groups with they are expend job all in environment where the fed can give their friends trillions of dollars with no restrictions whatsoever this is another clear example as well of being an issue of distribution there is no shortage of money there is no shortage of credit there is no shortage of room on the federal reserve's balance sheet we see that now because when the hedge funds and private equity groups when they start wobbling because ever since back in repo something was going on but now we have them there are fracking debts defaulting we have the commercial real estate sector trillions and trillions and trillions of dollars trillions and the fed instantly is able to transfer money to them instantly in the other space where the rest of the 99.9 percent of the population lives where we all live we have a situation where oh it's so hard i don't know we don't have the money and we don't

have the infrastructure we don't have the institutions like all these small and medium sized enterprises having to borrow via you know the s.b.a. the small business administration that used to be set up during the end of the great depression to give money to them instantly and directly from the treasury now it has to go through banks but banks no longer lend to small and medium size and prices because everything is about real estate in the commercial real estate and derivatives market and free money for them so we have a situation where there's no distribution of the liquidity of all the abundant capital in the system won't remember the soup nazi from seinfeld saying no soup for you right i mean there was soup available but there was no soup for you so now the central bank has plenty of soup they've got plenty of cash but no cash for you but why for no reason that makes any sense other than the fact that they are in the service of a bunch of. kleptocrats and are simply printing money for themselves i mean face it

if you had a bank and you could print your own money and buy these for 150000000 or an apartment on park avenue for 250000000 as the hedge fund manager ken griffith recently did who also hired ben bernanke he has his pen the condom is to work for him you would do it right i mean everyone would love to print their own money and buy rare arts of work or sites for gray or works of art like your soup there you know. people in this fashion standards high during the pandemic i have a feeling people might not see it because there might be overmodulated in terms of that's why god like laura you're like i am so toshiba's representative here on earth i am the bishop of bitcoin well of course we're talking about distribution and distribution and how it's not a problem of of having no supply there's plenty of supply of money there's plenty of supply of capital it's all there we you know all these things are produced all

this wealth is produced and it's just about distribution because if you don't have this reaction if you have a lot of rocking rotting carcasses and rotting products in the field then you encounter a situation because. you know if a farmer had a sprinkler system you know going through his entire field and decided well i like watermelons better than i like we so i'm going to favor the watermelons i'm going to give them all the water and forget that we were not going to like we're just going to give them a little bit every once in a while or let it trickle down we're going to put it up on the watermelons and hopefully it trickles down to the wheat well then your we harvest gets ruined right so that's not the way you should be distributing it and speaking a farmer is an agricultural products and this is the big issue in terms of getting distribution of this and i want to look at this screen grab here this is from a tick tock by the farm cat and that's a field of onions totally abandoned and he has nobody he could sell it to because normally. he sells them to restaurants and all the restaurants are closed he points

out and in his clip he says basically by closing out the restaurants the bridge is out the road out of here is out and it's not for a lack of products they're supplying here it's about getting the stuff to the city and i can't get enough to the city so it's going to be left there in the field to rot while people sitting here at home and lock down they might be you know desperate for some onions for their meals but we saw plenty of foreshadowing of this in the markets you know markets give great signals doesn't mean people respect the signals or can't hear the signals so we had 2 remarkable signals in the last 3 or 4 years that people ignored number one companies that would be perpetually unprofitable going public for huge valuations like nuber and others that stated in their prospectus we have no expectation of making money and yet they went public for billions and billions of dollars that shows that failure was being monetized

and capitalized and bid up to extraordinary valuations we also had another incredibly insightful prognosticating market signal if you were listening to it and that would be negative interest rates negative interest rates a provably false. invention of ersatz financial leisure domain that's somehow game currency in the sovereign. banks around the world even though it was a guarantee last so why shouldn't agriculture be a guaranteed loser it's just mimicking the corporate world in a sovereign bond world and so the agricultural world is following suit they grow food that nobody eats this like they have companies that never make money and bonds that never show positive returns well in fact i did tweet out here that say u.s. banks are preparing to seize energy assets of shell companies. plenty which are now

on the brink of insolvency j.p. morgan wells fargo bank of america and city are each in the process of setting up independent companies that own oil and gas assets of course those are members of the federal reserve banking system j.p. morgan bank of america citi bank and wales far right to fracking industry being an industry that we've been saying now for 10 years is cash flow negative from day one energy negative from day one takes more energy and then comes out more cash goes in there comes out and now it's going to be terribly supported by the federal government how is that different than soviet union 1950 it isn't it's exactly the same so again we're talking about supply and. demand but supply and distribution of that supply there was no shortage of suckers this in these past 10 years no shortage of them why because interest rates were is 0 they kept going to 0 and negative in some places so they need to deal that any cost because we have these boomers about to retire on these huge promises given to them 2030 years ago that

will give you way more than is possible under how much wealth and our economy creates now but if we collaborate lies the next 2 generations you know there's plenty for you but this is the conflict where you get in right now because the distribution of that wealth well the people who you've already taken their wealth they're like hey what about my well that's my well so we're seeing that intergenerational conflict because of the distribution of their wealth that was taken without their participation and that contract i mean that's a point that needs to be repeated so it's their percent interest rates to keep the bailouts rolling the banks have had to collateralize and monetize evermore greater pools of commodities and future revenue like student loans for example the reason we have so much student debt is to create tradable security to give boomers retirement income same thing across the board that's why you have health care being commodities and turned into financial instruments to give boomers today. who have 0

percent interest rates but they need 6 or 7 percent in their retirement account to keep their standard of living at the same place that's why it's packaged as a loan the collateralized obligation but it destroys the future so now students are destroyed and the health care is destroyed and the economy is destroyed been paul krugman thinks that's a good idea but at the end of the day nothing changes unless. that's always the problem flower it was in the arab spring and member was caused by the price increases in member 20092010 after the financial collapse oil prices went up 147 everything became expensive the egyptians couldn't feed their people were it same in haiti same around the world same in revolutionary france if if the peasants couldn't get in that was caused perhaps by of ok now but here's a question asked by the evening standard have you struggled to find flour all that was made on april 9th 2020 on march 29th 2020 i tweeted supply chain

collapse watch try to find a single bag of wheat flour only option is e.-bay at a 10 x. to 12 x. mark up are there going to be food riots in america soon we're not that sort of people but you look at those tens of thousands of people showing up in cars lined up at these food banks in san antonio texas down in florida all over the united states outside of vegas there's huge thousands of cars lining up philadelphia lining out to get products and some of the articles did mention that part of the reason is not only have millions lost their jobs but they can't find any products on the shelves in the supermarkets it's a lagging indicator if you will so that the fine art market which i think is a great market to give an indication of where prices are and where they're heading the fact that fine art of sotheby's and other auction houses has gone up dramatically over the past 10 or 1520 years spectacularly so it's not reflected in the price of bread until it is and now it's starting to be that. so that inflation

that we saw in the high end products is down going to end up being in the staples like wheat bread food chicken i just saw somebody post image of a chicken for sale somewhere that price was up 100 percent the problem is is all that money and that causes inflation or deflation or hyperinflation but the distribution mechanism remember the fed only has the ability to feed to the bankers to feed to take market wells fargo citibank and bank of america only feed to them so all of their artwork like our wonderful piece here for sale for whatever you want to pay but they could distribute easily to them but it's the fact that nothing goes down into the bottom and therefore those products don't get made nothing gets made even the food products for the poorest of the money goes to the top it doesn't go to the bottom and so the efficiencies at the bottom collapse so all the industrialization collapses and then you have the prices skyrocket because it's all parties and all your blood being artie's all bread is artesian all at some point because all the bread factories are shut but we're going to take

a break more supply of cars the report after the break don't. you. think you know because you know. we do need to create with them. freaking out when it's pretty much anywhere near. breeding dogs or. conditions on 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. they have no protection. it's. across the u.s. . 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 sought in stores even giant a good businesses are involved like cargill among santa there has been a shocking amount of organized opposition to adverts to increase the standards of care for dogs but in commercial rating for so many most of that opposition is coming from huge agricultural groups and industries that have nothing to do with jobs don't buy dog. is you'll be via reflection of reality. in a world transformed. what will make you feel safe. high salacious community. are you going the right way or are you being led.

to direct. what is true what is faith. in the world corrupted you need to descend. to join us in the depths. aura made in the shallows. humanity is on the edge of a precipice thanks to a continuing destruction of the natural world. you just seem leery of a lot of those also. losing much of a later period. of pianos a bit. less than nothing you can hold up.

i think that all of the war. or the. only dealing in the muslim world as a rule book you can sit around and stuff it and ship them through that. human activity has brought us to the brink of the world's 6th major extinction of it and the people in this film just can't take it anymore. welcome back to the kaiser report i'm max keyser time now to turn to steven mclaren he's a former bond trader turned bitcoin investor with the appropriately named exponential

capital stephen walt of the kaiser report thanks for having it all right let's get right into it the fed has promised wall street that there is quote no limit to the amount they will print they are now buying junk bonds and c l o's that would be collateralized loan obligations thus bailing out j.p. morgan wells fargo citibank which own 81 percent of these what comes next even you know digging into the fed announced last week on junk bonds they're essentially bailing out any company that's a fallen angel so if they were a investor grade corporate rate it on a. shell to below investment grade which by the way every airline in the u.s. except for so west is no below desperate they going to sicily by those parts the question is whether or not they start moving into things like equities or high

yield bonds that are junk rated so you know that's they really proven that you know they're discounting crude investors at the start there's a concept that has been floating around for quite some time called moral hazard that is if companies make mistakes should we really bail them out of course covered 19 is a pandemic that nobody saw coming however these airlines fail to put any cash in reserves as a matter of fact they've been using free cash to buy back their own stock to give their executives huge payouts and they brought this on themselves in many ways so should the public be bailing out. praful get airline executives soon are acting in a way that well used to be called theft and well you're right you know a lot of a lot of these airlines have been you know mismanaging their their their money

buying back their equity in order to you know give greater bonuses to their investors and to their to their executives. somebody airlines are a little bit more prudent. for instance southwest airlines is a good example you know they're there they're much better at cash management they're much better asleep management. they are it's one of the reasons why they're still better great credit for instance but you know it at a time like this even though i'm i'm a libertarian and don't believe a whole lot of government intervention if the government's going to you know for shutdowns or public safety then there should be a limited amount of of a bailout in my opinion or limited about relief and help. you know it all depends on how they go about rates so so so many airlines like delta they they're only days away from being and so they have no assets they have very little cash left in

a lot of debt. but some of the other airlines like you know i've mentioned southwest or jet blue or even alaska. have been much better in the past management much better saving for a rainy day so to speak but i but i believe disappoint time where a lot of big airlines really should just go ahead and file for chapter 11 american airlines united airlines delta that's really the only way they're going to get out of a lot of the obligations they have with the unions ok well the fed vice chairman richard cleary does says the central bank has the tools needed to keep the u.s. out of a deflationary trap what tools do you think he's referring to and while they work some of the things that you know that are there that are obvious or are by got assets right so you know new tools really were the massive bond backed by programs that occurred 10 years ago and the new tools today are buy junk bonds and other

corporate bonds as well as when it's a power if you remember 10 years ago there was the build america bonds program where sort of buy municipal bonds onto the balance sheet of the fed you know the u.s. government i decided to actually insure a portion of the coupon for build america bonds and they made them taxable instead of tax exempt so that other people would buy the stock up in its colonies of course but by muni bonds it's an ok idea but i think reviving perhaps the little barack obama program is a better idea i'm curious to see if the fed will start doing things like education and history where they're actually you know over the last 2 years have been by e.t.s. an equity because they run out of the piece to purchase and that's really the only way that they can. lift asset prices so we'll see if the fed turns to those measures it reminds me of 1st grain or 2nd grade where the teacher gave everybody

a go. gold star because they didn't want any of the kids to feel bad and so the fed is saying hey you companies and banks out there we know why they feel bad we don't want the executives the missi out payment we we want to be your friends so we're going to buy e.t.f. that has the training some ball j. and k. kyung and put that on the public's balance sheet and is america maybe. i often say that as a young country it's only 230 years old it's still in the people kaka phase of his development is america ever current grow up do you think stephen r. do we have the mollycoddle for the next 50 to 60 years when we think well i certainly hope so. that we get out of this without causing more problems than that horror when you're bailing everybody out essentially you're bailing nobody out and and certainly hurting the middle class and the working class in the united states

in the process one of the most important things that i was looking out through a lot of these bailout situations as were the last 10 years because we've had very easy monetary policy it's caused big investors like insurance companies a pension funds and down its trusts to purchase things that are much more riskier than they normally would because they'd be healed but our insurance companies need the eld to meet their actuarial some should then should funds have to buy higher yielding products or risk your products just an order to pay their bit of fischer's so so this this this state of monetary policy has cropped up a lot of companies that really should exist right now one of those companies are producing inferior goods maybe there are many factories and so it so you have the zombie companies that are running around the last 8 years that should have collapsed so that new innovations could actually come out good examples have been

things like sears. the tories are us or they simply weren't innovating any more and they were simply just. you know selling goods so they can make their debt service and their debt service was actually quite low because everybody was was was buying a bed was probably about an hour to say 18 lampard over there at sirius is a good guy example of a wealth extract or who left the company to die as you point out they've become a zombie let's talk about the fed again they can't print you know they can print on limited amounts of u.s. dollars but they can't print food or supply chains smithfield foods just closed their pork processing plant in sioux falls south dakota that's a 5 percent of us point production what happens when there's no food on the supermarket shelves the central banks are trying to keep printing they solve that problem statement no i don't think they can solve the problem at all you know really really what's what's what's happening in the u.s. it's mild compared to what's going to happen in the rest of the world so whether

it's a corker chicken. plants that already shut down a lot of beef plants are planning to shut down supply chain has been disrupted by a lot of people not wanting to risk getting the coronavirus by participating in the supply chain and then of course as you know in the northern. part of the world we produce half the year and then the other half of the year we import from the southern half of the world when we're in winter there in summer so we have you know supply chain has allowed us to take advantage of office it harvest seasons a so so with the ports shut down that's that's that's causing him bigger problems but let's say that food prices double in the united states it is united states most of that most of the citizens stand between 5 and 10 percent because those were income on food so 'd

a doubling in the cost. the food because of the supply chain disruptions the bail ability disruptions is a massive tax on the on the on the u.s. consumer the office it is energy so energy has actually gone down so so we're offsetting the few costs with energy in the rest of the world where they spend anywhere between 25 and 60 percent of their disposable income on food. we're really going to see a problem i think we're going to see a problem and it be emerging markets will probably see what it best but standpoint emerging market bonds will probably see spreads blowing out so especially in emerging market corporate bonds it levels that we haven't seen since the type of prices about you probably worse now you've got an excellent essay out called hunger the socio economic effects of food inflation disrupted global supply chains i recommend people take a look at that and as you point out most people it's

a 5 to 10 percent of their disposable income goes to food and of course for the super rich that number goes down to near 0 a so it's a regressive tax when food prices go up and let me ask you this about food price inflation because the entire last 30 years have been based of fed policy has been based on the idea that inflation doesn't exist and they do that by not in count by not including things like health care or housing costs but it's going to be tough to ignore if food prices double or triple and there's going to be a real inflation suddenly and they can't ignore and they can't use had donek adjustments to get it out and to make it invisible what happens to the fed policy then stephen i mean if rates are going to have to go up and of rates go up then it's game over right well look you know fed policy if you're the u.s. that a.c.p. and other large more developed countries you know we couldn't we could absorb

a little bit of that. you know helicopter buddy right but emerging market countries are forced to implement similar prop programs just to keep up and when they do it it's a lot more painful and they they risk zimbabwe type situations. you know with the us is a global. medium of exchange global it's us dollar central it global currency. bretton woods try to replace gold with with with with the u.s. dollar but when you have matching policies an emerging market countries they do they have the opposite effect hyperinflation and currencies that are worth nothing so so we're essentially hurting the rest of the world every time we talk about right great point statement click thanks for being on the kaiser report a thank you for having me max well that's going to do it for this edition of the

kaiser report with me max kaiser stacy hubbard want to thank our guest eva clearing up exponential capital if you want to reach us on twitter it's kaiser report and so next time. when else so seems wrong all rolled just don't hold. me i'll get to see how these things come after him and him again trying to trail. one something and find themselves worlds apart we choose to look for common ground.

that is just every small cycle where you hit you miss. receive the really p.c. on fire and you can be c.g. sure getting the clue from. today to fit cool shots walk to sit next don't. give a solution safety feature on your mobile chip it's likely the. chronic pain has changed american lives but pharmaceutical companies have a miraculous solution. based drugs it's not the people who are chronic pain is and

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in the headlines this hour the u.n. children's fund swarms of a potential measles outbreak with youngsters missing their vaccines because of the covert 90 pandemic we hear from the unicef the cheaper the united nations these 117000000 children that we estimate are going to minnesota and means of the red sea nation. have been rescheduled. from clyde medics in the united states say that their lives are being put at risk by the government's failure to supply hospitals with protective equipment. and small business owners in france say the newly extended lockdown could force the balance of business leaving millions of people jobless.