it was just a typical russian above but a few of those and you'll be taken out 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. bilingual and well 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 the 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 well there are brazil russia india china it's an emerging growth story it's all hot as globe 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 in 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. to go about it from natural resources to social media to billionaires investing in u.s. based social media companies i should invest in home grown russian social media companies we know from the people out there in the social media phenomenon that they've got the talent for so let's move over to the rest of eastern europe era max the first headline max frank mortgages caused pain in europe this remarkable max this is regarding the carry three 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 audience here what this

means well the interest rates in switzerland really 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 on 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-o. 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 oh people the us you say that they haven't engaged in this carry trade mortgage but the banks in the us have their laps and america's on the hook for austerity measures and bailouts and so they are paying well just to put into context how much these mortgage holders have and hit the franc bought one hundred sixty hungary and forints in the summer of two thousand and eight but as strange as so much that it can command two hundred forty eight for its 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 mate 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 was told on a 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 to these people that doesn't mean it's to their anticapitalist know they're anti criminals that's right now max 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 and. artificial exchange rate of one hundred eighty to allow

homeowners to convert loans into foreign so without going bust they interview good or gay barks chief economist at hungary skate bank and he says this is a better option than banning banks from for clues and loans this created a moral hazard a banker should really talk about moral hazard as people simply stop their repayments believing that the government will 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 debts 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. 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 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 lecturing 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. bay 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 here in these two 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. . you give up economic sovereignty budgetary requirements yeah. we

take all the money you can just already 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 and these have apparently made investors nervous. argentina. so you know let's look at another former eastern european put former soviet bloc nation which threw off the chains of command and control communism only to ing brace the commanding control interest rates heading banks thursday grand illusion why europe should question wisdom of austerity by alan scherr turner 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 thousand 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 collapse as well so well it's a common thing throughout the history of these collapses that generally it has to do with bankers and day just an incredibly stupid banking tricks for their benefit and everyone else's detriment of course looking at the lot of an economy collapse and something reminds me of jeffrey sachs out of that remind me of jeffrey rosen oh never mind well it took a template two billion dollar 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.e. 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 yeah absolutely and in brazil also there were other i.m.f. loans and became part of the brics growth and then finally talked about social media that here's the 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 with fresh branka crash bank. wasn't much money

at the crash of banks 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 lothian authorities 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 are 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 crash. 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 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 the. technology innovation. developments around russia we've got the future covered. tasha welcome back to the kaiser report time now to go to double and speak with

economist professor constantine good yeah constantine is from moscow and now teaches at trinity college dublin welcome back to the report carson tan thank you much all right now detained if it were to happen what impact would a euro zone breakup have russia there i read it two ways in which the euro can break up and we can call it or the disorderly in the other the case of a default or breakup of the euro what will happen is the monetary must all that money in circulation currently 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 such as all that very pro countries there are different permutations and the case in this case the disruption will be the most minor and the impact on russian trade and the russian personal savings and investments will be very minor the worst case scenario calms when there's disorderly default or sort of the destruction of the currency markets and there's

a lot of the what happens as overnight you will see the exist in a number of countries and there's also the other countries euros will be comedy prices as well so in their kids 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 the you know goes on it so well that and they get on some of their obligations especially to foreign investors and for foreign savers there will be also just their actions and investment markets which will impact the russian companies especially corporates which are least adult side of our island where they're trading either in shares or in bonds and bills and also there will be disruptions to the investment markets so the new investment will be disrupted the inflows of investment into russia in isaac. yes there will be any price in the european lawsuits and in that case russian companies. some rebel fund for example will be able to enter the markets and invest in european assets that much better valuations

than before and so there is really makes 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 to the same mix of toxic debt that are taking down banks elsewhere but i think from the russian banks perspective you have to recognize about two tiers 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 very strong capital ratios and most of their capital comes to see over the government as a result of this high quality capital that will call so we would expect far less disruption there and there is also implicit sovereign guarantee in the case of those banks there is a need the range here we should itself is relatively healthy some of the industrial base needs to the industrial assets and doesn't result of that they also are much

more conservative in terms of their business lending 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 which are very light on the external funding which also relied on foreign funding in many cases as well and as a result of that they are 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 through their lives the smaller banks two years now the government has given them the central bank of russia in radio active 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 smaller tier bank kind of levels if you want and this process is. go in will be destructive will be better 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 admitted to the world trade organization and w t y changes should we expect to see and twenty twelve as a result russian admission of the w.t. oyster only one of the invasions one of the longest process is over session two w. two zero and so it's function of w t o conditions or any countries so far in their records that actually stretched over 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 w t o session in play it's well well it's likely that they will see inflated twelve was the beginning of the process whereby foreign investors start to be pricing the least in russia as the trading partners for the rest of the trading partner for the for the rest of the world and then it will be in the positive it will start in place if 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 competitiveness that they industrial and the prices level and also that 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 towards 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 the mission but rather to w t o but also the greatest benefits that will gain the greatest benefits from that membership as well in the long run i also talked about oil or certainly oil is can't talk about the russian economy its oil prices manage to stay near one hundred dollars or up to a crisis and of course big depend. c. 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 also in part best move them into what we call a billet so less so in the short term the demand side of the economy however we don't anticipate that their 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 and look at the oil. less so on natural gas for example site what we're seeing is that the prices of those commodities just. continue today to ease and you were 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 to inflation future inflation those expectations also been factored that in and the real lawsuits were. kind of physical tangible assets own we're not in bali you would expect that to continue not in terms of rising oil prices but the firm level of oil prices in the range of say eighty five to one hundred five somewhere in the 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 or 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 cards 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 the economy the younger generation of the archons now days are much more focused. high technology high value out of what we call sectors especially service sectors they also become increasingly traded sectors russian experts for example of i.c.t.

services which is self-regulated services and 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 stamp or forty do you start out slow or brains what we call in other words that human capital people collins which is behind and there are just tremendous capacity of the talent but unfortunately in the last few years it has been losing the grass of late so the countries outside of us are and in particular the multinational corporations so it is crucial that the russian government policies and the context for example of projects like skolkovo are very interested in those projects to potentially anchor multinational corporations research and development centers in russia proper itself doesn't give them there are younger russian people who work in that sector and in those areas and moreover the opportunities in terms of their growth and career wise and growth experience

wise and skills wise and that is very very much important because russia currently has compared to personal income tax rates which is a very significant incentive for people with high quality care with human capital to be there and to stay in the russia but unfortunately it doesn't offer the same quality of promotional opportunities for growth opportunities and also business station of the two inches so we pair in those two areas redo the corporate side the multinational corporations and domestic business creation in these areas will be very much crucial to anchor in the talents 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 some are advocating. money spending. the government printing now you're in ireland they've chosen austerity how's that working well ireland has not chosen a stair carolyn how does thirty imposed by the circumstances in most cases this

theory different been never been really chosen by the governments governments always pursue their objective or raising their expenditure no matter what it's really is a matter of consideration 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 that 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 skills and best we can use of countries like carbon that isn't truly capacity when you reach the level of debt to g.d.p. ratios of one hundred percent plus like are likely to be like greece if you also have a very high specially if you have a car you drive or you don't have a choice you have to bring your all to me then go. back to the level of sustainability over the long term and that is something that our leaders trying to

do unfortunately it's best done at the times of plenty rather than the middle of the crisis and of course that is the part of the economy which is not working right now for our domestic economy in effect is not go it's continued to shrink as a result of those that are so all right cause i'm saying there yes thanks so much for being on the kaiser report. and that's going to do it for this edition of the kaiser a par with me max kaiser and stacy herbert our thank my guest 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 until next time there's a match guys are saying. turning

up the tension france calls for tough new sanctions against iran accusing it of developing nuclear weapons while temperance says it's ready for dialogue. israel and the palestinians head back to the negotiating table for the first time since peace talks broke down more than a year ago. and the russian military is on the march to restore its former glory with the kremlin to reboot the armed forces and cut out corruption. hello and thank you for joining us four o'clock here in moscow i'm karen taraji with a look at news around the world around the house war in the united states it will take action if an american warship returns to the persian gulf and left the area when iran started its ten day naval war games during which they successfully test

fired a number of different missiles but russia's defense ministry says that despite the latest military exercise there are any and don't have the technology to make intercontinental ballistic missiles meanwhile france is pushing for stricter sanctions as it says it's developing nuclear weapons it's urged countries to follow the u.s. and freezing iranian central bank assets and imposing an embargo on oil exports to iran has been threatening to block the strait of hormuz one of the world's most important oil routes if the west stepped up its sanctions let's discuss this more with james corbett editor of the corbett report website james thank you for joining us so france has been calling for tougher sanctions against iran do you think military exercises were a major factor in all.