good afternoon and welcome to prime interest i'm perry i'm boring and washington d.c. let's get to today's headline. there's been a lot of economic data that was released today and a bit disappointing on the housing and unemployment front first the private payrolls company reported only one hundred thirty five thousand jobs were added in may it was expected one hundred seventy one thousand when we learned that mortgage applications were down the week over the week by eleven point five percent capping a four week downward trend in a related story a federal housing administration stress test which was previously undisclosed it's been released and projected up to one hundred fifteen billion dollars in the lawsuit over it thirty five years for the mortgage insurer and not to be left out

of the separately administered fannie and freddie mortgage giants have also been making headlines with their big coin like price volatility share prices surged in made by over six hundred percent only to cross over the last weekend by sixty five percent now bloomberg had noted that their prices height last week they were a very good i've laughed wrong at starbucks talking about a government run you know and finally the insider trading scandal involving stevie cohen i think the capital looks like it's going to take a billion dollar hole in the financial industry at least calculated by the financial industry the hedge fund giant is already facing three point five billion dollars and investor redemption and they could lead to wipe out would mean one billion dollars less brokers in business partners and commissions financing fees and other payouts. well it's like wall street's circling the wagons here at c.c.

and here is what's in your prime interest. today iraqi oil production is thriving but who's benefiting now the u.s. went to war with iraq despite protests from the international community under the pretense of eliminating weapons of mass destruction but many speculated the u.s. went to war over oil and two thousand and eight this is what representative dennis consented told the congress we found the weapons of mass destruction in

a reactor joyal and as long as your companies control our government americans will continue to pay and pay with our lives our fortunes our sacred honor. interestingly enough we're starting to see it china import increasing quantity of the boil from iraq earlier i spoke with stephen leeb who has been warning us for years that china has planning on dominating the u.s. by forming a monopoly on natural resources as he explains in his book red alert now we first address the question why did the u.s. go to war with iraq i think that we saw a rack and saddam hussein as enemies there may have been some you know peripheral intelligence that suggest that they could have had weapons of mass destruction but look there's a lot of other countries that you know fit their profile and we didn't go into those countries but we did go into very oriel richard wreck so it seems to me very logical to suppose. that oil certainly was on our minds when we did enter iraq and

not on our minds is that you know what a quagmire would it would result in well some might be surprised but china is now purchasing around one point five million barrels a day that's more than half of the iraqi production you know how is it that china is the number one and beneficiary of iraqi oil well you know you could ask the same thing about afghanistan i mean when we were fighting a war in afghanistan i mean i guess we still are a little bit but when we were going full fledged china was mining copper in afghanistan and they had their own militia military militia there to protect them and you know we were probably helping them and they were mining copper now in iraq i'm sure china has probably have military militia to help protect whatever their properties are and they're securing as much oil as they can and you know perry and what people don't recognize is what china's not doing and they're not x.

trying to exploit their spoke tension enormous shale reserves and this is very very significant because we think that we have found the answer to energy independence by exploiting shale but what we don't realise it's at it takes so much energy to get energy from shale that in the end we're really not that net positive that much net positive it's much more profitable for the society is a hold to export oil from oil rich middle eastern countries like iraq what i'm saying is china is acting in a very very rational way rather than exploiting shale which would be extremely expensive and risky because of the water reserves there are exporting oil from iraq which is much cheaper and makes a lot more sense i mean you know we should take a lesson but basically if china has something that that's in their strategic interest nothing will stop them from achieving it. well according to government

data that was compiled by zero heads a quarter of our oil imports come from canada and mexico as you can see on this graph iraq is only our fifth largest source of imported crude oil however oil imports have decreased significantly over the past few decades and as we have further tap into our own reserves as you have just stated is this because iraq is still very unstable even ten years after the war last month was one of the deadliest that we've seen in a while they're extraordinarily unstable and really the only way that you could guarantee a flow of imports from iraq is again if you're willing to station a paramilitary group there you know a militia part of the army i mean i don't know this for a fact i haven't been on the ground in iraq but i would bet anybody a lot of money that. china has a lot of military there to protect their oil fields and you know that gives them some protection and you're absolutely right to point out what's going on in iraq i

mean last month was hideous i mean it was just horrendous it's like a country looks like they're on the verge of civil war if not already there so you really do need government involvement in order to assure yourself a stream of oil out of iraq and that means military involvement and the chinese are much more willing to do that sort of thing than we are so this doesn't mean that we're just completely losing access to iraqi oil resources i think well let me put it this way completely nowhere as you pointed out earlier i think the fifth largest but we're certainly at a significant major disadvantage fees of the china and again i can't emphasize more that would make more sense for me for us from a societal point of view to import oil from a place like iraq than it is to develop oil or produce oil from shale i mean that's in economic terms now admittedly there are jews. political considerations etc but

i'm pure economic grounds iraqi oil is much cheaper than it is to produce oil from shale that's very expensive because it takes a lot of or a lot of resources to produce that oil from shale and. taking more and more iraqi oil resources how is that going to reflect the oil market price. well i mean i think you're already seeing it i mean you know oriel despite the fact that the developed world has not grown in has shown almost no growth over the past five or six years europe has been i think six consecutive quarters in a down trend or in still about one hundred dollars a barrel if you look at oil based on twelve month average is it's not very much below its all time highs yes it did spike up to one hundred forty hundred fifty dollars depending on where the use crude brant. in two thousand and eight but if you average that those prices out on a twelve month basis today is india u.s.

is only about five percent below its peak based on twelve months and brant which has been come the world's benchmark is probably two or three or four percent below it's maybe a little bit more maybe seven or eight percent below its peak so we're very close to peak oil prices despite the fact there's been no growth in the developed world with the lion's share of the world's economy well let's get back to the oil rigs near basra where publicly traded oil companies like exxon mobil and b.p. as private entities they're legally bound and responsible to their shareholders to maximize profits so this leaves chinese state owned companies such as the sea and they're more likely to sear secure contracts that are less profitable as they are not they're not only backed by their home government but they're also more willing to take on projects with a sliver of profit margin but now we're seeing that china is gaining increasing control of not only oil rights in iraq but of resources you all over the world such

as in africa could it be that the state model is more profitable in the long run. you know i think history will tell but you know it's certainly true that basically our companies and this was certainly true with our solar companies are not you know fighting chinese companies on equal terms i mean china went from no where in the solar industry to dominating the solar industry and the reason was that they were able as you just pointed out to under bid everybody i mean cylinder everybody thinks it was a case of fraud well there may have been fraud there but basically behind it was the fact that they just could not compete and u.s. solar companies have been the chinese solar companies too but i mean solar stuff it's remarkable probably in the history of capitalism you've never seen an industry grow at a faster rate than solar maybe fifty sixty percent a year over the past seven years yet if you look at the typical solar stock it's

probably down eighty ninety percent from its high that kind of divergence is on earth up and does occur in the context of state capitalism in china that's the reason for it now is that overall in the long term a better model i you know i think it's way too soon to tell but basically i think to some extent we're our own worst enemies i mean when you have congress fighting back and forth about this and that and no one really focusing on long term strategic goals and you have our energy policy being you know in my opinion just totally flawed i mean fracking is basically a ticket to nowhere in my opinion as are the tar sands because it's just too resource. and it just won't take us to the next level. and china gets it i mean there's no reason with all the brainpower in this country that we can come to the same kind of conclusions. and that was steven lee of the author of red

alert how china's growing prosperity and the american way of life and up next we're going to bring in an. a logical economist to discuss the potential conflict between economic growth and environmental protection then prime interest producer bob inglis are going to see what was found when the auditor or was audited yes there are more scandals at the i.r.s. they tailor. told him a language of oh but i will only react to situations i have read the reports for.

the players to know i will leave them to the state department to comment on your latter part of the month. to carry out a car is on the job here no going to. take you no more weasel words. when you say to direct question be prepared for a change when you should be ready for a. printout of speech and a little down the freedom to watch. seals are born right on the ice fields of the white sea. throughout the twentieth century the poles were hunted for their snow white fur. russia imposed a ban on this trade and hunters have since been replaced by tourists goodwill to stay safe forever. saving seals on our t.v. .

and following up with the questions posed in our previous energy interview regarding oil and natural resources we now have on deck an ecological economist who is advocating for

a steady state economy that would be an economy that is not constantly striving for growth but poses a fairer distribution of wealth and efficient allocation of resources to ensure a sustainable and environment brian check of the president of the center for the advancement of the steady state economy and author of new book a supply shock economic growth in the crossroads and the steady state solution brian thanks so much for joining us thank you great to have you here so i have the center earing a lot of attention to the conflict between. growth and environmental protection you know why is it that we have to look beyond economic growth to have a strong and stable economy well first of all the economic growth is not sustainable you know when you think about growth and growth paths you can have gross you can add growth or recession and you can have a steady stream and when you think about it which one of those is really sustainable in the long run it's a steady state i think it's crucial to remind ourselves and viewers about

what economic growth really is when we talk about the conflict between economic growth and environmental protection economic growth is simply increasing production and consumption of goods and services in the aggregate so it's not necessarily just growing solar panel sector or some other sectors declining that would be a sectoral readjustment it's more and more stuff in the aggregate and so it requires a growing population and or per capita consumption and it's indicated by growing g.d.p. production as such a critical indicator and i want to just bring attention to the fact that you know over the past two hundred years we've had you know multiple people who have said human activity would eventually overwhelm the world's resources and you know it was thomas mouth this in seventeen ninety eight that he i have a quote from him he warned that the power of the population is so superior to the

power and the earth to produce a subsistence for man that premature death must in some shape or other visit the human race and then again and one nine hundred seventy two it was the club of rome think tank mit economist warned us that if present growth trends and world population and. pollution and food production and resource depletion continue unchanged the limits to growth on this planet will be reached sometime within the next one hundred years and now these. these claims have been heavily criticized by the time new technologies propelled grow so how does this fit in and this and resource depletion to fit into the contacts out of your view is in what you're promoting at the center well first of all there have been some mail through xeon scenarios that have played out regionally around the world and in human history i talk a little bit about that in supply shock but i think the key thing here is that you

know mouth is focused on our human's ability to feed more and more people but there's a lot more at stake than just you know how many people can be fed how happy are these people. how healthy is their environment to support. good economic activity and good happy societies but i think the really key thing is that the mouth rusian scenario can eventually occur at a global scale and that's why the title of this book is supply shock with a capital s. and capital in another capital s. because we're talking about macro economically oil water timber fisheries resources across the board are in real scarce scenarios at this point and and not only that the increasing size of the condom is beginning to cause more

problems than it solves the. technological advancement that playing any role and resource fifteen ability well certainly plays a role in it and you're right you're right before it has at times in the past steve dog you know bought some more time but at some point you don't have more raw materials you that's the that's the another capital essence in supply you can expect as shortages occur prices rise. producers to bring more to the market that's little ass little supply and will supply more in the market but the big supply of what's out to minutely available for producers to produce with that doesn't change there's only so much water on the planet and only so many fossil fuels and so on yeah i'm talking about water which you outline and your bug very clear about it's exploited it's not properly valued it's very undervalued but not

only that the demand for water is increasing the supply is that so how is population growth and issue here and a threat to national resources and how do you fit just stabilising. population growth well first of all i want to point out yes population growth it's but it's the economy i mean water is the lifeblood of the economy right so it's once again its population times per capita consumption when you look at a las vegas and see how extravagantly the water is being used per person with you know a casino fountains and pools and every house and things like that apart yeah water parks in the desert so it's it's the economy more so i would see than just the population even though population is fundamental to the size of the economy but if water doesn't make it clear what else could i mean you look at north

america you've got the old for from south dakota down to texas or by a nose that's receding the central valley western mexico but look around the planet an especially areas where there's a lot of strife got you tend to have water shortages you know look at the mideast from the persian knock refers in iran all over to all the way over to the nile nile delta aqua for and then even further west into the new be an awkward for in libya these are play. this is where water shortages are causing real strength. in northern india and pakistan. china is running into major problems with a number of resource shortages but including water i want to get some of that government data set to say if we have gross national product and gross domestic product would you talk about at length now how serious of a measurement g.n.p. in g.d.p. as a measure of growth in your opinion well i differ from some ecological economists

would like to just dismiss g.d.p. and g.n.p. completely and not counted or not even look at it to me i think g.d.p. is an excellent indicator of the size of the economy but that helps us decide when the economy used to at some point you don't want further girls it's like and every director who is in all the species i don't. have to cut you off but we are out of time thank you so much for joining us this is brian tak he is the author of supply shock.

and it's the day we do a bob english do a bit of foreshadowing for me today what kind of days it going to be on prime interest wasteful day ok well day and so we're going to get to what happens when the tax auditor that was the i.r.s. was recently audited and he was caught with his pants down yesterday revealed that the tax collecting agency spent forty nine million dollars of your tax dollars on employee conferences and just the last two years. told me we have some kind of q. on this i guess this is so that the virus can produce more work and that their employees can have more value they can collect more taxes do we have any evidence of this we have no evidence of that but if we do have. some data from from the art it's fifty thousand dollars was spent on a video production and we have a clip from their star wars perry parody training video that took sixty two hours

of staff time to create. another member of the landing party is hailing us on screen the. captain of the complex tax evasion scheme. it was difficult to follow but in the end we got it. on the street amazingly. good work. this was an actual i have created you know you know this is going to collect more money for the taxpayers or help the irish people maybe just boost morale while they just prove that they are now using social media to help with their auditing process exactly that's kind of been a controversial idea recently of be careful what you tweet exactly and they also spent seventeen thousand dollars on their keynote speaker who also doubled as an artist he painted six portraits portraits one of which they completely washed but we were able to find one it was abraham lincoln we have

a clip of it the ira stated that the speaker was uniquely qualified because of his ability to learn the rules break the boundaries and free the thought process to find creative solutions to challenge is what they obviously did that's pretty interesting i think i think we can try to institute an income tax but it was overruled by the supreme court at the time but do we know who this or it is who is uniquely qualified is or you couldn't find who it was i just found that part of the contract ok. and they also spent sixty four thousand dollars on gifts and trinkets . they just never ends does it. got to love what's going on that way government. conference a thanks for weighing in bob and if you would like to follow us on facebook you can find is that facebook dot com slash prime interest and on twitter we're at english p i and i am perry and r t bob thanks for joining.

and have been a day of ways don prime interest but not of your time i assure you the united states has come to close to one trillion dollars into the iraq conflagration and thousands of troops in casualties have suffered but he couldn't lock down the oil contracts and stephen leeb warned us that while the us is waging wars china is moving in under our feet and securing the rights to the richest resources bryan tackett explained that we're wasting our energy on trying to grow the economy rather than preserve it and the auditor of the auditor found forty nine million dollars thrown away at lavish government contractors hope you guys had fun and that it was in a waste of your time and everyone at

a time prime interest i'm harry and boring have a great night. eleven

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