stacie max kaiser i am looking like a shadow today in honor of the shadow banking system the shadow banking grows to sixty seven trillion dollar industry regulators say the regulators are the financial stability board and they say it's six trillion dollars more than they thought it was only a week or two ago wanted to have a parallel universe you have the global 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 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 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 two thousand and 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. 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 a 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 their their their their balance sheet the liabilities and assets that they have they will temporarily put all the liabilities they'll park them in the shadow banking system don't work they won't report the liabilities therefore making their profits look greater than they are and then the regulators move 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 that 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 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 they 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 it's 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 job back a 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 an 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 you have 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 fly in a lot of prostitution going on a lot of kind of murder for hire and that's kind of going on the 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 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 an accountant 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 the 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 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 chilean 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 in forty chile 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 is fraud as well so you've got seventy five eighty percent of the global g.d.p. is controlled by shysters and charlatans and 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 in some 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 fraud 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 you'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 and 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 and i'm so actually closer to a 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 at 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 in a two hundred forty year high in britain they're turning to three hundred year high is that a bubble well like a tool of baldwin from one to nine thousand a back to zero is a like the mississippi company with 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 this call 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 create 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 h.p. 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 that one of the hundreds of billions of dollars that's all the federal reserve and all the kerfuffle about auditing the federal reserve is when they open the vault to say oh as our money they're going to find a printer when they open up for not the same words or 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 is 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 a 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 right 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. yeah it's fine 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 chanos who in july two thousand and eleven max wrote a report saying this was his biggest. europeans short 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 as 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 don't ever it is. all right suzanne thank 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. download the official publication so choose your language stream quality and enjoy your favorite. t.v. is not required to watch on t.v. all you need is your mobile device watch on t.v. any time. you have mobile before. it even notes we have a lot of groups of the. sluices also argues in. my mouth it was like when you had that matter which was of course the smadi when i

was fourteen years old. you can't live there when you certainly can't do it through the barrel of a gun it's still change you can. ask. afghan women we believe. because. it's. people in the obama administration talking about how much they care about the women of afghanistan it's true they don't care about the women of afghanistan.

which brightened. from funds to. start on t.v. . as your welcome back to the kaiser report time now to turn to jan squirrel's of the real asset company where she writes the daily nugget research and commentary jan welcome back to the kaiser reporting q have we how are you. now jen your clients are moving their gold from switzerland to singapore you have a unique position over there at the last a company you can see the flow of waters now why is switzerland it is still a safe place to store your gold. we did a survey asking our clients and our readers where they would like to see that gold stored if they had the choice and we gave them

a series of options. there's also hong kong u.k. . yes 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 if it's an injury is this safe haven that we will proceed to be and instead they kind of looking toward 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 the last few years there's been quite a few changes and 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 is let me democrat in for a second so in other words the scandals in switzerland. and the banks open 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's no. there's no tax this is the g.s.t. which was a seven percent tax on gold and silver has now been removed as of october and as a result the freeport facility has been extended by i think fifty thousand square metres because of this huge demand they're saying look i want to. wealthy people

are adding to their gold and silver positions it's a. amos 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 now is 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 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're missing something i don't think they come base keep going up but once i think when steve a short time 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 are going up then maybe it's dropped slightly and i setting a profit and then there's two different things going on and there's two different types of vest. 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 short time apart each but that is not making a lot of sense are you going to write 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 bonds in places like pension funds words 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 that and you know i'm pamela writes in the other day about china saying that you know they will kind of invest in gold buying gold the government encouraging gold and those over here in the west are getting heavy seem they see see what's going on people are buying gold and i just think that gold still see. 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 market is still doing well because governments don't have the ability to be print money and say people are feeling confident in their governments particularly in the west and i think maybe we're not taking it they're not taking enough of a long term view on it but i think it's you know you're right it's facing

everything but if gold is just it's just not in that psyche at the right still keeping in the squabble theme of what's happening the global bond market how china is obviously buying a lot of gold 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 there's something in terms of what they see in the future 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 of people obama romney with its currency manipulation which we think by the u.s. because they're the largest holder of u.s. debt but if you look in june two thousand and eleven which is when china will give an act complete access to buy u.s. 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. olding of u.s. treasuries and pretty scene ship it looks like japan will one day will see the largest holder of u.s. debt so china are 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 opposed to the buying investing in gold and we see huge measures coming out from the government which is 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 sell out and the government is now allowing working to allow banks to import more gold they're looking at emission more payments and able them to do that was the government doing that well i i think

i have a personal favor which sounds quite naive in the quite simplistic but it's an interesting way of looking at it in that china has approach grace and if any kind of keynesian way in the classical way and they you know they create a huge amount of money and it would see this grace 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 lie buying these u.s. treasuries and now they're saying this 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 there are feed there she steps behind the western world and they watch what's going on and they know i you know china has one of the oldest memories of the damages of paper money and i think you know they're on to it and they know what's going on and so they're encouraging people to invest in gold and that will say you know the government. you know keeping gold this discussion is about whether or not they now have and they're looking to back

the currency with gold which is one debate i'm going to say of course everyone's talking about how them they want. to remove the dollar from being us sorry the world reserve currency let me let me jump in 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 in 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 at this with this this question but china currently according to the surveys 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 and 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 a view so this is a guess 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 this in terms that was very kewl a thing about you know i think we need to for numbers every day i read two thousand there are six thousand times have been accumulated what i know exactly what's just a huge amount six thousand or so yes there will be the second school that's lots of breaking news as well it's not quite because i only read and i can't remember his that. but i do every week and you know it's all pure speculation what you just said and i think the impact that would have is well obviously would be dramatic but they found their current freshman cats because it would be interesting to see what

happens and it will make the rest of the world wake up and think cry. you know what's going on we've all been a bit of it being back here we should be paying attention to it that's an. interesting wake up and say crap certainly dollar holders donahoe day would certainly wake up with that on their lips yeah they realize that their dollars are approaching worthlessness on the events arise and known as the china takeover of the global economy now we'll have about thirty seconds left i want to get your take on the news that just broke over 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 tons on the open market at a twenty year low price because they apparently had sold or leased out german germany's gold and they needed to manipulate the price down in order to buy back to them to liberate the gold to germany this is pretty shocking i think is shocking

these but when i read yes it is shocking but it's a time i thought well i mean just look at how what a terrible decision to go to made today 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 up all right jim thanks so much for being on the kaiser report thank you all right that's going to do it for this edition of the kaiser report with me max kaiser and stuart i want to thank my guests of the real company would like to send me an e-mail please do so at kaiser report at r t t v dot ru so next time ask others and.

technology innovation all the developed. around russia we've got the future covered. live.

we speak your language might be rolling out of. news programs and documentaries in spanish matters to you breaking news a little tentative angles kids stories. that all teach spanish find out more visit eye eye to .