off them but no jerome powell has announced that he's only going to buy t. bills so they're shorter term like under year mostly under 3 months so he's going to he's not buying the 161000000000 yet from this is a fascinating history because of course broker being a broker is being an intermediary you're matching buyers and sellers to stated in its most rudimentary form and i've been fascinated over the past 3040 years the emergence of the aggressive market maker the aggressive intermediary who egress of market maker right so the broker dealers in this case are supposed to be an intermediary between the government and wall street who is then an intermediary between finance and main street between wall street and main street and stead of being a channel a conduit to function as part of the plumbing of the finance market they take it upon themselves to weaponize their role as intermediaries and to

as warren buffet called it use weapons of mass financial destruction so there instead of just trying to be a conduit from the central bank to main street they are saying that we are going to abuse our role as intermediary to coerce you to. reward us with huge rewards of cash that we'll then pocket and not circulate in the economy and this is a problem that's gotten worse and worse we saw it in the 2008 crisis where hank paulson went to washington and got the tarp money and we didn't get it the 1st day he instructed his minions on wall street to crash the stock market the next day they did it again abusing their role as market makers to weaponize that role. all

and then the next day congress gave them the 750000000000 which became now 16 or 17 trillion. and so the ability of bankers who have weaponized intermediary market making products to cold worse government and to have the media on their side to bankrupt the economy has led to now a situation of extraordinary duress so what he's saying and in fact i'm going to go into it in this quote here about what they're actually were intended why they cause the panic because they hold $161000000000.00 of longer dated treasury securities so they have 161000000000 that they've been buying and they were hoping to dump on to a bigger chump and this the bigger chump was the fed the fed keeps on putting off introducing more q.e. for they've been demanding it since last december member when the stock market had

that turmoil that they've been demanding more q.e. and drone policy of saying no no it doesn't announce new more q.e. he's not buying more securities the fed's not buying more securities so what happened is according to wall street primary dealers are funding their hoard of $161000000000.00 treasury securities in the repo market these funding needs were putting pressures on the repo market the fed already said in its minutes for the july meeting before repo rates totally blew out in mid september but primary dealers could have sold a large part of those securities if they had wanted to prices were high and yields were low a sign that there was heavy demand but the dealers were holding out for even higher prices and even lower yields and any heavy selling could have pushed up those heels and steep in the yield curve very unpalatable for folks clamoring for rate cuts so these dealers are sitting on a pile of. treasury notes and bonds whose prices they want to rise and therefore

their yields have to fall massive q.e. where the fed buys these type of treasury securities would have accomplished less so it's a reverse armed robbery so to play and if an armed robber goes into a liquor store and they put a gun to the cashier said and says give me all your money here the bankers go to the fed with they're armed with exploding financial derivatives and they say take all my money. i want to stuff all my money into your cash register the socialists are reversed armed robbery and. the effect is not to create liquidity or to be a market maker you just have a. you know it's it's a gang warfare they're just gangs indeed they are they're playing with our financial system to extract a few pennies and profits on that on the $161000000000.00 and you know pennies per

every single dollar of the $161000000000.00 in longer term securities so the fed drone pow announced they're going to buy treasury bills so t. bills are securities with maturities of one year or less such as a 3 month t. bill they do not have a coupon and stead there purchased at a discount from face value and are redeemed at face value the difference is the yield for the investor dealers however have not been hoarding t. bills as of october 2nd they were holding less than $7000000000.00 and t. bills at the very low end of the 3 year range so these crybabies were hoping for real q we would long term know it some bonds and all they got was a plan focused on acquiring t. bills on top of the new plan from a new few months ago to replace longer term treasury securities and all mortgage backed securities on the fed's balance sheet with a mix that includes t. bills right in the course of the only way they can effectively do this is through collusion now j. . j.p.

morgan is investigated now for rico for colluding manipulating precious metal markets and we've talked about it for 10 years he's demonstrated how they collude they they're back they're involved in rico in a functioning economy this wouldn't be possible we just describe because there would be a another bank would offer the liquidity and they could. game the system like they are doing now unless they're all colluding so they're in chat rooms or anonymous chat rooms and private chat rooms the various brokers of different banks and they collude they say we're going to you're going to take it to the fed we're going to jam the fed or whatever and they extract wealth through racketeering this is a racketeering crime it would be great if the justice department followed up on the j.p. morgan investigation and apply the same rico statute to other to this rico situation if in fact wall street is correct it smells like it is correct that would be another example of racketeering on wall street no less a crime than any theo racketeering crime or any other example of racketeering it's in and it's anti economic health the problem in this situation is that 'd

most ordinary people think well i want interest rates to go lower but what they don't realize this is an ongoing private equity style heise their extracting all the equity for the past 4050 years of interest rates that declining for the last 37 years down the been extracting equity the whole way down and by the way these games that they're playing of driving interest rates down and down and down will so security be there for you status of the social security trust fund in fiscal 2019 so this is also from wall street and you can connect it to these low interest rates because the old age and survivors insurance own a trust fund which does not include the disability insurance trust fund close the fiscal year 21000 at the end of september with a balance of 2.8 trillion according to figures released by the social security administration this balance was up by 3000000000 from september last year. it was

down by 16000000000 from september 27th teen so this is the chart of showing you the trust fund balance and as you see it's topping out despite the fact that there are more millennial xin there were a bit boomers for example so there is a huge surgeons into the into the jobs market of millennial as they are a vast pool of people contributing to social security and these are being paid out 63000000 people are drawing sick social security and 8000000 are drawing disability benefits but because of low interest rates their income on their interest income is down from something like 128000000000 just in 2009 and it's down sharply now and every single one percent decline in interest rates they lose $28000000000.00 and interest income to the social security plan so you know this is this fight that everybody's been having over when social security goes bankrupt as

it were. that low interest rates are causing a lot of duress they're right this is where the paul krugman comment that that doesn't matter because this money we owe ourselves breaks down just look at the social security pot of money that's going now to bankrupt is because of this mentality that it doesn't matter we can just go into debt forever but way to go to debt forever is by constantly lowering interest rates to support was a effectively a ponzi scheme and in the case of say social security they realized that interest of pay recipients that is going to lead to a day when there is no more money to pay social security so krugman is wrong is patently wrong and he makes a statement like that you have to wonder why he would be so obviously making such an obviously wrong statement and it's quite troubling well that the balance the trust some balance rose by 24 percent between 2009 and 21000 but in. trust income

fell by 28 percent from $108000000000.00 in 2009 to 78000000000 and 2019 so the average the average interest being paid is 2.73 percent down from 4.8 percent in 2009 they would have to start to operate more as a hedge fund to buy and sell bonds which then you're relying on the same people on wall street that bankrupted enron worldcom week work etc and it's a losing proposition that they can well they don't buy marketable securities so they're held to maturity so that they have to buy low prices all right well we're going to take a break when we come back much more coming your way. thinking of getting

a new phone the ones we got in here shows no problem was he didn't know what to do he was trapped in this tiny little wired how much we don't need a crate with him the wall. reaching out into the wall when is freedom anywhere near and thousands of breeding dogs are caged in the interview lane conditions on puppy farm i mean 67 years you know they've been locked up in a cage outside you see no protection from the weather the heat you know the courtier the rain the snow the founder nothing they have no protection. to get well you. know it's ok. across the us cruel puppy mills are supported by dog shows and pet stores most of the puppies that are coming from these large scale factory farming kind of operations are being sold in stores even joined a group businesses are involved like ogling mom santa there has been a shocking amount of organized opposition to adverts to increase the standards of care for dogs bred in commercial breeding facilities most of that opposition is

coming from huge agricultural groups and industries that have nothing to do with jobs don't buy dog on a. visit this is a sticker from the water bottle phone in the stomach of a fish the brand is part 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. as it sits do cookouts lose its feet so. that seems cool sets for their plastic a 6 day coffee on my end only stay on your own hands at a special projects funded he tells the defense i'm. on i'm your best bet is the end of it for the city but for now the mountains of waste only grow higher.

elaine. welcome back to the kaiser report or own most at the i'm off the coast write a tally and think any you know we should do a t.v. show us do it in fact in italy on the a mouthy cust the michael pentel max kaiser it could be cooking cooking the books

in their mouth because like me we could cook the books just like in all the famous different ways bankers like here's the way jamie dimon cooked his books here's the way lord blankfein cooked the books at goldman sachs and like a all of celebrity book cookers we could have them right there anyway welcome back thank you michael pence of pet o.-port dot com he's a money manager he's a guy who spent on the show many times and he's got some very interesting insights into all kinds of things let me talk a little bit about your one of your recent newsletters michael it's called gold it's all about real rates not the dollar with just me well a lot of people think well because gold is a real and honest currency that just competes with the dollar so if the dollar is up gold is down and if gold is off dollars down but it's more complicated that then that the primary factor that determines the price of gold is the level of real interest rates so interest rates in

a nominal sense can be rising but as long as inflation is rising faster real rates are going down gold is in a bull market and if nominal normal rates are crashing like they've been i mean the 10 year note was 3 percent a year ago now it's 1.7 percent ok that's crashing nominal yields yet it might surprise even the fed you know that couper c.p.i. is up 2.4 percent year over year that's higher when i went to school and of the new math but the new math might not agree with this but the old math will tell you 2.4 is higher than 1.7 so real rates are falling and that is the reason why gold has been in a primary. bull market while the dollar has also increased against a basket of other flawed horrific terms so these 2 trading in tandem both by the up dollar and gold it's quite highly it's been happening and it could happen in the future i even think it could be the case that the dollar starts to

fall against other currencies not get wiped out but starts to lose its way against the euro and the yen why did we talk about this just 10 gentilly in the last segment we're back in q we max what is this what number is the q e 5 which would be aesthetically $4000000000.00 a month we were at $85.00 or 80 in the peak of q.e. ok so if the fed can't raise rates they went to 2 and a half percent on the fed funds rate now they're on their way back to 0 most likely we're back into q e that interest rate differential between us and europe and japan that margin is narrowing and why then would the dollar strength of any longer right fair enough let's talk about another country or china the likes of kyle bass famous guy in the money management space he's been shrinking for more than a decade now that it's all about to come tumbling down there where do you fall in

the china economic apocalypse scale is it all fine i'm fine your thoughts worst china these days i think this is the $36000.00 foot view is that when you increase your debt from 2 trillion dollars in the year 2000 to $40.00 trillion dollars today and that is state directed debt then you have built a massive unproductive pile of debt dung which is about to implode debt don as i said i felt that dung yes yes debt on debt down is about 38 trillion dollars max in less than 20 years from china. national communist party telling state owned enterprises what to build so you have massive oversupplied massive over investment in infrastructure massive bubble in fixed assets in china their currency is teetering on the collapse like oh well krugman at the new york times says that's no problem because it's just money you owe yourself and grow

really money we owe ourselves well if you can't pay yourself ok so we owe our let's just talk about the banking system do you know how how many treasuries have been sequestered in our banking system because they have a 0 risk weighting it's an all time record high trillions upon trillions if you told the banks call up jamie diamond and tell him you know you're a u.s. citizen right and j.p. morgan's a domestic bank. since is a debt we owe ourselves we're not going to pay you anymore on your treasuries see if that's a problem why do you see say such a blatant false. maybe because he's a keynesian liberal i don't know i mean i don't want to offend anybody but i don't know most of them that's all good one of the ideas i don't learn there is that the only reason that you can ignore that that is if you keep jacking rates lower through this quantitative easing a manipulation interest rates lower which is almost a definition of a ponzi scheme and it would be great unless things like social security are not

going to go completely bankrupt they're going to go bankrupt and all the all those programs and all that it's all going to go bankrupt that that's that's a problem in the future for the next generation a problem now max we you know japan peaked in 1909 that's 30 years 3 last decades and we just had we just had our last decade here the united states we're going to have decade after decade where that's our hope max so we can have one or 2 percent g.d.p. growth clinging to the hopes that interest rates could always go down and bail us out you know it normally takes $500.00 basis points of a minute at minimum to get the. conned me out of the malays and we only have 175 left and there's nothing in europe the e.c.b. is 0 they went back into q.e. also by the way to pay what i actually had never what japan ever got out of q.e. well here chomp on television talking about it running out of ammunition make it impossibly applying that to the social banks yes. yes exactly. so meanwhile you

know stocks are near all time highs unemployment is 50 or 60 year lows right so you know the top line looks good i mean people are like so so i mean how do you avoid appearing as a cassandra as a doomsayer now and this will euphoric well because beauty full top because i manage money for a living so i wouldn't have any clients i just bought gold in short of the stock market always ok i have to make money for my clients continuously and that's what i try to do and i have a track record that you know anybody can vet if they would like ok did the job and so you're saying so you but here's the thing here's the thing this i have gone on record saying this this charade can last and still one of 2 things happens either we have a recession which blows up the junk bond market or the fed is finally successful at engendering inflation. either one of those things will destroy the stock market

and the economy and there's a good chance that both of them are on the way now what do you do do you just short everything and hope to be right and run out of capital you know and then the several 1000 percent gain to get back to even that's not what i do i model the economy of a very complicated 20 point diffusion index model that tells me where the economy sits along the spectrum of inflation to deflation growth and recession ok so either the fed are stupid or they are purposefully doing something that you would fall in the category of lying for not what i mean is that you say if the fed a 6 hour. fall and they bring inflation back but the fed's actions now have been proven to cause deflation not fight deflation we now know that by engaging in the practices that they are engaging in by keeping these rates artificially low you're crowding out the productive economy you're keeping alive zombie banks and

corporations they are creating the deflation they're not fighting deflation don't that there's a massive intellectual disconnect here and so they are successful today in supporting the zombie economy right and so if they fail to continue to support the zombie on to me they will have what they say they are genuinely looking for inflation will pop out but that's not they're not look when they say we need 2 percent inflation there that's a lie number one or they're really stupid number 2 max you know if your decision to go back on c.m.d. see this is not the way to do it but if i am i wrong in what i've just said nothing you know you said is the fed stupid there's no obvious we've proven themselves complain on a leaflet are they purposefully lying and engineering in a way to be banks and zombie corp they had as they watched i believe the fed is desperate now they their models are broken they're doing a phillips curve analysis of the economy they're looking for inflation in you know

wage growth that's how that's the big danger out there they totally neglect the fact that the stock market the market capitalist nation of equities is now 145 percent of g.d.p. it is never been higher so you look for inflation that's where all the inflation is that's running around the canyons of wall street but you're right about this inflation that's why the bond that's why nominal bond yields on the 10 year note down from 3 percent but they're not want to point fingers where they hit a couple months ago the wages aren't up because they've been financially engineer not to be important anymore and that through outsourcing and through mechanization and ai wages are not part of the economy you know in saudi arabia. when the princes well more money they print more oil they pump more oil they don't need workers that's why it's princes and poppers i saw her you know middle class in america you go on wall street when they need money they print they don't need a $3.00 trillion dollars in taxes that are collected every year that is superb choice they just print money when they want it workers are so perfect they don't

need workers whatsoever that's why they're treated like garbage in this country that's why wages are never going up in this country max if you are correct that how come the fed back in 2008 printed all this money and gave it to individuals who could make their mortgages they didn't give the banks any money did their. exact proving that i don't bargain means art harris has to yes exactly so it's all about a panicked condition let me let me play on this a telling heritage of yours for a 2nd because. back to the mideast you family goes back to venice i mean the italy has been on the forefront of economics for hundreds of years they invented double entry accounting ok so one in history michael has we've seen in a bail out situation the creditors get bailed out and not the debtors we see that history i put on here is this historian crap on 1st like a jeopardy thread as we already had before now know that the answer is now now now this is this is what the fed is supposed to do they're there are there to protect banks now they're also there to make sure wall street never has

a downtick the way people organized 6 months without a single down day on their training desk is that what is said all it's like i go to the casino i go to vegas and if and i'm thrown red and i'm like i'm like you know moved to the regulated and all that movie les with you know rain man where he's never losing like that autistic writing devil who would be as a word out of the casino right how can we as a people don't escort j.p. morgan out of the wall street out of this go we have to we we need to vote a little more but i don't remember voting for any member of the f o m c right by the way our president what is the. our president wants to fight again i'm not talking attacking iran but what is his name issue with the fed that there was too tight too tight so we don't have a reality in this country anymore and the fact that we mentioned before several times the fact that the central bank the united states is now back in q.e. and going back to 0 should scare the hell out of

a lot of people all right well on that now we're going to going to wrap it up we wish we could do more but unfortunately we're done we're now we've got the trip. planned all expenses 1st class by the way that is the thank you thank you thanks for being on the kaiser report thank you well i'm going to do it for this is this on the kaiser report with me max kaiser states are like thank our guest. dot com if you want to reach us on twitter is kaiser for until next time by a. good who moved before. much of those who heard the preview. we were going to. move. move.

move show didn't stoop to do the media good. move most of these goals did you good. to go to shows look but do you disagree you want me to show you. should go. told to get to meet until it was the middle of the mist see look it is it's. just not a chance to just move. on. to the president to be skint. more to come to. those who have to choose to go to summer to snoop or come up with new yorkers are those the girls are with you or your supporters to your shoes shouldn't be you should

cook door for the one who's doing. so we've got to do is identify the threats that we have it's crazy confrontation let it be an arms race is on offer and spearing dramatic development the only personally i'm going to resist i don't see how that strategy will be successful very critical time time to sit down and talk. are you really at the. birthing room or was a real team on social media needs to stretch it's just. that they did so. that satisfied.

that. the official moves to switch from over. their view but on the. call.

i am. 322. 306. getting. their approval. to seek another extension from brussels. us alone has been hit by a 6 day of protest that's being rocked by another night of violent unrest. separatist leaders.