and you don't hear the 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 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 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 b. into the water it's encouraging the seals a minnow as the little fish and the little chubby humans to get into the market waters to get eaten by the sharks now i for have this tweet here max vick has been 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 so you feel quite confident that it's safe to get into the waters and

a 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 even if you like the market so that it's easier for them to make more and more money so money i gave tends 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 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 market so by politicians oh by david cameron the by barack obama they'll do it over the 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 like 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 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 real wealth being destroyed yes there are a few people that are able to position themselves to make money on the crash and of course throughout history have people who position themselves and then caused the crash now i mention the word chumming 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 the moment happen well 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 dub me everything of the baby doll i got my rollie. because of their also just the queen they all want to be that the queen of

the mommy my. country needs to grow up well in many parts of the world robbie wu 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 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 bus are preceded by ultra low libel rates and then everything 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. well you had

a really good example of that under the clinton administration after his failed health care reforms never got throw and robert rubin his one of the sharks on wall street to charm the population back into the markets they got rid of glass steagall they brought about the commodity futures modernization act which decriminalize gambling on a lot of these derivatives contracts and they brought back a whole new group of folks to set them up for another slaughter and this so 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 selling anybody that 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 in the bank of england to throw out the charm 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 dahlan ism or just plain financial terrorism whatever you want to call it the result of the same good whole generation get wiped out and then because people still you know go to bed at night and make babies. there's plenty more chunk for that came from well this robbery dubey or chumming whatever you want it call it in because of the libel rates being very low just the colombo 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. oh 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 this finding 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 anywhere on 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 because they're afraid that 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 to 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 say in the airline 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 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 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 the bank 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 that would there packaging junk off you know to income off the pavement they're turning it into a high aaa rated bonds so what where where is that why 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 and dan and. stay tuned for the second of all more.

live. live live live. live. live . live. top rules in effect that means you can jump in anytime you want to. live. country history of yugoslavia formation as a prosperous and peaceful country was consider that so be a success story of market socialism and in many regards it was the most developed

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 the public. 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 long boomers. bomb conflict. bombs will. bomb all of tofu kitchens six of them new explosions.

to keep cool assists and the multi-ethnic society to live in harmony and show not. what was forgotten to be told feel about yugoslavia the weight of chains on our teeth. did you know the price is the only industry specifically mentioned in the constitution and. that's because a free and open process is critical to our democracy correct albus. role. in fact the single biggest threat facing our nation today is the corporate takeover of our government and across a cynical we've been hijacked why a handful of transnational corporations will profit by destroying what our founding fathers once it's all just my job market and on this show we reveal the big picture of what's actually going on in the world we go beyond identifying the problem

trying to fix rational debate and a real discussion of critical issues facing us to find them are you ready to join the movement then walk a little bit there. 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 one 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 pete cohen as. 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 will turn to a zombie ok so let's look at something right 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 exactly 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 whether 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 pyar you know of the many ends you're going to like like people you become pathetic like minion vampire so your son running the capitals mentality from capitol yet a lot of ways so it's actually 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 some other soul anthropologists are like that i mean they 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. so he's going to do it if 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 let's say occupy the younger buy 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 there are fighting against not only a wall of accepted immorality and accepted criminality but they're fighting against

a wall of a generation whose very empathy 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 this psychological studies i don't see what you're talking about that's really interesting the ones i have seen show that the poor 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 reason seems because empathy gets in a 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 worship adam smith but adams mess as the only reason i want money is because of empathy we all want to employ empathize for others be one of those 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 it well that's what the enlightenment 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 big. that my giving folks the ability to get paid and to participate and to be part of a middle class i want to talk about that 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 kleptocrats 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 to 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 but 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 some of the. in capitals of all we're seeing is a rise of the kleptocrat and similar in gauge of the same kind of misallocation 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 and all 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 that goes through different

cycles new are obviously in a period right now of enormous debt aggregation how does it compare historically less 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 fifty 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 periodicals 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. 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. buy camera shell or a gold nugget or a unit of exchange but as you point out your book it starts off with alone especially is 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 tell you 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 a 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 so this would seem to pursue the re institutionalization of gold it could be the actual direction we're taking seems to be moving the other way but we're doing that backwards i mean if we descend into general warfare that will tend to go back to 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 there is actually less work there than there was twenty thirty forty years ago we. were like thirty forty wars or credit has expanded exponentially and try to keep expanding but if we're heading toward a more of a war footing and you see a lot of play 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 war making and michael hudson has written on that some in

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. talked about how that works on the show before. that system is being challenge now and people like russia and china talk about it very explicitly we need to break the 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 we did ask twitter to tell people go on the show and we asked for some questions and one question came up you use the term often and

b.s. joe we can yeah actual for that i think people understand what that means they be asked and the the assumption of course is that we'll have about thirty seconds. 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 when you look at the average firm there full of people who don't do anything you could tell people at this will 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 new. york or which is actually nothing just move paper going to be average corporate lawyer drunk they'll say the same thing it's like i don't really do anything and if i job disappear the world won't be any worse for it. because a lot of time completely out against. my pleasure and that's going to do it for this edition of the kaiser report with me 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 reported like stunned by oh. so we leave the. oceans to. visit the. issues that no one is the big. deserve answers from. player. tried to. get.

into. the well. but. it's. nothing. just he still. believes. led. to believe. anything mission to teach me. this is why you should care

only. practically to the blount meanwhile r t this is a training camp self-defense say they're preparing to take. control of a northern iraq. and. i mean i was really offended when i saw anger and frustration from locals at the so-called empty home.