asia east asia is a flashpoint or trigger point of military conflict and all right i think we have a mad we are just simply out of time but they do very much appreciate your coming on the show that was right on lot of political economist we'll see you right back here at seven. the official g.o.p.

cation show on phone only pulled touch from the. video. cheesemonger. omissions feeds now in the palm of your. i am max geyser and this is the kaiser read for what it is say about a country whose economy results in a problem of obesity in see this is. ever tell us more max i'm sure you're referring to the pill that they now give pregnant women in order to make sure their fetuses are not obese but we're going to look at how a situation like that develops where there's just too much a very thing and we're

going to roll back to december twenty first two thousand and eleven burn anky money policy seen successful as savers become consumers and they say the federal reserve chairman ben bernanke he finally may be catching a break is easy money policies are showing signs of speeding up the economic rebound three years after he cut interest rates to zero and the article cites the fact that the housing market and car sales market that looks like it's reviving a bit well the savings rate has plunged again back to zero so america has those savings which means that they're entirely reliant on the state for government handouts there's no formation of capital amongst the citizens to give them independence and freedom outside of their dependence on the state bernanke you understand he's a communist dressed up like a capitalist but the mainstream financial media as this article points out makes it

sound like it's a very great result of ben bernanke is zero interest rate policies ok they quote allen sinai co-founder and chief global economist and strategist at decision economics in new york who says when the fed sprinkle happy dust on the economy we always respond the happy dust has been out there a long long time and i think it finally may be settling in some places this not happy ghost is angel dust it's p.c.p. and there are more than a lane line. and this is causing of course people to be number one dependent on the state number two drug addled so that they don't lose their depended on the state well he. calls it happy but it's only a certain segment of the population that is actually happy with this and that is those who are sponges on the system who don't actually contribute to the economy over the long term perhaps the short term and one local area like wall street and

they might use the happy dust of zero interest rate policy to stoke a bubble in say groupon shares that last all of three or four months i think people have to understand that this term happy does is code for counterfeiting or confetti and what ben bernanke is done by keeping interest rates essentially zero percent is that he has made it easy for central banks of banks to indulge in a silly as the term goes in economics create money leverage that they use to buy stuff and as a result of those policies game the value of that stuff goes up including the bond market and this is a go on for thirty years until the bond market collapses and it's only a matter of time some would argue within the next six months we'll have the end of the thirty year bond market and the collapse of the bond market or asset prices and

the ponzi scheme like groupon start which we've warned about all the show we said henry blodget over presence insiders that his whole case for groupon was flawed in fact that we were right he was wrong it's just another posies game ok so we should mention that groupon shares have fallen sharply since you mentioned that so but let's move on back to our main topic here max because we're talking about this happy dust that the federal reserve bank i sprayed all across the global economies and they say they maintain that everybody's happy so we're going to go look at some headlines where people aren't happy at all brics summit emerging economies condemned military threats against iran syria so leaders of the five world's fastest growing economies called thursday for an end to the rhetoric of military action against iran and syria. as they met in india to develop measures to boost mutual trade and their local currencies so the five leaders of the brics nations of course are brazil russia india china and south africa and they were very vocal including like close allies like india indian prime minister singh said we must

avoid political destructions that create volatilities and global energy markets and affect trade flows and this is written in response to the threats against iran and syria but they do also go on to suggest that a central bank for these bric nations and an alternative to the us dollar so all those who are critical opposition for the us dollar and our guest in the second after show jim records will go into this is book currency war details this he predicted this would be the case that it is in fact happening and the dollar as the currency used it at one point was seventy percent of all global transactions us just continuing to go down and down and down and this takes away the us barrier from competition which is destroying the u.s. competitiveness more than it's already been destroyed but also let's see what they said the five leaders signed a pact that they hope will reduce the demand for fully convertible currency such as the dollar for trade among brics nations the agreement will allow credit local

currencies among brics export import banks could boost trade the internal trade among the brics nations now at two hundred thirty billion is growing at an average of twenty eight percent a year and the coalition hopes to increase it to five hundred billion by two thousand and fifteen and the article then goes on to quote max rajiv kumar secretary general of the federation of indian chambers of commerce and industry and he says the brics group is trying to tie five votes together and the myths of an enormous global economic storm they are trying to hedge their bets by promoting trade among themselves and creating a fallback plan in case the dollar denominated global trade falls apart in the future. motion it's on go it's happening the currency wars are won and of course russia has blue gold in the form of natural gas they bring to the party trying to three trillion in reserves of trillion us dollars that they need to rejigger in the

global economy and so this action here where they're tying their boats together to prepare for the fact that the u.s. dollar will no longer be the reserve currency in member all of america's trade all of their deficit is with these countries in fact so if they're saying we're going to divorce ourselves from the u.s. dollar let's look back to right before this meeting when brazilian trade and industry minister fernando pimentel accused the rich nations of causing a monetary tsunami by engage in expansionist policies such as low interest rates and bond buying programs so max we go back again to this happy dust angel dust these guys are high and when somebody is high when they're drunk they think that they are cool that they're flooring their words and falling all over the place and makes them look sexy where every sober person at the party looks at them like they're some jerk you know standing naked like swinging around their hat people at a party they're those the brics regarding burning exactly the briganti they also

mention in europe they specifically mention the euro and they're printing money so these are the major trade partners these are the guys in charge of the i.m.f. the world bank. and they say these guys are stoned on angel dust well this is one of the u.s. consumer is doubly screwed because they're dependent on the fed but the fed is dependent on the creditor nations for guy reserve their securities of their bones so as the chain breaks apart the u.s. government collapses the bernanke used friends collapse but then the consumer collapses doubly hard they also mentioned that they're going to try to form a competitor to the world bank because of course they provide all the capital that is backing basically all the derivatives and all the fraud across europe the euro zone. america all these debts all these student debts that can't be paid all these mortgage debts that can't be paid across all those economies and here's a tweet from jim records regarding this proposed banks he says if bricks start bank as planned currency would be far behind geitner out to trash u.s.

dollar he's getting his wish right well you know here's the fundamental point to keep in mind so see end of world war two the reason the u.s. has gotten away with this idea being the world's reserve currency is that they have outsourced their military effectively to the allies of america but what india is saying what these other countries are saying is that they no longer agree with america's foreign policy they no longer agree with the pentagon's occupation of these countries in their neighborhood and around the world so therefore to cut off funding to do the thing that the american people should have done a long time ago they are going to do what america can do for itself cut the pentagon off from its primary source of funding by borrowing money from these foreign creditors and they're doing so because it is a very subtle and fundamental shift of the around the world they see america pentagon as being protectionist to being a forever that's what's happened in the last three years and that's the number one reason the u.s. dollar is going to collapse so let's move on then to other people who are furious

and not very happy at this wild party the bokken alyea going on at the fed and the treasury car why savers are furious in america so the savings rate is back to collapsing here's another fun one check out income earning from interest as a percentage of g.d.p. of course is a fun chart to the guys at business insider joe wiesenthal thinks this is funny and as you see that the income from savings has collapsed well these are the best of financial repression that happens when banks are in bed fascistic only with the central banks and corporations so that savers are workers are subsidizing joe wiesenthal's paycheck if it wasn't for savers joe ways of gold. the selling hot dogs in times square to people coming out of the garden after being drunk on a basketball or soccer or hockey game and he wouldn't you got to get a real job and so just tweeting all day well so let's look at the numbers as well

because forty one percent of early boomers and forty eight percent of late bloomers and these guys are all about to retire do not have enough income to retire so if their savings is collapsing and their earnings from their savings is collapsing we have another crisis on our hands coming up in the next decade for sure well as goldman sachs was finally divesting itself out of that prostitution ring it's been a vested in for a number of years they shouldn't but i bet so quickly because a lot of those breakers are going to need to make a living sold out so let's move on to a final one joining so i showed you some headlines where they some people importantly they're our primary trading partners ok and have all of the capital in the world they're very angry with the angel dust the happy dust that ben bernanke has spread all over the financial system the monetary system now let's look at somebody else who's going you know that you start on a soft drug like a happy dust and you have to go up to the next you have to start doing bigger and

stronger lines even a one trillion euro firewall wouldn't be enough so we know about the eight hundred billion euro european stability mechanism well german chancellor angela merkel and her finance minister wolfgang shell bill have been accused of crossing many of the red lines that they have set for themselves over the course of the euro crisis making u. turn after you turn as the crisis escalated they officially stepped over the latest red line on friday when european finance ministers meeting in copenhagen agreed to boost the scope of the eurozone firewall to over eight hundred billion euros berlin had long rejected such an expansion out of hand so max redlines doing u. turn after you turn walking in circles which i remind you of well it's others. play that the bernanke is happy is a gateway drug to red lines red lines of l.t.r. oh. the bolivian marching browder is a practice in berlin and angela merkel is getting with suited on an expansion of

the fire wall dust up her nostrils then it doesn't help the cognitive abilities much the beginning to last the last coherent as days go by but that's what angel dust bernanke is does will do to you stacy herbert thanks so much for being on the report thank you max all right don't go much more coming away including jim records. couldn't take three months for charges three. three.

three. three. three broke video for your media project a free media john darche john tom. i

am max ties are welcome back to the kaiser report i told you about this book currency wars have you read it if you haven't read it then you're in blowfly misinforms about what's going on the global economy we welcome back to the show the author james records jim welcome back to the kaiser report thank you max thanks for having me all right jim records you have tweeted and i and i quote your tweet if the brics countries start the bank as planned will the brics currency be far behind geitner is our trash the us dollar he's getting his wish so jim rickards really brics currency be far behind in will this be a factor i think it will be a factor match there's a lot going on this is a good example of you know because of what you wish for obama bernanke and geithner set out in early two thousand and ten to take the dollar down by some larger amount

twenty twenty five percent they haven't specified that but it's clearly of their go us as we promote u.s. exports they've also used financial worth arrogance to ram you know what happened there they tanked uranium currency drove interest rates up to twenty percent and charges hyperinflation into the iranian economy and now the brics they just had their summit so what's going on the u.s. weapons have been affected but they're beginning we're beginning to get some push back where countries particularly central asian countries and south asian countries are saying you know what we don't want to participate in the dollar system anymore when surprised me in the next couple years to see for example russia china india iran perhaps malaysia other central asian republics form their own payment system we kicked around i was swift well that's a good it's a good hardball tactic if you want to punish iran but iranian oil is too important to start their own payment system the brics are talking about starting a bank they actually agreed to explore that they haven't actually started yet but they're getting close to that these are all straws in the wind these all these countries around the world want to get out of the dollar system because we've abused it we haven't held up our end of the deal or into the deal as

a sound dollar and we. just trash the dollars and they're saying to heck with it will do something else all right sam i mentioned something in the first half a shot i want to get your take on it i said that after world war two the u.s. got away with being the world's reserve currency to a large extent because it provided military assistance to countries around the world it was the world's policeman to the degree but now you've got countries like india saying that we object to what america's foreign policy is we don't like what america is doing with our foreign policy is not part of this trend that the us is that the rest of the world are rejecting this washington consensus that's part of it maps and you're right about the us position of the end of world war two we were an economic hedging monic power and military power but there were two elements to that one was the one you mentioned which is our superior military force we extended the umbrella of a nuclear umbrella over europe and japan so we can kind of get them to do what we want to because we were holding up their defense but also remember in one nine hundred fifty the united states had twenty thousand tons of gold we had all the

gold two thirds of all the official gold the world today of course that number is down to eight thousand tons we've lost twelve thousand tons actually that was all was between one hundred fifty nine hundred eighty so we had two things for the military we have the gold today we have a lot less gold although fortunately the u.s. still has a fair amount of military still the strongest in the world but you're right the country has been steadily enemies but they're saying we don't we don't want to participate in this washington consensus system if it means a cheap or a cheesy dollar and promoting u.s. exports if the expense of growth in the emerging markets ok so for those who may not know the book currency wars basically what you've got here is a narrative where you have three distinct currency wars we are in now at this time currency war number three which began a proximately with the financial crisis of two thousand and two thousand and seven and two thousand and eight when suddenly you've got mayhem in the world you've had one major battle as you take it with china being. the on the short end of the stick

with the last quantitative easing where the central bank in the us was able to the base of the chinese currency and i got that wrong they were able to debase the thought tell us about that incident actually right now the fed was able to debase the chinese currency and here's how they did it they printed so many dollars that those dollars found their way to china in the form of purchases of chinese goods so that those the chinese trade surplus and also hot money inflows investing into china china for its part was determined to maintain a peg between the dollar in the one that meant the more that we printed and sent over there they had to print more to soak up the dollars they were buying dollars from their own exporters and stashing them away and sovereign wealth funds in the central bank that they had to print their own currency to do it they caused inflation in china so actually we did to base their currency they they sort of outsource their monetary policy to the fed and that's what they got me term at some

point the chinese became spooked by inflation inflation is highly destabilizing in china as they said are we have to do something about it so they did allow that you want to appreciate slowly but what happened next was fascinating you know that's why i say the fed won the first round but what happened next was really interesting chinese growth net exports inflation came down very rapidly i would have thought about it taken eighteen months to play out it played out about six months and then we're back to a peg you know the different level that they've repaid to the dollar will guess what that's going to mean another round of quantitative easing because the fed's not done are saying hey you want to start appreciating your currency here come the dollars will print more and do it to you again that's what the currency wars are all about ok so a lot of people when they hear quantitative easing they think it's a net benefit to the price of gold and we see that it has other ramifications in other dynamics involved here so let's walk us through what happens another quantitative easing around another chapter in the currency wars what happens to the price of gold and will this new bric currency if it does materialize

will there be a gold component there may we're very wealthy now. you know the chinese and mind goes fast as they can the russians central bank has been buying gold consistently for the last four years maybe a gold component maybe a commodity component depending on who's in the in the mix certainly iranian oil i mean the largest oil exporter in the world is russia so if you ever combine to rein in exports and russian exports and use that to back up the value of the currency that would be very powerful lost in areas that as you know we talk about some of these in the book where we did that our war game for the pentagon it was a financial war game where countries are trying to gain power against each other using financial weapons and we describe this there are many ways it could play out but what's interesting is that it's developing by the way i don't think that's going to happen tomorrow even next year but looking out two three years whether it's a good currency or i think even more likely the s.t.r. you know everyone knows the fed is a printing press and can print dollars but fewer people realize that the i.m.f. has a printing press they can print these so-called special drawing rights with the s t r's they can flood the zone with money so this game isn't over yet of course it was

badly i don't think is going to question about that but the a good don't underestimate the ability of the u.s. and the i.m.f. and the europeans and others just to keep keep these balls in the air by printing money and that's what we're seeing in the housing market in the stock market today right now i'm saying now few months ago you were pretty aggressive with the air. with your prognostication of us and kind of iranian israeli conflict and since then we've had a price of oil reflecting the sanctions we've had the situation now where the swift amount of money system has been cut off from iran extent or so there's been some other developments what do you stand now in your thoughts on your thought with your thoughts on that what have really changed very much from actually right about these developments but you know we sort of gave it our best shot you know when you kick a rat out of swift that's not sanctioning a bank or sanctioning some revolutionary guard corps general that's saying iran you're out of the global payment system you can't pay your bills you can't take money in for oil much you go around which they're doing by the way of setting up by

lateral. true. her mechanisms with other countries for example one of the things they can do arrange to make an arrangement with of an extra guy three to be in russia right or a chinese banker or banks in a way around the world and basically and there's evidence that they've done this give them billions of dollars and then let that bank in a in effect be a frogman to the rest of the world so you see dollars coming in and out of you know the t.v. were some chinese bank. there are separate bilateral transfers between say china and iran or russia and iran so our sanctions haven't really worked we've given it our best shot diplomacy hasn't where sanctions haven't worth sabotage assassination a lot of things blowing up and around there's a lot going on sorry we're fair looks like the israelis to launch another round of the stuxnet virus or some variation on that so i still expect something like that perhaps by the summer now if i'm if i read the book correctly the one point that she identified as the really the soft underbelly in all of this would be if china

dumps u.s. treasury bonds they've got over a trillion and if you add in the agency that the fannie mae and freddie mac. and you point out it could be a lot more and this is kind of their nuclear option if they go to market they don't those securities it would crash the dollar and this would cause obviously some mendis. mayhem now if china good follows through is there a connection there are they motivated to do so is it is it do we enter the fog of currency war where people start making decisions you know after the first currency shot is fired where it just goes into chaos which i think is also one of your prognostications as one of the being one of the four possible outcomes is outright chaos correct and i think it's a very good way to put it there is a fog of war whether it's a shooting war or clandestine war finance who work currency war you're always going to get our expected consequences but just on that chinese point i talk about the

scenario of the chinese dumping their u.s. government. and raising interest rates and staking our economy only to set the stage only because everyone else talks about it i actually don't think it's a threat for two reasons number one the minute they try to do that the president with one phone call of the fed to freeze their accounts in place all these treasury bills they're not paper they're not physical there are electronic book and trees on the fed wire system the fed is the keeper of that system along with the treasury the minute they say they tried to dump them we could freeze their accounts with an executive order on the new legislation from congress they would be locked in place and we'd say chinese we're not stealing your money we're just putting in escrow for a while we'll get back to you in terms of when you can use it so we can freeze the whole three trillion they can't pay it if i could actually treasuries would rally because we take that off the market would be a shortage of supply the other thing is they're completely vulnerable to the idea they have us a bit over a barrel in my view is nonsense because we can say hey we owe you three trillion printed up here you go here's a three trillion they look like a loaf of bread so we can either inflate the currency or freeze the bonds or the

chinese are completely vulnerable to us because we play rough in the financial worth airspace now with h.r. these are chinese are dumb they understand what i just said so they're out by gold you know left and right stripping their gold mines buying african gold mines sending out their army and their intelligence services to acquire go through agents it's all very bullish for gold at the end of the day i just want to turn now to a domestic issues now you were recently in testifying before the senate banking housing and urban affairs subcommittee talking about financial repression and how the feds policies are causing a lot of pain and suffering out there we only have about thirty seconds as i mentioned if you can just go through that for us i sure do there quickly by the way anyone who wants to read the full testimony is on my website currency wars book dot com so you can go there and find the full range testimony and the video if you want to watch it is that the senate banking committee web site you can find it there but just to summarize where i said we are witnessing the greatest theft in the history of the world four hundred billion dollars per year is being taken from the the

pockets. savers and handed over to the banks through the fed zero interest rate policy everyone likes low rates because you know mortgage rates are low and it uses the stock market but what about people who actually save and try to do the right thing with their money in the bank they're getting zero you know sort of a more normalized interest rate of even one or two percent so that money has been stolen from them has over the backs and forms of the four zero cost of funds or as they say as this is ten times worse than made off of the treasuries behind it all right that was very distinct and people can get the details on your website but rather the time jim rickards thanks so much being on the kaiser report thank you max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and i want to thank jim rickards senior managing director tangent capital and author of this book currency wars if you'd like to send me an email please do so at kaiser reported r t t v r u n select imax now they're saying.

you know sometimes you see a story and it seems so sleek 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 i'm tom hardy welcome to the big picture.