welcome to the kaiser report imax kaiser you know wired magazine this week feature of the absurd creature of the week tongue eating i suppose. this parasitic guy's a pod consumes the tongue of the rose snapper fish and replaces it with its own body providing the fish with a fully functioning tongue i know what you're thinking you're thinking that sounds a lot like jamie diamond and in a way you're right jamie who is normally seen masting in the large intestine of the chairman of the federal reserve bank of course and his fellow financial parasites have replaced the origins of capital allocation and price discovery with their own slow the report parasitic toads throw but if you remove that zone we're going to

support from the fish the holes dug for those notes on. but what happens when you remove the banking parasites from the system. most goods to serve are those what is this all going to do we're going to have to ask this question max but first i want to look at the actual headline about this tongue eating ice a pod absurd creature of the week this parasite eats officious tongue and takes its place here is the image of it and you see this is called the same oath the exit you are a tongue eating ice a pod and it targets a fish by infiltrating his gills getting into his tongue and replacing it and of course you can see that as an analogy for many systems around our world whether it's the food system the political system we have the organ of legislative bodies which are supposedly politicians for example operating in a democratic way but they're actually corporations and you know executives for corporations running a corporation was serving

a parasite enters the fish to the gills and then eats the fishes tongue and then it replaces the tongue and it lose inside the fish as well as the tone presumably as food comes in then the parasite is fed i'd think about hard frequency trading because remember goldman sachs j.p. morgan they put these high frequency trading servers right next to the new york stock exchange so as trades are churning on the exchange then j.p. morgan and goldman sachs like this parasite they take using high frequency trading they glean or they scoop or they steal cash all day long so this is again it's a very instant parasitic relationship now ben bernanke you're not janet yellen will argue that wall street needs parasites america needs parasites and jamie diamond is doing the good work of a good parasite but when the parasite gets bigger than the host as in the case of jamie diamond or lloyd blankfein the parasite gets bigger than the global economy then you have

a parasitic world driven by parasitic needs ruled by parasites and that's not really help. anybody well the parasite and the host get bigger and bigger and they need to consume more and more more to sustain themselves but you know look back at that image again and this is the absurdity this is exactly as absurd as the banking system is right now is like this little absurd creature sitting at a fish's tongue. you know you can just look at me when he's on the news like. you know that's to me as a parasite. you know and as money comes into wall street jamie scoops it up. and it comes into his gills and it makes a stupid. person it's one of the ugliest so obviously in that situation with the tongue eating ice of pot if you put out the fish no longer has a tongue so it needs it but we're going to look at these next few headlines to

whether or not we can remove this absurd ugly sort of fish tone that we have in our own banking system iceland reveals one point two five billion dollars in mortgage cuts to recovery the icelandic government said on saturday it would right up to twenty four thousand euro's off the mortgage of every household making good on an election campaign promise despite international warnings over the plan so we have a situation where they're going to rip that little creature out of the tongue of their banking system people internationally warning them against this are of course the o.e.c.d. the i.m.f. the likes that are speaking on behalf of the you know the lobbyist for that little creature inside the tongue or at the little parasites are the change lobbyist but not so nice and so iceland is doing what people used to do right off bad debts because this is ultimately the only way you can deal with a situation that grows exponentially larger than the underlying economy can support you have to write that off that was going on for hundreds of years thousands of years only until reasons on the debt been allowed to rule the megalithic

godzilla just finally eating so iceland no way yeah and that's the important point you bring up is that the tongue if you compare it to the tongue in the fish the banking system this was a normal procedures is how we always operated for thousands of years is that debts that couldn't be repaid wouldn't be repaid they would be written off or the bond holder would pay the investor would pay here. all of these of bailouts and crises around the world in last five years is the bondholders are never asked to pay in the creditors are always made whole at the expense of the population so here they're basically writing off about thirteen percent of the average debt for an icelandic citizen right now their household debt to g.d.p. is about one hundred eight percent but they're going to finance the government. by taxes on banks and funds managing assets of banks which went bust during the two thousand and eight financial crisis so they're actually taking it from the people

who caused the crisis and that are still there own by foreign creditors right so the icelandic government made a simple equation of cause and effect you had a parasitic group of bankers who stole lots of money and then want to hiding in places like london to escape the long arm of the icelandic law and now they're figuring that you know what these are the people that stole the money let's put the money back to the people that got victimized by financial terrorists in iceland and that's how they're dealing with the problem but are they in britain though they still they still basically lionize financial terrorism osborne and cameron prey on their little maps every day to financial jihadi and they pray to whoever they pray to the market fundamentalists god that these financial jihad these continue to destroy the economy whereas i slammed apparently the leadership there does in fact have a brain well here in the u.k. they've kept interest rates at zero percent and also most importantly really stoked

the housing bubble and this is the result and this little tweet here from i.t.v. news average disposable income of working households drops by six point four percent to twenty five thousand seven hundred pounds according to official statistics is that when asked incomes for retired households actually went up by five point one percent of course the retired households tend to own the property so they're receiving the ever diminishing income of the people who are working so this is the very parasitic relationship by the way as well not so healthy but the u.k. suffers from obesity and they're calling that healthy growth but it's not healthy growth it's obesity they're obese with debt and of course that could only end up being a catastrophic collapse now i want to also look at another sort of system of removing the. the absurd creature that is the tongue of our global financial system of capital allocation and payment systems and remittances because that's in the news

this week in bloomberg news they report service targets kenya remittances with cut rate fees a kenyan startup will take on remittance providers like western union company by using the bitcoin virtual currency to cut transaction costs for kenyans working abroad who send home one point two billion dollars a year so they're hoping to gain one percent of this traffic that's it that's their small ambition in the beginning and that six thousand five hundred transactions the month the cost will be drastically reduced down from say it will cost about seventeen dollars right now to send two hundred dollars back to kenya where they'll we do sit to about six dollars so we'll just intermediate and put out of business various companies are in the remittance business they charge exorbitant fees compared to the same process the same service being provided by a bit going for a fraction of the cost so around the world people that were you know point are now

pro big coin i think famously joe wiesenthal over there at the business insider he basically had a medical he said that he was completely wrong about. digging into it and realize the learning curve is still quite fresh for joe he's kind of a has no knowledge of it i think my tweet where i suggested he blows brains out. in reference to his stupidity and garbage to bitcoin i think finally was like getting it in the face of the wet trap well it shocked him to he was scared straight the thing is ok we talked before about you know the snapper used to have a tongue it was a normal tongue that looks like a tongue and perform the function of a tongue then this tongue eating i supplied came in like an absurd creature in there and then the community of get used to that here we also get used to an absurd payment system where. a lot of people like joe isn't all before think that it's absurd that we could ever replace the currency system we have now even though we've

only had it for forty years they're like this is their world our fee our currency system has replaced a system we've had for thousands of years of gold and silver backed currencies and based on something but and we've grown so used to this i suppose thing sitting in there in our monetary system that we only insist that way that this is the normal way once we remove the parasite however we're starting to see what could happen and what sort of innovation and new technology is going to merge all of these types are moving over to bitcoin and they're becoming more vocal about it going so the trajectory of the market capitalization of it going it will head to that four hundred billion dollar mark at the winklevoss twins have suggested that means a price many many times the current thousand dollars per but going price well in fact a lot of people do obsess about the price this is the mainstream media only ever talks about it when it soaring then a little bit if it crashes but the thing about the bloomberg article call is pointing out it's far far more than that it's way more revolutionary so different

from anything we know we are where you saw an ice a pod world a parasitic world where the exchange rate is the only thing that matters whereas here there's a new revolutionary system that is displacing it now you came up over the weekend with a great idea i thought of ice coin and so apply this system and bitcoin to iceland and what they could do to create a new system for themselves but well i suppose all that especially for a geothermal energy and the cost of mining bitcoin us to the hard cost the real cost in terms of value to do it the cost of the mining and the energy that goes into it iceland could create ice coin and they could be a world leader in the cryptocurrency market and they would have a huge source of revenue and they could be a world leader and they could be doing marvelous things leveraging on their geothermal energy because as you pointed out in your tweets. they can't really export that geothermal energy that was always a big problem for them for they are an energy giant with the likes of the or saudi

arabia or russia but they can export it because they can't put it in a pipe and send it out right so convert that into essentially a crypto currency then you're doing free mining and then you can use that as a medium of exchange so big going to have a major competitor which is healthy competition is good if iceland develop their own crypto currency called ice coins so i would look forward to that and that could be again another nail in the coffin for the current status quo of various banking services like j.p. morgan or goldman sachs they are on the firing line could be basically competed out of existence having said all that it's time to go go go stay see you thanks so much repel the town meeting of the banks. about that for christmas dinner all right stay tuned for the second half all whole lot more.

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on our reporters live live . welcome back to the kaiser report time out of turn to futurist architect and free software advocate campus has a report here ok now before we get started maybe just a brief synopsis of what is an i architect and i chair architects is sort of an architect is to build or so where maybe programmers who are system administrator are the people who you know make this things and keep it running due to maintenance to ip architect things about sort of the major rules and structures of how big i think systems are need to work and to function out of the ranks together now tell

us about the n.s.a. they have really architect the internet that is what should the internet look like compared to abbott looks at a post surveillance rewiring so you're an i.t. architect you look at how the various structure of the internet is pieced together and yet here is the n.s.a. they really architect of the internet what does that mean they've very very purposefully trained some of the structures. and security of the protocols that we all use for something like you get from a banking or for sending security sending or e-mails they've weakened of protocol so that they could do more spying and i think into the future we need to take the internet more back to its origins where it's fully decentralized where there are very few central infrastructures we don't stick all our services in a few big companies that are running under the patriot act so it's decentralization that's that's the core thing i think of the future of the internet if we want to have a free internet now before the n.s.a.

started plugging the systems into the internet the internet was a fairly robust system and it was growing really on its own accord and it was being helped along by the free software movement and by engineers like the linux movement would come up with software that was superior to the commercial software and now you've got the n.s.a. so much as if they. you've got a bridge they suddenly they are picking away at that bridge trying to take out bits and pieces for themselves i think some of the concrete might be valuable or what out you know but they're destroying the integrity the robustness of the structure correct yeah you know it's there and they're purposeful weakening of security protocols has literally endangered everybody who was doing anything on the internet so it's made us more vulnerable to all kinds of low mid level cyber crime and it's made us all less private and it's i don't think most people really sort of have forgotten how bad this really is ok now some people have you got brazil brazil says they want to create

a separate internet so now is this possible all number one and number two are we going to have a balkanization of the internet where you've got different territories are going to split off they're going to try to recreate the internet but is that going to work i think there'll be a heavy price to pay for not having you know one integrated system in terms of economics and convenience but i think many countries will see that it is worth to put up some fencing because otherwise basically you allow the handful of countries to do industrial spying on an industrial scale all the time and violate the privacy of all your citizens all the time and luckily there are still some governments like the government of brazil who seem to think that actually it's their job to make sure that that doesn't happen and so they're not going to cut themselves off from the internet but they're going to make sure that they control as big a part of the infrastructure you know from the fiber optic cables up to the software and everything in between as possible so it's not going to be perfect a separate system but it's more about who controls what pieces and if you control

more of the pieces then you know you can prevent at least some of the spying you know you talk about the internet it's not about the fact that every time you add more users on to the internet the value of the network expands almost exponentially the so-called network a fact network externalities that occur when the value is actually increased. the more people use it also as a repudiation of the diminishing returns theory in economics so now you've got a situation where the n.s.a. is plugging away at destroying the internet and its network of facts and all these companies that are tied to this network effect the google amazon e-bay they are highly leveraged on this network the fact the metcalf's law you could look that up on google and get a deeper understanding what this means so the n.s.a. is going to start to data leverage and architect and destroy the internet the entire this entire global economy based on i t starts to collapse and give me an idea some of the downloads are doing there by some estimates u.s.

corporations are already losing one hundred eighty billion dollars of business as the rest of the world's divorces itself from this crappy as a virus joke write your phone on it no i don't think i'm sure if you are well it's not necessarily that the total value you know to the global society of information technology is going to go down but certainly the u.s. economy is going to be heard very very badly by this in the long term already germany just last week announced that they are basically going to rebuild and reengineer old critical software that they need to run their country and their industry so that means that they will stop buying lots of american software which is what you know most western countries do so my home country tonight and buys about ten billion euros worth of u.s. software on a yearly basis so you know that's that's something like several hundred euros per citizen every year now translate that to all of the western world and your debts

the kind of money we're talking about and we've been paying that for year on year on year and year to companies like microsoft and apple and google and of course everybody starts saying oh we need to actually do this ourselves if we want to be safe and secure and if we want to be sovereign and oh by the way great there's all this free software out there that actually mostly already does what we need to and we just need. built the last five percent or two percent in usability and then we can we can run that fine and so now did ten billion that we used to spend on form software licenses we spend it on hiring local programmers and support people and educators to make sure we can work this right so we have a couple of companies let's say microsoft or oracle that are entrenched oligarch us or monopolists and the countries they speak of when it comes to deciding where to spend their infra structure or dollar sometimes just through sheer inertia they end up signing up again to the latest liker soft or paying oracle some more money

but you're saying that this is then a wake up call where this these countries and these companies are saying you know what we can is free software it's more robust obviously it's cheaper and it works better when we just don't these clowns in the us and start from scratch are exactly and i think i think certainly in germany some of the revelations that have come out over the last half year of really waking up a couple of people that yes there's going to be some you know work and pain involved in switching you know people have to return a few things things like that but already there are places in germany where they have proven and also in france by the way what have proven that this is possible it takes a bit of time it takes a bit of effort but actually after a few years nobody really remembers even the past then and you will find and now you're saving tons and tons of money i mean you know if it's ten billion for a tiny country like the netherlands imagine what it is for all of europe right now you mentioned earlier the word protocol and he talked about the various protocols in the world and this brings us to big point because big coin is

a protocol just like h.t.t.p. is a protocol so before people start to speculate about the price of bit calling or about the mysterious origins of bitcoin let's talk a little bit about first of all for the viewers out there that are just coming to this what is the protocol and then information its arms you know what is that what is a protocol a protocol in the patient is just a set of agreements on how. two entities whether they be humans or systems communicate so our protocol right now is we're speaking english which is great and we can both use english and that's the nice thing about something like english or the stuff so when i go to the internet i go to a web address i go h t t p s slash slash address dot com then everyone has become totally normalized i don't really look at that h.t.t.p. bit anymore but that was the protocol that created the ability to do internet that was the big leap yes so now this is usable yeah let's flash forward a bit point because i yes it's a currency yes it's a manes of moving money around the internet but first and foremost it's

a protocol s. that is so speak about the big protocol so it's a set of mathematical agreements where all the participants in you know the global network of computers all the computers are checking each other's ledgers against each other all the time and as long as everybody agrees that this is the letter and these are the transactions that everybody agrees on that works then the system works beautifully and there is of course a tiny tiny chance that somebody will find a flaw in the cryptography that's always a possibility but obviously by now lots of people have tried nobody has found a whole yet otherwise it would have collapsed very rapidly so i think we have to go or hear something that really goes what is a pet a flop pet a flop is a flop is floating point operation it's an amount of mathematical work done by a processor and a pen a flop it's a number of zeros the exact number eludes me they say that the current big coin protocol is hashing or solving problems at a rate that's greater than five hundred times the cray supercomputers and as

a part of this protocol and operating at some multiple of these pet a flop yes so mike i guess my question is when people say that while you want to start a crypto currency that's not necessarily true because the barrier to entry at this point with bitcoin is that you've amassed the biggest decentralized computer network ever in history bigger than such as. about how big it is i don't know even know the exact numbers and it might be quite hard to actually calculate but all the individual computers of all the participants so these are the big mining weeks but also smaller laptops maybe participating in a network it's their total computing power that you would have to beat if you wanted to manipulate the system and the numbers are not so great as your sat that that's pretty much impossible i mean anybody can start to you know crypto currency but unless you can amass this kind of level of participation it you know it won't compete with this so like with any currency anybody can start

a currency but it's if other people don't believe that your currency is anything then it's not going to go anywhere so it's always about how many people join you in saying ok we will take this thing and use it to exchange value and whether that's a big calling or a lump of gold or a piece of paper made by that you should be somebody could start a protocol for the internet to compete with h.t.t.p. absolutely but it doesn't probably won't work because h.t.t.p. has become the standard if it were an order of magnitude better and you could promote it effectively and you were to make it free so h.t.t.p. and bitcoin like english we can use the protocol without you know taking a license from the majesty the queen or the e.c.b. or or inventor of it quantum he you know he gave it to the world everybody can use it like tim berners lee gave to the protocol to the world to use and therefore we have a web and so i think if you were to start something you would have to give way to protocol for everybody as a to even participate in the process if you want to set a new standard you have to make it completely free for everybody to use and then in

order to be adapted on top of the existing thing it needs to be an order of magnitude better so if somebody comes up with something better than that's great you know i welcome the competition that's all that's only good but yeah people are going to go there if it's an order of magnitude better than what we already have right now we've already seen this protocol to completely change the way people look at money and look at the way. money is sent around the world and companies are now talking about being put out of business so the n.s.a. we talked about is being putting out of business a lot of technology companies needlessly now but on the flip side if you look at just how competition works companies like maybe a western union what you think that going to really challenge a lot of these established company that's absolutely in the way that m p three s. is making so these are relevant dates exactly to the music business yeah right so it's time to go and it's not like m p three napster our music business means money yes so that ben bernanke is going to go the way a lot of these established acts like the beatles can't make money anymore or some

of these others because of this new technology and stuff. all right well that's going to do it so area that campus thanks so much for being on the kaiser report and 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 arion compass if you like to get in touch please tweet us a kaiser report until next time. the . problem. comes. to. the phenomenon of friendly fire probably extends back to the french quarter.

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be in the. center of ukrainian capital keep growing the government slams the opposition for its methods and accuses it of attempting a coup. meanwhile divisions in the country become more visible as people in the east to make it clear they don't share the views being voiced on central square. also british m.p.'s are set to grill the guardian's editor over secret service allegations the paper had damaged national security by exposing the government's spy program. a villain on stage but is if villain off stage the court is set to deliver its verdict on a leading soloist of the bolshoi theatre in a case that's raised the curtain on the station rivalry jealousy and threat said one of the world's most famous.