mix to listen to the ivory tower economist telling them to print money joyously the world's greatest a calm as they are i reach our on top of the ivory tower the man who wrote the defining textbook that all economists follow around the world being number one of the premier 0 economic mind of our generation of our century is of course plucky. right no one expects the treasury to abide by the sayings of nobody actually say yes but if someone is who they call so with that i want to point out that here is a headline and we're going to go into this about like why no one actually expected it when i say no one people who make decisions financial decisions and economic decisions for the manufacturing entities for the large corporations around the world and you see that with intel and t s m c

n chip shortage after blowing $84000000000.00 on share buybacks since 2011 and now wolf fully behind intel clamors for $50000000000.00 in subsidies for us chip industry intel is getting $50000000000.00 they're one of a few companies getting $50000000000.00 in subsidies in the latest of the trillions of dollars package and they're getting $50000000000.00 to help build the foundry you know build some more semiconductor chips in america and on the other hand t s m c was who is the large which is the largest manufacturer of these us semiconductor chips which are such shutting down production all over the world because of the shortages of it what happened is they did not expect as i won't shriek as much but this is plucky and plucky is an economist who works for the central bank and offers his advice never have any central banks ever actually taken his advice because it's always so absurd and he shrieks as you've heard him speak.

and nobody has ever taken his advice but these are different times these are unique times and they seem to be listening to his ideas about and i'm t. of money printing and negative interest rates so what happened is t s m c did not expect central banks or treasuries to listen to absurd economic advice right so they thought pandemic global economy shuts down therefore people aren't going to buy goods and services like washing machines like automobiles they didn't expect trillions and trillions and trillions of dollars to be thrown out the window at the population across america so that's not what they were expecting and they themselves last year at this time order is all these manufacturers like automobile washing machines all that sort of stuff they shut they they pulled their orders that they we don't we won't need some a conductor chips because everything sent them a little do they now there's another flipside to that story about there's money printing and then there's price signals right so the problem with having money

printing and also near 0 percent or 0 percent interest rates is that it destroys price signals in the economy because you're saying the underlying fundamental substance of the economy that is money money itself is the grow material of economics of capitalism you're saying it has a 0 value so therefore if you have a 0 value for the substance of your economy it's very very difficult to build something that you can point to and say well that has value and that one doesn't have any value because they're both equally valued less because they're both based on something with that has no price signal has no intrinsic no $1.00 here and no economic value and so in the case of intel they are allowed to buy back all their stock with 0 percent interest and they were not in the business of capital expense or to create more business opportunities or to hire more workers instead they just played the system because they realize price signals are broken and we're going to make money by capitalizing on the largest of the psychotics of the plucky bang. the

1st plucky bank currently run by jay powell so they then go into a chip shortage because the signals weren't clear to them they become tone deaf you involved in malinvestment and you lose track of what you do for a living and andy grove who is running in tell the family that until he's long gone the people there now can't hear the market they don't see the market all they know is they're getting free money now there are without chips so they're scrambling oh where does the money come from now to build chips to meet supply meet demand oh it's going to come from the government and government money printing so it made it exacerbates the problem that's why we have this bermuda triangle effect all corporations are flying over the bermuda triangle blind and they're just like have no idea what's going on except they're getting free money and the average person in america is also getting free money 34 percent of all the income is transfer payments from the government they do have no idea what's of value in what's value

lists they have no idea what they're eating for example as i see the obesity problem in america they think high fructose corn syrup is the same thing as actual slewed so they go a little bit they become what i do 500 pounds then they get sick and they wonder how did that happen because you've become berati due to free money printing so as i said no $1.00 expects the spanish inquisition no one expects clucky suffice to actually be taken and it was taken so we had manufacturers doing the thing that any manufacturer would ordinarily do if you're about to face a crisis right like a pandemic if you pull your orders you're not going to need there's going to be no demand obviously well they were wrong. the other thing that they supply the pandemic to expose however and i think that's a lot of bluster that you're saying and all this money being thrown is that they want you know our politicians especially ones to be blameless because they told us that there would be no cost to export. basically our entire manufacturing base and

yet it exposed that there was a huge cost we couldn't get masks and of course now we have the semiconductor chips shortage the article here on wall street points out that us and my conduct of manufacturing has declined to where it is only 12 percent of the world's total now and this is what intel's new c.e.o. pat gelsinger said in an interview recently just this past week on c.b.s.'s 60 minutes he said quote and anybody who looks at supply chains says that's a problem it's a problem he said because relying on one region especially one as unpredictable as asia where 75 percent of the chips are made is highly risky so here's a guy going on c.b.s. to basically pitch to the american public give me $50000000000.00 and you know those asians can't be trusted even though i've benefited from it by billions our company benefited by billions and they for example did share buybacks of

$84500000000.00 in the past 10 years so $84500000000.00 handed to the insiders essentially they didn't have to invest in cap ex they didn't have to invest in supply chains in america because of asia so they benefited from now now they're going to the audience with a slight xenophobia saying hey you know what the asians to get head give me $50000000000.00 you know gimme gimme gimme gimme gimme more give me more everybody is where we're small money he is this is the c.e.o. level c.e.o. level of words my money yeah this is are a remarkable development in the last 18 months really it's quite sudden so for 10 or 20 years certainly sense of the clinton years when china was led into the world trade organization the idea was that china's an up and coming country we need to help them out of my hand it's a great people or you know chinese people and we're going to send them all of our jobs and they'll always take. money and they'll never be any problems and then

suddenly and within 18 months people are saying wait a minute in fact here's what we're going to say we're going to say in order to get more money out of the taxpayer we're going to start this on a phobic thing going on we're going to start attacking chinese people as untrustworthy as a way to get more free money and there's no end to it it's the the allies the deception the racism is in a phobia the class war there will never end as long as there is free money available yet right there's nothing that will stop you stop you you will say anything and do anything to get that free money so you and i started doing content in this sort of space in the early to thousands and the this next bit here is so remarkable you're not going to believe about what he said so this is the incentives of this structure and how it's harms the entirety of the global economy but also to mastic lee so you have to something he said about the mistakes they've made in the

past so they have a choice to invest in cap ex to invest in production or to give themselves the money hollow out the company right he said in this interview on 60 minutes on c.b.s. the company stumbled we had some product stumbles some manufacturing and process stumbles perhaps the biggest stumble was in the early 2000 when steve jobs of apple needed chips for a new idea the i phone intel wasn't interested and apple went to asia eventually finding t. s. m. c. a taiwan semiconductor manufacturing company today is the world's most advanced chip manufacturer producing chips that are 30 percent faster and more powerful than intel's he said that's exactly what we've said since the very beginning of our content that we've been creating when we spoke to the likes of michael hudson or paul craig roberts from both sides of the aisle in terms of you know right and left and what they said is it's in the. manufacturing process whereby innovation happens

so we chose this company intel chose not to innovate that's too hard that we see that across an economy now as everybody's following plucky said price is like everybody staying home nobody wants to work and by not working you're not innovating and you're not having to confront problems and then overcome the problems and find solutions so it all got exploited to t s m c because they were too lazy to get out of bed they were like supermodels were too lazy to get out of bed we get so just financial eyes our company hollowed out the company and it's easy and free and why should i work well let's be clear that the money that they're now being sent isabella yes yes those bad mistake right so they made a mistake yeah and they're getting bailed out you see it once capitalism it's the situation where if you make a mistake you get penalized yes right it's it would be like having to follow says

i'm without health. that's what like speaking of no one expects the spanish inquisition no one expects anybody to actually listen to dub in tile is like one of those you tube videos of young person crying because somebody is picking on. madonna or. trailer swear ft or somebody like this right they're crying so here's a mature company throwing a fit like we're stupid we're the stupidest chip manufacturer in the world we make stupid mistakes and we buy back our own stock. please give us a bit louder so i'm still to go into my pocket right i'm going into my pocket yeah to have these idiots at intel because they're stupid because nobody expects anybody to fall pluck use advice and that is against the advice of capitalism which is that nobody expected like adam smith said the invisible hand he would. protect yourself

you wouldn't haul out your company and destroy your conny like no one ever and all economists ever expected that none before plucky ever expected that people would willingly do that well there you have it one thing we've got to take a break they will be yeah i might mention it was britney spears of people cried over yeah it was britney spears. intel. take your pick go away.

is your media a reflection of reality. in a world transformed. what will make you feel safe. heise a nation full community. are you going the right way or are you being led. to direct. what is true what's his face. in a world corrupted you need to descend. to join us in the

depths. or remain in the shallowness.

welcome back to the kaiser report i'm max keiser time now to turn to john he's a filmmaker he made the film bailout he's also a retired cat attorney and financial analyst john welcome back thanks max good to see you again oh all right john so you filed a freedom of information request with the federal reserve bank what information are you seeking from them why are you seeking it and what has been the response i am after a memo that was drafted in 2009 by the staff and is simply referred to in transcript as a staff there was a 2009 meeting in june during which time the federal reserve f o m c was discussing how do we reduce the balance sheet because now we've undertaken the expansion of balance sheet we started quantitative easing we started buying these assets and expanded balance sheet f o

n c members in the june 2000 i mean you're looking down the road talking about you know it's easy to expand the balance sheet because we can print money out of nothing how do we contract a balance sheet and one of the ways that was discussed was using federal reserve bills not federal reserve notes not treasury bills fed bills that one of the participants in the meeting jeffrey lacker who is the president of the richmond fed at that time said i was stunned to learned in staff memos that if this being the federal reserve bills had the full faith and credit of the u.s. government behind it our books would be consolidated with the government and so what i am after my 4 year request is those staff members and the reason i'm after is a 1st of all i'm interested just as an american you know what you know what would cause the federal reserve books to be consolidated with the u.s. government because that would open the fed to a massive dose of transparency but really i suspect. the whatever it is that would

cause the fed bills being backed by feel full faith and credit to concede have those books consolidated i suspect that the same thing would also apply to central bank digital currencies but i don't know that i'm awaiting on the request the fed has just gotten back to be recently with a notice saying hey we're going to give you a full response if we will produce the documents we will cite an exemption to the foyer by may 14th that's a friday with sounds like another issue hair is that it would be this idea that the fed is independent right that janet yellen was at the fed now things i treasure a and now she gets press conferences talking about the fed and a lot of people say that well in order to solve this crisis there is a big consolidation of the treasury and the fed so what you're looking at here if in fact they consolidate that bill that would mean that we no longer have any pretense of an independent fed john you have to remember the federal reserve is a creature of congress and answers to congress the fed likes to style independence

as independence of both the executive branch and of congress which is nonsense it is an independent agency independent agencies in the federal government that means independent of the executive branch the president can't come in and hire and fire you know heads of the agencies it does not mean that the fed is independent of congress it is a creature of congress the congress can reach in and created the fed it can close the fed down whenever it wants the issue of consolidation is really an issue of transparency because the issuing members the the parties the energies that are issuing the currency in the u.s. in the federal reserve are all private there are 12 regional federal reserve banks in the system each of which is private and so that's the real issue it's really a transparency issue with the consolidations we don't we want to look at those memos and see what is it that we consult cause the consolidation of the books now i see. specter the consolidation relates to the fact that the fed is stepped into the

shoes of the treasury and it is issuing really issuing forms of money with those federal reserve bills that it doesn't have thought authorization to do but i don't know i have to wait to see those memos if they ever show up they can call anything they want money they can call repurchase agreements money write so repurchase agreements that are considered money and they print them up by the banks and by the trillions along with every other phony baloney that they call money the result of course is that the balance sheet of the fed increases by trillions and what is the current status i mean the fed reserve balance sheet when it went over a trillion and that was considered alarming we're well past that now what's the current situation the fed balance sheet back in 2008 when the crisis hit play as you say it was below a trillion dollars and it went over one trillion in the crisis and it didn't rocketed up to about 4 and a half trillion 5 trillion and stay there now it's but it's pushing

a trillion it's 7.8 or 7.9 trillion last we looked and that is you know the fed issues you know that this predominantly that money is federal reserve notes which is sitting at 2 point you know some a trillion $2.00 trillion dollars and a lot of its reserves which is electronic money that sits in the reserve accounts of the banks that are to subscribe to the fed and this or that balance sheet is massive and because it's all so it's their so-called liabilities and they're balanced out by the assets that those that those reserves are purchasing you know mostly u.s. treasuries but also a lot of mortgage backed securities right it's mostly junk that they buy from wall street that has no resale value so net net potential resale value over the john that they're swapping with wa straight the fed is leverage to probably close to $70.00 to $1.00. that's a very unstable situation similar to other central banks are. the world and they

can't raise interest rates because that would maim that what they do have on the books would become instantaneously insolvent and here we are entering into an inflationary period where the classic response by the treasury and the fed would be to raise rates to try to stem the inflation but of course they can't do that so all right just heading into a crack up to more this said it's important to do anything because they've already blown their box of tools out of the water by. they actions that they've taken and crack a poem is one with i will go on without a response right thought of control it's a row all right well we don't know i mean it looks that way right now if as you say you cannot raise the interest rates the juice on the debt just the interest payment on the debt is massive if you just raise the interest rate a little bit the debt goes up to the interest payment on the debt goes up so much to where you risk not being able to make the interest payment on the debt drum

powell himself recently said if you are on an unsustainable track meaning you have debt growing at a pace that is greater than g.d.p. and he said he admitted that's unsustainable now he claims that the 20 trillion dollars in debt itself that's sustainable by itself you know i don't know whether that's true or not but he's done exactly correct the growth rate of the so the fed the debt is outpacing the g.d.p. and that's the real danger defend itself admits that it's really kind of an out of it's own and out of control contradictory right now and there's no indication that anybody is supplying the brakes they'll say that oh gosh we care about people so much we're going to law introduce universal basic income or a modern monetary theory m.m.t. which is just more money printing right so they're going to rebrand it $1.00 thing i noticed i was straight over the decades that i've been involved is that they commit the same frauds every 5 it's an air of but they reprogrammed it right so. this one this m.m.t. or u.b.i.

will be the latest battle out of wall street because of course all the payouts of be distributed through wall street and they'll take their cut but it's a sense thing just another bailout for wall street we know very little about c.d.c.'s disk except what the what officials tell us like jay power and they say it's the 3rd liability balance sheet you know meaning that you would be you know right now the only people with account the only energies with accounts at the federal reserve the treasury in foreign central banks and american commercial. banks you know and some formats with with american presence and that's really it what they're contemplating with central bank digital currencies is allowing ordinary americans and ordinary businesses to have accounts at the fed electronic accounts of the fed so they're saying it would be the 3rd form of money the 1st $2.00 being cash physical cash and the 2nd one being reserves and this and a 3rd would be the central bank digital currency but it would be individual accounts and really i look at that not so much as that there are

a lot of 1000000000 think it's a liability law i think it's really to me the system is out of control as you said and it's been out of control we started to see you know cracks in the in the end of this in september of 2001000 that predated the pandemic incidentally and with the repo market in new york fed and so i think the system is starting to shake out of control and the c.b.c. and that system i think is really a reach to try to rein in control and have a you know one unitary monetary system where you know there's a lot more control mechanisms built in and hence you see all these things like oh we need to be concerned about green energy and we need to be concerned about inclusion and all these other nice subjects that's all just a pretense for the fed to be able to exercise control in my opinion we don't know time will tell as we learn more and more about c.b.c. from the fed officials write this i thought bank that philip current stays appeared to be a way for the powers that be to do an end run around the wall street banks actually

and so that'll be an interesting conflict between those 2 groups doubt you made the documentary bailout during that global financial crisis today we're in the midst of a looks like a global crack up boom from all this inflation the money printing that the bailouts are are are permanent and a turn all. it seems like it's just rolling balance won top of the other but is this now a crack up boom. it's different than 2008 john because in 2008 you had the bubble pop and they came in with what thankfully became almost 20 trillion dollars worth of funny money and but now they've caused a y m r germany zimbabwe like hyperinflationary cycle. your thoughts did is different from 2008 but you're right let's back up bailouts are forever once you once you take that step and you start beyond people out there is to me to my

way think it's a ratchet rents there's no going back the other thing there's not going back on is that we've dispense with the rule of law you know we've known about that ever since 2013 when d.o.j. officials announced very candidly that they were no longer really they would mid they were no longer prosecuting wall street banks and that's another thing you can't really reverse that because once you give somebody criminal immunity you know they're just going to run with it and then at that point there's no voting your way out of that system so you're right the system is out of control it is criminally out of control and now i think what you're seeing in terms of the difference between now and 2008 is 2008 you could just lavish a lot of cash on a bunch of banks into sort of you know stem the bleeding and now what you're seeing is the federal reserve which is really the ultimate it's which one notch up the monetary chain from the banks you know the banks issue bank money the federal reserve issues reserves and now what we're seeing is indications that the fed is going to start using those reserves or using its issuing power to connect with

ordinary people and as you said they're really short circuiting out the banks with that and that's really a radical departure from 2008 when the banks were sort of part of the solution now the fed is stepping up and putting the banks out john we're going to have to cut it off there have you back on santa talk about this stuff thanks for being icaza report thanks max all right and that's going to do it for this edition of kaiser report with me max keiser as they are to thank our guest john titus until next time . ready to work for you can put up a little bit. to do good they see a major overhaul. just to keep the interest.

force ninety's through you but i see no reason to get the white. flesh a little fish not go for it it's the beautiful bill the mortar should be out of these that the. bullet was a skilled workforce and the she beautiful was a ball of the wood school that once this issue will. go on for just brilliant it will slow down the story could have a good beat and if we do those initial you have to for much of what you mean yes the. door was a shade but they could be when you get out of the scott. peterson you're sure it was 3 series on what you as a mistress. americans love buying homes.

this was a fundamental part of how our political leadership and our country a large understood the bargain you get a home and then you know rebel right as the things you don't revolt if you have a stake in the system. and be really interesting to dial it back and think about the longer deeper history and what housings meant in the united states not just that old question of the american dream but the bigger question of who the dream is and for. it's seemed wrong oh well let's just don't call. me. yet to shake out these days because that's ahead and it. equals betrayal. when so many find themselves worlds apart we choose to look for common ground.

issues. but breaking news this hour an international 9 people including 7 children have been killed in a mass shooting at a school in the russian city of many others are injured the suspect is in custody hearing on the hiding. place. for a look at. the 19 year old registered gun having received his license just weeks ago investigators will be conducting a psychiatric assessment while neighbors say they would never have expected anything quite like this you had a very intelligent appearance he was very tidy i've never seen him.