as we have russia versus saudi arabia the price crashed 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 royce a blogger we mentioned 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 its 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 i gave america the us empire of debt it gave america the world reserve currency it gave america one. called seniority which which is basically they get

a cut over every transaction ever done anywhere in the world every coil transit 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 us 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 $10.00 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 i 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 that'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 a tax of about just under $7.00 obviously since we went on the u.s. dollar standard and we were untethered from cold 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 bus 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 oil industry that's bloomberg take i responded with the red queen was at war with shale 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 treehouse slash studio and you might hear a couple of birds tweeting in the background because we're living with the birds in a tree have 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 but 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 the 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 some are 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 debt is always been greater than any any of the any of the past that's come out of these things and. it takes more energy in for

a shell rake than energy comes out it's 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 kaiser report talked about the shell industry but the markets are telling us that we were right as we see with this headline here crashing energy junk bonds s. and r g 2027 bonds 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 but you know a lot of people criticize a big point as too volatile but look at the o.l. junk bond market for the shell of history 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 there is to 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 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 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 in fracking we could have built you know infrastructure we could have built high speed rail we could have bought it 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 an glorifies salesman. to 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 of pay 12 percent 13 percent 14 percent you're going to make a killing right in that stupid cell 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 bomb 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 any 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

and 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. the loss is cumulative in the facking sector by the way right now imagine reisa bog really or he said when that thing spike that was worth almost 2 trillion that this is the greatest short of his lifetime once again you know he was right this is it's a short sale today it's going to you know goose egg on a 0 sound he's a picture album anyway we're going to take a little break and when we come back much more coming your way. and we're going to repeat that probus is probably to the people come on you know we've all pots. pretty.

pretty good. if you want to work.

for the super cool for sure but a little try to there was a news media if the sun is shining star would sure be the cheapest we've got some people feel and i'd be distasteful wolf for you to. no i don't need to have his name push me i will push and push it i mean you know. most recent. past. welcome back to the kaiser report i macs guys are time now to go to bed firesign author of plan a ponzi welcome back mitch great to be here max 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 deerhunter 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 happen is the enormous amount. of increase exponentially so now the federal reserve is a panic desperation move coming in and they cut interest rates by 50 basis points the bank of england follow suit by cutting rates their bank of japan buying all equities central banks think they can make the coronavirus go. the way by buying equities and spending more money this is a fallacy it'll never work the problem that we have that we need to identify is the fly shock and a 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 fuel jet fuel and now it's gone up in flames so we're seeing a whole 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 why it's a good buy. i think valuations were way too high we've discussed before buyouts like and credit will be the one wall works we've already seen corporate bond market is up a bit but i think things are going to get much worse because all the dumby the tide goes out we're going to see. the precipitous decline in oil prices it's going to accentuate the collapse of the pond. shell oil this. i think we've got a lot of components here look at part it is a big one and i think the lack of liquidity in the markets when you get involved

those 2 is going to make the decline even larger and the loss is even larger which will cause bankruptcies in a cascade of bankruptcies i mean italy is a lot them martial law they go or trillion dollars in debt that 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 about a way out of this problem you know like the bad. larry summers and the same people that created this mess bankers want to tell you it's all. coronavirus but it's absolutely not. moral hazard caused by the global central banks enable

a reckless lending practices the company organizations and. entities we're not we're not 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 shape if we just make money available for a as far as this global pond is game they'll 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 the 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 outsource 98 percent of the inner chemical components antibiotics that she preferred auction in china so we are we are actually relying on china to buy the necessary men that we need and we could 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 speech and he planted which we don't use is a much larger problem we've got critical infrastructure 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 a started in 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 i want to get 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 steve a new kitchen a former 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 throughout asia that the bank of japan which is the major. purchaser of the e.t.f. products is exchange traded funds stocks and this risk national bank finds stocks e.c.v. will start buying stocks in favor buying stocks or 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 tiffany's by healthy m.h. with our man i thought negative you're going to bond purchases so that means the e.c.v. paid france is richest made to buy. a $1000000000.00 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.v. 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 of credit to fall and and the oil prices should go much lower because you don't have demand 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 wristed drive all the shell oil producers banks and they will succeed of oil prices stay down here and then they'll be able to control the prices if you like

opec again dries out is all this healthy for go bankrupt we need 200000000000 worth of bonds starts to fall thing and we'll have bond on 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 think 3 to 5 have a lot of problems at 1.3 they're off balance sheet driven 70 trillion so if you're many going to bail them out i'm glad they. smart enough to write and leave the e.u. but all the 27 other members of the e.u. will get to pick up our bailout which is a big problem but it could be germany don't try to i lost. the last couple of years the big problem is you see the repo market it added 2 'd 100000000000 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 is borrowing a 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 and it's fun right we've got about 20 seconds left one quick question. if you can the petrodollar 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 it's over but when joe biden gets elected with michelle obama 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. descriptions 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 and what's necessarily good for the pet. food may not be as healthy as 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. can be linked to ferry simple problem of

diet and some dog owners so heartbreaking stories about their pets streets the larger corporations are not very interested in proving or disproving the value of their food because they're already making a $1000000000.00 on it and there's no reason to do that research. in the united states presidential candidates debate the future of the u.s. the world max kaiser and stacy herbert dig into the burning questions of this election cycle. every week. x. student debt trade wars corporate money universal basic. and more catch up with what's front running this sunday exclusively on r.t. . you see every passage is the death of something all passages involve some kind of conflict in

between where one is trying to reconstitute the old way of doing things but it doesn't work as a service i'm often working with people in those in-between so again the key is how do i find my pass through all of this and where do i find innocent those moments we have to start beginning to trust what is coming from within. today the. story.

is here. to be reached. to unleash the full power of the federal government of this effort today i am officially declaring a national emergency. the us stepped up its response to thwart the spread of the coronavirus following countries across europe and asia. to trumpet ministration also seeks magical imports from china which could cause prices to rocket. a full thought whistleblower rounds on the chemical weapons watchdog box connie claiming mistreatment and mismanagement at the investigation often at the top in syria.