good afternoon and welcome to prime interest i'm harry and boring and washington d.c. let's get to today's headlines. the silicone valley is heating up in the wake of the national security agency whistleblower scandal the american civil liberties union is now involved in 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 in 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 that future profitability the chief financial officer threw his hands up saying i wish i had a crystal ball and the subject of government surveillance did come up and zuckerberg reiterated earlier statements that uncle sam doesn't plug in to fix what servers really really promises. and finally the new york fed a published a paper on his website that calls for the u.s. to seize 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 or the author of the paperwork or now a law professor robert pockets. once and drew out

a paper tag from the very 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 ice jobs are bad. and here is what's in your plame interest. good news everyone our goal is to 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 pure than previously thought

that's according to a first ever audits of the us gold on deposit at the 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 at just how much gold of the u.s. 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 six point five billion of this resides at the fed it 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. inventory on it. with detailed explanations of the gold and who is responsible for. terms. yes he wanted an audit of all the countries gold reserves not 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 and does this violent get to third parties whether they be other countries clearing houses or even big banks like j.p. morgan and goldman sachs and 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

supposed to be and there's really no confirmation of who owns legal title to what congressman and the us are worried about who owns their country's gold you have 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 other countries follow suit the fact is nearly 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 some have alleged 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 u.s.

gold holdings. 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 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. if your theory has a big black market these days i don't really know any other so i go there all black markets and i'm not sure what that means but you're exactly right you know black markets think this if they bring over the currency it tells you something is wrong you don't know what's wrong. like taking your temperature or you know you're sick. but you know exactly what it is it's a question i don't want you know of any black market right there i have to start trying to go some places that have well i was thinking mostly of cyprus and what they've been through the past several months i'm sure there's a black market for your insight but i just never been there which i wrote program

cycle. india where you also talk about agriculture and you've spoken on a wide about how until it's profitable to grow food that we're not going to see today's farmers be replaced is obviously a huge problem so you when do you see prices on a global scale start to increase and what do you think we should do now to start to mitigate shortages. it's starting to happen now perry and go to the supermarket or go to a restaurant and say the prices are starting to go up for food we 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 any 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 little capital labor and management and tag approach are and then we want to have any food at any price the world set

a serious crisis in the next decade or so this is not 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 a normal correction was in stocks bonds anything for a lot of these last a few weeks or a few months i orginally goat 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 over would have to last longer just to make up with a 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 ask me if they were worried about the price of gold they should look at india and it's 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 in the wrong by the way they're wrong but they're looking for a scapegoat allegations always look for a scapegoat and we'll see more problems coming out of india and therefore it will affect so yes i mean i guess it's because if there is but i 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 is already attracted staggering amounts of money from. europe are there because the swiss that had such a monopoly you know that god corroded their god god a ship that got the expensive god not very confident the results of the right for that 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 what you're going to spend twenty years what i moved to sign up for us i moved to singapore not for that reason i had nothing to do with live here but that is something that i noticed there with singapore is it possible that singapore will buckle under pressure from states like the us and eventually turn over customer records as switzerland doing oh. if singapore it was a chip there's a reason the chart over the records they worked on them over this is not some kind of iron clad lockbox a secret they will turn them over if you could 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 of 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 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 or interest rates or finance so so tight to much it's been the is never ever been right about any of this public or doubts the market is not going to let this play out you see what's happening in japan i mean the whole markets collapsing because people suddenly realized wait a bit this cannot go on forever in europe in one us before. now realize this is totally artificial described going away as a whether it in this year or next year it's already in the market sidebar let it happen now hopefully 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 smart or 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 bob being us and i have a tasty menu at bad policy tapering top but you don't want to miss out on. technology innovation and developments from around. the average.

nobody chooses to be holds no one chooses to me and now sorrow. is that all sort of show to. get in the six pm get out six p. six a if. they were a. school they. had to name me the class people in the. days the word against the word. it's tough to think about all of them comes in. and to know that many may not have only been the last to choose should never be me but there are also do different closures that never should have.

and welcome back to prime interest continuing our conversation with jim rogers we were just discussing chairman bernanke e.'s 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 this their way to if i get it wrong and see is that over the past

i suspect it does so i'd like to try to stay around if your doctor were what you get out to i mean the results of this were when we were in the reality sinks in the next couple of years it got 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 a little bit earlier but it's in a spreadsheet is probably the what is this call is this to anybody even dr greenspan that djoko puts that really messed up the world of the last i would try to get out do well let's go back to japan who has embarked on the most aggressive our monetary and fiscal stimulus program in their history so called abba nomics and initially 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 and 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. good question better yet if

i was smart enough to know that i'd be rich but not if he says that he's not a dog to me mr babbitt has said that he's going to print unlimited that's his word unlimited amounts of money so he could make the pan out of shining star of inflation japan's got serious problems they've got it got a declining population yes i suspect when we look back in twenty years. you know the end of japan and everybody will lay out it goes to obviate the base and 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 early. france try to gently try to pretty strident many people have tried it for decades that has never led to also most. 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 japanese to buy all the little bit of

this because it went down so much i'm hoping it's going to rally but i don't have much confidence in japan at all at the present you know 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. i'm sorry and 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 just like that japan would 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 a problem out of japan as alleged in 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 there would be a problem and certainly after the german election in the fall but because by been you know things in the cards on the part of many parts of the world do you mean 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 b. 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 pag from the u.s. dollar. boy you know if i were china i would do it by two thousand jenner 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 car it's 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 and recent thing they've certainly made a lot of progress or opening for them. to 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 played and they have a property bubble and they said we're going to do something about it seems that they are doing something about it and as you know their customers america europe japan slowdown so it's not a surprise to me i do is watch prime interest read the newspapers and you know that there's a slowdown in china it's. like a china have a recession and then in the nineteenth century is america was rising we had sixteen depression for the 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 and started well done 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 in 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 helston rath wrote or 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 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 i said 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. our own little fed menu. in here is here is what it is at first we have a slow code to entrust reserves on. accessories right 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. after next we have marinated at mortgage backed securities a hint of a negative kind of vaccine this kind of sounds like something only you could. no 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 on 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 it pickle the reverse of repose and fused with the money market fund liquidity i think only you could during something like that. but

bernanke is going to have to drink it himself because. 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 two to two to two to two point two two euros per retiree in the 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 us and what would happen if the fed to maybe that's how we got this crazy policy of q.e. in the first place very possible the 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 prime interest in follow bob on twitter at english and you can follow me at perry and r t bob thanks for joining you. and it was a globe trotting day here at prime interests first we trek to silicon valley to see mark zuckerberg going palms begging for absolution on facebook at last and share price given twitter were nearby petitioning uncle sam for permission to release

their snooping details when we say i. although over to singapore it's had would be an estimable example rodgers as he led as through the occidental oriental central bank or door to lock all bank finally we doubled back to the basement of the fed to find john hilson rad and ben bernanke he breaking bread outlining the fed's next a p.r. campaign but thanks for watching come back tomorrow from everyone at prime interest i'm harry and boring have a great. wealthy british sign on the sun. is no time to write for.

market why not. come to. find out what's really happening to the global economy with mike's concert for a no holds barred look at the global financial headlines tune in to conjure reports . here's mitt romney trying to figure out the name of that thing that we americans call. a dollar. i'm sorry i missed the guy who cares an awful lot but you sir are a fool you know what that is my son doesn't want to give us a defeat terrorism be a liberal and a christian. could still be civil to the. we're going to look we're going to

distract us from what you and i should care about because there are profit driven industry that sells us sensationalistic garbage he calls it breaking news i'm at a martin and we're going to break this that the. live. live. live nation is free liquid intake free live in store charges free. range mental free live free listeria type friesland free blogs plug in video for your media projects a free media r t dot com.