welcome to the kaiser report i'm max keiser you know decades after world war two a handful of japanese soldiers held out on limbs across the pacific refusing to surrender or not even knowing to surrender today several lost decades after japanese financial equity and property markets collapsed millions of salary men also refused to surrender a hope that one day their monthly allowance might actually increase alas the

average japanese husband's monthly allowance has slumped to the lowest level since one thousand nine hundred two yes despite never ending money printing by the bank of japan seven men and workers are still eagerly awaiting the dividends promised by . fight on yes max keiser the salary man is the soldier who refuses to surrender in this financial war i think they were inspired by here you know donna who didn't surrender for twenty nine years after the end of world war two he was out in the philippines until one thousand nine hundred four when he finally surrendered only when his superiors his superior officers told him to surrender now in this financial war the generals of the financial war are telling the soldiers decades now after the financial war began in japan but now five years in the west is keep on going keep on going spend spend spend spend and japanese men's allowance at one thousand nine hundred two low

as they await a bit nomics so salary man's spending money typically set by wives managing family budgets was thirty eight thousand four hundred fifty seven yen which is three hundred eighty six dollars down three percent from last year and less than half the one nine hundred ninety peak according to shin say bank now they're saying of course that this is remarkable because there's been so much money printing and even nomics and the markets are booming and there should be a wealth effect so the wives should be giving them more money but they haven't done it brings up a couple of interesting yeah that story about the man and japanese man who didn't surrender and everyone knows the story of what they they don't know is that he had discovered this cave full of saki and actually he was having a good old time you know the japanese housewives of course control the purse strings in japan the salary men the saki imbibing salary men famously the sushi bars after work getting drowning their sorrows. they are really

on allowance set by the japanese housewife the famous mrs watson abi who was also instrumental in determining key cross rates never during the collapse of iceland it was the japanese housewife that was. playing the swiss franc over the swiss over the icelandic krona exactly cetera so the japanese housewife is a key player in the gold global economics. a levels i don't think many people understand so this is really actually quite quite an interesting development well they have actually the salary man has despite not having seen an increase in their allowance they have increased their spending on beer by twenty one percent so there are a lot more money towards drinking but japanese salary and don't have to be pessimistic their pocket money should gradually increase to reflect japan's recovery says hiroshima's aki senior economist at mitsubishi morgan stanley securities in tokyo who he says he is the chief economist of mitsubishi morgan stanley and his own

allowance has not been increased but he says there's a recovery but what there isn't a recovery where we're all sacrificing ourselves for kamikaze pilots in this financial war to these debts the zombie banks that refuse to go away and we're sacrificing ourselves to this ideal of these debts that cannot die well let me review again how this all happened because as you point out there's a lot of money being printed however it's not trickling down to the salary manager pan or the worker here in the u.k. or any worker across the world and this is why you see in cairo and in brazil people are rising up because that money is not trickling down because of financial engineering which has eliminated the role of the bond vigilantes the person who is supposed to be an active player in these markets punishing the government for overspending and over money printing has been neutralized by these quantitative easing programs by the central banks who are not coordinating on a global level so without any checks and balances you have the continuation of

asset prices going up in value the top one percent of one percent or the top basis point as i call them and the stagnation and social unrest of everyone else now you talk about the lack of a trickle down effect and. is what you're seeing in japan because here they're telling people that they should the average salary man that they should feel better because the stock prices are rising the nikkei is rising and house prices are rising at least around the world and the japanese yen has dramatically declined in the past few months but we just fell or were unchanged in the eleven of twelve months through may even as japanese companies stockpiled cash rose to a record exceeding the size of italy's economy bank of japan data for the first quarter showed last month so that's over two trillion dollars sitting on japanese corporations balance sheets that's not trickling down and it's not going to trickle down because the corporations are in a better position to know how much debts are still outstanding let's put this in

another context money printing to the west to bank of england bank of japan and then reserve bank of america is to those economies what oil is to opec and the opec nations because the oil is essentially controlled by the state they don't need people to vote they don't need people to work the people live in a stipend in those countries in america in japan and in the u.k. increasingly people are living on a stipend set by the state who doesn't need them because they can print all the money they want to make themselves as rich as they want just like having an oil well if you pump the oil and you become a sheik and you come to london during the summer to escape the heat in the mideast if you're of j.p. morgan banker or nature's b.c. banker you print trillions of dollars and you live like a sheik at the expense of a thriving economy that is diversified in some way that is affording people a decent middle class lifestyle and so that's why the the people the uprisings in

cairo have a party of interest with brazil and america and the u.k. at some point. now of course the way these generals in the financial war continue to fight this war is they take turns devaluing their currency because of course there is a global floating exchange rate that's nothing to do value again so they devalue against each other for a quarter of two it seems to be coordinated and the pound sterling for example on friday dropped by one point two percent which is a huge move in the four x. markets but then they take the next turn so i think the salary man also knows that they might as well just spend a little bit more on beer because it's only going to last the short term well whether it's beer in japan or prozac in america or whatever they do here in the u.k. i don't know sniff glue it's all about yes i do know the effect of the financial terrorists well on the other side here the salaryman there the older guys

in japan you also have the younger guys and this is the next headline here he kiko mori why are so many japanese men refusing to leave their rooms so as we know there is that huge swathe of youngsters up to actually the age of fifteen now that just refuse to leave their bedrooms and japan and their parents take care of them because of the social stigma of throwing them out in the road but the article connects it to the growth of the he could mori kiko mori to the phenomenon of the popping one nine hundred eighty s. bubble and the onset of japan's recession in the one nine hundred ninety s. it was at this point that the conveyor belt of good school grades leading to good university places leading to jobs for life broke down a generation of japanese were faced with the insecurity of short term part time work and this is when these youngsters who were now and no longer in the in a in a society of ever declining rates because remember rates have been flat in japan for twenty thirty years as call down under pointed out this call this is basically

just as bad as non declining rates so here you have these generation who is now considered. parasites by the rest of society there but there are no jobs there's no way to leverage yourself up because rates aren't going down from where. well this is why robotics are so strong in japan is that parents are creating robotic children and robotic pets because their own children are in their room they're fused to come out in their dogs and cats are killing themselves so they're just creating robots that's why it's so huge in japan so people have robotic children the factory you can vent about as you mentioned after world war two japan recovered by creating this enormous factory floor of the world with something that china does now but he japan and they had two robot aside their minds as a result of robot assize their souls and then when the factory broke he just had a conveyor belt of teenagers fall off into this country about face down into a kind of pool of terri acting and they haven't been able to escape their origami

and waiting for a tsunami but you know in terms of the global bond market the bubble ending the boom the bull market that's been going on for thirty years in the west this is over and as karl denninger pointed out last week the only thing we have to hope for the best case scenario is that rates stay at zero percent for the next thirty years as they happen japan and this is what you're going to see is salaryman hoping to god that they get a little few extra pennies for another pint of beer or your youngsters with no hope of a future but services in this debt these student debts they're going to be living in your bedroom and with their parents for decades right well as you say on the show these low interest rate policy is they're sold to the people as a way to get out of deflation but they cause deflation because deflation the low interest rates are causing the problems the thing that must be done as soon as possible to rectify these economic woes is to start raising interest rates now of course the parasites who are speculating of the real estate and other quote unquote

assets would get hurt but they've already accumulated trillions and trillions of gains on their. so they might lose you know a few bucks here and there and of course to them that's a sign of the apocalypse just a sign a they themselves will start killing themselves if they lost a penny going to jamie dimon to say jamie just lost a nickel you put out a gun to blow his head off because to him that's the same thing you know as one of these other people losing their solo losing their lives and losing their their vive now another nation where you see a lot of young men living with their families for many decades is italy and this is in the news as well in regarding this financial war where you must sacrifice somebody must sacrifice for the greater good and in italy it appears to be small private businesses broke italy would love to but can't pay its bills this year so in italy expenditures rose by one point three percent revenue however remained flat and so the deficit rose to seven point three percent of g.d.p.

up from six point six percent last year but they have a magical way to sort out their master treaty requirements to keep the deficit under three percent basically they have one hundred twenty billion euros that the government owes private contractors and they haven't paid and they can't pay because they just don't have the money nor does the e.u. want them to have to sell bonds in order to pay off these private debts and flavio is on a note economic development service says i would love to pay the past two debts of the public administration by two thousand and thirteen but i don't know if it can be done it's not ill will but there is a technical problem. whether going to default essentially and there just stress again a default up a something other than a default and default is where everyone set in because there's no way that this ponzi scheme of global economic fraud can continue yeah and just like the first story you know the generals of this financial war this economic war who are the heads of state the heads of finances and treasury they need to tell the people that

basically the game's over we all need to surrender because the debts can't be paid and they won't be repaid so we need to reset start over all right stay forever thanks much. you guys are part thank you max stay tuned for the second half a whole lot more. i'm never used to the tundra the freedom i am my dear. came. in second grade i ran away from the boarding school with two of my friends will be around to the tundra. to the tundra is just a mosquito that's practically i don't know how people can live there to get in there no t.v.'s in the tent how can i send my child to boarding school i won't be

able to sleep at night after that. they enter a life without knowledge of how to do basic things they don't get that in school. please keep.

welcome back to the kaiser report on i'm max kaiser time now to turn to anyway i'm sort of charteris treasury and welcome back to the kaiser report. and let's talk about precious metals you called for silver to get to one hundred fifty dollars by december of twenty fifteen is this still the target what's going on it is actually didn't quite expect it to come down this fall it's come back on the back of gold so then goes come down on the back of some five hundred ton liquidation from gold e.t.f. smily by north american investors. that's most of that gold seems to have been

bought by asian mind the china and thailand the far east. is there a transfer of gold from the west to the east absolutely and hundreds and hundreds of tonnes this was the speculation now how many times is china officially they own a thousand or so tires what's the scuttlebutt how much do they really own well that's the central bank ownership of any gold or the most this boy in recent has been by private individuals which doesn't get counted in that but i mean the if you would the costs of escalated in the mining industry if you would have fun and you go deposit today and you're borrowing money and whatever and build a mine you're probably talking fifteen hundred dollars an ounce so what's going on moment is ollie's american in the e.t.f. individuals are selling gold three hundred dollars below its replacement value and the chinese and most the asians are bowing go three hundred dollars below the replacement value will ensue going to wouldn't let me ask some of the replacement value in other words you're saying that the miners their cost per ounce of gold is

between thirteen hundred fifteen hundred dollars an ounce to build a new model building in the currently the current mines and i just read something recently the cost of pulling gold out of the ground is now the cost of something around eleven twelve thirteen dollars an ounce you have to some mines it's six seven hundred. it depends on the mine because the infrastructure as an alcoholic going up here because of how sharply is cost in mining can be my bottom point is this the central banks are saying there's no inflation in the economy they're pursuing deflation policies to fight deflation however the cost of mining has gone up one hundred percent at least over the past five or six years so where's the deflation there shouldn't the cost therefore of mining be deflating at the central banks are truthful we don't think from here on it will be because it's a typical sort of boom bust mentalities during the expansion phase shareholders of these mining companies were again the management growth at all costs and they were all expanded to the same time so they were all. in people paying quite huge wage is

paying out for equipment so the a lot of the caustics relation was due to that what's happening now is a lot of the c.e.o.'s of the big mining companies will bring forward food basically wasting shareholders' money and they've now been replaced by new people when the new first thing the new guy does is cancel the marginal capek's projects so so that that investment cycle in mining is now going into reverse which is actually going to be very favorable for the mining companies free cash flow because it's going to potentially to show. in the sort of two thousand and sixteen two thousand some two numbers so gold is typically trades inversed with the dollar dollar as out trading up it's got a lot of strength all the technical people that i'm looking at are saying dollar on a technical basis is very strong on a fundamental basis it's strong so my correct to sume that for this

gold is silver rally to find some footing into key and to break out and start moving to the upside it'll be concurrent with a dollar topping out is that is that it is not necessarily absolutely because if you look between two thousand and the truth. and eleven gold were not every single year and they were not matter what currency it was profit so there let's talk tech technical analysis for a second because charteris your work is primarily technical we want to lot of ludlow to do technical analysis and technical analysis would be say unlike the fundamental announcers are looking at the management you're looking at the macro economic trends technical analysis looks at the price charts pretty exclusively to look at repetitions and chart and this so i thought cycles there so in a case of sober ok here you have a chart you know i don't not a chartist i'm not a technical expert but i think anyone looking at that chart would say this chart looks pretty awful so what what how do you get to that hundred fifty dollars price

target target by the end of twenty fifteen what technical patterns every violate is usually. some terminology that people bring in whether it's at and shoulders reversed head shoulders or candlestick break i don't think we're technically give us a tech speak here or the mining reason we think this is a apart from the fundamental the gold and silver practically been below the replacement cost on the turn of the main reason we don't. is there's almost perfect ten ten and a half year cycle in so that bottoms around the years and into three so you had a major lead in seventy two major low eighty two. a major low in ninety three who was ten and a half years then the another major low in two thousand and two and we think that the two thousand and twelve two thousand and thirteen is the bottom end of the ten year cycle and

a lot of the set off we've seen in the last three six months if you look really a wave type stuff where you are see way refuse a complete solution so in wave. a lot of the stuff that markets heavily oversold of the moment or the technical indicates to fit in with. in that what you will see it is it with the sea wave traditionally just wipes out all the stuff and then what you're left with is a complete clean sheet of paper and then you're off again on the news boom all right so he referred to elliot waivers to get a technical tool technical analysis to all and for some watching will say well that does sound really like you can buy into this type of forecasting however since so many people do it can become a self-fulfilling prophecy because there's a huge number of hedge funds out there that actually just look at technical analysis and fall in and start buying according to that that it happens but i want to change gears for a second because last time you were here you called pretty much the top of the bond market and that of course was

a quite prescient bonds topped out and now where are we in the bond market well again if you look at so i could. get market has a thirty thirty six year so i for the go. so you had thirty years a upswing in the treasure is and we're now potentially going to have thirty years of downswing. it's going higher now at least you know for a. period of the signal call. you know all the tracker rates in them for mortgages in the u.k. they'll be starting to be adjusted upwards every quarter now going forward. interest rate sensitive yes but the bond market when you talk about bone market we're really talking about five year bonds ten year bones' thirty bonus fifty year bones doesn't necessarily mean overnight interest rates are going to move there be the last to move what will happen is the bone well the further down that will all move up and then at some stage at end of next year or whenever the fed will get

around to maybe raising interest rates and tapering off its q.e. program but but the the the first. phase of this will be in the loan with a to maturity it won't necessarily mean that cash overnight deposits don't rise if you have to track a rate when you get out of it. basically you're going to look over whatever your movie just basically comes off you're going to be look at ohio financing charges when it's rolled over now because some of fixed a five year some of fixed a ten year deep deep there's so many different types of mortgages and then various ok let's move on to. now you in your latest newsletter just a follow up on this bond thing and it's titled bonds the eighty trillion dollar gorilla in the room so you know it's funny because the gold or silver markets have sold off and there's a lot of talk about that but if you compare the bond market saw

a particular last friday the dollar volume paper losses in these bond selloff eclipses whatever anyone lost in gold and silver by a factor probably at least of thirty or more direct i mean in size to compare in a macro to a while in terms of the i mean you look at an average pension fund they might have fifty sixty seventy percent in bones they might have one percent and go so even if gold with a hall of. it in terms of what effects a traditional pension fund it may be knocks the overall fund by no point three point four or something if the bond market. it decimates the value of the entire farm so the movement in the bones is far more important. it's a most bigger market so any percentage losses they're going to lose if he's if he's eighty trillion dollars bond market which we think is the size of the market if you back up to the historic lows because we're at three hundred year lows at the moment effectively someone some allusions two and a half trillion dollars that's that's the magnitude of the losses that you look at

and bones you know look at and that. as i said is compare no matter who was nothing like that sort of money been lost in the right people said there was a bull market in gold that was over and we were less than one percent of global investing last answer in gold so that's not a bull market but markets have a lot higher ownership and bond market of course and especially. in last few years during the rates coming down the fathom massive rush into bonds that's the bubble not people of what might have forty fifty sixty percent of their money and bought absolutely no move like we've seen in the last week you're talking about a real pain and this is going to start again with a lot more to come on the night you know only four there was a bond so are pretty vicious if you're looking for something of that magnitude or bigger i don't know how it's going to be ninety four was just like a six week six week blowout i mean it was pretty painful and we don't go it's went from eight percent to ten percent in in six weeks. and but it wasn't

in exactly the same why that they this pullback ingo it was the latter a pullback it was in the bed big bear market in bones it was just pulled back because i percent is still quite good value for this dude in the stock i'm going to ten percent and then what you had when that selloff six weeks alone was over the board market resume and it didn't and i think this is what's happened in gold as well you bet you had gold went up every year from two thousand to two thousand and eleven every single year it went up it's now had a big shakeout we don't think this is the top in the bull market is one of the boxes as you rightly say is participation in the market it is only one percent participation right if it's a box you take that you haven't seen the top so we think what you're now going to see in gold and silver is another multi-year bull market still i mean it's a tremendous investment opportunity for anyone to so bomb them by precious metals and mining companies because i mean for those people who watch the show regularly

as they know we started recommending sober at five dollars gold at four hundred dollars so we've been really following this for quite some time i want to spend the last minute or so just touching on the banks because banks of course they're capitalizing bonds and we just went through a huge banking crisis when the credit for those banks had to be bailed out and it triggered a massive transfer of wealth from the top eighty percent of the top one hundred one percent you know ok so. bond markets in a bear market now. banks therefore are the major players in the book because you know the bank failure obviously if the bond market goes in through. more than one bank it is going to suffer some quite severe losses if the market pulls back and i would think the ones that get it right like go visit in the two thousand crash they get in the minority and the ones. owning these bombs will probably be in the majority. but some of the someone is going to take a bath all right ian williams thanks so much for being on the kaiser report. well

that's all the time we have for this episode of the kaiser report with me max kaiser and stacey ebert i'd like to thank our guests eight lanes of charters treasury if you like to get in touch tweet us a kaiser report the next time guys are saying. what defines a country so. faceless figures of economic growth. standard of living.

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this. coming up on r t with all the buzz about n.s.a. surveillance exactly how is the u.s. able to track movements around the globe will take a trip through the wires and tubes coming up. from n.s.a. secrets to the public spotlight and now to a lawsuit the group epic is turning to the supreme court to block the disturbing expansion of government surveillance more coming up and it's now day sixteen of the bradley manning trial the defense teams today is focusing on guantanamo bay and what was leaked about the security facility live from fort meade coming up. it's tuesday july now.