local economy then you have it kind of a death star that circles the globe run by banks there's fraudsters kleptocrats who prey on the poor things with their shadow derivatives and shadow banking system and they commit all manner of fraud is totally unregulated and the shadow banking system as just being is the non shadow banking system and it's the primary source of the fraud that's destroying the global economy and yet it's growing by leaps and bounds that's the very definition of financial accounts or it is where all fraud goes to hide a lot of it is something like repurchased agreements the repo one hundred five that took down lehman brothers they had fifty billion for example hidden in these repo one hundred five repurchase agreements out there in the dark pools the dark matter which sucks in all of the real wealth the real activity of our economy is sucked into this thing so the fs to be a global financial policy group comprised of regulators and central bankers found

that shadow banking grew by forty one trillion dollars between two thousand and two and twenty eleven the share of activity based in the u.s. has declined from forty four percent in two thousand and five to thirty five percent in two thousand and eleven moving to the u.k. and the rest of europe so as you see there was a mammoth growth in it since two thousand and two right moving to the u.k. when david cameron wants to defend the city in london he wants to defend the shadow banking system that has its headquarters here in london and you mention the lehman brothers repo want to five scam just briefly for people to understand what that means is that at the end of the quarter when they're supposed to report to regulators they're there they're their balance sheet the liabilities of assets that they have they well temporarily put all the liabilities they'll park them in the shadow banking system that we're they won't report the liabilities they therefore making their profits look greater than they are and then the regulators will. on to

the next company they download the liabilities once again and they do this on a quarter by quarter basis this is done by all the fortune one thousand companies engage in massive accounting fraud using the the shadow banking system to cook their books to mit you know these foreign remaining big accounting firms are involved day in and day out with massive accounting fraud there they're just as guilty as lehman brothers and financial terrorism the deloitte and touche the k. p.m.g. they're just as guilty as the rating agencies and financial terrorism we're actually going to move on to them in a in the next story but i want at this point i want to cover this shadow banking system because remember the shadow of the movie had the shadow had the power to cloud men's minds so they cannot see him and this is what i think the shadow banking system does its cons people into not being able to see the fraud to see the theft because a lot of it is about theft about transferring that the mirror image real economy where every joe baca doenitz and joe schmoe are working they're transferring the

wealth to this unaccountable unknowable dark matter out there now the size of the shadow banking system includes the activities of money market funds model line insurers and off balance sheet investment vehicles supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets so yeah an area that is i guess you know if you've got it driving down the highway in cities around the world if you pull off an exit ramp you final lot of prostitution going on a lot of kind of murder for hire and that's kind of going on a shadow banking system so now i just b.c. barclays lloyds when they want to kill a company they want to do a massive fraudulent deal like i don't for going to talking about the h.p. deal at some point there's an eight billion dollar fraud. that was conducted in the

shadow banking system with the help of a accounting big big four accounting firm so once again and and when these banks need to be bailed out they they turn the government that to impose austerity measures and so this is that's the chain of of action there now let's go back to this shadow banking system that we're talking about here because earlier i did tell you about this and you said well it's not a shadow it is the banking system so it's wrong to call it the shadow that in fact it is our banking system now and that is the size of the banking system just so to say to cloud people's minds to say oh it's a shadow banking system it's just a reflection of what we are here today this banking system here that you can see the little shops out front those that's our banking system but this so they're calling it a separate thing all this fraud all of this this derivatives all this highly leveraged craziness it's all out there and that's a shadow but you said to me earlier that you start that this was actually the

shadow of the real banking system all right so the the banking system inclusive of the shabda so-called shadow banking system that means that you've got financial fraud comprising not just ten or twenty percent of the overall g.d.p. but the for shadow banking system that's fifty percent because that's the total g.d.p. of the world you have to include the sixty seven trillion so the total g.d.p. the world is not sixty nine trillion or seventy challenge it's including the shadow banking system is on unfortunately and so fifty percent of that is financial fraud then of the remaining sixty nine trillion that is counted in the non shadow system fifty percent of that or more of it is fraud as well so you've got seventy five eighty percent of the global g.d.p. is controlled by shysters and charlatans in banking terrace in the city of london and wall street and around the world no wonder the economy is collapsing environments collapsing others war perpetually and countries all over the world and austerity is causing massive suicide rate and financial hardship because eighty percent of the global g.d.p. is from. so now we mentioned repurchase agreements and they go on

a little bit further into this. and they say that repurchase agreements are contracts where one investor agrees to sell a security and then buy it back at a future date in a fixed price so as we saw with the lehman brothers collapse what they found was that they had basically overnight when the regulators came to look at their books when the the auditors came to look at their books of course it was during a black hole of debt so they sold that debt overnight for that day that they were being audited put it into this shadow banking system and then it magically disappeared they looked healthy so the fact is we don't know you know j.p. morgan celebrates record earnings you know is that because all their record debts are off in this shadow banking system well the cost of actually having cash on the books is prohibitive for a financial terrorist like j.p. morgan so they outsource their cash operations to the repo market essentially is

why they report market existence so that banks and corporations can outsource their whole cash management function to into this thing called the repo market which allows them to gain negative rates of interest on their cash or they're making money the more money they borrow the more money they make on the borrowing that they do it's a complete opposite of what everyone else in the world has the experience of borrowing money and being charged an interest if you're a banking terrorist in the city of london you borrow money you get paid to borrow money so of course they're going to be well capitalized because they're being paid to commit financial fraud from born cameron obama the whole the whole lot. well the financial stability board finally on this story is very concerned about the systemic risk that this black hole of debt out there in this black shadow banking system is causing and you know i think they're attempting to say we need to regulate it in some way but i feel like that's like nasa trying to say well there

are these dangerous black holes out there so we're going to send some astronauts to the event horizon and try to fix it look the financing of this shadow banking system sixty nine seventy eighty one hundred trillion i'm so actually closer to hundred fifty trillion if you include really inclusive of all of the double accounting and triple accounting the financing of this is due to and with the help of zero percent interest rates that people say well it's great interest rates of zero but they never take into consideration that for interest rates to be zero bond prices have to be trading at well let's see in america they're trading at a two hundred forty year high in britain they're trying to three hundred year high is that a bubble well like a tool of baldwin from one june two thousand back to zero is a like the mississippi company or the stock went from five hundred to eight hundred thousand to zero yeah it is it's a multi hundred year incredible bubble that's ready to pop interest rates go to

twenty percent and people are going to be absolutely decimated it could be prevented but of course you don't have anything to get in the way of this freight train of fraud and financial all across is called what it is so it's a cover up all this fraud that is out there in the shadow banking system of course we've seen lots of printing printing of quantitative easing printing money printing new debt in order to cover up all of the fraud so back in episode three three six we referred to mitt romney who had bankrupted essentially a company and held the f.d.i.c the federal deposit insurance corporation in america basically held them hostage forced them to give them more money to. ten million dollars in bad debt because what the f.b.i. see found as if they seize the assets of this company that mitt romney had basically hollowed out and taken away is that all that was left was an h.p. printer so we are which has restated eight point eight billion dollars a charge of eight point eight billion dollars on their purchase of this british

company autonomy so i want to flash back to just september fourth when you talked about a printer and its role in the u.s. economy the i won't i mean that's all j.p. morgan is they have a negative one of the hundreds of billions of dollars it's all the federal reserve and all the kerfuffle about auditing the federal reserve is that when they open the vault to say all words are money they're going to find a printer when they open up for not the same words are gold are going to find a printer over there lloyd blankfein j.p. morgan's last goldman sachs they open up of all this only i was a printer used to be nothing but a printer it's amazing that the company that makes printers hewlett packard's doing so poorly considering the only thing that any of these companies competence was a printer this is amazing and even the printer company is going out of business because of too much printing the h.p. deal you know with autonomy perfect example even larry ellison or over oracle when the deal was going down said this is a fraud you know it's an eight billion dollars fraud it was signed off by the

accounting firm number accounting firm rating agencies investment banks regulators terrorists biggest terrorist in the world accounting that these accounting firms need to be severely punished now as you said did lloyd look at the books of autonomy and and said to h.p. yes find to buy it for eleven billion dollars well looking back to another headline max a short seller saw autonomy's problems this is just jim chanos and while alleged fraud at autonomy may have been a surprise to hewlett packard it's auditor's bankers and its executives it wasn't too short seller jim who in july two thousand and eleven max wrote a report saying this was his biggest. european short which was autonomy and he noticed that autonomy claims about the size of its discovery business are questionable and represent forty percent of total market share in an industry with more capable and better capitalized competitors like microsoft autonomy's claims of twenty percent growth in revenue are inconsistent with competitors reported figures

so they wrote a report prior to the lawyer and also k p m g looked at it and price waterhouse coopers also looked at this deal and they all found it was fine of course insider trading hedge fund shadow banking system accounting firms all committing massive pollution and fraud the austerity is right is a response because there's no leadership there's no government look at global insurrection against banker occupation continue billion people in the streets with torches hunt down these bankers and do what they have to do to get over it is. all right suzanne thanks so much for being on the kaiser report thank you so stay tuned for the second half of the show me talking to jeff gold of the real company. before. it even though we have. groups here at the.

sluices also argues in. my mouth it was like many of them out h. was of course the smadi when i was fifteen years old you can liberate their women and you certainly can't do it through the barrel of a gun police say the social changes in the afghans themselves afghan men and women we believe are going to spawn. a patient it's chemical position and that it comes to actual. people in the obama administration talking about. how much they care about the women of afghanistan it's not true they don't care about the women of afghanistan. well. science technology innovation all the list of elements from

around russia we've got the future covered.

i am asking as you're welcome back to the kaiser report so i now turn to jan scales of the real asset company where she writes the daily nugget research and commentary jan welcome back to the kaiser reporting cavalry how you fantastic now jen your clients are moving their gold from switzerland to singapore you have a unique position. over there at the last of couple you can see the flow of waters why is switzerland it is still a safe place to store your gold. backtracks slightly we did a survey asking our clients and our readers where they would like to see their gold stored if they had the choice and we gave them

a series of options which to them with switzerland and singapore there's also hong kong u.k. and u.s. and we i think i personally had expected to see switzerland take the majority and instead singapore would not buy he to mount and so it's there was still very popular particularly of european customers but singapore was right up there. are american readers and clients and i think this maybe doesn't show a dramatic shift yet but it is saying that is what changed in the water with people thinking maybe questioning and really is this safe haven that we've all perceived to be and instead they kind of looking towards singapore and i don't think i definitely would agree that switzerland is a dangerous place to keep your gold anymore but it's only in the last few years there's been quite a few changes and then a few moves by swiss banks in the american government which have made people question whether or not they're you know the banking act which came into place i think in one nine hundred thirty four is still a strong as it was and if there was let me democrat in for

a second so in other words the scandals in switzerland. and the banks opened the komodo sort of speak and american regulators are looking into the swiss bank accounts so it appears as though this is scared away a lot of folks yeah i think singapore might be a little bit more friendly to the two are seriously wealthy while the prying eyes of a foreign government but i think basically do your best is that one bit of respect paid to them and feel that it's not really a huge amount of the government's business what they're up to and singapore you have this amazing free port facility. where customs and you know. there isn't a tax this is the g.s.t. which was the seven percent tax and gold silver is now being removed as of october and as a result the freeport facility has been extended by i think fifty thousand square meters because of this huge demand i think what this trend of wealthy people are

adding to their gold and silver positions it seems from the evidence that we have that they're doing so pretty aggressively but now so too are the big hedge funds like the george soros he has been in and out of gold he just was back in in a very big way john paulson another hedge fund who's big in gold the central bank since two thousand and nine have been net buyers of gold increasing their positions radically at the same time jan squirrels we have people who are buying bonds so there's a fair trade going on be the people are afraid of the global financial catastrophe and they're buying gold that makes sense but they're also buying bonds at three hundred year highs here in the u.k. are two hundred forty year highs in the america something's got to give they're right they can't both go up in this fair trade or am i missing something i might if you i think i mean i don't think they come base keep going up but ones i think wants to be short term wants to be long term and people are buying gold because it's a hedge against the kind of currencies which are backing you know all of these countries

nothing and then they going into phase because they think it's going up then maybe it's dropped slightly and i selling off profit and then there's two different things going on and there's two different types invest. going for these things say gold is going up it's going up say and i may be investing in bonds because it's a quick it's a short term approach but that is not making a lot of. risk right all right but i understand what you're trying to say there that. there's a lot of trading going in and out of bonds however the trend out of equities into bomb. in places like pension funds towards a longer term money is enormous and yet again the bonds are trading at multi hundred year highs it would by any definition be in a massive bubble government bonds around the world so are these bond investors asking for trouble. and we are the gold investors trying to tell the bond

investors if the smartest money in the world is buying gold because of inflation essentially that's going to be rearing its ugly head shouldn't the bond buyers look over at the smart people and think we maybe they know they know something that maybe i shouldn't be buying bonds well i feel like i'm not you know i'm pam really right and the other day about china saying that you know they will kind of invest in gold buying gold the government encourage and go nuts over here in the west are going to be seen they see see what's going on people are buying gold and i just think that gold still. kind of it's old fashioned irrational pessimism to be going for it and you know i think we talked about this before that you know the bond markets today why because governments don't have the ability to be print money and pay people to feel confident in the government particularly in the west and i think maybe we're not taking they're not taking enough of a long time if you want to but i think it's you know you're right it's have faith

in everything but it gold is just it's just not in that psyche at the right so keeping in the squabble theme of what's happening the global bond market how china is obviously buying a lot of gold and a lot of it's going through hong kong and we see hundreds of tons going through aka china again here's a here's a country was a huge reserves of paper money three trillion in paper but it was very aggressively buying gold. our people a storing gold in china the again is china on to something in terms of what they see in the future and so what are your thoughts well i think china really does fascinate me because i think you know during the u.s. elections a lot of people well there's a lot. people obama romney were based asked about its currency manipulation which we think by the us because there's a large holders of you know that but if you look in game two thousand and seven which is when china were given x. complete access to bite us treasuries directly at the same time they actually pretty much slowed down on their buying and now there's an interesting convergence

between japanese japanese and chinese holding of u.s. treasuries and pretty scene ship it looks like japan will one day we'll see the largest holder of u.s. debt so china actually slowing down if not backing off from the holder of u.s. debt but at the same time we see that they are i mean last year they were accounts for twenty one percent of global gold demond set up in the gold the gold is that people are personally buying and investing in gold and we see huge measures coming out from the government which are facilitating the ownership of gold and banks and then a line for the import. import so you're forced to import permits you know pam is to. pick it up from. and banks and the government is now allowing working to allow banks to import more gold they're looking at an issue more private certain able them to do that what was the government doing that well i i think i have

a personal theory which sounds quite naive in the quite simplistic but it's an interesting way of looking at it in that china has approached grace and fatty kind of keynesian way in the classical way and they you know they created a huge amount of money and it was to promote this grace and at the same time we've seen a huge amount of wealth coming to individuals we've seen huge amount of development a lot of street cheap exports which by keeping the currency buying these u.s. treasuries and now the same with wealth and it's i rather reinvest that into the stuff that made it as let's reinvest it into gold which will guarantee out wealth and that will secure our wealth for the future i think that's why they're encouraging and it's almost like they kind of they were feed there are a few steps behind the western world and they watch going what's. going on and they know you know china has one of the oldest memories in the damages of paper money and i think you know they're on to it and they know what's going on and say they're encouraging people to invest in gold and they all say you know the government is. keeping gold there are discussions about whether or not they now have been looking to back the currency with gold which is one debate and then also of course

everyone's talking about how they they want to remove the dollar from being u.s. sorry the world reserve currency let alone job and so those are two extraordinary things are saying that number one they're talking about a gold backed currency in china which would be the first country to do so quite a number of years. and this would obviously set off a bit of a global firestorm would it not because suddenly you'd have one currency that was actually backed by hard metal and and as you point out it would totally take pressure and interest a way from the u.s. dollar so you have a total shift let me ask you this question and put on your prognosticators hat for a second apologize if sabotaging you with this with this this question but china currently according to the survey's about a thousand and fifty tons of gold they've been accumulating massive positions

surreptitiously and overtly they're the biggest gold miner in the world at some point are going to announce their revised position in the gold holdings in reserves some are saying they're going to come out and say we jump to two thousand tonnes some people say three thousand tonnes can you give us. this is a guess and what are your thoughts there on how many times they've been keeping i think what i think they're going to announce what impact us in terms that is very evil a thing a bit like you know i think we say many different numbers every day i read two thousand there are six thousand tonnes have been accumulated what i know exactly what's just a huge amount six thousand job yet so maybe the second. schools that's a lot of breaking news well it's not quite because i really read it and i can't remember he said it. you know but it's all pure speculation now you just said and i think the impact that would have is well obviously would be dramatic but they found . this because it would be interesting to see what happens and it would make the

rest of the world wake up and think crap you know what's going on we've all been a bit of a dingbat here we should be paying attention to adults and. wake up and say crap certainly dollar holders got a hold it would certainly wake up with that on their lips yeah they realise that their dollars are approaching worthlessness on the event horizon known as the china takeover of the global economy will have about thirty seconds left i want to get your take on the news that just broke october twenty second during the two thousand two thousand and one period germany britain for a thousand nine hundred tons of gold and this in fact is what triggered gordon brown to dump four hundred tonnes on the open market at a twenty year low price because they apparently had sold or leased out of german germany's gold and they needed to be late the price down in order to buy back to them to live or the gold to germany this is pretty shocking i think is shocking these but when i read it yes it is shocking but at the same time i thought well i

mean just look at how what a terrible decision to go to mate to do with the whole thing and say i wasn't really particularly surprised by and i think we were just waiting for a story like that anyway because if you're going to store your gold in another country you can't you can't be surprised when things like that happen nowadays with the currencies going the way that they are thrown out for a jam scoreless thanks so much for being on the kaiser report thank you are and that's going to do it for this edition of the kaiser report with me max kaiser and steve herbert i want to thank my guest jan of the real company if you like to send me an email please do so at kaiser report that r t t v dot are you so not. scholars i.

live.