the next ten countries combined yes one thousand eight hundred twenty eight tanks to three hundred million people out of thing so. yes max actually the number two is china with four hundred twenty six and then the united kingdom with two hundred eighty seven and you know one of the things i think you see with think tanks is they push these myths on to the population and propaganda for their sort of schemes to essentially convince the population to indorse systems and financial systems and economic systems that are bad for them essentially so the way to look at america is with this one the king jaafari defense wealthy teen kills four people in drunk driving accident claiming affluenza so the nine one one call you know when this accident happened it talks about all these scattered bodies all over the place and this rich kid drove drunk and killed these four people normally

a normal person would be sentenced to prison for this however this kid was rich his parents were wealthy and the judge accepted the argument that because he was he was given there were no restraints on what he could have in life he was unable to determine what was good and bad right it's the defense free from that. game of thrones. for is this little pint sized dictatorial king that likes to torture people because he's the king but that's the problem with the current economy feudalism or a neo minorca whole system where the elites as they're called simply do whatever they want without any regard to the law whatsoever and their defense it's almost like the divine right of kings defense like the king could kill anybody they want to say well god told me so here you have some punk of america that kills people and says well you know my banker said it was ok jamie diamond told me it's ok. murder

somebody so therefore it's ok because jamie doesn't have any role of all and i'm included jamie so i don't have a rule of law and i think the word for a think tank here is going to yes in fact you know this the fact that this kid is driving drunk and he his position is that all these crimes put forward is that they themselves are the victims i'm so rich and you all you poor people that were walking in the street and i hit you and ran over you you're causing me to be a victim this is so stressful and the same thing when you bring up jamie diamond is you know there were some people presented the notion that they were like trading drunk they were trading with fat fingers and we can see flash crashes and their argument is well when they kill the markets is that where the victims here stop banker bashing well i think this marks an interesting beginning of a new chapter in this huge wealth and income gap that's been reading now for decades because of financialization because of quantitative easing because the

argument from those who are stealing is that there is a sort of jealousy that the folks that are having their money stolen through quantitative easing other schemes are jealous but it changes character dramatically when these people who are stealing the money to run a start murdering plugs the serfs then i think the population is like a by the argument anymore that they're just. jealous of the folks doing the stealing i think that's when things start to get a little bit more as the economist magazine might refer to in a risk to social cohesion well that happened to me and then of course that happens in china and there are bene few riots in the past few years when the guys in b.m.w. drive at high speed through a peasant village and run over somebody keep on driving through some money back at them and just keep on driving and that's caused some riots but i also want to look at you. no in terms of this killing the economy and blaming the victims of their

crimes i want to look over it to a stroller because there's a story there about what's going on that productivity is declining rapidly and they're blaming the workers they're blaming the workers for taking too much income the unions are being blamed it's housing that's killing productivity trying to pin australia's mediocre productivity on factory floor wages it's just not good enough productivity problems lie just as much on the capital side of the equation so the think tanks will tell you that it's just labor it's just labor costs that contribute to inflation for example it's just labor costs that contribute to declining productivity but there's the multi-factor productivity as australia determines it is also you have to count capital the returns on capital where capital is being deployed and in. being deployed to property and causing land values to rise and the misallocation of capital is causing a decrease in the return on capital right the country is going bankrupt that's

another way to describe it they're losing their productivity and this is a fantastic study or they call multifaceted productivity multi-factor productivity multi-factor productivity because it takes into consideration the damage that blowing housing bubbles has on the productivity and whether or not the country can sustain itself economically as a growing franchise and this is something that in the u.k. they never make mention that they don't mention the fact that when unions and other folks there's been some unions on strike recently in the u.k. over transportation system the government employs them and saying you know the fact is you're making too much money already and they'll say look at the guy who runs your union he's making too much money but if you look at it comprehensively in the big productivity picture the fact that the banks have scooped up all those capital and put it into unproductive assets if you're speculating in real estate. that's

not a productive use of capital it doesn't create any productivity gains so this is something that if applied to the u.k. i think what people would understand that it's not has nothing to do very little to do with what people are being paid to sit down there the tube punching tickets it has a lot more moving parts well of course house prices if it goes from one hundred thousand to a million it doesn't produce a tradable good there's nothing you can export you can't ship your house overseas you can bring money and perhaps from also some foreign investors but they point out for fifteen years the australian media i think tanks the media are sort of think tank of course has celebrated the nation's appetite for pouring domestic and foreign capital into non productive assets the housing stock while many firms to fail to recapitalize to upgrade technology management techniques or plant and equipment and they point out that companies like holden and quantas to australian giants are very noncompetitive and competitive against their competitors because of land value the cost of land is increasing so much to their cost of doing business

it's not the labor that they employ that is causing the decrease in productivity it's the cost of their land i think it's a good point that the think tanks are quitting goes or media were always points of labor and suggested as a labor fault that productivity is diminishing and we need to pay labor less in order to get productivity higher which is a completely fallacious argument this element that needs to be addressed is the mal investment of capital thanks to programs like quantitative easing give away the capital to speculators doesn't anything to the productivity and they also talk out that so as the media as the population everybody's in on the frenzy of rising house prices it should be no surprise that the finance and insurance industries which are dominated by mortgage lending have grown at more than twice the pace of the rest of the economy since financial markets were deregulated in the mid one nine hundred eighty s. due in part to the housing quango operated by the various levels of government.

exactly so they have two charts that go with this and this shows the growth of the finance and insurance economy and as you can see the blue line is finance and insurance and you can quite see quite clearly that it's grown its surges from one thousand nine hundred five while the the red line is all other industries which haven't grown at all there's a the other industries of course of the wealth producing tradeable goods all that sort of thing that is not growing and the folks remain in jobs that do contribute to productivity like they work there on the railway system they're being told that they're not trying hard enough they should be more like the city bankers that are simply speculating with borrowed money that app's no productivity gains what so ever so it's like a double punch in the face firstly the not making the money the wages don't keep up with the inflation and because of all the money printing and the other being victim victimized you know they're being pilloried for being somehow not trying hard enough it to they want an entire nation of speculators which is becoming more and more the case but you know something flash in my mind when you mention that the

productivity has been gutted and the nation essentially collapses because it reminds me of the collapse of the spanish empire remember they spent the entire empire aggregating gold but gold in itself was not a productive asset and then that empire collapsed so similarly the u.k. which is aggregating debt as if it were gold and servicing debt at some point and no one is can afford to live here or work anymore it will simply collapse and they go on to show you what this growth in the mortgage lending and finance sector has done to the economy with this chart bank lending by category the blue is housing red is business and green is personal again i mean you go back to gold it's there treating the houses as the store of value but at the expense of the real economy somebody has to create value and add value to the economy in order for it to continue to sustain the ponzi that. that is the leverage housing bubble yeah it's

interesting and people have been talking about iceland again and again and once again the example is that they have to get rid of the predatory banks before they get any kind of productivity improvement and this is what exactly happened in iceland going to get rid of those part of the story banks and the economy is now growing organic basis were unemployment is at four percent heading to two percent and as the article mentioned it was australian government crang goes the crane goes these lobbyists meet with the government and convince them that they'll be reelected if you force house prices up these people will feel rich and will be the wealth effect they'll vote for you they'll continue to vote for policies that are going to destroy the entire economy and then when the economy collapses the question goes come in and tell you are they peasant people and you're the reason that we ran you over that's what happened so cycle right and that's that's evidenced by the story here of somebody just simply driving in and killing lots of

this child who murder folks murder people is saying that essentially i'm innocent because i'm contributing to the that is something the country. itself to death and now finally i want to say that you case are supporting says banking weakness at heart of productivity problem so george osborne you know did not blame workers in this he said there's been a decline in productivity but he blames the banking sector he doesn't blame his own housing scheme and he says chancellor george osborne said on tuesday that britain's low productivity growth was disappointing and put most of the blame on the slowness of recovery in bank lending after the two thousand and eight financial crisis and he says they need to expand lending to small medium sized enterprises but the incentives and the ghost are not there for that right so george osborne made a rare factual statement based on reality but his salute. it is

and complete and well the question goes to tell you the problem with that is that the crying because if you have a small medium sized enterprises you have to hire people in the tell you labor is bad people working is bad you have to have them speculating instead. a very good stance we must go thank you good bye king joffrey. all right states of the cycle are all out war. it was a. very hard to take a. long. live happy ever had sex with her make her look.

like. the. lud. live.

live live. live . welcome back to the kaiser report imax keyser time now to turn to simon rose of save our saviour's dot co dot u.k. simon welcome back to the kaiser's our humanity now i learned that you're also

crypto currency mogul you have not only because. you also have max cohen is that true i have to have mexico and you know as much going that made me find my toe in the water two years of you telling me i should get involved in this not understanding any of it but yes in a week of going from going nothing to knowing a little bit more than nothing in the first of our guest actually on mexico right now we have a five year anniversary very exactly five year anniversary since the bank of england cut the base rate to a three hundred year low of whatever percent so tell us about the mckinsey report into how much these low rates have actually harmed british populace because there's this general perception that somehow low interest rates automatically good for the economy but very few people actually trying to fight so mckinsey to report very recently in which they worked out how much u.k. households again and from low mortgages and how much they had lost through their savings and they actually found that balance u.k. households in five years had lost one hundred and ten billion pounds they worked it

out for the u.s. and the reason as well and similarly horrendous figures there i'm not sure why people find the such a hard concept to understand if you're going to take money from one pot and give it to another pot well then the part you're taking money from has less money and i shouldn't be and there are fewer there are fewer people who actually have mortgages and then there are savers so wallie this policy favors the the less than one third of households who actually have a mortgage at the expense of everybody else i simply do not know what i do know of course the government is the biggest debtor so so two thirds of the population is holding stiffed subsidizing the whopper and that's that's a fact eating in five years if you have one hundred thousand pounds mortgage you would have gained three thousand. and two hundred pounds every year because of a low mortgage cost so you'd have made about sixty thousand pounds over the five years if you were a saver with a hundred thousand pounds you would have lost four thousand two hundred pounds every year so that's a total loss of twenty one thousand pounds so

a loss twenty one thousand pounds or a gain of sixteen thousand pounds that's a massive. thirty three percent differential i mean that's extraordinary well i don't why savers on out on the streets every day protesting but i'm afraid the trouble is by and large savers tend to be run as required nice people but they're moving over to cryptocurrency around the world because the banks have failed and they're clearly not doing the thing that are in the interest of the majority of the population so they're seeking alternative ways to achieve savings whether it's precious metals cryptocurrency and of course peer to peer which is just i think last year they doubled the business period peer lending and yeah which is why in essence you're sort of trying to match off some of those savers and people want to borrow money both people who want to borrow it for personal reasons or indeed sometimes for businesses like the savers are getting five percent on average on a peer to peer exchange and the cost of borrowing money for the borrower is also less than they get back i know because the risk is great so

a lot of you know if your pension with the chances are peer to peer is maybe not the thing to put your life savings into but there are alternatives out there and you know all the way through the last few years we've hoped that savings rates are going to go up but it's quite clear that he does not want interest rates to go up whatever the economy's demarc are he'll get on mainstream media else the problem is that they need to guard against the deflation and this is a real interesting propaganda because there is inflation in the house prices for one third of the country then being subsidised by two thirds of the country and that one third of the country is essentially taking a gift from mark carney who because he claims there is deflation is giving them lots of free money to go speculate now and it's being subsidized by the other two thirds of the country he calls that the flow. asian but for some reason the fact that people are using home equity laws to extract wealth there are using their inflated house prices as collateral to do other other kinds of speculation that there is rampant inflation in house prices and anybody personal experience over the

last few years would show them that for the essentials that they've actually got to cope with prices have been going up and this critics have to update a book recently that i wrote nothing to do with money at all but it was a little bit about money and it. came out two thousand and five two thousand and six well only official figures alone were having to ramp everything up by a third so from then until now official inflation numbers show that prices. talked about it before but there is an essential index these are the things that you know not like i pads or something like top of the things you were absent go to how well the level of inflation is running about twice the level of the fish you've got the essentials and yes now there's a study in the us john williams as a website that he calls shadow stats you know where they try to figure out the inflation numbers if they were calculated without these donek adjustments as they're called so you've done something similar here in the u.k. called the essential index and the price rate increase for the essential stuff is

running at what percent level was double over the stock to morgan who's done it over the five years the last five years whereas c.p.i. and r.p.i. a both about eighty ninety percent it's about thirty five thirty six percent for the essentials so it's really tough deflation and so on i mean the government says inflation is running at just over two percent you know it sounds like based on what you're saying it's closer to four and a half five percent yet at least i mean that in i haven't seen that index updated recently by moody's about that's not coming back to target of two percent any time soon now and we had a guest on recently who suggested it was closer to nine percent certainly in the states under the shadow stats website is really really interesting calculating the indices the way they used to be before they stop tinkering right so here is i mean economists are trying to do something over here but nobody wants to have a go sadly right there and then of course people are not getting paid as much as they would if the central banks start banging on about what they perceive to be deflation they say there's deflation so we have to keep rates low which means you have to also get lower wages because there's deflation meanwhile i'm just giving

a lot of money to my buddies one third of the country that you're subsidizing to go speculate the housing market if you stop and unwound himself then you'd have real inflation wages would go up and two thirds of the country would benefit and the one third of the country who has got a basically a free ride for the last five ten fifteen years would be have to seek other ways of rent seeking. we hear a lot about when wealth inequality. you're in the states why is nobody talk about the fact that it's the monetary policies that are actually making everything unequal they are making the rich a ritual the time of the grinding down those people who got almost nothing it's appalling well it's a great question and why is that such a hard concept to understand you know i'm thinking about mainstream media here it will have sold like mark carney on but they were all never ask him this question why does he pursue policies that are causing wealth and income inequality what why the wiser he's talking about you know bank of england should be the bank of inequality should be its official name he thinks that this whole idea of low rates

to stimulate it doesn't stimulate the economy that's another doesn't stimulate employment no it takes it a little profit thing else in this country the economy is driven two thirds of it driven by consumer spending well so from the majority you've taken money away and you wonder why they're not spending anything there was a seawall so feeling at the bank of england that somehow if you cut interest rates people would spend because there'd be no point in saving but of course their mind theoretical column is they've never actually had to live in the real world they don't understand that if you all living on a fixed income and your income is going down you're going to husband your resources not simply splurge on a new car it's ridiculous can we say that garnett was officially now lying when he said that when employment got to six the happy. that he would possibly resign ok well it's got to do these numbers yet. what is a reversal of course we're going to read by the way these are these are not again these are temporary jobs low paying jobs jobs are not providing for households

enough that they they can afford to get off government assistance i mean this is all very crappy jobs actually but somehow they're calculating that at their equation even with that bad data is still not seeing any end user content i was watching a program the other day and they had somebody who suffered from something called munchausen syndrome by proxy so i had never really heard of before but this is when you're keeping a patient medicated to show how we. you ought to them even if they get better if you stopped well i'm sorry but i think colony of the central bankers have got munchausen's syndrome by proxy if they just get out of the way maybe the economy could recover well i think that's the best the criticism most people have of the central banks is that they're saying most only the enlightened. they're solving a problem doesn't exist and if it can't buy the income the rent seeking is just a classic their scheme of rent seeking where there inserting themselves into a situation that there are needed to extract wealth to be a gate keeper to be told booth to just take the suck money out there's no problem

being solved they're just they are the problem but we have five years of this now in this country how much longer is it going to go on it's just it's appalling well let's talk about this we don't why doesn't the mainstream media question central bankers ok at that with this i think you know we're. all because of that one for what about stephanie flanders at the b.b.c. again why didn't she report on these banking scandals for years oh because she took a good idea j.p. morgan a. step i see want to go there did you can i just tell you last week on the today programme radio four leading current affairs program on the radio the b.b.c. wrote person who's the b.b.c.'s business first course we're talking about the banking sample said the twenty billion pounds plus the having to pay in fines for p.p.i. insurance misselling is economically good news because people who got refunded the money they were defrauded all going out and spending it oh.

well the psych another example at that most the journalist from reuters was up with shaking hands with mark carney and she tweeted the photo and said she begged him to keep rates low so her mortgage repayments would be. well i'm afraid that is the problem quite often if you're interviewed by the standard people in the media he had they all mortgage holders and all they can think about is yes i'm paying less on one move and therefore it's good for everybody when i'm sorry as you pointed out but all the same for him or her at the end of the month her net worth is declining because he's paying more for the assigned souls her savings are being wiped out her access to public services are being destroyed because it up being there's no capital investment because it's all going to speculation did quality of her life is being degraded every month in total bubble pops now that she's going up to the guy who's she's like stockholm syndrome she's getting held hostage by this bank or the

central banking nightmarish fellow as you saying oh i love you mark already we're destroying my car to be destroying my life please keep me locked up in this nightmare of debt longer please it's like being in the matrix you know we have an inflation target which i've only just reached about a couple of times in the last five years of two percent why is nobody question why they actually want it to be two percent inflation every year anyway over my lifetime i'm not old on the official numbers money the pound is lost ninety five percent of its value while i'm sure many savers would actually prefer to we had deflation what prices things actually going down that would be fantastic again monkey around with the terms and the some out of the economy of the country ends up subsidizing of third to do rank speculation at this time a real wages are down the most and for the longest sustained period since world and the end of world war two now let's talk about how this is related to low interest rates because this is another we all about thirty seconds. ok well i mean

information's been above the increase in wages now for sixty years on just keeps going on so everybody is losing out using up to inflation you're losing out because your wages not rising like that. the government refuses to incorporate wages in anything that they do they don't consider what they don't need and they don't think . there's any good house prices inflation because they know that we go soaring through the roof so that they have to double blind it's a double fraud and they don't need wages because after all the taxes are needed to pay for government services because things get more card to print money right yes sadly your rights as ever. all right we've got to go simon rose of famer savers i forgot to ask report thank you 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 simon rose of save our savers dot co dot u.k. if you'd like to get in touch tweet us a kaiser report until next time but you know.

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