are going to i'm sorry we're just we're running out of time there on thank you so much for your thoughts on that was former reagan administration official and columnist paul krugman roberts well that is it for now for more on the stories we covered go to our t. dot com slash u.f.a. and check out our you to page it's you tube dot com slash arts in america so you back here at seven.

i am max kaiser this is the kaiser reporting oh 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 . that was grandma ate our bon bons and now here's the blue horse walks on the horizon. it will be right this is

fascinating so the coded message is a big broadcast in occupied france as a way to communicate to the resistance so it's like all the book itself like jibberish but there's some meaning if you understand the code and we see this now today go away with this kind of financial some a for loop into our day to day broadcast and 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 save 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.m.f. deny italy loan discussions right so you have to really do code what's being broadcast from. the censors of the financial war obviously the u.k.

is now home going down into the trenches ready for warfare with the continent of europe in this new global financial war and you've got the same thing going on in continental europe and you've 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 a 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 plans were also denied by the german government on monday they say there are no plans for a aaa bond or at least bonds 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 is a form of financial eugenics these. from the germans is coming and they're communicating visa v. the financial press so a lot of people don't understand what's happening in the markets or fight it's reaganomics because they don't understand that it's all heavily coded to communicate amongst the various financial terrorist centers berlin london york tokyo exactly max you call it financial eugenics and this is the. that the 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 bonds or an italian bond or in portuguese bond or 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 the you know the fitch and moody's and s. and p. reading at aaa yes the rating agencies are involved in financial eugenics and they give the currency coming out of berlin at the triple a blessing as it were but of course they are exactly the same now others of observe that this is setting very many 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 with the u.s. for so many years they just built the u.s. for hundreds of billions and trillions for this 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 uber 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. i guess that's just the headline they know most people won't read past the headline and that's the propaganda but if you look into the 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 isn't from just germany and france though their banks are. hard core involved in financial fraud they created

a lot of these toxic fake derivatives that are blowing up around the world they've devastated commies around the world and now they're pretending that they're there. and there's a cozy the new vichy government in france basically a cow towing to the occupied german currency forces cameron in the u.k. appeasing the. currency blue devil with his 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 of derivatives and their 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 the aim of giving super national 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 munchen p.p.p. please return to the obviously the at least a palace is trying to assure people that the people won't have any outside authority governing now it will just be those dirty stinking debtors down there now the better is right the tank 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 its. not however there is another rumor going around should

the fed save europe from disaster 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 oh of course he's he's a big nobel prize winner for the black shoals often 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 people thought that the rivers market was shrinking no it's a new all time highs along with a quantitative easing that's come face to could all myron shoulders off from pricing volatility formula we can now look forward to having many more trillions of dollars worth of worthless paper trading on worthless paper which is nothing more than a huge ponzi scheme run out of berlin whose intentions are not to run europe or run the world why would we ever think that amber alert they want to change the world that are saying well max jean has a long mustache grandma ate our bon bons that was one of the sort of statements that myra shoals 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 bloomberg freedom information of. nation act and it turns out that the amount of money the central bank parceled out dwarfed the treasury department's

better known seven hundred billion dollars troubled asset relief program or tarp at guarantees and lending limits and the fed had 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 playful way. to grow my problem. so exactly the same shot more or less with the thing they committed massive accounting for a bank vault and some guys are your is still slinky school of economics it's like oh fierce seven trillion dollars give us a loan then they get the loan they go oh no it's over in the european banking system to help them think out some kind of bailout package that they can cause with only suspect we lost almost to a pile of us because we have collateral now the banks don't need to be bailed out anymore we go to the best test they got close a little to do forgive know those of america those who still have no time to go do

some more of those also paul krugman is patient about this place looking for some aliens to payload to the states to do some keynesian theory that has been true for less does this leave you schools which have never fails until one day we're all speaking german which. 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 that 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 to the fed and with that hank paulson was able to go hold up the 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 saying congress you better vote for to start but in fact the tarp never would have happened had they known that the banks

were actually completely insolvent then the word the key word there is insolvency vs illiquidity because during the time remember it was position that it's a liquidity crisis not an insolvency crisis well there isn't the thought insolvency crisis is because we're going to illegally park seven trillion dollars from one off balance sheet i don't like and ron to some other off balance sheet item i'm going to point to that and say 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 it is completely illegal so it is insolvency and that's the root of this global crisis is that these bags b.n.p. society general h.s.b.c. park leaves citigroup bank of america they are insolvent ok so you can write to me to 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 frickin insolvent and you need to go the way of all just ashes and dirt and everything that dies and ends up in the ground yet because you've got nothing i do policy but i say sir

thanks for staying on the cause report i think cats are fresh and ran today say too much work coming away so stay right there.

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more news today harlan says once again flared up the phillies are the images girl you've been seeing from the streets of canada. trying to look for a shelter all day plug. welcome back to the kaiser report i'm max keyser time now to go to venice florida and speak with carl then and there are markets record or a car welcome back to the kaiser report a man excited to a very good car and then a journalist talk about m.f. global why hasn't john corps name been arrested or at least been pepper sprayed the least we could do is have a little pepper spray and maybe some plastic can caught sight i don't understand this the orderly functioning of the futures markets demands they customer

funds be sacrosanct and never invaded and dead appears at this point to have not happened you know it it's one thing to say i don't know the twenty dollar bill went but when it's starts a six hundred million and it always son becomes a billion plus you've got to wonder these guys not only can't find the 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 stream this basic law you can't take money out of customers accounts it mean it's pretty basic i mean if this doesn't work why would anyone keep their money in a nice brokerage firms that's the question max i think that everyone has to be asking now and use that risk that in my opinion is the largest to the to financial industry and to the orderly function of the markets that we've seen thus far this goes far beyond whatever point brothers of bear stearns. you now apparently have the 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 has probably made this mistake or you get stuck in a bad 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 it for any significant length of time knows what happens you go. it appears that that's exactly what happened here but then enough global seems to have gone even further and so you know we'll just kind of rate the bank over here that isn't ours and keep the game going for a while that's that's a deeply troubling thing because if you have any kind of money on deposit with a brokerage you have to wonder whether or not this is happening somewhere else right now my understanding is that morgan is a 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 customers isn't that also sending a bad message to the retail banking customer out there 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 there should be an escrow function and there is supposed to be a fiduciary responsibility if like depositing escrow money for a real estate transaction which tourney it's supposed to go into a segregated account and if that in fact has been violated here in the evidence certainly that it has then essentially when you are treating with somebody you are using them as a broker you are for all intents and purposes backing their bets it doesn't matter whether it's a bank or a futures merchant doesn't it sanely dangerous precedent to set within the marketplace iowa 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 some money this seems to be what every wall street firm is doing they are continuously losing but they are doubling down on every subsequent frau because they know that they've got unlimited cash in their disposal from the fed. is this sustainable is the correct way to describe what's going on your thoughts i think it probably is i'm unfamiliar with a strategy that bankruptcy everybody who tries it eventually because although the probability is that this will work out the back of the matter is that for any sort of random trial each probability of success is distinct and separate from all that 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 hype these schemes and it will blow up in your face and that is a that is it appears what happened here i had another quick queston federal judge rake off recently in new york he admitted that he had no authority to do penny thing but admonished the f.c.c. for their settlements when citigroup and bank of america for a fraction of the l. gotten gains on mortgage securities fraud your thought we need to see some snow cross accusing in much less looting recalled is one of the good guys he's at least 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 in taxes because it is supporting the myth that the economy is is located at least it is not totally collapsing you have the last great banks that are anxious to earn their big

so they can pay their own ases and then you have the federal reserve which is the hand made it is enabling both those things along with the offshoring and 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 in there for. then you end up in front of judges like break off who say hey guess what guys you swindle 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 these financial firms you'll find it under are three strikes laws for felonies essentially all of them would be in prison for life at this point which means they'd all be dissolved out of business so why is it that we continue to give these people 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

something good point three strikes you get locked up for life or this thing sometimes you end up on death row and and you know 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 when in all but capital punishment but revoking corporate charters is certainly something that could be done i mean after the third offense it's pretty clear you're not going to reform right the only way that we're ever going to see this stuff max 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're caught to be a line out the door guys with ski masks and guns in so there's really no wesen for these institutions not to engage in this behavior when that's the penalty all right karl denninger a bloomberg freedom of information request has uncommon evidence that the fed gave

banks seven point seven trillion in lines most of them in secret in order to make the banks look healthy so that the congress would give them those tarp funds going back to two thousand and eight your thoughts the biggest scandal there max isn't that we gave this money out in terms of loans. a lot of this was was in terms of past securities another was allowing people to push collateral there was could the big scandal here is the fact that everyone. these institutions c.e.o. seems to show up on c. and b. c. or somewhere else proclaiming how strong and healthy their firm was when in fact if you look at the state 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 neat stream media outlets proclaiming how wonderful they are will their company is on the brink of collapse fuld but there 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 that's 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 know we say has anything you know any any resemblance to the truth right now of course the banks earned the thirteen billion from processing the secret lungs and also though their earnings were then paid out as bonuses so the that the taxpayer have the right to reclaim at least the thirteen billion that was fraudulent least on from them unfortunately probably not you could potentially i suppose file let's call it we have a lawsuit essentially 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 know it is the taxpayer that gets ripped here and again this is just another example of the best

congress money can buy all right back to more questions than i am happens 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 an interim bedo. so i mean i think it's a curious thing that they floated this rumor. it was some word six hundred billion three hundred do it. 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 subscriptions 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 it 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 felt like rather amusing it was good for a big pop in the futures put i don't see where the fear is there right sound i

meant a special drawing rights and this 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 raising characterize it create new maturities and basically increase somehow and that bubble to even new heights of absurdity even finally let's talk about the ending this neverending bailout for banking and market rating france there's the seeing and a group in their latest ten-k. 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 fraudulent activities i don't know to tell you the truth max i think the problem with occupy wall street today 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 sort of pointed out to them that if they get into the we want free like you point 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 if the european banking system just cheating on the edge of collapse you have all. all of these institutions including ones in america the port of call the step in sovereign europe thinking that this was going to be some great investment because it was trading at a fabulous disco but regular matter is it was trading at a fatalist discount because they can't possibly pay so now you're going to result those two things i'm not sure but frankly i see both of them ended very badly some time next year all right karl denninger out of 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 think i guess carl then unsure 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 are you until next time max has are saying by all. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't i'm time part of the big picture.