live from moscow this is our top stories from mass killer anders breivik tries to defend his sanity to give credence to his murderous extremism with fears that his anti islamic ideology has taken root elsewhere. a lie detector test clears russia. of poisoning and the murder of a former security officer alexander litvinenko whose father hints he knows who the real killer of his son. and the tear gas rains down on bahrain's anti-government protest of western governments keep quiet prompting accusations of selective support for arab uprising. heading stateside now to our studios in washington d.c.

for the next ninety minutes first off with tonight's capital account. good afternoon and welcome to capital account i'm lauren lister here in washington d.c. these are your headlines for april twenty fourth two thousand and twelve when italian and spanish bond yields back on the rise we've recently seen the dutch government colao under the weight of austerity talks and french president nicolas sarkozy did not win first place in the first round of french elections now its price discovery is guarded against in the financial markets are we seeing its emergence reflected in the delicacy of the eurozone governments as discontent is b.n. priced into the democratic process will answer that or try to meanwhile central

banks may not be waiting to find out if major currencies do zero or the us dollar for that matter will collapse or be devalued there is dunking on gold i am at data shows mexico at a close to seven hundred tons of gold to its reserves in march turkey russia and kazakhstan are buying more too we speak with gold money founder james turk about why he thinks central banks could be guarding themselves from the confetti can and currency be and shot around the globe and in the us we've seen oil prices become a political football in an election year look at what the onion market can teach us about oil speculation let's get to today's capital account.

all right so is the democratic process tearing down the house of cards euro zone policymakers have built to solve the debt crisis let's take stock of what's been going on politically in europe you can decide for yourself nicolas sarkozy the french president more cozies second half did not win the first round of french elections he came in second place now he and his first place opponent are reportedly vying for the votes of the far right national front party now they fielded first place candidate a third place excuse me i should have said marine le pen now what's interesting is that as europe integrates further internally certain countries have seen the rise in fringe political parties nationalist or right wing movements now france is an example marie le pen though she was defeated got close to eighteen percent of the vote her party seeing unprecedented gains as she reportedly campaigned on anti immigration and economically on protectionism and on x.

sitting the euro the dutch freedom party that's another example the dutch government collapsed and the prime minister resigned monday after the far right party with drew its support for the government and withdrew from talks about austerity now this is interesting because the northern countries the richer countries surplus countries have seen themselves as the good guys doing the right thing financially economically so what happens if one of these countries rocks the euro zone boat or jump ship entirely and what does all of this mean for precious metals we spoke to james turk about it he's founder of gold money and the author of the collapse of the dollar and how to profit from it make a fortune by investing in gold and other hard assets here's our conversation. we've seen a lot of coverage of protests in the periphery in greece and spain and portugal we haven't seen that kind of discontent in these richer countries i'm just asking you i know you're not a political expert but you are in europe is there any kind of sense that there

could be such discontent in these richer countries that we could see one of them pull out of the eurozone or or the euro. yeah it really is interesting that the are spreading and it's really recognizing you know that the underlying problem is the same in the south as it is in the north the problem has been less labeled it's called a crisis of capitalism but it's really not that it's a crisis of socialism and both the socialist governments in the north are those that favor you know heavy government spending and those in the south are being affected with that and people who rely on governments and governments who make these promises have to rethink that relationship there comes back to my favorite quotes from margaret thatcher a few years ago she said the government the problem socialism is that eventually governments run out of other people's money and that's exactly what's happening in europe that actually happened long ago but not only did they run out of money but they are now running out of borrowing capacity they tried to keep the game going by borrowing money more and more money but they've reached a stage where they can't borrow anymore so what governments in europe have to have

to rethink in this is true in the north as well as it's in the south some of the socialist policies that they followed in the past because literally they've run out of money they've run out of borrowing capacity and that's the core issue that's behind the crisis let's talk a little bit more about what impact this could have on the euro because it's interesting this dutch freedom party commissioned a report that we actually cover back in march that lombard research state called netherlands and the euro and it showed why the netherlands would benefit by leaving the euro saying that italy greece and spain portugal would need a lot more money and germany and the netherlands would end up footing the bill and the party's leader of the dutch freedom party is a euro skeptic to say the least what impact would it have if a country like the netherlands exit in the euro. yeah i think what it's doing is it's highlighting the problems of the euro itself and the way it's been managed you know there's nothing wrong conceptually or in theory with a single currency after all the united states has a single currency and the people in california use the same currency that people in

new york do you know throughout the fifty states but what's happened in europe is that people in germany are being forced to bail out people in as a greece you know. governments and banks in greece and it's taken a single currency beyond just the neutral currency that it's supposed to be and this turned into a political currency and whenever you mix politics and money you end up having a lot of problems one of the reasons why the book in this bank was so successful for the one nine hundred fifty until two thousand managing the dortch mark is they very clearly guarded their independence they didn't finance government deficits they maintain the purchasing power and the stability of the euro but the e.c.b. has gone another way and it's not too surprising to see some of the problems that we're seeing in the euro rising inflation and some of these issues that are tearing countries apart rather than bringing to them together which is what the hope was for the euro initially well again speaking of the e.c.b. we see a talian in spanish yields on the rise again we've seen the e.c.b.

step in the past by bonds in the secondary market their programs like the s. and p. recently we've heard it european central banker come out and remind everybody hey this is still a tool in our tool chest do you think that the political will will continue for the foreseeable future for these kind of policies to try to put a ceiling on yields. yeah you know but they may try to do this they may try to buy more paper in the e.c.b. to keep yields from rising but the e.c.b. cannot keep all you'll down forever it's just a practical impossibility and just taking the risk away from you know a commercial bank and putting it on the e.c.s. bank's balance sheet doesn't really solve any problems the underlying problem as i mentioned earlier is governments have run out of money they've run out of borrowing capacity they cannot take on any more debt yet they continue to try to do that spirit has always shown in monetary history that when governments try to take on

too much debt in force that debt into the central bank the currency ultimately gets destroyed so i wouldn't be too surprised if the euro does break up and germany will stick to german discipline and go its own way while the rest of europe might go back to national currencies how it plays no one knows but it's clear that the present system as it's structured is its shelf life is limited it's not going to last much longer well then let's talk about what all of this means and what the effect is of it on precious metals a lot of the it's an heiress you just mentioned a euro collapse or a euro zone collapse as well as the policies that central banks there are continuing to try to pursue along with the reality of these indebted countries. yeah individuals should take a cue from some of the central banks outside of europe and what they're doing you know central banks are accumulating gold in their cumulate in gold because it's a safe haven it's a tangible asset that doesn't have counterparty risk meaning that it's not the pen and the government or any banks promise it's the pen and the fact that the market

gives a value because gold has been money for five thousand years and is likely to remain money for the foreseeable future so one of the points that i've been making for years is that every individual has to act like their own central bank in the world but what that means is that you have to have your own gold or silver reserves you know own physical metal and when you own the physical metal you know you're protected from all of the monetary chaos that we've already seen and the monetary chaos that's yet to come your wealth your purchasing power will be preserved by owning these physical metals and the key is don't look at the price of the metals look at whether they're undervalued and they still are undervalued so despite the volatility inflection price fluctuations you might see the fact is that they're still undervalued is the important point that you should be focusing on and why you should continue cumulating precious metals that's interesting and since you mention the central banks i thought it was very fascinating that i am that data just out shows that mexico added close to seventeen tons of gold to its reserves in march

turkey russia kazakhstan all increase their holdings of gold this is a continuation of a trend you spoke to which is central banks stocking up on gold what do you think they're bracing for and tension mentioned that you're are they bracing for a euro collapse. well what would you rather own euro or dollar or would you rather own gold i think the central banks are voting for gold is probably the logical response well and along the lines of the central banks mr turk one thing that we've talked about in the past is allegations of manipulation of the gold market and one argument that people make is that central banks are involved in manipulation of the gold market so how do you reconcile the fact that they're stocking up on gold while at the same time their argument that they're manipulating it i mean are they manipulating it to push the price down to buy on the debt well there are hundreds of central banks around the world and you know there are some that are accumulating in there some that in the past have been the sorting in order to keep the price of gold low the reason why central banks like the us treasury or perhaps some of the

european central banks have an incentive is they want to keep national currencies looking good even though they're being badly managed and have policies that destroying the purchasing power of those currencies you know gold is a messenger when the gold price rises people start to understand that something's happening with their with their local currency and as a consequence they move to gold you know the incentive of the treasury is to keep people in the u.s. dollars because if you keep people believing that the dollar has value that gives power to the u.s. treasury and maintains the present system as it's been structured since the end of the second world war so do you think that there will be a day alternately when the price of gold will explode upwards because there won't be left there won't be anyone left to buy on the margin. yeah there will but maybe the better way of describing it is not that the price of gold is going to explode upward but the purchasing power of the dollar collapses you know which is the title of my book going back to two thousand and four the collapse of the dollar you know

everything that i wrote my co-author john robina wrote about back then is still very much true today it's just taking much longer for it all to happen simply because governments and central banks think kicking the can down the road as the saying goes but i'd like to say that kim is no longer can it's just to turn bolder and it's not going to be kicked much further interesting and i know you're not you don't have a crystal ball you can't predict when this will happen or what the chain of events will be but you are still a believer that there will be a collapse of the dollar and that that will be near or rather than later term and i guess i want to know what kind of a scenario it would be that we'd see that well it's really hard to predict i mean you can go to a place like zimbabwe and see what the collapse of the currency did to the economy but when you're talking about the world and we will have more with james turk after the break and also still ahead last week we saw president obama pledged to ramp up . oil futures we'll give you our three then what the onion market has to say about

that person or close the markets i'm. sure is that so much. i mean if you want to give it real. hard to deny something in this happening in french politics with president nicolas sarkozy fighting for his political life what is the future.

all right welcome back before the break our with our gas was explaining why he believes that the collapse of the u.s. dollar is still coming despite the fact that central banks have kicked the can down the road which he now calls a bolder or he explained further why let's listen to what james turk founder of gold money and author of the collapse of the dollar how to profit from it said about that ups of that currency did to the economy but when you're talking about the world's reserve currency collapsing we've never been here before so there's no precedent to save this is going to happen or that's going to happen but if you stop and think that the year zero is mainly backed by the u.s. dollar if the u.s. dollar goes into the black hole will the gravitational pull pull the euro and the other currencies that are using dollars as reserves like the japanese or will they go into the black hole along with the u.s.

dollar i think that's what the possibility is and such a banks are obviously worried about that that's why they're taking this these steps that they're taking you know the long term refinancing operation from the e.c.b. the huge swap lines that the that the federal reserve is extending to europe but these things are not solving the underlying problem there's too much debt that has to be repaid or written off by the banks and the central banks are afraid if all the bad debts are written off most of the banking system worldwide would be insolvent but it's an inevitability that these debts have to disappear one way or the other and unfortunately central banks today are not addressing the heart of the problem. are you saying they're protecting the banks at the expense possible of the currencies and faith in the currency is. protecting the banks and they're protecting the way the system presently works you know this relationship between the governments and the banks all of this new financing that the spanish government to a large portion of it was bought by the spanish banks that gave this the spanish government the currency it needed to continue fulfilling its promises but the point i was

making at the very beginning of this interview we're pretty close to the end of the line here and my time frame has always been twenty thirteen to twenty fifteen when things are going to blow up and we are i think moving toward that kind of timeframe that eventually central banks are going to have to realize that the promises that the pursuing are no longer sustainable governments are going to recognize that they cannot count on commercial banks to buy government paper to give them the currency that they want to spend and that we're going to need to spend style discipline on the euro and not just the europe of all of the world for the currencies in the absence of the fiscal discipline that made the been inspected the market great currency for fifty years it's inevitable that the currencies are going to. collapse go over the end of the cliff or have you want to describe it right policymakers still appear to be trying if you watch the i.m.f. they're just thinking oh hey if we keep trying to paper it over with a large enough bailout fund maybe this will go away but it certainly isn't meanwhile i want to talk about the issue of counterparty risk because here in

washington today mr turque there is a hearing going on about how to prevent an m.f. global type collapse from happening again a firm that collapses taking customer money with it now gold is something that a lot of people own e.t.f. futures and other derivatives which how counterparty risk do you think people should be liquidating the physicians and going into physical gold. yeah i really do but let's look at it from a big picture point of view when you're talking about wealth wealth comes into different forms it comes in tangible assets gold silver houses farmland timber land and it comes in financial assets in a bank accounts insurance accounts and that type of thing financial assets have counterparty risk associated with them the value of that asset is dependent on someone's promise whereas a tangible asset the value is in the asset itself and when you're in a financial bust people are concerned about the promises that have been broken and are likely to be broken as the financial bust continues so it's very natural to see people moving out of financial assets into tangible assets and you're starting to

see that you're even seeing people move out of questionable finance or financial assets into what they think are safer financial assets so there's been a huge flow of euros from southern europe into northern europe thinking that the northern european banks are better than the southern european banks but eventually when this financial crisis comes to its final conclusion there will be i think a tidal wave of people moving out of financial assets into tangible assets of all sorts because you're better off owning a commercial building in london or paris or berlin than you are having you know huge amount of money sitting in the bank regardless where the bank happens to be in the world today because there are so many bad assets in the banking system yeah that's really interesting analysis one flight more specific issue because i wouldn't want to miss the opportunity to get a little more specifically into gold with you miners have underperformed the market for physical gold recently one reason that i've seen given is that tax policies in the countries within which they are domiciled have affected them why do you think

the reason is that miners about to perform the physical market. yet it's not just recently if you really look at it you know gold's been in a bull market for twelve years and miners have been in a bear market really the way i measure the price of mining stocks in terms of gold not in terms of dollars or euros they've been in a bear market for fifteen years going back to the collapse. bre-x. you know share prices are a function of two things that are a function of price and are a function of earnings and both of those things are absolute numbers that we could look at but sentiment really determines the ratio the price earnings ratio and for the past fifteen years the sentiment toward the mining shares is just continually been negative it started with the collapse of pre-x. it started continue with some of the disastrous hedging programs in the banking system people then saw the e.t.f. easier way to have exposure to the gold sector than taking the risk of owning a mining stock and basically that's continued to this day but we're at

a historic moment in time that the mining shares have never been this undervalued and i'm basically a value investor so i look at the situation and say to myself well i should just continue cumulating value because that's where basically the value is but the interesting thing is not only are the mining shares undervalued but gold is undervalued too as is over so i think the whole sector is a place where people should be putting more and more of their assets if you gold to be a form of savings and when you're cumulating gold you're saving some money and i think that's a good thing and we will leave it at that that was james turk author and founder of gold money. all right we're going to leave you with our wrapping up with some loose change

dimitri and shan and we have something really. funny to tell you so before joining the federal reserve chairman ben bernanke he was professor ben bernanke he has many people know or have been reminded with his recent p.r. blitz of college classes but if you haven't seen our show let's go to break for miner from his stint lecturing at g.w. university george washington university earlier this year. unfortunately the fed made its first great challenge in the great depression and it failed. both on the monetary policy and on the financial stability so now we play that because the great depression was his expertise as an academic and paul krugman in today's new york times magazine writes about the bernanke he can none from the divergence between what professor bernanke he advocated and what chairman bernanke has actually done and crewman argues that he has gone too far from his academic roots and needs to do much more he argues that chairman bernanke used bed has been much

more passive than professor bernanke is writing would have led us to believe so he says bernanke has not done enough. and that really he's not been enough of the academic that he once was this is this because obviously i think that he is a little cuckoo well and you know even believe ben bernanke you should exist because i think you're right i understand if that didn't exist certainly not should the china position maybe bernanke himself should not exist also but but but this just goes to show you this kind of helps you peer into the mind of paul krugman and you can just see how radical he is because then bernanke is a crazy academic i mean he's condemning everything he's doing this is applying his crazy theories to the real world and he's not seeing the results he wants are saying i'm going to buy more my peers ok so this is show you how much of an i could then make paul krugman is because he's saying you're not living in fantasyland enough ben right you need to come live with fairness i would be who carry the real world just do more of whatever you want to live look at models the look or reality

look at these thing you know the thing is interest rates are at zero they can't go lower so you can't lower interest rates but you should do more you should find something else to do instead of looking at the fact that ok there are interest rates aren't helping unemployment the way that you would like it to doesn't that say something or something he's saying so that's why you hear people like paul krugman others talk about negative rates because they want it's a they're constrained by the laws of gravity by the law they want to so they want to enter this fantasy world that's where they want to bend time and space right that's why we use that metaphor about destroying the space time continuum that's what paul krugman and break you want to do he want to take rates negative way out of the store all of reality and space and time and this even showed that because kirkman wants to go back to the future get professor bernanke and bring him back now if they get it he can do. continue where they're standing you want to add anything those who can do those who can't teach and those who aren't in the

position right into the new york times magazine about it. of the hour how about all i'm in the new york dot. it was sitting with the coffee yeah yeah i like about the future than i like that i like the adage to end on let's move on because last week president obama went after oil speculators we covered it of course he's dealing with the high price of oil in an election year and so in response he pledged to go after evil speculators with more regulation take a listen we can't afford a situation where speculators artificially manipulate markets by buying up oil creating the perception of a shortage and driving prices higher. but do or oil speculators really drive the prices higher it's something that's heavily debated we've debated it take a look at this comparison made by an a.p.i. scholar and professor mark j. perry brought to us by reason in a great piece looking at the volatility in the onion market versus crude oil onions

are the blue extremely volatile market and crude is the red much less volatile now the big takeaway here guess what you can't speculate in onions onions futures are not allowed because onion farmers back in the one nine hundred fifty s. thought that traders that speculation was increasing volatility and was leading to the extremely low prices the falling prices of onions so they lobbied so that there would be a ban of futures trading and look how volatile onions are and how. comparatively less volatile crude oil is is there something to this is this a good perspective for us to be looking at in this debate where you have because i mean the whole people people blame the speculators i mean obama is ridiculous you want to you want to talk about volatility oil prices stop bombing kind of the middle east but anyway the know the reality can speculate either way so it's not that people people say it's or oil speculators are responsible for the high price in oil no that's just absurd because i think it was from rises up down and down so

it just compounds the trend if you have you have some sort of oil short and besides having speculation ok is important because a speculator is important to be there in order to help push if you're going to rise is going to give a signal to producers think to get more supply of the market. in any case the there is speculation but people like obama use that as an excuse as a political football yasmine to do with the i mean this adds to the argument that people make that speculation actually decreases volatility also i just want to point out six two thousand and six oil prices have risen one hundred percent porn is that three hundred percent but onions they're up four hundred percent wealthy if you look at that because that's. well we have time for thanks so much for tuning in to our show do not forget to follow me on twitter at lauren lyster and give us feedback on the show at youtube dot com slash capital account you blow want to miss tomorrow we will have our favorite zero hedge blogger english bob on the show for is inaugural capital account debut to talk about the fed the interest rate decision

is coming out tomorrow and bernanke he is giving a press conference we'll give you our three cents on it i'm sure but for now from everyone here at capital account thanks for watching and have a great night.