tv Boom Bust RT July 18, 2014 4:29pm-5:01pm EDT
reversals of fortune and stalemate the harder the western backed regime in kiev assaults to resistance in the east the more the resistance is able to push back washington support of a military solution is flogging as well as pushing close off you where. the stability. she said. you called so quick. to call not should you. meet will.
hello there i'm marinated this is boom bust and these are some of the stories that we're tracking for you today. first up let's call it the everything bubble why because little bit tony right now everything that is could the feds a wildly wildly accommodating monetary policy trigger the next world financial crisis we look into coming right up then chris martenson is on the show the brains behind peak prosperity dot com sat down with want to discuss his video the crash course which focuses on the very subject financial crisis and in today's big deal edward harris and i are discussing the latest companies from the world require it
all starts this very moment. with. our lead story today the next crisis and the central banks that are causing it now does the federal reserve while lee accommodative super low interest rates and bond buying program risk triggering the next world financial crisis the answer yeah likely yes so wednesday the federal reserve released its latest minutes from the june seventeenth and eighteenth open market committee meeting and the minutes show that if the economy progresses as the f o m c expects it will the final reduction of asset purchases will occur following the f o m c is
a tobar meeting the ultra easy monetary policy being employed by major central banks around the world has created the ultimate bubble and sovereign debt that's the big story that we're running with here now. new york times writes welcome to the everything boom and quite possibly the everything bubble around the world nearly every asset class is expensive by historical standards stocks and bonds emerging markets and advanced economies urban office towers and iowa farmland you name it and it is trading at prices that are high by historical standards relative to fundamentals so what's the inverse of all this relatively low returns for investors obviously and as frustrating as the situation can be for investors looking for bigger better returns the more pressing question is what happens next for the global economy that's a big question you know how long can this low return environment last and what a risk of being created that might be realized if and when the everything boom
busts now market veteran stephen roach warns monetary accommodation to the point of ignoring the stresses and strains of financial stability and what they mean for asset markets and credit markets is something that needs to be seriously rethought . it's not hard to see why investors are expressing little concern over this the fed has injected more than three trillion dollars into the global economy through its bond purchase programs these c b cut its deposit rate to minus zero point one percent in june and has provided about one trillion dollars of emergency loans to banks and japan's central bank has been buying about seven trillion yen of bonds a month through its own q.e. program so here's the thing i don't know how this is all going to end and mine's greater than my own they don't know either but what i do know is that it will end eventually and likely in spectacular fashion. because.
optimism in the us is slowly returning given the largely positive economic indicators as of late but as you heard from my headline the federal reserve in its effort to pick up the slack of non existent fiscal policy might be creating another bubble in the process now chris martenson of peak prosperity dot com largely agrees with this general view and i sat down with chris to discuss his video series called the crash course which was released before the great financial crisis and i asked him what is changed since the release of these videos here's what he had to say. you know we had an opportunity to revisit all of the data look at everything my team and i we went through every piece of data you know two thousand and eight what six years ago now so what we wanted to do was updated bring all of the data into current format and also ask ourselves what's really changed in the story where did we get things wrong what did we get right and so this new version has all the data
includes shale oil shale gas all of those developments and here's the punchline many of the trends that we saw in the first place. we warned about in the concern to spec in two thousand and eight those are still with us in many cases they're larger. now i understand they are up to a crash course in releasing a new video series is that right that's absolutely right and will you we talk about the new problems that you just mentioned before absolutely so we've got two things out there full first is the full crash course that's twenty eight chapters now goes into everything the economy energy the environment our thesis is you have to look at all three of these together now you can't look at any one in isolation like the federal reserve wants to just look at money in korea money into the situation and somehow things will work so we've got that full one and then one of the most common requests we got was for a much shorter version that you could help spread the word show it to friends family neighbors and we call that the excel aerated crash course that's out as well
just fifty three minutes long and it weaves all of those pieces together and i think does a very good job of explaining what we're seeing in the world today so here's my question why do you think the next twenty years will be nothing like the last twenty years oh aaron for the simple reason that we don't have cheap oil anymore you know we always had cheap oil we've always been able to park that into the equation is an assumed thing that just happens when you dump more money into the equation we don't have that anymore it doesn't matter how much technology advances at this point you know that the shale plays the ultra deep water finds the tar sands those things are expensive to prosecute and so we've got expensive oil now slowly swapping out the cheap oil that we've built everything around now this is a very interesting and loaded statement that the next twenty years are going to be unlike the last twenty years because everybody in power everybody sitting on the federal reserve board in washington d.c. and all the institutions they think they know how the world works based on the fact
that of how operated under cheap oil we don't have them anymore and we don't see anybody in power really dealing with that concept and we think it's very important . pres how much will technology be able to overcome some of the climat excuse me and climactic resource and demographic constraints that we face well technology can certainly play a role we'd feel a lot better at peak prosperity if we collectively had started applying technology twenty thirty years ago you know there's a lot we could do for instance natural gas we could be swift swapping out to natural gas using it for transportation using it for more of our electrical generation needs things like that and we're not really doing that at this point in time we're waiting for the market to figure this out we don't think we have time for the market to figure out how to deliver to us natural gas powered vehicles we think that what we see in the oil data all around the world tells us that we are
pretty much at max capacity right now for traditional conventional oil we think that we're going to see a peak of that my the world stage in terms of exports starting probably now but by twenty sixteen seventeen that's really going to start to bite that's not a lot of time and so we really believe that technology can play a role but every day that we wait to apply that technology the harder it's going to be to apply the technology in the less its impact is actually going to be now chris this is a little off script here but one of our producers here jonathan can hear it said to me after you were on the last time you know we might have had people oil but i don't think that we've had peak consumption and i thought i was that was quite astute but i want to ask you if we haven't hit peak consumption how does this play out in the markets. well aaron every single market in the world be those the bond markets which are the largest markets that you know the just the debt in the o.e.c.d. countries is now over one hundred trillion dollars with a t trillion we've got the global equity markets both of those rely on this
assumption that we're going to have growth you know you wouldn't loan somebody one hundred trillion dollars if you didn't think they were going to play the interest and the principal back what's the interest represent in the story it represents growth so called the weighted average interest in the bond market three four percent whatever you want to call it today without three or four percent growth in the future it becomes impossible to to pay those debts back and so that's the circumstance where in this idea around are we at peak consumption i don't know yet people definitely want to consume we want the economy to grow our financial system needs it to grow here's the part of the story that gets really interesting we don't have the oil coming out of the ground like we need in order to get the kinds of growth that we want to see in the past hey i think it explains a lot it explains why oil's over one hundred a barrel it explains why the trillions dumped in by the central banks has not ignited the kind of economic recovery we expected and even required in the system so those are some of the big risks that we look at now chris what about the ability
for policy responses to and the specter of overindebtedness malinvestment and cronyism now don't you think one more crisis just only one could be enough to force a rethink of policy altogether. well it would be nice if it if it did i thought two thousand and eight was our natural shot across the bow we should have done some things what could we have done we could have said wow derivatives are dangerous let's have fewer of them we could've said too big to fail doesn't work let's make things not too big to fail we could have said wow sovereign debt loads were kind of too high let's see if we can bring those backwards air and each one of those three things is now much larger much worse than it was even in two thousand and eight so those would have been good times for policy to come forward and say hey just on an economic basis we live beyond our means for about thirty or forty years and by that i mean we were borrowing at about twice the rate that our income was growing so debts grew at eight percent per annum for forty years straight the income the
g.d.p. under that grew it about four percent so what we're looking at here is an idea that yeah we could make different decisions but nobody's been willing to bite that bullet yet even the vaunted austerity that we see in europe i don't see it when you look at debt to g.d.p. numbers in any of the nations that are apparently struggling under austerity they're all still spending faster than their incomes growing now we were debating these issues in the office and wondering how many resources rich countries would put to bear to deal with the strains of resource depletion or climatic stress now i mean aren't rich countries in a much better position in this score than say you know a bangladesh or an a maybe a oh absolutely i think the winners and losers as we go forward is clearly defined by who has access to resources and who doesn't so resource poor nations have always been poor i think that dividing line just gets a little bit more stark as we go forward now you mentioned wealthy nations versus not wealthy nations if the nation has the ability to keep importing the resources
it needs it will obviously have a much better chance at the appearance if not the reality of prosperity the nations that can't do that this is of course the risk. that was chris martenson a pic prosperity dot com. time now for a very quick break but stick around because when we return a genuinely on land of the big question foundation is alive on the show she's bringing us all the latest and greatest from the world of bitcoin and in today's big deal edward harris and i are sticking with this whole big flying theme and we're discussing the latest from the wider world of their currencies outside of a client and remember you can see all segments featured in today's show on you tube and you tube dot com slash their boats are cheap and on hulu a new dot com slash room dash bus and as we go to break here are a look at some your closing numbers the bell about.
dramas that can't be ignored. story others you know. things change the world right now. picture. from a to. brooklyn. this was a washington well it's a miss the trees being suggested add to the list of numbers among the many candidates for the office even going to issues that actually back you and doesn't do too much for ad revenue biotech agriculture giant tits on
a seventy six year old american farmer east india fallout do you think this is going to create for the cia do you think this is what's triggering a race for so long just to come but it's also the largest debtor nation in the history of breaking the set is mostly about alternatives to the status quo but when i give you all those points to the working poor the american dream the next day we're just trying to survive it's time for americans and lawmakers in washington to wake up and start talking about the real causes. i would rather as questions to people in positions of power instead of speaking on
their behalf and that's why you can find my show larry king now right here on our t.v. question for. in the midst of the federal reserve's excludes the ordinary monetary experiment also known as q.e. is the slow and gradual rise a bit coin now crypto currencies exist outside of the few currency world of central banks and as this monetary experiment continues. it seems like the cryptocurrency world has only been gaining steam even despite facing setbacks from the melt down major exchange mt gox so we wanted to check in with genuinely england of the bitcoin foundation to get the latest on what's going on in the world of bitcoin welcome back to the show and first and foremost i apologize for but butchering your
name so many times a month it's too easy that's a problem so i want to start off by asking you know. the place a bit. of the possible months particularly since the last time we spoke or do you think that this will have a positive impact on the acceptance of bitcoin as a proper currency no well i think again the price of oil actually doesn't matter what matters is the number of merchants that we're seeing bring on big queen as a payment now we have mainstream retailers like one hundred flowers rewards pedia dot com where you can book your travel from your flights to your hotels completely quiet or you know send your mom flowers or give one hundred flowers and i think as you see more merchants adopt it quite then you're going to see consumer confidence and then it solves that chicken and egg problem of ok is the coin valuable where it is because we are seeing companies accept them and i'm glad that you bring that up as i want to talk more about retailers that are accepted but first i want to ask
you know between twenty fourteen twenty fourteen in amsterdam you were just there what were some of the bigger issues and ideas discussed wall there what's the world a big chattering about well the big. annual conference and the theme of the conference is building the digital economy now the reason why folks we focus on that is because we want to remind people you know become a still experimental we're five and a half years old as of july and incredible if you like it's been around much longer i know but it's only five and a half it will baby and i average takes anywhere from ten to twenty years for any new technology to really go. and so one of the themes is building the digital economy and i think a lot of people left the conference with a sense of renewed optimism because now they've met these players face to face and there's a spirit of collaboration and really a call for investors and entrepreneurs if you want to build a startup now's the time it's great no one asked about you you mentioned one hundred flowers inexpedient which i didn't know about the both of them except
a big one but you were kids and online retailer and it's going to accepting big point as well so do you think this is a watershed moment in terms of you know really really taking a position in the world of payment processing systems absolutely as you see more and more merchants accepting the question well why well it's because they get a competitive advantage remember went over start started accepting the first day they had one hundred twenty thousand dollars in sales by march they had three million in sales mostly new clients and so i mean if you're a business person a smart business move just accept that quaint because will introduce you to new customers in and. around the world and help your bottom line and you know i understand the point is working with quick books apparently yes. payments to small businesses ok tell me a little bit about you know payment systems for small businesses and how that can replace maybe one day replace the traditional idea of a credit card or
a debit card well so small businesses especially if you think about your mom and pop coffee shop you know they're paying anywhere from three to twelve percent on every single transaction that's why they don't take usually credit card. actions less than five dollars because they lose money in the long run and so for a small business especially if they start accepting big transactions and you work with a company like quimby so you work with a company like they pay you know they assume all the risk in the volatility of the price because we're to new technology but as a small business you immediately can add that three top percent to your bottom line i mean that's a huge huge and sounds like an appropriate business decision to me but i want to read you a quote here you know the state of california has legalized corn and other digital currencies and this is a quote from roger dickinson and now he writes in an era of evolving payment methods from amazon coins to starbucks stars it is important to me it is impractical to ignore the growing use of cash alternatives this bill is intended to
fine tune current laws to address californians payment habits in the mobile and digital fields now this sounds like a very positive development for pickling but what exactly you know have they allowed people to do with bitcoin in terms of a payment in california how does that work logistically well. as you know you know culture is downstream from government and just because the government says you know that something is or isn't. permissible doesn't necessarily mean that it's going to motivate the market to grow however it does help and so we applaud california for their position we think that you know they realize that corn and other virtual payment methods the you know their ideas because time has come. now i understand that big foundation has recently acquired a lobbying firm i want to know what are the main issues of the big foundation you will be focusing on view of this lobbying firm here in d.c. so we haven't acquired
a lobbying firm but we've contracted out an outside lobbying firm and what they will be doing so jim harper is our global policy council and he is the thought leader in terms of providing policy. thought leadership but also coordinating with governments around the world now on the ground here in d.c. are outside lobbying for first and french they're going to be doing the day to day visits to hill staffers and hill members and introducing them to decline teaching on what it is what it isn't the social economic benefits and just demystifying and really in doing the relationship building. and you know is this a very new thing for you guys and it has this been in the works if you want to do this for a while and just didn't get around to it what's the process it's definitely something that we've considered for a long time our first step was to bring jim on so that he can you know build out the strategy of the operation but it's also you know in the last couple weeks we've brought on four additional gold members and
a platinum member and what that means is as a foundation you know these companies are trusting us to do the interfacing with lawmakers and regulators so that they can go focus on building the business and so with all with this influx of new industry membership we've been able to stand. expanding grow operations it's really amazing though we only have thirty seconds left but i want to quickly ask you about security you know more retailers are going to accept and become because obviously brings up the idea of better security whereas because i'm standing right now in term security better or worse than i was six months ago what's the story well so when it comes to a big point security i think you mean in terms of storing. data so starting points every day we're seeing new companies come up with new businesses and new services to help you as a consumer a better story or frequent because if you're an everyday joe and you don't know how to code your own secure wallet right yeah you want to go with a company and so like just last week zap oh you know they want to be the first in the just received forty million dollars that you know that zero zero zero zero zero
x. a p. not that sure doesn't mean you're going to different just yes and they just received forty million dollars that's the largest venture funding around today to build secure ways for people to genuinely it's always a pleasure talking to you thank you so much for coming in and we have to back on very soon that's all for now big deal time for me and upward. big deal time with my body and yes and today out and i are discussing the latest updates in the world of big point now people might have just missed it you know even six months past this cryptocurrency seems like it has a bit of staying power right now and one way for the cryptocurrency to gain in
popularity or legitimacy is when people start accepting them for payments obviously like we just spoke about overstock dot com was an early adopter but now it's more recognizable names have joined the fray so can you tell me which one of those companies. other than one hundred flowers which is a million which you know will your interest in you have you guys talked about quick in that into it virgin those are some of the other names in a new egg obviously which you talked to. about a lot of major retailers and i thought it was interesting in terms of what you were talking to her about she was she said something that i that i would say which is that when there's a chicken and egg really it's about the payment for the retailer you know i know some people who work in the payment processing industry and they're trying to get off the digital payment system and they tell me that basically it's very important that your payment system is available for people to start using it i mean the
hardcore people will take care of it no matter what but when you want to get a massive sort of broad base of acceptance it has to actually be available to use in many different locations it has to be a broad base there has to be a lot of people interested in you know what does this tell you about the cryptocurrency is the study in terms of itself is this a real currency a real thing that's that's game popularity well you know i think that even though it does i think it does matter what the price big point is and that is a good thing that it's been stable but i think what it says more than anything is that as a payments platform bitcoin is for real and that it will continue to thrive and move forward i think that now that we've sort of left the ultra volatile state of the currency that's always a good thing right but you know now we're seeing more retailers get in there was seen a more robust network of companies that are in there coming up with new innovative
ideas about how to make this a really good platform and i think that's going to continue now into its service called pay by coin apparently allow small business owners to accept payment so here's the question do you think this is more important for people to have declined you know to buy. i with them or to you know small businesses to accept paper and which ones which ones are actually going to yeah i'm going back to what we were just saying before i agree with about the fact that it is the retailers that are more important and that was interesting that what she had to say about small business is the fact that your small businesses have this huge nugget to deal with in terms of the percentage costs for credit card those existing payment processing system to the degree that big calling can get in there it will small businesses i think that's a great thing now security is obviously a very big topic with us and we saw people get really really spooked after mt cox well that was that was the staple of the tried and true bank if you will or your center for storing purchasing training but you know marc andreessen horowitz
recently participated in this idea of balts which is quite. quite bases evolved which basically is a place to put your money your being right here i think in part to believe it is like a savings account right exactly what do you think about this and what does it say in term security for pick point. so i mean the idea is basically you don't need if you have a savings account you will need access to your body of immediately if you have a checking account you need to immediately write so they store the money in the vault in a different location and you have to go through much more security in order to get access to that money and the great thing about it is is that really what they're doing is they're saying that we're taking on the security features that you would traditionally in any financial institution it's almost like a bank holiday is becoming a bet there you go it's the first trip to a currency bank and as always thank you that's all the time we have for now but chris should also mine at facebook facebook dot com slash the best our team and
please tweet us at erin aid at edward and it's from all of us here boom bust thank you for watching to see you tomorrow. i'm abby martin the stories we cover here you're not going to hear any right other big story the pastor that lives there is a reason they don't want him to now. that we. now let's break the set. goals for the. science technology innovation called the least developed minutes from around russia we've got the future covered. reversals of fortune and stalemate the harder the western backed regime in kiev assaults the resistance in
the east the more the resistance is able to push back washington support of a military solution is flagging as well as punishing those popular. missions are forced. to. look at the finish line of the boston marathon. bombing hearing. your friend post a photo from a vacation you can't afford. to different. the boss repeats the same old joke of course you like. your ex-girlfriend still tends to rejection poetry keep. norris. we
post only what really matters at r.t. to your facebook news feed. coming up on our team would continue to follow breaking news of the down malaysia airlines jet in eastern ukraine we have extensive coverage of the crash site and how the world is reacting to the news that it was shot out of the sky. and the violence in gaza a school it's israeli defense forces of launched a ground invasion as the death toll rises the latest on the middle eastern crisis coming up. it's friday july eighteenth five pm in washington d.c. i'm a mere idea that you're watching our team.