as guilty of 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 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 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 yeah an area that is i guess you know if you've got it driving down the highway and 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 just b.c. barclays lloyds when they want to kill a company they want to do a massive fraudulent deal like that are open 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 an accounting big big four accounting firm so once again 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 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 a 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 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 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

a drink it 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 existed 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 oz 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 eight hundred trillion 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 at 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 june two thousand back to zero is a like the mississippi company when the stock went from five hundred eighteen 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 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 us 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 careful about auditing the federal reserve is when they open the vault and 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 printer this is amazing that the even the printer company is going out of business because of too much printing the h.p. deal you know with autonomy perfect example and 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 to lloyd looked 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 john 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 is short wish it 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 funds shadow banking system accounting firms all committing massive collusion 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 let

a billion people in the streets with torches hunt down these bankers and do with that the don't ever it is. all right stacy ever thank so much for being on the kaiser report thank you. stay tuned for the second half of the show me talking to jan scholes 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 any.

hid in sorrow. and hope for escape. barely surviving longing for a godsend. they live in a search for gold. why doesn't it bring them wealth.

lead . lives. you're welcome back to the kaiser report so i'm not a jerk to jan squirrel's of the real company where she writes the daily nugget research and commentary jan welcome back to the kaiser reporting q haven't we howie . now jen your clients are moving their gold from switzerland to singapore you have a unique position over there are lots of company can see the flow of orders now why

is switzerland it is still a safe place to store your gold. backtrack 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 me 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 to not buy heater amount but 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 the show is that there were changes in the water with people thinking maybe questioning if switzerland 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 to deal with 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 the market in for a second so in other words the scandals in switzerland. and the banks open the auto. so to 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 to those two are seriously wealthy and don't want 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 the seven percent tax and gold and silver has now been removed as of october and as a result the freeport city has been extended by i think fifty thousand square metres because of this huge demand saying look i want 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 a 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 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're missing something i don't think they can base keep going up but ones i think we'll still be short term once the long term 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 profits and they're. 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 sale and i may be investing in bonds because it's a quick it's a short term approach but 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 bonds in places like pension funds towards longer term money is enormous and yet

again the bonds are trading at multi hundred year highs you would by any definition be in a massive bubble government bonds around the world so are these but 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 socially 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 we have a about china saying that you know i will kind of invest in gold buying gold the government encouraging gold and then say here in the west bank and he seemed nice to you see what's going on people are buying gold and i just think that gold still . kind of it's old fashioned it's 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 printing money and say people to feel confident and i governments particularly in the west and i think maybe not taking it they're not taking enough time if you want to and i think it's you know you're right it's. thing but it gold is just it's just not in that psyche at the right so keeping in this global you know theme of what's happening the global bond market how china is obviously buying a lot of goal. a lot of us going through hard when we see hundreds of tons going through harken 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 all. 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 was seen 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 slow down on their buying and now there's an interesting convergence between japanese japanese and chinese holding of u.s. treasuries and pretty soon 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 demand so they're upping their gold their gold reserves people are personally buying investing in gold and we see measures coming out from the government which are facilitating the ownership of gold and banks. import. import permits you know permits to. pick it up from. and

the government is now allowing working to allow banks to import more gold they're looking at. them to do this what was the government doing that well i think i have a personal theory which sounds quite naive quite simplistic but it's an interesting way of looking at it in that china have approach grace fairly kind of keynesian way classical way and they you know they create. did he have money in order to create this great and at the same time we've seen a huge amount of wealth coming to individuals development and that it was through cheap exports which is by keeping the currency fine with us treasuries and now they're saying this wealth and it's ok rather than reinvest that into the stuff that made 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 their feet they were a few steps behind the western world and they watch 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 they 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 they all say you know the government. keeping gold this discussion is about whether or not they now have to back the currency with gold which is one debate and then also course everyone's talking about how then they want to remove the dollar from being u.s. sorry the world reserve currency let alone job and those are 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 away from the u.s. dollar so you have

a total shift let me ask you this question put on your prognosticators hat for a second apologize if from sabotaging you with this with this this question but china currently according to the survey is about a thousand and fifty tons of gold they've been accumulating massive positions surreptitiously 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 tons some people say three thousand tons can you give us. this is a guess and what are your thoughts there and how many times i've been keeping i think what i think we're going to announce what impact us when times are very you know anything about you you know i think we say many different numbers every day i read two thousand there are six thousand tons have been accumulated what i know exactly what's just a huge amount six those are so yes it may be the second germ schools that's

a lot of breaking news well it's not quite because i only read and i can't remember he said it but i definitely can 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. this because it would be interesting to see what happens and it will 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 it that's an old term. 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 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 that 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 their leased out german germany's gold and they needed to manipulate the price down in order to buy back to them to live the gold to germany this is pretty shocking i think is shocking these but when i read it yes it is shocking but same time i thought well i mean just look at how what a terrible decision to go to bromates 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 they're not the right jan thanks so much for being on the kaiser report. all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guests jan squirrel's of the real asset company if you like this i mean email please do so at kaiser report that r t t v dot are you until next time ask others i.

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