welcome to the kaiser report on max kaiser let me introduce you to the portrait of uncle sam a desperately handsome man back in one nine hundred seventy one an old scary haggar if you care to look in the right place you see back in one nine hundred seventy one when uncle sam was that handsome young man one wage earner could support an entire family in the u.s. economy incomes were growing for all that america was an export powerhouse were dreams could indeed come true it was then that nixon decided to close the gold

window and turn the monetary system into a painting on a dollar bill and in exchange for this deal with a fee out devil the u.s. economy would never age we were told we could lead lives to balance currency without cost. i've got news for you the portrait of uncle sam has been hidden in the basement of fort knox behind the barbarous relic old gold and that portrait of uncle sam my dear people shows a tired haggard and ugly old dude from monetary to boucherie fiscal murder empires of dead and banking immorality i want to fantastic story stacey has a terrifying story and in fact our headlines are the truth of this horrid looking old man and these portrait of opal sound the first is a tweet from the wall street journal and it says more companies in the u.s.

are closing than opening that tweet also includes this chart which shows the blue line is the entry rate and the red line is the exit rate and it goes back from one hundred seventy eight to present so you see that blue line of the entry rate is you know a new company formation and there's less and less and less than one hundred seventy eight yeah i love this idea of compare it to portrait of dorian gray obviously a famous story of a guy who makes a deal the devil and his portrait ages but he remains young and nine hundred seventy one the u.s. actually made a deal with the devil by going off gold and embracing fear of currency but the statistics they charge the reality on the ground the economy is collapsing wages are down manufacture is down the chart you just showed shows horrid economic decay so that portrait of uncle sam in the basement or in the basement of knox behind the goal is looking a horrid ugly and balanced and so it's only a matter of time now as as i understand the story before these two things are reconcile in

a most unpleasant way yeah did it then doesn't the dollar stab itself to death and it will be found on the ground and the floor of the new york fed or their fort knox you know in the warehouse next to all the gold and gold will be there the chinese are going to show up looking for their money that the u.s. . owes them and they will get upset and or it could be germany you know germany has a tons and tons of gold it's held in the new york fed they could show up and be so angry that there's nothing there but a bunch of money that they start to stab uncle sam's portrait and lo and behold on the floor is the reversal agard old uncle sam having spent all that gold many years before in the world recognizes that this has been a horrible ugly travesty of course in the original story not your uncle sam version but in dorian gray what he did is he sold his soul to stay young looking and that no matter how much debauchery murder or anything he would do in morality it

wouldn't show up on his face but it would show up on his portrait and it was turning into an uglier and uglier thing well here in the u.s. they also did the same deal once they switched over to feel currency all fee at back by nothing then all the bankers of private equity firms the hedge fund everybody started committing fraud and thinking it's not going to show up in the portrait of the u.s. economy because g.d.p. would always rise of it always look fresh and healthy and wonderful but behind the scenes of course gold and all of the cities like detroit falling apart though if you peek into those cities that's like looking at the portrait of dorian gray it's like. exactly the dow jones is making new highs but at the expense of sacrificing detroit sacrificing michigan sacrificing baltimore sacrificing industrial cut areas of the united states sacrificing the in the entire state of california which is now having its worst drought in history thanks to the sour on sustainable

immoral economic model that is the us resulting in this bifurcation of reality and portraiture resulting in this reconciliation of some point where the old hag uncle sam reveals himself to looking like some monster for. well now i want to look at some of the deposit tree that has been going on in private equity and hedge funds the headline reads hedge funds and private equity fund rent seeking high fees crappy performance so this is for me smith naked capitalism and she looks back at there was actually a paper in the one nine hundred eighty s. a short paper published in the early one nine hundred eighty s. by robert joseph locke in shock and life are discussed with some puzzlement that the asset management industry delivered negative value meaning it was extractive they seemed perversely optimistic that investors would over time realize that fact and industry would shrink so they thought people would look at it

and say well why am i giving my money to a private equity fund or hedge fund because i just lose money but instead because of this portrait of uncle sam this confusion that people think uncle sam is getting away with all these crimes he looks great he looks gorgeous this is the way to make money but in fact people kept on piling in fact more money was piled in into private equity and hedge fund fraud and debauchery right in america and around the world really investors are synonymous with amnesia this is a story you could write every six months or every year that people are waking up to the fact that hedge funds under-perform the mass market have done so for decades but that story is written every single every single year that story is written meanwhile over there berkshire hathaway warren buffett's company he's been quietly compound in money a twenty percent for thirty years is the best performance ever in the history of the world by doing absolutely nothing but buying large stakes and predictably

predictable earning companies like coca-cola i think maybe only george soros beat beat beat them over a certain period of time but hedge funds are ninety nine point nine percent of the time underperforming those two guys and because they simply cannot match the. predict. below the that is the heart of these markets there's only really one way to beat the market you have to go like it like warren buffett does which is the take it takes control of the market he owns the market he has the market he's not really betting against the market warren buffet is the market so like i said their departure e and crime of the hedge funds and their low returns nothing adds up two thirds of hedge funds fail but no more and just came out with a report and they also look at it and they find that shockingly pension funds are piling into it if you look at this chart this is from no more and on the left are the percentage of assets held by pension funds in various assets at the bottom on both sides of equities and then the greatest bond light blue is property and the

dark live atop is private equity and hedge funds where you see is that the assets under management by pension funds they put ten percent in private equity and hedge funds but that represents forty percent of the fees they're paying but they're losing money on that i'm paying more and more in fees so they're still piling into that and what number concludes is that say in our view alternative assets as a group show consistently poor performance beta is high output is near zero if not negative correlation with standard asset classes is high return and diversification benefits are negligible pension funds and again it's where money goes to die it has been. twenty five thirty forty years since the modern pension fund industry came around it's always been a large pool of money run by somebody of low intelligence it's very easy to get a pension fund manager to buy a really bad investment they're not particularly smart people they get paid really poorly they just are sold toxic investments by sharpies on wall street and not only

do workers get ripped off by their wages being destroyed by inflation destroying the purchasing power but then their pensions are stolen by the same people who are engineering his own policies so that's why people in america are living such horrible standard of living in the average net worth of americans been cut in half in the last six years again but go on with this dorian gray. the theme is you know you don't collect your pension for thirty forty fifty years once you start it so this is the door dorian gray that the portrait is in the pension funds people don't know it yet but when they get their own will sound has not been so kind to them it's they they retire and find out oh my god this portrait of my future i had back then is haggard and old and deprived and decadent and decayed and an old ugly man on the ground well i mean a good example is social security social security pays out money at the same time it takes in money and those two things are supposed to balance balance themselves out in what's called a good ponzi scheme well that good ponzi scheme is set to run out of money entirely

in about eighteen months so the entire social security scheme in america is going to have to formally be declared bankrupt that's a liability that'll be kicked up to the federal government of hundred or so trillion dollars to add to the seventeen trillion dollars on top of the other unfunded liabilities of another hundred or so trillion dollars that's why america technically is bankrupt so going back to this report about hedge funds or private equity one study concluded that investing in hedge funds produced from one thousand nine hundred to two thousand and eight produced only the same returns as investing in treasuries meaning investing in stocks would clearly have been that handily so here they were wildly speculating deposits criminal fraud all sorts of crazy activity monitoring your pension fund and the haggard this is in is is hidden behind this sound looks great but in fact you should just invested in treasury if you would we had the same return oh yes from out of jurors tend to be corrupt they

collude with each other they manipulate markets they work hand in glove with corrupt bankers like goldman sachs or j.p. morgan they would buy the same stock while selling the same stock simultaneously wald putting on a hedge to totally insulate themselves against any risk whatsoever and charge enormous fees for doing. probably balance nothing they walk away with the eighty million dollar home of the hamptons for especially running a ponzi scheme and no it's great recently is that part of the scheme or pyramid scheme that is herbalife was the subject of two hedge funds trying to take it over there you have to essentially ponzi schemes financed by the federal government hedge funds trying to take control of a pyramid scheme herbalife so this is really the tail wagging the dog multiplied to an extreme level for so finally in this headline about this portrait of uncle sam what we have is s. and p. wealth gap a slowing u.s. economic growth economic disparities appear to be reaching extremes that quote need to be watched because they're damaging to growth said beth and both you know chief

u.s. economist at s. and p. so what they found is that because of the increase in wealth and income gap it's actually is causing slower growth it is harming the economy is causing not the young looking hot dorian gray but the old haggard uncle sam because it turns into boom bust boom bust because the poor need to increasingly rely on more and more debt and also less and less consumption one once everything goes wrong and they're cut off from the debt so again this dorian gray isn't really a gumi economy or is that the haggard old painting of this in the attic so that moment reconciliation is fast approaching in the story at the end of the story when the really the reveal of the american economy local sam as being an old hag is shown and that'll take manifest itself essentially and i believe in a sudden burst of inflation so food and energy something simple in price and america goes down the tubes as we all knew what prices are going to go back to yes and everybody will be toothless toothless old hags well all right well stay tuned

for the second half i'll be continuing my interview with nick lambert and david urban made safe. play it was terrible they claim very hard to take a plunge again here is a club that never had sex would that hurt their feelings let's play. lists lists lists lists

lists lists lists. of a. slip right from the scene play out search tree limbs and i think the term. leg length on our reporters with her mum against the leg. to be in the legless slug choose your language killing a killer though in a financial planner they still sometimes examine the tapes of a series of children's lives the concerns get to. choose the opinions that

invigorating good. excuse to stories that implicit truths be access to often. well. science technology innovation the list of elements from around russia. the future covered. welcome back to the kaiser report i'm max keyser time now to return to nick lambert

and david ervine from made safe and acronym for massive rave internal disk secure access for everyone gentlemen welcome back thanks much on our discussion about made safe this new phenomenon sweeping scotland so just to review recap a little bit for those who missed part one give us the little twenty second version of made safe what is it made safe as intimate as it was supposed to be intimate with intermediary companies no one else on your veto so if i'm going to speak to your inmates if i speak to your note and i was speaking to you know to keep a corporate speaking to you and there's no ability to steal information and sell it back to you if you're. to own to the meat safe network of the safe network. then it's the in front of or it can be deleted it can't be corrupted you do tobacco so the storage is on people's hard drives in this distributed network and to just sort

of to be a part of the network you get a token yeah actually you get to talk and you don't actually need it we're actually been able to do work at an algorithm where everybody in the world will be able to join this network for free and years of for free care is one of my early things was some pearson in africa is given the ability to contribute and consume information and knowledge and leaps out from behind a bush and his cure cancer the areas that we're talking that's the important thing information the ability to be sprayed for and prayed to means that we've got much wood innovation spread water but now you're cutting into the whole patent business so patents become intellectual property that is highly protected and the example of various plants actually in places like africa and are and being distilled by for. armistead goals and patented and then sold back to the very afternoon where they got it to begin with so in this kind of system that information goes into the network and goes around all the current patent laws becomes accessible for free and

because it enjoys all these levels of encryption they can't get at it the same way they can't get out bitcoin because encrypted they can't get at proton mail which is a new encrypted mail service so encryption israeli the twenty first century. rallying cry for freedom and scholars is a place people rally for freedom yeah you're all about the freedom they touch and really important to most of the board important thing but the safe network is is based on not too busy and it's based on the does a. hole in the shoes or things can be found in nature so yes very very high levels of encryption but the ability for a computer to connect to a network of computers be taken as the computer would be run and then given data through which often to make sure to sleep enough that the the network becomes almost like a y. you've. and it's owned by no one so if you're going to network and speak to no. we don't know you've been on to network we do know next on the network we do ignore

customers we don't know any information about our customers and that's really important and it's never been done before because all of these even brought on any any system out there just know that says i'll give you security put your name you know secure or i'll give you security at logon to the several i control your most secure or pick a date on this it's really encrypted you're not secure because i could delete it so in a safe network you decide to join we don't know you've done it the network knows you've done a perfect fool if they can it's a network you'd be a data want to interact with who you want to interact with no one can look at you and i guess it's scrubs on the very first whole pizza takes so you're you can actually go through completely compromise with those that doesn't the network just doesn't care that centripetal way through so this is the implementation of exactly what the internet should have been the freedom for everyone it's the ability for us

to communicate and put information on and consume information. from logic or pretty shin's and we i believe that gates is the age where we have news that's given to everyone. free of propaganda we're all controlled by his propaganda system and i would like to see something where you get a piece of news that says. three people were killed today injured was a little one of them was a moment just a little more as a soldier it doesn't matter i thought more or less tries to once again it's using distributed networking to disenfranchise all the gatekeepers of the middleman so that it creates sovereignty and freedom for everybody on the network and you guys are from scotland this is all happening in scotland of course i want to talk about royal bank of scotland for a second but before i do. we've got a lot of interest in that auction that when that happened there's the auction of the coin that there was some controversy about the auction can perhaps make you can

walk us through the auction and what was the concern and what would you say to folks now that are looking for some guidance on this so i think i think what we're doing was where as a significant previous episode we were actually over kind of p.c.l. in the ability for users to buy these tokens which would give them access to services in the network i was in a sale that was intended to take their t.v.'s. and went through it at six million dollars and five or so really can a wall up close and we were taking. participation in two currencies one was a master calling and the was calling and we anticipated getting i would see at least seventy five percent calling and the rest amassed according we feel that we wanted to support the mass according guys with what they were doing because we were using their. they are smart properties which is a way of them issuing our talk and before the networks launched so but the current

still never worked like that it went so fast that we ended up with a fifty fifty split and as always to anyone looking at the market cap master card is not to hugely liquid so what we've come away with is probably fifty percent of an ace liquid currency calling which is fantastic and we've got fifty percent of the less liquid. the master coin which we're kind of holding for the time being and see what happens there but with good reason to believe those guys are you know going going to do some but because of the next next few months so right so so master cohen is i guess people call this big going to point out. it's more of a oh well how would you describe it i would describe it as a way of integrating all those things into the book chain so you can just basically you know a lot of the things in the book that isn't similar to a colored coin concepts are probably a smart property a color coin so you take an individual coin and because big coin is being created

on the hop for another million you know ten million coins or so over the next hundred years yeah this is an idea idea to pull one aside and say it has a limited supply right now and you can do a stock offering you can do a deal offering you know you can trade as a contract offering yours of course a save point it's proof of it's proof of resource versus proof of work so how does that work dave basically the resources as proof over the tree of ability of data as what you're doing and we need so the network is the c.e.o. can you computer connect the network and it's like this on call when it was and and it grows is that it worked or was it starts off as a small computer and an infant and then it grows and rank it's given data and people ask for it and the network can tell the computer give the it and if it does give the date a lot of it you want to see fill in and that's really the the proof of the chief

ability of the it and takes into account the machine itself tame itself. by the c.p.u. capability in the. then interestingly lou the network is intelligent as it has no ability to decrypt it in. the network with all its power up to the to the house to be a human. that's automatically honed with a client so proof of resource photos is. a more natural way because you're rewarding people for doing something that's good no to walking people for doing something which is for me you know what tricity you know the barman you know interest it was wrong for calling because there was no i told him this network i would do you know into logan too for any purpose and i secured a private manner but couldn't care less and. it's a bit of a choice really how to use or can i prefer for mechanism. of these things like.

the ten minutes and sips someone not to do and against three i think i've always tried to think about not systems work and remove much numbers and number of sort of tangible find and security in particular in the corruption that's one of the issues with some of the sea curves ok so you mentioned a couple times ants and colonies and the type of thing and. we seems like as economics and finance goes forward there's more observation of the way things happen in nature in terms of the economics of like the economics of photosynthesis for example it's a perfect almost frictionless market isn't happening on the level of photosynthesis how do you mimic that had to capture that frictionless trading and these ant colonies are now are known to be extraordinarily efficient and xander so do you draw on. oh i don't i'm trying to segue into royal bank of scotland somehow in

every way if yeah and every natural system there are rats and the editors of life and this type of thing and royal bank of scotland h.s.b.c. barclays lloyds here in the u.k. you know i mean you know like your lower intestine has as has you know parasites but they're needed to some degree but when they take over the body you know you die so here you have like a just b. c. . parasite clearly a parasite the chairman is out in the newspaper. saying that enough of those banker bashing. you know we paid our finest and let's move on now when you read something like that. does that make you feel like well you know the banks are going to start behaving better now so maybe we should just give up what we're doing though from a natural system perspective in nature any excess and greed leads to the demise of the species so something with the. food supply and the buy

is stored food supply of money and should have to eat but we we kept a life of eighty on the shuttle system it was not shuttle and also on teacup it was then on to every other system we could imagine so what adam smith a one of the famous residents of scotland well he thought i think will be looking at this kind of banking system right now what would he be appalled what's a collapse that they think about money and safe going is a very. focused ordinance that to me money is oil that drives an engine and if you have someone that keeps taking the oil i want to know the reservoir the engine goes dry. so money finishers does a trans fair all product and service what i would wait which was adam smith's real goal was i can see where you might provoke the lever for what your previous before that wasn't and somebody in the middle is going to double profit on it so the idea of money and if i think if we consider money only just on oil from an engine it's

got to floyd's court and if people are taking all of them have to stop them and making money for all money is a ridiculous thing it was it was illegal it was. a bill i think they want to use or a centrist use usagi it was was legal up to the seventh so. the to make money money is a terrible thing you know i'm going to stop it there but one quick question one is a launch that one's all going to have another six weeks each so this year we're all going are dying so god is real because a report like you expecting about all right doesn't do it for this edition of the kaiser report with me my guys are staying over and i think our guest nick lambert and david ervine from eight say. let's not go.

in december two thousand and ten. more likely to be raped in college than in the real world. i don't think people did that to each other when they knew each other i thought rape was a stranger on the bus this. girl complaining about the son of an alumni gives millions of dollars to the school why listen to somebody who's going to lose money at the school of schools that make money based decisions are much more common than they would ever admit publicly. on your home or in a washington d.c. college face i think your own.

pleasure to have you with us here on t.v. today i'm sure. she would love. to believe. anything. to teach me. this

is why you should care only. ukraine's army pounds the center of the stronghold for the very first time at least seventy people have been killed in the city in the last three days. russia should. break ties with its partners that statement from president putin as he had . in the resort city. militarized police forces in the. fourth. over the fatal shooting of an unarmed black teen.