prize for those of you who have been watching us for so many years is that right stacey max it is a continuation of the pandemic and the pandemic response in a pandemic situation we also have the oil wars going on allegedly some oil wars we have russia versus saudi arabia the price crash you know it kind of started with when the opec plus when they met you know saudi arabia essentially and russia and russia decided not to cut any production based on the decline in demand out of china and elsewhere but also right after that saudi arabia offered up to a $10.00 discount per barrel just because i guess mohamed bin solomon got a little bit upset and threw a temper tantrum so that's what happened there but you know that seismic sell off a 30 percent and then followed by a like 101213 percent rise and boom bust and boom bust i thought this was an interesting tweet to kind of look at the whole situation is from roy said that we

mentioned that in the last episode and he was so prescient about this pandemic situation when he predicted sort of a pandemic basically that negative rates were signaling that he predicted that last june or july he says i think we have just witnessed the end of the petrodollar system non us countries will soon see a new unit of account medium of exchange and store of value a new bretton woods that will not be decided in america or by americans right well all the key players necessary for that are involved right now saudi arabia russia states so the petro dollar of course was established in the early 1907 days with america and saudi arabia when america defaulted on its sovereign debt remember richard nixon defaulted on the dollar default on the treasury market and we went on the petro dollar standard because america had to close the gold window could no longer fulfill its obligations to. it's creditors this was the beginning of the

petrodollar era and the beginning of all things everywhere are being priced in dollars oil is being priced in dollars all commodities are priced in dollars they gave america the us empire of debt it gave america the world reserve currency it gave america what's called seniority which which is basically they get a cut over every transaction ever done anywhere in the world every coil trans if japan wants to buy oil that the buy dollars 1st and then buy oil for example so they have to give america a commission they get a cut that's a huge source of revenue for america now with saudi arabia and the u.s. have been at loggerheads down for a couple of years that relationship has been strained and saudi arabia is i think you're correct they threw a hissy fit they said we're going to just walk the price down by 10 bucks for oil because our cost production is not even $3.00 a barrel and so i think they thought everyone would just step in line but then russia said whoa whoa whoa whoa whoa whoa hold on a 2nd they looked at the numbers and they said wait a bit in our cost of production is actually higher it's like $7.00 but america has

$50.00 or so and we have no debt the saudi kingdom has a huge amount of debt and we have a lot of gold we could actually participate in this global geo political oil poker game very very we got 3 aces here and now i think roy is correct i think the u.s. dollar loses its status as the unit of account in world reserve currency something else is coming it won't be u.s. dollar it could be another country's currency or another consortium of countries developing some other currency backed by somebody else's oil or gold etc i just make clear that in russia the breakeven point is about $15.50 because there is an $8.50 cent tax on every single barrel so you have a cost of production it's about $7.00 but they add in the cost of the tax just like in the united states about $50.00 is the break even and that includes the tax of about just under 7 dollars obviously since we went on the u.s. dollar standard and we were on t'other. from gold then we could control everything

because we could print as much debt as we want and nobody really knows how much debt we have and that's why we have the repo market situation that's why we keep on having boom and bust that's why we have especially at the boss like radical bust because people are when a sort of crisis hits whether it's the subprime mortgage meltdown or now the fracking sector meltdown like people are uncertain how much debt is actually there because nobody knows and now going back to what's happening in the geo political oil space lattimer putin dumps saudi arabia's crown prince mohammed bin solomon to start a war on america's shale industry that's bloomberg take i responded with the red queen was at war with shell long before this headline oh right i should mention that as part of the social distancing that we're practicing in the pandemic we've built a studio in an actual tree house slash studio and you might hear a couple of birds tweeting in the background because we're living with the birds in

a tree house to practice good social distancing during the pandemic hearing them as a good sign because this is a sign that spring is here and perhaps we don't know but then perhaps the couvade 19 coronavirus could disappear. yeah so with the shell industry in the u.s. like i pointed out recently you know there's no reason why russia should subsidize american shale industry if there were russia's been saying now for 20 years you know let's be friends let's do business let's grow together and about america needed a scapegoat for the hillary loss in 2016 and everything that's gone wrong with the u.s. they like to blame on russia and now they're at a very tough spot because russia is not going to be lobby to help them bail out america's shale industry ok fine i mean that's russia's position i think it's a smart position and the u.s. as you point out the shell industry has been a negative cash flow negative energy industry since its inception. shell ministries

never made money summer made profit doesn't even make revenue but let alone profit the amount of debt required for shell is all was the interest on the debts always been greater than any any of the any of the cash that's come out of these things and it takes more energy in for a shell rake than energy comes out its energy negative we cover that extensively on our show of course we then get blamed for a russian gay and d.n.i. report says you know that because guys report talked about the shale industry but the markets are telling us that we were right as we see with this headline here crash an energy junk bonds s. and our g. 2027 bond dropped by almost 50 percent following oil price rads that looks like the bond market which are supposed to be the smartest investors of all that they decided that well you know what kaiser report was right all of this time you know a lot of people criticize a big point that is too volatile but look at the o.l.

junk bond market for the shale the strain it's incredibly volatile it's going to go the way of enron remember enron was worth $80000000000.01 day and then it went to a big fat goose egg the next day worth 0 the shell american shell industry junk bond market's going to 0 because this was a farce this is the shell american shale hoax it was and it's just going to 0 that's all of us do it now going to bail it out print tons of money probably that's just going to make the dollar worth even less than it is right now world markets and jack the price of gold up oh who owns a lot of gold home russia also put this into context mohamed bin solomon has overthrew an uncle or cousin he's got like 5000 uncles and cousins who are princes and so he's got to keep that economy stable because he's got 5000 people and his family wanting to overthrow him and replace them just as he had overthrown somebody else i think he's in the process of executing 4 of his cousins around close at the

moment in now it's so he has a situation that's precarious there and he has a huge population that needs to be fed so you've got that situation and lots of debt. in russia you've got loads of 4 x. reserves loads of national wealth research loads of gold and loads of resources and you know saudi arabia relies on 87 percent of their imports are our exports sorry are our oil and about 53 percent and russia is oil and energy related so they're a little bit my more diverse it should probably be more diverse but in terms of the u.s. and all of this debt like we could we could have thrown it we didn't get a free ride ok we got a lot of free stuff. but at the cost of manufacturing and you know instead of building boondoggles like this fracking which never made sense we could you know we have loads of episodes you can go look at the past episodes where we go extensively

into why it makes sense but instead of wasting half a trillion dollars that investors are lost and fracking we could have built you know infrastructure we could have built high speed rail we could have. spent on you know electric power grids everywhere we could have done something else that would be useful in the long run and then stiff everybody else with the bill you know mostly china and japan that own all our bonds so we could have done something else with it it just seems a little bit ridiculous that we didn't write let me explain. america is run by and glorifies salesman. and europe and the rest of the world tends to respect bureaucrats civil servants there's a big difference so the key to sales is developing urgency to get someone to believe that there's an urgent reason for them to act for them to buy what you're selling in the case of how did america get wrapped up in the biggest boondoggle in

american history the half a trillion or trillion dollar shale fracking boondoggle is because the sail from a wall street bank was so compelling and the pitch goes like this i can sell you a 1000000000 dollars of the shell projects right now by by by simply giving in the following pitch stacy write a crisis america needs to be energy independent because of the terrorists. now that's all i need to say and you're going to start writing checks and by the way we're going to sell bonds that pay 12 percent 13 percent 14 percent you're going to make a killing right in that stupid sale technique unfortunately the joke well there is some value of course i think in for national security for any nation to have energy security any nation to food security and then as well it has no food security they import everything puerto rico imports everything that leaves you totally vulnerable

to a global debt market so anybody should consider that but they haven't been honest and a lot of people have thrown money into it how they said this is like a war bond this is a national security bond this is an energy independence bond you know you might lose everything but we're going to be number one no no no. it's energy independence was the sale and the but energy independence could have come from the same amount of money by building renewables sure the money that went into junk bonds for fracking could have built a sustainable renewable energy infrastructure in america of solar wind hydro well i did because the pitch for energy renewable energy is not exciting to a wall to a drunk wall street broker hangout of harry's bar in wall street it's not exciting to hear about renewable energy it doesn't get them and it closer to having exciting times at night guaranteed by the fracking salesman well that sector is seemingly dead now and finally i want to turn to you with the saudi aramco of course because

you talk about bankers and that was sold to the public markets just recently oil price melt down saudi aramco has lost almost $500000000000.00 in market cap from its all time high in december nobody knows the oil sector better than the saudis they were dumping at the right time of course this is very volatile now up and down but $500000000000.00 is. a little bit more than not the loss is cumulative in. by the way right well imagine. short of his life. it's a. good. picture anyway. back .

in the presidential candidates. of the u.s. and the world. every week. student. was money. exclusively. time after time corporations repeat the same mantra sustainability it's very important celery transitions to sustainable prize board sustainability stay number man or a more equitable and sustainable well. they claim their production is completely harmless. lovely. it into something companies want us to feel good about buying their products while

the damage is being done far away there's a 2nd eldest going to any minute i'm a new mother. and you missed me doing the nieman i'm stunned. understood superman in. a fairly super cool porsche look at all the little tractor there was a news new york at the sauna trick to stop what is sure it was for the chiquita ash look you feel and i mean the streets full well for the 2 of them or not only do this movie for bush but i will push for so-called bush are going to kill us no sure the answer is. yes.

welcome back to the kaiser report imax keyser time now to go to matt firesign author of plan a poncy welcome back mitch great to be here matt thanks for having already i've got an interesting introduction for you here today the whole idea of plan a ponzi of course goes back to 1987 crash and the beginning of the federal reserve put under alan greenspan the idea that the central bank as an act of a central bank was always going to come to the rescue because ultimately this was one big enormous ponzi scheme now this past week or so we've had the death of mach's on the sea though a famous actor and his famous scene was playing chess with death

in the movie the 7th seal i would like to possibly suggest that right now the policy of bailing everybody out from the central bank is similar it's like playing. chess from the movie the deer hunter where it's russian roulette essentially and eventually of course the end is the same complete obliteration mitch is this russian roulette basically gone wrong with the constant bailing out of central banks around the world as part of this planet ponzi that you've been documenting for so many years mitch you can never see her on the back you know and all that happens is the enormous amount. of increased exponentially so now the federal reserve is a panic desperation move coming in and they cut interest rates by 50 basis points

back followed suit by cutting rates their bank of japan buying all equities central banks think they can make the coronavirus the. the way by buying equities spending more money this is a fallacy it'll never work the problem that we have that we need to identify the fly shock and demand shock simultaneously the same time coronavirus was the trigger it was. in the tinderbox that the central banks around the world have homes with liquidity aka petrol high through object hero and now it's gone up in flames so we're seeing a hold back in stocks right now i think we've got a long way to fall towards the bottom it's not a good big you lie good bye. i think valuations were way too high we've discussed before buyouts like word and credit will be the

one wall works we've already seen corporate bond market he's off a bit but i think things are going to get much worse there's always gone be 'd a tide goes out we're going to see. the precipitous decline in oil prices it's going to accentuate the collapse of the ponzi. shell oil that. i think we've got a lot of components here look at heart it is a big one and i think the lack of liquidity in the markets might get involved those are going to make the decline even larger and more losses even larger which will cause bankruptcies in a cascade bankruptcy i mean it really is not a lot them martial law they go or trillion dollars in debt they were never going to repay before this now the country is closed for business and as we know their g.d.p.

for the past 18 years has been. the worst in the world. so but their debt is the highest in euro problematic many different. view now we've got to see. how we get out of the problem you know like the bad. larry summers and the same people that created this mess bankers want to tell you 'd it's all. coronavirus but it's absolutely not. moral hazard caused by the global central banks in a place reckless lending practices to companies organizations and. entities we're not we're not we're alone that's why we're seeing we're lowering interest rates again and this ratio of the middle class we've seen wealth inequality and shatter new record right let's talk about this idea the difference between

a demand shock and a supply shock so everyone is familiar now to say wall street bankers with a demand shock and lowering interest rates and flooding the market with more cash cures a demand shock there's no absence of people looking to get on debt and expand their credit cards and expand their debts on their balance chain if we just make money available for a as far as this global ponzi scheme they will always be people lining up to take the free money but this is this is different now this is as you point out a supply shock when the supply lines from china are cut and stuff is not apple store you can't print that you can't you can't solve a problem by printing money because it doesn't matter the goods are simply not there mitch they think that they can buy all the 3 d. printers and create stuff i think is absolutely ridiculous what they think i mean with the supply and when you think about it this was the whole idea behind the

obama you're where they are. so they outsourced 98 percent of the inner chemical components antibiotics to cheaper production in china so we are we are actually relying on china to buy the necessary men that we need and we can cut off any time production around the world shut down and everybody throw my. beholden to china that's not a good position because the politicians in washington strom and westminster strom were too busy with other matters that were not relevant not helping needed by the aisle to line their own pockets rather than ensuring that the people they represented which they did represent would be out of harm's way should we have his teaching he planted which we don't use is a much larger problem we've got critical infrastructure in industries that now are

all outsourced to china where this problem originated as you call it the ruhani virus you're a race right well i mean i don't know why they call lyme disease lyme disease because the start of than lyme connecticut and most diseases are named after their origin where they come from but let me ask you this because you're in the banking business and i been in and out of banking and finance for 30 years and so i'm curious what your thoughts are because they will come back with some kind of package of financially engineer solutions and we've seen negative interest rates in the last few years that was a new thing that was invented just a few years ago it had never existed before what got a bit reach into the bag of tricks what kind of programs are inventions well they come up with trump is proposing a cut in payroll tax that seems very minimal going to do much to get save a new kitchen a farmer i believe is a goldman sachs guy he's

a financial engineer they will charge some outlandish absurd financially engineered solutions to this any and can you give us any idea what might be cooking in the back rooms i've mentioned this before and it's pretty much happened in europe and throughout asia that the bank of japan which is the major. purchaser of the e.t.f. products is exchange traded funds stocks and national bank finds stocks e.c.v. will start buying stocks in favor buying stocks they're buying on right now that it's not a long time from now until the fed says well we're going to start buying equities so this is a problem because it's not capital with. we're all we've got to intervene and the need to lay. the fire out of. hell with the mh with our man i thought negative you're going to bond purchases so that means the e.c.v.

paid france's richest man the 5. 1000000000 dollars in low how does that help main street. it doesn't. call you guys that self-interest you don't care what happens to main street does burn down long as they get paid what's next thing to pull out of the bag of tricks you know i told you you get a marginal marginal return for that increment you know now they have to spend $3.00 make it makes no sense whatsoever they're burning the house down they don't realize they are burning down and we're not and very well right you mention the e.c.b. finance the takeover of tiffany's by showing a negative response effectively having the public financing kleptocratic concentration of wealth but what about the fracking industry it's never made any money if the cash flow negative energy flow negative and there are i think a trillion dollars of the junk bonds associated with that industry how they're

going to handle that manage you're going to have a cascade credit fall and and oil prices should go much lower because you don't have demand we have and we're going to have an economic recession which we're probably in already or an economic depression which is going to push prices even lower now there's no war between saudi arabia and russia on the oil prices saudi arabia's plan was to drive all the shell oil producers back from it and they will succeed at oil prices stay down here and then they'll be able to control the price if you like opec. dries out is all this healthy for go bankrupt we need 200000000000 worth of bonds starts to fall thing and what have gone on to get we've been tracking this for a number of years deutsche bank they have a lot of exposure to these bankrupt energy companies a sarnie a very troubled bank and by some measures you can say it's an insolvent institution is deutsche bank going the way of enron in the near term mitch i thought you might

have a lot of problems at one point you're off balance sheet derivatives 70 trillion so if you're really going to bail them out i'm glad they. smart enough to write and read the e.u. all the 27 other members of the e.u. club would get to pick up are that bail out which is a big problem but it could be germany don't try to i last as. the last couple of years big problem is you see the repo market added 200000000000 a day it's still function we broke it rico market doesn't work any more and they won't tell you why. or who's borrowing the repo market it's a big secret what we've got to do is and the federal. it's not a federal organization the feds got nothing to do with federal government and it's not a bank we've got to and it's because they're just helps fund right we've got about 20 seconds left one quick question. if you can the petro dollar this is the

relationship between america and saudi arabia we don't have time to get too deep into it but is it over well i think that's over but when joe biden gets elected with michelle obama as is vice president we're going to see things really get tanked oh while they're dismissed firesign calling joe biden michelle obama winning ticket in 2020 you heard it right here in the car as an important message thanks for being on the kaiser report thanks for having that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert want to thank our guests misfires time author of the seminal important and translated into many languages planet ponzi try to catch us on twitter it's kaiser report and select by .

description summed up to tell using even for the owners. how to choose and should industry is telling us what to do. our pets really more based on what they want to sell us than what's necessarily good for the pet turns out may not be the best people believe we have animals that have you know diabetes in arthritis they have auto immune disorders allergies we are actually creating these problems it's a huge epidemic of problems all of them i believe can be linked to very simple problem of diet and some dog owners so heartbreaking stories about their pets streets a larger corporations are not very interested in proving or disproving the value of their food because they're already making it a $1000000000.00 on it and there's no reason to do that research.

there are not ones out. on the flues off then one might have been a top the definition isn't a bad. ones you can get a nice south. and. take in the eco city. and then yeah whatever it. is that i. would meet right now as. good as you know what that beach yeah that sounds out. just get silly me one means i love this they not be deep but it. is now tokyo found it. going to.

lay out. his work with because it is a dense and coral cultural pretty high. to unleash the full power of the federal government of the surfer today i am officially declaring a national emergency. the u.s. steps up its response to thwart the spread of the corona virus following countries across europe and asia. the trumpet ministration also seeks to restrict medical imports from china which could cause prices. and a full round of the chemical weapons watchdog and former colleagues claiming mistreatment and mismanagement in the investigation of an alleged attack in syria 2 years ago.