tv Keiser Report RT July 18, 2013 3:29am-4:01am EDT
to blow your neighbor's it off well that's ok because it's a generic copy no no sane person would allow generic drug producers to have no liability for their product but that's just my opinion. welcome to the kaiser report imax kaiser is big coming quite apparent that quantitative easing is the. monetary policy central banks no problem checking in but there's no way to check out now to explain all this let's turn to herbert yes max keiser well you know that the u.s. federal reserve chairman ben bernanke when he basically alleged that he might taper
one day well the bond pocalypse set upon us and now he's claiming to un taper well i'm not actually going to taper but the question is quantitative easing can it be unwound so to economists look at what's happening in the u.k. and what they found is that central banks and governments have so far profited from q.e. as the central bank purchases interest bearing assets for money as q.e. unwinds those interest bearing assets will obviously be sold and the key question becomes at what price as interest rates would likely be rising and central banks becomes a standstill sellers of financial assets asset prices are likely to fall since q.e. as involved major purchases of financial assets a relatively small fall in asset prices more asset prices that future sell day compared with prices at time of purchase would generate significant losses so basically they're in a situation where right now they could tell their taxpayers that they're making money on quantitative easing however should they seek to stop the program to have
to report losses because of the games aren't based on the ponzi scheme i mean bernie made up got to report every quarter it was investors that they were making money as long as there was a new fresh crop of suckers coming in to feed the. then once they figured out oh wait a minute by these games over then they all lost everything and that's the problem with a four hundred trillion dollar to a quadrillion dollars global derivatives market that has a parallel universe which is sucking interest rate gravitational force field on planet earth infrastructure and economy so there is about as much likely chance of them stopping quantitative easing as there is for the sun to rise in the west and set in the east they've created a parallel universe of a debt sucking black coal monster of interest rate caused that is now some pulling down on the bankers the heads like bernanke and mark carney guys actually feel the
brain cells popping up up up up up up as gravitational force and all of debt just sucked out all the interest payments from these underlying economies and they say well more austerity more austerity because there are cracks. well right now the central bank of england has three hundred seventy five billion pounds worth of these quantitative easing assets and the economists who did this report looked at it and said that even a fall of ten percent of the asset prices therefore they lose thirty seven billion pounds so they have to report that as a loss but also because right now they're in interest bearing assets so basically the bank of england is loaning itself money that actually is called the asset purchase facility lending it money at point five percent interest and then lending it to the government at a higher interest with their guilt but then capturing that spread and giving it to the government to reduce their deficit so. you know if you borrow money from longa
which is a payday lender shop here in the u.k. they charge annual analyze rates of interest a five thousand percent if you're one of these bankers dealing with the bank of england mark carney's new shop. then the rate of interest is negative another word they pay you to take out a loan the bank of england pays h.s.b.c. barclays royal bank of scotland lloyds to take out a loan if i want to the bank of england and i was one of these banks and i borrowed a million dollars i borrowed a million dollars it wouldn't cost me any interest rate of all at all at one go they charge me five thousand percent at the bank of england they pay me two percent they pay me to borrow money that's the difference does any aspect of wires or those huge wealth and income gap in the u.k. and around the world well because if you're on the inside you get paid to borrow money if you're on the outside of the interest rate apartheid wall then you get
charged five thousand percent to borrow money is it any wonder the entire world is all rising so that they conclude this thought experiment is saying that basically they won't be able to unwind without threatening the entire financial stability of the store soon if i put a gun here and said you know you're loaded and then you on the b.b.c. and say wait i'm going to think one of them but i love my mother didn't they got to look at the do the do the detainees efficient markets theory examine the textbook buy a post and you think it's right then i would. it's fraud. well of course this fraud of quantitative easing was introduced because bankers had collapsed the global financial system with their fraudulent derivatives that went boom everywhere so we introduced quantitative easing to help these fraudsters bankers try to manipulate q.e. says bank of england's paul fischer traders are being investigated for attempting
to rip off taxpayers by manipulating quantitative easing as the bank of england desperately tried to rescue the economy two years ago so paul fischer is the bank's executive director for markets and he told m.p.'s on the treasury select committee max he said that the quantitative easing program may have been manipulated by gilt edged market makers gems in october twenty seventh he passed that information on to the financial regulators which is still investigating the case so that's october two thousand and eleven he said he found evidence that they were manipulating the quantitative easing program a few months later by the way david cameron said we have to stop banker bashing so here he knew they were even rigging the system that was there to save the disaster that they themselves encouraged guilty to market makers before i guess that would be the equivalent in the us of the primary dealers which don't believe twenty one
primary dealers so these are the banks that are dealing directly with the fed the government to make markets or to be the interface between fed policy or central bank policy and how those interest rates are played out in this commercial banking system so what you would be charge on a mortgage or what kind of interest rate you get on the certificate of deposit for example so these guild market makers these gems i guess are the u.k. equivalent but yes so they've been caught now a front running the fed or the bank of england and pocketing illicit games just like we found the exact. same thing in america the primary dealers are have been caught front running with the fed are in cahoots with the fed and you are right david cameron knows this information and yet he had a bald face lie to the public he stood up in the house of commons he pounded the dispatch box and he lied through his teeth and said there's nothing wrong with the banking system. and there's george osborne's there like i don't get it done i don't
he can't he can't stop them so from line so the article no this is following on the heels of libel rigging and all the other rigging they've done then they say the latest allegations relate to a reverse auction of gilts conducted by the bank of england on october tenth twenty eleven shortly after q e two started on that day one lender tried to sell gilts the bank at an inflated price official spot of the sudden spike and pulled out of the deal their minds moved to the south of the scam from a few years back to be as were allowing their high rolling clients to manipulate prices of art work higher so that the value of everyone's artwork in everyone's portfolio would be priced higher than kristi's has also been involved in the similar scam but there is very no markets now in the world they're not subject to massive a manipulation and scamming of this sort in large part because of the artificially low interest rates that make it easy to borrow money to commit fraud the easiest way to get rid of all this fraud would be to raise interest rates but they're never
going to do that for the reason you just mentioned because all the assets and all the bank's books would then be marked down by thirty forty fifty sixty percent and then it would be exposed that every major bank in the world is insolvent remember this is not a liquidity crisis this is an insolvency crisis h.s.b.c. barclays lloyds and world bank of scotland are insolvent institutions their liabilities are fifty times greater than any possible configuration or accounting of assets they might ever possibly have yet by the way they don't mention which bank this is a who knows if it's barclays for example which just was fined half. billion dollars in the u.s. for rigging energy markets so how many times do these same guys have to rig another market fundamental fabric of the entire financial system before we say maybe they should go into that traders game over there and stop calling the traders with the d well that's a problem with market fundamentalism as your ideology because they are convinced that if they don't blow the whistle on the baxters then they are sure to place on
the market fundamentalist heaven goes back to pre-enlightenment days a medieval catholic church where the priests are able to sell indulgences to ensure people's passageway into heaven here you've got the mark carney selling fraud ben bernanke selling fraud as a way to guarantee passage of bank stores and to post career option ingratiation haven't so the article knows that since the budget the ten year guilt rate has jumped from one point eight to seven percent to two point two seven two percent a small rise will add one billion pounds to the u.k. fifty billion pounds of debt interest cost next year and two billion pounds in twenty fifteen compared with the government's central forecast in march and by the way you know people out there keep on asking max i thought you said something was going to happen to the bond market who obviously it hasn't obviously these people are so stupid that they don't even deserve to be watching the show. financial darwinism as a if they're too stupid to know the difference between a bull and bear mark in the bond market and they are in that street. going to jumps
and getting high on. twenty twenty so now we're talking about these the quantitative easing programs and how don't want it but they won't be able to because they're going to have to continue to print to continue to make the asset prices rise and so that they can say to the taxpayer that they're earning money well inflation numbers came out the u.k. petrol prices push inflation to highest since april two thousand and twelve consumer price inflation two point nine percent higher than the same month last year with upward pressure from fuel and clothing prices so the retail price inflation. and it's three point three percent the consumer price inflation is two point nine percent and wage inflation is only one point three percent so as you see the normal person on the street that's not connected to the bank of england money printing is of course losing money you know like the american indians. you know who were put on reservations and then the price of booze went up you know they get up to alcohol then they raise the price up and then they all die and there's very few
american indians left same thing with britain's you put into these things called reservations or council estates then you raise the price of alcohol and you raise the price of gasoline and a lot of we're just going to die so that's your final solution you know if your camera knows more smart so you know despite this inflation policy makers have made it clear however that they will take a flexible approach to inflation targeting if the broader economic picture requires it that potentially paves the way for more quantitative easing pumping cash into the economy by buying bonds from financial institutions despite above target inflation and as we said at the top of the show you can have guys front running at the same guys who now need to pay off of course barclays needs to earn some extra income because otherwise they'll go bust because they have to pay this half a billion dollars to u.s. regulators for rigging the energy markets so now in order to help them the bank of england mark carney's going to have to give them half a billion dollars in order to pay the fine for rigging energy markets exactly right
thanks never thanks much bring on the concert for thank you matt don't go away much more coming your way. some of these traditional chili lines the grit and bill that's down from generation . this is a total destruction of the culture of mexico by telling them i mean this is not going to impact asylum in mexico whatever happens. there. were enough starbucks in the in the open in the eighty's in all the. genetically engineered carbs why do you think this country is full of obese and sick people because we have a crappy food system.
is easy. to. eat. and simple question who is behind nine eleven i give you the courtesy of being on your show you should give me the courtesy of answering one simple question the question is whether the death of those people or just the five hundred six thousand some. people were killed off towards i don't mean the goals that were sad before the war were actually achieved during that war and that's the biggest problem.
well going back to the kaiser report i'm max kaiser in our sense of moving to london i've been hanging around pubs a lot and meeting some interesting people including my next guest pete comolli who wrote this excellent book inflation tax which we must talk about right now as a reporter nice to me nice to see you again all right pete my first question tell us what the u.k. inflation rate is at the moment for real there are several different official numbers and then there are the real numbers start about ok the official number is two point nine percent c.p.i. yesterday r.p.i. which i personally think probably a bit closer to the real number is about three point three guys consumer prices and it's i.p.o. the retail price index ok so they say c.p.i. is when they quote they say two point nine percent continue i mean i think what's
interesting is that that number's been going up. the figure yesterday that they talk about increases in close prices and petrol prices but i think if you dig down into the actual report i think what's interesting is that the main thing that's driving those prices higher is government regulated prices and indeed if you look in to what moving king was saying in his inflation reports in the last month or so prior to him going that was exactly the point he was making if you look at the key things that are going up education costs are up about twenty percent. prices for energy things like electricity and gas are up about nine percent train fares are up six percent. tobacco coal so i just i never said all of those things are much higher than the right and they're talking about government government related elements to the to these numbers increasing in price of course you're just talking
a lot about law things have been privatized education has been privatized health is get out to be privatized the n.h.s. they want it to be more privatized these real system transportation system privatized and then when they were they were told the british public were told that these things being more efficient way would help drive greater efficiency what are you telling me that privatization is actually in profit creating inflation it can be because the contracts that were written law if you take the rail franchise contracts they were written so that the price increases would be at r.p.i. plus one percent each year so you have built in a permanent rate increase which wouldn't necessarily have been before i mean i want to talk about something that came up recently because in the us there's a lot of discussion about how the inflation reported numbers of two and a half percent percent or so actually don't take into consideration like energy costs and food costs that the real red inflation if you were to dig down into the numbers and find out the actual price movements you come up with an eight or nine
percent flat rate in the us in the u.k. ever talking to you you're saying something similar is going on there's there's a there's a big actual inflation rates as an expressed as a percentage of it to really include actual representation of stuff that people buy at the shops is a lot higher i think it's higher i don't think it's a lot higher i think is the key point i think they've actually done a fairly good job with indices like our p.r.i. the big problem is that our people what r.b.s. is above three percent now it's above is about three point three percent three point three percent ok what the they said the stated target for bank of england's two percent yeah ok that's a huge miss it is if there's no cricket. if i knew anything about cricket i could make an appropriate joke there but i don't so i can't really i won't however. if it were something like that you would be disqualified because you are of all you've done a terrible job correct and indeed if you read their latest inflation report they reckon the inflation rate is going to carry on going up and it's not predicted to
come down and so yes they are missing the target but this is quantitative easing they say they're fighting deflation and yet inflation keeps going higher are they how do they square that circle they're saying we're fighting deflation so we're going to keep qualitative easing rolling and yet inflation rates are actually rising so there's a complete disconnect there but inflation is going up probably for other reasons apart from just printing money or not all the printing money filling in the gap from the money that was destroyed inflation as the said is in this country is primarily gone up over the years for a couple of reasons one is external oil prices going up devaluations of the pound and also. to some extent printing money all of those factors have contributed to it and they're and they're all still there i mean i think the one that's probably not being talked about possibly why they're expecting inflation rates to go up later in the year is what's happening to all prices and i don't know if you've noticed you
know if you look at. brant crude prices they have massively spiked up over the last few weeks and if they carry on the way they are going to break out of where they've been for the last couple of years ok well you know yes we're going to take you can place into five percent. i reckon you could go to five percent we're going to go to the pound sterling. i think the pound sterling has been in a long term decline for the last hundred years mervyn king was talking it down. earlier in the year and it lost nearly ten percent before it recovered a bit but again it's broken out of its trading channels i think the print is going down. this book inflation tax will run out and get it immediately if you don't already have a copy or buy three copies are going away as gifts make a great. stocking stuffer as we get closer to christmas and i'm getting close to christmas sorry but. you just said something when i have to ask you about this and dig it out a little bit deeper you're saying that the price of oil is going up it's going up
of course was quoted around the world quarter in dollars correct rise of oil and yet there is a slowdown in a connelly's around the world slowdown in china there's a slowdown in the u.s. slowdown in the u.k. there's so where does this price fall in oil come from if you see deceleration in the global economy if not for a money printing i don't understand i have to say it's not primarily money printing that's my point being ok i totally agree with you i think that rise in oil prices are because of the host of the show that you agree with me or you have a more academic reasons no i don't i i would i would i think it's related to to be easing like you're saying because that money is going to go somewhere it's going into stocks the whole money is coming out of gold now it's going into other commodities light and i think that's why oil prices going up ok that's my point goes higher money yeah so which is money printing it's not going into the real economy you know the banks are hoarding that cash yeah and they kind of keep it
internally within themselves and their customers for the most part which include people who are speculating on oil speculating on other agricultural products so you have this strange two tier economy where the speculators are being given money essentially and that there are other economy is suffering and they're being asked to impose austerity bellamy talk about savers for a second because inflation is a tax on savers. is it not because the savers the people who have money in these bank accounts that are getting less than one percent are wanted to send in return because of quantitative easing which is fosli being perpetrated as a result of a false definition of deflation but it's just a subsidy they're just transferring wealth from savers to speculators right that is indeed one of the key things that's going on i mean it isn't just savers that are being affected it's also pensions because they are the counter party to a lot of government debt and who owns the pensions it's us that owns the pensions so both of those parties are being cut so i think the thing that. a lot of people
don't really appreciate is what changed after quantitative easing came in and how big an impact that is because even back in two thousand and nine four years ago you could go walk into any building society and get interest rates of about six percent in this country and inflation at that time was only two or three percent so even nothing paid tax you could still get a return on your money that all changed after constitutive easing in the latest funding for lending is just made that even worse i mean i did some calculations the other day that over the last four years the average saver has lost around about eleven percent of the value of wealth in a bank or building society and what i find incredible is that in cyprus in march they were talking about taking away six point seven five percent of people's money or nine point nine percent if they had a lot of it and they were out on the street protesting in this country they've taken away eleven percent in the last four years and there's no one on the street i
mean i find that incredible that because it wasn't a speculation there was people have money in their houses house prices are going up which as far as god is helpful help the land scheme or some other forgot this game and so they've got real estate prices and they say an article about inflation because i've got a big mortgage there's a couple problems that number one a problem crashing your case darling of the way out the gains and number two people are tracker rate so they mitigate any benefit that they get from the so-called rising place because your interest is going to just every quarter the other problem is that it's ok to have you know take out more debts when inflation goes up but it's going to be wage inflation that goes up the big problem at the moment is that wages aren't going up i mean the latest figures i've seen are about point nine percent annual wage inflation and total household income has hardly changed at all for the latest four years of statistics i think the average gross
income of people in this country is something that's so. one hundred thirteen pounds a week and four years prior to that it was exactly seven hundred thirteen pounds a week let me just ignore changed because thirty years ago people talked about inflation or deflation and occlude wages were part of that equation but starting with about twenty years ago started at the factory or the reagan era we talk about assets in terms of inflation and deflation and never talk about wages anymore as if wages just don't matter anymore whatsoever yeah i mean it's it's very difficult to define exactly what you mean by inflation you you have to take a definition of it personally i think the current way that we define it in the u.k. which is the way it was with r.p.i. which largely included everything that people spend is a fairly good way of doing it yes there were things missing from it like it didn't include taxation and certain other elements but it wasn't as bad as c.p.r. which doesn't include any of the higher costs i mean you know there were big issues
with that i mean that c.p.i. was never ever really meant to be a general inflation measure it was only ever created so that we could all join the mastery treaty and join the euro and that's an instruction to the kind of problems it's not greece and or. the various countries italy entering the euro they cooked the books they juggle the definitions they decide that inflation means that it doesn't mean that they're exactly look at the money supply or go look at my spy wages you know we've got about a minute left i want to touch on something which i think is kind of interesting and that is that in the u.s. when they report c.p.i. they do so in a way that goes to the said donnegan just went where they were for example say that well going to substitute a hamburger for steak you know that's the price of the hamburger is less than steak inflation is cheaper or they'll say this computer has twice the the processing capacity therefore it's half as expensive as the. i talked about this and you're saying no we don't do that here what we use is geometric mean so geometric means.
is roughly the equivalent of how the u.k. government gets away with scamming the public by misreporting inflation geometric means is just a different way using to calculate the average change in prices but what it does mean is that the meet the price index you get with c.p.i. on average is about one percent low. which is a big difference. for what is just a technical statistical change in the way you calculate and it's very debatable over whether a geometric mean is the right way it's a little bit too much to say that it's being purposefully dishonest. you can say that. you know and uses math geometric means to deceive you suckers thanks so much for being on the thanks max all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i'd
like to thank our guests calmly author of the inflation you can find on amazon if you'd like to get in touch tweet us at kaiser reporting so next time. when the great spade blind to what is happening in their country. the american dream is disappearing. the houses with guard. the poor are left hopeless the streets are full of angry crowns fighting against.
that is. breaking news here on our t.v. you're looking live pictures of russian anti-corruption campaign or ali sina volleys convicted of embezzlement acord finds him guilty of a scheme to defraud a company olive of half a million dollars. once again these are live pictures there from the courthouse. at exploiting the chaos of conflict is said to be drawing up plans for its own islamist state carved out all the ruins of war torn syria's north with control over oil revenue and arms routes. and a competition is launched in britain for the best roadmap to leave the european union following the government's promise to hold a referendum on whether the u.k. should remain a member.