manipulating metals librorum for x. then fire squids and tapeworms we've covered it all here on the kaiser report but aside from the bad and the ugly we've also covered the good so over golden bitcoin the global insurrection against banks to rock your patient aka. move your money and campaign will pay and the most interesting guest of all financial media mainstream or alternative and the best audience for sure that's you right stacy yes max and of course five hundred episodes of the kaiser report we have an audience out there including a looks like g c h q or n.s.a. they've been forced out of the dark by edward snowden and they're after only a little bit. people who put it that the time clearly there. there we go we started the show in november of two thousand and nine four years later we're at the five hundredth episode and you know i'm going to go over some of

the topics the things that we've seen over these years and where we have arrived after four years of this show now the most remarkable is the aftermath of the financial crisis and one graph you see the blue line is financial profits are up fifty nine percent since the beginning of the financial crisis the red is corporate profits up forty two percent green is the s. and p. and that is up eight percent and purple is employment which is down seven percent the crisis was created by over financialization of the economy in the u.s. and around the world that is to say that the business of the u.s. and the u.k. became the business of printing lots of bonds and then manipulated those bonds using derivatives derivatives market got to be six hundred trillion in size on a global g.d.p. of about sixty trillion then you have the crash of two thousand and eight which was a crass. of financialization securitization to get out of that crash the government

decided along with the treasury and the federal reserve bank to increase financialization which increased the profits of the people who caused the crash to begin with and as we've said on the show along stacey people are not needed in an economy where the top two or three hundred people can just get money for free from the fed similar to saudi arabia they don't need the citizens of saudi arabia they just they just pump more oil and there is incredible poverty in saudi arabia in america now there's incredible poverty because the people are not needed their jobs are not needed their tax revenues are non-native because the bank of america the federal reserve bank just prints money and therefore it just creates a suit of wealth and income gap actually i'm going to skip ahead to a headline i have there because you mention the derivatives use of derivatives as a what form of wealth confiscation and wealth transfer schemes the typical american family makes less than it did in one nine hundred eighty nine in one thousand nine

hundred ninety median american household made fifty one thousand six hundred eighty one dollars in current terms that means that twenty four years ago middle class american family was making more than a middle class family was making more than a year ago which is fifty one thousand one hundred seven now if you look at the chart you can see the past twenty five years that it rues under that median income rose under clinton but then what happened at the end of clinton administration max we had the repeal of glass steagall and we had the commodities futures trading act which enabled derivatives to go global they had the reclassification of derivatives as gambling instruments to legitimate instruments of finance as part of the global financial ization of the economy most corporations by the way are in the business of finance they're in the business of lending famously g.-mac general motors acceptance corporation makes most of the money and not for that g.m. not making cars ok that's just one example there are many exam. but just take

a look at the last ten years as what happened to one portion of the american population the black population they were told to buy houses under bush they they got caught up in a subprime scandal which was a manufactured crisis they've had the biggest wealth confiscation in their history going back to slave days and they are now feeding into america's prison system which is owned by the same financialization the same securitization the same banks on wall street so the black americans have gone from slave to middle class back to sensually imprisonment and that's all served to the purposes of the top one percent of financialization eyes or so you mention one percent and of course the ninety nine percent live with occupy wall street happened since we began the show we've covered that we were right there covering occupy wall street from the very beginning now here's a headline from forbes on the two year anniversary of that give back yes it's time for the ninety nine percent to give back to the one percent and they say imagine the effect on our culture particularly on the young if the kind of fame and

adulation be the lady gaga attached the more notable achievements of say warren buffett or if the moral praise showered on mother teresa went to someone like lloyd blankfein who in guiding goldman sachs towards billions in profits has done infinitely more for mankind well this is a market fundamentalism just like america is now hiring al-qaeda in syria to make way for a pipeline for saudi arabia then forbes magazine points to a financial terrorist like warren buffett who's in the securitization business financialization business who has done more to destroy the american economy than almost anyone except for lloyd blankfein they've all been caught and gazed in massive fraud they've had to pay small civil fines as part of rigging the judicial system and the legal system with the money they make in this financial life ponzi scheme and forbes magazine is a shameless promoter of market fundamentalism or market terrorism this is an article that said in pain. in peace

a commentator an outside commentator who posted this on there he's an iran fanatic so he's looking at the profits the so-called profits that lloyd blankfein has stolen from the rest of the population through fraudulent warship mortgage backed securities to front running markets through high frequency trading and he's saying that this is in an absolute objectivist fundamentalist way that the profits are all that matters and the fact that he stole it from you from your granny tough luck that's that's capitalism and his version of it well we've seen this with other fascist regimes and as the wealth confiscation gets more pronounced those who are doing the stealing whether it's the nazis in the thirty's or warren buffett in the twenty thirteen period they scapegoat the losers so the losers are being scapegoated i've already mentioned the black community america's being in prison a record amount of the prison population in america is the fastest growing population the prison population in absolute terms is higher than any other country in the world and that forbes is assisting in this scapegoating of and pretty soon

prisons become concentration camps and they become extermination camps that's the final solution to the debt bomb created by the federal reserve bank mark my words you'll see that america in the next five years the other thing that we've been covering is the global insurrection against banker ochs occupation but of course that is nothing has been able to stop the rise of the banks for class i was as we see in the numbers that we've just covered the median household income is down the wealth and profits of the fate of the financial sector is up lehman's legacy of inequality james saft of reuters when lehman went down five years ago it set in train forces which could easily have led to the failure of many financial institutions face of the possibility of take a large sways of the banking system into effective government control first the bush and later the bomb a administration's chose instead to shelter institutions and executives from the consequences of their actions that involved creating a variety of policies which subsidize large banks and help to do. a moat around the

businesses this went hand in hand he said with monetary policy and put this in the context of the guy who wrote a commentary on forbes dot com where he's saying that lloyd blankfein his profits make him a holier than the ninety nine percent when as james saft envoy here is pointing out is government policy it's manipulation through the fed that is giving the that has built a moat around goldman sachs and enabled them to profit at the expense of everybody else but i would this is a failure of all markets signal big due to market fundamentalism the collapse of lehman was a market signals that should should have alerted the government and everyone participating in these markets that their massive reform was needed but instead they interpreted that market saying bill as a way to make the situation much worse again i made the comparison to theocratic fanatical religious extremists who misread their fundamentalist texts and everything they read suggest that they should blow themselves up in other people same thing as lloyd blankfein and warren buffet everything they read says i should

blow everything up i should commit mass terrorism that's the message that they get from the from the price signals that they receive it's a breakdown in capitalism unfortunately and this predictable because unfortunately the price of money is close to zero and access to money is ubiquitous by the stock or c. in america ruled by the least qualified not to mention the kleptocracy on wall street this is again what they point out is that there's a huge subsidy that has worked in the last five years since we started doing the keiser report there's a massive subsidy and that these banks goldman sachs j.p. morgan and he of the other surviving banks they know the investors know that they have a guaranteed subsidy is that the government will bail them out no matter what and he points out we also have an effective subsidy or rather multiple subsidies to an industry which has proved itself remarkably immune to the power of technology to bring down costs and improve products despite what the guy in forbes said is not bringing innovation. and efficiency to our economy is actually slowing it down it's

gone king up the wheels of capitalism well our frequency trading which is a technological innovation finance is used to steal money from the new york stock exchange you put a computer colocated next to the floor they stock exchange algorithmically a front runner trades on the exchange and that money goes into the pockets of banks like goldman sachs with zero risk that's siphoning cash from the economy had zero risk so naturally people are increasing the rate of poverty there's an increase the rate of poverty in america if you have a bank that's actually got a computer parked next to the exchange that siphoning off them funny then you're going to have a lot of poverty out there and of course you have to add let's scapegoat the people that were victimizing to make it a true fascist trifecta thank you lloyd like life so finance went from fifteen percent of g.d.p. in one nine hundred eighty to twenty two percent today and so they are able they're too big to fail they're able to get away with massive crimes and and why is i why

are they able to why are they able to scapegoat people and part of it is the media because you can't have these crimes without propaganda and i saw a tweet this past week from dennis kneale a fox business and he says hey guys another day another fine on j.p. morgan what's bugging me tweet us is the government's assault on j.p. morgan going too far is the government assault on j.p. morgan not the j.p. morgan's assault on the american population the global population to libel rate rigging to municipal bond rate raking through the collapse of jefferson county through the front running of markets through manipulation of silver gold energy markets no j.p. morgan financial terrorist embraced by fox in d.c. just like they now embrace al-qaeda to fight their wars and in syria you know twelve years ago it was bad oh nine eleven blew up other bad now they're out there a lovely friends we want them there on the i'm so not surprised they don't i want these guys to run the bank the federal reserve bank just go out and hire a terrorist out right drop the fist. higher hottest to run the better was there

bank of america warren buffett you've got influence all right stacy ever thanks much for being on this very special five hundred episode of the kaiser report five hundred more max. all right states over the second half a whole lot more. crosstalk

rules in effect that means you can jump in anytime you want. the interview.

one of the new. pleasure to have you with us here on our team today. welcome back to the kaiser report imax keyser with this five hundredth episode of markets finance and scandal time now to go to ecuador and speak with professor steve came who was on our fourth episode of the kaiser report so it's time to check in with professor king welcome back to the kaiser report serve makes

a lot of being able items are still going to grow the most popular show on the finance and growing around the planet professor king has been five years a sense lehman brothers collapse are we any better off today is the financial system more stable no way no way or the great tragedy of this is that this should have been the final straw flowing in a debt bubble and i mean private there primarily message for the global economy when the crash happened and because the politicians become so i walked up on the belief that if you yukon have a viable economy the shoot out a lot financial sector they spend is fine revolving the financial parasite rather than reviving the economy to parasite it actually brought to its knees so in fact we've now got a sow's back on another unsustainable trend probably of rush profit that new america for a while feeling the same sort of thing with that ludicrous i go to the sale will see this go forcing it another bubble i did it the same apparently happening in a strike or does he simply have low interest rates so that blowing bubbles one

small and the system is much more fragile was a scary to much of a logical level a good life and it was before the last crisis began ok now you mentioned something there that we stacy and i talked about the first half that is that the lehman brothers collapse is a price signal and if the capital system were working normally that signal would have been separated as we need to reform the system but instead that price signal was attempted as we need to double down again on fraud correct i think it's correct and it says ruefully. i often blame the private sector if it is buffalo but i blame the free to the public sector fool not doing what it should have done and saying will you guys you could use french ideas which side would if any were day. of the economy and it's now time you try to prosper doing it your way you walked out you know the real one holes go your paper you post and we're going to put gold like on

you and put quite a few in jail through it because cleavage had to be involved in what you did none of that happened i became totally psyched fanfic for the financial system so i just talk about the military industrial complex aching over america i would actually happen is that politicos financial complex aside can i have it not just america but the entire planet imagine the you blame the private sector more than the public sector the public sector of course being the government now when you hear debate about this on the mainstream media you see it or your hear a lot of finger pointing so the private sector will say look we wouldn't be gave to this massive fraud if the public sector or the government didn't didn't allow us to engage in this fraud in other words if you want to stop then you need to pass laws to stop us then the government or the federal bank reserve bank in washington will say well we can't stop the fraud because if we do it'll cause a problem in the private sector all the banks will collapse so we have to keep the

fraud going with artificially low interest rates and quantitative easing they keep this ponzi scheme going so there is this finger pointing by the way everyone in government is getting fabulously rich everyone in congress has participated trading on inside information the net worth of the average congressman senator every one of the administration has doubled tripled quadrupled every of the bankers in the private sector same thing their net worth of doubled tripled quadrupled everyone's making money in this unholy alliance this fascist alliance between government and wall street and all the one holding the bag of course. are the average person who is not part of the kleptocracy but they believe they are participating through the housing market particularly here in britain we're george osborne believes that by re-inflating the speculative housing bubble he will bring social economically back to the economy of britain is this a good idea professor steve came it's long city to live in the short term this is

a great tragedy max because as you say it's obviously the politicians in the financials that made the biggest bottle out of this process we went across to get sucked up by a housing bubble that big getting better off it was only those that got houses that were to go to the guy and you're coming out ahead what you get is social division coming out of this and ultimately that lisa social breakdown as well so it's a short term tactic it fools you for a while and it collapses in a heap of a later stage and we're back in the same bloody stock again so it is a great tragedy that there's a chance to reform the financial fraud of capitalism which senator whitehouse might make more money out of the financial form of capitalism and to even further involved in the finances in the process what we've seen over the past ten to fifteen years a global bubble and bust economy driven by low interest rates we had the asian financial crisis we had the dot com blow up we had long term capital management we had the housing bubble subprime bubble and burst now we're into what looks to be a sovereign bond government bond bubble but there is a a rotating a musical chairs

a bubble and bust and we've talked before about the real estate market in australia and the real estate market in canada it looks like mark carney's old country canada is either it right in the middle of or about to experience a major real estate collapse or thoughts yeah i think it's sort of it's good to go and that's the bubble looks like a good bit of actual makes them a lot some of the debts are the most rigid numbers i was still driving process off . when you when you look at the level they've reached a kind of years now and we've gone from being. like you did country and over just to have to have medium to high good country and overeaters and you always have a boss at some point they can raise food again is a very skewed the american dollar that's now rising once will but you have to have a crash and they certainly have you and you've been trying to issue a while ago i don't know if you skyscraper and crying and crying country so in a sense that having developers that massively go committed will competing to be the first aussie open the front tool and i think that if they want to be the last one

didn't have to write the hype in the door to the bank and said i think about this walk again but it may be quite another year ok let's talk about one of your favorite economists i mean minsky and i should point out your book debunking economics is a must read for anyone who wants to get a good picture a good view on exactly all the dimensions that are contributing to this massive global fraud but let's talk about i mean minsky for a second because i'm an immensity of course the minsky moment is something that he came up with and it has to do with the self referring bubble mentality so we see it right now in the u.k. because house prices are up the people who are part of the bubble believe it's been due to their own ingenuity and ingenious b.a.v. or they buy into the bubble this is part of the minsky moment this self-referential what i call financial narcissism where it becomes patently obvious that the bubble must be real because i'm part of the bubble and this is part of what contributes to and there's different levels of those different parts of the minsky moment cycle i

wondering if you could review that for a moment so we can have an idea of where the u.k. is now in this delusion or if there's a good wife putting it next because one thing we skied spike about right wing was what he called euphoric expectations and he said if you have a capitalist economy it's always going to be cyclical that we've been still the boss even without adding the finance sector on top of when you do have the finance sector on top people get to in a bit and they borrow too much money they're going to refight some of the during a slump so the economy slows down and listens to your terminal slump like a great depression or if a government comes in and does this ridiculous spiral out the financial. like i've done this time around because i'm the only stossel stabilize because assad's study the last people stop as they get the previous crossers so they're willing to borrow money one small so the bubbles out cycling off once will and once the dons what's actually drawing economy out is the rising level of debt and everybody who is dropping by selling assets on a rising market cools by rising dead as you cite financial gnosticism not because they will a genius that does it is really the fact of what is borrowing money and buying

second as well for each other the drives the process up so you get to the size with a completely euphoric and they got absolutely total rage and in the ivory coast many of the projects they take on are actually losing money and then what happens once they saw it's a lose money they're going to borrow money just tight to have to stave off bankruptcy making keep on doing it one of the sides is going to be for someone to go slightly too long they miss one and bang that bankrupt and the whole thing comes crashing down once more and that's the will of the politicians in the financial sector that they're giving us a lot of the night and sixty's when we were talking about taking off to the moon in rocket ships we're not taking off to the moon in day. yeah i saw an interesting statistic today and i will quote this paraphrase it a bit but the house price average house price of the u.k. is increasing by one hundred pounds a day whereas the average median income in the u.k. is roughly eighty eighty pounds a day excuse me but you see right there

a huge disparity the house prices are moving up quite a bit more rapidly than what people are being paid on a daily basis additionally i saw an interesting statistic that said that in the u.k. over the past several years you've got your ten thousand dollars a year you have in the bank has lost purchasing power down to the eight thousand pound level just over eight thousand pounds so once again they say there's no inflation they say they need to keep interest rates low they say the housing market is not a bubble and yet the average person is losing purchasing power they're not participating in the bubble and they're and they're creating social unrest so this is a recipe for i guess either as a societal collapse or societal of people where your thoughts. yeah the trouble of lesser siding these days when no near is open honest as we used to be back in the not in thirty's and forty's because of this stuff that happened back then when you had strong trade unions and militancy in the working working class and you also had

your let's listen to carry you couldn't afford to put up with it people would be on the streets to get actually see political demonstrations against it these days in some way social security that was the bottles as moscow to that level of political revulsion that people should have of what's happening right now so i could organize the politicians continue getting away with it the outcome ultimately i think is more like turning japanese without the benefit of being jeff an ace so you stop getting out of a stagnant economy because there's this process going to only work for a short while before it falls back into an all slot and you didn't have usually use it possibly day it's a slow growth meaning people convert into the workforce in the first place they certainly combine a house and over already ready to run out and you then get a depressed society a congenital depression i think is more the outcome rather explosive reaction to it i would like to see the explosive reaction but the trouble is normally when those things come they don't come from the people they come from the fascist movement and

i think we're more and more likely to see that happen out of sign and frankly this is the same way you'd look kind of crap back in the 1930's it just happened foster back then right well we're already seeing it in grace with the rise of the name of fascist party challenging the i.m.f. and other financial terrorists now i know you're working down in ecuador at the moment steve keen so your thoughts on emerging markets how how they've done in the past five years into this debt crisis them they've got about a minute left. yeah they do some of the legit markets themselves appear to be getting back into a bottle again seventy shiners and evolve with it has more of a capacity with the state's finances and it strikes at the state that awful going indefinitely so i wouldn't gamble on this one it will actually find pretty interesting progress to a country mary where there's still the stuff i'm trying to stop themselves being taken out of by the financial sector and doing a lot of attempts to build innovative genuine capitalism down here rather than the fraudulent stuff that's running and wastes so there's some glimmers of hope in the do it in emerging markets but let's not gamble on them let's get back to being

a really productive industrial capital society one of these dyas all right well save game thanks for visiting us on our five hundred episodes you were there on our fourth episode we've been tracking your work your career now for a number of years and it's great to have you back on the kaiser report. right to still be in touch with you guys i love you guys do you like and that's going to do it for this edition of the kaiser a four with me max kaiser and stacy herbert i'd like to thank our guest professor steve king author of debugging economics if you like to contact us tweet us at kaiser report that we're looking forward to another five hundred more episodes for you it's a lifetime backscatter saying by all. the

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