thousand people who gathered in florida last night to protest the death of an unarmed seventeen year old american african-american by a neighborhood watch member it's a case that has gotten a lot of attention in the news lately and one that brings up the question of racial inequality in the u.s. . you know sometimes you see a story and six so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't know i'm target market is a big issue. good afternoon and welcome to capital account i'm more in the store here in washington d.c.

these are your headlines for march twenty third two thousand and twelve then breaking today is needing in washington with central bankers for what sounds like a central bank and love fest where they're gauging the impact of their easy money policies this after the head of the federal reserve has made the rounds this week defending these very policies to students as professor bernanke piri is arguing that loose monetary policy did not cause the housing bubble the increase in house prices was way too large to be explained by the relatively small change in interest rates. but we have the pleasure of breaking that news to investor jim rogers he helps us set the record straight and the white house announces its nominee for the traditionally washington dominated position of world bay president i believe that nobody is more qualified to carry out that mission than dr jim kim. he is dr jim yong kim a physician president of dartmouth college not a banker not an economist nor

a diplomat also not larry summers he's born in south korea immigrated to the u.s. when he was five so does that still lightly confuse the much bawly and cuckoo tradition of an american lock down on the spot in a good way if you get this job or would it simply represent. this status quo will discuss and with gold prices dropping recently some headlines are saying gold loses luster in base of the u.s. recovery so is economist nouriel roubini right that gold bugs are clueless as he says there in that tweet we asked john rogers and this just in according to bloomberg former m.f. global c.e.o. john corazon gave direct instructions did you hear that direct instructions himself to transfer two hundred million dollars from a customer fund account to meet an overdraft and one of the brokerages j.p. morgan chase accounts in london this is big news we'll talk about it let's get to today's capital account.

so as i just said we have gotten news bloomberg news obtained a memo drafted by congressional investors that according to an e-mail. sent by a firm executive at m.f. global jon made that direct order to transfer customer funds to the tune of two hundred million dollars to j.p. morgan in london before the firm went bankrupt this should be a game changer we'll talk about it with our guests but now let's get to ben bernanke it's been a busy week in the spotlight for the federal reserve chairman today ben bernanke you spoke at the opening of a fed conference in washington with other central bankers this rounds out

a week where he gave two lectures in his college class the first ever talk by a sitting fed chairman live streams for everyone to see not just the students they got the spot there now you could call it class or you could call it indoctrination or an attempt to rewrite history or a p.r. offensive in the face of criticism regardless it's friday so we have some time we took some time to look at his lesson plan with more scrutiny and yesterday he tackled the issue of the housing bubble and the debate over the role of the fed's loose monetary policy in creating it so here is professor bernie accompanied by his power point slides making his main point and excuse the camera work. the evidence that i see and we've done within the. suggests that monetary policy did not play an important role in raising house prices during the. ok first of all this is false on

its face because the housing bubble was not just a bubble in house prices it was first and foremost a bubble in mortgage refinancing and because credit that's why you hear about the credit crisis and you cannot have a credit bubble without rates that were too low now he gave a full argument as defending his position we don't have time to dissect the entire argument so we picked one of his main points let's let's talk about it bernanke argues that boom and bust like we had in the u.s. in housing were not unique they happened other places with different monetary policies he cites an example in europe. but germany and spain both share the euro so they have the same central bank european central bank the same monetary policy germany's house prices remain absolutely flat throughout the entire crisis spain had an enormous price increase considerably larger than the united states now what bernanke he fails to acknowledge is that a rate that was appropriate and dusseldorf germany may not have been appropriate

for a borrower in the dritte indeed one of the problems with the euro area is the capital from germany was being exploited to the periphery as a result of a uniform interest rate that was inappropriate for both germany as well as spain now for an eighty also claims that countries like the u.k. with their own monetary policy and with higher interest rates also experience their own housing boom when he fails to acknowledge here as in the case of latvia is that a country's monetary policy can be overwhelmed by that of a much larger country like the us or to pan in latvia's case people were borrowing money and yet where they could do so at a lower interest rate and then they were purchasing real estate in latvia therefore the cheap money policy in japan was responsible for creating the housing bubble in latvia and this is something we've seen time and time again in global markets people and assets well they may be local capital and credit is international now

bernanke he says this about why the issue of the housing bubble and getting it right is so important to understand here's this reason going forward we want to think about you know what you know what should we take into account when we look at monetary policy to what extent should we be thinking about things like housing bubbles when we make monetary policy ok i'm sorry to break this to you but let's look at how well that's served him in the past listen to when he was asked about a housing bubble and burst before it all came crashing down. what is the worst case scenario if in fact we were to see prices come down substantially across the country but i guess i don't buy your premise it's a pretty unlikely possibility you've never had a decline in house prices on a nationwide nationwide basis what's now in our view the fundamental problem ben bernanke and his disciples out there they are and it is that governors is that they

believe the interest rates should be immune from the laws of supply and demand that every other price in the economy that the interest rate is somehow special and when you have lower interest rates artificially you make enterprise venture investment temporarily more profitable than it otherwise would have been creating un sustainable booms fuel by debts now last night i had the pleasure of breaking the news to our guest that ben bernanke he was teaching this college course jim rogers investor and author of a bull in china investing profitably in the world's greatest market take a listen to this today his lesson was how loose monetary policy by the federal reserve did not cause the housing bubble do you think he's out there trying to rewrite history with the most impressionable minds students. very nervous system silly things like this of course that's what he was doing he were the very fact

that he's protesting and then. of course it's nothing more than to indoctrinate the world we're see teaching this course george washington university students had to apply bright as ses only thirty were selected and you know there were quotes where they were saying that this is the most important guy they were so excited to take a class with him. because he's destroying america western world as we know it so yeah that's sort of good for he's not doing much for the rest of us you make a fair point there mr rogers as usual i want to tell you what mr bernanke he said to politico about this he said that this outreach is to help as many people as possible including the media to understand that we're doing our very best for the public do you think he really believes that when he says that unfortunately yes he's not a very smart person for goodness sakes of course he's doing his best but that

doesn't mean he's doing the right thing he's doing absolutely the wrong he's doing his best and doing the wrong thing you have a dozen to understand currency markets those are the standpoint of those that understand oh you know this this is printing money so of course he thinks he's doing the right thing and of course he's doing the best he. or she is not good for the rest of us would that's a question that i have for you too because i know i've heard mark fabiani your friend say that bernie he is a madman and that he really is one of those policy makers who is a true believer and what he's doing i'm curious if you do think he's kind of this ideological fanatic who is looking at his models and is going to apply his theories accordingly no matter what it does even if that means blowing up the global economy . it is entire professional career is all it is. it's like a man with a hammer. everything he sees is and. everything he

says he wants to print money he believes what he's doing he just doesn't know. and that's the problem for all of those i don't think the man is designed as i just think he's. not very smart mr rogers it does appear that the press at least some of us goes along with this alan blinder. old friends of the federal reserve said that it seems to be the prats that is not as hard on him as politicians have and then there was this cover story of the atlantic i don't know if you saw it but it was this long sympathetic you could say story about bernanke in an interview the cover said the hero and you know i heard an interview with the author where he was asked about his sympathetic viewpoint which he was defending and he started mr rogers by saying you know maybe you could call me a contrary but and then he went on to defend it my question to you you've been called

a contrary an investor mr rogers is supporting a contrarian view point. you know for a start everybody in america nearly everybody in america of course of nearly everybody and most irregular know there is a federal reserve in the works we do know and understand what it's doing and how it's working and i see your cover you have it on my screen. maestro. of the same thing about what's his name alan greenspan yeah. another misguided journalist writing about the rise through well on course you are just going to suffer when you are in the world comes up to realize what's going on well and then their idea for a headline that some people had was the zero and that they care which i thought was kind of him using ok let's switch gears and not by hammering mr bernanke i want to talk about m.f. global because mr rogers you said very early on that m.f. global broke the sacrosanct rules and the commodities market taking money out of

segregated accounts mr rogers it has been five months since m.f. global declared bankruptcy customers are still missing their money. is still walking free there had not met a lot of consequences i'm curious where is this leading are we going to see next that you know chase customers wake up one morning and see that there is money taken from their accounts from j.p. morgan is that the message is sending well it might wear away but this is sending a terrible message to the world you're never supposed to touch your segregated accounts that's the first rule one learns in the commodities business and somebody charge the money that's. large this is a bigger issue you know nobody's going to jail. in the thirty's a lot of people with the president of the new york stock exchange went to jail in the ninety's when we had the you know what they call the s. and l. problems hundreds of people went to jail we know he has gone to jail to this is

just staggering and the problems and the misallocations if you want to be nice about it worse than ever and nobody here is so i mr rogers i think. except except the part because i think it's interesting you said the message it sends to the world sitting there in singapore you can attest to the fact that this is not just the u.s. it is getting its message the world is getting its message but on the point that you made about how people have not been prosecuted people have not been put in prison mr rogers we have talked to a regulator during the us now crisis who was the director of litigation who saw that bankers that had committed corruption were prosecuted for that we've spoken to pro bono attorneys that are working on behalf of customers in this case we've spoken to futures industry veterans who are just so shocked that this is happening are investigating what is going on and yet they're all saying this is fraud this is criminal and nothing is happening do you think there's something bigger going on

here in f.l. but is it. bigger i'm not sure what it is it's just maybe more incompetence in washington or more of our lives in washington you know it's the corps i was a big contributor. and democratic party i have no idea what's sitting back here rest of us especially the people who suffered no there's something there oh and by the way are i think the people who suffered in all of this that rather have their money back and see people in jail they have a choice what it really like is their money. but this is this is not good for you. right and we'll have more with jim rogers but still ahead president obama announced his nominee for president of the world bank this morning and luckily he's got just what he needs for the job danciu i'll give you our three cents but first the closing marking a market. has

put a picture of me when i was like nine years old and just a little truth. i confess and i am a total get of i love driving hip hop is a planned trip. but it was kind of the gesture that. i'm very proud of the role the belgian she has played. oh. you know sometimes you see a story and the scene so. you think you understand it and then you glimpse something else and you hear see some other part of it and realize that everything

is ok and. i'm charged is a big issue. what drives the world the fear mongering used by politicians who makes decisions to create through it's already made who can you trust no one who is you with a global machinery to see where we had a state controlled capitalism in school sessions when nobody dares to ask we do our t. question more. before the break we were talking and then global sticking to this subject there is a larger story here larger than one bankrupt

a story of too big to fail you heard my report the breaking news that john. had the funds the customer funds transferred to to j. p. morgan two hundred million dollars so it's the largest creditor i talked about this the too big to fail angle with jim rogers there is the too big to fail thread there is junk or as i knew was the head of goldman sachs as you pointed out very politically connected that is see if he see one of the regulators also former goldman sachs the largest creditor j.p. morgan my question to you has too big to fail allowed or created a corollary which is too small to succeed which means if you're a small firm a small investor not as politically connected not as systemically important institution or per that you're just simply choose not just sixty. no no no if you're smart doesn't matter if you're smart and play by the rules and do it honestly you can make the best successes in america in the world not just in

america but nearly everywhere in the world. as long as you play by the rules and if you're smart and it was a great success i am mr rogers not everyone is as smart as you and like i care a lot of small firms are being crippled by their zero percent interest rates for example. that's a different story us an entire year or makes it very hard to make in writing for anybody smart or dumb it doesn't matter know this and mr bernanke is destroying the class of people will save and invest and throughout history when you destroy the people who say and invest and do things the right way your society old summerlee has to pay a huge price for it and that's what he's doing he's wiping out all the people who got it right at the expense of the people who did it wrong and people who took out huge mortgages and boras amounts of money he's saving those people at the expense of the other people who play by the proper rules and he came by playing by the

rules or not playing by the rules i want to know what your take is on this whole goldman sachs thing i don't know if you saw the whole brouhaha that ensued after this britain by greg smith but one of the things that i guess on my show has worked in and around wall street for many years she worked at goldman sachs in the eighty's said you know the fact is they're so big and have their hands in everything so maybe they haven't lost clients because people have to kind of do business with them and one way or another despite the fact that according to this guy greg they're called muppets my question in your experience does goldman treat its clients like not its. well i go rosenzweig i'm not a client of goldman sachs and i haven't really years. so i have no idea but i saw all of this the store i mean so it was a disgruntled employee. you know it was own. little bit too much and since there are no in the pressure or low low this kind of pretty much attention to it i'm sure

a year or two most people will have forgotten but one thing that i know you pay attention to are at least in the past when we talk seems like it was gold and maybe had a m.f. global one of the things that that would do is make people want to own it because there may be concerned about their money but there is a story that i just saw come out that gold is losing its luster because of the u.s. recovery and it cites gold prices down nine percent it cites that something that is kind of a litmus for for gold performance or investment sentiment as the u.s. men's sales america of american eagle gold coins which fell to the lowest level since may two thousand and eight nuria were being how to write is gold in a bubble and are gold bugs who we sure like to tweet about a lot clueless. no no go to sort it out in a bottle of this list if you have some things that are probably everybody's buying and i suspect you know very few people who own code and if you walk around the streets of america hardly anybody owns gold is not in a book that doesn't mean it's not going to continue to go down go does going up

eleven years that i wrote mr and that's very unusual for any of us anywhere in the world throughout history so bold is taking a well deserved rest it could go down thirty forty percent you said down nine percent since you were think you said it could go down significantly i'm out in the one nine hundred seventy s. no went down fifty percent. and scared a lot of people out and then it went up eight hundred fifty percent that's the way markets work if you people don't understand that about markets they should not be investing social can go down and if it does i hope i'm smart enough to buy one so then should marry out or be not be tweeting about called is he not smart and how do you think i missed this it's a free country it's a free world and the most people can make pools of themselves if they where they want to. very well said mr rogers it's a pleasure to speak to you as usual you have a illuminated with all of this insight thank you is this

a listener against. thank you. thank you thank you you. thank . all right let's wrap up with the loose change let me get dimitri and shannon in here because drum roll please president obama revealed his nominee for world bank president of course he is the president of dartmouth his name is jim yong kim he's not a banker nor an economist nor a diplomat but he does have what every head of a global financial institution obviously needs which is rocking skills and dance moves take a look. so

there he is doing a dance as part of that part of the dartmouth idles finals last year he's pretty good if you ask me he's also a physician and an anthropologist now he wasn't a name thrown around by the press ahead of this nomination people like larry summers and jeffrey sachs were he is south korean born moved here reportedly when he was so what do we think it is nomination normal firm and i think this is a good first of all i like they're trying to bridge the gap in this creative way to warn us of the united states raised in america i like but i also love the fact that as you pointed out this is not a banker or an economist and he's another apologist which is great because we understand and have studied people and the way that herds of people migrate from place to place. and they could be could be much better to have a guy like that running the world bank than some banker poses going to libation probably going to low easy money if you drop. you're usually critical of academics . this is an academic. i have

a problem with weathermen who also happen to like the measure of the weather so i don't have another apologist who doesn't think he's so smart who knows what interest rates are and what the world should look like i would rather the server so you know right not not that they set interest rates but to your point i do think one of the reactions i've seen today is we he's not an economist he's not a banker he's not a diplomat and not seen as surprising at the same time that can be a hugely good thing ok as we heard jim rogers say if someone is that you know trained to be a carpenter and use a hammer everything they see is going to be a nail it's probably a maybe a beneficial thing that it's not a banker who's going to constantly want to get people in debt and make money and that sort of thing however i do think you know he is a break from the white men who have always been americans that have run this bank we did show a picture of there they are so you know it's a bunch of white guys americans that have run the world bank this is been a criticism of the united states as the developing economies have become

a much larger part of the global economy and i think that maybe they're trying to send a message that ok while the u.s. has dominated this position you know the south korean born is a break from the white man american trend however this doesn't address the main criticism which is that this needs to be a more meritocratic process and needs to be broadened a thoughtful response lawrence is not a banker. here guys not a banker or let's not let's not rosy over the right fine as you are and as for loose change and you want to do on anything. i just think he's good for having those dancers are good and you sense of humor. tension i got her to drop the one he was the last stop at our center so i know that her a nation owes stuff that's just that's just wrong ok moving on to the end of taken a harsh stance on balance he recently that's one players received extra cash for hits that her particular opponent the organization suspended new orleans saints

coach sean payton for all of next season and indefinitely banned you weren't former defensive coordinator gregg williams for this practice but guess who also wants an end on the bounty gate i commend the national football league for taking swished swift and decisive action to discipline those involved in the city exploding program. we need to make sure this never happens again so senator dick durbin of illinois setting up a judiciary committee hearing about bounties in professional football he says congress should at least explore whether it's necessary to have a federal legislation in this area come on you know getting well someone should send reggie white into congress and tackle big urban give him fifty concussions because these guys are wasting our time with these hearings ok we have bigger issues like them of course don't work for people sticking needles up there but with steroids and other freaking guys tackling other people don't worry about sports we're about fraud fair enough shannon

a regulated. oh i don't know that i'm sorry. reggie what. do you gentlemen might want to watch you know what he's looking for because if congress everybody gets involved with federal legislation in the end. he might not have any chicago bears left. and as you put pointed out earlier the n.f.l. already took disciplinary measures why is the government getting involved you gotta be kidding me and i'm not going to be called i want to bet that that's ok well he's not well in our eyes that's all we have time for thanks so much for tuning in don't forget to follow me on twitter out lauren lyster a get it back on the show you tube dot com slash capital account and from everyone here thank you for watching and have a great night. wealthy

british soil sunny. spot on guys.