but they don't they don't act so this is a three hundred seventy nine trillion dollar market and who buys these interest rate swaps they're municipalities corporations and sovereign governments and what they're trying to do is manage the risk that interest rates might go up or down whatever that they don't want so they sell basically the interest rate to the banks like j.p. morgan and they're supposed to take the risk but now they're actually find out not only were they manipulating interest rates but they're also manipulating these interest rate swaps the banks implicated include barclays u.b.s. bank of america j.p. morgan chase and the royal bank of scotland but we've also talked about this sort of nexus of london as the center of all these frauds and of course this is i cup which is a london based firm but this was the desk in new jersey which was involved in this crime there are twenty guys on the desk there controlling interest rate swap prices and they are known as treasure island because they were coining so much money according to the reports the commission is also looking at whether or not employees that i may have intentionally delayed publication of swap prices which in theory

could give someone bankers cough cough a chance to trade ahead of the information so again max we have another case of front running we see this in high frequency trading we see this in the treasury market time after time their front running all of these big market moving numbers are going to bust and i can. you know that's the thing i don't know what they say is treasure island is out there new jersey. and they're committing fraud but of course the c.e.o. knows about and i forget his name schwartzman or something like that he's a look it up on google he's just a scoundrel in the crook you know i'm trying to come on the show in defend himself but of course if that he would risk you know. you know meeting up with the wrath of the people i don't think he is i don't think he goes outside anymore he just stays in this little model you know guarded like don't let me know if they're out there the people who stole money from you know it's all hidden away and things like that and you know matt taibbi in this piece refers to the illuminati and still people

around the world anybody who should be there to help stop this fraud ongoing fraud ongoing rigging all these better prices around the world he says all of them whether it's libel or whether it's credit default swap prices whether it's gold silver jet fuel prices and energy prices coal all of these are set by not by the free market but by a few guys in a room the price is fixed by them they tell everybody what it is so of course all these stories collectively pointed to the same thing these banks which already possess enormous power just by virtue of their financial holdings in the united states the top six banks many of them the same names you see on the librarian is the fix paddles own assets equivalent to sixty percent of the nation's g.d.p. are beginning to realize that awesome possibilities for increased profit and political might that would come with colluding instead of competing you know this is a real live now happening we can point to conspiracy a global one the interest rate swap market max is three hundred seventy nine

trillion dollars the global interest rate market the library fixed market is five hundred trillion so these are massive massive markets that are happening now you don't need to look to five hundred years ago and whether or not the illuminati controlled things back then well this is what i don't understand about people who are obsessed with the build of birds to build a bird mating or them just about the loop. nadi as matt taibbi said the current scam is being perpetrated by icap and barclays and these other banks are happening in real time and they're reported every day in the paper you don't need to go beyond that you don't need to see who's anywhere connected to this criminality other than the actual criminals themselves and i don't know i don't care about the build a bridge group because. we don't need to have a conspiracy theory about people that might or might not be committing crimes when we have actual criminal behavior being committed in real time openly tauntingly it's just i think the people who are upset to build

a bridge i think it's an excuse for them not taking action instead of taking action against the guy runs i kept there saying oh we have to go after the builder burke because they're too timid to go after the actual criminal they're too lazy to go after the actual criminal and you know highlight some of the utter contempt they have for the population where libel or was rigged for example on behalf of for one broker who asked for it to be rigged by the submitter the submitter who was going to submit the libel rate for that day and he did it in exchange for some day old sushi this was what the e-mails back and forth showed so matej he says screwing around with world interest rates that affect billions of people in exchange for day old sushi that's the reality it's not some like kings and monarchs in some secret castles out out there you know this is together just these two markets libel or and interest rate swap markets that's eight hundred trillion dollars right there that's

ten times bigger than the global economy you know that as i mentioned our celebrity get togethers and like a lot of power throw will be good and i celebrity do now the subtlety of their criminality is about as subtle as the dress she was wearing recently of celebrity event where basically her entire but was hanging out of this dress you could almost you know read. you know the pubic hairs and get an idea of what she was thinking that's how transparent this test was that's how subtle i've caps criminality is it's so out in the open so obvious that i think people are just gobsmacked by it or they blame the build of bridges are too lazy to do it has to be done to this i kept well matt taibbi does point to the fact that moreover it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them even when they do get caught working together to game the system and we saw this of course recently when there was a civil case in manhattan against the libel riggers and what the judge said is that

you can't bring an antitrust action against them because in fact they're not competing so they are colluding so therefore it's not us that's right now there should be a record tearing laws and imposed now i think we're going to end up going down the path of maximillian robespierre who brought in this thing called the reign of terror yet a scorched earth policy against baxter's of his day he said forget it we're forget the trial head in the getting chop chop let's move on he killed like fifty thousand people were executed by robespierre's gang in the reign of terror that would be a good start that's where we start i want to see the river red with baxter. well mack concludes that if true that the criminal justice system will not touch these banks toure's that would leave us living in an era of undisguised real world conspiracy in which the prices of currencies commodities like gold and silver even

interest rates on the value of money itself can be and may already have been dictated from above now of course the mainstream financial media they mock and ridicule and laugh at the people who talk about building berg and the illuminati but what do they do when a real world conspiracy is right there in front of their face reporting on it they act the opposite just as ridiculous because they refuse to believe that any conspiracy could possibly happen that bank stores are are wealthy because of their wealth generation and that they're better than the rest of us as rob said and i quote terror is virtue virtue is terror keep that in mind as we cleanse the system of the baxters well you know another is speaking along this line of what matt taibbi is saying here is that all prices are rigged every single thing is fixed every single benchmark rate which they interact with is rigged so then we know that global the all monetary policy is based on putting these guys out there

are the ones that own the central banks and there are the so everything around us is a fabrication of their imagination and jeffrey sachs who is a former insider was i a communist wrecking economies around the world he's gone well he's seen he's pulled back the curtain and now he's ranting everywhere and recently he's just said i meet a lot of these people on wall street on a regular basis right now i'm going to put it very bluntly i regard moral environment as pathological and i'm talking about the human interactions i've not seen anything like this not felt so palpably and he says outright these guys are crooks and we are that and i have to warn you he said. they're going to get away with that well we were there for six couple years ago and i tipped him to this incredible scheme that's going on on stage at the carlton omics festival and i think i turned up because before that he was trying to make sense of it and put in

the context of policy initiatives and failed policies and now he understands that and until this river runs red we're not going to be rid of the plague of baxter's destroying the economies and our lives going forward states ever thanks so much for being on the kaiser report. stay tuned for the second half a whole lot more. welcome to teal one here you can feel it. there are three choices in life first used to work you know mckillop live on a miserable way like a slave. the second is to jump the wall and catch the

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international airport in the very heart of moscow. welcome back to the kaiser report imax keyser time now to go to australia and speak with das madonna of economist author of extreme money das welcome back to the kaiser report nice to be with you max right does tell us about japan they're taking monetary policy where no central bank has before gone tell us what's happening and what could be the consequences. well essentially japan has adopted the comic ozzy strategy because having done nothing for a long period of time and the economy's in the doldrums they've now got a three pronged plan plan number one spend more money than you have so this could be a massive fiscal stimulus secondly central bank intervention interest rates have been zero for about fifteen sixteen is so the central bank is buying assets it's going

to essentially double the supply and double the size of the central bank balance sheet within a couple of years and finally they get to do some structural reforms but max it ain't going to work what do you think is going to work well let me cut in for a second because this idea that pan is pursuing that they are against and more quantitative easing and of course they were the first major economy to go into this quantitative easing phase or up to quantitative easing around them before and it's used by other countries like the u.k. and the united states as an example of why i quantitative easing works so there isn't japan is a case study of why it works because japan still maintains a vibrant export market the economy is still functioning it's the model it's the poster child for the g. twenty so what it what do you see that everyone else seems have got wrong and in a global economy where so far we haven't seen the inflation we haven't seen the problems that everyone predicted would come with quantitative easing we're going to see inflation but that's a separate issue but let's look at japan ok the reason their export industries

worked is in the first few rounds of course a t.v. easing and so forth the rest the world economy was ticking along which it's not the first thing is ok let's say we flood the system with money and devalue the yen the first thing is is it going to help the answer is probably not the reason japanese exports have relocated a lot of their plans. so they get the benefit of a week in the next problem is the companies in japan which export to companies which are such stasis sony and shop very very close to bankruptcy because they have beat out competed in costs and innovation by the koreans and other. people say going to work what it's going to do the week again is going to push up their energy bills and that's not really good for japan because it's a heavy energy importer and we've seen old electricity prices go up and that's going to tip day trade balance which is already negative further into the black eye to get caught in the red and then what's going to happen is the current accounts going to turn around and now we have the. first is savings in japan

today a low at than they were in the united states and the problem with that is as the government issues more and more bones that is the central bank there's no other buys left so basically they screwed on that front but the other side is the current account which is helped fund the deficit is now going to turn around gradually over time so it's all good news to go back to your question if this is the poster child the future does not go well for the way but i asked i haven't seen the inflation yet and you are saying well you know it's not about inflation or i wouldn't say inflation but you just described a situation of a yen getting cheaper being devalued which would cause the price of oil to go higher which would have a problem for the economy is not inflation number one number two again it's the poster child for these g. eight g. twenty nations who are able to manage the prices of things like bonds they can manage the price of things like oil they can manage the price of things like gold

and silver because these things are traded on these features exchanges which are completely in the province of the cartel of of wall street banks on the banks of the city it's not a free market anymore so they were not going to see any price signals that's why question das as i signaled been obliterated by the terrorists das well let's leave the prosecution just for one second come back to question inflation i got to separate out two things inflation in general and the inflation problem specifically in japan because of the imported energy commodity inflation is going to be a feature with quantitative easing around the world but. in terms of the type of inflation you need to bring down the debt burden you not going to get it because you need a whole bunch of conditions for inflation number one you need excessive money supply my god have we got that the second thing you need philosophy of money circulation of money fractional banking is broken so that's not going to work you need demand excesses over supply that doesn't exist anywhere in the world and finally because we've been in thirty's where the central banks have told us they

have inflation under control inflation expectations are low as you know going to get that but anybody who actually is an importer of commodities like japan is going to get whacked and that's going to have a terrible effect down the track because if they create the two percent inflation they're looking for what's going to happen is they bond yields are going to go up twenty four percent of the government's expenditure is on interest so if you push operates from where they are today to three percent roughly about three quarters to three quarters of the tax revenues and their spending will be on interest which is unsustainable that coming back to your question on price signals anybody who thinks markets have basically been free i think is under a bit of an illusion because many of these prices have quite correctly as you say been controlled by a small number of banks this is not only in financial markets we know from trade practices and competition type of cases around the world price fixing is something which occurs in all industries and given the incentives in finance to manipulate

prices it's hardly surprising that's a could but that should be prosecuted under existing laws because those are crimes market manipulation offenses that should be the question to my mind is will they be prosecuted will you say that japan is about. or if a consequence of their mismanagement other economy how do we know if that's going to happen how do we know that's true if we can't rely on the price in other words if the price is broken as you've just described it in we have no way of knowing therefore that the economy is broken because there's no way to judge that the economy is broken we just have a. propped cartel in place that is making money available cheaply to speculators who then in turn use that money to destroy the price signal by just keeping the price of these futures markets completely under their thumb so how do we know that broken if we don't get a good price. well i think fundamentally the real issue is going to be what happens

to real economy how the people are unemployed how many people have income how many people feed themselves how many people can buy health care how many people can buy h.k.s. i think you getting to obsess about the finale i want to cut out a second because you say ok the real what really matters is up people are dealing with the economy if they can't eat at doesn't matter if the government says that there is no inflation because they can eat big so therefore their only recourse is what one of the people of japan going to do or what the people in europe going to do the united states are being disenfranchised well that's being transferred in an epic scale from the commonwealth to the elite terrorists who run the banking system what's their recourse stocks what are they doing down there in australia are they buying gold are they converting with koala bears what's happening in australia i did about converting with koala bears i've never really seen how that's done but you know but leave that to one side i think what we're going to see is the type of backlash we've seen in italy with the five movement and the dissident movements

around the world now whether that's going to work or not i don't know but fundamentally it's going to be a social and political issue and don't forget in the ninety twenties and nine hundred thirty s. fascism came to power on the back of the middle classes who had they savings and they life wealth wiped out by inflation in the why i'm a republic so i think that's where it will be resolved i think the financial markets is going to be a bit of a sideshow to that right now it's want to come back to something i said earlier just for the viewers out there who follow these things in terms of the terminology that is used we're talking about inflation and you're talking about the price of oil going higher but. you are describing correct me if i'm wrong a scenario of cost push inflation can you just for the sake of our listening audience a viewing audience kind of review how this differs from other forms of inflation. well i think this demanded place in which is what the world really needs if you actually look at what the central banks are trying to do they're trying to create growth and demand pull inflation because that would basically create the growth

which allows the debt to be gradually run down the comp get that what we're seeing is quantitative easing particularly by the u.s. federal reserve with the devaluation of the dollar because most commodities are traded in dollars pushes up the price of those commodities which is affecting for instance japan which is also scored an own goal by devaluing the yen but the fundamental thing that it does do is push up those costs of commodities and that's a huge issue to go back to. enfranchise and issue is in emerging markets with things like food and energy are a huge pot off the actual spending of individuals so in places like indonesia and bangladesh we're going to see a massive problem for the poorer people in the world and i think that's the bigger issue is the difference between the type of inflation they want and the type of inflation they write so if the goal is to create cost pull inflation that would also imply that wages would be polled higher but again the

cartel who prefers to pay people at absolute slave rate rock bottom chinese slave market minimum they don't want people having their wages inflated or pull higher do they because that would that would destroy their monopoly profits so isn't a true dos and i read your book extreme money where you delve into the machinations of the global financial system isn't it true das that we have a situation where these bankers have created a new global economic paradigm were absent prices go up to make them wealthy but wages never go up so nobody outside of that very small group ever participates in this inflationary bubble dos. i think there's certainly an element of truth in that but i think let's look at it in two ways one is to be fair many countries now recognize particularly say the administration the u.s. is trying to push up the minimum wage we can have a debate about whether that's going to be sufficient i don't think it's going to be sufficient but i think fundamentally one of the key issues going forward is to be

able to address the question off the wages as a percentage of g.d.p. basis things like corporate profits and that's an issue that's bubbling along but i suspect there is no will among policymakers to deal with that issue but in japan it creates an interesting problem on the one hand they want to get more competitive on the other hand they want to push up wages which makes them less competitive in a global sense there's an inherent contradiction in the japanese position finally does i want to ask you something late breaking story or the c f.t.c. or investigating the rigging of interest rate swap markets tell us about a particular market this particular market the significance of fixing prices and allowing for front running so this is on top of the library scandal with some thought was the biggest market manipulation history now we have something even bigger tell tell us about it. this is a very famous thing the what used to be the telly late ninety nine to one screen where all the dealers put in their prices it will have a name it was used to set up rates the settlement etc and basically it's exactly

the same problem as libel you got a bunch of people putting in quotes with huge incentive structures to manipulate that number for profit and so hardly surprisingly what happened in libel happened here and i think this is quite an interesting story in many ways it's of biggest story then probably the libel scandal is because this is a much smaller group of people and it was never the police to the same way theoretically that libel was so it's the biggest story but the fantastic thing about both of these stories is it's very difficult for get legislative and prosecute traction on these because nobody really can figure out who's lost and who's won but i think watch this space i think you're going to see a couple of big banks because the actual swap market is dominated by six rate banks let's. and the number you see libel so i think you're going to see something there but the key thing here is until we change incentive structures in finance now this is going to change if you've got a young blokes who basically have huge incentives in a bonus sense to manipulate numbers where they think they can get away with it and

the fundamental thing is these rules are very very vague they're not police in any way and that's going to be a huge problem but i think it'll be interesting to see how this plays out because a sea f.t.c. will undoubtedly be joined by other regulators around the world yeah well once again the price signal completely destroyed all right us a lot of time thanks so much for being on the kaiser report good to be with you max that's going to do it for this edition of the kaiser report with me max kaiser and stacey arutt our thank my guests doctors. author of extreme money if you like to send us an e-mail at kaiser reported r t t v are you until next time i've got a. welcome to teal one i hear you can feel it home.

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