nine million dollars amassed by consulting for by now financial firms like city now summers went on to write that president barack obama is right to be concerned those who condemn him for tearing down the wealthy and engaging in un-american populism are to put it politely lacking in historical perspective now kind of like the pot calling the kettle black a little bit later i know especially when your historical perspective is based on that fictional t.v. show. to try to give me orders with you mean she mistook you for soup but you don't live it was a shill. for morrow and the director david stockman joins me now from our new york city studio to discuss yet but us budget deficit fed policy and much much more now welcome david i want to jump right in and start off by asking you

a lot of people that we've talked to recently on our show they're concerned about the destabilizing effects buoyant assets right now is this something that you're concerned with personally. very much but let me observe first that larry summers should know about fiction he's been discussing economic fiction his entire career and is behind the policies of unlimited money printing that are behind this huge windfall that has gone to the one percent after all when the fed keeps the money market rate at zero for seven years which is its current policy and yellen is reaffirmed that it is essentially creating free money for the carry trades to engage in every kind of speculation known to man all over the world planning dangerous time bombs financial time bombs that one of these days will go

off anything that can be traded reposed securitized options the fast money and the hedge fund traders are doing all on the back of the free overnight money that is being dispensed to wall street by the fed and which they're gearing guaranteed to keep in place for several years yet to come this is the cause of the problem we don't need to change taxation we don't need to have more keynesian type you know middle income oriented manipulations we need to get the fed out of the financial markets its fat off the scale let interest rates clear the market based on true supply and demand let traders and speculators be at risk shut down the fed fueled casino in will solve the problem that he. purports to be addressing so you obviously think that the fed's accommodative monetary

policy is a big reason why the asset markets might be so point right now correct yes of course that means the fed is sealed. in massive inflation but it's inflation of financial assets not inflation of goods and services and but it's equally damaging in fact it's even more so because this huge inflation of financial assets take one measure of the russell two thousand which is the index of the most speculative and higher beta stocks so-called main street america small mid-cap companies is now trading at eighty five times trailing earnings that is lunatic that is that we have surge that's what you get at the peak like we did at the dot com peak in two thousand or early two thousand or at the peak of the market in two zero zero seven before the big crash so the handwriting is all over the wall there is really extreme speculation everywhere and you have the new fed chairman

testified last week that she can see no signs whatsoever of not only any red flashing lights but orange ones as well and i think that's just a major of the fact that the fed today is being run by academic zealots who do not understand that they have fundamentally crippled in disable the financial markets and created a casino that is dangerous and is nearing the end of this bubble inflation and then i have to ask you do you believe destabilizing bubbles are one of the principal problems for the u.s. economy right now. absolutely it's the heart of the problem the fed has become a serial bubble machine look at the record from eighty seven and look at the panic in one thousand nine hundred eighty eight when they bailed out long-term capital and created the great moral hazard and the speculative final blow off of dot com

and then greenspan panicked again put the interest rates down to zero or one percent said we have your back the so-called greenspan put then we got the housing bubble in the credit bubble and the wall street bubble and then the mill down into us eight and then they imply that they don't they didn't know where it came from but they were going to do even more when bernanke he opened up the monetary spigots and drove the fed's balance sheet as you know from nine hundred billion on the eve of the breakdown or of the lehman bankruptcy to pushing four and a half trillion before they finish tapering and frankly they're likely to keep on going beyond that so that's the heart of the problem when you have these massive cycles of asset inflation sooner or later they collapse it creates panic go throughout the economy activity freezes up comes to a halt and you start all over again the main street economy since two thousand when

this bubble you know pattern really emerged has been growing at the lowest compound rate for thirteen years about you know one point seven percent of any time in the last hundred years that's that's how bad the negative impact is so david i think it's fair to say that you think the fed should raise rates then but i want to ask you what should they raise them to know i don't can i can i just jump in there do you think the fed should raise their rates i think the fed should get out of the market gets them off the scale let the market clear where the supply of savings and demand for credit. intersect and i don't know whether that's eight percent four percent or even you know not that much higher than it is today but i do know what's out there today is totally artificial it's set by the fed they say there's there pig in the rate they're fixing the rate and the entire market is now trading

against what the fed is doing may do the word clouds that come out of the fed speakers and not doing its job of price discovery and finding balance of supply and demand throughout the money markets and throughout the debt and equity markets now i want to ask you about this fed chair janet yellen she has said that she is concerned about bubbles but she had the fed officials have also said that they feel compelled to keep rates low and even to continue asset purchases because unemployment in the u.s. is elevated while consumer price inflation remains low what can the fed best do to support employment given its dual mandate to support employment and price stability . well the dual mandate is just an excuse the pretense there dual mandate was adopted in one thousand seventy seven so-called humphrey hawkins that was in place when volcker basically slammed on the brakes and forced the economy to go through

a cleansing and ordered to purge the runaway you know inflation of commodities and goods so there is nothing in the statute says the interest rates have to be zero through to fifteen that they need to pay the ten year rate under three percent or whatever they're doing the mandate is so vague elastic and generalized that it provides scope for the fed to run a sound money that allows the market to discover the correct pricing of money and debt and equity securities and options and all the rest of it rather than trying to dictate it and run what i call a monetary central planning system from the eccles building which is totally impossible look at how wrong they have been in their forecasts going all the way back to the sub prime is contained and there is no recession i mean and and we're

now going to have a booming recovery none of that has happened and it proves that their models are no good they ought to be trash can and they ought to get out of the business of trying to drive the economy what i say is we need regime change we need to get the money printers out of the eccles building we need to get people on the fed board who understand that you've gotta let markets work you've got to let. you know millions of investors and traders and borrowers and lenders determine what financial prices and values ought to be maybe someone like you on the board president david don't have any way. we have to take a super fast break and you out there in t.v. land please don't go anywhere either because more of david stockman when i return then in today's big deal i'm joined by madonna occurs the us to talk about poor uprights and drag yeah plutocrats in drag true story but as we had to do

a quick break here's a look at some your closing numbers of the bell sticker out. right on the scene. first street view and i think you're. on a reporter's twitter. and instagram. to be in the know.

it's the last contango in london but no butter is being is this time even an investor lives two hundred frickin years will never discover the vampire squibs true nature investor may be able to understand the secrets of the fibonacci analysis but he or she will never understand the truth about goldman sachs tentacles of fraud and deception. in the. show we're going to touch i'm stunned when we meet some of his sons innovators and. we find out how to speak black queens for companies and craft. the modern day planking but still money still takes some smokes to the album. said . here on r.g.p. . the future.

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player. back now with more from mr david stockman now david i'm going to jump right in now ask you do you share ben bernanke and janet yellen deflationary fears. deflationary fears absolutely not that is just a canard that they constantly try it out when all else fails to justify continuing to run burning pres at these crazy rates even sixty five billion a month after all we're in the fifth year of this so-called recovery look at the last twelve thirteen years the c.p.i. is average two point four percent if you take the one they prefer you know the p.c.

eat deflator less food energy assuming no one has had to eat their home or eat for twelve years but even then it's one point eight percent. the rates do bob all up and down a little bit by a month or quarter depending on what's going on in the world economy commodities oil a lot of other things but on trend there is absolutely no whiff of deflation in the air and besides that where was that ever written that if you don't make two percent inflation you're failing to help the economy i mean inflation is all for debtors and is a huge negative and harm to savers and the fed has decided to weigh in on the people that want to borrow build up the debt and it's just a doctor and that is erroneous and leads them to what i think are really very dangerous policies they ought to get out of the way let the market work its

will there is so much capacity in the world today that inflation isn't a risk in my judgment nor is deflation and we've got to somehow liberate the financial system from the domination of this monetary politburo is trying to run the show in the eccles building in washington now in a previous interview with r t you said that in your experience in private equity it really convinced you that debt and leverage were big problems for the u.s. economy can you explain how you came to this conclusion. yeah i mean all you have to do is look all around you the companies in america today are not really investing in the future and to any great extent in terms of new technologies plant need quitman and tangible assets they're essentially borrowing money that is

really cheap because the fed is repressing interest rates and using their borrowings to buy in stock in an effort to pump up stock prices and therefore the value of management options but this is sensually accomplishes nothing for the real economy it's just financial engineering all of it is being fueled by the fed the same is true with all the l.b.o.'s and the leverage recaps and so forth that are going on it is tilting the balance towards massively the leveraging up the entire business system now they tell you that there's all kinds of cash on the sidelines and the corporations are unusually liquid well that may be true for the top ten or fifty or one hundred big cap international companies that have a lot of cash abroad that they can't even use but if you look at the business

sector as a whole there is thirteen trillion of debt on incorporated an unincorporated business in america that compares to less than levan trillion at the time of the crisis so business hasn't dida levered business is actually increased by nearly twenty percent or two trillion dollars the amount of debt they're carrying around and the debt is not been used to acquire tangible assets and to invest in productivity and growth and jobs for the long run but simply to fund financial engineering like m. and a. deals based on cash and stock buybacks and one time special dividends and all the rest again that's part of the negative consequence of what the fed is doing when you couple that with the fact that debt is tax deductible it's

a business and equity capital isn't you so tilt the playing field that we're turning as i have said the entire us economy into some kind of collective leverage buyout and it's dangerous and it's one of the reasons why we have huge problems that we're facing today now i don't know if it's a draw for you but or he weren't concerned with public debt or with private debt. well i'm concerned with both and that's why when we look at the balance sheet you should. measure something the fed itself publishes which is called credit market debt outstanding that includes household debt mortgage and consumer business debt of all kinds short term long term financial institution debt and public sector debt and when you add it all up today it's a startling number fifty eight trillion it is three and a half times our national income that is near in all time high and is

dramatically above what it was prior to one nine hundred eighty when the ratio of total credit market to national income was more like one point five times so that's the nature of the problem we have and it's spread into all sectors of the economy mainly under the doctrines of you know there larry summers in the paul krugman as of the world who insist you can have enough debt whether you're a household or a government and i submit you have so much debt today that it's a clear and present danger to our capitalist economy now we only have about one minute left i want to ask you superfast we spoke with your former regular reagan administration colleague paul craig roberts last week and although he didn't discuss it during the interview i know he wrote a book on what he calls the failure of laissez faire capitalism now his view is that we have

a sort of crony capitalism in play dominated by vested interests and large corporations rather than a real capitalism that can spur growth what is your view we have thirty seconds i'm so sorry there's a long way to you know i agree with that i agree with that i think the problem is overwhelmingly crony capitalism that's what the bailout of all the big banks and wall street of goldman sachs and morgan stanley and a i.g. and all the rest of wasn't two to zero eight in my book the great deformation which i put out. recently i refuted all of the urban legends on which that was based but if you look at washington today it's a money machine where the interest groups come in and try to get their hands on the tax scene or subsidy or regulatory power of the government to get outcomes in the economy that they wouldn't. market like you know like the u.a.w. are bailing out g.m. so yes capitalism capitalism is being corrupted we don't have on as capitalism we have crony capitalism the fed and keynesian philosophy are the primary source of

that tremendous damage that is being done david thank you so much for your time in your insight come back anytime that was david stockman author of the great defamation time now for today's big deal. and today's big deal rachel is back madame curtis and we're here to talk about wall street secret for two hundred a true story a secret fraternity now many of the barons of wall street they come from ivy league fraternities and secret secret societies skull and bones being the most well known among them but journalist kevin roose found his way into an annual black tie induction ceremony for kappa beta fi now a frat with a decidedly older age group then most dartmouth greenhouses now he detailed his experience in an article one percent jokes and dr what i saw when i crushed

a wall street secret society. some wall street's most powerful wearing leotards and gold sequined skirts and costume we exempt trying to get that image out of your head sorry going to be hard rachel tell me more about the beta five what's the group's history what's the deal with them yes so it's essentially a switch the name of five beta kappa which is the name normally for honor groups in the there used to be a ton of the. societies now there's just one left it's wall street and it's it's essentially like a friars club they make jokes at one another's expense and sometimes at the expense of politicians and regular old schmoes who are some of the famous members of yes wilbur ross was what was called the grand swipe. somebody who is kind of the master of ceremonies but there are others like michael bloomberg who wasn't intended it's when kevin roose went but he's a member john corps time hasn't been back since he kind of embarrassed himself but . greenberg. larry fink these are just

a few of the many many members who have been around i mean this organization has been around since the great depression it's incredible to me all those names you know you ask the question does going to get it wrong kalpa bay to find out thinking . do they have any sway over the global financial markets right so not is not as a group because they're essentially together to have a good time essentially forwards apple and others actually something that they do but reduce makes the point that if there had been something that had happened at the st regis where this event taken place global financial markets as we know them would have totally melted down because all of the people who comprise of men are making these major decisions would then be gone the group has all the powerful people but they're not making decisions there except the one thing would be it's kind of a sign of your success to be inducted into this group who's who of wall street and then of what they call. spring street which are kind of the offshoots are that

financial centers street is seeing francisco's the wall street of the west and. that is a jeopardy factory. now i have to ask you what were some of the skits that. roost watched all the members to get inducted have to do a lot of musical skits in particular some of them were doing kind of jokes from the book of mormon but it was kind of a parody skit a lot of them were doing jokes on. and at the expense of people like hillary clinton and barney frank barney frank in particular someone who they saw as pushing for financial regulation for a lot of jokes no this was from january two thousand and twelve when he went so there were a lot of jokes at the expense of occupy wall street which was still kind of right occupying physical space at that close to wall street now was what was reduced his conclusion after these proceedings what do you think what will he said that this was kind of an indication to him that these financial titans were very disconnected from the world they surrounded themselves and he made particular mention of the

fact that they were making fun of a lot of people when they got a bailout for instance and mainstream america did not so he said quote the upper ranks of finance are composed of people who have completely divorced themselves from reality he got busted trying to leave and they offered him essentially if you keep your mouth shut we will give you inside scoops on a lot of information he decided to publish the story i think we're all better for it and i'm excited to read the book and hear more rachel as always your fantastic thank you for joining us yeah thanks for having me that's all for now but you can see all segments future and today's show on you tube at youtube dot com slash boom bust our teeth we also love hearing from you so please check out our facebook page at facebook dot com boom bust our teeth you can also tweet us at. edward and it is not your day and at curious underscore kurt there you go from all of us here boom bust thank you for watching see you next time shall.

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transit. your best way to the heart of moscow. scenes of chaos in kiev the number of dead is rising with over twenty people reportedly killed as rioters clash with the police on the streets of the ukrainian capital. videos and pictures emerging of protesters attacking security forces with guns explosives and molotov cocktails. and in the meantime a western officials are lining up to condemn the violence now threatening sanctions against the ukrainian government.