we are coming to you live from the heart of moscow warships ground to air missiles and drones britain is not gearing up for war but london's summer olympics the preparations are calling on all corners of the nation's defenses as artie's either bennett reports many fear the measures will pose serious risks to ones privacy. 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 tactics 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 like the sea where we store all this equipment in the name of national security and then when the other bits are over we keep using it to spy in the sky has 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 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 give you an 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 but that still couldn't stop two fake bombs being sneaked in under the radar at the stadium. 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. either bennett r.t. london. or right before we go to dmitri with a business for now is to

a quicker world update for you here on arts he and i will start with. overnight air raids by american drones in southern yemen have killed fifteen suspected al-qaeda militants the target was an insurgent base in an area taken from the government following the ousting of former president ali abdullah saleh the country has been locked in months of a civil turmoil and violence which stores embattled leaders step down last month and head to the u.s. for medical treatment. at the u.n. nuclear watchdog says three day visit to iran to monitor the country's nuclear facilities and on tuesday despite an offer from tehran to prolong the mission u.s. lawmakers say they intend to impose more sanctions on iran even before the inspectors publish their findings tensions are running high between the islamic republic and the west amid accusations that iran's nuclear program is not.

the search for the remaining fifteen passengers still missing from the stricken costa concordia cruise ship have now been called off italian officials say the effort was just too dangerous for rescue workers the search had already been suspended several times due to poor weather choppy water seventeen bodies have been recovered from the concordia since it run aground off the island of giglio you earlier this month. right now a time for your hourly business update here on r.t. dimitry is next. welcome to the program the chief said opec have knocked back warnings from around the e.u.'s decision to impose an embargo will lead to skyrocketing oil prices the organisation's general secretary says a fair price of a barrel of bread should be about one hundred dollars instead of the current one hundred and twelve dollars that we're seeing right now he adds that the market is very well supplied and to discuss where crude prices are going now joined live by

david the global director well it industry research is plats david good to see you so opec says one hundred dollars iran says under fifty who is right. dimitri i think what that tells you is that the oil market as many of your viewers will know is is trapped in a little bit of a channel right now one hundred to one hundred fifty is kind of the conventional wisdom you know a couple of years ago when oil was on its giant rally it touched one hundred fifty ever so briefly before the recession that followed and what's on people's minds including consumers in asia is that if it gets that hundred fifty mark again it could begin to spark a kind of financial recessions in the east to go along with some of the problems we're having here in the west so that's why one hundred fifty is being seen as a bit of a psychological barrier right now and also in some ways even a target if you're looking at it from the iranian point of view you have a one hundred two hundred fifty is quite a big margin i mean with opec now saying that they can cover up the for the

shortfall if either your imposes the european bose's an embargo or run off supply do you think that's actually possible to cover this supply hole. it's an interesting question that you ask there because most of the people we talked to in the market don't expect oil to get anywhere near hundred fifty anytime soon in fact the concern is really rather that oil will fall below that because to your question saudi arabia which of course has the greatest reserves of oil it can bring to market in the event of a disruption has made constant assurances that it's going to be able to fill any gap left by the iranians even if they attempt to close down the strait of hormuz which looks increasingly unlikely as the weeks go by right now there appears to be plenty of supply available in the event of a disruption and of course there's a lot of stock they hand as well a lot of countries have been busily stockpiling crude oil and they've been well aware of a potential structure for the better part of a year now so the market is positioning itself so withstand the supply shock so much so it might be over supply the short term a lot of watchers are concerned that the price of all my fall rather than rise it

may be a case of being a little bit overprepared here for what might come to pass. doesn't surprise you a bit that opec does not really want to see oil prices even as high as they are right now wouldn't they be actually interested in having high oil prices therefore higher revenues. well you know dimitri you would have thought so but the concern of the the great wise men of opec in the last couple of years has been to try and shore up its reputation as a reliable supplier a reliable partner if you like if you look at it from opec's point of view their reputation has taken a hammering in asia pacific particularly with the japanese and the koreans who've just been distressed by by the economic impact of the arab spring and the disruption they felt coming their way through the shock the supplies leading from the libyan cuts last year talk constantly of other kinds of disruptions so what opec trying to do right now is talk for the long term five ten fifteen years down

the road and they're trying to reassure consumers particularly asian consumers that they're there for the long haul and that they're not interested in seeing high prices and let's not kid ourselves that hundred dollars a barrel opec's making plenty of money right now how worried is the oil market right now by the possibility of a recession in europe how much could that then demand. well opec is concerned about that like everybody else in the world you know europe accounts for approximately a third of the world's oil consumption and you've only got to look at some of the headlines out there in the industry right now petra plus going bankrupt and taking several fineries down with it the perilous state of a lot of the private industry supply you consume it well in western europe to see how close to home the general fear of recession really is now as a consumer of a third of the world's oil if there is a major recession and we're not out of the woods yet on the financial negotiations for greek debt and there are still concerns about portuguese that you can see why opec and everybody else would be concerned about that front frankly

a recession in europe would have the same kind of impact on the oil market that recession in the u.s. did in two thousand and eight which is to say cataclysmic all right david ensor thank you so much very interesting david as by a global director of oil at platts talking to us life. all right let's quickly take a look at what's happening on the markets we start with currencies where the dollar is just a notch lower versus the european currency as some progress has been made in talks with greek bond holders but strong oil is pushing the russian ruble higher versus both the u.s. dollar and the euro by twenty four and twelve respects all the. oil as we've mentioned before is gaining values traders get the message that greece is closer to the final stage of its talks with the bondholders now that brings hope to the e.u. crisis might soon be resolved which in turns increases risk appetite lights we design for one hundred dollars and a half per barrel brant over one hundred twelve. stock markets now

and in the us they are flat to negative will this moment with the bulls eye we've got the sun on europe's debt crisis and on the bear side us consumer confidence retreating in january on worries about income prospects. and in the euro pretty much more of the footsie on the next game in point six point nine percent e.u. leaders agreeing on monday evening to boost fiscal integration and germany's unemployment data coming out which is presently surprising investors and fell to the lowest level since the creation of the euro zone let's now move finally to russia the closing picture over here in moscow looks like this the more than two percent in my six one point two percent of my sex is lower than the r.t.s. as the ruble is strengthened second it was moving the my six financials she has a strong is burbank one of the biggest gainers among blue chips it's up one point four percent roe snapped up just point four percent despite a high oil price and the largest drugstore chain in russia thirty six point six is

among the top again it's up more than two percent on news of plans to open a drug discount chain to boost sales and that's all for now the headlines are next on. wealthy british style.

market. really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines. good to have you with us live from moscow time for your headlines now russia's foreign minister warns that u.n. security council will never approve foreign military intervention in syria but says that moscow has never insisted that retaining the assad regime was a condition for peace the syrian opposition rejects. with the country's president instead threatening the assad family with a brutal and bloody. u.s. military presence in the asia pacific region. on the philippines which has offered

to host more american troops. on. the island nation. tension in the region. this year's first e.u. summit exposes deepening divisions within the union with predictions that grow even the best despite most members agreeing to fiscal restrictions that critics say is an affront to soften and democracy. all right bill daughters here in half an hour's time but for now max kaiser puts the eurozone in his crosshairs because the report is next. for this is the kaiser report. in the new.

mag that's right from barry ritholtz on the word of the day the debt or a zombie debtor is a noun and indebted consumer who is only able to pay the debt interest each month. 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 anything that touches 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 i were to get awarded norma's fees so here you have the two pillars of

society zombie debtors who never gave and clown bankers who never have to pay debt so the zombies and clones yet wherever there is a zombie debt or you can be sure there's a zombie creditor and as 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

design 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 disease of the the capital you should have taken that conversation today max the whole world would be devoid of the zombie banker is not i want to make a protest igloo in davos that looks like fun rub noses with some of the locals or most of them. as onto 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 a capital is flowing through the economy it's 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 then some devise 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 rate so 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 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 yours asymmetric they lower rates but the benefits accrue ninety nine point nine percent to the lenders the financial establishment on wall street very little 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 know of no benefit in 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 of 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 anytime 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 margin 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 the war as was 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 close the gold went

down 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 a 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 economist versus 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 perfect 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 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 say zero thanks so much for being on the kaiser report thank you matt . and why our shirts match. it's a magic that go i am much more coming away stay right there. are. old. technology innovation. developments around russia the future for. sure is that so much that you should be sitting on the market located in the churning off of the tanks as the united states in the e.u. again sanctions and is also threatening to impose.

or. buying back stairs are welcome back to the kaiser report time out of london is bigger than that there leyland. manis read that welcome back to the kaiser report thank you max them wearing a special silver toy just for you now actually now they're sober is well over twenty percent for the air and twenty twelve and it's in backwardation so first tell us what is backwardation backwardation is the opposite of can tango normally in the precious metals market you'll find in the futures 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 mo withing the spot contract for a daily it's just a smidgen higher than the front month month which is march 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 that precious metals in the most sensitive investors overall 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 going to the spot market which is very bullish but 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 they 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 then yeah absolutely and bear in mind as well we have the the second element of this which is the fact they're exposed to it 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 oktober 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 the place over a period of about six months i think is very interesting that we've got backwardation.