that's still to come for you but first e.u. leaders at their first summit of twenty twelve were all smiles but the existing tensions were clear to see there was another war of words between the french president prime minister over who is industry is larger and conan set to join the eurozone demanded a greater say in decision making and was at least one decision made however with twenty five of the twenty seven e.u. nations agreeing to a german fiscal rule that would limit the size of nation spending also agreed to set up a permanent bailout fund for struggling members by never felt also of the end of the euro says there's a lack of solidarity in the e.u. and some leaders are pursuing their own political interests within it. especially if it's of course very big problem for the european union to keep up the unity it's always a question of national preference. coming into kalash or at least into some kind of coalition with each other and for example france it's obvious that president sarkozy the upcoming presidential elections are quite important and he uses the

european platform to a certain extent to try to get some score back on these opponents in that french presidential election race but there certainly is at the moment a lack of unity at the european union level but also at the level of the eurozone countries where of course the dominance of germany is something that most of the other countries are looking upon in a very. fearful way. there today marks cousin stacy herbert take a swipe at those they say orchestrated the e.u. financial mess. debt or be deader 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 are never again

and clown bankers who never have to pay dead zombies and clowns yet wherever there is a zombie debt or you can be sure there's a zombie creditor and as zombie central banker feeding them all. occupy protesters have stood up to the authorities in washington d.c. refusing to remove their camps from two parks despite threats of police action activists though is still preparing to resist with officers standing at the ready nearby and that is less wall explains occupiers remain united in their beliefs. so we are here ad macpherson square where protesters have been occupying the park since october throughout the demonstration about one hundred tents have been pitched here the national park service has repeatedly slapped these notices on tents here macpherson square informing protesters that they can no longer camp out here that means they have to get rid of sleeping bags and any other material which

allows them to live here protesters are responding by painting that symbol on the notice which demonstrates the fact that they do not agree with this mandate to their tents can stay but their doors must remain open proving no one is living in it the notice warns protesters that violate the rule are subject to arrest and it's basically a symbol of opposition. to you know what everything this movie is opposing right now and so i think the tents are really important part of occupy but police presence was sparse with no reported arrests they stand mostly on the sidelines refusing to answer questions from the media or with what but occupiers made their message loud and clear they are not giving up the fight here as you can see protesters have erected a massive shadow over the statue here at macpherson park it's all a demonstration to the anticipated even action by park oh yes this is our tent of

dreams and we want to be able to sleep here so we can dream of a better world where everyone has access to health care education housing and where the rich and corporations banks no longer have control over political systems the federal government and the political leaders in wall street were all tone deaf they could not hear this so the occupy movement has offered them a hearing aid and they're getting our message loud and clear now the purpose of this was to unite us in this space so if they want to arrest one of us after arrest all of us or not of us and washington. don't forget we've also got the world cup of you on our website is r t dot com here's what's on line right now. you know why did the pentagon confirms all the money kept in saddam hussein's bank accounts and stored in his baghdad palace vanished that's true but the billion u.s. dollars just disappeared into thin air plus. a whistleblower in springfield makes

it to the small screen in the five hundred episode of the simpsons discover when you can catch it on air on our website r.t. dot com. for the business news with dmitri let's have a look at some other world news in brief now thousands of egyptians have flooded the streets in protest of the ongoing parliamentary elections demanding faster reforms demonstrators want the immediate dissolution of the military council which inherited absolute power from the deposed president hosni mubarak is this parties are expected to win majority control of the upper house of parliament and already hold the majority of seats in the lower house. the search for the remaining fifteen passengers still missing from the stricken costa concordia cruise ship has been

called off italian officials say the effort was too dangerous for rescue workers the search had already been suspended several times due to poor weather and choppy waters seventeen bodies have been recovered from the concordia since it ran aground off the island of giglio earlier this month. blobby back to recap the headlines when about five minutes from now in the meantime the latest business as promised with dimitri. and welcome to business r.t. emerging market currencies are seeing the best start of the year since the turn of the century the russian ruble along with the mexican brazilian reale half of foreign currencies from major developed nations sentiment is supported by rising risk appetite of the e.u. leaders signed up for a strict budget discipline at monday's summit however steen jacobson from saxo bank believes the positive mood will not last long. the central banks continue to print

money so much that they are actually running out of paper to printed on if you look at the easy be they have been expanding their balance sheet since july first by thirty eight percent in terms of currency strength and risk appetite has become a game of continuing to for all the credit she added what is extensively a solvency issue these little bit like pretending that you can treat a patient who is ill by giving them more 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. the chief said knocked back warnings from iran that the e.u.'s decision to impose an embargo will lead to skyrocketing oil prices the organization thinks a fair price for a barrel of bread should be about one hundred dollars david global director of oil industry research as plants says the worry is not so much crude prices will hit one hundred fifty dollars a barrel but that they'll actually for. most of the people we've 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 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 to hand as well a lot of countries have been busily stockpiling crude oil and they've been well aware of potential structure for the better part of the ear 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 over prepared here for what might come to pass. russia's markets and they choose day session and they would on a positive that would be more than two percent of my sex one point two percent

secular the main movers on the my six those were financial shares was back again one point four percent last nafta was up point four percent of the close despite high oil prices weaker than the market and russia's biggest a drugstore chain thirty six point six in the money game is that's on news accounts to open a truck discount chain to boost sales. lebanese and will soon become the controlling shareholder of russia's biggest carmaker the coronas have agreed to buy the twenty five percent stake currently held by investment bank troika dialogue the cost of the deal which is expected to be completed next month has not been revealed and the estimated to be worth one billion dollars this will give right over fifty percent of the group the other major shareholder is the russian state which owns twenty five percent holding company of course to tell them. all right coming up next on i would say the headlines do stay with us.

today violence is once again flared up. these are the images the world has been seeing from the streets of kenya that. giant corporations are on the day. the official.

video. on. the palm of your. top stories in the russian's foreign minister wants the u.n. security council never approved. but says. that is the syrian opposition rejects a chance for talks with the country's president instead threatening the assad family with. plans to expand the u.s. military presence in the asia pacific region back in the philippines which is to host more american troops. call for sanctions against the nation for creating tension in the region. first exposes deep divisions within the union. even deeper. restrictions that critics say is an affront to sovereignty and

democracy. summit in brussels that's capital account next. good afternoon happy monday and welcome to capital account i'm lauren lyster here in washington d.c. happy to be back and euro zone leaders are meeting again after talking about the eurozone crisis in davos they've moved to brussels to talk about it some more at an e.u. summit a lot loblaw a lot of talk will tell you when something really happens that we need to break down until then let's talk about this meanwhile government and banks are still in bed together tangled up in their illicit love affair three years after the financial crisis yeah yeah we know the drill we're sick of socialized losses but how do we break this consensual rate of the public purse by wall street.

if you in the last whoa john. thank you for you. and of that's all we're really contending with out of touch leaders what chance do we have of escaping rule by financial all of our heat we'll talk to dr michael hudson about it and i'm back obviously from the world economic forum my return to davos woman hardly one thing is for sure i never have to rely on this press pass ever again to get anywhere or to get rejected from anywhere i still have badge p.t.s.d. i'm still suffering but i will debrief you on my experience let's get to today's capital account.

all right it's good to be back i just want to say dimitri did a great job filling in and i'm so happy to come back and do this show because coming back from davos i realize how much there is to talk about that is left out of the mainstream conversation for example getting to today's guest michael hudson he recently quotes joseph stiglitz nobel prize winning economist in his latest article in hudson's latest article talking about the u.s. government's vast transfer of money and public debt to the banks as a privatizing of gains and the socializing of losses it is a partnership in which one partner robs the other now this is the kind of thing we hear and talk about all the time but why does it seem to be falling on deaf ears i was just at davos i watched bank c.e.o.'s defend their practices and the form of capitalism that continues to pad their pockets with cheap cash courtesy of zero

percent interest rates set by the fed with interest paid on excess reserves mind you which they keep at the fed we heard this. whole situation. policy to bernanke is. yeah i bet you will jamie dimon i'm sure you're happy to leave that up to the fed brian moynihan too he's c.e.o. of bank of america said boom bust cycles are just part of the capitalist system this is just what we have to deal with meanwhile there continue to be protests on the streets over the issues we've seen a number of developments with the occupy movement just over the weekend in oakland here in d.c. so where is the political awareness or the will to do something about this well let's go back a little into history today to figure out where this to disconnect is coming from. the big group fired by people. for it.

i love them now we used to be kings executed bankers when they didn't want to pay their debts the banks suffered losses when march when monarchs died or defaulted now we have that in reverse and our western democracies we have governments taking on bad bank loans and banks cashing out on profits while the governments are sentenced to death with some risk of default well let's talk to michael hudson he's professor of economics at the university of missouri kansas city he's also author of this book super imperialism the origin and fundamentals of u.s. world dominance and we're so happy to have you on the show dr hudson nice to see you as always so let's start with your recent piece you wrote banking wasn't meant to be like this you kind of gave a short history of banking over the centuries concluding with how it looks today

what were you getting at though what is thinking supposed to be like. there always been two ideas of acting so it wasn't supposed to be like to go where it's extract the whole idea in the late nineteenth century especially in germany was that banking was supposed to work with government to finance actual capital investment in industry but if you look at banking today you have some very flat set of loans to consumers all of the growth in banking in the last five years has been loans to other credit other financial institutions so banks don't make loans for tangible capital investment to increase output them toil labor that's time retained earnings of companies it's banks make loans for derivatives for speculating currency for arbitrage interest rates and for stocks and bonds and of course eighty percent

of bank loans are made on real estate mortgages so contrary to what was expected a hundred years ago banking has not become industrialized it's sort of waxed back into what people used to call user id and that's a word you don't hear anymore that banking has not become industrialized which was the dream of at least no europe after world war one. banking took the cooperation of american sort of merchant banking lending against the collateral against assets that could be grabbed not lending that vote against productive means that could be put into place not lending against the means to produce future and ok got their heads i want to get into some of the different things you're talking about i want to get into derivatives and all those mortgage loans that were written knowing that they could never be paid back but i want to talk about greece because that's very big in the news right now and debt literally seems to be used right now for

a weapon of control the latest news that came out with a juror. money actually wants to control the fiscal matters and the budget of greece so you know greece going to have to give up its sovereignty if that goes through and this is because of debt written by the banks and taken on by the kleptocrats do they have to lose their country as a result. that's the theory obviously the plan is to do the greece what america and europe used to do into latin america in third world countries in the nineteenth century when a country couldn't pay the creditors would send in the gunboat and they would literally occupy the trust them office or they could collect tariffs revenues and repay the bondholders so what you have to get a is a decision that. finance capital and extracting money to pay the bankers is incompatible with democracy a few months ago when the elected prime minister of greece five

grails was about to sign an agreement with europe to say ok we're going to sell off the speed billion euros worth of reply and this water and sewer systems of athens and others that is on the market by rest maybe even the parthenon if you will islands. the prime minister said well we've got to put this to a referendum and let the people voted on it and angela merkel said no you can't ever referendum if you have a referendum no doubt no end of media leave the greek poppy population went out into the streets to demonstrate and say look there is no way that a national debt can beat elected if the people haven't approved it we have to legitimize them and so whatever debts we take on whatever promises we make to sell are not legitimate and as soon as we have an election then we're going to vote them out so you're upset you can't have an election we're going to put in our or our

technocrat a technical or is a euphemism for a factotum a lobbyist with a financial interest and they said we're going to put an essential a our dictator to tell you what to do so and essentially what they're telling greece to do is you have to. won't lower your wage rates even more right you have to show off your public property you have to essentially don't go into a chronic depression in order to. yes i will write you can list wealth the chairman mark well within greece obviously people are saying well wait a minute if that's the price of joining europe you not want to be part of will and using this is a model because clearly the greek government has needed to reform for a long time that this that can be argued but the debt burden is forcing reform on to greece it's not the type of reform that the people want it's the type of reform that technocrats want so what president is this setting about national autonomy.

this is exactly the point warrants it was the germans said look we're going to come in and we're going to tax the wealthy people we're going to put in a progressive taxation we're going to do just what you're doing a lamb tax ancient athens use that we're going to tax the land of x. wealth and everybody will pay their fair share with a progressive tax like europe that will be fine but what they're saying is we're going to come in and we're going to take your money and we're going to buy them and submarines and we're going to buy german arms and second hand american tax and we're going to spend it on the military you don't have any say in that and we're going to essentially shift the tax off well on to the population at large with a flat tax like europe is in one of the post soviet economies in the latvia and of those that aren't there not some some countries have had some success with success with flat tax but i do want to move on to wealth transfer transfer more broadly ok

because debt and other type of derivatives financial derivatives which you named were issued with literally no hope and no ability of the borrower to pay those back defaults were avoided because they transferred those payments to the public purse and now they demand austerity in conjunction with money printing to pay the interest how is that different from stealing. it's legalized sets you know in america when president nixon said when the president does that it's not a crime when the financial sector does that it's not a crime and in america and europe crime spend decriminalized you're allowed to do that and you don't call it run in america you've had not a single banker or kleptocrat be sent to jail by the f.b.i. they have been arresting the occupy wall street people who've been protesting against this now so you go to jail for protesting you don't go to jail for. stealing you go to jail for complaining it ups the and on the financial side of

things how is that price inflation a ponzi scheme. so while people say that the reason they want fiscal responsibility is to keep in place inflation and in place but the only way to keep the bank claims going is to fuel the largest inflation in history which is what we have seen in the last ten years is inflation of real estate prices and of corporate bonds and stock prices since nineteen eighty the world the same but the largest bond boom. in history and its interest rates have gone down twenty percent. one percent you have the recent violence go up the price of stocks go up and banks that lent heavily against the us if they were known to begin to raise interest rates you'd have the price of bonds go down real estate would go down and banks would be even further in the negative equity so the banks are in negative equity you know and essentially

they have to make a choice are they going to play in the positives where they want to pay the big gamble and certainly in this country obama says forget the guys that are taking the big gamble it's their our campaign to give us and it's pretty much the same in europe europe is not coming in and saying ok we want the greek banks to be able to be money transfers credit cards. but they know what banking you know writing checks we want them essentially to pay off all the gambles that have taken especially now that the vultures of funds of come in to greece and bought greek debt on the thirty cents on the dollar and they're saying we want a thirty percent now we want the european central bank the borrow from the front only settle to pay us one hundred cents on the dollar will make a killing by pushing greece into a generational depression that basically is what it is nice if they can't vote on it because obviously nobody is going to vote for depression. having

a centrally finance achieved today what needs to be achieved only by military warfare and dr rice and i want to continue this conversation we're going to get a break but we'll come right back because i want to talk a little bit more about what this all says for the future of capitalism what it means for at it what some solutions are so we'll be right back with dr michael hudson. now still ahead here i now have one world economic forum under my belt i'll debrief you on what i took away from it after the break but first your closing market numbers.

welcome back to capital account so some of the issues that we were talking about earlier and are in the show bring up a lot of questions about what capitalism in its current form actually is what is this what about casino capitalism take a look. you know if i didn't have the marwari one of these from the saloon would you learning

that it's going to be. no one's going to interfere with you running the casino how relevant this seems right now let's bring back professor of economics though michael hudson also author of this book super imperialism the origins and fundamentals of u.s. world dominance to talk about just how relevant it is because dr hudson you've mentioned because you know capitalism gangsters used to run the casinos we just saw a little movie clip of it is it any coincidence that gangsters run them again in the sense of the banks well that's what franklin roosevelt pointed chair of banks. this is their idea of free market is a market free from consumer protection free from anti-fraud laws and this is exactly it's kind of free market with the classical small you know the sort of ironic that they're using they're claiming adam smith in the classical.