thanks to wider acceptance of the supernatural report finds you know i think that's a good metaphor analogy whatever for the u.s. economy whereby you know they all look for this fed speak of what the fed says and and what my future looks like oh i get to buy another two hundred fifty million dollars apartment in new york city thank you thank you for cutting rates this year well you know i've given a story called precedent for this after world war one the carnage was so bad and there was such a horrific murders and trenches gas warfare and that we had a rise in america and around the world of spiritual ism so people were trying to make contact with their dead grella to they couldn't justify their means they couldn't see you know what the point of all this horrific murder and war was about and you have this incredible rise of spiritual ism and it's very well documented in houdini when after the spiritualists a very interesting story so this is kind of echoing that you have

a two thousand and eight crisis which is like a complete devastation of the world economy wiping out millions of people and the devastation is horrific and no it's providing an adequate explanation they don't understand why would you steal a lot of money why the central banks are gods why am i broke so they're turning to psychics or spiritualists and because of the devastation so it's the human nature tries to fill in the gaps psyche they try to make sense of trauma and they had world war one but they all said the spanish flu the bird flu that went around the world and killed many millions of people so they were trying to make to understand what had happened to them and i think you have that with that turning to conspiracy theories as well mainstream conspiracy theories fox news and m s n b c each have their own set of conspiracy theories and you watch it if you yourself are not traumatized it's crazy to watch it seems absurd but you see that it does provide some sort of comfort to those. who are watching now the wise they want to be

watching it so excessively but they are comforted now i want to look at this headline about this sort of money printing that has followed and the you know the the bankers also you know they they're sort of turning to spiritual ism is turning to this this all of the central banks who grant them all this good fortune right it's a tweet thread that is we're following the whole thing but we'll go over some of these tweets in this long tweet thread from me on and he says some thoughts on silicon valley's and again we have long said the biggest risk to the bull market is an i.p.o. that is now upon us the first tweet from that goes in two thousand and fifteen venture capitalist bill gurley predicted dead unicorns and that all these private valuations are fake now he has reconsidered his view you have to adjust the reality and play the game on the field there are no more disbelievers except for one guy chain mouth so bill gurley is a member of park d.c.

he's invested in zillow open table previously on the board of hoover so he had he himself had said like he was going back in twenty fifteen that all these unicorns are going to be dead but now all these unicorns are worth even more and they're all about to go public live and the fact that there are only believers and just one disbeliever the theory is that therefore these are all going to die ok so the private companies that have got a lot of v.c. venture capital funding are ready to go public this year i saw the list they're all going out of forty fifty sixty seventy billion dollars valuations so the prediction here is that it will be the end of this cycle you're going to have a like two thousand and one style crash. due to the fact that there's nothing to support the valuations of these companies and very quickly will crash that while this venture capital himself reversed himself back in twenty fifteen he was saying out. unlisted venture capital market was giving these huge valuations to companies

that could never be supported another going to go public so he's assuming that they will have a bad time in the after market in the secondary market that's assuming that the central banks don't continue what they're doing right now that is to say print trillions and trillions of dollars to keep dead unicorns alive to keep zombie banks alive so i don't know why they would stop at this moment i mean why now why would they continue i don't i don't understand why he's making that thesis not sure well the thesis is like just like say in the bear market when the last bear capitulation says that's it i'm not going to be shorting this market anymore i'm not going to not buy in fact i've decided to go long after dissing gold say for twenty years now i'm going to go along usually that's the time to start selling when the last bear capitulates so what he's saying is like the last bear capitulated on these these

unicorn silicon valley v.c. backed the last bear capitulation there's only one guy left just one so once that guy capitulates then there are no more bears there's nobody to short this thing there's nobody to doubt it and there's nobody to bet against that to take the other side i get that yeah but i also cognizant of a world in which there are no restraints whatsoever on multi-trillion dollar quantitative easing money printing schemes and the only thing i think that will take the wind out of that what i see and i see it happening in the political market the political market is showing signs of collapsing due to the inability to negatively short sell the platy a market that could be the beginning of a massive unwind much of this is that this is going to talk about venture capital funds this is tying in with the money printing in the wall streets and you know the fed keeps on saying that they need. to print more money because there's nothing

there's no money out there there's no money we need to get people to we need to cut interest rates in order to get people to invest what i'm going to show here is that there's billions of dollars on herd of amounts even for silicon valley they cannot they have too much money they can't possibly even spend it and they're saying they have more money than they possibly need and yet the fed is saying we need to print more because it's not circulating right here they talk about it for it to twelve and thirteen he says because of q.e. capital was abundant but not had no where to go and be productive because the world was still in a downturn the scarce asset was growth and so have created a bubble in the riskiest long duration asset venture backed companies as lesson puts it technology was a bubble of last resort soaring tech valuations are really more a commentary on the plummeting value of capital than the value of tech companies themselves this is now changing money is becoming scarcer and the cost of capital is rising you know i'll go over some of the fun is going to pop the dot com bubble

was that it was a realization that a band with costs were not plummeting at the rate that it was assumed at the time of and that bandwidth was proliferating at the rate that was assumed at the time there was an extrapolation of bandwidth that growing at forty percent a month and so this was going to drive ubiquity in the internet and then suddenly somebody came along and said you know what actually it's growing anywhere near that rate and so every valuation crashed ok but that was tied to an actual fundamental plank of that industry band with here this is tied to something that is unprecedented in modern times have to go back to medieval times to find any any of our log and that is unchecked. money printing to the tune of trillions of dollars and there's nothing to stop it there's nothing to stop it and the last dot com bubble that popped in two thousand and two thousand and one that was actually building out the infrastructure

a lot of those billions of dollars that blew up actually went to laying cables all over the world this time around almost all of these unicorns have put all of that risk of building their infrastructure on to get a commie workers who are building these so but however the vcs again i mentioned that there's so much free money just for the billionaire class here's some of the numbers so he says vcs are raising ever larger funds at an increasing pace despite a lack of viable opportunities sequoyah raised eight billion dollars largest ever by a u.s. venture firm it's easier to raise money than any time i have been in business said david rubenstein of sequoia does not bode well for future returns and then he also skips forward to there has been a ten fold increase in v.c. stage investment by mutual funds and just three years with more than two hundred fifty funds now holding positions in private tech companies so of course this is

one of the theories is that like everybody who wants to be invested is already invested more than you like has ever been needed there is an eight billion dollars worth of of of investment opportunity we saw that with i.c.a.o. is people wanted to invest they had some money from their prices going up and they that was they were throwing money at i.c.'s who just had a white paper and there was nothing actually there so this is what he's seeming to suggest is that a lot of these v c's are raising money but there are no opportunities to invest right well i have the same argument about the dow jones when it was trading at around nineteen thousand on the dow jones that the last bear have capitulated so therefore using contrarian thinking we must believe that the dow jones has in fact . opt out well no it's pushing twenty six thousand right so that i understand the country an argument here but given the broader context of unchecked unlimited money printing by the trillions there's nothing to suggest that the bubble is going to be

popped up this time a lot of those sort of contrary and bats in the last bear has capitulated the last bull is capitulated and blah blah blah and you can never have negative interest rates that was before the cult of the central banks so central banks we don't know how much of the shares they're buying we know in japan openly the swiss national bank the bank of japan are buying up all sorts of equities and bonds and stuff but i also want to point out the other problem for the u.s. he's pointing out is that saudi arabia now has a bad reputation not only did they chop up this guy melted down and cook you know that jamal khashoggi the journalist for the washington post but and now it is looking like they had a whole hit squad killing all sorts of people you know americans you know the media doesn't care about that m s n b c maybe doesn't care so much about that but because it's not you know and we so-called enemy nation venezuela china russia but saudi arabia is the single largest funding source for u.s. startups funneling at least fifteen billion dollars since mid twenty's sixteen s

kara swisher said if you remove the saudis from the worldwide network everything collapses by comparison china has invested just eleven billion since two thousand versus saudi arabia's fifteen billion write in a bad reputation or trading on the new york stock exchange it would be them highest capitalized stock on any exchange anywhere in the world bad reputation doesn't. matter what is so ever on people's money flows of anything it helps and the saudis they could just bite the bullet and take around co public that's a trillion in cash right there so again there is no a limit to the free unlimited trillions being friends. if you have the right friends in the central banks and finally quickly this last tweet here to show you the juxtaposition between silicon valley the most privileged of america versus west virginia the least privilege of america oh my god west virginia lawmakers have

sided with dow chemical and agreed not to implement stricter water standards recommended by the department of environmental protection why look at their reasoning they argue that the e.p.a. encourages states to incorporate state specific science and that because west virginians are heavier their bodies can handle more pollutants and that because they drink less water than the average american they are less exposed to the pollutants so this is what it's like to be at the end of that toxic river a free money that starts out goes to silicon valley for free they get to invest in all these uniforms and you get fed toxins because you're fat go along body bags all right well we're going to take a break when we come back much more. breaks

it killed. join me every thursday on the alex i'm unsure when i'll be speaking to guest of the world of politics sports business i'm show business i'll see if. i would call me just manufacture consent to the public will. when the ruling classes protect themselves. with the final larry go round be the one percent. we can all middle of the room sick.

see. such konami smoke by still making fun of me that might come up one of them for someone who is you know families of someone such as the feds about. the. mother was. next i think that. she is or was he making. more serious for him. john but summed up some of my post books to go to the british course that's enough my family thought. i mean they got. to. take.

welcome back to the kaiser report imax keyser time now to turn to michael penta of pent o.-port dot com michael welcome back thanks for having me back on max well all right let's get into it since we spoke a month or two ago michael the fed has continued to iraq how they are now claiming that a is permanent and that in fact negative interest rates may be next year thoughts michael pent up well you know i find it amazing max that you know you have to come on shows like yours that actually tell the truth and

center most of the mainstream media which obvious case what's actually happening to the middle class and to the american people as a whole. you know what's happening here is that the fed has admitted that they have her minutely monetized a little over three million that's what she really in dollars worth of consenting of their debt of the money they print x. nilo ok out of nothing and that that was something i remember mr fischer of the dallas federal reserve once said that the federal reserve of the united states would never go down the road of a banana republic and rick hundreds of billions or even a trillion of its own units of currency but we just printed three point seven trillion dollars coming out of the great recession. and we're only dealer to drain

maybe about six or seven hundred billion dollars of that there's going to announce very quickly very soon here exactly the final size of its balance sheet but let me make this clear the federal reserve of the united states is now acting like a banana republic has printed wellmost words trillion dollars and will currently monetize over three trillion dollars oh it's assets all right when quantitative easing was first announced a lot of people said mike us that is debt monetization and isn't that what banana republics do and the answer was no because it's temporary and big a while we can start reversing this at any time ben bernanke has said we could reverse and fifteen minutes so here we are several years down the road and they've just announced that it's permanent it's not temporary and every time they try to

reverse it they can't because it can never taper a ponzi scheme so. even though we are in a banana republic in that sense and we're. we're only human now we're not a banana republic because everybody else is doing the same damn thing i mean you know maybe what a banana republic did its currency collapse because it was a world's reserve currency so let me be the ecb the export prices go through the roof the currency collapsing you know hyperinflation but everybody's doing the same thing the e.c.b. is doing the same thing the bank job isn't the same thing so maybe we're not going to have an isolated hyperinflation like we had in say zimbabwe but maybe we're all going to look like rome rome as the world's reserve currency that is a thousand and he will percentage rate of inflation how does that sound for the middle class you know let's explain a little bit of the mechanics here the fed prints money out of nothing and gives bang. something called dead credit which is actually. just good is cherish its base

money but by saying to the central to the commercial banks by the central bank saying to the commercial banks. our three trillion dollars worth of base money and permanently monetizing what they've said is we have no ability to take those hot high powered reserves that high powered money out of the system which is a fractional reserve system genndy multiply by ten times or more especially when you figure x. factor into the sweeps of the men deposits into long term deposits so what i'm saying is is that inflation could run intractable and the fed is basically a minute that we can do nothing about it we have no ability now to take those reserves out of the system and we have no ability to raise interest rates any longer because we we've given up that right to that's how they raise interest rates

you know they sell assets grey money out of the money market and interest rates rise they don't have that ability they're really diminished by three trillion dollars they can't take at money out any longer and that also means that they have less ability or willingness or desire to fight the asset bubbles the massive asset bubbles in equities and in fixing them that they have created so good by middle class right now during the two thousand and eight financial crisis eric holder the attorney general barack obama famously came out and said look these big banks we can't prosecute them they're too big to fail and we have to look the other way when they're committing fraud and by doing so he opened the gateway to having that double standard of law applied to the central banks and way you're describing is a situation where the central banks are now too big to fail there's no economic law that. applies to them the gravity doesn't apply to them they're simply printing

money add in fun item in what could i think be characterized as a ponzi scheme but to your point i think is is the main point is that the middle class gets it best separated right and then you get people like you see coming on the scene and exposing things like modern modern modern monetary theory you know that's what the central bank of this yet of the united states of america is doing they're actually doing this modern monetary theory random they are printing money out of nothing buying assets and their kids sling those assets there curiously in those as is it never existed. ok that's a form of modern monetary theory by the way max if they couldn't reverse what they've done in an emergency you know after two thousand and eight if they were able were able to really even choose the excess reserves at all basically

on the mortgages will you be able to do it because don't forget central banks around the world are it zero percent interest rates they have no room to lower interest rates so the next downturn which by the way we're pretty much in the middle of right now if you look at earnings per share on the s. and p. five hundred negative look around the world is really no growth anywhere the next recession that occurs what's going to happen forget about your skinflints reach really and we're going to be in multiple trillions of dollars to the federal reserve balance sheet and guess what everybody is you know where it ends it is intensely leaving all those reserves in the system flooding the baton system making the banking system healthy blowing up assets would be ultra rich and with no possibility of taking that away or we're just going to continually monetize debt exponentially as time goes by and as each recession waxes were pernicious because.

well we have a new concept in the mix and that would be negative interest rates so there's nine point three trillion worth of bonds that are sovereign bonds or the kind of glory of negative interest rates the thinking is that this will enter the retail banking space at some point and that they money on deposit at the bank will not yield you point zero zero one percent but actually give you a negative yield so it just becomes a confiscation scheme that is the cessna t. to keep the banks from having to implode which the government and the central banks will say we can't possibly let happen so you're going to have to. tide you're going to have to give part of your money to the banks to keep them afloat how is that different than in medieval days when we had to give a tie have to the king michael so they've tried to surrender you don't such as that were we might be going to make it

a race here in the united states they have negative rates right now negative deposit rates so the excess reserves that are held by banks in europe they lose money by holding them at the european central bank and the idea is hank don't keep your reserve access reserves that were created on our balance sheet because you're going to be losing that money you better get out there and lend it so if you lend it you don't lose any money but if you keep it there you lose money but guess what banks and your aren't lending money really willy nilly because we are in a condition or debt saturation across the entire planet so it's a different of a european bank says i'd rather lose a few percentage points on the excess reserves to the e.c.b. rather than make a loan and have it go default that you have to go completely default and then lose all my capital. so you know that there is no free market anymore max and there is no easy solution other than having the currency and the debt and the jubilee and

reset everything let's start all over all over again that's the only hope we have left before we enter into a condition where i call global intractable inflation in a profound basis case a global stagflation that's was coming in the next couple of years right and to do a global race and of course you would need something to stop that against and the name that comes up of course all the time would be gold and i want to talk about gold and palladium here for a moment so give us your take on gold and also play to him because palladium is a record not record high for palladium you know you know if you look at precious metals i'm a little dumbfounded in the fact that they are soaring right now i mean they are doing very well compared to what they're doing in two thousand and fifteen but max when you have global central banks don't forget he's seen be threatened to raise interest rates in the summer a year ago now where are. they going to another third round of t l g r o ok so are targeted long term refinancing operation now the bank of japan which

owns almost fifty percent of their it's higher equity market never even threatened to be able to raise interest rates or even stop. so you know if you look if you live in a world where nominal interest rates are around zero or even below in most major center back central banks and after you are in just for insulation they are negative reply only negative and will be coming even more negative over time then how could you not buy gold physical gold take it in your possession at least ten percent of your portfolio at this point should be in physical metal and then you should buy some gold stocks ices some silver some play the i'm. and. i'm sure you've read the i here is so we got about forty seconds left but i do want to get your reaction to

a thought that's being posed is that palladium is getting hit with a massive short squeeze from people taking physical delivery and something i haven't seen in gold and silver where they've been settling in paper palladium could be the first in a domino of precious metals to face actual comix physical delivery calls your thoughts like i've been saying three years you must take physical possession of your precious metals that's right not your kidneys not your gold all right thanks so much bring on the cause report michael pent up. thank you guys all right that's going to do it for this edition of the kaiser report was made max kaiser and stacey who would like to thank our guest michael pentel of pentothal poort dot com if you want to read just on twitter it's kaiser report by l. .

ukrainian presidential elections are just days away but the cause of eligible voters still don't know who to support with thirty nine candidates in the race is the choice too broad. to go straight to. the tense situation in venezuela is still all over the news the problem in venezuela is not that socialism has been poorly implemented but that socialism has been played only implement from the inside venezuela things look different we're going to announce sanctions against the venezuela associate. of a supplement. down. move to.

the who story isn't new makes him cold in henry kissinger to tell him that it would not be tolerated in latin america. an alternative economic and social system could take hold and therefore the policy would be to make. the chilean economy scream so wants and making the economy of venezuela screed.

the front. was one of the richest companies certainly and now it's one of the poorest countries of the world company not country. president someone as we. pulled from the mediterranean. more than a hundred rescue boards including children. they are not cast away. you know. billions of dollars in charges for. medication.