anytime anywhere. good afternoon and welcome to prime interest i'm harry and boring big wish and here's the stories that we're tracking today. markets are up can gradually send burning while the bank of england said they put q.e. on hold this morning the s. and p. five hundred edged over seven thousand five hundred to day with the help of a key manufacturing report according to barron's that one of our key sources they say quote it's hard to understate the gains in this report unfortunately construction spending collapsed by the largest amount in a year missing expectations dramatically and mortgage rates would be the cost of buying a home here in constructions are up again now just shy of four and a half percent problem is just three months ago they were all percentage points lower and that was about the time chairman bernanke you threaten to taper off his

q.e. bond buying then there are all these funds that swooped in to buy cheap foreclosed houses and turned them into rental properties well they are selling as we've been reporting abuse of the i.p.o.'s in other words they're dumping the inventory on the middle class we can't have above without right and as zero hedge notes american homes for rent just priced out of forty four percent discount versus its june prospectus offering meaning rents both small and new york size alike are leaving the ship and there's new developments with the controversial durbin amendment which we've coined as the swipe fight and you as a district judge a cake to back the federal reserve's rule capping debit card swipe fees saying they're still too high the durbin amendment has saved merchants billions to date which they're not passing on to consumers and retailers are asking for even more meanwhile banks are losing revenue and passing these costs on the debit card customers more than likely. the fed will appeal of the court's decision and i'll

break down and her change fees in detail and yesterday and i will discuss a number of recent global economic trends with gerald celente detroit fred summers versus yellen well you get the picture and hopefully we will get a handle on the future. and here is what's in your prime interest. channel in the dark from back to the future it's time to think fourth dimensionally that means we're going to look into the crystal ball with the help of gerald celente and he is the director of trends research institute gerald thank you for

joining me thank you it's great to be with you well muni's are in the news we have detroit and we have this prediction from meredith whitney a few years ago which didn't come true in its day are we seeing the first domino right here with detroit is it all about to fall. well it's not all about the fall and she's correct i believe in her assessment of all of these unfunded pensions etc but to us at the trends journal the did the fall of detroit the bankruptcy is a metaphor for the entire united states so let me explain this is from a it's gone from motown to no tax this this was the country you know henry ford giving workers a working wage so they could buy automobiles this is then becomes the place where dion dust realisation began and america starts sending its jobs to cheap labor

markets whether within the states and then overseas and also bob very importantly it also became the blueprint for america's future in producing garbage from quality products you know i'm old enough to remember when order mall bills were really great and then they became really crummy and that's when the japanese and other marketers moved in to the united states and then when you look at what's going on in detroit now in keeping the metaphor for the united states it's a new form of war stary t. measures here's how it goes we go bankrupt we don't have money to pay the pension is and the people that earn their money but i'll tell you what we have money for we're going to pay back those banks seventy five cents on the dollar how's that so when you look at what's going on in detroit and see what's going to be going on

around the rest of the nation where we're going to have these same problems this is what you could look forward to add one more word to this president obama say that detroit wasn't going to go bankrupt. well he might have said that and i would add that japanese they do produce some good cars but we have a key manufacturing statistic that came out today it's the manufacture report and it was fifty five point four it beat consensus so what are the relevance of these economic this is i mean statistics to our economy right now well that will look at the one that came out of ad of china and that came out a fifty point three and it's just up from fifty point one they're still weak and i believe the ones from china as many people do in the business they're being rigged and it's very important because if the united states doesn't buy and you and europe doesn't buy china doesn't make and if china doesn't make that noise trail

you're brazil canada olivia chile all these natural resource exporting countries they don't sell their products we're looking at a global slowdown everyone knows that when these q we choose stop q e three and when interest rates go up and they're going to have to go up listening to your report about construction spending when mortgages when interest rates go up the economies go down and the bubble in china it was built the same way as this q.e. bubble has been built well china has certainly had some short term funding problems or money markets have seized up and it's very similar to what happened in the united states just prior to lehman so what is their exit strategy from all this what is your prediction of this. they don't have one the same like here how they going to get out of the tapering once they start dumping eighty five billion

dollars in buying a bonds of government backed securities where they're going to do for an encore how are they going to keep interest rates low and you pointed out that that the thirty year rate went up one hundred basis points and it actually the quick is rising twenty six years for us so when the end is sit in china more than just a credit problem they have a huge debt problem and they have a huge balloon of a real estate bubble in other bubbles so and by the way you know china's greatest fear is what people their people when you look at you know with the with the with the gross product is for the average person in china it ranks like around bangladesh in iraq so what you're going to see are built hundreds of millions of angry people and they're not going to be able to control them this is a huge issue that doesn't make the media ok let's switch over to the u.s.

and the federal reserve monetary policy we have bernanke it looks like he's going for the exit doors is it going to be summers or is it going to be you know in or some other third party well of course there are the people in the real democratic party that want yellen and they want to put a woman in peru particularly pelosi and others and then on the white house side they want larry summers let's take a look at larry summers let's. you cannot mention larry summers name without adding the word brilliant either before in the middle or after every time this guy showed up when he was heading the obama economic team it was always the brilliant larry summers what has the brilliant larry summers ever done that has turned the corner of the economy absolutely nothing one failure on top of another and one other thing about the brilliant larry summers this is the same guy at the last end of of the clinton administration who pushed through the glass steagall act that deregulated

the banks that allowed them become to become because c. knows they gamble that brought about the panic of oh wait that's larry summers and then you look at yellen and go back to the fed minutes that were released five years later after as they always do they hold them back and she along with the rest of them every one of them called the panic of a way wrong as it was evolving so it's more of the same and worse well yeah that's actually something we pointed out on yesterday show was that if you look at yellen she was she was simply cheerleading on this expansion in monetary policy during a real estate bubble and then if you look at summers another thing we've highlighted is that she pretty much tanked the harvard indictment fund so could it be that there is going to be a third person that comes in here is this just like a p.r. campaign for the media to float various options here. whoever it is it's going to

be a member of the club and it's not going to be much different than what exists it's the same crew. so the so let me ask you what is the expectation we have expectations of tapering at the end of the year now maybe maybe not it seems like there's a new policy every day unknowns what is your prediction of the length of q we are going into two thousand and thirteen and two thousand and fourteen even. our it's difficult to say but what we do know is that interest rates are going to have to go up yes and this global ponzi scheme of printing digital money not worth the paper it's not printed on is going to happen and when interest rates go up the economy goes down period paragraph it's in every country it's the same thing again the only rio look at retail sales what's driving retail sales the most one of the big items automobiles tell you what bob like so we don't need any references any any

references at all will going to give you a loans zero per se doesn't that sound familiar what they did with the real estate market they're doing the same thing with the auto market and that's a huge sector is society so as the interest rates go up the economy goes down when will the interest rates go up on their own and the fed won't be able to jack him down because after all they say they're going to keep it at zero i don't know it seems to be a paradox because they say they're going to taper in other words they're just going to take their monetary foot off the pedal but at the same time they're going to take their own interest rates or keep them low into two thousand and fourteen two thousand and fifteen maybe what is eventually going to drive interest rates higher . i think you're going to see a deep basement of the currency and that's why so many people still believe in gold and roy one of them and so you're going to be able to debase the currency is only so much and then they're going to have to do something to strengthen them when that

happens then you're going to see interest rates go up well when you talk about debasement of the currency what is what is the alternative to that are we going to receive are we going to return to a gold standard or acquires a gold standard i believe that zoellick the former head of the. world where you have world bank thank you i think he came up with the best solution and yes gold part of a basket of currencies it was the you won the dollar that your oh and gold or some other precious metal maybe possibly silver but i see i see it in a new world reserve currency in the future ok let me ask you about this new world can you do you have any are there predictions from your trends or newsletters that you can share with us here and we have just about a minute left. our greatest concern is war and the war in the middle east if there's a civil war going on now in egypt they're not calling it that i mean after all in the united states they still don't call it a military coup i mean how could anybody buy that b.s.

line and so with the gone it's not going to end it's not going to be a happy ending and you also have a civil war in syria you have one in libya you have one in yemen in bahrain they're not calling them that that's what they are as long as the united states israel iran lebannon russia china would ever become involved in these conflicts you're going to see these civil wars go to regional wars that's our greatest fear so let me ask you can you expand upon a regional war how would that play out again we only have about thirty seconds but what would a regional war look like in the us if the u.s. were involved well it was the u.s. supplying of course now the syrian rebels and we think the trigger points going to be israel israel already has bomb syria twice and they'll have another reason to do it because now they're saying that they didn't get all they had missiles the last time so that's what we think is going to be the flashpoint and when that flash

point happens then you're going to see other countries in the middle east probably unite against israel that zaps that's a very provocative statement and unfortunately we're out of time thank you for joining me this is gerald celeb director of the trends research institute and coming up area and breaks down the durbin amendment we promise it's not too long retailers have been saving millions at the expense of big banks but they're still crying fall yesterday a federal judge handed down a ruling that could mean lower costs for retailers and customers alike then later i do a political commentator sound on fast foods and the ratings agencies so it turns out that they're turning more tricks states.

i would rather as questions for people in positions of power instead of speak on their behalf and that's why you can find my show larry king now right here on our t.v. question more. the guantanamo bay detention facility who's now over eleven years old the broken presidential promises the congressional stopped the never ending war on terror all forces and conspired together to keep this prison open but now a hunger strike brings a tear it all down as this hunger strike near six months r.t. takes a closer look at the prison i just can't be quote was. pretty

something the feel good you will find it here if you're looking for relevant stories unique perspectives on top of my scans to start. with i am a swipe the fight continues between credit card companies and retailers over who should bear the brunt of the debit card swipe fee burden on wednesday july thirty first a district judge shot down the federal reserve's rule on the durbin amendment which kept a swipe fees at twenty one to twenty six cents the courts. said the cap was not for coney and nuff the durbin amendment was a last minute provision added to the dodd frank financial reform law that drastically lower visa took

a bite out of banks revenue while we're discussing the case with breakdown interchange fees they're also known as a swipe fee and by definition it is a fee charged to merchants when a customer pays with a credit or debit card when a customer for example swipe their debit card at a retail store and there is a hidden be assessed by the banks to process the transaction the banks negotiate between each other and the fee is charged to the merchant bank the swipe fight is contentious because of a very lucrative industry interchange fees represent about fourteen billion dollars per year before implementation of the durbin amendment swipe fees averaged forty four cents per transaction the fed kept those fees at twenty one and twenty six seconds the court however threw that rule out yesterday and swipe fees will likely have to be lowered even further the sponsor of the measure as senator durbin said it would be good for consumers he claimed credit card companies are being unfair

and setting the price too high this is how soon you're durbin explained it. over dinner change for you was in the range of forty cents per transaction the actual cost the actual cost. maybe even less they were charging three to four times as much over the. clearing the transaction to merchants and retailers across america. the durbin amendment mandated debit card swipe fees to be reasonable and proportional to the cost incurred and savings were to be passed on to consumers passage of the durbin amendment was a win for retailers they have already seen eight hundred twenty five million dollars in savings according to the electronic payment coalition retailers however are not contractually obligated to pass those savings on and shoppers are actually paying on average one point five percent more the billing is that reported that

retailers out of the gas stations are pocketing the money that was intended for consumers on the other side of the equation are the banks who have lost revenue by having to slash swipe fees these costs to the banks are being transferred to consumers in the form of reduced services and higher fees according to bankrate dot com significantly less banks are offering free checking and more banks are charging higher fees citing the durbin amendment as the cards and yesterday's hearing judge richard leon told the federal reserve that caps on debit swipe fees were still too high and john breaux while from the competitive enterprise institute pointed out that should the fed interpretation it will almost certainly result in more bank and credit union fees for consumers. but it's not all bad news so while the merchants and credit card companies are arguing over who pays what and swipe fees the

electronic payment system is quickly gave ing market share over the antiquated banking system there is a full wad of new innovations emerging including mobile payments mobile wallets virtual currencies crowdfunding and more that's changing the way we financially interact with one another so if you're not sold by the durban amendment don't worry it's not the end all and now let's get to today's daily. jesu's bad if you get sam sadducees here for the daily duel and again what's with the lucent tie this is just too cool for school actual happy hour hello bob it's almost happy hour but ten minutes all right so look first story this week hundreds

of fast food workers are on strike protesting labor conditions at the u.s. is the largest chains so workers at mcdonald's wendy's and burger king are demanding higher wages in the right to form unions your take should we pay workers poverty wages in america and what is that is that a great is not a great way to run an economy what are poverty wages wages in which you can't get out of poverty if you're making money but who's actually working at these companies like mcdonald's and wendy's and what would have you you know i think the average age is dropped from twenty to twenty nine so we're not talking about young people who are not in our name or out people who are raising families that are working at the traditionally or i would say traditionally minimum wage policy has been in a just one unfortunately it excludes people from the workforce because when you have businesses that only have that they have to pay a certain wage let's say it's ten dollars or twenty dollars an hour they're simply going to hire fewer people but because of the economic situ. and now we're in the yes people are actually working at mcdonald's to support a family that's the larger problem right no i'll give it to you that the obama

economy that's been created is one of the low wage jobs now low wage service sector jobs that's the reality since we've devastator manufacturing base and since we've relied on wall street to manufacture most of the wealth in the country right now if you call it wealth ok manufacturing wealth on the nominal basis how her fitting well there you go but this is the reality we live in is now we have all these workers who they're not young workers anymore they're older workers they're working in the service sector industry we need to be paying them enough so that they can get them contribute to the economy and it look we're talking about yum brands we're talking about corporations that are making enormous amounts of money c.e.o.'s that are making enormous amounts of money in studies that have shown that if you raise the pay of workers that the price of food is would go up a negligible amount and that's something that we can all afford if we're making more money unfortunately that's a very i would say neoclassical maybe post can see an argument that we don't you know you would call it you have states exactly what i would call it that you can

just arbitrarily raise wages and then the the economy magically recoverable what you need to do is increase real wealth and that that comes down to productivity we need to increase productivity we need to are you kidding me we needed to be has increased steadily since the seventy's and the only thing that has anything to do a lot with it is wages the only thing that has increased with our productivity is wages and basically all wear out all the fast food workers that are on strike and those who are advocating on their behalf are asking is that they get paid what they work for if minimum wage kept up with what it was in the one nine hundred sixty s. they'd be making fifteen dollars and it would have dealt with this productivity that you so demand yeah would be over twenty dollars an hour they'd be well listen to us in that i can point to the sixty's a family of four could survive on one income one income so there's something there's a disparity there that something has gone a ride and it has to do with the purchasing power of the u.s. dollar being is gone awry in our economy needs to a down. but the bigger problem is wealth inequality in the fact that these corporations have the money they can spare but they don't want to ok we're going to

move on to our next topic now. let's see here that according to a recent new york times analysis s. and p. has loosened credit rating standards in order to attract more business the report states that s. and p. has routinely given higher ratings on new mortgage bonds when compared to other ratings agencies this divergence became more apparent after s. and p. changed its bond rating criteria last september and in a related story wall street journal news j.p. morgan's recent settle them over electricity manipulation charges brings total fines paid by the company to seven billion dollars which is actually a paltry amount compared to the profits of fifty three billion dollars and that's since two thousand and eleven so is wall street learning its lesson you know ok i mean it's this speaks to the point of psychopathy really running rampant on wall street s. and p. knows exactly what it's doing where they got sued by the government so what are they just like taking taking their medicine and the changes threaten all as we said which if you mortgage these these companies take into account what their crimes

will cost them how much they might get sued and they make a comparison of it's much they make off and it's like this side saddle airbags with general motors that people tanks with g.m. sure they are making calculations on how much they're going to pay and how much revenue they get yeah but why do they do that it's because the government allows them to do that we have these we have these veils of protection we have the e.p.a. we have you know all these regulatory agencies that give cover but don't actually provide any protection for the investors or the consumers so if we actually had a free market system in which these companies had to answer for their own actions i would say we'd have a vastly different result or if maybe these companies' c.e.o.'s were afraid that they might be thrown in jail when their committee well i were odd yeah i would have to they were they rather than just having to write a check for whatever their company earns in three days there might be there might be a letter is interesting there's an interesting parallel here because in europe there's a. why that wealth management system especially in switzerland where if you're

managing somebody else's money and you screw up in other words you can cruise you know you do fraud. basically you're on the hook for it i mean look these people are short sighted they know they know exactly what's happening they think that they're going to make their money get out be somewhere in the islands or something when it all falls down and that was the calculation they made two thousand and two thousand and seven yes we know we're building up a giant bubble we know it's all going to crash but i will be a part of it when it happens i'm getting my money and getting out fortunately everybody's thinking that way that's going to set up quite a disaster i hate to tell you this but you are going to be a part of it and unfortunately that's all the time we have today and there are a dual if you want to weigh those today today's show be sure to like us on facebook at facebook dot com slash prime interest you can follow sam here at sam's you can follow me english sam thank you so much for joining me yet again.

and it was a day of status quo ante here ad from interest the bank of england said still let them bond and s.m.p. was up marginally but not too far from a decade plus old trading range there was more job owning at the fed boring and a visa and mastercard are in the middle of a slight fight with starbucks and seven eleven gerald solent a didn't hesitate to make a few of dire predictions for our favorite reserve currency to which we were somewhat privy and our popular is to do alert mr sachs and dug into the mix devil and the slack as in peace standards no news is good news except it thanks for tuning in come back tomorrow everyone affray. i'm harry and boring and have a great flow.

wealthy british style. sometimes that's right for. markets why not come to. find out what's really happening to the global economy with mike's cause or for a no holds barred look at the global financial headlines tune into kinds a report. the

worst journalists a long white house to give it to the radio guy for much of a minute from a quick profit i want you to watch quote for a budget because you never seen anything like this i'm told. me he took a. seat. in the.

coming up on our t.v. everyone snowden has been granted temporary asylum in russia after being stuck in the moscow airport for weeks he's now somewhere in the country at a safe location more on this story ahead and the los angeles county sheriff's department faces a scandal a deputy has been accused of committing sexual assault and bribery while in uniform more on this story later in today's show. and the tech report is on the road today def con as a grand gathering of hackers where tools of the trade are shared will give you an inside look coming up. it's thursday august first.