tv [untitled] August 25, 2012 10:30pm-11:00pm EDT
operations rule the day. it's six thirty am here in moscow you're watching our let's take a recap of all the headlines united solidarity ecuador receives overwhelming backing from the all the migration of american states and song condemning earlier bridges thread such a storm of the embassy that has london finds itself red faced with secret police documents accidentally rebuilding plans to retain the whistleblower under any circumstances. to defend president extend the hand of friendship to china and iran in a gesture that is seen as shifting away from american influence that's amid empty government protests with demonstrators accusing the new leader and his party trying
to monopolize power. and brand new talks between iran and the un's upcoming want to talk and come to nothing a movie hasn't run but giving assistance to the agency or come to higher heights. if there's a large aside to losing a fortune cause a report has it and that's next on our. i'm max foster this is the kaiser report i know if you think about justin bieber right stacey no max banky. yes byrne and he more popular than justin bieber this of course if you watch c m b c so chicago booth school of business professor randy krause there was on c.n.n. b.s. and he said that ben bernanke he is more popular them justin bieber but also
responding to a question from a caller who asked about romney's plan to audit the fed and he said well the fed is already audited by the big accounting firms well yeah this is justin bieber should be running the fed really because he'd have more sense but the fact that this c. and b. c. clown can make this kind of statement because you think c. and b. c. listeners old eighty year old white guys dribbling on their you know front of their shirt like a charlie munger and warren buffet would be like oh we're we're we know justin bieber is we would you do we say we're going to hold a cryptid brokendown non-sensical it is almost all. and you did mention warren buffett so let's talk about warren buffett buffett's move raises a red flag a decision by warren buffett's berkshire hathaway to end a large wager on the municipal bond market is deepening questions from some investors about the risks of buying debt issued by cities states and other public
entities the omaha nebraska company recently terminated credit default swaps insuring eight point two five billion of municipal debt berkshire's move comes as investors are flooding into municipal debt right well again warren buffett the coward pulling out sucking all these suckers into the debt meredith whitney remember last year said all these missed bull bonds are going to be toast and everyone ridiculed her including c. and b. c. o. mary if you're anti-american you're a bad woman and of course she was dead right and all these biggest problems are going bankrupt and he's been a civil bombs are going to be worthless and warren buffett is retreating but he pays lip service to how great america is it is about all these are on t.v. because he's a duplicitous lying sack of omaha steaks so however when this was announced just this past week that warren buffett has raised a red flag and he scaring everybody to get out of the municipal bond market i recall from june where he was praising j.p.
morgan's jamie diamond personally betting on j.p. morgan and jamie diamond buffett revealed his bet during an interview with c n b c so this is j.p. morgan and jamie diamond jamie diamond he said is the world's best banker now. what role does j.p. morgan play in the municipal bond market in the united states then right now the banker they are the banker they wrote under a lot of the credit default swaps the interest rate swaps which has since blown up they devastated and wiped out the largest bankruptcy in municipal county history and across america which was jefferson county so at the same time that should have been your signal that should have been your true red flag he was waving the flag when he was saying in june on c.m.t. see where he goes to talk his book that was where he was saying jamie dimon is the best banker in the world now everybody two months later is acting all shocked that he's dumped his you know municipal bond holdings so one more book like jamie diamond now you know it's like the u.s.
you know after nine eleven al qaeda was the enemy then they attacked iraq now al qaeda is the rebel forces and working with america and syria so al-qaeda is the good guy now so jamie dimon is the good guy now he's the good terrorist he's there to commit financial terrorism on behalf of warren buffett but when it's not convenient then he'll be thrown over the bridge temporarily and then be brought back it goes from being the good terrorist to the bad terrorist depending on what role is easily played out on c. and b. c. the number one propaganda network in america so warren buffett said that jamie diamond is the best banker in the world he's in the next headline public pension funds name to leave london whale lawsuit public pension funds for markets ohio oregon and sweden will be lead plaintiffs in a group lawsuit against j.p. morgan chase over trades made by brutal excell known as the london whale the pension funds allege they lost as much as fifty two million dollars because of fraudulent activities by j.p. morgan's london chief investment office all right so now jamie dimon is the
bitterest for the moment and then he'll be probably given a presidential medal of honor and there will be an election then the treasury secretary and then oh although there is a big loss to terrorism they do good therapist and c n b c is up there with maria bartiromo whatever she. going around saying oh yeah jamie diamond jamie diamond warren buffett come on almost excuse great no he's bad no he's great oh yeah by the way the entire economy has been a mystery to joblessness all time high over fifty percent the populations on government assistance food stamps are zooming up are hoodoos food stamps jim you know i'm in j.p. morgan it's a prison gulag state brought to you by jamie diamond warren buffett and c n b c and of course this london whale happened in the city of london through which all fraud happens now in the u.k. there is a dish known as bubbling squeak i think it should be renamed bubble in fraud in this headline here max r.b.s. investigated over possible iran sanctions violations according to the f.t. report of investigations by federal reserve and department of justice follows three
hundred forty million dollars settlement by standard chartered the financial times said that the new york state agency is not investigating r.b.s. it's just the federal reserve of the department of justice who are a little bit annoyed with this new andrew cuomo agency that tried to you know get in on their turf oh yeah last year r.b.s. was a good terrorist so the state bail now another about terrorist so now they're to be shaken down by wall street and bubble and squeak that is a famous dish in the u.k. they should rename it bubble and fraud and while they're at it they should rename put bob diamond on the dessert menu he's the new spotted. well but this is also the problem with having an oligarchic system we have like the kingdom of saudi arabia we have seven thousand princes and there's all sorts of little turf or is that occasionally you know pop up in the news when they got each other down but you know at the end of the day there are just too many princes nothing that's a great model of the saudi arabian prince is really the model that the u.s.
is following you know they've got seven thousand princes they all need an extraordinary amount of free money from the government to keep themselves in their princely affairs and in the us now you've got this seven or eight thousand made people like a jamie diamond a prince of the oligarchies who's given all this money freely from the u.s. government to go out there and commit acts of financial terrorism and this is what we're having a global saudi model. well you can't have a global saudi model without either a flow of free cash or a flow of lots of oil u.k. unexpectedly posts deficit as tax receipts plunge britain unexpectedly posted a budget deficit in july as corporation tax receipts plunged partly due to the closure of the elegant gas field in the north sea the elegant gas field design led to the elegant marbles that were stolen when a minute so yeah the gas is shockingly less this year than last year the north sea
oil because they're in huge decline is one of the big fields in the world of rapid decline because you know oil fields have a lifespan this one is past fresh sell date well there are three fold there's a rapid decline there was a gas leak from i think those totals field that when they shut that down for months on end and also there was a corporation tax introduced as part of the austerity measures last year in the two thousand and eleven budget by george osborne north sea oil tax revenues fall offers a glimpse into a diminishing future so last year george osborne slapped a two billion pound tax rise on producers which was only an eighty percent tax free you know we invade countries if they raise their taxes of thirty five forty percent so in his most recent budget the chancellor revealed that the oil industry responded by cutting production by eighteen percent leading to a two point three billion pound drop in tax revenues combined with many fields coming to the end of their life this is seen output fall
a total of one point zero four million barrels a day was pumped in the year to march two thousand and twelve down from a peak of two point seven million in one thousand nine hundred nine and the lowest since the one nine hundred seventy s. so you know look at this chart here max of brant crude oil prices one thousand nine hundred nine their peak which was the lowest all time bottom price for oil was nineteen dollars a barrel well you know this is what happens when the governor. throws money at the the oligarchs and the monopolist the oil companies and the bankers because when they stop giving them money they can pull the old atlas shrugged they'll be like. you know we're not going to work anymore we're in a gatekeeper position we're wedged into the economy if you don't give us more money we're call systemic collapse which is ridiculous because the government if they want to give away money they should give it away to the entrepreneurs they should give it away to the consumers it is a consumer economy after all why not help the consumers know that never occurred to
george osborne he's too busy doing whatever he's doing but who knows what he's doing he doesn't seem to understand exactly how the u.k. economy works pricewaterhouse coopers a few years ago right before the financial collapse did a study where they said that had the u.k. even saved any of those fifty percent of those tax revenues they would have one of the largest sovereign wealth funds in the world they didn't save any of it they poured all of it into housing speculation and to the city of london so it'll be very interesting to see when all of that collapses at the same time that the global financial collapse is happening on the other end of the north sea oil is norway they created one of the biggest sovereign wealth funds in the world they're laughing do you don't hear norway going bankrupt you don't hear norway with huge employment issues you don't hear about norway going through the same problems that's going with the u.k. because they like george osborne they have proven to do sherry's stewarding their capital and not some yahoo eaton oxford you know friend of cameron georgie porgie
in his bubble in front toting. and then finally here max peter luger steak prices may soar as drought coals herds. so you know in america there's a major drought in the corn crop is failing and americans feed their cattle corn which of course destroys the quality of the meat but nevertheless minetta tavern charges one hundred forty dollars for its coat to book for two that's a fifty six percent increase from may two thousand and nine when the restaurant charge ninety dollars sounds like a lot of inflation in u.s. dollars anyway max yes priced in so over there's been actually decrease exactly see on the one hand your steak is getting a lot more expensive in the u.s. fifty six percent in just three years however it's down about thirty percent in silver prices so silver traded at fourteen dollars to fifty cents a may two thousand and nine which means it would have cost six point two ounces for
that coat to buffer to at minette is and now it only cost four point six so i'm from six point two ounces down to four point six that is how precious metals protect you from this inflation that's right you can't eat gold and silver unless you go to luger steakhouse and swap them for a big steak and pay less now than you did in two thousand and nine and you have some silver on your neck today i do and one final comment about this to just show you how when the government intervenes wackiness ensues the drought prompted president barack obama to help farmers with one hundred seventy million dollars in government meat purchases obama told a campaign rally in council bluffs iowa we've got a lot of freezers. lots of fraser's no brains all right stacy ever thank so much for being on the kaiser report thank you max not knowing much more coming away stay right there. are economic.
theory and. welcome back to the kaiser report imax kaiser's i'm at a got a london and speak with dominic presby the resident gold bug at money week dominic is also a comedian and sometimes a singer including the smash you tippit debt bomb dominic welcome to the kaiser report hi max how you doing great now dominic we've been talking about singing sensations in the first half of the show you're out with
a hit debt bomb what's the song about why did you make it i made it just for fun i should point out actually i didn't actually sing that i can't sing that well i got a friend of mine in virgo to sing it and then i mind along in the in the video but we made it really essentially to to get the message out there of these you know large debt problems that we had and we were trying to do it through the medium of comedy and it's done pretty well it's had over a hundred thousand hits in the week in just one week so that's pretty good i don't know how you define viral but i suppose it's nearly viral right and you touch on some interesting things. in the song if people were to really hear a transcript of the song they would find some interesting themes in terms of bankers or central bankers elaborate a little bit yet well i mean basically i've got some friends in the states who are passionate democrats and they they think it's absolutely horrible and they're deeply offended by it so i feel that i've achieved something in that but the basic
themes i s'posed out lie outline the basic themes of of austrian economics government should spend less they should interfere less in the economy they create all sorts of unintended consequences every time they attempt to do something and i've simply taken tom jones his famous single sex bomb reworded it with debt bomb and i think it's pretty funny we've set it in congress and i got to burn less strippers in and as i sing the song they take their clothes off and all that they have left on by the end of the song is too little gold coins revealing their essential private parts and i suppose the theme of the song is that by the time you strip everything bare all that's left is gold great well i suppose for the sequel you might get prince harry he seems to be fine taking his calls up these days but speaking of debt bombs the u.k. has just announced a shock deficit of over five hundred million pounds
a large part of the deficit was caused by the shutdown of north sea oil now with declining output from oil from the north sea what does this suggest for the future of the u.k. economy especially for a city of one and how that is that worked out well there were two big things that made our economy strong in the eighty's and ninety's and early part of this century max one was the exponential growth of the financial sector and the other was the revenue generated by north sea oil now the financial sector perhaps rightly is in deep deep trouble and now we've got the declining oil. receipts so you know where's the where is the. economic growth going to come from is it manufacturing because manufacturing in this country is so heavily regulated and basically we outsource everything to china all devolve into the north sea oil field coincided with the so-called thatcher revolution if you took north sea oil out of the equation where the big bang in the city of london and the stature movement would it
have been anywhere near a successful i don't think so people always point to the growth of the financial sector but they they ignore the huge revenue that came from the north sea the north sea is in decline it's been in decline since the early part of this century it's yet another manifestation of peak oil syndrome the script in the world speaking of london as a epicenter of fraud around the world it seems on an hourly basis that u.k. banks are implicated in yet another multibillion or multitrillion dollar or pound scandal what happens if the fraud is truly shut down completely can the u.k. economy survive both the collapse of north sea oil and the flow of fraud which is the principal g.d.p. booster in the u.k. . well the answer to that is yes of course we can survive but we need to dramatically rethink what we do and how we go about doing it but you know i agree the outlook for finances is limited but you know we are an entrepreneurial capable
people but there's so many problems we've got with our economy chief among them being the fact that you know we have too much debt and the debt bomb to go back to our earlier theme is yet to explode but yes of course we can survive but there's a number of things that need to be done i you know there's a big big argument taking place not just in the u.k. but around the world and it's there's two essential themes to it one is that the private sector is the way is the root out of this and two is that the government and government spending and government intervention is the root out of all this now i happen to think that the private sector is the way we're going to grow ourselves out of this mess but you know in order for the private sector to be able to do that you know the burdens placed upon it by x x taxation excess regulation and all those other things need to be need to be rescinded well in the u.s. and in the u.k. but particularly in the u.s. and one nine hundred thirty s. a similar dilemma do you grow out of the problem of the depression by government spending or do you need to stimulate the private economy in some way what was done
to stimulate the private economy was the pechora commission the f.b.i. seeing the glass steagall act they cleaned up the fraud and in the u.k. now it's very much a bubble and fraud economy with no regulatory oversight whatsoever any i.g. made up m.f. global the london whale trade all happens in london and now the problem is that arguing you i'm not arguing with the max i'm not arguing with you i couldn't agree more ok well let me let me like leaned up let me follow up and ask you this is an interesting development recently is that as the global economy shrank from these banks are still over a shoes for money there's a bit of a turf war going on between wall street the city of london recently we saw wall street attacked a u.k. ban. standard charter they shut them down for a few hundred billion now wall street saying we're going r.b.s. is implicated we need to shake them down and what is the history of money going to stand up to the wall street shakedown shysters i don't know the answer that question but i guess they need to in the u.k. london and the rest of the u.k.
like two different countries and london is basically built on finance and you know outside of london london is is quite hated by other parts of the u.k. particularly in the northwest and the financial sector in particular is loathed and you know what does the government do because on the one hand you know banks and so on are in many ways the agencies of governments that you know it's they control the where the government money goes but on the other hand the people want the financial sector to be taken down there is a there is a a massive amount of not unjustified loathing for the financial sector we'll see what happens during what about the housing sector of course the housing problem london was huge then we had the global housing crash but then in london of course prices haven't been affected too much to due to the influx of all the dark money that flows into london but that seems to be something that's unsustainable how do
you see the aus market going forward and secondly what about this a limb pick economic bump is it just a rat through a snake. well yeah i mean there's two very big questions there focusing first on housing you know this divide between london and the rest of the u.k. is is clearer in housing than it is anywhere else london house prices are up twenty percent or even even more in some cases since about two thousand and eight i've looked at some properties that have doubled in price since two thousand and eight since the financial crisis whereas the rest of the u.k. is is down twenty percent so you've kind of got this kind of allocators teeth where london's done that the rest of the u.k.'s done that in the divide between the two has grown and yes london has benefited from the cheap pound a lot of money fleeing the rest of europe there's also you talk to real estate i think over twenty percent of central london properties bought by foreigners influx of money from china from russia from india from africa or even this even an influx
of buyers from brazil starting to be recorded so you know all these things have pushed up central london prices but you drive through central london and night and it's a good in the residential areas it's a ghost town nobody lives there it's everyone's it's people's third and fourth homes and you drive through places like belgravia and knightsbridge and they're dead and that's i think that's a great shame that none of the locals live in central london any more now let me ask you about gold for a second because of all these bubbles and fraud people have been piling into gold the financial times commentary recently attempted to deed bank gold you responded in money week what's your response to the argument made previously by warren buffett and others that while gold is now interest well warren buffett is absolutely right in warren buffett's track record in investing is considerably better than mine nevertheless when you know it doesn't matter that gold pays no interest when real interest rates a negative. because you're losing money by having cash so that argument bears no
quarter in gold if you just look at the interest rates priced against gold gold will always appreciate as long as real interest rates are below two percent as soon as they go above two percent then gold loses its luster i must say max i'm very bullish about gold at the moment over the last ten or twelve years it's displayed a repeating pattern where it has six or nine months of significant rises and then it consolidates that appreciation for the next eighteen months twelve to eighteen months now we've had a period of consolidation since the last move up to nine hundred that period of consolidation has been going on for a year i think we've seen the low in gold at fifteen twenty gold's request it tested that low several times it hasn't gone through it and i think we're going to see the old highs and gold retested perhaps before the end of the year and next year i think we break out to new highs and we go to the mid two thousand i like gold here right well it should be noted that gold stacked up against warren
buffett's a vehicle berkshire hathaway is up but i should say warren buffett stock is down about ninety percent versus gold over the past ten years so i'm not sure exactly the point good point i'm not exactly sure why he's so balazs on his own stock when it's ninety percent down against all also matters that there's no way to value it what's your thoughts on that well there are all sorts of different ways to value gold but the problem is because it doesn't pay yield because it doesn't pay any interest you know. that makes it hard for a value investor. to evaluate using traditional value investing methods but there are all sorts of different ways of valuing gold you can value gold based on it's the cost of production which is currently the industry average i think is somewhere around twelve hundred dollars an ounce or you can take us debt i like to use this method because it gives you silly. for gold but you can take u.s. debt u.s.
national debt which currently sits at around sixteen trillion dollars and you take the u.s. gold holdings of two hundred sixty one million ounces and let's assume they're all there and if the u.s. used its gold to pay off debt the gold price would be i don't even know or so i think it's around sixty thousand dollars an ounce now in one thousand nine hundred eighty did that the value of u.s. gold holdings was enough to pay off the u.s. debt when it spiked famously to eight hundred fifty dollars in january nine hundred eighty now were it to do the same we'd have to go like i say to somewhere near sixty thousand dollars an ounce which would be very nice because similar silver which i know you like would be doing something similar right and of course paying no interest is still better than paying a negative interest like two year paper in germany and switzerland finally what about the statement people make hey you can't eat gold well you can't eat go but you can wear it and it looks very nice let me just say max on your last comment about gold paying no interest you know over the last twelve years it's been
appreciating by an average of fifteen to twenty percent a year if your underlying investment is appreciating by fifteen twenty percent a year who pays about three who cares about three or four percent interest right you think warren buffett would know something about total return but i guess he's smoking dope literally mongerer hiding under the couch or who knows what he's doing up there aren't all the omagh of oracle all right dominic first me thanks so much for being on the kaiser report writer time. max thanks very much for having me on my first time on and it's been a real pleasure thank you and i look forward to seeing you in london you're coming here in a couple weeks understand yeah we're going to sing debt bomb together on stage and hopefully we'll get tom jones to join us ok well that's going to do it for this edition of the kaiser report with me max kaiser and stacey herbert our thank my guest dominick for me is going to send an email please do so at kaiser report at r t t v are you until next time x. guys are saying bio.