markets. find out what's really happening to the global economy for a no holds barred look at the global financial headlines. bringing you the top news headlines and commentary from. your headlines right now. the father of a former f.s.b. officer poisoned in london six years ago says he was mistaken when he accused. of being responsible for his son's party gets his story firsthand from. the u.n. considers a new draft resolution on syria with a softening of demands for president assad to step down following criticism from russia and china diplomatic sources also say the motion is likely to have

references about an arms embargo removed from the text. more than six hundred have been injured in clashes in cairo as police fired tear gas at protesters this comes just a day after a. football match left seventy four dead. today looking into global financial delusions. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. ben bernanke he is defending the federal reserve's financial repression of save words

. i recognize that it poses our ship. the purpose of our policy though is to create a stronger economy. and he also says there are no signs of inflation lucky for us legendary investor jim rogers is here to tell us how wrong bernie is meanwhile angela merkel is in china reportedly trying to convince the country with three point two trillion dollars worth of foreign exchange reserves just for a little in the direction of the euro zone so one could shelling out for the trouble debtors by the largest creditor nation in the world will find out and another major euro zone credit pusher christine legarde we just saw her taking her fund raising efforts to the world economic forum coming to collect for the i.m.f. but one might her and more of these heavy hitting women the butting heads will give you the back story let's get to the day's capital account.

ok so ben bernanke the federal reserve chairman testified on capitol hill in washington today and you know it was really interesting it really sounds like u.s. congressman who is the house budget committee chairman paul ryan actually knows what's up listen to him talking about quantitative easing and the impact it's had on keeping treasury yields which is the interest the u. u.s. pays on its debt so low when true price discovery in our treasury markets like it has in other countries might give us the wake up call we need to get our act in order to fix our problem are we not lowering ourselves in a false sense of security by this intervention in the in the treasury markets it is just what we've been asking and here is burning his response our policies are

hardly unusual at this point. almost every major industrial central bank excluding canada which had less of a recession than we did has a large balance sheet and low interest rates then my money is doing. that is just fantastic i am so glad that's the rationale now i am not saying paul ryan is off the hook ok congress has been a disaster at dealing with the fiscal side of things but listen to ryan advocating for savers are you concerned at all about the very very very low interest payments that these savers are getting from these kinds of fixed income assets which are which are hitting our savings and investment side of the economy we are but here's bernanke you defending his policies saying the purpose of it is a stronger economy. if you don't have a strong economy if you have weak economy you're not going to get good returns on

all the other asserts ok so there's his rationale now this is a conversation we often have on this show and in fact we were just debating it yesterday and you know the fact is we're not central bankers here we're not economists we don't have ph d. we're not billionaire investor we don't have a financial show where we are trying to get to the bottom of all of this economic craziness the very best we can because we care desperately we think a lot is at stake this is really important so i took the topic again to legendary investor jim rogers if you don't know him who most people should he was co-founder of quantum fund with billionaire investor george soros was his partner there he's also a commodities guru author of many books including this one a gift to my children a father's lessons for life and investing i told him you know mr rogers i think savers are getting unfairly punished but i've been talking to people lately who say you know the economy is bad zero interest rates are helping savers are making money but right now no one is so this is just

a deal i asked mr rogers if he could clear up just how zero percent interest rates are helping the economy you know properly just to tell us. person i'm delighted to be here there are not many people i would come straight to the gym from to talk to but you're one minute just off the job. i don't know to whom you've been speaking but that is madness you have to have people who save and invest if you're going to build an economy i mean i don't know any economist in history karl marx even realized you have to build up capital in order to build up your economy so if you destroy the class which saves and invest you have no future you may have a present you may even have a next week or next year but long term you're destroying a whole class of people that whole and saving ethic that whole and. then how do you build an economy and the idea that there's no inflation war i mean those people must not shop i presume they have their bubble or do their shopping for them

because everybody knows that prices are going up all you have to do is go and buy anything to these days and you know that even last week you know the federal reserve in the united states changed their way of measuring inflation yet again they've changed their inflation measurement several times in the last few decades last week mr bernanke you said we're going to change the way we do it again and guess what the new way shows this and collation there is information war ok so the people that say you know government and measurements don't shell a lot of inflation and they're pretty pathetic so are those people just stuck or is that they're looking at these government figures. and you must have learned by now that if you listen to the government any government to get your investment advice you're going to go broke and us get away together with the russian government the u.s. government the germans those i'm not thinking it's all good the chinese government's the orderly you would know because you know about actually making money which is

that why i know that you know you're the expert on these things i want to look at the federal funds rate if i can bring up that chart for our viewers. it shows that during each for a session since one thousand nine hundred eighty the fed has taken rates lower and lower and lower so now we're adding there oh the fed is keeping them there at zero for a few more years according to their recent remarks what impact does it have that we literally have nowhere left to go with rates it shows that the reserve is totally incompetent and an incredible they don't have a clue what they're doing nothing they've done in the past several years has been right if you look at the statements of mr greenspan and mr bernanke you see that everything everything they've said over the fairest fewer years has been totally wrong and we know that their policies have been wrong this does not work it did not work in japan and the japanese of the last two decades the japanese stock market today lauren is eighty percent below where it was twenty two years ago that's not

a typo eight percent below where it was twenty two years ago they tried this absurd policy didn't work there it's not going to work here do you think that's where the u.s. has headed to see a stock market decline that much and a lot. well laura we've already lost one of those we already have one last decade as you know the stock market is not done very much in their lives ten or twelve years the economy certainly hasn't done much and you know as it were judged by real measures of course we're going to have another. at least what worries me the army is we're going to have another two or three by. the way these guys are gone and interest rates that the federal reserve sets that doesn't just impact the u.s. because the u.s. is the global reserve currency what impact does that have globally when rates are capped at zero and islam. ultimately it's building a huge distortions in the world economy as you know the us is the largest debtor

nation in the history of the world and our debts are going higher and higher and higher are going to these imbalances are going to lead to more currency turmoil more inflation turmoil all over the world most of the world already knowledge is that there is inflation i care i cannot think of many countries that don't acknowledge that there's inflation except except the united states we say there's no inflation it's astonishing to me on that everybody else in the world has inflation and admits that the united states i don't know how long journalist and the public is going to accept this alan kohler this is leading to a huge distortions in the world imbalances and we're all going to pay for them so then speaking of those in balance and the cost of those and balances i was speaking with someone who believes that the key to bringing manufacturing jobs back to the u.s. is a competitive dollar that if the u.s. devalues the dollar further there that will keep manufacturing jobs from going overseas and will bring them home is that then false well that's

a common theory and it sometimes works in the short term it's sometimes worse in the medium term it is never worked in the long term many countries that try this repeat of the if you just sell on price lauren yes you have an advantage for a while but in the end you've got to have the back up and everything else. devaluing the currency making your currency go less does give you a competitive advantage in the short term but i know of no country in history succeeded by. doing that currency and so in one prize and shoddy goods it's never were not in the long term ok so say they tried to do that now in the u.s. because they want they believe it will work in the short term more or whatever and ben bernanke he does devalue the dollar by printing more money what could be the collateral damage and i intended consequences of that. well the first is you and me and i mean we're americans and our cost of living and everything is going to go

through the roof and everything we buy is going to go higher and higher in price and we are going to suffer so that some in some businesses some industrial is can do better people will have jobs but are there is their standard of living better probably not because their costs go through the roof standard of living goes down that's the first collateral damage or three hundred million of us american citizens and american taxpayers we're the first fell out of that and that day is not what they're trying to achieve with that i don't think one thing that i wasn't clear on that i've heard people on different sides of it say that you would know best because you've been in the trenches you are in the trenches when we talk about wall street and speculators and what they benefit more from an overvaluing of the dollar a devaluation of the dollar. dippin. just got through saying if the dollar goes down three hundred million americans have

a lower standard of living because everything we. increases in prized and we and we use. if you have a prized currency and obviously it's good it's good for american citizens a sound i never heard many people many many knowledgeable people say that basing the currency is good for a country but an overpriced currency wars that you can this and we can all go to paris or go to paris for the weekend if we won't do that you have a problem we get by a lot of things from abroad high quality goods from abroad yeah i was just tense what's left of my money didn't go very far at all speaking of this issue germany has a trade surplus china is one of the largest importer of german goods there the two the world's top exporters the euro is relatively you know at least stronger than the dollar so does this kind of add to what you're saying that it takes more than devaluing a currency to make an export economy in the long haul. oh absolutely germany and

japan both have circuses with you know trade surpluses with the united states and their currencies have been going up against united states for decades the cameras are the japanese yen is up about five hundred percent against the dollar over the past several decades and they still have a balance of trade surplus with the united states and with most of the world no no no you cannot i mean that the politicians like to blame it on the chinese the chinese have big trade deficits with many other countries including germany and japan as you just pointed up and yet those current countries have a much higher cost of doing business much higher level than we do and yet they're still extremely competitive and it's largely because of quality and service and being attentive to the customers quality and speaking of germany merkel is going to be in china looking for beijing's support on the ailing euro she reportedly wants

china to contribute via the i.m.f. to a financial firewall to stem contagion from the garo zone crisis what do you think china will and should say to her. well i have no. i wouldn't i'm not buying european bonds if i were the chinese i would say no however the chinese do have another reason that they might it would be very cheap foreign aid for them it would be very cheap ways to buy influence and power if you will because let's say they spend a few scores of billions of dollars buying bonds in europe then europe has to pay a whole lot more attention to them at the i.m.f. hit the world bank at the un etc etc you have the europeans have to be much nicer to the chinese if that happens so i mean as an investment i wouldn't do it not for a long term investment if i'm trying to buy something else and that's another consideration and you said that you're certainly not buying at european bonds right

now right that's what you just said yeah that is right ok so it may be a very good speculation right now but i'm not very good at speculating i just like that but long term investments and it looks as though things are going to be better in europe for a while for a while while it's issues just like to get through the next election but longer term it's still huge problem. and with those political interests are we seeing bank bailouts and we're just not hearing about like hear from john rogers about it part of their closing market never. touches that so much. which of course you're right i think you actually once

president campaign become a horse race pretty common rockabye much against republican beat romney if this is really the case with. well. technology innovation all the developments around. the future are covered. welcome back to capital account german chancellor angela merkel is in china reportedly seeking a little cash from china to help europe also reportedly pressuring china to do more on the wrong now according to reports so far sounds like the chinese premier is saying iran i don't think so stop politicising our commercial interests this european bailout fund though that i'll consider so why what would be the benefit of

that will i asked jim rogers and also he told us about his investment outlook for china but first more on europe. you've been critical of the eurozone monetizing the debt and i think it was interesting i was in switzerland i was at davos and some of the bankers there were saying that the arrow has been very successful and averting a credit crisis and a liquidity crisis but politicians did the l.t.r. oh technocrats in order to try to get these banks to buy european sovereign debt which they haven't done instead it's just you know as i said averted a credit crisis or a liquidity crisis in their view is this just another example though of politicians or governments doing whatever they think is going to help but in the end of the day it's just a bailout for the banks. that's exactly what it is that's good and sure i mean you pump out hundreds of billions of dollars for two or three years

everything looks better for the people who get it but in the end on its worst for all of us it's worse for the world because three years from now or two and years from now we're all going to have to start dealing with these problems that they're not solving the problems no country that's involved here shows the deficits a year from now or two years from now three years so all this is is that ok let's get through the next election or two and then things will be better but nobody nobody as they want to show you a balanced budget or reduce that. over the next few years. just continues to build ok speaking of problems building up some people think china has problems building up and i want to bring up paul farrelly market watch has been writing he sat there singing your praises as a commodities guru i want to bring up what he said about if people should follow you. in china he says should you follow his lead forget america invest in china the

world's greatest market maybe follow roger's earlier advice and hot commodities how can how anyone can invest profitably in the world's best. market he says don't this is a no win scenario for china the usa the world and yale so tell me what do you say to that. i think mr prout should short commodities and should short china it's very simple we don't want i don't argue with anybody there's no reason to argue all you got to do is write down what he said right so short the commodity is so short china and we will see in five or six years who was right and who was wrong this is not something to argue the market will tell us what the answer is pretty quickly but so far all you do is you pointed out all of europe is now in china trying to get them to bail them out. china and europe try to get your to bail them out america is a job of trying to get. the us out canto mr farrel better read better watch

r.g.p. . see who's got the money and who doesn't have the money because so far the chinese seem to be doing oh i'd better and certain they'll be setbacks in china of course and we in america have horrible setbacks as we rose to power to go over but in the . midst of these alone yes two choices you could draw divorce from the us a good driver barred from china a as a good boy but what about some of those concerns about the housing china over building of luxury condos nothing. too big of a government footprint a bubble that's collapsing are those problems you're worried about. i don't know what i don't know where the global is the chinese stock market is down about seventy percent from its all time high it's a very strange bubble that is. as far as property yes as that are both in urban coastal real estate this list of pros

a little late again the chinese have been trying to pop that bubble for three years they have. prices coming down they've raised interest rates they've raised reserve requirements several jobs so i'm not the only one who knows the real estate problem they knew it the world knew it and they're doing something about it but let me repeat what i said before and our china will have said backs we in america in the nineteenth century had fifteen which is the civil war horrible civil war no human rights massacres in the streets very little rule of law and yet we became the greatest country in the twentieth century china is going to have a lot of setbacks and you've said that so i don't know what it when or why but to repeat if you need a loan you're more likely to get it from china than you are from the e.u. as you know this is a large debtor nation in the history of the world china is the largest creditor nation in the world despite said they're going to do well it's an interesting song and dance they do together speaking really quickly before we go we're almost out of

time but mr rogers i was just in davos for my first time at the world economic forum where experience for me i'm not a billionaire i'm just a lowly journalist obviously i only have my perspective on the thing but i didn't hear a lot of creative thought or innovative thought i why are so felt like i understand where the herd mentality comes from when it comes to conventional wisdom i'm wondering you've been around longer than me even you know done very well what's your insight on. why do you said been around longer than you. oh i don't mean it if i said are you saying i'm old and not on. your side about herd mentality is as well said extremely well said lots of things when they're in the beginning their love their very cutting edge but after a while they become. part of the crowd. you've heard of legendary investor and

author jim rogers. all right we've got a fun new graphics. to talk about some of these stories that we didn't get to. our producer here in the studio and shannon donahoe in the news where the control room scares me where am i ok so with the craziness of the eurozone with the debt crisis. it's really become that there are two women that are really kind of the most important in dealing with the financial crises that face the globe one of them is is this one let's roll the tape. here with my

little bug to actually collect a bit of money. so there was christine legarde in davos she's head of the i.m.f. collecting money for the i.m.f. the other woman angela merkel the leader in germany and she is collecting money for the i.m.f. for europe and china as we speak but there's this article talking about you know the female titans that they are but but saying are they is this the battle of the female titans you know or is there tension and the the article cites you know look guard criticizing germany for relying too much on exports and then talk about how fireback kind of a response to that at her speech at the world economic forum so i don't know do you guys buy this well this is the reemergence of the franco german rivalry right we've seen that that was the time of bismarck we saw it again in world war one and world war two and france is still reeling from the defeat so i think merkel.

being chancellor she was in the limelight now christine lagarde as you said she was majestic and. very tall very elegant woman. i think it's i think going there clearly a level of competition i don't blame. ok you know what. i am sorry this is b. ok it is that they're citing a merkel firing back against what glo guard said about germany everyone is. criticizing germany right now i was at davos cameron david cameron from the u.k. george soros everyone is indirectly criticizing germany because they want germany to spend more money the fact that they are being blown up is the clash of the titans this is written by a man ok men just don't like women however they think they can't get along i think this is misguided and. i think it's just interesting how women fight as opposed. to get out and shout that each other woman spreads rumors oh come on this is just a little of stereotypes women and men both fight dirty they both you know are

passive aggressive i don't buy it women ok let's move on. if you guys this is an absurd ok speaking of fighting this is the lawyer that evidently fights the best against wall street according to time magazine this is the man busting wall street their least favorite attorney he is pretty. i hope i said that right he has a record of zero losses when it comes to insider trading but when you look at some of his tactics and we already know what the tactics are on wall street ok it makes you wonder if this fight is going on more like this. or with your. removal. we've seen a little. ok and we're almost out of time but just quickly this guy wiretaps conference calls for ninety three people

with no reason to do so he's best friends with the author of the patriot act is this any better than the guys he's fighting on wall street this is of these guys going to go to a far far with far after nine eleven the gloves are coming off this is how we have to go after wall street you've got to you've got to know your wrongs don't make a right. that a time but you just want to add the final word. to. thank you two to one to me to you. over roles whether or not that is already out and i want to tell you that's all we have time for our show is over thank you so much for watching now chicken feel free to follow me on twitter at lauren lester you can give us feedback at youtube dot com slash capital account and you can come back tomorrow for a very exciting show including a video you didn't get to see me with no make up but it's also interesting ok well see you tomorrow thanks for watching connect.

the losers. we'll see british scientists on. sometimes i just want to go.