thing into private communications it is more more people become aware than to realize nothing is secure and we might see that absolutely well thanks for breaking that down price ride hard t. web producer andrew blake thanks and that does it for now i am here today that. welcome to the kaiser report i'm max kaiser you know it takes all the running you can do to keep in the same place said the red queen to alice it takes all the printing you could do to keep in the same place said the banks are two bernanke it's six all the working you can do to keep in the same place said the neal futile fax to the chumps we have to work for a living but i say not only does it take all the running printing working but it also takes all the bombing stealing and the fraud exploiting and dying shaking

breaking and taking to stay in the same frickin place isn't that right stacy. 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 increase 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 will me 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 prints of more money this truly is out 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 boyle and the military industrial complex in order to take that oil from that around like a. rabbit they go the day they go.

well they take. still oil. well america might not need to steal it they think anymore pedro de 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 us shale oil boom may not last as fracking wells lack staying power so they look at test of peak energy use 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. 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 and america would have energy independence and we're going to really fricative 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 zero the debt ceiling well part of the chile that's right is going to go up another five chile oh yeah santa can happen in the u.k. you that why because they're all fricken functionally so great dan they all need to

be euthanized oh this economy is going to create human species wide 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 realized 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 well 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 blow 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 hackers in saudi arabia as in america as in anywhere else in the world they're 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 that global sustainability research shows that the new us wells aren't as productive as through those drilled in the first years of the boom a sign that oil companies have already tapped the best spot which means of course that next year instead of six thousand new wells only twelve thousand and after that twenty four thousand and that's for 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 the gates 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 you predatory monopolist twice convicted intellectual property including. 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 exactly are the producing more 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 sinkhole than jamie diamond's derivatives book this is obviously what jesus wanted. and the two parted on their oklahoma texas. call

a phone call from jesus and he's told them directly that jesus wants him to frack and that's why in america they've 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 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 and 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 your essays here were thank so much for going to as a reporter think you stay to have a second to have a whole lot more. please give or take her very hard to take time. to get along. happily ever back with her make her look. look.

look. look. look look look look look look. look look look look. look at the polls. there's a medium leave us so we leave that maybe. by the same potions to cure. your party there's a goal that question is that no one is asking with the guests that you deserve answers from it's all on politics only on our t.v. . if.

welcome back to the kaiser report imax keyser time now 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 shill 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 repriced 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 the shale

regions 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 gregor mcdonough 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. xs 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 dollars 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 raw is 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 show regents in the bach and the eagle ford and so forth so i get 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 but prior 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 ad 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 are beyond 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 over. 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 gini coefficient 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 but 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 is 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 perma. constrained as a result and the 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 signalling money printing by the central banks at artificially low interest rates and it's signaling that you've got the kleptocratic classes 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 signal so at the 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 at 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 in your 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. 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 it 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 the global parties game and clipped a credit class that can warehouse tankers full of it all over the world and they feel like it they can parse it out to individuals out there and 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 signal we're much wrong well i think i don't disagree that oil has been increasing we 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 did it or it does not there's a theology involved in diamond mining and gold as well i'm just saying ok you can say it's grass because there's less of it but it's no longer part of the global matrix of economic indicators and pricing goals 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 left abby on again sent 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 as. i'd like to thank our guests gregor macdonald of gregor you if you'd like to get in touch please tweet us at kaiser report us like signed by a. big

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a documentary filmmaker is being sued. for the truth has been told the private investigator think. it happens people buy and sell those kind of services cool of the world. hundreds of million dollar industry needs to protect its reputation a few million being spent on the only campaign to do just that is probably goods money well spent. so what will be the verdict. big boy is going bananas. more news today. again flared up. these are the images the world has been seeing from the streets of canada. trying to corporations or the day. the

i'm. at the at the peak of the problem it was terrible a problem very hard to take a look once again the among the plug that never had sex with their lives in the military. going to the submissive. lists lists lists lists lists lists.