tv [untitled] January 10, 2013 11:30am-12:00pm EST
much alone on the world stage of leaders as introducing austerity and so he's doubled down even cutting his own child benefit despite the fact that this week i.m.f. economist apologized for austerity forecasts so the international monetary fund's chief economist today acknowledged that the fund blew its forecast for greece and other european economies because it did not fully understand how government austerity efforts would undermine economic growth the new and highly technical paper looks again at the issue of fiscal multipliers the impact that a rise or fall in government spending or tax collection has on a country's economic output so max they've been looking at the eurozone and making projections based on a point five multiplier which is a very low multiplier effect of any fiscal policy but what they've discovered is that actually this is only appropriate for a nation with low debt low fraud low amounts of fraud in a stable banking system. it turns out that for greece for example it's one point
five so for every dollar in cuts to government spending it actually takes a dollar fifty out of the economy well the i.m.f. knows this to be true the fact that they say this is a surprise is a lie they are staring measures and by the way since opposing austerity in the u.k. the debt seven gone up so there has really been no austerity when the i.m.f. talks about hysteria in countries like greece or when they talk about here in the u.k. it's justification to bypass civil liberties to commit massive injustices against a local population that's having their wealth stolen so when the cops in greece would use tear gas and other forms of punishment collective punishment on the greek people they say it's part of the stereotype package even though we know and the i.m.f. knows that that's false it's just justification. for traveling on civil liberties
and they talk about the fiscal multiplier but of course in the city of london you have to mention the fraud multiplier as well what does that how does that factor into these models you know it for every dollar of real collateral in the economy remember there's not least one hundred dollars of fraud backing that the multipliers of fraud as you point out are not count delayed by the i.m.f. they're not calculated by the government of the u.k. it's a real problem there are trillions of dollars and trillions of pounds of fraud money that they put off the balance sheet the population is not even left with the bread of an austerity sandwich they're left with the crumbs you know we have crumbs here on the table and this is what the people in the u.k. the people of greece the people of europe the people of the united states are suffering through now are they being they're being forced to live on the crumbs it's all about corralling the population and two zones where all civil
liberties are deprived and the consequences of austerity which is to say extinction and genocide are written into law so the chief economist here is the libya blond charred and he says forecasts are significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation so again here we look at the population and all the markets all the mainstream financial press what they do is they look for every single word the chief economist of these banks and the central banks and the people advising george jobs board what they have to say about what what we should do with the economy and yet they totally obviously don't know what they're doing they're just pulling it out of a magic bag of tricks they they don't know and it's a huge wealth transfer and they use the language of economics and finance to bamboozle mainstream media into mouthing their propaganda while they they. demise
a whole segment of the population that's being financially exterminated or by using interest rates we're seeing the imposition of what i would call interest rate related apartheid where if you're in the top one percent your cost of borrowing money is you know percent if you're going to want to go for a payday loan you basically have the same rights as a black under apartheid it's financial part time in this country and it's sickening well talk about this wealth consolidation and this wealth transfer high stakes gambling machines suck money from poorest communities m.p.'s express alarm about five billion pounds spent on fixed odds betting terminals in northern cities and london boroughs so it seems these betting shops with these little slot machines have been consolidating basically clustering in the poorest areas i mostly labor constituencies very few in tory constituencies but they're sucking billions of pounds out of the economy from the very poorest now the labor m.p.'s are blaming
the casino companies but tories blames the culture of poor people rather than betting companies for exploiting them john redwood the conservative m.p. for walking him in berkshire which has three betting shops said he had been surprised by the spread of bookmakers in poor areas so he says max that i put it down to the fact that poor people believe there's one shot to get rich they put getting rich down to luck and they think they can take a gamble. right the tories are scapegoating the poor as part of a program of genocide and furthermore the same people who run these gambling outlets in these neighborhoods are own or affiliated with the same banks that are being bailed out by the state and are the same banks that are availing themselves to near zero percent interest rates but to the extent that interest rates are not
at absolute zero there might be two or three basis points for a loan that incremental piece of interest has to be paid for and it's calculated to go into these neighborhoods so when you go in and you buy a lottery ticket or one of these one on bennett's in a poor neighborhood you put that pound in the machine and it goes directly into paying off b.a. e's debt test goes debt david cameron's debt george osborne's debt they take the money directly of the pockets through the banking system which is totally consolidated there's no competition it's a it's a dead hand of banks toure's you take that money from the hardworking burnished person and it goes directly to pocket to pay off his ill gotten the legally accrue debt as a matter of fact if i look at this austerity sandwich i can see george osborne's face that says jesus was saying that a toast a grilled cheese sandwich has there been such a miraculous sighting of a portraiture of the exchequer in this slice of bread.
felt good i think is the town floor of the fricken exchequer but you know here john redwood the conservative m.p. for woken which is one of these commuter belts from the city of london so there are a lot of bankers working there. he is wrong to mock the poor for thinking that first of all there's one shot to get rich there is that you can gamble that's the only way to make it rich well look at what is happening in the city of london. h.s.b.c. gambled that you know laundering money from drug cartels would pay off it did they got one shot and they won you know r.b.s. lloyds. every single bank here in london gambled that george osborne would come to their rescue once they were selling all these fraudulent loans for august fraud fraudulent interest rate swaps and every other derivative product that the chancellor would come to the rescue and he himself was sacrifices
child benefit to make the bankers whole and the next step for us more in a sacrifice was trial and he would throw the child into the volcano if it meant getting a good deal of the revenue number one and number two j.p. morgan they were gambling and derivatives the so-called london whale scandal they got caught breaking the law they got caught breaking into the proprietary desk law and they gave nine billion dollars to cover the loss and the chancellor said oh here he hears nine billion dollars and they can't win the bet for them. and so all of these betting shops are clustering in high street areas of the very poor poorest regions and constituencies and what they found is that betting shops are clearing out britain because they were listed as financial services and planning guidelines this meant empty shop fronts that once contained banks and building societies could be converted into betting shops without any planning permission so the government here includes them as financial services that considers them financial services and
the u.k. has turned over to a gambling casino economy part of the key scene of gulag economy because if you go back to two thousand and six the headline reads take from the poor to give to the rich that's new labour's super casino plan so here john redwood said he blames the poor he says it's not a casino companies and yet documents from two thousand and six they clearly stated that they will not bother with areas that are not poor because they need the poorest of the poor in order to make any money in these casinos that's what i'm saying yes it is financial services when you put the pound into the slot machine and the ghetto it goes and i was more of pocket to pay because. there's a financial they're all consolidated it's all owned by the same global ration it's a genocide of the poor that's their post and it's the final solution jake george just more work to get that idea all right susan thanks so much for being on the kaiser report thank you max. state and first talking to us.
welcome back to the kaiser report i'm max kaiser time matta go down under to australia and speak with. us author of extreme money welcome back to the kaiser report nice to be with you max all right let's talk twenty thirteen what do you see is the key economic themes for the new year. well the first thing i think is this is the year in which people are going to realize that economic growth ain't
coming back because i think for the last few years everybody said well we tried this it didn't work on our we've got a new thing it will work and i think people suddenly realize that growth is not coming back at the levels we saw it's a pretty two thousand and seven the second thing which will slow from that i think is that people will focus more intensely on the policy to which is fiscal policy the monetary policy which is zero interest rates as you know we might have negative interest rates at also all the money printing the quantitative easing people will start to ask questions like this is stuff actually work and if so when will it work all right and also the are some accounting for a second because you said the cure he theme in twenty thirteen will be lack of growth now what we've seen in the past is our policymakers when faced with lack of growth they change the definition of growth for example though change how to calculate g.d.p. they'll change how to calculate c.p.i.
now we have a new central banker coming in to england is name is mark carney they're bringing him over from canada he's talking about nominal g.d.p. growth isn't that just basically more of this shuffling around definitions to hide the fact that the economies are in freefall your thoughts. absolutely i think we've got to change that i mean the french are experimenting with gross national happiness so if you live in france and need a few could include things like the amount of garlic in your food and the beauty of women and the sort of length of skirts they g.d.p. would be just monstrous so people will change all the definitions around you're absolutely correct the most funny one of that was argentina in argentina when inflation went through the roof they decided basically to exclude anything which was going up to for us on the basis that nobody could afford it anyway so i think we'll see a lot of that you're absolutely correct and i think that's going to be a theme of more lies more hypocrisy moment appeal ation on the part of politicians because we all know without delivering prosperity they'll have trouble getting
reelected it's just simple as that you're smart fella i've got my own theory that i would like to present a year to get your thoughts on it i call it the zombie economics and it works like this there are those in the economy who have access to money at zero percent so every time prices go up they simply dig deeper into their zero percent infinite credit line so i never feel it those who have to pay three percent or six percent or sixteen percent or thirty percent or a payday loan at four hundred percent they actually feel it when prices go up therefore the central banks are talking about deflation but they're talking to people whose cost of money is and who have an end infinite credit line they live in a parallel world correct. absolutely i mean the classic one is in japan if you actually look at japan that the phrase zombie economics actually comes from japan because after the bank of japan started to flood the system with money print money had zero interest rates what we saw was exactly what you're describing except that
fact financial assets didn't go up in price in japan but in terms of the real economy what we saw was that businesses because they could keep their loads in place didn't sell you know bad assets they didn't do anything they didn't do any of the steps necessary and effectively what the zero interest rates do is a massive transfer of wealth so if you've saved money if you've been a good boy or a good go and all the things that you were taught to do thrift and all of that sort of stuff you basically pay the costs off all the people who've borrowed more importantly as you correctly say will keep borrowing i mean but necchi last year people missis is one of his press conferences admitted that chordate easing has very little impact on the real economy what he's trying to do is based financial asset prices and read from that he's trying to help out the financial sector i mean basically the world is one gigantic carry trade we do you know interest costs and that's what we see and the poor guys of say are going to get killed but you know at
the end of it we have to remember a simple truth people have made bad loans and the bad loans are resolved one of two ways you either write them down or you pretend not to write that down and stretch them out we just retching it out and the people paying it are the savers and that's the tragedy and i wonder how long the rent t.a.a. the middle class savings are being wiped will start to protest not to mention the other group which is the people who don't have jobs the twenty five percent or twenty seven percent in spain but twenty percent in greece the fifteen percent in places like portugal and ireland where are they going to take to the streets and basically case the buildings down i think that's the key issues going forward right so the central banks are stoking social unrest because their definition of their mandate a central bankers is. to act like a hedge fund and to stoke asset prices even though it's destroying the real economy so they are creating the social unrest that you are are you are suggesting it's only going to get worse now one place an economy where we see
a massive distortion is in the sovereign bond prices the u.k. guilt or the sovereign bond market in the u.k. is trading at a three hundred year high treasury bonds in america are trading at a two hundred forty year high when is the bond bubble going to burst you've got bill gross over a pepco suggesting it's going to burst soon that's why he's moving into some other assets when what do you think about this bond bubble bursting is it going to burst in the near term or are they can they keep the ponzi scheme going much longer das. well i hope they can keep the ponzi scheme going and i think it has a bit more to do but you're absolutely correct to my mind sovereign debt and money are synonymous and i think james grant called the moment really well when he said that government bonds basically once gave you risk free return they give you a return for your risk and they just debasing that but the most important thing to understand is why those ills the way they are people seem to have missed the
fundamental fact which is the fed was buying sixty to seventy percent times as high as ninety percent of all new u.s. treasury bond issuance so basically it was like financial masturbation between the u.s. treasury on the one side and the fed were basically circling the money around from each other but i'll give you some idea of how the game is got you were talking about the bank of england and makani but the bank of england has now made quote unquote a profit on its quantitative easing simply because it's creating reserves which doesn't cost anything and is buying deals on the other side and the positive kerry gave them income they had to distribute that up to the government as a dividend and basically the government is going to finance a corporate tax cut from this i had to read the actual announcement about six or seven times trying to work out how do i get in on this but to give you some idea of that this is not uniquely an english experiment in the states what they're talking
about is the fact that the fed issues the bonds the treasury the treasury she has them it buys them and then the arms of the same government so basically what they're talking about is why don't we just forgive the did it and i said well what happens to the balance sheet of the central bank which also all the stuff that's in that's just an accounting technicality this is just a basement of fundamental principles of sound money on a level that we haven't seen but i think the game has got a little bit to go simply because everybody wants to believe nobody wants to look at the other conclusion which would be devastating and damaging to. everybody and nobody wants to get out of that and certainly the politicians i get to lead us into that particular decision making point all right does he talk about financial masturbation and. following up on what's happening in the u.s. they're talking about this trillion dollar platinum coin a magic coin to save america from going over the debt ceiling
cliff and this is of course a favored by the modern money monetary theorists who also would fall into the camp of the financial masturbators i have a feeling what are your thoughts on the magic one trillion dollar platinum coin m.m.t. fandango. oh well this is brilliant actually ever empty which is you know it's. very i actually call it magic money tricks because basically all they saying is they can print money we all know you can print money but at the ultimate point money has to represent something real real goods services and what they forget is if you keep printing money which is the gideon going to which is you remember was the head of the central bank of zimbabwe effectively people just stop using the currency they moved to other things whether it's to precious metals or to no alternative currency and basically this game with the platinum coin is just meaningless at the end of the day you've got to meet that money is just a means to an end it's a claim on real goods and services you go to be able to eat you've got to be able
to buy things and debasing currency debasing trust does not in any shape or form get you further down the path to financial sound but human beings are capable of infinite delusion you and i both know that it will delude ourselves with just a little bit longer right it's also schizo frantic because the same people who are talking about platinum based monetary theory hate goal so of course out of the square that circle now let's move on it's almost been six years since the global financial crisis began there's a new swap clearinghouse and new tier one capital ratios will any of this help and what has yet to be addressed before the system can ever hope to cover using these time again accounting tricks changing the to one ratio there of course are now including gold as one hundred percent margin collateral value in their tier one capital so that seems to be recognition anyway that we will end up on a back on
a gold standard but what about this this type of trickery by the bank of international settlements and others. you'll be amused to know that i was asked my opinion on the central clearinghouse about four years ago and i basically said at that point in time look the fundamental problem of the derivatives market is that there are too many derivatives notional is about six hundred to seven hundred trillion which is ten to twelve times what global g.d.p. is in a single year and that's just too much you've got to reduce it and everybody looks at me like i was insane and gave me all these reasons why that was a not correct and b. could be done and i said it's easy you just make sure that you can only have a derivative when it's a genuine hate and if that was the case the volumes would fall and all this kind of party risk which is why you need the central counterparty in the first place would go away instead of that we've got this very very complicated structure that's been set up which would work because basically the first thing is it's going to be monopolized by ten to twelve banks and they set up the structure they realize it
will lose the battle of transparency and a few other things so what they did was to actually create this structure where they are now the gateway to the c.c.p. for everybody else and so basically it's a way of enshrining the position of the existing money center banks that's all it is but i would go one step further essentially i think until you change a fundamental assumption about the way the financial system works which is the financial system has to be supporting the real economy you can have a financial system which assumes the real economy is sort of just there for them to create financial claims which they can trade as the only basis for an economy and to change that perception you can't do that but to change that perception you've got to weaken the banking lobby and the banking lobby a winning and i think you will see in overdyed on i think was the weekend that basel basically weakened on the liquidity standards that they were going to put in place there's no given them till two thousand and nineteen and somebody actually said to me two thousand and eight i said is that this century or next because it'll
be pushed back we know it'll be pushed back it's being watered down essentially. i don't know why politicians get paid by the people they should just get paid by the banks because that's essentially what's happening all right outside of time thanks so much for being on the common report good to be with you max r.-i and that's all the time we have if you'd like to get in touch with us you can do so you can tweet us kaiser report or on facebook dot com forward slash you can reach us there as well and so next time max guys are saying bye.
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