ally to lose for the valley and his people lost her news updates for knows more great programs. right ahead. but that's help of the our new harvey from sir election coverage. there he is getting his rehearsal in with his coat. it's a bit nippy on top of the hotel or on the eve of rushes. parliamentary will join him, join the team from our studio overlooking moscow was ready for my for the i when i was the wrong when i just don't the room. yes. to shape out the thing becomes the aptitude and engagement equal betrayal.

when so many find themselves will depart. we choose to look for common ground. the i a mass guys are, this is be kaiser re port. well, you know, we also coming off different places. i think, right, well you and i have been covering here on the kaiser report for the last decade at least, but especially with the last 6 months of as we lead up to the 50th year of fi at when the u. s. went off the gold standard and august, 15th 1971. we've been looking at all the problems with the trip and dilemma with you know, all the consequences of the exorbitant privilege. and one of the things you see is, as we've covered in nigeria, where they've turned to bitcoin, we've seen hyper quantization there because they had no access to dollars during

this crisis. during cove it as world trade shut down, we're seeing a similar situation emerge and sri lanka. and i believe bitcoin facts as this sri lanka declares food emergency. as for ex, crisis orphans sherlock has declared a state of emergency over food shortages that according to the government, are caused by hoarding. as private banks say they are running out of foreign exchange to finance import, the move followed a sharp rise in the price of sugar, rice, onions, and other basic ingredients. right, right. for ex markets are car. the thing food shortage is and with bitcoin, you don't need it for x market. that's the plain, an obvious and simple truth and country after country is beginning to realize they can escape the matrix of for acts with dominated by corrupt players who control us dollar. and they can have sovereignty true sovereignty. if you have rely on the

us dollar, you do not have sovereignty full stop. this is part of what we've been covering with the trip and dilemma is that there's always going to be that dilemma where a currency and national currency is the world's reserve currency is during a time of i assess whether it's 820082009 financial crisis, or the coven pandemic, the locked downs. what happens is, you know, obviously the elected leaders going to allocate all their time and resources to the domestic population. an international population therefore, has no currencies with which to trade. we saw that with nigeria, that's why they went to hyper bit quantization because there was still there economy by the way, didn't shut down that much because it's much younger and they can afford to shut down. so they had demand still for it used cars and nigeria, but there was no, you know, there were no us dollars with which to trade with japan or trade with china for used cars to be important in tonight's area. so either they could just say it, ok,

well, because we can't get dollars, we're just going to starve to death. instead they turn to bitcoin. and here is a solution i think to sri bank as the problem is like the government is actually having to shut down imports in order to avoid further depletion of their reserves. because they said the economy shrank by a record 3.6 percent in 2020 because of the pandemic in march. last year, the government band in ports of vehicles and other items including edible oils and to merrick. 3 an essential spice and local cooking in a bid to save foreign exchange. however, import is still say they have been unable to source dollars to pay for the food medicines that they are allowed to buy, so that their foreign exchange reserves have absolutely plummeted. and we'll get into that, but basically it weighs down to $2800000000.00 in july from $7300000000.00 and november, right, just as part of the theme of the collapse of globalization. the collapse of

dollarization and one might argue the collapse of neoliberalism. the now the, the american model, the washington consensus and countries are starting to reject that full plate of foreign influence. and in places like el salvador, they're simply going through a big coin standard. and there are g d p, a set to double in the next couple years. right? but again, like the point about the story about sri lanka is there is demand. there is desire . there is, they want these products, they're not allowed to have these products because in order to do so would require foreign exchange being sent overseas because they need it. they have a shortage of dollars. so if you had or a neutral currency, a neutral payments rail, whereby any demand could be met through the payments rail. despite the situation of global trade, you wouldn't have these sort of situations whereby shall august foreign reserves.

as i said, fell to 2800000000 at the end of july from 7500000000. sorry, i said $7300000000.00 but $7500000000.00 in november of 2019. when the government took office and the roof pay has last more than 20 percent of its value against the us dollar in that time, according to the bank energy minister. dia, government has appealed to motorists to use fuel sparingly, so that the country can use as foreign exchange to buy essential medicines and vaccines. right. well, who benefits from this for x mark is it's the people who are in the money changing business and they get an override on all that money sloshing and flashing out. and they get a commission. they get a ron t, a globalized finance, lies the economy. and when it breaks down, whether through the pandemic crisis or the global financial crisis, the people who are not finance years are all going to get penalized. the finance years are not getting penalized, they're right. they're using this as an opportunity to even gouge more from the

people. that's why the people and we said are now salvador have said, you know what? we're just going to go to a big point standard and get rid of the whole, the whole lot of you. well, the salvador experiment is ongoing. it's, i think, an experiment which will prove to displace, especially for developing economies. and even the financial times is now reporting this, that bit quite make sense for a developing economy because of these issues like for ex reserves and trying to manage inflation, trying to manage the problem here in atlanta as very high inflation. and these staples, of course, we at kaiser port saw this back in 2010, 2011 after a similar situation whereby a huge amount of money printing met financial crisis. and now we have even more money printing meeting this pandemic crisis. and that the domestic economy could

keep on like just printing and printing to feed the people. whereas that, that the how it filters out to the rest of the world is what ends up costing huge inflation. and then we saw in 2010 and 11 crises across the world and huge riots and government overthrown. so we'll keep an eye on what's happening, history of anchor, but this could just be the 1st of many stories to come if it's any, if, if history rhymes with what happened in 201-2011 which we covered here. but, you know, of course there's somebody as well that's winning and another nation that's winning during this whole crisis because yes indeed, americans are by and large getting huge quantities of stimulus checks, enhance unemployment benefits. so for those who don't understand like what the enhanced unemployment benefits have been, is that you get your normal unemployment benefits that everybody has. if they were made unemployed,

they got their standard unemployment benefits. that was for the past few decades, the expectation of what you would get on top of that. they got an extra $600.00 a week on top of their ordinary benefits. so people were, a lot of people were making a whole bunch more me on top of that, they also didn't have to pay rent and they didn't have to pay their mortgages. many millions of people didn't do that for the past 18 months, so they were flush with cash. some people get upset, the comments saying that they deserve this and blah, blah, blah. what i'm, where we're talking about is the macro consequences of that. because obviously they're staying at home, they're receiving these enhance on employment benefits. they're not paying rent, but they're flush with cash and they want to buy and they spend and spend and spend on durable goods, who is still working. we're not working here obviously, but they are working in china. china's exports strengthen despite cobra, 19 disruptions, august data shows shipments of imply and says furniture and clothing grew helping

offset waning demand for pandemic related goods. chinese export unexpectedly expanded at a faster clip in august, shrugging off the impact of a global resurgence of the corona virus. pandemic court congestion and supply bottlenecks. china is outbound shipments. rose 25.6 percent in august from a year earlier. higher than the 19.3 percent increase in july, the general administration of custom set on tuesday. there is also a comfortably topped the 17 percent increase expected by economist pulled by the wall street journal. right, so the, my print thing in the us, the stimulus tax are going for the most part, the china. and they gave me an amik power which supports their geo political possession. and this though accident that they're also getting a little bit more what's called self confidence in their disposition toward some of their neighboring countries in territory. if this is not inflation adjusted. so if

there was money printing on the order of 23 percent last year, you know, assuming that that's also adjusted there. so that's not yet adjusted. so the increase of 26 percent might just be a reflection while the money printing. but nevertheless, the fact that the economy remains open as we have covered with a stan trucking miller, the famous hedge fund manager, has taken a bet against the us dollar in the past year. and is betting as long as asia, in particular, china because of the fact that they haven't had money print and they're still open and they're creating, well, this is, this is called wealth creation. and it is a situation similar to post world war 2, where america saw those order numbers for themselves, like they were producing all their manufactured goods in the world. and we have the era of detroit and things like that so that china could be in a similar situation. who knows, we could end up in a nuclear war instead and, and you know, way, it would all go horribly wrong. but in the meantime,

shipments to each of china's major trading partners increased at a faster year over year pace in august than the prior month, according to calculations based on the official data exports to the european union, which is china's number 2 trading partner, jumped by 29.4 percent in august from a year earlier accelerating from july 17 point 2 percent rise, while shipments to the association of south east asian nations and the us china number one and 3 trading partners respectively. for a 16.6 percent and 15.5 percent. yeah, i don't know the us really mr. trick. you remember i under f d r during the depression the he created the jobs, the public works programs and they built them. they built the hoover dam. i believe they built rockefeller center, they built roads, they built bridges, and america needs infrastructure rebuilder. they just want the congress to get multi trillion dollar infrastructure build package. but here, under this administration and started making up jobs with that money,

they're just the fact of sending it to china that money. so they, they could, they could have actually rebuilt the infrastructure with the same amount of money that they're sent to china. but they're going to pass another bill in washington to do the infrastructure, and we know that that will never make it to be to the, to the work either it gets stuck in the banks and into that chasm is, is the 200000000 americans and they're just being disenfranchised. yep. the, all that money gets, goes to the bank, which goes to the big contractors, the, the multinational ones, which, that they, they don't do any of the work they subcontracted, who subcontracts that, and then filters down till a few pennies to a local road. i mean basically the afghan model, what we did an afghan as well as that's great. we're going to take a break. and when we come back, once more, here, when it the me

the seafood may be red or orange, always yellow. maybe be assumed that they going to be on the sweet side of things and received a rounder and softer and soon again, they're going to be sweeter in some way. oh right now, there are 2000000000 people who are overweight or obese. it's profitable to sell food that is 20 and sugary and the under the victim is not at the individual level. it's not individual willpower. and if we go on believing that will never change as obesity epidemic that industry has been influencing very deeply. the medical and scientific establishment, ah, what's driving the mac,

its corporate me ah, the the me welcome back to the kaiser report. i'm nice guys are time now to return our conversation on michael pena. pencil port dot com. michael, welcome back. always good to be with you max. well, ear latest method that goes out to your followers is entitled the great deflation of 2022. ok. so you're looking ahead the next year. and so you're, you're thinking that there's going to and our previous like when we talked about the nick, a average back in 1989 and had

a huge collapse of peak that is 40000 on the knee k. there is this 20 year deflationary period. so you're making a comparison. you think that the u. s. is on the cost of something similar to it and do i have that? right? i actually think that the evaluation of equity is now at 207 percent of g. d. p is something similar to what they saw in japan. you know, paul bookers day when he raised rates to 20 percent evaluation of equities as compared to g, d, b was 35 percent. so i just don't see the fed being able to fight inflation the way they did before. so i think this might be a truncated period of inflation. and then i think they come back with this massive fiscal and monetary package. and a b at that juncture, where i will join the inflation nieces. and believe that the headed decided is going to engender the treasury is going to engender intractable,

stifling action with rising interest rates and plunging g d p growth because we lose all competence, our federal reserve to support the dollar and the u. s. bond market, i think that's sad to say, but i think the game is over max, you know, they think keeps bluffing, that we can normalize interest rate. but as i said, the last statement, you know, you take the fed funds rate, the 5 and a quarter, and you're going to be a $125.00 basis points higher than junk bonds. so, so you know, block cielo market leverage law, what market the junk bond market, the shadow banking system you are going to have a deflationary depression like we've never seen before in this country. it makes it look like a walk in the park. so they can't really fight this inflation and we have a shame inflation that we have today is the same inflation that paul walker type is like in the late seventies and early eighties to look at that number again. children 7 percent of g d p is the valuation of the stock market. i believe the

buffet rule is that he thinks stocks, good price, see if they exceed 100 percent of g d p. and here we are 200 percent of g d p. so clearly, by any measure, by any metric, stocks are extraordinarily high. if you are to strip out the stock buyback programs and you were had a real accurate look at earnings, that price earnings ratio would, would be closer on average, would be closer to probably $50.00 or 50 p, which again would be highest for the highest ever in history, so this idea of course, the, the home exercise of money, print thing and quantitative easing was always that while we jumpstart the economy and then we get taxes flowing and then we're going to pay down that debt with those taxes. you know, the trickle down, it goes all the way back to reagan and trickle down economics. david stockton, this has been with us now for 40 years. michael. what would you, would it be fair to say that what you're saying here is we've reached the end game

of this 40 year trickle down experiment. well, you can also look at price, the sales, which trips out all that engineered air earnings. they like to report on the s and p 500 record high priced sales. so, so they did the game changer here. the watershed it just in a moment that we reached here on the states is that we've now engendered inflation . we go all the other times we were, we had a crisis, the crisis engender deflation. and we had to try to attack it by lowering interest rates in printing money when we could do that because the, the salient issue was deflation. and a pro long period protracted period of deflation. but if you have a situation where we have a truncated theory of deflation, which deploys modern monetary theory once again and helicopter money

once again, the stench credibility is blown. so like you are learning to with the question, this is no longer an experiment. this is no longer an emergency measure. this is something that is current. we can never dream the balance sheet of the federal reserve. we can never raise interest rates. we can never and q we, we can never support the purchasing power of the dollar, not versus the you're not talking about now. the dollar on the dx one or the bloomberg dollar index. i'm talking about supporting the dollar against real estate and stocks and hard assets. and precious metals can never do that. so again, would be over because we have jumped the shark with inflation. what about structurally speaking? you know, back up a 2008 craft? remember the money market funds, there was a threat of breaking the buck and extraordinary measures were introduced to stop

that from happening. and jim gardner and the tank paulson. they got together and they kind of rewrote all regulations as they apply to finance markets to make it possible. busy to just channel in this torrence of, of cash and to strip out a lot of those regulations. so you're, as you point out your money manager, you do this day in and day out what, what did you steam structural a? is it, is there a risk of a, been the wheels actually falling off at this point? is there are, are there any safeguards in place or is it just a house of cards ready to blow? i'll choose the ladder match. this is, we have a record amount of margin dead record amount of margin debt as a percentage of gdp. we have the biggest junk bond market in history, with a title spreads to treasuries and the lowest rate in history. we have the highest

real estate values in history. the home price, the income ratio, is the highest, it ever been outside of maybe one month in 2005. we have the biggest bubble in the bond market, real estate and stock market. we have a triumvirate of bubbles and, and records of worship. and the problem here now is that the spanish, as they always do, they always threaten to normalize monetary policy. and when they do, the chaos will begin, the deflation will begin. the markets will unravel very quickly. i think you're going to have circuit breakers hit. the credit markets will freeze once again, and then you're going to get, have, you're going to have power. i think you will be re appointed, yellen loves him, gave her blessing. i don't know why this billionaire private equity guy wants this job. he's just fell off into the sunset from the end of this year, but he wants the job as can be his decision then to increase his balance sheet,

which i will remind you and you know. so as you're this balance, she, the bell reserve was a $100000000000.00 in december of 2007, it is now well over a trillion dobbs balance sheet is going to increase by trillions of dollars per annum after the next crisis. and i just cannot fathom how that engenders any kind of confidence in our treasury market crushed the bond, 6 income market and in the stock more. so let me ask you this back of the 3000 crisis, but the layman moment caused global contagion. since that time, particularly in asia countries, i've been buying hundreds of tons of gall and preparing themselves for the next crisis, insulating themselves against the contagion. and the dollar rising. russia,

for example, is gotten rid of all their dollars. china seems to have insulated themselves against china doing, doing the dollar with bilateral deals. ah, well, this be a similar contagion when this thing blows up, or will this be away most heavily in the u. s. so i just back just history. i know you might disagree with this, but when they, when the largest economy on the planet goes down and you're going to bring down europe and japan with us. so you take europe, japan and the united states offline. and the dollars probably the most shorted currency on the planet. maybe you check into japan yen. you're going to have a lot of people who are going to be invested with dollar denominated debt and other countries. that's going to have to sell that debt and buyback dollars, so i am not predicting a dollar demise. these are the other currencies, not when the chaos is but exposed the chaos. i am telling you that

a dollar would probably decline against foreign assets like you has never declined before. but to specifically answer your question, i do not see a world where the united states goes down and the rest of the world sales often from kind of a concurrently. it's just not going to happen. it's not patient history. and it's not based in real economic as a money manager when, when you see the chaos in capital afghan, stan does that ripple through as a risk event, that competence in the u. s. and the u. s. military is epping. is that a risk event for you? it is indicative, i don't know if it's a risk event where you trade on it because you know, it's a dollar hasn't lost much value ever since we just bought the bottle and dentist and i said it's still more marginally up on the year. but it does tell you that confidence in our president confidence, in our federal reserve confidence our in our treasury,

is completely misplaced confidence. these people have no idea what they're doing. i mean, the fed has just stayed mild of still obscure, saying that inflation comes from too many people working when it's the exact opposite. inflation comes from too many people not working and giving them money to stay home and consume. job owners theories are wrong. and the fact that the u. s. military supports our currency and our bond market and took a torpedo to the bow. does. it is part of that picture that ex post the next crisis. when we bring embrace a permanent, a permanent condition of child income tax credits and hands, unemployment, ellicott their money, m m t that will all serve to expedite the demise of the dollar as the world's

reserve term. yeah. on the global risk front, you know, we're speaking about cov, it here we got the new variance are making their presence known explosion of breakthrough cases. what's happening in israel as seemingly pretty remarkable. they, they're on their 4th booster jab, cases are not diminishing at all. again, from a risk perspective, ah, that would cut into can the consumer dollar at some point with the seemingly we've got about 20 seconds left. me sir. let me, let me stop you because i'm going to make sure you have smart, really aren't. how enjoy your program that so i you know i look at cobra, one is variance and i think there's going to be a backseat resist and barrier emerging soon. it was not one already. israel is very important. their teachers aren't diminishing their skyrocketing. i follow israel because there is a country that has the best vaccination program going, but they're just arising and their cases are sore. and so that has to be part of

any good active money man. what's happening with toby and so far the news is daunting to say the weeks. well, i wouldn't want to be sitting in your chair down there florida because you've got to deal with an awful lot of things going on. but somehow you manage to give your clients excellent performance. michael, thanks so much. bring on cars report. always my pleasure max, and i'm going to do it for this edition of guys report with may max kaiser and stacy herbert want to thank i guess michael panto, a pencil port dot com and so on. i signed by the me the long when i would show wrong when all rule, just don't hold the world to shape out the thing because the after an engagement equals the trail. when so many find themselves well the

parts we choose to look for common ground in transparency for the full privacy for the bell. this bit cares about privacy. what people care about is power. julian sons is become a symbol of the battles of brevity. information is power. that's what's going on. a huge struggle with the government's corporations who want to keep information secret and others who the democratic rights should be pushed forward and people have a writing. oh, are going to do watch houses help to shift the conversation around transparency? see what that battle has done to him. i feel like julian's life might be coming to an end. we are in a conflict situation with the largest and most powerful employer in such

a situation. it's remarkable because the who's the good afternoon and welcome to our coverage of the 2021 russian state, duma reelections. we've chosen one of the best views in moscow. no doubt about that . certainly the most appropriate location, politically we're overlooking the kremlin, this is our base of operations and it's from here that will be counting down to 3 days of voting. which will be getting on the way now in less than 24 hours. so thanks so much for joining as much appreciated as we get these.