nine thirty pm in moscow these here are t. headline volleys of tear gas fired into crowds of protesters in egypt people rally there for a third day with reports of at least thirty killed protests against the military rulers broke out after wednesday's football violence left seventy four dead. moscow says it can't support a new draft resolution on syria at the u.n. although the text had been softened to overcome some of russia's objections and still fell short of addressing moscow's main concerns. at all polling stations across russia to get their own digital. cameras are installed on the prime

minister's orders the move was introduced by vladimir putin as a step toward stopping electoral fraud in next month's presidential election. up next capital account with laura lister who's today looking into the global financial delusions stay with us. good afternoon and welcome to capital account i'm laurin this year here in washington d.c. ben bernanke is defending the federal reserve's financial repression of savers. 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 budding hads 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's 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 the way when 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 look up early just to tell us. person delighted to be

here there not many people i would come straight to the gym for him to talk to but you're one minute just left 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 of coniston 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 in the us and yet they 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 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 the last rate mr bernanke you said we're going to change the way we do it again and guess what a new way shows this and collation but there isn't traditional or ok so the people that say you know government and measure it's don't show a lot of inflation and they're pretty pathetic so i don't if people just sucker is that they're looking at these government figures. and you must have learned by now that if you don't listen to the government any government to get your investment advice you're going to go broke and u.s. get a better way to go with the russian government the u.s. government the germans those i'm not thinking it's all good chinese governments it's only 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 recession 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 into a bubble 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 there for as few or 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 a zero 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 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 the list ten or twelve years the economy certainly hasn't done much in the ten or twelve years it were judged by real measures but 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 cuts are going on 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. oh it's only 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 up or not higher and higher they're 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 an inflation i care i can't think of many countries that don't acknowledge that there's inflation except except the united states we say there's no inflation is 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 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 the competitive dollar that if the u.s. devalues the dollar further that will keep manufacturing jobs going overseas and will bring them home is that then false well that's a common theory and it's sometimes it works in the short term it's sometimes works in the medium term it is never worked in the long term many countries to try this

repeat of the if you just sell on price lower and yes you have an advantage for a while but in the end you've got to have quality backup and everything else. devaluing the currency or making your currency go out does give you a competitive advantage in the short term but i know of no country in history that succeeded by constantly valuing their 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 industry some businesses some industrialist

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 a 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 but 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. i just got to say if the dollar goes down three hundred million americans have a lower standard of living because everything we. increase is in prized and we and we are if you have a prized currency then obviously it's good it's good for american citizens

a sound i've never heard many people many many knowledgeable people say that you're basing that 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 of 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 surpluses with you know trade surpluses with the united states and

their currencies have been going up against united states for decades that cameras are the japanese yen is up about five hundred percent over 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 but i mean that the politicians like to blame it on the chinese the chinese have a big trade deficit with many other countries including germany and japan as you just pointed out 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 their customers. ok 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. i i

wouldn't european bonds if i were the chinese i would say no however the chinese do have another reason that they might have it would be very cheap foreign a 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. at 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 yes i have that is ok so it may be a very good speculation right now but i'm not very good at speculation i just like

the long term investments and it looks as though things are going to be better in europe for a while for a while oh it's issues just like to get through the next election but lowered sort of it's still huge problem and. and with those political interests are we seeing bank bailouts and we're just not hearing about we'll hear from john rogers about it but first their closing market numbers.

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 iran 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 l t r o has been very successful in 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 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 it's worse for all of us it's worse for the world because three 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 involve you shows the deficit is 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 nobody showed you a balanced budget or reduce the debt over the next few years. just continues to build ok speaking of problems building up some people think china has problems building up then i want to bring up paul farrell at 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. and china he says should you follow his lead forget america invest in china the world's greatest market maybe follow rogers earlier advice and hot commodities how can how anyone can invest profitably in the world's bed. market he says don't this is a no win scenario for china the usa the world and you 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 to 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 as you pointed out all of europe is now in china trying to get them to bail them out. china's i mean you're trying to get your debate over them america's job of trying to get. bailed the us out can't go mr farrel better read or watch r.g. t.v. . see who's got the money and who doesn't have the money because so far the chinese individual you know i better and certain they'll be setbacks in china of course it will be we in america have horrible setbacks as we rose to power to go over but in the end. these alone yes to joyce is a good job divorced from the us a good driver barred from jaya a as

a good point but what about some of those concerns about the housing 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 than seventy percent as far as property yes it has that abode in urban coastal real estate but this list of pros a little late again the chinese have been trying to pop that bubble for three years they have bubble 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 our china we don't have said backs we have american 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 child 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 you 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 any of a to have thought i more 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 say i've

been around longer than you. oh you know an old man you play said are you saying i'm old and not on. your inside 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 got a fun new graphics. to talk about some of these stories that we didn't get to with our producer here in the studio and shannon donahoe in the newsroom where the control room is newsroom where am i ok so when 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. with a 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 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 article cites you know lugard criticizing germany for rely too much on exports and then talk about how. fire back 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 a 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 clearly a level of competition i don't blame. ok you know no 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 what you know how are they think they can't get along i think this is misguided and you know. i think it's just interesting how women as opposed. to get out women and shouts at each other women's sports 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. the more we sure. are in the. you know lou you know. what's. 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. that it's time but you just want to add the final word. to. thank you two to one to me to you. our overall

whether or not that is already how times are 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 without make up but it's also interesting ok well see you tomorrow thanks for watching today.