not list this futures contract and you've got a huge schism in the banking community now those who want to cling to the old ways the fees the larceny the drug running and those who are ready to embrace the future of frictionless transactions very little fees and it's attaining as. you know non subtle myth dates like our friend patrick byrne at overstock dot com who's leading the pack is going to put the next anyway i'm getting to the point as you know i saying what is the point at which point get to the point price interview drooling like the price the price is give me the price action and i'm not sure about the facts the figures the economics the architecture the prices govern mechanism this could be the price you look at price junky you know they're like give me the price i want a price ok so what about the futures contract one of the c.m.e. guys i forget his name right now but he came out and said actually between is not a crypto currency it is a new assets class so what will a futures contract what is

a futures contract what will it do to the price and to the assets class called bitcoin this new assets class will it some people have been tweeting me asking me for your opinion about what will happen in terms of life we know that the futures market for gold and silver we know that it's caused. you know there are naked shorts there you mention patrick byrne overstock dot com has a new to zero platform where basically you won't be able to do net naked shorts so what do you think about a futures contract in terms of what will they be able to do naked shorting now that it's not they don't have to deliver any bitcoin it's just they have to deliver more paper so can it cause price action like a pressuring down can it do that ok you make a point there about it being cash settled in dollars and not in decline. so like the silver and gold market and their futures contracts that's used to keep the price cheap keep the price low by using naked shorts in the paper market. so is

that a risk yes it is a what will be the mitigating factor to swart the evil banks or is in their naked shorts will be overwhelming demand yes because as the banking system we see this is the trojan horse as big becomes more accepted banks are collapsing their ability to get themselves bailed out by the fed is winning because there's only so many dollars the fed can print before they put the entire dollar currency matrix at risk and so they're out of there out of runway the banks are sitting on balance sheets that are insolvent every single major bank in the world is technically insolvent they cannot pay the debts they will never pay their debts and if the fed stops giving them free money they will all declare insolvency immediately therefore the demand for bitcoin no matter how many fricken make of shorts they stick out there is going to kill the naked shorts and that's why it's important for everyone like i'm talking to you indian people in india forget gold gold it's not helping you get

open a big call and wallet star point because they were tickled by bitcoin and this will help us defeat the banks stores the banking terrorists the evil doers like jamie diamond lloyd blankfein and the rest actually chart the latest out about the average consumption of gold per capita and germans are the biggest buyers of gold of course and people of india the germans are biggest baht per capita yes but they like to buy big cars a goal is to get their safe and go down and put their leader frozen and drink a few beers at the october fest and talk about what their gold bullion but the indian people do not like this they're buying like a twenty dollars at the market to prove that they're worthy to be married or whatever a trade a couple goats but they need to get rid of that whole gold based economy and move over to crypto you know they're drop a billion phones on to the continent of india so they can get those wallets going like africa africa zooming at africa is going to be a crypto powerhouse. africa's going to be the twenty first century winner in the

crypto world because they're already in the mobile phone they're already exchanging and dealing on crypto currencies are already light years ahead of america europe india africa baby that's why i'm thinking about moving to africa because i want to be part of the revolution in africa ok but let's move to the united kingdom this is a nation of much debt and one obsession only what does it what does britain do housing bubbles everybody there is no matter what you try to do no business exists except for the property ladder that's the only story nothing else no other financial story no other business can you set up there no conversation can you have that it doesn't lead to the property market or british person to say you know your family was just kidnapped they've been set on fire your yacht has been burnt to a crisp and you know you've just been discovered to have herpes and then be like well how does this affect my property. my house go up in value that's all i think

about yes and if you ever have lived in los angeles like you and i have separately you know everybody there from your waiter to your doctor to everybody has a pitch they're selling they're selling some script they have some script they're working on some so one in every town is a one industry town the entire year living there separately by choice we have net get that way separated and we're living in los angeles separated you know we have met yet you were living in different time periods online was different time periods like a different era i was living there in the one nine hundred century you were living there and twentieth so let's turn to this headline here about the united kingdom because you know over the past week they did raise interest rates two point five percent from point two five percent interest rate rise to cause some pain says bank deputy the rise and you can't interest rates will cause some pain for homeowners but should be kept in context of bank of england deputy governor said ben broadbent told the b.b.c. that the rise announced. last thursday was moderate and that interest payments and

debt were still at record lows this is the. more interesting stuff is what comes in the context of the content of these stories because first of all they highlight that it's the first rate hike in ten years which is remarkable right it also says that only four million households. in the united kingdom face higher mortgage interest rates because it's only actually thirty percent of households have a mortgage on their property most people have that they own their property outright in the united kingdom after decades of living in it well the e.c.b. is not going to help. bail out these banks because they did albrecht's a thing so the e.c.b. is going to thumb their nose at mark carney bank of england and the u.k. and say you deal with the inflation that you now inherited because you're so frickin stupid to vote out of the biggest trade bloc in the world and try to go it

alone even though that sixteen percent of your g.d.p. depends on trade with you versus like seven percent you versus the u.k. they went to a gun fight now with a knife with a wet noodle i mean they got more went noodles than harvey weinstein in a car wash and then i kind of get this interest rate policy sorted they'll never get the interest rate policies or because they kept a low they gauge of financial repression to keep barclays it just b.c. lloyds r.b.s. for insolvent banks for insolvent banks keep them from declaring insolvency because we're aristocrats and we don't cue to the law we don't need to participate in society because margaret thatcher so there is no society so we're for big banks in the u.k. and we don't have to obey the law and even though we're sitting on hundreds of billions of pounds of able to we just got the money from mark carney in the bank of england who would like the free money and now they went breaks it and the like. and

now they're going to have to declare insolvency they're going to need i.m.f. money within five years in the u.k. i predict i predict within five years they're going to bail out because they're so stupid they've got a little a little georgie guy i am cured you. make him the chairman of the bank of england and you have the same results as having some dirtbag like mark carney. ok so they were remarkable things i'm going to talk to you about this was the first interest rate rise in ten years so ten years the qana me is still just struggling ten years they need the free money on top of this article from the b.b.c. points out savers will see a modest lift in their returns although barclays h.s.b.c. lloyds and lloyds are yet to announce they will pass the full rise i was still greece surfaced yeah there's a jimmy savile a bank ok ok ok good you can so i will put

a feeling i'm sorry but that's just the truth so let's move on to the next headline because this is the headline so there they haven't announced whether or not they'll pass on the full rights to their customers we know of course they won't pass on the full rise to their customers because they never pass on the cuts to their customers on the other side in terms of their credit cards the credit card interest rates are still up at fifteen to twenty five percent so that let's look back however i want to turn to the fact of one of our frequent guest here on kaiser report steve keen and he's a heterodox economist not actual structural yes he's not in the mainstream he's he's told you here on the kaiser report that what matters most to the stability of the financial system is the rate of increase of debt in the household sector yes so this is an article from the guardian just a few days before interest rate cut rise surge in u.k. consumer borrowing fuel's likely interest rate rise the pace of annual consumer

credit growth was nine point nine percent last month according to figures from the central bank as borrowing in credit cards overdrafts and unsecured loans jumped this is part of the reason why they increased interest rates by twenty five basis points but remarkably this was down from the year before when the annual growth rate of unsecured credit was twelve percent yes stagflation and it's tonight. but i will admit they are all well we got to go to the break don't go away stay right there. they call me a useful idiot i mean you called me a useful idiot

a useful idiot useful idiots go expressing my opinions there are thousands of us doing it his record is a simple strategy we attack person instead of talking about what's next why stop me from getting this close to the white house i'm with a group code pink why not ban the color pink one hour stretch dildo right i should be sent to the town because i'm going to try to break me on the we'll put up with a long time of this sort of nonsense you don't scare me and i'll continue to voice my opinion i'll continue to speak out in good company i'm in good company you're going to want to do this because we're a free thinker. corning to the department of justice r t the channel you're watching now is an agent of before and even hostile power all the while the d.o.j. refuses to explain why this is the case critics warn r.t. is a test case for

a wider campaign of media suppression. welcome back to the kaiser report imax keyser time now to return to our guest dave column he's a professor at cornell university who writes a yearly your review of pick prosperity in zero hedge we'll get to that a moment they welcome back jamie thanks for having me back for a second segment today leave me at the curb if caught well dave we were chatting you have an interesting resume if combined you're interested in science organic chemistry or hard science you're also well known for your observations in the economics failed something of a soft science like psychology or sociology so my first question has to do when these two worlds collide for example going back to the long term capital management

crisis you had a bunch of quantz you know mathematicians of smart guys who took a very hard science approach to money management that they had figured out risk and they were absolutely going to beat the risk you know and they went to deliver these outsized returns and then of course they blew up spectacularly because they didn't understand the psychology of markets is that a fair characterization of what your thoughts on the. well you know in the long term capital management guys fall into the category of loosely i actually just wrote a chunk of this good hard slog word that basically says any time a certain thing becomes popular no longer is useful it's more specific than that but i use it that was these guys i think got a good idea and then they leverage it up so much they became the market at some level and same thing happened with united remember the old janice tech funds where they were owning you know thirty percent of. so they could liquidate their their

positions if they wanted to and so actually i think this year the topic is your is to talk about how indexing is now become an example of good hearts lollie says the argument i'm going to make this year is that it was a great idea that now it's too bob you want to become a bad idea potential or eight now when i was working on wall street in the eighty's we had something called portfolio insurance or it's meant that people could buy stocks with reckless abandon and have very little downside because the portfolios were insured and then you had the crash of one nine hundred eighty seven when that whole model broke down and hear about that for a while the current market is trading you know above twenty three thousand on the dow there is a belief out there that risk management is very robust and that we can't won't see any significant downside anytime soon what are your thoughts there. yeah it's a crock. so great stories coming out of guys like jesse feld and getting steve

bragman who i didn't know until this year so you look at some like the triple q. or the russell two thousand and they have reported price earnings ratios of twenty twenty five and you know well ok for growth companies that's not a bad price. what bradman points out what others have pointed out is that the way they get to an average of twenty three is they take any stock above forty and they round it down to forty any any stock with an earnings. that are negative they rounded to forty and then bragman does this great mattresses if you take the whole market cap it all the earnings of the triple q. you get at eighty seven which means which means that you're being lied to so that's a pretty bad valuation if you use various tobin's q and you know market to g.d.p. the price of g.d.p. is a point that were approximately two fold over ballyhooed in my opinion and if we regressed

to the mean that will cause damage that will destroy pensions and all the strong retirements if we were rushed through the mean which my understanding of mass says you've got to spend half your time below the mean it'll be it'll be a come to jesus moment firm most investors refresh my memory a cripple kill again as that's the of the tech in next hundred hundred big tech stocks and the p.s. reported by the parent company whose name escapes me right now but but so they basically commit what looks like from a physical science perspective was fraud they're just making it up as they go once again dave we have a problem with the federal reserve bank that is allowing corporations so borrow at virtually no money whatsoever and make this is acquisitions or buy back their own stock and boost earnings artificially a practice i used to be illegal for obvious reasons that's now been illegal so. and the mergers and acquisitions are a bit out of control so

a company like amazon can buy a whole thing and it's a creative they cost as zero for funds a zero it goes i'm a delay to the bottom line they pay the market cap of the company goes up more than the acquisition price so you've got this inversion of the capitalist tenants where the risk seems to be borne by entirely by one segment of society and then you've got folks like jeff bezos is it has no exposure to risk whatsoever is printing money essentially at this point and becoming an out of control old gaap list your thoughts. well you know for those like trivia it turns out the share buybacks were enabled dramatically back by a decision made in eighty four that excluded buybacks from a rule and said you're not allowed to manipulate share price but you can buy back shares and so the so now you know executives who snare and the year bonuses by buying back shares what the average investor seems to not understand is that while

you are buying back shares you're usually running the balance sheet and be able see some low p. e. which is a stupidly simple number and it's a blunt ended tool that i no longer use actually in what they don't notice is that there's you know thirty forty billion dollars of debt lurking on the balance sheet and so it's kind of a leveraged buyout by the creditors and some point the creditors of the whole company and they're in the it's a basically a financial engineering to make everything look good to keep your job as a c.e.o. and so. this will come to an end right earnings are actually going down when you strip out the effects of share repurchases so those p. e. ratios are wildly understated so now dave you do annual wrap up for the markets and do a bit of an al look for the for the next year i think last year you were pretty positive on gold a negative on stocks if i'm correct if i have that correct. that was not

necessarily a great timing on that what's that what's your current feeling. my current feeling is that people who are pessimistic near the end of a market cycle look like idiots and the closer you get to the end the harder it is on those who are passing us. i absolutely passed this to and in zero nine was warranted if if if if you look at the valuations in zero nine we regress to but not through the mean and that's thanks to an estimated twenty to thirty trillion dollars a backstop by central banks that i've asked many many smart people did anyone predict that level of intervention a lot of people predicted the crisis no one saw that level of intervention coming and so right now i think we bears will be cat called to the point and sanity until we're right now and then ironically once we're right it will be so

much like on the street that. they be able to gloat because because it will be an unseemly mess that's an interesting number there they have you saying that the fed backstop twenty to thirty trillion meaning that the initial tarp bailout money of seven out or billion that we were told kind of expand it it went between twenty and thirty trillion to bail out the bankers depending on how you account for the reason that's an interesting number is that the social tax network or the tax justice network in the u.k. published a study recently that suggested there's between twenty and thirty trillion dollars held offshore not being taxed. and for this reason you have all and it's all coming out the scandals of the paradise papers the panama papers so in other words how can we really even begin to offer numbers like g.d.p.

inflation growth employment when two times america's g.d.p. is held offshore invisible untaxed controlled by these banks and there's a whole parallel universe out there of money that that no one's really paying any attention to except those that are benefiting wildly from having untaxed wealth appreciate in the spectacular games again on tax day. well you know if you look at america if you call it america's g.d.p. the question i would ask is if it is a an american don a sly old company but then all the manufacturing and all the employment all the production is off show or does it really matter that it's an american based company i would argue that whatever country is doing providing the goods and services and making the products that's the country that's benefiting from it so i'm a little reluctant to consider those multinationals as american right i'm fairpoint

companies can have their taxes applied in one country they can have their labor outsourced to another country they can have their marketing in a third country and we know about all this kind of machinations that go on in corporations to absolutely game the global markets in a way that is only available to transnationals multinationals and not available to the individual but i'm talking about hidden thirty potentially thirty trillion dollars cash of wealth that is not being taxed that is being managed by the likes of h.s.b.c. barclays goldman sachs j.p. morgan on behalf of a approximately two hundred thousand people that are making a mockery of the global economy and essentially stoking an insurrection stoking violence by laughing in the face of these groups around the world that they've stolen from dave. well you know i agree. and i think that again the central bank interventions cause this disparity if you look at

compensation for the high tech it is compared to the the average schmuck in the factory that those numbers who soared and it's some point you end up in a lot of meat cake moment i think and that's part of the underlying anger on college campuses as part of n.t. feds part of it is part of it's part of the all the mishaps that we're seeing who knows are being blamed some of the shooting out and i hear that such so what we're seeing is this is a system that is being shaken dangerously by an increasing sense on the part of the proletariat. that that bit is that fair now now there's always been people down the chain that there were paid a lot but i think the sense of fairness is does move around and i think right now there's a real sense of unfairness and it doesn't matter if it's true the perception of

unfairness what causes it's going forward there which is why trans president right everyone said screw it. i'm going against the system or it was a bipartisan throw the bums out moment for electing trump right then talk about tom talk about the fed looks like he'll be in a position to appoint up to five f.l. i'm say such a banking member soon how do you see that playing out we've got about twenty seconds he'll blow out in what way will kill kill put a bunch of money predators in the fat out ok so it's dow jones four thousand a list all right dave thanks so much for being on the kaiser report thank you all. all right well that's going to do it for this edition of the cause report with me max kaiser states air would like to thank our guest dave hall is a professor at cornell he's got great videos on you tube check them out if you want to catch us on you tube ourselves us guys report and so next time by oh.

you don't consume you then talking to the sheriff there on the stand on the person in that equal buddhism's is my son and what he calls his stance make the connection don't want to smoke don't leave then suddenly i'm doing. this and this is how the acidophilus. this is boom bust broadcast around the world from washington d.c. i'm bart chilton filling in for lindsay friends coming up we're going to talk climate change and the paris party that u.s.

president donald trump has not been invited to attend this one with his eiffel tower dinner pel president and french boy wonder emanuel mccrone plus over one hundred other world leaders that it's been ten days since saudi government officials and business leaders were thrown into jail related to corruption charges what are the current ramifications for geopolitics and oil will begin doing plus president donald trump is back from his whirlwind asia trip what did he actually accomplish we'll find out but before we get to those stories let's go to boom bust bianca's schieffer some stories than today's financial and business headlines bianca a notable probe that leader in the u.k. is under fire for telling investors to take their money out of britain and pay john redwood penned a column in the financial times titled time to look.