live live live live. live live cross-talk rules in effect that means you can jump in anytime you want to live. but i'm abby martin write the stories we cover here we're not going to hear any rights at our back story but i'm struck that while the same time there's a reason they don't want to do not all of them are no more telling the truth is

that we should all be completely outraged now let's break the set. head low there are coming to you from new york first up we all know that actions have consequences but u.s. financial regulators they don't really seem to care not that much so huge u.s. funds and foreign banks are having some unintended consequences what will they do where will they go we look into it coming up then dr barry eichengreen is on the show today dr ivan greene has done considerable research on the history and operation of the international monetary and financial system and he sat down with walker earlier today to discuss the validity of a country probably regulatory and foreign dubious and in today's big deal edward

earth and i are discussing the annual brick summit held in brazil right now sorry no more soccer for you above for finding out what this means for the emerging markets of the brics seventeen's it all starts right now. now our lead story today actions and consequences massive fines placed on foreign banks by the united states are garnering a lot of pushback from the international banking community now this comes following the nine billion dollar fine that french bank b.m.p. perry boss has agreed to pay the u.s. government after conducting billions of dollars worth of business with sudan iran

and cuba all of which are not on america's good list no they're not but the curious thing about this situation is that france francis. those to be on america's good lists are things pretty important ally and fact there's another u.s. ally currently being slapped with fines by banking regulators as well german commerce bank the german bank has been accused of conducting business with an iranian state sponsored shipping firm and could be forced to cough up between six and eight hundred million dollars in order to resolve investigations into its compliance with u.s. sanctions now over the past five years over half a dozen foreign banks have settled with u.s. authorities over sanctions violations to the tune of more than twelve billion dollars again these are not u.s. banks they're foreign banks back in two thousand and twelve british lender standard chartered was accused of hiding two hundred fifty billion dollars worth of iranian transactions from regulators and ultimately forked over six hundred million to u.s.

authorities now here's the question what effect will all of these sanctions ultimately have that's the million dollar question or the trillion dollar question potentially monday reuters published the following on this subject which i think sums it up pretty nicely financier's may grumble that the united states is acting like an imperial power and punishing foreign banks for doing far beyond us territory but in the end they are more likely to bow to washington and kick against the dollar muscle. in fact instead of turning away from the u.s. major lenders in europe and asia are reacting by doing more than ever to fully comply with u.s. laws going so far as to cut ties completely with any business that puts them on washington's bad list remember you got to be on a good list if you want to stay in the dollar basically foreign banks would rather miss out on potential transactions than god forbid be excluded from doing business in the u.s. dollar essentially they could no longer do business that's what it would happen if they were excluded from it and will countries may be looking at other ways to

prevent their own banks and markets from being damaged by the scale of u.s. penalties for now each bank on its own has little choice but to toe washington's line but as i stated in the very beginning actions do have consequences mark austin of a hong kong based bank trade group said quote regulators in some jurisdictions are beginning to recognize that they need to band together as they won't get very far on their own we are seeing a change for now the us is content to so we serve its own geopolitical interests but the things we do in the present could and likely will have policy implications in the future that were completely i mean completely unintended and truly detrimental but only time will tell. because.

your government slammed the dea and perry boss with a major fine and now they're going after german commerzbank for also violating u.s. sanctions but i do banks obligated to follow u.s. sanctions or they basically being bullied into playing by us rules i want to check with dr paul craig roberts are we finally call p.c.r. now dr roberts is a co-founder of reaganomics and has also been an editor and columnist for the wall street journal businessweek and scripps howard news service i first asked him what he made of the whole billion pieces here's what he had to say. to the great u.s. law through the different now don't you see what look i'm not an expert on. what marriage. united states. to all cultures and says everybody regardless of their sovereign state. best of

a on a low end because we announced that there were sanctions on iran if you buy a can and a country finance business with iran we have going to generalize you and if you don't pay we're not we'll let you conduct operations in the united states so i'm not sure what the bike is broken any law goes in montana and united states government does not have the option of dictating law to sovereign countries but it's been doing it for a long long time it did it to switch them. in and now they're starting on the commerce fight in germany they're trying to same thing to it that they just did to the french by. i think that part of this is that washington uses. american clout over of the people by threatening them to be excluded from the

american market. and all of to her those financial institutions in order to in. the financial interior lism all the american banks so when they beat up on barclays they beat up on the french by the beat up and injured by then goldman sachs j.p. morgan city bye bye from america they can start a movie an easier oh noes only territory of those black so i think that's also part of it in fact a true think should be the main. the main part of it but i don't think the world should accept the fact that the united states government jan and. decide. what countries there by these other sovereign countries what the banks of sovereign countries who they can do business with yes i think you see the dollar's importance diminishing over time is that right. yes i think it has to

diminish over time primarily because of the sanction thing because you say if you're not if you're a country and you're not far off the dollar payment system that no sanctions can be applied to. and there's really no benefit any longer of being in the dollar payment system it grew up at the end of world war two because united states was the only country that had an economy all the rest were destroyed and so how were you going to settle international payments new you looked to the strong current the country that actually dominated manufacturing trade and so that became the world money but today trying trees have recovered in many countries whose occurrences are just isn't practical and there's no reason not to settle trade in their own currencies it's it's actually very costly. for example japan and china to settle their

trade in dollars because the chinese if the chinese buy something from japan then they have to transfer their have to pay a fee to convert their currency in the dolls' then they give the dollars to japan and then japan has to pay a fee to convert the dollars into yen so what is the point of these countries doing there is no known reason any longer and as the united states increasingly i mean to say washington increasingly abuses the dollar has received reserve currency in order to print money to pay its bills in order to impose sanctions on the activities of countries that it disapproves of i think more and more people will leave the dollar payment system now if the dollar does diminish in importance or what games you just mentioned some some examples that is a gold or you know the chinese currency the euro and there is no assets because there doesn't seem to be a lot of options out there. but you don't need

a world currency anymore as i said the situation in days totally different from one thousand nine hundred fact. the world was destroyed and nobody had an economy except united states every on the economy was distorted or had never gotten past third world status that's not the situation today there are many columns and so they can settle their trade with their own currency there's an absolutely no reason to prefer the doll of the euro or of the chinese currency or over the russian ruble it is there's no reason for this now some engine countries they've appealed to the u.s. to help them against chinese maneuvering so do you think china has a strategic threat to its asian neighbors which the us should help defend against oh no of course it's not and. look. there there is some very small island syria in there and people war warning to our you know that well

that's between them and china scott nothing to do with us there's no reason for us to be involved in that and is certainly no reason for washington to make an enemy on the chinaman's john is far stronger in the news of the war countries and it's our big discreditable and we have huge trade relationships with it so. it's just a silly phang that washington is doing trying to hold all into its hedge enemy all over the world they really should stop it. by china's not threatening anybody it's the united states that is building bases from the philippines to vet now naval and air bases to surround sound it's united states mistake and nato to russia's borders that it's calling now for troop build up is to noora postponing missile bases on russia's borders is trying to cut george you're in ukraine in. the

aggression is not coming from china or russia what are the economic implications of allowing sign a free rein in asia. ornamental our work but it's not up to the united states who does business with china and china does business growth . with the whole notion that we could disallow is that somebody can sense that's it so i think that people will do business with china because it's profitable and we paid since they have good deals and they approach people and that way they say hey look let's do business we come in and say let's have military bases let us buy your government and that's your payoffs and some of the you will do we wall we'll put military bases it's a totally different approach and that was dr paul craig roberts.

time now for a very quick break but stick around because when we return dr barry eichengreen is on the show he's a well known professor of macro economics and political science at the university of california berkeley and he sat down with me earlier today to discuss the practice of mixing regulatory and foreign policy like oil and water and in today's big deal edward harris and i are discussing the annual brics summit mean how the result right now and don't forget you can see all segments featured in today's show on you tube you tube dot com slash investor t. and on hulu hulu dot com dash to slash us now before we go to break here are a look at some your closing numbers the bell on that.

we like what you comedy news from ti to comedy news to be a bare fisted no holds barred fight to the dead. but the truth vampire fighting into the necks of the corporate elite billionaire freaks well they're going. well that's what you get with my new show projected in night. welcome back now with all the fines that u.s. banks have been slapping on foreign banks recently they sure haven't made themselves any friends however it has demonstrated that the u.s. won't allow its currency to be used in ways that contradict its foreign policy aims that's for sure yet no friends but they got that point across but as the world's reserve currency such actions might prove disruptive for countries that disobeyed

u.s. foreign policy rules so i want to check in with dr barry eichengreen now i can green is a well known professor of macro economics and political science at the university of california berkeley and he has done considerable research on the history and operation of the international monetary and financial systems and we want to get his take on the whole situation right now so i first asked him if he thinks it's valid for the u.s. to couple regulatory policy and foreign policy in this way here's what he had to say. i don't know if it's a matter of being valid or invalid it's what governments do the united states did it in one nine hundred fifty six when it used the dollar and u.s. financial power to force the french and british government. roll back their invasion of suez financial power is used repeatedly and when you have a case like a european bank funneling money to the government of sudan i think it's entirely

appropriate for the u.s. government to use whatever instruments that has at its disposal to discourage that yeah i you know what barrett i have to say that i kind of agree with you when i first heard this story i was outraged but then you know the more i read about and the more that i learn about all these sanctions we've had a lot in the past five years on foreign banks it seems like it's almost shocking that anyone is shocked on some level do you not agree. well i think what is shocking is that the french authorities either were unaware of what b.n.p. probably bought was doing or they looked the other way either way it doesn't reflect well on the quality of european supervision and regulation of the financial system we know that banks are in the business of making money and moving money and it's the role of the regulator the role of the supervisor to be sure that they they do so in in socially constructive ways so the financial crisis was one

reminder that banks can be weapons of mass financial destruction and i think this affair is another reminder now very the u.s. is perhaps the only country in the world to impose sanctions and then find a major bank from an allied country for violating those sanctions now because the u.s. dollar is the world's major reserve currency what impact will be as kinds of fines have on the u.s. reserve currency status if any at all. i think very very limited impact the reason that the united states is the only country to use these kind of financial sanctions is that the dollar has the exorbitant privilege of being the the world's currency the vast majority of foreign exchange transactions and finance for imports which is what the government of sudan wanted go through the dollar and go through new york

financial markets so that's why the u.s. could do it what impact will it have i think. some governments that are unhappy about the fact like france and other governments that are worried about the fact like a ran north korea will look for alternatives to the dollar i think there are very few alternatives in the short run european markets are not as deep in liquid as markets and the dollar chinese financial markets are far from as steep and liquid as markets in the dollar so it would take mass migration of importers exporters foreign investors both private and public away from the dollar toward another currency in order to change that situation and that simply is not going to happen in the short run. but could it potentially happen in the long run.

shameless plug for my book exorbitant privilege i think it will happen in the long run that the united states is no longer large enough relative to the world economy to be the only supplier of safe and liquid assets to the world as a whole so there will have to be other suppliers and i think the eurozone and china as the two other big economies on the world seem are are the plausible suppliers but both europe and china will have to get their act together financially for that to happen so will it happen this year no will it happen next year no but ten or twenty years from now i think there will be two full fledged rivals to the dollar. now i'm glad that you bring about china because the chinese renminbi is increasingly mentioned as a potential reserve currency but a lot of things have to change to make that happen like you just mentioned now

recently china construction bank was maybe official renminbi clearing bank for london and bank of china for frankfurt so what importance do these moves have well. the fact that there are official clearing banks chinese clearing banks in london and frankfurt will reduce the cost slightly of europeans exchanging their pound sterling in euro as for chinese renminbi they don't have to go through the dollar in order to buy renminbi there are now a couple of big chinese banks that can source renminbi onshore in shanghai and sell it to. european banks and firms who need it for their international transactions so that will promote the use of the renminbi in europe i don't think it's going to change the financial landscape in the short run but it's a positive step from the point of view of renminbi internationalization. you know

paul craig roberts told me that the future of the international monetary system has to match our multi-polar global economy in which the us is just a one actor do you agree and if so why well it's like george orwell in animal farm right all the animals are created equal some are more equal than others i think we will move toward a more multipolar monetary system that better matches our multi-polar global economy because as i said before the united states will not be big enough to provide safe and liquid assets on the scale that the twenty first century global economy requires but the dollar is likely to be first among equals for a considerable period going forward simply because the us treasury bond market is the single largest financial market in the world it's deep it's liquid it's safe

haven it's the market that investors instinctually move toward whenever a bad financial thing happens because the fed is there to provide dollar liquidity when it's required the willingness of the european central bank to provide euro liquidity isn't open question in some sense and the ability of the people's bank of china what with chinese capital controls renders its ability to do so an open question as well. that was dr barry eichengreen professor of economics at u.c. berkeley time now for today's big deal.

big deal time with that word harris and it's good to see you remotely and that's now audience out there in today's big deal edward harris and i are discussing the annual bric summit and what the summit might mean for emerging markets so before we begin the brics nations are can you guess is drum roll i know you know brazil russia india china. do you have this one south africa yeah ok the brics and their group together due to their size and the strength of their economies and this summit is a multilateral forum for these economies and coincidentally enough it's being held just days after the world cup wraps so edward we've been talking about currencies a lot on the show today and is there anything on the on the agenda at this summit that might have an effect on our international monetary system or any fundamental consequences on what we use as a reserve currency truly fundamental because i think the answer is no but i'll throw it over you know i think there is something that's interesting not that the silly agree on it but they're talking about an alternative to the billion dollar

i.m.f. and then some other fifty billion dollars to go along with that in terms of a liquidity but basically what it boils down to is that the as it's been developed is really about western europe you know the whole of europe in terms of the e.u. and north america and there had germany over policy issues in terms of the global financial system and so as the emerging markets have because much more important from an economic perspective they're looking for a greater voice and they feel that they've been blocked in the. in the world bank and all these other multilateral lending institutions from having this greater voice and therefore the brics is the most important emerging market countries are going to out and say yeah we're going to actually do it on our own we don't make our own multilateral institution and do an end run around these other institutions . now as you mentioned there are a bunch and i mean

a bunch of multilateral forms on economics we have the o.e.c.d. g seven g twenty brics now but are these primarily diplomatic and political organizations or do they have any serious economic implications basically what i mean is that what is really joins these economies together. it's a good question because ultimately the fact that you even asked the question suggests that they're really just talking sessions that there's nothing that really gets solved in those sessions but i think to a certain degree it's important for them to coalesce on certain ideas and come together in order to overturn such a form of the policy so when we had barry eichengreen talking about what's going to happen terms of the multipolar world that's what we're talking about with regard to the brics if you think about the european union the fact that the euro even exists is really a result of their understanding that they couldn't compete against the united states in terms of having economic power unless they came together as one currency

and even the europeans they don't have the depth of the u.s. markets they don't have the treasury market because they're all ball you have the german market you have the french market you have the spanish market so eventually they're going to want to come together and have one market that has nothing to quiddity to be able to rival the united states. now ed can you explain to me the purpose of a brick's bank would it be like any other sort of you know developmental bank such as the world bank or the enter american developmental bank is a developmental bank what would it be like it would be essentially be their alternative where they it's like the europeans when they talk about the european monetary fund we control the levers of power we control we the brics we control all of the political operational machinery of this particular organization and as a result of that you know we get to decide how things get implemented so when bad things happen then put it to you that gets provided is politically in our hands

rather than in the hands of the united states and its allies now many of the brics nations have been in the news lately russia and the west have experienced a lot of tension over ukraine china has been flexing its muscle muscle in asia but each country has very different political traditions and economy so really quickly how do you think these countries differences affect their ability to find common ground they very much do and so i think that will fall in this particular summit that we're not going to necessarily get to any clue and create conclusions but at a minimum we're going to move in that direction. and thank you so much i'll be back with you in the flesh tomorrow but that's all for now thank you thank you we love hearing from you so you out there in t.v. land please check out our facebook page and drop us one facebook dot com slash combust r t and please tweet us at aaron aid at edward and age from all of us here at the us thanks for watching c.n.n. .

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coming up on r t albuquerque police officers are receiving hundreds of new a ar fifteen rifles that's while the police department is still under investigation by the d.o.j. over excessive force the latest on that just ahead. and israeli military strikes continue to devastate gaza but talks of a potential truce may bring a stop to the violence more on that coming up. and is there another form of life out there today nasa hosted a special event to discuss ways to make discoveries of habitable planets more on this search and later in the show.