stills the day of the fall i don't know why. but i still don't know why genetic improvement through forced sterilization the basis for nazi ideology they don't stop at just sterilizing yet not going to now go to the point of death he did for years rarely discussed. till now i'd really rather not talk about that right.

hey there i marinate it this is boom bust and these are some of the stories that we're tracking for you today that's right the i.r.s. has announced tougher laws on tax cheats and we'll tell you all about it coming right up then pick up mall broom is on the program today the politics and policy experts is helping give us some perspective on the u.s. economy and clue us in on how politics and policy n.g.o.s politics impact the financial markets and in today's big deal i'm joined by our t.v. arabic correspondent rima comedy a little rima is sitting down with me to tell us. and on the latest economic

happenings in around the middle east it's all coming up to. our lead story today u.s. tax was always a light being sarcastic there now under new rules announced by the i.r.s. on wednesday if folks with offshore bank accounts don't disclose those accounts to the internal revenue service by august then those individuals are going to face dramatically steeper penalties than if they just fessed up to holding those accounts a couple months prior now starting august fourth taxpayers making such voluntary disclosures about offshore bank accounts will have to pay a penalty of fifty percent have fifty percent of the accounts entire value that's

a lot of money and not the current twenty five point seven percent for sure now the penalties are among changes to the i.r.s. is offshore voluntary disclosure program a program that is drawn forty five thousand account holders and six point five billion dollars since two thousand and nine this will particularly affect u.s. citizens of the one hundred and six swiss banks banks which are currently seeking to avoid prosecution by the u.s. justice department by disclosing how they helped american citizens of the tax man to switzerland is no longer a time saver and that's for sure now under a swiss u.s. tax treaty the u.s. can use that information to seek taxpayers' identity again clients who disclose their accounts after august fourth will face a fifty percent penalty whether or not the u.s. has already learned their names not only that the ira's can now fire taxpayer identity via data provided by credit suisse after the bank pleaded guilty in may and had to fork. over two point six billion dollars in penalty fees to the us

government deputy commissioner mike dental x. said quote if you're engaged in willful tax evasion time is getting quite short for you to come in and forstmann efforts in this area are continuing to thrive and we are very intent on stamping out noncompliance now these changes are just the latest in a five year old campaign by the us government to force millions of us taxpayers living abroad or who hold accounts in other countries to disclose and pay what they owed to the u.s. government now bottom line better to fess up now to your offshore bank account unless of course you think your craft enough to outwit the iris. with various economic indicators looking strong could it be that the us economy is turning a long awaited corner that is one wide corner or are high asset prices especially

in technology a signal of future instability to help give us some perspective on the u.s. economy i spoke with dr graham a politics and policy expert and founder and president of deep p.r.m. group dr mohler room helps fund managers better understand how politics policy and geopolitics impact the financial markets we spoke about the u.s. macro economic growth inflation and the emerging markets now i first asked her what she sees for u.s. macro economic growth and twenty fourteen here's what she had to say. well i am very bullish about the u.s. what i have seen in the last few years is americans have been the quickest to sort of tighten the belt rationalize businesses get to the bottom line and make the cash flow work in a positive way of abandon anything that's not working and this is apparent across just every sector of the economy and i guess the big question for investors is are

the prices already too high and there is a lot of concern about that especially now that we've got the fed started talk about may be we start to talk about policy at some point in the near future i don't actually think they're going to do that i think that asset prices are going to go a lot higher but the degree of nervousness about that means that investors slow down a little bit and maybe that's not such a bad thing when things are not supposed to go straight up in the air right it's good if it's a moderated increase in valuations picked up given the recent turmoil in high flying tech stocks are you concerned that markets have risen too quickly and that a pullback could be in the offing well i think they're actually quite a few pullbacks that we're seeing across multiple different markets we're seeing it for example in property prices certain categories of high yield as you say the tech sector is experience and i think this is partly a function of the fact that asset prices have risen very dramatically in the course

of the last two years and people are a little nervous about that but what i'm concerned about is is this a minor correction in a long term upward trend or is the beginning of something more substantial and i think it's the first category i think it's a relatively minor pullback in a long term upward trajectory but it would be better if the upper trajectory was a little bit slower and as it stands most simple banks are not adding new liquidity except for the e.c.b. the u.s. is a top destination for global investors now and we see that even with reason i.p.o.'s of chinese internet brands like alibaba and j.p. dot com so why do you think that is. always so many different reasons i think it's partly that the wage differential between the united states and china but generally with all emerging markets is narrowed so much that it's competitive and profitable to produce in the u.s.

mexican wages are now twenty percent cheaper than chinese wages in mexico is effectively another piece of the u.s. economy so that gives a big boost i think part of it is the view that a the u.s. is going to be energy efficient it's going to be able to supply itself and the prices will be low i'm not convinced that that's true i think energy prices are going to surprise us they're going to go up in the coming few years even in the u.s. but the belief that the u.s. has a privileged energy position definitely supports investment from outside coming in and i think also the oil price is still pretty high so if you can eliminate the transportation cost from other parts of the world to the u.s. which is still the biggest consumer market even if it's not as dynamic as it was prior to the bust happening then that really saves you a lot on your margin so the other thing that's interesting is seeing chinese companies beginning to build production facilities in the united states companies like foxconn have announced they're going to build production facilities in

pennsylvania and frankly they're moving to automation i think the financial times is covered quite extensively the shift to robotics in china as that begins to happen again the differential between the u.s. and china starts to narrow it's going to be robotics on both sides and then the question is going to be who's more innovative my guess is the u.s. is still going to win in the innovation stakes for many years to come that is interesting that you know they're moving to the u.s. i'm glad that you bring that up but picked up in the u.s. we see food costs rising energy costs rising rents rising and property prices rising yet according to the official numbers there's little to no inflation so what's your take on this juxtaposition and what it means for the future of fed monetary policy. so i do think the gap is widening between what the official data points are telling us and what people are experiencing in their everyday life and i think it's typical at the beginning of a higher inflation rate that you get such a gap and then we can argue about the reasons why it's occurring what i don't buy

is the argument that some prices are rising but a lot of prices are still falling i don't see evidence of the falling price environment like not like the way we used to have it for example you used to falling prices and clothing and textiles shoes because there was always cheaper stuff coming from bangladesh that is no longer the case of products don't they recently levi strauss said they were going to limit their production in cambodia because the wage demands they're rising because the political environment of the ball you know we've seen more and more attacks on production facilities in asia recently in the city there were a lot of attacks on chinese facilities which has to do with the disputes over the south china seas and china going for oil rigs in other people's territory but the point is it means your safety of your production line it's no longer secure so relatively the us looks a lot more attractive so bottom line is i don't see the downward pressure on prices

in the way that it used to exist not even for computers and stuff like that and i pads and i pods so i think people are going to experiencing good to be experiencing higher prices food is a really important thing to keep an eye on we've got record high prices for beef for pork shrimp is up sixty one percent in a single year we're seeing much higher prices for kind of all the core proteins that matter to people and more and more signs that the packaging is shrinking as companies are selling you basically they're making you pay more per hour wait than you did before and all they is are going to head. pocketbook of every american so it's not enough to damage the economy but it's enough that we should really be thinking about inflation may have more foot hold than the things right now have us sticking with the inflation theme here are there any indications that inflation might be causing social unrest in emerging markets what do you think. yeah i think

inflation has been a huge driver of the social unrest that we've seen in argentina brazil south africa . places like nigeria or the middle east certainly in thailand in china in every single case i would even ukraine in every single case we see the same phenomena you seen a rise in food prices in places where people are spending a massive proportion of their income on food as all emerging markets do you see high or rising energy prices again even in ukraine we saw of rising energy prices going into the social unrest that has unfolded there so you put those two things together higher food higher energy prices and bang you create pain people start to ask questions why do we have this form of government how come we don't have a different way of building and distributing well and people start to push for change that. that was dr graham the founder and president d p r m.

time now for a very quick break but stick around because when we return it chris martenson of prosperity dot com will be on the show the energy expert is telling us about some unexpected consequences of high energy costs and in today's big deal i'll be joined by our tea arabic correspondent remote. sitting down with me to discuss the latest economic happenings in and around the middle east and remember you can see all segments featured in today's show on you tube if you tube dot com slash boom bust our teeth and on food but before we go here are a look at some your pleasant numbers of the bell stick around.

well you like me to want your comedy news with some key points of comedy news to be a bare fisted no holds barred fight to the dad. but the truth vampire pointing into the necks of the corporate elite billionaire freaks while they're going. well that's what you get with my new show redacted tonight. with the washington well it's a mess with the letters being stressed that unless. there's a. prophecy of going to that place that doesn't do too much for ad revenue in biotech agriculture giant song a seventy six year old american farmer based in indiana fallout do you think this is going to create for the cia do you think this is what's triggering america's the

largest economy in the world it's also the largest debtor nation in the history of the world breaking the set is mostly about alternatives to the status quo i want to give you all those points to working for the american dream for the next they were just trying to survive it's time for americans and lawmakers in washington to wake up and start talking about the real causes a problem. welcome back to this so now what effect stu rising resource cost especially energy have on the larger economy as a whole and how do the pressures on energy markets affect your bottom line chris martenson a pic prosperity dot com is an economic researcher who specializes in energy and resource depletion and he spoke with me earlier about some of the consequences of

high energy costs now i first asked him if rising resource costs are related to peak oil here's what he had to say. well aaron they're one of the most tightly clara lated and causative associations we have in the data series is between the price of oil and the price of food and we know that this isn't just a simple rodeos correlation that there's causation involved and that it's high oil prices cause high food prices not the other way round in the reason for that simple on the supply side when you're growing food obviously you need diesel fuel to plow you need fertilizer you have all your chemical inputs so you have all of those cost components on the supply side on the demand side as the price of oil goes up you find people converting farmland to fuel based production and be it for palm oil or corn based ethanol or things like that so for both reasons we can very easily say that the high food prices we've been seeing over the last several years are directly related to high oil prices wow now how do we know it's not just

speculators driving up the price by trying to increase returns in the commodities market. well that's always part of it right there speculators in there right now on the idea that it looks like there's a very high chance el nino is going to return in the pacific that it always correlates with very poor harvests and so you do have a little bit of speculation there but long term commodity prices in the grains are very much a supply demand. sort of an equation that we can look at and you know when you ask about peak oil before one of the reasons i'm convinced that we are past the peak of cheap oil is just look at what's happening with all of the international oil companies deciding that they can't make enough money friend current operations to both explore for oil and pay dividends they have to cut one of those two things and it was the cap ex or capital exploration budgets they got hacked this year across all the majors and so that's telling us something about where we are in this oil story and that is that the oil majors don't think they can make enough money at one

hundred ten dollars a barrel brant crude world price and perform their business anymore that tells us everything we need to know about where we are in that peak oil story wound i mean that's plain credible but it was want to ask you what about technology you know look at how fracking has added to oil reserves in the us gerald celente was recently on the program and told me that the u.s. government spent every dollar and spent afghanistan and iraq and on the other wars on developing new technology we might be able to drive down fuel and food costs cannot happen. it can always of course make a little bit of a difference but when it comes to the geology involved in fracking this is a very very different sort of a situation we have to look at there's a lot of technology and technical jargon involved but the simple story is this we're down to taking oriel out of really deep really tight really difficult to extract rocks and it costs a lot of money now some people say that well at eighty dollars a barrel at the wellhead price these are profitable concerns and that these wells

pay themselves back in a number of years but i have a concern about that so looking at five years of data now across all eighty north american operators that are working in the shale plays we find that for the past five years they haven't developed any free cash flow so free cash flow you know you take your operating earnings you subtract out your capital expenditures and they're not making money in fact they've spent a dollar fifty in cap ex for every dollar of revenue that they've been pulling out of these shale plays and so i have to ask why is that it is here we are many years into this story where's the free cash flow from this and the answer i think erin is that even at one hundred dollars a barrel they're not making money they're getting maybe eighty at the wellhead i think they have to get one hundred ten hundred twenty i think the price of oil has to go higher technology can help out a little bit but what it can't do is change just how expensive it is to go after these shale plays so when do you think we can expect to see it going higher cost.

well you know if we have a global deflationary bust obviously anything can go down in price including the cost of politicians i guess but what we be expecting here is that we're looking at roughly a really tight supply and demand balance at this point is one copy as long as we don't have that third deflationary bust i think that the prices are going to have to start marching up within the next year or so i think the natural price if we want to see more exploration if we want to get more out of the ground that's around one hundred twenty one hundred thirty a barrel on the world stage and that'll last for a little while and then we'll need even more but that's the next target i'm looking at is a minimum to encourage the international oil companies to go out and do what they do which is find more and produce more wow now do you see shale drilling well data and bokken and eagle ford regions suggesting that new production growth offsets future decline rates. well so we already know that for instance if we're looking at the barnett shale which is just a pure gas play that's already in decline at this point in time and these shale

plays mike to all the analyses i've seen in the ones that i've run suggest they have somewhere between a ten maybe twelve fifteen year life span before they hit the i.a.e.a. the forecasting arm of the department of energy's got about right we're going to look for a peak in u.s. shale oil production somewhere around the year twenty twenty maybe twenty twenty one and then after that it will go into a fairly steep decline so if you know people are saying well you know the united states is going to be the next saudi arabia we're going to be an export oil if that's true to only be true for maybe a year or a couple of weeks out there somewhere in twenty twenty and then it'll decline again very rapidly and that's something that very few investors or people i think are prepared for when it's only going to be a couple of weeks who are using their dad to mean that i absolutely mean that we are in no position to export any oil at this point in time we still are importing roughly about six million barrels a day assuming all of the technology and all of the things that we're hoping to happen in the shale plays actually happen we might add somewhere close to that in

additional production that that would be of the most but then it will hit that peak and will go into decline very rapidly so the united states is not ever going to be in a position to be an exploring oil powerhouse wow great to know now how does this work i basically resource costs rise and then what. well the unfortunate relationship here is that when food costs go beyond a certain level in certain countries where they have other weak social institutions or political institutions so people are already a little bit aggrieved and prone to rest of this high food prices tend to be the spark that ignites the tender and you get food riots you know we saw that in egypt we saw that certainly in syria they had a drought that started in two thousand and eight and you know a couple years later they were in a protracted civil war or that very damaging that's still ongoing it's the same thing in ukraine right now we're seeing that people there are spending forty to fifty percent of their average income on food and that was an up so that when

additional pressures came to play people were ready to get out and protest and start blaming each other as it were for that condition but that's what you get with rising food costs as you get a lot more social unrest you get a lot of political turmoil and it's a very destructive situation for the for the countries that go through that. that was chris martenson of pic prosperity dot com. big deal time with us first time her. getting her name i'm pretty proud about how we're thrilled to have her today and she is from arabic one of the correspondents there and she's checking in with us on what's going on in the arab world in the wake of the arab spring and how the economy is shaking out over there after these political revolutions now beginning in two thousand the arab world underwent

a major change the first spark began in tunisia but soon protests spread across the region syria egypt libya yemen just to name a few countries that were affected by it but it affected almost all arab countries in one way or another and while some protests like those engineers have led to significant political changes other countries experienced ambiguous results now egypt opposed whose new mubarak but a military coup against elected president mohamed morsi brought the military back into power and some protests mutated into extreme forms of violence like the ongoing civil war in syria so now it's hard to generalize you know many of these different countries and they are of world just give us a sample of what's going on but i would like to get your take on the events in the aftermath of all these protests and basically has it been a net net positive the effects of what happened in these protests and. that or is the legacy much more ambiguous depending on who you're talking to i would say that

a lot of that a lot of people would tell you is that this is a work in progress a lot of peoples still have hope and the changes that they took to the street have happened in their countries however a lot of people just see the dark ages coming facing the arab world and they don't know what's going to happen not only in the disk. future but in the near future as well so really there is and no one knows what's going on there are new developments every day on the ground now economically is this a good time to get into the market or do you think that because it is so ambiguous some people say it's very good times have this revolution was for nothing not for nothing we're going to make this happen and other people like you don't feel feel the same way but do you think from an investment perspective it's smart to get involved it really also depends on what kind of name investment you're talking about and also depend on the country that you're talking about if you're talking about the gulf countries that are stable you can do investments left and right there and a lot of people would not even argue about that however when it comes to countries like syria when it comes to countries like libya when it comes to countries like

egypt the situation is fluid no one knows what's going to happen no one knows who's in power to morrow or no one knows what's what's affecting the market their situation is so fluid that a lot of people would be scared to do investments in those countries right but we also see people who are doing that who are not afraid of those changes who think that this is maybe. a fortunate it is to seize and that's what is happening now i want to focus on egypt going to ask you about you know that was one of the major arab countries that experienced a lot of turmoil in during and in the aftermath of the arab spring but can you give me a summary here basically what went on in egypt basically what were the reasons that egyptians began protesting in the first place whole wide spectrum of reasons a lot of people went out for political reasons many people went for. social reasons other people economic reasons behind their taking to the street people just had

different expectations from the revolution and people had different reasons for participating in those revolutions not just in egypt but across the arab countries however in egypt politically they said that they wanted justice they wanted freedoms on the comic side they said that they want and of corruption. in their country because that affects their economy negatively badly and they also want their employment for instance they also want their country to run better economically and these of the reasons that had people take to the streets do you know and have those demands in the first place you know if things were going smoothly there would be every one of you so so upset but you know some animal analysts they believe that the egyptian military has a major major role in the economy but what is your sense of military's role in the egyptian economy people see the military's role in the economy differently and a lot of people saying that they do control a major part of the economy many people say no it's not that big of

a deal and i was trying to read more about this than they were just completely different numbers and bigger is that suggest different roles that the military is playing many numbers just the just anywhere between twenty five to forty to forty percent of egypt's economy but people some analysts say even more even forty eight percent well some say no it's not that big of a deal and not that much and people are exaggerating just because the military has played a role and is playing a role in the economy that doesn't really make it does eager remote i'm sorry to tell you off we have to have you back on it's so interesting to learn about this stuff to thank you so much for your time and your insight we always love hearing from you but we love hearing from you too so please check us out on facebook drop us a line facebook dot com bust boom bust our two you can also tweet us at aaron aid as well i wish better handle or at every word and my partner in crime odaka next week from all of us here boom bust thank you for watching the next.

well you like me you want your comedy news with some t.v. . comedy news to be a bare fisted no holds barred fight to the dad. like a vampire whining into the next of the corporate elite billionaire freaks while they're going. well that's what you get with my new show but jack to the night. will say to hell with you we're going to follow our brothers down the south are

going to follow up others and to follow our brothers and grace we're going to follow our brothers and sisters all over the world who want to escape a patch and jettison themselves from this awful american a gemini which is based on dollars of curiosity based on money printing from a bank that's clearly. substantial and. balance.

coming up on our team in iraq government forces and isis clash in a crisis that's tearing apart the nation and today president obama laid out his plan for dealing with the growing conflict the latest just ahead. and we feel leaks founder julian assange remains in ecuador's london embassy it's been two years since he was granted asylum in a long saga of legal troubles more on that and wiki leaks coming up. and international travelers are ecstatic at brazil's twenty fourteen world cup and sports fans are still in high spirits even though the games are large by street protests and local concerns.