outrage in themselves but i want to ask you know you have said before that living in a central bank world is like living in a hall of mirrors or living under a central bank is like being in a hall of mirrors and then more recently i heard you compare it to the truman show that movie where where truman is in a fake world but he doesn't realize it until he's going along in his rowboat any hits actually on the campus and this is the limits of his fake world i think you said we're already there so do you does this mean we're at the end to arrange things can continue to manipulate the fake world that they want. i think that we exit the fake world when people decide that they are living in it the jim carey character. in the truman show made this discovery when the proud of his rowboat for a member. tore through the canvas sky. i'm not sure how many investors are yet at the moment of realization that the values that they see are derived from manipulate interest rates the interest rates are

really the. the basis of so much of we regard as value. i am afraid that the that the moment of more or less universal realization is a way off but perhaps at the margin more and more people say hey when the second that's guy's not real right this right this water is it's like plywood. how do you think that would take because you could argue that existential crisis that truman had maybe was exhibited in the markets in two thousand and eight there was an existential crisis but what do you think it would take further went to the right and there is a there is a more interesting and and i think more historically remarkable existential event. in which we have been living lo these many decades which is the almost universal acceptance of pieces of paper established with the image premature of sovereign governments claiming to represent wealth your currency.

and in fact it does pass for currency people take it and the dollar is a little miracle of faith because it passes for value the world over you stand on the street corner of moscow one hundred dollars bill and people will think better of you for. but the idea that that these pieces of paper no intrinsic value could indeed represent actual value this is a heresy for most of the world's history that has only recently come to be accepted as an article of a fact. and i think posterity will look back on our collective acceptance. of these items of colored paper as money and say they believe that if you read the text in the federal reserve note it says no no no no it is a. this is an instrument of debt is a promise to pay something. how much to pay what well nothing actually and there

was a guy who worked at citibank for many years and was one of the most thoughtful and perceptive server critics of the first name was john exter and he's no longer with us but used to say if it were of no use an iou nothing you nothing so we're talking about the truman show and about our collective acceptance of canvas skies and plywood sea. and imagine towns i think that the the the the article of paper money which is so much a commonplace in everyday life and of commerce and great investing and save i think that will be seen in retrospect by our heirs and assigns since this thing of amaze with the same for forty years and counting we believe that so our error so do you think the next generation will make this. distinction or. you have a crystal ball here i'm just curious of all is generally has been broken for some.

decades. i think that. that i think i'm beginning to see signs of people questioning the legitimacy of these certainly the euro has come under some scrutiny euro is the currency of confederation which an american might say makes it confederate money and we know what happened confederate money. and with faith based currency i want to stick to this topic of faith in the people that print it so the federal reserve we saw the ethyl mc minutes come out earlier this week and oh no it wasn't enough for the markets they didn't promise end of that easy money was going to come there wasn't enough of a sense that it's coming do you think that the fed has run out of the tool of instilling optimism. or hope grow its legs it is as it were a kind of a drug dispenser when it's five years it's taking larger dosages and they said

minister of some soul searching about whether they have run out of technique. so they might do something more even more dramatic maybe rabbits and have something like that. but there was an expression in the fed minutes of. consternation that. the techniques at hand were not sufficient to off in a maze. so they might do something else but it is it is a pretty worrying sign that the. these massive massive materializations. of money or whatever they call it you know the is no longer having the desired effect. do you think that the power of percepts chen is more important than the power of the printing press for the federal reserve that's it which is wrong or

a great question i think perception is ever so important the. markets perception that the fed is can is in control is an important element in what the fed does. yeah i mean that the what the fed is doing in fact is to cause to come into existence. untold hundreds of billions of dollars as defined which take the shape of electronic impulses that stored in somebodies hard drive of the federal reserve bank of new york that really create no wealth. that at best lubricate the census in the expectations of people who may choose to materialize themselves bank crimea it all gets to be very were conned diet and rather mystical so perception faith is is part of the this magical mystery tour that we call central banking and yeah do

you think that power perception has run out for for the fad i think i think that the market is increasingly skeptical in the market needs more and more these larger larger dosages of whatever the fed's dispensing. coming up you will hear more of our interview with jim grant and still ahead if library manipulation central bank manipulation p.s.g. fraud m.f. global fraud all how you're looking for a way out of the financial system you may be interested to hear what jim grant has to say about planting trees and first or closing market numbers.

dreaming of a luxury used see room trip with open air entertainment. a little bit of exercise to get in better shape. queasy with all my healthy ingredients. in this case something to remove our summer sales on our cheap.

welcome back so why would anyone want to give their money put it in an investment knowing. that they would receive nothing in return or they would lose money after all was said and done in a perceived safe haven like treasury or or government bond well let's look at today's news cycle p.s. g.'s founder and c.e.o. arrested he admitted it is suicide no he attempted suicide to fraud going on according to his note undetected for twenty years so does fear over protection of your property rights factor in to what our guest calls a bubble in perceived safe havens where you don't have to listen to me can hear from him more of our interview with jim grant founder and editor of grant's interest rate observer he's also author of this book mr speaker the life and times

of thomas be read the man who broke the filibuster take a listen. we've talked a lot about a bull market in safe havens and people willing to level in a bubble as a bubble incident perceive safety now see actual safety we we see in retrospect very clear all that was safe. and but paradoxically that which is substantively safe often appears unsafe for example the. two thousand and late two thousand and eight early two thousand and nine. so-called toxic mortgages selling at twenty cents on the dollar actually proved to be a fantastic investment because they had built inside them a margin of safety built on price they've been sold down to next to nothing people were sick and tired didn't want to analyze and lo and behold the dregs of this stuff proved to be a wonderful investment if not well certainly a great year long speculation similarly now we are to the swiss

government securities out to five years yielding less than nothing are safe we are told that danish treasury bills french treasury bills german woman's yielding less than nothing are safe the tips in this country treasury inflation protected securities yielding less than nothing are safe i submit that less than nothing is not a promising place to start investment. i mean once investments all too frequently wind up delivering less than nothing but you don't set out that way right that is a shame but it's a part of the value proposition even passed muster with a two year old that was you know they know that they're not supposed to give their money to someone they want to get money but is there our role or is there a part that property rights play and this because we've seen m.f. global we've seen i've heard many stories of customers of m.f. global who had their money taken they put it in parent financial group and now the money has been taken from there so is there

a role that people are more willing to put their money somewhere they at least perceived. not to be safe because they're more afraid of it being taken. out of the mess that that is certainly that's part of it i think there's an overarching fear of something terrible yet not strictly to fight awful. and yet this is such a very a gated financial landscape there is this thing without a name this year that causes people to settle for less than nothing on fixed income investments yet there's also a strong enterprising feeling still in the world. you know the world is a presbyterian say of sin and sorrow to be sure that it is pretty well yet there are companies such as google that are in the business of codifying and making accessible the sum total of the world store of knowledge for free that would seem to be encouraging. the higgs bo's'n apparently has been unmasked i mean every day

there are marvels and our material lives so it is a curious. it's a curious juxtaposition between abject fear and hope. of course. one shouldn't invest on the basis of hope but i am not persuaded that less than nothing is the thing to shoot for right just a little higher maybe we can do better the easy way out of the speed of shooting higher this is kind of a creative interpretation but i was speaking to someone who was saying that a lot of swaps were done with y. bore and so a lot of those those investors will have a may have a case there may be a case of litigation for lawsuits of these banks that have been found i mean in manipulating it so based on that is it first seeable or perceivable that say verse or investors could say hey we want to sue the fed for this is zero percent we're

getting on our money because they're manipulating it yes i bet it would be a splendid suit certainly the headlines would be slim not sure about the substance of the litigation but you know if let us say that litigation goes forward with respect to life who are going to say that. the dark powers of these commercial banks were manipulating the rate down so that means that people are paying adjustable rate mortgages were paying artificially low rates that mean they had some you know some made off the state guys go back say all right cough up more money you mortgage all right for you if it ever are wrong arguing it's right at the side i don't see that happening either before or vote for we go. let's talk about gardening i guess is not gardening but i'm just curious when you start actually bullish on black walnut trees yes yeah let's look at what's with that what did you have to offer ok so. the seedling of a properly. trained. oh black walnut. pretty

university has produced a strain of these things that reach maturity in twenty five to thirty years the post fifty to sixty years to five bucks at maturity perhaps because the future is uncertain i say perhaps they could fetch a thousand and so you the internal rate of return and this look at zero coupon bond of yesteryear that's like what it when we know we had real interest rates you probably read it i don't i don't know it was a long time. but that represents the rate of return on one of these old fashioned bonds actually paid something. so my thinking is that instead of taking one's entire risk with the federal reserve to give nature a shot at it as well right. so with a tree your risk of a thousand canker disease but not so much with you know with peregrine or with the right right right is different kind of risk exhibiting kind of risks that are or is

it is not within the financial system it is outside of the financial system a very innovative alternative i don't know what's the what's they say the financial courtney's uncorrelated risk correlated rescue there you go in a world of so many correlated thank you so much that you were ever getting down there since all you need to talk to it's you know. i guess you could call that the mother nature risk now that is not all of my conversation with jim grant you can go online and catch a web extra at our you tube channel it'll be up shortly because i'm sure you saw the j.p. morgan reported a five point eight billion dollar london whale trading loss to date a lot more than they originally reported it would be and they will clawed back compensation for two years for the traders involved and their boss i know drew but did these clawbacks reinstate. realistic accountability you can find out what mr grant has to say about club x. but first this.

it is friday the thirteenth and we are going to be right so there's a graveyard behind me but there's a church right over here. which i don't know if you're not from new york are you haven't spent time on wall street you may not know that this is actually on the wall street right across the street which is kind of interesting and for me makes me wonder if during the financial panic during in two thousand and eight if if people were coming here. for a his things were just so very sure there were but you know the irony is that the church used to have a lot more power in society in the west as the middle ages obviously than then it

does now today the fed is kind of taking over the role of the priesthood the monetary presuppose our destiny direct we call them. monetary priests but they used to be that the church has an incredible amount of power unfortunately now it's kind of waned a little bit now but i think that i have that unfortunate i think that for you to get back i'm a little competition is the year when i think that the fed i mean the fed has got such a strong you know stranglehold on the economy and on the culture of this country that the church should step in that vacuum it's been on competitive for a while we're used to paying the church for indulgences and things like that if you want to commit sin you have to pay the church i think there should be some sort of tax on wall street since i mean if you want to find a way to claw back the club that they claw back some of those bonuses the clock back some of that will go up again where you can do that and you can demand that bankers proportionally paying indulgence. speech the church is a repatriates them right through the government i mean it's an ad hoc i mean it's

not the ideal system i'd like but it's some way to kind of get that money back to people well what's interesting about that is you can't legislate morality as we've seen that it's very difficult to prove some of these alleged crimes that occurred during the financial crisis and by the tremendous. is more relevant in church it's difficult to to prosecute criminal prog you have to prove intent although a lot of these actions in the spirit of fraud are criminal tried so and the spirit that's reading in the spirit has been broken see the spirit of this need to reread the the slobber has been broken and that's why we're here at the church lose the spirit yes there is the president and we to really bring that spirit into the law of the law and i was that it's a zombie there because the constitution is so huge and zombie banks to bring to bring spirit a spirit a life of soul back you'd be right who should the government and demetrius the

course there are a lot of worry here at the church on wall street that brings i guess the spiritual world to wall street we need to restore the spirit of the law that we all are among the dead who we honor we are not at all of the bed we cannot speak so we can honor the dead no no i don't i don't agree oh ok but you're putting someone else also if you say that in his book there were there were there of reckoning all right and they were side part that about that that would send a small i think the point is that on friday the thirteenth we are in a great arc trying to invoke this spirit of the law that seems to be missing when it comes to financial crimes. right that's it for our show today that's all we have time for from our jaunt to new york but will be back in washington on monday with charles ferguson of inside job until then follow me on twitter good or you tube or hulu and from everyone here thanks and have a great night. the

devoted u.n. security council tries again to break the syrian deadlock with turkey pushing for a buffer zone as heavy battles continue. while syria's delegates walk out of a meeting of states not aligned to the u.s. taking place in tehran outraged by egypt's new president damascus an oppressive regime. plus the euro zone's engine room of germany heads east for investment chancellor merkel is in china to drum up business and convince beijing to begin road is on the road to recovery. online on screen international news and comment live from the new center here in moscow britain and france say they're not ruling out any options in syria including

a military force no fly zone the deadlocked u.n. security council is to discuss the crisis with turkey also pushing for the creation of a buffer zone a new york correspondent reporting reports. nine foreign ministers of the security council seats will be in attendance as will representatives of turkey jordan and lebanon those representatives will be discussing the counter effects and the consequences of the syrian crisis and how it spilled over into their borders turkey is expected to raise the issue of buffer zones with the security council turkey wants to create according to reports of buffer zones within syria for displaced people now this is an idea that has already been shot down by the syrian government as well as russia and china and if i'm not mistaken possibly even the secretary general of the u.n. because creating a buffer zone many say why would put military

a military presence into syria that is not a part of syria's government or military so china and russia are arguing that this can only make the situation that much more dangerous now if the foreign ministers of britain and france were addressing the media just a little while ago saying that their countries are already preparing and planning for a post assad era and they have also said raised a new call encouraging for the defections of syrian officers and soldiers what they're doing to encourage those defections is not clear and the rhetoric from the west has been westward escalating over the past weeks we did recently hear france call on the syrian opposition to form a provisional government this came after france just a week ago called on the consideration of a partial no fly zone to be implemented over syria's air space meanwhile the u.s.

president barack obama said that the u.s. would intervene if the syrian government were to use chemical or biological weapons on syrian civilians and britain echoed america's. sentiments we also see the west is planning they say for a post assad era but meanwhile this violence is still escalating and the security council has not reached any kind of consensus on how to deal with the problem so you're dealing still with a deadlock among the international community but they're also at least trying to handle the humanitarian situation in syria so clearly a lot of issues on the agenda for the u.n. security council to be discussing but it's not only the u.n. that's divided there's also no consensus among the syrian opposition let's now talk to bus market money who's been a prominent member of the syrian national council but resigned this week or prompted you to leave the syrian national council what why have you been

disappointed in areas. of the council are the same as the ones i pursued there is no difference there the real reason is that i feeling the work from inside the council is not effective enough i believe there is more work that needs to be done to connect with groups on the ground. those connect them together this is a heavy task but it needs to be undertaken quickly and urgently because this is this will determine the post receive the money solution of syria we need to reassure the international community that the syrian opposition is capable of connecting and coordinating with the groups on the ground and getting them to abide by certain commitments but susan who are divided by ethnic tribal and religious tensions how possible is it to unite such

a divided syrian opposition now. i do think that they all pursue the same objective they are to find it not that they are divided in the sense that they are working in different directions they are all working in one direction which is to end the assad regime they are all right in the assad regime although no power amongst themselves though they are fighting together and what we see is coordination in specific regions and specific battles that is taking place and therefore i think this needs to be turned into an agreement among these groups because they working for the same purpose they need to strengthen these this coordination and establish rules among themselves a code of conduct that will lead to them really working together at the moment the regime falls we are all afraid of chaos guaranteeing against chaos is

by linking those groups together and that needs to be done by a political authority and do you think we have but this could be provided by the french president francois hollande he said that if the syrian opposition formed a government he would recognize it you really do feel that is possible i don't think that france is claiming to be able to help establish that government it is only saying if the opposition establishes such a provisional government prances willing to recognize it now recognition will of course be vital extremely important but the opposition has to come up with its own process to produce a legitimate provisional government this is currently under a very serious discussion and preparation now the syrian opposition has once again as we're reporting today called for a no fly zone over the country what do you think about that is that the right way to go.