to hedge themselves against volatility however the vix like everything else is being manipulated so it's not giving a good price signal it's like you take the batteries out of the of smoke detector in your home so your house could be on fire and you don't have a smoke detector because it took the batteries out so you don't leave the house even though the flames are engulfing you in your family or like i don't hear the smoke detector so must not be a fire so the vix is completely manipulated so it doesn't tell market participants it doesn't give them a signal about the true volatility and is just another piece of the overall way that markets are being destroyed to service a few kleptocrat well all of these rigged indexes around the world in price signals i think is a form of chumming it's basically thrown be into the water it's encouraging the seals a minnow is a little fish and little chubby humans to get into the market water is to get eaten by the sharks now i for have this tweet here max they exist but sitting near or

below twelve for two weeks the last time this happened was in two thousand and seven so everything seems comb the water seems calm sea feel quite confident that it's safe to get into the waters and to swim in the markets right well those markets go higher there's a sense of my people making money in these markets to do it or they can't have a nibble at the market so that it's easier for them to make more and more money so money i gave sounds to make people greedy your dozen people are not satisfied when they are making or accumulating large amounts of wealth that increases their greed and paranoia and fear that's one of the tragedies of wealthy i guess you could call it is that it doesn't most people it doesn't give them any relief release from fear it actually increases their fear and paranoia and so they go to ever they can to make it. impossible for anyone to encroach on their ill gotten gains so they'll manipulate the vix the manipulate the. arkansas by politicians know by david

cameron the by barack obama though did ever that takes to protect themselves until such point as the whole thing explodes so i mean there's a famous line in jaws where. the fishermen on the boat one of them says we're going to need a bigger boat i mean this is what the european central bank has told the market that the fraud is so enormous at this point that in order to accommodate another ten to fifteen trillion dollars worth of credit default swaps and derivatives such a fraud they're going to expand their balance sheet by ten to fifteen trillion euros they need a bigger boat to float on this ocean of fraud meanwhile there is the killer white shark ready to jump up like it did in two thousand and seven two thousand and eight like it did in dot com in two thousand and one like it did in asian one nine hundred ninety six like it did on wall street one nine hundred eighty seven there is always a reversion to the mean there's always nature excerpting itself there's always the killer white shark it's here it's coming it's breaking surface yes in fact we're

going to go over those exact moments you mentioned but i want to mention you know that when when those crashes happen it's like a feeding frenzy great fortunes are made by the giant white sharks of the markets think of this last crash that we had in two thousand and seven two thousand and eight john paulson made billions and billions of dollars on the collapse very few like destroying all the wealth of the long peaceful period before hand while they say markets go up a staircase and down an elevator shaft you know they go up up up up up and down the shaft because there were a few participants that made money on that collapse john paulson being one of them but remember there was a five to six to seven trillion dollars wiped off the face of the market just back in two thousand there was a five trillion dollar wiped out of nasdaq and the stock market crash of one thousand nine hundred seven was a multi hundred billion trillion dollar wiped out so there was money on the crash and of course throughout history of people who. position themselves then cause the

crash now i mention the word charming and i want to go into that in order to highlight what is about to happen perhaps in the markets should this done done done in a moment happen while chumming is the practice of lowering animals kind of like humans usually fish such as sharks by throwing chum into the water chum as bait consisting of fish parts and blood which attract fish particularly sharks owing to their keen sense of smell so we're being attracted pulled into the markets by the charming which is the reading of for ics markets which is the rigging of libel war which is the rigging of gold fakes to make everything seem placid seem safe that there are no great whites there's no jaws lurking below the surface and just so you know because i know you think the brits make funny words for everything they call charming they call it here robbie dubey for see. what is wrong with that. rather you dummy everything up to sound like baby talk i got my rollie but only.

because they're also just the queen they all want to be that the queen the mommy. this country needs to grow up well in many parts of the world robbie w. or as we call it charming is illegal because it attracts the sharks so i want to look at one of the recent illegal activities of rigging markets and that's libel or this new scandal will cause a terrifying financial crisis and this is from jesse colombo and he says yes it was a very boring yes they still tend tens of billions of dollars but it's creating this the ultra low libel rates which have been low for the longest period ever in history if you look back at the chart that he gives us you see japanese bubble and bust asians economic miracle and crisis dot com bubble and bust us and european housing market bubble and bust and the current lowest level right now so all of those busts are preceded by ultra low la. our rates and then everything is people

were secured to get into the water they thought it was safe to get into the water and they got eaten by the predator on wall street you had a really good example of that under the clinton administration after his failed healthcare reforms never got throw and robert rubin who was one of the sharks on wall street to show them the population back in the markets they got rid of glass steagall they brought about the commodity futures modernization act which decriminalized gambling on a lot of these derivative contracts and they brought back a whole new group of folks to set them up for another slaughter and this right now you've got a big set up for another massive slaughter and you know this charming process goes on i think bernie madoff mean bernie made off was really a keen student of chumming in that he would constantly deliver one percent a month returns the genius of bernie made up was that his returns were great they weren't but they weren't super spectacular they were just very good levon twelve percent a year consistently markets up markets down that was his chum that chum line without

telling anybody there was a huge ponzi scheme similarly in the u.k. in the u.s. and around the world around europe it is an enormous ponzi scheme built on debt that can't possibly ever be paid back but as long as they get the e.c.b. in the federal reserve and the bank of england to throw out the channel line of promising lower interest rates and quantitative easing you bring a whole new generation in to be destroyed by the shark the inevitable consequences of the crash that is as predictable as night following day as just another generation gets destroyed some win some lose the call darwinism financial darwinism economic don ism or just plain financial terrorism whatever you want to call it the result of the same good old generation get wiped out and then because people still you know go to bed at night and make babies. there's plenty more jump through that came from well this rubbery dubey or charming whatever you want it call it in because of the libel rates being very low just be close saying similar to what

you've said is that interest rates should be at forty seven percent in most non-crisis areas of the world like say china and yet because all of their contracts most of the contracts like two thirds of the contracts in china are actually based on my board so they're there but able to borrow at one percent which is why you see these giant bubbles emerging. the bubble so big that we're feeling the effects of the bubble right here right behind us in london with these house the all these flats being bought by a chinese based on these live or bubbles over in china but people don't understand is that this funding intelligent life somewhere in the universe is a failed mission from the get go because all the intelligent life outside there in various planets around the universe see us through their whole telescope equivalence and they see a big planet of debt and they try to avoid this at all costs nobody with an intelligent brain and any other planet anyone in the universe was going anywhere

near a plant to debt as it's known throughout the galaxy throughout the universe nobody wants to touch planet debt so they don't reveal themselves cause they're afraid of robert rubin is going to show up on some plot of some exoplanets some some parallel galaxy and leveraged buyout of some jupiter like moon and end up giving them all the debt nobody wants anything to do with earth anymore well speaking of debt the largest holder of debt or certainly the second or first or second is j.p. morgan they're in the final headline here j.p. morgan sees record one hundred billion dollars in loan funds the business of bundling junk rated corporate loans into top rated securities is booming like never before after the implementation of regulation aimed at making the financial system safer in the headline itself it belies anything resembling truth there it says we're going to rebundle junk into high rated securities. well more than forty six billion dollars a collateralized loan obligation c.l.o.

those have been issued so far this year up to may compared to last year all of last year that we saw eighty two billion dollars so this year j.p. morgan says a one hundred billion which we are a record high in more than two thousand and seven and two thousand and six before the last crash and again it's bizarre because it's saying it because of the volcker rule which is supposed to make the system safer. they're actually issuing more of these debts making the system less open but nobody is going by any of the volcker rule nobody's doing any compliance at all to any rules they're simply repackaging the same worthless toxic debt ad infinitum and reselling it back to themselves over and over again to take the fee and because interest rates for them are zero or less than zero now they get a bunch of friends policies there's no risk to them but meanwhile in the other part of the reality curve you've got people who are now paying two three four times more

for food for energy for a debate for health care for airline tickets so their quality of life is shrinking and you've got countries now impose bringing about laws that would institutionalize serfdom here in this story you have these collateralized debt obligations people can't get enough of junk and yet the e.c.b. is saying somehow sending rates negative the deposit rate is going to drive more loans like we need more there is already too much they were there packaging junk off you know to income off the pavement they're turning it into a high aaa rated bond so what where is the i don't see that there isn't a problem not enough debt circulating well meanwhile the environment itself which is the source of all wealth is collapsing pretty rapidly so the ecological hole the cost that is going to destroy human species is rapidly approaching touch not fast enough as far as i'm concerned i say thanks so much dan dan and. stay tuned for the second of all more.

leisurely. people are going to. know what. my own life. was like setting time with. these cases you know moments. sometimes from nothing. this is a moment. it's not just a story you'll be shocked if the safety they say they don't believe

will be john was. told. the pledge was a terrible mistake now i'm very hard to take out a little i'm to get along here there's a club that never had sex with the earthquake there's no lives let's play. lists the

amount . of. welcome back to the kaiser report imax keyser time now to turn to david graber author of debt the first five thousand years they would welcome back to the kaiser who are going through i want to throw a number at you and we have not had a chance to talk about this but i think you might have something to say about it according to some recent psychological studies and some surveys some studies have been done of this current generation and they discovered that empathy is down

forty percent over the past fifteen years so the ability of this new generation to empathize is crashing and i would think that would have a lot to do with everything that you talk about a lot of ways what do you think yeah well i mean one of the effects of debt is creating these generations of people who start life in the sort of panic we're caught if sixty thousand dollars' worth of debt what am i going to do is that you can't sort of sit back and observe the world care about other people because your you almost have to be self obsessed and and it's an interesting thing actually coma's. i always use the vampire metaphor you know why is it that monsters are scary it's not just that they'll kill you like the really scary monsters are the ones that turn you into one of them so you get bitten by a vampire you become a vampire you get didn't they will become we are will return to a zombie ok so let's look at some of it there for a second because dent in economics they talk about the transfer mechanism where

banks or the talk about contagion how one bank will blow up in asia because there's a counter party risk you know other banks blow up and what you're describing is that on a more human level the mental we all get taught to think like that and you become kind of human being your day to day emotional reality is reflected in this ways i think so they're trying to turn people but this is this is the evil part ok the evil part is you know you get turned into a capitalist would you like it or not you want to go to college to think about the meaning of life but it's like sixty thousand dollars in debt i need to makes money so everything becomes subordinated to thinking like what can be turned into money and how she become a capitalist but you become accomplished with no money so you don't become like the cool count them you know of the many ends you're going to like like people you become pathetic like minion vampire your son running the capital's mentality from capital yet a lot of ways so that in other words you've got

a generation now that graduates from school totally in debt they become mercenaries if you well they need to just pay off that debt and they'll do a job like be a remote drone operator in florida flying over afghanistan exam or some other sole anthropologist like that i mean it used to be in the sixty's like employers want to work for the military and now now you know despite thirty years of like our telling our little was terrible colonial legacy you know we're doing the exact same thing now that we wouldn't do back then and the reason is because there's no jobs i mean everybody's in debt there's no academic jobs or there's adjunct jobs which are pathetic military comes and says ok i'll give you a couple hundred thousand a year to light blue people up. somebody is going to do it if they have an empathy as a component of society is crashing if you will it is you know a stock market turn then for groups that are trying to get people motivated to think differently if they occupy the occupy movement what you were one of the from one of the architects if you will of the of the only movement so when how or the

ecologist movement or human rights civil rights movement that they're fighting against a wall of a generation whose very apathy ability to empathize is crashing how do you overcome that if you will if you can if it's possible i see two things one thing is psychological studies i don't see the ones you're talking about that's really interesting the ones i have seen show that the poorer you are the more empathy you have so essentially when they put you through higher educational it's that you through the sort of the things that you learn to being a privileged person you're taught how not to empathize so it's not natural naturally you see somebody suffering you feel bad you want to help them and that's a basic human. it's not something you have to teach people to do something you have to teach people not to let me jump in if i can because we know that recently the trend and banking circles has been to hire people with autism and other forms of mild brain disorder because there's like a higher sociopath psychopath very reasons and because empathy gets in the way managing money if you start to think about the consequences of your actions you

might not pull the trigger on a trade to make bank money so i say that's part of it which is really interesting if you read out i'm smith because like these guys were about him smith but adam smith says the only reason i want money is because of empathy we all want to employ empathize for others we want all of these people to care about our so that's why you want to have money because if you're prominent you're doing ok that everybody cares about well that's what they mean like many comes along after medieval ism where there was a tremendous wealth disparities and then the enlightenment and adam smith's way of thinking was a way to try to even things up a bit my giving folks the ability to get paid and to participate. and to be part of a middle class i want to talk about it you're considered a wild radical right now by most of the people who like it and what i don't blame the concept of market fundamentalism or people misread adam smith to draw their own conclusions the way fanatical extremists would misread the koran to come up with the justification for all kinds of bad bad actions same people read out of smith

incorrectly to justify their bad actions are absolutely i mean and they don't read as full work because in fact what he actually said is the only reason to want wealth is to put yourself in a prominent position that people like you and care about you and you'll be able to be in a position to care about other people empathy what was what it was all about for what i find amazing is that the whole idea of a market as described in wealth of nations and during this period is that the price discovery mechanism is the product of the community coming together and trading but these days when you mention terms like community they hope that it immediately becomes socialism and something to to sneer at somehow that prices are going to discover themselves through the actions of a few club to kratz and with the result is ecological devastation and social unrest right yeah if you really think about it like you know from each according to their abilities to each according to their needs that's must be communism but supply and

demand that's because it's kind of the same thing you know everybody puts out by what they can do and everybody gets in terms of what they need that's what supposed to set prices right the problem is that it's all based on the idea of a community of people division of labor the benefits everybody. mutual benefit and in that socialist model what happens is you end up the rise of a charismatic dictator a central right or a bureaucratic class and the resources and goods are misallocated not according to your asst notion of what it should be but similarly in capitals what we're seeing is a rise of the kleptocrat and similar grass that is in gauge of the same kind of misallocation. in either case you get some sort of privileged elite that ends up taking advantage of the situation ok so your book which is really some of the book which is taught in many universities around the world now five thousand years of debt and it's quite a book and i think it is as a mandatory reading for anyone who really takes their interest in economics seriously. where are we in that cycle because debt goes through different

cycles neumar obviously in a period right now of enormous debt aggregation how does it compare historically was interesting thing was when i started looking at the really long term historical cycles what i found was that there's there's a kind of a back and forth movement you start out with credit systems and then you go to bullion systems and you go back to credit systems in the middle ages and. then around fourteen fifteen start shifting back to bull you know everybody's actually using specie gold and silver is money now moving back toward a credit system but the thing is when you move to a credit system you need to have mechanisms in place i think that's the big lesson of history and to mesopotamia they would just cancel debts periodical just wipe the slate clean start over again. usury laws both in islam christianity and they were doing other stuff in china have the same effect on you need some overarching mechanism to make sure the people who have control of means create credit don't

just basically enslave everybody else so just because just to give people an understanding of your book one of the interesting facts about it if you in the opening chapters five thousand years of debt the money as it came into existence in the modern world essentially started off by me going into a shop and telling the shopkeeper let me get up out of flour right now when i'll pay you next week right ok that was the beginning of money so basically there's a receipt there that was kind of the first notion if you will wasn't the people think that money was started by camera shell or a gold nugget or a unit of exchange but as you point out your book it starts off. with alone especially as how kind of money got started right if you go in ancient sume or if you go in get a beer you put it on the tab and every six months or so you bring in something you tallia you know everybody had a little tallies what they owe and this is punctuated during war times when soldiers say i'm not taking your credit give me gold first or merchant say to the

soldiers yeah i'm going to like give you money on credit you know you're not going to pay it back are some big thugs wandering through a big sword and never get my money back so it never integrated to right now as you describe it it looks like that world is poised for some major conflicts with so this would seem to perceive the re institutionalization of gold it could be the actual direction we're taking seems to me moving the other way but we're doing it backwards i mean if we descend into general warfare that will tend to go back to like some kind of hard currency but there's a lot of reasons to believe that that kind of war we're actually moving away from but there's actually less work there than there was twenty thirty forty years ago we. were like thirty forty wars or credit has expanded exponentially and twitter keeps expanding but it's reading sort of more of a war footing and you see a lot of replay of the cold war rhetoric and a lot of people are not talking about gold and china russia iran accumulating at all they're trying to do something to break out of the dollar because of dollars

essentially being used as a way of funding american warmaking and michael hudson some great detail the whole international architecture is designed around funding the pentagon points out and it operates that way as a sort of indirect tax through american treasury bills. but how that all works out of the show before. that system is being challenge now and people like russia and china talk about it very explicitly we need to break we need to break out of the system into a different kind how they're going to do that isn't entirely clear for a long time china had a big problem that they couldn't turn their currency into a global currency because they didn't you know the whole thing is based on debt currency zero u.s. military debt is basically the world i can are in a base of the world financial system china doesn't have any debt they can really do it so they're now trying to create a new system to go to get around yes twitter. people are on the show and we asked

for some questions and one question came up you use a term often and b.s. joe we can yeah actual frome so i think people understand what that means they'd be asked and the the assumption of our system we'll have about thirty seconds i don't know that it's like a low paying job but an awful lot no no no actually this is a really interesting thing that i've been fascinated by this for years it is like the soviet ization of capitalism you know they had all these makework proletarian jobs that are full employment now that's exactly the sort of thing that's not supposed to happen capitalism but if you look at the average firm they're full of people who don't actually do anything good tell people about this and say oh yeah there's like all these kind of middle management guys who like one global strategic vision coordinator for the east coast of know. what you're going to do to actually nothing just move paper of going to the average corporate lawyer drunk they'll say the same thing it's like well i don't really do anything and if my job disappeared the world wouldn't be any worse for it. because a lot of time complete lobby on against anti-spam my pleasure and that's going to

do it for this edition of the kaiser report with may max kaiser and stacy herbert i think our guest david graber author of debt the first five thousand years if you'd like to get in touch tweet us a kaiser important like. country history of yugoslavia this formation as a prosperous and peaceful country was considerate so be a success story of market socialism and in many regards it was a model of development on. whom was this teacher of democracy and market economy if any republic in yugoslavia wanted for the us a it would have to break away from yugoslavia and declared its independence ok it's not a conspiracy theory it's not my speculation it's not my analysis it's

a public. to. move and punish it harshly for every slightly less some unlearnt the serbs started this war the serbs are legal riginal cause of the war they are the complete aggressors and wrongdoers. to bomb conflict. on that. bomb small. will bomb all of tofu kitchens six of them knew its own so. to go assist and be multi-ethnic society to live in harmony and joe not. what was forgotten to be told she'll about yugoslavia the weight of chains on our t.v. . dramas that can't be ignored to . stories others refuse to notice.

the faces changing the world lights never. on full picture of today's leaves my own demands from around the globe. local. t.v. . i can only pray. for. peace now and. what if the part of my.

ukraine's army targets the rest of the east with artillery fire leaving one village practically razed to the ground. the training camp of self defense you say they're preparing to take on the government forces. seize control of a northern iraqi province setting thousands of prisoners free. to flee also . obscene i mean i was really offended when i saw yourself and get and frustration from locals at least so-called. spikes designed to deter rough sleepers from the streets of london.