u.s. department of justice a very small cut of his ill gotten mortgage fraud gains and oh how the penniless peasants outside buckingham palace gates rejoiced at the impossibly large number of thirteen billion dollars jamie. all hail jamie don't even they cheer but while the food stamp meeting bedroom tax paying part time working masses gaspin off the large songs of ill gotten gains falling out of the financial times pockets the likes of jamie diamond and his close friend tony blair know that winter is coming and that when you play a game of thrones you win or you don't there's a true stacy herbert apparently now you know everybody knows that we have this rise in wealth and income gap and the inequality gap the gini coefficient index around the world is rising but many people look at it and think that it's the poor that are going to rise up and that they're going to be be angry with how little they

have in fact over at bloomberg dot com they're looking at it from another angle blame rich over educated elite as our society's fray we have too many disgruntled elite wannabes and because of that this is what you're seeing the social disintegration around the world there are not enough positions of power . with so many elite want to be. of course drag history this is the case isn't it because there are only a certain number of top elites that can rule and if that bulge bracket of elites gets too bulgy it's too fat gets too against too much of a not a greater get out get out early and so it's like an elite hernia popping out of congress and the houses of parliament and they need to be lives to be boiled

they need to be x x x or sized excised ex-communicated that is made exorcism of the elites but historically when you have this there's this hernia this hemorrhoid of elites like that tony blair is the hemorrhoid of the world he just sits there on the room of the one of the detritus pouring out of his financial terrorism and picking up a little feet here and there on a bus to walnut that's passing through and it turns into a revolution this is historically one of those up in the road like tony blair to rid of the detroit is obvious ill gotten fostering revolution from the peasants were tired of this die just walnuts this is what happens in fact the article from bloomberg dot com calls this elite overproduction it's called you have too many elite wannabes too many graduates from law school too many graduates from masters of business administration give too many graduates of of medical schools there are too many elites and tied with that historically during times of revolution or civil

war increasing inequality leads not only to the growth of top fortunes and also results in greater numbers of wealth holders the one percent become the two percent or even more there are many more millionaires multimillionaires and billionaires today compared with thirty years ago as a proportion of the population and hence on the rest. arises and absence of cooperation happens as people start fighting for territories and you saw this in the lead up to the civil war for example in america in america yeah well i think the point i'm making here which is interesting one is that in the wealth and income gap widens that you'd expect of people being downtrodden to rise up and stage a revolution but what we find throughout history is that it's the top elites who are not able to get themselves the best spot in congress or the house of commons or

the four seasons in new york city or some hotel or restaurant or spa that they're the instigators of the revolution this is what starts the global insurrections is when some miffed billionaire like like larry ellison you know is a billionaire if for some reason it was determined that the world cup was sailing competition would not be conducted in the way he'd be happy with i'm sure you'd buy a nuclear weapon and bomb somebody and world war three would be started that's the way it all goes down well as article points out there millionaires and multimillionaires and billionaires tend to be more politically active you see it in the u.s. with all the aid all sent on one side spending huge of fortunes on getting policies that he once you've soros shell the shell yelled. yes sheldon adelson and then on the other side you have george soros seeking his sort of policies but underneath them you have in america you have twenty five thousand surplus lawyers graduating every single year from universities twenty five thousand many people who go in for

law degrees plan on becoming politicians at some point so here they graduate with no jobs available and huge debts for the law schools in america so they're anxious they're angry they're bitter now i mentioned the civil war in america that had a similar situation well let's look back to that time from eight hundred thirty to eight hundred sixty. the number of new yorkers and bostonians with fortunes of at least one hundred thousand dollars which would make them multimillionaires today increased five fold many of these new rich or their sons had political ambitions but the government especially the presidency senate and supremes court was dominated by the southern elites as many northerners became frustrated and embittered the southerners also felt the pressure and became increasingly defensive so there was an emerging sense of no longer where these elite cooperating they started competing they weren't willing to compromise and you see that now and it

might not just be southern versus northern though it looks like that it's about industries perhaps agricultural a big ag or cultural industries a versus big military industrial complex there are too many people trying to get a cut of the pie i mean people don't understand this part of american history that before the civil war that washington in the power in america was controlled by the southern states and their vast slave plantations that gave them their wealth power and influence then you had these upstart the northerners in new england new york boston and they were frustrated because they couldn't get their way into the elite tables the congress and the halls of power and this is what led to the civil war more than anything else so the rallying cry of free the slaves was a great banner headline that gave the north a great marketing gimmick but mostly they were interested in pushing the southern power core that occupied washington out and they could move in and that's exactly

what happened yeah and many other nations of regions around the world for example had slavery or similar like indentured servitude and they managed to end it without war but america was unable to because of this there were too many at least there was over production of only too many only now that takes me to the next headline here the world's two thousand one hundred seventy. billionaires control thirty three trillion dollars in net worth double the u.s. g.d.p. so not only have the world's richest been the biggest beneficiaries of the monetary and fiscal policy since two thousand and nine with a current two thousand one hundred seventy global billionaires representing a sixty percent increase since two thousand and nine according to you b.s. that sounds like an overproduction of billionaire at leats but they're consolidated net worth has more than doubled from three point one trillion in two thousand and nine to six point five trillion now at the same time the net worth of the bottom

ninety percent of the world's not so lucky population has declined as you said at the top this is winter is coming and if you're going to play the game of thrones there's only there's only one throne possibly five possibly seven but that's it game of thrones but what about those white walkers exactly those guys are scary there is the zombie banks in the zombie banks there isn't the zombie people eating but pies who could who don't mind eating a nice chubby little billionaire let's give a good example of this a concrete example would be the billionaires that rise up in los angeles through the movie industry which is subsidized to a copyright cartel and the influence of power in washington to keep copyright extended every twenty years a so-called mickey mouse law now these people want greater influence in washington they want greater law making ability in washington so they use a lobbying effort like the m p a to change the entire industry of america which would include larry ellison which would oracle or include google or include a.o.l. by introducing digital rights management technology or convincing the n.s.a.

that they need to spy on every single american not only in wherever they are of the world but merkel every leader in the world generally germany's leader they need to that's comes from the n.t. a duck trying to dominate as you point out there is really there's a kerfuffle in the halls of power in the area of one group that's fueled by billions of dollars of subsidy from the u.s. government a copyright law given free money for. ben bernanke is zero percent interest rates who are causing global consternation we work for edward snowden we wouldn't even know and this was going on but importantly you mentioned that's a good point to bring up in silicon valley is near san francisco and this is a famous area for great universities well educated over production of elites so these ones are you when you see over and over new stories emerging about how the locals are angry about the wealth of silicon valley and all the tech giants forcing them out they're the ones that are bitter and angry because now they can't afford

rent whereas obviously zuckerberg can afford to buy six houses tear them all down just to have space between him and then ordinary person that's a direct relationship with the n.s.a. as we know the facebook is an n.s.a. spy tool so is google and these other outlets and that is as you describe it a shuffle or a power power struggle in washington where you've got these guys multi-billionaires struggling with each other and as they rock and roll trying to get the only there are only a certain number of seats you can have in washington and congress there's only they don't expand them you know then the world suffers and they cause all great all of global appeal well there is not enough room for two thousand one hundred seventy billion or so it will have to be cut at least in half so that's all we could tolerate now the what did solve the problem for the last situation similar to this in america was the great depression it was the great compression the wealthy lost a lot of wealth and it was compressed down towards where the middle classes and

that brings me to the final chart is the s. and p. five hundred the depression versus today so the red line is the s. and p. up to for the depression and the blue line is today as you see week the s. and p. five hundred still rise from eight hundred up to two thousand by the looks of it and then another big collapse but we have had nowhere near the collapse we had back in the great depression for. top just for the bottom. i think that's a good point that the markets are certainly stretched and they are stretched because of this incredible money printing that's gone on by the central banks and the financial engineering that has irrigated the economy in such a way as the free money goes into asset price appreciation but completely escapes wages so nobody has had their wages increase on a real basis for twenty years thirty years wages have been stagnant in the u.k. in the us in the west but meanwhile the money goes well you know right into asset prices and you've got an elite club an elite glut there's

a glut of elites that's why in my final prediction i say we're going to lose over a thousand billionaire is within the next two years how we lose them i don't know but they will no longer be billionaires one can only speculate well stay tuned for the second half a whole lot more. do you think humanity as a whole would ban a fan from leaving some parts of the wall can we just to play on the same side here through biotechnology research through genetic modification we can give those small holder farmers the opportunity to be able to deal with and survive all of those challenges and i believe they should have all of the tools

. if you're thinking about an alcoholic drink associated with russia it's probably not going to be one that springs into your head but they've been making it here on the. black sea coast for more than two thousand kids and there's an industry which really can compete with the best the rest of the world has to offer i've come to meet some of the people going the greats and to see if i can find out the secret to the perfect. play. but. i'm not.

playing right on the same place first street live and i think that your clinic play on a reporter's politically and instantly live. live in the limo on the click. welcome back to the kaiser report i am max keiser time now to go to upstate new york and talk to james howard kunstler is the author of the long emergency the geography of nowhere too much magic and many others james welcome back to the kaiser report nice to be here with you max all right james you say that america

has quote failed to reckon the central quandary of our time the fadal hypertrophy of finance or is that hyper high pop or trophy what is that word play talking about what is this all about james purchasing i think is the pronunciation if it really means just over growth you know something becoming gigantic and in our case the financial sector of our economy went from being five percent of the total economy a few decades ago to being about forty percent now and the growth in the activity that that represents is really a growth in the financial innovations that should be called. these are two words that are rarely used in this discussion and that's really sort of taken all the air out of the national room shall we say well let's give an example of that here in the u.k. there's a bank called the royal bank of scotland it's now eighty percent or so on by the

state they were caught swindling a couple of portsmouth out of their hotel by forcing them to not only take out a loan but part of the loan was a credit default swap which they know they knew ahead of town time will blow up in the couple stakes and then the couple lost her entire fortune they lost their house so r.b.s. the state owned bank committed an act of financial terrorism as part as part of financialization are talking about correct well the says like an old nine hundred twenty s. bucket shop as it was run by the guys in the home movie yeah exactly this is a bucket shop and this is exactly what we saw in the one nine hundred twenty s. which of course led to the crash of twenty nine is there a parallel james well the thing that's interesting that you say is you know this act this behavior was was known to have taken place and the misbehavior misconduct that's taken place in american banking is well documented well known and

probably the best well known thing about it is that nobody's done anything about it so there are no consequences for bad behavior in the financial in financial misbehavior right now they have depression that resulted after the lead up in a one nine hundred twenty s. to the crash of twenty nine led to a compression in the wealth and income gap and set the stage for the american century and some might say and also the securities act of thirty three and thirty four brought in by f.d.r. allowed for that architecture of finance to exist that would allow for some more equitable growth amongst those who are participating and benefiting from the securities industry is the only thing that's going to bring it back balance at. at this point a major crash james well the distortions and impairments of capital formation are so bad now and they've become so institutionalized that it's probably true that

some kind of damage event well has to occur to allow for the rebuilding of the institutions that regulate our money and regulate. investment and financial transactions because you know sooner or later we'll just be at a point where people have no faith in paper and and the assets that it's supposed to represent so yeah it seems to me that we are cruising for a bruising and that it will take really some kind of radical and desperate shaking up for us to change our behavior right james howard kunstler how would you describe your books i know in the case of the long emergency it's basically describing how the earth's carrying capacity in terms of the environment is limited and the population and our habits as modern humans is running up against the carrying capacity are ending up in this incredible disconnect but you also write on

a number a number of topics so just to give viewers an idea how would you describe yourself . well i would describe myself as a journalist but what i've been following really is the arc of a story and it's a story of an industrial civilization that had a beginning a middle and an end you know that one of the things that's missing from a liberal education these days is the idea that life is tragic and by that we don't mean that everything has an unhappy ending but what we mean is that you know stories have a beginning a middle and an end and the outcome depends on the choices that we make and we've made some very unfortunate choices as a society and we're failing to pay attention to what the consequences are. i think that the biggest part of the story at the moment is the delusional thinking and a lot of it comes out of. the psychology of previous investment you know we put so

much of our national wealth into a certain way of life that we can't imagine changing it or letting go of it or altering our behavior to meet the new circumstances of what the future is telling us to do and the future is telling us that we have to contract we have to get more local more food close to where we live we're going to have to reckon with the dwindling of globalism and of these are all tremendous changes that we can't really afford to pay attention to so we're not we're just having a party instead but i guess that's one of trying to get to is that you're writing it where very well researched and you look at pray in detail it's amazing the logical issues and on the end it's use of energy and energy consumption but it has a philosophical bent to it and you describe the beginning middle and end now you are presenting a concept which you call that or are talking about the that two thousand and fourteen as the turning so this is really a combination of

a few things there so talk to us about the churning and why it will happen. i happen to subscribe to the ideas that were articulated in the book the fourth turning by strauss and how that there are cycles of history and that we have entered one of those cycles that really takes about the length of a human life about eighty years and that this is a period of to motor with change and we know what it really represents is the end of the industrial era as we've known it and the financial operations that have attended it and the reason for that is that the cheap energy that fueled the last part of the industrial story is now coming to an end and one thing that we're really unable to do now is run the interest operations of finance that

that were only made possible by the fact that we could continually inject new energy into the system now that that now that that's no longer possible we can't really repay the loans that we've taken out and we can't create new loans because we have no prospect of paying them off so the circulatory system of the economy which is finance is now getting blocked up and we really don't know what we're going to do about it all we're doing is pretending that we can create. fictional money and keep on pumping it back into the system is that as though it was a strasburg goose but the strasburg goose has crohn's disease and was coming out the other end is this toxic sludge in the in the form of mal investment that is really going to prevent us from carrying on as a civilization if we continue to behave this way they point out that the foot i feel is a fan which has been growing almost exponentially for decades fueled in part with

the energy industry and the credit needs of the energy industry the global energy industry these two a been progressing power passu to the banking term for decades. aids and of course the idea of peak oil was quite popular recently but less popular now because america is hugely now oil rich with their fracking and other oil exploration they're soon to become the biggest oil entity in the world is that mean that the projections toward peak oil have to be changed or menacing something really it's a result of wishful thinking we want to believe that we have this much oil as we will ever need. a lot of this is focused on their shell oil in north dakota and texas. last week a market technical analyst named ralph and comports actually said on the web that he expected us to become energy independent by two thousand and sixteen you know that it's an amazing statement because of course it would mean we'd have to find it

eight point five million barrels a day of new oil to accomplish that and the prospects of that are are nil either that or we have to give up driving cars altogether so the wishful thinking is really behind this but i think that the reality of the situation is that we're we're probably probably got about three three more years of the shale oil boom and then we're going to run out of the capital to keep on pumping into that because it's very expensive to do it to run those operations and then we're going to see the shell oil boom go up in a vapor and we're going to be left with you know the ashes of our wishful thinking so you really have two tracks running through this post world war two economy credit and oil and you've got the credit potentially hitting a moment of peak credit that would be the moment when interest rates really start going higher as opposed to this thirty year bull market in bonds where we've seen

interest rates as actually trending lower janet yellen she. come in as a new fed chairman he has already stated more or less that he's going to keep the quantitative easing spigots flowing we're going to go from eighty five billion a month to from quantitative easing probably two hundred fifty billion dollars a month so there are there is are capital there's your money for the oil exploration. when is this going to end or is it what's. being fueled with more cheap money so is this really going to happen twenty fourteen well what we're seeing now of course is the taper talk head fake too with the federal reserve pretending that it can end. its purchase of bonds and u.s. treasury paper and of course it can't because every time that it even whispers in this so-called forward guidance that that they may net down or taper their bond

purchases the ten year treasury note goes up you know ten twenty basis points and that's actually been going on the past week my guess is that they they may attempt a fake taper of maybe ten percent and they'll do it one time and they'll pretend that they're tapering and then the markets will have a whack attack and the interest rates will freak out and start going up a lot and then they'll go back to the photo on quantitative easing or maybe even more you know maybe even pushing up to one hundred billion a month and it'll be perfectly clear that this is this part of the economy cannot exist without quantitative easing and that's when people are really going to start losing faith in money it's really a question of which way we go broke you know whether we go broke through hyperinflation or our. massive contraction and deflation

and either way you're broke you know in the first case you have a lot of money but it's worthless. in the second case nobody has any money so it just remains to be seen you know what happens when we get to that fork in the road all right fair enough james howard kunstler out of time thanks for being on the guy's report you're welcome and thank you all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i'd like to thank our guest james howard kunstler you can learn more about him at consular dot com if you'd like to get in touch with us tweet us at kaiser report until next time i go to my you know. the key for probably the most complex difficult to.

the phenomenon of friendly fire probably extends back to the invention of gunpowder . kill a bunch of people in. their families their review of people. reading. this something shoots my brother in the leg not intentionally because of it because it was nine times four in the morning even the best even the best soldiers. are going to make mistakes this is this whole idea of brotherhood and order. and camaraderie and in this sense it was in this context that has absolutely no place.

the olympic torch is on its epic journey to such a. one hundred twenty three days. through two thousand nine hundred towns and cities of russia. relayed by fourteen thousand people or sixty five thousand killings. in a record setting trip by land air sea an outer space. a little victoria treeless. on archie and archie dot com. choose your language. we can with. some of. the concerns get to. choose the opinions that invigorating. choose the stories that impact your life choose access to your office.

europe waits to hear which way you crane will finally turn over the e.u. deal itself tens of thousands continue to push for the government to look last also . tremors in texas an unusually high number of quakes hits communities there as locals and scientists point a finger at fracking and. homes are finding it increasingly why use all over the world but we are not going to operate them as other countries do it's not a video game we bring you food and take on drone warfare and his assessment of the russian city that's set to be hosting the winter olympics in just two months time.