ok matthew with the live from moscow headlines now protesters in egypt hold their positions on cairo's revolutionary tahrir square for now it takes a welcome breath after yet another night of heavy clashes meanwhile the arab league is meeting in cairo rest is not on the agenda the focus instead is on syria and the imposition of. ethnic tensions once again in breakaway kosovo when nato soldiers used tear gas against locals trying to stop their barricades being

troops in riot gear attempting to remove a concrete barrier. late on wednesday. i must go to stress it's not about to stop the reset of ties with the u.s. but it will hold nuclear disarmament and deploy rockets to its borders if washington establishes its missile defense shield in europe the u.s. says it will not review its program. my colleague bill dollars here in half an hour's time but for now financial analyst and stacey her but discuss the plight of taxpayers in the west being forced to stomach toxic debts in contrast to china where for instance given the death penalty a report is now. max

kaiser this is the kaiser report is this you know it's a pepper spray because you don't like the way things are going this spray some of the people space station however tell us more max of course you're referring to the police pepper spraying students at u.c. davis the occupiers there universe in california davis and the headline on this newspaper it police suspended over pepper spray attacks that shocked us i thought

it was a good parallel to what's going on in the global economy that we have these. unelected officials imposed upon us and pepper spraying us with equally as they describe it here pepper spray is a toxic red liquid and said we have toxic debts sprayed upon us and yet nobody is being fired or suspended over this yeah you're supposed to stay out of the red if you're running an economy you're not supposed to spray redness or dead into the economy as you see happening now in the eurozone with these elected bankers who go by the code name technocrat but that's just code for bank sterner and they go in there with their aerosol of debt and they sprayed into these economies and of course if these damn allies these economies even more and it requires more austerity measures and it requires a confiscation not only of wealth but of civil rights let's see how this pepper

spraying of dead works and you might want to pepper spray me now while i'm reading it just to see if i'm able to tolerate the peanuts. taxpayer to carry their risks for private mortgages. if you could see through they paved the first spray the taxpayers to become the ultimate guarantor for hundreds of millions of pounds of mortgages as part of a radical strategy to boost britain's ailing housing industry so by taking some of the risk of lending the government hopes to bring down deposits of up to twenty percent for first time buyers to as little as five percent and to kickstart demand for homes look if the tax prayer is the backstop and the guarantor maybe the taxpayer should elect somebody to run the country that has their interests at heart and not the interest of the people who are putting together these false

agglomerations of illegal debt i don't think if they're going to be the backstop and you're guaranteeing the debt then shouldn't they have somebody in office who's who's there for their interest how can they allow for so in be parachuted in from a banker to serve the bankers interest to set it up so that when the bankers fail then the taxpayer the citizen has to be the backstop he's also helping developers out so housing developments the article says will also be able to bid for up to four hundred million pounds of government subsidies to start work building on land which the developers already own but consider currently economical to develop isn't this what a market is maximum price discovery mechanism all that stuff right well the way to cure the housing problem in the u.k. is to let the market determine where the price should be that would stimulate demand so by cameron coming in and gifting developers with huge cash gifts to go out there and manipulate the market is only going to

a base of developers rich in an unhealthy way that we saw in ireland look at all the developers of ireland who walked away with billions of euros because they were crooked and corrupt same thing with the house developers in the u.k. they are pretty much across the board. the corrupt so the camera is just going to give them a free gift just like the banks they won't actually use it to build housing and a sustainable way they'll use it to pay themselves huge bonuses and walk away and then five years from now cameron will be in the exact same position he was and if you look at look what they have done with the rail system every five years the transportation system needs a bailout they give it to private contractors who steal the money five years later nothing's better and they give them another gift so now they're they're using the same ridiculous methodology that's bankrupt the country and are going to apply it from the transportation industry and are going to try to ground the housing industry because it'll work so well in transportation they're going to try to housing and completely and systemically and institutionally totally corrupt the

five back part of the economy the fires that are up to five. well but it's also you know how democracy can work as a tyranny against everybody else because in the u.k. especially you only need something like twenty three percent of the vote the popular vote and you could come prime minister here he's helping out a select group of people who could even come up with a five percent because the average house prices in the u.k. are still two hundred thirty two thousand pounds which is like you can buy beverly hills for that absolutely they think the problem is not with the prices them subs as it would relate to a free market capitalist system they perceive the problem to be that the additional layers of an enormous ponzi scheme is missing that the government will supply because the private sector is too broke to provide that next layer of a ponzi scheme this will result in further market this location that house prices

will never find a point of equilibrium that would be equivalent to a free market system and cameron clearly is pandering to his constituency to try to stay in office because everything else he touches turns to a complete joke he's got the reverse midas touch well listen to what another article on this. story first time buyers could get government backed ninety five percent mortgages so listen to his arguments out goes free market capitalism that the market should determine what the price is and listen to the airy fairy middle class or lovie class sort of targeted language it's not just about the economy it's also about people's hopes and dreams you always remember that moment if you've done it when you get back here and you walk into your first flat it's a magic moment it's a moment i want everyone in this country to have not just better off people the dream of home ownership is something that should be achievable for everyone if you

play a speech and you put it word for word and match it up against what jim jones told the folks and yana surely before they drank the kool-aid it reads no for know exactly the same we're talking about cult leaders leading a homeownership cult over the of business into financial suicide let me explain something to you for a second capitalism without bankruptcy is like christianity without hell i mean you've got to accept the total package if you're going to be a free marketeer you've got to accept the people could bankrupt us the way you weed out the weaklings or those of course old copper list and go on to perpetual david cameron merry go round of free giveaways for the club to crash while austerity measure for everybody else but we're supposed to feel good because somebody has got a speech that they stole from jim jones down there in vienna ok he announces this plan just as this headline breaks property asking prices cut by

most in four years how sellers have cut their asking prices by the largest amount for four years as the relentless flow of bad economic news down in just confidence according to the latest figures from right move that's the way you clear an inventory you drop the price and then people can afford it because. is that the new market price the new reality camera know about that for a turn of phrase down there at this press box of the house of commons reality i know it's a freaky term that they didn't teach you at eton but maybe you should read up on it gets cold reality and you obviously don't live anywhere near that neighborhood you live in cuckoo land or you can stimulate the economy it's freaking if the housing developers who are known just saxon's no financial crooks well then are you out of your volume well average asking prices have dropped by seven thousand five hundred twenty pounds or three point one percent from the previous month so that's a better way to help people get on the so-called housing ladder rather than take

from somebody else he's having to take from somebody else in the economy and as we covered when we were in london he cut it from the poor and the disabled so some paraplegic right now is being thrown out in the street so somebody who might vote who can vote is going to vote for david cameron so that right your point is well taken he's moving assets from one part of the economy there subsidize the housing industry which he has identified as key to growth in britain why because of that stupid cockamamie speech you just read me that is like playing the violins in the background about every fricken middle class idiotic british person wants to have a home is their castle and on the government i'm going to make it happen it's like george bush retread remember his speech the ownership society cameron you're ten years too late that ship has sailed you can't just replay old george w. bush beaches and expect people to applaud as if you're saying something

a original be truthful see sane and then remaining minutes we have here max i want to turn to this little bit of audio to show the nature of the people who are bailing out who are all suffering for and this is eric townsend he's an american investor. living in hong kong and he's talking to financial sense news hour about it counts that he had commodities account where they started liquidating his account even though he was perfectly hedged and they started liquidating is account due to an obscure rule they say that was in his contract it really makes me wonder you know designed to protect them in some way because every action they took increased risk to me at an increased risk or is it intended so that customers account can blow up according to a complex set of rules that the customer can't possibly inform themselves you know what is the point of all this why does it work this way yeah like i've been saying i mean the the way the industry is not regulated is

a lot of dead bodies are floating to the surface whether it's the n.f.l. oh boy scandal or other related scandals now this scandal this act is that these brokerage and bankers there are simply taking money directly out of people's accounts as the global economy continues to suffer from the deal leveraging that's happening as a result of all the fraud to begin with and i think anyone who has money in any of these institutions be prepared to lose it well he's lost two hundred thousand dollars and he says he's never going back into a commodities brokerage again and he did ask why hasn't john core sign been arrested what is he doing walking around a free man so i want to turn to this final headline here max we keep on turning to where all the power is going and it's heading east china applies five finger death touch to another business fraudster so former president chen chang through china mobile telecom was sentenced to death on charges of taking bribes of over thirty

six million remember which is a around six million dollars and then banks on november seventeenth his son was sentenced to ten years in prison for taking bribes of two million dollars and this is the killer sentence here in this case the son was sentenced for using his father's connections to support getting. new contracts for companies he was then pay dividends by the companies so just by using his own father's connections now you think of david cameron's entire cabinet and all that they have behind him they have no work experience no credibility you know intelligence or you know how all they have is that they were part of the lucky sperm club if they were complying with china's standard of moral rectitude they would also all be five finger death. so you have to ask yourself why would you rather have your money and david cameron's shack. vaporizing out the window because these unnamed or china were people actually killed the malcolm sounds. there were thanks so much for

being on the kaiser report thank you max don't go away much more coming away so stay right there. we'll. its technology innovation all the developments around russia we've got the future covered. room. like the back of the kaiser report on max kaiser decide now to go to portland

oregon and speak with gregory macdonald of greger dot you asked gregory is now also running for chris martin since his letter gregor mcdonald welcome back to the kaiser report thanks so much for having me max good to see you all right dr laura with the war back roads and political crazies in the many have missed that oil was back up over one hundred dollars how is all well at one hundred dollars a barrel when we are in the midst of a great global deflation in the near term i think that we may have just seen oil prices make their last. for the great reflection or period that started in two thousand and nine and clearly is probably finishing up in two thousand and eleven even though i think that won't prices will probably we can from here i do think that whatever level they go down to will probably be much higher than what we saw in two thousand and nine financial crisis you know we've had no growth in crude oil

supply for the sixty or now and really the way the world has has coped with that is play taking more and more demand out of the nations of europe and the united states so that asia with its growth in demand could actually have some oil so you know we were flat max for the last six years all right so a couple of points first of all i guess that is the definition of peak oil and number two i would i mean it's moved over to asia in what capacity how does that work exactly what the supply is no zero sum game. one hundred percent of the growth in asian to me and has been composed of simply frame no oil consumption from here in the west i mean for example if we look at petroleum consumption in the united states or around peak so to that. thought of two thousand and six at the top of the housing bubble when we were building lots of houses and people were buying pickup trucks and light vehicles oil demand here in the united states is down almost

thirteen percent in that period and we're not recovering our demand we've removed a lot of discretionary demand obviously we have a lot of leasehold discretionary mentor to move out and of course those are caught in the fields to recover maybe we're about to remove another tranche of tin and here in the united states now gregor i see a lot of activity in the us with this fracking this you know they go into the geological crust and they and their racket open and they release natural gas and it is this a meaningful amount of new supply to the energy mix overall it is a meaningful contribution to new supply and many of us have watched the growth of new title oil from places like nevada conformity in north dakota for a couple of years now once then a little bit comical however is to see the press in both london and new york talk

about this new supply not in net terms however because the united states has seen an uptick in overall production of about eight to ten percent from its recent lows in two thousand and eight but that hasn't changed quoting supply aggregate global supply of oil so you know i think it's wonderful for the smaller independent oil and gas companies of the united states that production has come back to on shore they'll certainly see higher production and higher profits but that doesn't mean that the united states on a net basis is going to go through a significant supply growth period over the next decade say out to two thousand and twenty now here's a a straight up with that economics question for you what's true. or for the us to develop alternative energy to continue inventing other countries like somalia yemen libya iraq sudan are supporting these kinds raise to get oil what's taper the

current fall foreign policy or develop the technological alternative sources and this is a fairly easy question i mean just to put that in context america built out its highway system after world war two one fourteen dollar oil we're now trying to run that system and repair that system and maintain that system on a hundred dollar oil is very an economical and from an energy standpoint it might even be an energy sink in other words the amount of resources were putting into that system maybe more than the amount of economic benefit they were actually getting back out of that and then the problem is liquid energy and x. that's that's the real problem racing around the world trying to secure new liquid energy resources has because on economic loser for the united states we would be much better off investing in the power grid and plugging various sources not just solar and wind into that new power grid but also natural gas we do have a decent natural gas resources here and here in north america so you know your

question's pretty easy to answer. also considering the fact we don't even price in the cost of security you know the cost that we incur to maintain our global military presence which if you look at a map of global military presence were dispersed throughout the world but that main concentration is in the middle east near all of the resources so that's not a mistake right now while let's talk about japan for a second and i was just reading that warren buffett in the wake of the fukushima disaster and the more a bond markets over there is going to take a little field trip from omaha to tokyo looking for bargains is a good idea of warren buffet's to go look for bargains in this area or is this economy because it's dependency on oil and the changes in. macroeconomic really not such a bargain but the fukushima disaster revealed. in is really running

on what's known as a very tightly coupled energy system and tightly coupled systems tend to collapse when you break off just one little part of them and when the fukushima and other nuclear complexes went down you had tremendous strains on the rest of the japanese energy system and of course japan's manufacturing a lot of its goods through the electrical grid and through the importation of liquefied natural gas so japan i think has been a bit of a value trap for value oriented investors for two decades and yes they do have productive capacity and a very high world class productive capacity but hand is not bringing any other advantage to the table in terms of energy inputs they're having to pay the highest prices in the world for liquefied natural gas in fact i was just looking at liquefied natural gas prices for japan they're between fifteen and seventeen

dollars per million beauty you and of course what how do we price the cost. to the quality of life in japan of the fukushima disaster which is of events that is going to ripple to image over several decades so i think that warren buffett very nice guy how does golden age in a particular you know to stink the arrow of global growth i think that warren has perhaps run out of ideas at this point it's not really warren's fault the world has changed we're in a phase transition through their energy and i just don't think that warren's perspective is as valid as it seems right now are gregory mentioned this phrase tightly coupled well i guess another analogy to this would be that just in time the supply chain management that part of globalization everyone's all hooked up and

moving around and the transportation system and all the parts and assembly it's all happening linked together very tightly coupled i guess you could say now with japan obviously being an island and whatnot you can see how they would be exposed to this type of a couple of economic backdrop what are some of the other countries that are similarly let's call risk you know let's call tightly coupled risk as as the world the leverage is as the world as globalization i think we have people globalisation as we have hit peak oil and and peak water so what are some of the couple of the other countries that are rest of tightly coupled disintegration risk i think the other system that of course remains. is of course the financial system within the o.e.c.d. actions and that's principle united states europe well it's true that the united states has fairly decent energy resources if you don't count oil i mean we were

pretty well. stocked with coal and with with natural gas but europe looks pretty securely vulnerable in that regard and it's somewhat tragic or ironic and some sense because europe perhaps has done one of the better jobs over the last two decades of becoming energy efficient and other words they have continually weaned from the demand side their consumption of oil and continually move towards natural gas and solar and wind but as you saw post two thousand and eight even europe took another leg down in its petroleum consumption losing another million barrels per day and so one of the boehner abilities that i see with europe is there isn't as much discretionary energy consumption to shed at this point and

so any lead lower in energy consumption is going to be correlated basically more than one with economic growth and of course this is the really tough spot that the developed world is in right now it is to find some way to grow to service the debt and the barriers to growth are twofold one in the private sector remains way too high and two there just isn't an easy cheap energy resource coming along to rescue us and so you're in a very vulnerable type of threshold situation with what's occurred with debt in the developed world right now although europe has been cutting back on their consumption of oil the fact is that the oil industry over the past twenty five years has had a reciprocal growth arrangement with the credit markets and those banks in europe are exposed to those credit markets in a big way so even though they're cut back on oil they collapse in the credit

markets is pressuring the banks anyway so they went through the exercise of cutting back really they finding out there. yeah that they're just as exposed to the global credit oil so i call regardless of whether they cut back that's correct we're sort of trapped below a ceiling you know that the image of a ceiling is very very useful here every time these western economies try to get their head of a ceiling and try to look into some sort of industrial growth to get the credit cycle we started again and to get that service going again oriel rises back up again because its current any sort of growth whether it's production growth for consumption growth as i said max i think we've just seen the turning point and that cycle or west texas intermediate crude came up very quickly in the last four weeks because it finely was released from its landlocked status in the interior of the

united states and it's making its way down to the gulf of mexico and so west texas intermediate crude is rejoining with brant which is the global grade of oil that the world is paying the price for brant in the last year or so but i think you know yes the oil prices have just briefly come up above one hundred dollars a barrel but i just don't think given the levels at which we're operating that our economies are going to be able to sustain that so i think it's probably time to see a weakening face of oil prices all right greg mcdonald right of time thanks again for being on the kaiser report thank you max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacey harbor our thank my guests gregory macdonald if you want to send me an e-mail please do so at kaiser reported r t t v dot are you also follow me on twitter at kaiser report or on facebook kaiser report as well it's a nice time to snacks rather saying. that's

become common names and mobile home is told me oh creation of the group of the system but no one food system is not created to feed the people of the world is created to maximize the profits. sure not trading the actual physical grain or trading promises for grain to be delivered a month or six months or twelve months or eighteen months in the future. for reasons modern regulators silver or gold they can be negotiated in their hoarded somebody very. place. yet or. possibly it's not traded now. but it could be in the future.