president trump threatens to cut aid to united nations members the votes against america america's vision to recognize jerusalem and israel's counsel. these ideas is it dangerous to say here ok thank you wouldn't our correspondent reports on the arm rest in ramallah as palestinians declare another day of rage against donald trump's jerusalem move. social media giant facebook is accused of abusing its market position in germany and of limitless collection of users data. and virginia putin says foreign intelligence services are ramping up their activities in russia trying to interfere in the country's internal affairs and. you can find out all the details of those stories on our website r.t.

dot com all about with the headlines about in about an hour in the meantime here on r.t. international the kaiser report examines the effect a bit corn is having on the gold markets and if you're watching in the u.k. or ireland has been bust. over there are nice guys or there's the guys report one year. max you know there's one thing that you have been saying and quoted them many times and all the sort of financial media relating to bitcoin is that this black hole concept that. queen is a black hole sucking in all these other investments. and it is quite ironic that gold is kind of the result of those sort of universal forces universe the

forces of the universe rather than universal forces black holes explosion exploding stars all that sort of stuff because you're black hole that is called bitcoin a black hole. black hole is like and then all the wrapped. i was on the kona drink in some drank well known black holes hey buddy what's going on is america repsol is a chart so. my you referred to my. chart from zero head and it's going gold just going back to you know a few months into this year so you know it's only twenty seventeen. queen takes off gold falls remember when the queen hit one mr jones of death this is called a crocodile if you get sucked into that you get. me this the rest of the script. oh

yes i'll give it to her because i'm. holding the script hostage so i'm taking over there is going to be no turning back at this toys. black hole so remember when queen first passed the price of gold and that had been something that we had been waiting for for eight and a half years everybody in the bitcoin community has been had been waiting for will it ever hit the price of gold will they be one for a one and sure enough it hit that unlike september september october probably early september maybe the summer everything goes by so fast it's kind of like we're in parallel dimensions in the big quaint space so it's now obviously like exploded well past that but we now have people in the bitcoin in the gold space talking about referring to the fact that goal are there one of the feeling this is

a headline from daily reckoning and by the way you know you and i first when we first met back in two thousand and three daily reckoning was one of the only sort of online sites available at that time one of the go to sites you know this is way before facebook and twitter and all that sort of stuff we went to the daily reckoning all the time they talked about gold they talked about silver and here's a headline from the daily reckoning how bitcoin killed gold. most seasoned traders concluded that the advent of bitcoin futures what unravelled the insane crypto rally we've witnessed over the past twelve months futures traders would eat the amateurs alive and slam the price lower once shorting bitcoin became an option they said but so far they've been dead wrong so you know they go into how big coin trading has still bothers obviously as soon as the futures launched it was up twenty six percent that day that was down that it was up so they were no less they

they weren't able to do what everybody in the financial media like c n.b.c. had said that. you know these these the smart money involved in futures would. eat you know all the bitcoin investors alive i said that would not happen you did say that would not have been even though i am well experienced in all things financial and i made a whole career on wall street training futures and options i knew that this would not be the case. anyway the black hole concept is one where this is good money according to therese law if you wanna look at economics it's pushing out the bad money you know somebody asked me this morning what does big coin backed by you know that question is all it always comes up what's it back by you know my simple answer is this backed by all the money that's coming into it you know it's sucking in all the dollars yen drachmas un euros it's all being ruined then it's off called into it it's not going to leave you know once it goes into big going encrypt

out the year swapping garbage money for good money so you're not going to go back to garbage money so it's backed by all that money is backed by now when at that time people are saying well you know gold is a seven trillion dollar market and it's a bad comparison to just compare the price because bitcoin at that time was only worth you know hundred billion dollars and gold is what seven trillion dollars will sense that was a statement was first made the whole crypto market now is work over half a trillion dollars it's on its way to be worth a trillion dollars it's going to be worth seven trillion dollars going to be worth more than seven trillion dollars big coin is thought to be worth a trillion dollars so all the free up money in the world all the fractional reserve banking over leveraged garbage we've been warning about in the two thousand and three we said yeah gold is a place to hide from the. apocalypse but then because it came around and starting in two thousand and eleven we said you know this is actually the way it's going to happen this is the financial black hole that's going to suck in all the

all the fia money and it's happening you know quite rapidly and so he's right to say that the gold is the first of the major commodity slouched currencies to be disrupted by bitcoin but after gold we'll see other major fianna currencies collapse implode well you remember alan greenspan who was a gold bug and then became the head of the central bank of america well he had said that. goal the u.k. was stupid to give up their gold because in extremis the gold is always used just like what happened to germany during world war two but this is something we're seeing that bitcoin is becoming that because the gold is kind of linked to the u.s. controlled financial system so look at what's going on with that case of turkey versus around and they were using gold because iran was on allowed to use dollars

but now i've seen more and more we've seen venezuela announced the petro partly if not mostly to circumvent sanctions. i saw an advisor to vladimir putin being quoted recently that he thought bitcoin could be a good way to circumvent sanctions as well so they originally design for bitcoin was also in order to circumvent the financial system where so much fraud and opaque happens behind an opaque wall of drea all sorts of derivatives and fraud and then they get bailed out by the central banks remember that there was actually mention the bank bailouts in the u.k. in the run on northern rock so here this gold guy from daily reckoning and that's how you and i met over gold talking about gold and daily reckoning he says big queen trading is totally bonkers and it doesn't look like it's going to come down anytime soon it is morphed from an underground deed to the biggest market menial

we've seed to the biggest market mean year we've seen in decades big news is pushing stock market stories below the fold despite the market's incredible bull performance this year equities are starting to take a backseat to cryptocurrency and then there's gold big to ceilings gold's thunder as the holiday season approaches doomsday preppers used to stock up on gold and canned goods now they've cleaned all the gold out of their bug out bags and replaced it with bitcoin. so then he goes i just mention that all these debates that is a store of value or payment system doesn't matter people are piling in they're getting rid of their gold and they're going long on big coin you know that's right i mean it's turned out to be a fantastic store of value and it's attracting trillions of dollars and the price will explode upwards two hundred thousand and beyond and then we'll start to level off there's a fantastic chart of somebody posted online about the gold versus the reich mark i guess was the german currency during hyperinflation wymore republic days and gold

one to trillions of dollars an ounce versus the right market. right mark around and the same thing is happening of bitcoin versus the u.s. dollar where you could see big coin trade a million dollars a coin you know it's not necessarily the price of bitcoin is moving so much as the the u.s. dollar is experiencing a hyper inflationary collapse like a why more republican having a why more republican moment for planet earth well hyperinflation is a kind of a political thing you know they always say it like inflation and deflation are monetary events hyperinflation is a political event people lose faith in that system so i know there are some who say like you do you see the force of the u.s. government or the chinese government or the abu dhabi government or you know any government going to come in and smash your head if you don't use their currency but if if the people have lost faith in their political and financial system there's nothing you can do you can't beat them over the head enough you cannot the gulag

archipelago show that you can't force people to believe in your your cult you know within a few years you know fifty sixty percent of the population will have a million dollars worth of crypto on on a private key on a you know a tres or a some other off line you know storage device and how you going to convince those people to comply with their stupid laws i don't say i'm going to be able to do was not just that. you couldn't you couldn't. it's not whether or not you can get them to comply with the law yeah we'll pay their taxes yeah they buy their obamacare yeah i'll do that but can you get them to believe in janet yellen in the next fed chairman in the e.c.b. can you ever get them to believe that that system is sound again can you get them to say ok that's going to be great doesn't matter you can arrest them you can put them in jail you can fine and you can do all that stuff whether or not they'll ever believe you whether they're now they'll be like hey happy with the system i'm going

to go out and shop and i'm gonna think about the future and it's all great now they're not going to do that so here we've established that for some time in my block all that's affected your cognitive abilities don't make the care of people laugh ok let me frank i can only so we said it's a story about you it's also the value of bitcoin is the actual network of ecosystem in the open public ledger it's also attracted just like early silicon valley which didn't attract the best smartest most innovative people but the thinkers the sort of people who think about putting there's not going to answer is no they're not going to go back they're not going back to janet yellen they're going to back the central banks they will they won't go back they had the confidence in the system is collapsing and there is no turning back this is the collapse of the nation state and the central bank and the fractional reserve money

system big coing is to banks what the printing press was to the catholic church it collapsed it in many ways this is the end of this era this is the new beginning this is about everyone having autonomy and sovereignty with their own money that can't be confiscated then never is deflationary wral uganda and like i said the value of the network is also the fact that the smartest minds in the world are attracted to it and they're all working on it and they're coming up solutions with . and so no matter how many how much fun you throw at it you can say all the things wrong with it as soon as you identify the things wrong with it or the flaws that's the thing of an open source network is people like oh the evening standard in the u.k. ran a front page story recently that said that the government needs to warn people that if they lose their crypto currency there are no bailouts for them exactly exactly we don't want bailouts. go to go hole in the ground throw yourself in blow your brains out and cover up the hole that's what we think of you eating standard george

osborne the british establishment lloyds r.b.s. h.s.b.c. and barclays you're all frickin terrorists and should die. ok we've got to go to break stay ten much more coming your way. here's what people have been saying about redacted in the senate it's full on awesome the only show i go out of my way to you know what it's really packed a punch. is the john oliver of party americans do the same. apparently better than booth. and see people you never heard of love back to the night. president of the world bank take. me seriously send us an e-mail. across europe municipalities are taking their water supply back from private companies to meet the simple song alone even some company elsewhere

they invite private companies to take over the utilities many by the telescope was allowed to miss you guys you got to pick him up because. this is. of more use than bill bill if bill brought up locals are ready to stand up for the basic human right of access to water it's about water but it's called school for much more than war it's about the hurt and the redistribution of. their debt downwards. welcome back to the cars report imax guys are time now to turn to jim rickards prolific author and he's also the chief global strategist at merrill. jim welcome

back thank you max all right mary glom what is. the company i started with some partners a year ago we specialize in predictive analytics and capital markets it's actually the continuation of project prophecy which i worked on at the cia pfizer privacy if you were down here in studio very close to the world former sort of the twin towers there was insider trading in advance of the nine eleven attack after the attack the cia said well it was going to be another spectacular attack would there be insider trading again could you identify it could you trace it to the source code if i swore to break down the door and stop the attack that was project prophecy i was one of the code managers on that and basically we developed to predict about a legit system inside the cia and it worked extremely well all that's happened now is taking that technology was some partners with some investors we're now doing private version of that to do predictive analytics the capital markets however we've go well beyond what we did at the cia as you know technology is advanced

science has advanced so we've really got third wave artificial intelligence and some other inputs to that to come up with a very robust system ok now remember poindexter was saying john poindexter will jump points that oh gosh yeah he came after nine eleven i think it was he came up with. mark it was a call well there was to be a total information awareness the right project but they wanted a they wanted a futures market basically a geo political futures market so you could bet on whether the time yasser arafat was going to be assassinated are what the whole thing was modeled on my hollywood stock exchange did you know that i don't like technology or not know is based on that technology i do know that this is sort of the call the wisdom of crowds if you get enough people making enough that it's. and that was the word marla better production than you know an analyst sitting in a cube about how now that this time when they launched it they there was a lot of pushback because they said hey you know there's a conflict there because terrorists can bet on the terror act and then they go out and commit the act and they cash it well that was one of the objections but

specifically one of the contracts was with yasser arafat be assassinated the pushback came from then senator hillary clinton who the new york senator at the time who course was a good friend of arafat so there were there was that was shut down but we were we were hearing that was actually darpa the defense. project research arm but we were doing inside the cia as we did we sort of dodge this ball is a process that really you know prediction markets such as the years a predictive analytics where you're looking at the data and you are using algorithms and you are sorting through the data to try to pick up on patterns and and this is all internal it's not out there people are not buying and selling protection contracts we're not running production market run appear to violence but the science is when we do on the there's a lot there's less there than we see out of the wisdom of crowds wisdom of crowds is really good if you want to guess the number of jelly beans in a jar the average of a thousand people would no matter how to go understand what actually be pretty good guess the weight of the car like an old english fare that stuff works good but the

more complex the problem the less the wisdom of crowds works and for example even in markets where you have a lot of bitterness patient so let's go back to february twenty seventh two thousand and seventeen earlier this year the market was giving a thirty percent chance of a fed rate rate hike in march the fed actually did hike rates and marcel it got two hundred percent the day before the meeting but there's an example where the market was way off and the cicadas mean markets are invaluable but there's a lot more to we use. basically we use their complexity theory behavioral psychology history and other branches of science to come up with our forecasts ok so you say this is now across your work i believe it was in death of the dollar or the chapter one the death of money chad. ok not the nine eleven you were observing as well as your colleagues in the intelligence community activity in the financial markets that telegraphed that something was coming we were not observing

it in real time it was there that information was there and i did run into people later who saw that the cia was not observing that at the time but after the fact you can look back it was very obvious the the it was done through a by a put option usually insider trading is done in the options market because there's a lot more leverage with the first place the i.c.c. looks by the way so that on two trading days before nine eleven buying puts american airlines two hundred eighty six times the average believe i'm so sick i order a big mac every day and then when there were two hundred eighty six big macs you know something's up i talked to her and i just think after the after the fact if you looked at the data and he said oh my gosh some some of this knowledge was circulating ahead of the of a not just me and not just the agency but there were academics i talked to john the one who was the special jumbo hearn's. new york stock exchange specialist for made markets and american you know he was the market maker in those two studies that like i said i've never seen more blatant insider trading when a space shuttle or a special challenger blew up more if i call the contractor for the booster rocket

puts in this case skyrocketed sure because the thing just blew up here you are observing the event as if something a blown up before it blew up in the post event you're looking back i seen that man and so now. markets are very sensitive to this data and how much of the predictive analytics that you are incorporating in this service is taken from market data well we start with market data and that's the many many example by the way you have to separate sort of predictive analytics on the one hand and like law enforcement looking for insight of traders and all that but this is sort of trading all the time in the head of you know i mean a announcements that's quite common you can always see that you can see it before the fact definitely see the. after the fact but we're seeing that we see market data but we're also using complexity theory which says that in any system the scale of the system scaling metrics are very important in the density function the interconnectedness that's a leading indicator of potential collapse or you know they are ok so what's the

ratio between market data and non market data roughly well it's hard to say it depends it depends on the particular no see we take all this so we use behavioral psychology that's just that's very well established here is to expire says you know people would rather take three you know three dollars as a sure thing instead of three dollars twenty cents expected value if there's a twenty percent chance of loss and your risk aversion anchoring always be a robust has been very well known you can incorporate that we use history a lot of the what wall street does these correlations are regressions there are a lot of limitations on that number one you'll never see the weird avail never see a recession you never see a so-called black swan you never see a catastrophic event you'll never see that the correlations you always predict more the same you get random outcomes which is not true things are pet dependent number one there were two the time series are often too short like one hundred five hundred or even use fifteen hundred year time series go back to the collapse of bronze a civilization the collapse of the roman empire you know we're about to for another civilizational collapse you don't predict that tomorrow morning but there's the kind of time series that are more meaningful my view so we use history we use bayes

rule which is a statistical method that involves just starting with a hypothesis using the best idea you can that we use an intelligence community all the time that was used to that movie imitation game where alan turing cracked in the code i was using these rules where we use all that but the thing is you have to take all that and combine it what we call fuzzy cognitive network just a neural network with nodes each node might represent a different one of the disciplines i mentioned one might be in a storage room that has some weight because something happen before one might be a basie and nobody gains weight or loses weight based on updating now you have to feed those notes to do that we've teamed with i.b.m. the idea lab and watson watson can read you know two hundred. and twitter feeds simultaneously i might look at ten but you know the two hundred million so with plain language ability in eight languages so now we really go way beyond this is really a three way of artificial intelligence as i described ok so i was always in these

situations you have a problem i guess you could call it of slippage. in for example are bits arbitrage opportunities open up in the market sure and then everyone jumps in on those arbitrage opportunities you know by the spread between t. bills and one market versus another market in the arbs come in and it shrinks down to zero in this type of work and i know having and created the hollywood stock exchange and invented the predicting prediction market industry thank you. have a problem and this happens in markets all the time where you are the intelligence that you think you are gleaning as far as a predictive intelligence starts to get discounted by the fact that you're looking at the intelligence level of the heisenberg effect if you actually start to see it start to disappear. phenomenon and it doesn't mitigate the risk of a black swan these black swans are there because they are black swans do you feel comfortable that your work to what degree is a let's say a leap forward in generating do you know yet if you have

a track record on the side what was the horse and what's the status of that where we do we do a trucker first of all are we predicted that we said the u.k. would vote to leave the european union that was a completely out of consensus view we predicted trump selection i was on television australia new york europe before the election saying trump was going to win so we actually we predicted the fed rate hike in less march a time when the market was giving a thirty percent probability which is true from december to late february we were an eighty percent probability now the market caught up in the last two weeks is there a problem with that we have a good data apartheid and what i mean is you've got access to the data you're making predictions you can cash in on those predictions not that that's your point you know when you're doing it we don't trade when. you know of an. all bald heads funds big money to the intelligence committee they've got cia guys on their payroll so suddenly they access the data it gives them an edge now they're profiting from this data and the average joe on the street is not profiting from this data what's your thought about well first of all you're absolutely right about that and this

one things i said when i when i got the cia were talking about this is this was all new the cia had done this one guy they put in charge of this because he traded options like in his spare time he was a math whiz and just trade options first person account he said we believe the only guy in the agency do this if you're in charge they didn't have capital markets expertise capital markets were not part of the battle space prior to nine eleven they are now but they were at the time so when i give the cia a lot of credit they know what they don't know and they're very good outreach and i was not the only one recruiter there were many who were invited into this project so we kind of build from the ground up but one of things i said i said guys hedge funds do this all the time we're not trying to do anything the hedge funds don't already do we're just doing it for different reasons we're not trying to spot insider trading had an m. and a announcement we're trying to spot insider trading have a terrorist attack but the way you do it the math and the data inputs are the same number one number two source data piece they're not cheap but you know for twenty five thousand dollars you can get real time prices from chicago mercantile exchange new york stock exchange so all that information is available but never the

algorithms at all it appears science an answer you have to know the legions of these guys you've got to know about you know they're expensive they are expensive you have to build it yourself so there is there is a little bit of that but this is it's not in a given example you can rent sellers for sellers in space they're private you can rent a space you can rent the use of them there are people they fall in cracker barrel nobody walks to a cracker barrel they're all by the highways you drive to a cracker vine oh yes they were using the satellites to spot how many cars are in the parking lot they have some data on the average cell per car average number of people per car and they use that to predict iran as a cracker and that's that's completely legal it's inside information but it's few there to put to be guilty of trading in sanford mentions a two part test. espied material nonpublic information but also has to be acquired in breach of a fiduciary duty if you do it yourself you have been breached in the duty it's your information you can steal from yourself so that's completely legal insider trading right on wall street ways to say it's inside not inside well in for no one likes

the word insider but the fact is if you if you invent it yourself you're not stealing it so it's legal but you have to do those funds have an edge over every day of us of course they do and that's that's that's just the way it was usually and didn't get past the first question. keep you over for a segment that's ok that's not ok that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert like to thank our guest jim rickards prolific author and data guy if you want to reach us on twitter it's kaiser report and so next time i.

think the most important social equalizer of our time the internet is under great threat the decision by the federal communications commission essentially gives internet service providers the keys to the internet without a net neutrality economic opportunity only widening for all.

eat eat eat eat eat eat eat eat eat. can you dance like going to get this could be. i think stephen cycling to expel and also want to do everything that you thought the. reason it but . i don't want. hopefulness i was almost. if you don't know. that if you take. this you dog paula.