good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. it is your headline for april seventeenth two thousand and twelve i meant tie oil and gas prices u.s. president barack obama demonizing the oil speculators proposing more regulation. we can't afford a situation where speculators artificially manipulate markets by buying off oil creating the perception of a shortage and driving prices higher. but how much is bank elation really to blame for the rise in oil prices is the problem the defiling of the dollar is declining purchasing power and what about regulators failing to regulate what rules are already on the books in the first place we'll talk to commodities expert dr steven

lee about all of that and while we're on oil is the argentinian government's move to take control of its largest oil company why u.p.s. despite the political fallout the latest example of the increasing tension between energy and economy as oil becomes more scarce and expensive and as the global economy is on life support built on dads will economic growth increasingly depend on energy control and a record number of americans are reportedly denouncing their citizenship or handed over their green cards many say it's for tax reasons that's right it's tax day in the u.s. we'll talk about the international backlash against a all i.r.s. let's get to today's couple account.

all right u.s. president barack obama in the face of higher and rising oil and gasoline prices that we've seen went after evil oil speculators today and he wants congress to pass more regulation he wants lawmakers to do the following he wants them to fund a six fold increase for surveillance and enforcement staff at the commodities futures trading commission to put more cops on the beat overseeing the oil market he wants to empower the the f.t.c. to raise margin requirements for traders oil positions and raise the penalties for market manipulation to ten million dollars from a million dollars i have some proposals how about getting the cops already on the beach to enforce the rules already on the books which appeared majorly lacking in examples such as the m.f. global bankruptcy and stiffer fines for manipulation ok what about going after the accusations of manipulation already going on which we had to guess just recently

talked about in the silver market as for the price of oil and what's really behind it in chris creases that we have seen what the weak dollar let's take a look at prices ok this is where oil is at when we went to air crude at one hundred four brant crude it went eighteen and a gallon of gas the average at the pump that people are paying it is three ninety two now one of our friends from daily reckoning charles catholic calculated that if the dollar since two thousand and two had been as good as some other currencies these would be the prices that we're looking at for oil and gasoline of the you want eighty two dollars or three ten and then the euro the japanese again and the swiss franc ranging from sixty three to seventy seven dollars for a gallon of oil and for or excuse me for a barrel of oil and between two fifty and two ninety four a gallon of regular gas so quite a difference there to talk about all of this what's really behind these oil prices

and the politics dr stephen leeb chairman and c.e.o. of lead capital management and author of red alert how china's growing prosperity threatens the american way of life he is quite the commodities expert so i'm really excited to talk to you today dr lee welcome to capital account thanks for being on the show. thank you so much lauren pleasure being here yeah so first let's get to kind of the premise of obama's speech today which is that oil speculators are presumably behind or possibly behind the rise in oil prices we have been seeing my question to you wouldn't boil speculation both the pressure up push the price up and down. yeah i mean maybe the speculators are behind the fact that the the dow is gone from eight hundred fourteen thousand i mean you know there's so many things wrong with this kind of statement i just want to add to what you had said before about pricing oil as if the dollar hadn't changed air pricing and in swiss francs

if you priced oil in terms of gold it would probably be around i'm guessing fifteen dollars i was just doing it in the head calculation would have gone up is that at all because gold has gone up more than oriel since the beginning of the century so yes oriel has gone up but other currencies have gone down and the reason oriel has gone up as much as it has is that it's scarce and if it's scarce the last thing gore and you want to do is prohibit price increases because the only way capitalism works is if you have real price increases inducing other forms of energy or other drilling if it weren't for the price increases in or out just to give you one example in this country you would not have oil fracking today you do have oil fracking now there's a lot of things wrong with oil fracking but you do have it and it is incremental supply and you do have tar sands producing oil again lots of things wrong with paris and lots of things wrong with fracking they're not going to solve our problem

but if oil had been let's say eighty or ninety dollars a barrel there would be no fracking i mean and so this is showing you how these markets work they're working very well and for obama to sit here and say that we want to discourage high prices is the same thing as saying we want to discourage alternative energies we want to discourage more drilling and exploration for that hard to get hydrocarbons it just makes no sense whatsoever except in the political context in which you speak when dr levy if you want to talk about speculation just to hammer the white house a little more don't they play a role in it whenever they spurt grammars that obama will release search egypt oil supplies every time that oil prices climb. of course and there's an ongoing rumor echo if you will i mean obama supposedly has said sat down with the french and the europeans and they've agreed that a particular point in time they will release a teacher petroleum reserves this is i can't tell you how silly this kind of thing

is i mean those reserves are to protect this against the real rainy day i mean a stormy hurricane like day and anyone looking at the middle east in the past couple of years the arab spring etc how much money the saudis are paying for security and incidentally the saudis probably need or look around ninety or one hundred dollars in order to maintain all those security provisions anyone looking at the chaos in the middle east and saying that well we really don't have to worry we'll just release the oil now because we think it's a little bit high this is the kind of nonsensical policy that is led to the sort of problems that we're in right now and we are in very very deep problems with respect to energy and other resources and we talk about those problems do you think that's what is going into the price of oil that this is about this air study of oil that's what we're seeing in high prices as opposed to speculation. of course totally i mean that you know the international international energy association for instance

. has issues reports and they don't make up anything if anything they're super bowls on oil but i think for about the last ten quarters in a row oriel inventories in the developed world have been lower than five year average is to me that doesn't speak of abundance that doesn't speak of speculation it's honest to goodness scarcity especially when you consider these low inventories are occurring in the context of no growth in europe negative growth in europe and anything but soaring growth in the u.s. so that i mean there is a serious situation here and it is called oriel scarcity and to try and solve it by releasing reserves from this particular particularly reserve is so much the wrong message i mean it could not be more wrong it is really because selling our future and almost giving up on energy is something that we need in this economy and what about the solutions i mean we keep hearing about natural gas why doesn't that mean

more of a role and an alternative to oil. well it should be but it would take a tremendous build out of infrastructure in order to get natural gas really working i mean right now the only real way you can substitute natural gas for other hydrocarbons is in electricity generation and maybe a little extent in trucks in buses etc but really a car fleet that uses natural gas is just no word on the horizon i mean that would just cost zero massive massive amounts of money but to the extent that we can substitute natural gas for coal we are doing it but you know make no mistake lauren natural gas right now is price must to low i mean your porter on previously had a very very good point about these well casings i mean they're they're just you know going to continue to pollute water of people that are living near these wells

there's just no way around it fracking itself may not be dangerous but that well casings are very dangerous and the leaks from the well casings and the fact that we over frett and the fact that the large i mean all you have to do is look at chesapeake which is the leading company it's dedicated to fracking it's making new lows day by day it's only existing because it's been able to sell assets another leading frac are in the continental resources which i happen to like as a company right now but still a long term no bet on it because their cash flow continues to get more and more negative fracking is can't go into all the details right now but it basically is something like a ponzi scheme you need more time more and more rigs to increase your production and eventually you run out of rigs and you run out of production that's interesting and i think that you were talking about greg palast an investigative reporter who was on our news you have to switch gears just to because i do want to get really a little bit more nuanced on the dollar issue when i brought up the price of oil

and gasoline would be at if the dollar had debt or excuse me if the dollar preferred like other currencies have my question with that are oil prices because the value of the dollar is down. well you know i would say that the two are interrelated you know if i were among the side of the debate or the other i'd rather say that the dollar is down because or a list scarce and when our resources get scarce whether it be the dollar whether it be any other essential resource you have to print more and more and more of that currency in order to afford the scarcity and the dollars no way. basically resources are being rationed today and if you don't have hard currencies to ration you're basically in a contest of who can print more money and you're seeing there with all the currencies in the world and you made those comparisons comparisons lauren at the

beginning of the show i think from the reckoning when they said it for a were priced in swiss francs et cetera be a lot lower and again i go back to what i said if priced in gold which is a currency i mean you know absolutely in its day fadhil currency oriel today would probably be around fifteen dollars a barrel or eighteen dollars i'm doing the calculations in my head so don't shoot me if i'm off by a little bit that i want to hold up yeah yeah you know i do want to get into this combination currencies that are hard very much a debt based money system of currencies that have escalated in continuing to print and put liquidity into the system of the economy combined with the scarcity of energy when we look at that announcement or a news item such as argentina announcement i want to get to that after the break that we're just a book of before we do i want to shoot i only have a minute but i'm manipulation when obama's talking about cracking down on oil manipulation bringing more people in to do that what about the manipulation

allegations that are already going on and don't really seem to be really pursued in the case of something like a silver market i know you're a precious metals expert. well yeah i mean you know super market is much easier to manipulate than market because it's very very small it doesn't take a whole lot of money to manipulate the silver market now i have not eyewitness to any of the manipulation in the silver market but if you were going to look at manipulation i'd certainly start with silver rather than oil but you know that said silver also is going to become a very scarce commodity because it's essential that solar energy and the chinese see this and the chinese i think are going to be accumulating have been accumulating i think they're going to aggressively accumulate silver and i think that's going to preclude a lot of the manipulation that you may or may not have seen in silver so far that's really interesting we're going to go to break dr lee but i want you to stick around stay right there because there's more i want to ask you are we will have our doctor lead author and chairman and excuse me author and chairman and see iowa of lead

capital management also still ahead you know the saying they think nothing is certain in life but death and taxes that no one said anything about being taxed twice we'll give you our three cents on the growing trend of people working abroad and now saying their u.s. citizenship the first their closing market numbers. put a picture of me when i was like nine years old when she told the truth. i think i am in total get a friend i love traveling here is a planned trip. she was coming yesterday.

i'm very proud of the world with its place. you know sometimes you see a story and the seem so you think you understand it and then a glimpse something else you hear sees some other part of it and realize that everything is ok. i'm charging welcome to the big picture. see. what drives the world the fear mongering used by politicians who makes decisions through. who can you trust no one who is you who with a global missionary zeal where we had a state controlled capitalism is called sessions when nobody dares to

ask we do our t. question more. welcome back let's talk about this tension we kind of got to before the break between energy and a condom use so argentina has moved to seize control to nationalize its largest oil company y p f the spanish company repsol is the controlling shareholder and the company madrid others are angry for obvious reasons despite the political fallout here's what the argentinean president reportedly said about this move she said we don't choose a nationalizing model but we promote a model focused on recovering on excuse me on recovering the sovereignty of the country's resources so the question i have you know however you want to however you

see this is this an example of the global tension between energy and the economy that is oil is being depleted and the price rises controlling natural reeses resources to control your energy future is needed to control your economic future as a country or even as a company i want to ask that to dr stephen leeb chairman and c i o of lead capital management and author of red alert how china's growing prosperity threatens the american way of life so dr lee we have this announcement i'm just curious if you see this is kind of an example of a bigger picture issue of this tension between energy and the economy the tension between wanting to grow grow grow grow but having ever depleted resources that are getting more expensive. well lauren on many counts the answer is yes it is and it is absolutely an example of the kind of tension and you're not just seeing it in argentina i mean you're seeing in an in australia where they're starting to raise taxes on miners i mean you know it's common sense that if you have something in the

ground which you think is going to go up in value why should you sell it today if you think you can sell it for twice as much tomorrow so i mean that's sort of the common sense issue of scarcity of resources once people become convinced they have something that's just going to go up in value i mean when they're just giving it away if they're selling it today for whatever the prices are in argentina and also to an extent all over the world what you have now is that you know whereas headline inflation is not really worrisome when you talk about the lower level of incomes in this country i mean you had a guest from occupy wall street on the show i think preceding me and you know he's making a lot of i thought interesting points well one piece of data his just not left my head is that in america the bottom twenty or thirty percent of this population in america is living is spending over fifty percent of their income just on energy

and food so they are basically living courtesy of the largest of the government they don't have enough money don't make enough money when we're talking twenty to thirty percent and their percentage is probably going to grow they're experiencing wild inflation because the essential zefi of life are very very expensive now in argentina what you have is probably even a worse situation i don't know the numbers chapter and verse but if it's twenty or thirty percent in the usa it's got to be at least fifty or sixty percent in a country like argentina and what this says to the leaders of argentina is you know we should gain control of this because we may want to subsidize it we may want to you know make it you know make this company now. profitable because it's going to really harm us if we continue to sell this excuse me this horrible profitable prices it's going to really upset our populace they're not going to be able to drive we're not going to be able to irrigate we're not going to be able to do

a lot of things that oil allows us to do so that by taking control it gives them much more control over the prices now is this a long term solution absolutely not it's a solution borne out of desperation yes absolutely there is nothing good about it but you know you raise the question between energy and nation and national security you cannot separate the two if you don't have control of your energy supplies you do not ultimately have national security on many levels and that's just the way it is and i not just nation is this corporations too i saw an interesting report that delta's on the verge of buying a refinery they're buying a shuttered refinery in philadelphia are trying to bring that this can help them save some of the billions of dollars that they spent on jet fuel each year so it is the same for corporations. well yeah obviously i mean you know basically the refined products in this country like gasoline and have risen even faster than oriel and one reason is that it's very hard to build

a refinery and i don't think we've built a new refinery in this country for twenty thirty years i mean it's a long time so that you know by the time you translate the oriel into gasoline into diesel fuel into distillates into all these different things it cost you a tremendous amount of money and you know again you're losing control of your fate if you don't own you know at least one of these tools one of these products in the supply chain and i think delta you know if they can get away with this and do it at a reasonable price i think that's a very very good idea but it doesn't really solve the essence of the problem which again is oil but it certainly will give delta a little bit more peace of mind and i think their shareholders as well it's interesting i just have one quick question i know it's a big issue but if you just have any quick thoughts on it with this tension if you think we're going to see increasing nationalism increasing wars as we think on trees grow and grow and grow need more and more energy and less of it. well you

know i hope we can get around this without any sort of resource wars but the way we're headed right now trying to develop hydrocarbons is no way of doing it china right now is doubling their their expenditures on power within the next four years they are building out smart grid they control wind energy they control such a solar energy they are the biggest factor in nuclear energy they are on the verge of controlling desalination this is a model i hate to say it that we should be following and if we don't follow this model i just think we're going to be very much out of luck and i think our strongest card right now unfortunately is our military it's the reason that i think saudi arabia is beholden to us how long that lasts i don't know but once china has two or three aircraft carriers you know the equation changes and you know china's military i think made the cover of the economist within the last i don't know were three weeks no this is a very dangerous situation because instead of cooperating with the chinese we are

basically following a totally different course and in fact we're helping them because by producing this oriel this fracking oriel we are keeping if anything or a prices artificially low and the chinese are benefiting from their doctor leaves so many interesting points with love to follow up like this they have the rest of the conversation for another day we're out of time i appreciate you being here that was dr steven levy chairman of the author and chairman in the eye of leave capital management. thank you. all right let's wrap up with some loose change we have a looming cause he may very very nicely for joining us again today filling in for

dimitri and shannon in the control room to talk about something that we talked about a lot on this show the lengths people are going to try to keep their money they've afraid of government overreach here is one of our gas and although you are talking about what a traditional safe haven switzerland how that's been affected by the reach of the i.r.s. listen to this. for americans this is a lot of safe haven because. he says it is impossible for anybody holding an american passport or going to get and deposited what you teach them. well it turns out that reach of the i.r.s. is affecting a lot of us this and that are lining up to hand over their passports get rid of their citizenship they live and work abroad they don't want to be taxed twice the u.s. is one of the only countries to tax their citizens on income earned abroad the number of people getting rid of their citizenship alone it's at a record the record since the i.r.s. started publishing the list in one thousand nine hundred eighty eight hundred

people last year i think about i mean it's very interesting obviously they have been publishing this list for that long. but this is always been a policy of the united states and i think that people aren't really paying higher taxes right now taxes haven't gone up so to me it's kind of just interesting because maybe people have less money out of this massive financial crisis and so maybe they've just chosen their priorities and realize that we're in the past it actually made sense for them to keep their us passport pay two sets of taxes they could keep that u.s. citizenship and live wherever they wanted to be. maybe they realize that he wasn't a target and you know that i want to keep my money because we've seen the i.r.s. increase its reach like on zoeller was talking about switzerland won't even let americans open bank accounts because you've seen the i.r.s. get names of clients from u.b.s. merican clients with accounts over there i mean it's just it's reached new levels and i feel like this is a really good hard fact that we're seeing to back up what a lot of our guests anecdotally tell us what do you think i think regardless of how

much money i make i want to be taxed. yeah yeah i mean always you know the policy right if you want to keep your us citizenship then you shouldn't have to also pay taxes and drive but i want to have agreed ok let's move on. and it all seems close to casinos may have hit the jackpot take a look at this. commissioner roger goodell could authorize teams to sell casino ad space on. radio broadcasts and in game big programs the new revenue could bring in an extra forty six million dollars a year for some teams so traditionally the n.f.l. has been very vocal in its anti gambling stance but they want these so i don't know if it are critical or are you cool with this is it too hard to turn down by i think it's a little hypocritical but i mean the n.f.l. the business but if they're going to try to claim that you know their problem with gambling is they don't like gambling only specifically what has to deal with the n.f.l. and with their business but then we're going to place these ads in the casino where

people might be tempted to gamble i mean you're kind of asking for it you know i stand and you're a shareholder why don't you tell us how you feel i mean i'm not allowed to bet on n.f.l. games anyway or else i would probably be in prison oh come on i mean this thing that the n.f.l. has done many suits coming out regarding concussions and players getting injured and things like that and this is a money making scheme in order to protect themselves from all those suits that are obviously going to cost millions of dollars you don't think they already have enough money yeah that you know you very well from what i hear it's a major growth industry as far as media is concerned one of the only protect themselves yeah well i don't know but i think that it does remain to be seen if this is a continuing trend that vice sells and it's just too hard to turn down especially these tough economic times that's why we have time for thanks so much for being here alina and shannon of course as always and thank you for tuning in do not forget to follow me on twitter out lauren lyster give us feedback on the show at

youtube dot com slash capital account ever and everyone here at the show thank you so much for watching come back tomorrow and have a great night. ok . download the official anti humbly patient your home phone on pub touch from the i choose option. one jaunty life on the go.

video on demand all season long gold coast's an r.s.s. feeds now in the palm of your. question on the dot com you know how sometimes you see a story and it seems so for lengthly you think you understand it and then he glimpse something else and you hear or see some other part of it and realize that everything you thought you knew you don't know i'm tom harpur welcome to the big picture. there hasn't been a theme here on t.v. . it is to get the maximum political impact health. before source material is what helps keep journalism fun of.