tv [untitled] April 18, 2012 4:30pm-5:00pm EDT
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good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for april eighteenth two thousand and twelve european banks are under pressure to raise capital and the euro could collapse triggering panic in financial markets and another great depression and these are all the warnings coming out of the international monetary fund central banks have been waiting they appear to be moving away from the euro by buying more gold we'll talk about all of this and of all we're on the topic of the i.m.f. as policymakers descend upon washington for the spring meeting it seems all about raising money to boost the i.m.f. firepower aimed at course of trying to put out europe's debt crisis and the guard
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continues to collect money from the words as we've seen it before. smokers more to come here with more you could budget churchly collect a piece of money. we saw that a davos but how much debt can you know for roa debt as economist michael hudson always ends famously says debts that cannot be repaid will not speak to him and british m.p.'s a savior as you've been penalized by the bank of england's money printing should be compensated for it while citigroup investors say exacts should not be compensated so handsomely for poor performance of first for a big u.s. bank but does it matter we'll tell you what we think let's get to today's capital account.
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the international monetary fund and the world bank are gearing up for their spring meetings it's happening now in d.c. they get officially underway at the end of this week in washington there is a view outside take a look at this the giant plasma screen of world bank propaganda that set up outside getting ready for these meetings that's amusing we don't think we've seen that before the world bank's mission remember is to support or to reduce poverty but it's been subject of course to much criticism over the years for social engineering shock therapy the lending conditions of the washington consensus so vulgar on the floor we have some of our own ideas first let's look back at lord remember in medieval europe there were people like robin hood who would steal from the rich and give to the poor take a look. beating them maybe
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a little of your food there's no need for such. and. still and gems off their fingers well now you have the rich stealing from the poor through massive debts that cannot be repaid debt that are beyond the means of the borrower to repay whether it's a defrauded mortgage holder or a country forced to cut vital public services in order to prioritize debt service payments so the poor are buried under debt for the benefit of the british creditors and the arguably bankrupt banks do we need the power to default and order to end this perverse reverse robin hood situation let's bring in michael hudson and ask he's professor of economics at the university of missouri kansas city and author of super imperialism the origin and fundamentals of u.s. world dominance and dr hudson thank you for being on the show it's always a pleasure to talk to you. ok so let's get straight to there's
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a lot of headlines coming out about the i.m.f. japan is pledging sixty billion dollars to help the i.m.f. expand its resources we know they're trying to get four hundred billion dollars in new money this week legard is all or urging nations to follow japan's lead dr hudson how does this do anything if the giant debt overhang is still there in europe sucking capital in the other direction into that bank or black hole because the debt is so big and everything is going towards debt repayment servicing the debt instead of building economies. oh remember back in two thousand and eight the i.m.f. had lost almost all of us must americans except one turkey out paid just about the last customer its president arrogant again said get out never come back save the i.m.f. from just being told it up and going on was the financial crisis for other countries aren't very interested in giving money except those in the european and
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u.s. so it remember they just had a very. contested lot over the who was going to be the next the head of the world bank and for the first time it wasn't a representative of the u.s. pentagon and the u.s. military establishment but it was a u.s. candidate and you had criticisms from the third world countries saying wait a minute i do we want to be the major contributors when we have such a tiny voting right and it's the better it's. like the united states and europe or one of the moderates and so i don't think they're going to be very interested in me i am a loss if they. when the i.m.f. wants to impose on europe really the same kind of austerity programs that it imposed on latin america africa and asia and turkey from the one nine hundred sixty s. on through the early two thousand so other countries except for europe have rejected
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a kind of austerity programs of the i.m.f. selling and i don't think there is going to be much impact at the meetings in washington at all except the usual self congratulatory austerity in stood you can get. that propaganda that we hear so much hell on that note of the developing countries like you talked about you know we've seen them say that we may play the pledge more money to these i am after higher power fines if we're given more power within the i.m.f. that there is changes to the club as an. i thought it was interesting because now europeans are worried because those changes are supposed to take place in october and we know it's in november at the presidential elections in the u.s. so they're worried that congress would block changes to the quotas in the i.m.f. i know in the past you've said hey this is kind of a joke the u.s. controls i am there it doesn't matter what they say so is all this all of this discussion about changes to quotas is this kind of a joke or do you think this is actually a real thing. there's no doubt america's allies are going to contribute chapin
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always does when it started but i don't think it's going to be very important and i don't think it's going to make much of a difference for how the world is. ok i don't think if they make a change as far as book could change the i.m.f. now says and one of its recent reports that the euro could collapse and this is being billed as a big deal because it's the first time the i.m.f. is saying guess my question to you they're talking about the collapse of the euro there's plenty of people in europe already seeing their lives collapse whether it's someone in spain who's unemployed or someone in greece who can't get their medicine and is digging in the trash for food literally as we've heard reports what's more important the collapse of a currency that's been around for fifty years or the collapse of a common needs they cannot grow under all of this debt well first of all the euro is not going to collapse the question is what would it actually gets and the euro and the dollar are pretty much in the same much situation and both going to the
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wheelchair olympics which isn't moving very fast the i.m.f. when it makes a. wild statement like europe euro is going to collapse that means do what we say we want the following little change and what it means is if you don't give us more money in the banks for us to get banks then there's going to be real trouble so all this is is threatening to cause a currency play out in the banking collapse if it doesn't get its way. the people's . health and welfare is much more important and if the i.m.f. doesn't collapse then the economy will collapse and the real worry is that the euro and claims the worry is that the euro will survive and will hold together pennell continue to impose on greece the kind of austerity it imposed on. latin america and other countries and asia and the asian crisis that maintain maybe
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a little bit of them. to europe but it's the under these other countries and there would be an utter disaster but it's a disaster that will benefit the united states and will benefit the i.m.f. quite a bit because they hope that if there is pressure on governments that he thought this will force governments to begin selling off their private interest rapture there when they say greece may collapse what they mean is greece look unless it overrules a democracy pushkin one of our power technocrats which means the bank lobbyist to come in and sell off its land so office water and sewer system sell off its ports sell off its tourist areas sell off its. parthenon it sells a lot for very little amounts to be financed on credit by the banks the buy them out creating
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a huge bank market and create what looks like the biggest resource prayer since the breaking invasions of europe thousand years ago those in years ago it took an army to grab land and infrastructure and take over the government and today without an army without forests in the european central bank and the european union is being able to grab the land a better country a greece spain portugal ireland and to impose tribute without any military force that are just by trying to convince the. people but as margaret thatcher said there is no alternative and to make sure there is no alternative there is no discussion of actual alternatives of course there are many on here and of course i want to get into those i get talking about financial warfare which really does seem to be the name of the game and the direction that things have gone in but while we're on the technocrats that have been installed to push through some of these reforms it doesn't even seem like they're able to do it mario monti in italy is that's
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a myth about the target italy's delayed by one year its plan to reach a balanced budget in two thousand and thirteen according to reuters and the parts of the prime minister has written the country can't definitively promise that it will meet its targets to return to capital markets before september of two thousand and thirteen so is the problem these countries or is the problem these targets that seem ridiculous. it would be a disaster to balance the budget when the government runs a budget deficit as united states it creates money. into the economy and running a government budget deficit is the only way to pull europe's economies out of the depression and the last generation but they're falling into you mentioned unemployment in spain the unemployment among young adults and thirty percent of the average unemployment is twenty three percent it's twenty three percent also want tortuguero. this is sastre the only they need is more government
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spending and more government spending not less and so by trying to run a budget service surplus the the technocrats are saying is we want to squeeze the economy so that the government doesn't have enough money to pay its there so it has to sell off whatever public domain or it distressed prices for creditors to foreclose or to take over and by fire sale prices will they surrender that's the question at the same time lisa deficit and dads create this problem in the first place i want to ask you about depor given. when we come back as another one of those possible solutions so dr hudson sit right there we will have more with michael hudson professor and author and just a minute and still ahead it is a first for a big wall street bank citigroup investors are trying to fight a small battle against cancer and executive pay but are they shooting blanks we'll give you our three cents and first your closing market numbers.
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a story and it seems so silly you think you understand it and then you live something else here's some other part of it and realize that every single song you don't know i'm trying hard to do is a big issue. what drives the world the fear mongering used by politicians who makes decisions to break through that sort of made who can you trust no one who. it's soon to you with the noble machinery see where are we heading state controlled capitalism is called sessions when nobody dares to ask we do our t. question morning.
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welcome back here in washington we're getting ready for the i.m.f. and world bank meetings our guest doesn't think they will amount to anything significant so we're trying to have a conversation that is significant i let's bring michael hudson back in professor and you can of economics university of missouri kansas city and author of super imperialism the origin and fundamentals of u.s. world dominance and dr hudson before the break you were talking about deficits and i don't know that we agree with you that a balanced budget is a bad thing deficits have been part of the problem so is the real issue here debt and the fact that debts that are so odious need to be forgiven. yes well it is of course that is the issue and that's what it's really all about that that's can't be paid and creditors want to use their creditor power to try to foreclose that the fact is these debts the road by sovereign countries and any sovereign country can do what argentina did and simply say i won't pay so that that's
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a very tenuous but only if the doubters believe they have to pay and believe it's a good idea are they going to pay it well obviously the greek up population pressed very heavily or not it may and that's a natural americal and are sarkozy said wait a minute you can't have a referendum about this if you have a referendum people will hold the wrong way you cannot help the markets that we have reached the point now where democracy is incompatible with the world that structure and so are the creditor position has forced a transition from democracy to help oligarchy and some urging is the last three the occupy wall street people say the one percent against the ninety nine percent and they are willing to push the economy into a depression if they have to take one penny loss and what they hear they say all of the loss on our private planes are holdings of government bonds all last has to be
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absorbed by the taxpayers we the one percent ten or any of us that are you have to do what ireland and force your economy into a last generation into a depression in order to pay us and it's amazing how they're actually able to convince populations to do it and when they can't convince the population to say it's time to end that marker see there is no alternative put in our representatives and let our squeeze out as much as they can and just it just so that i can clear it up the credit debt restructuring in greece doesn't count because it's peanuts when you look at the big picture. well it's not enough to the greeks i mean greece is a small economy of course it's very major they're using greece is a text test case they say no country no matter how small can stand up to us remember creditors are politics it's like the united states versus atlanta stand where we like united states versus grenada they want to make sure that no one will
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emulate reeks iceland is bad enough so they're there you think greece is an object lesson because they're worry was that if greece doesn't pay its debts then ireland won't pay spain want to torture go on pay and all of a sudden you have democracy and that would mean curtains for that system well up on the note of iceland iceland did different things when it handled its crisis very markedly different they refused to pump money into failed banks it required debt write downs in situations where mortgage debt was too high for borrowers at is an aesthetic and i'm sorry i'm afraid you're wrong there and for iceland as has made some very bad errors that the situation in iceland is much worse than it is in any other country in the world because in iceland alone its debts are indexed to the consumer price index which means to the price of imports so if you borrowed say hundred thousand dollars on
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a host you know all about one hundred eighty thousand dollars because of the indexing for mortgage ice and thanks for bought up by a bunch of banks that have not not written down the debts as they were supposed to do i slowed is still a disaster area but not reports that iceland is now paying its i.m.f. loans are really unemployment is down growth is about average there is a program to write off a portion of mortgage debt to one hundred ten percent of households classical assets are you saying of these things don't matter in the big picture is that's what's being nest. be there is still a mess of foreclosures there and the mortgage debt is going up so high. i but if i'm starving the household assets to such a point. chris ten percent of iceland's population thirty thousand people but had to emigrate to norway alone so our unemployment is spreading but the president of iceland did say was that there was a silver lining to the bank crisis and that was that the banks in iceland had been
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employing all the best mathematicians and the best minds to do a scene of capitalism gambling and once the banks went under all of a sudden all of these good mathematicians became available for the. computer industry for a high technology industry and so they feel inside technology industry it planning on mathematicians and high skilled people are who are really taken off so that the best sector indeed is taken up but the icelandic mortgage debt situation is still very poor iceland has three mess because it runs the i.m.f. to get out of there forever i just want to get rid of them so that it doesn't have any control over the icelandic currency because the eye enough is consistently misrepresented the statistics are based on its forecasts abene dismally wrong it's been an embarrassment for the i.m.f. the move literally run away with their tails between their legs so then when their
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president of iceland says that there's an orthodox policies that the orthodox i am nothing like a people learn more from here and then he learned then they learn from the i am math do you think that's the bottom line i think he was being polite i've never in any i.m.f. economists learn anything because there are i want pseudo religious fanatics because every religion has been on the side of that it's not predators like the i.m.f. is but they're like sectarian cultists i don't think you can teach an i.m.f. economist on it but. gave up forty years ago and i think most people i know here so he was being polite what he meant was we were right and they were wrong but he said it not all work like you're not is the light of a lot more exciting we appreciate you being on the set thanks so much that was michael hudson professor and author. very much or.
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all right let's wrap up with loose change i have demetrius shannon here because we have talked a lot about quantitative easing low interest rates and its effect on savers and even now and again we hear someone on capitol hill question ben bernanke about it rarely though here is an example. are you concerned at all about the very very very low interest payments that these savers are getting from these kinds of fixed income assets which are which are hitting our our savings and investment side of the economy. well ben bernanke isn't concerned enough that he does anything differently but it seems the treasury select committee and u.k.'s parliament is taking the side of the savers m.p.'s there want the government to compensate the
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pensioners and savers for the money printing impact on them by suspending the income tax on savings interest so basically they want savers to be compensated for the central bank's policies we think the disaster. which markets are everything but that every year we can just have normal interest rates we have to have these kinds can you say ok. we'll look at that. and lower rates year raise them and give it back to actually or give me a break measured look work out of the local market rate blog post well it's like when you give that a cent per something you perceive something and instead of dealing with illness you have side effects so then you prescribe something for the side effects and then you are always dealing with the symptoms and not the problem but if that's the situation that we have had at least they're given some you know thrown a bone to the savers have gotten screwed over if they want to grow both of savers raise if there's to do this or you can recover them or they're going to say to me or you can go to sleep take some value oh and keep screwing up the entire economy
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these guys are professional you know those children are going to say the word but all right all right. i just don't understand we're all of them money is going to come from if they do suspend the income tax on the savings rate but it's not money from they always tinkering here and there they seem to figure it out. that remains unanswered let's move on because citigroup has become the first big bank the first wall street big bank to get a giant down from their shareholders over a fat executive pay package and what fifty five percent of those shareholders may have won the battle against the back cats in the sense that they voted no to those pay plans the war is not over take a look. well you call this a victory remember the vote isn't binding but city chairman dick parsons called it a serious matter and said the board will come up with another formula top executives say that thing is it's not binding so now they're saying oh we're going
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to do something about it and today this is not a binding decision it looks like looks like it's just to make shareholders feel better that they have some kind of a say so this is of course this is the same thing is always true is true it's true in the case of the british parliament it's true that gets the shareholders these votes it's just like when i was saying hello elections and it's these votes are just they're just an actor theatre at this point nothing more nothing less the power resides in the oligarchy it resides in the clip talk we see of people like that people like jay need diamond ok are you gonna who's a puppet in the government doesn't actually do anything so basically this is a big shown tell game and then that's great i'm happy for these guys wonderful i don't need it you're going to be is do it the kids' needs don't just do i don't need underneath it get to your point the records have a duty to loyalty to the corporation and not shareholders so it very literally is their responsibility not to do it shareholders on first let's move on because the time one hundred list was revealed today honoring the most influential people in
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the world we have to talk about a few of the honorees they include christine legarde mario draghi mario monti from paul and we can never forget to include warren buffett and you can just guess who penned the write up to go along with mr buffett if you can take a look it is true that by for him it's for the warren buffett for example let me tell you what with all the economic. progress on both of you for the. from warren buffett pays a lower tax rate than a secretary. these guys are still in bed together so obama rode warren buffett's most loyal person right up as far as corny capitalism is concerned though i think obama is kind of getting played by warren buffett right but we're both as a book part of the league jury and of the rock obama. is is is is the high seas and he is loving warm cover have his way with him and grant obama should basically grope her and do something realistic and something that
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people want to sort of basically just do whatever warren buffett wants and play the tune of one buffet which is like i'm just a little paper boy with the whole old you're not and obama didn't have warren buffett writing his write up he had some time down for seemingly less exciting i just want to point out the hacker group anonymous grabbed the majority of build web vote automatically gaining them a spot of thing it's interesting the difference between what voters pick and what editors pick shannon if you want to give us some final words on this. just the difference between the web and who made it actually excellence just kind of astounds me pretty astounding leave you with that if that's all we have time for thank you so much for watching don't forget to follow me on twitter at lauren lyster you can give us feedback on the show at youtube dot com slash capital i count from everyone here thank you so much for watching come back tomorrow we will talk to paul craig roberts and until then go check out our web site give us
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before the source material is born hopes if journalism honest we. know. we want to tip is it. something else. good. morning news today violence is once again flared up. saying these are the images world world has been seeing from the streets of canada . trying to hope for asians to rule today. look.
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