they come in contact with the rest of the barbs the entire phenomenon of this crack babies was based on one little study of only thirty four babies which turned out to be wrong so we're going to move from this crack baby phenomenon that never appeared there was never a scorches said member they were going to grow up to be a burden on society because they were never going to be ok these crack babies well the biggest crock of all today is ben bernanke global assured destruction or how ben bernanke now holds the entire world hostage the one headline we have been waiting for for over four years has just hit bank of korea kim says world may face rate risk if u.s. exits from q e not when if and there you have it if the fed's exits the world and most certainly japan gets it that's for the sake of the children who will have to inherit about one hundred trillion dollars in debt but don't worry debt is an asset

some analysts will promise bernanke he can never exit t v. so you have ben bernanke the biggest crack baby of off who has. the world is being held hostage by quantitative easing in such quantities that the dollar is being devalued in a way that forces other countries to devalue or give up their export markets and since all these countries. export markets to america to america's crack babies to the people in america who spend ninety percent of their income on buying junk from asia on borrowed money that's financed by crack baby number one ben bernanke so now the rest of world's like them to the fact that there is no escape there's no unwinding there's no turning back they're going down a suicide hole there's a focus shima federal reserve policy of just letting all thing a rip now ok that crack babies the original crack baby was based on a study of only thirty four babies and that turned out not to be right. so here ben

bernanke he is basing his debt crack theory on thirty four guys on wall street he gives money to them keypress money gives it to them he buys eighty five billion dollars in assets from from lloyd blankfein and jamie diamond and a few bankers on wall street and to it looks like it. ok it looks like it's going to be a successful policy but in fact it's a faulty policy i see where you're going with this it's a very small sample so just like the inconclusive. report tosh having to do with the nonexistent crack baby problem going back to the eighty's where they use a very small sample to build a case of a huge problem you're saying that the very few people who actually benefit from quantitative easing the wall street bankers the hedge funds etc who are the first to get that money and then speculate and then profit from it and that money never makes it into general circulation and never goes into the real economy wages are down employment is down unemployment is up food stamps are up so they're i guess

the economy is suffering horribly because it off very few people are benefiting so see n.b.c. for example or bloomberg they show those thirty or forty people benefiting from the crack baby schemes of ben bernanke and then they build this picture of this this montage of rope power tars that is giving a false picture ours that is all very interesting in terms of the propaganda content we see yes well just like the crack baby versus the debt crack baby so here you have biased confirmation so they find a study and this is a study the new york fed maybe did where they found that while giving bankers money helps their bonuses and they buy more shares share buybacks so they only see what they want to see they don't see. that the rest of the economy is being devastated by their consequences of their extreme money printing extreme asset purchases and

it's costing trillions of dollars just like with the debt crack well with the crack babies we spent we've spent trillions of dollars since the war on drugs started yet whoa i mean this is all adding up to the confirmation that the policies going back to the reagan era of trickle down this is trickle down economics trickle down economics people say oh you know you had a benefit from economic growth you know the one nine hundred eighty s. had a stock go but you also had a debt boom so the debt if you take let's say the stock market was up by five trillion the debt went up by twenty trillion now sense the eighty's we're talking now almost thirty years the equity of america has grown by let's call it five to six trillion but the debt has gone to now sixty trillion in america if you include unfunded liabilities plus the national debt plus corporate debt plus individual debt mortgage debt that's sixty trillion in debt for a fifteen trillion dollars congress of the debt is the only thing that's growing really exponentially are the rest the economy is stagnating and just like the crack baby story they just show you

a few black people in the ghetto with crack babies and they assume that this is why we need to go into iraq and kill a million civilians yes no wonder that they started at the same time this magical thinking suddenly started not too long after the ending of the gold standard so we could start believing in magical thinking whether it was this war on drugs or now this war on deflation and you know is there i had to point out that the fed is buying eighty five billion dollars in assets per month and there is a possibility is that the fed would end up owning over two thirds of all treasuries with the maturity over six years by the end of two thousand and fourteen right we don't i met a fellow from news australia not too long ago i believe it was a koala bears for a living or he sold kangaroo meat or ostrich mate or something like that but he told me the story about the magic putting you know the story. the magic putting where you eat for the putting bowl and never goes down in volume of bowl putting in the bowl that's the magic putting this is what bernanke he presides over some magic

putting a fed policy no matter how much how many trillions and trillions and trillions of worthless fiat money he creates there's always plenty more in that magic putting bowl on from wall street to borrow at zero percent interest rates to do whatever they want to do bid up the price of real estate on them and new york right now they have this new residential tower the highest residential tower in the western hemisphere where the average flats going for something like twenty five million dollars these are all people that are in the magic pudding business. well yeah you could call that magic but in debt crack and this never ending magic pudding of money printing of course realize completely on this next headline we will never run out of oil this is the cover of the atlantic magazine and james howard kunstler your guest coming up he says spread the good news that america will soon be quote one energy independent to the world's leading oil exporter greater than saudi

arabia is now and the go to nation for cheap manufacturing that's according to what the atlantic and many of the media across america now is there that remember as george bush said we're addicted to oil so this is the oil crack babies. well you know it's not it really it reaffirms certain stereotypes to call ben bernanke in debt crack baby i think we need to call him a debt cracker. is more of a debt cracker. to put this into context he lives in a ghetto called the federal reserve bank he's a cracker cracker number one and he slings debt in the ghetto that is wall street where everyone like jamie diamond he lines up each op's up as thousand dollar bills into one long line and he just starts it. as jamie diamond on his way to work every morning snorting thousand dollar bills gifted him from crackhead cracker number one ben bernanke so what we have the war on drugs we have the war on terror and part of

the war on terror of course is the war for oil as well james howard kunstler is pointing out about this this magical thinking about oil that america is now. believes that they are this saudi arabia the new saudi arabia and that they're going to be able to displace saudi arabia as the king of oil when in fact most of that that their talk about the supplies comes from shale oil which is let prac crack. crack. yes so to paris what the new oil landscape is in america compared to what it used to be he says horizontal drilling often more than ten thousand feet down plus many laterals an additional ten thousand feet horizontally and then fracturing tight rock for chalo oil is not only a way larger capital expense lots of steel but the flow rates per well eighty two barrels a day average are laughable compared to the house eon days a conventional oil little better than stripper wells so during that conventional

oil days there would be five thousand barrels of oil per day from a one thousand foot drill down so this is ten thousand feet down ten thousand feet lateral and you just get a stripper well known heart of. rock fracking sounds like something from plato's retreat back to the one nine hundred seventy s. and of course that's one american off the gold standard think about it. well it's interesting that of course for your crack addiction many women would turn to prostitution here we have these stripper wells who are turning to returning to stripping. well i mean that's another big trend is that you know i've often used as one of my informal economic indicators as to see what nationality of strippers are hanging out at the airport leading out of the nice airport to the code as you're in you have the brazilians strippers and prostitutes and i've seen a lot of american prostitutes young girls hanging out nice at the airport to give an indication of how bad american economy is well actually i saw timothy geitner

down in the city not too far from here he was. trying to get some flesh on his back well if the wax is all right thank you very much thanks so much for being on the kaiser report thank you and stay tuned for the second half a lot more. you know how sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you thought you knew you don't know i'm tom harpur welcome to the big show. choose your language. we can with. some of.

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welcome back to the kaiser report imax guys are time now to turn to james howard kunstler of consular dot com and author of the long emergency james welcome to the kaiser report nice to be here max all right your recent post. dot com is titled no mo co mo tell us about this. well at the time i was writing it at the suggestion that the federal reserve was going to stop its permanent open market operations of buying eighty five billion dollars worth of bonds and bills and securities and trash and other paper and i don't think any of us believe that the federal reserve can stop buying that stuff because if they do the american economy such as it is will probably collapse you say that the fed is undermining the meaning and value of money itself which is the most dangerous game of all elaborate welby interventions in manipulations have impeded the main functions of

markets in particular the function of price discovery which is the way that markets establish the value of everything you know whether it's a stock or a bond or any kind of investment and. we now have markets that that don't have that function which is their main function and so it you know it makes you wonder whether we even have real markets at all what about this new way of doing business in america and around the world where the idea of free market capitalism has been shunned the idea of crisis government has been abandoned free market capitalism is dead and instead you have central planning so who really won the cold war james howard kunstler of america as resorting to central planning command and control politburo style economics. i think the answer to that is you know sort of

lies in another area which is that we have an economy we have a global economy in particular that with designed to run twenty dollar a barrel oil and really doesn't function at ninety dollars a barrel or that's west texas intermediate or one hundred dollars a barrel for brant crude and so do it to compensate for all the problems that that causes. the central banks and the governments are trying to offset those problems with their military operations and. you know are absent on kind of a semi famous for saying that i'm allergic to conspiracy theories and i really am but i do think the central banks have a deep interest in driving down the price of precious metals because that would be a crisis you know the the the true value of gold and silver would be a price discovery mechanism for determining the true value or value of our fiachra

honesty's and so i think they're pretty desperate to keep the price of gold and silver down so that our world currencies will appear to be sound when in fact they're not sent as kind of foolish to think that they can be caught manipulating alive or they can become enabling the energy markets the credit default swap markets every index in the world pretty much at this point except they haven't been officially caught manipulating the price of gold and silver even other are a number of open investigations into this i want to change gears for a little bit and just talk about apple computer for a second as it relates to another of your specialties which is looking at the environment because there's a company that doesn't pay any taxes in ireland on hunt on tens of billions of euros and dollars in income overtly no tax something like one one hundredth of a percent they withhold sixty billion tax will revenue in america they claim to be a good corporate. citizen but they're there they're engaged in

a massive tax hikes meanwhile in oklahoma the federal government to said that they didn't have any money to build shelters is it to form a stretch to say that apple is in fact partially responsible for this disaster in oklahoma by virtue of them not paying taxes that could have been is to save lives howard james howard kunstler well if that's the. somewhat tortured idea but you know i i do think that there's a general belief in the american public that the tax system is ridiculously over a complicated and unfair and you know we we've provided an awful lot of incentive for corporations to do business elsewhere in order to enjoy tax advantages in other countries and i do have to say though that you know people who live in the tornado alley area. may have to rethink where

they're living i mean if they continue to be hammered year after year by tornadoes . and i'm not even sure that the tornadoes are worse necessarily because of global warming or climate change or anything like that we you know we do have a kind of richer media environment that circulates news about it but nevertheless those are places that get hammered incessantly by tornadoes and maybe just nature's way of say oh you would have to live here differently where you have to live somewhere else. yeah well we're saying it's all over the world the climate migration so as you have rising floodwaters around the world you've got now several hundred thousand people officially and several more million on officially that are on the move because they're running away from rising sea levels or a climate disasters whether it's in oklahoma as you're suggesting or in other places the world let's talk about this idea of cheap oil and peak oil and this goes

to your theme of the long emergency that you write about extensively the the debt crack that we're talking about here that's pushed by the central bank ben bernanke . it's abundant but it needs cheap oil to keep the consumption ponzi scheme going in your posts in title the new abnormal however you mock the notion that america will never run out of oil explained well there's a tremendous propaganda campaign going on right now and you know the major media these authorities who are the interlocutor were. americans elite have been in lists to spread the propaganda that we had no problem at all with oil you know the atlantic monthly this month ran a cover story with a yellow happy face on it saying we will never run out of oil i mean they just said it went like. the new york times the wall street journal forbes magazine

you know they're all sort of joining in this propaganda campaign and. the news that they're spreading is just not true that shale oil and shale guests are going to make it possible for americans to drive to wal-mart or ever in fact they're tremendously capital intensive. you know they represent very low flow rates of oil and very high cost or oil and that's exactly the opposite of what our economy was built. we each was cheap oil that floated at high rates you know the average well well in texas in the middle of the twentieth century produced thousands of barrels of oil a debt and you didn't you know once you once you got the pump jack ran and you didn't have to redrill it for years and years and years and years and years and it just produced like

a cash register shale oil is completely different you know it costs a huge amount said not only drill much deeper than they can venture a wells and then to drill an equal amount laterally horizontally on the ground but the flow rates are laughable you know there they average something like eighty two barrels a day which is almost what we call stripper wells male stripper wells are those wells in texas and oklahoma for example where you know that they reach the end of their useful life but they keep on going because they'll produce you know eighty two barrels a day you know that we will which is enough you know if you don't have to really put anything into it except a little electricity to run the punk check that's a so worth well keeping them going but it doesn't represent a real flow and you know more over the shale oil wells decline with shocking rapid it. by

a rate of about sixty percent in there after their first year of operation and then a whole lot in the second here and you know it's very very quickly they're really depleted and we have to redrill and that represents more capital investment and more expense and more steel and this is bumping up against the fact that we're now lyonnais climate really of growing real capital scarcity and i don't think that the american public and maybe even the american financial system has reckoned with. a capital scarcity. problem that's growing you know the the peak oil time in western civilization was also the peak credit time and the peak growth time and now that we're unable to stimulate any more of the kind of industrial growth that we were used to to having you know between three

and five percent a year we can no longer generate enough additional wealth to pay off to service the debt that already exists when a loan servicing that future debt or it or the additional debt that we're creating so none of that really represents a very salutary climate for the massive investments that we are imagining we're going to make in shale oil you know finally if you look at the map of where shale oil comes from it's a surprisingly trying the region of the united states it's only four counties in north dakota and it involves maybe ten counties in all in texas and eagle ford region and you know all the rest of the oil in the united states is in depletion so the idea that we're going to become energy independent or there we're going to become a greater export of this saudi arabia is ridiculous but you know it's not because

it's a conspiracy it's because the public and even our leaders want to believe that with that we don't have a problem with our energy. sector because of the sunk costs and stranded assets of our way of life what had james howard kunstler what is the red queen center home. well the red creek queen syndrome is named for the character and through the looking glass one of the alice in wonderland books and alice came upon the red queen and the rig queen was running when when alice came upon her and alice said why are you running in the red queen said i have to run this fast as i can to stay where i am and that's exactly the situation with the bokken north dakota shale oil program which is that the that the wells deplete so rapidly that we have to drill and drill drill

incessantly in order to just keep their production levels where they are so you know i don't believe the propaganda that we are going to get to millions of barrels a day out of the box and or there we're going to be him exporting it to other countries you know i think will happen in reality is we may end up around to where we are now about a million barrels a day total from aachen and he go forward and probably within the next three four years we're going to start down that general arc of depletion and then it'll all be over by about between two thousand and seventeen two thousand and twenty right james howard kunstler at a time thanks so much for being on the kaiser report a pleasure. and that's going to do it for this edition of the kaiser report with mate max kaiser and stacy herbert i'd like to thank our guests james howard kunstler of comstock dot com if you'd like to send us an e-mail please do so at kaiser reported r t t v dot are you. saying.

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coming up on r t jeremy hammond hacker an activist pled guilty to one violation of computer fraud and abuse act today the plea bargain could send him to jail for a year will give you the latest on his case and its connection to the stratfor hacks and wiki leaks the obama administration's relationship with the press is still on shaky ground as more details come out about phone tracking of journalists there's talk about changes could be made to protect the process we'll have an end up look at the continuing concerns just ahead. during the memorial day weekend there were protests against months santo around the globe thousands voiced their demands for genetically modified food to be labeled among other ways to ensure food safety updates from the protests from new york and l.a. coming your way.