later on and ron paul may not be leading the polls for the u.s. republican presidential nomination but is he a mouse in the political capital needed to rein in the brony capital we'll tell you why you may be building the clout he needs to do just that limit the power of the federal reserve one of his signature goals let's get to today's capital account. so great debt talks are dragging on but we're used to that by now come on negotiations have been going on and on to try to get greece to cut spending to meet the terms to get its next bailout to avoid default we know the drill we could recite it in our sleep the latest so more cozy has met they're stepping up pressure

to meet conditions of the next bailout merkel is saying time is running out but does all of this kind of show a bigger political issue that a lot of times we view things from this international prism but the reality is there are are internal politics going on in all of these countries this type of political wrangling for example going on in greece could give greek politicians the cover they need to say oh we got strong arms we had to do this so they can say we did the best we could just a thought as we look at what euro zone solutions mean for europe and for the rest of the globe and the impact not to mention let's look at the cost of the solutions debt to g.d.p. numbers came out from the euro step showing there were wide variations among different nations but there was one trend countries with bailouts from the e.u. and i.m.f. all saw their debts rise greece ireland portugal same

thing here is greece for example so their debt to g.d.p. was one hundred fifty nine percent about for q three two thousand and eleven that's up from just under one hundred fifty five percent which is up from a hundred thirty eight percent at the same time q three two thousand and ten so how are those solutions and what should we be looking at when it comes to debt and regulations and these solutions for the us to know where we've got a big debt load year where i'm sitting in that washington is supposed to be taken care of mike norman is here to talk about it all chief economist at john thomas financial he's going to help us sort this out it's really nice to see you mike too because i haven't gone to interview the. if you for a while because you were on contract with a certain network fox news according to your tweets that i've been reading you are no longer going to be doing that just do you want to tell us briefly why is your tweet seems quite opinionated about why i. know it's look it's been

a great run ten years you know it's time for me to move on i mean i've been under an exclusive contract at fox for the last ten years i'd like to be able to do other media but i had a great time and it's just time to move on that's what i'm going to say about that mike your tweets up here right now it says i don't have to deal with their propaganda anymore you want to add me thinking. well look i just think there's a big opportunity out there right now to talk about economics and policy sort of in a non mainstream way and that's what i do and that's what i bring to the table and i think you know my voice might fit better at another venue we'll see but i had a great run it's a great organization and it's time to move on my you personally mike what can i say i couldn't agree with you more about the opportunity for non-mainstream views especially given the economic turmoil that we continue to see you know three years after the financial crisis i can't tell if it's getting better or worse but let's

talk about greece because here is somewhere where we can we can apply all that ok talks are going on same old thing blah blah blah markos he's pressuring them leaders are trying to figure out how to cut spending in order to meet the terms they need to get bailed out meanwhile you are the numbers i read a debt to g.d.p. has grown for greece same as other bailouts nations as a result are perhaps of the policies that have been prescribed to them it seems like the basic issue here is that these countries have been prescribed medicine that are making their economies worse not better. yes exactly you know this is the classic this is einstein's definition of insanity right keep doing the same thing over and over again and expecting a different result look the problem with these bailouts is that they always come with conditions and the conditions are deep deep sterrett in happens is that you create a vicious cycle the austerity causes the economy to contract further it causes unemployment to go up it causes tax revenues to these nations to go down and you're

left with a bigger deficit the way out of this is through growth but you're never going to get that with those stereotypes i think the important thing to remember in all this is that these countries in the eurozone they're functionally like states in the united states i mean they can go bankrupt they no longer issue there. and currency they have no control really over their own monetary policy so they can get into a debt trap and when you prescribe you know when you get these loans but at the same time these conditions are imposed where you have to basically shrink your economy the debt becomes greater as a percentage of the economy and we're seeing that happen right now so it's a vicious circle it's a spiral down and we're you know the problem is that it's not only a debt crisis or an economic crisis it's devolved into a humanitarian crisis i mean and see people now really really destitute and

desperate and it's an awful thing to watch and it's again the same policy over and over i couldn't agree more and there isn't an effort to fix the actual economies which is what you're kind of getting at but it does seem there is an effort to extract as much money as possible for investors is this a form of extraction as capitalism were saying. that's one way to put it right i mean i'm imagining a scenario where some investor made a bunch of terrible decisions lost all their money and then went to the original clients and said ok now you've got to pay me back one hundred cents on the dollar for those terrible investments i just made well that's essentially the situation that we're seeing right now in these countries where the financial sector. took huge risks and lost trillions and trillions of dollars and now basically asking the people through their governments to make them whole again one hundred

cents on the dollar and forcing the governments to impose these conditions on the people in their nations have basically giving up their own sovereignty in order for that to happen i mean if you look at greece right there of former. democratically elected yet resident pop and radio he has stepped down i mean say what you want about the guy maybe you don't like him but he was a democratically elected leader and say the same thing about italy yet same thing exactly and you know the thing that's the funniest to me mike is that we've kind of gotten used to this you're talking about how this is even a humanitarian crisis now and it's a vicious cycle but it's become an offense the right norm where we're measuring progress against the financial crisis in two thousand and eight this is a little better than we could have hoped in this is a little worse but you know there's not a lot of hope and not so i'm curious where you think this is headed you mentioned some of these countries could go bankrupt. yeah well for now we have the

e.c.b. sort of acting like a cause fiscal authority for europe but i think that has taken at least for now the whole solvent see issue off the table you know lauren an individual could be insolvent right they could have debts or liabilities greater than their assets but if they're able to pay their monthly payment every month even if it's the minimum you know they could probably existed that condition or go on in that condition for a long period of time and that's kind of like what we're seeing right now in europe where the e.c.b. you could equate the e.c.b. it is sort of the rich uncle who's stepping up and making that payment for these countries but you know it's kind of not in the d.n.a. of the e.c.b. to do that germany is putting pressure on the e.c.b. so i don't know how long that could continue it almost seems like every time we're ready to go over the edge the e.c.b. is there and it's supporting these nations but the policies are just designed to fail it's a matter of time unless we see

a change in the european constitution that allows the e.c.b. to basically allow these countries to run deficits long enough so that they could resume growth but then you could still argue that you're pushing them to that cleft they're not going over it yet you're just prolonging how long they're able to stay going down the road so my question to you is what does this say about dad not just in europe but in the u.s. i know you think it's a different scenario but come on there's got to be some lessons for the u.s. where we have a high dad and we're running these fiscal deficits that are pretty big. why it's not that i think it's different is it is different i mean the debt in the united states yes it's a liability of the united states government but it's not a liability that the united states government can never meet because the u.s. government is the monopoly issuer of the dollar our debts are denominated in dollars and so therefore it's not a dead where we have borrowed in another currency or it's tied to some fixed rate

of exchange or there's a gold backing or something like that and the proof is in the putting lauren i mean we've been hearing so much about the debt in the united states and remember it's and p. downgraded the credit rating of the united states and guess what interest rates have been going down down down down down and we were warned that oh gosh if this ever happened we're going to see a spike in interest rates and foreigners are going to sell their bonds and foreigners are selling their bonds the chinese have been selling a lot of their u.s. securities interest rates are going down and that simply because the rate is set by the fed i mean that's the way it works is mike isn't that an unsustainable model ok we're talking about rates being loud and they're low because of that everybody still has confidence in the u.s. and it's not as bad as the alternatives right now the euro zone is a disaster what about when you lose that confidence even banker nagy says that you can't keep confidence and have fiscal deficit this high. ben ben bernanke i mean he

has basically lied to congress in these statements that he made i mean and he knows better more and he knows better he you know when he tries to equate the united states to europe or to greece for that matter he knows that is not the case and i have no idea why he goes on record and makes those statements look what we on any idea call it want you could want congress to act to do something and could be putting pressure on them but that aside what you're saying that the solution is the fed can you know print money we can get out of this debt it isn't got a tax on everyone that's holding dollars isn't that affecting the purchasing power and taxing every american one how is that because if you read i mean the fed cannot we hear this all the time that the fed prints money the fed does not print money if you read the federal reserve act the only thing the fed can do is make

a loan is discount something so it'll take one asset a bond or something from the public and it'll exchange that for a balance in the banking system a reserve balance ok so they have to create there they have to create debt in order to issue money but at the end of the day that's still issuing money so expanding the money is monetary supply lauren if i take a million dollars worth of treasury bonds from you which is this an obligation or a liability of the united states government in the value of one trillion and i give you one trillion in cash yeah your net worth has in chains you haven't suddenly received a million new a dollar or nine new net finance and now look my god i don't know what that about for just one second i'm not interrupting you i literally have to go to break we will be right back with more with you that in just a minute i would back with mike norman he is chief economist at john thomas

financial. and still ahead a new report about ron paul says he may be building the clout to move reigning in the bed more into the republican agenda class mike norman if he thinks we could see a more comprehensive audit of the fed the first your closing market numbers. old. technology innovation all the developments

around russia we've got those huge earth covered. welcome back ok i want to continue this conversation with mike norman we were talking about money printing he says it's not money printing i want to bring up this issue of of who exactly though is benefiting and one of the people we're talking about often is wall street take a look at this cover of new york magazine it says the emasculation of wall street that's a cover story and it's about how it's a really different time for wall street now that this is a bad year in a different way according to people on wall street bonuses have been kept dodd frank is changing the shape of the system but what emasculating wall street be more like pressing charges firing c.e.o.'s taking away bonuses in time. i really like

we've seen in the u.k. and what about reports that show that these regulations aren't exactly applied fairly i want to talk to mike norman about all of that mike i'm going to bring back into the conversation and i hope you don't i wasn't cut you off before literally we have to hit our break sat it's not my control but i do want to ask you about about this this issue of regulations because you have you know new york magazine on one side saying hey wall street is change these regulations are hitting them but i mean really would emasculating wall street be a lot better than that we see in the u.k. they had banks that have received huge bailouts not being able to accept huge bonuses and also i mean even losing their knighthood that sounds like emasculation i mean. listen for one hundred years we basically had not one hundred years for seventy years we basically had glass steagall which the wall street that existed for that period of time where banks were not allowed to do this proprietary trading and get involved in securities business so you know if we're inching back

to ever so slightly in that direction we're certainly not reimposing the glass steagall by any means is that an emasculation i don't think so i mean if anything you see the growth in the proliferation of hedge funds and by the way a lot of these traders who were on prop desks at the major banks now moving over to hedge funds the same type of activity is going down and we see the explosion of high frequency trading which is making the markets crazy more like a casino than ever so i think it's really hard to argue i mean you might get it from some of the big wigs of wall street who are good you know. a little bit about the loss of their profit but i mean if anything i think we're just seeing a transformation of wall street there's more speculative activity than ever i mean i don't see this as an emasculation i mean they're they're upset about one year that their bonuses are not going to be

a record. but come on i mean there's still out there in the rest of the economy there's still a lot of people suffering and if you don't think there's going to be there was some kind of backlash against what we saw the huge bonuses and really the question what does wall street contribute to the real economy think about it i'm not talking about traditional firms that raise capital and you know help to start up north i'm talking about all this speculation i mean for most people you know if that's translated into you know higher fuel costs higher food cause higher divorce for pretty much everything and i think you could understand the public's displeasure with this and the reason that policy may be shifted a little bit but i don't see it as a mess and like you said it's this new normal where we're gauging things based on the worst of times not you know a broader look at things and there's this report too from the new york times that the s.e.c. actually has been giving waivers to all of these big big firms that committed fraud

three hundred fifty intense as over the last decade but before we go because i just have a minute left i want to ask you about this ron paul story there's an analysis in bloomberg saying that he could be getting the clout he needs to within the republican party bring a lot more attention to the issue of the fed and possibly push for that bigger audit that he wanted or changing the fed's mandate from a dual mandate to you know just the one issue of price stability do you think that we could and should be looking at these measures from the fed. well i have no problem with the of fed audit i mean we saw the fed basically handed out twenty nine trillion in low interest stories zero interest loans to the financial sector was that necessary we see the fed doing these massive multiplayer hundred billion forex swaps with the e.c.b. and other foreign central banks i got no problem with that the elimination of the fed i think ron paul stands for that a little bit i don't think that's necessary i think it's good to have an

institution which you know let's say sets the interest rate on us money but basically the fed and the treasury should switch roles i mean the treasury should be the one who credits bank accounts like the fed does now and the faith should be the one that is shoes debt to control the interest rate will set the interest rate where it wants i mean if we have the treasury in the bed or if they consolidated both under the treasury i think we'd have a much better system that's a really interesting idea i'm mad to bring you want to get it you'll come to talk about that mark is that i also love to talk about zero percent money now you can resell excited we're out of time for now that thanks so much for being on the show that was mike norman chief economist at john thomas financial.

ok before we go dimitri is sick so wish him well we can banter back and forth today where shannon and the team but this gives me the opportunity to respond to some feedback which is great because on friday i tweeted one of my concerns about the job numbers that kind of started this firestorm so this is what i said about the jobs numbers i said anyone sharing the jobs numbers please tell me why i should be excited that over five point five million people forty two point nine percent of the unemployed have been out of work six months are more is gives me a pit in my stomach now this part a conversation about what are the solutions to unemployment and more broadly the u.s. economic problems dylan ratigan tweeted capitalism requires capital seven hundred trillion dollars and dark credit insurance is our current market foundation start they're really good point we couldn't agree more hopefully we'll have them on the

show soon to talk about that tweet also spurred some people who disagreed with me vehemently and were very excited about the jobs numbers chad smith said it was because it's a start and better than nine percent unemployment let's pull up not down robert ma she said it's clearly been a long time since you've been excited about anything provocative in a very boring way sorry to bore you mario and john johns made his point by tweeting to me hopefully you'll lose your job and hopefully you have nowhere to turn and you have to live off unemployment insurance then you'll see it differently wow i mean wanting someone to lose their job is a little bit of a harsh way to disagree with them but. of course if i was one of the people who had gotten a job in this last month one of those two hundred forty three thousand i'm sure i would be very happy to have a pay check absolutely their plight is important but i sometimes think that the shortsighted media analysis and market reaction to a good job report

a bad job report month to month distracts us from the big picture and dealing with the structural issues which are still a major problem then i read author and financial advisor john piece posted on business insider and it summed up a lot of what i was trying to point out so i suggest you read it because it's good with a lot of things i can't just reciting here i had a lot of interesting things to say about the revisions of these monthly numbers for one of course the broader perspective is this in the numbers it takes about one hundred twenty five thousand new jobs to keep up with population growth each month that means we created roughly one hundred twenty thousand jobs that helped bring down the unemployment number the u.s. has created almost three million jobs in the last two years that means we only need another seven million to get back to where we were in two thousand and seven. excuse me i have to call it's going around then there's the issues of wages in income in getting at the kind of job creation we're seeing he post this chart

pointing out take a look at it how real disposable personal income has gone for the last since two thousand after rising in line with inflation for a very long time so disposable income look at that it's below the rise in the c.p.i. and inflation also points out government transfer payments have been an increasing share of disposable income since the beginning of two thousand and eight and then there's the b.l.s. occupational projections through twenty twenty five job titles with the biggest projected increases in numerical terms let's see them registered nurses retail sales persons home health aides personal care aides and office clerks of those the first requires no more than an associate's degree the last a high school diploma and the middle three less than high school of the top twenty occupations just five require an associate's degree or more so there's a little food for thought before you go into debt for a college education for one but all of this should be

a lot of food for thought when we talk about jobs numbers we believe that was the point of my tweet i hope now you don't hope i lose my job. i hope i don't anyway moving on there is a youtube channel dedicated to i guess going after peter schiff the name is a pun that i can't say on t.v. but i'm sure you can guess it peter schiff they've been positive towards us before here's an example recently they put up one of our video saying lauren lyster teaches economic well whatever peter schiff the word of the day deflation but then they posted a video talking about how we're. we're pushing austrian economics as the solution to the problems anyway i don't know exactly what they said because we responded and we actually invited them on the show to tell us what their problem is to talk about it with them and they took down the video there's the e-mail saying they took it down and also evidently their objective is not to attack our team but actually they invest funds looks like in alternative media they see it as an

opportunity so that's a little time to think about but we wanted to clarify for anyone who thinks as they think we're not austrians on our show we have austrians keynesians people who subscribe to m. and t. as mike norman does that deflation is we don't endorse a specific ideology we do endorse alternative thought and i just want to leave you with that oh no this kind of funny segment we did oh excuse me i can't go to that we have no time we're going to leave you with that thank you so much for tuning in and i'm sure i'll be able to give you more of that viewer feedback later in the week in the meantime feel free to follow me on twitter at lauren lyster give us feedback on the show a you tube dot com slash capital account you can see that we take it all very seriously and if we don't respond you on the show you can often see our producers responding right there on the board so stay tuned this week we have a great lineup princes going to be on tomorrow i'm sure we're going to talk more wall street and in the meantime from everyone here at capital account have

a great night.

it is clear that efforts to end violence must be accompanied by a dialogue between all political forces syria's president confirmed that he is ready for such work breaking news this hour syria's opposition signals it welcomes russia's mediating efforts in trying to bring them and the government to the negotiating table this after president assad assured russia's foreign minister of his readiness to talk to all political sides and promise syria's new constitution will be soon put to a vote. and as russia stepping up diplomatic efforts to solve the crisis in syria major european and gulf states recall their ambassadors from damascus. standoff clashes in the athens streets as protesters voice anger and massive new jobs cuts will coalition members struggle to agree to more austerity measures to secure our vital second bailout. and

a discovery about could reveal previously unknown forms of life russian scientists drilled deep into a subglacial lake in the coldest place on earth exploring the significance of those who are fighting with our correspondent. now you're up to date back with more in about thirty minutes but first the ilona show stay with us. welcome to the alone a show where you get the real headlines with none of them or see where you live in washington d.c. now it's not going to take a look at what countries could be planning next in regards to syria as u.s. lawmakers say that they're working on other options after u.n. security council resolution was vetoed by china and russia over the weekend scott horton is going to join us but a new report from the bureau of investigation.