well the feds are making the college try cracking down on the big banks both an energy manipulation and a surprise surprise the big calling its first to see f.t.c. has formally subpoenaed the aluminum industry which of course means j.p. morgan morgan stanley is also in the commodity regulator cites the issue as we've been discussing and vasya shuffling pallets of metals and warehouse to technically comply with exchange regulation the problem is that it's been taking up to eighteen months for end users such as coca-cola to get the stuff the last time this you have to see investigated metals market manipulation and that would be a silver let's just say that well as well as the do you have good luck with that one whitewash so you have to see and then there were a bit coy and then as we discussed yesterday the state of new york launched an angry and effective currency now the senate is involved it seems a touchy issue ironic when the first role in this of these so-called currencies

inquiries have been made and the senate wants to ensure quote coordination going forward in the u.s. nothing is official and tell formally investigated by congress and congratulations but coins now on the back and funnily enough to get a bit too long there is this group called the public company accounting oversight board whimsically peekaboo basically if you want to be a treatable public company you have to hire an accountant who certified bit so because of myriad doubling of accounting statutes and regulations the cost for the average auditing cost for small businesses has tripled over the last decade well the quantity of what the so-called auditors now have to disclose both good and bad news is increasing also find out the option of the auditors company for accounting and quote aggressive. good luck herbalife bob will talk with austrian. qantas richard evil laying. and just semantics and i will dig into the fine print

of foreign aid going to egypt later in the show. and here is what's in your image a. little ink and bandwidth has been spilled about the austrian economists such as friedrich hayek ludwig one mrs murray rothbard so we've taken it upon ourselves to interview someone who knows two of them personally earlier i spoke with richard ebeling economics professor at northwood and i first asked him about well you guessed it quantitative easing and the future of bernanke the so-called exit. the

problem is is that quantitative easing means nothing more than the federal reserve's intensive expansion of the money supply to just take a second to make sure we understand this is basically what the federal reserve was doing for the five years before the economic crisis that began in two thousand and eight for five years the try to reserve has increased several measurements of the money supply by over fifty percent they had pushed interest rates to two bull below . zero and when discounted for inflation and it's basically about monetary expansion and interest rate manipulation that created the house of cards that resulted in the recession that we've been slowly recovering from then sense two thousand and eight two thousand and nine the federal reserve using the official term quantitative easing has basically attempted to inflate the economy again and in fact by measurements that they use the money supply has again been expanding over the last four years by over forty percent the result is is that this is

basically been a distortion and a manipulation of the economy first that it created the crisis and now they're attempting them to get out of it the difficulty of course is is that this is fail we are suffering from a recovery that is one of the worst since the end of the second certainly by the measurement of employment recovery and i think most of us understand in a general sense that one of the major roles of prices in the market is to bring supply and demand into balance that applies in the financial market as well interest rates as a price as opposed to bring savers into balance with those who want to borrow money with investment purposes and basically through. great to near zero in measured nominal terms but negative when it inflation adjusted basically this is been a price control that is kept interest rates from allowing savings in investment to

balance for the last four years and therefore creating the likelihood of a of a similar type of investment and housing distortion that created the original crisis another way there's a way of saying this is that i will not be surprised if if if looking down the road a little bit we will be going through a necessary economic correction again to compensate for the fed's attempt to overcome the last crisis that we themselves created and certainly interest rates are the price of money and it's not it is reminiscent of what happened over the board to where the fed actually pegged long term rates at a certain level of the believers two point five percent and when we lifted these prices and wage controls and world war two we then embarked on a national prosperity would you say that's the correct case and do we have to go through another economic crisis to get to that stage again. well i the attitude of the fed right now and of course obviously pushed by the obama administration as well is that the federal reserve should focus on trying to stimulate employment

growth to use their ability to control money credit in interest rates to induce an artificial profitable ness for businessmen to hire more and through expansion of investment the problem is as the famous austrian economist friedrich i it argues are there is no tradeoff between inflation and unemployment in the very attempt to stimulate employment that monetary expansion tends to distort interest rates they distort investment signals and decisions so that in fact the employment that such monetary expansion generates in the short run is likely to be found misdirected misplaced and mismatched and therefore setting the stage for a new downturn correction in which it's going to be discovered that people have been drawn into employment better unsustainable once the stimulus and and therefore the economy has to shuffle around again and people may very well temporarily lose their jobs as they discover what the real market is saying where the employment

opportunities are that hopefully would be sustainable ok i want to circle back around to the fed in a bed but you just mentioned hyatt and i know from our discussion earlier that you actually had some personal interaction with them so would you care to share any personal anecdotes with. well i would just say is that it for the viewers are pretty high it was very famous austrian economist he won the nobel prize in one thousand nine hundred forty s. during the one nine hundred thirty s. and he was the leading opponent and critic of john maynard keynes the founder of keynesian economics and his basic take words is a government is because of business cycles and the inflation recession a boom bust cycle not not not not the preventer of it i had the opportunity when i was in my early admits twenties to spend a good part of two summers in his in his company and i can i can say that he was one of the most informed intelligent and personable individuals i've ever met with

an immense understanding of both the politics and the economics of things and a great depth sub deprecating humor that made him very personable i highly recommend. that any viewer who is interested in these ideas to look at his works is most popular and famous one of course is a book called the road to serfdom the dangers of government encroaching upon our liberties through controls and regulations leading to the loss of freedom and a rich unified economy but he has some popular works on explaining how governments cause inflation is in depressions and these are often the keys to understanding our own problems in our own time just as he was explaining it during the great depression years when he was first writing now there's another famous austrian economist his name is murray rothbard and he also had a very self-deprecating style as well and i understand that you and you had at

least some brief interactions with him could you tell me a little bit about those. well i was a graduate student for part of the time in new york where rockmart was living and i was very fortunate to get to know him rather well and he had a great sense of humor and he would stay up at night with a cadre of people telling stories singing songs and he had a biting sense of humor. both against others as well as himself and he had a way of explaining things with a clear incisiveness yes broke down the complex a few things in extreme and simple way. all i can say is that anyone who had the opportunity to spend time in his company company not only interacted with a great intellect but was one of the great personalities in the movement for freedom in the united states i wish i had his ability to break complex things down as as well as he did so i'm going to circle around to the fed and kind of explain

rather perverse scenario in which banks right now are receiving what's called interest on excess reserves basically the federal reserve is printing money but then they're paying banks to hold it with the fed at zero point two five percent but when interest rates rise the income from the fed which comes from treasury securities and whatnot m.b.'s may not be able to cover the balance in other words the interest on excess reserves so the bottom line is there is a perverse scenario which the fed could go cash flow negative in other words they have to print money in a tightening cycle can you comment on this. yes you're pointing out the problem they're facing but they're between a rock and a hard place of their own creation since two thousand and eight and two thousand and nine the federal reserve has increased the monetary base this is merely cash in people's hands and the reserves available in the banking system for lending purposes they've increased that monetary base by about two and a half trillion dollars yes by the end of this calendar year they were living.

crees did by about three trillion dollars now many people expected that they would be severe inflation due to all of this monetary expansion but price inflation has been relatively low why because as you pointed out just now the federal reserve has been paying banks a rate of interest to park most of that created money as idol balances on land use by offering them a rate of interest greater than those banks could earn by lending you or me the money now the problem is if the economy starts recovering significantly and there's a more optimistic investment environment so businesses go back in a significant way to the banking system to finance new investment activities market rates of interest will rise and then it will be attractive for those banks to lend money to you and me instead of keeping it part unlearned at the federal reserve then the federal reserve has to offer anyone higher rate of interest to make it

attractive for them to keep it idle there. what will that happen the federal reserve will have to devise a way to prevent printing even more money in other words buying more u.s. government securities more mortgage backed securities which is the bulk of the way they've created the money up to now to jet to generate enough dollars in the system to create a critic continue paying the banks in this way. and if the banks start lending this money out of the federal reserve cannot keep this interest rate differential going then we are faced with a dangerous significant inflation as all this money comes flooding out through the banking system percolating and rising prices in various ways and then the then what does the fed do how does it suck money out of the economy the reverse of how it creates it it would have to sell u.s. government securities and mortgage backed securities out of its own investment portfolio. but if they dump mortgages on the market that's going to sink housing

prices and if they dump u.s. securities on the market they will be pushing security prices down and exacerbating the rise in the interest rates so they will exacerbate the downturn that their own monetary expansion will of itself may be inevitable but it's really policy this is a dilemma which i don't see but easily get out of yes one of our favorite questions is what happens when the largest marginal purchaser of treasury bonds ends up becoming a net seller unfortunately we're out of time but thank you for joining me this is richard ebeling you can omics professor at northwood university thank you so much my pleasure. coming up area and explores u.s. aid to egypt and the problems with doling out money to foreign groups in general then i do all prime interest regular sacks on the b.p. oil settlement yes it seems those split characters at the energy giant forgive the pun decided they would just suit so i also talked to him about property intellectual kind of hoping for sale.

most of these voices the couple of the law for violence or thefts. but we drove the window climbed in going tried to start it. we pushed it a little way and here we were drunk. and soon boom you're an alcoholic nearly all of them are homeless orphans no money around. why you may go without me. for a moment but there it felt like it was bad but those streets who did it was a good have beaten me up at any moment. as i turned my back i couldn't help wondering about my safety. isn't a warden he's their father you could say that slava races he makes normal people out of ugly duckling.

well see british sign it's time to. go. to the. market why not. find out what's really happening to the global economy there's

a report on our team. as tensions on both sides continue to escalate in egypt so does the international pressure on the u.s. to pull foreign aid from the middle east our i hear the u.s. appropriates one and a half billion dollars to egypt the largest country in the middle east much of that money is used to purchase military tanks and jets for the egyptian army or with a military overthrow of the democratically elected president mohamed morsi is money is in jeopardy of being withheld from egypt as the new york times reports the foreign assistance act says no aid other than that for democracy promotion can go to any country whose duly elected head of government is deposed by

a military coup d'etat what's still being debated today in congress is whether or not the. egyptian military overthrow of morsi was actually a coup daniel mcadams the executive director of the ron paul institute for peace and prosperity points out the obama administration is having a hard time defining the situation. once actually becomes sort of a comedy because the u.s. government has absolutely no idea how to handle this they have no coherent policy on egypt or you saw john kerry a couple of weeks ago saying oh no this was not a coup this was a restoration of democracy the troops were restoring democracy which is hilarious and makes no sense and then you had a state department spokesman i think two to three days ago saying we have determined that we do not need to make a determination as to whether it's true or not so because as you say by law if the u.s. decides it is a coup if it walks like a duck and quacks like a duck then they are required to suspend aid because it would be considered

a legitimate military government. but on capitol hill there's a lot at stake in providing egypt with military assistance thousands of u.s. workers depend on government contracts to continue to assemble tanks aircraft and helicopters that will be shipped to egypt and not too many lawmakers are willing to go back to their districts knowing that some of their constituents could lose jobs . it's something to do with the military contractors that are providing a lot of assistance to gyptian military you see senators who are funded their campaigns are funded by the military machines here in america there's a lot of political activity going on between the defense contractors who will lose everything if we cut funding to egypt. and just last week president obama said republican senators john mccain and lindsey graham to egypt both senators were turned can vents that time is running out to resolve the problems in egypt but they

also they also said that we find it difficult to describe the circumstance of morsi removal from office and anything other than a two. however i'm melissa youssef an egyptian american says it's a people's revolution backed by the military. the focus on that word i think has been so misconstrued and so many different ways that it's actually not enabling us to to view the situation properly what are the egyptian people saying do they believe that this was a coup absolutely not now i mean you need conceit and social media and the twitters and the facebook saying it's going on now instagram's everywhere because. there was a time when the us supported president hosni mubarak who was forced to step down after serving thirty year earth and off it but in two thousand and eleven of the united states supported the egyptian revolution that called irv mubarak would draw and then objections took to the polls to elect their first democratically elected

president and for national consulting to brian crosswhite says the u.s. foreign aid was used to influence the election. i believe our government wants to see the muslim brotherhood in office that's that's what's been seen that's why we propped him up in the beginning i think there's a big contradiction in american foreign policy in egypt who believe that the taxpayers need to be speaking out and they should be listening to senator rand paul in his position why are we supporting the muslim brotherhood why are we supporting the muslim brotherhood in the syrian brotherhood in in syria this doesn't make any sense as an american. now enter twenty thirteen and egypt is right back where they were two years ago during the two thousand and eleven revolution about ten million egyptians took to the streets however the revolution today is one of the biggest in history with over thirty eight million egyptians protesting. its biggest loser you know the biggest loser is the biggest loser is the guy who runs

a small souvenir stand who had benefited had made a living this whole term of tourism it's always it's always a small guy the small businessman who loses in these situations. they're the big losers. who was the winner nobody made you right no temporarily see gyptian military. i can't see how israel is a winner i can't see how they would be happy about chaos next door. the big losers the egyptian economy in the small. while the egyptian economy suffered the us continues to pop billions of dollars not to the development of egypt infrastructure and economy but instead to line the pockets of which have whichever party extremists are not holds power at the time now let's get to the day we do.

sam sax political commentator hello bob hello i know you love bitcoin so i have about five and a half minutes and that's all we're going to talk good points for five and a half minutes to be the biggest waste of time on television ok we actually have two other topics don't freak out guys it's official we've plummeted down the rabbit hole created by the b.p. deepwater horizon and have emerged going to strange topsy-turvy land where we get this b.p. is suing the government because uncle sam has barred the oil job the government will giant from new federal federal contracts so the company and i stress company pleaded guilty to manslaughter and other criminal charges sam does this make any sense to you know b.p. should be thanking the government for not being shut down by the united states government or at least prevented from doing any business in the united states ever

for have you ever long you want to put on it a look that they're responsible for the worst ecological disaster in our nation's history the world's history worse than exxon you know it's proven that they cut corners they. eleven people died as a result of this accident who knows how much billions of dollars have been lost in tourism industry fishing industry never going around there is forest gump our country has a long history of shutting companies down that operate against the public interest so why are we not only doing them criminally why is there where there are no criminal charges against any particular person and probably on the same page here why are we not going after b.p. you not only. don't know why but that's the major problem is if you're rich you know of any if you own a big enough corporation you're immune from prosecution and it looks like when you think that all of a dollars here and there the corporations are people according to the supreme court but unfortunately it leads to a situation where people are able to abate prosecution all right we're going to move on here i think we have something more compelling shut down be a pig. according to the wall street journal when it comes to intellectual property

one of japan's biggest maker of fixed high capacity battery says it's ok to be paranoid the firm makes sure that nobody knows how its batteries are built except for its president and vice president in charge of technology so i guess that seems kind of like coca-cola not sure about the tech on that one but you get the idea so an x. employee was actually arrested for leaking battery seek it is this an appropriate punishment for ip infringement i mean should people go to jail for this. i think our patent laws are totally screwed up i would think we have major problems going to be we have now the rise of patent trolls we have people who are creating problems with no intention of ever building or selling anything we're just using it to force lawsuits on the other people i don't think there's any proof that patents are good for me we tend to look at patent laws in their economic economic benefit we're not looking at the human benefit of them and i don't see any benefit right now if you look at pharmaceutical privileges then it turned twenty years twenty

years is a very long time that people get patents for it so i think we need to start looking into ways to completely reform our patent system perhaps even including getting rid of patents altogether but what about copyright. i mean if you write something you write a lot of stuff what if you wanted to publish a book some should somebody have the ability to just copy it photocopy it or even publish it and sell it on their own why i think we're kind of entering the sort of brave new world when it comes to patterns that operate as a new world where these are these are issues look the world of patents and copyrights is completely different than it was ten years ago in the debates that we are and i was one hundred years old and we're going to be completely ten years from now especially when we have three d. printers that are going to wait for that one it's going to be on man it will to create a legal framework over how patents and copyrights are going to be used moving forward and if you look at whether it's going to require a revolution in the in the law itself exactly and in how we humans think of innovation and technology here but if we look we want to think of artists we want to think of writers right you know all these people i mean what percentage of what

they earn actually goes to the people above them goes to record labels goes to now we have. to we have self publishing now so one hundred percent or nearly one hundred percent of the income from the book that you write and self publish can go straight to you the question is should anybody be able to copy that book i'm not convinced and i haven't seen any proof yet that if you get rid of copyrights or get rid of patents the people who are creating that stuff are going to do we suffer if you look at the people who are stealing music and stealing movies it turns out that hasn't done any. i'm just thinking i'm just getting we got we got to go say i'm going to leave it on that note if you want to wait and today's show be sure to like us on facebook at facebook dot com slash prime interest you can follow sam right here at sam sachs and you can follow me at english p.-i sam thank you so much for joining me thank you bob. i.

i i. i. and it was a cryptic day on prime interest yes the credit for first the cryptocurrency recordings but we just could help ourselves nevertheless the full court press to publicize an institutionalized what was supposed to be anonymous ten ten years and the veil as the process of being lifted from j.p. morgan's commodities market manipulation is you know what they're reporting requirement to shareholders and the public can be out the window on executive order on the president just saying and president our boss or evening it broke down the case of the insolvent bad coming to a movie theater near you know what and probably a year or so and whether it's a true or not that overthrow egyptian president morsi it continues to be a bit of a mystery thanks for watching and please come back tomorrow from everyone at prime

interest i'm perry i'm boring have a great. am i grew up near the air base. i dreamed of becoming a pilot ever since i was a child. or when you approach the aggro to me no mom. i love to just play right in little my little

. exactly what happened that day i don't know but a woman got killed. piers later is when i got arrested for. for a crime i did not do. we have numerous cases where police officers lie about polygraph results. innocent people taking shots at police officers don't beat people anymore i mean it just doesn't happen really. in the course of interrogation why because there's been this is like meant no because the psychological techniques are more effective in obtaining confessions than physical abuse and they were off taking they could get what they wanted they can say what they wanted and there was

no evidence of what they did or what they said. he'd. hold it. hold of. her lips. the speech. her. wish. to. be a misleading good.

come out of line i'm a better little. breaking news in all its aid the muslim brotherhood in egypt claim well over one hundred people have been killed in cairo as police used tear gas and dig is to remove protest camps. call rains brice for more mass protest it marks it ma.