good afternoon and welcome to prime interest i'm terry i'm boring here in washington d.c. and here's the story that i'm keeping up with today. bubbles bubbles everywhere financial markets are becoming too buoyant according to some members of the federal open market committee as expressed in today's at the mc minutes it seems junk bonds are on the rise as investors are chasing yields beyond the zero point two percent offered by their local banks but wasn't that the point mr chairman careful what you wish for and speaking of chairman bernanke he spoke today in front of congress it didn't take much to move the market when he softball the possibility of so-called tapering later in the year this would be the much anticipated wind down of quantitative easing and the final act of kabuki for the day was a john hilton raspiness the fed spokesman wall street journal reporter it did

a one hundred eighty from his prior views just a couple weeks ago previously he said the fed had mapped out a strategy for the mystical tapering process well today you simply stated the process will not be predictable great job fed after twelve speech is one major f o m c released and at the w.s.j. planted story the markets are thoroughly confused and finally after tempo's testimony on the hill yesterday much talk has been made about the viability of apple's tax strategy and investors in apple's recent seventeen billion dollar bond offering are fueling a bit of pain these bonds were part of the apple strategy it's a paid system starts investors dividends without tapping into apple's substantial cash holdings off shore which is a taxable event the bonds have lost two hundred eighty one million dollars in being issued by us money for the maker of the i phone or mains com but it confident it will keep its ability to maneuver along international borders as it sees fit let's

get to was in your prime interest. and we've been talking a lot about bitcoins recently i wanted to take a step back and break it down big for those who aren't familiar now cryptography has a long storied history although accounts of the first use are varied the ancient greeks and spartans were said to use a simple scroll like cipher to send and receive messages during military campaigns more than a thousand years later an arab mathematician made considerable advances which would

not be fundamentally surpass until world war two twelve hundred years later now with the rise of the internet cryptography made its way into everything from bank account transactions to security e-mail but it wasn't until recently that cryptography would make its way into what we know as money now enter into the world of equations in two thousand and eight the tashi nakamoto an anonymous person or possibly persons first described a peer to peer electronic cash system and this became the basis of big coins which are a decentralized digital currency that enables payments without the need for central authorities and issuers beautiful right most currencies and the modern air are based meaning that they are not backed by a commodity but they are declared to be legal tender by a government that means that you can use them to settle debts pay for goods and services and pay your taxes because things are not backed by any central authority or even a commodity their value assembling determined by mutual exchange and you may wonder

how you get that coins for people willing to use their computers and pay to run the electricity even. you can earn a newly minted coins this is done according to a complex algorithm that verifies bitcoin transactions called. hackers can attempt to overrun the resulting transaction but as long as there are enough honest users in the system the big currency remains sound now the computation becomes more and more difficult over time so the rate of which the number of big coins are issued slows down eventually they'll be twenty one million that computed into existence today there's only about eleven point five that have already been mined. but you don't have to mind koans to get them you can convert dollars euros and even gold into big coins via the exchanges now this is been a source of recent controversy as the largest exchange mt gox one of his major bank accounts frozen by the partment of homeland security it was alleged that the exchange are not properly registered as

a money transfer agent however there are other exchanges that are biting by federal rules and guidelines this is just a really costly process now the remaining risk of big coins is price volatility here we see a char a big coins a price to any u.s. dollars as you can see the price steadily rose from just over twenty dollars at the beginning of the year to two hundred forty dollars and april and then just before it crashing down to sixty five dollars a week later since then prices pretty much stabled out from price volatility it's regulatory burdens bitcoins are facing a lot of headwinds but it looks like they're here to stay even the feds are starting to get in on the action and. we as we can no longer say that big cohens are being ignored and that's the breakdown of big ones.

as i'm sure you're aware at this point prime mentions producer bob inglis and i travel to the big conference in san jose california over the weekend and we got a chance to speak to many of the movers and shakers in the upcoming cryptocurrency round now bob and are viewed chris larson who is the c.e.o. and co-founder of open coin which is developing repl bob asked chris to describe what exactly rival is and here are his comments. point is the a for profit company it's a typical silicon valley structured company and it is responsible for building the software that that is the ripple network so way to look at it sort of the ripple network is analogous to the bitcoin network the big point protocol in that it's it's an open protocol it's

a distributed system and that system is really what determines both the currency that we've created as well as the payment network so we're very excited about it we think this math we call the math based currency movement we think it's it could be the biggest game game changer in finance since the internet was was created and what we're really trying to create is a second generation. korea seeing the incredible success of it and then maybe trying to some additional improvements to some things that we think could be made better in this and what might be some of those improvements so a couple of things first we wanted this system to be viewed as a payment system first so we kind of view the currency is supporting a new global free irreversible payment system that's open to everybody rather than the other way around sometimes we we serve you because it is a payment system that supports a currency and now they're actually. tied together tremendously but when we look at

building a new currency we think you need three things you need trust utility and liquidity the trust part i think it is really the math based notion of a currency and that there is no central authority and it's not a company it's not a country nobody can debase it that's true of bitcoin and ripple these are fixed amount currencies through their deflationary currencies that people can trust the amount that exists that's the trust part but on the utility part that's where we think we we could add a lot because utility really comes to having a payment system that everybody can use so for example the payment system needs to be multi-currency so. the structure that we've built to solve the double spend problem which all math based currencies have to solve that point does it with binding ripple does it with something called consensus it's basically a global ledger. everybody shares the ledger and then there's a process of consensus which is what solves that i will spend problem that structure allows us to have any currency in our payments system including decline

dollars euro yeah and roubles anything can be in what is a latency of the consensus system and that's another key aspect we we thought that the confirmation times that you have in a mining system like bitcoins and good point we thought that you know e-commerce and payment systems. need to have a shorter period so in the in the consensus process of rip off the consensus happens in a matter of seconds so more analogous to what you'd see in traditional online payment systems but with the exception that interest in paper systems you still haven't settled so the beauty of going to coin a ripple is that you are irreversible so it's irreversible permanent light cash in a matter of seconds so that multi-currency the speed and then one final thing is just since we don't have mining all of the ripples are already created right that and that's another important distinction between some of the other cryptocurrency is in yours and what do you see the advantages of that being and it's

a great great point so by doing away with mining as the solution to the double spend issue we can create all of the ripples in the global ledger from the beginning when we did that six months ago and now what we can do is basically give away. more than half of that would be giving about half of the ripples that we've created for you about fifty billion and why that's important is that they are getting going to utility you can trust you to allow you to put a date if you can get this new currency and therefore new payment system in the hands of tens of millions of people by giving it away you therefore create more utility because more people the network. and that is good for everybody so we think that again helps with the success of the overall network and then the final part is the liquidity part and when you talk about giving away fifty percent of what happens to the other fifty percent you know the other percent is what we're using some of that for the company some of that for the original founders that will take the risk of being the creators of the currency so we want to search shield that the

open coin from sort of the being the creators of the currency that company really should be the software creator and should be promoting the network to constructive uses but pretty much that other percentage of the currency goes to higher you know the best engineering team of cryptographers and security experts and developers as well as promoting the network to make sure we have gateways globally which you know help put out those sounds like a regular business like you have costs and you have to be able to track money you have to pay your bills and that's really what this is going to do you know and i think that's the way we do look at it we think in an effort like this that we're really going to be changing in the world it is it's such a big endeavor and the consequences are so huge and so positive that it does need to have a well financed traditional you know kind of silicon valley structure we can have options in the company the engineers can be incented that you can get new venture

capital to invest we think that's critical and we've we've now been successful in getting google ventures id china entries and horowitz lightspeed ventures pick one opportunity fund. founders fund we think that's really necessary if we're really going to take this now from you know the the beautiful purist idea behind this to now how do you get the whole world thinking about this integration and that's kind of one of the criticisms over against it is that i guess big cohens is a grassroots movement people are really attached to it and maybe they see that as being too corporatist now or not this sort of corporatists but the interest that. generating in the business sector is really maybe crowding out some of the private enthusiasm for it it's a really interesting thing i think you see this in a lot of technologies where you know you start out with an incredibly devoted absolute true believers would do anything to see the movement succeed and there is absolutely necessary to get the you know the ideas flowing you get the best and brightest but how do you now make that jump to

a global audience and i think that's where the math based currency movement is and reports are right at that juncture right now you could see it in this conference it's kind of a teenager waiting to grow into a man but you know six months ago you probably would have expected to come here and we've been a completely different track and what do you see today you see as many received as you do you know crypto experts it's fascinating so we're right in that moment and now where does it go from here and it's i mean the potential system trouble right now. and that was crystal arson co-founder and c.e.o. of open coin and prime interest producer. i've next i have interviewed with anthony for a politically incorrect then bob and i will talk about robert that there i says the meeting with chairman bernanke.

you know she good lumber jury was able to build the world's most sophisticated when john think she doesn't give a darn about anything. to teach me the creation of why you should care about humans and. this is why you should care only. make it with zero and if you're going to kill some. of. the stories to.

access to. any freedom is our next guest he is a very successful and award winning artist whose work has appeared in some of the most popular publications including rolling stone business week time playboy and the trends journal what drew me to him are his politically incorrect messages behind his art he has a passion for anti-war issues and too big to fail corporations and he has a way of showing us what no one else wants to say so let's talk to the man himself and took a look at some of the things that is. just using the dinosaur as

a metaphor as they ruled the earth for millions of years and just like these bankers who are too big to fail ruling the earth right now. might not be around forever and it's the idea that i mean this i'm just an artist but if you're too big to fail maybe you should be made smaller and just a general idea behind it. doesn't thing have you followed any of the coming legislation and brown better introduced a bill to big to jail and we've talked about a lot on the show have you had a chance to look at. a little bit but i'll believe real reform when i see it there's a lot of smoke and mirrors and a lot of rhetoric but these guys are still running the show are they still ruling the world we're still at the mercy of all of them and we'll see. our next piece it's titled ben it was originally painted for the new yorker and it's the image of benjamin franklin from the hundred dollar bill with his mouth cut out

so i'm assuming yours silencing have a hoot who has silenced ben franklin i mean. it's the idea that. the idea of financial terrorism where. banks can hold us hostage right they did. you know there in the credit crisis and. it's also alluding to the the idea that we do valuation of the dollar and the. destruction of kind of these at large and. and a little to the destruction of freedom of speech and the war on that and free markets as they all kind of. work together and are being worked against. on your blog under this picture you stated that everybody knows that we've lost our way and america's future is bleak unless we reverse the damage that's been done to

us by the interest that promote war and finance the war machine and according to a harvard university report iraq and afghanistan are going to cost us between four and six trillion dollars and there's certainly a lot of business around war and commerce around going to war who do you think are the injuries that are promoting what you've called the war machine. well i think eisenhower said it best in his farewell speech you know the he predicted the vietnam war which was basically a war for profit and there was no clear moral message there there was no real good guy or big guy there's no reason why we're there and it was a war waged by the military industrial complex as he called it for profit and these concerns these multinationals have become and so entrenched and so powerful and they control congress they control. the

media they control basically the whole narrative and the whole structure of our society and to our detriment and we paying this price and where. our priorities are skewed because we're being manipulated by their ideas of where we should allocate our resources do you think that the debt as being incurred from going into these wars is going to enslave us. i do i think i mean you can't just keep kicking the can down the road and we have more pressing concerns than. starting preemptive wars and i think they're counterproductive i think the increase anti-americanism across the world and these are the messages i'm trying to get through in my or i think they're important and. i think that a lot of people are waking up to these ideas which is a good thing. well the next picture we have is the ten met and i really like this piece because the wizard of oz was

a great story behind money and the politics behind it and the wizard of oz its head man represented the industrial workers who were thought to be dehumanized who it represents the words one man. this particular assignment was about our dependence on oil and. how. if we had to cut off we're kind of like a junkie addicted to oil and i contend then we will just rust and die and kind of alluding to the fact that we need to be looking for alternatives and the geopolitics of oil i think is obviously driven a lot of our foreign policy and warmongering across the world that can't be denied and i think it's time for us to look at the bigger picture and look at towards the future and. more interesting and exciting technologies are out there we need to pursue those or we will wind up like this and that is to rust and. well i hope not

thank you so much this is what have you have any free to. tell me now is bob inglis prime interest producer great to be here until we get to talk about the fed to absolutely be prime interest and we did and of course well starting off house oversight committee starting to a grill its have been burning last week representative jim jordan and dare i say i had a meeting with the chairman this is following a letter that they sent to the fed starting to subpoena documents regarding the fed's exit strategy there has been no word from the committee on what was talked about in the meeting that committee and the fed both declined to comment and maybe

there is no exit strategy but i would point out that was one of the guys who was instrumental in getting some of the important documentation that we have from the fed's bailout g. and there was a lot of interesting information in there so i hope he's on the case again and we'll get something interesting for the chairman and his colleagues over at the thread i guess no comment is the comment exactly so also. minutes were released today and we take a look at some of the quotes and went through the fed's. first one thank you to zero hedge for making our lives so easy as always they produced a version right after the minutes were released and here's a quote a number of participants expressed willingness to adjust the purchases downward as early as the june meeting this is just in two months but then the minutes also stated most participants emphasized that it was important to be prepared to adjust the pace of its purchases up or down as needed so we might have the tightening as early as june or we might go up or we might go down basically nothing that is not

a flat line. the next quote says one participant cautioned that the emergence of financial balance is proving difficult for regulators to identify and address and that it would be appropriate to adjust monetary policy to help guard against risk to financial stability yes and my guess is that charles evans may be i don't know or somebody who's closely aligned with and i think what they're getting at there is if we have more debt ceiling drama later in the year the fed is basically threatening that they're going to keep the foot on the gas pedal they're always there to step in and keep the pressure on keep question on that exactly well moving on we promised yesterday to get to some comments bill dudley made an important speech and here is the new york fed president and you want to take this you have the first quote it says our view is that asset purchases work primarily through the asset side of the balance sheet by transferring. from the private

sector to the central bank balance sheet. is that ok duration is basically the price sensitivity of say a bond to interest rate movements so if interest rates start going up the value of the bonds that you're holding are going to go down it's how fast we're going to down that go down that we're talking about here and he's. basically talking about chasing people into higher yielding assets when the fed maintains its near zero zero interest rate policy but that's what they that's exactly all that is the goal that's the stated goal but is that going to stabilize the economy and well that's the theory i mean are we saying that right now is that we're going to see in the future we're going to wait and see my guess is no continuing on this he said the fact that such purchases increase the amount of reserves in the banking system and the size of the monetary base is a byproduct not of the goal of these actually see this is the monetary base expansion that we've seen to what three trillion dollars an hour or whatever that's

a bug not a feature that's not the purpose but coming down the pike we're going to have to deal with all this a lot of people look at price inflation which according to the official statistics is pretty flat right now and so what but when the banks start when the federal reserve has to start raising interest rates as we've been talking about it has to pay these banks more and more money higher percentage rate to keep all these excess reserves which are one point six trillion dollars in the system and that's where we could see the financial instability from the fed's action coming down the pike not necessarily right now but you don't think the federal reserve can just keep interest rates that's not forever infinity mean japan's been two decades ok maybe they can maybe they can't i don't think they can all right now we have one last concrete announcement to make our official favorite ousted congressman is running for mayor i love the use of the word our who is this anthony wiener is running for the mayor of new orleans new york ok i don't see why people would like

the ones probably so he's a famous guy who went on twitter and whatnot and now he's running for mayor well i wish him luck good luck mr bringuier. well it's been a slightly day on prime entrust our beloved fed chairman testified in congress and talked to risk assets up a wall of worry but it's. right in the bondholders when he said he to expect the unexpected but the fog was lifted in san jose when we discussed the future of the ripple current cryptocurrency network with lars that seems that math

based currency is here to stay which we attempted to break down for our sophisticated viewers and artists and things have made it a grim picture of too big to fail but we were never the less of what did by the aesthetic undertone it's too bad we can't say the same for j.p. morgan's living well and it was an enlightening finish we hope as we explore in the first wildly russian oil what is agree emergency and the politics good luck mr weener just keep her short on this time thanks for watching come back tomorrow and make sure you follow us on facebook at facebook dot com prime interest from all of us at prime interest i'm boring and have a good evening. i

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won't go into the. out of sight but still on our minds from the still exceeds the norm let's try to live smarter with smart phones you never know what some people are hiding thanks can't be sure to you prove down to the molecular level learned that what the doctor ordered is often based on secrets under our skin let us shine the light on a kid in a world. we've got the future covered. little bit of both. clinton. and over the speed. limit. which i.

think limits some good. luck and i'm. going to. come out. a little.

reinventing the war on terror a bomber prepares a major security rebranding taking in the hunger strike hit guantanamo bay and the white house's drone wars speech itself and reaction coming up this hour here on l.t. . suspects arrested over the machete murder of a twenty five year old soldier in london which was thought to be inspired by radical islam. also reporting this in smoke police stations and dozens of calls a set of plays as script stockholm for a full flight fanning out across the swedish capital our top stories this hour.