and the banks it's all been all about money and i've been bashed like that for a politician right a lot. coming up. here just to let pratt today's buy. that. it's a perfect. everybody's going to do it's job did you know the price is the only industry specifically mentioned in the constitution and the concept that's because a free and open press is critical to our democracy shred albus. role. in fact the single biggest threat facing our nation today is the corporate takeover of our government and across a semi-colon we've been a hydrogen lying handful of transnational corporations that will profit by destroying what our founding fathers once told to us by job market and on this show we reveal the big picture of what's actually going on in the world we go beyond

identifying the problem trying to fix rational debate and a real discussion of critical issues facing america by the book ready to join the movement then welcome to the big picture. there i marinate this is boston these are some of the stories that we're tracking for you today. first up the rupert murdoch is consolidating his european pay t.v. assets in the hopes of coming up with enough cash to buy time warner and we'll look at what this means for the european media industry coming right up then we'll bring you part two of my interview with dr steve the hankie now some voices in the u.s. want to block russia from using u.s. dollar clearing facilities and steve is telling us what effect that could have on

the dollar and it's the end of the week which means it's viewer feedback today here on boom bust edward harrison i address your questions comments concerns i live on the show you won't want to miss a moment when it all starts right. now and. rupert murdoch wants time warner and he's selling off assets to get it friday twenty first century fox said that it was selling its italian and german paid television assets to british sky broadcasting better known as b. sky b. which is by the way thirty nine percent owned by fox for more than nine billion dollars now this is just the latest sign of consolidation in the european media

industry and the deal comes out through time warner rejected the billion dollar takeover offer by rupert murdoch's twenty first century fox now analysts expect mr murdoch will make an improved offer to acquire time warner and the sale of fox as european assets could prove that the company with will then have enough extra financial. munition that it needs to purchase what it wants now in the deal announced friday twenty first century fox would retain its minority stake in b. sky b. and by doing so twenty first century fox remains well positioned to take advantage of any future deals aimed at consolidating europe's telecom and media industries now the deal still needs approval from regulators along with b. sky b. as minority shareholders and not to mention antitrust officials are definitely going to be scrutinizing how the takeover will affect customers choice but if approved the deals for the italian and german assets would allow b. sky b. to offer premium sports and movie services to roughly twenty million customers

across europe now b. sky b. said the new entity would be the number one pay t.v. provider in three of the four largest markets in europe so it's not peanuts but here's the question is all this media consolidation a good thing now generally i'm against massive consolidation especially in media but at this point it's really just a shift of assets from one big plate to another big plate and i don't think the consumer will be adversely affected at least certainly not in the short term really mr murdoch has his hands in both assets and he's just moving around furniture in order to make his empire bigger than it already is and with new business models like netflix coming into the game broadcasters now must compete with scale scope and technology but it sure looks like mr murdoch is game for a battle. states

has the exorbitant privilege of the u.s. dollar being the world's reserve currency and it has taken advantage of the status of the us dollar and its foreign policy for example b.n.p. perry agreed to an eight billion dollar fine for not following u.s. sanctions and russia of course is also facing the pressure of further u.s. sanctions as tensions over ukraine increase now i spoke to dr steve hanke a professor of applied economics at john hopkins university about sanctions the dollar payment system and the possible effects of using sanctions to achieve political goals now some voices in the u.s. want to block russia from using u.s. dollar clearing facilities and i wanted to know what in fact that would have on the dollar here's what steve had to say. for the dollar and dollar payment system this is potentially a disaster waiting to happen because if you look if you're four sided and you're looking out twenty years or something like that twenty five years the big

challenger to the u.s. dollar and the dollar system is what it's china and the chinese won and trying he's won and knowledge is not a could even a convertible currency but it is making. great advances i just saw in the wall street journal yesterday this switzerland known as entered into a swap agreement with the chinese using a was on so people aren't thinking ahead and short and the west sanctions by the way never achieve their stated political goal you asked me will they have an effect of course sanctions always would have an effect will h. e achieve their political goal and the answer is no they store glee have failed to achieve political goals in the past. now bloomberg ran an article two weeks

ago showing iran a target of u.s. sanctions with oil exports at a two year high of one point six million barrels a day now here's the question do u.s. sanctions end up hurting the us more then or iran more which is which one is the loser there. well i think both sides are losers i mean i haven't. been some kind of benefit cost analysis but the u.s. should be leading and be the leader of the free world and be leading. the movement towards more globalization and more free trade and more free commercial act activity peace and prosperity is the name of the game and people wonder why somebody like president clinton is so popular and had such a good record in the economy while it was peace and prosperity. you know we did have a little balkan war that thing got wand up in

a hurry that was under the clinton administration but but basically there was peace and prosperity in the ninety's when clinton was president and also i might add that clinton was the most austere that is cutting the federal government share of g.d.p. there are only two presidents who have ever done that since world war two one was reagan a little bit and a massive amount by clinton clinton was very austere and so the combination of free trade. deregulation and stable money was a formula for peace and prosperity in those clinton years which were very good. now steve i see that eurozone exports to russia are down thirteen percent well imports are down nine percent germany's economy has been hit by this as well so now a lot of people are saying that the russian economy was already headed down before the sanctions so do you think this fall and trade in is sanction related or not. to

some extent it probably is sanction related we don't really know the russian economy was going. prior to. well even the olympic showy. so it was it was on a downward trip project. looking like it was quite vulnerable to go into a slump and now of course expectations are quite negative. now a recent gallup poll in which of bottom or putin's popularity seems to have skyrocketed according to this poll and this is all from the last year while the popularity of the u.s. and e.u. has plummeted so how are the sanctions going to be effective if they're having this effect well that was my earlier point erin and that is that sanctions do have an effect they are whacking the russian economy. but

do they achieve their stated political goal and that is to change behavior or lead to some kind of the good. over problems that the various parties have with each other and the answer to that is no and look at putin's popularity i mean the polls i see and he's up about eighty percent or something like that he's certainly got a he's certainly more popular than president obama and or if you go to europe but you go down to the bottom of the barrel you've got president. francis i think he's in the low twenty's his popularity in the public opinion polls so most of the western leaders have very low ratings the u.s. congress of course is much lower than obama and the congress is really were the warmongers and and sanction imposers are located and their

popularity is. barely above zero i think it's ten or fifteen percent or something like that an all time low now let me move on to turkey here for a second steve erda wine is encouraging the central bank there to cut rates because the economy is not doing well now he says it won't stoke inflation but that's some kind of dubious to me but is there no one right. no he's wrong he's been pushing the central bank to cut rates and increase credit growth in turkey for some time now. twelve months ago perhaps eighteen months ago the credit growth was about forty percent per annum and in turkey very high rates of growth but it's still about twenty two percent now that's that's very high rate of growth in credit so credit is is still stoking basically and fueling too much domestic demand domestic credit is too hot in turkey domestic demand is too hot and that's

why they run these huge current account deficits in turkey as it is they they can't supply. the demand the local domestic demand and so what do they do they import lots of things and and that makes the current account flip into a big massive deficit which puts turkey in kind of a vulnerable position particularly if the if the if the carry trade ever starts unwinding and that is interest rates going up in the united states and and when that occurs of course the hot money that one end of turkey which is very large by the way will start coming out and turkey will run into a lot of trouble i think. and that was dr steve hanke the professor of applied economics at john hopkins university. time now for a very quick break but stick around because when we return we're bringing you the

best of the very best from this past week and it's the end of the week which means it's time to hear from you edward harrison and i are tackling our viewer feedback and our weekly accrued interest segment plus remember you can see also when speeches on today show on you tube youtube dot com slash boom bust our teeth and on hulu hulu dot com slash boom dot us now we got to go before we do here are a look at some your buzzer numbers of the bell come on back at us.

i would rather as questions to people in positions of power instead of speaking on their behalf and that's why you can find my show larry king now right here on our t.v. question lol. well you're going to like. a. pleasure to have you with us here on our t.v. today i roll researcher.

welcome back now to the end of the week and that means it's time for our best of the very best segment first up carl denham grrr is talking about the apple i.b.m. deal he explains what he thinks is going on and why it's i.b.m.'s bid for relevance then francis coppola is on to talk about the difficulties of using monetary policy to manage the economy after that steve king talks about how our debt levels are incredibly high and how that makes our ongoing recovery even more fragile then the libertarian guru anthony randolph though is on next to talk about the relationship between bubbly assets and the health of state municipal finances and finally to round out the best of this past week we're bringing you dr steve hankies views on

argentina's economic future in light of its current debt problems enjoy. maybe think about apple's basic business model with regards to their or their devices that are covered by this which is the i phone on your i pad mostly. there are simply replacement models when there's a problem so you you send somebody on the field they give you another one or you send in your device they give you another one it really isn't any onsite repair so the the concept of onsite support is well limited would be the nice word or an outright fraud would be the better word. the the one thing apple does get is an army of sales people to go into corporations and try to push their products. whether or not that has any kind of relevance to their sales rate is another thing entirely i think the answer is no i b m on the other hand has a problem and i think i.b.m. is really the reason that this deal got done did everything to do with coke at apple and that is that i.b.m.

has become a company that has become one of financial engineering as opposed to innovation if you look at their results over the last couple of years what you see is decreasing revenues and increasing earnings per share and their way they're funding that is through buybacks so essentially what they're doing is to c.e.o.'s which course looks great wall street but is masking agent cherish it in their core business so my suspicion is that what you really have here is a company flailing around looking for somewhere to stay relevant in a market that shifting away from them just as it did back in the oh the one nine hundred eighty s. and one nine hundred ninety s. when the mainframe kind of fell out of favor with a lot of corporate users. about this recently i looked at. them say minutes going back to nine hundred fifty phone discovered that every recession they had raised rates too late and then too much after each recession so we are going to ask leaving it too late and then panicking and raising them to notch

and that's because once policy takes time to feed into when economic effects but the effort i'm saying and the central banks in other countries have to make decisions on a month by month basis based upon backward looking indicator is because often then making decisions about what's going to happen going forward and what effect them lunch policy is having based upon what's just happened which may be nothing because i only did it last month it's quite a problem i see trying to judge when to raise rates and by how much. now when central banks begin raising rates they usually continue to do so so is it possible that raising rates too late means having to be more aggressive since the mere act of starting to to employ this rate hike regime increases credit demand as it's a signal to borrowers to lock in their rates now. yeah there is a risk and in fact again we've tended to see that in the past when they have started to raise rates they've often raised them quite

a lot quite quickly which has quite quite aggressive effects on the economy to be fair the last time we went into a tight tightening cycle which was in two thousand and four they didn't do that they raised them very very gradually over a period of about two years the problem was they raised them a bit too much and then held in too high. but they did actually raised very grout very gradually so an effect on the economy was gentler me go back to nights ninety four where they raised them very fast there was there was a huge spike in and nobody wants repeat of that boring the the private sector in the economy that's why we haven't seen we didn't see the didn't see the crisis coming that's why we've got out of the crisis now because having deal even very slightly american providential from about one hundred eighty percent of g.d.p. to about one hundred sixty percent is rising again now that's why this slump occurred the decline in debt that's why the boom is starting again now the rise and

it but amazingly this is still being completely ignored by a conventional economists and by the federal reserve so yes that's the real danger the fragility of the economy gets as the level of private dick gets higher and we won back to not in the not in not is recession when you came out of that in america the private debt ratio is about ninety percent of g.d.p. and it doubled until this process and then it fell by twenty percent to having another revival from a dead level of seventy percent of g.d.p. higher than the previous boom began in and of course it's only going to take a tiny increase in interest rates or. a couple of companies going bankrupt carrying the debt levels they are because they can't manage to roll over that so the system is much more on this recovery than it was in any previous recovery and that includes. right back into before the going back on the days of the with the great depression the economy has never been so fragile because the level of profit has never been this high one of the biggest issues let's just take the last one you

mentioned for pensions is that in order to hit their investment targets and hitting their best in targets is required so that their assets and liabilities stay in line which is not had not been the case for state municipal pensions in order to do that they've had to expand out the risk portfolio. of all their assets and so you now have instead of the old way that pension public pension systems were they were largely invested in long term bonds that mature it at the same time that people were retiring so that they could actually pay out these promised pension benefits with the assets they had available as they have a much more widely diversified portfolio which again sounds great for the individual investor when you talk about pension funds that means that you're going to have. all these funds that are now scrambling for where about twenty five percent of their investments are is they're going to get no yield from that means that they're going to have to shuffle what amounts to across the whole country

trillions of dollars into other assets simply because of a pop bubble that means that you're going to see price fluctuations in assets all across the country in ways that would otherwise exist except for the bubble so i don't know i don't want to sit here and say that i can tell you exactly what's going to happen other than it's going to be mis allocation it's only it's going to be money flowing into assets only because. it's factors instead of what's going on in those in those particular assets and that's going to create financial instability that's going to be problematic is where is the argentine economy headed . down the economic policies are. a complete disaster really sand they gave up and started breaking the rules of convert ability so this would go back before the. will default on the bonds this would go back and in one thousand nine hundred nine they started breaking most of their own rules around the convert ability system that linked the

peso to the dollar and then. eventually we've had many years with kirshner's and power and it's been one. irrational economic policy after the other so the economy's quiet vulnerable and i think if they don't default on the bonds economy a probably shrink by maybe a percent not half or something this year if they default who knows that it could go down by two and a half percent three percent in terms of a contraction which is a very severe. depression actually. that was your best of the best from this past week time now for our weekly accrued interest.

in. my work area thank you for being here my friend now every friday and i put you the viewer into the driver's seat a mystery of the show with your questions comments and concerns all sent to us throughout the week via twitter you tube and facebook so let's dive right animal start with taylor singleton folks who says quote dollars ation is inevitable because the u.s. economy no longer dominates the global economy like it did after world war two when dollars ation was solidified but if mr persaud is correct that the market will continue to react this way then won't transition necessarily be dramatic and if mr persaud is correct we'll transition from magic thoughts comments concerning. your favorite jim rickards and one of my favorite he thinks it's going to be traumatic as well he took the other side i remember when you were asking the question about you know what you think about what jim rickards had to say i think almost the opposite i mean the way that i listen to what they have to say i feel like they are

saying pretty much the same thing that the u.s. economy or the global car is dependent upon the u.s. dollar but i feel like it's the transition that is the difference between the two that is. thinks that this is a stable equilibrium and rickards thinks like the person who's asking the question that it's not a stable equilibrium there should be a sudden break up so i think it's a possibility different sides of the same coin wrote now another him our comes from octopus five who says quote victor she seems overly down on a competing development bank the desire among them i think is not primarily bearing a sufficient return but sovereignty and independence for. in the west and formed by their interests and needs sans the strings penalties demands adversaries and rapacious stupidity from an i.m.f. goldman j.p. morgan our city ed thoughts here you know interesting i heard just today the new.

canada want to stop any world big projects in russia as part of the broader sanctions so you can see that the world bank is being used as a tool of financial warfare so the question really is for the brics if this is what's going to do we really want to be a part of that system right it goes back to that last question if you're setting up the paradis for a competing sort of system i think china is going to be definitely at the center. and you do have the potential for a clean break as a result of some sort of crisis down the law stuff then we have a gable cain here she writes in to say is there a theoretical or model the limit to what the level of financial derivatives can exist at any one time relative to the real economy or is it the nature slash quality of the underlying asset that is the determining factor where there seems to be record highs in stocks and other assets do derivatives act as

a stabilizing force in the event of a substantial market correction slash shock or could the derivatives market seeming quite a complex system at a level of unpredictability in the event of a market shocks last for action example unforseen consequences i don't know much but i do think that this could very well happen you know yeah it was a very complex question so the great question two parts to it that i think were interesting the one is when he talks about complex systems i think by the name of rick bookstaver he talks about this whole thing about tightly coupled systems and we were talking about this before about. being single point of failure when you have single points of failure and. coupled system basically you have sort of a domino effect in the whole thing collapses and i think that the financial architecture that we have today is somewhat similar to that when you saw lehman go right there were you know there was a domino you know they were everywhere as a result the whole system was tightly coupled i think that derivatives are not

a stabilizing force there i think that they're actually a destabilizing force with them and you know we'll quadrillion of derivatives that are on the books of these bets right now we only have thirty seconds more but i want to get one more question this comes from michael j. writes you can't let off can be without a correction that's because it artificially along the capital structure investment flows into otherwise marginal businesses the same is true for consumption patterns does michael g. have a point can you get off let off without any correction i think the point is what he's saying is when you have a distortion because of the central bank. the austrian school basically would favor as capital investment and that creates mal investment i think that. there we go ed thank you as always and thank you for tuning in we love hearing from you so please tweet us or check out our facebook page facebook dot com such an investor handles are at aaron aid at edward n.h. for all of us here boom bust thank you for watching and have a fantastic weekend we'll see you next time.

i think. everybody. should you know the price is the only industry specifically mention in the constitution and. that's because a free and open press is critical to our democracy albus. in fact the single biggest threat facing our nation today is the corporate takeover of our government and across several we've been hijacked by handful of transnational corporations that will profit by destroying what our founding fathers once built up my job market and on this show we reveal the big picture of what's actually going on in the world we go beyond identifying the problem. rational debate and

a real discussion critical issues facing america. ready to join the movement then welcome the big picture. today on larry king now the debate over the pavement of college athletes we welcome ed o'bannon the man leading the charge against the n.c. double a in a larry king now exclusive if you a certain amount dollars for your school for university. you have the right to that one is the n.c. bill really care if you sell a ball with a good meal. it's all about control i think it's all about being able to put their thumb on your neck and you can only come up for air when we say you can't plus this is the most nassif.