tale's no we've been doing it piecemeal so i just don't know what the e.u. will be in two or three years i think there will be a euro but i'm just not sure if all of twenty five countries in the in the block at that point all right chris well now i don't want to get you in trouble with the f.b.i. but did. dick did going off the gold standard have anything to do with the u.s. going bankrupt and what role could gold play if any in making it solvent again so i kind of percent presume that work they're talking about dollar weakness they are saudi so isn't that just a presumption can you just as gold question as i said in my my book inflated gold is is symbolic is a store of value it has had a great following in the u.s. and you're right in the thirty's after your confiscated all the gold while he was devaluing the dollar to try and get the economy going. since then or even before then we essentially had the government imposed their monopoly on the definition of

money in the u.s. so today gold is considered a collectible it's not even a monetary asset but this goes back to lincoln if you recall how did we finance the civil war with paper money bad money and the little banks fought it the big banks national banks were created to buy the government's debt so the devaluation in the thirty's was really later the refutation if you will of a gold standard starts with lincoln and ever since the government has used paper money to propel growth layers of leverage if you think about it so we create the fed in one nine hundred thirteen you have the collapse in the twenty's and in the early thirty's they confiscate all the gold and we continue you essentially equating the dollar with gold up until today so all of the leverage we've seen accumulated since the thirty's housing global lending institutions big banks everything else or all predicated on this use of. paper money as

a substitute for gold in a monetary sense and we've kind of run full course if you will so if you go back to your point max gold is a haven yeah i think it is but don't be blowing toller opportunities because gold hasn't quite kept up with the inflation of the paper money world all right let's talk about paper money and the u.s. banking system in particular bank of america now i listen to you you've been interviewed a number of times on eric king's king world news and i recommend anyone who wants to catch up on the banking sector very specifically to listen to those interviews because they are actually in but can you speak about the bank of america and where we are now with the bank america story you know there was that when it was down to five or six dollars a share there was i know even i believe i heard you say that it had a lot of risk on the downside of the stock price due to their and their problems etc can you give us an idea of where we are now that bank of america story in the u.s. banking as a whole your bank america you write went down to four dollars a share late last year largely because of the european troubles who in their wisdom

the european governments decided to prohibit short selling of bank shares because they are so closely tied with the government so obviously if the bank shares were falling in value so would the political prospects of the various governments in the e.u. so unfortunately when the markets get anxious they still the u.s. financials because those markets are still open and that's i think what drove bank america down to four dollars now goes to bank need to be restructured yes in my opinion the preponderance of litigation that they're facing involving mortgage backed securities the state of new york eric schneiderman the attorney general i think is going to be going after bank america for texas because many of these deals were not put together properly so they were not exempt from state and federal taxes this is going to be a nuclear weapon max the nobody is paying attention to and let me just jump in for a second chris because what about obama's latest deal with these. thanks i mean

again they seem to be getting a minute or so is that how's a factor into this know about a limited immunity this was not a great deal for the banks what happened was the attorneys general around the country many of whom want to be governor that's what a.g. stands for by the way aspiring governor. they needed to get a deal done now because through election year schneiderman the california attorney general of delaware attorney general went along with this settlement on foreclosure abuse issues but it didn't get them immunity from more serious prosecution for taxes for securities fraud for other things that they're all facing bank america is facing over one hundred billion dollars in claims for securities fraud contractual issues from investors they're all going to go to trial and i would tell you right now i've been following this stuff pretty closely i think b. is going to lose in court so we there we restructure this company with the help of the bankruptcy court and bring this whole mess to a conclusion or we're going to face years more of headline risk when somebody like

m.b.i.a. for example the insurance company wins in court against bank america and ends up with a double digit judgment against them what are we going to do then that's why i've been saying you know we really need to bring this to an end and the way you do that is either with a receiver as we saw in the stanford group or with a bankruptcy as in the case of lehman brothers but to me that would be the good news because if we go down that road and we're going to be near the end are let me describe your situation maybe tell us more about my naive it's a then anything else but tell me what i am or where my thinking is either on target or off target it seems that every time we hear about a bailout or a rescue package or a multibillion or chilean dollar cash infusion to settle these bank debts banks suddenly from that's some place called the shadow banking system say oh no we have another half a trillion dollars in debt that we didn't record last quarter and it's not ever going to stop right number run in. is there

a limitation or are they just playing with us well they are playing in a sense i mean look at the foreclosure settlement the banks have already stolen enough money from investors in terms of raping these mortgage backed securities trusts to pay for all the settlement so i don't feel sorry for them at all now the real question is what else have they not told us and this goes to your point about the off balance sheet vehicles grey market banking everything else that marketplace is shrinking it's running off and we're not creating any new assets and say private mortgage backed securities even fannie and freddie are starving to death because ninety percent of the new originations in the u.s. today are getting a guarantee from the federal housing administration interesting lee enough so yes there's more problems here and you're going to hear more about it in terms of things like litigation and liquidated claims that nobody's heard about yet give a good example look at j.p. morgan and the in the gesturing they're getting from bear stearns you know jamie dimon told us two years ago that bear stearns would not be material to their

results but it's going to be very material because investors of lost more than half their money on the securities that they created so there is still stuff to fall out in this whole mess we kind of know what the numbers are now max i don't think there's anything particularly new in terms of their exposures but the thing is risks that we haven't talked about like eric schneiderman deciding that these people owe him you know billions and billions of dollars for the taxes that's a new factor that nobody is thinking about now i we got a one minute left i just wanted to add a comment on something that's a bit on the technical side but i think it's very interesting while ben bernanke is talking about the need for lower rates as a stimulus you have been quoted yeah i've heard you talk about this then there's a need for interbank lending just be stimulated by raising rates completely against what you hear the mainstream got we'll have about a minute i'm sorry but can you kind of run through that a little bit because i think it's important that people understand this well again . going back to the point about extreme swings i mean the fed has had to put

interest rates at zero to just trying keep the u.s. economy moving forward it's like a shark you have to have water going through the gills in order for the creature to survive and yet at the same time by putting rates at zero you're taking only incentive away from banks to lend to one another why would you bother doing repo for example where you lend treasuries overnight for nothing you're not being paid for the risk and there is risk in that transaction like was the hole in a bank market's going listen the jamie diamond in the most recent conference call he confirmed that they're not doing any on secured lending with other banks this is a disaster so what i've been saying is that the fed should gradually let short rates go up to half a point maybe three quarters of a point so we can again start to see the private short term credit markets revive because today all you've got is the fed the banks are dealing directly with the fed they don't want to deal with one another if we don't get credit to expand max we're

not going to fix jobs we're not going to fix the global economy but it's going to be private credit expansion the central banks doing what they're supposed to do but they've done it for too long and we get out of slowly let rates go up and imagine even if we had half a point fed funds rate that's still historically very low it's probably negative in terms of inflation but at least it would give people a reason to do business again right banks make money lending money so less rates are at a level that they can make some money lending money then you're not going to get any bank growth therefore no well that's right you know the great editor of the economist back host said it well he said don't keep rates at zero for too long. what that we're out of time well thanks so much for being on the console report thank you backs look forward to it again all right and that's going to do it for this edition of the kaiser report with me max kaiser and stays in harbor and i thank my guests first well and you can follow him on twitter at our c whalen course you can follow me on twitter to maximize or send me an e-mail at kaiser report. are

to that are you and so much time back tiger say by all. the money. he is he.

in the. world with her story and technology innovation all the rest of elements from around russia we've dumped those huge earth covered. it was. a.

church. job market in washington d.c. and here's what's coming up tonight on the big picture. on tanna ignored the citizens united ruling and now corporations have asked the supreme court to step in a might this play out and might we be on the verge of a constitutional crisis also it's been one year since the uprising wisconsin began where has the labor movement gone since then and where do we go from here and demand for oil is in a fifteen year low but oil prices are still sky high if demand isn't driving the

price and what is. you need to know this more than two years after the supreme court ruled that corporations are people and money is speech the issue is once again heading over to the supreme court this time the argument is over whether or not the supreme court's ruling in citizens united trumps a one hundred year old montana law that bans corporations and spending money in state elections according to the man to montana corrupt practices act passed in one thousand and twelve a corporation may not make an expenditure in connection with a candidate or a political party that supports or opposes a can a candidate or a political party in december of last year the montana supreme court upheld this law ignoring the supreme court's decision from the unit from the. citizens united decision and continuing that state's ban on corporate political expenditures but this week three montana corporations took their case to the supreme court

petitioning justice anthony kennedy to overturn the montana supreme court's decision and open the floodgates to corporate money in that state the lead lawyer representing these corporations james bopp jr who also happened to its assist with the citizens united legal arguments argued to justice kennedy that immediate relief is needed to prevent irreparable harm to the corporation's first amendment free speech right so how might this shake out first to get the perspective from montana i'm joined by jeff jeff milchan the co-founder of the american independent business alliance jeff welcome back thanks for having me tom let's get to how we got here in the first place what motivated the montana supreme court to reject the u.s. supreme court's citizens united decision. well first it's a little overstatement to say they rejected it outright i mean the they meet made some very clear distinctions between what was at stake in the montana supremes court case and what was decided in citizens united in a couple of the key distinctions were in montana the law the corrupt practices act

the law under under challenge actually protected nonpartisan and judicial election something that wasn't addressed at all in the citizens united ruling also in citizens united one of the arguments by the majority the five person majority on the supreme court was that there was not a real documented record of the corruption that was being alleged as a threat in montana the state attorney general presented an extensive record of. corporate corruption throughout our history right down to the buying of u.s. senate seats so there are a couple of key distinctions but i think part of the motivation of the montana justices also is the fact that this was a citizen vote back in one thousand and twelve this was not just the law makers this came about through direct citizen the reaction against some of the most overt corporate corruption in american history and that because of that they deserve some

special deference from the u.s. supreme court before saying that they know how montana elections work better than montanans do this was a citizens referendum back in one thousand twelve thousand and back in and in one nine hundred twelve that was kind of the tail end of the anaconda copper companies . basically ownership of the state i mean they they they had state legislators on their payroll they had governors on their payroll. on their payroll certainly you know passing money to them by by the backdoor they own the newspapers it was kind of all we want industry state. and what's the history of the people's revolt against you know the copper companies beyond just this. or is was this one of the. well there's been a continued history throughout the past century going on just several years ago. the federal appeals court actually struck down a montana citizen initiative that banned corporate spending on ballot initiatives

which then allowed mining company to come in and try to get rid of laws that protected us against cyanide leach mining which just despite them spending millions of dollars on actually we narrowly defeated but there's been an ongoing history and montana you know it's been traditionally a red state but there's a very strong populist streak there's a very strong cultural awareness of the threats of corporate power so that's part of what's led to the citizen support for the state defending the law the support the attorney general and the overwhelming support amongst montanans for the action taken by the u.s. supreme court you mean by the mosque before the montana supreme court yes and that was that was that was by the as i did us a. yeah you represent a small business group and the the you know i'm curious is there is there are widespread discussion and awareness of this and and our small businesses in montana

worried about what might happen if. suddenly this kind of political corruption is legalized in that state and all the politicians come knocking on their door saying hey gimme gimme gimme if you want something sure that's actually going on around the country with small business owners not just in montana just yesterday i believe amongst the growing number of communities to pass local resolutions against corporate personhood in favor of overturning citizens united was asheville north carolina in albany california in asheville the asheville grown business alliance one of the local affiliates of the american independent business alliance was a strong supporter of that effort we're seeing many more small business owners aware of the fact that when we allow huge corporations to translate their economic power into political power. they're using that to stack the deck in their favor and very often that's directly opposed to the interests of small businesses because they're competing against big companies that aren't paying their fair share of taxes that are getting direct public subsidies that are avoiding enforcement of

many regulations that are ensnaring smaller businesses so they recognize in order to have a free marketplace if if they want to be able to compete based on the quality of the of the products and services they're selling you know we need to eliminate the ability of the larger corporations to stack the deck in their favor a poll actually just came out last month indicating that by a seven to one margin small business owners were very concerned about the corporate power wielded by a large large corporations and wanting to it's eliminate that jeff thanks so much for being with us tonight and for the great work you're doing. thank you tom now for the legal aspects of the case and the potential for a constitutional crisis to arrive out of the citizens united ruling and its coalition with this with this decision in montana i'm joined by ian mille iser attorney policy analyst and a blogger over the center for the center for american progress as think progress was welcome it's good to see you there thanks so much what are the options jeffrey just pointing out that you know one of the things that makes this nine hundred

twelve law in montana unique it says that corporations can't give money to politicians is it was passed by a citizen referendum right and the in citizens united the the supreme court or five of the guys in the supreme court basically said there's no history of corruption of politicians and in montana there's a huge history of it and the montana supreme court said so what do you how can the supreme court deal with this dissonance i mean this is a very difficult case for me as a lawyer because on the one hand what the montana supreme court did here was wrong there a lower court lower courts have to file follow sapir your courts and so they had to follow citizens united whether they like it or not and they didn't and they did it on the other hand so citizens united is the worst decision in the last twenty years at least and so the question is now that this issue has been teed up the montana court has done what it's done what can the supreme court do and the answer i think is very simple they should realize they made an error. you mentioned how the

montana court made all these firings about well yeah you know like as it turns out these expenditures are really corrupting and the interesting things the thing about citizens united is we've seen that the federal level as well you know you have one casino billionaire whose family has given a web in million dollars to newt gingrich's campaign that he made a lot of his money in macau and hong kong and china and. yeah i mean he's you know he's an international billionaire who's you know he is a u.s. citizen but he's made of money around the world he's given a ton of money to one can and he's met personally with that candidate. and game which isn't the only person and you know that now you have santorum and foster friess is a wall street billionaire and then you've got john paulson and. we should i think we should be honest with ourselves eventually someone's going to come along and be very generous to barack obama sure and you know when you are a candidate and you get elected and then if someone who is giving you all of that

money you know you are you owe your office to the money that they've given you in some cases that's going to cause you to want to be generous back in the case which was just decided a few months ago the supreme court if my recollection is correct and the supreme court in fact as i recall from the bench was a rehnquist or not rehnquist scalia made a joke about you know nobody said corporations are people how can they be embarrassed because. it was if this boy a filing went through and their dirty underwear their do it dirty laundry or whatever got aired that they would be embarrassed about it literally as the word they used in the supreme court said no sorry you can't be a barrister corporation was that the beginning possibly of this supreme court walking back their own citizens united decision unfortunately i think that's unlikely so there are two different issues there in the eighteenth tee case the question was under the four year statute so like under the words that congress wrote it was a fourth a moment issue. it was

a statutory issue i mean as i recall it was purely a question of whether the words that congress wrote applied eighteen t. or not you know and of course in citizenship it's a constitutional issue is there any evidence at all that the court has even considered walking back from it because you know some of the public statements that were made by scalia and thomas and then some of their surrogates since citizens united been highly defensive position well that there was one blip which was there was this case they came up dealing with foreign nationals who wanted to be able to give money to camp aides and the supreme court said we think unanimously because it was done in a one sentence order into. indicate that anyone dissented that no they can't and it was i mean it literally was a one sentence order and there were you know if you take the reasoning of citizens united seriously there were decent arguments to be made that it flowed from citizens united that yes foreign nationals should also be allowed to spend their money to elect the people they want. so the supreme court didn't explain why didn't

give a reason but they thought for whatever reason that they weren't ready to go so far as to say that non us citizens andrew jackson famously said to the supreme court you know you guys have made your decision trying to force this was in the church key and you answer this back in the eighteenth thirty's could montana just say you know we're standing by this dam you know i'm a rule of law kind of guy i mean what the supreme court did was despicable but i'm asking what's right or was legal i'm asking you know can montana actually continue to defy the u.s. supreme court the supreme court has no enforcement mechanism the supreme court doesn't have an unforced mechanism but i don't want to live in a world where states are deciding on their own what the wall is and you know we see a lot of conservatives invoking patient theories to say oh we can just ignore the affordable care act we can ignore you don't think they'll do it i don't think they'd bill do it and frankly i don't think they should i think citizens united should be overruled and i think it's you know i mean legally i'm totally in agreement i was curious with him thanks so much for dropping by tonight

illuminating this topic so thank you simple fact is that as long as citizens united stands than our democracy is corrupt time to go to move to amend or to fight for a constitutional amendment to kick corporations out of our elections. coming up after the break it's been one year since the protests against governor scott walker's war on unions began wisconsin what's happened since what is the state of the labor movement and where do we go from here. he just put a picture of me when i was like nine years old i'm going to tell the truth. i confess and i am a total get of friends that i love traveling hip hop music and. he was kind of

a yesterday. i'm very proud of the world without us you are his place. look look. look . you know how sometimes you see a story and it seems so please you think you understand it and then you glimpse something else you hear or see some other part of it and realize everything you thought you knew you don't know i'm sorry welcome to the big picture.

who is screwed you are if you drive a car oil is once again trading at over one hundred dollars a barrel in their projections that gas could hit four or even five dollars a gallon this summer or before the election it's not exactly helpful for an economy in a fragile recovery but here's the strange thing demand for oil in america is lower

than it's been since one nine hundred ninety seven so if demand isn't driving up the price of oil what is. well it's actually being caused in large part by wall street and it's what's known as oil speculation here's how it works it's pretty straightforward say that you have an airline ok here's acme airlines and they use a lot. and then you've got an oil company over here you know b.p. exxon whatever the koch brothers and they want to sell a lot of oil because they pump the stuff out of the ground and the airline would like to know since they're selling airline tickets a year out they'd like to know for the next year what the cost of oil is going to be and the oil company would like to know that they're going to have a customer for the next year or so they make a deal on what's called a future the oil company says ok we'll sell you this oil and say well someone selling for seventy five dollars a barrel everybody thinks it might go to ninety or ninety five one hundred who knows so they say we'll sell it to you for eighty five dollars

a barrel will compromise will sell you a year's worth if you buy this futures contract and the airline then it's about i mean if the price goes down they say they had to pay more they're still paying eighty five a barrel for goes up they they make out like bandits so anyway it's a bet used to be up until one thousand nine hundred one that only the oil companies in the and the airlines could get in the game and play this stuff but then in one thousand nine hundred one goldman sachs came along the banks and they said we'd like to play we'd like to make some money off this even though they don't want to take any delivery of oil they've got no place to put it you know this is and they don't use oil so the f.c.c. gave them an exemption and said that's fine you can you can uniquely play in the oil fields so they started buying oil futures and betting on oil futures right now there's over eleven billion dollars worth of bets on the oil futures market from the bank's toure's who are using oil which is driving up the price of gasoline and oil for all of us who drop.