answer war dot com. that's going to do it for now for more on the stories we covered you can hand over the arts without hans last usa take it or you tube it gets you to dot com slash r t america you can also follow me on twitter at this ball will see you right back here at eight o'clock. and if you. get a. green. green. green. green. the old free blog video for your media drug free media organic argy dot com. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. and here are your headlines for march eighth two thousand and twelve well today with another d.-day of her very seriously how many d.-day can you have when you

supposedly already won the war meanwhile president of the b.b. mario drawing he is defending the e.c.b. trash to cast liquidity operation today the l.t.r. oh. the rule. i would say questionable such that is. really funny because your former colleague at the e.c.b. is out saying the easy balance sheet is gigantic and the quality is alarming will decode more of this euro zone news and the gold rush continues at least the rush to what counts for all the gold we told you german lawmakers are auditing the central banks hold now reportedly members of parliament in switzerland want this with people to be able to vote to keep the country's gold business glee in their country and forbid the central bank to sell any more of its reserves why.

does it come down to that is gold the nuclear option in a currency war as well described it and speaking of china and the rest of the brics what alternatives to the u.s. dollar besides big euro for obvious reasons to use for trade and investment aiming to move that along and internationalize its currency china reportedly is planning to extend the loans to other brics nations other countries in the blog are planning to do the same with loans in their respective currencies we'll talk about what this all means let's get to today's capital account. so the group that spot deadline was today just about an hour and a half ago now purport preliminary reports greece clear the minimum threshold to

get this deal done i've seen anywhere from seventy five percent to ninety four point five percent of private creditors signed on according to reports so far now this is yet another case though the solution isn't really a solution yeah forgive the debt in order to take on more debt to deal with the problem that is too much debt none the less these are the policies they continue to be deemed solutions by leaders and speaking of super mario better known as mario draghi president of the e.c.b. was defending another one of them today in a press conference saying that the e.c.b. infusion of more than a trillion euros of cash into european banks was a success this is of course the longer term refinancing operation or. now this is europe's quantitative easing but remember this isn't money printing because they are loans in exchange for really questionable collateral so just remember that meanwhile a few european countries that we know of at least look like they're trying to

prepare for the worst battening down the hatches on their central banks gold and china and the rest of the brics bloc of developing nations brazil russia india and south africa making up the rest appear to be making their contingency plans to to get away from the u.s. dollar and the alternative of the euro with all of its problems according to the financial times they're planning to issue loans to each other in their own respective currencies this is to boost trade between these countries and promote the use of the renminbi versus the dollar when they do so to here to talk about what all of this means edward harrison he's founder of credit write downs and he is here to sort it all out edward it's nice to see you again if you are right so of course what else are we talking about other than europe we only got to start with right. so greece is d.-day today it has deviated a there is always a d.-day when it comes to greece every time there is

a deadline the decision is branded as d.-day this is another one it looks like it you know made it clear the hurdles that they need to we are always going to have another deadline in greece there will be more to come so when is there really going to be a d.d. well the the there will be will greece leave the euro zone that will be the old smith solution here because the end of the day greece is uncompetitive in a strong currency with germany the political will for the fiscal transfers that need to be over longer periods just aren't there if you look at germany itself you know you had west germany that used to when they came to go you look at school transfers of twenty years before you've got any semblance of normalcy in terms of unemployment and so forth east germany is doing ok that's the sort of thing that you would have to see in greece in order to bring their competitiveness up to the level necessary to have these recurrent growth we are you saying the fiscal compact in all of these solutions are going to work exactly i thought wow imagine that so

da's when greece leaves the euro zone when you think that's going to happen i know you're not because of all. the good question is i think that the germans in particular are prepared for that are going to well be right now the real question is when do the. situation in place. are stable enough so that they can actually go ahead. make some compromises and see if. allow a while until then let's talk about some of the solutions that they do appear to be doing to buy time and kick the can down the road mario draghi president of the b was talking today in a press conference defending l.t.r. oh the longer term refinancing operation they've done two rounds of it through your loans one percent interest rate in exchange for what a lot of critics have said is pretty shoddy standards of collateral but i want to play what mario draghi said to defend l.t.r. as a success ok let's hear a little bit of what he had to say. but there is equally here all had

a powerful. powerful effect of removing what's called a risk from the environment now i think the ball is in the go in minutes and the other octave specially bang score. let's decode this because that is technocrat talk is he basically saying alex hero allowed us to kick the can down the road to by three years an order from governments and banks to try to get us together. is that you know if we didn't get in the. money off of the dodgy collateral that were bad things with. the so-called tail risk we could spiral down and we know that it's not going to happen and so we put it on there the whole thing it's on you banks and governments to get it sorted to say a trillion euro seems like

a lot of money to buy that kind of time when it when the eventualities don't seem like they're actually going to work out the way they're planning for them to well you know they're in a political economic problem the difficulty is the solution that they have which is austerity really isn't going to work basically it's creating a deflationary spiral in the periphery and it's actually crept into the core and interesting point is that the gods for instance they are not going to hurdle the three percent hurdle from austria in two thousand and twelve so they have to as well this is one of the countries that is actually supposed to be one of the better countries that is supposed to be doing well and if they're cutting you know you have austrian friends also cutting in the same way because they're going to miss there are rules of three percent and then you have you know a very negative so the problem's been much further than just the peripheral countries that are you know are the ones that are in the desert crises right now speaking of problems someone they did not mince his words said that the e.c.b.

is dealing with quite a few of them and of mario doggie's former colleague at the e.c.b. former executive board member you're going stark said in an interview with the newspaper today the euro system's balance sheet is not only gigantic in its dimension but also a law. army in its quality so he wasn't quite buying what super mario was saying in that press conference today he said no way the balance sheet is gigantic and the quality of it is alarming now of course we've heard kind of these reports that the collateral accepted for l t r o o was kind of questionable what they would accept but maybe you could help us kind of get some detail into what exactly is so scary it's now an e.c.v. balance sheet or or what about that quality is so alarming. let's recall the paper we're talking you know investment grade maybe even not investing i think the way to look at it is it's almost identical to what happened in two thousand and eight two

thousand with the fed when the fed was running these quantitative easing and all these other alphabet soup programs they were taking on dodgy collateral and they were lending it out. you know very low rates so dodgy collateral for a low as opposed to good. punitive rates i mean if you are going to have a crisis supposedly if that's what you're supposed to do that's the bad rule is good collateral at a penalty rate but instead with something different and the e.c.b. is taking a page out of their playbook it's exactly the same ok but riddle me this because bad collateral at a really good rate after the federal reserve it's a problem it's still the global reserve currency the u.s. dollar that they're working with in the euro zone the euro is not does that mean that this could be more disastrous for them i don't think the fact the dollars the global reserve currency makes a big difference you have to remember that the euro is one of the largest holders

of was of currencies in the world as well so really the real problem is that the e.c.b. has jumped its balance sheet if anything happens that you know in terms of that tail risk that that mario draghi was talking about in the e.c.b. is therefore on the hook. for the they have to turn to senior ridge which is basically money printing in order to make sure that there. is is there so they would just say the same thing but bail itself out by printing money exactly yeah ok well speaking of that i want to talk about the money that is now returning back to the eurozone one of the other things i thought was really interesting that super mario said is that l.t.r. o. has restored faith again in the euro and that they've seen money market funds for a term and i thought this was interesting because didn't money market funds go there in the first place because the federal reserve has been keeping interest rates at zero so they can't make any money here so they have to go pursue higher

returns somewhere more dangerous like europe right look i've been saying this for two or three months ago for months even back in november i said you know the whole italian thing was blowing. if he gets in the back stops italian debt and spanish debt and somebody gives it a bad start people going to go in there because your risk is seeking return people are getting cross they're not getting the yield at the and therefore they're going to go out and you know the risks are going to go into spanish and italian and so you know druggies organize the celts yarrow thing when we really know that it's all about the sob it's not just about the bags you know in the roads to facilitate this mother position of specimens are and therefore you know they have really bothers yeah but so ok so but to back up a little bit so money market funds once europe really risky they evidently left and ran away because they. knew it was going on to their rena say newspapers as we all were but evidently now they are returning ironically because of the actions of the

central bank to prop things up there so my question here is what is driving investment these days capitalism or the fall of the central bank row where the global risk seeking return is really would follow at the end of the day you know you have financial repression where the central bank is. keeping rates of the artificially low level and if you're a pension fund and you have you know things that you have to pay out in the you said to yourself we're going to get x. return and you're only getting x. minus two of which they're going to do that then you're in a big hole you have to go and seek higher return that means greater risk and this is what pension funds are doing this is what investors in general are doing and that's why easy money is actually not a good thing yeah and it's why i think it's ironic that you see the central banks decisions play such a role i'm both sides in financial repression and where they are you know propping up markets in a way that there is more benefit to be had as far as the u.s.

you can get there i want to ask about germany and switzerland is there are a few reports that have come out from both of them and germany lawmakers are auditing record in the central bank and switzerland for members of parliament want this with people to be able to vote to keep so to lend called physically in switzerland not allow them to sell any more of their reserves and keep twenty percent of their reserves and gold i'm wondering what countries are doing when they're doing this are they concerned about a euro zone collapse and they want cold to back their currency in that situation or are they worried about monetary crisis where countries could use the nuclear option and actually take their gold because a lot of them keep their gold outside of their country a lot in the new york fed for example. i think they are betting down the hatches as you were saying it's not necessarily that the actors themselves that is the central bags think about things and therefore we need to have physical possession it's rather that the political environment is so volatile that there are people who say look we think that this is

a dangerous situation we don't care what happens we want to make sure that we are we have our goal in our country and therefore we're going to post the political will to make sure that you the central banks are doing exactly that and so this is been going on for at least two or three years there's been a lot of reports. especially in germany about the germans not having physical possession of their gold. meaning that when the eurozone breaks the watch he does get a situation of people who think that they are so that we need a great example of that i'm afraid i don't think so we don't have time to get to china but i do think it's interesting that china is going to is planning to issue loans in writing and b. and other brics nations are plenty to do the same so that they can trade and their own currencies circumventing the dollar again we know that the brics have not like the dollar and don't see the euro as a good replacement for it either we can't get to the impact of that today but we'll have you back on to talk about it because it's interesting i appreciate that

talking to you though as always your insight is very insightful that was edward harrison he is founder of credit right on time. and to lead we've talked about zombie banks and banks jersey but the question remains are we headed for a zombie apocalypse we'll get our three cents on how one university is preparing for just that but first the closing market numbers. we just put a picture of me when i was like nine years old i want to tell the truth. i have a concession i am a total get over i love rob because he is excellent and. he

was kind of the jester. i'm very proud of the role that out you just played. you know. sometimes you see the story of the scene so you think you understand it and then you've lived something else here's some other part of it and realize that everything you thought you knew you don't i'm sorry in the future. what drives the world the fear mongering used by politicians who makes decisions comfortable break through. who can you trust no one who is in view with the global machinery see where are we having state controlled capitalism is called

satchels when nobody dares to ask we do our t.v. question more. right it's time now for word of the day where we break up an actual term or concept for our very smart viewer but just maybe not the financial expert and today it is that swap because it is a very important day for one in the never ending euro zone filled lucian fog just look. at why private investors have our website if i'm whether or not you walk the bar here the other details about the greek debt swap they each uno. what you need to know about the greek debt swap deal is what exactly is it gets walk in the first

place let's take a look at the definition a debt swap involves the exchange of a new bond issue first similar outstanding debt or vice versa in the case of greece they are replacing existing bonds with a package of new ones with less than half of the nominal value looking at it in a different way at net present value and best years are being asked to give up almost three quarters of the value of their holdings now this is all to cut greece's public debt to around one hundred sixty percent of g.d.p. of the two hundred six billion euros of greek debt it will relieve one hundred five billion euros of them now the benefit for investors is they don't lose all of their money they use a port lose a portion of it the necessity for greece is that they promise to get this debt swap done to reduce the country's debt so they could meet the terms agreed upon with the e.u. and i.m.f. to get more debt more loans in the form of the next one hundred thirty billion euro bailout so that the government doesn't default on you guessed it its remaining debt

now the debt i'm with today it was at three o'clock so the numbers are rolling in and we don't know exactly how it went we won't until one am our time a.t.m. and greece but the reports we're seeing so far is that ninety five percent of private creditors have signed on some reports put that number a little bit more modestly and again as i said we don't know exactly now this is a technical technically this is a voluntary deal but here's the hitch according to reports of greece gets two thirds of bondholders to partake which it looks like it did according to government according to government officials they put that number about seventy five percent if they get that two thirds of private creditors to sign on athens can impose a collective action clauses which basically just means greece can make all of its bondholders who own greek debt written under greek law except the deal by force now that will reportedly trigger credit default swaps. in that situation let's take a look at who reportedly is most exposed to greek sovereign debt very have it

french german and british banks those three zero expected to be hit the most c.d.s. exposure just to remind you we don't know exactly no one knows that complete picture now what you really need to know about this deal bigger picture is that this is just another example of more financial engineering war debt more refinancing that in the end does not address the issue which is big greece is insolvent and leaders are just trying to find new ways to pour debt down its throat as the medicine to cure the disease that is crippling debt that's that's what.

all right let's end this up with some loose change we've got dimitri and shannon to weigh in let's listen to jim grant he is the founder of grant's interest rate observer he's been a guest on this show he is who ron paul said he would pick to to be one of his economic policy leaders and raise that ron paul is that the interim chairman if there would be a fad because ron paul does of all you have you can you get if you look at his head over the way not like jeffrey tucker's that's right but he was in an interview with maria bartiromo and there was a very interesting part that caught our eye we want to play it for you and then more chaotic what are the alternatives to me that you can make a case that was one there is an alternative that's what we have the right what are we recommended right. and so we're all here but what about older adults. ok. so the question that came up for us is he just advocating capitalism and as he typically does or was he advocating for capitalism and implying it's the n b c does

not. obviously. do you think that i think i think that that's a little far fetched i mean i don't really think we have our maria bartiromo there going mostly just feels very strongly about capitalism and was making the point that a lot of people don't you know a lot of policy who doesn't put it was me i don't hammer people to benefit from it when i was in charge of he wasn't she said we believe in capital because no it's not true and so the point is that you know we all isn't really an issue made herself to him you know what was really saying is like with some real i like you coming. i'm going to. know that you're an apologist for banks that's why you work at c b c because the sea is actually there so that it can support the too big to fail banks that's its job ok let's be honest if you were one of the shareholders of call i mean who had money would have of course soon to see was a lot of the schools that information so they are invest in the banks they cover so you need a break all right fair enough. you what. got

us to against lyon and i'm going to have to have jim brann on again so he can answer that question for us let's move on for now this spring michigan state university is offering of course and how to survive one of the. the two credit online course is literally titled surviving the coming the coming apocalypse catastrophes and human behavior and of course begins and ends with a catastrophic event simulation were students are assigned into survivor groups and it goes from there is this a sign of sentiment we've talked about the headline intake air and all these different things and i mean the fact that they're actually actually horses and surviving a zombie apocalypse seems to me that's what's weighing much more heavily on people

in this country is a very dark reality versus consumer sentiment numbers that came out positively or whatever i mean i think i think it was even more deeply than i think all the all the zombie movies that you see more of it's become extremely popular over the past few years is a metaphor for what people feel like in their daily lives their zombies their consumer zombies their credit zombies or they be trying to survive the zombie attack if they themselves or is it because the people that are left are like i don't want to become a zombie like a river of sucker out there i want to survive the apocalypse i want to get out of this thing and make sense this is in michigan to where it didn't we say this is in michigan where i mean been extremely hard headed to put in the stimulus even if you guys don't rise and you seen the economy and so it's like what's it called like the will the will move or we will smith like i am legend these guys are like alone in this giant zombie world they want to survive. and in euro land and shannon we can bring you in here i just want to point this out because we talk about zombie banks

we talk about zombie democracy where they put in technocrats and right here you have your money you've got your merkel you know you've got to protect yourself against zombies so whether it's consumers or you know leaders i just i just hope people are going to. i mean students are going to take it seriously i feel like i mean that by university there is a class called class for credit there's also one called rocks for jocks. there are other reasons that are actually worth their time and also the courses but you know they were courses online courses that people talk you know just to get the credit so i'm hoping that people take it seriously as let's prepare the rocks for jocks me i don't mean it just means it's an easy class dimitri and rocks for george jones yeah i'm sorry i'm gonna let them down geology class it's easy then i dumb as a rock ok but i shan't and i'm i'm sorry i'm kind of with you i think i. fall into that category that you're alluding to speaking of zombies

a story came out saying that starbucks and downstate is banning all screenwriters from its locations worldwide effective immediately because they had a study commission and that found that screenwriters spent the least amount of money and also had the highest incidence of stealing sweet and low packets it was a fake story it took us five minutes to figure that out but it's funny that it's a story because i mean maybe this would be a wise business decision for starbucks we all know how many people boy are there all day long they can be good for business especially on the west coast because you're going to hollywood the more of those people you have is only when i knew you could say that i'm sorry that i can compare a very objectively l.a. star just to listen to music once all over the country and i would choose those i choose to have workers over a lot of the others are new york they're just really got aspiring screenwriters and i curse at the starbucks right if we were a starbucks press corps sparring between writers. people writing us are writing straight know who are your true parents even though it was i have an idea oh ok

because everything's like it is in movies for you to sign you can enhance on this story because of a conflict of interest coming and i'm going to come in on this story and i'm actually going to say it to the starbucks on the street from here should probably start banning you tube. now there's. that's true but we're paying customers and we don't part and we go there we just ok we just like the coffee and we yeah we think if you go with the best case scenario for cash cows yeah that's all we have time for thanks so much for tuning in don't forget to follow me on twitter at lauren lyster and get us back on the show you tube dot com slash capital account and from everyone here at capital account thank you so much for watching and have a. wealthy british style. sometimes guys on the.

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