there is a noun and indebted consumer who is only able to pay the debt interest each month so here you have the two pillars of society zombie debtors who never escape and clown bankers who never have to pay debt so the zombies and clones yeah wherever there is a zombie debt or you can be sure there's a zombie creditor and as zombie central banker feeding them all. this is artsy now britain is preparing for the greatest show on earth taking the possibility of a terrorist attack seriously london's summer olympic preparations are calling on all corners of the nation's defenses but as are his i have a bennett reports such measures may not only turn the capital into a siege city but it could simply just prove to be ineffective. spectators may know

who they're watching at the olympics but they won't know who's watching them surveillance drones like this could be circling the skies of london this summer police may use the spy cameras in their lympics anti terror attack ticks it'll leave no hiding place the drones can make out a car's number plate from heights of up to one kilometer privacy campaigners fear is the start of a slippery slope i think our salute tragedy for britain the largest part of the olympic legacy was a surveillance legacy where we have stalled this equipment in the name of national security and then when the other bits are over we keep using it person very very serious risk the privacy that might not be adequately protected the spy in the skies been piloted before in britain by four police forces but never took off after one crashed into a river and the u.k. aviation authority failed to grant the necessary license that's the only legal requirement before this sort of surveillance becomes a reality at the olympics

a minor hurdle for what's already britain's biggest peacetime security operation total cost over one point six billion dollars it is worrying that the security bill has increased so drastically from initial estimates one of the reasons being given for this is so heightened risk of terrorism which seems incredible as an excuse at a time when the original estimates were made around the time of the london bombings when london was considered to be a very high risk so it seems incredible they got the estimates so badly wrong in the first place commandos speeding up the thames is one answer to a myriad of perceived terror threats this time a hijacked passenger boat they'll also be warships and could on the thames attack helicopters on standby even ground to air missiles ready to launch or vance before you even get to the security on the ground to give you know. idea of the numbers take the olympic stadium capacity eighty thousand ground security at the games is

enough to fill sixty percent of that inside the venue will be over twenty three thousand security guards along with seven and a half thousand military personnel and then outside a further six thousand troops along with twelve thousand police total just shy of fifty thousand the budgets ballooned by a hundred percent because initial estimates were woefully inadequate but that still couldn't stop two fake bombs being sneaked in under the radar at the stadiums dummy runs not exactly great value for money london organizers have tried to play down fees the olympic village will be a siege city but with such a massive security operation the plan the limb pick legacy of international friendship may not be the one that's actually left. i've been it's london. all right before we get to new tussle with the business now let's check out some other major news stories making headlines around the world this hour over two

thousand people have gathered in believe years a main city demanding their government to resume construction of a controversial new road that are set to go right through an amazon resigned plans to build the highway were canceled last year after a good eunice tribe members went on two month long march to protest but now other communities are asking president evo morales to continue the project saying it would bring much needed economic development to the region. a senior pro-government militia leader has been killed after a suicide bomber targeted his home in northwestern pakistan rival militants have claimed responsibility for the attack which follows previous clashes between the two groups in which hundreds of people died three others including the man's son in law were also killed in the blast eight more were injured. the head of the bangladeshi opposition and thousands of her supporters of state to rally in the

capital calling for early elections and a return to the old voting system an independent caretaker government used to oversee the process before it was dropped by the country's prime minister shake a scene last year the demonstration comes after previous anti-government rallies turned violent leaving three dead during classes between protesters and security forces. in just a few minutes is the kaiser report but for now the tasha and the business. twenty three minutes past the hour here are you watching business started emerging market currencies are seeing the best start of the year since the turn of the century the russian ruble along with the mexican peso and the brazilian ryall have outperformed currencies from the major developed they showed us some time ever supported by rising risk appetite after the e.u. leaders signed up for a stricter budget discipline meeting however steam jacobson from saxo bank believes

the positive mood will not last long. the central banks continue to print money so much that they're actually running out of paper to printed on if you look at these e b they have been expanding their balance sheets since july first by thirty eight percent in terms of currency strength and risk appetite has become a game of continuing to for old credit she added what is essentially a little bit like pretending that you can treat a patient deal by giving them all fear and they did create a diagnosis of why the patient is sick but of course a patient will improve short term and this is what's going on with the risk appetite and that's what's going on with the currency market. and now let's take a look at the markets stronger oil is pushing the russian currency higher against the dollar the ruble is a lower against the euro though and the dollar's also lower against the european currency as some progress has been made in talks with the greek foreign holders and

oil is gaining value as traders get the message that greece is closer to the final stage of its talks with bondholders that brings hope that the e.u. crisis might soon be resolved which in turn increases the risk appetite this hour of the trading at more than one hundred dollars a barrel brand as more than one hundred twelve dollars and now on to equities european indices are upbeat after the e.u. leaders agreed on a boosting fiscal integration germany's unemployment data came out just a few hours ago and it pleasantly surprised investors it fell to the lowest levels since the creation of the euro zone this hour both the footsie and the dax are putting on around one percent and here in moscow the markets are in positive territory the r.t.s. is up more than two percent of the sour the my sex is gaining one and a lot of percent. and now on to the biggest movers on the my six banking shares including spare bank are higher energy majors are also with the boss navigating

around want to have percent and russia's biggest. org store chain thirty six point six is among the top gainers bats on the news that it plans to open a drug discount chain to boost sales. russia's economic expansion is losing steam the g.d.p. rose to four point two percent last year according to a mid january estimate by prime minister vladimir putin the final figures coming out later on tuesday while retail sales grew last year amid wage increases industrial production growth was cut in half to around four percent as the euro crisis tightened the demand for exports samsung will open more than one thousand branded corners and russia's top. retail euro set the south korean giant hopes the move will help boost its market share the company will spend from two to around fifteen thousand dollars in setting up each corner euro sets as the number of such

branded outlets within its chain could grow to three thousand in the near future last year some saw managed to grow its mobile phone market share to thirty six percent in russia running close behind its rival nuclear. and that's all the latest from just my colleagues oddly comments identical will bring you the update in about fifteen minutes.

it was shot four times in total and i want to as it were. serious the boys are still in my body. and the people should be allowed to defend themselves wherever they are guns in the hands of law abiding decent people are not our national rifle association was a group of basically retired military and we love to shoot holes and i'm sorry if you know that the bullet comes out here and this makes it go bang and if what's in front of here is going to die and that's all the training you really really need raise your hand if you know something's been shot ok kill him what i wanted and still don't feel one is over the streets. you can live without

a gun hopefully we will never have to use the weapons for self defense but we should be prepared the full class including the teacher i think was. seventeen students and i think i am one of seven last july.

the hour here in the russian capital the time for your headlines syria's opposition says the president will follow in the footsteps of. spreads to new york now where u.n. security council members seem unlikely to reach a consensus. occupy d.c. protesters dig their heels in and say wait for a police crackdown after the deadline to leave their camp by city off dorothy's house. london security goes large for the upcoming summer olympics with tens of

thousands of troops and high tech spy drones all that i mean for years the spirit of the games will be damaged by the show. right up next to see the latest report today artie's financial pundits reveals his uncompromising and rather unique take on the pillars of the global economy the kaiser report right now. max ties are this is the kaiser report. in the news. that's right from barry ritholtz the word of the day he tore a zombie deader is a noun and indebted consumer who is only able to pay the debt interest each month writes the debts never go away they get only pay the interest they're always in

debt and this applies throughout the entire economy not just on credit card debts but mortgage debts i think a touch of the consumer now if you look at the bankers of course they're involved in a very interesting situation in that they never pay interest on phantom debts. they loan into existence phantom debts that are on collateralized that they themselves only understand the configuration thereof but they never have to pay interest however they get awarded norma's fees so here you have the two pillars of society zombie debtors who never escape and clown bankers who never have to pay debt so the zombies and clones yet wherever there is a zombie debt are you can be sure there's a zombie creditor and there's zombie central banker feeding the mom the fed is

starving economy of interest income so warren most layer of former broker manufacturer and co-founder and distinguished research associate of the center for full employment and price stability says the fed is part of the problem rather than part of the answer this is why we have so many zombie debtors he said it would serve public purpose if the fed made it clear that in today's rate environment what's called quantitative easing in fact removes interest income from the private sector thereby functioning much like a tax and a source of what's called fiscal drag as it takes net dollars out of the economy as it reduces the federal deficit well you're right if there were not this is on be better effect you would have a creation of interest income which would form the basis of the capitalism something called happy tall. without the capital all there is no capital losses i'm

. getting them the hood. of the capital you should have taken that conversation today max the whole world would be devoid of the zombie bankers not want to make a protest igloo in davos that looks like fun rob knows us well some of the locals warn most of them. on to a second point he said this brings up my second criticism with regards to the interest income channel lowering rates in general in the first instance merely shifts interest income from savers to borrowers but he then goes on to say that while income for savers drop by nearly the full amount of the rate cuts costs for borrowers haven't fallen that much with the difference going to net interest margin of lenders thus you're enabling and feeding and empowering the zombie bankers and you know think of those with the capital is flowing through the economy as a pipeline of capital if you will and the lower interest rates have the effect of

the shutting down the pipeline of capital and causing deflation the central bankers are saying well we need lower interest rates to increase liquidity in the system that's patently false it shows that they have absolutely no idea how this economy works so unlike a chris whalen for example is a true banking analyst will tell you in order to get the cash flowing again you need to start to raise rates and incentivize banks to lend to each other or those creating the basis of an inflationary scenario that would create the jobs and the growth that some people say is their objective but clearly it is not but let's talk about this point here max because you've often talked about raising rates and all the time you hear screeches horror that this cannot possibly happen because when the fed cuts rates by five percent as it has done over the past two years we get point zero five percent taken off our interest rates that we have to pay for

mortgages all the rest goes to the bankers all the rest is taken from savers and shifted to bankers so there is a vocal portion of the population who screeches and in horror and pain and their voices get heard out over the people who are savers and who could possibly provide the capital from which capitalism can once again return to the american economy. in the currency wars asymmetric they lower rates but the benefits accrue ninety nine point nine percent to the lenders the financial establishment on wall street very little of the benefits go toward people who are in the consumer economy who are the basis of the economy toward lowering their rates so there is no no of no benefit on the consumer side on the banking side it stifles lending within banks and creates a illiquidity which is of course contributing to the deflation and then the central

banks say we don't know why there is deflation because we keep shutting off the liquidity don't understand why the taps of liquidity are drying up it shows a pattern of psychosis which i think most people now understand i think most people understand that in fact the intent is not for no money to go to the zombies because those are why would you ever want those peasant zombies to ever have any money again to pay off their debts you want them just eking eking eking out a lie a tiny tiny sort of subsistence level what you want those zombie shrieking to empower and to enable a vastly growing sector the finance sector lloyd blankfein gets more powerful jamie diamond gets more powerful the banking sector gets more powerful exactly because of this squealing desperate zombie debtors look at all these pension accounts like cal pers for example the biggest in california one of the biggest in the world there

they assume seven percent return on investments which assume interest rates of four or five or six percent interest rates for them because in less than one percent or close to zero their return last year was one percent and they're just being a sensually discarded by this form of economic or financial pressure and as it's called there's a technical term for financial repression so former chief. columnist from morgan stanley asia was interviewed at davos along a similar theme as well stephen roach explains how the fed is pulling the wool over our eyes so we have a lot of squealing zombie debtors in america and the u.k. and other debt debtor nations australia canada any time the notion that rates should be raised they shriek and it never happens well stephen roach talks to bloomberg and he talks about the fact that china is actually doing a lot better because they've introduced over a dozen marching requirement rate hikes and they've also raised rates so that real

interest rates are actually in real terms positive and then he goes on to say this when he's asked whether or not this would be possible in a democracy in a democracy do those actions do there you know we truly never met paul volcker well you know but do you suppose you know excellent question tom i mean yours told us paul but we need we need a central banker who can really deliver. the goods and we've got central bankers right now who are i think trying to pull a war as a zero interest rates in this magic called quantitative easing yes well the paul volcker example is a good example they had the inflation they came after next and closed the gold window and you had gold spiking in price and you had massive inflation stagflation and came in raise interest rates and set the stage for reagan reaganomics reagan just inherited everything that volcker position the head

of that economy raising rates increases competition because it forces out the speculators who are merely parasitical in their behavior the bankers are just being parasites they want to lower rates higher rates would force those guys out and bring in entrepreneurs who are doing something other than just financial speculation it would be the best possible thing you could do for the u.s. and global economies to start. raising interest rates forcing out the speculator parasites giving people what savings the return on their investments the pensions and also the effect of raising real wages so let's go on to more of this magical thinking economists vs americans a new survey finds that just twenty three percent of americans say they trust u.s. financial system that is that as low as the earliest months of the economic crisis and sixty two percent describe themselves as angry or very angry about the nation's economic situation the highest level since march of two thousand and nine now this is a study done by the university of chicago and northwestern university they also have

a specific question they asked those they surveyed and they said predicting the stock market very few investors if any can consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day economist sixty four percent strongly agreed that you can't predict markets where americans overall fifty four percent agreed that you can't predict markets that means forty six percent of americans believe that you can magically predict where markets will go and so max does that explain to you why they might be losing money to brokers them and bankers well there's two points there the first point is one of the financial illiteracy now the fact is that rising interest rates would benefit consumers benefit the economy benefit wage earners benefit retirees benefit competition look at the comments underneath this video as it's playing on the internet right now read the comments below this video that you're watching

right now look at all the comments from the financial illiterates who don't understand this basic financial concept and that is the part of the big problem the second problem is in terms of predicting stock market results and prices only broken markets are predictable markets that are functioning are unpredictable that's what makes markets the supplier of cheap capital are all the losers who can't predict out. comes provide cheap capital for their winners if it were predictable you'd have price fixing and then you'd have more of a state can purely black heavy hand of the state controlling the entire market that's not that's not the what the market's all about the sole moniker of prediction markets is completely false that there is no such thing markets cannot predict but let's talk about beyond prediction markets the actual financial markets that we exist in live in today in our economy because this is bizarre that that's what thirty six percent of a condom is believe you can predict outcomes and it is the maestro alan greenspan i

think that helped brainwash the economy into believing that you can create outcomes with this magical wand and magical thinking but that's exactly what stephen king says indeed bunking economics is that the number one chief. is ill conceived notion of economists is that you can predict economic outcomes or market outcomes and it's hard coded into the basic textbooks of economics that somehow economics is a science like chemistry where the outcome can be predicted that's false economics is like a social science where the outcome is completely unpredictable and the second you understand that the second you understand why ben bernanke and his crew are complete charlatans by putting forward some other theory it's simply not true look at the track record over the past ten fifteen fifty one hundred years based on the central banking theory it's been a catastrophe so as ever thanks so much for being on the kaiser report thank you

matt. and will be while our shirts match. it's a magical the go i am much more coming away stay right there. you. or. fans are welcome back to the kaiser reports i'm out of

a lot of this paper that there leyland. management that welcome back to the kaiser report thank you matt summering a special still with i just you know actual and now they're sober is well over twenty percent of the n twenty twelve and it's in backwardation so first tell us what is backwardation or backwardation is the opposite of can go normally in the precious metals market you'll find that the futures couple show you effectively the contrast trading higher than spot rather than lower backwardation effectively shows that there is extreme tightness in the silver market at the moment with seeing the spot contract trade daily just a smidgen higher than the front munch month which is march and on and this is very very bullish and particularly in precious metals one wouldn't expect to see that and it does appear to be being created by the problems with m.f.

global bear in mind precious metals in the most sensitive investors an overall to counterparty risk and of course what happened with m.f. global was an extreme counterparty event and that leads many people to leave the futures market in the pressure is gone to the spot market which is very bullish for twenty twelve and i see this is being a major change ok last year the powers that be the central planners of the central bankers who don't like precious metals because it makes them look stupid. when the prices go up they were raising margin acquirements and trying to get people out of this market but at the same time m.f. global and j.p. morgan stole people's account money right out of their account so all of that work for nothing because now people are dumping their rig market j.p. morgan m.f. global accounts of buying physical and this is causing the near term price to get higher than the out outward prize so-called backwardation and this trend is

a clear indication of the silverball market is well in place and going much higher i would imagine men yeah absolutely and bear in mind as well we have the the second element of this which is the fact they're exploited back in the market for three hundred million dollars where the physical of course when he announced his first purchase of physical in think it was october of twenty ten the price was around the sort of eighteen dollars twenty dollars level and when you consider when you think about the market this extreme physical tightness like silver does and someone comes in in their moans delivery of physical and saw it was no surprise to see that as a major catalyst for the run up to a new fifty dollars to place over a period of about six months and i think it's very interesting that we've got backwardation and brought back buying in saw it and bear in mind that this three hundred million is only one fifth of the overall show for phoring so.