welcome to the kaiser report imax guys are there but for the grace of bad english goes the japanese banking system so said the aso in charge of japan's finance ministry he said that and i paraphrase japan's banks emerge from the global credit crime crisis largely on skase because managers would not speak english well enough to understand the complex bogus to rid of contracts that these cancers from wall street had successfully pushed on other suckers from around the world yes what don't look for the japanese banks to have avoided jamie diamond's interest rate

swaps only to buy a boatload of japanese government bonds oh stacie. that's the yes so here we're going to introduce this first headline poor english saved japan's banks from crisis this is from. the finance minister and he says many people fell prey to the dubious products or so called subprime loans japanese banks were not so much attracted to these products compared with european banks mr also told a seminar in tokyo managers of japanese banks hardly understood english that's why they didn't buy he said. oh i can understand where he's coming from on that you know and i said a lot of french t.v. i would call jamie diamond lloyd blankfein curse words and names and all kinds of scatological references to their being and the french of course didn't speak english so they would just say yes i agree with you that's fantastic well but the other thing of course is that he could argue this but the fact is also that the

english speaking bankers did not understand a single thing they were buying or the pension funds or the small time investors had no idea what all the gobbling goup even though the words themselves were in english it was all just complicated mishmash of the words jammed together to hide basic simple fraud well you know let's break this down a little bit more because in japan they were not required to buy the collateralized debt obligations and all the flora and fauna of the writ of contracts that came out of the imagination and the. many of wall street financial engineers because all japanise had to do these past ten years is to allow their interest rates to trade near zero the cheapest interest rates in the world to become what's called a funding currency all these collateralized debt obligations sold by goldman or j.p. morgan or deutsche bank are financed with the interest rate cheap money of japan. so japan is the well from which all the cheap money comes to float the global

quadrillion dollar derivatives market and has been that way for ten years and this is why that bubbles about to burst so they're not required to buy these derivatives that ass so is talking about that's not their role their role is to finance the creation of these derivatives and so the fact that he's saying well we didn't get the trouble because it understand english he's just trying to make a joke that all our banks are somehow sound they're not sound they're sitting on all kinds of bad stuff because they've been the funding currency in the kamikazee currency called the japanese yen kamikazee currency japanese yen well max now how. the market language is the price signal so i want to talk about the price signal that nobody no longer understands because it's not it's no longer translatable people aren't able to understand what is being said by the price signal c.m.e. polls wash trade proposal first of all max what is

a wash trade for washrooms are a way to manipulate prices manipulate markets so let's say google stock is that six hundred dollars a share or seven hundred dollars a share you throw in order simultaneously to buy and sell washing those orders at a price that you want the stock to go so let's say the stock of google is six hundred dollars and you want the price to go to six hundred five you throw enough simultaneously buy and sell orders at six o five and so the price gets to six o five so if you have options that are going to pay off at six o five and then you throw a lot of wash trades and to get the price at six o five then you make money without taking any risk or if you make a mistake then the state bails you out it's called communism in america well that's what people will argue that a free market is the price is always right the price signal is correct because for every buyer there's a seller for every seller there's a buyer but here you're saying that the guy buying is also selling he's trying to manipulate the price he's trying to create a price now the c.m.e.

group introduced some voluntary reporting of your washers so basically they're making it a rule but. the c. of c. has squashed this for now because they say watch trades are banned by us law because they can feed false information into the market and be used to manipulate prices intentionally taking both sides a victory can minimize the risk for the trading firm while potentially creating a false impression of higher volume in the market and bart chilton of the c. f.t.c. is saying that this is sort of what high frequency traders are doing they're sending out loads of spoof trades and wash trades in order to create and benefit from the rest of the market they're scooping out well through the rest of the market right well instead of a price resulting from buyers and sellers in a process called price discovery price is determined first or calculated first or mentioned first and then you fill in the trades to get to that price but decide if

there's no buyers of sellers get back to the japan being a funding currency as relates to the federal reserve bank and jamie diamond so jamie diamond at j.p. morgan put a bunch of wash trades using zero percent money to get prices the word they pre-determined they're meant to go through manipulation and then the buyer and seller or the buyer of all the debt that they used to get to that trade is ultimately the federal reserve which is backed up by the bank of japan and zero percent interest rate so that's where all the risk is the buyers are the governments are sitting on a hundreds of billions and trillions of dollars of bad debt that they keep having to float and roll by quantitative easing that's that's the buyer of all the wash trades ultimately that have been used to manipulate prices and of course the edward snowden scandal brings in the other dimension where allegedly firms like booz allen and others and deloitte to keep b.m.g. are involved in the data selling to make this even less risky so in effect quantitative easing is

a sort of watch trade because here the the government of the united states is issuing debt and then they're buying their own debt in order to create what they want it to be the price they want to send a price signal. about the strength of the u.s. economy about the strength of the u.s. dollar about the strength of the reserve currency of the world but they say look it's deflation because interest rates are so low but they're engaging in washed by selling debt and buying debt simultaneously to create that in a low interest rate that they say is deflationary meanwhile they're inflating the biggest bond bubble in the history of the world which is as we've been saying warning about is in the process of bursting interest rates are ticking up and this will be a fantastic glorious collapse of this central planners of the federal reserve bank and other central bankers well though global real genuine world reserve currency the world reserve money has always been gold and that's the other side of the strait of the wash trade the one that actually can't be washed traded away so we're going to talk about gold here in this headline because this is another price signal

that nobody no longer understands it's suddenly the price signals are speaking another language that nobody understands but the ones manipulating so we're going to turn to a little clip from c. and b. c. in the interview rick harrison of points. rick harrison as a part time job as a point pole dancer over there sanity for marion bartoli. well and portfolios well he's a pawn star so he runs a massive pawn chain and he has four thousand customers a day just alone in his last vegas shop so here is what he was asked by c. and b. c. what he thought of the falling price of gold is business different where you are because of what's going on. here i also retail a lot of gold and silver and i'm having a real difficult time right now getting physical battle. it's the crazy world of gold and silver sometimes you know the paper market it's going down but you can actually find the actual physical ardor but that's another aspect of the wash trade

of gold price suppression if you want interest rates low and you want the price of the dollar to be simultaneously again wash trading over. different asset classes price of gold to be lower and as this gentleman points out from pawn stars that the demand for gold has never been higher but the prices dropping that's a clear indication of price manipulation same thing with the bond market the supply of bonds has never been greater and the prices have never been higher in three hundred years in the u.k. or two hundred thirty eight years in america that's again that's a complete repudiation of supply and demand the price discovery and economics as we know it we've seen reports over the past few weeks of unprecedented demand for tens of thousands of people lining up outside gold shops in china and dubai in india in vietnam in bangkok and yet the price that keeps on being talked about on c n b c is the price signal being chased by like cat chasing one of those laser pointers if you go to youtube and google it you'll see lots of cats chasing laser points and

they're being steered in the circle by a prop false price signal they're chasing a price signal that is lying i call the price propaganda people react to a price emotionally like a cat to a laser dot on the on the wall and if you can manufacture a price you can get the masses of people to pant like dogs toward that price if you know and if you see the dow jones at fifteen thousand that's a manufactured price you see all the the you tube and the tweeters you know clapping like seals on the beach like oh that means something even though it's a prize prop again it's meaningless well then finally here in terms of understanding language and price propaganda they combined in this final headline this is a follow up on the anglo-irish tapes hash tag anglo tapes i'll probably punch lenahan drome he told the world we are solvent now he can protect his hundred billion euro guarantee by writing us

a three billion euro check get on with it so this is david drome of course the former c.e.o. of anglo irish talking about his upcoming me. eating with brian lenihan and he said he was going to punch him until you've already offered us one hundred billion euro price guarantee just give us some money or else the markets are going to go crazy and investors are going to get scared and the population is going to be scared give it to us yeah well look there's a guy who's threatening violence against the irish people and who bailed him out and i've said all along that bankers to deter them they should maybe face capital punishment and the people said no capital punishment is too much you can't engage in capital punishment and yet we're talking about a banker who threatened violence against the bank and the state unless they gave him billions of dollars so the irish people you're never going to win this fight unless you're willing to fight this fight but you know keep picking them shamrocks whatever you do get us. all right stacey newman thanks so much for being on the

kaiser report thank you stay tuned for the second half whole lot more. wealthy british. time to. market. 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 in to conjure reports on. world. technology innovation all the developments around russia. the future

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welcome back to the kaiser report i'm max kaiser time now to go to investing legend and fashion plate jim rogers jim welcome back to the kaiser report i'm delighted to be here about all right jim rogers gold has had its worst quarter in thirty years is the bull market over. well max said that's a very good question and if it isn't how you define it you may remember one nine hundred eighty seven stock down forty to eighty percent and many people said the market was ok was it over in retrospect no it was not at all all right and my point is that i my view the market in gold is not over it may go down another twenty or thirty percent but by the end of this decade it will be much higher price of the fundamentals that are supporting the gold market are still in place that you did call for a pullback a company last year you said you were looking for a pullback to satisfy i guess healthy bull market has

a sharp pullbacks every now and then have we had that pullback now in this bull market are you satisfied are you buying or are you looking for maybe a little bit more of a pullback i bought a tiny little this just in chase but i would max number world's worst market time the world worth a trader but i would suspect that a thirty percent thirty five percent is not enough to make your final bottom i suspect we're in the process of making a complicated bottom which may take a few days weeks months maybe even to another year or two but then ultimately go will make it back to the bottom even if it's down fifty percent from its. and then it will be off to the right ok. fap ok i want to stay on gold for a second the price of gold is now lower than the cost of production for many gold miners barack is writing down billions on one mine so isn't this going to

affect the supply of gold and. the dynamics of supply and demand going to kick in here at some point. well some point but max i don't think many other commodities below the cost of production for your to it's great because people are very reluctant to close my clothes out of oil whatever happens you know it's very expensive to close something got it and start it up so it can study below the cost of production for longer that we like i want to ask you really to put on your journalist hat for a second because you're an singapore you're in asia and you can give us direct man on the street reporting whether this is true or not are people lining up in asia in bangkok and other places to buy gold physical gold at the shops is this true as an april and even into may there was some of that but that seems to be sure that people lined up but it's not nearly as much as it was the first time go now jim you've taught finance and economics at columbia university how is it that their

demand for physical gold is so large and yet the price goes down how is that possible professor jim rogers yes the demand is large but if you're talking about people shop buying go but more people selling the yeah that's gold as well a lot of people selling that that go and that's why the price is going down goat is rarely if ever that the physical market go prices any more than we reap prices on the market are all set in the futures market are you in the camp that believes that there are more paper claims on gold then there is gold in the physical existence and what i mean is it seems that there is an agenda here those that are supporting the paper market love to see the price of gold go down and they're willing to even manufacture naked claims against gold so-called naked short selling to make that

happen are you are you in the camp of those to believe this is what's going on or what are your thoughts there jim rogers. what i said about the futures markets and we need a much larger than all that we. in the world always says but when you say naked short selling i'm not max that's not the way my everybody who's in the futures market is. no such thing is that's how futures are when you sell gold or all know we don't cotton you're selling make it you may have it but most people don't that's the way those markets were not like where you can so make it shorter or you have to be long you have to borrow it you don't have to borrow in the futures market you don't have to borrow anything just call up your broker and start selling it on the internet right people can simply call up their prime broker they can establish a line of credit and they can start selling short gold all day long no matter what the actual fundamentals are regarding that commodity and i want to switch gears and

talk about bonds for a second. the bond market many people and yourself included i believe have been looking for a top in bonds the bond market seems to be having reached that point now in a thirty year bull market in bonds have we seen the top in this bull market in bonds it's been going on really almost your entire career jim rogers we've had the bull market in bonds is there now a reversal bull market started in bonds in one thousand nine hundred eighty one when it made a slow in september of one nine hundred eighty one going up that was i max not all the top and bonds were five times that are wrong but fortunately for me the last two times i've got it right i have no idea. where not i am short junk bonds not government bonds and you can ask me in three years if i got it right or not i don't know if this is a soft mac. but i do know we're getting closer and closer all right let me ask you about a comment made by richard fisher he's the president of the dallas fed he called

bond traders quote feral dogs likening their reaction recently. a selling bonds to the news of the fed tapering that is to say the fed stopping their quantitative easing he made a comparison to george soros as attack on the pound. so here you have a group of market players that used to be called bond vigilantes and applauded for being bond vigilantes now the richard fisher of the present the dallas fed is calling them feral hawgs is that a bit unfair jim i know richard and don't know it but i do know him and he's a smart guy i do know that whenever there's some kind of. comment better or anybody else people react the moment you know that as well as i thought it was even at the end. if he would get a report about hot go and sell or buy pot based on the report this is the way

market work markets work richard knows is this divine and he has never been right about anything came out and said x. y. and z. the markets react what is expected everybody just say ok if you do what mr bernanke says let's ignore it come on that's not the way markets work. now imagine ben bernanke ing and you're a critic of ben bernanke and the whole method i'll logy of the federal reserve bank which mimics more of a polar bear all style central planning than free market here in the u.k. we have now mark carney he's taken over the bank of england from urban tang he comes in from the bank of canada he's being lauded here in the u.k. as a savior as a rock star of economics as almost a jesus like figure who will save everyone in the u.k. and europe your thoughts jim rogers. mags go back and look at every time somebody has been appointed sure the head of the central bank in the past when you third year they're always brought in is rock star when thank you was

a rock star greenspan was a brock neither one of these guys had a clue what was going on i got it wrong over and over and over again but every time they break them in the press because of the government p.r. these guys are geniuses and they're going to study but unfortunately unfortunate for all of us is rock stars and turned out to be men with clay and they haven't known what they're doing and they're going to lead us all into a series they are leading us into a serious serious problem well so they're kind of yes then he will print money just like everybody else that's not a that's not going to save us right now seems up to me the philosophy of the central bankers including mark carney is to look at asset prices and bond prices as their pricing is all that they work off of and but they don't seem to take into consideration other areas of the economy that are suffering so they have a very myopic view. of the economy and what they're supposed to do it's

a matter of that economy how could the central bankers expand their purview to be more effective or to we just get rid of them completely. world listen to america for us america said three central banks are history the first to disappear if you know the world can get along without central east central if we don't have central banks next we have a problem obviously good that he's central banks the worse than having no central bank at all what's in the sense of making so many states many mistakes at least in the us we're going to get rid of these are going to go bankrupt because there are so many of them then she the buggers just. got us into such terrible trouble let's get rid of the central bank as it's happened in the fast look at the japanese central bank that guy is hailed as a hero at the moment you know he is driven down the value of the currencies it's japanese in twenty twenty five percent now that's great for stock brokers and

people who won't stop but don't hundred twenty five million japanese max and every one of those people who are now stuck think that the price the cost of living is going up everything they bought just more and more inflation yeah he's helping a few people but he's not helping a hundred twenty five million japanese any more than mr brown and mr carney is helping the rest all right you mentioned japan let's stay in asia here and talk about china it was recently reported that banks and china are relying on short term funding which may evaporate at any moment looks like a bit of a lehman moment when suddenly short term funding a bath and of course that was part of the two thousand and eight crash what's going on in china jim i know you're an expert on china but in the room looks like they're other than a credit crunch or is that over overstated what's going on. mag's i'm not an expert on anything i would like to be an expert on but china is certainly going to have problems you may remember fifteen years ago there was

a big crisis right most of the asian banks doing that borrowing long and then short and the whole thing collapsed i'm not sure that's what's going on in china right mind the chinese government and central bank trying to cool things off for the past three four years now all you gotta do is watch r t t v and you would know that most people should know that and finally it's becoming to their fruit is starting to cool things off it looks like it and people are coming then say wait a minute this hurt her well this supposed for goodness sake when you cool things out somebody has to suffer somebody and i hope china this time stays the course and does get rid of a lot of the excess developed in china too much inflation they have a property property bubble they need to clean things up less so thank you all right jim rogers we've got about a minute left i wanted to ask you again something more of a philosophical question putting your professor hat on for a second and for and staying on china. china the economy is really mading now

some environmental constraints and now according to people like milton friedman or other thinkers an economics company should never consider the environment their only obligation is to make a profit that's their only obligation but that kind of thinking in china and around the world is now meeting and immovable force call environmental catastrophe so are you in a school where companies in china and around the world should just forget the environment or they should try to mitigate their environmental damage or is it time for another economic model perhaps jim rogers. max if your goal is to make a profit that's fine but you can't make a profit if you want your customers your customers look at what did they see are the pollution caused by you going to buy from somebody else you have to balance everything the president is exactly right the goal of catalysis to make money part

of making money is keeping your customers happy and china now hundreds of billions of dollars cleaning up cleaning up the environment polluted both in the air and in the water somebody is going to make a fortune next cleaning up giant this spending a lot of money solving that yes but does a cost of course up an xterm allies off the company's balance sheet it ends up on the government's balance sheet and then the people end up paying this through higher taxes so there's a bit of a mismatch with incentives and rewards but anyway jim rogers rat of time thanks so much for being on the cars a report and if you max us do it again sometime all right. and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i'd like to thank our guests the legendary jim rogers if you'd like to get in touch tweet us at kaiser report and the next time ask out of saying by oh.

i would rather ask questions to people in positions of power instead of speaking on their behalf and that's why you can find my show larry king now right here on our t.v. question more. the interview.

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coming up on r t edward snowden's travel plans are still on hold the former n.s.a. contractor remains in russia he's now seeking amnesty from more than a dozen countries and it looks like venezuela love a.p. snowden's number one defender a deeper look ahead. it's now day fourteen of the bradley manning trial is the defense's turn to call on witnesses in a bid to help the whistleblower case we'll get the latest from fort meade coming up . the streets of egypt are still packed with protesters demanding the removal of president mohamed morsy and now the nation's army has offered morsi and ultimatum to resolve the crisis more on the unrest in egypt and today show.