have a saying go big or stay home you should have gone into the bank with a flame thrower asking for an overdraft extension you should have gone into the bank asking to have the bank give it to him as the president for being such a nice guy and having a good day to flame throw in a few other little niceties as a bag of tricks yeah well it's more very similar to the situation with hank paulson going to congress because remember at first when he went in with a flame thrower was rejected and then what happened they threatened to burn the home they threatened to commit suicide with the whole banking system and this guy also did that he threatened to after the flame thrower didn't work he threatened to ignite himself so the article is man who had been refused over draft extension is tasered by armed police after bursting into a bank with a homemade flame thrower now the interesting thing is that of course the u.k. where they're a little bit more stiff upper lip about things jackie clover who runs the clover tearooms opposite the bank said quote we heard that he got upset as he had been turned down for an overdraft extension maybe he was someone in business who had got

to the end of this tether right well i mean the point is a well is well made here that what the crisis was all about two thousand and eight was not about a sudden change in business prospects it wasn't a once in a one hundred year flood event on the that nobody saw it coming it was a bunch of banks who got themselves in over the head with their overdraft extended hank paulson and you're right he did x. they threaten martial law in america if you recall it also wall street which means goldman and j.p. morgan crash the market the day after they were refuser overdraft protection so they use this what i call financial terrorism and i see more and more people are using this term to describe accurately people like hank paulson as a jihadi who is willing to blow himself up for his cause of market fundamentalism i'm glad to see that is catching on jackie clover hypothesizes that perhaps he was just at the end of his tether so i'm going to look at some reasons in the headlines that follow that he might have been at the end of his tether well perhaps his home was earning more than himself. houses beating households london edition the average

house in the capital is now earning as much as its occupants with the average london house costing four into the thirty eight thousand pounds the capital gain was worth thirty eight thousand seven hundred twenty nine pounds by comparison the average london household had a post tax income of thirty eight thousand six hundred eighty eight pounds in two thousand and eleven the last year for which the oas has to to fix so that max is four pounds forty two per hour every single hour every single day rise to the house prices are appreciating at a rate faster than income now the bank of england under mark carney says there's no inflation because they don't include house prices when they calculate inflation they include things like electronic equipment they were the value is constantly plunging due to advances in computer processing unit the c.p.u. technology they include slave made labor close under prime mark with

a price sold by prime mark but they don't know what you're all going down in price due to the fact that the people who are direct beneficiaries of quantitative easing are using those bailouts those credit card extensions to buy factories in bangladesh to buy slaves to then really export into the u.k. slave made goods which people are then buying at a cheaper price they say that's deflation meanwhile however the wages are not catching up with the house price. they don't include that in the inflation statistics so net net the average person in the u.k. is experiencing extraordinary inflation but the government pretend it's not there and if they pretend it's not there then they say it doesn't exist well it's also a way that they could possibly manipulate in the head donek adjustment sort of way they g.d.p. figures for the nation so if their own population of human beings with you know sentience beings if they're not earning income then they could just start including

houses in the overall g.d.p. in terms of workers and employment picture so the average house is gaining by a hundred and ten pounds a day here the average person in london is earning ninety pounds a day right now whole g.d.p. of course when they calculate c.d.p. this is inclusive of the at output of the nation which includes in many ways what's going on in the housing market so they say that g.d.p. is rising however when it goes to looking at individual workers and their wages they say well there's no way we can pay you more because we see in fact deflation so when workers are experiencing deflation by definition and by the government therefore they don't get any kind of increase in wages because it's deflation however bankers on wall street get huge bonuses because house prices are moving up and that's of course causing g.d.p. growth they're causing the nation's wealth to expand so they get a bonus but there's so for them if there is

a place but for the average person they don't get it any kind of life cost of living adjustment the so-called cola because it's deflation because the house prices not included in the c.p.i. number so this is what we call apartheid if you're poor and you work for a living or anyone is working for a living not just poor people anyone on a wage is considered to be on one side of the apartheid wall they live in gaza and then everyone. listen for can tell a big everything's great for them they're benefiting mightily from it all so you have this extraordinary bifurcation of society using financial statistics instead of just an actual physical wall and guns so this is an innovation of the twenty first century is financial apartheid now in terms of whether or not this is a bubble of course we know that george osborne has this helped by scheme and all sorts of other government subsidies for house prices particularly here in the in

london but they also provide a chart in this article of how many in london expect house prices to rise over the coming twelve months and it goes back to february two thousand and nine on the left up to present day so as you see it's soaring people think house prices ninety percent think definitely house prices are rising house prices are rising because of george osborne's ponzi scheme as we've discussed it on this show but when you have house prices rising at a rate that's faster than underlying economic activity then you've got a distortions in the market that will result in either a crash in the guild market the bond market be a crash in the housing market or see social unrest so when the social unrest comes if nothing is done to address these excesses in the in the in the jihadi ist in the city of london to curtail their suicide debt then don't i just

i rue the day that when there's a you know a million people rise up with torches and pitchforks and go into the city of london and start doing what needs to be done to restore balance i just rue the day when b.b.c. is a headline saying nobody saw it coming it was a surprise who could have predicted this no you frickin idiots it's baked into the cake just look around you there's a financial wave of terrorism all over the city and here is your part of it because you don't even report on it well so back back to mr flame thrower maybe he was. because his house is earning more than he is or maybe after all if because he was over sixty perhaps after working all those years and saving all that money he's despondent by this next headline billions of dollars wasted on investment advice pension funds and other large investors are throwing away billions of dollars a year on worthless advice from investment consultants according to academic research so they looked at all of the research and what all the consultants like

mercer were recommending to pension funds and over eighty percent of pension funds use the so-called consultants and what they found on an equal we did basis u.s. equity funds recommended by consultants underperformed other funds by one point one percent a year between one nine hundred ninety nine and two thousand and one according to analysis of twenty nine consultancies accounting for more than ninety percent of the market now if you have a low i.q. there's two jobs that are suitable for you one is to be a cop because you want people to just take orders you want to order takers and cops and soldiers etc fit that category just happens to be true now the other job you can get if you have a low i.q. or you're borderline imbecilic is a pension fund manager and that's by design because they want these idiots to buy the stupidest frickin investment they possibly can and as your and as your headline points out tens of billions of dollars is wasted annually look at roberts the trone famously from the pension fund of orange county california the man was have the

intelligence just barely above that of a bag of hammers and that he's put in charge of billions of dollars and of course he blew it all on some stupid ridiculous ideas that he was involved but that's that's just it's all over the endemic throughout the industry finally here mr flame thrower was of course tasered and bundled away in the back of a police van well here is this final headline max slump f b i white collar crime prosecutions i'll just show you the chart and this is from one thousand nine. three to two thousand and thirteen the blue areas under clinton those are the number of prosecutions of white collar crime orange bush two that's as you see a drop from the clinton era and then green the obama era yet another further decline so despite the flame throwing despite the banks across the world being burnt to the ground pension funds being burned to the ground. there are fewer and fewer prosecutions right it's financial apartheid if you're white collar then

all is fair and good you can commit any fricken financial crime you want and suffer no penalty and mad if i get a huge bonus if you're not white collar then of course you live on the other side of the apartheid wall you pay one guy five thousand percent to borrow money you get prosecuted for every nickel that you don't account for in some way according to some invasive n.s.a. spy program and its own in jail become part of the president doesn't accomplish our stay here with thanks much for being on the kaiser report thank you don't go away much more coming your way. but. did you know the price is the only industry specifically mention in the constitution and. that's because a free and open press is critical to our democracy albums. in

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one of the new poll shows common to watch should be. the face you know. pleasure to have you with us here on t.v. today. bugga back to the kaiser report i'm max kaiser time now to turn to mitch firesign author of this instant classic planet ponzi makes a great christmas gift minutes welcome back to the kaiser report fantastic to be here max all right miss you have charts and as always and this is the fed's balance

sheet chart tell us about it warren buffett says the fed is the greatest hedge fund in history is this what the chart is telling us i don't know for call them a hedge fund but mr mr buffett has certainly profited off the backs of everybody else because he has a heads up as to what the fed is going to do pretty much because they're in constant low when they fall to hedge fund well i think they have deep pockets in other words they've got printing presses and so on security they buy and securities in the open market they buy stocks they buy and sell gold they buy and sell bonds and they're trying to make money just like a hedge fund and then there's sixty to one leverage how is it different deutsche bank you know is a different goldman sachs is just bigger version of the same nonsense but there's only one problem with that max you're right in when the aspect but they're only buying so it's the giant motel there's a big welcome sign for these toxic assets and for treasury bonds but there is no way out and i don't think they realize that yet but i think if you look at the.

sort inject your management they're also we are they we know that banks like j.p. morgan they are actively selling gold and silver that's right because i said that's a sell but it's the end of it's well that's it's the end of the scam or the big ponzi scheme intil they cannot suppress the prices of physical silver and physical gold when that stops that's the end of the game now if you go around the world you look at what's going on real estate and asset bubbles have festered to the point of almost ready to implode now i don't know when that's going to happen i'm not a bright enough guy but when you keep printing and printing and printing and printing. now the e.c.b. latest was drake he said he's going to come out with another trillion dollar l t r zero. zero collateral i mean the collateral that they're accepting spanish sub prime you can go on the e.c.b. as website have a look some of that collateral is pretty scary it's with an american subprime the best five zero that means the e.c.b. european central bank correct they're the last really of the of the majors to

expand their balance sheet yeah japan's been doing it for decades the federal reserve bank in america went from eight hundred billion to over three or four trillion same thing in orme bank of england they've gone they've expanded their balance sheet by four five hundred percent over the past five years they can going to continue to do so but the e.c.b. was the last into this they're now expanding their balance sheet the idea is that they'll take all the toxic debt they'll take all the bad bets that were made by bankers in america and europe and they'll swap it for fresh treasury bills and they won't reform in any way they won't curtail the leverage in any way they're just to give them a green light here's fresh collateral keep doing what you're doing keeping yourselves enormous bonuses so that the house prices in the u.k. on an hour by hour day by day basis are rising faster than the average workers making per hour so the average worker the average house price in the u.k. in london in london is going up like a one hundred thirty pounds an hour day cetera it's faster than the speed of light

almost but we've got actually two charts here we've got a chart of london house prices and you can see how that goes upward slope into the right which means it's a bubble now can you pick the top of a bubble i don't know i called the top of apple when it was trading around close to seven hundred i wrote an article in the huffington post and i was slated everybody told me two hundred fifty people wrote in said you don't know what you're talking about and i said look apple's a great company but it's a barrier to entry that's very low to get into the technology market is not exxon mobil getting back to the housing chart if you look at it it's massively upward sloping this chart illustrates that and then there's another chart that we have illustrating wages wages is the opposite way so there's since the beginning of time in history in every real estate market in the world max there's been a correlation between income and housing prices there has to be housed. the to be be an asset class and i think people mistakenly say that housing is an asset class it's not it's an asset bubble created by excess of money printing around the

world you're seeing the bubble in the chinese housing market in hong kong's housing market in but a simple question why does the government subsidize house price speculation with guarantees and set of subsidising wages or workers are creating work or that what they're doing is using it as a component of g.d.p. to make it to puff it up to puff up g.d.p. by still rising wages do not contribute to expanding g.d.p. and economy such as the u.k. that's based almost entirely on borrowing and speculating because the worker over the last thirty five years or so has been squeezed out of the g.d.p. equation g.d.p. just not include work for a job to get wages that doesn't include any more you can't pay your way out of debt with borrowed money so the program you know the ponzi scheme program of putting the taxpayers at risk by backing ninety five percent of housing loans is madness ok i learned listed below to dig down i want to get in there you say look g.d.p.

is based on a compound components where the workers' wages are not really heavily weighted or a factor for this reason taxable income from workers doesn't contribute toward the ability of bankers to get free money from the bank of england to continue their borrowing and speculating so the if you're unless you're a borrower speculator you're not included in this g.d.p. calculation well as a matter fact are not needed and you're being asked to walk the plank in essence what this government this coalition government is telling the average worker in the u.k. is go top yourself we don't need you the point you know very good points max but i mean if the government really was serious about helping people out i mean the miliband scheme is ridiculous to cap different prices richard nixon tried that it didn't work very well when they tried these price controls what they should do. is immediately signed into law in parliament a law that will prevent companies like one go from charging people five thousand

percent you know they have usury laws in many other countries they have them in the u.k. and they stop them but that should be done away with immediately by this financial reform you know that's financial report reform but they it's not in their interest to do that and as the housing bubbles and bubbles and bubbles no matter how much lipstick you put on a pig at the end of the day it's never going to be a supermodel gisele let's talk about ed miliband the supermodel lipstick with the pig. the pig with the supermodel lipstick the deliver the list the other is a pig trying to turn that. so ed miliband he made a comment at the recent labor conference that used to be the rising tide lifts all boats but here the rising tide is lifting only the yachts subtile is very insightful well the rising tide hides the dead bodies at the bottom which have become victimized by the money printing the money printing and the q.e. is going to go on you know the taper talk and taper tantrum that you saw is ridiculous if they can't get out because what you have is

a zero boundary on interest rates since one thousand nine hundred eighty one interest rates have come straight down ok we had a low last year of one point four three in the ten year which is what they base all risk off of in the united states bernanke he said q e three q e four what a q e insanity q e infinity whatever it is he's an academic that's never had a job in his life which most of them are which is part of the problem and they're neo keynesians which is a keynesian on steroids which makes it even more dangerous he said the reason why we want to keep long term rates low on an extended timeframe now so what happened the rates doubled to three percent and they've come off a bit since but we've seen the historic low for interest rates i think you called it which is a good call max you know i called it i thought what call for a second because you called the fact that the fed would not taper could not taper you said on the show i believe you know going into last six months for a year this taper talk was a hoax they can't taper because it's like bernie madoff suddenly saying we're going

to start returning people's money in a real time basis he couldn't because that would destroy the ponzi scheme the only difference between bernie made up and ben bernanke is that ben bernanke you can print his own money if bernie made up could print his own money he would be fed chairman today i mean there are a lot of things that happened i mean everything is changed since the credit crisis the beginning of the credit crisis because we're in the throes of it now they changed. mark to market to accrual based the counting which means mark to fantasy it's the same thing that took enron down and it was a big part of the problem when enron failed it's because of the accounting principles so this king can keep going on i mean refinance rates refinance in the united states has dropped sixty five percent in the past couple months so i mean the trick one trick pony is coming to an end we're coming near that wall and we're going to hit it we're going to hit it hard ok so to put the context the response to the bubble that burst in two thousand and eight was to re-inflate the bubble which means housing and stock market bubble you're saying that look at what's happening in housing now look the building stocks also the housing bubble that was rain

flayed it to mask the underlying criminality is that starting to roll over you're seeing a rollover in housing and probably at some point you'll see a rollover in stocks as well and we're at the end of this you have a collapsing housing collapsing stocks so the situation will be as worse than it ever was except the debts that will be a course at record highs and there's going to print more money will instead of eighty five they're going to print a hundred sixty or two hundred or whatever it takes is drag you would say but it's interesting if you take last friday's close in the dow it was down one hundred eighty five points so if you adjust that because they took bank of america out replaced it with goldman goldman seems to have its fingerprint everywhere it's technical maybe everywhere the difference between one hundred eighty five and with the components a visa which nancy pelosi was an insider while she was deciding what they could do on the i.p.o. so when they took those can if you took those components it would have been down one hundred fourteen which is a forty percent difference so you know numbers never lie it's politicians bankers

and lawyers that do so you know the book planet ponzi walks you through the numbers they use the government's own data which is important so they've created a market you just change the goalposts like the unemployment numbers you know let's show the you three number which is seven and change where the u. six number should be probably closer to twenty percent for the dow jones as some people quote the market there is. the dow jones industrial average but the components the thirty components of the dow jones are constantly changing and just like they had done it just with the c.p.i. g.d.p. and all the so it's going nominees and unemployment this is done to massage the fact that the market may look like it's up but in fact there's a lot of underlying weakness i don't get back to ed miliband for a second of course as the opposition leader here in the u.k. the making some speeches this week as you mentioned about price caps on different parts of the economy to try to restore some balance and you're saying hey the nixon tried it is it was a waste of time but it in

a way though if you look at what ed miliband is proposing and your criticism of it it's kind of like the bookend to the monstrosity on what the right wing as been proposing into another word george osborne and his by the let's game or his right to buy or guarantee mortgage scheme is ponzi scheme that is a ludicrous as it is to support bankers but ed miliband policies are kind of the other the bookend of that now would ever bill and ben maybe get better traction if he simply said you know what we're going to reform banking get rid of wonga get rid of the criminality put bankers in jail what if you came out with a message that said a set of coming out price controls said we're going to take the biggest mal mt milligan force in this economy the banks the criminals on the city and put them in jail when that be a better policy i think that we need massive amounts of change i don't know that there's political will to do it because i think the lobbyists step in who support the politicians the politicians are academics so they don't have a background in real business the markets are so have been so heavily manipulated

for the past seven years that there is no more price discovery i mean you had junk bonds trading lower than five percent that's a disaster it's called junk for a reason so you need to have a basic market mechanism where pricing can maintain a real price rather than the government coming in and supporting it and to tell in a capitalist system. i don't care if the energy energy companies you've got to have legislation to stop them from gathering that's a separate issue but you can't come in and say i'm going to cap your prices and you can't make a profit i mean that's capitalism you deserve to go bankrupt if you run your business poorly like if i had a survey and i went out and surveyed my customers this is very real and ninety percent of the customers didn't approve of the job i was doing and that's a public survey many surveys not one it's not an outlier the survey would you invest in that company or would you think that the business models flawed if i believe that they were getting away with criminality of course i would invest in

that company like i would invest in corrections core of america even though it's one of most corrupt companies in america monsanto exxon their eco terrorists their prison terrorists but it just b.c. financial terrorist but if you're trying to make a return on your money that's the game today you have no choice anyway mitchell and time we got to go but thanks again for being on the kaiser court thanks max pleasure to be here all right and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert are they our guest mentioned one applause a dot com which is a website and a twitter account in a book if you like in touch tweet us a kaiser report and select imax kind of thing but go.

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