max kaiser this is the kaiser report where do the politicians get that money they need to run for election it comes from trading on inside information of course they see her well max insider trading from congresspeople is not a legal i'm told just recently after it came to light but here's a good headline for you paul ryan traded on inside information to avoid two thousand and eight crash paul ryan attended a closed meeting with congressional leaders bush's treasury secretary henry paulson

and fed always are chairman ben bernanke in september eighteenth two thousand and eight the purpose of the meeting was to disclose the coming economic meltdown and beg congress to pass legislation to help collapsing banks is said of jewing anything to help ryan left the meeting and on the very same day paul ryan sold shares of stock he own to several troubled banks and reinvested the proceeds in goldman sachs a bank that the meeting had disclosed was not in trouble but this is an example of market fundamentalism paul ryan in his mind he's thinking he's justified in breaking the law more or less i mean it's legal then for congresspeople to trade on inside information or maybe it's not legal or maybe they're doing a work around but it's clearly immoral and it clearly disenfranchises many americans but he figures that it's his divine providence to do so because he. is

doing god's work as so many people in washington or wall street believe that they're doing market fundamentalism like al qaeda is a kind of theocratic fundamentalism paul ryan is an idealogue he's a fundamentalist he's an he's very he's a man who would break the law for his perceived greater good that's a dangerous man. my question to him is paul ryan what if atlas shrugged because some jackass congressman was going to front run him on insider trading information that he learned through privileged information what if atlas shrugged then. alice shrugged of course the title of iran's epic non masterpiece which is the legitimizing force in the fictional world people like ryan are alan greenspan use this greed is good thought process to do things like trade on inside information because after all they might stop trying

to get inside information and wouldn't that be horrible for the economy they would shrug they'd be like wait a minute i'm no longer committing fraud what will the economy do now paul ryan says echoing in random exactly and like in atlas shrugged like why participate in the markets when you know there are those able to trade on inside information and that it's not victimless the victims of these crimes are the other investors in the market at the same time because for every winner there's a loser well as paul moore said one hundred million people have been thrown back into poverty sense the financial crisis began five years ago he calls it the biggest humanitarian crisis since world war two clearly those are victims and that number is escalating sharply as a result of this financial terrorism perpetrated by paul ryan the ideologues who believe that he should break the law in the interest of the greater good and well in fact max turning the table on high frequency traders

a key executive of one of australia's largest retail stockbrokers has blown the lid on what he calls the market rigging which is taking place on the australian stock exchanges bell potter's managing director for its wholesale division charlie aiken believes that the market riggers the so-called high frequency traders are causing the community to lose faith in. australian and world stock markets again then i go back to paul ryan and his belief in atlas shrugged what if investors go on strike because they know the system is rigged by corrupt congress people and corrupt high frequency trading algorithm bought trading bankers i have a question for what about if the high frequency trading algo bought shrugged and eighty six percent of the volume on the new york stock exchange and around the world computers trading with computers they're using artificial intelligence what if they struggle and said to paul ryan and others you know what we're going to invalidate all of your trades we're going to raise your bank account like jamie

dimon does that m.f. global regrowing to check you out of this financial system now you're on the breadline and you're shrugging your shoulders wondering who is up and. and goes on to say that it is a national scandal that seventy five percent of of australia's stock exchange turnover is being conducted by unknown people who solvent see is uncertain and who could cause an australian market meltdown if they collapsed a can says these unknown people are not only manipulating the market but are the main cause of the violent share price fluctuations in turn these fluctuations are driving retail investors out of share markets again the retail investors are going on strike we saw this in the middle of the financial crisis they invested have not returned to the market the only people there are are the central bankers not like the phrases solvency uncertain because this is a growing concept and dilemma around the world because the collateral that is put

forth by these banks is being exposed as worthless f.d.i.c for example as the banks to prepare for a global financial meltdown in such instances what would their collateral on the books be worth oh jamie diamond j.p. morgan negative thirty four billion so you of the hundred forty billion market cap that's all wiped clean he's left the negative thirty four billion dollar in negative equity is essentially what's on j.p. morgan's balance sheet and they use their entire talk to the federal reserve bank and their entire relationship to get free money to continuously slam down on the silver and gold markets where they can shorts else which is going to obviously blow up as the demand for precious metals expands due to the money printing going on to cover the tracks of the fraudsters like j.p. morgan. so again this guy charlie aiken who's the head of the wholesale

division for bell potter is the one of the largest retail stock brokers in australia he says that the justification that the market riggers provide liquidity to the market was simply incorrect. they are merely taking cream off the market it's a form of legalized scalping scalping and counterfeiting no it's not liquidity in the sense that you're providing market discovery price discovery for actual bona fide buys and sells you're creating artificial manipulated directions and transactions in the market when somebody shows up with a real order then they either crash the market or spike it upward in these huge gaps called a flash crash for example or knight capital is another example of a market that's just really existing as a whole a gram and then suddenly there's a glitch in the matrix and four hundred forty million disappears you know this is

more and more the case isn't it that's why people are saying only keep money in banks that you're willing to lose and i think that's good advice. exactly but you know zero heads has been covering this for the last few years really they're the first one to really cover because they're trading and every month they have a tally of hedge funds and and legitimate traders and investors who have abandoned the markets who have closed funds because they are john galt going on strike because it's a rigged market rigged by the insiders and collaboration via the lobbyist with the same congress people well i think it's right to look at these as funders leading indicators they are getting out because they realize that the risk reward ratio is completely out of balance there's no point in putting any funds at risk in a market that's controlled by frank and market frank and market monsters being created in the laboratories of goldman and j.p.

morgan it's a lot. the franken market stocks the town. beating raping killing who'll stop the fraud to market well you know the story is always the same the villagers get their torches and they go and i hope down the frog on market except of course that's a bit of a concept does not look for the people behind the franken market dr frank and market lulu you mean lloyd blankfein and jimmy go. well we've talked about this legalized scalping forcing real investors out of the markets ryan ranks as top house fundraiser with backing by banks paul ryan mitt romney's choice for vice president is one of the top political fundraisers in congress with backing from the employees of banks and insurance companies that would benefit from his actions on financial regulation and medicare wells fargo eliot management and u.b.s. employees are among the top contributors to romney's presidential campaign according to reports so is comments on interest basically laundering four hundred

billion dollars in mexican drug money i didn't hear any of those comments his comments on barclays bank libel or rigging affecting five hundred trillion in global derivatives contracts oh no i don't hear john galt speaking there from washington to lou johnny where you come in oh that's right you're a bag man for shysters downtown that's all you are paul well i think he should instead of who is john galt he should worry about who is slacks myself because slacks my eyes are as it is on strike against u.b.s. but you know here he is receiving huge amounts of money from the banking sector studies show c.e.o.'s not subject to the same rule of law as you so there's been two studies done one study looked at the influence of corporate lobbying on fraud detection corporate lobbying and fraud detection in the journal of financial and quantitative analysis they found that firms lobbying activities make

a significant difference in fraud detection compared to non lobbying firms firms that lobby on average have a significantly lower hazard rate of being detected for fraud if they. fraud detection one hundred seventeen days longer and are thirty eight percent less likely to be detected by regulators the delay in detection leads to a greater distortion a resource allocation during fraudulent periods and also allows managers to sell more of their shares the other study from the university of florida found that those who are even caught if they've contributed to congresspeople or senators they receive six years less on average prison time oh yeah if you want to cut years off your present time give some money up all right but that's a that's an established washington dictum and i have one final headline here max because one of the biggest financier's of paul ryan is eliot management here's a headline only from last week eliot management we make this recommendation to our friends if you own u.s. debt sell it now quote long term government debt of the u.s.

u.k. europe and japan probably will be the worst performing asset class over the next ten to twenty years we make this recommendation to our friends if you own such debt sell it now you've had a great ride don't press your luck from here it is basically all risk with very little reward so that's paul ryan's investor right behind this of course is the idea to dump the u.s. dollar so paul ryan we're going to about that all right thanks so much for being on the kaiser report thank you max don't go away much more coming your way right there . the lead. role started. going global. cooling fire.

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more news today violence has once again flared up. these are the images. from the streets of canada. showing operation to rule the day. welcome back to the kaiser report imax keyser time now to go to london and talk with sandeep jaitley bully on basis dot com sundeep lectures to route the world on austrian economics sandeep welcome back to the kaiser report thanks very much max

sundeep i want to get your back on because you tweeted recently and i quote if it ain't mangere or is direct student eugene volokh b.b. it ain't australian sorry respectively too many mistakes were made now the reason i wanted to comment this is that many americans consider themselves austrian school libertarians but most will be following what are his mistakes i think his mistakes are probably too great to elaborate elaborate told sort of on the show. but essentially mazes didn't look back to. original axiom which was the values no doubt saw it of your own consciousness. and he did a. mango ribs about market action in the sense that there are always two prices there's a bid on an off. and. didn't like

to admit that interest was a market phenomena and. he sort of wanted to imply that it's a sort of a natural consequence of not having a present good basically. to develop a theory of interest without going back to main goes original observations is not continuing the tradition in the australian way as we would see it so it's it's not insulting or denigrating what von mises has done he was certainly the greatest economist of the twentieth century it's just that he made a slight few errors of observation that's all well but there isn't this is interesting and bringing it up there is that. this idea of value does not exist outside of mankind's consciousness whom this is pretty much the opposite object of ism which is iran's philosophy yeah many american libertarians add here and they

say von misses as their justification this idea of objectivism is diametrically opposed to the true austrian school of economics so that would be fundamentally flawed any so-called libertarians philosophy absolutely and the amount of guff that you read tries to associate itself with austrian economics. i mean it's remarkable. the reasons himself made the mistake of confusing. the the the thing that occupy is an object with the object itself so he made the mistake of saying that a promise to go. is exactly the same as the object of a promise to go and if you sort of stop and think about it that isn't quite true. and the same applies for the whole philosophy of austrian economics generally gold

does not have intrinsic value per se. it has value because it satisfies human ends and it's the means by which those ends of scientists foid. it doesn't have value in an over itself and that's a big mistake the a lot of libertarians or people who call themselves libertarians may right i wanted to also ask your thoughts on what i call fake libertarianism because you hear a lot of folks in the us who describe divine mazes purportedly but they're actually going to scratch the surface more of these fake libertarian variety and this comes up quite a notice of plate this i would imagine as related to price discovery way talk about bit off or interest rates they don't include certain extra nowadays or the the actual use of force which of course would be against the whole idea of libertarianism to realize an economic gain so in other words when you have

companies that are supposedly free market who are in the oil business and they don't exclude they don't include the extra analyses of the pollution that they're creating or the cost of that pollution they are by force subject things other people downstream to deal with the consequences in many cases deadly consequences of the force of those extra maladies putting being pushed on those people so again a major failure by libertarianism yes in fact it's supposed to be associated with this idea of. free markets etc with what were your thoughts mark so i don't want to. to paint about picture of volney as it is i mean it's a perfectly honest mistake to make confusing the object with the the ends that it's satisfying. but it's not and it's not

a mistake that i expected someone like of all mieses to to weave into his economic theory so so miles to flee so that's all i would say. ok well if you strip these things away from the current crop of libertarians in the u.s. that are informing the iran school all the paul ryans who are now on the republican ticket you can't they're not really libertarians they're not really austrian economists. they're fake what are they what would you call these people i don't know i mean i haven't really given much thought to what i would name these people but all story in economists is you know one of them by a very large measure on how to give it some thought but it won't be a car in the nomenclature let's just put it. all right now was sandeep in your latest bully and basis newsletter you write quote money is gold and silver money is nothing else and yet when ron paul asked ben bernanke the whether gold is money the

chairman responded now it's a precious metal what's going on there. well respectfully dr bernanke is wrong in that regard but he's not he's not unique by any measure. money is the universally acceptable ultimate extinguisher of any debt. and as far as i can tell credit. which is the system that we have currently doesn't doesn't fit the bill throughout the university accepted extinguisher of any debt has always been ultimate extinguisher i should always be in gold or silver nothing else that is the definition of money. so it doesn't take much thought to realize that dr bernanke is wrong plain and simple he's wrong. there are so we have clear evidence of this because the us as

a debt problem and ben bernanke the solution over there at the fed is to just monetary policy at attempting to extinguish the debt not with gold and silver but with more debt yes yes for that what he's doing cannot be considered money no no not at all you can't you can't you can't extinguish credit by issuing more credit you just end up with a larger amount of credit standing. i don't know whether dr ben one key realizes this in the back of his head i'm sure he does he's not he's not a dumb individual. but the consequences of what he's doing i don't think he does realize or in fact any country that is monetizing that to this degree they do not realize the consequences of what they're doing and there will be nothing that they can do once once everything starts kicking off once everything starts spinning what i want to make very clear max is that you don't need marginal quantitative easing

from here for asset prices to start escalating thing you only need what has currently been printed to just start spinning quickly and once things start spinning nothing can slow down no central bank we able to slow it down without sending the whole world economy into the second dark ages all right so now of course go if you take post world war two american economy there's always been this tension between escalation of debt and g.d.p. growth and for decades there was on balance g.d.p. growth in spite of the escalating debt so for a while america was able to get away with this escalating debt but now we see a period where what's happening is is directly outlined in the austrian school of economics is that when you achieve a certain debt saturation point you enter into a debt by. role in the attempt is to is to satisfy or to stage the debt with more

debt which creates this debt trap and is that it in mangers view it was either there was the first to articulate that aspect of the austrian school. or was never never market orientated or that specific in his observations because he must remember the time that he was writing none of the shenanigans that we're currently doing well happening. there was still still a gold standard and there were some issues with silver in austria specifically to do with. the the austrian. manga couldn't even comprehend what we're currently doing. so it wasn't on his spectrum it was on the spectrum of the late so called austrian economists like like for me to let me let me jump in there for a second what we see the break than from anger to of on mazes really as we go from a world of gold to a world of banking and and

a fractional reserve banking where it appears as of on me says attempted to shoehorn magers ideas into a new philosophy which is interesting in its own right but not you can't really confuse it with a real austrian school no you can't you can't and another thing that is often people often get wrong is that once you have gold and silver which is as i said before the universally accepted ultimate extinguisher of any debt all of the obligations that you have come across through the course of business are denominated in gold. and those obligations which are closest to expiring to liquidation into gold you can count as near money not not money and those instruments which take a long time to liquidate into gold like treasury bonds or long term corporate is less money like so the amount of obligations the amount of credit in the system

has no restriction to it per se it's only bounded by how productive how innovative we are as a species so extending credit does not cause boom and bust cycles it's when you extend credit beyond the duration for which it was intended and that we actually understand more colloquially is borrowing short to lend long it's when you don't match the purpose to which the credit was taken with the purpose for which the credit was granted basically that is a much bigger problem let's take that a step further because in london now there are the banks in london are under extreme pressure having been exposed to the scandal of re hypothecation forget about mack matching your short and long credit obligations they're really loaning the same security out in infinite number of time here are leading to

a total collapse in the u.k. banking system and economy so it's beyond even the mismatch of obligations it's become an outright fraud. there's no collateral whatsoever it is for all borrowing short to lend long is fraud because you're disobey ing the principles of a bailment which is that of the man deposit should actually be accessible at all times so you can have your money available at all times and an interest on it don't make sense yet we the people. i willing to accept things like this without questioning them so we get what we deserve in the ok son d.j. rat of time thanks so much for being on the kaiser report i hope they so-called libertarians like lou rockwell watch and learn who are much mike so do i. and that's going to do it for this edition of the kaiser report was made max kaiser and stacy herbert i was like my guest sandeep jaitley if you'd like to send me an email

please do so at kaiser reported r t t v dot ru until next time x. factor sank by all. the. technology innovation all the developments around russia.

for the future are covered. you know how sometimes you see a story and it seems so you think you understand it and then you glimpse something else and you hear or see some other part of it and realized everything you thought you knew you don't know i'm tom harpur welcome to the big picture. stop and look at the current a bit it's unemployment the national debt failing governments ask yourself does it really matter who wins with billions created daily you can gamble with your money or turn it into a solid gold.