hello there i'm aaron a this is boom bust and these are the stories that we're tracking for you today. first up janet 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 the fall of 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 one might do it now in today's big deal we have or now an economist in my opinion edward harrison he says causing why al gore moved a popular big plant out from a top story and what this means for the system that helped out this coin in the

first place all coming up it all starts right now. the. subject of a day in our lead story janet yellen all eyes on wall street were fixed on capitol hill tuesday 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's 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 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 abolish 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 economists hold 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. deliberately fall because it can print the money right so. the u.s. . debt isn't dollars so we can always pay its part no all that money printing may cause our 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 face it. will get dollars exchanged our new color. lewis 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 and so

to happen for the u.s. . 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 up sawzall billion dollars every year to bail out the banks it's going to undermine that role for the dollar and the exchange started all 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 dollar 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 haven't 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 a 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 of 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 reign 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 those numbers with a non 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 rural and retail sales housing there's no indication in fact all the most recent indications are there tanami is about to drop off further. the unemployment rate the way that goes down is because they simply do not challenge discouraged workers

who change find a job and cease looking for a job. so the unemployment rate measures simply because they don't shout those who give up looking for work the government has a second measure one employment which they call a new six and it counts. the short term discouraged workers and that rate is almost double the headline right to six point seven right . and if you count the long term discouraged workers as well as the statistician john williams does. the current unemployment rate in the united states is above twenty three percent. so there's definitely been a recovery which is so folks just larks the terrorists tripping over 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 or food stamps we see increasing. hardship on the departed lation more pressure on the population there was no. christmas. so the old saying about recovery it's not real stuff it's there and it. they've been able to do that developments this year are going to make 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 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 listen to this 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 us asset purchases do you think the fed is overestimating 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 there card and in fact the 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 knew connally 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 is it 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 easing i don't think the fed has actually made this file susan. for now they can't afford to cut back the bond purchases from eighty five billion dollars a month to sixty five billion which is still an unprecedented and otherwise unprecedented amount of 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. you know that will disappear later in the year. and so we don't really know what the fed is going to do like i say we real question. are they going to save the banks they're going to let the banks go so you can do all they can say right there's a critic all this money trust and water to support the balance sheets of the barracks 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. for the. wealthy british style. right. market why not. find out what's really happening to the global economy with my next concert no holds barred look at the global financial headlines tune in

to kaiser report on our. 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 lean 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 products go back in the futures market the comix more oh what the fed has done by suppressing it's made it very cheap to the chinese and indians to buy up the actual still typical supply will grow so what what the fed's policy is does is calls a massive go flows from nowhere 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 go variable for delivering the coming mix couldn't possibly make delivery only pitches contracts if people wanted to settle and go rather than just

settle in the cash price so so the result has been issued to go floating in asia at the scituate a low price now what's happening in the emerging markets is is unclear and there the conventional wisdom is that the fed created so many new dollars 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're going to go away at particular stock market falling still so much and the other explanation for the emerging market currencies problems is that their

currencies are being manipulated dispirit easy for dominant currencies whacked a dollar to to manipulate the currency is a small country. and maybe the venezuelans being paid back. maybe this is the 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 it's called 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 us a little further. what well they were the fed would give germany in 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 thought 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 allies and that it could only return to the goal that it left where they don't try to stay if it had to go it and i think this last year for the united states actually only return stack types of that i have seen is incredible to me now if the fed doesn't have a goal what will happen when bonus bank figures this out i mean a learning it as it goes along but what's going to happen i think the boom is black is already figured out but look look at it now go back

a little bit in time in two thousand and eleven should it and did as well demanded their hundred sixty times back. and they got it but it took the fed at four 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 in the gold trade for years that what the fed initially did to suppress the price goal was to lin that up the gold it had on the closet to bully the dealers who sold it and this increased supply of gold into the market helped hold down the price now as a 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 that gold it'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 and in consequence. there is fear that sooner or later their. western 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 have been a physical gold. to back their exchange traded fund shares well 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 shorts and drives down the price it causes margin calls that 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 gullible 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 amount such as 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. didn't lose that e.t.s. of the goal so that they could make the gold liberalised to endure and china 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. and 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 us you well it's an alp 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 out 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 aapl of trying to eliminate rival money transfer

systems systems that could potentially threaten apple's own ambitions in the mobile payment world he didn't think i was going to sit on the sidelines for this whole cryptocurrency craze did you 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 the big in terms of you know that people think that in fact apple is a rival to a 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 of an 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 point 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 cornwallis software companies say 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 with floor 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 question miners there. are 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. 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 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 there are no 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 always love learning more about their client that's all the time we have for now however you can see all segments featured in today's show on you tube youtube dot com slash two must r t they 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 russian see you next time check out. there's a game we like to play. this is a game with no added sovereignty it's jamie to above that puts me on my knees you

call it master and servant. outs and simon with this sort of independence you need servitude alex why be another nation on the chain gang when you can be the first on the block. chances are forced. into the finish line of the marathon.

new world record of the sochi olympics as a russian figure skating pair or wow judges with their short program and continue their pursuit for gold plus. the people working around the clock to make the sochi games and unforgettable experience our team meets some of the thousands of volunteers who have become the face of the host city. a lot of the fairly obviously looking to. really. hard he travels to south africa to explore the nation's struggle to overcome the rampant corruption and poverty and deep divisions left by the passing of nelson mandela.