ability to borrow so clinton did with the commodity futures modernization act and there were ducks of glass steagall allowed corporations to put up not ten cents for every dollar they are own or even one penny for every dollar they borrow but one one hundredth of a penny for every dollar they borrowed so that means that the asset base that girds this upside down pyramid called the american economy is getting smaller and smaller and smaller more as the debt gets bigger and bigger and bigger that's an unstable structure that means at some point it topples over and some point if you will leverage when it becomes to the point where it is now where the interest on the debt is a line item on the budget that exceeds some incredible spend like military i believe then you know you are talking about a hyper inflationary collapse of course there are some nations and companies who

are investing in the future because they're the rising power and that's china china's leading by far the way just google the you know china capital expenditure china cap ex and there are leading the way by far in semiconductor capital expenditure so investing in innovation investing in you know creating new products for the markets whereas our corporations are tending to. not invest in any new innovation but instead just handing it out to some oligarchs who are like ok this game is over for our economy let's just take as much as we can and live in a happy like retirement for us as china takes off they're also leading the way train is leading the way and oil refinery x. investment and also our telecoms where of course we have you know basically the telecoms have divided up this nation down to individual states or territories so you know it's usually just one telecom company that provides the internet internet

infrastructure to an area that's your only option so what do you going to do if they if they have bad service you have to use them anyway. so i want to look at one story as well that ties with both of these in that trump's tariffs on china and his sanctions on them it's like half the world including russia has led to this interesting tweet with some information about trade between china and russia fresh statistics on china russia trade is out trade volume for ten months is eighty seven point two four billion which is up twenty eight point two percent on twenty seventeen russia exports to china are up forty four percent to forty seven point nine seven billion and russia imports from china are up thirteen percent to thirty nine point two seven billion beijing and moscow are on their way to landmark one hundred billion dollars with russia running a surplus oh in the cap so way the mice will plea. take america picture

in china and russia are going to do deals and do a lot of deals they're going to continue to do deals are going to create a parallel currency to the u.s. dollar they're going to create a parallel system to swift they're going to get out of corrupt forex trading in library manipulation and interest rate manipulation and they're buying hundreds and hundreds and hundreds of tons of gold so they're preparing for a post u.s. dollar in germany and a new world and it's all happening before of area as well again like we kind of our all the guards made a trade with china which is like here you take all the jobs from our schmucks the bottom ninety nine percent you take those jobs which helps us in our own country because it makes them weaker and they can't have any impact on us we can we have more and more wealth relative to them and we can own the political system you take. our jobs but in exchange that

they became very powerful so here china not only has one point three billion and of course they notice that the u.s. is still in afghanistan we didn't even have a military they're still in iraq which was only a population of twenty five million people in a desert and they couldn't contain them so what hope do they have for a huge wide diverse china. you know environment and national you know reason national natural you know protection and one point three billion people to call up to the army but you know when you see that you know the iran sanctions have now been put back on an even harsher than previous sanctions and china is the only one still buying oil from iran because they can. everybody else has had to stop but you know the fact is iran has a lot of sovereignty that most other nations don't in

a unit polar world almost fights are very good and the point about the loss of jobs not only benefiting the oligarchs financially but making the population soft and weak and easily susceptible to political manipulation as well financial an appeal ation is a strong one you know it's amazing how population of over three hundred million people america can collectively suffer from p.t.s.d. you know i can trigger p.t.s.d. right now in americans by just saying one word you know in the comments section will be. fifty comments here the word climate change gun. so i just say that one work without any context and the entire population will be sidetracked from everything we just said and being triggered there p.t.s.d. triggered in their need to flame a little bit in the router no you really didn't you know it was only going to get

them going but that's because that's the only thing that can be taken from them right now in the second amendment is quite sacrosanct their jobs have been taken their dignity has been taken and everything else has been taken so what you know their future has been taken so at least they have the ability to hold a gun but i do want to point out another final headline here from china which might it's hard to get reliable information out of china what's actually going on because you know much of in the west is it's in too many of our analysts and what's actually going on there but fifty million empty homes in china third home purchases soar soon to be published research will show that roughly twenty two percent of china's urban housing stock is unoccupied according to professor ganley who runs a main nationwide study that has up to more than fifty million homes that are empty and here's a shop so the job of that blue line is third home purchases going back to two thousand and six up to two thousand and eighteen as you see as house prices become

more and more expensive. those with one home or two homes already are able to extract equity and invest in other homes whereas first time buyers are ever declining because they can't afford to find any equity which it took to put a deposit and then you know so it looks like a class a tonne zeese came there and you have fifty million empty homes they don't have a very advanced financial system so that also adds a little bit of an explanation to why they they see homes as basically a safe deposit box because they don't actually have a sound banking system but this looks on paper at least precarious yeah it is precariously there's a housing ponzi scheme and the thing about housing is that it's a wasting asset it falls apart unless. sure there these fifty million homes are completely not being maintained they're just rotting they create the i've seen the photo cities in our cities and you know within five years they're going to be have to tear them all down so paul krugman of the new york times will be happy because you know he loves to create work make work you know for people to create g.d.p.

and well the chinese government does think like that actually they do think putting workers to work is their citizens to work there one point three billion is is worth it in terms of social stability but i know you're talking to mr moore about talk to mr about that because he'll have the lowdown and that's coming right after this break we have to take a break now but when we come back i know we're having so much fun we've got to come back and after this break don't go away. i don't. say they're. going to say there's

a lot of business with the most intuitive of. these. guys go and. look at the model to blow. the show. moon you do when you. live. in a world of big partisan. lot and conspiracy it's time to wake up to

dig deeper to hit the stories that mainstream media refuses to tell more than ever we need to be smarter we need to stop slamming the door on the back and shouting past each other it's time for critical thinking it's time to fight for the middle for the troops the time is now we're watching closely watching the hawks. nobody could see coming that false confessions would be that prevalent in this population a problem for conviction if you look at any interrogation out there what you'll see is threat promise threat promise threat lie a lie a lie the process of interrogation is designed to put people in just that frame of mind make the most comfortable make them want to get out and don't take no for an answer don't accept their denials she said therefore with poor or very sad

statement then i would be home by that time the next day there's a culture on accountability and police officers know that they can engage in misconduct that has nothing to do with solving their crime. so what we've got to do is identify the threats that we have it's crazy people in front ation let it be an arms race is on offense spearing dramatic development only mostly i'm going to resist i don't see how that strategy will be successful very critical time time to sit down and talk. tracking gave americans a lot of job opportunities i needed to come up here to make some money i could make twenty five thousand dollars as a teacher or i could make fifty thousand dollars

a year truck so i chose to drive truck people rush to a small town in north dakota was an unemployment rate of zero percent like gold rush is very very similar to gold but this beautiful story ended with pollution and devastation a lot of people have left here i don't know too many people here and just slow down so much they lost their jobs got laid off the american dream is changing that's not what it used to be. and it's a tough reality to deal. welcome back to the kaiser report imax keyser time i got to chicago on top of that mish shed lock of miss talk dot com miss old buddy welcome back. pleasure max i'm government do here now let's talk about a bloomberg case recently published an opinion piece titled capitalism is not

working noting that most wiles of the past decade has gone to the top one percent while the wages for the bottom ninety nine percent are either flat or falling ok this is a big piece of mesh of big thoughts on capitalism what do you think you know the answer is well as i do there's one max known whom many years from art about this is i am. they're not they're blaming a symptom here the symptom here is wage inequality the that's just the symptom that's not the problem ines not cap it's not a failure of capitalism if you want to look at the problem here why we have this symptom it's the central bank bailouts of banks it's all the free money to banks it's the fed keeping interest rates too low too long fueling asset bubbles they did in two thousand then it again in two thousand and seven with ousting bubble

they did it again now with the everything bubble here and you know they were going to his own houses look at how much money these c.e.o.'s are making the well you know what if you don't make money so cheap for them to borrow money to buy back their own sure isn't a speculate you know maybe they were happy they let me give you my take on this and get your thoughts i've said often on this show that you can't have capitalism without capital and yet have capital without offering a savings rate that encourages people to accumulate capital and without that kind of an said. to capital and and encourage savers to save money don't have capitalism ersatz you don't have capitalism when you've got all of these regulations and then that's another thing you know those say well you know they deregulated the banks and want to do that oh the problem is we've got fractional reserve lending that that lets banks fraudulent legal and money and then when they do stupid things like

lend money to argentina or south america or wherever or where or or the dot com companies in two thousand you know then when those things blow up we bail out the banks because what too big to fail that that's crazy so. and you know right now you know we look at the there's like eleven or twelve unicorns are signed these huge billion dollar tech companies that have no profits haven't had any profits for years they're kept alive by these you know zombie financing look at all of the fracking you know the this is going on in these companies are struggling to pay bills if interest rates rise high enough so the zombie corporations are going to go under you know you know they're like the claim is that we have this job shortage racks and we have us shortage of skilled labor. it's ridiculous it's the same thing happened in two thousand and

seven early claim we had a shortage of out ok and the proof of that at the time was people were lining up outside the street all the way around the block waiting to enter a lottery for the right to blow up by a florida conduit so it certainly looked to why we did not have enough condos in florida in two thousand and seven then i was we had an amazing glut of them and no one could get rid of the things in the housing bust the same thing is going on right now max in the jobs market here it looks like we've got a shortage of labor but in reality it's a couple of things but to actually i think corporations are just advertising for jobs that don't exist at all so they can get these h one b. visas in from overseas the second component of that is

that financing is is so cheap we've got a bunch of zombie corporations they can afford to pay anybody so wages are down but they're actually looks like we've got a shortage of workers who eat in describing the the lines around the block to get a florida condo and how this was positioned as a shortage of condos in reality it was financial manipulation it reminds me of images from the soviet union of people lining up to buy bread there's no bread because that economy fell that economy didn't work because it was a poll of p.r. oh it was centrally planned and it did not allow for in the market to clear prices what you're saying and what i've observed is similarly in the united states you have a market that's failing to clear prices is in a price discovery mechanism matching buyers and sellers in a free market everything is now a poll of bureau everything a central. and as you pointed out starting with the federal reserve bank it's

a poll of bureau of money manipulators who set the price of money or economy that's supposed to discover the price of money in a free market so as the fed has gotten bigger and it's now i think ten twelve trillion dollars the balance sheet has ballooned as a way to bail out all these failed banks it's grown in power it's grown and it's an influence in setting the prices and to speak and now it's much closer and you know ironically it's closer to the six of you in and it's in its performance and what's happening to the economy then america let's say circa one thousand nine hundred fifty five or one nine hundred sixty mesh you said the key words max there is no price discovery now it's coming. and if is not going to like it when it gets here they all of a sudden you know oh these franchisees all these people to borrow to put

a new mcdonald's in a new piece or a new nail salon all of this kind of activity all of these companies are surviving in the fracking business looking like them a shortage of. skilled workers this all comes tumbling down once the psychology of the stock market changes in corporations no longer stop start buying back their shares of stock which is one of the things that's been proposing the market this is all going to come into our head whether this is the catalyst here today i don't know the curious saying is trump is blaming democrats we had a profit scare today and you know one of the suppliers to apple to the i phone is reporting a slowdown well this is another thing how many more phones do we need who needs

a phone doesn't have one so the same thing i said in two thousand and seven. who needs a house the didn't already buy one so. we're going to have another technology bust . and then we'll see where the alleged shortie of workers really is to repay a point there they the price discovery day of reckoning is is not far off and part and parcel of this discussion would be according to e.b.'s the wealth of billionaires rose by nineteen percent last year the bottom stayed flat or fell and i would say that is part of why air saying there this whole rise of the insta billionaire mesh e.-s. and if you look at real median wages are flat since something like nine hundred ninety five there abouts i looked at it the other day i don't remember the exact

year is a real median wages men are actually on the decline max and what's keeping our households up is a relative rise of women keeping things more or less study so but the median report had a laugh at this there were there was an article that came out actually a couple of last week that said. houses are as they. are cheaper now to buy than they were in one nine hundred ninety five so what you know they they did not look. at. how much home prices have gone up they're just looking at the average rent person that someone has to make well maybe the person it's had a house for ten years is paying last and last but to me affordability is about the

marginal buyer being able to go out and buy outs or more absurd. price now than ever and that's part of the housing decline we're seeing right now people just have stopped chasing houses here. resales on houses down six or seven months in a row this is another nail in the coffin and so many recessions have started without saying bust max we might see another one right here and that's allegedly where there's been another shortage of labor by the way we don't have enough people to build houses well we'll see about that want to mix let's change gears for a second and talk about china let me give you the bullet points there. are a lot of wealth increase in china. china leads away and patents especially feature technology like artificial intelligence concurrently you recently published a pace mesh talking about fifty million empty homes in china killing

a billion and mostly fraudulent peer to peer lending schemes in china. and again mr view on china now we've got two themes going here why is that their economy is growing they're leading technology that got artificial intelligence and the same time they've got a bust and a huge ponzi scheme peer to peer lending and there seems to be a lot of a lot of things happening at the same time as take to walk us through how you say this one playing out the capital controls that china put on to stop the outflow of warren. slowed housing in the us west coast and also in australia australia is going through a big housing bust right now simply because the buyers in china have given out and went with five hundred five hundred million empty homes fifty million empty homes in china and most of the recent demand has been from people second home third

buying counts for i think the number was like close to seventy percent. call it sixty five percent. of all new homes are are from second and third buyers china is on the furch of a huge bust with these empty homes sitting near once the credit market in china starts to turn down certain other stock market over there is is giving that signal right now that something is wrong and either we're going to see some follow up there we've got state owned enterprises over there that are insolvent china just keeps bailing out and keeping alive at zombie corporations over their fifteen percent of the companies in the s. and p. five hundred here zomby corporations all the zombie corporations are keeping workers employed because and then to keep happening as long as they can get

financing so it all ties back to that we're on the verge here i think of the huge global slowdown it's going to hit the equity markets hard in wrapping messala up but you are one of the early champions professor steve cato called the crash in the australian property market a few years ago looks like he was a bit early but absolutely right all right michelle like thanks ray on the kaiser report pleasure beyond max look forward to it next time and that's going to do it for this edition of the kaiser report with may max kaiser stay here would like to thank our guests they always excellent miche shad lock of mish talk dot com if you want to catch us on twitter it's kaiser report until next time.

thank you to the chico total more than the beach he cut the whole thing was told to see me your he said it's not that it's in some shots does that always sting against . yet i'm. beautiful to go see it myself included a cliche you're a loser that i was but i'm counting that in the scheme to show. that you review families. in the us not to the south korean users tell them not to be. summed up. the money i took of the british mr west imo.

i don't think the democrats are much mode in the go shape with the republicans or president trump so i think people are going to have to acknowledge that the united states over the next couple years is going to be consumed even more so by or internal our total bickering in affairs. it's hard to imagine after the war a nazi doctor was still active rich in the nineteen seventies current al had as the chair of its board a man convicted of mass murder and slavery at auschwitz a german company gruntal develops a little mind a drug that was promoted as completely safe even during pregnancy and it turned out to have terrible side effects what has happened to my baby is anything but. you know she said she's just cut short arms minix

a little mind victims i have to this day received no compensation they never apologized for the soft. i don't not only want the money i want the revenge. pics or it didn't toughen this is the phrase that has become a mantra for many people as more and more people get involved in physical eyes in the world around them how is the story we tell ourselves about ourselves changing. pranking gave americans a lot of job opportunities i needed to come up here to make some money i could make twenty five thousand dollars as a teacher or i could make fifty thousand dollars a year truck so i chose to drive truck people rush to a small town in north dakota was an unemployment rate of zero percent like the gold

rush is very very similar to a gold rush but this beautiful story ended with pollution and devastation a lot of people have left here i don't know too many people here and just slow down so much they lost their jobs that laid off the american dream is changing that's not what it used to be. and it's a tough reality to deal. just

twelve euros fifty. persons killed and two hundred injured in chaotic protests across france with fuel prices. they take their money every day to have small salaries for can make ends meet by the end of the month. of the still to come back drawing his buddies just like those before sending things from. the pentagon.