you know they're cheating they're lifting up the game and trying to get the ball to go down into the right spot you are talking about would be tilting the machine and the big screen comes up a big letters. on the ball tilt and this in fact came up a few years ago for the global economy in two thousand and eight a gigantic tilt if the moon or lit up with pinball type of machinery it would have said tilt tilt tilt to alert the world that in fact the global economy was crashing but however the purveyors of the global banking system played on. well they're playing on this game of pinball in iceland and i wanted to look at this because the government authorities there are trying to get the balls to go into the right holes in the pinball game and it's not quite working iceland seas bubble threat from foreign investor cash mortgages so max apartment prices have soared seventeen percent since april two thousand and ten are now just one point seven percent below

the pre-crisis peak in march of two thousand and eight the boom stems from currency restrictions imposed in two thousand and eight to prevent the collapse of the corona after the country's biggest banks defaulted on eighty five billion dollars of debt so housing bonds are the place where all these investors who've been trapped in the country because of capital controls brought in in two thousand and eight so you've got billions of dollars of investor capital trapped there and they're all going into the housing bond market be careful what you wish for you know iceland did a number on the bankers and kicked them out and as a result their currency became solid again and the rating agencies gave them escalating ratings and they said you know i saw there's a good place to do business but there's a track to the hot money the hot money is coming in from all over the world leaving the united states and europe and asia looking for a nice place to park their cash and they've ended up in iceland causing yet another bubble the bubble was caused by them being trapped inside. iceland they can't take

the money out and that was in order to keep the entire economy from collapsing in two thousand and eight now in the article they point out that iceland is actually seeking to end the euro currency so they are planning on allowing this money to flee eventually but that might be in two thousand and fifteen and because of the price rises in the housing prices people think the economy is recovering and growing so what secret ingeborg. chairman of the parliament's welfare committee in reykjavik says the capital controls have created an abnormal situation and they lead us to believe that the economic situation is better than it really is we're living in an artificial world with the icelandic krona which isn't a real currency we just prop the crow not up like a real currency with legislation which protects her for the time being right so the money is trapped and iceland don't let the invisible people the little people if you recall iceland like the violin they have their own breed of invisible little

people and now the little people i guess are preventing from the capital from crossing over thus creating some normalized situation forcing these house so the average icelandic person like everyone else in this bifurcated talk to world can't afford a house because of this crazy banking thing well the point is for me max is that we're in this pinball wizard world the world of wizards and invincible tattoos on us but the fact is if we actually try to act on it if we think those invincible tattoos will protect us from gunshots as what happened with the type of story the police said actually all the guys ended up in the hospital once they got stabbed here the thing is the capital controls are meant to protect the economy but now they're in a moment to stay since they can't move anywhere because to withdraw it means the whole thing comes plunging down ok i think i get your pinball analogy there so you're playing pinball the ball is the hot money and it's right to shang back and

forth amongst those posts in the pinball game and if they are in the right side of the trade or edge funny made the right bet you get extra points however it could be that the ball ends up going down the side of the machine into the gutter and you lose a point or it goes into a penalty to lose a point the point being here that there is no economic rules there are no schools of economy there is nothing actually guiding this global economy is just a random behavior of hot money back. around inside the capitol controlled world of a pinball machine god. and there's no way to predict it and i see no signs of caught right back up into the volcano of dystrophin well yes the thing is whether or not they could ever exit the game whether they could ever enter the real world again from their virtual currency world because as the times today in london was saying that perhaps iceland what's going to happen when they ever actually have to go back into the real bond market and people fear being trapped there now

a big bond market story is in the news from argentina because as you know in two thousand and two they defaulted on hundred billion dollars well ninety three percent of the bond holders of the one hundred billion have accepted basically reduced payout but seven percent held out and they went through the courts and now the courts in the u.s. the u.s. federal courts have ruled that basically argentina has to pay everybody out all those hundred billion dollars in bonds so i'm going to go to a story in argentina that is like a an analogy for what argentina did back in two thousand and two man set on fire in argentina over debt a man was arrested on monday in buenos aires for allegedly setting another man on fire during an argument over unpaid debt the debtor apparently thoroughly doused the collector with a flammable liquid set him on fire and then let the victim burn closing the front door before fleeing on foot but a group of local residents caught him and called the police so this is what

argentina did to their creditors at the same time they were the debtors they set the creditors on fire but a few survived and they've come back to haunt them. because they've got some of those jews. there give them immunity from being burned up by the creditors know this you know clearly stating that the problem is that when you have a system run by bankers for bankers there's no. ability to impose unanimity in any kind of resolution so they came up with a deal to satisfy the creditors with some kind of payment but a whole bunch of holdouts vultures whose interest allies only with themselves are willing to throw the country back into the gutter to make a quick buck i mean that's that's just a problem by having regulators in the global banking system run by the bankers who themselves are benefiting by not having any regulation well the headline for this max reads argentina faces tough choices after u.s.

debt ruling ninety three percent of argentina and bondholders agreed to swap their defaulted debt for new issues in two thousand and five and two thousand and ten but hold out creditors who rejected the swaps continue to press in course worldwide for full repayment on the bonds so last month a federal appeals court in new york ruled that argentina violated bond prohibitions to treat all creditors equally when it made payments to creditors who accepted the swaps while refusing to pay the holdouts so the decision of course led to a bond sell off a credit downgrading from s. and p. and moody's right once again the government saying we're powerless to do anything against the bankers but they were not powerless and allowing the bankers to impose their system of governance to begin with we see this in ireland we see this in greece we see this all over the world you see down iceland we've seen argentina there's two sets of laws the bankers have the ability to make up the law as they're going and then the government saying well we can't possibly respond by changing the law in a way that would match how the law just got changed by the very people that are now

imposing their economic well on our country that's not a government argentina immediately needs to realize that their government is in league with the bankers the irish government is in league with the bankers the icelandic government is in league with the bankers it also is a real challenge to what you look at in europe europe claims they've made some deals regarding greece this is ten years later and a u.s. federal court has ruled. that no argentina you have to pay everybody now no u.s. banks are allowed to pay they've been paying the ninety three percent of bondholders who did the deal no u.s. banks are now allowed to funnel that money to those bondholders because then without also funneling it to the seven percent at one hundred cents on the dollar argentina has stayed out of the global credit market since its two thousand and two debt debacle partly due to fears the holdouts could block the new issue it relies on instead on the central banks foreign reserves to pay debt but its efforts to

safeguard those funds using capital controls and import curbs have worsened an economic slowdown so like i said we're in this game where everybody is reading everybody's pushing at their sides of the pinball game now argentina's forty billion dollars in foreign reserves and the us federal courts are saying that you know they could use that money to pay the bondholders the lesson here is that ten years later they are still trying to work this out that's the last of the ireland names to understand that and that greece needs to understand because the way that they're being talked to by the i.m.f. the world bank the troika is that just do one more trollish just. one more austerity measure and this will all go away that's that is a load of code wall this will be go on for ten years in ireland this may go on for ten years or greece it will be starting in america and going on for ten years that america is going to over twenty years in japan you've got a budget cycle front vampire banks cherish sucking the life blood out of billions

of people around the world and it's always the same story just except as bag of worms today they're all be better tomorrow as to people urgent it's been over ten years. and not of the tattoos that are the economic fiscal and budget policies that our government central banks and politicians are imposing on us have apparently provided us immunity from the deadly financial. thanks for weapons. i've already seen it. all right stay zelig thanks so much going on the kaiser report thank you max stay tuned for the second half i shall be speaking to him a story about the gloom of central banking. maybe

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a dad all tito is comb. welcome back to the kaiser report imax keyser time now to go to argentina and speak with to

our demand stirrer of macro trends dot b. and author of the new paper the gloom of central banking to our welcome to the kaiser report comix nice to be with you all right george the european central bank recently released a fifty five page report called virtual currency schemes tell us about it tell us about the gloom behind this e.c.b. report well it's very interesting it got out last week and when you read it it's first seems to be just about you know it could be about any online competition for or for the central banks or any other types of currencies but when you read into it there's a hundred and eighty three mentions of bitcoin and they also mention that they they wrote this report because they got a lot of questions from the public in the past few months and i mean this has to be because of bitcoin so i only know that of course there is the question why why

would one of the most powerful financial institutions on the planet why would they bother writing about bitcoin because you could just as well see it as some kind of mathematical puzzle work by give each just send back and forth some bits and bytes over the internet so why do they take this seriously and that caused me to to look back and find some other papers written by the b.a.'s the bank for international settlements in baseball and also look back at how they wrote about online competition in the past and there's reports in one thousand nine hundred six for example so to compare these two. impressions they give is really really interesting and it turns out that bitcoin for them is a totally different ball game and frankly they don't know very well how to deal with it the world of central banking of course. is a centralized system manipulating and controlling money so-called in their

eyes whereas bitcoin by its very definition is a fully distributed form of money and banking can you compare that to long hours lines actually you can do it very easily by comparing the reports and what i'm going to see now it's literally coming from the c b report it's kind of like a it's kind of like a commercial for become but they actually say that because it is not backed by thier money it's also not backed by a commodity and that's very different from their seats in the past and also all the clearing of bitcoins which is checking whether the currency is there and nobody spends his money twice this happens in a decentralized network so i mean all these things make the european central bank realize that they have their very little grip on on this thing also elisei is can operate independently from the banking system they talk about how fast the clearing happens i mean and we all know i mean to do

a payment these days it can it can last three days if there is a weekend involved or it can cost you a lot of money if you're doing it internationally so this is ultra fast and it's very cheap they mention on how their money supply automatically is limited by their control call and they also talk about how complete discretion is is possible if you want to be anonymous with bitcoin it's perfectly possible let's talk about the bitcoin protocol for a second and put it into context of the following we have three examples here we've got balled we have fear out money like the dollar of the euro and then we have bitcoin now some would argue that bitcoin is a lot more like gold and silver because gold and silver are limited supply therefore there backing out a certain degree of scarcity whereas fear of money it's an unlimited supply there's no and to how much press. thing that the central banks can do and if you look at bitcoin however it's more like gold and silver because the bitcoin protocol or as

you called it already the mathematical puzzle is is scarce it's a limited there is a limited number of bitcoins to be created talk on their little bit to work oh boy exactly if you're if you look at what the mandate is offer you of central banks in general often it mentions something like whoa you know we have the duty to make sure that in the medium term inflation remains in check i mean this is over a vague and we don't know today how much printing there is going on but looking into the source code of bit corner which can only be changed by consensus so it cannot i mean you can only copy the source code and start your own currency which may be possible maybe in the future will have i don't know obama coins or or some other type of koreans but their current bitcoin network will not respond because their code will be different so. this apply because it is mathematically limited to

twenty one million bitcoins there's little a little over ten million right now oh and by i think around two thousand twenty five will be approaching twenty one million ok let's talk about competition the central banks around the world enjoy an oligarch plea they have the sole governmental agency right to print money and they do so in a coordinated fashion and they do so in many times to manipulate prices of other commodities for example gold and silver to keep those prices low relative to the dollar and other fee at currencies we know that there are several lawsuits right here in london against h.s.b.c. and others for plate lehman eppy late in prices and selling counterfeit securities into the marketplace and engaging in naked short selling so the you have in the future. there's markets this ability if you're blights masters or j.p. morgan to manipulate the price of silver down and gold down to keep bill value of

the dollar up but in the case of bitcoin to or i would think that this is a big competitive threat to the central banks because the central banks and their minions of the investment banks are incapable of manipulating markets in such a way as to stop this competitive threat a big point from cutting into their business what do you think you know now i totally agree i mean because it's perfectly possible for people to to exchange big cordons without using the banking system at all so they're not exposed to it if they don't want to and i mean this is happening today people or saving in bitcoins they're paying for services in bed points so yeah totally agree not sure we're coming up to the two year anniversary of the kaiser reports campaign to crash j.p. morgan by silver the idea being that j.p. morgan has a hedge position naked and silver if you take it off the market you crash the bank they've been right coming back with hundreds of millions of ounces of counterfeit

silver contracts to keep the price low but if i were to say a tour that crass j.p. morgan by big coin that's kind of a follow up. your thoughts from their perspective over central banks at least you can you can tell that they are afraid of losing market share they're afraid to lose . you know their prey to be neglected because. they need and they see this explicitly they need the confidence of the people in need the trust of the people and in this latest report they say literally and i quote virtual currencies could have a substitution effect on central bank money if they become widely accepted and of course the same goes for for any money in the world and also any kind of bank libor if people stop buying the riveters if people start trusting their pension funds and saying well i want to be my own banker well today it's perfectly possible it's

harder with gold and silver because there is this international quality if there is a situation of capital controls it's a lot harder to move right now it's still doable but in the future probably less so to move gold and silver across borders both good because you can be your own banker and you can be your own international banker right it should be noted that you could sell a million dollars worth of gold into bitcoins put those bitcoins on a thumb drive walk over a border and use that million dollars and bitcoins to buy a million dollars in gold the next day so it's a way to travel around where it could be a billion dollars of gold it doesn't matter because electrons are effectively free but there have been digital currency is in the past sure but central banks didn't worry about the why not then and why now. well they didn't worry about it because essentially they operated in a similar fashion as central banks they. they were often backed by money like

an enterprise that would star in million and see they would have a bank account with dollars and those dollars were backing the virtual currency they were just making it easier for people to move money around not so much inventing a really new money there was also eeg olds who was backed by gold but the problem there is once you have something that's backed by something then there is there is a link with the real world and worth a link where there is a link with the real world then of the already is can go there they can confiscate big unregulated they can intimidate and this is what happened with eagle for example it was very successful it was growing and in two thousand and five they had to close shop because the feds were all over there this is not possible with a bit canet work all right to our demands turner you are living in argentina at the moment where capital controls are recently introduced to tell us how you have seen bitcoin used to circumvent capital controls in argentina has very interesting and

there was a surge in interest in bitcoin from the moment these capital because there's always been some capital controls in argentina but now i mean there really kicked in then the beginning of two thousand and twelve so there was a lot of. a lot of interest in this this option. and so what i see today is that people are using it i've seen people who are foreigners who come into argentina and they buy their pesos. using bitcoins or they sell bitcoin to buy pesos there is local argentinians are mad too who are saving in bitcoin because it protects them against inflation i met people who have mining rigs they're mining bitcoin here not to tina so it's really interesting to see how this is. this is used in people's everyday lives without regard of whatever law there is there happens to be in place because because it is totally unregulated it's just

a couple of bits and bytes on a on a computer to how is argentina doing overall we country obviously was in dire straits started on a go down it popped back to life and now it seems like it's going through some tough times again your thoughts the absolutely absolutely i mean there is. a regulated think tank here that predict that the crisis of two thousand and one they predicted the government default well right now they're saying it's going to happen again and it's going to happen within the next five years they predict are probably suspects going to be sooner. and looking from their perspective a bit i think it's really interesting for everybody to look at how bitcoin is used in argentina because if you want to test the system or in our case a currency then i mean you want to expose it to some brutal circumstance you want to throw it out there in the jungle and argentina really is the financial jungle today i mean there is capital controls more than you can dream of so to see how

this is this currency can flourish in such or a hostile environment i mean it's very hard to get dollars here and it's extremely hard to find gold in this country let alone silver so i mean i think this is a lesson for the world because i think in the future the world is going to look a lot more like argentina as the government slowly run out of money. all right georgia master out of time thanks so much for being on the kaiser report there's no me that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert are they my guess tour de maistre if you are seventy please do so at kaiser report it r t t v are you until next time x. guys are saying i are. unknown.

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