since then and now the d.m.v. is trying to take the issue to indiana's supreme court they want voters case over rules and they're arguing that rewriting vanity plate rules would force it to allow offensive plays and because of this whole mess in the end i might drop vanity plates altogether can't we have anything nice seriously i'm not sure why we're also proud of all these freedoms we have in the us when we obviously have no idea how to tolerate each other's freedoms if we did we'd be ok with people say crappy things we could handle it and honestly i think we should let people say whatever horrible stuff they want because then we know who the crappy people are and we know who a little bit if we actually tolerated people being themselves we wouldn't have created the p.c. police at all and we might need the actual police a lot less tonight let's talk about that by following me on twitter at the resident

. technology innovation all the developments from around russia we've got the future covered. 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. fines 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 an old british summit held in brazil right now sorry no more soccer for you but we're finding out what this means for the emerging markets the brics the means it's all start 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. perrie 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 france is supposed to be on america's good list pretty important ally in 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 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 well 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. u.s. government slammed the band perry boss with a major fine and now they're going after german and commerzbank for also violating u.s. sanctions but i do banks obligated to follow u.s. sanctions are 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 ration here's what he had to say. to the great

us law through the differential now. you see what look i'm not an expert on. what marriage treatment is that the united states. to all cultures and says everybody regardless of their sovereign state yesterday are lowing goes we know there were sections on iran. if you buy a can and then a country finance business with the rand we're going to penalize 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 switzerland. 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 trench 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 and dance the financial interest is in all the american banks so when they beat up on barclays they beat up on the french they beat up on the german by then goldman sachs j.p. morgan city by and by america they can sort of move again easier oh noes own the 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 they're buying it's these other sovereign countries what the banks and sobbing countries who they can do business with and yes i think you see the dollars importance diminishing over time is that right. yes i think it has to diminish over time primarily because of the sanction thing. because you save 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 and all the rest were strong and so how were you going to settle international payments new you look to the strong currency of 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 there 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 dolls 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 why should we see 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 gains you just mentioned some some examples that is a gold or you know the chinese currency the euro and there isn't a assets because there doesn't seem to be a lot of options out there. well you don't need a world currency in more as i said the situation in days totally different from one thousand nine hundred five. the world was destroyed and nobody had an economy except united states every on the economy was destroyed 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 it is an absolute no reason to prefer the dollar all of the euro or of the chinese currency or over the russian ruble it is there's no reason for this now some imagine countries they've appealed

to the us to help them against chinese maneuvering so do you think china is 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 there and people are warning to argue that well that's between them and china diskette 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 chatham and china's far stronger in the news of the world countries and it's a big discredit to us and we have huge trade relationships with it so. it's just a silly fang that washington is doing that trying to hold it all into its hedge enemy all over the world they really should stop it. china's not threatening

anybody is the united states it's 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 buildup says eastern europe is putting 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. or to mean allowing or that it's not up to the united states who does business with china or china does business mess. 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 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 so you will do it we won't we'll put military bases this is 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 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 i wrote errors and i are discussing the annual bric summit being how the brazil 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.v. 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 of the bell on that. we welcome aaron made in abby martin to be terrific oh show me your team at work. it's going to give you a different perspective give you one star never i'll give you the information you make the decision don't you both go bring you the work the revolution the mind it's revolution ideas and consciousness is pushed through the system extremely produce would be described as angry i think in a strong you know under single. 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 use 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 it has at its disposal to discourage that yeah i you know what barry 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 him 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 sucking is that the french authorities either were unaware of what b.m.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 that 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 have imposed 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 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 deep 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 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 scene 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 on shore 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. now 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

a 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. good now

audience out there in today's big deal edward harris and i are discussing the annual bric summit and what this summit might mean for emerging markets so before we begin the brics nations are can you guess a drum roll i know you know brazil russia india china can you get sauce one she has this one south africa yeah ok so there's inverts 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 zero prover you know it's.

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