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loved by the people but fear by the banks. max kaiser this is the kaiser report yeah now i know i jamie diamond doesn't come on the show and stacey max the first headline might have something to do with that economist appearing on max keiser show forced to resign this is on forbes magazine max and in an email confirming the action sandeep jaitley explained to me apparently they don't want to burn bridges at the gold standard institute and i take this to mean bridges with large benefactors and partners however jaitley is

unfazed and values to continue his work including a ph d. acceptance speech on the lewd began missing split from carl manga and eugene vonn bone by a work regarding certain aspects of interest rate theory but you say i figured out that the whole mrs institute was populated with dangerous ideologues and that these guys formed the basis for the corruption on wall street for the financial terrorism on wall street they refer to the media's institute as their ideological framework that's why they're dangerous ideologues that we have a guest on the show just talking about it in general terms he's fired now what do you see that saudi arabia iraq afghanistan i mean you see this in totalitarian regimes of course i knew this was the case and that's where we're coming after the measles as well as forbes says i like sandy because he challenges orthodoxy and a thoughtful way aside from the illuminating monetary debate sparked by a as

a guest on the kaiser report the forced resignation of an economist is both interesting and disturbing well if they're there they're fake libertarians out there in the u.s. people who call themselves libertarian are not they're fake they're fake austrian school adherents and the whole room school is bogus and from here to sunday the whole all those guy. are the fake ideologues that are fueling the basis of the jamie diamond's the the alan greenspan's the lloyd blankfein the terrorism so let's move on to this next headline max group occupy protester accused of bank robbery for holding your being robbed a sign an occupy easton protester faces an attempted bank robbery charge following an arrest at an organized event at a bank during which the occupier was holding a sign that reportedly read you're being robbed dave grusin skee allegedly held cardboard signs outside a wells fargo branch that read you're being robbed while the other said give a man

a gun he can rob a bank give a man a bank he can rob a country the thing that got the police called however was that he was protesting outside bank of america and an employee activated the panic alarm oh right well you know we're sort of panic button there's a panic alarm bank of america and the employee inside the bank saw somebody pointing out the fact that bank of america is stealing money so that the words aren't perfect but it gets them actually max when we were pushing the panic button when we were saying there's fraud happening in the system there's manipulation happening in the system there's a fake bubble in the system we're pressing the panic button and here's what was told to the global you know panic button pushers this is a clip that somebody sent me from two thousand and seven bertie ahern he was the prime minister of ireland at the time here he is talking about the naysayers those pushing the panic button sitting on the sidelines or on the fence crippen a moment is a lost opportunity in fact i don't know how people who engage in dot don't commit

suicide that's right that was the response at the time that the market fundamentalism this ideology that's pushed by the freaks on these think tanks whether it's measles or adam smith institute they get these folks around the world like bertie ahern who's a market fundamentalist the time to suggest that for anyone challenging. they should commit suicide instead when they should have been pushing the panic button saying women will find interest on this show and first patrick is a terrorist starting over budget system leadership put up or sponsored and want to know bertie ahearn was there in front of his compatriots justifying the whole sale rape of his country thanks bernie well you know there's mass hunger desperation poverty people having to forced to leave ireland because bertie hearn was telling people to commit suicide in fact people are now committing suicide because at the time bertie ahern was telling the

journalist the people who were speaking up about the fraud in the system he told them to commit suicide and notice that the industry the mainstream media in that moment with him were laughing. yes tell those naysayers who want to pop our bubble that they should go commit suicide because like paul morse and top regulator it's bus turned whistleblower that hundred million people have been put into poverty as a result of bertie ahern in the financial crisis starting in two thousand and seven many will die many millions will die and they're laughing about it they're laughing about this financial holocaust they think it's a joke so you know here on the show we also cover the fact that these same guys bertie ahern when normal people out there are saying you know there's something going wrong with our financial system there's many people ation and fraud in our financial markets this property bubble this must be based on fraud because there's no way for the incomes to sustain that debt and he tells those people to go commit

suicide so when the top when those one percent that he helped let's see what happens when these guys become negative and down on what the government is doing m.p.'s anger over g four s. damaging to economy one of g four s. as largest shareholder has warned that the aggressive response of m.p.'s to the olympic security. shambles put recovery at risk by discouraging businesses to come to britain neil woodford investment manager at invesco perpetual which owns approximately five percent of g four s. of shares said that the verbal dressing down delivered to chief executive nick buckles at last month's home affairs select committee meeting was like watching a medieval persecution if this is the new way parliament wants to treat business please parliament don't be surprised when businesses decide this isn't a country for them not for of well first of all this phrase recovery put the recovery at risk there is no recovery in the u.k. there is a bounce for bankers stole

a few billion quid but the employment picture has gotten morris the economy is to contract ng and the g.d.p. is shrinking there was no recovery there was a quantitative easing by the bank of england that was stole that was put in the pockets of a few bankers they can call that a recovery and then second of all this compass crazy wacky defense contractor is just another shyster bleeding the economy dry you don't need all that that nonsense of gold product that they're selling then most of those people that would save the economy immediately so let's look on to another very close all of dark of the u.k. political system let's look at how he reacts to competition this is a tweet from rupert murdoch simple equation free open uncontrollable internet versus shackled newspapers equals no newspapers let's get real so instead of competing. he wants to raise barriers to to free internet not remove

his barriers as they are perceived in the newspaper space he doesn't want to compete you know that's murdoch's as i've been saying for years of open competitive landscape he's never been able to compete if he has a monopoly position with satellites he can compete but when it comes to real competition he's a failure as a businessman always has been and harry's castigating the internet because it's providing competition to his model of doing business which is out of business does he want what he wants to government basically give him protection you know if he's a buggy whip manufacturer he wants with cameron to give him protection as a buggy whip manufacturer and his model of doing business went out of date who purchased an octogenarian porn vendor and he's going the same way as porn is going the internet got rid of you know the porn market in l.a. that's getting room murdoch for the same reason you can get the same stuff online for free so just step off stage a little lonely old bat so here's a government again and this next story intervening into the markets creating chaos

through choosing favorites and on top of this you have an election happening in america so of course all sorts of political parties are putting out platforms that are either stupid or a hoax here in the u.s. right now farmers are king during an election season you know the heartland of america fades me wave ethan all mandate livestock farmers in indiana and across the nation are calling on the federal government to lift a mandate on the production of corn based ethanol that they say is squeezing drought devastated corn supplies and pushing up the cost of life stock feed some farmers fear the government's decision to promote alternative fuels by mandating the production of thirteen point two billion gallons of corn based ethanol this year is pushing the price even higher and could make feeds. scarce danville pork former david harden says quote a waiver would at least let the market determine who

is going to buy the corn and at what price like american never graduated from the circus side show when it comes to politics the geeks and the freaks that are like a mitt romney who will promise anything the city slicker comes into the hayseed town and offers old cars a thing to the people you know and they never figured this out they these midwestern people always vote for this idiot from the city every time this is a guaranteed winner you can't go lose you know. each can't lose but by betting against the naive a day of these midwestern works every time well here are there not naive because these guys are saying let the market decide what the price should be the government is introducing a mandate and saying this is what it is so all the other side when the government intervenes maxim provides their favor and somebody so let's look at who they're favoring with this because there are some in the midwest who are very happy with

this tipton corn farmer allan baird he called the mandate one of the most significant things that has ever happened in his career because it helped his industry to overcome low corn prices which were below two dollars a bushel and parts of two thousand and five corn now sells for about eight dollars a bushel baird sells thousands of bushels of corn he says about thirty percent of his production to need even all plants for fuel production but you know the article points out max the food prices are rising because of this the corn is being diverted according to a mandate to provide renewable energy in the meantime it's creating winners and losers the guys who are raising beef cattle are losing because they have to pay a lot more they're having to compete with the corn ethanol guys who are receiving huge subsidies to make that you can all so they're creating winners and losers in the meantime the globe loses with the high food prices well the globe has been losing for decades because the american corn is for is receive government subsidies

for decades as a result of corn and corn syrup is sixty percent of all processed food and you have thirty percent of americans obese as a result health care skyrockets due to these subsidies of the corn industry's been going on for decades and just because the ethanol just a new variation on because they can't compete again if you know if they're murdoch or a farmer or you're putting out content you know try to compete once in america instead of always relying on monopolies the military and mayhem there were things which bring on the cause a report by. don't go away we're coming away stay right there. dreaming

of a luxury sea round trip with the open air entertainment. a little bit of that just to get in better shape. and cuisine with only healthy ingredients. in this case something to. our summer sales on our cheek.

at the going down of the sun and good morning we will remember that we will. welcome back to the kaiser report i'm max kaiser time now to go to boston and talk with professor yanira barre yam founding president of new england complex systems institute professor welcome to the kaiser report. all right professor i want to get john i read your report and i think it's in st louis important that people take a look at this report the food crises a quantitative model of food prices including speculators and ethanol conversion he looked at various possible causes for food price rises tell us what factors you eliminated as the cause of rises which did your models conclude were the cause in

general. there are. the idea that supply and demand could fully or current for the price increases was naught which was shown to be not possible there are two factors that are important one of them is a supply and demand factor if the are increasing conversion of corn to ethanol and the other of the effect of speculation on commodity markets. following the deregulation of the commodity markets in the year two thousand those are the two factors. the corn to ethanol conversion has given rise to a rabbit but smooth increase in prices starting in about two thousand and six. and the speculation has given rise to short peaks in two thousand and seven eight in two thousand and eleven and that's the analysis that we did in that all right so professor talk about the deregulation of the year two thousand so you are referring

i would take it to the commodity futures modernization act this act of course which came at the very tail end of the clinton administration essentially legalized portions of the financial transactional ised economy that previously had been classified as pure gambling and i want to do you also mention the word supply and demand there and typically supply and demand are drivers in any economy they have buyers and sellers and they mean the market and a price is mitchell excepted but we're entering post two thousand but really building for a couple of decades there an economy that's really more systems oriented and requires the kind of work that you do in systems analysis and calm complex systems analysis understand what's going on because as you described food prices you're talking about multiple layers of of complexity of the revenue of of betting that's going on the financial ization the kazakhs all ization and at the end of the day the market itself is become something very very different over the past. air's then

what it was up until that time correct the suggestion did the science that we're doing might be helpful in understanding markets i can surely access. there are two ways that the science of complex systems act however can hack. what is through perhaps direct intervention when things are not working the way they should. that's akin to traditional government interventions price controls and so on that may be important under some circumstances and informing them with the scientific analysis they can quantify the impact of policy choices with you can prove of course the nature of those policy choices but there is another approach which is equally important at least and that is by understanding the functioning of markets themselves one realizes that. effective market

functioning depends upon structures that are in place for those markets to function within so regulations are not actually and pathetic to market function they are actually essential for market function now you mentioned the issue of the deregulation and you also mentioned the issue of the riveters and so on today we are at a pine where the concepts of deregulation have been prominent and have affected policy decisions of both parties and have led to deregulation that has undermined the very structure of the markets themselves so after the during the period of the depression after the crash of twenty nine but for other reasons as well regulations were implemented there were a frameworks in which the market function banking frameworks market

frameworks both for commodity markets and for star markets and those regulations serve the economy well and in their effective stabilisation of the otherwise free market system. they provided for a kind of tremendous growth so by recognizing that those regulations those or other rule hikes of regulations that are creating a framework like the the structure of a building. in which activities can take place they actually and mabel the free market to function well we can marry the two approaches of the free market and the regulatory side and realize that they're really not contradictory at all they really require each other as long as one understands how to implement appropriate regulation right professor seems remarkable that in the discussion of

the crisis and the. paris and to the one nine hundred thirty s. it's always about whether there should be deficit spending or not deficit spending but nobody seems to talk about the fact of the regulatory framework that was created at the time which gave rise to the recovery and it seems to me that that regulatory framework glass steagall f.d.i.c the securities act of thirty three and thirty four was the key in the recovery all to me but i want to ask you something about systems analysis for a second if i have a very complicated system and here are a complex system analysis. and that system let's say is tied to units of risk if i add one unit of risk to that complicated system and my adding to the complexity and in a linear way or am i adding exponentially the risk to the system professor well. the answer is more subtle it's neither linear nor exponential it's usually some

power law but what it means is that. indeed there are extremely variants that are much more likely. recently. been called black swan events right there much more likely than we expect they're used to form their quote normal distribution of behaviors and complex systems or are generally characterized by having a much higher probability rick stream of grants these are collective actions panics and bubbles and things that involve many people or many actors doing the same thing ok let me let me jump in here for a second time in interrupt agrees i bring it up two thousand and eight the system around the world financially seized up principally because of the inability for various counter parties to make good on their bets in the derivatives market as a response to central banks kamen and effective lay added more liquidity.

morphy out money more systems complexity with tarp and other funds other debt facilities more layers of debt more layers of complexity so the question is is the system now five years later are more fragile and prone to systemic collapse than it was a two thousand and eight or is it last fragile or is it the same what we have is a system that used to be able to stand as a building because it had all of the beams and structures in place. in during that deregulation which is not that long ago i mean the banking deregulation happened at the same time as the commodity market deregulation and the stock market deregulation happened in july of two thousand and seven only months before the market collapse so all of these major actions of deregulation are all very recent what we've done is we've taken out the support structures over the konami care of

each of the market activity and as a result we have an unstable system a system that is cheap teetering and taught to ring and showing signs that it's about to lapse in every threat so what we have is we have the government propping it up standing outside the system and saying we've got to hold you up over here we've got to hold you over there trying to prevent it from collapse and that's obviously not an ideal way to run a system that you have an unstable system that one is artificially propping up and really that's what's happening more than that the government is outing layers of complexity though the idea that it's adding complexity is not a reasonable because of course by adding these various external structures one is will roll increasing the structural complexity of system in a way that's not functionally perfect right and by government we are referring to me and the folks in washington that have beholden to the same bankers now talking about the price of food because this is obviously a big issue. there's

a ratio out there that people quote saying that when a budget of a family gets to forty percent needed to cover their food costs as was the case in egypt it's a recipe for revolution ok that's obviously a very broad form formula but is there a connection between this the amount of money is spent per month on foot and the population staging a result of some kind professor if you plot the price of food over. the price increase that we spoke about later how these peaks in two thousand and seventy and two thousand and eleven two thousand and seven eight feet. coincided with forty food riots countries different countries where there were food riots and the two thousand and eleven coincided with the arab spring the conditions of political circumstance and the canonic conditions for the countries that have been

involved in revolutions recently have been around for decades and the question as to why such revolutions would happen now or in the last few years is simply addressed by pointing to these food price peaks in fact we have identified a particular threshold. of the. food negroponte organization of the un's food price index. about two hundred ten one can correct for inflation a little bit but it's at that level food riots and revolutions become very likely in the world and indeed i'm sure that you're aware and you have spoken about on your show the impact of the drought that's happening now and even though prices went down the first six months of this year. as a result of the drought the prices of shot up again and that pushed us above the

level of our threshold or more in the range at which we begin to be worried about social unrest food riots and revolutions and our projections based upon the mathematical model that we've developed for food prices are that the prices are going to continue to increase. a lot of it is due to commodity speculation rather than through the drought itself but either way the food prices are going to increase and and that's going to put us even higher than the previous two peaks and the danger zone surely of widespread revolution and our projections are that this isn't going to take much time a few weeks to a few months is all that. it will take to be over the threshold and then the question becomes on the response side how do countries for their really know that their citizens or the poor from the stress of the food prices what

happens and everywhere in the world now depend on how we react. there are big policy options which if you look like i can tell you about but there are also of course country based options in terms of the interventions that are country takes to protect us from the rising all right professor area nearby yam founding president of the new england complex systems institute rata time but thanks so much for being on the kaiser report pleasure thank you ok and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and our thank my gas professor. yeah nearby i am founding president of knowing on complex systems as a tooth if want to send email please to us at kaiser report on r t t v dot ru until next time x. guys are signed by a. anonymous.