hello there i'm aaron a this is boom bust and these are the stories that we're tracking for you today. first up jenny yellen makes her first official appearance as chairwoman of the federal reserve we'll tell you what she had to say and what you expect from her new regime then we have run out of promise paul fred roberts sees on today's show he's talking gold default the u.s. economy and much much more you definitely cannot miss this interview plus we have renowned economist you know what i just told you that what my doing now in today's big deal we have are now an economist in my opinion edward harrison he says housing why how who are moved a popular bit more now from a top story and what this needs for the system that help out this coin the first

place coming up it all starts right now. subject to every day in our lead story janet yellen all eyes on wall street were fixed on capitol hill today as janet yellen chairwoman of the federal reserve delivered her first public remarks to the house financial services committee now yellen said that only a quote notable change in the outlook for the economy would prompt policymakers to slow the pace of tapering she went on to say that financial market turmoil doesn't pose a major risk to the outlook for the u.s. economy repeating the fed statements that asset purchases arch on a preset course so pretty much more of the same. however one thing that's not the

same the clear skies smooth sailing conditions that j.p. morgan chase is accustomed to now out of that thirteen billion dollars settlement that j.p. morgan worked out with the fed way back in november the federal government that is it caught the attention of both washington and wall street now the landmark settlement stemmed from ak accusations that the bank overstated the quality of its mortgage securities sold before the financial crisis however a lawsuit filed on monday by the nonprofit group better markets has challenge the constitutionality of the deal in the complaint better markets argue that the justice department violated the constitutional principle of separation of power when it unilaterally struck the deal without a judge's blessing better markets is seeking to have a judge approve an injunction that would have balazs the deal unless the justice department provides a quote ample and detailed records so such courts may review all the facts and all

the circumstances and one washington shenanigans slated to go ahead with the realities of the little drama the passing of a clean debt limit bill who knew now republican leaders in the house of representatives caved to demands by president barack obama on tuesday and agreed to advance legislation raising washington's borrowing authority without conditions where you have it what a pleasant surprise. american economist told fred roberts was an assistant secretary of the treasury under reagan and co-founder of reaganomics since then he has been an editor and columnist for the wall street journal of business week and scripps howard amongst many other media outlets now in that capacity he voiced his concerns about the strength of the

u.s. economy u.s. politics and u.s. civil liberties i started off by asking roberts if he thought the u.s. whatever default on the debt obligations here's what he had to say. doing that would fall because it can print the money right so that. the u.s. share its debt isn't dollars so we can always pay its part though all the money printing made cars are inflation and so the real value of the bottom rate fall dramatically but just no chance of the default or all or all the. danger that the country faces. will get dollars exchanged for our new color. i don't read all of them lose its role as world reserve currency you see being the reserve currency is extremely important it means you can pay your bills simply by printing money i mean other countries can't do that so nice thanks

again for the us. so and so the power of the united states and its financial good cinema over the world depends on the dollar having this role but if they keep printing thousand billion dollars every year to bail out the banks it's going to undermine that role for the dollar and in exchange for the dollar collapse and the power of the united states will decline sharply so the bats fly what i think as the fed same came about quantitative easing. if it's not really causing the banks to get well it's merely keeping them afloat that it's dealing with symptoms and not causes but it's threatening the doll then the policy doesn't make any sense so it's possible that the fed is thinking that way i don't know that they are but i've been pouring this out to them for several years now and they may

have noticed it and that it may have entered their mind and they may be saying well this would be a very serious situation in other words the dollar failure would be worse than the banks fail now mr roberts the last numbers we got on g.d.p. growth were three point two and four point one percent in real terms on an annualized basis now the u.s. unemployment rate has now dropped to six point seven percent after reaching crisis peak numbers at ten point one percent and the congressional budget office has said that twenty fourteen u.s. federal budget deficit will fall to five hundred fourteen billion dollars that's around three percent of g.d.p. the question is is the united states in an economic recovery. that no of course not . they get those g.d.p. numbers by under estimating or under measuring the range of inflation.

so when they deflate the nominal g.d.p. with an under stated measure inflation they get positive g.d.p. but if you actually were to deflate it was numbers with a not manipulated measure inflation there would be no g.d.p. growth this probably not been with very much of any g.d. p. growth since the economy turned down at the end of two thousand and seven so no other indicator shows economic growth we still have the decline and median family real median family income real capita income and there's no growth in real retail sales housing there's no indication in fact all the most recent indications are the economy is about to drop off further. the unemployment rate the way that goes down is because they simply do not challenge discouraged workers who

can't find a job and sees looking for a job. so the unemployment rate measures simply because they don't check out those who give up looking for work the government has a second measure one employment which they call you six and it counts. the short term discouraged workers and then rate is almost double the head tonight right to six point seven right. and if you count the long term discouraged workers as well as the statistician john williams done us . the current unemployment rate in the united states is above twenty three percent . so there's doubt been or a terrorist is a folks just larks the terrorist threat you know where every terrorism really that we've got plenty of spiral and the recovery is

a hoax no one is experiencing we see increasing numbers of people own food stamps we see increasing. hardship on the population more pressure on the population there was no. who's from christmas say. so the old saying about recovery it's it's not real stuff it's there and it. they've been able to hide it but i think the developments this year are going to make that even horrible now i thank you for bringing up the subject of unemployment because the unemployment rate seems to be deceiving the fed in fact the fed's growth forecast for this year is so upbeat it is a reason that now is the time to cut its asset purchase program even or out of a lot of the last f o m c statement quote was notice now in light of the comments

of progress towards maximum employment and improvement and the outlook for the labor market conditions the committee decided to make a further measured reduction in the pace of an asset purchases do you think the fed is over estimating the strength of the economy again. well of course but that's not in my opinion and reused best just their cover and it is not the real reason. they're they're cutting it in fact it remains to be seen whether they will continue with their quantitative with tapering the quantitative easing or whether they will have to increase it. if as. many suspect neutron money continues to worsen. and they'll have to. they may restore the quantitative easing the real question here is. what is the fed

go does it says is still focused on saving the banks or has it really lost that creating the huge numbers of new dollars every year threatens the exchange berry of the dog and so they can't save the banks and the dialogue if they decide to save the dollar they've got to stop connotative easy i don't think the fed has actually made this file susan. for now they can afford to cut back the bond purchases from eighty five billion dollars a month to sixty five billion which is still an unprecedented an otherwise unprecedented amount of a debt monetization they can do that because it's tax time. and money is flowing in and to the treasury they don't have to borrow as much for nasa

so that part of the quantitative easing that was financing the quarterly federal budget deficit that's eased up moment. that will disappear later in the year. and so we don't really know what the fed is is going to do like i say the real question is. are we going to save the banks we're going to let the banks go so you can do all they can see right this is critical all this money tries to get water to support the balance sheets of the banks you're going to undermine the very good all the. time now for a quick break but stick around because when i return more with economist paul craig roberts he's talking gold both physical and paper so you won't want to miss it and then in today's big deal edward harrison and i discuss

a recent move by apple that ticked off a bunch of big corn users we'll tell you all about it but as we had to a quick break here's a look at some of today's closing numbers a bell stick around. and . i would rather i asked questions to people in positions of power instead of speaking on their behalf and that's why you can find my show larry king now right here on our t.v. question for.

and we're back with more from economist paul craig roberts now in the second half of our discussion i spoke with roberts about gold both physical and paper and now there's a lot of talk lately have hot money lead emerging markets for safer havens and this is depreciating emerging market currencies but not as many people are talking about gold as a safe haven i asked roberts if the gold rise might be due to the emerging markets crisis. by suppressing the paper the price of gold that stood in the futures market the comix market what the fed has done by suppressing it's made it very cheap to the chinese and indians to buy up the actual physical supply go so with what the fed's policy has done is calls of massive go flows from the west to the

east at a low price. see the go price is actually established in the period just market which is a paper market for example them out of paper claims own goal far exceed the goal of able for delivering it coming max couldn't possibly make delivery only futures contracts if people wanted to settle and go rather than just settle in the cash price so so the result has been an issue to go for los and asia at the scituate a low price now what's happening in emerging markets is is unclear and there the conventional wisdom is that the fed created so many new dollars in the banks didn't have anything to do with them and so they led them into the emerging markets that they flowed into his way or in argentina or in the east of the country. and that

now that the fed is going to taper and cut back. there and this money is flowing back into the united states but still not clear where we want to go i happened to caylee was stock market falling so so much and the other explanation for the emerging market currencies problems is that their currencies are being manipulated dispirit easy for dominant currencies like the dollar to to manipulate the currencies of small countries. maybe the venezuelans being paid back . maybe this is washington's way of destabilizing the remnants of the chavez government i mean stranger things have happened but i want to talk about play on the subject of gold now the bundesbank they began repatriating its gold from overseas out of storage and presence like the federal reserve now you've said

that you think the fed as you mentioned before doesn't have enough gold to go around if everyone wants to our climate can you explain this a little further. world the fed would give germany a school back i think if i remember correctly german is deposits with a fair that is. fifteen hundred pounds thousand five hundred pounds a ton something tops thousand five hundred bucks wow and the fed said well and you can have it over the next seven years we'll give you three hundred tops that will give you a fifth of what you trusted us to keep for you well why would the united states tell its most important european now that it could only return a fifth of gold that it left with it don't try it if it had to go and i

think this last year the united states actually only returned fact on its. but that i mean that seems incredible to me now if the fed doesn't have a goal what will happen when bonus bank figures this out i mean they're learning it as it goes along but what's going to happen i think the biggest bank has already figured it out but. look you know go back a little bit and turn in two thousand and eleven should there and did as well demanded their hundred sixty times back. and they got it but it took the fed a cool minutes. for months to come up with one hundred sixty tons well now two years later they can't come up with three hundred times for germany. so this supports the conclusion of many people who are been active and would go train for years that what the fed initially did to suppress the price goal

was to lend out the gold it had on the posit two billion dealers who sold it and this increased supply of gold into the market helped hold down the price now as they drained their holdings of gold they had to turn to a new mechanism and that was to sell the next good paper assurance that is they go in and they sell a future contract the goal that's not covered there's no gold to try to protect and that then drives down the price so that's the explanation for why the received out so much negative short selling where huge amounts of contracts are dumped on the market it least opportune times of day and nobody trying to get out of a position would unload it in that way because that's the way for maximum loss it

drives the price down the most so i think the fed doesn't have any go they're having great difficulty. to come up with it and and in consequence. there is fear that sooner or later they're. system will not be able to deliver to china the go purchase right now case oh the system will just simply implode on the subject of paper gold gold e.t.f. and that's going to be my next question do you think these funds having a physical goal to back their exchange traded fund shares well were is quite clearly they don't i mean the evidence is clear that that they don't have enough gold to back the share in fact what has been happening is part of the mechanism for driving down the price to go when you sell the paper short

and drives down the price it causes margin calls it causes a stop loss orders to be triggered and all sorts of people bail out of the shares so the very people who are doing the shorting can then step in and buy the shares at a very low price and these gold exchange funds have very strict rules about who can redeem the shares from goal and basically it's only the big bullion bikes j.p. morgan for example and they and the shares can only be redeemed and large amounts just one hundred thousand shares so what what what the suspicion by many going traders is that these bullion bikes conducted these raids on the goalie yes in order to accumulate the shares. then loop the e.t.s. of the goal so that they could make the gold liberties to endure and shana is so

is part of the movement of the precious metal out of the west into asia sadly that's all the time we have for now please come back on the show very very soon and enjoy the warm weather in florida. pleased to be with you. that was economist and former assistant secretary to the treasury paul craig roberts time now for today's big deal. edward harrison joins me now to talk a digital mobile payment system on stuff now several days ago the last remaining decline wallet from its abstract work what is a big coin wallet you maybe ask you well it's an app that allows big payments simply to conduct by scanning a q.r.

code now the wallets are designed to be easy to use and reliable also being secure and fast however the move by apple to nix the out blocked chain one of the most popular big client wallet ups on the market has angered bitcoin supporters and with over one hundred twenty thousand downloads it's easy to see why now apple cited unresolved issues with the developer as their reason for banning the app however the makers of the op have accused of trying to eliminate rival money transfer systems systems that could potentially threaten apple's own ambitions in the mobile payment world you don't think apple is going to sit on the sidelines for this whole cryptocurrency crazed as you can possibly and now my first question to you is what do you make of this latest move by apple why would they do this well two reasons one that they gave in terms of you know that people think that apple is a rival to big coin in the sense that it's going to bring out its own payment system and the other is actually security because we're right now big problem with

mt gox and other places because it with attack by hackers some security vulnerability is that this scene with how they're developing their software ok now ahead with the availability of these virtual operating systems could apple's actions prove immensely detrimental to the growth of crypto currencies in general. you know i think it could be detrimental in the sense that we're going through sort of a hyperbolic phase in terms of the you know. the value of bitcoin and so you know to the degree that it suppresses the availability of bitcoin of the ability to get your money out i think that that phase is going to come to an end and so we're going to we're going through a phase shift from the early adopter of to sort of the mass business going to be a shakeout in terms of who the the agents are and i think that's going to be detrimental over the medium term but over the long term i think that bitcoin will

still be a factor always beauchamp eclat actually just read a tweet that you know at least a.t.m.'s are still working today and if they got you should have a pretty going to do about that you know is there a vulnerability to all big wall and software companies saying you know they are are they in trouble or something like this happen to all of them well you know that's what you were i was talking about the floor and you know i wrote up a little bit about that because you know let's just talk about how the point works because you know big point basically an internet wide distributed network of transactions and you have to make sure that the transactions are all confirmed you know the owner and the owners a big point of correct you have to have the big one miners there. only in these ledgers and alleges contain the transactions and the thing is that the miners turn these transaction i.d.'s these transactions into hashtags using a cryptic graphic hash. that's based on this script

a graphic format called a to take a guess who actually created this particular cryptographic system. and word snowden very close so and. so that's another point we'll get to but you know it's similar to the one that when we download. software off of the internet you know there's a there's a code that comes out and it says the code that you just downloaded or the program you just downloaded is actually the program of the person who put up the program once it's a bit so the thing is it takes ten minutes for these miners to transfer these. letters in this transaction i.d.'s into these hashes and you need six of these in order for it to be a confirmed transaction so it's a whole hour for the transactions to go through no one wants to wait an hour no so as a result these big cornwall it's are actually putting through these unconfirmed transactions

before the sixty minutes is up and that's where hackers can get into play take advantage of the vulnerability and then these transactions you know one quick question are the miners kind of operating as the bankers if you will there it's sort of like if you think of like bit torrent it's sort of like a distributed network knows these are the full nodes within the within the actual system and they're the ones that are keeping everything distributed and in concert with one another wow interesting fun facts i always love learning more about quiet that's all the time we have for now however you can see all segments featured in today's show on you tube you tube dot com slash two must r t but also love hearing from you so please check out our facebook page at facebook dot com slash boom bust our t. you know also tweet us at aaron aid at edward n.h. from all of us here at boom bust thanks for watching see you next time shall.

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and simon with this sort of independence you need servitude alex why be yet another nation on the chain gang when you can be the first on the block. but if you're going to like these policies i think you know. a pleasure to have you with us here on t.v. today i'm sure.

coming up on our tita so she went our olympics heat up as teams from around the world compete already a few select hundred stand at the top with medal wins but it's. far from final the latest on the olympic games just ahead. and since news broke about the death of actor philip seymour hoffman the danger of heroin is back in the news and a large portion of those drugs in the u.s. comes from countries like afghanistan and mexico a look a look at heroin in the u.s. coming up. and for decades u.s. marines and their families were exposed to toxic water at their military base in studio two survivors share their stories with r.t. america.