martin why not. why not what should really happening to the global economy with much culture a no holds barred look at the global financial headlines to name two cars reported on r.g.p. . back fortunately live from moscow these are the top stories of the longest standing on my movement can speared by police in los angeles with hundreds of protesters arrested in the process the move comes after innovation order for the man to two months off and raise the similar raise taking place across the country. diplomatic meltdown britain orders all arrayed envoys to leave the country within forty eight hours and announces the closure of morons embassy in london in response to their ransacking of the u.k.'s mission in tehran several you countries including germany

and france have also recalled their investors bomb iran. italian taxpayers are fighting against plans which can cost the country billions of euros of its economic crisis the military is planning constant as a nation a chance to tackle unsuitable you and your dad and adjust to a new prime minister. as the headlines here on our next to the kaiser report maxim co-host stacy discuss financially dan extend secrets stay where you are this is art . i am max kaiser this is the car as a reporter you know it's a financial war and coded messages are being transmitted in the financial pages let's get into this herbert yes max we're talking about financial war all the

time here in kaiser report and it made me think back to world war two under nazi occupied france b.b.c. london broadcast coded messages to the french resistance here are some of them max . it was grandma ate our bon bons and now here is the blue horse walks on the horizon. you will be right this is fascinating so the these coded messages are big broadcast in occupied france as a way to communicate to the resistance so it's still not like gobbledygook itself like jibberish but there's some meaning if you understand the code and we see this now today don't we with this kind of financial some a for loop into our day to day broadcast let's explain to actually what's going on you start off with a headline like this max i.m.f. drawing up five hundred seventeen billion pound package to see italy spain and the

euro within moments i see this tweet from b.b.c. business remember of the radio london of our modern financial era i enough to not italy loan discussions right so you have to really decode what's being broadcast from the centers of the financial war obviously the u.k. is now home going down into the trenches ready for warfare with the continent of europe and this new global financial war and you've got the same thing going on and come. it's an absolute europe and you got the same thing going on around the world so you have to decode these messages so in this particular instance it was just a straight denial of a coded message but the underlying subtext is that there needs to be a blitzkrieg of cash coming quickly or there's a dunkirk in our immediate future well i think what it is is that they send

messages out like this. but the people who need to know the financial terrorists know to read those articles and look for what is really going to happen so the b.b.c. article for example international monetary fund denies italy alone talks now if you read deep into that article it says over the weekend the german newspaper developed reported that a subset of euro zone countries with the highest credit ratings including france and germany may seek to issue debt jointly however the plans were also denied by the german government on monday they say there are no plans for a aaa bond or elite bond said the german finance ministry right but the subtext or the coded messages we know that that's not the case but they do have a plan for an elite bond or you might call the master currency it's a form of financial eugenics. from the germans is coming and they're

communicating visa via the financial press so most people don't understand it's happening in the markets are flooded three denominated because they don't understand that it's all heavily coded to communicate amongst the various financial terrorist centers perlin london new york tokyo exactly next you call it financial eugenics and this debt this so-called elite bomb the so-called triple a bond by france and germany is it actually has the same exact d.n.a. of a greek bond or an italian bond or in portuguese bond or a spanish bond it's riddled with banking fraud. it's riddled with too much debt but they have the blue eyes in this case are that you know the fitch and moody's and s. and p. reading it aaa yes the rating agencies are involved in financial eugenics and they give the currency coming out of berlin with the triple a blessing as it were but of course they are exactly the same now others of observe that this is starting germany for an interesting relationship with the rest of

europe or they are in fact in the vendor financing scheme where they are going to be looping loans into the peripheral countries and banking the spread similar to what china has done to us for so many years they just built the u.s. for hundreds of billions and trillions there's a vendor financing scheme germany being the other big exporter in the world could do the same thing with the rest of the eurozone by creating the goober currency bond market with their fellow master race of currency dealers well actually i think it's yet another front in the layer upon layer of this black propaganda being pushed on us by the banks toure's but before i get to that i want to show you this other headline here i met from paris to arm italy with a bailout bazooka but if i was. up again that's just a headline i know most people won't read past the headline and that's the propaganda but if you look into that article germany and france discuss fiscal

integration germany and france may seek to implement stronger euro area governance by striking a deal with a core group of euro nations rather than seeking the go ahead from all twenty seven members it was reported so again this. from just germany and france though their banks are hardcore involved in financial fraud they created a lot of these toxic fake derivatives that are blowing up around the world they devastated commies around the world and now they're pretending that they're the. you know there's sort of cozy the. the new vichy government in france basically a cow telling to the occupied german currency forces there's cameron in the u.k. appeasing the. currency blue devil with is happy talk to his constituency similar to remember i believe it was lord chamberlain who made the same mistake leading up to world war two so to follow down this path of

currency wars replacing shoot 'em up wars with tanks and missiles it's all being replaced derivatives and they're and money attacks you see the same patterns emerging we saw fifty sixty seventy years ago yes and there's black propaganda great propaganda white propaganda is how it goes and this fits in somewhere there france vehemently denied reports cozy had agreed with angela merkel to equip the european commission with new supranational powers this is a statement from the police a palace the president has a no way aim of giving supernational powers to the european commission we want to discuss the ways of creating more intrusive powers for brussels to monitor countries such as greece so in the same exact sentence they contradict themselves. sarkozy is lying. sarkozy is now occupied by the best munchen who p.p.p. please return to the obviously the at least a palace is trying to assure people that the goober dead and people won't have any

outside authority governing them it will just be those dirty stinking debtors down there not the debtors right the protesting the new unit of currency here in france has no connection to the bundesbank so either the i.m.f. is bailing out italy or it's not however there is another rumor going around should the fed save europe from to sastre nobel economist myron scholes was the first that floated this idea over lunch at the right bank forum an august he said. i wonder whether bernanke you might not say that we believe in a harmonized world but the europeans our friends and we know that the e.c.b. can't print money to buy bonds because the germans won't let them and since the e.c.b. will soon run out of money we will step in and start buying european government bonds for them it is something to think about he said so max tell us who myron scholz is well of course he's he's

a big one nobel prize winner for the black shoals option pricing volatility formula he is to derivatives what einstein is to atomic weapons he created the old idea of splitting the dollar into two parts reward and risk and then trading a risk separately and then creating now seven hundred trillion in derivatives which is pure risk no equity by the way that number's up over the past half year to a new record amount of people thought the derivative work was shrinking no it's a new all time highs along with a quantitative easing that's come close to could all myron shoulders option pricing volatility formula we can now look forward to having many more killings of dollars worth of worthless paper trading on worthless paper which is nothing more than a huge parties game roll out of her leg whose intentions are not to run europe or run the world why would we ever think that of berlin they want to teach the world how to sing well max jean has a long moustache grandma ate our bon bons that was one of the sort of statements

that my rituals first came out with with this the fed should save europe now let's look at the fed and how they saved the financial system in america secret fed loans gave banks undisclosed thirteen billion dollars well this is information that has emerged from a bloomberg freedom of information act and it turns out that the amount of money the central bank parceled out the war from the treasury department better known seven hundred billion dollars troubled asset relief program or tarp out of guarantees or lending limits and the fed. committed seven point seven seven trillion dollars as of march two thousand and nine to rescuing the financial system more than half the value of everything produced in the u.s. that year old plant go away i have to grow. so exactly the same shot more or less with nothing they committed massive accounting fraud bank vaults and some died or your is still sleep you school of

economics it's like oh theory some in chile in dollars give us a loan then they get a loan they go oh no it's over in the european banking system to help them fake out some kind of bailout package if they can possibly afford to look first right in the last hour let's do a bill of the us because we have collateral the banks don't need to be bailed out anymore we don't need this about trespass they got home a little don't you know forget no bills in south america no still no time to go to mars vote also paul krugman space ship could go to space looking for some aliens the payload you know stays bigger some keynesian theory that has been proved. this is like the school they can have never fails it's a one day we're all speaking german which i'm back because or so you know i'm prepared for that eventuality trust me well the loans were meant to deceive the public and the congress or at least it gave the congress the plausible deniability and they knew what was going on that seven point seven trillion dollars allowed the banks to transfer all their bad debts that would have indicated that they were

insolvent kid a fad and with that hank paulson was able to go hold up to congress it was a big show for the population however because remember at first congress rejected it because of all their tax payers calling them and then the second time the markets crashed in the taxpayer is the one thing congress you better vote for the start but in fact the tarp never would have happened had they known that the banks were actually completely insolvent and them were the key word there is insolvency vs illiquidity because during the time remember it was positioned as it's a liquidity crisis not an insolvency crisis well the reason it's not insolvency crisis is because we're going to speak legally park seven trillion dollars from one off balance sheet i don't like a lot and ron to some other off balance sheet i don't i'm going to point to that and say you see there's plenty of capital we just need a little short term to get us over. oh by the way when it's finished we got to move it back over to some other place that we didn't tell you about before this completely illegal so it is insolvency and that's the root of this global crisis is

that these bags be in pieces sorry general h.s.b.c. barclays citigroup bank of america they are insolvent ok so you can write to me and you can come on my show and you can demonstrate why you're not insolvent but you won't because you know i'm accurately telling the truth there you are going insolvent and you need to go the way of all dust ashes and dirt and everything that dies and ends up in the ground dead because you got nothing i don't doubt she called to say sir thanks for being on the house report that the cats are fresh and rented a. say to the last one coming away so stay right there. welcome

back to the kaiser report i'm max kaiser time now to go to venice florida and speak with karl denninger of market sector dot org karl welcome back to the kaiser report may excite you a very good car on them for let's talk about and have global why hasn't john corps seen better arrested or at least been pepper sprayed the least we could do is have a little cover story and maybe some plastic in caught sight i don't understand this the orderly functioning of the futures markets to me and bad customer phones be

sacrosanct and never invaded and appears at this point to have not happened you know it it's one thing to say i don't know where the twenty dollar bill went but when it's starts a six hundred million and it always suddenly comes a billion plus you got to wonder these guys not only can't point to money they can't seem to figure out exactly how much is missing that's a problem well it seems like a total breakdown all of the basic laws of the street this basic law you can't take money out of customers accounts and mean it's pretty basic i mean if this doesn't work why would anyone keep their money in any of these. brokerage firms that's the question max i think that everyone has to be asking now and it is the risk that in my opinion is the largest to the definitional industry and to the orderly function of the markets that we've seen thus far this goes far beyond what happened when and brothers of bear stearns. you now apparently have a futures merchant who got in trouble with their own proprietary bets and instead of facing the fact that they were underwater and insolvent decided to dip into

customer funds as a way to try to cover them in the hopes that they come back now anyone who's traded for a length of time as probably made this mistake where you get stuck in a pad position and you add to it because you're sure it's going to turn in everything's going to be ok well anyone who's done that for any significant length of time knows what happens you go pro it appears that that's exactly what happened here with an m.f. global seems to have gone even further and said you know we'll just kind of rate the piggy bank over here that isn't ours and keep the game going for a while that's that's acutely troubling thing because if you have any kind of money on deposit with appropriate you have to wonder whether or not this is happening somewhere else right now my understanding is that the p. morgan is the creditor of m.f. global and they're going to push to get settled on any of their accounts that are own money ahead of these past them or there is not also some have bad methods to the retail banking customer out there but the real question max is again whether

there is or is not separation between customer funds that are on deposit or is performance bonds and let's remember this is what the c.m.e. calls these if you go over the web page and you look at the margin deposits that are required to trade contracts they actually call them performance pons so if they are performance bonds then they should be held separately too should be an escrow function and there is supposed to be a fiduciary responsibility if like depositing escrow money for real estate transaction with a czerny it's supposed to go into a segregated account if that in fact has been pilot. you're in you know but it's certainly that a yes then essentially when you are treating with somebody you are using them as a group for you or for all intents and purposes backing their bets it doesn't matter whether it's a bank or a futures merchant that's a nude scene we dangerous precedent assert was in the marketplace i know i digress a little bit because i don't know if you're familiar with or not and let me ask you this question anyway the martin gal system of betting which is the bit doubling

down on every roll the dice with the idea that eventually you will win and make the money this seems to be what everyone else the firm is doing they are continuously losing but they are doubling down on every subsequent throw because they know that they've got unlimited cash in their disposal from the fed. is this sustainable and is this a correct way to describe what's going on your thoughts i think it probably is i'm from earlier with a strategy that bankruptcy everybody who tries it eventually because although the probability is that this will work out the fact of the matter is that for any sort of random trial each probability of success is distinct and separate from all it came before it and so it is entirely possible to get heads fifty two times in sequence and run out of money can go bankrupt and that's the the problem is that everyone says this is an infinite source of funds to the federal reserve but in

fact there is no such thing as an infinite source of anything and eventually you will run out of the ability to hike these schemes and it will blow up in your face and that is it that is it appears what happened here i had another quick back question federal judge rake up recently in new york he admitted that he had no authority to do anything but admonish the f.c.c. for their settlements when citigroup and bank of america for a fraction of their own gotten gains on mortgage securities fraud your thought we need to see some supra security and much less looting recalled because one of the good guys he said we stay out there raising an issue on this but you know max good the real problem we have here is that there's this deadly embrace between the federal reserve wall street and congress congress desperately wants to spend more than it takes in and check says because it is supporting the myth that the economy is is ok at least it is not totally collapsing you have the wall street banks that are anxious to earn their big so they can pay their own assist and then you have

the federal reserve which is the handmaid it is enabling both those things along with the offshoring to disastrous trade imbalance and all three of these parties are kind of locked together holding hands sing la la la la la la la la and what you end up with at the end of the day is selling a bunch of trash to people claiming that it's perfectly good paper when it blows up and if. then you end up in front of judges like break off who say hey guess what guys you swindled people and then there's a problem because if you actually claw back the money that was stolen it impose a realistic punishment and if you look at the statistics on the financial firms you'll find that under our three strikes laws for felonies essentially all of them would be in prison for life at this point which means they will be dissolved out of business so why is it that we continue to give these people a pass while at the same time the common street criminal that robs granny ends up locked up in a cell well i'm going to repeat that point carl down under because i thought it was such a good point three strikes you get locked up for life or this thing sometimes you

end up on death row and and you know kills him why don't we apply this to the crimes being committed in the financial space and would it be appropriate to apply capital punishment in cases of outright fraud from guys like hank paulson for example i don't know about capital punishment but revoking corporate charters is certainly something that could be done i mean after the third offense which i think it's pretty clear you're not going to reform right the only way that we're ever going to see this stuff actually is if it stops being a business model if i can you know if you put a sign out that said robbing banks means that you only have to give back half of the loot if you get caught to be a line on poor guys with ski masks and guns in so there's really no reason for these institutions not to engage in a speech he gave you one that's the penalty i crawled under a bloomberg freedom of information request has uncovered evidence that the fed gave banks seven point seven trillion in loans most of them in secret in order to make

the banks look healthy so that the congress would give them those part funds going back to two thousand and eight your thoughts the biggest scandal there max isn't that we we gave this money out in terms of loans in here and she a lot of this was was in terms of ass securities another with allowing people to pledge collateral there was could the big scandal here is the fact that everyone. leases the two should c.e.o. seems to have shown up on c. and b. c. or somewhere else proclaiming how strong and healthy their firm was when in fact if you look at this data it says something entirely different i thought we had this law called serbians oxley it apparently doesn't apply to people showing up on you know various mean stream media outlets proclaiming how wonderful they are will their company is on the brink of collapse you're full well there are needs to be some kind of enforcement mechanism here when you have firms that have their representatives showing up in the media to claim things that turn out to just plain old fashioned be false i don't understand how this is not something that you could

sue over as an investor but it appears that you know this falls into the idea that well you know we all the first amendment right to speak and it doesn't really matter whether or not we say yes i think you know if any resemblance to the truth right now of course the banks earned the thirteen billion from processing the secret loans most of those earnings were then paid out of bonuses so the other taxpayer have the right to reclaim at least that thirteen billion that was fraudulent only stolen from them unfortunately probably not but you could potentially i suppose file what's called a quick tam lawsuit to sensually suing in the place of the federal government for the fraud that has taken place but in terms of the individual taxpayer having standing in these kinds of cases it is been repeatedly told that they don't even though it is the taxpayer gets rooked and again this is just another example of the

best congress money can buy all right i've got two more questions that i.m.f. is either drawing up plans or not drawing up plans for another eight hundred billion dollar rescue of italy and spain and all its member nations are bankrupt then where does the i.m.f. get the money to rescue these bankrupt member nations called manager they don't. suck i mean i think it's a curious thing that they floated this rumor. it was some word six hundred billion three hundred billion. i don't know where they think they're going to get the money from because it doesn't exist they increased their special drawing rights allocations of course but the problem is that the i.m.f.'s to be funded by strip sions from its member nations and those far i think something like two or four of those nations have actually passed the allocations the rest of not including the big ones like united states so i don't know where they think they're going to get the money from i actually found it like rather amusing it was good for a pickpocket the futures but i don't see where the bear is there right sound i met a special drawing rights and it's appears to be going to be a kind of

a new global currency and waits to roll up all of this bad debt and reprice and raise to characterize it create new maturities and basically increase somehow and that bubble to even a new heights of absurdity to finally let's talk about the ending this never ending bailout for banking and market rigging france or the seeing and group in their latest ten kids you listed occupy wall street as a threat to their bottom line so who's the bigger threat here karl denninger occupy wall street or the bankers to their own progeny activities i don't know to tell you the truth max i think the problem with occupy wall street today is that they are still trying to figure out exactly what they stand for and i have pointed out i'm on a couple their mailing list on a point out of them that if they get into the way we want free blankety blank i'll keep you i'll save you from the believe that they're going to end up being relegated to the dustbin of history because there is no such thing as a freebie has to come from somebody on the other hand if they stay focused like

a laser beam on the fraud in the financial system they have the potential to do with the tea party failed to do and that is to get the public focused in its righteous anger on what's been done to them i don't know which way this is going to go on the other hand you in the european banking system to just bring on the edge of collapse you have all. of these institutions including ones in america that bought up all this debt in sovereign europe thinking that this was going to be some great investment because it was trading at a fabulous disco if i could matter is it was trading at a fair it was discount because they can't possibly pay so how you're going to result those two things i'm not sure but frankly i see it ending pretty badly some time next year all right carl senator at a time thanks for being on the kaiser report thank you all right not going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i would thank my guests carl then injure of market taker dot org you can follow carl on twitter at ticker guy you can follow us at kaiser report on both twitter and

facebook you can send us an e-mail at kaiser report at r t t v that are you and the next time max keiser saying by all. related. come. on come. on.

come. on. come on. come. instantly. on.