asking them to lower a transaction fee every time we swipe our debit card unfortunately these lower transaction fees have already been passed on to consumers so later i talked to both ben steele and larry williams about were global markets going up that's just be in charge of what's called the carry trade. so what gets to what's in your interest. when the fed begin talking about tapering last april many investors became worried naturally then no surprise treasury yields shot up so since may of this year or ten

year yields are up about one hundred thirty basis points so for more on this we turn to prime interest producer justin underhill just seen how does this have international consequences well when treasury yields increased the spring it affected something known as the carry trade and this is where investors borrow at low rates from countries like the u.s. or japan then they exchange the currency and invest in other markets that yield a higher rate such as indian bonds and a pretty straightforward way to make a good return on your investment but good things don't last forever this year when treasury rates rose and the u.s. dollar strengthened against certain currencies investors were forced to undo the carry trade and it became. profitable using india as an example i'm doing the trade in decrease the demand for indian rupee against the us dollars and the demand for.

for dollars wrote and this created a self-perpetuating cycle as the u.s. dollar went up more and more investors were squeezed out of the carry trade driving the rupee down and in this graph we have of the carry trade showing us dollars to india and to australia and investing in long term security or bonds and we have the scale here ranging from twenty percent to negative one hundred twenty percent on your return in india from maine to present an investor would have lost about twenty five percent on the trade on an annualized basis that's about ninety five percent your entire investment the same is true for us. which is not an emerging market but you would have lost about seventeen percent from may to today and on an annualized basis again it's almost ninety percent of the big picture here is that money is moving out of many of these markets and back into the u.s.

dollar euro bunnies moving back into the u.s. dollar so who does this of all this the facts many had fun specifically emerging markets but it also affects pension funds so this has consequences for the average worker pension funds sometimes investments in the carry trade to some extent right and let me ask you do you see this as a butterfly or. a butterfly effect sounds pretty i would call it more of a factor because it's so disastrous some ugly for the for the consequences basically the u.s. markets and the global economy are a very delicate balance almost like a rube goldberg machine for tinkering with one thing like let's say rube goldberg make sure you know what yes exactly like the thing with one thing such as talking about tapering or raising the fed funds rate. economic consequences so we only have a little bit of time but what happens when the fed actually begins tapering well just have domestic facts that's the. take away from this it will be an

international phenomenon and we still have yet to see what that might look like understand thank you just again now as we've been discussing emerging markets have taken a hammering earlier i spoke with ben steele author of battle of bretton woods and i first asked him about his thoughts on the prospects for emerging markets and here's what he had to say actually is this is well money is beginning to flow back from emerging markets and india is one of the countries that's really most directly in the crossfire is here india russia china they're increasingly trading amongst themselves but they're not using the u.s. dollars you see this as a trend that continues until perhaps the u.s. dollar is not the reserve currency you know over the course of the past several years china has signed bilateral trading agreements with russia for the oil japan. and turkey to begin trading without u.s.

dollars as an interim mediating vehicle i should emphasize though that trading is really in its infancy right now and here's what i see as being the major barrier to that going forward in much greater scale i don't believe that any of those countries is truly willing to stockpile the currencies of the others and this is the big barrier to development like that glow is going global countries broadly speaking have been willing to stockpile u.s. dollars because of the fact that dollars could be used to settle into national debts. it's probably unlikely that you would see china for example being willing to stockpile rubles in any great quantity at least right now ok well let's talk about stockpiling because central banks of the world have been stockpiling gold and one of the things he's right about. is the

gold standard versus the gold exchange standard could you explain that for us. people often lump together the late nineteenth century. and the one nine hundred twenty s. calling that. the global gold standard i think that really is extremely misleading during the classical gold standard of the nineteenth century which ended at the beginning of world war one broadly speaking you had a mechanism that tended to control global imbalances as well as keep prices stable that is when gold flowed into a country credit conditions were loosened and when gold flowed out credit conditions were tightened and as i said this was a global mechanism that countries followed willingly in the one nine hundred twenty s. we had nothing like that we had the united states and france for example sterilizing

gold inflows that means essentially you had countries hoarding gold and not. using the flow of gold as a vehicle to keep global imbalances in check so that's the classical gold standard broke down entirely after world war one it was never a buy well let me ask you something because you've written about digital representations of gold in which you can pay for goods and services across borders doing using transfers of gold but there are many critics of what it's called paper gold some of these examples are the futures market and gold leasing so when you say digital representations of gold what are you referring to. well for example when you buy the stock in a company. your buying ownership in the company but how is that ownership represented well it's represented in digital form is left on a computer. these days you don't even root receive paper shares. so many people who

own gold today don't actually have direct access to the physical gold they own digital representations of gold in the form of for example exchange traded funds or they might open an account in what is effectively a gold bank where gold is held in a balt and they own a share in that physical gold and they can trade those shares with others for example they can buy goods and services across borders at least to the extent that their governments will accommodated yes and you mentioned the ownership of stocks in the. d.t.c. she actually has title to most of people stocks which is relatively unknown but i think one of the one of the criticisms about the gold market the paper gold market is that there is not enough physical gold to back it up so does this become a problem well this is. true gold bugs are.

often not satisfied with the proliferation of substitutes for owning physical gold like. having said that as you know. the gold e.t.f. in the united states has become a very very actively traded financial product and is probably the cheapest way for retail investors who want. exposure to gold to get it. well the u.s. has had at least two bubbles since the late one nine hundred ninety s. and some would argue that we're forming another so what do you see as your projection for the future of us. you know i think we're entering into truly uncharted territory here as the fed begins to hold back on the monetary reins on the fed's balance sheet is. stream of the bloated compared

to where it would normally be by the end of the year for example the fed will have one point five trillion dollars in mortgage backed securities which it says it is not willing to sell this means that it will have to use untested mechanisms to tighten monetary policy in the united states and i think that's going to cause some anxiety in the markets yes and one of the other things bernanke he has said himself that he does not want to do this but he could actually sell some of these assets that would be the m.b.'s utilities and the treasuries do you think it's possible that the fed will be forced to be selling some of these assets when it's one of the biggest purchasers and what would be the consequence of. the fed would be willing to sell treasuries under the right conditions but he has already stated that the fed would not sell its mortgage backed securities and that means that it may have to resort to as they said nontraditional means of tightening

monetary policy things like term deposit auctions for example exact where the banks are asked to tie up their reserves for a period and not lend it out here's the problem with with that in order to make things like term deposit auctions viable the fed has to leave determination of the fed funds rate to the market no longer will set the short term interest rate in the market and that would really become quite revolutionary for monetary policy in the united states the e.c.b. has used term deposit options to sterilize. interventions in the european bond markets but i should emphasize that many of those options are felt meaning that the european central bank was not willing to pay the interest rates that the banks were demanding now that didn't cause any crisis because the e.c.b. is currently in the loosening mode. if the fed were in

a tightening mode and those options were to fail i think you'd see enormous disruptions in the u.s. market i agree with you completely thank you for joining me this is ben steele author of the battle of bretton woods and the director of international economics for the council on foreign relations. coming up we have an interview with veteran futures trader larry williams we get into some shop talk but we also talk about how he turned ten thousand dollars into over a million dollars in a trading competition in one thousand nine hundred seven and exactly how his daughter michelle williams won the medal while working on dawson's creek then i do a break in the set producer of mary david over stealth clothing there is more or less than you think to this story.

plus i was a new alert and. scared me a little bit. there is breaking news tonight and we are continuing to follow the breaking news. alexander's family cry here's a. great thing that had ran into court around. there's a story made sort of movies playing out in real life. here's mitt romney trying to figure out the name of that thing that we americans call. i'm sorry i'm just a guy who cares what you say arts. you know what. i

want to feature is. the crime. it's really about it's. going to hurt you to distract us from what you and i should care about because there are profit driven industry that sells us sensationalistic garbage he calls it breaking news i'm having martin and we're going to break that it's a. little.

earlier we had the chance to talk with veteran futures trader larry williams we first asked him what his thoughts about the fed's money printing to week policy were and here's what he had to say. that given the history of the stock market up on national merit i think you're going to lot of spirit but we're going to change a transition year so long to patent decline but i think the long term fundamentals what's going on in this market your commitment trader report the relationship will gold to trade you bonds also see just we're not going to see substantially higher rates in fact we've got to act we're rally i mean the bond market right now you know that's interesting and it gets to technical analysis versus fundamental analysis but one thing you just mentioned is the commitment of traders report which a lot of people who trade stocks don't even know about even though it might be useful could you explain the history of that. and basically how it works sure once

a week the government releases a report that shows what the large institutional is if you will of the commercials who buy and sell commodities as well as treasury bonds their net long position are the longer the short how much it also shows what the small speculating doing they're usually wrong they're very very straight here and then the large traders primary the managers a commodity funds and my sense of that my reading of that is without a doubt we're at an overwhelmingly polish by point in here this is a time to be long take by signals which actually trenching signal we're going to coming down exchange a trend in here to the upside in bonds you've got to go on and what about other markets such as gold crude oil what do you see in those right now but i think gold still has some legs to rally here our forecast of the first new year was for a substantial decline until about august august he's come we've got a rally and yes i think this rally has legs we haven't pulled back in here but i'll be much down on a longer term basis we come back in

a month two months from now. buying it just general price very well i'm going to track it well we are talking about the bond market in the one nine hundred eighty s. and actually in one nine hundred eighty seven you did something that was absolutely amazing it turned ten thousand dollars into i believe one point one million dollars in a trading competition could you talk about that. well that was a training competition and i was very very aggressive i just train a lot i did a lot of short term training not much of a trainee actually but a whole overnight or a couple two or three days and i just maximize money management i had the answer amount of money and every single trade that's what accounted for the exponential gain and of course i had a hand in the market you get to go in together you can really make a lot of money trading stocks or commodities certainly and you actually ended up i think your high water was about two million dollars and you certainly i read i read your account of this you really pressed the pedal to the metal throughout the whole thing and i think you were away for a period of time doing something else interesting would you like to talk about.

yeah i was in a safari in africa in the crash of one thousand nine hundred seven so the account i think the high was one point rather two point three or two point four million starting with ten thousand dollars and then during the crash it went down to seven hundred fifty thousand dollars and came back from africa and created a seven hundred fifty thousand dollars back to one point one million dollars so a little bit of a bounce back in there but the crash of eighty seven now i felt the pain of that well you're not the only williams to have won the competition your young daughter michelle williams at the time also the how did you prepare her for that. by home school michelle in so i had to teach an important thing lots of margin call what's gratian out in trade to drive a car out of their car and that was just like a task that we did when she was selling dawson's creek fun father daughter thing to do and she started training and eventually just followed up on system and she got busy with their own acting career and place your orders automatically but the

really important thing was she has the money management strategy x. number of contracts regular dollars net cash and national gave her the exponential being that she out of her own training and could you explain for the viewers a difference between technical and fundamental analysis and what you were using at the time or what you use today actually. well i use a combination of both i think you really need to know fundamental i don't believe the charts markets i think that markets move under mental reasons as the amount of the gain is going to be caused by a fundamental condition the choppy year erratic stuff along the way that's caused by price action and emotions so the technical stuff looks at price action where is a fundamental to supply me and relationships and i really like to combine both of those together i think the optimal way to trade you can't have one or just the other i think both of them well there's another dichotomy and i think you're a trend follower but there are also people who are a bit contrary and they're looking to short the market when it goes up by buy the

dips can you explain the difference between those two different styles. well you know after fifty years of doing this i was excited to hear that. but they've basically. i do you want to get aboard a trip and you are right that trend as long as you can that's where i found to be the most radical that might be a very short term trend might be a very long term trend but i think that's the overall takeaway that i've gotten from my fifty two years of trading now is that you want to try to find a trend and stand that horse as long as you can do you think we're going to be able to enter a new trend following environment in other markets that we haven't necessarily seen trending maybe there are a bit more choppy right now. what i think rather see a big trend here in the stock market and nasty the downside i think we still have substantial move to the downside left in this market that's a big trend coming up probably a big trend move coming up in coffee to the upside also the japanese stock market the upside those are big economic plays there will out pull back to rallies along the way but the significant movement is should be up trends or down trends as i

pointed out. that was my interview with larry williams veteran futures trader. i am with breaking this side producer amir a david thank you so much for joining us again for adding we're talking about surveillance clothing today i know you just did a little piece on topic it is fun have you ever done it i haven't wow and you had yesterday i did i did dabble little and you painted your cheeks a little bit i saw that i did you know ok so what you may add so what's up with this surveillance fashion exum quite simply surveillance fashion is basically incorporating countersued valence technologies into the things that we wear at the

accessories we carry basically and. has to do with our appearance and what is. being used to enhance the security measures of governments for instance and what are what are people doing to counteract this for instance i think there's something called a burka or there is so that's part of this line that's called stealth wear and it's not a misnomer at all it's all about hiding ourselves from cameras and particularly from drones so these are basically garments that are designed with a metalized fabric basically that shields us from the thermal imaging that we use to basically figure out who we are but it's interesting so how do we from drones in other ways i mean it seems like they're kind of pervasive and i know that this is a topic that's discussed on the field they are pervasive and it's really hard to do that's the reality of it and i think that's why we're starting to see these technologies emerge yeah and i think we have another technology which is your face yeah it's you know this is really interesting so this is using it's called. the

sickly camouflage computer vision ok so this all has to do with facial recognition software this is really really cool and involves breaking up the most characteristic parts of your face that mean this is when i have this is what i was doing yesterday because the eyes the nose the chin that small triangular area that's where facial recognition software really zoned then and so a really really works to break that out so kind of look looks funky but it works ok i got to tell you i carry a cell phone on me almost twenty four hours a day most people do and a lot of people don't realize that this is just a built in tracking device so how do you get it out of the people don't realize that it's completely traceable trackable even when it's off even to how is it that's what i'm told i have no i don't that's how it's possible but government agencies have that ability so this pocket is really really cool because you just put it in there you can see like a little wall that is just going to. and then basically it blocks all wires. list

signals from both entering and exiting so you are off the radar completely when you put it in this little guy and that that something like that goes for about sixty five dollars what about ten of. those are the kind you can get those. things for those are just i think when your colleagues has one all you need is a simple woman of oil and you've got that that's that's the easiest but that's not turner's surveillance tactic of a mall are these things going to cut my not quite work as well as as the. so are these are the big picture question is are these things going to catch on i think they are i think this is a really growing industry and as you see the surveillance apparatus grow as you see these technologies are merging more and more you're going to see the demand for them and merge more markets because people are becoming more politically aware people are starting to connect that was a nice thing now they are and they're starting to understand that you know these government policies these technologies are affecting their lives they are they're

actually resorting to proactive measures doing something about it one of the unfortunate things is that there are many other ways to try people and this is something i've been following for a few years now is that it's called gate technology in other words gate in terms of the way people walk and everybody walks with a unique signature and according to the sources that i have cameras can track people just based on the way they walk is that crazy that's really really unsettling. that's amazing and i'll tell you another anecdote there is there are these bars in scotland and these guys there are years they're used to coming in there for years and they have these hats and they're not allowed to wear them anymore because of these surveillance cameras so unfortunately the surveillance creep has definitely impeded our law it has and you know what hats used to be a not. a good time you know and if you want to wear the today show be sure to like us on facebook at facebook dot com slash prime interest you can follow mirror

mirror david you can follow me at english p.-i thank you for. joining me. and it was a foggy day on prime interest we shined a light on our favor and a largish shadow regulator that's prominent financial group who signed off on bloomberg eight problems were found but now apparently they're corrected you should ask john corazon about that whitewash and the newly transparent fed said no news is good news or maybe there's just no news and they're fed began way behind the clouds we found an obscure corner of the morning and the story back in the white. part about the time that an alliance but then steele and larry williams open their

umbrellas in our beloved chairman to brainstorm it you guys were talking about you speaking of which the global money printing program has successfully devalue the currency of five billion people but signing off this is carrying boring from a great night.

iraq's. prime. minister. coming on. wealthy british soil some time to see what's right for. markets why not. come to. find out what's really happening to the global economy

with mike stronger for a no holds barred look at the global financial headlines tune into cars a report on our plate. plus there was a new alert animation scripts scare me a little. bit. there is breaking news tonight and we are continuing to follow the breaking news. the alexander family cry tears of joy at great things other than their. red dark and a court of law found alive there's a story made sort of movies playing out in real life.

knows in surveillance but when it comes on to fresh fire for helping the n.s.a. spy on millions of germans every single day. the un is pressing for access to the scene of an alleged chemical attack in syria i hear a nazi we investigate how the ongoing chaos is allowing al qaeda linked organizations to thrive. and egypt to pose dictator leaves prison while the question on whether he'll serve life behind bars for the deadly crackdown during the twenty eleven revolt now remains on unsaid.