few months ago, as people were getting used to these enhanced unemployment benefits, the non stop stimulus checks arriving in their bank account. and now those child credit tax credits are also arriving a bank account. so everybody feels flush and they don't care how much prices are going up, they're willing to pay, they're not negotiating, they're not bargaining. right? so this, we already have universal basic income, so called u b i. it's already happening in america right now. people are just getting the steamy checks and they won't stop coming. they are going to allow people to live rent free. they're going to pay them more than they will get minimum wage. and so yeah, they don't care where the price, the coffee is going, because it's not their money. it's just the pass through mechanism to bail out bankers. and the amazing thing is that simultaneously we're saying interest rates go negative, surrendering into a period of the global economy, where banks are charging customers and savers to have money at their institution. and then that money that they take is going to be sent to the same customers to buy

a free cup of coffee. and this will be looping around now for a while, until such time as true, catastrophic resulting in sue's, which would be either on the environmental front where we're seeing the bile fear of the ability to support human life is collapsing. or we'll see a bond collapse which will throw in immediate screeching halt to the global economy, or we're going to have some kind of war world war. well, everybody gets a cup of joe biden, in today's america, where nobody has to work. they work from home, right? and everybody's having the free money, their, their mindset about inflation. it has altered, it's changed, they're all ready and willing and able to spend. all things must pass. however, we forgot to mention, as we've been celebrating, or commemorating the 50th anniversary of the nixon shock. when president richard nixon took the united states off the gold standard, and august,

15th 1971 put into effect, august 16th, 1971. and what happened is it ended bretton woods, well, 50 years later, all things must pass. every single new money printing idea gets past no problem, whether it's a debt sailing going up, whether it's a new stimulus package, whether it's a, it's an infrastructure package, whether it's tarp, whether it's q, we spin, twist, all these various programs, mortgage back, security being put on the fed, bouncy, all things must pass because all things must pass 50 years ago was the name of the album released by george harrison. and i forgot to mention that while we were busy paying attention to the 50th anniversary of the gold standard ending. right, well you make a good point there. the infrastructure bell, for example, in the us it's not about infrastructure. it's about printing more money to keep the policy scheme of wall street alive. and we know this because by recent studies,

90 percent of all the money print thing for all these different programs never leaves. wall street. yeah. right. so it just stays on wall street. don't say, here's an infrastructure bell, roads, tunnels, bridge is, and they the 2000 page bill, they numerate all the things where this money is supposed to go. then they pass the bell, then they authorize the money to be printed and then they sent it for distribution to wall street. and wall street sits on it. and we see that very clearly in the money velocity chart, which is all was going toward 0, that never goes anywhere just it's on wall street balance sheet and they use it to buy expensive property. and that happens. and that's been the story now for more than 20 years. we saw that for sure, with the rent moratorium situation. joe biden decided to basically violate the constitution because the supreme court had rule that he could not, that this rent moratorium issued in, you know, ordered by the cdc. the centers for these control was unconstitutional. he decided to extend it for a few months. but the thing is that taxpayers, we,

we gave $40000000000.02 pay the rent for all these people who haven't paid rent, only $3000000000.00 of it under $4000000000.00 arrived at the destination. whatever . for the other 43000000, right. like only 7 percent of it made it to the bomb. so that tells you what the toll is for the oligarchs for the near future. all of them who, how much they have to take. so they qualify for every single, all things must pass every single measure that passes it. so if they take 97 percent of it, right, i mean it's so easy to really research this and see the numbers are starkly plain and visible to all the a wealth going up amongst the top oligarchs of america versus the money printing. since cobra crisis, they're about the same. right? so i mean, if you can't say that, you don't know, you can't, you don't, you're either dead or year paid back to see it as so many people in america,

particularly in the news media. their job depends. their salaries depend on abc, cbs, nbc, cnn, fox news. their salaries depend on being presented, the stark reality of the money that's going into the oligarchy. procket from the money printing in d. c. and pretending that they don't see that that's what their job is, that their primary job. so they focus on things that are distractions, like social justice warriors, and who's wearing what, what cocktail party and everything. but the actual fact that the oligarchy in america is about draining every last, then from the economy. and when it's all said and done, they'll be gone. they'll be on there just off. they'll will never hear from them again. and what will be left is a dead zone, demilitarized zone of poppers and beggars and people who didn't buy bitcoin because big winners will be out of there also, yes. will picking up on that whole point. so back to 971. when we went off the gold standard, it used to be the situation during the seventy's and perhaps the early eighty's.

whereby if the government or whenever it's all the debt in the system, $1.00 that would perhaps create 2 or $3.00 of g d p growth. and so the, the, the theft concept, the fact that felt money is theft, right? inflation is theft. the fact that that mindset has sat in through the entire economy down to the person who will take a cup of joe biden. right? right, for free. they thank but that mindset said in, you can see it in the numbers that it now takes like $9.00 or $7.00 of debt to create $1.00 g d p growth. so that's all the, the, the, the, the correction right there at the top, right. the, the says all or something like that. they call it where they take all the, the money at the top. yeah, well, it's the best all the best. you had to say, i believe that then embezzlement, right, is money is being embezzled,

civil. it's kind of like, you know, flap or does. yeah, yeah, yeah they, they got the best little down real good. and then the g d p that they do count as having resulted from all that that creation are going to bankers whose job it is to process manufacture and distribute all about that. right? yeah, yeah. so it's a year, it's, the church says you never try to appease a crocodile because they're likely to take off your arm. so you know, you never supposed to appease the financial terrace on wall street for obvious reasons. but that's been the policy now for 25 years and the results are in and it's not good in the other thing that stood out to me is like when we 1st started doing this show 1011 years ago, the richest man in the world was warren buffett and bill gates, they always went back and forth, and remember, they went back and forth between the stock market ups and downs, between 40 and, and 60000000000 dollars. that was their net worth and they were the richest people

in the world. now it's like jeff bezos and in mosque are up there at 200000000000. so just in this time that we've been making the show, just the enormity of the, the vacuum up, the, sucking up of all the wealth from the bottom through this inflation system as we enter the 50th. now we're into the 51st year of an all see out system like the acceleration. how much faster the black hole, how much like would be sucked over into the black hole. debt is amazing. well the, the key moment in my view was in the 1980s. under ronald reagan's 1st term there was a seminal event where he fired all the air traffic controllers. and that was the beginning of a serious, dismantling of organized labor. and so once they were able to stop labor from having any traction in the economy, wages were then going to stay completely flat, if down a versus the money printing. so they knew then that they could print an endless amount of money without causing inflation in the sense of a wage spiral. they,

they're, they're perfectly happy to accept, asked the price inflation on the fine ard, the shot chosen switzerland, yachts and things like that. which is, we see that happening and there's oligarchy developing. but they, once they were able to financially eliminate labor from getting any of the pi that then the gloves were off in the oligarchs in america. now we have the present situation where jeff bezos, you know, is that a point where he will probably buy several countries in the next year or so? well, he did buy greenland, he and bill gates and jeff bezos have bought a few sway the greenland, good mine, some point, some those rare earth metals or something. the products ingredients for electron batteries, for electric vehicles. so yeah, but everybody has a couple joe biden, that's the thing you mentioned the labor thing and you're seeing shortages of paper bags and mcdonalds, you're seeing shortages of pilots, airlines stuff. you're seeing, everybody has

a cup of joe biden. everybody is like price insensitive, they don't care, they'll pay whatever it takes, but nobody, all those people with custer, joe biden, with as enhanced appointment buttons, all the stimulus. they don't want to work. why should they work? because they have so much money, right? so you're having a supply crunch and people are being offered ridiculous deals to go join like to work at mcdonalds. some of them are offering, some of the franchises are offering things like full tuition to university for your kids and stuff like that. so they're having to offer extreme amounts of money. so we are in a different paradigm, whatever. however, this plays out, we don't know, it's an a new new pair, i think, for historical precedent. i would go back to the bar, sy, the courts of guess it was louis the 16th 16th and versailles with a place where during the monarchy of france, where you had the nobleman, they're accessing all the wealth but to when they went to the toilet,

they simply went behind the curtain and relieved themselves on the floor. and then the pre, everyone pretended that they didn't see that. right? are they put bike stuff under their nose to keep a stance from ruining their beautiful conversations. and this is america. now you've got the oligarchs, i go to a bama birthday party in their jets. and everyone around them was pooping on the floor or dying from overdose, from opium diction. and they just have to put the blinders on and say, we don't see nothing. we don't. we're just living in the versailles 2.0 in the court of louis the obama, that's it may have been louis the 51 of the louis could be the 15 louis saint louis louis. and quickly, you know, while everybody, the mindset, the inflation mindset a setting and people are willing to pay whatever it takes to get a cup of joe biden. that's important to realize when you look at this headline, oops, china's producer price index, which measures cost for goods of the factory gate jump 9 percent year on year and

july way faster than expected fuel and global inflation fears. so usually the producer is a lot of that price. now the consumer is willing to pay it. so we could see a real ratcheting up of inflation go well in a systemic in a secular. and it's the beginning of an inflationary period that cannot be hidden. will be back after this, don't go away. the me you could go to in a 6 day marathon of creativity, multi cultural festival, and the biggest ever artist, competition for a few days became a russian cultural capital. 28 categories. ahh from filing

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is to great track rather than fear take on various jobs with artificial intelligence. we'll summoning the demon a little bout must protect his phone, existence with existence. americans love fine. ah, this was a fundamental part of how our political leadership and our country at large understood the bargain. you get a home and then you will rebel, right as the things you don't revolt if you have a stake in the system. be really interesting to dial back and think about no longer deeper history of what housings meant in the united states. not just that

old question of the american dream, but the bigger question of who the dream has been for the me welcome back to the kaiser report imax kaiser time now to go over to old blighty visit our friend ouster mccloud of gold money dot com ouster welcome back. thank you for having me max. all right, so we always talk about the gold market. there seem to be something actually important happening in the gold market. finally, something is really changing structurally that could have an impact on things that is the extinction of gold derivatives. you wrote a piece about it, what's going on? well, it's, it's all to do with this net stable funding ratio. which basel 3 has in jews.

and there's been a long doing and praying, and this rarely ever since the regulations but finalized back in october, 2014. but now they are finally implemented as far as europe is concerned. as far as united states is concerned, and they will be implemented in the u. k. as of the 2nd of january next year, the resist. the 2nd is the 1st is a public holiday. the members of the l. b. m a are going to have to come in line and basically they will spend the time between now and the end of this year, adjusting their balance sheets to take account of the changes brought upon them by basel 3 of the point. but the net stable funding ratio is that it is really an attack on banks that rely on trading and derivatives

as a major component of their profitability. the reason for this is that the derivative market. so we were looking at around about 7 times d pay. and over the counter derivatives along, i mean, these is a huge market bank, speculate they make market and things like credit for the full swaps. your foreign exchange transactions forwards and all the rest of it. and so go is actually a very small possible. i mean, we're looking at, i think with total otc universities around about $830.00 odd $1000000000.00 worth. so it's really a fall way to thing the golden silver, which is what you and i normally talk about. and the way this works basically is that if you have a derivative, a net derivative, liability is

a bank on your balance sheet, then you cannot use that liability to fund anything on the, on the assets side of your balance sheet. if on the other hand, you have a net, a positive asset value on your derivative positions on the acid side of your balance sheet, you cannot use any of the available stable funding amongst your on your liability is to finance that position. so you can see that any unbalanced position where one derivative doesn't cancel out another one completely and is tied to it. that's if you'd like, means that the bank ends up having its balance sheet been used very inefficiently. so the bank treasury department turns round and says to the management, this is what we ought to do. and basically what it means is that we've got to cut

back on our market making activities. we're going to cut back on unbalanced derivative possessions and so on. and so forth. so this is a very, very big change. and one of the things that i tried to bring out in the article is that the banking system really from big bang in the 1980s has been evolving away from financing industry. if you'd like non financial credit expansion, instead they've been expanding credit in towards financial activities. i mean like they start out buying stock brokers. they got involved in market making and equities. they've been doing investment banking activities and financing last off the balance sheets and so on. so forth, so the expansion and bank credit has had this emphasis of moving away from non financial, into financial activities. right. let me, let me jump in for a 2nd. i just set the table a little bit here. so the 1st of all,

basil 3 is set by who the b i s yes it says it sent by committee underneath underneath the bank of international. ok. so back of international settlements. it's kind of like the central bank is the central bank of central banks. so basil 3, as you point out, we usually talk about gold and silver, but this suggest is more of the global banking system as it relates to derivatives, which as it relates to leverage, right? so a simple way to say this is that they are trying to reduce the leverage in the system by eliminating the number of derivatives in the system. and many, many of these derivatives have as a reference price point, other derivatives, right? so they're stacked on top of each other and they create this, the layer of derivatives. and as you point out, the total number of derivatives in the global market is many times the global gdp. and the question is, you know, what good does all that do?

i know in the u. k, i believe this would also fall into the category of re i papa cation. right? so this is republication. so you are essentially lending something more than once. my question, my 1st question is that in the united states, re high publication is limited to something like 104 percent of the value of the underlying security. my understanding is that in the u. k, it's almost infinite. there is no limit to the, not the amount of re publication you can do. is that still true? and will this browse all 3 net stable funding ratio, guidance, change that i haven't looked at it from the point to be able to read high publication. but certainly as far as basel 3 is concerned, it puts very strict limits on the funding of a bank's balance sheet. this is the key thing. what they're trying to do is to match they, if you like, the 10 of the law villages with the tenor of the assets. so they don't want to get

into a situation where a bank let us say, has a run on it, because it has got too much short term financing for the length of this liabilities . that is the underlying approach. if you'd like the bank and end of the basel committee to try and eliminate that risk. and they were given this instruction by the g 20, following the lehman crisis. i mean, this is what we're going back to. let's talk about goal here for a 2nd because you're extrapolating and all this and saying this as a net positive impact on gold because we'll get into it. why, how does that impact gold? what it impacts code because what we're looking at is basel 3 regulations will reduce banks. involvements in the derivatives forwards, swaps and also on the listed dave, the regulated derivatives on futures exchanges such as comics. now the question then is what the clients do? what the banks customers do?

when the banks turn around and say, sorry, we could no longer provide you with an, an allocated gold account. the customers will probably turn round and in some cases say, well, it's fun, molly lost it. but in these rather inflation rates times they're likely to turn round and want to replace that exposure with another means of hedging. see if you like fit currency risk and about the only way they can do this is either to speculation of what and what will be in a liquid market on, on the comics because banks withdrawn from is in the main. alternatively, they will seek some sort of physical go to replace. they allocated gold, which they regarded. if you'd like on their banks advice as being, don't worry, it's just the same as having a position in real gold. i mean, you, and i know it's not that we've discussed this so many times, but that is the message is the banks are pushed over to their customers when they

run gold accounts. and essentially the whole of a, l, b, m, a banking system is short of k to go to the customers. so, you know, the point is what is going to replace that. it is obviously going to be a significant extent gold itself. now that's the equivalent of, of for the gold speculators out there, a giant margin call. yeah, it's a don't margin call in effect on the system. all right, so the only way to do that call is to pay for more actual gold. yeah, absolutely. and you know, where's the go? good, come from. i mean we have, they will be, i'm a keeps on telling. they got $9600.00 tons of the figure is the gold in london. but actually when you do dig down into the figures, most of that is bank of england's custodial gold held for all the central banks.

and you've also got atf holdings. you've also got privately held girl. now we don't know how much facets, right? we know why is somewhat constrained, so we're going to have something happening in the price discovery, right? so if you're eliminating all of those derivatives, which we have talked about before, are used to keep the gold price suppressed. and that's been documented. and no one really debates that anymore. and now you've got this basil 3 or guideline which is essentially coughing up more goal to stay current than your leverage account. so is this going to take the, you know, take the blocks off the wheels, and we're going to start to see some price movement in gold after 10 years, because as over 10 years it's been down 3 percent in dollar terms. are we going to see some, actually of all, i'll start to get all the things being equal. the answer is yes. now the reason i say other things being equal is that we are living in the time as they're all aware

of this program. while massive monetary inflation, that is the background to this and in a sense, it's coming at the worst possible time for the banks trying to get out there short positions. right. so i mean, eventually there had to have been a trigger. you now, you mentioned lehman crisis and the 2008 crisis. it was, i believe, as i recall, there was a fund in europe that had trouble meeting its pe requirements that set off a cascade or a global you know, contagion that gave us that crisis. could this be the spark that finally generates some, some buyers in gold and we get a price movement. i mean, and only take one event. could this be the event that triggers it could well be and i would say that, i mean, recent events. let's never last weekend when they go prices slammed on a sunday sunday night all the time in europe chose that. you know, if you like,

the establishment in the gold market is extremely nervous about the current position. they cannot close down their position. this is the problem. they are short. the way i calculated on comics, looking at the bank participation report. i mean national positions around about $25000000000.00 net on comix. now how do you pose that done? that is the question. all right, well we're going to cut her out there. we'll pick it up on the next episode. that's going to do it for this additional because their report with may max kaiser and stacy ever want to think, i guess 1000 mccloud of gold money dot com. and so like sign via the me ah ah,

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