cans of his own let's call it human manure in ninety cans some of them sell for up to three hundred thousand us dollars equivalent today made these in one nine hundred sixty one but i'm going to rename this for the artists at the u.s. federal reserve bank cantillon de artist we're going to rename this work of art because the feds clary that says monetary policy more art than science and i renamed it cantillon dot artist because the cantillon effect i think is what basically. infects much of the world whether you see the riots in paris or the election of trump or the brakes it so remember the cantillon effect this dude richard cantillon lived two hundred years ago and what he realized was that original research peons of newly printed money enjoy higher standards of

living at the expense of later recipients of that money so since the financial crisis of two thousand and seven two thousand and eight two thousand and nine when those artists at the fed began printing money the new reef cyprian's of it are those winners that hillary spoke about. re in the cities in new. york off a million directions are let's get back to the original quote ok or the guy at the fed say though the person at the fed clearly it i said monetary policy yes is more art yes than science ok let's focus on that what does this mean it means that the fed the people who run the economy who price money the commodity that runs the economy they say it's more art than science i mean they're just making it up as a go along it means that there is no principles that they are guided by they consider themselves artists they consider themselves in precious they consider themselves completely subjective in their view of the world that they can simply

raise rates and lower rates based on a whim there's nothing guiding them of economic reality there's no school of economics there's no science behind it it's pure whimsy and as a result the u.s. economy is suffering tragically now we get into a cantillon effect you can say the fact is if you're a friend of the fed and you get the money first you put it in your pocket or you buy an asset and as that money trickles into the economy the value that acid goes up that you sell to top and repeat that's how we end up with this wealth and income gap that's how we end up with a platonic recy that's how we end up with a new gilded age that's how we end up with people in the street riding and fixed cost for things like health care skyrocketing because of gouging because of robber barrons and now we get to this artist he put his own poop into a can and sold it and it's worth three hundred thousand dollars a can of the artist poop because he recognizes that it's easy to fool people into thinking that my art is valued at this price because i subjectively believe

that you will pay that price and if there's a market around it as we see in the art market is similarly manufactured pricing by people like sotheby's and the media to follow that industry as we are living in the whole of grandma. economics affected and participated by the fed well of course piero manzoni wrap this in cans of steel so you can't actually see inside it to determine whether or not it really is what he says is inside there if you were to open it it would devalue the value of his art so the same with the fed who claims are artists they have wrapped a lot of mortgage backed securities and all sorts of things that goldman sachs famously also said was basically a wrapper of you know their securities were wrappers of these bags of you know we can't say on air but the fact is we have

a lot of stuff hidden and wrapped in stuff you can't see on the federal balance of financial crisis there was a testimony in congress by warner bankers who referred that said yes we sell sacks of poop essentially and we said just like this artist sells ten cans of his own coke and as you point out if you open this can of coke it would lose its value instantaneously and the same thing with the fed you cannot audit the fed when ron paul says audit the fed he's referring to the fact that if you were to audit the fed it would instantaneously lose one hundred percent of its value because there's nothing in there if it's exposed to the light of day it loses one hundred percent of its value because there's no collateral whatsoever in the fed is complete and utter artist poop the reason why i bring this up is since the election all sorts of data is coming out in the united states in europe in around the world what you're seeing is that the democrats hillary clinton won the votes of all the city dwellers all the suburbs very close of the city near suburbs to the city the people who

overwhelmingly went for trunk or rural the same thing you're seeing these protests the yellow vast protest as in you're in france and that is rural versus metropolitan the same thing happening and i think hillary unwittingly touched on it what she called. the city dwellers who vote for her they're the winners and she said those people out in the countryside in the rural areas are losers and they're dead and they're declining to bring that to the continue in effect the can tell in effect you saw that before world war two as well is germany was having to print a lot of money in order to pay all those reparations and who gets the new money the bankers get the you know the goldman sachs lloyd blankfein doing god's work jamie diamond they became billionaires since the financial crisis that happened because they got the free money and as i can tell in effect shows it's the recipients of

the new money enjoy higher standards of living at the expense of those who get it later so by the time the money trickles down into the fly over states and the united states it's really expensive their standard of living is declining because it has got their standard of living has been redistributed to new york city right and the fed official points out the policy is guided more by art than science which also tells us why people who work at the central banks and commercial banks on wall street. because it's monetary policy is science it's mathematics it's predictable it's deflationary that's why they hate it it's like in the wizard of oz throwing tears at the wicked witch of the west they will dissolve in the kind of the disassembled nightmare of their own lies obviously the winners will tend to find excuses not because they were handed free money that it must be some divine

right lloyd blankfein said it was he was doing god's work they come up with an explanation for why they're there innovators their wealth creators they are somehow better than those deplorable is out there and you see the same thing now the same sort of story happening in france. what's driving this french revolution for gotten france is sick of being exploited by the political class and left behind by the city they will probably come up with conspiracy theories that some guy who lives a thousand miles away or two thousand miles away from them in moscow who is somehow controlling the minds of these the forgotten people the rural dwellers those nobodies out in the middle of the country who see who you've stolen their life their living standard by can tell in effect but this movement in france is own

it's spread like wildfire from several unconnected petitions and blogs first posted on social media late last month to the petitions were posted by women a fifty something hypnotherapist in rural brittany called jacqueline morrow and a thirty something commercial traveller in the outer paris suburbs called priscilla neither had any previous connections with politics and they make clear in this article that they hate politicians all politicians end up working for the metropolitan elite at the expense they they say their selves their own quotes are saying that they're paying for all the lifestyle of the metropolitan elite because you know we pay all these gas taxes the gasoline taxes and there's billions collected from the gasoline taxes and in france. but it goes straight into the general fund in france it doesn't go towards building any infrastructure for them out in the rural areas so they have to drive great distances nobody in the city has to drive you and i lived in paris for at least seven years and we didn't need

a car there because we have the transportation public transportation not right and the french people are well organized and they have a history of fighting back against corruption and corruption of the state they have the french revolution the united states had a revolution russia had a revolution in britain they never had a revolution so they're going to get something like breaks of past even though now it's demonstrably economically to their disadvantage they will lose g.d.p. wise between nine percent and three percent depending how horrific they put together their brands and they've never had a revolution so the people are kowtow ing and they are simply taking it because they don't have the dignity that comes with having a revolution the french people have dignity well american people have dignity the british people they do not again these are all sorts of ordinary people non metropolitan people who are joining this protest and in terms of the protests in france whether or not the last looks like they're already wind now macro because of

there is talk of truck drivers during the protests and there is a possibility of a mass intervention by farmers veterans and many bloody minded confrontation with the government backing up because they get together they fight for each other and there's not a reason caste system like you see in britain between the tops and the plugs but of course the farmers are the ones that all politicians and the metropolitan elite in france are very scared of the farmers because the farmers bring their tractors out shut down the entire city nothing can go in or out they also say that this is also a deeper and older issue a sense that tens of thousands of french people are being left behind ignored or exploited by the thriving world of metropolitan france which includes not just paris but leone bordeaux to lowe's grenoble and many other sit. francois she presses environment or minister for ecological transition sums up the issue well he says i see above all the profound exile eighty's of a peri urban friends imprisoned in all car world there is an in-between france

which lives neither in the country nor in the town and whose homes are far from their place of work again they can tell in effect this is what we're seeing in america we saw that in the vote for trump we saw in england in the vote for brags that it was very rural areas that voted for bragg said yeah exactly but there's no way to push back unfortunately so they're going to vote for economic misery and it looks like that's going to continue as i've been saying for two years now well the time when germany in world war two voted for chaos as well. put them in a very unfavorable position and they had to deal with that this is a self harm so. they voted their self harm this is the european central bank it's the bank of england it's the us federal reserve bank choosing to print money give it to the huge banks the huge banks flourished they profited their standard of

living however increased only at the expense of those outside in the u.k. instead of going after the central banks they have tried to turn back the hands of time and they want to live in the in the previous century that's their solution but you can't control where art takes you and the arts of the fed has to take taken us down into a very macabre ugly wasteland don't forget the reign of terror in france that was very profound well we've got to take a break when we come back much more coming your way don't go away. to this because where you can call quote chancellor merkel runs who said we have built up a lot of riches between germany and europe and russia and to

destroy the bridge to see this quite easy and very forced. to loop through a whole lot of. the ways of the united states is dangerous for most of the illegal immigrants. quasi government is to us that's the word of sympathy i want to take on a mantra and i want us to sum this up but i have many of them look for refuge in the so-called sing tree science the draft used to share information about undocumented migrants with federal authorities how to best present mass than. i've ended up as i'm not getting a lot of class and i want that. they can watch as they all choose to stay in the country with donald trump in the white house for forty gravels this is also the have to be about the deal. i said sit many couples won't. deal with the push to

put impulse response both both up for a few doubtful to do the hope of the. you know world of big part of the 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 watching the hawks. welcome back to the kaiser report i'm ask iser time now to talk with chris martin senate pick prosperity dot com chris welcome back it's great to be back with you

max and stacy i haven't talked in a while but i think this is a point in time when we need to check in with chris martenson ok now markets have been a volatile way that chris could this be the beginning of the next leg of the global financial crisis your thoughts absolutely you know how far back do we rewind the clock to take a peak where the central banks made huge errors and they kept repeating them so we had a giant credit cycle bubble in two thousand that blew up ouch you know and then we had ben bernanke has one percent blowout rates and then we have the housing bubble and other associated things double ouch this is worse than all of those this is the third big swing at a credit cycle we have the everything bubble now stocks bonds real estate it's global nowhere to hide yes what i'm seeing in this volatility is simply what happened is soon as the central banks started to slow down the rate of balance sheet expansion that gave us the trouble we're seeing as long as they stay

committed to that path i think we see more volatility all right they have term they can't taper a ponzi scheme they can level economy is a ponzi scheme but di definition you constantly native print more money to keep the ponzi scheme going it cannot sustain itself on its own accord taxes are never going to be sufficient to pay down the debt that has been incurred in the u.s. the debt interest on the debt is dad becoming a line item almost as high as the military so your answer into a hyper deflationary collapse at some point and we may be entering that risk zone of very very soon the last crash happened during a time when the fed's balance sheet was a fraction of the current size interest rates are over five percent and that they're going to i think it to be able to get interest rates back up to four. five percent before they start easing again with like a quantitative for a q e four or do you think that they have painted themselves into a corner and this is surely the big the big one chris first these are we have to

look at this is a global story what are the global central banks up to and you know there's no possible way that the world's central banks collectively are going to be able to raise interest rates aning like what you just mentioned five percent you know let's rewind two thousand and seven there was one hundred forty seven trillion dollars of global debt on the books that just debt not ious not unfunded pensions and title means all that junk under forty seven trillion of debt hate hundred extra trillion we're about it two hundred fifty trillion dollars of debt could that stand a normalization process where interest rates are going to be going up by what three four percent in nominal terms no way we're already seeing the stress in the strain of that so that yes they're painted in a corner and it's worth remembering even now i don't have numbers you know more recent than a few weeks ago but there's roughly five trillion dollars of sovereign debt that still trading with a negative nominal yield it's nuts i mean the world has never been this nuts before

watch what happens when portugal is suddenly having to pay to borrow money instead of being paid to borrow money oh nuts is that right so i want to pick your brain about we've been talking about the ten council in a fact you know when the central banks print money those who are first in line they get the benefit of it they can buy expensive paintings by picasso four hundred fifty million dollars or real estate in new york and they get fabulously wealthy but it does not trickle down to the gen con m e a large and then you have the killie money for the big banks as it combat the expanse of the economy and make it a draw a line that says that kowtow into the ruling elite with free money and the council . the fact has come at the expense of the general economy and is it that they always say that these banks are engaged in victimless crimes and yet

it seems that there are a lot of victims and it's a lot of criminality chris oh it makes absolutely look a lot of people get this wrong they're very confused first they think the federal reserve is some sort of federal entity it's not it's a private concern and it operates at the behest of and for the pleasure of the member banks that own its boating stare stock right so those are the big banks so that's who the fed works for secondarily if we get low unemployment or low inflation those are sort of side effects but job one of the central banks is to make sure the banking system is healthy so that's part one part two all the way back when i first created the crash course that video series in two thousand and eight i said that the central banks when they are facing the bursting of that last bubble they had one of two choices one let the deflationary collapse happen and wipe a lot of things out and that would have wiped out the banks it would have wiped out j.p. morgan probably city for sure morgan stanley you know gold and they would all got toasted may should of because they made bad decisions right but that didn't happen

so if that choice one is deflation in the fed's it can't do that what's said what's choice too well choice too is you're print like crazy and you feed that into the system that's why i had a quote all the way back in two thousand and eight from plutarch's who said the oldest and most fatal element of all republics is a gap between the rich and the poor now why did i put that in there how did i know this was going to happen is because i understood the cantle in effect i understood that when you print it doesn't go to everybody it goes to somebody first so here's the thing people get wrong about the federal reserve they don't manufacture wealth when they print three four trillion dollars that's not money that that came out of the heavens down to earth to bestow purchasing power on everybody so the real question to ask is as they were handing purchasing power which is real to. the people where to come from well we all know where it came from it came from savers came from gramma it came from pensioners it came from everybody who didn't earn a trillion dollars in interest income and the federal just like oh you know what

you can do well where did the head trillion dollars of lost interest income go hey it went to the government which got to borrow money real cheap it went to the big banks which help them hand out record bonuses to themselves that's the game it's not that complex you know the fed doesn't make real purchasing power they take they do create purchasing power but it's not out of nothing it came from somewhere it was given somewhere so that's all we saw we saw the federal reserve pick the ultra elites as the people that should be the rightful beneficiaries of taking purchasing power from the masses and now we get the masses rising up we're seeing it in the catalonia breakaway in the brics it votes we're seeing it in france in the riots we're seeing it in donald trump being voted in these are ordinary people saying weird my economic oxygen go this hurts let's do something different now chris i've been talking to a fair few years and it was a few years ago that we call in the phrase global insurrection against banker

occupation and that's been gaining pace all of these different uprisings and banks have votes and trump votes and breakaways and that all feeds into the same problem because it's a global problem but i wanted to get your thoughts on an idea hare and i would call it something new also in the field of economics that would be zombie economics in other words all the money printing that came at two thousand and eight it didn't create inflation across the board because at the same time you did have selective implosions of bank balance sheets that were hit in our masks by all that money printing so created zombie banks and they now have corporations that can't make the interest payment on their debt and they're doing south through money printing. the federal reserve level so you have what to call zombie it's a zombie economy and escalating toward greater monopolization and it's

becoming very soviet union like in that you have price fixing by the fed has led to a collapse in the free market and. what is that is that a fair observation well it's very fair you know to lead with another quote charlie munger the right hand man of warren buffett said i love this quote he said you show me the incentive i'll show you the outcome right so we're humans we're just incentivized by the area's things so what happened when the federal reserve gave us a zero percent interest rates and and the european central bank gave us negative interest rates on their discount window what happened well the corporations said wow free money i'm going to just lever up and they and corporations now in the u.s. have nine trillion dollars of debt on the books i know that you know wall street journal c n.b.c. they love to talk about the cash on the books but you know the balance sheet of any organization including myself as an individual is assets minus liabilities equals equity c.z. right so yeah they've got some cash on the asset side but let's look at their

liability side just absolutely mushrooms in what did they do with that when they bought their shares back right because the incentive was there for i can borrow money at one percent and retire shares that are yielding two or three percent in dividends i'll do that right plus it drives my earnings per share up and you know i get a better stock option as a c.e.o. or a c.f.o. or something like that so those were the incentives the incentive said hey borrow money and lever up and destroy your balance sheets and that's what the corporations did they didn't invest in r. and d. property plant equipment certainly not workers not pay raises any of that they did what was in their own best interest and that was incentivized by the central banks they knew they were doing it or if they didn't they were certainly negligent derelict in her duties so now what do we have well we got a bunch of super high lever. companies you mention the worst of the worst the zombies they can't even make interest payments out of operating earnings so they have to borrow more money to keep that whole thing going that's why the resign be right this is

a an italian shoe manufacturer can't make payroll but they can still go to the capital markets and in europe they can borrow money at maybe three four percent is just ridiculous right but that's where we are so the central banks really screwed the pooch on this one they've given us an enormous amount of imbalance is i don't see any way out of this without experiencing what people would call pain but i would call it reality settling in which is that italian shoe manufacturer the can't make payroll probably ought not to be in business any longer and that's the essence of a zombie company is they need to be cleaned out so that the fresh companies can come in and keep things moving right now in know in economics they like to price signals and we look at the price of the ten year bond we like they look at the stock market and weigh and fur and we can make extrapolations and we have conclusions what can we infer from the from what's going out the u.s. dollar i mean it's racing ahead you know we're describing a u.s.

economy in a freefall in many respects to over leverage and yet the dollar is telling a different story or is it what's you know the dollar signaling what crisis i wish i wish i could tell you you know because i've been studying this stuff for thirty forty years now and what applied twenty twenty five years ago doesn't work anymore the federal reserve has in the words of david stockman they deformed the overall market structure so when you take both the price and the quantity of money so the price of money is the interest rates we have to pay on it they destroyed the price discovery on that and then with the quantitative easing they also just pushed huge quantities of money out they wanted to control both of those it was supposed to you're not supposed to be able to control both but they did something it's really little arcane it was called offering interest on excess reserves so now in the fed's going through the. rate hike cycle if you can't compare it to prior ones why not well because they're not withdrawing cash from the market place no money is being withdrawn they literally turn a dial and they say there's

a higher rate of interest rob for an excess reserves banks chase that instead of the overnight lending rate and you have a higher rate but you didn't have less money out there so you want to personally go to cut it off right there for a second we're going to pick it up in the second segment thanks for being on the kaiser report all right and that's going to do it for this edition of the guys report with me max kaiser and stacy herbert like to thank our guest chris lawrence and up big prosperity dot com is going to reach us on twitter as kaiser report. one moment i think. we're buddies.

a lot. of them when i do you should have been there so. i don't want to thank you i think that's i mean yes. you know that you know yeah. he continued any kind of taking. a few days of. the before that i think. donald trump outs of a meeting with vladimir putin doesn't seem like a big deal given the already polls states of affairs between. the two countries to the manner in which it was cancelled over twitter may sting the kremlin more than the consolation itself is the mythical trump truth in

a bromance finally over. when a loved one is murder it's natural to seek the death penalty for the murderer i would prefer it mean when the death penalty just because i think that's the fair thing the right thing research shows that for every nine executions one convict is found innocent the idea that we were executing innocent people is terrifying the is just no really hasn't been that we want even many of the dems families want the death penalty to be abolished the reason we have to keep the death penalty here is because that's what murder victims' families what that's going to give them peace that's going to give them justice and we come in and say. not quite enough we've been through this this isn't the way.

to. be. honest you know what obama will ultimately headed back. you. can't get no. french polish detained over a hundred people a central part of his script by yet more angry protests over fuel prices it's the third consecutive week in the so-called yellow face demonstrations over rapid in.