fred dixon chief investment strategist at davidson corp he said that it won't automatically kick in on the first of january that everyone basically how they're going to sort this out it's going to the wire again tomorrow tomorrow barack obama and congress are back again and talks on a plan b. kind of resolution to this this is all happening because of the bush era tax cuts they basically have expired and now this means automatic switch and taxes and spending increases because it's all going to. the g.d.p. in the u.s. to go down by around three percent if nothing is done ok well you'll follow that up the next absolutely in a couple of minutes when i'm back i'll give you more details on that ok. speak your language. programs and documentaries in arabic it's all here on. reporting from the world talks to feel interviews intriguing stories

are you. trying. to find out more visit our big.

lead . lives.

thank.

you watching business very welcome to the program live or fixing money laundering and more two thousand and twelve has seen the banking world rocked by scandals this year financial institutions have paid record fines totaling over twenty billion dollars but clay's u.b.s. and other banks admitted to manipulating the libel rates h.s.b.c. was fined for money laundering for the mexican drug cartel while misselling and poor consumer protection also drew attention from their financial watchdogs so this is the list of the top bank fines of this year coming in number one on the list h.s.b.c. in the same but the bank was fined one point nine billion dollars for failing to prevent money laundering an investigation by the u.s. said it found h.s.b.c. failed to put measures in place to prevent money laundering and its u.s. and mexican operations investigation found h.s.b.c.

accounts in mexico and the us were being used by drug barons to hide the proceeds of crime. back in the sports yeah u.b.s. which was fined for libel or fixing u.b.s. was fined one half billion dollars barclays around half a billion altering the london interbank offered rate can make banks look a risk less risky to investors than they actually are and it can affect the rates customers are offered on mortgages and other loans while handing out the fines the us justice department did not mince words the banks conduct was simply astonishing hundreds of trillions of dollars in mortgages student loans credit card debt financial derivatives and other financial products worldwide are tie to libel or which serves as the premier benchmark for short term interest rates in short the

global marketplace depends upon all of us relying on an accurate lie bore u.b.s. like barclays before it sort repeatedly to fix live or for its own ends. rounding out the list is the u.k. based bank standard chartered which was fined three hundred million dollars for violation of u.s. trading sanctions american authorities found it had broken u.s. sanctions on iran burma libya and sudan bank was accused of hiding sixty thousand transactions with iran worth two hundred fifty billion dollars over nearly a decade as well as making transfer to other restriction nations. heiler secular was happening on the markets we start with the united states back from christmas traders are and this is the first consecutive session of losses the dow jones and the nasdaq losing within one percent president barack obama and

congress are expected to come back to the table on the fiscal cliff version although we have heard that basically there will be no immediate implementation of this of this tax hikes because employers have not changed payroll tax withholding rates for january payrolls and federal budget cuts would slowly be phasing in also we are seeing retailers losing very much this year hasn't been that good basically for for sales all right let's move over to what is it we have currencies the. oh you know this week it's going up and down with the pretty much same amplitude day after day when they station so the russian ruble currency gain around half a percent against both currencies both the dollar and the euro right crude is up on a geopolitical factors appears to be a route between iraq and turkey so there's some kind of supply halt there

and this is causing basically this is causing basically worries about the supply in the region and also of course fiscal cliff could lead to the market just dropping altogether and demand going down and russia's markets so pretty upbeat session on a stronger price of crude one of the biggest winners was raw snapped up one point two percent that close. right christmas is the a gift giving season and holding spending is enough to put a dent in anyone's wallet crisis stricken europeans are tightening their belts this whole day season russians are continuing to spend more on holiday shopping that's how the gov explains. as christmas celebrations tangle over and for a chill spent on gifts our resident highness most people around the world russians are still preparing to celebrate their main winter holidays a new year's eve and then russian orthodox christmas on the seventh of january and while people are shopping for their last minute gifts extra second placing how much

money and they're ready to spend on it this year below it consultancy reports that russians and pleasing they're spending on gifts and the festive table by almost ninety percent more than three hundred eighty euros a year compared to last year and that while most europeans are cutting their holiday spending by an average of zero point eight percent to five hundred ninety euros greeks and portuguese accosting festive spending most severely by sosia and sixteen percent respectively while germans are boosting their spending by seven percent to more than four hundred eighty euros. well it is spending is growing they still spend much less than europeans and traditionally presents that russians want to leave and receive very different most russians plan to give gifts of cosmetics and chocolates but what they will believe that their christmas tree is

first money then a holiday trip and jewelry. and what they want leave books for albums and calendars but yeah people of business r.t. moscow all right i'm back in two hours after the break we talked to a british m.p. who says he was drawn to of politics by the financial crisis government's handling of the do stay with us. my. plan. the ride is that takes your breath away fleeting across the sky as it was a mohnish good you know the biggest salt lake in europe and more than two hundred species of birds but also it is and are on the verge of extinction on these islands

in the south of russia they find shelter before migrating to other parts of the world much of this here we see the great white pelican and several species of the domination pelican which are both in the read data book but there are only forty to fifty couples left in the region you know how we can use as well as other species at the monish who do know feed and face these birds are waiting for their parents to bring them food to the best cash for them is in a small area is a lake with a warrant is relatively fresh as fish cannot survive in the salty a part of the money and the lakes getting salty every year the monish with the lows and all to fish oil reservoir which has failed in the nineteen fifties in the areas hot climate the evaporates quickly and the local saw as natural saltiness takes over just for the poor stupid storm matures there are relatively few water sources here some water comes from the dawn river and some from the cuban during the last three to four years we've had a very severe drought that's going to see this drought we are practically standing

on the bottom of this like it's been falling every year the majority of birds have been retreating as well or they nestle in new orleans. apart from birds the drying out of the lake cool so threaten one of the world's biggest populations of mustangs . they leave a one of the money on and someone next destination. they're more than four hundred is the animals here the area is a protected wildlife. bring peace and calm in recent decades dozens of canals have been dug around here to cultivate the local staps broad grassy plains this may be useful for humans but it is badly hit many species as the animals here for instance cyber antelopes which are extremely shy were scared away only to be killed in the

hundreds of thousands by poachers folklore here believes the substance found in their horse can cure impotence just so four years ago there were more than two million so i go into lobes living in asia and they lead nowhere else in the world but now people brought the species to the brink of extinction this region is be reaching life for thousands of years but now i know relatively short space of time it's my been diversity of creatures is second front by man and nature itself. sitting opposite me today is steve baker a conservative m.p. who first came into politics after watching the two thousand and eight financial

crisis unfold steve baker thanks for talking to us tell me what was it about the financial crisis that you found so revealing and so galvanizing in terms of your future where the first thing was that the lisbon treaty had certainly off because it was such an obvious trampling of democracy that our boys are prepared to tolerate it and that was the final straw but no sooner had i reached that final point than the financial crisis began to unfold and i've been following the austrian school of economics since two thousand when the dot com bust happened i was looking for a reason why because i was doing a masters degree at oxford trying to get into software and suddenly my investment in the books i was so i discovered the austrian school. the trade cycle predicted very much what happened then and what's happening now but i cast it aside because i thought if there was anything in it the economists and the politicians would sort out the monetary regime the banking system. and of course they didn't so when the crisis broke i was delighted i was still on a trajectory to parliament and i co-founded the compton center to try and get these

ideas out in the public space one of the things that you've campaigned against quite vociferously is bailout does that mean that you think a lehman type event would be good for the e.u. economy well none of these things really are good the problem is not so much whether one piece of dreadful pain or another would be a good thing it's how to best get back to sustainable inclusive prosperity which people can see is just what we've had is particularly the last thirteen years the money supply in the u.k. and for tripled under new labor this great torrent of new money goes to particular sections of society first creates all sorts of other sorts of unwanted non helpful economic activity and then the chaos sooner or later has to be revealed and that chaos was revealed for example has happened worldwide it was revealed lehman brothers but i don't want the pain but what i recognise is that the sooner we take the pain in the correction and the adjustment which is inevitable the sooner we'll get back to sustainable prosperity which is best way to to fight poverty surely the

justification for bailouts is that they are a stabilizing mechanism. well people just desperately do not want pain and i include politicians and economists and that of course the public as well but really the whole economies right around the world has been painted into a corner you know we've had cheap interest rates artificially cheap interest rates and consequently a great flood of new money the choice now is going to continue having a flood of new money which you can see at the moment is the choice with q.e. although there are modest quantities either keep having new money and ultimately that will lead to inflation and probably accelerating inflation or you stop accelerating the supply of new money and you take a correction now neither neither part is painless but i'm arguing is that those two parts are inevitable at the moment we're stuck in a sort of. stagnation but it won't go on forever the u.k. is a country with a strong banking lobby how likely is it to think that

a no bailout policy would be instigated where it doesn't feel very likely at the moment what role do you banks play in politics well at the moment the situation is that banks in the state of very very tightly interwoven the idea that banks are free market institutions is faintly ridiculous they're absolutely riven by not only by privileges like tax payer funded deposit insurance and lender of last resort also the whole credit markets are centrally planned by the central banks so politics that they are actually banks themselves are part of an enormous monetary power in the world which is directed by central banks so they're very very tightly coupled also when you look at the revenues from the banking system you can see that the banking system inflationary money is a very important part of funding the welfare state so they're incredibly tight become called i don't actually think that's very healthy or in anybody's best interests how do you characterize them that relationship between the banks and the state is it a sinister kind of a partnership sinister is kind of the wrong word and with these things i try to

stay very close to the literature and to facts because obviously there are people out there will sort of want ideas i don't think it's sinister i think it's. the automatic consequence of people having commercial interests and seeking to capture the state as people have always sought to done in all sorts of industries seeking to capture the state to their own advantage so it's not sinister but what it is is unhealthy and it's also completely understandable given the sort of public choice factors involved you mention central banks just a mess again but you say that economies can get on perfectly well without central banks yeah well you look at the united states now the federal reserves are relatively recent in innovation and it was supposed to stabilize prices and no sooner was it was implemented than there was an enormous boom ending in a dreadful bust which at least prior to this one was the worst the world ever seen and so i don't think that central banks are actually a stabilizing factor i think they're a destabilizing factor i don't pick advocate of free banking but you know what i'm not alone alan greenspan wrote

a wonderful essay called golden economic freedom in which he advocated free banking and banking without without central banks so i think we should have this conversation how would it work though without that overseeing body well you know that's an interesting question because in more or less any area of economic life we take for granted that there isn't a central planning orthorexic we don't have a track to planning or for it's your bread planning or thorazine in the u.k. or indeed in the united states we just know that there always be tractors and there always be bread in fact it always be a rich variety of bread of different kinds of different price points but when it comes to money and banking the commodity where money is the commodity on one half of every commercial transaction we take for granted the existence of committees of wise men planning it's price and quantity so some sometimes i think it's like the emperor's new clothes what's wrong in the world is the system of banking and of money in credit that system is centrally planned in

a way that we would not tolerate with any other commodity precisely because we know if we if it was centrally planned they get it wrong so that the emperor's new clothes need to be so it just isn't the emperor's naked has to be revealed and we should be really looking hard at central banks and how they're destabilizing our whole social system. how is it then that needs central banks is it politicians that can't let go that bankers need central banks if you if you were to trace back through the way that banks work mervyn king said of all the many ways of organizing banking the worst is the one we have today so what characterizes banking we have fee up money money backed by nothing notes and coins are just paper money in token coins. but actually most of the money supply is accounting entries but it doesn't account for anything it's just an accounting entry so that's the first thing we have fractional reserve deposit taking which means that when you put your money in the in your current account it belongs to the bank they're able to use it to fund themselves the taxpayer funded deposit insurance lender of last resort central

planning all of these things taken together are hugely destabilizing and actually they're not helping so how would it work the way it would work in free a free banking system you'd have commodity is the basic a commodity is the basis of money normally gold or silver in the past you wouldn't have limited liability for bank directors and again that used to be normal people used to accept partnerships trustee savings banks mutuals instead of profit making because the various factors involved. in a toxic taken together i'm all for profit making but what you can't have is profit making on balance so so the way it would work is the normal rules of contract property would work instead of having this system of state planning state control and legal privileges so it would work through the free market quantitative easing with another pair of yours you say it's part of the problem and not a solution to the crisis so what's happened if you look back

a particular over the forty years since bretton woods but especially the last thirteen years there was an enormous increase in the money supply we've based our economy on that increasing money supply so the crazy thing about q.e. is it's not actually new this idea of increasing the money supply it's just that it was previously much more insidious. what's happening with q. is it's just ducking the problem that the central banks politicians are trying to restart with the money creation process in the hope that the economy will restart everybody get reelected in the cruel fantasy is being maintained that everything can go on as it was before so what q.e. is doing it's maintaining a cruel fantasy and it's also introducing further distortions kids who gets the new money first banks people close to banks the state it's just further distorting our economy towards banking towards hosing towards the state and it's really is not healthy direction of travel the us as we know has done a lot of quantitative easing how much inflation is the u.s.

exports globally with that policy well i think it's the us is exporting considerable inflation in fact if you look i don't know particular gold bar but there's a wonderful website priced in gold dot com if you look at the price of oil in gold it's been stable since the end of the second world war it's been low and stable the prices hardly increased in fact last time i checked the price of oil in gold was lower than it was at the end of the second world war if you. look at the price in dollars of course since one nine hundred seventy one the price of oil has been high and very volatile and there's something going on here that are there is obviously to do with the supply of dollars because the supply of gold is relatively fixed supply of dollars is relatively volatile and as a result the result which is that universal global commodity traded in dollars is highly volatile so i think actually there's a really profound and fundamental problem with the dollar and commodity prices i put it on the record in hindsight of ask the government to look at it i really just

want to keep pushing that banging that drum to see if we can get some sense into our monetary order. back in this country and you say we're in a crisis of state intervention what does that mean it's been true for most of the last forty years governments have spent more than they could take in taxation they've then borrowed and then they've allowed of the currency to be debased through the credit markets and this whole nexus of state intervention in the economy state bent debasement of money is ruinous but i'd add to it it was once enough to say that capitalism was the private ownership of the means of production but then ownership also meant control and the private bearing of commercial risks but today people may well own capital but they end up so constrained by regulation and taxation that they don't really effectively control it and you can see in banking that they don't buy their own commercial risks so this is not a capitalist system it's a heavily interventionist system so basically you're all for rolling back the state

well i am for rolling back the state but it's not for some spinning i do ideological reasons it's just obvious that our present social system is manufacturing poverty and injustice so what i want is a system which manufactures justice and prosperity and it seems to me we've got a choice we can either roll forward the state which from current levels means effectively becoming communists or we can roll back the state from where we are right back regulation accept the need to allow corrections to prices to wages to infer to interest rates and allow the forces of social cooperation to generate the wealth that we know that they can so it's but it's of course it's difficult and it's frightening because two thirds of government spending in the u.k. is welfare health education and debt interest. now we're not going to have lower taxes and smaller state without reducing spending on those areas and i recognize that that's why i talk so often about mutuals i really think what welfare and health in particular would be better delivered by mutual lives in those services it

is worrying though isn't it i mean if you roll back the welfare state isn't there a huge risk of leaving the poorest and most vulnerable in society exposed well this is the this is why i are i'm so insistent that we must change the system of money because this this cycle it's a complex cycle of state spending on the deficit plus currency debasement to maintain this idea that we can all live each other's expense through the state it's increasingly obvious that it is a cruel fairy tale now i come from a very ordinary background my mother my father dependent on the state pension and the n.h.s. but it's a cruel fiction we have to get to the point where we're actually able to to sustain ourselves in a way which can go on indefinitely because at the moment if we look forward and just look at the what the western world projections it is obvious that in our lifetimes i mean in our lifetimes that the current system of society will come to

an end the question is not whether it will it's when it will in the manner in which are happening and politicians are going to have to really step up to the mark and be honest with the public and say we just cannot meet these promises we need to make new promises which can be fun the more misleading and have a productive and inclusive economy which is just and more of steve baker thank you very much you're most welcome. thank. you. do we speak your language i mean some of the will not advance. what news programs and documentaries and spanish more matters to you breaking news a little turn to tip angles keep the stories. you hear. detroit altie spanish find out more visit i to our.

deadly rivals for decades. if you had fifteen thousand people killing each other in any other country there would be diplomats there would be mediators. self-imposed out costs from society i will attack myself and my going to my brother understand my contacts immediately i am going to leave basically attack the call of my anger and my frustration. that upgrade well into the territory. two of the most violent gangs in us history. is just all model kill or be killed

with the colors matching the national flag. but this country uses violence when it was chooses and then it legitimizes the violence they are made in america on the ati. wealthy british style sign. that's not on. market why not. find out what's really happening to the global economy with mike's cars or for a no holds barred.