live from moscow this is artsy here are your headlines two large bomb blasts have shaken the syrian capital striking close to a government building it all comes just a day after a deadly. government t.v. station. to undo the ruinous effect of austerity on the union while member nations grow wary of german proposals of political federation of europe. and the anti-american sentiment in pakistan reaches new peaks as the country's involvement in the u.s.

led afghan war claims pakistani lives on an almost daily basis. as the kaiser report next. imax cocksure this is a cause or report you know zombies are everywhere in the world not only bats salt and howling flesh eating zombies in florida but the global banking system as well is replete with dead men and zombies stacy herbert tell me more max in fact i think we need to start looking at the headlines and applying that to j.p. morgan goldman sachs u.b.s. credit suisse they have to prove to us that they are not dead because i have declared them dead they are dead the keiser report has declared them dead max keiser has declared them dead so it's up to them to prove that they are alive dead

man runs for india's presidency a dead man is running in india's presidential election next month to prove he is alive santos kumar saying a thirty two year old cook has spent nine years trying to prove to officials that he is alive after his high caste relatives declared him dead after he married an untouchable well his manifesto contains only one pledge max and that is to be recognised as alive and he has no desire to be president he says all i want to do is prove i'm alive if the government cannot declare me alive then i request them to kill me and issue a real death certificate in my name right he's got a good point there you need to have some credibility some credit beijing that proves that you are alive and not dead now in the case of banks. you know it started in japan right with the zombie banks now in western europe and in america similar situation the banks are dead and we won't prove that they're alive

by simply not having a stress test but pulling away the support system tollway the quantitative easing for days. just pulled away all the life support systems all the fake accounting all of the credit default swap and fake accounting and collateralized debt obligations that cross you know in europe the credit facilities that are lending with each other that's like two zombies having sex you know they're trying to give birth to another zombie another corner facility you know and meanwhile people are reacting by storing bath salts and ripping each other's flesh off in the streets in the world we have to stop to zombie apocalypse we can do so in the banking system but prove to us that you're alive when we take off the life support system there's a ripple ok max that's the question we're asking here and many people are asking that this is bloomberg news here dear mr diamond is your bank getting corporate welfare so they know that he goes before congress and declares himself i love free

market don't you dare regulate me and they said well fact if that's true why do you have so much corporate welfare in in fact they point out max in recent decades governments and central banks around the world have developed a consistent pattern of behavior when trouble strikes banks that are larger interconnected enough to threaten the broader economy they step in to ensure that all the banks creditors not just depositors are paid in full although typically necessary to prevent permanent economic damage such bailouts and courage of reckless confidence among creditors they assume the government will always make them whole so they become willing to lend at lower rates particularly to systematically important banks this bloomberg points out has provided an implicit subsidy to these big banks as of two thousand and nine the expectation of government support was shaving about point eight percentage points off of large banks borrowing costs for the top eighteen banks max this is equal seventy six

billion dollars. per year and that number is roughly equal to the bank's total profits over the past twelve months right jimmy dunn says he loves competition or he loves free markets free markets imply competition but of course there is no competition in the american banking sector because they all work with the government all colluding and they're all dead they're all they're all basically zombies here's what i propose stacey. let's put some images right up on the screen right now there's a very famous five year old girl she's an artist her works are selling for thousands of dollars give this five year old girl one hundred thousand dollars and open letter open up a bank that runs on a legitimate banking model of basically just holding on to deposits and making simple loans to compete with j.p. morgan i guarantee you that within six months her bank will be bigger than j.p.

morgan because she would have an august bank and she's five years old and any five year old can open a modest bank but jamie diamond is a fifty year old shmona who opens a crooked bank who's a believe with the devil and the bomb administration and he runs i think going to share bank it just give any competition any five year old give it give give give a gold fish baking alliances and they'll attract more deposits then this out right criminal diamond so the top u.s. banks received an implicit subsidy of seventy six billion dollars last year j.p. morgan's share of the subsidy is fourteen billion dollars a year which is about seventy seven percent of its net income for the past four quarters so they're almost entire income comes from this one subsidy but seventy seven percent is due to this one subsidy doesn't call it all the other subsidies why are we applauding this guy jamie diamond the fact that he can walk and chew gum at the same time the fact that he is not walked is not you know tripping over

shoelaces all day long so we came a standing ovation but also because we taxpayers have subsidized him to this tune we taxpayers are broke and destroyed and our condoms are devastated because as they point out like all subsidies the taxpayer large us distorts supply if the government supports corn farmers you get too much corn if the government subsidize banks you get too much credit as of march household companies. and government in the us had a massive debts of thirty eight point six trillion dollars or two point five times the country's g.d.p. that's up from one point three times in one nine hundred eighty right there. thing about this is that if you're not part of the banking mafia you can't get any credit and there's a recession slash depression where we live in greece you live there you can't get any credit there's a depression but the bankers are taking over your country doing the leverage buyout of you stealing all your assets they've got an infinite line of credit at zero

percent interest rates they've got no problem in credit using your life as their collateral for their cheap loans what kind of insight is that of course by this mis allocation of capital because of the overly cheap rates that these subsidised too big to fail banks have received the economy has collapsed and now remember the total for eighteen just eighteen us banks the total subsidy just from the low interest rates was seventy six billion for the year u.s.d.a. budget would rise eleven percent on food stamps spending so this is from last year max the supplemental nutrition assistance program or food stamps will cost eighty five point two billion in the year starting october first two thousand and eleven up fifteen percent from levels in two thousand and ten so eighty five point two billion to feed over fifty million americans or seventy six billion to feed eighteen guys. right and they don't want americans being solved supporting

self-sustaining growing their own farms growing their own food they'd rather have them on food stamps bush is a by the way a program mostly run by jack jamie dimon and j.p. morgan and they want americans begging like chihuahuas for their scraps down at the food stamp supply but they don't want to be self-sufficient but i'm saying here that here are fifteen million human beings in america fifty million that some of them could not live if they did not receive these food stamps there are little children their one year old two year old three year old there are seventy eight year olds who who rely on these food stamps fifty million and for almost the same exact amount of money there's a subsidy provided by those taxpayers to subsidize jamie diamond and jamie diamond then gets to lord it over them saying here maybe i will give you a food stamp card maybe j.p. morgan won't this month right so the subsidies that morgan gets are roughly

equivalent to the food stamp program yes and but in america turn on fox news who are they hating on who is the one that are the welfare queens. if those fifty million people all how bout solves that would be a really interesting zombie apocalypse imagine a fifty million bats solve zombies made a march on j.p. morgan speculators book the employer along this is that well just to confirm this we look at moody's remember they downgraded fifteen the top banks around the world j.p. morgan trading loss drove three level stand alone cut however according to moody's max j.p. morgan benefited from the assumption that there is a very high likelihood the u.s. government would back the banks bond holders and creditors if it defaulted on its debt according to moody's statement. without the implied federal backing j.p. morgan's long term deposit rating would have been three levels lower and its senior

debt would have dropped to more steps says moody's so remember that american population when jamie diamond goes up in front of your congress your elected representatives donning the the presidential cufflinks and saying those little peasants well fifty million of them rely on me for food stamps. i am the cop would be a cop oh he is a welfare queen just as much as anybody relying on food stamps just as anybody relying on medicare or medicaid i love the language of the the assumption that their their balance will be backed up by the government otherwise it would be downgraded more so they're using their gambino john gotti metaphor there is cufflink jamie you know the congress. fellows that want is almost. that you're not going to downgrade me more than two categories or i'm going

to have to cut off all your junk in the guns and i'm going to have to make sure that you don't have the gas to even get home today because i'm just going to come up with a couple and you know there's still the same kind of language you're wiretapping when you drop in on the mafia there's like so choky the dead fish bongo is saying that you assume that you could only get the big rigging done in a certain period of time or it's going to come over there to soome that you know it could be living much longer i came back so we're going back to the top of the show i'm saying that here's a man who is having to try to prove he is alive because they the elite of his country have determined he is dead and they won't let him access the global financial system or his own national financial system so i want to say here's another test to see if these banks are alive burn the bondholder see if they're witches see if they're like living unnaturally burn the bondholder over one billion euros of engle bonds will be repaid irish bank resolution corporation the new name for anglo-irish well we pay more than one point one billion of debt next week as

the controversial policy of paying all unsecured senior liabilities continues the bonds are mainly held by foreign investors many of whom bought the debt at steep discounts over the past two years when the original lenders feared the collapse they owned banks might remain on the ious yet why don't we why are the i paying this dead bank whether paying this bank well let's see burn the bondholders see if the bank collapse. says now i r b c this new fake bank that isn't even a bank it's a virtual mirage of a bank that is exists only thanks to the unwilling large us of the irish taxpayer well let's see if you burn the bondholders whether the banks still spend a lot so if you burn the bondholders that say we're not going to pay this bond over angle irish would they get any pushback we're saying that you're talking to a dead cadaver on the other end of the phone they're not going to push back there are good people why are you paying dead people irish government in that they're

psycho they're sniffing the shamrocks over there this worse than bought salts. stacey lambert thanks so much for being on the kaiser report thank you max don't go away much more coming your way stay right there. well. it's technology innovations all the developments around russia we've got the future covered. welcome back to the consul report imax keyser time now to go to toronto and speak

with economist professor steve keen it was currently in toronto working on his mathematical models with researchers at field's institute you can find all of steve keen's work at debt deflation dot com or on twitter at professor arsis a prof steve keen professor steve keen welcome back to the kaiser report writer max ok steve king let's talk about european debt crisis is it mathematically possible to bail out europe all if we have by mathematical logic and math that's not my quote might mark always way that's. right so you've got to be to write them down. probably once so let's stop this is an insoluble problem well steve king the seems like what they're attempting to do is to lever up a bad situation by increasing the number of lending facilities the acronyms the european lending facility one two three three one hundred and then they borrow with

each other they lend to each other. they create this massive ponzi scheme and they have the federal reserve of as a model because and in america they've got fifteen sixteen trillion in debt in the whole entire eurozone they've got another ten trillion euros to go before they even match america so why can't that game go on so a bit longer steve well the reason is because the bakshi behave like the american central bank you might actually be able to get out of this because nobody you know mikhail on having a pretty house plan right now and nobody in california is declaring bankruptcy because they are expected to so why the heart but that's the situation there in europe because the european central bank isn't actually central bankers will be more like a european central disciplinary already where its role is to discipline the starts rollup the farm directivity so because that is the central bank doesn't have on the deficits of the individual countries but i have to go to the market there would of

course they specialise in all rights and now your site is saying what part of this money from us and all our rights so far it's a recipe for disaster what they're after doing actually soros amounts it much the same thing today they have to wish to genuine central bank in europe which funds the activities of its obvious various national treasury which so let me follow up the other top three central banks to give you an example of how the central bank virtual reality is exploding. the u.s. fed the year the e.c.b. and it's virtual acolytes the bank of japan twenty five percent of the developing developed world g.d.p. is now tied to this floating of fake securities that the so this is again this ponzi scheme is continuing steve the worst of words words words that once a bubble going to be punctured well got a bunch of the product out first night which is the problem here or the state can get away with it certainly sounds like you can get away with it indefinitely two

decades now. they can do it indefinitely but the running a trade surplus leg. there are unmeasurable this is a green and so on with their except in japan and i don't run out of them as i would like to try this if i can get away with it i don't believe america can do it indefinitely because running it's right to try to deficit with the rest of the will and and europe is also a bit on the edge they would like to continue and down the road to some substantial time but the reality is that leaving the biggest can still have a unaccounted for that's a little profit and if they actually want to get rid of it what it was created brought pencils private actually gets rid of it and then we might get rid of a millstone around the necks of the public because even though we took him up that way about how he would get wise down all of us blah blah blah the reality is that. we buy. private x. when that is so bright we decide we can't afford to go shopping or economy or to

invest then we pull the sort of economic front we're in right now and we stay there indefinitely but it's going to focus on the really important debt and that's the private debt granted by banks that like on the finance she is rotten thing in finances of industrial capitalism that's honest ok well let's explain spain spanish banks have just given sixty two billion euros in exchange for their private debt so they can't predict down the road in spain and the austerity steve keen is where the rubber hits the road right i mean this is where the a sturdy is where is where people pay for this ponzi scheme right there what they should be doing is rather on evasion the banks that should be getting out of the public what they have a special tilt with what we should be doing in. the banks because the banks don't deserve to be baloch the banks so what in your receivership an old debt they generated you go down they go down the good when they get hurt. me rescue the public from the book that that's what the central bank should be doing certainly

rather than a closing hostility on the public would like my role really apply. passive role being dragged along with him and a house to. actually causing the growth. has been causing the imbalances the responsibility in europe's what's home to the bureaucrats it is on something as stupid as a master treaty and the banks went along and financed the stupid and across like that until it fell right up and now of course we're putting the pain on the public . rather than in the bank back on the banks and the bureaucrats were longs ok bailing out the citizens versus the banks let's go and refer to your book deep bunking economics the newly expanded version and let me ask you this question keeping here book in mind when barack obama was asked why he bailed out the banks and not the citizens back in two thousand and eight he referred to the multiplying effect of lending to banks bailing out banks creates a multiplier effect in the economy it sounds like me

a liberal economic steve came and he just wrote a huge book debugging that entire notion talk about it yet it's the whole model of how that money my used i want to go to this task in the first was because economists believe a little theory of how money is generated which the question what i used in the book from an american satirist it's an ace also bill and wrong theory of coral obama bang a moral void and he's honest well i just thank him and then went by white america so what do ya give the american public was fitted up by a lot of banks because of dollars given the banks and he would surely sit this generous i in with ten dollars in additional money into the economy and they call the multiplier fix they actually use try to explore economic kuwait through obvious about going out the bank struggling after trouble is anybody who's signing up marcus well i am pretty quickly worked out why that's nonsense for stop going to the say that americans have borrowed the starch and product already two trillion

dollars worth of it on the poor. change trillion dollar economy by to shoot out three south groups are using our in a little bit by typing on by a bomb or getting insane or actually true it involves the money markets are big specially in america that we've been at we've got i think we're sure you got it and being treat point i use word and deborah and all the three years we know what it was going to were so there's room id or whatever. but also when you put the money in the banks account it just sits there because they don't want to wind up it doesn't want to borrow so the reserves no logic increase in the market. and this is because with nine to fifty years pretty much the thanks that nate reserves the land banks lent money creating to others in the process and they look at the reserves light up so if you actually want it you want to generate wyman's you have to have a willing to take on debt in the first question and of course they're not willing

to take a hit so that the trillion dollars that obama threw will pretty much the change during the tried and since the whole process began would have been far better being given to the public on condition that i must write this down right and to to add support to what you're saying there all these scandals of the past five years have been tied to a similar type of problem having no collateral a.i.g. blew up because they had no collateral current credit the false wop is a virtual security of no collateral all of the recent j.p. morgan's two billion dollars or ten billion dollar loss of the policy had to do a training securities that had no collateral they're just training thin air now i can't i can't totally blame barack obama because after all he gets all of his information from reading the new york times and in the new york times there's paul krugman and paul krugman is an academic who believes the multiplier effect the money even though makes absolutely no economic or academic or logical sense and you have bit of a dust up with paul recently i think basically had a bit of

a debate he is continuing to be interviewed outlets around the world as you are to steve king but how does paul krugman survive his his ideology which is clearly completely corrupt. probably close his lips and little fantasy world of people who are white and call it momentary but then there are a sickle school of economics is actually one of the most radical on all but basic begun to recidivate armchair notions sit and i'm sure your imagine what world hospital are without actually going in check and seeing with your imagination actually match reality and then you go to sort of model him once he starts from this idea that winning is good like you know statins a bit down on his luck the ghost is rich might max carson bars a million dollars and therefore max has actually to spend money drops why million six passengers and rises by million dollars macroeconomic there was no impact so that doesn't matter and he thinks it's because banks it before in may and max and that whole process you can ignore banks as well and you can model capitalism as if

it doesn't have x. and it doesn't have money you sectors that are going to include bit of that just sort of debt when you're in a rock and actually back. now frankly it's i mean it's like trying to model out birds fly by pretending i haven't got wayne good luck. the market interesting theory but it's going to give you no explanation of what will actually write well i mean krugman getting the nobel prize in economics i mean it's ludicrous it would be as ridiculous as if let's say barack obama got a peace prize from the nobel committee of course that would never happen to one of the most warmongering presidents in american history now one last question steve keen in terms of hyman minsky modeling and of course he is inspiration for a lot of your work and he's the one to kind of outline this idea of how markets feed on themselves in these bubble machines in the in the u.s. we see that the median household wealth fell by forty percent mostly among those under fifty in the middle class what role do wealth and income gaps contribute to

the ultimate minsky moment when it pops and you see the the big one well it's the contributor to old wise that was rising inequality if you and if you're that of all . what man you're going to try to borrow money from a course of the banks so you that even buy a house and a house and go on the capitalist class in the process that will if you're taking on more debt but in the mathematical modeling is going up here it's a built in one thing with a stat wishing an unexpected result is that work is being is negatively related to the level of interest rights and a little bit even if the workers that was doing the borrowing so we look at the social class with a look at the bottle of the bank because capitalism works because it's the capitalists of the last war on the money which is what you want to be the ones that actually can because they're borrowing the money and a little bit the typing on is wrong thing then in fact they are in constant change much like what to regard a sample it's the workers income so fundamentally rising levels of debt of course

the decline in the worker sharing so they actually rising did cause inequality as well of course inequality was in a rising bit so it's a lot of positive feedback cycle and the engineer will show you a positive feedback sokolov with it to a break now that's the situation with now aren't all right fifteen right a time thanks so much for being on the gaza report thank you michael wasn't going to be here now right now going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and we thank my guest steve keen going to send me an email please do so at kaiser report in r t t v dot argue until next time next now to saying.

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