hey there i'm aaron a that this is boom bust and these are some of the stories that we're tracking for you today. first up the tax man is coming for you shore bank account holders 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 develop multum 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 and geopolitics impact the financial markets and in today's big deal i'm joined by our t.v. arabic correspondent rima i will come da sitting down with me to fill us in on the latest economic happenings in around the middle east it's all done up to.

our lead story today u.s. tax was always a white 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 we have to pay a penalty of fifty percent have fifty percent of the accounts entire value that's a lot of money and not. current twenty five point seven percent for sure now the

penalties are among changes to the irises offshore voluntary disclosure program a program that has 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 us 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 iris can now fire tax payer 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 u.s. 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. future instability tell give us some perspective on the u.s.

economy i spoke with dr graham a politics and policy expert and founder and president of a d p r m group dr mohler room helps fund managers that are 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 us macro economic growth in 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 good degree of nervousness about that means that investors slow down a little bit and maybe that's not such a bad thing maybe things are not supposed to go straight up in the air right it's good if it's a moderated increase in valuations but 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 recent i.p.o.'s of chinese internet brands like alibaba and 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 at the u.s. 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 but it is interesting that you know they're moving to the u.s. i'm glad that you bring that up but pick 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 now 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 and products don't mean recently levi strauss said they were going to limit their production in cambodia because the wage demands they're rising because the political environment has left steve all you know we've seen more and more attacks on production facilities in asia recently and 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 going 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 pocket. the pocket book 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 foothold than the fed 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 the middle east certainly and thailand in china in every single case i would even ukraine in every single case we see the same phenomena you see 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 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 started to push for change that. that was dr paul 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 team and on flu but before we go here are a look at some your closing numbers of the bell stick around.

this is the media leave us so we leave the media. by the sea motions to cure the play your part of the musical. push use that no one is asking with the guests that you deserve answers from it's all on politicking only on our t.v. . the white house is considering air strikes on iraq so help stop the advance suggest had its forces through the devastated country metairie option a mother and take young child killed in homi assault in ukraine and the presidential ceasefire promises military offensive and radical groups claiming to protect the rights of jews intimidate their victims with death threats. what other media tons of blind eye to get all nazi seaways should be a problem for any country to diversify the sources of supply or demand that's

a size at the beginning since who will energy policy. right. first street. and i would think that you're. an army corps. welcome back to the south now what effects do 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 there's one of the most tightly clara lated in 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 is 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 and i mean that's pretty incredible but if i want to ask you what about technologies and you know look at how fracking has added to oil reserves in the u.s. side gerald celente was recently on the program and told me that the u.s. government spent every dollar and spent afghanistan and iraq and all 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 or oil out of really deep really tight really difficult to extract rocks and it costs a lot of money not some people say that well at eighty dollars

a barrel at the wellhead price these are profitable concerns and 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 how 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 my tip all the analyses i've seen in the ones that i've run suggest they have somewhere between a ten maybe twelve fifteen year lifespan before they hit peak and then they decline very rapidly after that so i'm looking for i think the e.i.a. the forecasting arm of the department of energy's got it 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 a exporting oil if that's true it 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. are you there yet do you 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 there would be at 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 arrest of mis 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 enough 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 a bust 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 the 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 in tunisia 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 in the arab world and just give a soundbite about 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. distant 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 i had 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 and really also depends on what kind of an 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 out 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 economic side they said that they want and of course. option 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 wouldn't be everyone 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 the military's role in the egyptian economy people see the military's role in the economy differently

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 there were just completely different numbers and bigger is that suggest different roles that the three is playing many numbers just the just anywhere between twenty five to forty percent of egypt's economy but people some some analysts say even more even forty eight percent while 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 it remote i'm sorry to put you off we have to have you back on it's so interesting to learn about this stuff and thank you so much for your time and you're in so 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 our two you can also tweet us at aaron aid as well i

wish better hand 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. gen it's what you do and it's full grown as a nation of darwin science punishment for an on committed crime i was still really struggling to believe the. eighty feebleminded still today for the few i don't know why not a lawyer but i still don't know why genetic improvement through forced sterilization the basis for nazi ideology don't stop at just sterilizing and now go to the point of death. for years rarely discussed on till now i'd really rather not talk about that right.

some people say that when it happens to some one time not a very nice one the curtain falls down. at some point i could no longer stand it i decided to kill myself. all the even i was scared of what i'd done i punched but i didn't understand where i didn't want a man raising his head and the woman should. run from him. every one who sees this video to also speak to the children's father. my has then became a controllable people that he can do anything. while you're crying don't cry i know i'm tired of crying too don't cry.

series to get the basics right to. the airport to make sure you're not going to be a fire alarm if you're treating everybody. in the lab how well. my our last wife. was sick so. these cases eat words. sometimes from nothing to. disorient and it's still it's not just egypt still can still be just if you see the eight states into it look easy. but it's the other cell.

the lead. more civilians a five year old boy among them are killed by army shelling in eastern ukraine even as the president prepares a peace plan promising a cease fire. iraqi forces are on the brink of losing control of the country's biggest oil refinery to islamist radicals that have reportedly taken over an airport already are advancing on baghdad. a group set up to fight. in front to kill those who don't want to. coming up this hour the eco activists greenpeace are left to wonder exactly what plants are being used over at nato after the head of the public with this conspiracy to.