tv [untitled] RT July 22, 2010 7:00pm-7:30pm EDT
the separatist movements that a dangerous precedent has been set. and a fender or a victim of racism an arab israeli. on bars after having consensual sex with a jewish woman she complained to police afterwards saying he tricked her into believing he was also a jew. and a ruling against the ledge. moscow has been put off while four of the suspects go through psychiatric tests racially motivated birders and if found guilty face life behind bars. those are the headlines and up next our financial guru. stacy herbert delve deep into low standards in the world of high finance stay with us.
welcome to the kaiser report with me max kaiser and stacy herbert stacey i don't know if you start or not but the washington post reported on something they're calling top secret america two thousand companies in the u.s. are involved in spying effectively on americans and people all over the world and we know that the reason they're doing this is to help them manipulate markets around the world and trade out inside information and i saw something interesting on the financial times today talking about the cocoa market the fact that it's being manipulated up dramatically right now and causing starvation in countries in
africa of course where the price of cocoa is now absolutely destroying the economies there and they're saying that the markets are not to blame is the fact that the information about the supply and demand is absent well they should contact top secret america those two thousand companies that track all the data on these wrong materials around the world for their own personal gain is it any wonder that the wealth and income gaps in america are now at historic highs if you've got two thousand companies doing the work for the american oligarchs and everyone else is at a complete disadvantage that's not a free market competition that's rigged market capitalism as we've been talking about on this show stacy herbert what else you got max some parents are now stealing their children's credit yes this is good morning america and they're reporting on an alarming new trend of desperate parents in america stealing their own children's identity for financial gain now apparently according to linda foley
of the identity theft resource center parents are privy to children's information and if they're desperate enough or if they're that type of person they seem to have . no reluctance using their children social security number so if they're that type of person but also if that sort of nation run makes sense now why politicians like sarah palin are against abortion so you see here you have the leaders of the nation greenspan backs and to bush tax cuts congress according to alan greenspan should let all of former president bush's two thousand and one and two thousand and three tax cuts expire to cut the long term deficit mr greenspan support of course helped persuade congress to pass these tax cuts in two thousand and one it's trillions in tax cuts and yet spending wasn't reduced now their revenue was reduced to the government but spending accelerated because of as you pointed out in the beginning this huge expansion of the fourth branch of government now which is the
surveillance state with borrowed money you know reagan wasn't a tax and spend politician he was a basically a borrow and spend politician and he borrow the country into the it's current state of bankruptcy well now alan greenspan is saying oops i shouldn't have persuaded you to do that of course this is his like deathbed conversion saying oh i'm sorry i sinned the maestro is a fraud we've been saying that for years his policies are really on on work the ball and that all he did was stoke the biggest bubble in history and particularly after nine eleven they brought interest rates down to levels that increased the borrowing spigot to levels now that only financed this surveillance state top secret america fourth branch of government state and did absolutely nothing for the general population and now finds itself in the vast majority of states coast to coast in negative equity what they did with that broad money going
to the housing market and now they're getting a loan act the housing market was used to collateralize these debts into all these derivatives which were then sold to europe which. kept this ponzi scheme stealing from the american population going so american banks sold us junk to europe thus continuing the whole ponzi for another three or four years after tom olt debt worries ease in europe just two months ago europe's sovereign debt problem seemed grave enough to imperil the global economic recovery now at least some investors are treating it as the crisis that wasn't they highlight just two facts spain held an auction of fifteen year bonds last week that went off without a hitch moody's investor service downgraded portugal's debt and yet investors didn't seem concerned no i'll direct your attention to have one i saw just a few days ago and all put up on screen there greece and spain had the fortitude to kick out goldman sachs in fact access the next headline europe freezes out goldman
sachs so according to data from deal logic greece spain france and italy have all denied the bank a leading role in their sovereign bond sales so greece which used goldman in a bond sale this year is practically at war with the bank the press is acting as if it's a mystery like why suddenly is europe having no problem selling their debt but before you had goldman sachs was the primary dealer and yet they were betting against their own client just like in america the deal seems to be bet against your children bet against the future still from the future steal from your population and apparently when you remove that element of the equation your economy grows like a real free market right i mean you've got a war on terror and it's interpreted in two different ways in the united states are going after men in caves that are probably long sense departed and in europe they're getting rid of the real terrorists goldman sachs and as a result their economies are now doing much better certainly they're able to sell
their debt easier now so francis the article says hasn't used goldman in three years quote french people would. in the streets if we chose goldman said a person familiar with the french treasury so this is another important ingredient where the american population has been plundered goldman sachs being the primary front person for it whether it was hank paulson or let lloyd blankfein or timothy geitner on behalf of goldman sachs plundering the economy but there's been very little rioting in the streets against the bankers there's been riding in the streets against their fellow citizens but in europe you have resistance from the population to this sort of behavior now i'm trying something myself in france when everyone anyone is caught stealing introducing the phrase they're committing a goldman goldman goldman so goldman becomes a basically a synonym for stealing larceny because eventually the dictionary will have to make
like a p.t. it will have to make this change to the definition for stealing it will now be lloyd blankfein photo and wikipedia is the very definition of larceny stealing and corruption you know goldman sachs was agreed to pay five hundred fifty million dollars fine this week to the f.c.c. for misleading investors about these mortgage backed securities and you know to americans i'm sure that this looks like justice nobody has received any criminal fine for this they're just paying a five hundred fifty million dollars fine. which in the context of hundreds of billions of dollars seven hundred fifty billion dollars handed to them by former goldman c.e.o. hank paulson this seems like a small change to me but of course they don't actually pay that money they just borrow that money from the government or from the taxpayer and then to pay the interest on the loan they actually engage in more market rigging more high frequency trading more front running more high speed trading more flash trading so they actually destabilize the market because they need to go in there and steal
more more more to payback the loan that they got from the government to pay back the fine and of course this destabilizes market so this is the way suicide bankers like lloyd blankfein operate they don't think twice about blowing themselves up their economy their country and they're doing a fine job of it meanwhile europe is put up the barriers and said no more financial terrorists no more goldman sachs and presumably j.p. morgan as well well you know actually germany this week has just launched a national suicide bomber hotline not a suicide hotline so perhaps lloyd blankfein next time he feels the inclination to destroy an economy around the world maybe you could call this suicide hotline suicide bomber hotline well they should put the plenty of phones in frankfurt that's were all the suicide bankers in germany are working and any time they feel like hitting a fat finger trade or putting on a collateralized debt obligation collateralized but nothing but you know disease toxic waste that is put through the extruder of somebody's quantitative
analysis and codification of an algorithm that only pays off in the basis of the belly button lint being smoked by some ex former fed chairman hit the suicide banker hot line this brings me on to the next headline because where have all of the assets and wealth and future wealth of america been sold off to for pennies on the dollar basically so all the. jobs have been exported to wear china all of the assets have been sold off to where china who own many of the u.s. treasury bonds but also the housing bonds fannie and freddie bonds so china should cut u.s. treasury holdings economist says so this is two economists in the state media. former academic advisor to the central bank wrote that although assets and other currencies and forms are not ideal replacement for u.s. treasury bonds diversification should be a basic principle when demand for u.s.
treasury securities a strong it's a rare opportunity for us to gradually pull back so these are the same sort of you know speaking of alan greenspan he's to send subtle signals to the market insiders about what his next move was of course nobody in the population knew how to read alan greenspan but he was sending them signals of what to do to protect themselves these are the same sort of equivalent in china these economists are telling people what the program will be very soon now shang money and another economist who works with the state told the paper also that china should invest more of its two point five trillion of foreign exchange reserves and hard assets such as gold well they're buying they're selling the dollar on rallies and they're buying gold on tips is to china put any time gold comes in the price moves down john is there bye bye bye so one way and they've got that fantastic because it goes with the previous story about the europeans holding all these debts now the europeans hold the debts
that are denominated in dollars so every time another round of the financial system collapses the europeans have to buy dollars in order to close these bogus debts so the chinese know that there's always a buyer basically a forced buyer of the of these debts that they hold that's right when two thousand and eight when we saw massive unwinding the dollar rally because for that exact reason to get out of the dollar you had a buy dollars paradoxically enough but the effect of that paradox. unwinding dollar trade is a winning until the point where the dollar gets to the edge of the cliff and then. and another thing you know as we've sent all of our wealth over to china is shown in this headline china now world's biggest energy user so china overtook the u.s. last year to become the world's biggest energy user the international energy agency said this week now this makes beijing's new status as expected to make it more influential in global energy markets in determining prices and how it is used
well in israel but of my friends with china real quick because saudi arabia's looking like they're going to be courting favor of with another country other than the united states but this also in terms of the currency now this is another leg down for the u.s. currency because china as you know can say they're playing nice on the global markets by revaluing their yuan letting it float up and of course that gives their own consumers more purchasing power as they're able to buy more oil because thanks to the saudis they're willing to price it in this junk currency of the u.s. dollar so the chinese can make it very easy or a nice for their own population fantastic one quick final headline to go with this whole american style capitalism of just stealing from the population china warns tourists forced shopping in hong kong now recall that milton friedman said quote if you want to see capitalism in action go to hong kong well apparently there's been
these a few events of hong kong tour guides ripping off chinese visitors from the mainland by forcing them to buy things and the tour guide is caught on camera in this one situation where he said how can there be free lunches in this world forcing them to consume and buy these junk products well you know america forced consumption china was forced labor now it's other way around we're seeing force consumption in china and the us is turning into a forced labor. they say our thanks again for being on the kaiser report thank you max don't go away much more coming your way so stay tuned. for another month.
back to the kaiser report time now to go to massachusetts and speak with gregory mcdonald is an oil analyst and energy sector investor with his own web site greg are you ask greg or welcome to the kaiser report it's great to be here max gregor you recently wrote a post hollow man of economics tell us about it who are the hollow man and why are they hollow the whole meant to be economics or are essentially the entire post-war
economics establishment which since world war two has essentially ignored energy as a component of our economy no of course they paid some attention to that during the original opec shocks of the one nine hundred seventy s. but since that time max there's sort of been a common agreement among the post among the economic establishment energy no longer plays a significant part of the us economy and it's you can see for a might charge in the last ten years. energy is a component of american g.d.p. absolutely soon upwards. early two thousand and two words two thousand and eight so . i think that you know that kind of describes least a little bit of what they're missing right south the chart available on your site is us energy expenditure as a percentage of g.d.p. from one nine hundred ninety nine through two thousand and eight and as you can see
by the chart this is climbing and yet what you're your assertion is that this ron dave with energy insufficiency is been completely ignored by the current group of the hollow man of economics the folksy we read of the new york times and elsewhere they simply don't take us on board and factor into their model no they don't and i've done. and a lot of work both on the national economy and also state economy have done a tremendous amount of work for example on california and a lot of the big southern california counties like san bernardino and riverside counties where people are very exposed to energy and gasoline prices as a result of having to drive long distances and i'll tell you max the economic sensitivity of the united states and many of our regions is still very very high to high energy prices and so you know we've seen real devastation in places like
southern california where brought unemployment still tracking in the high teens very high usage of food stamps and you know as you can see from the chart on a national basis i think we got close to about nine and a half percent of energy usage per year in the states yeah i get questioned all the time from people who want to know why in america are people so complacent with the economy collapsing the way it is why do people seem so apathetic and the answer i come up with is that as long as the price of gas is still relatively cheap nobody really notices but going back to when oil got to one forty seven of course then the energy costs hit home in a big way and within a few short weeks the economy completely crumbled and those people who were caught out of what to call the ex-urbs were literally just abandoned out there in these ex-urban had no way to move around and they were just became an immediate
underclass in america now talking about this one forty seven price. do you think there's any connection between that one forty seven price the overall action in the market and where will prices go from here in your opinion we've got a lot of difficulties with price right now max because my view is that any time price goes below seventy five dollars a bear. no one who is in charge of making decisions about developing new barrels of oil will decide to go forward with the project prices below seventy five dollars a barrel are simply not enough to create new supply of oil meanwhile in the background of global oil supply we have a natural decline rate from existing fields that is a very least five percent a year and maybe as high as six or seven percent a year so if you're in a world of seventy two million barrels a day of production and you're losing
a couple of million barrels a day to decline you've got to come up with fresh barrels you know equal to roughly iran this production of three to four million barrels a day each year just to just to stay in place now tell us about those on your side you also have a chart for crude oil supplies two thousand and four to two thousand and ten. where are the oil supplies falling off the fastest around the world whereas peak oil hitting the hardest is hitting non opec the hardest and you know opec produces roughly forty percent of global oil supply and not opec produces sixty percent of global supply but it's in non opec that's largely governed by the private companies with all their ph d.'s and high technology equipment and airplanes that fly over you know the gulf of mexico with radio spectroscopy equipment and drill down to
twenty five thousand feet below the surface of the ocean in that region that supply is declining and you know it's that's where it's in nano tech where the decline where the decline is really taking place in fact if you look at that global supply chart in two thousand and five in two thousand and six and in two thousand and seven boys will supply. in the face of rising prices in other words once well crossed forty in two thousand and four a lot of people went to subpoenaed oh we'll have more supply and this really brings us back around to the whole i'm meant to be economics max because their main view about energy is that higher prices always bring on more supply they just feel that you know an expansion of credit. stimulus into segments that will cause the supply to come on in greater volumes and it's just not the case it's just not in the data right there's three super fields if you will those cats around bergen and kuwait
and dow are in saudi arabia and they have got can around mexico like falling off a cliff in terms of what they're being able to pull out from their bergen i understand in kuwait is also similarly affected not dour and saudi arabia they've been on of the thing for ten years but magically they don't seem to ever run out of production and the feeling is around the world that the saudis are i guess to put it kindly are lying it seems impossible that they could possibly not be experiencing the kind of declines that we're seeing these other major fields or in fields around the world would you agree with that here's how i come to that question why did the saudi arabians develop a new field called cold correct at enormous expense multibillion dollar newfield then then has to have its oil pumped out with seawater that comes from fifteen
miles away and you look at pictures of this new field that saudi arabia has to correct it looks like an oil sands project like you have a know with you know all sorts of processing and steel in the ground so you know to process the oil why would saudi arabia who and to tell it such a field if there was even. here oil in saudi arabia if there was more oil you know the stick the straw in the sand kind of oil why would they do that and i think that what i think really the most the best answer that i use for got war going to your question about car war is that war production can be sustained but it but it's not easily and if they try to increase production from war there's been a number of indications from saudi arabia that they're concerned about damaging what's you know what remains in the war so i think that you know what people don't
understand about saudi arabian politics is that saudi arabia has a long history of to rising political power in the world from being able to advance the idea that they are the number one supplier in the world that they control all the spare capacity that they could either crush price by pumping more or release and price skyrocketing by pumping less but the fact is max russia has no leg saudi arabia is the number one well supplier that's amazing i don't think a lot of people are aware of that let's talk about the big geopolitical game gamesmanship here for a second wave now that it's a process every barrel of oil it takes something like two and a half barrels of water fresh water and we now know that the u.s. has invaded iraq to exploit their oil but unfortunately the water feeding that area flows through turkey and now the news coming out of the
mideast is that israel has taken a very antagonistic position toward turkey is there a connection there is one of the reason we see israel now gunning on turkey the fact that the euphrates river as it flows through iraq is. really started a sickly. fly through turkey and this is why it is causing some geo political tension in that area i thought well i'll hit that question in two ways first from oil geology side and then from the and then from the water side one thing one thing we may be understanding now is that the the dark years of saddam hussein's tyrannical rule in iraq may have resulted in tremendous damage to the fields down in central and southern iraq but not tremendous damage to the fields in northern iraq and it's that oil that is now flowing much more easily in northern
iraq. that you know that has become the point of contention there are a lot of there's a lot of dreaming going on currently about the ability of central and southern iraq to significantly increase oil supply in the years ahead i'm just not convinced that that's the case i do agree that there is a wonderful resource base there but it is possible to damage your fields geologically over a twenty five year period and i think saddam hussein may have done that now to the water to the water point we also know that the great marshlands. of central iraq were destroyed during during saddam's during saddam's time there and i think the water issue max in terms of oil is more of an issue in terms of refining and perhaps less of an issue in terms of pumping less you're saudi arabia and you've got to pump you know seawater you know from you've got to pump seawater so
it's you know israel has always had a significant a significant water problem in fact when i visited israel back in one thousand nine hundred forty university student and was taken around israel by a representative from their department of the interior this is this is almost an exact quote he said you can you know you can read the headlines you. you can read about all the costs of the problems but he said our main problem is water all right gregory mcdonald thanks so much for being on the kaiser report thank you max was great to be with you again that's going to do it for this edition of the kaiser report i want to thank my guests stacy herbert and gregory mcdonald if you want to send me an e-mail please do so at kaiser report at r t t v are you until next time this is my guys are saying by all.