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 bee 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 that 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 cockroaches drones for the hive that's managed by the queen bee mark zuckerberg nerd or the google guys are various other high tech enabled parasites pulling the paul and m.r. magill nations out through the modem of the internet for their personal gain at the 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 japan 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 just by 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 their retirees are just not there so these are this is japan buying these e.s.m. bonds for those who have forgotten the he stands for european this first ability not japanese stability otherwise it would be well j s m keynesian 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 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 insecta wall proctors like facebook are in our big developing a global hive if you will a global banking high. which they're all swapping each other out in ways that are

highly detrimental to anyone's ability to make a living wage you noticed that during the past ten years during the whole buildup to the crisis and after the crisis the banks had 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 growth 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 it's 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

intellectualization 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 your 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 and 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 their naked selling short their own currency in their own bonds 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 knows that north sea oil has helped the u.k. economy avoid what would otherwise have been brutally imposed market reform an 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 exploitation of services or they've got the

exploitation of goods manufactured goods in britain has not exported had a net balance of exportation of manufactured goods since the nineteen eighties the entire economy sense that's or 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 the famous guru who wrote currency war has come out and said the british pound is toast jeremy warner who's a cheerleader for the government over there at the telegraph is pointing out even that the pound is toast a pellet 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 bullion 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 there 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 at 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 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 and you 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 kaiser for it thank you max. stay tuned for the second i'll be speaking to reggie middleton. the government no longer represents the. people who are going to take such.

a traditional. the way our economic system.

great. song from steve. stanton don't come.

welcome back to the kaiser report imax kaiser time now to go to new york and speak with reggie middleton a boom bust blog dot com reggie milton 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 history of the developed nation you have an excessive amount of debt chasing funding said that it has in afraid it's value and to offer to six where you the debt is the. system credit system in the u.s. particularly and the assets of the deployments that the loans of funding. the diplomas have both in my opinion and from and a little perspective even 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 at the trillion dollar mark and increasing by roughly we you know hundred billion dollars or so per. two thirds of a quarter every other month i think at this rate so really looking somewhere above maybe 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. 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 that's his 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 the prime market the government gets involved they make money cheap but they create this incredible bubble which is now set to pop and so what is 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 probably still with us right reggie you know of course is nobody from the only real. form is that the market do its job you want reform don't bill and buddy out you won't have to reform those who got carried away so people out of business then that's your reform it's actually called capitalism but you're. pretty frustrated from pure or even apply kept his own for right now.

the again said he may is acting as the fannie mae of can say old coots just a few years ago and basically creating the quiddity with liquidity doesn't belong and that's was booking a bubble this is worse because not only do you have. trouble dead 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 return on investment perspective literally as in mathematically on worth the paper they're written on all right so to make the comparison of bad back to 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 really hypothecated in re loan and securitizing are created this massive bubble that blew up in the case of sallie mae student loans collateral and is the education that's being produced to create

a person who can make money in the economy and 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 any 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 deployment 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 all you need to have a job number two is the value of the diploma how many m.b.a.'s graduating out of maids here schools are going to or even the ivy league schools can truly own their way out of a wet paper bag that many of them they're taught what is called knowledge that which is the type of knowledge that is rote memorisation 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 now is how would be the ability to ride a bicycle ok the ability to get on the bike and right and keep your balance without

their knowing the science behind the bounce now from a. burning perspective you know you know how the 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 right versus somebody who knows the history of media but doesn't and i said 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 an m.b.a. and a bachelor's you know right and right for 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. 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 or there's 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 to your 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 is not as if it is the risk of france it is been undismayed it in relation to the u.k. it has encouraged the is undismayed significant in my opinion but it's not and then as it made it a relation to 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 now performing i said you know. that have been swept under the rug due to changes in policy regulatory 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 that. but. no. 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 and 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 zarf 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. one piers to be a bond bubble a bond bubble that seems to be are 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 whether it's the french bonds and u.k. bonds as proven investor you have to assume that rates either drop and as 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 a pen and 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 are those which are true and you know for most investors that's impossible but for central banks the grand purvey of the global plans these 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 the buy the bonds and then they purchase the bonds died from them and that's the case with france the u.k. the u.s. and that's the case for japan and it's happening all over the world. 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. i mean to you that you have a reset i cannot guarantee you even assure you when the reset will happen i know it's now going to perpetuity now go on 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 your reckoning ok reggie middleton run out of time thanks so much for being on the kaiser report. you're very welcome and the put to come back all right that's going to do it for this edition of the kaiser wait for with me max geyser and stacy herbert i'm with my guest reggie middleton a boom bust blog dot com if you like to contact us you can tweet us at kaiser report or at facebook dot com forward slash kaiser report one till next time nice guys are saying by a. good

speed. the.

long. run i mean very little. join me on a journey to the heart of the kremlin to a place is hidden from the tourists you're going to meet some real kremlin insiders although they may not be the usual news makers you see on t.v. . movie.