well in fact says we you mention we have to print print prints and we're printing printing printing just to keep even on g.d.p. in fat and many now think inflation helps the fed has worked for decades to suppress inflation but economists including janet yellen president obama's nominee to lead the fed starting next year have long argued that a little inflation is particularly valuable when the economy is weak rising prices help companies increase profits rising wages help borrowers repay debts and inflation also encourages people and businesses to borrow money and spend it more quickly well this is stupid because. in other words the fed to quote the program of quantitative easing and there's been one two three and four in japan and in america in the u.k. the whole point of it the design of it the reason we have it is to increase

inflation yes now this is been going on if you count japan for twenty years now and the new york times are saying you know what maybe we need to increase inflation they've been trying to increase inflation for twenty years the bank of england has increased our balance sheet by four hundred percent attempting to create inflation the federal reserve bank has printed truly and includes of dollars trying to create inflation. what they don't understand that well many print they actually cause deflation because of the sudden. financial repression that occurs when you. forced onto an economy hundreds of trillions of dollars worth of unpayable debt causing things like cyprus to blow up or for greece to blow up or for the wages in the u.k. and america to collapse that's all caused by the deflationary fact of money

printing so now the new york times says well maybe we need a little inflation less prince more money this truly is al in alice in wonderland moment i won't i don't know you know they are of no help whatsoever to having people understand that money printing causes deflation and therefore in the deflation is getting worse and more money printing is going to cause more deflation where you also mentioned defrauding in the opening and that's the our banking system is a black hole of fraud and the fraud is sucking in more and more fraud in the sucking in all the newly created money is going into this black hole in fact the more you print the more you incentivize more fraud which is deflating the economy the real economy faster and faster let's be clear about something although prices of stuff at the shops and education and health care are going up three four five six percent the rate of balance sheet implosion on the central banks and commercial banks balance sheets is imploding by a greater rate it's just not visible it's not reported why do you think jamie dimon

had to pay a huge multi billion dollar fine that's a deflationary event to cover the fact that his balance sheet isn't worth that belly button lint that he's smoking so the fed has to print money but the money's not collateralized by anything because the economy is shrinking so the implosion is happening but it's happening in a way that's not visible to the general public because these jackasses at the new york times say maybe we need a little inflation maybe you need to put a gun to your head pull the trigger and blow it to kingdom come because you are too stupid to be on the face of this earth. well of course the thing that backs all of the dollars back all of these new debts being created is loyal and the military industrial complex in order to take that away from that around you i think to take . the credit they go the day they go. well they take a. pill or go. well america might not need to

steal it they think anymore hey jude to cost of reuters tweets holy frak the united states will soon overtake russia as the world's top oil producer yes through the looking glass they think that they could displace saudi arabia and russia as a top oil producer because america is now producing seven point eight million barrels of oil per day the most in a long time and thirty percent of that however is from fracking u.s. shale oil boom may not last as fracking wells lack staying power so they look at test of peak energies one dash three h. well near oklahoma city and it came on as a gusher in two thousand and nine producing one thousand two hundred barrels of oil per day is now down to one hundred and the article points out that this is the dark secret in the oil world is that this whole thing might not last because you can have to keep on pumping and pumping and creating new wells in order to sustain just

to keep flat even in production right like the red queen you have to keep running to stay in place and we've said this on the show now for several years since the fracking boom started in america the average lifespan of a fracking well is twelve twenty four thirty six months tops but here's the joke in order to create this fracking boom in america all these oil companies with the pentagon by their side went to the federal reserve bank of j.p. morgan and goldman sachs they borrowed fifty one hundred two hundred three hundred billion dollars to because their projections for fracking would go out twenty or thirty years america would have energy independence and we're going to really get to them saudis oh yeah boy now all of fracking is gone but the debt still there all they did was increase america's debt load by another truly the debt ceiling we're part of the choice that's right because a lot of the five chile oh yeah something can happen in the u.k. you bet why because they're all fricken functionally so brain dead they all need to be euthanized oh this economy is going to create human species

extinction. well this is shale oil they talk about in this article not shale gas and they're. also like shale gas requires constant new wells to emerge so it relies on the very first story we're talking about the never ending printing and this never ending purchasing of u.s. government debt by the fed and recycling this into the corrupt banking system so realize they always lie on each other to keep on spending and spending and spending as fast as possible and they're producing at breakneck speed all of these oil wells at the moment and david hughes a geo scientist and president of global sustainable research has examined the life span of shale wells the red queen syndrome just gets worse and worse he says the higher production goes the more wells you need to offset the decline so in the u.s. alone this year they need to drill six thousand wells just to keep pace with the

old wells declining and they at within the first year of the shell oil wells declined by seventy percent within the first year but ok let's talk about how deflation works in this context when the cost to drill a well is higher then the g.d.p. that results from burning the oil that comes from that well and this is a negative feedback loop that creates debt and more deflationary pressures the amount of energy it takes the cost of the energy it takes because of course drilling for oil needs energy and the cost of that energy which is run by oil as oil prices go up is greater than the amount of energy that you're pulling out of the ground the amount of credit that you need to finance these wells is greater then the credit that's being created as a result of g.d.p. growth tied to an income tied to a taxable revenue that would be a sustainable economy so again this is suicide economics these are suicide bankers

they strap on the fracking best they could then hope they pull the pin and they've pulled them for. so so they don't care who they kill the process of their suicide bankers their jihad is for wall street there's a complete terrorist operation run by the same for actors in saudi arabia as in america as in anywhere else in the world there are fracking nuts the amount of capital required just to keep even just to produce these new wells is thirty five billion dollars per year and research from the same group the global sustainability research shows that the new us wells aren't as productive as those drilled in the first years of the boom a sign that oil companies have already tapped the best spots which means of course that next year instead of six thousand new wells only twelve thousand and after that twenty four thousand the next or that forty eight thousand well of course to frac you need water yes and water is a scarce resource a lot scarcer then oil or gas but thank god because bill gates and against

institute has solved the problem it's called prescribed water all you do is add water. and you have all the water you want thank you bill gates or jesus predatory monopolist twice convicted intellectual property who they were. so they speak to art berman a petroleum geologists and he says i look at shale as more of a retirement party than a revolution is the last gasp and yet you look at the mainstream media in america and they're like who in fact was the truth producing their oil and all the geologists the experts are in fact also the experts in banking are looking at this and saying wow this is a bigger c cold and jamie diamond's derivatives book this is obviously what jesus wanted. and the two parted down there in oklahoma texas. called a phone call from jesus and he told them directly that jesus wants them to frack

and that's why in america they started to arm fetuses because this way if anyone tries to abort them they can shoot their way out now one of the biggest oil companies in the world shell is in the news about this very this alternative energy and that is peter foster says he regrets shells huge bet on u.s. shale peter foster said the failure of royal dutch shell is huge bet on u.s. shale was a big regret of his time as chief executive of the company and they've written down billions of dollars on this again the deflationary spiral of this running over and over faster and faster defrauding faster and faster printing faster and faster to stay exactly in the same place with point one percent annual g.d.p. growth. that's exactly right it's a net deflationary doggle as exemplified by this shell executive articulating what i have just been saying except in a way that requires him to get

a bonus that would be equal to the queen's annual budget for her corgis i think the rest is here with thanks so much bring on the counter party think you state to have a second to have a whole lot more. right from the seat. first for you and i think you're. on a reporter's. instrument. to be in the.

press and media freedom was nothing. when it comes to the interests of

multinationals we have a media that is corrupted by power mostly by corporate power you have corporate ownership from the top of corporate advertising coming in from the side we have a media that is where advertising and money and corporate influence is really the mother's milk a documentary filmmaker is being sued. for the truth is being told the private investigator think something taking e-mail reading it happens people buy and sell those kind of services all of the world when you've got hundreds of million dollar industry that needs to protect its reputation a few million being spent on it on a campaign to do just that just for me goods good money wells well spent. so what will be the verdict for the big boys going bananas.

it was a. very hard to take a. chance on. that and that that would that hurt their number. one. if. it was. one of the people.

welcome back to the kaiser report imax keyser time out to go to portland oregon speak with gregory mcdonald of gregor dot you ask greg mcdonald welcome back to the kaiser report max it's great to be back greg mcdonald is retiring c e o of shell oil said that his greatest regret is investing in you as shell oil and gas what does he know that the enthusiastic mainstream media in america doesn't. yeah that was in an mazing admission on behalf of the c.e.o. of shell just a little background max schill is already in a very good position for the emerging global trade in liquefied natural gas it has a very good global infrastructure in that regard but unfortunately what what shell did in us title oil and natural gas shill regions is it came in

too late to the game and it paid too high a price and that resulted in an unfortunate economic outcome if you will for them for both natural gas and entitle oil in natural gas they certainly have good assets here in north america but as you will have noticed natural gas prices have have failed to really rise or rally or reprice to a higher level yet we're still wallowing around in the sub four dollar region for a million b.t.u. in the oil area where shell just had some big write downs because of their properties in tight oil. in the oil area what happened for shell is they realize that these assets don't scale anough or a super major remember max the title will revolution to use that word which is a popular word the title revolution has been wonderful for independent oil

companies smaller oil companies for whom this new production really adds meaningfully to their to their bottom line for a super major like shell it really didn't make a lot of sense for them to try to come into these regions but i want to make a larger point here max which goes more directly to your question what did shell find out that the media doesn't quite understand what shell found out is that the economics of the shale regions are much more precarious than the public knows if we should ever see oil fall to eighty dollars a barrel for any length of time the kinds of properties that shell purchased really won't be worth much at all and i think the point here max is that in these shale regions the economics are you know it's title that economics are tight if you will

and as long as oil is a is at or above one hundred will have continued production but it's going to be very hard to expand meaningfully production if oil were to fall again and of course as we're talking today or oil is on the weaker side as we head into the end of as we head into autumn here gregory mcdonald let's talk a specific numbers here how much does a barrel of the seven point eight million barrels of oil produced per day in the u.s. cost in terms of capital and energy to extract today versus just ten years ago ok well this is you know trying to quantify that comparison is not particularly easy again just a little background here. max as you may know we've had a lot of cuts to government funding and our data gathering agency which is known as the energy information administration they used to produce better data on these financial comparisons but unfortunately that's one of the areas that the e.i.a.

has has has cut however what what is perhaps most helpful for your audience to understand is is the following max when oil was rising in two thousand and two two thousand and four two thousand and six two thousand and eight u.s. oil production was falling another words forty dollar oil sixty dollar oil eighty dollar oil was not enough of a firm price to give. even independent operators of oil and gas here in the united states enough confidence to go out and explore for new oil it was only when oil securely repriced not at the first time above one hundred dollars a barrel in two thousand and eight but when oil came back and re priced more firmly at one hundred dollars in two thousand and ten that you begin to see us oil production rods so i think the best way to think about this max in terms of what

the capital costs are per barrel we have got to have at minimum ninety dollar oil in this country and really frankly one hundred dollars oil to give confidence to a oil c.e.o. that he can go out and invest and earn a profit on a new on a new barrel of oil and that as i said i think it's going to be a wonder it would be a wonderful test if we could see oil fall maybe to eighty or seventy five dollars a barrel for a short period of time to see what kind of supply response we get. from the shale regions in the bach and in the eagle ford and so forth so i guess this story it's a very exciting story it's putting a lot of people to work with courses putting a lot of people to work because it costs a lot of money to get these barrels out of out of the ground these are much more

expensive barrels than they were ten years ago so it's a very exciting story but it's going to be a different kind of story if for some reason or were to become depressed in price for six or nine months. let's talk about the crazy world of economics these days because the price of oil is high relatively speaking and of course the oil and gas business is extremely capital intensive business meaning that these companies borrow a lot of money interest rates are at thirty year lows historic lows two hundred year lows in america three hundred year lows and britain so here you have an industry reliant on cheap credit to go out there and buy oil and gas presumably to fuel an economy that's growing however all that credit that's being created by the central bank and others is actually having the effect of depressing the economy wages are down g.d.p. adjusted for the price of oil is negative in both the u.k.

and the u.s. so look out of psychotic economic model are we talking about here because they can drill all they want and they can frack all they want but they're playing a game of of the end game essentially looks like they're just trying to get as much as they possibly can before people wake up to the fact that we had picked credit we hit peak oil game over and these guys will be on it does you know a tropical island somewhere sipping on my tie and there will be nowhere around to take responsibility for all this what will next we're definitely in the late phase of of global oil production this this late phase comes at a time when as you said we've got fairly grotesque wealth inequality now emerging in the. o.e.c.d. and in the united states in particular in fact just to just to your point max i don't know if your audience is aware of this but the united states measurement of inequality the gini coefficient index is really on the threshold of

rising past the genie co-efficient index in brazil max you and i are old enough we remember when when brazil used to be the global poster child for wealth inequality the super rich living in high rise high rises down in the cities of cell pollo and and poverty poor people living up in shacks in the hillsides the united states is it's incredible for me to to think about this the united states is actually about to have wealth inequality at worst levels then the country of brazil so what's happening in this world of one hundred dollar oil and in this world of of wealth inequality is that oil is being transferred in shifted to the parts of the world that can still afford a barrel of oil when of course here in the united states we've got each year that goes by we've got trenches in tranches in trenches of americans who are no longer using while we're giving up or second cars we're getting back on bicycles even in

europe i believe that bicycle sales in fact are outpacing. automobile sales in most your most european countries so you know there's there's grotesque outcomes to this maxim in there's also some good ones air is getting a little bit cleaner in the o.e.c.d. because we're burning less coal and burning and burning less oil but you're right max the energy transition that kicked off with the oil shock in two thousand and eight is still with us peak oil in terms of the end of cheap oil is still with us and the economy is is sort of per. constrained as a result and the occur and we're in a phase of stagnation and in this phase of stagnation wealth inequality and wealth disparity is expanding and it's expanding rapidly democrat or what i'm trying to get at here is that the higher price of oil is sending

a completely false signal because the higher price of oil is not signaling robust economic growth the highest price in oil is signaling money printing by the central banks at artificially low interest rates and it signaling that you've got the kleptocratic class of around the world buying stuff like oil chateaus in france and assets that are being financed with ultra cheap money that's of does a false price ignace so at the other end of this false price signal you have an economy like in the us that will never as you point out with the gini coefficient as wide as it is in a worst in brazil there's never going to be a scenario where the g.d.p. growth in america results in the taxable revenue needed to pay the debt to finance this oil exploration this is a suicide mission because the oil price of one hundred bucks or higher does not indicate economic growth it indicates out of control speculation what were my getting that wrong i know what you're saying max because what's what's happened is

well used to be almost like a democratic kind of energy resource in the in the post war in the twentieth century era you know the rich man bought oil in the poor man and the poor man bato oil is becoming a either a rich man's fuel in the west or it's being distributed more broadly in asia except that those populations are using only a very small only a very small amount of oil and you're right high oil prices used to send a signal of robust economic growth but merits. in a lot of that are second because you're saying. saying that the price of oil is a rich man's luxury at this point but i'm saying that you've got firms like goldman sachs and others who when the prices at a certain level will fill up tankers tundra tankers all over the world and just storehouse oil as

a way to protect their asset because that assets used as collateral to fund more levered schemes that are involved in mergers and acquisitions and other tricks on wall street where they use the cheap money collateralized by oil that they're hoarding in warehousing they're not even putting into the into the real economy as a way to finance this apologies game that's become the global economy so oil is not really a utility any more oil is a bargaining chip for this global policies game and cup to create a class that can warehouse tankers full of it all over the world and they feel like it they can parse it out to individuals that they're at when it when required but as a price signal telling us what the economy is doing and shot it tells us nothing is a complete false ago we're much wrong well max i i i don't disagree that oil has been increasingly monetized as an asset over the past decade where i differ with some of the models which show that oil prices are where they are because of this

monetize ation is i'm much more on the geology side of the explanation and another words the for the floor under oil prices is really because of geology not because of speculation but that doesn't yet but that it didn't it does others and you know if you're involved in diamond mining and gold as well i'm just saying. because there's less of it but it's no longer part of the global matrix of economic indicators and price signals as it relates to how to grow an economy because economies are not growing and oil it's got nothing to do with it it's all about printing money but unfortunately we're out of time gregor love to have you on again soon thanks for being on the kaiser report ok thanks max and that's going to do it for this edition of the kaiser report with me max kaiser and stacey everett i'd like to thank our guests gregory macdonald of gregor you ass if you'd like to get in touch please tweet us at kaiser report us like signed by zero.

zero. zero zero. 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 albus. in fact the single biggest threat facing our nation today is the corporate takeover of our government and across. we've been hijacked by handful of transnational corporations that will profit by destroying what our founding fathers one still just my job market and on this show we reveal the big picture of what's actually going on in the world we go beyond identifying the problem. rational debate and real discussion critical issues facing. you ready to join the movement then welcome to the big picture.

if we look at the history of the all p c w and its engagement say in the past with the united states there is a history all let's say intimidation on many collation of well whatever you call it if indeed we find president assad is lying or cheating and i i'm doubtful. if you'll do that because his life is really on the line in the life of the whole regime then of course then i think a military strike could take place. this weekend with. some of. the consensus you. choose to give to use that to great. choose the stories to. choose the. often.

many questions but no. i'm going to give some information. the five. e.u. delegation looking into u.s. spying in europe comes away empty handed while an internal review into america's surveillance activities continues. it is laughable it is just about as laughable as wall street banks regulating themselves. their human beings after all there's no reason to expect if they enjoy being here as torture accusations keep piling up in the guantanamo bay prison officials inside the cabin trying to convince our crew the inmates a fine and enjoy force feeding that story in just a minute. secret deal to.