in fact last year i'm not sure if it was a record but it was definitely a high nearly thirty five billion dollars in foreign sales of u.s. weapons. and these are companies again like boeing lockheed martin raytheon now i know that recently there was an announcement to some proposed budget cuts to the pentagon so what happens if these large companies we know they're not going to accept less profits and i mean the previous year what happens when you know the pentagon starts giving us not money as they're used to what will they then you know where will they export these weapons to continue to make money will be more pressure to export because if they're losing revenue from the pentagon here domestically in those they would gee you know want the economy to go south we're already seeing arguments that we need to keep defense spending high for the economy but if that doesn't happen then the companies are going to go well you know we could provide jobs in the state of that district if you just let us export

a little more just open the gates. sport so there will be more pressure to export if the pentagon budget is being cut at home what's the biggest concern you think americans should have about what we're seeing here well i think. the unintended consequences of all this what happens at the side does get overthrown the israelis were originally very cautious about this because they didn't really know what was going to follow and i think that was the probably the best policy is to be a little cautious but you know sometimes the united states gets. extatic about doing in a one time adversary and i think that's what happened in libya moammar gadhafi started to play the west game he gave up his nuclear program he was making amends with the west yet we had this opportunity when an internal revolt overthrow him i think the same thing with assad with assad it's just irresistible. not to go

after this guy who we've built up as an enemy over time now it's a totally artificial enemy and we should be doing this sort of thing but i think that's the temptation is and you see a lot of pressure in the u.s. to actually create a no fly zone or actively take military action but people are saying well you know this is syria this is this is not libya and syria is right in the middle of israel turkey all these key players in the middle east to be a little more cautious so that's why you see this movement to do something a little less than that and that's get weapons to them but they can do that surreptitiously because oftentimes what the u.s. does it gives weapons to its it well encourages its allies to export weapons surreptitiously and then says well will replenish your stocks that way the u.s. can keep its fingers clean sort of stick and that's what may be happening with turkey as far as selling or giving weapons to the syrian opposition right now it's a model situation we don't really know what's happening but given task history that

might be one way that it will shake out certainly interesting when you look at sort of the criticisms being launched versus some of the actions being taken i line with what's going on ivan eland senior fellow at the independent institute. well it was a make it or break it decision in greece earlier today a vote by the parliament there on whether to approve yet another round of austerity measures and therefore pave the way for the eurozone finance ministers to move forward on a bailout plan for greece the greek parliament did approve that austerity plan and one hundred ninety nine to seventy four vote included in that plan fifteen thousand public sector job cuts a lowering of minimum wage from seven hundred fifty one euro per month to six hundred euros per month and several other cuts in government spending wages and pensions that are sure to have some major impact on the people there now the decision was seen as a necessity for the country to avoid a default on its debt but thousands in greece are fed up with what the austerity

measures have already done to their lives and their economy and they made sure that that anger was known and the. police estimate eighty thousand protesters turned up in the streets to protest they set more than forty building buildings on fire and hurt rocks and fire bombs at police who in turn used tear gas and arrested dozens of people now the concept of the plan was seen as a major step but the approval of the second package will not be decided at least until wednesday when finance ministers are scheduled to come together for a meeting. a lot of people of course will be keeping our eyes on what's happening there and to talk a lot about what a few of these decisions might mean we're going to the president of euro pacific capital here said he is and he says access hey there peter what do you think is this the right move by greece's parliament was the right direction maybe it's not the right order of magnitude the problem is the austerity is an austere enough and

you know if the greek people are protesting it shouldn't be out there staring it should be the praful you see of the greek government that may be austerity necessary and as i said earlier he is going to get more steer before it's over but yes they are moving in the right direction albeit much more slowly than nations so you think further and larger cuts should have been made. then were decided upon i absolutely and i think they're going to be made i also don't think the greeks can repay the restructure debt i still think it is too much debt on the greek economy and they're going to have to have a bigger haircut to make it possible that you know what should really be so alarming is the extent to which greece is broke because they were just as broke a couple years ago but no one cared if you keep borrowing money that's the same situation that we have in america we're just as broke except that we can keep borrowing because people haven't figured it out that but once the bubble bursts

once don't want to lend us any more money it were the same us circumstances now it's i wonder i mean as something that this bailout is approved on wednesday what do you think i mean it is one of those situations where it's going to get worse before it gets better. it is so i think there's more cuts coming both as far as haircuts on the bondholders and more cutbacks in government spending i mean that's the should just be lowering the middle way they should be a policy good but you know a lot of countries have these minimum wage laws it's it hurts our economies but you still have too many people employed by government you still have government meddling too much in the economy and that has to stop you know i think what really should have happened is they should have defaulted completely stayed in the euro and dramatically cut government spending that didn't happen but i do believe that what they're doing now is better then simply leaving the eurozone and trying to perpetuate massive government with

a pretty president drama because if the greeks think it's bad now will they see how much worse it would have been if they took that took that well i mean i'm wondering for so many of these people that are in greece the people who have been out of work already or will now lose their jobs council me i mean fifteen thousand more jobs cut. last wages than even they were getting before i mean a lot of these people this is going to really really impact them and you know how are you going to stimulate any sort of the economy that's not even in the realm of focus right now trying to stimulate our economy because they're just cutting and cutting and cutting remember a lot of these jobs were a drag on the economy were good wait the greeks are better off without wasting the late. we seem to have lost peter a little technical problem there i hope we're going to get him back but again we're going to of course keep our eyes on what's going on in greece and i think we have clear back lots of first second pair but you were talking about you know just the

people in greece should be concerned about it's going to get even worse than it is whereas now i thought it was they're better off without these jobs the economy will be more productive if people stop working for government instead and work productively in the private sector the economy was still going because the greeks were able to borrow money and spend it but that's what we're doing in america they were perpetuating a phony economy if you really want to create what we growth in greece people have to get fired from their government jobs so they can have more productive employment in the private sector that's what needs to happen all the all the austerity programs are or is europe pushing greece in the right direction because i what i need are a lot of people are looking at what happens in greece as kind of you know a model that once implemented will be used to deal with other struggling countries countries like italy and portugal do you think that's a good thing. i think it's a good thing that we're trying to reign in government i don't think it's

a good thing. the way it's done completely as i said i think that rather than just going through this painstaking process i think it would have been better off if the greeks just restructured right off the bat and maybe had a complete befalls and stayed in the euro zone but had made much bigger cuts in government spending than the ones that are being made now so i don't think this work water torture which is kind of the way it is is the best approach but it is better then the greeks trying to just preserve all this government i create drama because that would lead to a bigger collapse but you know a lot of the reforms that europe is forcing i reste you know to look at them europe because they would benefit from the same types of reforms it's still the pompous calling the kettle black it's just in this case the kettle is black or the pot we've got all these problems too in america you know we've we have got to come to terms with the same thing obama tried that with here we had we're out of time i think i think you're on to something now agree certainly an example for there are

there are a lot of the rest of the world to be looking at in terms of how to react and how to respond peter seth a president of euro pacific capital and that's going to do it for now for us but for more on the stories we cover go to our team dot com class with us today. the issue is that some of you are going to fight to the learning of the muslims to some of these are mothers and no shortage of austerity can the slashing of budgets of the street and the welfare state generate jobs in return is. welcome british scientists out on. the. market. find out what's really happening to the global economy

with much stronger no holds barred look at the global financial headlines tune in to a report on our keep. the focus. shifts . to me. sometimes you see a story and it seems so horribly you think you understand it and then you've lived something else here sees some other part of it and realized everything you thought you don't know i'm sorry the big picture the bubble the be. submission and free the could take three. three.

three. three. three. mediocre four year media projects myanmar t.v. dot com. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. here are your headlines for monday february thirteenth. probably seen images like this by now been on fire this city literally gurning as politicians within parliament voted to pass a tough austerity measures to meet the demands of the e.u. and i am out there international lenders this story is about so much more than just austerity and riots though it's wealth extraction i mean it's economic collapse at

work we're going to break down exactly how that works and while we're on debt let's talk about how the u.s. is dealing with it or not dealing with it you want the president brought go bomb our releases two thousand and thirteen budget today well it will be analyzed how did any tax why should you care or really why should you not care we'll tell you and as more economists come out saying the federal reserve is making a big mistake if it sticks to keeping interest rates near zero for the next three years old look at how the bad even got here it's evolution from passive to central planner a buyer of junk a war enabler and firefighter of the economic buyers it creates itself will speak to g. edward griffin who's been opposing the bed since the sixty's let's get to today's capital account.

ok before we really get into the meat today i just want to touch on this because obama today unveiled his two thousand and thirteen budget he gave a speech at a community college in northern virginia very is to tout it to manage expectations take a listen. was strong on the cost of the work everybody gets a fair shot everybody does their fair share everybody plays by the same set of leaders from washington from wall. street. right so the new but it is a solution to america's rising inequality to wall street and corporate welfare and big business is the bandage over the small entrepreneur i see let's see where the budget goes from here well as want book points out in the washington post like the

two thousand and twelve budget it has no chance of being adopted by congress the big ideas in it are d o a in the house dead on arrival ok well obviously obama knows this let's listen more. the last thing we need is for washington to stand in the live americans covet. a year we go again and get ready for of those same song and dance we've seen in washington already so many times before already look at this house budget committee chairman paul ryan blasted the white house's three point eight trillion dollar budget requests for failing to reduce the deficits or rein in spending on entitlement programs the president obama's fiscal two thousand and thirteen proposal he says is a recipe for a debt crisis and fails to cut the deficit in half during his first term a promise he made three years ago ok so we are not psychic but we've seen this

before we'll see it again the wrangling the twenty four seven coverage of the rain falling the new goshi aiding and compromising that never happens so we will talk about the budget when there is something to talk about and there is actually something that can be passed and get out of washington alive but we wanted to make sure to give you that reality check about the future of this budget as obama's touting it today for now let's talk about something very alive and active in the economy as it stands the federal reserve it does what it wants when it wants that happens whether it gets approval or not it doesn't need approval you don't need approval when you're independent that is that it expects to keep short term interest rates near zero until late two thousand and fourteen now we're not fans of this we've talked about it many times on this show now more economists thirty three out of forty nine polled by the wall street journal are criticizing the fed's guidance saying raising rates then three years from now would be too late now our

guest has been opposing of federal reserve since far longer than we have and certainly then when it's become brought into the popular conversation he has been opposing it since the late one nine hundred sixty s. at least calling it a banking cartel and an instrument of war. then he is filmmaker and author. of many books one of them that you see there the creature from jekyll island a second look at the federal reserve and so he's going to really break it all down for us in a way that we maybe haven't before because he's got really great contacts so thank you so much for being on the show first of all thank you for inviting me absolutely so you know opposition to the fed has really gotten a lot more attention in the last few years with of course it's been a platform of ron paul's so it's gotten more attention and he's a republican presidential hopeful in a congressman but you have been opposing it since the one nine hundred sixty s. when the fed was seemingly

a more conservative institution and before other people were really talking about it so why were you so i guess ahead of the curve. well i think it's because i recognize the federal reserve for what it is instead of what it pretends to be all of the items that you mentioned just a moment ago involving criticism of the fed none of those people were challenging the the right of the fed to set interest rates or anything like that their only disagree event is that they're not doing it right the implication there is if they were doing it it would be better i recognize from the very beginning that the federal reserve system shouldn't i don't even think it should exist because you see it's not a government agency it's a private banking cartel and people don't realize that it's a cartel no different than a bank i mean than an oil cartel or a peanut cartel or sugar cartel it happens to be a banking cartel and when a cartel exists it has only one function and that is to promote the best interests

of the members of the cartel so when the federal reserve system says it's going to push interest rates towards zero the idea is that they're trying to stimulate the economy for you folks for me but that's nonsense because everything the fed does has only one purpose and that's to help the banks and once people understand that basic principle then they get off of this trick about well the interest rate should be a little higher a little lower or you know that kind of thing i don't think anybody should be setting interest rates i personally believe that the best way for interest rates to be determined is by the free market by the free interchange of those who have money to lend and those who have and who want to borrow the money but when you give politicians or bankers the authority to sit there and manipulate the interest rates on loans regardless of what people are willing to pay for them that is a tremendous lever of power they're literally creating money if they lower interest rates that stimulates people to borrow and they don't realize when you go to the

bank and you borrow twenty thousand dollars event doesn't have that the land. they created it i did nothing and lend it to you and charge interest on it they say so by lowering interest rates that means more people will borrow things that puts more money into creation and into the economy and we've got this ugly thing called inflation so what we're really dealing with here is that i personally think that the federal reserve is a mechanism that is in the way of recovery in fact it's the mechanism that caused the problem in the first place so let's break down some of the things because first they're calling it a private car kalib now some people say oh that that is a public institution because it's harmed by the government some people think this is a private institution because look at how it starts right at the corporate structure you think it's a private cartel but i think you both said that at the public private partnership so can you kind of break down how you come to death conclusion what yes it is really it's a hybrid isn't it it has some of the characteristics of

a government agency because as the police power behind it what they basically did when they created the fed back in one nine hundred thirteen they actually drafted a cartel agreement between the big banks and then they took this cartel agreement to washington got a bigger racer and took the words off the top of the paper that says cartel agreement and they wrote in the words federal reserve act and so it's passed into law and now it has the force of the police in enforcing every provision of the cartel agreement so we think it's a government agency because if you violate the rules of the banks you go to prison so it seems like it's government agency but it's really not it's a it's a private institution like any cartel it's made up of the largest banks in america and it but it's not really as a purely private institution either because if it were and it does issue stock of course the banks all hold some stock in it but it's always real genuine stock like in any other corporation they'd be able to sell it wouldn't they if you if you own something you can sell it but the member banks are not allowed to sell their stock

they don't have voting rights they can't select who's their chairman they can't put people on the board of directors so it's good parents. being a private corporation is so in essence we're dealing with a hybrid it's nothing more but a legal framework that makes the operation of a banking cartel so powerful because it's backed by the force of the government i am i want to get into another thing he said which is they the federal reserve is there to support the bank that the federal reserve is doing the bidding of the bank then supporting debating factor oh did i get you wrong go ahead no i would say that they are the banks the federal reserve are the banks that's what they are that's a cartel you say ok it's like opec it's like opaque what is opec well it's the oil producing countries with the bed then has the ability to issue money and to affect interest rates that the interest rate all of these things and yet when i've suggested or when people have suggested that it is acting to support the banks that i've argued with people about that some people would be called you know

conspiratorial or think cathing that it's not obviously the fed official mandate so how do we know that. and how did that work exactly did you know lloyd blankfein pick up the phone and tell bernanke you did jump and he says how high. well bernanke he doesn't really set the policies remember he's working for the banks this is the chairman of the federal reserve and the federal reserve is a cartel back over that track again and so bernanke he doesn't really determine these policies before he announces something he's on the phone talking to his employers the banks saying and how do you may know that this for the banks of the banks and so forth just follow the money that's the old adage isn't that if you want to know what's going on follow the money so you take all of these so-called bailouts that have been going on starting in big big time since two thousand and eight billions and billions and now we find out trillions of dollars being created out of nothing by the federal reserve and pumped into the economy where does it go

it goes to the banks doesn't it and some of it of course goes to the big corporations like general motors and. natural order countries mexico and so forth but what is unique about those corporations in those countries it is always the same thing they owe money to the banks and they can't pay and that's why we send money to those corporations and to the countries so they can continue those interest payments to the banks but all of this money if you follow it comes back to the banks and if you can't figure that out i'm going you know it's pretty simple and so you know it's interesting because a condom is on on both sides of the political spectrum whether they support the bad some do but they still say that despite that the fed has been corrupted. it hasn't been very fixed that well at its mandates is this because it's official mandates are really its mandate. that's right what is the mandate of a cartel is to promote the interests of the members of the cartel but we're taught

in school i was taught in school that the mandate of the federal reserve was to stabilize the economy stabilize the purchasing power of the dollar you know and to to make america a better place you know that's the mandate that we were told as well as you give the federal reserve a report card on how well it did in meeting this mandate they get feeling marks all the way up and down the line they haven't done any of those things we've had the period of greatest inflation and economic booms and busts and we've had chaos in the market so it's failed but if you recognize it's true maggie it's true purpose is to benefit the banks and if necessary plunder the american people to bail out the banks and make sure that they have make plenty of profits now if that's what you recognize is its goal now it gets age on his report card all the way up or down the line yeah maybe if they were more more forthcoming about it they would be under such scrutiny now because that view that they delivered on that on that agenda or have delivered

a sir i have i want to talk you more about that creature of jackal island and where this all with hats but we got to go to break quickly though we will be back in just a moment with jihad word griffen he's author and filmmaker. oh and still ahead greece's parliament attempts to end the english the risk of default while outside athens are in twelve breakdowns where last night's vote pits and increases political history and what lessons you all should be taking from it but first your closing archigram birth. mother. just put a picture of me when i was like nine years old the the only true. confession

i am a total get of french that i love rap and hip hop music and. it was kind of the jester. bury the little sheep in its place. you know sometimes you see a story and it seems so pleasing you understand it and then you glimpse something else here's you some other part of it and realize that everything is ok and you don't. think. the same. drives the world the fear mongering used by politicians decision to break through

bits of it and you trust oh. if you would have noble. where we had a state. control capital is that we know terrorist week you are teen question more. welcome back for the break we're talking about some of the criticisms of the bad today but let's talk about how we got here i want to bring the edward griffin filmmaker and author of the creature from jekyll island a second look at the federal reserve back and to tell us about that tackle island meeting now he also has the web site reality zone dot com i should mention so your book is creature of jackal island and when you go back to these meetings that

jekyll island a handful of bankers and policymakers obviously a very sentimental moment in your view why was this so important to central banking in the united states well it was said because it was brought into being at a secret meeting which is the reason that the the bill was drafted on jekyll island this is an amazing story in itself in fact when i first first started to research this i couldn't hardly believe what i was fighting in fact i challenged it i didn't i didn't believe it i mean here we have something as important as the federal reserve act the creation of a national bank and setting of monetary policy for the nation and it wasn't drafted in washington d.c. it was drafted on a private island off the coast of georgia called jekyll island and not only that but the conditions under which that meeting took place were very secret i can tell you that very few wars in history have been plotted under conditions of greater secrecy that that there were six men that were told to or.