with the introduction of sanctions against russia and the tumble of the ruble well during that time b.b.c. newsnight said there would be a current account crisis there would be a debt crisis and basically russia would fall and we covered the story we had leant how again on telegraph journalist and we had constantine and i was episode six nine five and this is december twentieth two thousand and fourteen and here's a short clip of liam halligan talking about the nerves of steel coming from the kremlin i actually think even though the current interest rate move that we have seen has been dramatic from ten and a half to seventeen of course the six interest rate rise so far this year the central bank hasn't actually fired its big guns yet we have had a little bit of currency intervention it's mainly been the conversion of the ministry of finance as existing on the books flows from rubles. from dollar story

into roubles. you've also go the reserves this the so-called stabilization fund stabilization fund those created for more revenues over the last few years precisely for this moment we've already seen single digit billions used from that. and that's why a lot of people have been so we've got to i say and they still didn't fire the big bazooka it suggests to me that some pretty strong criminal at the moment so the kremlin had nerves of steel back then and we reckon they would survive b.b.c. didn't reckon they were survive and then we're going to get into a headline from bloomberg saying actually they did very well they have an agenda over there the b.b.c. and we also have an agenda it's called truth and we just look at the numbers and we give you the unvarnished view of how gravity works in the universe as it relates to the economy they were basically blinded by some sort of head. steria they were

wrong here's one area where russia beats the u.s. by several key measures it has the world's best economic management says the i.m.f. former top man in the country martin gellman he spent twenty four years at the international monetary fund much of it as the funds man in russia before during and after the country's the final crisis of the late one nine hundred ninety s. a devaluation and default that reverberated around the world since two thousand and five is then a professor of economics at moscow's higher school of economics and a well connected observer of the government's policies so bloomberg asks him how does russia's economic management today differ from what it was back then and he answered that well it's much better largely because so many of the people now in charge experience that crisis for instance the head of the central bank elvira nab ilana was a deputy economy mr alexei kudrin a close putin advisor and chairman of the accounts for chamber was a deputy finance minister german graf the chief executive officer of the state controlled sperm bank was a deputy minister of state property these people want to make sure that it never

happens again on their watch so long as this economic team is in charge there won't be that crisis and russia people criticize us or they question us and they want to know why we're not more quote critical of russia the real question is how come we're not tooting russia's horn more because they are been genius during this crisis but that would be i think a little bit you know over the top to simply point out all the good things that they're constantly doing so we just try to take a more balanced middle of the road approach that's you know the fact is that they're making all these other economies look stupid by comparison certainly alvira now believe as mark gelman goes on to say he says they have really brought home the lesson of that crisis consider the oil shock of two thousand and fourteen and two thousand and fifteen as the price dropped by more than fifty percent the central bank protected its foreign reserves by allowing the rubles exchange rate against the dollar to fall politically a very brave move and they had the stabilization fund which insulates the economy.

from the oil market by calling excess revenue when prices are high and providing support when prices are low we mentioned that on our show there were actually a lot of comments if you go back and look they're saying that was propaganda you know this is part of this whole cold war but they were saying it's propaganda if you watch all those news nights from that week evan davies who's an economist by the way i'm not a trained economist he's a trained economist he never mentioned this stuff so you have to question who is the one that got it right we got it right based on just looking at the numbers we mentioned that well you know when they had the debt crisis in ninety eight they had debt so we were asking where is the debt like show us the debt like where is the beef because they kept on saying there's going to be a debt crisis but based on what like there was no debt so we were right they were wrong and we're in a lot of lessons were learned in the late ninety's ninety eight crisis and countries started build up their reserves to give themselves a cushion against these types of fluctuations and the other thing that people should be aware of and i will say it again and i'm sure nobody will follow up on

the b.b.c. or anywhere other news outlets that russia has been a huge buyer of gold why are they doing that why is china buying so much gold is because they see that the u.s. dollar will lose global supremacy at some point and that has wide scale ramifications when it happens all these news outlets will say oh my god we never saw this coming oh why who's who's behind all this is it a paranoid conspiracy theory you know once again we're trying to alert you what's going on and give me the reasons why looking at just baseline numbers and economics and i don't know evidence just what have the courage to see what's directly in front of your face that's a good way to put what warren buffett is courageous in that he he's willing to invest in the blindingly obvious reinvests of what we try to do is like this is blindingly obvious just state what is there well at that time when we did this report and it was to experts on both halves we had liam how again and who had lived in moscow for a long time and he was in the. mr he's speaks on economic matters for the telegraph

and we had constantine going to have another economist he was at trinity college dublin at that point now he's teaching out in california and we were i was open to hearing whatever was going to happen you know we asked them newsnight saying there's going to be a current account crisis at current and a balance of payments crisis what's going to happen and they disagreed based on what their understanding of classical liberal economics and here the i.m.f. guy who went through the ninety eight he is the one in charge of the i.m.f. who dealt with the debt crisis of ninety eight and he was saying here he also says russia was right i was wrong when he says that in two thousand and four when khujand first proposed the stabilization fund on the norwegian model the i.m.f. advised against it we thought that in terms of governance transparency and corruption russia was closer to nigeria than norway so the first priority was to build the institutions before trying to be norway and by god khujand proved us

wrong because they brought the nonsense they were all to propaganda that the russian was closer to nigeria you know than norway no in fact russia is closer to norway and they've got the stabilization fund and they can you know to took the economy from under two hundred billion g.d.p. to close to two trillion in g.d.p. want to take it to four chilian in g.d.p. how to get there through trade not through anything that rachel maddow or the hollywood elite are suggesting that he is all paranoid lee scheming to do he's done doing any of that he just wants to grow the economy it's like remember america is to be a growth situation people used to like to grow the economy and be honest and trustworthy and that's what russia is now it's like america in the fifty's and america's become the still be you know the fifty's it's complete role reversal actually you mentioned nigeria and this guy had mentioned nigeria and we did ask during that time because newsnight did not want to cover nigeria who actually is very close to the united kingdom and there are a lot of nigerians who moved to the united kingdom. it's

a relationship there and nigeria actually did suffer greatly during the oil price collapse so their currency collapse even more they had a lot of debt they had a difficult situation at the time now it's obviously better the world oil markets have recovered and we're glad they recovered but here he's saying as regards to growth because you talk about growth in russia he said russia is an old industrial economy it's not one of those places where you have a lot of peasants coming into the mainstream workforce you can expect it to grow very significant real rates particularly given that it's stuck in a world economy where nobody is growing significantly but an important aside. this is from the i.m.f. guy ok this guy is an i.m.f. official one can't know the future what if investors wake up to the financial profit to see of the u.s. and other western nations where government debts are at historical highs and budget discipline is not great after the crash who is going to look good can you name one

g. twenty country with almost no debt positive real interest rates a flexible exchange rate significant foreign exchange reserves and a very prudent macroeconomic policy so you know russia's general electric and america's pets dot com you know they mean russia is generating consistent earnings growth inch by inch by inch and they manage that and it looks like the right does as mentioned debts are a low gold reserves are are building up and you know jim rogers our friend of many years has been saying this for the last ten years is been investing in russia and i would give you you know chapter and verse exactly why this has been a great economy to invest in yeah and probably the rubles probably cheap on the four x. market and it's all there later jim rickards as well as talked about it as. vajra here is again what he says this is also mirrors exactly what our experts in the second half constantine gird you have had said is that she was following exactly to a t what classical economics would teach you how to respond to this crisis during

the financial crisis for russia two thousand and fourteen exactly the opposite of how the rest of the global central banks responded to the financial crisis of two thousand and seven to two thousand and nine he said so when abilene goes to the central bank governors meeting some basel she's the one preaching orthodoxy almost all central banks have either negative interest rates very low interest rates or some kind of extraordinary monetary accommodation and here you've got the central bank of russia with the highest real interest rates in the g twenty they are. pursuing what the i.m.f. would call a classic conventional policy where he said that at the time that it was a classic conventional policy this is how you would respond but you can't have capitalism without capital and you can't have capital without an interest rate sufficient to attract savers without savers you don't have an economy and that's what they're doing in russia and america also in the world there think that you

don't need savers you don't need wages you don't need workers you can take interest rates down to zero you can rely entirely on mergers and acquisitions and accounting fraud is the bernie made off model in america versus you know eisenhower in russia this is the russian economic policy of the runtime is eisenhower you know that actually if you can learn from disaster so they went through a disaster genuine disaster in ninety eight russia did and they learned from it so we went through a disaster here as well during the dot com crash and the two thousand and seven eight nine crash we could have learned a lesson what we we haven't however we just bailed out everybody and we didn't learn the hard lessons because they made it you know the central banks basically made the system not take its medicine like. if you talk to any russians ninety eight was a brutal brutal situation and they don't want to ever repeat that here people feel like well what was so bad about it like we can repeat the crisis because it wasn't so bad and we got free money exactly right if you can tell there is no such thing

as come false islam if you can't have losers in a capitalist society that you don't you have some kind of socialist quagmire like venezuela which is like the us now anyway we've got to take a break and we'll come back so don't go away. join me every thursday on the alex salmond sure and i'll be speaking to us of the world of politics. i'm show business i'll see you.

right we're all set to start to strive to get ice to snow to the studio house a signal. he's not going to talk about no place just maybe right after the mars explorers one movie would have their own unique. record. to say let me know. how the alice room will welcome to sophie until i'm so sweet shevardnadze said today we've got lots to talk about in our program and our guest is. good luck little.

welcome back to the kaiser report i'm asked as are time now to turn to chris whalen chris whalen author and banker i guess yeah hey welcome back i'm max has gone good thing cool you know you predicted trumpet when and now less than two years later he's he's won over the world basically he's got policies he's shaking things up he has turned over the chord table and the standing on top of that jump up on us where because all these folks like and so-called liberal elite are very very upset like a michael moore site because they've been revealed as war mongers yet the left or the worse really soros well all of them are quite amazing they they tend to be the left is quite authoritarian it's the end of the day well they have to be because as margaret thatcher said eventually run out of other people's money so you've got to put a gun to people said all right so first let's talk trade war your thoughts on trump's trade war with china europe canada mexico chris domestic politics mostly he's

playing to the base not only for this election coming up but for the inevitable run for a second term well markets are acting positively how's that playing well because it doesn't really matter it's marginal to us has slowed large trade relationship with the rest of the world but it it's going to endure day when we're in another and i think the change that will occur over the next few years the structural change as a result of this is going to be important of the us has been paying the freight since world war two and then we had the cold war and we had to help everyone so the europeans never really stood on their own they have not had to spend money on defense why do you just cut letterman's have the air force plan just cut a nato in half well no i don't need to cut him off you need to make them rationalize it but what's the what's the point of it and has no use well i mean i'm going least into another countries territory that in the us all. i don't happen

what's the point of nato and that is that this function is worthless it's an extension of the old model that's correct what model well british imperialism followed by american president but i don't i mean part of europe there i think they don't want to part of the world anymore they just want to eat my mind he left. you know the empire is gone but they have pretended that it's still there and look at trump and queen what a great picture point is you have this american president who still really doing the bidding of the british empire one hundred years after we took the ball you know i say that's obviously wrong you know the brits lost same pyar really at the end of world war one and they became they had to realize they were broke because they are a parasitic society they don't really make stuff they're not a manufacturing society what do they have now to think british petroleum the city of london lloyd's one of the great schemes of all time that's how they make money so now that they're with leaving b. you know colony we don't think nothing they've got northern ireland they can beat up on the irish people the middleby about it they will sail down to falklands again

now they won't be deploying power in the state it's a good job the falklands to go back to argentina they could if they wanted to i don't think anyone cares age is over but it's a transition and the world economy is going to change as well because if the u.s. says to the chinese no you can't steal our ip anymore no we're not going to allow you free access to the u.s. market unless you give us free access to u.s. china relationship is fundamentally changing is it to a stance a way that makes it to make sure the two biggest economies right walk us through what we'll see happening between these two countries over the next couple of years four years a lot of posturing a lot of. because trade is obviously changing with tact with the tariffs that are going up i mean this fundamentally changes the cost will go up the chinese are trying to put tariffs on stuff they get from the u.s. but they don't get anything from the u.s. really bright work so how do they do tit for tat i mean they can't there isn't a symmetry there they don't. they don't fit together well in terms of balance and

the chinese also have dominated a lot of low and mid and manufacturing but not the high end stuff if the u.s. can still buy high and some of conductors from the taiwanese for example or the koreans how much is it going to matter the koreans will feel like out very quickly thank you ok so on the global trade front south china us you see posturing but not a lot happening what about us and the e.u. anything at all it's more fun ok walk us through that well with the british leaving with their modest but still significant resources the e.u. does it work max they just don't have the money to subsidize everybody especially the italians who are a festering and you know they do want debt forgiveness they do want to issue their own funny little currency which we printed like a lottery tickets so this is the end of this pretense called the e.u. which really came about because we didn't want europeans killing each other anymore . it was germany germany is abundance bankers on this bank is the

euro and the c.p.a. and central bank is germany and the bunda spank and they can print lots of money and cover lots of it well you know nine debt was high now it's low you know they are they're under leverage as compared to the federal reserve bank of new york or the bank of japan the e.c.b. is relatively on leveraged no i don't i don't agree the germans and the french are paying for everything they've had a defacto union in fiscal ever going to spend that founded on the e.c.b. by now there are five hundred fifteen trillion euros and they well what are your determined banks and the french banks and the dutch or all ultimately underpinning us or one of the. bank itself the rumor is that it's a basket case that is going to explode going to go the way the lehman brothers your thoughts a slow death painful doing linda because of this was model that doesn't make sense anymore but in the middle well it was london based capital markets and investment banking with this twenty. a rump bank back in germany they don't have

a banking business in germany so they have to figure out what they want to do with themselves same thing with citi i thought why don't we marry them this wonderful german american alliance but in both cases you have businesses that are big fund themselves off the markets they don't have core deposits they don't have stable funding the way a wells fargo has for example and so they have to figure out a way to be profitable and they haven't they've lost money for ten years right wells fargo's business model is something other than stealing money from clients i'm not aware of that money where the only answer own money. they have something other than just a larceny you know it's basic banking a lot of the. same thing yeah you wrote the book ford man now what do you say about the reports that will ford will stop making cars and make only trucks and s.u.v.s walk us through this they're listening to the market the market wants s.u.v.s they're what hybrids they want things that look like they came out of the avengers or something cars are really not popular and there are

a number of makers like machetes audi that still haven't gotten the message strangely enough tesla one of my favorites but ford that's are strength and most of the trucks quote unquote that they make are really cars. you don't take them off road you know don't take them fishing in maine and what's up with a car in a straight america so that mean that would be involved in the trade war right i mean there the u.s. exports a lot of cars but the u.s. has been on the losing end of that for a long time the you know how do they how does how does that rewrite itself or what can be what is the remedy that europeans export cars free of that and then they come into the u.s. with no tariffs are people on the other hand if we want to export to europe we get screwed because we have to pay the vet and we have a tariff as well so how is a fear the reality is europeans can't have freer trade with the united states or couldn't afford it so it sounds like a good point there yes ok so you want to industry is going to support him one hundred percent they've been waiting for him for twenty years and that's his base marcy kaptur for example in ohio protectionist democrat she will be one hundred

percent behind trump she's been waiting for this guy for decades ok well that's a lot of voters yes you mention the carolinas there one spills booming in the town is that north carolina is booming looking at the democrats today max i think trump gets reelected easily fake you could impeach him if he got reelected easily right ok twenty twentieth's odds on he's an odds on favorite i think so i mean he's from so far increased. employment numbers that's right this whole bit how does the wall street how do the capital markets view the meeting with trump putin how do they see that i mean the reaction of media does appear to be much of a nonevent but when you know your thoughts are it kind of reminds me of identity politics the media keeps trying to weave a connection between trader connection between you know putin and trump meeting an old dress of the markets shrug it off you know the markets are still feeding on the fed and that's slowly going away but there's

a rainstorm rising so you know the ten year fifteen years are heading ten year highs and higher you're getting the rates are going up to two percent three percent on the us on this on this paper deposit rates are going up ok. years ago if you were a big business and you had cash balances they wouldn't give you the time of day j.p. morgan all right so jamie dimon is going to call you and say thank you max and he's going to pay you more plus for that money really that only sort of that's how much it's changed so you read it two to three percent to the vig that a business will get from a bank compared to a few years ago so they yield on the cash instruments is now higher than the dividends on the s. and p. five hundred yes ok that's the first time that's happened in a while as a lot happen in the curves already inverted a little bit and i was warning to the buffett model of valuation you know looking at yield and just up a thing he that would suggest that the stocks are overvalued or people will take the money off the table that they made earlier this year and last year and stick it into bills right exactly i mean that's what i had to write. to me out of people to

take portfolio and a lot of people are doing this then you have a rotation out equity out of stocks yes now i think yes and the only thing that is holding it up frankly is buybacks there's a huge amount of stock repurchases this year yeah which most retail investors don't understand but the long and short of it is your rates are going to keep going up and when we see the treasury yield curve flat from t. bills up to ten years the fed's going to have to blink right they're going to have to set up i'm sorry we didn't mean that because otherwise this thing is going to we're going to be in a recession by two thousand and twenty all right so bloomberg interviewed a former i.m.f. economist martin gellman who says that the russian economy is actually the best of the big economies pointing in particular to the central bank russia's policies criswell in your thoughts russia still basically an extract of economy they make money on commodities they don't have a big industrial base so some are based on they have been

a bigger than their energy business yes ok when i say when is it when you look at how they make money and how they interact with other countries that's still a story now they have to rule i want to generate leads during the debate now and. if you listen to that debate a lot of stuff was said other than the two or three words that were highlighted ok one of things putin said was that ok russia of oil price if it gets too high it's bad for them because it focuses too much attention on the energy sector and they need to diversify when it gets too low it cars trains them of capital reserves so there's a sweet spot where the price of oil should be i mean that's a remarkable kind of data point that people need to keep in mind going forward planning the economies of the world and i care the two biggest energy producers in the world picking a spot and they're holding the spot opec now is is not a factor opec is in disarray and i think the russians very astutely are trying to avoid what's happened both to the gulf states and then the swale and in other

countries where they've just become entirely dependent on energy they do think about the versifying anything right. away from a the point that russia is something like fifteen billion twenty billion into the us versus china versus you that can easily get to fifty billion one hundred billion two hundred billion dollars it's of commerce between these two countries that's a lot of jobs with america. right i mean if you're pro jobs i would think people are going to can trump just make that point like you know what the sanctions are stupid because we're going to export two hundred billion into russia that's another anyway we got to go we've got to go chris darden want to pick this up on the time thanks for being on the kaiser report them or all right that's going to do it for this edition of the kaiser a part of me my skies are safe here but life there goes chris whalen and i just on twitter it's kaiser report and i know.

you will do. it is. it's dylan who was. asleep and even though it is early and i am. all for school it's only about the walking on the other. hand for the one hundred ninety one columns on the wall. will. cut. you loose i.

four men are sitting in a car when the flips get shot in the head. all four different versions of what. one of them is on the death row there's no way you could have done it there's no possible way because the owners did not shoot around a corner. no . good.

good. family. good good food russia shimmering goodness. the kremlin confirms president putin has officially received an invitation from washington to meet with donald trump and a second major summit later this year. facebook is mocked for so-called cultural censorship after in those ads featuring the works i may seventeenth century artist known for his nude paintings. the white house threatened to revoke the security clearance of six of bomber era intelligence officials accusing them of politicizing their public service and leveling baseless accusations by president trump. and helpful answer frist who made his fortune as a slave trader is commemorated it is dividing that residents and bristol themself west england the old ones will the plots going to be so you because you've got to

put things in some sort of concept.