so you can expect a further unintended consequences to your checking account and finally circling the economic news wagon and it turns out china and japan aren't liking. that's right according to the us treasury itself it's two largest creditor nations just dumped forty two billion dollars of u.s. debt and this would be the most in years thank goodness for the fed q.e. backstop unless we take the tapering comments to heart don't worry bernanke is bluffing. just thinking over them behave of unpaid n.p.r. and then just a minute then bob talks with alan brown about the web of data. and here is what's in your prime interest.

currently youth unemployment is above sixteen percent in the u.s. and recent graduates are clamoring to get work experience even if it means working for free however this trend of unpaid internships may have some unintended consequences for income inequality so prime interest producer just under held has more in a recent lawsuit it may just change the landscape of unpaid internships. i'm going to keep on making the case and fighting for the fact that we need to raise our minimum wage because right now. but for hundreds of thousands of students and young adults raising the minimum wage won't change their income because they are unpaid well i feel like i've been doing unpaid internships and before i can remember i mean it's really for experience especially on the hill you have to do unpaid internships to get a job that's just the way it goes here however

a recent court case may have changed the future of unpaid internships at least in the for profit sector eric lott was an intern for fox searchlight pictures but his unpaid work on the movie black swan was nothing like what he expected big county office the county department for black swan had four full time paid employees and me so as the clerk i was in charge of paperwork purchase orders received by coincidence able to thousand and ten right when production was winding down. the u.s. department of labor issued a fact sheet fact sheet seventy one about unpaid internships that for profit employers and the new york times picked it up and published an article and i read that article and immediately everything came into focus this wasn't a gray area this was crystal clear black and white a violation of labor law so we sued fox searchlight pictures and won the case the merits of the case rested on the fact that the work glad did for fox did not meet

the labor department's criteria for an unpaid internship the requirements include the internship experiences for the benefit of the intern the intern does not displace regular employees and the employer that provides the training derive no immediate advantage from the activities of the intern this means that an intern can only for go a salary for the sake of professional training in no case should an internship merely provide free labor for the corporate employer people like aaron smith founder of a youth advocacy group stressed the need for oversight i also think there's an enforcement side of this and obviously the department of labor the recent court decision maybe expands a little bit what the department of labor can and should do in enforcing some of these unpaid internships jessica fink was fortunate that her unpaid internship provided her with valuable training and my current intern sat i'm definitely learning a lot and getting experience writing cross releases and doing a lot of communications work that. i would get other places however

even though this internship is legal it fuels a bigger problem growing economic inequality after all those who take unpaid internships depend on financial support from their family they end up with a significant career advantage over those who can't afford to work for free when congressional internships become the standard way to get your foot in the door to working on the hill and then working on the hill becomes the way that you influence laws including those around labor. you end up with a system of lawmaking that doesn't reflect society as a whole instead it ends up reflecting the people who can afford to do those unpaid internships to begin with since glass keys more than twenty lawsuits challenging unpaid work have been filed against for profit companies such as n.b.c. universal mourning music and condé nast as recent graduates face unprecedented unemployment many are desperate to get even an unpaid menial job and if companies

can profit margins by hiring unpaid interns rather than paid workers the threat of lawsuits may be the only way to stop the cycle of abuse in washington just seen underhill. well on top of that young adults entering the job market may have seen their pay shrink over the past five years and that doesn't bode well as student loan debt has reached record highs and now this is saddled a generation with decades of responsibility so joining me now to talk about the currency in the banking system is ellen brown author of debt and more recently the public bank solution allan thank you and thank you. for talking about debt let's talk about the largest purchaser of u.s. debt that would be the federal reserve and it's actually not so federal their website has a dot g.-o. v. address that would be dug of but there are twelve reserve banks and they have dot org addresses so is the federal reserve public or private or both what's the deal.

the federal reserve is composed of twelve branches which are one hundred percent owned by the banks in their district we the taxpayers do not own one single share of any federal reserve bank they have federal reserve board is considered a public private entity because they are appointed by their congress you know and there's a congressional and presidential appointment and approval but once they're appointed they're pretty much on their own they're caught and independent central bank but they're not so they're independent of government but they're not independent of the big banks that on the twelve federal reserve branches and that the federal reserve actually considers their constituency. well we have a quote from an american entrepreneur and it's too bad people don't know more about the federal reserve this is from henry ford who said it is well that the people of the nation do not understand our banking and monetary system for if they did i

believe there would be a revolution before tomorrow morning so why are people so in the dark about our banking and monetary system. for one thing i think we've been brainwashed for at least one hundred years our people are pretty much plugged into t.v. these days they don't have time to read that that is part of our monetary system where you are you have to work two jobs or if families are just so busy that they don't really have time to read books they're lucky if they know about the alternative media nobody points into the alternative media you have to find out yourself and so otherwise you just turn on the t.v. and what you see is mostly in the news it's all about murders and violence and but nobody gives you the big picture of what's really going on so the way you learn it in school you think that money is created by the government and you blame the government for anything that goes wrong with the money system but really it's all

virtually all created by banks and our monetary problems are due to fraud and mishandling by the banks well we're trying to give the big picture right now so let me ask you another question at one time the banks actually made most of their money by extending loans to entrepreneurs whether they be farmers or benefactors so in other words they lent money to people who were doing productive things but now it seems most of their income derives from derivatives you know seven hundred trillion dollars and growing so how did that contribute to the previous financial crisis that we had in two thousand and eight are we going to see something similar again. i would predict we're going to see something worse than a lehman brothers it was lehman brothers investment bank that went down and took down them money market with that there was a run on the money markets and that made the banks insolvent because they couldn't fire from the money market. but lehman brothers was not

a depository bank there we we had glass steagall had been repealed which meant that investment banks and depository banks could to mingle their funds but lehman brothers that type of bank now what we have is the two biggest. banks the big wall street banks dealing in derivatives are bank of america which their merrill lynch branch they're investing and j.p. morgan chase and both of them have over seventy trillion dollars in derivatives and over one trillion dollars in deposits and they are allowed to commingle derivatives in their deposits so are the derivatives i mean they're there at that casino and the deposits are one big system so when when they have another big gambling bust the derivatives claimants actually get to go first before everybody else before they depositors because the bankruptcy reform act or two thousand and five which

was pushed through by the banks which gives super priority to derivative claims which makes no sense at all because they are sheer gambling where is the deposit that depositors' think that that's actually their savings in the bank if you have people know that when you deposit your money in the bank it becomes the property of the bank and you have an iou so you are just an unsecured creditors which puts you way down the line in the bankruptcy proceeding and unfortunately we have just about forty five seconds left but i want to get to that super priority in a second you mentioned the money market funds what kind of a would you say the federal reserve was instrumental itself in creating a run on the money markets. in two thousand for women. no not not in two thousand and eight that was the money market is the shadow banking system so it's not actually regulated it doesn't every survey kremas it doesn't ever kaplan requirement. and the money market there was

a run on the money markets because after lehman brothers collapsed there the dollar broke the buck so money markets what your dollar supposed to be worth at least a dollar and it went down to ninety seven cents and so the investors pull their money out and match the banks do not have the related a to cover their loans we're going to have a we're going to get back to this in just a minute this is ellen brown and coming up after ellen i finished hashing out the solution to all our financial woes that shouldn't take more than a few minutes i will do will tom hartman of the big picture on the current financial crisis he promises to dish out some historical analogs that should prove quite instructive. so we leave the. other motions to the other party there's a bill. that no one is there with to get that you deserve answers from.

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alright we are back with more from ellen brown author of the public bank solution all right we just we were covering money market funds and the fed so i'd like to get to the fed again there's been a lot of talk about money printing and when the fed quote prints money actually a lot of it is just digital money not physical cash and it seems they simply trade their existing inventory of treasury and n.b.s. securities for cash so how does this benefit the banks what is a subsidy here. well it does not benefit us it does not get out into the real that money supply it just goes on to the reserve accounts of banks. it's not they can use that as collateral for speculating in derivatives apparently but that's a bit shady the whole shadow banking system is definition in the shadows so really

it helps the government because half of their quantitative easing currently is to buy government securities which means the fed rebates the interest to the government so they're basically borrowing interest free and it does allow it it means it doesn't matter who else is selling securities because the federal just buy up the difference and backed securities supposedly that lowers the interest rate for a long term like thirty year fixed rate mortgages but it's not clear that it had that effect it was certainly we've seen a spike in interest rates recently due to the tapering talk but i want to continue talking about the monetary base because there is a distinction to be made between the monetary base that is the actual cash that's printed or additional cash in the money supply you know when we're talking about the money supply that includes or checking and savings accounts so how does the money supply itself expanded lead to price inflation. the money

supply actually right now or in the flesh and it may look like we're inflate in inflationary times because due to interest and having to add. profits and cetera to their costs manufacturers have to raise their prices but it's not because there's too much money in the system in fact there is too little money in the system the money supply has shrunk by three three trillion dollars since two thousand and eight that's including the shadow banking system which is where about half the credit in the system comes from sorry forgot nearly because i want to get into this a little bit more is it possible that we could get into a hyper inflationary scenario how could one be avoided while also liquidating the existing public you know what about all these so-called unfunded liabilities. you know we're not going into hyper inflation where indeed lation we're quite like japan which isn't been in

a deflationary spiral for the last twenty years even though they've been doing quantitative easing after quantitative easing it's the same deal where the money cannot jump that great divide between the reserve and the the reserve accounts of banks which are held at the central bank and they're the circulating money supply where the money really needs to go in order to get some demand out there to actually. get get the whole thing moving again sure and what i was talking about was kind of a crisis of confidence in the u.s. dollar and there's been a crisis of confidence unfortunately in detroit because it's going bankrupt and they filed for bankruptcy recently it looks like the pension funds are going to take a major haircut this isn't dissimilar from what happened in cyprus so can you explain the concept of billions as they really to examine these examples and what are we going to see in the future. well in a bail in the the little people bear bear the last that bank always wins

the deal is that the too big to fail banks must survive at all costs so now we've had bailouts which is where the the taxpayers have bailed out the banks but governments are barking at bailing out banks anymore and so we have cases like cyprus where where instead of in that case it would have been the e.c.b. and them it was that the troika the e.c.b. the european commission and the i.m.f. that when these two big banks in cyprus went bankrupt they said before you get a loan from us you're going to have to. bail in your creditors which they start with the shareholders and then they take. the unsecured or the uninsured creditors . and the insured which means the depositors it turns out that people's deposits are. liabilities of the bank and that that the people and they have

i.o.u.'s. to say for the u.s. we have about fifteen seconds left can we see this in the u.s. so in the u.s. actually that's a template we thought it just happened in cyprus but it's actually a template that started in two thousand and eleven it was set by the financial stability board of the bank for international settlements it's a requirement of all big banks now they have to come up with these living wills where they say what they would do in the event of a big collapse and things happening in detroit where there. was the short but that was fascinating thank you for joining me this is ellenborough an author of the public bank solution and web. jesu it's tom hartman of the big picture with thom hartmann thank you for joining

me now you've been talking a little bit of gloom and doom lately especially with respect to the united states and you've been making comparisons with the civil war and even the revolutionary war i believe can you can you comment on this. yeah. that's a bit he had because it is you know we had a great depression in the ninety's but it was a direct result of the monopolistic practices of the industrialists in the gilded age you know from the gilded age the beginning of the industrial revolution in the eighteenth seventy's until today most of american history we've had regulated capitalism but there have been these two little short periods where we had essentially monopoly capitalism one was the seventy's eighty's ninety's and the other has been from one nine hundred eighty five roughly until today is it possible that monopolies can be i guess where i'm coming from is it possible to have a monopoly without the government sanctioned in other words if the land grants

given to the big companies that they hadn't had the government support would they have been monopolies in the first place well. i'm not sure about the railroad because they require massive amounts of infrastructure and if you look at what rockefeller did he built monopolies just fine thank you very much. oil yeah and he did it through you through the predatory kind of practices that we've seen with wal-mart over the years you know going in underpricing competitors not because that's the actual cost of the product but because you can afford to bleed money longer than they can ok let's bring this to the modern era though how has the middle class suffered and what are we heading for well in the middle class has been wiped out because what's is there a little close. well of the i think that there's still a small middle class the united states but what has happened is all that money you know over and over from the washington and ministration till today productivity is going fairly steadily we're talking about george washington george washington the first one where as and wages always track productivity but recently in the last thirty years wages have gone flat productivity has gone up productivity increases

profits so does more profits they are the highest they have ever been in the history of planet earth but if they do just to corporatism itself i mean a lot of this liberations are deriving their profits because they're basically in bed with uncle sam you know you could talk about the military industrial complex how much of this is really due to private sector problems i just don't think it's a problem of free markets it's crony capitalism that markets always lead to monopoly that's why the game was invented to really each people how it works absolutely if you have eight and completely unregulated market was regulation the markets you know teddy roosevelt transposed in the sherman antitrust act that stopped monopoly capitalism and all those until the eighty's while the sherman antitrust act was actually based on a model act in missouri it was a missouri state law and it was because farmers and hog producers were actually complaining because chicago had become such a productive meet center so it was kind of ironic that they would trust busters would end up you know ending the financial game for these guys but my point is you

know if the government law is based on something that is used to discourage competition how can we blame this on free markets while the lack of government laws encourages. encourages monopoly of the the problem is that little fish get eaten by middle sized fish middle sized fish get eaten by big fish until eventually to know you've got nothing one big fish right i mean there are natural regulators in an ecosystem like an ocean those natural regulators and capitalism with lives by the way yeah. ok let's move on to our second topic so i've heard you talk about the quote libertarian approach to capitalism yes. and i'd like to get your view on this because this is something you talk about a lot of your show well the libertarian perspective is that if we don't regulate products coming into the marketplace if we just let anybody throw anything in the marketplace without knowing whether it's safe or not that. people die and the libertarian approach to that is well yeah people die and then everybody figures out don't eat that but you know europe does the precautionary principle they said

before you put in the marketplace yet to prove it's safe ok but i would say that's not necessarily free market because what we saw with b.p. and i just brought that up the deepwater horizon oil spill and this is something i like to talk about they had there was a seventy five million dollar liability cap and that only encourage them to take on more risk more risk than they would have encouraged been encouraged to take on otherwise and that was due precisely to the government i don't know how you call that a libertarian approach either it's you know you have free market capitalism or you don't it's like being well as a liability apple isn't really real i mean you know that there are to be on the hook for twenty billion dollars well there are a much greater cost beyond that but i think initially at least initially they were they were encouraged to take on additional risk because they saw that liability cap they didn't think that it would become a twenty billion dollar nightmare i don't think so i think that what you had was you had multiple companies colluding you know everybody was trying to fast buck you know right let's you know so this map doesn't work we'll try to anyway that kind of thing. again this if you want to put b.p.

in the frame of regulation. the regulators almost never get out of those facilities i mean it was one in ten thousand and someone made easily a low figure yeah it was definitely a problem but let me get back to the point of free market capitalism because i think the definition of libertarian is often come conflated unfortunately with free market capitalism and i don't see it i don't see anybody in congress right now as a libertarian do you probably rand paul but my point is that while he thinks he is my point is first of all nobody owns that name you know i mean charles koch maybe i wouldn't we don't he's known for i'm with me but he founded you know what is now the cato institute is. so i'm not sure where we're going to leave it on that thank you so much for joining me if you want to weigh them to be a show be sure to like this on facebook at facebook dot com slash prime interest and you can follow tom right here at tom underscore hartman course you can always follow me on english p.r. i thank you for joining me on today's daily duel my pleasure.

all event a statistically mixed bag on prime interest what you report to you what a ninety five percent confidence interval c.p.i. up manufacturing's down following bell curve formation are betting the big banks will start charging for checking accounts and response to the showdown over swipe fees but japan and china aren't wagering with uncle sam when it comes to his debts and if you're an enduring don't expect to get much support and then your future but if you're looking for a tangled web we look no further than allen browne's of debt thanks for watching please come back tomorrow from everyone at prime interest i'm terry and boring have

a great night. most of these voices the couple of the law for violence. when we drove the window climbed in and then try to start it. we pushed it a little way and here we were drunk. and soon who you're no call it nearly all of them are homeless orphans no money or relatives. to and without me. for a moment but there it felt like i was back with those straight into going to beat me up at a moment's. notice i turned my back i couldn't help wondering about my safety. isn't a warden he's there the father you could say that slava races he makes normal people out of a glee duckling. look

right from the sea. search tree limb and i think the tree. on our reporters. and instrumental. to be on the list. why do you consider it is to be and now we in the bill right up to any staff play a huge started preaching homosexuality to minus one that parents for example are against it and as you probably know it based law has and although bombing support around eighty percent and all discussion public strong disappointed when asked for

you to come from a certain country of course is his or her children right true or used to freedom of speech to freedom of expression her. liberal live. good speech. for her. to live. with. the luck good luck to mislead. live.

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on the edge the army is deployed to the country's biggest cities stoking fears of further bloodshed instead of security as rival groups continue calling for more protests. messing in china's backyard washington its military aid to the philippines boosting control in the oil rich south china sea but adds more fuel to the friction with beijing plus. the u.s. government's virtual currency is like big coin with the senate saying the sector must be regulated.