itll distinction can be made between money printing and financial engineering which for the most part means. exaggerating or expanding the ability to borrow so clinton did with the commodity futures modernization act and there were ducks and 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 borrow 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. 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 there also leading the way tennis leading the way an oil refinery x. investment and also a 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 cats away the mice will plea. take america out of the picture and china and russia are going to do deals they can do a lot of deals they're going to continue to do deals to going to create a parallel currency to the u.s. dollar going to create a parallel system to swift they're going to get out of our 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 shmucks 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 that boundaries and 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 around has a lot of sovereignty that most other nations don't in a unit polar world almost fights are very good and 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 manipulation 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 on americans by just saying one word. you know in the comments section all before. fifty comments here the word climate change gun. i just say that one work without any context and the entire population will be sidetracked

from everything we just heard and being triggered there p.t.s.d. trigger in their nature to flame a little bit in the router no you needn't fear it will only 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 to the job of the 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 classic ponzi scheme 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 per carry. it is precarious it is a housing ponzi scheme and the thing about housing is that it's a wasting asset it falls apart unless you're there these fifty million homes are completely not being maintained they're just rotting they create the i've seen the

first 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 their one point three billion this 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 there. is a lot of business with the most intuitive of. these. guys go. that you know but you also look at the mother and the funniest applause most homes will show such as the flu it's almost like. moon newborn you must. move.

pics or it didn't toughen this is the phrase that has become a mantra for many people but as more and more people get involved in visualizing the world around them always the story we tell ourselves about ourselves changes. dollars. dollars. dollars. the dollar value is what i was doing. when we got carried away here we care the music with us. we are a year we were dragged here. by the love going to get rid of those who are not

go away who will not die quietly. real the hard work we do is the truth. i've been saying the numbers mean something they matter to us is over one trillion dollars in debt more than ten thousand dollars timestamping each dish. eighty five percent of global wealth you loans to the ultra rich eight point six percent market saw thirty percent just last year some with four hundred apply. hundred three per second per second. point growth to twenty thousand dollars. china's building two point one billion dollars a i industrial but don't let the numbers overwhelm. the

only numbers you need to remember one one showed in afford to miss the one and only boom but. it's hard to imagine the decades after the war a nazi doctor was still active rich in the nineteen seventies great intel had as the chair of its board a man convicted of mass murder and slavery at auschwitz a german company grown until it developed so the denied a drug that was promoted as completely safe even during pregnancy 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 many so they don't mind victims i have to this day received no compensation they never apologized for the suffering that not only want the money i want the revenge.

welcome back to the kaiser report imax keyser time i go to chicago to talk with mr shedd lock of miss talk dot com mish old buddy welcome back oh he's a 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 it big thoughts on capitalism what do you think you know the answer is well as i do there's one max known whom eight years right about this is i am. they're not they're blaming a symptom here the symptom here is wage inequality is a that's just the symptom that's not the problem in nest 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 bed 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 loan us was look at how much money these c.e.o.'s are making well you know what if you don't make money so cheap for them to borrow money to buy back their own shares and speculate you know maybe they were now ok 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 sent. to have to lay capital in and encourage savers to save money that they

don't have capitalism your thoughts 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 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 but that's 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 they know you know that 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 where they 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 condit so it certainly looked like we did not have enough condos in florida in two thousand and seven. then i was on we had an amazing glut of them and no one could get rid of the things and now zing bus 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 ever tasing 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 you'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 are 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 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 using a price discovery mechanism matching buyers and sellers in a free market everything is now a poll of bureau everything is centrally planned as you pointed out starting with the federal reserve bank it's a polak bureau of money manipulators who set the price of money in an 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 and so. adding the prices and i speak and now it's much closer and ironically it's closer to the second in and it's in its performance and what's

happening to the economy then america let's say circa one thousand eight 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 all these franchisees all these people to borrow to put a new mcdonald's in a new piece or a new nail salon and all of this kind of activity all of these companies that 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 that 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 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 reported a laugh at those over 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 there are more absurdly 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 with aus and bus 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 to feature technology like artificial intelligence concurrently you recently published a piece mesh talking about fifty million empty homes in china killing a billion in mostly fraudulent peer to peer lending schemes in china. south and again mr view on china now we've got two themes going air one 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 u.s.

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 there once the credit market in china starts to turn down certainly there's 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 as zombie corporations over there fifteen percent of the companies in the s. and p. five hundred here zomby corporations all the zombie corporations are keeping workers employed. 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 a huge global slowdown it's going to hit the equity markets hard in wrapping messala you are one of the early champions of professor steve case who 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 as they say here would like to thank our guests they always excellent miche shad lot of miss talk dot com

if you want to catch us on twitter at kaiser report until next time by. blushes and the. morning the beach he cut the host for the team you'll be set it's not that it seems that only shooting against. let him into. the utopia because you know i said. you needed at least. a year that i was caught but i'm going to have been scheming to show. form but you believe you shall use.

the end of a threat to the south korean users tell them not to be come forth summed up all. the money which of them were dismissed of last time i am all sure because. you know world of big partisan movie 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 truth the time is now for watching closely for watching the

hawks. it's hard to imagine the decades of to the wall. a nazi domes that was still active and rich in the nineteen seventies criminal had as the chair of its board a man convicted of mass murder and slavery at ash was a german company develops in the demise of drugs it was promoted as completely safe even during pregnancy it turned out to have terrible side effects what has happened to my baby is anything but. you know she said she's just got choked up mimics of it a mind victims have to this day received no compensation they never apologized for the suffering that not only want the money i want the revenge. but politicians to do something to. put themselves on the line to get accepted or rejected. so when you want to be president. or some want to.

have to try to be for us it's like the four three in the morning can't be good. i'm interested always in the waters about how. this should. fracking gave americans a lot of new 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 among the employment rate of zero percent is like 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 for 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. you . know. even one person is killed and two hundred injured in chaotic protests across a frenzy over soaring fuel prices. they take their money every day we have small salary we can make ends meet by the end of the month overtaxed pensioners can barely survive the street has broken the camel's back micro and his buddies just like those before him ascending things from bad was the pentagon fails its first.