there is no i thank you so much for joining us today why don't you adult film actress back in a half hour. good afternoon and welcome to capital account i'm laurin lister here in washington d.c. these are your headlines for april nineteenth two thousand and twelve were in trouble numbers shows vanished banks may be running out of easy money to buy spanish bonds to prop up their own balance sheets so is signs of the next fire

sparks from the smoldering ashes of the debt crisis in europe it's a good reminder for us that the euro zone's firefighting solutions require nonstop for ever participation by central authorities leaving the free market burns we'll talk about it and all of this brought to you by the power of global bakers and their friends of course at the i.m.f. which is generally is gathered in washington for the spring meetings this week and christine legarde message to global economic risk number one europe is keep up take a listen. people means implement. the reforms tough to you can place nationally. so basically you better meet those impossible targets through pitbull austerity as a condition of your eye of bailouts is the message there so as the i.m.f. gets pledges to add to its lending firepower right now in washington is the classic criticism of the washington consensus the same as it ever was for this institution

and will the u.s. tax man tax man rather extend its totalitarian reach congress is working on passing a bill that would not only. passports for people with seriously delinquent tax debt they would do it with no due process and this bill would also allow uncle sam to shut foreign jurisdictions out of the u.s. financial system for impeding tax indorsement we'll tell you what we think let's get to today's capital account. so reports are out that i mentioned that spanish banks which have been recently the primary buyers of spain's debt have used almost all of the money that they've

borrowed from the e.c.b. so they don't have much left to buy spanish debt you can see the numbers right there ok there's just a little sliver on the right that's left of empty space and that's the money that they have left to buy debt it's not enough now the same goes for italy now this is all according to the wall street journal so it looks like we're back to our usual question what are policymakers going to do that's always the question it's always the policymakers forget the markets they don't matter anymore we will get to our guest about all of this but first a long way to step back for a second have a few words ok the world we live in today really seems not even a little surreal a lot surreal and that's a put it mildly because in the west we've been raised with certain free market principles at the core of our economic price ignores are about as fundamental to the operation of markets as you can get but by constantly manipulating and propping up asset prices central bankers and they're too big to fail handlers have really

made it simply impossible for anyone to claim that we live in a free market and price discovery was deemed essential to a well functioning economy is now seen as the fly in the central planners point isn't it prices are a nuisance or so they say and they deem it their job to support them at ever elevated levels from now on to eternity seemingly europe's. was the central bankers the latest attempt at letting the banking system with currencies whose supply is now only constrained it seems by the limitations of modern computing but the problem is the real world unlike the one of money and credit has limitations ok wealth unlike credit cannot be conjured out of thin air there are limits to what can be created and. what period of time and say we've already reached those limits and central banks are do we. can to prevent the overdue onset of reality

they are no longer the overseer of free markets if they ever were ok they have taken it upon themselves to act as kind of make up artist make over artists really hell bent on making over and sexting global asset prices beyond their substance beyond their years and the hopes of the rest of us have wasted on easy money for decades won't be able to tell the difference i mean come on but not everyone in the world is so bored i really any related some are looking to escape from this centrally planned nightmare of diminishing economic returns we are seeing it for example in the greek town of volos they're borrowing look at this b.b.c. report from be crossed everything here is for sale from him a new alternative currency. reduced by offering your services as one of you is recorded in a central computer network allowing them to spend the term on whatever they choose

and it's not just in greece the spanish towns of villa may or just santiago morgado and silva tara have all reportedly reintroduced the old spanish currency you see it right there because that's alongside the euro so here to talk about all of this i have paul craig roberts economist and former assistant secretary of the u.s. treasury under ronald reagan so welcome back to the show nice to see you thanks for being here. please play with you ok so let's take it from the top because now that l.t.r. o. money seems to be drying out we have analysts pointing out that this could lead to a renewed crisis in spanish sovereign god that's really where the fire is heating up now so years will rise if there isn't fresh money available to purchase bonds we are these kind of saw that this morning yields rose in a bond auction this is renewed concerns about the solvency a large nation states in europe and i are told that it's only been a few months since that last out here option it was incredibly wary so my question

to you is this really the new normal because it doesn't seem central bankers are ever going to allow the markets to return to normal. well they're not going to allow themselves to go. bankrupt and close down but keep in mind the original approach to sovereign debt was to shift all of the cost to the ordinary people carrying all of their social safety net their pensions employment wages selling off of national assets. and that this wouldn't work and they met opposition in the streets and so the european union came back with a. solution which was well we'll print some money to give to you to buy back your debt and you'll have to do less of this i was staring sawing off the bastards so. they came up with a trillion dollar

a trillion euros. and they're finding that it's not enough. and so they seem to be reluctant to create enough new money. to deal with it is sure and they try to bring in the i.m.f. through i know we'll get to that later. but what's so funny about since all ears. none of the policymakers in europe or the economists there seem to understand that if you create money to buy a bank there this can keep interest rates low only temporarily. cause as you create more money if you're imposing austerity at the same time in money is growing relative to the output of goods and services so prices have to rise. and if prices go up interest rates are going to go up and therefore when you

create money to build out there the ultimate effect is inflation and very high interest rates so all of this is sort of mindless episode that they're going through trying to avoid one problem they're going to create a much greater problem for the future when they get huge rates and not employment and high rates of inflation and since they have central planners and unemployment while we're on that i want to take the opportunity to ask you this you know every year who knows how many ph d.'s and economics are produced from american university as i don't know hundreds or thousands most of whom are taught that if you lower interest rates you lower unemployment it's the relationship that's illustrated in the phillips curve someone that something that anybody who is i guess taken an economics class of probably know about but with rates near zero as they've been kept for more than three years now in the u.s. and we know what out of climate studies been pretty stubborn is it safe to say that

this relationship is completely bogus. well it was always bogus that was one of the main points that the supply side economists established in the early one nine hundred eighty s. and the phillips curve is bogus it was a product of the wrong policy mix now but you're raising a broader and deeper question and it's certain you know why are the unemployment in the united states and in europe and in the united states since mainly due to our suring of so many jobs in industrial manufacturing jobs professional service jobs and this is spread to europe they don't have the same extent but in addition they now have these austerity proper policies imposed on greece italy. ireland portugal spain and these then contribute so that is you drive it economy down and the unemployment rises its ability to service its debts declines so whatever the bailout even if you know

issued bailout was enough right is now not enough because the economy is worse sodomy is not growing and it's getting worse and then a death all the have heavier so then i mean the robert for having a conversation it seems all very clear what our policymakers missing how can they don't understand us well you see i think the whole purpose in europe. was to use the sovereign debt crisis for two purposes one was to establish that the banks are not responsible for their own mistakes the ordinary citizens are and so if the banks make mistakes and and create losses for the years to sions the cost have to be imposed on citizens and citizens have to make good those losses by the banks and other words they're re installing served started yeah we start about that a lot along those lines though you're saying these are this is basically business.

service the banks we just heard managing director of the i.m.f. christine lagarde today say that these european rescue mechanisms should be rejigged so that they literally directly give aid to the banks and just cut out that middleman of the sovereign are they just now saying hey cut the crap we're going to stop pussyfooting around this appearance there we're not bailing out banks really this is what it's about well that that's the more honest approach you have to give you that because that's what they are doing they're not bailing out greece they're bailing out banks who probably. are goldman sachs financing you know why did the board move to greece can pay so that's who they're bailing out and not greece and then you know. and of course the i.m.f. itself is in violation of his own sure what it means money because it's only permitted to live. for the balance of payments just not committed to live for.

the deficit problems government problems so what we see coming out of this crisis is lowness next. has just been good story of the european central bank is just disappearing its charter and so by refusing to face the real issue or create lawlessness in addition to these other things that we have spoken about yet and that's something i want to talk to you about after the break in terms of what you think the i.m.f. is really trying to become maybe and also some of that lawlessness that i believe we're seeing in the u.s. we will be back stage here i will come back after the break and have more with paul craig roberts economist and former assistant secretary of the u.s. treasury under ronald reagan and also still ahead payday lending ok it seems big banks are bankrolling the practice even getting into the business themselves and

you know who else they're bankrolling in the process oh. candidates will give you our three cents but first your closing market numbers. you just put a picture of me when i was like nine years old i like to tell the truth. i confess that i am a total ghetto friends that i love rap and hip hop music and pretty much. he was kind of yesterday. i'm very proud of the world without you as playing. oh.

you know sometimes you see a story and it seems so silly you think you understand it and then a glimpse something else you hear or see some other part of it and realize that everything is ok if you don't i'm sorry welcome to the big picture of. what drives the world but there are mongering used by politicians who makes decisions. made who can you trust no one who is you know with the global machinery to see where we had a state controlled capitalism is called sessions when nobody dares to ask we do our t. question more.

welcome back before the break we were talking about the lawlessness of the i.m.f. and the e.c.b. and other institutions that's the case according to my guest that's what paul craig roberts believes is economist and former assistant secretary of the u.s. treasury under ronald reagan so i want to bring him back in here to stick to this to see what he really thinks is is the goal here that so dr roberts we talked it up i am at before the break you think that they are being a lawless so then regardless of what christine legarde says about the i.m.f. wanting europe to take care of its own business do you think that in reality the i.m.f. is wanting to become more like a central bank. it's not clear what's more they. could maybe do just we don't want to be without a role in a big crisis they made it maybe they think there is

a crisis will not carry over somehow or their own sidelines but according to the i.m.f. charter it's not what i think instance what the facts are. they will form your purpose is to learn the countries who are experiencing downs payments to call kids and their charter to him it's out from living to go much for the purposes and yet they are in the middle willing to governments for other purposes but now you know look at the role of the media as see today bluebird reported only i.m.f. getting three hundred twenty billion a new pleasure they did and this is this is what the report says through short japan denmark its whistle there among the countries to rally this week to the guards call for a bigger living capacity here on the current three hundred eighty billion to shave the world's economy and against any deepening of europe's debt. well this report

is nonsensical so long as we're not shielding the world economy loans or shielding the private banks from their own mistakes at the experience of the world economy i like every writing out headline there dr roberts i think your take is much more telling was speaking of the mainstream media when you talk about alternative currencies they were definitely i think a look down their nose turned up their nose i don't know recall their eyebrows but yet we see in greece and in towns in spain countries adopted sydney towns adopting their their currency before the euro or alternatives to the euro to get around the current system so what do you think some of these initiatives offer advice they have any staying power in your view where you say globalism was supposed to unite the world economy and stands fragmenting it with a great light all of these people are having to resort to local barter and order to

protect themselves from being re and served by globalization now we struggle with these schemes as they don't they will work if they have if the countries need a connection internationally because they can't order internationally not within the american. reserve currency system so they can work locally but if greece for example is dependent on imports of international goods they won't be able to bargain for that very effective me though we see for example. the so-called brics you know brazil india russia china they're they're trying to develop. an alternative system to the current to the current dollar based reserve currency system so that we may be witnessing now at the local level is the break up of dollars into enemy. just as

a rising. russian. term. international law to see how that all pans out and what time frame while we are waiting on that while we're on lawlessness it is kind of the thing i really want to ask you about this bill that's making its way through the u.s. congress ok there's a provision in it that would for one revoke passports of people with what's deemed seriously delinquent tax debt this is even if they have not been charged with a crime they don't have due process i don't know what you think is driving this because there is one angle which is financial and the government needs the money and then there's another angle which is that we've really seen an encroachment and civil liberties and you process in many different ways since nine eleven i'm curious what you think. it's probably encroachments rights because you know the government is already proven we have a huge deficit the federal reserve prints money. so this law is

being applied to people who are delinquent fifty thousand dollars to the i.r.s. well there's a there were incredibly paperwork thirty seconds so the war afghanistan. is not as meaningful and. if the federal reserve is printing money you would know it will turn another fifty thousand dollars so the whole thing has nothing to do with the need for money. it would be very interesting to see senators don't write bills that bills come in to them are either from the private interests not to fund their campaigns or from the executive branch. and i don't know where this bill came from and i don't really know what the motive here i suspect is just more of the shut down of the liberty of the american people it's been going on pell mell you know

through the bush regimes and the regime yeah and there are so many there's so many different instances of that and this is just one way that adds to that the whole laundry list really i appreciate you being on the show and talking about all of this that was that paul craig roberts economist and former reagan administration official yes. all right let's wrap up with a loose change i dimitrius candidate here talking about what i was talking with paul craig roberts about it and of our interview about this bill it's called senate bill eight hundred thirteen and it may have brought down partisan bickering in the senate at least which has to take a listen. remember. we

want to. go. ok so let's look at what is in the fine print ok what's hidden in this bill so the secretary of state can revoke or deny a passport to any u.s. citizen who the i.r.s. commissioner determines about seriously delinquent tax death a seriously delinquent tax debt as you heard our guest say is defined in amounts in excess of fifty thousand dollars no due process there is more ok let's look at another provision if the u.s. government decides a foreign jurisdiction is impeding tax and forstmann uncle sam can shut them out of the u.s. financial system this passed in the senate hasn't in the house so that's where it stands right now this is pretty concerning the whole the reach into foreign jurisdictions is something we've seen with for example swiss banks that won't let americans open accounts there anymore because they've had you know the government

come into u.b.s. and say hand over your client names and that's where they now hey if you don't do that it sounds like they could say you're shut out of the u.s. anshul system which is really required to do so many transactions globally and it's just one more step we've seen this along the way and a lot of people that if you can preemptive measures over the years and it has been this sort of stuff because as you mentioned with paul craig roberts we've seen we saw a big change in this regard after nine eleven the future of the speed up as far as the state reaching in and one of things are going to great is the people that immigrate here feel that they were more for you they were more opportunities and your cross boards have more if i do trips if you want to go somewhere i mean it's it's all part of this this breakdown in the spirit of the law and you know rewriting of laws to control the evil and you know if they do on the flip side of this people's passports people that are worried about their money hey maybe they won't care because we did a story recently about how people are lining up to turn in their passports because hey hold on there's that isn't a standard you want to anything you completely stole my ankle i was. i'm still over

the line because people are lining up to turn in their passports anyway so this passes could be good for the people who are lining this is like to think of unintended consequences but policy makers never understand you're pushing people out of the country you're pushing the wealthiest people and the most capable people of experience you're pushing the village elders out of the village ok and if you don't have the village elders who's going to give guidance to the rest of the people in our village and that's the problem who's going to invest and we're going to vote for your ideas in the system of capitalism you need capital ok but they don't want that they want to move to a post capitalism world they have as banks credits notes of credit backed by nothing and they steer the economy straight into the gutter well maybe businesses can go on the internet and do some crowdfunding with very little regulation for the jobs act maybe that's the trade off speaking to people they need money if these people flee that have money payday lenders or something that some people may do you see no commercials before they're used by people who need

a short term loan when they're between paychecks take a look need extra cash right now one day my car broke down and i was going to get pizza friday whatever the reason when you needed emergency cash with pay when i made a phone call and i was paid a one is here around the clock. ok well now not only are wall street banks getting into this practice payday lenders are spending big when it comes to politics those two always seem to go together don't they so while fargo has become making big on making advances to customers checking accounts who have direct deposit interest rates are going at two hundred seventy four percent for a five hundred dollar loan and second according to a d.c. watchdog group payday lenders are increasing campaign contributions for political candidates so these two go hand in hand we have wall street now looking at this as their revenue stream and then at the same time now all of a sudden this is getting more involved in the political process with candidate contributions and i would imagine lobbying you know if you have

a complete different angle on this but when i saw a commercial it just didn't realize it just reminded me going to serve this role in this world we live in where these people have real needs and the product that's being sold to them is credit a credit line ok so no more do we support the idea of autonomous individuals and solver individuals not individuals need to have constant access to credit because otherwise they can't pay their bills they can't get loans they can't be able to get food unless they have food stamps and the whole country will be on food stamps and you can move will be issue the cards and what does it say about the fact that this is where there is growth ok people used to need money to borrow money in order to buy a home something great is this now they need money in order to literally make ends meet between paychecks that's where the growth is coming from the room are really serious notion you want to throw on a light note for ten seconds here's really quick i actually question for both of you yes or no should we regulate payday lenders. we should raise interest i

think we should have everyone right into the ground yeah i'm sorry you have to regulate payday lenders are you kidding you want to see coming like w. stars because they already have no money and then they're really in trouble that's all we have time for our so let us know what you think of payday lenders to be regulated because that's all we have time for that thanks for tuning in don't forget to follow me on twitter at lauren lyster and give us feedback on the show at youtube dot com slash capital accounts miles fridays that means i will respond and so then from everyone to hear it at capital account thanks so much for watching and have a great. there hasn't been anything yet on t.v. . it is to get the maximum political price for.

its source material is worth hopes for and was and we. we want to visit. something. more news today violence is once again flared up. these are the images the world has been seeing from the streets of can.