it alleges that the facebook ads used facebook members names the likenesses to sell products without their consent case in point facebook used one member's name and face without his knowledge to promote a fifty five gallon tube of personal lubricant under the terms of the settlement any current or former facebook users who have their identities shown in a sponsor story add name to name profile picture photo excited or could be entitled to a check from facebook you know on this show i mentioned a new concept in sexual like insect and such like and this is what social networking is evolving to mark zuckerberg is basically the queen bee and billion facebook users are the drones they collect the pollen of their interactions which go to make money of facebook's corporate profits the majority of which are taken by the queen b. mark zuckerberg this is the natural step in evolution that we can look forward to

as humanity leaves the state of homo sapiens and becomes more of a state of homo insect again and also is there a perfect sort of signifier of this so-called trickle down economy here mark zuckerberg ten fifteen billion dollars for your ad for putting your ad on the side of a fifty five gallon tube of personal lubricant oh this is again the way that technology is is merging with our experience of what young called the collective unconscious before facebook or social networking no monetization had occurred on wall street to take what was the collective and put that into the pocket of a few entrepreneurs now that exists with social networking sites and you know people complain that we becoming more orwellian with the spawn i surveillance society but we're becoming more kafka esque remember his famous story metamorphosis man. turning into a beetle or

a cockroach this is what becoming unsexual is all about it's about our collective experience of humans becoming insects or conquer drones for the hive that's managed by the queen bee mark zuckerberg or the google guys are various other high tech enabled parasites pulling the paul and of our magination out through the modem of the internet for their personal gain at societal loss and in japan of course we've seen monetary lubricant used very generously for the past twenty something years still the economy is limp the credit markets are bone dry and yet they're going one step they're upping the crazy upbringing the lubricant japan may or may not meant quadrillion young coins but it will monetize european debt just when we thought america would be alone in crossing into the

monetary twilight zone where so many kenyans and lunatics have gone before and where trillion dollar platinum coins fall from the sky right on to the heads of all those who have not even the faintest understanding of money creation here comes to pan asso japan to buy e.s.m. bonds asked so says to plan to buy e.s.m. bonds using foreign exchange reserves asso e.s.m. purchases will help to stabilize the n. right so you're saying despite monetary lubricant it's still bone dry and limp and i guess this would also account for the demographic crisis in japan as the funds that were hopefully there to pay off the retiring are just not there so these are this is japan buying these e.s.m. bonds for those who have forgotten the in the e.s.m. stands for european this s. for stability not japanese stability otherwise it would be well j s m k. the

end at that but yes to pan will now proceed to stabilize itself by monetizing european debt because its own japanese yen one quadrillion in debt was not enough well the fact that japan's buying european bed and the canadian central banker mark carney is now going to be running the bank of england you see what people have been talking about the globalization of the central banking industry the the people who are running these banks who are financing the insect to all pride to others like facebook are in our developing a global hive if you will a global banking hive which they're all swapping each other out in ways that are highly detrimental to anyone's ability to make a living wage you notice that during the past ten years during the whole buildup to the crisis and after the crisis the banks have never missed a pay day the bankers have been getting increased bonuses but wages real wages adjusted for inflation have been stagnant or going down that's because this in

sexualization of the global economy where we're just drones giving the pollen of our imagination and our labor to these parasites in queen bees that are now big drop in this global hive you know we need some kind of pull there to go out there with a big stick. and kick down the hive you know and and maybe he or me in the story is well. well carol i don't know i suppose because clearly there's not enough lubricant in that in quezon to solve this global banking parasitical sexualization problem. speaking of queen bees we are going to talk about george osborne in the city of london but first i want to make note of the fact that we have covered the fact that europe first went to china didn't they to try to get them to buy european bonds and they were like no what they did that would be insane

that would be lunatic so of course they went to japan the state in japan was like yeah ok why not well looking at this over the past twenty years but particularly in the last ten years japan in the yen has been what's called the funding currency for the global carry trade which means that the yen has always been trading at a low value compared to these other currencies and at these ridiculously low interest rates so that these other countries and even japan itself can borrow money from itself at ridiculously low rates and then use the proceeds to invest in these other higher yielding securities and currencies now here is where you're going to see the end game manifest the japanese authorities are not only selling their own bonds and using the proceeds to buy other countries bonds but they're selling short their own currency and bonds and they're naked selling short their own currency in their own bond so they're counterfeiting themselves. they're counterfeiting their own currency in their own bond market and then using the proceeds to buy other

countries bonds because they're trying to pick up two or three points of interest income to finance an economy where it's run by a guy named who's running out a lubricant i posit that this will not work. i promise we will talk about the queen bees over here in london where of course much of the so-called economic miracle of britain for the last thirty years has been due to oil the lubricant of oil that has allowed them to provide all sorts of fiscal and monetary stimulus over the last twenty thirty years and also gave them the luxury of giving up industry they were able to just get rid of their industry and not actually produce anything but fraud sterling crisis looms as u.k. current account deficit balloons is the u.k. heading for a currency crisis asks jeremy warner in the telegraph and he goes over the usual things of the deficit and all the debt they have but he notes that north sea oil

has helped the u.k. economy avoid what would otherwise have been brutally imposed market reform in adjustment as recently as two thousand a one britain enjoyed a trade surplus in crude oil of nearly six billion pounds a year in two thousand and eleven the deficit was ten point seven billion pounds like a receding tide fast depleting north sea oil is exposing the underlying wreckage of the u.k. economy well jerry warner makes an excellent point now and economy has two components in its export market they've got the exportation of services or they've got the exploitation of goods manufactured goods in britain has not exported at a net balance of exportation of manufactured goods since the nineteen eighties the entire economy sense factor has been built on basically services and what are these services they are financial services. i want to power pursue with a thirty year bond market bull bull bond market where interest rates were falling

now we're at a juncture in time where britain has got its manufacturing capacity they're left with financial services as really the only engine of growth during a period of bond collapse in interest rates rise that's why i'm shorting the british pound that's why jim rickards famous guru who wrote currency war has come out and said the british pound is toast jeremy warner who is a cheerleader for the government over there at the telegraph is pointing out even that the pound is toast a payload in the yen are toast additionally not only are the internal structural problems of these economies looking incredibly weak but both of these economies lack something critical going forward they are two countries with the least stockpile of gold going on britain has one of the. smallest stock piles of gold going on japan one of the smallest stockpiles of gold bullion when you enter

a currency war you need to have gold you can't go there with a quadrillion in yen expecting to survive that battle and they're not going to survive that now you mention this current account deficit and in the second quarter of last year britain recorded a higher current account deficit than spain italy portugal and even greece according to comparative data from your us that their t. engulfed ireland meanwhile it's heaved a surplus of an impressive seven point eight percent and he goes on to blame partly the monetary lubricant over the supply of this lubricant of of quantitative easing has ironically caused inflation here this is what we've been saying quantitative easing in the artificially depressed moment of interest rates have in fact ruined they ability for this economy to sustain growth in a meaningful way that would translate into wages and sustainability for the vast

majority the population instead you've got the city that's become huge at the same time you've got millions unemployed who don't know george osborne personally and can arrange a billion pound loan and just happened to hang out at the club that he hangs out at where they dress up like women and smell each other's flatulence they can't get a billion pound loan coming so they end up not being able to support themselves the state has to support themselves by borrowing money but hey interest rates are not skyrocketing so now the city and the young are all going to crash because of mervyn king because the bank of anger land. we're sure the british have a lot of it. thanks for being on the cousin for it thank you max. stay tuned for the second half i'll be speaking to reggie middleton.

the government no longer represents the. people are going to take the term. revolution in the traditional. the way our economic system currently.

cool.

welcome back to the kaiser report i'm max kaiser time now to go to new york and speak with. blog dot com and welcome back to the kaiser report. thank you and as usual it's a pleasure to be back all right reggie middleton you've been writing about the education bubble tell us about well it's a bubble that's very similar to i guess all the other bubbles in the history of the developed nation you have an excessive amount of debt chasing funding and i said that even has an inflated value and to a fictitious where you the debt is the student loan. system credit system in the u.s. particularly and the assets the deployments that the loans of funding. the

diplomas have both in my opinion and from and a bit of perspective it inflated a fictitious value and the debt is excessive it's very easy to attain and it's massive it's approaching that of the subprime bubble at its peak which was a roughly about one point three trillion dollars the student loan. debt market is piercing the tree and mark and increasing by roughly we you know hundred billion dollars or so perfect. two thirds of a quarter every other month i think at this rate so really looking somewhere above midyear it would be past the subprime. bubble level in terms of aggregate amount what makes it interesting is this is a different type of debt because the state is not dischargeable. so it's and it's backed by the government and it will follow you and either you die or into the

government decides to forgive it which means that the value was disappeared poof gone somewhere and if this fear this brings up of the two or three points i want to touch on first of all when you talk about the student debt bubble of course we're talking about a government agency called sallie mae which is doing to student loans what fannie mae and freddie mac. did to this prime market they think government gets involved they make money cheap but they create this incredible bubble which is now set to pop and so why the second point is that from the crisis that blew up in two thousand and eight there was some hope that there would be some reform that would stop wall street from creating these massive bubbles but what you're telling me is that there has been no reform and we're we're at the bubble problem is still with us right reggie of course is nobody from the only real. form is that the market do his job if you want reform don't bill and buddy out you won't have to be for those who got carried away

so people out of business then that's your reform it's actually called capitalism but you get. pretty frustrated from pure or even apply kept of his own for right now. the again said he may is acting as the enemy of i can see old coots just a few years ago and basically creating the credit he liquidity doesn't belong and that's was booking a bubble this is worse because not only do you have. debt but you also have the fact that there is no real. recoverable i mean real backing diplomacy diplomacy some of diplomacy if you look at it from a real perspective. the cash flow and return on investment perspective literally as in mathematically aren't worth the paper they're written on all right so to make the comparison a bad back to the housing in the subprime market in the case of housing you've got a house which is working as collateral to some degree in the financial system and

that collateral is being catered in re loan and securitizing are created this massive bubble that blew up in the case of sallie mae student loans the collateral and is the education that's being produced to create a person who can make money in the economy generate growth and taxable income but i gather from your work that that's not working either the education system is not producing jobs that are creating a taxable income the collateral value of a student in america is dropping along with those credit bubble your thoughts. well the civil dimensions number one is an employment dimension where you have a structural change in the plot and employment in my opinion and even if you don't by the structural change in employment in other words technology has either eliminated or cause the economic incentive to outsource many jobs you have an increase in service sector and a decrease in certain other sectors where a four year education would have been more amenable even if you don't buy that you

simply have very high unemployment you know if you follow the trend from the last ten to fifteen years in employment that is cyclical high that's number one you know in order to pay back the loan from a diploma you need to have a job number two is the value of the diploma how many m.b.a.'s graduating out of mit's here schools are going to or even the ivy league schools can truly own their way out of paper bags that many of them they're taught what is called knowledge that which is the type of knowledge that is rote memorization of information versus knowledge how would short version would be know how and that would be the type of knowledge that solves problems and creates things a good analogy good analogy would be knowledge that from a university perspective would be the physics behind riding a bicycle annoying basically what pressures apply where and how the bicycle is move

forward from a physics perspective right knowledge how would be the ability to ride a bicycle ok the ability to get on a bike and ride and keep your balance without that knowing the science behind the bounce now from a. burning perspective you know know how knowledge how pretty much reigns supreme you know if you're hiring in terms you want to hire somebody who can produce value for you out right versus somebody who knows the history of media but doesn't the state you know how to produce value you have a lot of those who spend. you know fifty sixty eighty one hundred two hundred thousand dollars on a m.b.a. and a bachelor's no right and right from not just that but once they graduate they actually want to have an employer pay them right to teach them know how child which is the inverse of what it should be well you know reggie middleton and the graduates are entering a work environment that is not generating any meaningful income to pay off these

debts but i think more importantly the institutions themselves the universities are gaming the system and gaming the government i know from my own them out of new york university it's become a real estate development ploy where the did real estate developers at n.y.u. garrett are relying on guaranteed government sallie mae generated subsidies to two to speculate the real estate market and utterly destroyed greenwich village with gentrification for a great generating graduates where there is no jobs for these graduates so again it's welfare for the banks welfare for the real estate developers welfare for the top one percent generating millions of students around the country where there is no job market but i want to go back a year reggie middleton you we talked a little bit about france you said france was the next to go the way of spain and greece now today the debt of france is yielding less than the debt of the united kingdom where the central bank is the biggest buyer the pendulum of risk seems to have swung from continental europe to britain as people realize that britain's

current account deficit and the underlying fundamentals are grave and people are piling on a short sale of british pounds it looks like the british pound bubbles about to pop your thoughts well it's not as if it's the risk of france it is and this made it relation to the u.k. it has in the current is undismayed significant in my opinion but it's not and then as to meet every day since the u.k. the risk in the u.k. has been recognize well for me so for some amount of time and now you know. realities started to come to light the knowledge you know the u.k. is in a significant has a significant issues u.k. has is rife with non-performing assets you know that have been swept that have been swept under the rug due to changes in policy very good tory reform quote unquote but basically you have to look in the direction they still have structural issues and terms of expenses and revenues. they have

a banking system right and an insurance system which still has to deal with now only the embedded but. new. new paradigm in terms of the economic environment you have when you have syrup and you have. you change the nature of risk and people take risk without expecting to compensation and that means you have rampant risk that has happened in the u.k. a lot of the regulatory blow ups have emanated right from the financial center and u.k. and the reason is in my opinion rampant syrup now that you have almost no return on your financial assets you have no significant decrease in risk you have a system that is eventually going to blow up so you've got some terminology here you've got some imbedded non-performing assets you talked about observer of course zero interest rate policy you talked about quantitative easing which is the central bank buying back its own debt all of this leads to. what led peers to be

a bond bubble bond bubble that seems to be were all this is headed you know you talk about a student loan double of roughly a trillion dollars but here in the u.k. this guilt bond bubble is going to completely overwhelm this economy wants to topps i mean what is what your thoughts are. well you know you've pretty much said you've pretty much spoken my opinion the the when he said that the central bank is buying the u.k. bonds you know the french banks in the e.c.b. also buying french bonds there is no natural market for a lot of these bonds in my opinion because in order to buy these bonds where there's the french bonds and u.k. bonds as proven investor you have to assume that rates either drop and is close to zero as they've ever been or you have to assume that economic activity will increase significantly and they help with economic help these countries will increase materially over the medium term. almost nobody is saying that you know the

pan european sovereign debt crisis is going to end it with the next eight to ten twelve months eight to sixteen months nobody with a calculator up in a paper and not many people think that the u.k. is a bastion of health so if you don't think that the economic activity behind the bonds are going to increase and if there's no room for them to decrease in terms of you because you're pushing zero as it is then what is the economic incentive to buy bonds you know the only one who has the economic incentive to buy piles of bills which it will and you know for most investors that's impossible but for central banks the grand purvey heads of the global pansies you put a fancy name on it they have the power to do it and even those that don't do it they enable their private banks to buy the bonds and then they purchase the bonds drive from them and that's the case with france the u.k. the u.s. and that's the case with japan and it's happening all over well. in the developed

countries all over the world and like you said this is unsustainable you can do it and you can't. the issue is timing you know timing is the key because most bubbles can go on longer than the average speculator can remain solvent so timing is i came. every few that you have a reset i cannot guarantee you even assure you when the reset will happen i know it's not going to perpetuity it's now gone for ten years i doubt if it will go on for five years you know my calculations say two thousand and thirteen two thousand and fourteen is the year of reckoning ok reggie middleton rata time thanks so much for being on the kaiser report you're very welcome and the four to come back all right that's going to do it for this edition of the kaiser report with me max keiser and stacy herbert i'm with my guests reggie middleton a boom bust blog dot com if you'd like to contact us you can tweet us at kaiser report or at facebook dot com forward slash kaiser report on till next time x.

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