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max scherzer this is the really poor you know twitter's got a lot of crazy things going on a lot of people you know. twitter arising and occasionally somebody pops up or something really insightful really interesting stories or yes i had a very interesting engagement on twitter right before christmas and it's really relevant to all of our stories that we've been focusing on including cantillon a fact and money printing by the central banks around the world of course the european central bank has stopped. asset purchases this month so they're ending quantitative easing for the moment anyway and here's a tweet that i responded to this is from mark j. valid gigantic e.c.b. money printing q e program will and after one thousand three hundred and seventy one days that was from march of two thousand and fifteen to december twenty eighth

seen total money created two point six trillion euros that's per day and an amount equal to euro one point eight nine six point four two five nine six so almost two billion euros per day per person in the euro zone that equal to seven thousand six hundred fourteen euro's he asked everybody who did not receive this sum of money was robbed inflation is theft they're saying that really interested me was that per person amounts seven thousand six hundred euros if you're not richer by that in those three years of love of money printing by the e.c.b. then that's been stolen from you that amount has been stolen from you francis coppola who is not francis ford coppola but a woman she's an economist in the united kingdom and she responded to my reach we what inflation i've pointed out just the quickest your info. that i could find which is from the actual euro statistics website the european union keeps all their

own data and this is what they had on their own website and this is house prices across the euro zone i pointed out that's march twenty fifteen exactly when they started money printing quantitative easing from the e.c.b. member they were quite late to it house prices had been falling so they started soaring and she wrote back correlation does not equal causation. yeah yeah that's right that's that's how this whole thing got started and there's a economists she turns to go against anyone who who has a real world experience in the economy she's an academic she still if you tell or hey you know your house is on fire so quick look at a book and decide whether or not that's true or not and how to act right so she has no practical experience with anything so half the time she makes comments that are somewhat germane to what's going on half the time just like a lunatic but this was the beginning of this of this exchange it seemed to me quite obvious that ok correlation does not necessarily always equal causation but that

was pretty convincing that something changed in march of two thousand and fifteen the central bank started printing well we happen to have interviewed and i happen to know he follows me on twitter danny blanchflower he was a member of the bank of england's monetary policy committee he responded and jumped in the entire point of q e was to raise asset prices from someone who knows and voted for it presses coppola then went silent on this she didn't respond any further to this but here is an actual sound banker and she you know her or her position in this debate have been that there's that there's no inflation there's nowhere you look can you see inflation the central banks need to print more maybe that's what she wants or like that there's no sign of inflation even though we see the unrest in france. and that as we see on the rest across europe this is a result of this these are the people who are complaining about purchasing power

when your income has not increased when certainly not at the pace that house prices your basic fundamental needs you know you need a house you need shelter you need food if those prices go up faster than your income. if you feel anger and here he is saying the entire point of q.e. was to raise asset prices and that's an asset price she got busted and typical a she disappeared from the from the debate because like i said at her house so that was on fire and her she had to go find a book somewhere or some theory that quote in and but she has no practical experience and has no real real world kind of knowledge base that was useful in any way and yeah so danny blanchflower said this is the stated policy of the bank of england to increase these prices to get you know the the inflation equivalent moving identified asset prices as the inflation equivalent that needed to be good

by money printing so was it a coincidence that was a direct result of money printing to create that chart that graph that increase in inflation now government source what she's referring to francis is that governments in the u.s. and u.k. don't include houses in their inflation calculation they removed it years ago because it would require them then to recognize that there was an inflation and that would require them to raise rates and to fight inflation which we might also raise wages and then their friends in the industrial sector who control the government and control the banks would have to pay more so they were eliminated house prices to avoid the cost of labor as part of this massive wealth redistribution enabled by central banks and given academic cover by academics like francis mcdonald or mcdormand or coca-cola francis coppola that's it yet so i continued my conversation because she had dropped out of the conversation you know

it's up to her if she doesn't want to participate that's fine but i continued my conversation with demi blanchflower because i thought that was quite remarkable that here he was admitting that the entire point of q e was to raise asset prices and now why i continue to highlight that is that who owns the. most assets it's the very wealthy the wealthier you are the more assets you are you can see that across the board is an asset price is also stocks eighty four percent of all stocks in the stock markets are owned by the top ten percent so i pointed that out to him i said that's going to cause a cantillon effect and that's caused breaks that that's caused that's caused cause trouble so. you know you have to see this he was responding to my my continued on the policy of why they why they had to do q.e. he said if you can't lower the price of money you increase the quantity in the u.k. the footsie fell from may two thousand and eight picked up at the end of february

two thousand and nine just as the monetary policy committee moved to asset purchases the point of q.e. was to flood markets with buyers pushing others to take more risk and buy more assets well that's right you know that's where danny talking his book in that case he's not really being completely intellectually honest at that point either the point of his money printing was the bailout the banks and whether he knows it overtly or some consciously he must within the brain of his understand that that's pretty much what he was doing he's in the employ of banks who needed a bailout look what i've said all along is that if you want to avoid the social unrest if you want to avoid if you want to avoid the global insurrection against banker occupation pitchforks and torches in the street all that fifteen sixteen seventeen eighteen twenty trillion dollars of money printing that you've been engaged with to bail out zombie banks could have very easily just gone into raising minimum wage. an increase in your g.d.p.

and you would have all the effects you want but without getting burned at the stake here he's pointing out and this is something we've noted and our guests including in the second now steve kean has pointed out that they printed that money he was looking to flood the markets. in order to convince people to take on more risk. while the top ten percent the top one percent the top point one percent were not hurting maybe relative to their position in two thousand and six and seven they were down some but they were still they might have been down from twenty billion that worth of ten billion the fact is they could he could have they could have chosen to instead just send seven thousand euro seven thousand six hundred fourteen euro to every household in europe that would have targeted that would have been q.e. for the people that would have been money for the masses that would have been something that had. cause not the cantillon effect which is what they've created

instead this instability of the wealth and income gap whereby all the free money went to a very select few because when they're flooding the markets where he's meet with buyers pushing others to take more risk and buy more assets he says there's only a small percentage of people entities corporations in the world that get that money from the likes of danny blanchard from the central bankers and that's wall street and it's the banks that they're after banks and yes he's trying to encourage people to take more risk he doesn't bother to add it is analysis somewhere maybe in the footnotes when he says people he means bankers ok he wants bankers to lend out to keep there so there's a money multiplying effect but they weren't because the central banks were paying them for the money that they were given a positive spread so it stopped there on the zombie banks balance sheet as a bailout for the banks he knows it but is using software straight and double talk

so high is what he does you know he's no less of a financial charlatan than francis cognomen dissonance they think that they're doing they've they've he's achieved something he himself is pointing out we wanted house prices to go up house prices did go up we wanted stock markets to go up how the stock markets are like double or triple or quadruple since the bottom so they did succeed he did succeed however the result of the political chaos that is unraveling around you know happening around the world from the she lays down to trying to set and others coming down the pike that's a different thing now we also have new ideas leaders coming up we have alexandra cause cortez out of queens who what she's pretty proposing is a new green deal well of course who else has just proposed that and that's yanis varoufakis he was in new york recently proposing that he's proposing that for europe and essentially. it's similar to money for the masses is similar to

quantitative easing for the people and that governments and the central banks are basically going to pump the credit towards building new infrastructure that we need any way we need it anyway in order to advance. to the next level of capitalism in a post carbon world this is what danny blanchflower is suggesting let's say you've got a bar let's say bill gates is now worth a sixty billion yes let's say there's a bar of sixty people in that bar the average wealth of the people not bars is a billion dollars so bland for saying i'm going to walk into that bar and give bill gates another sixty billion dollars yes and now the average wealth of the borstal billion dollar that's exactly what central bankers did is they they gave it to the likes of bill gates and hoped that he would distribute it to people in need and tell him to say we're successful because the average wealth of everybody is just going up but the their i mean spendable well the way things happen is bill gates's

wealth went up sixty billion dollars and this equivalent and all of wall street and the elite and what you do is you start to justify you deserved it that something a neatly good about you makes you worthy of this and so it doesn't trickle down because you're like those people should just get a job you know they'll say look therefore it's just went up by hundred percent yeah you know that is delusional it's magical thinking is central banks thinking and of course all these property bubbles and stock bubbles are crashing now so that's where we are now going nuts now where you don't just give the money to people and avoid getting torched that are going to get torched maybe you'll learn next time danny are you going to take a break when we come back dr the magnificent steve king don't go away. i've been saying the numbers mean some things matter to us is over one trillion

dollars and. more than ten going over there in tampa. eighty five percent will be well you won't see the old bridge the six percent mortgage for thirty percent is . last year some with four hundred to five hundred three per second per second and bitcoin rose to twenty thousand dollars. china's building two point one billion dollars ai industrial park but don't let the numbers overwhelm. the only numbers you need to remember one one doesn't show you can't afford to miss the one and only . my son missed doing drugs my nephews was still in drugs my sister just with doing drugs it was like an epidemic of drug abuse america's public enemy number one in the united states is drug abuse we started going after the users in the prison populations

more we started treating sick people people who are addicted to these drugs like criminals while i was on the hill. then the war on drugs was on the sting there are countless numbers of people who are in prison for. certain sins for minor minor offenders in the drug trade it's a lot watching your children grow up and miss you in waves and say bye daddy as you're walking out of a business it's just it doesn't get easier. welcome back to the kaiser report i'm max keyser time now to go to amsterdam and speak with

steve came professor steve kane author of the bunking economics steve welcome back to him x. and so i see already you know we've got to talk about the australian property market for reasons that will become apparent quite so here so the australian property market sydney is down ten percent the impossible as happened this is just the beginning or will the government of central bank come to the rescue once again steve came i think it's good to explain the world's longest pump and dump scheme and the pump is now over in the dumps occurring and it's the reason it's try to manage to avoid tumbling into the global financial crisis in two thousand and i is fundamentally some good government policy which was a huge stimulus actually done by one of the gods is currently being grilled by the royal commission into banking can't henry who was then treasury secretary who had gone as they've been the labor. government led by kevin rudd to quote unquote go go

early go households so they threw money at the household sector and that's the government money and you literally every everybody with a pulse got a thousand dollars to spend as they call the tax rate i but at the same time they also raised a lot of the housing bubble by doubling for existing houses and shriveling for new houses what they called the first time in his boozed and i call the first time vendors opposed because it went from giving us every every new buy for seven thousand destroying dollars roughly five thousand us to twenty one thousand dollars a struggle to buy a house and in victoria if you bought an existing and you house outside the metropolitan area they gave you thirty five thousand australian dollars his cash to buy a house well guess what to the house for. losses then when that started to run out of steam the said the central bank there was a bank of australia cut interest rates quite dramatically encouraged

a whole lot of political investor housing and then the so-called regulator otherwise known as ponzi merchant central call is dry and credential regulation authority approved the development of what they called interest only mortgages which meant fish twenty five of the twenty five years of a mortgage you just pay the interest bill for the next twenty you pay the interest plus principle so when the switch over a could the amount of money you paid increased by forty percent now of course you never did that because of course hausfraus always rise so after five years you flip the house and you made a profit on the increase in the in the value of the house without ever having to pay into the principal a lot of wonderful system couldn't nothing good ever got wrong well and to make it is it is still the bank's worked out your living expenses for you so rather you haven't decided what you actually spent that i calculated it for you and the national strike you bank has on the row commission website that they call the

living expenses calculator and you'll be happy to max that if you in size you decided to have a kid you'd be best to rise it in sydney because it costs you seven dollars a day to write. another was process you know about maybe that's great while i'm ahead sperm donor australia but i'm not sure i get a tax rebate for that i'm only joking about that but you know steve you're an economist let me ask a question air so people always talk about venezuela as being an economic basket case because the venezuelan government keeps just giving away money to everybody and i think that's socialism venezuela doesn't work as fail the air but what you're describing there is the government giving away money so how is that different than venezuela other than the fact that instead of giving away the. cash there are thankfully giving away houses well they're giving away houses because only you borrowed money from the banks to bought them and that led to a strike in households going from being heavily leave but not the worst on the

planet so the second was household in terms of level of household debt to income and household that jaideep a second worst on the planet beyond switzerland and switzerland of course runs a massive tried. to try deficit and that makes a big difference because and sense of countries are running try deficit the only country that compared to restructure was wait for it on a wind and island reached its record back in two thousand and ten i think it's since slumped to about from when it went from sixty percent of g.d.p. as the household debt level to one hundred twenty percent during a so-called kill tick saga thighs back down to sixty percent as a bubble but the stress or it one hundred twenty two hundred twenty three percent as the household right level rush of household debt to jay so one of the world record holders amongst countries running outright deficit and now it's all coming on stock because the only way that whole thing would reserve more people jumped on

the ponzi escalator and as you now are you pointed out to begin the spree program house process in sydney which had been rising by ten twenty percent per annum for some me is have now fallen by ten percent in one year and the course is saying it's going to be a soft landing in france it's a soft landing like an exit missile hitting hitting baghdad well you know markets go up the staircase and down the elevator shaft as a family last right and there is the soft landing but you know when you talk about ireland and you talk about two thousand and eight you talk about the housing bubble it sounds like two thousand and eight so the question as are we basically just picking up where we left off in two thousand and eight with all the global banks central bank money printing having worn off at this point and it didn't really do what they hoped it would do a long time. we bet that we ever leave the two thousand a crisis stave it won't be a rerun of the two thousand and process and the country that actually had a process in two thousand and i the ones that are going to have

a two thousand and start process now the ones that managed to jump over it jump over the puddle in two thousand and eight by leveraging up households even mall and that's fundamentally a strike here in canada but also china which leave it up the entire profit sector to some extent possibly korea i think france is looking like one is on a large amount of of corporate debt increase over the last cheney is so there's a range of countries which manage to sidestep the process by continuing to borrow private private money private dead ones that actually did the process back in two thousand and i obviously the america but also the u.k. spine and a lot of it of europe those countries are in what i call the walking dead of dead state they've got they had they had a debt driven ball back in two thousand and five it bust them they reduced the debt levels of bitch but nowhere near as much as they fell off of the great depression of the second well wall so that carrying the ball and chain of dead around their ankles that comp get much momentum up whenever they do the central banks there

particularly the fed will believe ok we're back to normal guys again because they know the role of debt and credit any economy stop putting up interest rights which they doing now of course another was just recently with that increase in. charges people are going to no longer wanting to borrow money from banks and also trying to pay down their debt levels and guys some of them go bankrupt on the devils have currently go out that will mean they'll go back to daily averaging again reducing profit day meaning negative credit rather than the positive credit in the boom before the bust and that will mean they do the growth will suddenly unexpectedly fole and they'll be a need to reverse interest right process and the bank the banks central banks will go back from trying to cool and hating economy you're trying to stimulate a declining one that's what i call john in japanese. and that's the side i expect for the america in particular the u.k. as well europe with its added problems of the euro so we're not going to have

another two thousand and crosses on a global scale we will have a number of oscillated crossties in countries that avoided it back in two thousand and i'd and stagnation like the japanese have been through for the last quarter century in those that had the crosses back in two thousand and eight alright so that's an interesting point there so the one that jumped it over the crisis in two thousand and eight australia canada china korea and possibly france are the ones in line to get clobbered this time let's focus on china for a second you know australia has benefited enormously from the massive wealth creation that happened in china how do you see the trade war now between the u.s. and china unfolding in twenty nineteen go to go to study any comment on the show and are saying is than an incredible transformation of its economy and its culture in the last thirty years i was actually there ninety one ninety two when i organized a conference between straw in china as journalists just as done shopping attack and i we were literally day joining the trial of the gang of four when it was being broadcast on loudspeakers all through by and that stage it was a peasant economy no i wouldn't describe it the standing was extremely low the mine

smell you caught in the streets of beijing was cabbage because people were preserving cabbage for the winter it was a primitive. he did dance of culturally but primitive economically thirty years later it's dramatically transformed it's an industrial power house it's the production of planet. you know country of the planet technological available occurring at a very high right a liberal culture to some extent with big brother sitting in the background but that big brother is more responsive to what its people want than the countries that the west with the followed him ocracy we have in the west so dramatic transformation but they are a solution to when the when the global financial process heated china's exports fell by about forty percent and you had a dramatic shifting of people from all the. the coastal cities where all the production and try to goes back to the rural hinterland because they get way with the chinese social security system you are registered for

a particular location most of the work is in the coastal fringes were converted peasants from the countryside they had to go back to the countryside and they were not happy ending up motley there was talk of revolution talk of writing the war and of into warring city. stites like the same provinces that of china could go back to being out in separate countries so the chinese communist party basically hid the message because the most they could they told their banks which allowed and started controlled suddenly to lend to anybody with a pulse the increase in private debt in two thousand and ten in china was roughly forty percent of g.d.p. in one year and they went from a dead level of about one hundred twenty percent of j. esus private debt to about two hundred percent in a matter of five will sixty is the fosses right of growth of private debt ever in history three zones foster than japan or america during the bubbles but what it meant was a huge stimulus now of course that's built all those empty empty cities we've been

saying for the last decade now that's running out of steam those processes can't be sustained and falling over but at the same time the chon is going this body is directed state level finance to say let's build the biggest infrastructure boom in history so you have all the high speed rail being through the through and through china itself which i'm looking forward to experiencing one day. the the silk road engine issued as well which is building a conduit to europe with chinese workers and chinese firms and chinese goods being built through the countries between china and europe so that is actually both from what i'm saying equivalent to something like about fifteen percent of j. spending by the government now the give that put out in concert that's three charms us with a gross sky. all of the the new deal during the great depression and and one and a half times the scale of the obama stimulus in two thousand and ten so that huge

local government spending is masking the collapse of the credit system oh fantastic steve nice talking with you again have a great new year by the way how can people contribute to you. you know well they can go to the website chargeable w poetry on dot com slash and sign up to the minimum sign up as a dollar a month maximum is a lot more than that if you want to be generous my basic idea is to give an amount of money that won't make your spouse annoyed with you and i can support my work and keep in touch with the research i'm doing to try to give us a decent economics is there an amount of money that one can while make your spouse mad at you that's an existential question for twenty nineteen that's being on the show steve thank you that's going to do it for this edition of kaiser report with me max kaiser stacy herbert like to thank our guest professor steve k. and you can find him a patriot if you want to catch us on twitter at kaiser report and select a bio. welcome

to the crystal ball edition of crossfire what can we expect in the new year we have a great lineup of guests telling us they think. it's hard to imagine decades after the war a nazi don't tell was still active. in the nineteen seventies crittle had as the chair of its board a man convicted of mass murder and slavery. the german company develops a 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 anything. she said is just. so they don't mind victims i have to this day to receive to know. compensation they never apologized for the suffering. not only want the money i want the revenge.

questions are raised over a new york times reporter who revealed an anti-republican this information campaign in alabama it turns out that the journalist spoke at a secret meeting of the group behind a scheme several months before he broke the story. of his forces are seen entering a city in northern syria close to kurdish held territory as opera agrees to coordinate its actions in syria with moscow and. he says. a police officer takes aim at a journalist trying to film the yellow that's protest in the french city and when we

reflect back over the weeks of demonstrations in france with the philosopher it's lovely music.