as well if that happened our economy would be even better on the world economy we agree on quickly enhance good for everyone this brings to mind to ship wrecks one the poseidon adventure and the other the titanic on the poseidon adventure they had to realize that the ship it flipped over and it was upside down before they could escape you know and then what the titanic you have these negative interest rates and the economy is sinking but if you remember the titanic film or you know based on the titanic sinking. the front of the boat back started to head down into the ocean the tail of the aft the not the bad but the tail. it flips up so those are those are the people who buy these negative rate bonds they have the sense that their value of their act of their equity of their bhaumik what is

going up as the titanic that is the u.s. economy heads points down to the bottom of the ocean and when it perpendicular. on the horizon there then the entire thing saying so trump is we are about 5 to 6 degrees away from perpendicular perpendicular and trump is calling for more of a faster sinking he wants to you want to us the economy to sink faster and you know so and i thought when he came into office he had some brains. but it turns out he is completely out of his mind so this is the end game of any system i think this is the 1st time we've had a global fia system all fiasco prior to 971 as we've pointed out many times we had the gold standard and against gold you could devalue your own currency what we saw

in the 1st great depression the global great depression was a beggar thy neighbor sort of policy so everybody you know reduce their own currency against gold faster and faster to try to beggar thy neighbor we're seeing the same thing of course with the us dollar i think part of the problem is we can't really go negative we'll see you know. alan greenspan this past week said the u.s. dollar can go negative our treasury bonds can go negative however will that destroy the u.s. dollar as a global reserve currency so europe going negative has kind of beggared by neighbor what trump is responding to i think when he sees them being able to cut rates to negative and in terms of that you know titanic people at the top of the you know the part that's not underwater yet they think everything looks fine and is hunky dorey and they're dry right right so something like 94 percent of all the bonds

sovereign bonds that are yielding positive rates of return have a positive yield are the u.s. treasury and u.s. corporate debt even corporate debt in europe is negative 94 percent of bonds that have a positive yield are u.s. bonds so that would be just a few degrees from perpendicular so i think i think the u.s. will go to negative interest rates and i think that will be when the entire global economy still does it right down to the bottom of the ocean and you know gold and of course because when will skyrocket i mentioned alan greenspan he's the former head of the federal reserve in america before he became the federal reserve chairman he of course was a big gold bug and wrote some by. gold and then he started to speak in fed speak he invented fed speak but i think that was really his own way of like you know cognitive dissonance he knew that it was all fake but he had to pretend that he was you know he was speaking truth and his length his mind but nobody could interpret

it and they only read what they thought they heard in the family so he said it's rubbish than what i'm saying you didn't hear me well that's a good way to put it because he says greenspan says there is no barrier to negative fields in the united states but the other point i want to point out that he said because this is what we've said here in kaiser report he said why people continue to buy long term treasuries at such low yields maybe also due to forces haven't altered people's time preferences but there are hundreds of years of history showing the long term stability in time preference so these changes won't be forever so he's saying yeah rates could go negative but obviously this is because something has changed humans time preferences investors time preferences. being off since 1981 but he's saying that the long term stability people will come to their

senses one day and this whole thing will crash you know it's really strange is that in these bond markets the liquidity to sell doesn't really exist for you know the fed and other central banks of trying to sell their bonds on their balance sheets they couldn't find any buyers so they stopped they stopped quantitative tightening and they now they're back to easing in the go back to quantitative easing q e 4 in america so without any market to sell their bonds the path of least resistance is to keep buying bonds a particularly since they're being given essentially free money if you can borrow for nothing and interest rate is 0 or less than 0 you know it's not a market where you have to buy from a seller you're just printing you're just printing. chains out of thin air affectively so this market is so strange because there's no there's no there's no market for a sale there's only markets for vertical ascent and hence the prices are going negative the yields are going negative right so this is the poseidon adventure

mixed with the titanic in one colossal sinking of the global economy right now we've got donald trump starring with the ghost of paul newman on the bridge of the titanic watching as they engineer a colossal failure of the global economy and without it without the benefit of owning any gold less than one percent of investable assets around the world there's $100.00 trillion own gold. there is a lot of gold of the bottom of the sea thanks to many ships that you sent to carry the gold across to the point and point where you find the gold best for our answers when. we figured it out also you mention the strangeness of what's going on in even alan greenspan in his fed speak his elliptical way of speaking is saying things are strange because time preference seems to have changed radically people no longer value time well the bond black hole is getting larger and scarier with

a 3rd of the global market now negative the quantum of negative yield debt doubled to 14 trillion in the 1st half of 2019 its growth now appears to be hitting more speed because it is melting up in terms of the quantity of these negative yielding debts it was at 17 trillion i don't know by the time we speak it could be 800 trillion by the time as air is it could be i have spoken so by the time i spoke it could be a fucking try to remember the game back the titanic they hit the iceberg and you know wasn't i see there's a brilliant video on this on line as all 2 hours and 40 minutes of the iceberg and that's. king of the titanic re redone in real time it's beautiful for this is that you can understand the economy so they hit the iceberg and they're taking on water for 2 hours you know it's over took 2 hours before the actual sinking began in earnest and you know this is where we are the sort of negative interest rate as in

2008 the global economy hit the iceberg we had a credit freeze the global economy it's been a disc stinking epstein like corpse since 2008 and the central banks keep pumping in the cash but the market takes that free cash and they buy bonds to the point where they yields are negative so that's the capsizing of the boat and they're almost vertical and we're almost right it right down the bottom of the ocean where all the gold is again to mix all our metaphors we have passed the event horizon and apparently according to physicists once you pass a event horizon there's no going back you're going to be turned into spaghetti and thrown through that black hole what lies on the other side i don't know perhaps it's all that gold at the bottom of the ocean and that will rescue us but of course germany denmark netherlands and finland are all now negative all the way out to the end of their bond horizon and whether or not the u.s. will go there alan greenspan says it might be possible but i want to turn to

a quote here from hong kong based mcquarrie strategist victor shrek's because it's because he says this the destruction of time value is again like physics you know that's not supposed to be something that happened alan if albert einstein were alive today and he looked at what's happening in the bond markets i think he would be you know sounding the alarm and telling everybody that we've hit an iceberg and move on so he says that we've destroyed the time value of money as this is the core of finance theory so the fact that we've destroyed the core finance theory we've had this meltdown he says this has serious consequences the destruct. and of the cost of money not only interferes with credit cycles but also keeps zombies alive it encourages speculation and discourages productive investment and spurs a race to the bottom with beggar thy neighbor strategies as nations compete to

maximize returns from an ever declining utility of debt g.d.p. adjusted for actual inflation including stuff that people actually are exposed to like health care education and food is negative has been for a few years now the economy in the us is shrinking right now used to take $1.00 debt you get $1.00 g.d.p. where they give. $1.00 g.d.p. then it now it takes $5.00 of debt to get $1.00 g.d.p. that's obviously it doesn't work because the thing about some statement is that it mean it can prove he's he's lost his mind in one in one very simple equation if the economy is growing you raise rates that's the economic orthodoxy if the economy is shrinking you lower rates jump a saying the economy's growing but we need to lower rates that's an oxymoron that's

refutes all it can amik orthodoxy and makes absolute it's only an insane person would make that state well because he sees the propaganda free numbers that they do massages the numbers and i think where if you're closer to the treasury and get to see the real details you know that is taking ever more debt to stand in one place i think that's interesting that it's just math it's the math as i would say in england and it's interesting that because one is about believing in math we have andrew yang sent to us and he's all about math and he even has the hat now that he you know sells on his site it's all about the math so i think people. are starting to recognize the physics of the situation of passing the bet horizon i don't know if it's too late but gangbang is in the house for sure and they're putting forward mathematical solutions to a mathematical conundrum how do you put 20 pounds of garbage into

a 5 pound bag that's the attempt by the american economy is physically impossible yang is saying you need a 20 pound garbage bag to fit 20 pounds of garbage and that's what gold is always bennett's mathematical number and now it's number on the chemical 79 on the periodic element table mounts are making a comeback and it's all coming back mathematically i can guarantee you will be back after this short break don't go away.

you know world's big partners. and conspiracy it's time to wait 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 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 we're watching closely watching the hawks. cash cow and darling alfonzo among his dart has chosen peach dard so though. his 1st words were at a low a see or a challenging post you got 2 years to live. i have no doubt that what happened was criminal.

defense concentrate market is a $1000000000.00 industry these companies have a huge financial motivation to sow these products there are numerous documents showing that doctors were keen to cast factory concentrates free infectivity on their patients gives them doctors the wrong to play golf term system and why they would keep me consecutive those years day to day and people still die and i'm always question or so i tried being hard to live when so many have. welcome back to the kaiser report i'm max keyser time out of turn to wolf rector of

a wolf street dot com all flocking back thanks for having me back max compass demanding the fed cut interest rates by 100 basis points and restart quantitative easing your thoughts wolf rector and that's interesting because also trump is saying that this is the best economy ever so why cut interest rates by a 100 basis points on the already low when this economy is red hot and. you know we're sort of tony between the 2 and the economy is probably in the middle yes not the best economy ever but it's pretty good shape except for manufacturing is not good shape that services. you know consumer spending it's growing retailers doing ok you know in this sense economy is doing in the middle of the range of the last many years and and so there's really no no reason to to cut interest rates from the already low levels and of course to market has already. cut

those yields down away by about a large amount and and so the stimulus in terms of lower rates is already arrived in the markets i mean barring mortgage rates have come down a lot are corporate borrowing costs have come down so that's already happened without really the fed cutting much of anything that cut $25.00 basis points and the market rate started coming down 8 months ago so those financial easing has taken place and the market which without the fed doing really any cutting and. if i don't think it's necessary to cut i think. the market is overreacting to this and and you know i would like to see the short term rates it where they were about 2 and a half percent and i think just about the rate of inflation i think that will be about right rate of inflation as measured. by by c.p.r. as we usually do you know not some other rate of translation that we might personally experience which could be a lot higher but this whole idea that the market they conned me is doing great

let's raise rates goes against orthodoxy in terms of if the economy's going great as great as tom says it's going to raise rates that that's what you do if the economy is doing poorly lower rates so he's he's being duplicitous air or uninformed and you know just a few years ago he was saying the opposite that the fed by cutting rates is undermining the economy and isn't just become an expedient for ham to mouth the corporate line and defend the banks outsized profit margins or is he become a less informed sense he's become president while well i don't think that trump is informed i think he plays a political game and he has his own objectives and sometimes you know he needs to make people happy over here and sometimes you need me needs to make people happy over there and so he says these conflicting things and and it's driven by

a political objective not really by. essence that we're facing and so he will will change his mind i mean during the campaign he said like you mentioned you know interest rates artificially low that stock market is fake and you know there's a political objective behind everything he says and i think that's how we have to look at it oh ok so the time tromped arrangement syndrome that was popularized by some corners of the political spectrum in fact could apply to comp i'm self when it comes to interest rates an economy now a strategist out of hong kong recently noted that negative rates suggest quote an ever declining utility of debt ok it's interesting phrase that nations is now engaged in beggar thy not neighbor strategy 1st is trump right to respond. to the attempts by europe south to expand i think just like the conversation to global sense what you know what trungpa seeing is that rates are going down in europe and

that the us to remain competitive is supposed to be lowering rates but the larger question here would be an ever declining utility of debt it's a phrase you go into in your recent podcast in great detail can you expand on this clearly if you have 2 major economies such as. your p. in the euro zone and japan cutting rates below 0 that has an impact on on you know the economy such as the united states' economy and and it changes you know exchange rates and so forth that could be some disadvantage and there's some real problems and try to get rates to low and we've seen those and in japan and in europe japan is and you know 0 or a 0 percent rates and negative rates for 2 decades and you know the banking stocks are down 92 percent i just looked at this the other day when it in my podcast 92

percent from the bubble high in 1989 so that's 3 decades ago and bank stocks if bonds by 92 percent sense and have not recovered their european bank stocks are down where they were in the 1990 s. . banks need to be healthy for them to supply the kind of infrastructure that an economy a modern economy needs and if you don't have healthy banks you know you can't really run a healthy economy and you know low very low interest rates or negative interest rates make it very difficult for banks in the core business to make money and so they venture into very risky activities. just to make a little bit of money and these risky activities make these banks much more fragile and much more. risky. as a core element of. the financial infrastructure and so they you know they don't do it the supposed to do and they just chase yield and they're they're paying they're taking on extensive research is into lateralized loan obligations which are not

really hot at banks and and you have a situation war bank stocks bank investors feel like the banks are way too risky you have an economy that's becoming unhealthy because. the standard. thinking that the standard decision making in an economy is is pricing of risk and that's expressed in a cost of capitals as something gets to be riskier investors demand a high yield and that helps corporations identify how much risk they can take and so forth and we take rates to 0 below 0 that whole capitalization goes out the window now you have mal investment as a consequence you have all kinds of wasted resources you have companies taking way too much debt is doesn't cost anything and they're not using it for anything productive so they're buying back their own shares now it's kinds of things and so you have an economy that really doesn't perform well and he see that in japan and

you see that in europe in the united states we've had rate hikes in 20182017 our economy has outperformed that of europe and japan so you know i think negative interest rates negative yields are are they destructive think they're maybe ok very short term to deal with an emergency but now that's been going on for years and there is no emergency and we're all touring the way an economy functions we're taking away a decision making model that we have relied on forever which is to the pricing of risk and we're replacing it with some kind of wishy washy concept that nobody really understands and knows how that's going to to turn around so i think. it would behoove to be in a leadership role and say no this is gone too far these negative interest rates are . we need to let the world know that we're not going to do this never in the past

i've said this pretty much i've said interest rates are not on the table and and. you know it would be helpful if it provided some leadership in this before ready we get some really. messy reset it's important you know that's what we get with get a reset and. you know that's going to be very messy when that happens banks loses with low rates and they lose more with negative rates and banks are a fundamental part of the economy and so the question is why is this allowed to continue be like forcing a car company a car manufacturing company to say you can only make cars out of cardboard and that's it you can have to make a business out of selling cardboard cars right b. are saying you hate banks you're going to have to make a profit you get to make a viable business with low to negative rates and of course that's in impossibilities and they're all collapsing bank indexes are collapsing and the reason why is because the banks as of 2008 are insolvent so these are low and

negative rates are because they're too big to fail according to the central banks and they need to be kept alive no matter how predatory they become no matter how many good companies and good banks they push out of existence there that this is homage to cash in on the global economy is metastasizing and snuffing out any possibility of growth and therefore the debt can never ever be paid because you'll never ever have genuine growth above the rate of the growth in debt so. let me continue on here. so we have also established that big trump by job bombing the fed to lower rates by a 100 basis points and engage in quantitative easing for q.e. for he is patently and obviously buying votes which again is not only used to be illegal but so much of what used to be illegal in america nobody

pays any attention to anymore all right let's move on so what do you think about rates in the us can they go negative in the us and if so can a still retain reserve currency status that being the us dollar or and will that we see a breaking of the block remember in the 2008 crisis the money market fund is going to break the buck and alarm bells went off and they had to write a check for 17 trillion dollars to bail it too big to fail banks oh here we are once again breaking the buck but the question is will negative rates come to america we've got about 30 seconds and we'll hold you over but go ahead take a shot at it we've got about 30 seconds wolf so far i don't think that's wanting to go that way i think they're sticking to your own lower bound and that's what that's what they've been saying i think i may restart years some porn windows a big problem but i think negative interest rates from the point of are not a pretty one that sounds like it's going to be a function also of market action if bonds sketch bid up in these

a story ron you're going to start to see negative yielding debt happen on the treasury market anyway due to the irregularities and the market confusion out there but let's have you on for the segment but will say goodbye for this segment well thanks for being on the kaiser report thank you max that's going to do it for this edition of the kaiser report with me max kaiser stacy herbert like to thank our guest wolf richter of the wall street dot com report if you want to catch us on twitter keiser report or the website ties the report dot com so next time. live.

plenty. plenty. play. live live. live . live. live. oh. please. live.

live claim. and very well continue watching on since last. join me every thursday on the alex salmond show and i'll be speaking to get us out of the world of politics small business i'm show business. so what we've got to do is identify the threats that we have it's crazy to confront a shouldn't let it be an arms race is on all fronts very dramatic development only closely and going to exist i don't see how that strategy will be successful very

critical time to sit down and talk. in this community there are people who believe that it's ok. it's really hard there are no jobs and you see the kids ask and as a parent. i can come up with arguments and there's a lot of conflict within the game and between the teams most of the conflicts i would say revolves around money and most of them money is made. close one on the children's cosimo each other is good business the state of california alone makes

$6000000000.00 a year of prison complexes you get some 20 alive where. you don't care and. so you don't care mind anything. headlines in r.t. human rights activists warn that hammering separatists crisis bill worse than his lead is appropriate quite a range and receive life sentence. australian parents whose baby daughter was left malnourished by a free diet avoid jail i guess debate the issues raised by the campaigns. when the 2 people. people who probably the best recent saw misguidedly beating their children healthy diets thank you need supplements you can just really an intriguing diet. and across russia people are celebrating the country's national flag day including here in moscow where our own correspondent don quarter is joining in the fun.