the headlines here on r.t. probably dependence parties looks set to keep their absolute majority in the council and parliament a result that would likely lead to renewed political conflict with the spanish government. the us suffered a stinging rebuke over its recognition of jerusalem as israel's capital as the un general assembly voted overwhelmingly to condemn the move. the use of the veto obstructed the security council shameful meeting. in violation of the rights of america will put our embassy in jerusalem this is bullying. in the vote over one hundred countries ignore the intense pressure from washington and threats from the u.s. president and i'm confident. we can find out all the details of those stories on

our website r.t. dot com we'll be back with your world news that day in an hour's time but right now though the kaiser report shines a light on how bitcoin is affecting the gold market. 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 in 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 you know like and then all the route to. i was on the kona drink and some drink on my black hole say hey buddy what's going on is america repsol is a chart so slow mixed. my you referred to. the 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 you for a because i'm. holding the script hostage so i'm taking over there is going to be no turning back up this toy black hole so remember when the queen first passed the price of gold in 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 other thing 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 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 unraveled the insane krypto rally we've witnessed over the past twelve months futures traders would eat the amateur's 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 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 smart money involved in futures would eat. you know all those 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 so the black hole concept is one where this is good money according to therapist 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 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 and it's all being pulled into in a sock 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 worth 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 because when it's tough to be worth a trillion dollars so all of the out money in the world all the fractional reserve banking over leveraged garbage we've been warning about in a two thousand and three we said yes 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 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 commodities last currencies to be disrupted by bitcoin but after gold we'll see other major fianna currencies collapse and implode well you remember alan greenspan who was a gold bug and then became head of the central bank of america well he had said that. gold the u.k. was stupid to give up their gold because in extremis the gold is always use 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 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 where so much fraud and opaque happens behind an opaque wall of drew 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 any time soon it is morphed from an underground tech geek trade to the biggest market menial 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 it goes on just imagine the all these debates that is a store of value or a payment system doesn't matter people are piling in they're getting rid of their gold and they're going long on big corn you know the sort of i mean if it's. and out to be a fantastic store of value and it's attracting trillions of dollars and the price will explode upwards to a hundred thousand and beyond and then it'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 coins trade a million dollars a coin you know it's not necessarily the price

a bit coin 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 republic 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 when 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 find then 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 shell 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 because sometime in my block all it's affected your cognitive abilities don't make the camera 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 that actual network in the 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 you know the answer is no they're not going to go back they're not going back to janet yellen not going to back the central banks they will they won't go back to their 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 coin 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 it 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 with solutions 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 to go out. 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 lawyers r.b.s. h.s.b.c. and barclays you're all frickin terrorists and you should die for ok we got to go to break stay ten much more coming your way.

apply to many clubs over the years so i know the game and sorry guys. the ball isn't only about what happens on the pitch for the final school it's about the passion from the families it's the age of the superman each kill the narrowness and spending to get the twenty million and one player. it's an experience like nothing else not to because i want to share what i think of what i know about the beautiful game great so what chance for. peace. you know the palestinians have to use the united nations as a weapon of war against the future of peace both for palestinians and israelis the

united nations general assembly has passed more resolutions against the democratic state of israel that it has against north korea and iran and syria combined so that you know it is a bubbling cauldron of hatred and anti democracy. 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 does it as a company i started with some partners a year ago we are specialized 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 have been started trading again could you identify could you trace it to the source code if i swore i'd 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 a predictive analytics system inside the cia that worked extremely well all that's happened now is taking that technology was some partners with some investors we're now doing a 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 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 rights project they wanted a they wanted to futures market basically a geo political futures market so you could bet on whether at the time yasser arafat was going to be assassinated are what the whole thing was modeled on my hollywood stock exchange you know that i don't like i did not know is based on that technology i do know that this is sort of what they call the wisdom of crowds if you get enough people making enough that it's. and i was the reverse of marla better production than you know an analyst sitting in a cube about how now that the 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 in 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 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 bill is a process not really you know a prediction market as such as the years saying 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 mark 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 know mathematical understand well actually be pretty good guess the weight of the car where you have an old english pair 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 to spatial 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 in march 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. this that 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 what i don't want to. 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 their 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 f.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 yearly garm so assegai 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 john martorano just 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 hearns. new york stock exchange specialist for made markets in america you know he was the market maker in those two studies are going to go he said i've never seen more blatant sort of trading when the space shuttle or space shuttle challenger blew up more if i call the contractor for the booster rocket puts in this case skyrocket it sure does the thing just blew up here you are observing the event as if something got 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 predict about linux on the one hand and like law enforcement looking for inside 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 deafened 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 from roughly well it's hard to say 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 pay 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 correlation shows 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 in 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 in intelligence committee all the time that was used to that movie imitation game where alan turing cracked in

the code i was using various rules of what we use or that the thing is you have to take all of 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 happened 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 two hundred million so 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 as always in these situations you have a problem i guess you could call it of slippage. in for example our big arbitrage opportunities open up the market share 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 as a heisenberg a fact 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 this show what was the worst what's the status of that where we do we do which are the first two 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 a 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 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 and the reason you're doing it we don't trade when. you know of an. no ball to hedge funds to pay big money to the intelligence committee they've got cia guys on their payroll so suddenly they access to 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 there's one guy they put in charge of this because he traded options like in his spare time he was a math whiz and then just trade off his 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 their 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 having them in 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 and engineering you have to know legions of these guys you've got to know that i know they're expensive they are expensive you have to build it yourself and so there is there is a little bit of that but this is it's not 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 they drive to a cracker vine oh yes they were using the satellites to spot how many cars were 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 bro and that's that's completely legal it's inside information but it's either 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 the fiduciary duty if you do it yourself you have been breached any duty it's your information you can steal from yourself so that's completely legal insider trading right on wall street was 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 do those funds have an edge over a reverse 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 right. and 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 until next time.

welcome to well to part these really leadership wasted no time in painting donald trump's movement as a he story club mark bowling of course within its own interpretation of history and beloved shingle praised intensified even more after the united states had to invoke a veto against its own allies at the security council what does israel hope to gain from isolating show of support to discuss that i'm now joined by dan dyker fellow at the jerusalem center for public affairs. as a dyke it is great to have you on the show thank you very much for your time thank you now let me know if you disagree i bet you disagree with that but i think the israeli authorities and first and foremost prime minister netanyahu very apparent in their efforts to oversell what donald trump really sad on the.