out of the euro and in the u.s. of course new unemployment numbers are out being touted as good news happy friday. we're making progress we're moving in the right direction one of the reasons for those. not so fast will show you why the so-called improvement may not be the hail mary touchdown for the ailing economy that people are hoping for and it's friday which means from gold to guns and ammo will respond to you our viewers let's get to today's capital account. so again today we saw the euro hit another close to sixteen month low against the

dollar we saw that yesterday too also germany factory or german factory orders plunged to an almost three year low that was news out today that showed that plenty more bad news for the eurozone i could rattle off plenty of it despite that politicians are just continuing to try to hold it together technocrats meeting today monti met with nicolas sarkozy the guardian's rome correspondent says montes aim is to drive a wedge into them or cozy alliance this is of course before monday when merkel and sarkozy are supposed to meet in berlin to continue trying to get a grip on the debt crisis but what about getting out of the euro well you may remember european m.e.p. nigel farrar she was on our show telling us that an exit plan was needed. but i've been urging the bosses in europe for the last year or more please can we have a plan b. please can we have a contingency plan you know we started to work on this we got a conference here

a month ago with a couple of senior germany call them a sporting forward ideas as to how we can help greece portugal and other countries get back to their own car and says there's been a big problem now one of those german economists is with us now one of the keynote speakers at the group's conference that was organized by nigel fraud which he was just talking about called preparing for euro break up his philip bagus professor and author of the tragedy of the euro which you see there and he is coming to us all the way from spain the heart of some higher unemployment and of course the housing crisis one of the major problems for that country thank you for being on the show i'll get straight to this because you have an interesting perspective unlike many of the people we interview who think that the euro need to be here to stay you have a plan perhaps for getting out of the euro but do you not think that the euro is worth saving. no of us not to us saving it sue misconstruction.

it has proved this over and the process and this is no no coincidence it's as i do my book it's just tragedy or succumbs that is governments can't finance the deficit is. central banking system and them. and thereby externalize the cost of the deficits on the other nations so there's a run to run about higher deficits leading tool to inflation now your book i think as you just said is the tragedy of the euro we teased it you said you originally wanted to call it the case against the euro so i'm going to go out on a limb here and say that i bet you're not exactly a big proponent of the euro project in general why not if that is the case. what are we because it's as i said it's a misconstruction approach still to come and says you haven't come only owned

resources can be that can be exploited by several uses tertian example officious and zero since everyone can fish them so there's overfishing why of course if i cannot i don't fish the other live. exportation of the same hands this in europe several governments can finance their deficits. with the banks and the banking system the resource they are there they are exploiting is the purchasing power of the euro that is bengal example greece has a deficit what does greece do it prince paper and names that government bonds then the banking system buys these loans pledges is as corrupt as you see being receives new reserves and with these reserves the banks can expend credit the money supply increases and prices rise but not only in greece but also in germany and austria in france so not only greeks are paying for the deficit of their government why are

price inflation but also former us. germans are friends of spain units that are using zero so in them then you have to incentive to live on on behalf of. infected can only profit from this money to redistribution if you have a higher deficit then other countries for example if germany has a deficit of three percent and the rest of the eurozone has a deficit of ten percent of g.d.p. this is all monetized and then prices rise eight percent. in the euro zone then you are so then losing so then let me ask you this i didn't mean to step on your toes there is there any scenario where you would support a euro system or are you against the entire notion of a common monetary policy even if there is linked budgets

where you could solve the problem if for example you saw a bit of the c b two except government bonds as collateral. and if you flip the c.b. to buy government bonds and if you. governments to bail out other governments then you have no problems that deficits one interest. and then the governments just go bankrupt. and that's it ok so bankruptcy not bell out so let's talk about speaking of bankruptcies and defaults let's talk about a break up plan for the year zero because we haven't really heard one yet on this show though we've heard a lot of discussion about the problem of the euro before we get to that though a lot of people say that an exit from the euro a breakup would be devastating economically how do you argue against them we're going to slow steps too. but it's less in the

sense that yes buying government bonds that has been monetizing the interest rates artificially them on investments them maintaining government spending that is waste and we're going to centralization maybe your state i mean this is. of course if this is your exit that will be for us but only for people that gave money to irresponsible governments. so and so for any investor. investors would have the pain now nigel for you you took part and what he organized and he said that there is a quarter of a million dollar prize for someone who comes up with the best solution for exit in the euro so what is your plan that could buy for that prize. well i actually proposed several options that go ever further than the right direction

one would be just to return to national council you can do this just by surprise you introduce a and then afterwards you can do a referendum referendum on it if you want to stay on the net or don't you're not another option would be to introduce a parallel currency that is besides a year or so your your central bank exits your system and uses its assets s.s. to back a new national accounts and the third option is just can't see freedom that anyone can issue its own currency and difficult that is what this important in these. in this response is that they're accompanied by measures to eliminate. the turmoil in markets and that there will be and that there will be anyway so in the euro the price of fuel is also because the state europe has grown to such an

extent that it strengthens the stability of the council so to live to make the exit. less harmful or less syria what you have to do is to reduce the size of the state you have to prioritize you have to reduce the deficits you have to pick supplies for labor markets and even the exit would be a success so maybe if greeks so maybe at let's put this into terms that are a little bit more specific let's take kind of the best candidate for an exit from the euro some would argue grief what would you tell their central bank about how to get back to the drachma. well as i said the best would be probably to just close the central bank and then counsel competition but when they could. close the central bank and have competing currencies.

yes is this that would be the best so who comes up with the currency of. the company your your company and you issue. your print gold coins. and. notes that the big one of the sumburgh owes them and then they're called and you're going to complete without us that issue so. for other currencies so we will have her undies would compete with each other to become the currency no central bank really interesting i want to keep you on we have to go to break but i want to i'm dying to talk to you about germany because you're a german economist you're sitting in spain we got to talk to you about both we'll be right back after a break we'll have more with author and professor phillip bagus. thank you and still ahead here on capital account so just how can a country get out of the euro we'll be talking about it we want to know what germans think we'll talk to a german economist philip bagus about it after the break first your closing market

numbers. it really does put a picture of me when i was like nine years old i couldn't see the only truth. i mean he says and i am in total ghetto princess i love driving hip hop music and pretty. much it was kind of a yesterday. i'm very proud of the role without you she has played. my.

guitar sometimes you see a story and it seems so you think you understand it and then you glimpse something else here sees some other part of it and realize everything. you don't know i'm tom harpur welcome to the big picture. what drives the world the fear mongering used by politicians who makes decisions to break through that sort of made you trust no one who is imbue with a global missionary see where we had a state controlled capitalism. it's called saxons when nobody dares to ask what we do r t a question more.

all right we're back we're hearing about how to get out of the euro and we're going to find out what german sentiment is because we hear so much about germany they are the heavy hitter in europe and philip bagus professor and author is a german economist so i'm i'm going to bring you back into the conversation because i really want to talk about the sentiment with the germans they're against e.c.b. money printing do you think they're going to get fed up and say to hell with this we want the deutsche mark back or do you think that they're going to want to stick in the euro where the german. criticisms and obey to the they go moves so they have protested very much because they don't see of the. really that they're going to suffer but once inflation present vision to go maybe the pressure on the population will be so strong that the.

exits. but as far as sentiment with germans it sounds like you're saying that they're not that concerned about this euro zone crisis that they're fine to stay in the euro. so the germans jump against the euro the majority probably would like to have the courage mark beck however the drum establishment put it to sions have supported the euro project and the beaches there are connected to the project of the of the european superstate. that germany has on germany has begun agrees with other countries portugal ireland they have instituted. or big bailout fund they have allowed the c.b.c. to buy government bonds so i think they have already done almost everything it's

really strange that it has gone so far so that shows who have there's no most strong resistance at least not resisting through this is a resistance that this kind of lies through a political party and and as i said you're a german economist but you are in spain yourself where of course unemployment is incredibly high a housing bubble is deflating the fourth largest economy in europe we are a lot more in the news about italy do you think more attention should be paid to spain. well the to be is more in the news because they're government that's a much higher limbs spain's thing has more time so to speak italy so but yes so could be more in the news because it's all or it's in a very dangerous situation because we have here almost five million unemployed. and this is not sustainable in the long run for the government for the finest public

finances going further and further to that path where you see disintegration as being an option so i'm wondering what about the argument that this will create political. disunion if the disintegration is what happens it could lead to overturn a real politic take greece for example its membership in the euro has offered it a level of diplomatic protection from turkey so what's the risk that a new europe would bring back all divisions. well not it's i don't think it's really a risk at all it's a chance a chance to look for another will you have here two two options we can go to a socialist europe the. superstate can go to free trade so. i think the european superstate will actually. provoke more conflicts because there

will be just a beautiful and there always then there is distribution the conflicts of late and can conflict only free trade generates and peace and this is the great chance of the subsidisation to go back to a more free trade zone ok so you see free trade no euro do you think you're going to win that quarter million dollar prize. well it depends who who decides who really started living the pros and cons or editions probably. probably not but it will remain to it'll we'll have to wait and see what happens with nigel for roger's prize we appreciate you coming on the show and giving us a solution to exit in new york as we hadn't heard one yet that was again the late bagus author or economist joining us from spain.

all right u.s. unemployment numbers came out today for december showing the rate edged down to eight point five percent everyone is excited mainstream media headlines are cheering the news here is one to give you an example usa today says december unemployment rate lowest in nearly three years this headline i saw a lot of other places too of course u.s. president barack obama is excited to. we're making progress we're moving in the right direction and one of the reasons for this is the. right progress moving in the right direction so should you be excited ok's sorry to point out the obvious but we all know those numbers are be as especially if you're watching this show but let me break it down for you ok this chart comes to us from our friend karl denninger at the market ticker showing the employment rate he points out that the

employment rate dipped down a little bit if you can see this and that more or less it has flatlined now for the last two years now also i want to point out that the total number of people employed also went down so that should make you scratch your head if the number of people employed are going down and how about the jobs that were added ok reportedly two hundred thousand according to the b.l.s. was zero hedge posted this from morgan stanley's david greenlaw pointing out that some of the strength in this report should be discounted because of a seasonal quirk in the currier category of payrolls ok this is. those kind of workers jobs in this sector jumped forty two thousand and december repeating a pattern seen in two thousand and nine and two thousand and ten we should see a payback in next month's report ok so minus those jobs things were about where economists were expecting also retailers added more positions than expected which again could turn out to be seasonal ok this was for december we talked

a lot on this show about the seasonal hiring and reportedly even if the economy did add two hundred thousand jobs per month we would get to pre-recession unemployment and till two thousand one thousand ok by then i'll be pushing forty on the bright side back to the courier's maybe it means hey let's roll the video if we have it of this guy maybe it means that someone like that who yanks won't be delivering your breakable glass to your backyard again on the downside this house we could bring it up. will remain a pipe dream for most i think we have a picture of it katharine hepburn's old house is on the market for twenty eight million dollars you may not be able to buy that but it is rumored in the connecticut post that president obama may be considering buying it i should be food for thought and i hope that now we've given you thorough reason not to cheer about those unemployment numbers.

all right it's friday which means it's time for viewer feedback and this week one of our guests we interviewed james turkey's founder of gold money and this sparked a conversation about gold the fed and hyper inflation on the web first here's turk on hyperinflation. this is actually the point that i've been making for some time that we're on the road to hyperinflation because what we're doing is turning government paper into currency. ok so he thinks hyperinflation is a scenario we can see and dick three tennis writes on you tube that compound interest is the most powerful force in the universe quoting einstein the us has to pay interest on the debt and when the amount of payable interest on the debt is at a level that it consumes all tax income then that's a point when even

a country like the us can go into hyperinflation we are not far from that place so that is his view that we're not far from that moment we think we guess that could lead to hyperinflation if you have to print out more and more money to monetize existing interest payments then again you could just do fault which would be deeply . to see what the us actually does but for anyone curious the interest on the us debt in two thousand and eleven according to the us treasury was a staggering four hundred and fifty four billion dollars ok and with all the talk of money printing that we had this had coffee writing to us i just don't see how dismantling the game that the federal reserve is playing is even possible at this point and you know what it's a great point how do you put the genie back in the bottle it's actually a question that i posed to james turk some would argue the economy is going to have to go over a cliff first and take the currency with us and this leads us to how to protect yourself and turk was talking about gold and are you be mad elo well says sell

everything and own gold at that i started to stock up on plenty of food and ammunition since last year well viewer it turns out you are not alone my friend it looks like more people were at least looking at buying guns last year according to the f.b.i. it performed a record number of instant background checks in two thousand and eleven these are for could be would be firearm buyers sixteen point five million a fifteen percent from two thousand and ten and anecdote. italy if you follow me on twitter you know this because i was tweeting about it last week and tweeting pictures and a lot of us retreating back and forth about it but i actually went to a gun range. for the first time in california over my break and it was packed it looks to me like a bull market and guns and ammo from my very limited experience now also a lot of viewers have been asking about when the james whether exclusive which we would be up online it is up now it's at youtube dot com slash capital account and

it are his price predictions for gold so you definitely are going to want to pay attention to that he says some really interesting stuff and after yesterday's show maybe nine hundred ninety eight a west didn't see those pictures i tweeted last week of me with guns blazing but he wrote this law and you came out swinging this time another great show you guys are awesome is there a way to pressure satellite to feature our team without paying twenty five dollars a month the rest of the country desperately needs to know this information well we appreciate you for thinking that i don't know about this satellite but you can always watch online for free at the library has free internet youtube dot com slash capital account and sticking with of your love fest and those getting their info here on capital of count philips c.e.o. e-mailed me to say that he studied history and law and never took a class in economics while in college but i think your show has provided me with more useful information on this subject than a college course keep up the good work smart guy says he wants

a cow thank you so much we will of course do our best to keep it up and david fowle also e-mailed me to say that your work on economics is important i watch bloomberg too but you offer better explanations and offer a non establishment perspective i'm glad you appreciate it because that is the point you're not going to see the establishment perspective here that is for sure and about our interview with ed harrison of credit write downs that was yesterday a you tube viewer mr zak eighty eight said i think things will play out exactly opposite of his prediction. some sunni's talking about edward i perceive dollar index over one hundred long the dollar may be the biggest trade this decade i just want to point out go back and listen to the interview with that word because edward told me and fact similar to what you're saying to start planning my vacation to the a mall ficos next summer because of the euro and the dollar strengthening against it and optical density wrote to me on twitter about our interview with professor steve keen where we discussed occupying economics department happened

a while ago but we really air the interview last week when we're on vacation he caught it then we're so glad and he said fabulous interview with steve keen and here's the occupy economics you suggested and he shared a really great video to show some of the action that's been going on from a group trying to change the economics profession here's a bit of that video. we're going through a period of economic crisis. that's kind of illustrated a lot of the shortcomings conventional approaches it's pretty clear to everybody that economics as it is commission. do have sufficient warning and certainly did not inform the decision making that took place prior. thank you so much for sharing that video with us and for telling us some we didn't know about what's going on in the occupy economics movement and that is it for your feedback that's also it for our show thank you so much for watching feel free to follow me on twitter at lawrence mr and give us feedback on the show at youtube dot com slash capital

account go watch that james turk interview i'm lauren lyster and from everyone here at capital account have a great weekend we'll see you here on monday with some exciting new guests and story next week we'll also have our capital account trifecta to talk about some of the fun things you love so much at the end the show every night. i had a family i lived in a fairly nice community wasn't rich it was an upscale it was just like you know march to society ok then they started showing up here what happened was my company decided i could get cheap labor and they got rid of. these there. was a legally blind legally we have to get up every morning we have to go to work and you know we have to pay our bills and we have to do it and that's just the american

dream and if you want the american dream you have to go by the last i figure it's yours one of the major trails in the united states and. i watch and they run run down my property and some about this noise. is a little mean the characters from the wire is protecting the country i'm the kind of guy who doesn't mind your newspaper and sturdy so i come out here you know we're all immigrants as well know that we all came from somewhere else. zap.

this morning we learned that american businesses and is another two hundred twelve thousand jobs last month and was the best of times it was the worst of times it was the age of falling unemployment and yet today's jobs numbers can't hide the u.s. as dismal economic truth so with many families still struggling to make ends meet r t asks what's in a number. it being generous to give us weapons out of the aaargh at no charge so that you really have no feelings against them while president obama is out and about touting those latest job numbers millions of americans sit at their kitchen table trying.