tv [untitled] August 23, 2011 10:31pm-11:01pm EDT
and all charges are dropped against former international monetary fund chief dominique strauss who had been accused of sexually assaulting a hotel maid. as a cash crisis rages across the united states and europe financial guru max kaiser and his co-host stacy herbert give us their take on the situation the cause reports coming up next on our to. kaiser this is the kaiser report. stacy herbert apparently the vampire squid is back to devour us and only an alien invasion force can save us stacy herbert max well the global financial deflationary collapse that continues to this day almost three years later apparently only inflation can save us and place in is
impossible by the central banks the only thing that could stop it is here is paul krugman if we discovered that space aliens were planning to attack and we needed a massive build up to counter the space alien threat and really the budget deficit took secondary place to that. this slump would be over in eighteen months twilight zone economics so paul krugman over there the new york times all of the stimulus package the work ready shovel ready solutions all failed and he's calling on an invasion from outer space to rally the economy to overcome what is essentially still bad behavior in the banks. yeah and max you know you read the front page of the financial times and there's no more than an alien invasion as a possible hope paul krugman hopes of an alien invasion are no more daft than
people believing that central bankers might save us that they might save our economy move to curb swiss francs rise backfires as you see there so trader shrugged off new measures by the swiss authorities to stem demand for their currency sending the swiss franc sharply higher the franc jumped by two percent in just a matter of minutes as traders ignored the swiss national banks decision to almost double the amount of liquidity yvel a bull to the money market well look the central bank is a force. that resides outside of the economy and it's there to provide theoretically speaking price stability and in full employment that's their charter but they got sucked into the bank they got sucked into the parasite that is the banking system so now a sense earth is no longer available as a location to create a central bank policymakers and keynesians brainiacs are saying well let's just
create a central bank outside of earth or depend on an invasion from outer space aliens from abroad of course so might also argue that this is a thinly veiled reference for the need to create more war because people often say well world war two got america out of a depression so having failed to stimulate the economy by let's say imposing the rule of law and by eliminating parasite bankers and imposing true accountability they want to go and send us servicemen and servicemen from other countries to the front line and get slaughtered so that paul krugman doesn't look like an intellectual pygmy well speaking of war an act of war has of course spent a clarity over the past week chavez orders eleven billion dollars of gold home then as well as finance minister jorge do your dept donny said that the weakening u.s.
dollar and near default by the u.s. government and the european sovereign debt crisis threaten venezuela's savings and they will be more secure at home and in allied countries yeah that's right the various gold hoards by various countries are not held in those various countries we've talked at length on this show about germany sixty percent of their gold is held in america now hugo chavez in venezuela is saying we want our gold two hundred tons of it to be brought home and then held in the bank of england and of course the bank of england is not the only person holding the the gold. also include banks such as j.p. morgan so it's as if you go chavez watches our show realize that the crash j.p. morgan buy so over a campaign could be applied to gold is demanding physical delivery of his gold because you know that j.p. morgan and the other banks don't actually have the physical gold they have to go into the market to buy that gold but they're bankrupt to begin with that means they
have to incur more debt which means that they're going he's trying to collapse j.p. morgan just like we're trying to collapse j.p. morgan so you go chavez welcome to the gold liberation army yeah but the point is whether or not he'll ever get this gold back because he's put in a request but is this going to trigger other people demanding their gold back other nations demanding their sovereign gold back there are thousands of tons held by germany in at the new york fed all countries around the world story in the u.s. will the u.s. give that back that's the big question what do you think. well i think no i think democracy is correct yet i would i would agree with both you and jim rickards that these countries that he's made a big story out of this he believes that america should commandeer the world's gold which would give them something like fourteen thousand tons in toto and make them on the glide path toward having a post keynesian post currency economy based on having the most gold but you're right this is a huge set up for
a global conflict so hugo chavez says this max quote we've held ninety nine tons of gold at the bank of england since one thousand nine hundred eighty i agree with bringing that home it's a healthy decision max the only way hugo chavez is getting that back as he comes back to with an alien invasion force hugo chavez well he's good friends with of course all over stone and sean penn and noam chomsky maybe they can put together an invasion force go into the vaults in the bank of england and liberate venezuela's gold at the least it could be a great movie well max hugo chavez is not the only one seeking gold gold equals treasuries the evidence a stunningly high correlation of gold to twenty year treasuries from july twenty first through august sixteenth is point eight nine over that period gold is up twelve point three percent and treasuries are up eleven point eight percent i was no result the conundrum that people are talking about right now on this show people
say that bonds and gold cannot both be hitting new all time highs simultaneously because that would mean that inflation and deflation are happening simultaneously let me break it down for you. the bond market is being bought up by computers. the gold market is being bought up by people who are fearful that the bond market is being bought up by computers generous and i'm saying one is real the people in the governments are buying gold the other one is fake a bunch of computers are buying treasuries to make it look like the us economy is not as catastrophic as it really is and that can only last so long well the reason why people are going to gold instead of the treasury according to this article on real holes dot com gold does not carry a downgrade risk as do treasuries so this is the beginning just like i said hugo chavez pulling his gold out of the bank of england this could set a bank run on the bank of england and all their gold this is also the same thing
the downgrade of s. and p. this is the beginning of the rush out of treasuries and into gold it is it is a run on the bank answer mask the collapsed structure the computers to buy more treasuries using borrowed money which is only making people buying gold want to buy more gold like i said treasuries carry the downgrade risk or at least they did until last week d.o.j. probing s. and p. the investigation centers on the alleged cases in which the company's analyst sought to award lower ratings on mortgage bonds but had other s.m.p. managers overruled them the department of justice in america alleges that they began the probe of s. and p. before the downgrade of u.s. debt they're going to rewrite the story of the boy who pointed out that the king had no clothes in this version the king investigates the boy for having faulty eyesight well so i mean yes s. and p.
did faulty grade these things but our fits in oh it won't no no no no they didn't fall to grade these things that two trillion dollar error supposedly according to our body peter schiff this was an assumption that certain growth parameters would be met that there's no way in heck any of the growth parameters will be met this is a straight up and down the street. forward honest to goodness report there is no true trillion dollar error made the right call the fact that they're now being vilified by the people that they made the call against doesn't invalidate the call well i'm talking about the mortgage securities when they rated the mortgage securities that have exploded and across the entire global economy the s. and p. rated all of those goldman sachs c.d.o. as a way to them triple a they redid all of those things aaa that they sold to french banks german banks swiss banks italian banks all those things blowing up economies were rated aaa by s. and p. they were but they were also rated aaa by moody's they were rated aaa by fitch
those two are not being investigated as far as we know at the moment because it's only s. and p. that has downgraded u.s. government debt now this is the question people are going into gold because treasuries carry a downgrade risk or at least they did until the department of justice sent a message to those who dare to downgrade i did it ok well so let's look at where this message is going matt taibbi a whistleblower claims that over the past two decades the agency has destroyed records of thousands of investigations by white washing the files of some of the nation's worst financial criminals the s.c.c.s. kept an entire generation of federal investigators in the dark about past inquiries into insider trading fraud and market manipulation against companies like goldman sachs deutsche bank and a i.g. so what do you think about this story here that the f.c.c. is the one that was through has deleted files that is breaking the law by the way because according to the law they're supposed to save these files. for twenty five years you write in. to the idea that there is
a criminal racket because the f.c.c. and the investment banks and the fund managers and the rating agencies and other aspects of government are cool looting to create this on the holy racket of price manipulation and price fixing and extraction and siphoning of wealth for their own and grand at the jeopardy of destroying society was their doing and only it also part partially explains max why obama keeps on saying we have to look forward because in fact there's no way to look back because all the records have been destroyed as dorsey flynn the the whistleblower in this case said it pays a startling picture of a federal police force that is affectively been conquered by the financial criminals it is charged with investigating you know it's also remarkable is that the crash in interest rates you would think it would spur a refinancing boom for homes but what they're finding is that there's so much of a mess in the mortgage market that people who could normally refinance and spur the economy because all the paperwork was fraud fraudulently signed and induced that
they this normal machination of lower rates to spur the economy is not working either so fraud is just totally blocks any potential growth in the u.s. economy max mattei because on he says as one former s.e.c. staffer describes it the agency is now filled with so many wall street hot shots from often best to get a bank that has been in infected with the goldman mindset from within and the goldman mindset max what is the golden mindset greed and suicide banking and bank until you kill yourself. that's the goldman mindset their suicide bankers the goldman sachs could be the aliens from outer space they could have spawned a banking parasite there in eighty five broad street before they moved uptown and now they're they've they've made their way into all these writing. story agencies there though there is a night of the living dead or i should say night of the living debt all right stacy
hammer thanks so much for being on the kaiser report thank you max don't go away stay tuned much more coming away so stay right there. bright. from studio. team don't. i welcome back to the kaiser report i'm max kaiser let's go to town to see and talk with catherine austin fits who served in the george h.w. bush administration katherine is also a former banker and is now an investment advisor and blogger at solari dot com
catherine fitts welcome back to the kaiser report max it's great to be back all right catherine also fits first matt taibbi in the latest rolling stone asks is the f.c.c. covering up wall street crimes your thoughts. yes because actually no make model is a criminal motto so of course they're covering up crimes they have to ok so he's saying the economic model is a criminal model explore that a little bit in other words the banking system itself is basically a glorified ponzi scheme correct well we have an economy that sippin unworn organized crime in and you know part of the profit so that organized crime is part of what's keeping the whole economy going it's not just the banking system it's every community in america so let me get it this way if the united nations says we're competing for four hundred billion dollars
a year global money laundering then then this financial centers to attract that money and wondering are the leaders ok let me follow up on this money laundering fame because walk over here now owned by walls fargo which is owned in large part by warren buffett has just been fined two percent of one year's profits for laundering three hundred seventy eight billion dollars in drug money for the mexican drug cartels what about the settlement is it an adequate deterrent first of all you know absolutely none if you're if your business model is ended on attracting those revenues and processing those revenues there's no way a sign like this can be a deterrent of something you know is something is part of what i do an essential part of the business model of a sign like this would stop it ok let's talk about the proportion of these banks first of all the banks in the u.s. and in the u.k. because i would kind of talk about the u.k. a little bit the g.d.p.
numbers that are quoted in both of these economies as the relationship to what comes out of the banking sector has grown fantastically over the past twenty five years and over the past ten years in particular from five or six percent twenty five years ago to twenty five thirty forty depending on how you make the calculation fifty percent sixty. g.d.p. directly tied to financial leisure jermain in the banking system so it's a fair to say that the g.d.p. numbers that come out of the us in the u.k. are tied directly to banking fraud well i think i think they are tell you know they include banking fraud but themes ludes truth is securitization of the economy so we're shifting much much much more of the economy into financial instruments that can be traded in represented and and you know there's no doubt that the fraud is very significant and part of the reason it's very significant is that it
a lot of the fraud is journey with the intimate support involvement of governments so you really have a government banking model and a lot of that is done under the national security law ok you talk about securitization more and more the economy moves into securitization more corporations who are reporting profits are reporting profits as a result of transferring themselves into companies that get into the secured taishan securitization business but let's take an example for goldman sachs for example in the mortgage business we now know that the mortgages when they were originally offered there was fraudulent due spent then we know that they took the mortgages that they sold they repackage them or securitized them and fraudulently marketed them to funds around the world and then we know that they went into the foreclosure process and goldman and bank of america these other corporations and banks engaged in fraud on foreclosures so there's that so if you take away all the fraud associated with securitization it's a carrot a session itself is now proven to be an inherently fraudulent business i mean the
word ok first of all so what it what your thoughts are thought on that well i think it's much worse than you're describing max. because you describe the russian word which is we're fraudulently induced let me use an example of one house let's say we had a fraudulently induced mortgage on their house but let's say we also cream. and you know two mortgages that were completely fraudulent so so i think the collateral fraud you know if you take the description you described and you add collateral fraud. you know i think it was much worse and then when you learned that derivatives on top of something that's full of collateral fraud you know you're getting sort of exponential for it so i think the fundamental fraud process was far worse than you just described right so you have on top of the three phases of fraud that i just described the project inducement fraudulent securitization and of course the fraudulent placement of those securities and to funds around the world
you also have a security isn't the derivatives that were created on top of the fraudulent securities on top of that so that adds to the ponzi scheme i mean we keep coming back to this we're technically legal to it's technically legal but in a in a country like america or the u.k. where the banking lobby has effectively taken over and change the laws repealed last eagle brought in the securities modernization act and made prodigal i mean if you make fraud legal is it enough to say whilst technically legal i mean at what point do we say and as enough we need to take stronger measures. well i think i think at the heart of the matter max is not sort of banks out of control i think at the heart of the matter is physical violence because a lot of what has happened particularly and you know that i understand in the united states is is you have people who are afraid to say no because the result of saying no is physical violence directed at them or their families i mean we've had
lots of people murdered and assassinated etc etc so the question is you know yes we have to say no but the question is how do we say no and that's why you know sort of it comes down to shifting our money but the reality is is we have a force operating in the world that is completely operating outside of the law and and no one yet has come up with a way to stop it we're talking about my only violent mobster operations. if i got an example to use a personal example but i was a i was. you know i was a former assistant secretary of housing and i had my own business in washington and i i was helping the department of housing and urban development essentially run things clean and you had to get rid of the clean team to to run the housing bubble and i was targeted i was poisoned i had dead animals left on my doorstep my house was broken into people tried to run me off the road you know it was very very
violent and it went on for years so you know so people who try and run the government clean or or run wall street cleaner targeted and literally you know have to fear for their lives i mean people have been dying so. you know it's a very very dangerous this situation and the and the challenge is if you have people who can kill and physically harass with impunity how do you you know how do you run a governance process just for people who are unfamiliar what your role with the bush cheney administration it was what exactly i was assistant secretary of housing so i was the lead regulator for the housing area and you know it's very interesting because i left washington in one thousand nine hundred eighty eight and i kept saying to people look you know their engine area housing bubble this is going to destroy the country it's going to bankrupt the country and literally i'll never forget it in about two thousand but two thousand two thousand and one the soprano
t.v. show had a whole series on had fraud and my own college roommate called me up and said well fitz you must be telling the truth it's on the sopranos and i said why is it that the soprano t.v. sure is this show is more credible than the former assistant secretary of housing but literally max i lectured in spoke in london and in wellington new zealand all over the world in sweden trying to warn people about the housing bubble and the investment community in all those places simply just to. heard it mean when fannie mae went down in two thousand and eight i have been on the radio show in in outside of san francisco explaining about the housing bubble. you know three years and one of the biggest investors in san francisco lost over a billion dollars and saying make going down and brought up the thing on their website and put it up and said you know we had no idea there was a problem well i was on the radio for years the florist this and secretary of housing saying you know describing the problem in great detail ok imagine fannie
mae freddie mac. they were caught committing fraud they were bailed out by the government there are liabilities are now the taxpayers liabilities we've talked about we talked about wells fargo talked about bank of america all the banks committing master fraud securities fraud accounting fraud and. what we're all in the global all accounting and securities fraud that you see in the banks how central is that the city of london factor into this max clearly the city of london is very important and i would say the united states european investment interests have been controlling since the revolutionary war from everything i can tell but you know the other thing i would say is we're talking about a model which is is is not just fraud it's
it is the model it's the plan it's the governance model it's the way things are so there's the fissure reality that has law as you and i were brought up to believe it and then we have a system which believes it's above the law i mean i literally had the secretary of hud once say to me look you know i don't have to pay attention why i don't have to be able or i report to a higher moral authority so we have the planet run under a model this is our operating on. different set of rules or laws that we believe the law to be now if you look at how much of money's been pulled out of the economy globally whether it's by united states london whatever we're talking about trains the trillions of dollars and you know what i refer to a lot of it in the united states as the black budget but the fundamental question is where is all this money going because we're talking about truly trillions and trillions of dollars that have been pulled out and managed according to his that
you know i call it a financial kuti top but the question is who's running the financial couldn't tell and weirs on the money go on because it's very very significant and it's a system that doesn't consider itself to have to obey the laws that you and i are talking about now hey let me ask you a question about europe of a european debt crisis french president sarkozy and german chancellor merkel have proposed a quote collective government headed by e.u. president for your thoughts so essentially what we're watching is this is the academic failure essential decentralization the more essential lies the weaker the economies get going to get so what they just said is socialization has just wrecked europe so what we're going to do is we're going to do more socialisation well of course that's the worst thing you can do so you know this i hate to say this because i don't think europe has a debt crisis i think europe's governance is being reengineered in debt is being
used to do it so we go into a place we encourage them to take on more debt than they could ever afford then we do a series of things to pull the income then we say we have a debt crisis and then we surgically aiding to them terms by which they will start being run as a sovereign government and instead report up to the top of the financial system so that's why i call it a financial could a time because. you know it's not a debt crisis it's a plan all right catherine often fairfax so much for be. on the kaiser report. and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert and with my guest catherine austin fits if you want to send me an e-mail please do so at kaiser report at r t t v are you until next time this is max keiser saying bio.
the. rebel forces have entered the compound of moammar gadhafi in tripoli the opposition that claims to be in control of most of the capital however the whereabouts of the libyan leader were main unknown meanwhile gadhafi has addressed in the nation the radio and says that leaving his compound was a tactical move. the u.n. steps up pressure on syria ordering an investigation into possible whites violations during the crackdown on anti-government protests. police arrest a man suspected of masterminding the murder of we're now into russian journalist on a police call sky. and all charges are dropped against former international monetary fund chief dominique strauss kahn who had been accused of sexually assaulting a hotel maid. now as the conflict in libya continues to unfold we go to our washington.