chief we don't have we then we had greenspan who said we're going to this bill you guys are going trouble and you just continue that and you know what it's not the united states is not the same as other countries we've seen the prime minister of iceland for example based criminal charges because of the financial crisis in that country so the question remains open ended if you have any answers please feel free and let us

know what you think why the. well aren't being facing criminal charges now because that's all we have time for thanks for tuning in and feel free to follow me on twitter at lauren lester give us feedback on you tube dot com slash capital account mafia mom. you know how sometimes you see a story and it seems so poorly pleasing you understand it and then you glimpse something else and you hear or see some other part of it and realize everything you thought you knew you don't know i'm sorry welcome to the big picture. download the official antione cation job on the phone called talk from the all you

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