thanks for joining us on half past the hour on parents are actually taking a quick recap of our headlines america's armed involvement in syria is knocked off the table for u.s. military officials are reviewing their alterations in case the diplomatic isolation of assad's regime sales. pressure criticizes nato at the u.n. security council for refusing to admit civilian deaths during the alliance's air raids in libya last year and expresses outrage over training camps for syrian revolutionaries discovered in libya. and iran warns the resumption of nuclear

trials which have recently been agreed upon might prove few tile if world powers keep imposing pressure and sanctions on top from. coming out max and stacey discuss in their own unique style the latest economic headlines cars a report is up next on our team. you. guys are this is the kaiser for you know the global economy has been somewhat of a mood. of markets. no major organs remaining this is not

a boat accident this is boy a lot of girl. facts that sounds like jamie diamond and life masters and the global what happened to the money well this is not a boat accident the facts suggest that the customer money at m.f. global stolen twice first by core sign next by j.p. morgan the system was twisted to hide the involvement of powerful figures the strong ties to the political system and multinational corporations operating out of new york and the city of london as richard dreyfus said in the movie jaws well this is not a boat accident and i remember the response from richard dreyfus was to the corpse of the first victim of jaws and. to the public to the tourists coming to amity it was a boating accident that had killed us all and would of course when he saw this the body he said this is not a boating accident and we see the same thing in the financial markets now is

regulators and politicians seeking office to keep on telling us it was just a boating accident was just a little accident a few derivatives blew up accidentally there is no predator involved here there's no violence right the equivalent is they keep saying it's a liquidity problem this is a problem of liquidity we need to keep stoking the banks with more liquidity they don't mention that it's not a liquidity issue it's an insolvency issue and as these banks go insolvent as they go bankrupt they go to zombification the mechanism to keep them alive is accompanied by austerity measures so the austerity measures are in direct proportion to the cash transfusions that are helping keep the zombie banks alive and no this is not a boating accident this is a outright predatory shark attack and people are dying out there they should be

told specifically that this is what's going on but they're being held in the dark to try to get them to play along and to go to the beach and to swim in these shark infested predatory waters so let's talk about two of these sharks in particular shark boy or girl and apparently these are the nicknames for daily dime and life masters of j.p. morgan in the commodity pits taken morgan's blith master is the twenty eleven queen of commodities shark boy lava girl there fierce performance in crushing goldman sachs in the commodity pits uncertainty anytime in a blith monsters the fearsome nicknames shark boy and lava girl apparently shark boy and lava girl are celebrating the fact that they beat their archrival. well goldman sachs the earnings from j.p. morgan two point eight billion from the commodity in twenty eleven guess how much goldman sachs was one point six billion what's the difference in the earnings how

much more did they pay morgan earned one point two billion where do you know that number from the the m.f. global scandal so long point two billion of course as we started this show is missing one point two billion that was transferred apparently to j.p. morgan yeah absolutely j.p. morgan stole one point two billion from the m.f. global clients and this is the exact amount that they are claiming that they've made a head of goldman sachs over on their desk of death apparently there's this really lovely girl life masters is competing against isabel elects who is the goldman sachs head of commodities trading and isabel according to blith masters can't cope with our superior platform in industry connections a certain dark mistress of the universe has been heard to say if you are the queen you don't make markets you own the markets and everyone including goldman sachs pays exactly they own the market it's a rent seeking proposition they have

a monopoly pricing there's no free market there's no competition they simply bludgeon these markets you know most spectacularly in the silver markets you know they would for example last week there was eight hundred million ounces of silver traded in one single day this is more than all the silver that's mine during the course of a year this is directly out of the lights corrupt lawyer in this sprawling this trading activity that smashed the price of silver just to keep in good with her paper god masters who hate gold and silver because they pursued the god of paper well i thought with these two women love a girl i life masters and. isabel battling out in the commodity pits i thought i would jump in there with sweet sweet silver space that you know you're coming over strong you know both lovely girl and gold and god and you know the end of

competition coming with silver surfing stacy. well now we established that the predator in this situation on the bankers using these credit derivatives quote here goes on ms masters gained notoriety for pioneering credit default swaps blamed by many for the financial crisis she acknowledged in a two thousand and eight speech that she had granted the woman who created weapons of mass destruction although she defends the products saying the people using them were at fault hello it's like saying that people who came to meet fault for getting sick a current of all swap is illegitimate security because it masquerades as an insurance product but there's no collateral there's no way to pay out if in fact it's needed as we're seeing in europe now there's a default in greece but apparently they're not going to pay out of the quota falls off they can't pay out of the growth of also because there's good there's no such

thing they don't exist there's no money to back them up and most to go back into the wholesale market can count on a more phony loans which of course would require more all serving but of course as we established in the previous episode or kaiser report taken morgan itself sits on the board and is determines whether or not there has been a credit event. glose mausers is creating austerity. purging into the marketplace fake unaccounted for nonexistent nonsensical credit default swaps are ridiculous and do nothing except create austerity for these poor people so we've established that commodity pierce j.p. morgan came out on top by one point two billion which happens to be the magical number of the m.f. global missing funds the futures market was created really performers so let's look at some of the victims the farming victims of m.f. global farmer faces planting season with seeds of distrust so first the article

from c.n.n. looks that dean tossed in a minnesota farmer who had two hundred fifty three thousand dollars with m.f. global he notes that he can track a hog from his farm to somebodies table yet somehow he ponders authorities haven't fully tracked the missing one point two billion or who was behind it he said money doesn't vaporize if my account is them to somebody else as this fall you know actually in point of course you can track through the real economy how goods and services flow but in the shadow banking system in the dark exchange world of blights and goldman there is no accountability there is no tracking they can reach and grab one point two billion dollars in claim babe arised i mean that's that's absurd of course it isn't vaporized they stole it and the article then goes on to point out that most of them of global customers have received seventy two percent

of their money back executives at the chicago mercantile exchange in chicago board of trade like to tout the fact as a great feat but they'd better duck if they ever step foot on a farm they might just get punched in the jaw tossed luna's still out seventy thousand dollars and the other important point here max as i said futures markets were recently established to protect from the you know the wild nature of nature so the these farmers invest a lot to plant and then it's not for a very long time afterwards that they can harvest. and in that time drought can happen severe storms any sort of thing well the article points out that this guy hoffman is this has zero heads he's now not head he's just planting so this is creating another too big to fail system because if you think the quiddity in financial markets is too big to fail we need this what about food on your table right there's no hedge against life masters i mean this farmer should be able to buy life masters futures contracts on the open market to hedge myself against this

part of the story nightmare of life masters and the entire futures markets has come full circle as you point out they were invented originally to give farmers a way to get some price stability but they were hijacked by the financial futures markets in the seventy's and eighty's so they have currency features and treasury bill features and all kinds of security features that are outside of the agricultural sector and now they themselves have morphed into the colossus that's putting a risk the very farmers for whom these futures are created for to begin with so now you've got futures risk you've got tornado risk hurricane risk flooding risk grant risk and blight masters risk so they need to be a futures contract for farmers to protect themselves against blight masters. exactly they treat it like it's a game it's a competition between lava girl and it is the get out of it what is supposed to be about protecting agricultural industry so they say for an industry that relies on the futures market it is based on the system that has been most raddled they speak

to brad moo of feeding grain in his or his brother's view the m.f. global scandal amounts to the largest bank heist in u.s. history so where is the national outrage they ask where's the all points bulletin for those responsible and why have the occupy wall street protesters remain silent about the scandal and the eighth largest bankruptcy in u.s. history while the occupy wall street folks don't have the financial literacy to dig down into the machinations of these markets to really put up a cogent. and the point is well taken though the futures markets have been securitized a lot of the financial eyes of grown into many many many times greater than their usefulness so i mean in the oil market for example for every one barrel of oil that's traded amongst nations there are sixty four thousand barrels traded in the paper market in the futures market that doesn't do anyone any good except the people who are involved in the corruption of those markets and whenever they make

a mistake they get bailed out and to pay for the bell the governments of those austerity measures well speaking of the measures and where is the national outrage there are some nations that have national outrage and express that and we see that in greece responding to blythe masters austerity measures and here's how the political elite think once you respond to their crimes former french pm greece could face a military coup in an interview in a leading french newspaper former french prime minister michel or a car seat to the increased austerity measures such as those imposed on greece by its lenders could well see the country having to deal with an explosive social upheaval sooner rather than later he said nobody seems to be saying it but the only way out for greece could well be a military coup he said while also expressing his belief that no nation can be democratically governed when you cut back twenty five percent of its earnings. so

they want to go back to the junta so they want from the junta to the troika of back to the junta were they ever going to have democracy but exactly he points out when you have to cut back twenty five percent of its earnings as we just pointed out those farmers in america have lost twenty eight percent of their earnings so do they need a military rule over them because they might get to one really because they're upset that belies masters and izzy. and you let from goldman sachs still all their money i mean that's already immelt martial law in the us you already can't speak up and offer any dissent you're already surveilled twenty four seven it's already a military coup it's shark boy it's not a girl it's going to hold a lawyer and some money and big bruises think they're ripping so much rain on the kaiser report thank you my friends don't go away much more coming away so stay right there.

but i'm back to the kaiser report imax kaiser trying not to go to new york and speak with economist and professor dr michael hudson back routes and welcome back to the kaiser report thank you very much max all right dr michael hudson you were in an alley where you were treated like a rock star were you there what happened well the italian journalist pilot barnard

lighted up four of my colleagues and myself from the university of missouri kansas city to explain the principles of modern monetary theory which is what our university is known for we're sort of me until the first to the university of chicago and our job was to explain to the year or two of your peons in general in the italians in particular that the austerity is not necessary there is no need at all for the government to balance budgets in fact governments are supposed to run a budget deficit that's how they provide the private sector to production in a cut consumption economy with the money in the credit that it needs and the income but it needs to grow basic keynesian policy we also pointed out that when the central bank creates credit runs at levels that is not hyper inflationary what isn't glacial is the commercial banking systems flooding the economy with credit

for the last thirty years to build up real estate prices stock and bond prices and that provided the credit for corporate rates takeovers and what is basically loading down the economy with debt and it is legit. if lation today right so it's a variation i keynesianism are updated version of keynesianism so how does it different their backgrounds and then what is already what already exists put came to those hoping that no credit would do what a government deficit would do that new credit would be used to up front new investments which would. investment in motion but today's new credit doesn't do that credit is extended today to take over company and buy property and real estate that's already in place but almost all the new capital investment in the american economy is funded by the retained earnings of corporations not credit so the financial sector is then decouple from the production sector and i what we want

to do it missouri is unite the sectors and modernize an industrialized credit for what people expected of a consistent to be a century a god openly industrial revolution was still gaining power prices and they pass a city university center city where you hear gang hangout is the antithesis of what's happening at the chicago school of economics so we know that there's a heavily influenced all i component from mr carrados school that informs people like christine lagarde is now running the i.m.f. there farms the obama administration and it's not identified with milton friedman and neo liberalism so there's a dynamic between these two the free marketers believe that you can't have a free market unless you ban art and ignore and censor all especially of any alternatives so there's no interaction at all by the chicago school of enter the

six were actually were the university of missouri at kansas city u m k c and there is a blog if you were to google your own case the economics blog you get the blog you know economic perspectives best at. by stephanie cult and who's the incoming department chairman of the economics department and you'll see we have a regular commentary on what's happening in the economy and an alternative to the austerity and the profane anshul lobby here in the chicago art school doubts we have started so along with me in italy where stephanie help build black was talking about law and another blogger marshall our box so the sort of sort of basically they're explaining sort of three solid days it's all about monetary theory and it's amazing there were over twenty one hundred people in a stadium i was a sports stadium and when we walked in on

a friday night two weeks ago we couldn't believe that we walked down the aisle and walked and walked and walked and none of us had ever had such a gigantic audience and they were all there early stage to the end they really wanted to hear modern monitary their rate and how central banks were supposed to run deficit not surpluses in order to reflate the economy our university of missouri act as a city with modern modern terry theory received like rock stars and only of course you're saying that the right the route the other side the three caught us call doesn't allow for any kind of debate going on but it does have one apostle with a big platform in part for going at the new york times correct. he's more of a neo classical sort of liberal but he doesn't focus on the debt issue or get a fallacious other we do and he believes that big government should balance the

budget pretty much he doesn't follow modern monetary berry to anywhere and here he tries to be sort of the voice in the middle and he doesn't really discuss our theory or discuss up by as fine a fix for the unspeakable crimes were the people that liberal. well talk about where the people at the university of chicago in the magazines that it's put its editor is and it will not permit our discussion so basically the free marketers are sent third they don't believe in a free market of ideas they believe in what they didn't show it remember the first thing the chicago boys didn't show it was closed down every economics department in a country they thought that when they controlled one of their professors told harvard or was accused of our setting as our teller on favoring what economists should be excluded and he said he had no idea that they were going to have your stomach start open shit oh i got there isn't thrown out over the oceans to yet no

idea there are families that will be killed he had no idea that the people he was citing were going to be victims of the operation condor that filled up i wasn't some labor leaders and economists he had no idea that run he and the other people were closing down all the departments they were to be herded into stadiums and machine gun killed or tortured shot but less the aspect of chicago still up and certainly he had he had no intention of ever acknowledging that there was any idea except for his own son story and people that's why he tried to take over harvard's institute harvard institute of international economics the students all protested and said we will not have men with blood on our hands coming here and degrading our university with their intellectual intolerance factor as of now they are the other side the right side of sky the chicago school they claim that the free markets on their side we know that their their school is dominant in the current

economy and the current economy is generating the biggest waffen income gaps in the history of united states and is clearly failing in many countries around the world . so where do they where does this term free market get lost because it's not a free market the chicago school of inverted what the classical economists meant by free market when adam smith and john stuart mill and the one thousand nine hundred three in the progressive era spoke about free markets they wanted a free markets from their own th they wanted to get markets free of landlords free of the bankers and freedom monopolies the idea of free market to classical economics was to bring prices in line with the actual technologically necessary costs of production so that it wouldn't include land rent land rent would be tech it would be the tax base it wouldn't include interest charges it wouldn't include

predatory banking charges and monopolies were either to be regulated to keep their prices in line with the actual costs like america regulate or a good bill that will likely people it's going to charge or the most monopolies will be as in europe kept in the public domain and operated as public utilities and if there was something basic like education or roadside these would be provided freely in order to minimize the the economy starts to production and make it more competitive this was the whole philosophy only industrial revolution and it was the free market idea that the classical economists say out. of the rocky a front back around world war one they began to inverted and their idea of a free market was free for predator freeform an upper three for our edwards to go to whatever rights they could get and to free themselves from taxation so that the government had a tax labor and x.

interest free and the result is that the american economy today under the so-called free market has such a high cost of loic and the high cost of production that our labor can't compete internationally that's why america's balance at. traders move so far into deficit if an american worker has put a forty percent i was income on housing if yes to pay fifteen percent for health care and social security f. i see a wage withholding if you yes that pay another fifteen percent and excise taxes each sales taxes income taxes and other taxes and if yes to take other debts for a credit card debt education debt then obviously even before he spends about one third of the salary on goods and services is a monthly not is so high that he's priced out of the market and that's why americans can't compete in exports except for agriculture which is heavily

subsidized by the government and of course the military industrial complex like so exports other diplomatically through international your situation so free market is what is killing the american economy and it's not free at all it's free for creditors not free for labor not free for industry not to find a free market just up and up was that what you're describing there is in a lot of ways you could say that the occupy wall street movement is simply a replay of what the original american colonies were feeling when they before they wrote the declaration of independence they wanted to be free from the rent seeking occupying force of the british and now the occupy wall street is saying we want to be free from the rent seeking occupation of wall street bankers and they so therefore and my question is where did the occupy people do themselves

a service by maybe taking some classes at university of missouri kansas city and brushing up on what you're talking about there to give them some intellectual firepower well the occupy wall street people do have on sunday here in new york a regular. meeting the financial advisory committee kathy only all runs it and there are people like eve smith from naked capitalism is there i'm usually there dave kelly who's going to ask their senators economic advisors there are a lot of well three to insiders are there to say look we're money managers we're edge fund managers but this is a hell of a way to make money but we look rather make money in a way that helps the economy he productive not in a predatory way so you can be sure that there are some pretty smart people advising the occupy wall street movement for what could happen this summer when school lets out that's asacol right well we're out of time but thanks so much for being on the cars report dr michael hudson thank you very much marriage and that's going to do

it for this edition of other guys report with me max foster as they say herbert i would like my guest dr michael hudson really to send me an email please is our kaiser recorded r t t v that are you at all next time next either saying.