really knows what's inside. the plant. that put them that are good could. they do it. live be of it spirit which yet that is allowed to would i need it so the minute the whole supports i'm still spoke with. you to tell you that you can have it you are right oh yes yes yes yes that's a genius that it was a. solution. that is. known i'm going to cook them though.

welcome to the kaiser report imax kaiser the money is the root of all easy pickens and money is the root of all crashes for a once every dumb dumb ass but to what fool is one to sell stacy macs is a lot of money around the first tweet is from market watch s. and p. five hundred close point two percent higher at one thousand nine hundred ninety seven and two cents closing at a record level for the twenty sixth time this year but on the same day within the same hour we received this tweet from reuters jamie i.m.f. cuts u.s. twenty fourteen growth forecasts to one point seven percent from two percent only

a month ago well yes well this is an interesting study on market behavior mass psychology and prices so. the fact is that markets tend to go up when there is a feeling out there that the fed is going to have to stimulate because the activity on main stream is weak that's why when things like the unemployment numbers go up stocks might go up as well because the idea is no the fed is going to inject lots of money this will cause stocks to go higher so it's very often a disconnect between main street and wall street but over the past twenty years there's been a new trend and that is that interest rates have been trending towards zero and we're entering a period of negative reserve banking on the central bank level central banks have no assets whatsoever they have no capital whatsoever they only have liabilities

tied to other central banks which in turn have liability is tied to other central banks were in a negative reserve market so these stock prices now trading at seventeen thousand eight hundred thousand on the dow don't reflect any economic reality at all any technical reality at all or any real historical market reality at all a perfect example is a company called herbalife which is a pyramid scheme legalised pyramid scheme where people sell potions and things and they get a cut of the action and they recruit more people to do the same and it's a serious pyramid scheme like mary kay cosmetics accent or a and i've got to hedge fund managers who are borrowing money from the fed as part of a ponzi scheme who are doing battle to take control of the pyramid scheme and i think that's a perfect example of what this market's all about it's fraud within fraud within fraud and ultimately it has to as night follows day collapse and that collapse will

be much worse than the two thousand and eight collapse but until then we have to kind of make believe. leave that this is somehow representative of a functioning economy well as you mentioned at the top of the show is money what is down money if you're a wall street banker what do you call down money who's the dumb money who's the smart money well then the dumb money comes in at the top and this is a contrarian indicator when the retail investor the uninformed low information investor so it's the retail investor it's like the mom and pop the average person and the pension fund well you know a great example another way that dumb money versus smart money operates in this economy you know a few months ago i said that the property bubble in the in london is going to crack and it's going to crash and for anybody thinking about buying property in london they would buy the property but at the same time sure shares in

a company called foxtons which is a real estate property seller here in the u.k. and sure enough foxtons the price was four hundred pay it's below three hundred pay it's really moving down quite aggressively as a real estate bubble money continues to inflate which shell tells you that the smart money. the people who really understand the dynamics are bailing out of foxtons and that stock is down sharply. what are these people stumbling in and saying i'm going to get on the property ladder no matter what they're typically topping the top ticking this market and coming at the very top and they will be from holding the bag completely on hedged meanwhile the people that sold the property are our heads and they have zero risk so they're just passing the rest parcel on to the dumb money the dumb money is the guy at the end of the pyramid scheme or at the end of the chain letter at the end of the game who's left holding the bag the guy at the poker table who is the chump these are the people buying

stocks buying property in london they're the dumb money foxtons owner the guy who stabbed in the one nine hundred eighty s. he's completely sold out he sold out his entire share so he's smart he's smart money now you know the s. and p. five hundred hitting at the twenty sixth new all time high so far this year the i.m.f. just gave the blessing to the u.s. fed to keep interest rates at zero or close to zero well into two thousand and fifteen because it looks like the economy is doing badly there now here is a very mainstream publication in the united kingdom the spectator and the headline is the next crash would we could be on the verge of another financial crisis says liam how again we're actually going to have him on the show on monday but you know here we are on the verge of another crash as the article points out systemic global risk today may be greater than before the lehman crisis the b. i s.

warns as debts have risen across the developed world the average combined public and private debt ratio is two hundred seventy five percent of g.d.p. compared with two hundred fifty percent and twenty seven and no less than two fifths of new sendek aided loans are now sold. dodgy sub prime borrowers to be i asked ads above the pre lehman high so not only is it dull money and dumb policy caused by q.e. and zirp an urban zero percent interest rates negative interest rates this is the moral hazard that causes the entire economy to be dumb that we are so dumb that within five six years we're back at a worse condition than we were prior to the last financial crisis well imagine an obese man climbing ice wall and this obese man is climbing up this ice

wall and he's using his pee tons of his ropes and his cranes as derek and he's climbing up that wall and after a few days of climbing the ice wall the fact that he's obese and the fact that gravity is beginning to play on his obesity kicks in and that obese man tumbles in to the valley and suffers catastrophic damage to to his body to his bones that was the two thousand and eight crash it was an obese economy obese on debt that was allowed to climb the ice wall of risk in the stock market using tricks of wall street accounting tricks accounting fraud manipulation forex manipulation library manipulation energy market manipulation gold market manipulation all this was meant to get that obese and in debt in gore's fat man the ice wall well a crash in two thousand and eight and the prescription going forward was not to get the obese man on a diet and to wean debt off no the obese man of debt was allowed to gain another

three hundred pounds and wall street came out with new algorithmic trading new mathematical formulation new ways to avoid risk new ways to put risk on the balance sheet of the public domain and they hoisted to fat man up he's now higher than he was before he crashed last time the obese have a year he's fatter and now when he crashes as is the going to be the case very short. it'll fall down even further it will hit the bottom of the goalie once again and is his skull will crack and every bone in his body will crack it will be obese blubber building into the belly of our of our of our markets in the form of toxic risk that everyone will have to absorb and that's the problem with this crash is that nobody reform the system they simply made it easier to take on more debt and take on more risk now speaking of this the market this obese market the price earnings ratio is now on the s. and p. five hundred is that twenty five point six according to robert shiller the average

sixteen point five across the history of markets so it's way overvalued and on top of that because there's just the very very dumbest of money involved in the markets now trading volumes meanwhile are wafer thin with just one point eight billion shares trading daily within the s. and p. five hundred over recent months that's a six year low so the normal participants in a market the normal investors know that it's not there it's not somewhere they want to be leaving just the dumb money trading in these markets right that's another way to look at the dumb money versus smart money the volume on the exchange amount of stocks bought and sold every day is drying up like a like the morning dew on a scorching hot day who's left to buy and sell these stocks the dumb money that people stumbling at the very top the price earnings ratio that you mentioned in other words for every dollar a company earns the stock price trades at

a multiple of that earnings is trading at historic highs the amount of debt in the system as i mentioned is trading at all time highs nothing even comes close to the official debt in britain for example there are seventy seven percent debt to g.d.p. if you calculate all of the corporate bank debt private debt mortgage debt except you. added to kingdom economy is trading at one thousand percent debt to g.d.p. america has if your calculator all the debt including unfunded liabilities i got over two hundred trillion dollars in debt the economy has a g.d.p. of sixteen to seventeen trillion the globe has sixty trillion dollars in g.d.p. one back alone do it your bank in germany has derivatives on their books worth the equivalent amount of sixty trillion dollars and they've they're now being downgraded and they're being questioned whether or not those derivatives are sustainable they are the obese is beast men climbing up the ice wall of risk nobody

is fatter with unsecured debt then do it your bank and of course now that the u.s. has launched a financial attack and b m p because b.m.p. is a bank that america banking system would like to grab those assets so they gave a nine billion dollar fine based on extremely thin claims about doing business with iran now america's going after deutsche bank for the same reason because of course they don't want germany and russia to come together and fight off the america britain. ally that they have going on over there in ukraine so of russia and germany aligned of course that would be a game ender for the america u.k. ukraine fandango so now america is saying ok deutsche bank we're going to put you out of business we're going to cut the dollars off of your derivatives we're going to try to take deutsche bank down which of course they could take deutsche bank down so he goes on to say despite the high p. e.

ratio and despite the low trading volumes investors can't quite stop themselves from investing because they believe that the fed will step in and they believe that it will have to happen and right now professor michael dempster he quote says i would be extremely wary of stock markets right now the last crisis was caused by keep money and it's happening again via q e which is very very worrying q. he started as a way of priming the pump but no one knows how to turn it off without causing financial havoc that's important to remember nobody knows how to turn it off so these dumb policymakers turned on the switch of q e and they don't know how to they don't know where they off button is they don't know how to do that right stacey this is very interesting out of though the guest is for later in the show but i'm going to cancel the deficit i want to talk to you in a second half instead this is much too interesting the can you stay for the second half i'm going to stay for the second half ok that's fantastic well state for the second to be talking with stacy some more on this don't go away.

what. you don't want to stay is sad people essentially leaving in this world when they believe that you know that me to. talk to that they simply don't realize when propaganda is being pointed out we need to go beyond that and actually gauge what the ideas in the information that is presented as well and confront that information and i think that's something that as you mentioned before not everything is black and white not everything isn't taken istic and the more that we can be i guess. open minded calm a source of information regardless of the source i think we're all going to be the . government system is to help poor people who are women but you can go to change

their life and nobody's trying to make money out of them those who want to make money out of them. turn the whole thing into couldn't do that and we're all forced to. dramas that can't be ignored. stories others refused to notice. faces change the world lights never. old picture posts long long distance from around the globe.

up to. fifty. welcome back to the kaiser report i'm max keiser as promised stacy herbert again for part two conversation a sense letting stacy we must continue we were talking about an obese man climbing a nice wall and you were bringing up quantitative easing in the fact that they can't turn off the can't figure out of turn it off oh speak on it well we were talking about dumb money and dumb politicians and dumb policymakers and dumb central planners so part of the reason why we have so much dumb money and dumb economics and dumb financial system are you know just dumb policies all around in the empire so we're going to look at the us where we also see this dumb policy making headline why do other rich nations spend so much less on health care the

united states will spend almost eighteen percent of the gross domestic product on health care six percentage points more than the netherlands the next highest spender so if they spent as much as the netherlands as a percentage the u.s. would be spending one trillion dollars less per year on health care and they look at the reasons why and one reason for the more expensive mix in the us is it produces more income for drug manufacturers specialists physicians and others who have considerable influence on policy second some patients prefer the more expensive mix just as some prefer to shop at whole foods rather than wal-mart third some workers mistakenly believe that employers pay for their health care and that more expensive means better care but as the health economists in the article point out that employers are not paying for it the worker is paying for it in a reduced income. so this is one of the interesting aspects of the american

economy that is not well understood the whole topic of health care and the true cost of health care is really paying for health care and for me i think one of the most. aspects of this debate is how this actually plays into the reality of inflation in america but if you listen to people like paul krugman of the new york times they claim that there is no inflation in america and therefore the federal reserve bank should keep those interest rates at zero percent but the fact is that if you look at something critical to the economy like health care the costs are almost on the verge of hyperinflation if you want to really look at the numbers and discount the fact that people are being thrown off the system or they want to challenge obamacare and destroy a bhaumik eric cetera if you calculate the real numbers and put it back of the system having health care that works that's really utilitarian the prices are almost of the hyper inflationary upward spiral but it's hidden by the fact that

people who end up falling off the health care rolls and in the street homeless and i countered any more and any statistics that are essentially abandoned if you do a calculation on the average health care over three hundred million people comes over the difference that just tickle reality the fact that while most people can actually afford health care and only a few people to very top are and they hide it very cleverly well it's also we're talking about dumb money so the money miss allocates capital this is a mis allocation of capital they're comparing the next most expensive place which is the netherlands think of the netherlands what they do with the equivalent to their g.d.p. all of the trillion dollars that the u.s. decides to spend on often unnecessary m.r.i. scans or or you know antibiotics what they do is they have a much better a vaster infrastructure they have a high tech high speed rail ways they have pharmaceutical companies seeking to. send their corporation corporate headquarters there rather than the u.s. where they have to charge higher taxes so the netherlands can afford to reduce

their taxes because they're not wasting it on misallocated capital like that it's a complete misallocation of capital and it leads to short changing things like and for. structure i was just reading in chicago for example that because there's been no upgrade of the infrastructure and because climate change is occurring in the waters are rising in the storms are becoming greater the cities facing us with the huge infrastructure collapse the bills that are being deferred to you know into perpetuity where they don't have any plan to pay those bills whatsoever detroit's going bankrupt pieces outside of detroit are going bankrupt whole municipalities are going bankrupt because of this incredible misallocation of capital trillion dollars could be saved if they had a health care system that was. thought out in an intelligent way that provided a basic service i mean think of it this way states in detroit they've actually cut people off from having water yes they've turned that back on they stopped cutting people off because of the public outrage around the world we're going to talk about

infrastructure and the next headline but i want to finish up on this health care because there isn't a second ingredient if you look at the this article that i just talked if you look at the comments all the americans are shrieking that they want to keep the system but they say the article points out that a second important reason for higher health care spending in the u.s. is higher prices for inputs such as drugs and the services of specialist physicians the prices of branded prescription drugs in the u.s. are on average about double those in other countries the fees a specialist physicians are typically two to three times high as in other countries the lower prices and fees a broader. trolls by governments who typically pay for about seventy five percent of all medicare medical care government in the us pays about fifty percent which would still confer considerable bargaining power but the government is kept from exerting it by legislation and a congress sensitive to interest group lobbying so. when this whole health care

debate obamacare is a fraud ok that's just a payout for the insurance companies nothing is done about cost controls but already before obamacare the us government paid fifty percent of all health care compared to seventy five percent in europe but it doesn't do anything with that government single monopsony power bargaining no it doesn't and if the population is constantly in fear of getting a health bill that will bankrupt them they're already in incredibly in debt due to the predatory nature of bankers on wall street and the foreign policy of the government is joint tag and eyes dozens of countries around the world to the point where the threat of being hit by an attack from outside forces is a daily and real threat due to the american antagonists ation of countries and groups around the world that's a population that's easy to control they don't want a healthy educated country that is in debt and individual sovereignty

because that country would vote out all these politicians so remember at the top of this article i pointed out that if the u.s. spent as much as a percentage of their g.d.p. on health care as the netherlands the next most expensive in the world they would save one trillion dollars and this is important to this next headline aging u.s. power grid blacks out more than any other developed nation according to federal data the us electric grid loses power two hundred eighty five percent more often than in one thousand nine hundred four when the data collection effort on blackouts began that's costing american businesses as. much as one hundred fifty billion dollars per year the department of energy reported with weather related disruptions costing the most per event now it cost businesses one hundred fifty billion dollars but if they had if america they always talk about the smart grid they want to get a smart read like in europe well the cost how much would that be between three

hundred thirty eight billion and four hundred seventy six billion but they can't come up with the money because the government can't do it they have to rely on private sector because of their ideology but here we have one trillion dollars over spent on health care and like i said this is a misallocation of capital they could instead have a smart grid better energy grid for two for half of that for half of the money wasted annually on health care yet they refused to do it for ideological reasons it's a misallocation of capital in america is becoming like one of these eighty year old women then essential pay in france you said when many too many faceless so you know there they are like america. would go to really good infrastructure and foreign policy much a lot of sun through. the rest of world like that woman said to many facelifts you know they're spending too much money on their own vanity this is america's vanity

is killing it because they're spending too much money on service saying the few plutocrats who have gamed the system and stolen trillions of dollars meanwhile everyone knows in the boonies infrastructure is collapsing wages are collapsing social unrest is rising and prison population is skyrocketing but i do care because i didn't know the first live one then was america own little america ok so according to the department of energy a smart grid would cost as much as four hundred seventy six billion dollars in total for the tire united states it would save forty nine. billion dollars per year to business if we had that but also in two thousand and nine the american recovery and reinvestment act invested four point five billion and trying to achieve this this smart grid and it was matched by private funding of eight billion so remember this is the two thousand and nine member this was the policy of helping us recover

the economy there were a bomb his recovery at and everybody shrieked this is like communism and socialism and blah blah blah they never shrieked when three or four or five or six or twenty trillion was given to the banks the banks misallocated all that capital into subprime auto loans since the subprime mortgage collapse and property bubbles all over the world and the s. and p. being an adult money high it's looting. the american economy suffering from wholesale looting from the plutocrats and you know i think this is the least understood aspect of the fallout from nine eleven since nine eleven the rich people of america said you know what we're not playing anymore we're taking all our money out we don't trust this country anymore and they started to wholesale confiscate wealth they've done everything they can to compress generations of wealth to create accumulation and brant to the few into the present and to put that into their

offshore bank accounts and they're essentially saying we don't we don't care about america anymore this is the least understood about nine eleven the american oligarchs have turned their back on the country and they said we're not playing anymore it's too risky we're taking all of our money out and then we are fourteen years later and the infrastructure shows exactly what happens when there richest of your rich takes all confiscates trillions in infrastructure just goes to ours first and now the infrastructure and the same people were responsible for both so finally i want to point out here that you know the other down the ideological reasons for all this cost of the energy outages is we used to have two or three major weather events per year that knocked out power. from the fifty's the eighty's said massud i mean director of the technological leadership institute of the university of minnesota between two thousand and eight and two thousand and twelve major outages caused by weather increased to seventy to one hundred thirty outages per year weather used to account for about seventeen to twenty one percent of all root causes now in the last five years as accounting for sixty eight to seventy three

percent of all major outages i.e. more and more extreme weather events in the past five years are causing these outages causing costs causing real costs one hundred fifty billion dollars a year and business costs but again no amount of evidence no amount of facts no amount of data can change the ideological dumb because they don't want to spend the few extra bucks to stop the ravages of manmade global climate change they don't want to spend the extra dollars they'd rather just give the money to mainstream media in america and b c c.b.s. c.n.n. but they are spending the dollars that's what they're saying they're spending one hundred and fifty billion dollars per year they are just on weather energy outages not that yeah but not the people who are benefiting from the fact that they are compassed getting a lot of wealth that sounds like a lot of money but even in the context of them stealing trillions it's just the cost of doing business and the result is pretty obvious i've got to go thanks so much. that's it for this edition of the kaiser report with me max kaiser

stacy herbert if you'd like to get in touch tweet us a kaiser report. join us this month impossible as we hold the key to national team despite recent glory ultimately one holds how much we've been so mysteriously of a cult classic underscoring that we in the clearly. those first days. technology that you are g.'s we've done the future. you shall know where you. at least.

do. you. love her. mum. it.

was. how it. was. israel approved a new twenty four hour ceasefire in gaza last thing until midnight sunday but some us says it will not abide by the truce. abstain body quoting military i was threatened with my life but i was deported from the country and banned for three years in a few minutes i'll be telling you the full story about my three days in detention in ukraine. british journalist. and phillips describes what happened after he went missing in eastern ukraine. the number of civilians killed in a military crackdown on the eastern provinces of ukraine continues to rise here forces a shell of the city of gods killing at least nineteen people.