good afternoon and welcome to prime interest i'm harry and boring and washington d.c. let's get to today's headlines. silicon valley is heating up in the wake of the national security agency whistleblower scandal the american civil liberties union is now involved with attempting to rein in the n.s.a.'s alleged snooping but several tech giants are being proactive as well do no evil google is seeking permission from the u.s. to disclose the volume and scope a federal request for customer information which twitter officially why but facebook won't join the fray asserting the disclosures would be vague and the meaning us and facebook c.e.o. mark zuckerberg face heat from shareholders yesterday investors angry at the forty

percent drop in facebook's i.p.o. price a grilled him for thirty minutes and when asked about the company's accuser profitability the chief financial officer threw his hands up to saying i wish i had a crystal ball and the subject of government surveillance did come up and reiterated earlier statements that uncle sam doesn't plug in to face book servers really promises. and finally the new york fed have published a paper on his website that calls for the us to see the underwater mortgage is under the premise of eminent domain they would then be refinanced with government largess repackaged into new security and sold to new investors according to the wall street journal kicker will be author of the paperwork or now a law professor robert pockets once and drew a paycheck from the very. the company that first pitched the idea mortgage

resolution partners of course there was no disclosure of this until the wall street journal made a few phone calls nice job or bad. and here is what's in your prime interest. good news everyone are gold it is see earlier this year the l.a. times wrote the us government's gold and new york is safe and the vaults underneath manhattan and some of the precious metal there is purer than previously thought

that's according to a first ever audits of the us gold on deposit at federal reserve banks and new york and elsewhere first ever audit one wonders who was counting the gold and beans over the last two hundred years anyways the problem is that the u.s. keeps only a small amount of its gold holdings with the federal reserve the bolt is warehoused and bases such as fort knox in tennessee and west point in new york is the military safeguards the bulk of the nation's gold not the new york fed let's take a look now i just how much gold of the us is supposed to own. as more than eight thousand tons are roughly five per cent of all the gold ever mind from the earth as a value of nearly four hundred billion dollars roughly a six point five billion of this resides at the fed. seems as though perpetual

thorn in the fed chairman bernanke you side ron paul was behind this audit idea in two thousand and eleven he sponsored the gold reserve transparency act. we greatly benefited from a fool inventory. with detailed explanations of who goldman who is responsible. yes he wanted an audit of all the countries gold reserves now and just those at the fed he also wanted to know if the new york fed had a loan or encumbered u.s. gold questioning whether the fed might try to make money on the gold it's supposed to be safeguarding it does this by lending it to third parties whether they be other countries clearing houses or even big banks like j.p. morgan and goldman sachs now this gets back to the problem with this so-called audit it only confirms that the gold was physically present and at the purity it's

supposed to be and there's really no confirmation of who owns legal title to what if congressmen and the us are worried about who owns their country's gold you can bet others are to germany recently announced it will be clawing back three hundred tons over the next seven years about one fifth of its holdings with the fed while other countries follow suit. the fact is nearly and ninety eight percent of all gold held by the fed is on behalf of other countries which begs the question of what happens if and when these places start withdrawing their gold in mass and as some have a lives it has been loaned out this could create some pretty sticky legal and political battles maybe someday congress will decide to open up the vaults at fort knox and find out for now the best we can say is there is a little transparency on the us gold holdings.

today we are seeing a lot of gyrations in the global bond stock in commodities markets gold has taken a downturn after a twelve year bull run and the united states the fed is hemorrhaging cash under a massive bond buying program with consequences that have yet to be seen japan is easing similarly but at an even larger scale relative to their g.d.p. a china's economy has slowed down after several years of self reported steady growth but what do we make of all this and what does it mean for the average consumer the earlier i spoke with the well traveled jim rogers and author of street

smarts adventures on the road and the markets i first asked him about black markets and what country today has the biggest black market. there were three as if. there were you know in the other. markets or roger what you know what you're exactly right you know like what you're saying. the big premium of the car is that it tells you something so wrong you don't know what's wrong you know something for all like taking a chance but you're you know you're sick if you have a high fever but you don't know exactly what it is it's a question i don't really know of any black market breakers right now i have to try to go to places that have a premium why i was thinking mostly have cyprus and what they've been through the past several months. i'm sure there's a black market for the human side but i just never been there to watch maybe we should have a program for cyclists. idea well you also talk about agriculture and

you've spoken out a lot about how until it's profitable to grow food that we're not going to see today farmers be replaced is obviously a huge problem so when do you see food prices on a global scale start to increase and what do you think we should do now to start to mitigate the shortage is. it starting to happen now terry and go to the supermarket or go to a restaurant and say that prices are going to go up or when you've got to do something now i mean that farmers around the world are dying and retiring more people in america for instance there and setting public relations and study agriculture we don't have a young people becoming a most young people are not becoming farmers so the prices have to go up now starting now and they have to go up a bit but we're not going to attract capital labor advantage but i reproached her and then we want to have any food at any price the world's fattest serious crisis.

that cater so this is about the next century this is the next decade or so i want to talk to another industry turning to gold and now you did correctly forecast the recent downturn in gold twelve years up it's a pretty good run how long does a typical correction last and a secular trend and how patient might gold gold have to be. for another. i'm a corrections in stocks bonds anything for a lot of these last a few weeks or a few months i orginally gold is going up twelve years at a row and that anomaly that's not the way market for it so i suspect this correction and go well have to last longer just to make up for the great period of the great twelve years i don't know i'm not smart enough to really know our area and you should probably watch prime interest to get a better answer i would suspect it's going to go on for a few weeks more and maybe even a year or two but it's going to set

a set of bottom and all. the bull markets will our geishas of manipulation in the paper gold and silver markets are legendary in financial circles and some of the conspiracy theories to have been completely vindicated in recent years i know you're a long term investor but does this play into your decision making in the gold market . you know i'm very skeptical i've been hearing those stories and gold and silver for at least thirty years. i'm not accurate if you asked me if they were worried about the price of gold they should look at india and india is the largest consumer of gold in the world in politicians and this repeatedly this year has been bringing out measures that limit the purchases of gold and they say they're going to do more and i was out when the largest purchaser of anything a so it's cutting back on demand it has an effect as i think it's fair to say about it what's going on in the world people should should watch prime interest or read

the papers or watch what's happening over that's the largest customer and indian politics they're wrong by the way they're wrong but they're looking for a scapegoat all of this as always look for a scapegoat and we'll see more problems coming out of india and therefore it will affect so yes i mean if you don't have to look as if there is but ignore them one deutsche bank is moving nine billion dollars worth of gold to singapore the nations they already have a reputation for respect of private property secrecy in banks for instance don't have to report encounters names to authorities and seek a form becoming the new switzerland. singapore has already attracted staggering amounts of money from from europe are there because the swiss that had such a monopoly you know that god corroded their god god god they spent say that god not very confident the results for the many many many reasons that money is leaving

switzerland the focus looking for and europe people with looking for a competitor at singapore is turning out to be a great competitor whether it's a new it's a new school it's a lot or no i would suspect it will be but but what you're going to spend twenty years what i moved to say for us i moved to singapore not for that reason has nothing to do with live here but that is something that i noticed there with singapore is it possible about singapore will buckle under pressure from states like the us and eventually turn over customer records as switzerland suing over it if singapore it was that just there's a reason the chart over the records they worked on them over this is not some kind of our inflated lockbox a secret they will turn them over if you can present a good reason. in this when be prime interest if we didn't take some time to talk about the federal reserve there's been a lot of chatter from fed officials feeling out that the markets might possible possibly see it raining and if q.e. the so-called tapering possibly as soon as the end of this year how realistic do

you think this timetable is. whether the federal reserve rein that in or the market forces them to it's going to be in a dr bernanke says it's going to last until two thousand and fifteen mr and i think doesn't know much about markets he doesn't know much about current interest rates or finance so so tight to much it's been the is never ever been right about any of his public pronouncements the market is not going to let this play out you see what's happening in japan i mean the whole market's collapsing because people suddenly realize wait a bit this cannot go on forever in europe england us before. now realize this is totally artificial just tried going to last or whether it is this year or next year it's already in the market sidebar let it happen now open it if you want to call it the central banks around the world got their act together and stop it that is not good for the world or even that they are not surprised that the market will force

them to a bench. after the break we'll continue our interview with jim rogers giving his a take on the far east then involving us and i have a tasty menu a fad a policy of tapering top guys you don't want to miss out on. i would rather as questions keep people busy season instead of speak on their behalf and that's why you can find my fill larry king now right here on our t.v. question more.

thank you. first time as a new alert and scripts scare me a little me on the wrist breaking news tonight we are continuing to follow the breaking news we are. now xander family crying tears of joy and even great things. that had to be everything grander and more of what. is a story sort of memories playing out in real life. and

welcome back to prime interest continuing our conversation with jim rogers we were just discussing chairman bernanke ease decision to skip this year's jackson hole meeting something that's unusual for a sitting said chairman i asked him if he thinks that this signaled bernanke he is on his way out next january and won't seek a third term. try to stay away too if i get it wrong and so yes that over the president i suspect it does the right to try to stay around if your document you want your get out to i mean the results of this were when we're in the reality sinks in the next couple years it going to be terrible the world's going to have problems and i would argue we're not you know we're going to be around in either a quarterly but somebody else will bring that out but it's in a spreadsheet is probably the what is what caused this to anybody even dr greenspan

that joko put so that really messed up the world of the last. so i would try to get out to well let's go back to japan who has embarked on the most aggressive monetary and fiscal stimulus program in their history so called aben on mags and actually the end we can considerably over twenty five percent against the u.s. dollar and the japanese stock market went up but there's been egg credible voluntarily and their bond markets and now the nikkei has given up significant gains you know what's going to happen next over there. being a good question there yet if i were smart enough to know that i'd be rich but that if he says that he's dug me mr babbitt has said that he's going to print unlimited his word unlimited about the money. to make the pan out of shining star of inflation japan has got serious problems they've got that they've got a declining population this i suspect when we look back and sort of here's. where

the end of japan is everybody will lay out it goes to obviate the base a new currency is something that sometimes works in the short term but in the long term it's always going to call that it's always always or even france try to try this pretty strident many people have tried it for decades that has never led to a socialist or a thing or in japan what's going to happen the short term i don't have a clue. i don't own any japanese sold all my job with a jew by all the little bit of this because it's down so much i'm hoping it's a rally but i don't have much confidence in japan at all at the present was it bad it's a wonderful country was anyway well i know it's very difficult to time these types of things and you said you're not the world's best market timer but do you think that japanese will have a crisis before in the us or even your head. but i want to correct you on the

world's worst markets because what that's what i've said and i know that's a very good question that we're japan and i would suspect i suspect that your band will have a crisis before europe those of. europe it's already said it's all of the way crisis so we all know about that the surprise the next the pros will probably out of japan after the election this summer you know the upper out problem out of japan as well as the summer i suspect we were so i would say a serious problem after the election before the you know when those elections everybody everything together for the election after the election i would suspect that would be a problem and certainly after the german election in the fall but because by then things got the cards on the part of many parts of the world. you said you're not the world's best market timer but you also noted the slowdown in the chinese economy and how this has depressed commodity prices but you're also on record as

being bullish on china and their currency the rim and be in particular so when what do you see as the middle ground here i mean how bad could things get in china and what would need to happen to finally see them deep pags from the u.s. dollar. boy you know if i were china i would do it by two thousand and ten or two thousand and eleven or two thousand and twelve just shows you how much i know about when they got to. the chinese have no reason not to make their current convertible now i'm not chinese so obviously gotta do what they want to i would expect that to come any time now they've been making more and more strides towards opening it up as a response they've been opening it since two thousand and five in a recent surge in there certainly made a lot of progress towards opening and vodafone. could come any time a problem in the next two or three years they're going the chinese have slowed down their economy for good reasons they haven't placed and they have a property bubble and they said we're going to do something about it that they are

doing something about it and as you know their customers america europe japan a slowdown so it's not a surprise to me i do is watch prime interest read the newspapers and know that there's a slowdown in china it's. like a china have a recession and then in the nineteenth century as america was rising we had sixteen depression with a we did a pretty good job in the twentieth century so china can certainly have slowed down the idea that china cannot have a recession the poppy crop. and that was my interview with gemma rogers the author of street smarts.

and the daily deal with. hungry they were cut off later sounds good all right get started well john health and wrath the unofficial fed spokesman at the wall street journal was added again yesterday apparently fed officials don't like the word tapering right and that's the plan to wind down to a bond purchases which are currently running at eighty five billion dollars per month and the theory about tapering is there will be a gradual reduction of q.e. bond purchases over time to ease the amount of shock to the markets and even though a set officials use the term tapering themselves i guess they're having second thoughts anyways and here is what helps in wrath wrote all right this is a quote because fed officials are uncertain about the economic outlook and the pros and cons of their own program they might reduce their bond purchases once and then do nothing for a while or they might cut their bond buying once and then later increase it if the economy falters or they might indeed reduce their purchases in

a series of steps if warranted by economic developments but they don't want the markets to think that's a set plan it is as fed officials like to say data dependent dependent and that pretty much gives the fed leeway to do anything and everything and then reverse on a dime maybe every fifteen minutes or so and this directly contradicts the historical pattern of the fed which is that they would raise interest rates over a period of years in the lower and it just seems like bernanke you can do anything he wants now willy nilly and let the markets be confused in the meantime exactly so we've come up with air. little fed menu. and here is here is what it is at first we have a slow cook to entrust reserves on. accessories or writing so you're from the south you like slow cooked meals don't you think that. exactly ok what is what's the point here the fed can raise interest on excess reserves over time to keep all that

money that's parked at the fed one point seven trillion dollars in excess reserves but you know that money is going to go to the big banks right now it's going to the treasury because if that is paying such a little amount of interest rate but like i said that's going to change eventually you don't have your own final there you know i don't know where. i've next we have marinated at mortgage backed securities a hand of a negative kind of vaccine this kind of sounds like something only you could. you know actually it was cooked up by bernanke himself when he decided that he was going to depress mortgage backed securities or the yields of them to make housing more affordable for everybody and support the mortgage market and this was several years ago as part of q.e. one and he just couldn't stop he's been doing it ever since it's been crazy yes it has also flash frozen fed the bills the hybrid for future consumption kind of sounds like something i saw in your desk it's probably still there and it will be next week to clean that up anyway this is the third term deposit facility it's

another way of the fed being able to keep money in the federal reserve as opposed to out in the system creating price inflation maybe hyper inflation it's kind of i call it a fed bill because it has all the characteristics of a treasury bill except the fed is issuing it and paradoxically enough the fed isn't really supposed to be doing this kind of stuff but it says it has that authority and on this side you can have pickled reverse of repose and fused with the money market fund liquidity i think only you could drink something like that. but now he's going to have to drink it himself because. as these money market funds have a lot of cash and bernanke has decided that he wants to be able to tap that cash there's too much money in the system now what is a do for them in a liquidity crisis i don't know but it doesn't sound like it would be very good for the money market fund holders and that includes people like probably you and me it seems like we have interesting futures and are in our future yes now on in germany

there are a bank employee fell asleep on her desk and accidentally transferred to zero two zero two two zero two two two point two two euros per entire bank account the correct amount was only sixty two point four you're out of this up she fell asleep at her desk you know that we've got the will of the desk and what would happen if the fed to this maybe that's how we got this crazy policy of q.e. in the first place very possible with a woman lost her job rightfully so i don't know about that i mean the bank had internal control systems and you know they caught the error before it was made so i don't think it was a situation for them well she got her job back good for her thanks for joining us you can follow us on facebook at facebook dot com slash prime interest in follow bob on twitter at english and you can follow me at perry and r t bob thanks for joining and i do.

and it was a globe trotting day here at prime interests first we tracked to silicon valley to see mark zuckerberg going palms begging for absolution on facebook flacid share price given twitter were nearby petitioning uncle sam for mission to release their snooping details when we sailed out. it's a singapore's account with an estimable example rogers as he led as through the occidental oriental central bank or door level at all bank finally we doubled back to the basement of the fed the fines on hills and rad and ben bernanke are you breaking bread outlining the fed's next p.r. campaign thanks for watching come back tomorrow from everyone out prime interest i'm carrying boring

a great. download . to you so. stream quality and enjoy your favorite. if you're away from your television well it just doesn't go so well with your mobile device so you can watch your tea any time and you were.

talking about the same story doesn't make it news. no pompey says the new tough question. wealthy british study all. the time to. go. around with. their. markets why not. find out what's really happening to the global economy with mike stronger for a no holds barred look at the global financial headlines tune into cars

a report. coming up on our two year after days on rust what's next in turkey as night falls we'll have a report on the violent clashes between police and protesters just ahead of this growing fallout from the revelations of the n.s.a.'s massive surveillance apparatus here in the u.s. p.c.l. us following a lawsuit against obama well the director of the n.s.a. stands by the intelligence gathering a deeper look coming up. in the bradley manning trial continues today the court reviewed the video and files that were leaked a week a week and what was found on manning's computer updates on the case coming up later in the show. it's wednesday june twelfth five.