for the news i'll see you right back here tomorrow our great night. sometimes you see a story and six so you think you understand it and then something else you hear or see some other part of it and realize that everything you thought you knew you don't. charge becomes a big picture. 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 . 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 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 jam bresh but there are some meaning if you understand the code and we see this now

today don't we with this kind of financial some afore. or looped into our day to day broadcast and let's explain now exactly 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 the radio london of our modern financial era i.m.f. did not italy loan discussions right so you have to really do you could 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 and 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 loan talks now if you read deep into the 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. they do have a plan for an elite bond or you might call it the master currency it's a form of financial eugenics. from the germans is coming and they're communicating viz a viz the financial press so no people don't understand what's happening in the markets or finance or economics because they don't understand that it's all heavily coded to communicate amongst the various financial terror centers berlin london new york tokyo exactly max 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 they you know the fitch and moody's and s.

and p. reading it aaa yes the movie the rating agencies are involved in financial eugenics and they give the currency coming out of berlin with the aaa blessing as it were but of course they are exactly the same now others observe that this is studying 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 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 super currency bond market with their fellow master race of currency dealers well actually i think it's yet another front it's a 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 still up a zuko i guess that's just the 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 hard core 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. there's a cozy the the new vichy government in france basically a cow telling to the occupy german currency forces there's a camera 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 with 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 that sarkozy 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 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 debt munchen p.p.p. please return to the obviously the at least a palace is trying to assure people that. people won't have any outside authority governing them it'll just be those dirty stinking debtors down there now who are dead and debtors right the 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 disaster no go economist myron scholes was the first that floated this idea over lunch at the rykes bank forum an august he said i wonder whether bernanke you might not say that we believe in a harmonized world that 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 we'll go 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 new record amounts people thought of the rivers market was shrinking no it's a new all time highs along with the quantitative easing that's come face to could all myron shoulders option 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. wrong the world why would we ever think that they want to change the world are saying well max jean has a long grandma ate our bon bons that was one of the sort of statements that my originals 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 and disclose 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 is better known seven hundred billion dollars troubled asset relief program or tarp at guarantees of 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 all of the third go away. exactly the same shot more or less with an affair they committed massive accounting fraud bank calls and some guys are your is still slinky school of economics it's like oh through 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 fake out some kind of bailout package that they can't possibly afford to look back on us dollars to a pile of us because we have collateral the banks don't need to be bailed out anymore we don't need to spend the rest they got close a little don't you never get know some merican also still you know time to go no more photos from paul krugman spaceship another space looking for some aliens the payload you know stays bigger some change in threes out of control the close this is the sleepy school they can move which it never fails it's a one day we're all speaking german which i'm max kaiser 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 a 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 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 this tarp 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 isn't solvent see vs illiquidity because during the time remember it was positioned as it's a liquidity crisis it's not an insolvency crisis well the reason it's not insolvency crisis is because we're going to illegally park seven trillion dollars from one off balance sheet i don't like and run to some other off balance sheet i

don't 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 innocently 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. barclays citigroup bank of america they are insolvent ok so you can write some made 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 flipping insolvent and you need to go the way of all dust ashes and dirt and everything that dies and ends up on the ground dead because you've got nothing i do policy. say there were thanks i was going to cause a report if it gets a freshman rand. say too much work coming our way so stay right there.

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around russia we've got the future covered. out of. welcome back to the car as a report imax keyser time now to go to venice florida and speak with karl denninger

of market thinker org our welcome back to the kaiser report they may excite you a very good current then a journalist talking about m.f. global why hasn't john course dame been arrested or at least been pepper sprayed the least we could do is have a little pepper spray and maybe some plastic and caught sight i don't understand this the orderly functioning of the futures markets demands their customer funds be sacrosanct and never invaded and dead appears at this point to it not happened you know it it's one thing to say i don't know the twenty dollar bill when but when it's starts a six hundred million in it all the sudden 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 but it seems like a total breakdown all of the basic laws of the story 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 a these brokerage firms that's the question max i think that everyone has to be asking now me and use that risk that in my opinion is the largest to the financial industry and to the orderly function of the markets that we've seen thus far this goes far beyond what happened in brothers of bear stearns in there 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 is probably made this mistake or you get stuck in a pay a 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 goes what happens you go. broke it appears that that's exactly what happened here but the. local seems to have gone even further and said you know we'll just kind of repeat 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 all right now my understanding is that c.p. morgan is a creditor of m.f. global and they're going to push to get settled on any of their accounts that our own money ahead of these past emerged as not also setting 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 sponsored let's remember this is what the c m e calls these if you go to their web page and you look at the margin deposits that are required to trade contracts they actually call them performance bonds 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 real estate transaction with a surety it's supposed to go into a segregated account if that in fact has been violated here in the evidence

certainly that it has then essentially when you are training with somebody you are using them as a broker you are for all intents and purposes back in 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 i don't know and i grasp 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 of 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 throw because they know that they've got unlimited cash in their disposal for. on the fed is this sustainable as is the correct way to describe what's going on your thoughts i think it probably is i'm dumb familiar with their strategy had 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 the 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 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 hide these schemes and it will blow up in your face and that is it that is it appears what happened here all right has no quick back last him federal judge or a cough recently in new york he admitted that he had no authority to do anything but had not asked the f.c.c. for their settlements when citigroup and bank of america for a fraction of the l. gotten gains on mortgage think guarantees frogs your thought we need to see some

supra security and much less looting recall it was one of the good guys he's at least out there raising an issue honest but you know max 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 texas because it is supporting good 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 bonuses and then you have the federal reserve which is the handmaid it is enabling both of those things along with the offshoring of disastrous trade imbalance and all three of these parties are kind of locked together holding hands saying 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 a perfectly good paper. when it blows up in their face then you end up in front of judges like break off who say hey guess what guys use little people and then

there's a problem because if you actually claw back the money that was stolen in 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 chaos 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 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 for 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 so i think it's pretty clear that 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 get caught to be aligned altidore guys with skinny ass 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 of bloomberg freedom of information request has uncommon 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 tar funds going back to two thousand and eight your thoughts the biggest scandal there max isn't it we we gave this money out in terms of loans and guarantees a lot of this was in terms of ass securities another was allowing people to push collateral there was could the big scandal here is. the fact that every one of the system two should c.e.o. seems to have shown up on c n b c or somewhere else for claiming 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 period stream media outlets are claiming how wonderful they are will their company is on the brink of collapse fold 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 are first amendment right to speak and it doesn't really matter whether or no we say yes anything you know any any resemblance to the truth right now of course the banks earned the thirteen billion from processing the secret loans and most of those earnings were then paid out as bonuses so that the taxpayer have the right to reclaim at least that thirteen billion that was fraudulent least on from them unfortunately probably not but you

could potentially i suppose file what's called a quick tam 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 in and again this is just another example of the best congress money can buy all right i've got two more questions than 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 beto. something i mean i think it's a curious thing that the flow. 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 subscription is 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 the united states so i don't know where they think they're going to get the money from here i actually found it like rather amusing it was good for a big part of the futures put i don't see where the bear 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 race to characterize it create new maturities and basically increase somehow and that bubble to even new heights of absurdity but 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 thank you listed occupy wall street as a threat to their bottom line so who's the bigger threat here karl denninger occupy

wall street are 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 is that they are still trying to figure out exactly what they stand for and i have pointed out on a couple their mailing list sort of pointed out to them that if they get into the way we want free thank you blank and i'll keep you i'll save you from the week that they're going to end up being relegated to the dustbin of history because there is no such thing as a free beat has to come from somebody on the other hand if they stay focused like a laser beam on a 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 thing and you in the european banking system just cheering on the edge of collapse. you have all of these institutions including ones in america that bought up all this in sovereign europe thinking that this was going to be some great investment because

it was trading at a fabulous disco matter is it was trading at a fabulous 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 both of them ended very badly some time next year all right karl denninger out of time back to being on the kaiser report thank you all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guests carl then injure of market taker dot org you can follow carl on twitter ticker guy you can follow us at kaiser report on 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.