u.s. that's right so the chinese are doing bilateral currency swaps with russia. and other countries so they've been moving out of the u.s. dollar as world reserve currency status for a while it's like the old joke about the husband knowing the last one to know that his wife's been cheating on him the american people are the last ones in the world to know that the rest of the world has been cheating on the us dollar they've abandoned the u.s. dollar years ago it only now is becoming an issue in the us but it's been an issue around the world ever since china became part of the world trade organization and you had this massive transfer of labor from the u.s. to china taking advantage of the so-called wage arbitrage thanks to bill clinton which gutted manufacturing in america and when they talk about this debt ceiling and the need to stimulate and the need to print more money as rick. having u.s. economy that would imply that there is some manufacturing base that is there to be revived but there is a manufacturing base there's only weapons of mass financial destructio

and prime currency off yesterday see exorbitant privilege which is a nice way to say rent seeking by the u.s. dollar being the world's reserve currency. the united states gets an extraordinary play on the global economy and this is insulated americans from price hikes in food and energy in a way that ninety nine point nine percent of americans don't understand but they will understand soon because even though the u.s. is experiencing a recession a slowdown they haven't seen nothing yet because once the dollar truly collapses price of gas will quadruple price of food will skyrocket and then are really going to see what the american economy is all about a third world take dressed up with a lot of lipstick and phony accounting tricks well max that in a way i think it's kind of like the oil curse that having this absorb it's a privilege of the u.s. dollar and that the government really doesn't need the population because they can just print money they truly can unlike any european country where in europe you have to work for a living you actually have to produce wealth in order to maintain your

u.s. currency become the sort of span of stability that i don't think can remain true once you get a lot of other countries which have more or less similar size as the u.s. and in your ideal world who should referee the club or a commie i think there is a lot of consensus around the world that the fund is the international institution that should be looking at these things and if there are governance problems or inadequacies in non representation in adequate amount of the newly emerging countries then those should be corrected and we should actually use this as the for and obviously you know there is reshaping of the world economy as we've discussed that's happening that's probably going to also cause fundamental political shift as well what do you expect to be from our point of view the rise of a number of emerging market countries will create a much more balanced sense of the world economy amongst countries that were earlier seen to be dominant it my. create a greater awareness that you know they can't unilaterally decide the future of the world and certainly countries that earlier felt t

u.s. currency is too big presence or invest cafe analysts are going to go to the bottom thank you very much my pleasure. well i won a small debt for about one giant black hole for a government later on in the program we are in new york to ask what's the difference between our debt and those of. you much worse for a government to be in debt why because we trust the government to do the right thing and they're doing absolutely the opposite of that but don't you trust yourself to do the right thing and within your means i do but i mean dad so that i can pay off. a quarter past the hour here in moscow you without see israel is bursting itself for a fresh wave of massive government protests activists are planning a third weekend of rallies all across the country one street has already been renamed by really a rear after the square where the egypt uprising took place. they said today saturday tens of thousands of protesters will be taking to the streets here in tel aviv as well as in several other cities around the country where they'll be holding mass rallies against the government there hoping

currency. britain which failed from his perspective in this respect and didn't the u.s. say hey we disagree we want to be the main reserve currency and got their way so in with the u.s. still have that same power if world leaders got together again today for another bretton woods conference i think at that same meeting we're l.t.r. in bretton woods the world is markedly different china has close to three trillion dollars of reserves about a third of the global reserves about nine trillion dollars you're holding three trillion dollars you have some voice in what kind of reserve currency system you want to have and china has been very clear that it worries about the current dollar based reserve system right after un commission came. support china supported it france is supported russia supported it so there is a wide understanding not unanimous but a wide understanding of the importance of this idea and i think if the economy global economy remains weak i think will be more interest as one of the remedies to the current instability and weakness in the global economy has als

u.s. speed the rise of the chinese currency bank balance welcome to the kaiser report by max good to be here all right dan tell us about the red back and is it going to overtake the u.s. dollar and its lan there article i wrote really talked about. you know as we've seen continues money printing specially the last few years the world really looking for a new store of value. everybody knows china is also trying to limit its increasing dollar reserves and they really have a three phase strategy to internationalize the renminbi starting with making it to international trade currency. anybody's been to hong kong recently has seen that the renminbi deposits in hong kong this year will rise roughly three hundred percent to over one billion u.s. dollar china's also same currency swap agreements with over fifteen countries this is really the first step of trying to internationalize the rim and be the trade numbers that have come out this year sure led to international trade which was in rim and b. last year was about less than one percent this year will be roughly seven percent so what would china's

u.s. credit downgrade triggers freefall of global markets india claims its economy could actually benefit from the situation. plus the eurozone tries to whether its economic storm pull its shelving of plans to adopt the single currency highlights a broader european desire to stay out of the euro crisis. over the u.s. stock markets dropping heavily and with debt crisis spreading over europe talk about a new global reserve currency is mounting a large he spoke to a nobel prize winning economist joseph stiglitz on the eve of bretton woods conference in april but his revenue seems to have only gained currency since that. joseph stiglitz is a nobel prize winning economist in columbia university professor and he's pushing for a rethinking of the global economic framework in the wake of a financial crisis now he's come with other economic and policy leaders to the historic bretton woods where decades ago a conference here led to the formation of the international monetary fund and named the u.s. dollar as the reserve currency and they've gathered to rethink some of those very policies he joins us now to tell us more about it i want to thank you so much for joining us professor now you frighten recently about the increasing

u.s. dollar as the reserve currency and they've gathered to rethink some of those very policies he joins us now to tell us more about it i want to thank you so much for joining us professor now you've written recently about the increasing disparity between rich and poor in the united states and you've even compared these conditions to what led to the other us we've seen in the middle east so what do you think are the factors that led to this and what do you think the consequences will be the point raised was that the increase in the concentration of income in wealth in the united states has been enormous. would happen in the last couple decades is almost a quarter of older income goes to the upper one percent around forty percent and you measure it all the wealth goes to the upper one percent americans used to think of themselves as a land of opportunity that everybody else thinks of themselves as a land of opportunity and that you can old europe is isotropic the data. show that meanwhile we see protests taking to the capitals of states like wisconsin so it's reaching a tipping point i thin

currency club. the european stocks are volatile following the biggest song in the u.s. for years a plunge was caused by fears the downgrade of america's credit rating could worsen the slowdown of the world's biggest economy. and with the current financial turmoil in the us and europe to talk about a new global reserve currency is mounting spokes noble nobel prize winning economist joseph stiglitz on the eve of the bretton woods conference in april but his remedies seems to have gained currency since. joseph stiglitz is a nobel prize winning economist in columbia university professor and he's pushing for a rethinking of the global economic framework in the wake of the financial crisis now he's come with other economic and policy leaders to the historic bretton woods where decades ago a conference here led to the formation of international monetary fund and named the u.s. dollar as the reserve currency and they've gathered to rethink some of those very policies he joins us now to tell us more about it i want to thank you so much for joining us professor now you've written

currency club. and european stocks tumble following the biggest slump in the u.s. for years the plunge was caused by fears that downgrade of america's credit rating could worsen the slowdown of the world's biggest economy. next to sport with kate. thank you for joining me for the sports update this tuesday afternoon and here top stories first eleven russia coach dick advocaat will pick his strongest side for wednesday's friendly against serbia in moscow. while council of england's friendly with the netherlands away the stadium is called off because of the riots in london . last home a stanley cup winner elects a couple of joints russian side outland off almost two decades in the n.h.l. . but first russia says he will pick his best eleven for wednesday's friendly against moscow adding there's no time to experiment ahead of the fast approaching european qualifiers however the dutchman will have to do without any feel that denise off the twenty seven year old picked up an injury during saturday's two know when a tabletop is taste but meanwhile serbia missing top playe

u.s. currency and its ability to pay its debt, and people don't have jobs.ioned the rate at 9.1%. it's closer to 16% when you consider the number of discouraged workers. definitely a lot of head winds out there, which has had more people talking about possibility of double dip. >> i want to talk with you, jack, about the companies that have announced layoffs this week, because there seems to be this disconnect between companies saying we have to let you go and yet they're sitting on piles of cash, and some of the companies would include in terms of layoffs, merck, sifk yoi systems, and lockheed martin. loofr the four tune 500 companies are saying these are healthy companies, and whether are they doing? >> they are healthy companies, and one of the reasons they are healthy is because they're sitting on piles of cash and they get rid of people they don't messily need in an environment like this. it's large companies that shed jobs because they get more efficient. it's smaller companies, midsize companies. those are the ones who actually create jobs. big compan

u.s. is an empire and it's the reserve currency of the world so when it when this when the system collapses it's going to be most felt in the u.s. because an empire sits on a nation state within which it resides of a giant parasite and so when that crumbles it's the it's the biggest stars that is the final piece to go i think the first crewman in that system is like it taken so

u.s. dollar as a reserve currency that's right and what we describe what i've described in the u.n. commission that i chair your position on the reform the global financial monetary system. explains how we can create a global reserve currency as really interesting to be here at bretton woods talking about that because keynes argued for this seventy five years ago. in the aftermath of the of the great depression he understood. the links between you case problem the u.k. being the reserve currency then and then if we're going to have global economic stability we needed to move off. of the. single currency country being the reserve currency. bretton woods failed from his perspective in this respect and didn't the us say hey we disagree we want to be the main reserve currency and got their way so would the us still have that same power if world leaders got together again today for another bretton woods conference i think at that same meeting we're in bretton woods the world is markedly different china has close to three trillion dollars of reserves about a third of the global reserves a

u.s. dollar rising today slightly against major currencies. looking at the dollar index, the u.s. dollar against six major currencies -- clearly the trend for a weak dollar with the soft economy. japan's central bank intervened to weaken the yen. the dollar rally did help bring gold and oil prices down but gold falling more than $7 per ounce. oil shedding more than $5 per barrel. that is tonight's market focus. >> tom: higher air fares not enough to make up for higher fuel costs. earnings 15 cents per share. a nickel below wall street estimates. almost cut in half compared to a year ago. that excludes any special items. southwest c.e.o. gary kelly joins us tonight from dallas, texas. mr. kelly, welcome to "nightly business report." nice to see you. >> great to be with you. >> tom: what happened in the past quarter between the fight of raising air fares and seeing higher fuel prices? >> the story for 2011 is pretty much fuel. we've had a nice recovery in terms of travel, and particularly business travel demand dating back to last year, but in the second quarter, in particular, we sa

u.s. dollar rising today slightly against major currencies. looking at the dollar index, the u.s. dollar against six major currencies -- clearly the trend for a weak dollar with the soft economy. japan's central bank intervened to weaken the yen. the dollar rally did help bring gold and oil prices down but gold falling more than $7 per ounce. oil shedding more than $5 per barrel. that is tonight's market focus. >> tom: higher air fares not enough to make up for higher fuel costs. earnings 15 cents per share. a nickel below wall street estimates. almost cut in half compared to a year ago. that excludes any special items. southwest c.e.o. gary kelly joins us tonight from dallas, texas. mr. kelly, welcome to "nightly business report." nice to see you. >> great to be with you. >> tom: what happened in the past quarter between the fight of raising air fares and seeing higher fuel prices? >> the story for 2011 is pretty much fuel. we've had a nice recovery in terms of travel, and particularly business travel demand dating back to last year, but in the second quarter, in particular, we sa

u.s. dollar the currency is now in a very vulnerable position in my view i think sooner or later more and more people are going to come to the same conclusion but the world's reserve currency is no longer a reserve currency and that the u.s. doesn't deserve a aaa credit rating it is a joke it is like giving a aaa rating to the subprime bonds before the hold up and if you look at this finances of the u.s. the federal debt now accounts for roughly ninety six percent of g.d.p. and as far as i can see there is no way this that's going to come down and the u.s. has no business getting a aaa rating and when other people come to the same conclusion as i do then i think there could be a rout in the bond market and as mr obama was alluding to earlier we could see seriously higher interest rates and seeing this weakness in the u.s. dollar which is obviously very bullish for commodities and precious metals such as gold and silver paper is actually from a wealth management talking to us live from karl thank you. washington and germany are threatening to take decisive action against the syrian regime

u.s. currency. they also found about $22,000 worth of fake peruvian money. t's printed there and then sent to the u.s. >> what a bust. >>> the berry industry is again under fire for violating child labor laws. two years after an abc investigation showed small children toiling in the fields, this time growers were fined for using little boys and girls to pick strawberries. abc's brian ross investigates. >> reporter: it's an ugly secret in american agriculture. out of sight, far from the main roads, children as young as 5-year-old suli working in the country's fruit and vegetable fields. we found suli and her 7 and 8-year-old brothers during an abc news investigation in the blueberry y elds of large commercial farms in michigan. it's legal for young children to work on the family farm but this is much different. >> every year there are children who die in agriculture. these kids, they're working with sharp knives, sharp tools, heavy machinery, there are tractor rollovers. >> reporter: now as part of a promised crackdown, in the wake of our investigation two yea

u.s. isn't going to default a prince it's own it bars in its own currency it can print and so the u.s. in a legal sense will never default. and i think that to some degree the the reaction of the markets to the standard import downgrade is really interesting because the treasuries have rallied and they're the ones that got downgraded whereas other including the stock market has been really heavily hit so it's really been more of a flee from risk and that's entered the downgraded instruments surely you know it's sort of ironic interesting you mentioned there defaulted i mean we're seeing that the danger there in the euro zone and also you had mentioned in one of your articles that governments are going to have to default i mean there's a lot of worry now that this is going to be similar to two thousand and eight if you say that governments will have to default is this the only solution really. you know i think it's the most likely solution i have kind of a pessimistic view of democracy and populism i'm not against democracy but there's a tendency toward for voters to vote for things tha