stevens the head of the central bank of australia has spoken in the past week and he says that the balance sheets of central banks have recent wartime levels and he shows these charts and you can see it's quite dramatic but he says in terms of the policy response there is a discomfort in some quarters that central banks appear to be exercising an unprecedented degree of discretion introducing new policies eeling uncertain benefits and possible costs well what they're talking about as you are i think alluding to here is that the central banks have been expanding their balance sheets to hide the d. leveraging that's had to happen as a result of the criminality of the big banks who committed terrorism and just b.c. has said yes we are a terrorism. a terrorist organization and their central banks to cover up their terrorist activities have had to engage in policies that now

are running out of their effectiveness now did there need to be an admission that there will be no growth unless financial terrorists are somehow. this is somehow addressed i don't i don't i just don't understand why this is such a big issue in this country that the country is being held at gunpoint by a just b. c. the big four banks but you have to if they want to say that nine eleven was an act of terrorism they have to admit that they themselves are terrorists or admit that nine eleven was a nonevent and just another day in the life of a financial terrorism that's what h.s.b.c. is begging you the public to accept as their business model get over it if you die there happy deal with it. so terrorism and genocide whole accost terrorism genocide whole accost whole cos holocaust holocaust that's that's what we have whole class holocaust holik cost. that's what they think they can every dead

body and they put a price tag on it and it's on their books as their revenue stream so let's look at the policy response from the central bankers as you said at the top of the show monkeys where advanced above monkeys because we know the universe in which we live so here we're talking about glenn stevens who's the head of the australian reserve bank and he's looking at the westerners over here who he seems to be saying let's move over to the more sane policies of the east he's looking at all the quantitative easing going on and now we have more and more rounds of quantitative easing to cover up all the crimes and he says the problem will be the exit from these policies and the restoration of the distinction between fiscal and monetary policy with the appropriate disciplines and he says importantly what's going to happen is not only do we not know how to exit it but the whole fabric of the financial system the economic system the monkeys jumping around in the pool what they understand the system to be is they've now think they're protected monkeys

that they're playing around and mom is always going to take care of them central banks can provide liquidity shore up financial stability and they can buy time for borrowers to adjust but they cannot in the end put government finances on a sustainable course and they cannot create the real resources that need to be found from somewhere to strengthen bank capital they cannot cautiously correct earlier misallocation of real capital investment they cannot shield people from the implications of having missed assess their own lifetime budget constraints as a result of having consume too much they cannot combat the effects of population aging or drive the innovation that raises productivity increase new markets nor can they or should they put themselves in the position of deciding what real resources transfers to should take place between countries in a currency union so again all these crimes. taken place and i think it's in order to cover the fact that they're at the end game as we've said they don't know where else to go but get in the last few dregs of crime and capital available well that's

not i just. we're going to see hyper inflation peter schiff is absolutely correct that his timing it was a little off but his theory and his reality of hyper inflation is the only exit and in this country nominal g.d.p. targeting is the beginning of hyperinflation and we're going to see it right here in the u.k. now glenn stevens also mentioned at the very top of his speech this notion of an asian bank of international settlements including australia for a stroller to be included in this so he's mentioned this yes and he's saying let's get rid of all these monkeys jumping around in the pools cannibals look fine yeah sometimes we have fun guys report gets to have some chuckles at the monkeys jumping around at the bank of england now i want to call attention to this piece i saw in december fourth time newspaper here in london an american target for golden shopped. and here is the times saying that

china in numbers one thousand that is the amount of gold and tonnes that china expects to be consuming every year by twenty fifteen they also know that china shows every sign of being a gold hoarder chattering among gold traders puts chinese total reserves at two thousand tonnes and they expect it's actually three thousand tons and what the times looks at this and says what the plan is for china it is incremental measures such as this combined with the fat in gold reserves that suggest to some that beijing is planning something big possibly promoting the brim in b. as an international currency partially backed by gold well recurring gas sometimes report weighed in on the twitter sphere about this jim rickards said that china gets over four thousand tons what she looks like they'll be announcing that shortly they will announce a partially gold back room and b.

and also member jan squirrels said she heard a rumor that china's going to have up to six thousand tons of gold meanwhile america as leased out most of their gold in fort knox doesn't exist and of course britain sold six hundred sixty percent of their gold four hundred tons to germany back in two thousand and one so they have almost no gold at all and now of course the times presents this as a currency war and it's a hostile act for china to entertain the notion of a gold backed currency but you know you combine this with glenn stevens warnings about our. basically the monkeys jumping cannonball jumps of policy that's where our monetary policy is now we're cannibal jumping into the pool hoping our splash is bigger than the others but at this point you know the splash or the splashes of quantitative easing appear to be having less and less effect and nobody's even paying attention there's tiny tiny little blips from trillions poured into the markets it just causes

a tiny little blip nobody cares about it anymore they just see them as monkeys playing in the pool won't cost you more by definition is basement which is the same thing as i have for inflation so jim rickards agrees. peter schiff agrees marc clubber agrees jim rogers agrees most of the informed economists around the world a grave that hyperinflation is a mouse in the cards so gold is part of these currency wars and this week max everybody out there in twitter on facebook and the e-mail people have been sending us e-mails saying i think the queen watches the kaiser report because she was down at the bank of england checking out the gold supply the queen gives bank chiefs a ticking off over the crash as she visits vaults the queen goes to the bank of england and asks about the two thousand and eight crash she said what happened was everybody just got a bit lax and. cup audio who is on the banks financial services committee he gave the queen three reasons for the crash of two thousand and eight max he said that

the financial crises were like earthquakes and flu pandemics and because they were rare events they were difficult to predict obviously he was watching b.b.c. news night with. only the night before he also said there was a new paradigm where people thought that markets were fish and risk could be managed better than before and might have something to do with all the propaganda being pushed on c.n.n. b.b.c. and bloomberg and everybody tell you that markets are perfect markets are efficient thirdly people didn't realise just how interconnected the system had become well the queen is something in common with kate middleton. when she's down there in the vault and she found out that england had sold sixty percent of its gold to germany in two thousand and one she threw up yes well here is an image of her looking at the gold in the bank of england now in light of the fact that china is accumulating massive tens of thousands and thousands of tons of gold and you see the queen there posing in front of the gold bars in the bank of england and remind me of only just

a few days ago that there was a university of nottingham released this video from professor martin poliakoff and he was allowed entry into the bank of england vault and he's looking at all that gold there and he says this in some ways i think it's quite disappointing to see because the goulds is an exciting and it has interesting chemistry and it's just sitting here doing nothing you know want to shame it's only moved up five hundred percent in the last ten years and will replace all of the fianna currencies as the standard of wealth around the world know the queen is a tough old bird she's down there defending what's left of britain's gold so when these other countries come to repatriate expect a queen oh. and take them out or fire only if the queen doesn't do what monarchs of old used to do you're going to see the likes of this headline the first shop in europe to sell opens in madrid the headline in spanish is. so

unnecessary i was already in my did in the primary and the. euro i know our spanish version of kaiser you for it loves my spanish there but madrid is open the first store max throughout europe where you can find this tool in solid pine with a height of two meters in the motto is cuts are necessary they encourage people to get one for their home for their living room for the bar and perhaps in the public square right well you can cut all become u.k. more cut. i told you two years ago to buy good things yes you did yeah because the price and the market's going to. exploding i expect a gay teen manufacture to go public all right stacy never thanks so much for being on the kaiser report thank you max stay tuned for the second i will be speaking to sun deep jaitley hopefully this time he will get fired.

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welcome back to the kaiser report max kaiser time now to turn to sandeep jaitley the cata research dot com sundeep welcome back to the kaiser reports very much max thank you all right sandeep you recently tweeted quote not joking when i say this monetary wealth throw us all into poverty none of us will be able to satisfy our ends that's poverty talk about. there's a confusion between people that you can go on to a gold standard because of this hoarding aspect of go people want gold so you can use gold as the the monetary substance basically so you need something to use as money and they think that that is the system as we have it at the moment and they think that because we can satisfy all. the movements that we'll continue to be able to satisfy our ns and the current monetary system. all i'm saying is that it's

been what forty odd years since we've been on this monetary experiment where we've been off go. it's not going to last very long before we're not going to be able to see. so far and the only one holding credit i like to call it figure out credit instead of money it's not money gold and silver money. will not be able to serve their ends with it now how that manifests itself some people itas hyperinflation i think that's a bit too simple it will be in ways that we simple. might our first half the show is based on. it's going to be a lot more complicated than just asset prices going up i mean. it could start at the moment as it seems to be with the stock market going up. all right let me let me cut you off right there for a second because we have to go back and this idea that hoarding and relating to

gold and fee out money that there is a disconnect in some way because the assumption there is that banks for example would never who are money because it's not it's fair not so they wouldn't hoard hoard the money and yet sense the crisis of unfolding for the past two years they've done nothing but hoard the money because they obviously see value in that they pay their bonuses and that they pay their salaries and that their they recognize it as something that they're willing to hoard so for them there's no distinction between gold and money because they're hoarding it so how does how does this notion that well gold can't be used as a monetary unit because people tend to hoard it well yeah people would tend to be engaged in desiring any unit of wealth that is the underlying basis of an economy that doesn't invalidate that unit of wealth as a basis for that economy so but why do these bankers get away with the idea that well it's neutral it's because because they feel that intellectually they can manage to feed that using their their their their ideas their ideology their

kantianism and therefore it's somehow outside of the baser instincts of humanity yes yes you're taking power from the people depending upon your philosophy to think that's a good thing or a thing depending on my mood as well you know it's not it's not something that for me to be sort of groups with taking power away from the people and if the people are intelligent enough that should not be done to them but that by that reckoning then the people were hoarding or greedy for houses and that's bad but the bankers are securitized mortgages and sold amongst each other for fear of money to pay themselves billions of dollars in bonuses that was not greedy because it wasn't actually a house that they were trading it was a representation of a mortgage. but of an algorithm of it of a vehicle of a phone that was a house therefore they're above the law and a little so of course the. filler so by the law story not philosophically there is nothing wrong with what they did but philosophically of course there is you

shouldn't be encouraging an alcoholic to drink you shouldn't be you know it's done kind of philosophy that's been lost in finance generally we've gone beyond this idea of well i should encourage an alcoholic to drink because now h.s.b.c. has admitted that they were in bed and financing terrorism full stop therefore they were involved in nine eleven full stop their bottom money laundering for mexican drug cartels full stop but they don't go to jail for that because after all it was for fear of money not gold if they took their payment from the extortionist in a terrorist and gold then they would have been guilty of some crime but because they got free up money therefore they're innocent is that what we're saying. more or less it is it is it's a big it's a big problem i think yeah it's a big problem i would think because it leaves institutionalized legitimize in monitise terrorism as the moment of operetta business model you could argue you

could argue that indeed you're going to fire to get are you. going to be ok. there was going to. happen ends up with your sunday meeting where were. you going to walk back from that statement. you could you can all you the anyone that's engaged. anyone that uses a. currency is just to my seeing the intent of its use and the intent of its use is not noble in the traditional sense of being a nobleman. ok let me ask you about this idea of inflation because the gun. i mean here in the u.k. and in the united states and elsewhere they say that inflation is not a problem it's on the radar deflation is really the problem and therefore we need more quantitative easing we're going to target nominal g.d.p.

instead of inflation but if you expand your balance sheet by trillions of dollars or trillions of pounds isn't that where the inflation is residing at the same time america just announced that one of their big health insurer providers is upping costs by twenty percent education skyrocketing every single year prices on things on the periphery are skyrocketing but they say there's no inflation but yet it's right there on the on the fed's balance sheet an argument peter schiff makes repeatedly now he's getting into hot water because people say wait a minute peter you're wrong because after all when i buy a computer it's the same my apple be computers the same price as i paid last year through inflation so isn't inflation on the books of the how does it how they're going to get out how does how does a bank of england and the fed on wind. i've asked myself that question many times and the way that this story. the inevitable what they'll have to do is by this operation twist is because you in order to extend the maturity of your of your

scheme that's all it can be called. in order to extend the maturity you have to sell your short to dated him by longer dated and i read somewhere that they're running out of shorts of things to sell in order to buy long you know and you think ok so that means that they're trying to buy time there aren't enough debt assets for them to monetize almost to do what they want to do ok but sandeep we have a bit of a conundrum here because keeping a low zero interest to quote unquote fight deflation hasn't fact become the primary cause of deflation. so ben bernanke paul krugman the keynesians are have their head completely up because they're saying low rates to fight inflation in the low rates are causing the deflation there's a tug of war going on you see because everybody i wouldn't argue that low rates are beneficial to the economy generally whatever that means but when the rate is

fooling ok and when the intent is to make the long rates fall the liquidation value of debt just goes up exponentially so if you look at the nominal value of whatever ten year treasury over the past thirty years just looks like a straight line going up so you've got you've got this sort of fight going on between the public and the private sector if you can put it in those terms because it's quite beneficial to be in the bond business and to hold bones if interest rates of fall even if it is only a nominal increase you know you might not be beating inflation with ok so it's only very good there are other words the cost of lowering rates on one side on why. thing is actually exponentially more expensive ok that's a key point the other thing is to keep in mind is that even the bank of england has said that the lower rates have saved interest cost by seventy billion pounds things

on mortgages and credit card tuner but that it has cost over one hundred forty billion pounds for pensions and savers so it's a two to one their losing their draining the economy on a two to one basis every time they lower rates they pull double the amount of liquidity out of the system then you have these crashes and flass crashes which happen because there's no liquidity in the system you know so then they put in lower the rates which like i'm saying define to deflation they're causing the deflation because according to weiss as many liabilities that are being borne by the savers and the pensioners who are then being asked to suffer austerity measures to pay for the prophecy and the terrorism we now can say it without any hesitation that it's one acts of terrorism so the savers and the pensioners are put reaching into the pocket or taking out pounds and i giving it to terrorists right. no you couldn't you couldn't make it through to journey quite quite evident. ok let's so the only answer this sunday jaitley update us on the basis ok

silver is in backwardation the l b m a is sending out fishy smoke signals according to nasa leyland what are you seeing in the supermarket well there's a lot of volatility going on in the before market is ok that's a non-statement you know the cover for say it is something real somebody began to say those volatility you know moving into backwardation both in gold. quite aggressively in an ounce of barcode gold is moving in a backward gold. piece and all is moving in backwardation that's a complete condemnation of the fia money system if it was to keep on recurring and get exponentially how it would be and we haven't had any sign of yet. but let's wait ok so just for the uninitiated backwardation simply refers to the fact that the cost in the near term is higher than than what you'd pay for a longer term contract because time. it is money and you would pay for time exactly

if you're not paying for time it means that people are willing to sacrifice any bargain that they might get by jumping in right now getting it right how did you know the price in the short term goes up this is called backwardation the opposite of the of. contango which is not very simple stuff for a movie called it the markets but with gold and silver mean something very very special because it's going to be the new global standard for currency and wealth the resumption of the oh and we have to do banking properly no blame any mistakes from doing banking incorrectly on gold which a lot of the people who don't want us to go back and who go on silver stunned when whenever we say gold we should say so we should even start with silver and so you go i got to ask you one last question the. idea of a gold and silver standard of course is being usurped by a new concept which is give me my gold or i'm going to frickin freak out in other

words the countries are saying they don't want to be in a gold standard they just want a physical gold because they realize paper money is collapsing china not necessarily about gold standard or venezuela or germany is repatriating gold not because they want to go back to a gold standard but because they don't trust you know central banks they want the physical stuff in their vaults right yeah and that's an understandable psychological state as you go towards what we're doing you want to go near you as opposed to new safety deposit box in most cities next time germany asked for go it was just on them paul krugman. yeah yeah yeah you know you say never explain why their goal is worthless. all right said jamie that's all it's all we have thank so much for being on the kaiser report thanks very much mike. all right and that's going to do it for this edition of the kaiser report with me max keiser and stacy herbert our thank my guest sandeep jaitley katz a research dot com if you like to send me an e-mail please do so at kaiser reported r t t v dot ru until next time i got assigned by you all.

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you know how sometimes you see a story and it seems so for life you think you understand it and then you glimpse something else and you hear or see some other part of it and realized everything you thought you knew you don't know i'm tom harpur welcome to the big picture. of the. moment. i am.