well mag says only eight days there are lightweight we're still partying here. but . that's because i found what's considered to be a shot in russia a shot of vodka but at the down of all those is just a typical russian but if you know these and you'll be taken off a few days or so yeah i think hey max i learned how to say happy new year in russian here it goes from good the best friend faster. growing bilingual yes max this is our eastern european special here we're going to start with the headline here on russia russia economic growth bodes well for putin election this is from forbes and they're reporting on the new statistics which say that g.d.p. is that nearly five percent year over year ending september the key indicator they say to watch going forward will be corporate investment the latest figure of seven point seven percent year over year shows companies that started investing again

after investments collapsed in late two thousand and ten and support for the consumer sector max comes from rising wages apparently there somewhere in the world that wages are actually rising wages have improved and unemployment has dropped to six point three percent from six point five percent with incomes rising more in the last month than they have all year november wages rose seven point one percent higher after inflation well you can spell brick without our brazil russia india china it's an emerging growth story it's all hot as close country in the world well it's also of course has a huge vast reserves of oil and natural gas and i know you're going to be talking to constantine gird give about that in the second half he is from moscow and he's an economist but the article does note that russia's g.d.p. is growing faster than brazil's one of the big four emerging markets so as voters look around at their neighbors to the west and see one economic. crisis after

another putin's chances of becoming president of russia again are greatly improved so i guess there are lots of protests going on in moscow and st petersburg and around russia but according to forbes they're saying because the economy is so strong compared to their neighbors all over europe it might boost his chances protests this is an emerging social media ploy. think about it make a transition away from natural resources to social media all those brilliant russian programmers and developers creating all the new generation of the son of the russian billionaire is investing in u.s. based social media companies i should invest in homegrown russian social media companies we know from the people out there in the social media phenomenon that they've got the tone for so let's move over to the rest of eastern europe era max the first headline max frank mortgages cause pain in europe this is just remarkable max this is regarding the carry trade that happened on mass across europe now by

the time the economic crisis hit in two thousand and seven some two thirds of all mortgage loans in hungary were denominated in swiss francs two thirds max in poland more than half of mortgages were in francs while other eastern european baltic countries also had high rates now explain to the up audience here what this means well the interest rates in switzerland are really cheap close to zero so people would borrow money and then low rate then they'd buy real estate in their home countries but they didn't factor in the currency risk you see the thing is that people who are taking on mortgages and these low rate interest environment and foreign countries don't have the same tools to sterilize their currency risk that major corporations or countries do every single day they sterilize their currency risk but if you're out there borrowing in a foreign country to invest in a home without hedging your currency risk. then wham oh you're open to these

currency moves and this is what happened again and again and again all over the world people are getting slaughtered by these currency rate changes and currency value changes yeah i mean it didn't happen obviously in america so american audience won't recognize this and but a lot of apologists for the banks through his will say well those people shouldn't have taken on mortgages that they can't pay but this story more than anything else demonstrates without a shadow of a doubt max that banks first were engaged in criminal activity because how could two thirds of the mortgages in hungary be written in swiss francs the bankers themselves understand the four x. market they understand how dangerous that is they understand the danger of the carry trade but how did you expect two thirds of the population of hungary to understand what they were engaged in the risks involved well people knew us you say that they haven't engaged in the scary trade mortgage but the banks in the us have a lapse and then america's on the hook for austerity measures and bailouts and so

they are playing well just to put into context how much these mortgage holders have been hit the franc bought one hundred sixty hungary and forints in the summer of two thousand and eight but his strength is so much that it can command two hundred forty eight forints at the moment so it's almost doubled the exchange rate you know it's like offering a consumer tainted meat basically that is against the law you can't sell somebody tainted mace and now when people say oh you know this whole wave of anti-capitalism is destructive no it's not about anti-capitalism it's about being anti the sellers of tainted meat i eat meat but i don't want to be sold tainted meat that doesn't make me a vegetarian still a capitalist i just don't want to be tainted meat now these banks offer the equivalent of tainted corrupted maggot infested products that are sold to them by these people and with miss sold these people. that doesn't mean it's

a their answer capital is still there and criminals the best right now max in an effort to stem the rising foreclosures the hungarian government earlier this year in the first quarter of two thousand and eleven rather they basically banned all foreclosures just for a quarter but then they in order to help stave off the social meltdown the hunger enough already set an artificial exchange rate of one hundred eighty to allow homeowners to convert loans into forints without going bust they interview good or gay barks chief economist at hungry bank and he says this is a better option than banning banks from for closing loans this created a moral hazard a banker should really talk about moral hazard as peat people simply stop their repayments believing that the government would bail them out and then he goes on to say allowing people to exchange their francs at an artificial level is less damaging to banks but it simply delays the debt problems for a few years now max isn't this what all european banks are doing they're exchanging

their toxic debt at an artificial level to the e.c.b. oh absolutely but they're doing so now three or four years after the crisis started so this is why you have the currency war going on in the relative valuation of your overseas dollar the dollar is already exchange with the fed trillions of dollars of toxic loans in the e.c.b. that process is just starting so on a relative basis the euro is a lot better off than a dollar so they still have trillions of euros to go to even achieve parity with the u.s. corruption on the fed's balance sheet the e.c.b. looks like mother theresa looks like the virgin mary compared to the fed's balance sheet they have a long way to go basically you have to suspend yourself or into your economic sovereignty and who steps in here but the e.u. and the i.m.f. to bankrupt organizations on their own i mean the i.m.f. is receiving loans from italy and spain and portugal and greece right now that they're lending back it's just so absurd but these people are now lecture. hungry

hungry warned against new laws the european union and international monetary fund are pressing hungary to postpone action on proposed central bank of fiscal policy laws now before parliament if it hopes to win their approval for a financial safety net to protect the indebted country during the continent's financial crisis. they're totally indebted they have no money how are they bailing out people that are in debt what yet again it emphasizes the theme of medieval ism remember during the medieval period the pappas you would get together and decide and figure out how many angels can dance on the head of a pin you see this was a preoccupation for hundreds of years then they used to being the user figure out how many derivatives can they slice and dice and dance on the head of another derivative while being balanced on the fulcrum of a derivative laced situation balanced on the nose of a central banker who's standing on a beach ball in the middle of a topsy turvy city with this new law that they're proposing going hungry the e.u.

and i.m.f. say the financial stability law which would set tax and debt policies could limit the government's flexibility to negotiate budgetary requirements in any loan package so the prime minister viktor orban said that he was trying to regain economic sovereignty but of course once here in the hands of the i.m.f. even if you give up economic sovereignty budgetary requirements yeah. we take all the money you've got the austerity that's a requirement just to go over some of the policies that viktor orban has introduced in hungary which are called an orthodox from levying a large windfall taxes on banks and other industries to diverting pension funds from private management backed into state coffers that these have apparently made investors nervous. oh argentina. so you know let's look at another former eastern european point former soviet bloc nation which threw off its. of command and control communism only to ing brace the

commanding control interest rate setting banks thursday grand illusion why europe should question wisdom of austerity by alan scherr ter first let's start with this chart which is shows the biggest declines in modern economic history as we see the biggest on the bottom there was one nine hundred twenty nine that's from the us when real g.d.p. declined by twenty eight point nine percent over four years two thousand and seven that's a lot it declined by twenty four point one percent in just two years and then two thousand and one argentina declined by twenty one point nine percent one thousand nine hundred seven max indonesia declined by fourteen point seven percent in thailand by thirteen point five percent you were there at the time that was of course due to the carry trade carry trade collapse as well so well it's a common thing throughout the history of these collapses it's generally it has to do with bankers and day and incredibly stupid banking tricks for their benefit and

everyone else's detriment of course looking at the lafayette economy collapse and something reminds me of jeffrey sachs out of that remind me of jeffrey rosen oh never mind well it took a temp point two billion dollars bailout from the e.u. and i.m.f. and the author of this article is arguing that mafia represents a key test case for the economic policies european officials are counting on to revive the region which is of course effectively a pilot study on whether economic austerity i tax hikes government spending cuts wage reductions and other measures to shrink a nation's debt work better than the alternative a fiscal and monetary expansion and of course they use the example of argentina which said you know forget you i.m.f. and they tripled their government spending and in fact their economy ended up booming after that well you know absolutely and in brazil also there are other i.m.f. loan. and became part of the public's growth and then finally talked about social

media that here's a headline a lot via a lot of your probes rumors behind cash withdrawals well you know like two or three weeks ago there were some run on the banks a lot here crashed bank and lot fia which crashed bank of crashed bank i wasn't much money at the crash or bank there was a run on that bank and it collapsed after snorer us bank and lithuania taken over by the lithuanian state anyway then there were rumors that the government saying was via twitter so a lot the in authority said that a run on swedish banks the lafayette was started by false rumors aimed at destabilizing the country and that is police forces were investigating the matter but of course this nation has embraced the neo liberal banks for financialization model and these are the same guys that do spread false rumors in order to you know better fit from that credit default swaps they've bought on any of these banks or nations falling apart or crash and rumored to be bankrupt about grumpy and sneezing

. well you know rumors of course are as good as anything else the entire global economy runs on rumors goes rumors traded on the chicago mercantile exchange of c m a c f t c doesn't regulate rumors and create rumors and cash in on the rumors and a lot of plays austerity measures it's all about the rumors are i think sam or thanks so much for being on the kaiser report thank you max you know you're. well be right back don't go away.

well with. technology innovation all these developments around russia we. covered. with.

back to the kaiser report time now to go to job one and speak with economist professor constantine good yeah constantine is from moscow and now teaches at trinity college dublin welcome back to kaiser report thank you most all right if it were to happen what impact would a euro zone breakup have on russia there i read it two ways in which the euro can break and we can call it disorderly in the other we can easily default or break out of the euro with the monetary all that money in circulation currency in euros will be gradually over a number of years displaced out of the existence whether in one country such as greece or in a number of countries so i just hold. this there are different permutations in that case in this case the disruption will be the most minor and the impact on russian trade the russian for example savings and investments will be very. miner the worst

case scenario calms when there's disorderly default this order the structure of the currency markets and there's a lot of the what happens as overnight euro system exists in a number of countries and there's a lot of the other countries euros will become be priced as well so in that case there will be significant disruption to the savings a lot of russian savings are currently held in euro's all of these will be in effect lost over time either to devaluation or directly or through both processes themselves as the countries will be when they can eurozone countries which as it's you know goes on it so well that and they get on some of their obligations especially for the stars and for foreign savers there will be also just actions and investment markets which will impact the russian companies especially corporates which are least adult side of our island where they trade in either in shares or in both and also there will be disruptions to the investment markets so the new investment will be disrupted the inflows of investment into russia in either case there will be need price in the european assets and in that case russian companies

. rebel fund for example will be able to enter the markets and invest in european assets that much better valuations before and so there is really makes bug but the destruction will be very significant right now while all eyes have been on the arab and debt crisis how have the russian banks been holding up are they exposed the same mix of toxic debt that are taking down banks elsewhere but i think from the russian banks perspective the we have to recognize about two tiers or even three tiers of russian banks first at the very top all the banks the likes of the t.v. for example they probably are less exposed to the crisis in europe and they are less exposed to the crisis that mystically as well they also have their distro capital ratios and most of their capital comes to see of the government as a result of this high quality count at the local call so we would expect far less disruption there and there is also implicit sovereign guarantee in the case of those banks there's a needle. here we should itself is relatively healthy some of the industrial base

linked to the industrial assets and as a result of that they also are much more conservative in terms of their business land and in terms of their development loans and things like that so they probably will be as well ok where the real problem will occur is that the lower tier of the banks the smaller banks will shove relied on the external funding which also relied on foreign funding in many cases as well and as a result of that there certainly exposed to the crisis in europe at least through the front and side of the markets they're not so much exposed on the asset side because very few russian banks have significant exposure to financial assets outside of russia but they have their own problems inside russia and that's really applies to small banks two years now the government has given them the central bank of russia being ousted in terms of trying to reform the bacon sector in russia over a number of years of and before the crisis because they correctly foresaw that there will be problems at the small bank kind of levels if you want and this process is ongoing will be disruptive will be very problematic for sure i don't

think so assuming there are no major blow outs and global economic environment and global markets in general assuming everything continues as it is right now i don't really see a banking crisis of the proportions emerging in russia and i got it in russia recently been amended to the world trade organization a w t y changes should we expect to see and two thousand and twelve as a result russian admission of the w.t. oyster i believe one of the invasion is one of the longest processes over session to w t o and so it's function of the ability or conditions of any countries so far in the records it actually is thrashed out with twelve to sixteen years depending on different types of measures the different components of those measures so that is out of that you wouldn't see a significant impact in terms of the double your session in twenty to twelve what is likely that we will see inflated twelve is the beginning of the process whereby foreign investors start to be pricing the least in russia as the trading partners for the west and the trading partner for the for the rest of the world and there will be. positive it will start in twentieth well it will continue throughout the

period of a session so the next eight years that we will see an obsolete in terms of the positive valuations on the east side over actually is again trading partners investment destination on the russian side i certainly hope that in twenty three it will see an increase drive towards improved imposition was that they industrial in the prices level and also at the certain sectors especially sectors where russia can be very competitive in international markets such as the food for example also the new technologies and if their process starts and turns it well this will be a very good market for us to go in for it in terms of achieving both on the earlier mission not just for the mission but rather to w t o but also the greatest benefits that will gain the greatest benefits from the membership as well in the long run and i asked part about oil are certainly oil is can talk about the russian economy and oil prices manage just a near one hundred dollars for obvious tire crisis and of course big dependency on oil and gas in russia if the price falls back to the sixty or seventy dollars per

range how does that impact the economy and constantine well i think it will impact the economy it will impact the physical dimension of the economy and it will also impact the investment i'm actually going to let so less so in the short term the demand side of the economy however i don't anticipate that there are market moves in terms of the oil prices because the world price currently like the rest of the if you want storable commodities there especially if you look at gold if you look at precious metals a look at the oil. a little less so on natural gas for example site what we are seeing is the pricing of those commodities just the effect anticipation of continued burns a day to ease and in europe in the united kingdom in the united states and also some globally there is an expectation of increase among three mosques as a result of the you know that is expected inflation inflation those expectations also being factored in and the real loss that's what we would call you know kind of physical tangible assets home going up in value you would expect that to kind. not

in terms of rising oil prices but at least the firm level of oil prices in the range of say eighty five to one hundred five somewhere in that neighborhood now of course think it's a bit of a curse as that because the high oil prices dissuade our disincentive as the economy to move entail us a more technology based initiatives and where is that drop down to a lower price there is an urgency certainly to diversify but putting that aside for a second is there now some diversification in terms of a move toward let's call it technology our social media certainly we saw social media on display recently and laskoski there's a lot of talent there is that in the cards going forward certainly isn't the guards both from the government perspective government pulls the perspective and the incentives that are being put in place and also in terms of the dynamic and they want to be the younger generation of the archons nowadays are much more focused on the higher it's acknowledging a higher value out of what you would call sectors especially as service sectors

they also become increasingly traded sectors russian experts for example of i.c.t. services which is the source pretty late services. you know so social networks as you mentioned them down things like that all based related services has been growing at about forty percent a year and that is going to continue the big problem for us that there is there to continue that momentum you have to stem or for you do use the outflow or brains what we call in other words that human capital people gollum's which is behind and there are tremendous capacity of the talent but unfortunately in the last few years it has been move there aggressively so the countries outside of us are and in particular the multinational corporations so this crucial that the russian government policies and the context for example of projects like school are very interested in those projects too but they're actually anchor multinational corporations research and development centers in russia proper itself that's a given there are younger russian people who work in the. and in those areas and

moreover the opportunities in terms of the growth and career wise and growth experience wise and skills wise and that is very very much important because russia currently has a comparative personal income tax rates which is a very significant incentive for people with high quality to it was human capital to be there and to stay in the russia but unfortunately it doesn't offer the same quality or promotional opportunities for growth opportunities and also business station of the two inches so we peer in those two areas read to the corporate side the multinational corporations and domestic business creation in these areas will be very much crucial to enter in the talent and thereby benefiting from this growth as well because it's a drought about a minute left i want to talk about an economics kind of you know difference in an approach different countries are approaching the crisis in different ways some are advocating austerity you summer advocating. money spending by the government printing now you're in ireland they've chosen austerity how's that working well

ireland has not chosen a stereo arlen how does thirty imposed on the right by the circumstances in most cases sterritt it hasn't been never been really chosen by the governments governments always pursue their objective of raising their expenditure no matter what it's really is a matter of consideration of how high is the national debt in the case of for example countries like russia some stimulus is warranted simply because it actually is not overboard or there's a lot to me the government does is very low in the country there are significant reserves of funds and those can be deployed in a careful way not to overspend but at least to invest in the future capabilities such as infrastructure investment or skills investment we can use of countries like ireland but it isn't really capacity when you reach the level of debt to g.d.p. ratios of one hundred percent plus like ireland likely to be like greece and if you also have a high especially if you have a car you drive or you really don't have a choice you know. to bring you all of me in the fiscal situation back to the level

of sustainability over the long term and that is something that our of this trying to do unfortunately is the best times of plenty around the middle of the crisis is that the part of the economy which is not working right now for our domestic is no go it's continue to shrink as a result of those that are so all right because a thing thanks so much for being on the kaiser report. and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guests constantine girl yeah you can follow constantine on twitter g t c o s t or g t cost you can follow me on twitter as well that's just max kaiser and of course you can follow stacy herbert you can send me an e-mail at kaiser report at r t t v dot r.e.o.'s stacey read it and the next time this mass guys are saying by our.

mind. which brightened. from friends to. stone time t.v. don't. more news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. giant corporations rule the day.

this is on see the headline. rocket bomb that also rises a little giving the military more power to detain people indefinitely without charge or trial if classed as terrorist suspects critics cry foul claiming the new bill violates the missing democrats to deprive the u.s. seeks to trump and elsewhere around the border. warning to the west as a brand successfully test fire as long range missiles during naval exercises of the persian gulf islamic republic says it is prepared to pay a fine if at times on this comes as the u.s. imposes proud the central saugus invaded brainiest central bank and i'm full sector while teheran threatens to cut off a crucial oil supply were to rest. on the conflict in syria takes

a new twist as i have a big upset at say the regime which has pulled its forces back from plant point opposition stronghold of demanded in a peace plan a deal when i say she knows that snipers are still shooting at her testers killing at least a hundred fifty people since changed. as the headlines for you up next the story of a catastrophic environmental disaster and our special report creek will rogers once somebody asking about ram they said well i just don't make much i've been in a more and we need the lord intended to be good stewards of what he gave us and we did a terrible job here we have better curb drug. knew nothing about pitcher i'd spent half of the football game picher oklahoma back in ninety nine.