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kaiser this is a very poor you know the global economy has been severed at the mid so are acts of financial markets. no major organs remaining this is not a boat accident this is boy local girl. max that sounds like jamie diamond and life masters and that's closer 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 corps i next by j.p. morgan the system was twisted to hide the involvement of powerful figures of 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 this woman and one of course when he saw this 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 it was just a little accident a few derivatives blew up accidentally there is no predator involved here there's no violence but 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 as 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 there's 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 girl and apparently these are the nicknames for jamie diamond and prize masters of j.p. morgan in the commodity pits j.p. morgan's blith masters is the twenty eleven queen of commodities shark boy a lava girl their fierce performance in crushing goldman sachs in the commodity

pits and jamie diamond 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. all goldman sachs' the earnings from j.p. morgan two point eight billion from the commodity pits in twenty eleven guess how much goldman sachs was one point six billion what's the difference in earnings how much more did morgan earn one point two billion where do you know that number from the m.f. global scandal so long point two billion of course as we started this 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 the head of goldman sachs over on their desk of death apparently there's this real love of girl life masters is competing against isabelle he lets who is the

goldman sachs head of commodities trading and isabel according to the life masters can't cope with our superior platform in industry connections a certain dark mistress something 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 with our 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 blights corrupt lawyers sprong 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 pursue 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 look strong you know both love a girl and hold it wad you know them to have competition coming with silver surfing's they see. 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 been granted the woman who created weapons of mass destruction although she defends the products saying the people using them were at fault i'm low that's like saying that people who

a tainted meat already 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 their quota falls off they can't pay out the growth of all substances but there's also thing they don't exist there's no money to back them up and looks to go back into the wholesale market can count on a more phony loans which of course would require more austerity but of course as we established in the previous episode of kaiser report taken morgan itself sits on the board and is determines whether or not there has been a credit events. blows mausers is creating austerity purging into the marketplace on account of for nonexistent nonsensical credit default

swaps that are we do killers and do nothing and create austerity for these poor people so we've established in the commodity pits 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 for farmers 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 when 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 somebody's 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 empty somebody else's is full yeah 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 claimant vaporised 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 in a 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 and he sort of think well the article points out that this guy hoffman his just has zero hedge he's now not hedged 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 blight masters i mean this farmers to be able to buy life masters futures contracts in the open market to hedge himself against this part of the story nightmare blight 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 had currency futures and treasury bill futures and all kinds of securities futures that are outside of the agricultural sector now they themselves have morphed into the colossus that's putting a risk the very farmers for whom these structures were created for to begin with so now you've got futures risk so you've got tornado rist hurricane risk flooding rest

drought risk and blight masters risk so this would be a futures contract for farmers to protect themselves against bligh fasters. exactly they treat it like it's a game it's a competition between lava girl and it is doing it out of the modern pits 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 rattled they speak to brad moo moose 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 risk. and the point is well taken that the futures markets have been

securitized a lot of financial eyes and 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 among stations 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 us parity 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 blith masters posterity measures and here's how the political elite think once you respond to their crimes former friends pm greece could face a military coup in an interview in a leading french newspaper a former french prime minister in the shell or a car seat or that increased austerity measures such as those imposed on greece by

a slanderous could well see the country having could 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 and back to the junta were they ever going to have democracy but exactly but 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 the live masters in izzie. and you let from goldman sachs so all their money i mean that's already a melt martial law in the us you already can't speak up and offer any dissent

you're already surveilled twenty four seventh's it's already a military coup and sharkboy it's long a girl it's a know it all we all want some money in. there but thanks so much for being on the kaiser report thank you don't go away much more coming why so stay right there. mission free cretaceous free storage free. arrangement free. three stooges free. old free books loaded video for your media projects a free media gun to our teeth dot com.

you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else and you hear or see some other part of it and realize that everything is ok if you don't i'm sorry welcome to the big picture.

welcome back to kaiser report imax kaiser time now to go to new york and speak with economist and professor dr michael hudson back to us 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 are you there what happened well the italian journalist i'll of barnard by the duck 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 thing and so that's just to the university of chicago and our job was to explain to the year or two of your themes in general and

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 production in a cut consumption economy with the money in the credit that it needs in the income that it needs to grow basic keynesian. we also pointed out that when the central bank creates credit runs a deficit it's not hyper inflationary what isn't place 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 it provided a credit for corporate raged takeovers and what has basically been are loading down the economy. with debt and it has led to the inflation today all right so it's a variation i keynesianism our updated version of james in asm so how is it

different than i could and then what is already one already exists book angels hoping that no credit would do but a government deficit widow budget no credit would out be used to auckland new investments would cut out investment in motion but today's new credit doesn't do that credit is extended to day to take over a company and buy a property in real estate or so 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 spent he cut a lot from the production sector and i what we want to do it missouri is reunite the sectors and modernize an industrialized credit for what people expected american system to be a century ago openly industrial revolution was still gaining power there is a sign of pad a city university of kansas city reeling your gang hangout is the antithesis of

what's happening at the chicago school of economics so we know that there's a heavily influenced still component from the cargo school that informs people like christine lagarde is now running the i.m.f. there forms the obama administration and most 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 pay on part and ignore and censor all the special of any alternatives so there's no interaction at all by the chicago school of antithesis we're actually where the university of missouri and kansas city u m k c and there's a blog if you were to google your own case the economics blog you get the blog you know egg. mic perspectives this edited by stephanie calton 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 pro financial lobbying the chicago are still doubts we have spent so long with me in italy where stephanie calton build black was talking about well and another blogger marshall our cock though on the floor of a 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 the stadium it was a sports stadium and when we walked in on a friday night two weeks ago we couldn't believe that we walk down the aisle and walk and walk and walk you know none of us have ever had such a gigantic audience and they were all there early base stayed to the end they really wanted to hear the modern monetary theory and how central banks were supposed to run deficit not surpluses in order to reflate the economy are

a university of missouri ad sans a city with modern monetary theory receive the like rock stars and only of course you're saying that the right the roof the the other side the three condo school doesn't allow for any kind of debate going on but it does have one apostle with a big platform in part at the new york times correct by he's more of a neo classical sort of liberal but he doesn't focus on the debt issue or debt deflation other we do and he believes that the government should balance the budget pretty much he doesn't follow the modern monetary fairy tale anymore and here he tries to be sort of the voice in the middle and he doesn't really discuss our theory or discuss a biased by name for the un speed. the welcomes for the people of liberals like ruben won't talk about where the people of the university of chicago in the magazines that it's put

a senator is and it will not permit discussion so basically the free marketers are so thirsty they don't believe in a free market of ideas they believe in but they didn't show it remember the first thing the chicago boys didn't show it was closed down every economics the department in a country a photo when they controlled one of their professors paul of harvard or was accused of us sitting in his auto room figuring what economists should be excluded and he said he had no idea that they were going to have their stomachs cut open shared by coppers and thrown out over the ocean yet no idea there are families would all be killed he had no idea that the people he was fighting were going to be victims of the operation condor that held up by rosen's of labor leaders economists he had no idea that one of the other people were closing down all in apartments that they were to be herded into the stadium so the machine gun kelly tortured but

that's 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 of people that's why when he tried to take over harvard into that his 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 backpacker 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 the united states and is clearly failing as. in many countries around the world so where do they were does the term free market get lost because it's not

a free market the chicago school has inverted what the classical economists meant by free market when adam smith and john stuart mill and the one thousand nine hundred eighty and a progressive era spoke about free markets they wanted to 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 when brant would be character 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 regulates a lot of the bill that will likely to tell 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 economist cost of production and make it more competitive this was the whole philosophy you know be industrial revolution and it was the free market idea that classical economists say out. of the rocky age front back around world war one they began to inverted and their idea of a free market was free for predators freeform an upper three for landlords to go to whatever rents they could get and the freedom so some taxation so that the government had that tax labor and tax industry and the result is that the american economy today under the so-called free market has such a high cost of living and the high cost of production that our labor can't compete internationally there. that's why america's balance of trade has moved so far into deficit if an american worker has thirty forty percent of those income on housing

if yesterday fifteen percent for health care and social security if i see a way to old which is yesterday another fifteen percent excise taxes and sales taxes and income taxes and other taxes and if he asked to pay 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 his monthly nut is so high that he's priced out of the market nest why american can't compete in exports except for agriculture which is heavily subsidized by the government and of course the military industrial complex of exports. diplomatically up through international goshi asian so free market is what is killing the american economy and it's not free at all it is free for creditors not free for a labor not free for industry not the kind of free market adam smith. was that

what you're describing there is in a lot of ways you could say that the occupy lost free 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 now the occupy wall street is saying we want to be free from the rent seeking occupation of last three pranksters and they so therefore 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 all the occupy wall street people do have on sunday. here in new york a regular meeting of the financial advisory committee kathy only old ones that there are people like eve he moves from macon capitalism is there i'm usually there

dave kelly who's dennis kucinich is economic advisors there are a lot of wall street insiders are there is a look at where money managers were as fund managers but this is that hell of a way to make money but look rather make money in a way that helps the economy be 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 the phillips ups that's asacol right well right of time but thanks so much for being on the cause report dr michael hudson thank you very much nic and that's going to do it for this edition of the kaiser report with me maximizer as the three hundred dollars i guess dr michael hudson really just i mean he now plays is now a kaiser reported are p.t.v. are you next time next time you're saying.

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