dating from our governments but particular from the central banks is because we actually do have globally and ask not because most people think that banks lend to businesses and that's what they're doing and everybody's looking at the e.c.b. to cut rates at that they can lend to businesses and grow the economy but actually over 85 percent of all bank lending is for properties and property bubbles so we're stuck with that right something that's a transfer payment and they use derivatives they use modern channels of banking and conduits to collateralize the property in the modern cars the french government the time simply seized via the catholic church their property securitized it and sold their currency back as such but here in the 21000 era they did they do it using reverse collateralized morgan's obligations and fancy wall street products but as you point out so so well there this is a replay of all the elements that led to the french revolution using financial

engineering and securitization and derivatives to debase the currency and the currency is being debased well you reach an end point of how much the value of the property can go up and with the asset not the french people demanded they print more of these astronauts so that the property prices can continue to rise because they didn't want them to go down so we have that global situation right now it did it was able and possible because we went off the gold standard in $9071.00 at the same time it wouldn't have worked without the fact that the boomers hit the right way they were entering the workforce at that time and that was a massive population so you could create a ponzi sort of scheme here's a headline to prove my theory that what we're seeing right now is a kid in to back at the ask not. and the collapse of the astronaut and the strife

that followed the reign of terror that happened here in france banks are now referring people to food bank to help them pay their mortgage this is in australia so it's called food bank south australia has been approached by banks tree for their clients to the charity in the hope that it will prevent people from defaulting on mortgage payments not let them eat oreos but let them eat food bank this is a real up to me moment and another replay so it's got a couple of almost verbatim replays of the revolutionary times of france so not only are they collateralize ing property as you point out it's no fat is nothing reinvented here it's all property backed and now instead of letting them eat slices of brioche they're allowing the folks to use their foods to know they're subsidizing the food banks they are bank will food so they don't default on their

mortgages these are normal middle class upper middle class and even indeed upper class people but they're stretched they have 10 x. that they might be earning a 1000000 or so their dollars a sisterhood bank to get shooed them food coupons so they don't default on their mortgage they're calling it vouchers these banks the bank you have a mortgage with the bank the bank is concerned that you are not able to meet that mortgage because your income has not gone up and the prices continue to rise so they're creating vouchers that they give to the. virtual reality virtual brioche token as it were as a child care and i see oh yes of brioche yes on the theory and block change it's near c 20 token and they're throwing it out see we found a use case for a theory and finally say it's halleck to can be happy and so here again we had. 10 years 20 years and australia to feed this property bubble there to keep that going because if you're not working in the

commodities business in australia then you're your property speculator and you have the asset now so here's the unusual situation food bank south australia chief executive greg pattinson told a.b.c. radio adelaide it was still exploring how the program would work quote that's what we're exploring with some of the banks for the moment it hasn't started yet because we are still working through the process we've never been approached by financial institutions in the past and the banks to their credit are doing the right thing in trying to find a way of keeping people in their houses now in the medieval times you have the church and they have a lot of property and here you have the church of central banks and they're treated as saints an apostle they definitely are infallible banks have been determined and deemed to be infallible they are not punished by anything there is no mortal that can ever punish them because they say this with knights and our whole fabric of

society and the system around us would collapse should we question today too big to fail yes like god gods too big to fail so in the sector this is what they said at the time pre french revolution that they were infallible these corrupt. priests that were wandering around europe at that time you know they were shaking down people for indulgences and nevertheless here we have another let them eat brioche moment and i want to turn to another part of this this trying to sustain this asset system that we have around the world and you had predicted here in christ report that cutting interest rates down to 0 and then to negative that it would cause deflation and here's a headline from bloomberg central bank's negative interest rates were supposed to increase spending stop deflation and stimulate the economy. they may have done the exact opposite so this is based on a study from the university of bath in england and you had to wait 10 years after

kaiser report told you this would happen and here they're saying yes they don't credit us but we were right. partridge when danny blanchflower another economist and former central bankers argued that this type of money printing would create inflation however what it did was it kept the zombie banks alive and they pushed out companies that could create actual jobs and innovation and genuine taxable inflation economic activity and by catering to the zombies of the zombies got bigger and bigger and as such became a black hole of debt so the black hole of debt the cheap rates of negative rates are increasing that black hole of debt in that's deflation and now negative interest rates are soft default on sovereign debt that's also the pleasure but again go back to my theory that this is an asset not they were never ever going to lend to businesses businesses don't exist in this world where financial ice world

what they ran out of was greater fools back in the 1980s when we began this bond market bubble when interest rates were at 20 percent and now they're down to 0 and even negative what we had always was a greater fool to roll over your debt who could back in the eighty's you had to have you know take out a mortgage to 2 and a half times your income you had to put 20 percent down then they cut the that down to 3 percent down then to 0 percent down and even they would pay you to take a mortgage they would give you the deposit essential and they would loan you the deposit and add it to the mortgage so you came up with that then you could always roll it over and well because interest rates are lower now than they were in the eighty's you could act you don't need to just borrow 2 and a half times your income you could do 5 times and then 7 and then in central london this 12 time. your income so there's always been a fool willing to say ok i'll take out 12 times my income what could go wrong

because i know in a few years time maybe somebody will do it for 15 times but that fool never came along to your point so the lending is spent to property and property assets are collateral izing ever greater lending into ever grating misallocated resources into inflated property bubbles yes this is iceland you know i saw bull and then a popped in the entire country went bust this is being done on a global scale what we saw in 2008 the world came to a crashing stop iceland went under ireland was faced with near extinction there was this huge multi 100 trillion dollar bailout and now we're at the end game about where the property values that were inflated to these incredible values where you've got the guy at citadel hedge fund ken griffith buying a flat in new york for $280000000.00 right so you know if a little short in here is the titanic is the world economy is the titanic in 2008 it hit the iceberg. and started the saying and here's ken griffith with his

$280000000.00 it goes up in value. ok what has perpendicularly that's a that's for now when we reach to a shortage of fools that's what's missing in the world we need to grow more fools and in fact in the united kingdom when you know there's a help to buy scheme and remember george osborne introduced that in the u.k. his mom loves the program and the fools that bought that are using it love the program but other people like us report might suggest it was a ponzi scheme we have the us like not and what are they doing with the help to buy scheme 6 years after we called it a ponzi scheme but the fact is the government is having to say well now you could take out a 35 year mortgage because member that's how we had greater fools you had less deposit down you extended the mortgage 3 times and you lowered interest rates so now our app and game we know what happened in france may be this could well if you look around the world and see the unrest that it's the beginning of that sort of

thing when the assoc now falls apart right instead of having one revolution in france or in the russian revolution of the american revolution of a global insurrection against banker occupation. right and they're all one joining of forces the g.l.a. shah will join forces with the folks in hong kong when horses and arab nations and it's all the us and not essentially that's what they are going to see you know us and you know currency titanic's last nightmare so we have a lot of the 2nd half remember. states.

i. ready ready ready ready ready am sure need to stop at the continuing to grow. i just never know very good about the idea of bringing children into the world because i didn't feel like things were in very good shape that a life was just going to be a lot of software programs. there's no reason the more. you take things that are to me the movie is a myth something else that. everybody's scared to talk to that is certifiable is truly dependent on us addressing this issue and if we can even talk about it if we can even have a conversation about it then. we're in trouble ready

. so what we've got to do is identify the threats that we have it's crazy confrontation let it be an arms race off and spearing dramatic developments only recently i'm going to resist i don't see how that strategy will be successful very critical time to sit down and talk. welcome back to the kaiser report on i'm max kaiser time out of turn to mark the lack who publishes the annual in gold we trust report we're going to get into this massive tome quickly marc walk i'm grateful to have you on now you're from lichtenstein 1st of all i like the way you say like the time how do you say it

listen the. affair like i'm in a crazy movies are they well we are in paris you are from vienna so you're austrian . in more ways than one many of our guests here on kaiser reporting who watch the show call themselves part of the austrian school of economics are you an austrian school of economics person or what does it mean to you well i would say so i mean it's quite important for our develop and test been very deport important the austrian school of economics i think helps to really see that this is in the turn a twofer way to view the monetary system so it's not only central banking it doesn't have to be central banking necessarily but like mainstream economics just takes that as a given and i think that's perhaps one of the biggest atlanta just if one studies there was just cool of economics just that one really realizes a this can be another way and the central banking may not be the holy grail for

a day or big fan also of the big standard that book saved in the most i am yes and he goes into detail into his view of the austrian school of economics and he's a real he really hates keynesians and and their idea of printing money ad infinitum into that point there are over 17 trillion in negative yielding bonds in europe in what school of economics is this or do negative yields defy the laws of time and space and finance and other words. this is definitely not austrian school definitely not i think it's basically a function of that based momentary system which we have which basically. brings us to a point where we have an ever expanding amount of that and then we need to central bankers to kind of try to inflate the way out of this and we lend that at the point where we're pretty much at the end of the road in terms of youth's into the terms

of interest rates and we really need to know that the central bankers have to really try to reflate the the system in a new kind of way and there's all kind of interesting debates going. currently which is quite interesting to follow i think we are at the verge of the new period to go with this reflation will really hit the new go. to very little start of others a little bit of face so inflating out of debt so money is constantly created to pay down the debt that you're creating and you create more money to pay down more dad and there's this vicious cycle and if you know it we know because they can't tell a fact if you're a friend of the banker and you're the 1st in line to get that fresh money you can make a lot of money in buying assets you know you can buy a chalet in liechtenstein you can buy fine art but if you are not part of that group by the time the money gets down to you you're paying more for groceries

you're paying more for gasoline so you experience that price inflation and it creates us an enormous gap between the haves and the have yachts and the have nots and stuff but this negative rate seems like more of a defaults and outright default on a bond then an attempt to inflate one's way out of debt i see you nodding your head what do you think you know i think one can make the argument that it's kind of a. soft the fold i mean you get you know $0.09 on the dollar big even less if you have a negative one percent so that's basically a partial default sure but i think the main intention is really to push this currency on force and really i mean in switzerland and least on where we have the swiss run we have pretty negative interest rates already and this is a huge huge problem obviously for us that managers for for all these pools of funds

they really need to do something with. or obviously they miss that in equities bones less and less an alternative corporate bonds listen listen the tentative and once this kind of hits the u.s. dollar i think really that that's really an interesting environment for gold and bitcoin you know it's almost like statutory financial all crime being foisted upon let's say pension fund managers who are obligated by law to buy government debt if that government debt is a negative yielding debt it's a negative interest rate that they have no choice they have to buy that debt even though it means that they're bankrupting all these pensions and so where do they get away with this because the social contract you know where in europe right now we are in paris where in home of really the whole idea of the social contract and

the idea of the enlightenment and if the social contract is broken according to john locke the people must revolt you know are saying that we see the zone we see in hong kong we've seen occupy wall street we've seen this all over the world what we call the global insurrection against banker occupation would you would you put it in those terms i get asked this question because we are near or it's a bit of a highfalutin question but however is it a. break in the actual social contract that is girding society together i think so i mean the quite a few indications that this kind of social contract in germany it's called to get other to once fair to the uk which is also quite interesting work is somewhat breaking down and people are also losing tons of the trust in this social contract i think one of these indications also would be like dropping birth rates so people

really have to take care of themselves if they're one to live the kind of life with which they were used to growing up and they really don't know how to manage that was like 2 or 3 kids even let's where you've got birth rates was scratching at one actually in germany and even in countries like like france and spain which traditionally had. higher birth rates that these birth rates have been shining during the last 10 years especially so so that's one of these indications in other indication i think is the whole crypto phenomena which is obviously embraced by the younger generation more and they think perhaps ok who knows if really this whole field system collapses down the road when i when i'm at my pension age i may be able to save myself from economic point of view if i have a few bitcoins right so that's also i think a part of this mistrust in the social contract right well let's turn to this mass

of report last seen a lot of reports on monday but i've never seen a report like this it's huge and been through it and every single page has some good stuff in it incrementally as the company anyway if you get as bad as a p.d.f. yes or they can contact i guess the name of the report is gold in the age of a roading trust the very thing we're talking about dollars now on the upswing all of the institutions as the family as you just mentioned banks things that are. the social contract these are all dissolved in real time and this is now reflected in the price of gold you publish just in may in just 2 weeks ago mark carney confirmed this trust has gone globalisation is over what next for what people are familiar with and that is fear out money fiat's currency like the dollar the euro i think one has to differentiate very much with one lives so which kind of

culture one has in terms of currencies we say we in central europe for instance in switzerland again and austria germany we were brought up with a relatively stable money and relatively stable purchasing power which is declining no not perhaps in terms of consumer price inflation but in terms of purchasing power of real estate so people now starting to question a little bit of. the system also from from the field money side if you are on the other side living in south america or living in the middle east i think you've got a completely different. view of money you already were much more skeptics and so the eroding trust which we this report also mainly refers to i say western societies which still had generally the feeling that this is

a stable system but this is i think now also on this way down let's talk about the e.c.b. the airplane central bank it's really mostly the old. bank right and it became the central bank it's german germans the biggest economy in europe and it's basically just the germany is running the show and yet member a few years ago when people were aghast at the balance sheet expansion of the fed and they were saying well it's all never had to pay. hermansen germans would never allow this type of monetary maddest and yet they certainly want to have did that and now the results are pretty obvious i mean i would think the german people. are starting to get a bit nervous if not quite upset about the germans definitely a nation of savers i mean also that is declining a little bit busy but still it does is more in the genes than in other countries

and savers in terms of saving in the bank account and not investing so so they really get a problem if they have negative interest rates so they were kind of ok with interest rates which they've been living with for quite a few years actually so that's in real terms negative interest rates anyway but if you want to be of nominally negative interest rates then then people really think. i'm not happy. so that would really be i think the point when when when a broader potentially a broader wave of unhappiness regarding the c.p. will rise the key word in all this course is trusts trust is the key word and you know in crypto and big coing trust is a big word because it's trust less trust isn't needed the transactions are solved

verifying you don't need a 3rd party to apply that stamp of approval and in this in this report gold in the age of eroding trust you put a right up there with gold it's essentially gold and because in our together in your view of how to play this collapsing a world of collapsing trust. yes i think it's important to to not neglect generally the technological progress which is going on on the crypto currency side generally which is obviously also being followed. and try to being taken advantage of from central banks so so so it's just important if you really want to see the whole picture too to follow what's going on but when it comes to bitcoin. i mean this this discussion is always interesting one of the. bitcoin versus gold gold is. obviously a physically metal it's an internal metal it's just never dying and bitcoin is

a man made system so so that would be one fundamental difference but then again from from a from a term of money bitcoin one can make the argument is even harder money than gold in the medium term so so it would be really an interesting measure of value so i think one needs to follow it closely right where an interesting camp being both gold coin we're going to talk about that's the more in another segment if you can hang on but thanks for being on this episode of kaiser report thank you well that's going to do it for this episode of hazard for with me max kaiser and stacey however like to thank our guest mark of alec. this is the thing you've got to get the p.d.f. and stray it let's get in touch with us as kaiser report on twitter or man i report dot com and i stand by all.

during the great depression which are old enough to remember there was. there wasn't it was you know much worse objectively. but there was an expectation that things would be good better. there was a real sense of hope. there isn't today today's america where shape my the turn principles of concentration of wealth and power. reduced democracy attack solo debt. engineer elections manufacture consent another prince holds according to know on chomsky one set of rules for the rich opposite. that's what happens when you put her into the hands of a narrow sector of will which will is dedicated to increasing power for itself just as you'd expect one of the most influential intellectuals of our time speaks about

the modern civilization of america. she stressed to make sure that the british edible of the. job was to you she. pushed quite a long. time and i know what you mean in a response to trick or for sure you. want to talk to me short of your my it's your bonus for each of you you. get to mr ellsworth. with the spirit of this interview but you both at least the studio actually the person the

person of the phone or should stop them spinning. is this is a stick from the water bottle phone in the stomach of a fish the brand is spawns of the coca-cola company which sells millions of bottles of soda every day the idea was that let's tell consumers there are the bad was there the litter bugs are throwing this away industry should be blamed for all this waste the company has long promised to reuse the plastic. that seems. to. stay on your. fundamentals it depends. on the new best that is the end of it for the team of fun now the mountains of waste only grow higher.

daters things. we do and. it was all done with the least say of the 2. a and the

a. united states could potentially be smuggling tons of weapons and ammunition to militants in syria according to leaked documents obtained a viable garion journalist. that they may have heard in house key leaders from asia on the 2nd day of the eastern i can only form invited both on with the iran nuclear deal and all men's rights high on the agenda. also in an all to exclusive we speak to the malaysian foreign minister on the sidelines of the forum as he continues to criticize the international investigation into the downing of flight m.h. 70 and outlined his country's early concerns over the probe. some people who've really quick.