youtube dot com slash r t america our web team is working very hard to get all the interviews that we've posted today and also check out our web site r t dot com slash usa have a great night. download the official publication so choose your language stream quality and enjoy your favorites from our time our t.v. is not required to watch on t.v. all you need is your mobile device more charge to you any time any. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for friday august seventh two thousand and twelve another

jobs report out today reiterating a grim situation for millions of unemployed americans down on their luck while stock markets maybe got lucky you could say they appear more than eager at least to grasp the hand of dovish central bank stocks rallied after the e.c. be announced its unlimited bond buying program yesterday so we'll talk about both and china has reportedly approved plans for a one hundred fifty billion dollars in infrastructure spending china's growth is no secret has been slowing and analysts have been concerned about gauges such as slumping iron ore prices and what they indicate about china's growth so how does this stimulus factor into the equation will last commodities expert stephen believe and speaking of commodities barack obama in his speech at the d.n.c. last night talked about a path where the u.s. controls more of its own energy here's what he said about oil. in the last year

alone we can't all imports by one million barrels a day more than any administration in recent history well whatever speaking of control the white house has reportedly been considering another release of emergency oil reserve. despite this possible manipulation along with slow downs in places like china and of course in europe we'll talk to analysts lindsay hall about why she still anticipates higher prices for oil let's get to day's capital account . so as we know a new jobs report is out today for august which is a great reminder of what i was talking about with our guest yesterday which is why statistics are misleading and the mainstream press is not

a great place to get your economic news so the report undershoot its expectations once again the economy added only ninety six thousand jobs while analysts were looking for one hundred thirty thousand and the household survey found one hundred nineteen thousand jobs were lost yet the unemployment rate falls to eight point one percent which is of course what gets play all over a lot of mainstream news headlines look at falls to eight point one percent eight point one percent eight point one percent these are all major mainstream outlets i'm sure a lot of americans are looking to for their news they think hey the unemployment rate fell from eight point three to eight point one percent great news let's go party got a little better but if you're watching this show you have already read the on the headlines i'm sure and you know that the unemployment rate fell because the labor force participation fell by three hundred sixty eight thousand people bringing the labor force participation rate down to sixty three point five percent it was sixty

three point seven the prior month and this is the lowest labor force participation rate since way over here september of one thousand nine hundred eighty one this was according to some reports when a lot of women were still getting into the workforce so this reflects an increase in people who have given up looking for work because there is none or they're discouraged they're depressed or they're retiring to be fair they're not in the labor force they don't get counted the labor forces people working or looking for work to be counted as unemployed i should mention too you have to be looking for work so this detail aside big picture unemployment has been above eight percent if you want to use that headline number for forty three straight months reportedly the longest stretch since the great depression and yet still have government officials nonetheless. talking about mainly job growth as good because oh at least it's growth i guess it depends on what the matter you're using for what you know progress looks like and what i found interesting too according to the b.l.s.

report that's just out was that leading the employment increase for august was food services and drinking places so i guess people are boozing because waitresses and bartenders are what's in demand so the job situation seems grim low wage jobs seem to be getting the most traction yet these people are affected by rising prices for things like i don't know boyle but why would you ask go up when some large economies are slowing across the globe that is a good question for that i'm in a different our guest let's talk to her she's joining me from l.a. she's lindsay hall chief market strategist from the r. and b. group so first lindsay thank you so much for being here welcome to the show. thank you so much i'm glad to be here and we're glad to have you because as i said china's growth everyone knows has slowed and some analysts are worried it will get worse because of gauges like iron ore prices and the eurozone economies are struggling to be as one example of where they're headed said they think euro zone

economies will probably contract more than it previously expected so despite all of these pressures that some would imagine would put downward pressure on the demand for oil from what i understand you see oil prices headed up so tell us why i do see it i did you see oil prices have i think it's important to keep everything in perspective and we have to look at that from a two thousand and eight perspective as well we have to remember that crude oil went to one hundred forty seven dollars per barrel and then within a six month window they drop down to the thirty forty dollars range now that is a typical that's not true supply and demand and since then we've kind of been inching our way back the fact that we've hit seventy five stayed above seventy five is extremely important we've pushed above one hundred we've come back down we've tested seventy five and the thing is we didn't touch it or break it right so that's important on a chart basis right on a case basis but then you were talking about growth in china and even though growth in china has slowed you look at china and india we've been paying a lot of attention to for the last decade you look at both of those societies and together their population is almost forty percent of the globe's population so even

though they might be slowing down a little bit now they're me maybe in the seven percent growth rate instead of the eight plus you're still talking about massive growth and anything like that is going to have emerging middle classes and things of that sort which is going to be an expert going to put an extra demand on crude oil and energy in and of itself ok that's of those are really great points but i'm curious what about a situation where we see a more significant slowdown in growth in china hard landing as some have predicted or a collapse in europe as some are also predicting how would that change the landscape of oil prices what i think i think. you greg. ok so what i think happens there is you kind of put a cap on the growth potential of crude oil prices i don't think that you see it falter to the point that it really ultimately fails i think that we've created a new a new kind of ground level for oil pricing and so when you look at things like china or europe falling or failing even more than they already have i think that that can kind of suppress it a little bit but that just puts more pressure on it in general to pop when things

start to shift so could it keep it a little bit rangebound certainly am i looking for cruel to be one hundred fifty dollars tomorrow probably not but over the next few years i think that that's that's more the timeline i'm looking at to be pretty specific that that's really interesting so kind of a new normal that prices are going to ever go lower than with oil it seems like there is a never ending list of geo political factors that come into play structural factors technological factors that affect the price in your view what are the most influential demand side factors that will play a role in determining long term prices. on the demand side i think it's that emerging middle class piece and the in the greater numbers that will see as far as populations are concerned goaltimate the crude oil has its tentacles all over everything there's nothing that you touch on a day to day basis that doesn't involve petroleum at some point so i don't think that that is slowing down as long as you have massive nations that are growing and coming into their own as far as somebody like india and china are concerned so i think those are the bigger demand side pieces the supply side of course is the

other end of the equation so that's important as well right of course and before i get to that what do you think are the most significant and maybe the supply side goes into this the geopolitical risks that threaten supply of oil production or are some of the issues there that may create increased volatility or drive the price up . sure and i think right now we're in a hotbed of all of those with the middle east and i think that that's first and foremost on everybody's mind coming into a political situation as well now with our election. that's going to be interesting in addition i think it puts a different angle on things but the middle east is extremely important is responsible for forty percent of global production for crude oil you look at a nation like russia who is the largest exporter there are a lot of things that we need to be watching and there are a lot of a lot of powers at play in the pricing of crude oil on a day to day basis so i think that it's huge iran in israel big big deal and there are threats even now or rumors of the potential for israel to strike iran prior to

the election here in the united states and it would be extremely interesting to see how the white house would handle something like that i've heard that what would that do to oil in the case that israel does bomb or overload skyrocket it was skyrocket i mean in the past few months you saw you saw crude oil take a dip to ten little retracement right came back towards the seventy five level didn't hit it or break it and then started to rally back up. and you're talking about big percentages sometimes you've seen you know thirteen percent in in a couple of weeks that could happen as far as a shift in crude pricing so if you're looking at an intense situation such as israel and iran if they went to blows for real you would see crude prices absolutely skyrocket and the thing is that since two thousand and eight we have now at some level become accustomed to the idea of crude at one hundred forty seven dollars we've gotten used to the price of gas or the cost the cost of gasoline being being three dollars plus in some places even four dollars plus once it once you're kind of accustomed to that much easier to kind of make that the norm if that

makes sense that's a great point speaking of the norm do you see the next ten years following the trend of the previous decade with volatile prices but just as general upward trend . i do see it as a general upward trend i think that until we eliminate a big chunk of the usage of petroleum then i don't see our demand slowing to the point that it would warrant anything you know below fifty dollars i really don't see that happening and right now seventy five for me is the real marker if we start to break crude down below seventy five again that'll be interesting to me if crude can hold seventy five plus then i think we're moving forward ok and then you've said before that the world may not be running out of oil but it is running out of places where it can be extracted inexpensively i'm wondering how you think technological advances play in such as the shale revolution could these be a significant increase in oil extraction or supply. short technology is great and every little bit will help us something like fracking is going to give us the

opportunity to reduce our foreign dependency on oil but at the same point it's not going to a limited eliminated it's projected that by twenty thirty five even with fracking technologies in play we'll still as the u.s. be needing to import thirty six percent of our crude oil so it helps and the more we can do like that fantastic but ultimately you know we have to attack it from a lot of different perspectives and all of those things including technology takes time to put into the infrastructure and i think that's important to consider as well so you know we can't do it all overnight but the more we can attack it overall the better we might be down the line ok and before i get to the yen because i really want to get to that before we run out of time i do want to quickly ask you about these reports that the white house has been mulling over possibly releasing some of the strategic petroleum reserves what impact would this have or even what impact would the idea of this have. ok so the idea of it you can already see has

has kept cruel back a little bit even in the last twenty four hours which is fine it's not that's not scary it's been three ninety four ninety eight dollars for the last month which makes it really tight and ready to go but as far as far as you know looking looking at these pieces longer term. it would it would have an impact short term ok as far as releasing the reserves i think short term it lowers prices for the moment so that people can get there and they're happy out of it at the same point it's pretty interesting that it's right next to the election right so i think it's a short term resolve i don't think it's i don't think it's going to impact it over the next number of years beyond that again to throw in the mix to see something that would totally be nuts but completely potential would be the release reserves and to see israel attack iran its all of that happened at the same time we would have a very very interesting scenario on the crude oil front certainly it would real quickly before we go we get we hear the dollar and the euro get a lot of play but what about the japanese yen we've seen flight to the yen with the

crisis in europe do you see this continuing and will the yen become even stronger or are there other underlying weakness is that could take over and i just need a quick answer. ok so what the yen is very important to realize that it's extremely overbought in my brain my perspective the trend lines to much it's gone up over thirty percent in the last three to four years crude oil higher pricing would cause yen weakening beyond that you look at the yen itself there they run a trade deficit for the first time this year in thirty two years july the biggest trade deficit they've seen for that month and you have a crumbling crumbling industrial production numbers as well so it's kind of like a terminal velocity piece the yen can only get so strong before the markets really needs for it to come back the price themselves out of the market otherwise got it thank you so much lindsay hall chief strategist for the r. and b. group and still ahead china markets are up after announcing an infrastructure stimulus plan what is the role of what we're seeing in commodity prices though we'll get some insight from steven levy after the break continuing the commodity

discussion but first your closing market numbers. for. the world. i want you to tell me. what's. going on.

welcome back gold was up today if you notice the highest it's been and monts above seven hundred dollars an ounce does it have to do with the e.c.b. propping up europe or perhaps expectations the fed is going to announce next week after its meeting that it's trying to prop up the economy once again that remains to be seen but let's stick to resources in commodities and talk about what this gold and barometer may be telling us joining me is dr stephen leeb he's chairman and chief investment officer of lead capital management also author of this book read a lark and stephen leeb is here to give us the gold alert first dr leigh welcome to the show thanks for being here thank you so much lorne it's always great to hear it's always great to have you on our audience loves you and this is

a great day because gold is going up i'm curious if you think gold is telling us anything right now and also what you'd like to tell us about gold right now. well i think yeah i think people are in a way they're scared i mean they're scared of paper currencies i mean paper currencies are currencies that are great as long as everything in the world is great but once you having trouble generating growth and you have to print more and more paper whether it be euro's or whether it be dollars paper currencies really are there it's there's no downside to what they're worth so people are really seeking sources of value and gold and silver are two of the best and i think there's tremendous room for gold on the upside i mean lauren i mean the thing about today right now the world we're living in not not the employment report we saw today though part and parcel of that is scarcity of resources we don't have enough resources in this world and that's capping growth and we're just spinning our wheels right now printing more and more money to try and get growth up there but

every time you get a little impact in terms of economic growth you see oil you see all these other commodities jumping forward and it's not getting better it's getting worse and what people i think are missing and missing big time is that you really just can't isolate oil from all other commodities i mean i think your previous guest said or else part of everything and they are but it is part of everything it's part of mining for copper it's part of mining for iron ore it's part of the whole mining equation and you know what else is water and that's part of food part of mining we need a policy that addresses all these interrelationships and i have to tell you one of the most depressing weeks for me has been the most recent one i listened to both conventions and i didn't hear food mentioned i didn't hear water mention i didn't hear energy mentioned i really didn't hear resources mention i don't think i even heard the middle east mention these are the critical issues that are going to

define the rest of this decade and you know maybe the rest of the next twenty or thirty. years not one mention i don't want lessons i don't want oratorial. examples i don't want to hear how what a good order everyone is i want to hear concrete. solutions for incredibly serious problems and years they're going to get worse they're not going to get better i wish i wish it weren't true don't shoot the messenger i'm just you know i totally hear you i was going to ask you that if you felt there was a disconnect between the political rhetoric or hearing and the economic cycle that we're and it sounds like you absolutely do and yet you have all of these people that are long term unemployed they're being left out of the economy they are falling through the cracks socially you could argue and yet they're still going to have to buy all of these things that are required to live which you argue are just going to keep going up one of them is food which you just touched upon and we're experiencing a drought that's had in fifty years what impact do you expect not to have because

i've talked to economists who say this fall and he's going to go up same time or get the fiscal cliff disaster lauren even before we had this drought the bottom twenty or twenty five percent of this country was paying about fifty percent of their income on food and energy i mean that's poverty that's not a bad definition of poverty yet what we're hearing i mean what difference does it make i want to ask you what six your partner is if you can't feed your partner at dinner if maybe if there's no drilling on to go to i mean seriously let's wake up america and let's address these real problems which are food which are energy which are resources which are resource in dependencies and then we'll get to and we were talking a little bit you were talking a little bit while ago about fracking well yeah fracking may produce more oil but not cheap oil this is the whole problem right now to get oriel out of the ground

the marginal cost is close to one hundred dollars a barrel when you see oil under one hundred dollars you it means that p. . all that are producing extra oil are losing money and that's what the real problem is and that's why you're seeing these cutbacks in iron ore expenditures people aren't developing iron ore not because it's not plentiful i mean there's more iron ore in this earth's crust than we could ever use but to get it out and to ship it requires lots of water lots of oil and those commodities are getting scarcer and more expensive by the minute that's really interesting i want to get more into iron ore because some people that i talk to that follow closely china they're worried about slowing growth in china because they're using iron ore which is falling as a gauge so what role do you see iron ore as as a gauge of china's growth and how do you stack that up against for example the stimulus plan they just announced. i think iron ore prices in china are going to bounce back and probably bounce back fairly sharply yes they have dropped and yes

manufacturing growth and in china has slowed but you know if you look at the next seven or eight years in china what they plan to do is spend several trillion dollars on guess what water and energy and that's going to take a lot of iron ore they also expect to sell ten million hybrid cars by twenty twenty in the year two thousand and twenty that's going to take massive amounts of iron ore copper you name it and right now in china and one reason you're seeing low iron ore prices as it the chinese are producing iron ore at a loss they're going to stop doing that the reason they're producing it is losses because oil is so expensive once they stop doing that i think you'll see iron ore prices bounce back very sharply but if i can just make one quick comment on iron ore kloppers the head of b.h.p. recently about seventy billion dollars in capital expenditures and he said that's

because of poor demand from china what poor demand over the last six or nine months when they're going to spend several trillion dollars and how about india and how about all these other developing countries that's not the story and the story with iron ore as plentiful as it is is that you cannot figure out how much it's going to cost you no one knows what the marginal cost of oil is going to be three or four years from now but we do know it's been going up at over ten percent a year even with no growth in the world all these commodities are getting scarcer and scarcer and it's becoming harder and harder to produce anything of real value any commodity that we really need that's really interesting and you obviously think water scarcity is a problem how do you rate is a problem as a problem for the u.s. and is there a solution for water scarcity like desalinization yeah i mean diesel in the say shit makes a lot of sense and guess who is. head and desalinization right now it's china china waited to exactly the right point they waited till you really cannot get lower in

terms of energy in order to desalinate water lower and you need energy and four years ago you may have needed three times as much energy as you need today that's just a figure but now you've gotten down so that you really cannot improve reduce the amount of energy needed now china's full scale there are whole hawg into desalinization they're selling the freshwater for that they get out of the ocean for fifty cents on the dollar they're going to do the same thing in desalinization as they did in solar undercut everybody and learn how to produce it at a cheaper and cheaper rate and be able to use it for their own economy america has to wake up these are the issues talk about water talk about food don't just you don't want conventions which everybody is practicing oratorial skills i think americans are sick of that at this point and you know that could be one of the gold is up but the real reason gold is up is because the jig is up. that

people know that these paper currencies dollars and euros are great when there is plenty of resources but when there is resource scarcity there is no way to ration those resources to c. c. to say who gets what unless you're using gold as a currency the chinese see it they see it in spades their imports of gold have gone up about six fold over the past year they are mining every single drop their gold they possibly can and they're not doing that because they want to where it is jewelry they're doing it because they want their currency partially backed by gold and i know i've said on this show before and i'll say it again within the next five years or so you will see the you will see saudi oil price if not in one certainly in a basket of currencies that include one that include gold. and that's just the way the world is going yeah gold is up because the jig is up that is such

a good line i just wanted to highlight it once more i just have a minute dr lieberman running up against the end of the show but i want to talk solutions for one second what about wind and solar power because these are two renewable energies that are unique in that they don't require something that may be more scarce than oil and that's water so how important is the water issue for and what role do these play we should have ten manhattan projects devoted to these energies and how to store them and how to develop a smart grid which is exactly what china is doing with probably over a trillion dollars water i mean water solar. that you make from silver using the sun with silver is one of the few energy sources on this earth that doesn't require water when really doesn't require water either but it does require a lot of other commodities but basically photobook talents where silver is a very very important metal really doesn't require any water so what are we doing we're fracking and we're competing with the farmers for water and we may be ruining

our water supply no one knows we're into you know the unknown and we're risking a precious resource when there's sitting out there and the energy source that you can use that doesn't require water that's clean that is so plentiful it's unbelievable i think got enough sun strikes the earth every minute to get us five the earth's need for your third layer of search certainly lots of sun we've gotten this summer and that's for sure dr levy thank you for giving us this speech that maybe a lot of people should have heard at the d.n.c. or r n c thanks so much and that's going to do it for our show thank you so much for watching and make sure to come back tomorrow and in the meantime you can follow me on twitter give us feedback on the show and you missed it you tube dot com slash capital account watch us an h d on hulu and from everyone here have a great weekend and great night.

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