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tv   Headline News  RT  February 4, 2013 1:00pm-2:00pm EST

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france's military is guarding one of the biggest iranian mine didn't. say they want to deal with paris and could be looking for other countries. locals from recently liberated parts of money claimed the france led offensive against islamic militants has come at a high cost. as america's top diplomat we hear of revelations that many in the foreign service. time the country. and the opposition in kuwait fails to keep protesting against the country's unelected rulers after another activist from behind bars for criticizing them on a. life
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. in moscow this is r.t. with the twenty four hours a day the president of has confirmed that french troops have been guarding one of the country's biggest iranian mines in a bid to avoid a repetition of last month's hostage crisis in neighboring algeria. spoke to my colleague. the mine in question is the olive facility a location in which the french company a river has a large stake now it's important to know that this is the second mission in africa completely separate from france's mission in mali which has been going on for nearly a month as neighbors mali and the situation very continues to remain unstable the french government is making it clear that they are ready and willing to protect their assets in the region and on the african continent as a whole protecting assets in the region many know that france gets most of its energy from nuclear power hence the uranium is very very important indeed so
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massive economic concerns are indeed but as you also mentioned we've called the french led multinational intervention going in mali now boots on the ground in nigeria where it's certainly getting a lot of reaction from critics around the world at the moment certainly has been if you ask france they've pointed to the incident that happened last month in eastern algeria when islam ists took over a gas plant there eventually leading to forty eight people being killed thirty seven of those foreign workers france's predicting that more islamist retaliation to french presence in africa is likely and they say they want to prevent a tragic situation like this from happening again but then again there is the world's fifth largest producer of uranium a product that is vital to the french economy in fact it's estimated that nearly all or at least seventy five percent of france's electric infrastructure is dependent on nuclear power given this it makes sense that france would want to protect that resource at all cost the president has welcomed the french presence in the country and recognizes the need for the having security but has also stated
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that they want to better deal when it comes to uranium exports measures economy is also largely dependent on your radio as well critics have already been wary of french involvement in mali claiming that the real motivation is a return to imperialism economic policy and a stronger control of a region that used to be french territory now with france's expansion into neighboring countries compiled with president expressing his concerns those critics now have a bit more that they can chew on. john laughlin who's the director of studies at the institute of democracy and cooperation in paris believes securing natural resources is not the only goal from has in the region. i think the two main factors in this are france's own desire to strengthen the her role on the international stage in particular piece of you know european partners and also the american strict future plans for africa it's important to know that america which strongly supports france in this mali and intervention has plans for establishing
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a military presence in the military control over the whole of the african continent some people speculated that used the phrase that this was america leading from behind that america had decided to put forward its european allies to do as it were external work in a continent where as i'm sure many of your you viewers know china has been establishing an economic presence now very successfully for a large number of years so there is a scramble for africa isn't there or is it just to grab some resources yes it is obvious that the securing of energy resources is one of the key factors behind many if not most political developments today and that's why i say that the of course the issue of hydrocarbons and uranium and other energy sources is a key and me be the decisive factor. mean one and northeastern monny french jets have carried out
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a series of airstrikes on the bases and fuel deputies of islamic terrorists with the intervention now heading towards the desert and away from the cities r.t. reports on what's left on the ground after the liberating troops move on. francois hollande victoria's trip to timbuktu marked the declaration that three major cities in northern mali have been declared liberated from rebel although the sharia law and islamic extremism of the rebels and forced will not soon be forgotten nevertheless this victory is a partial what the militants have merely retreated and fled and the suffering in this war has seems disproportionate to the gains made as we're learning what happened in battle day by day in the town of kona like we heard stories from the fog of war this is small settlement in the mopti region was seized by the tribe they fled to the north when french troops showed up but it's reported that the cost of that victory was high while french planes killed only two rebels the number of
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civilian casualties was an estimated fourteen. i wasn't home when the bombing began i started praying when i learned my house was under attack they ruined everything i had my family and my livelihood my wife's name was i mean she was forty my son ali was eleven you made adam was tanned and so you know who was six they all died. people such as this farmer idris ask themselves if the victory was worth it i mean we also met at the camp a family who had suffered badly when the bombing began everyone scatter it the compote lost two of their son of those unable to swim they drowned in the river playing the fighting. we also heard the story of a young mother who died from shelters leaving three children behind a newborn baby. the village was a complete mess it's impossible to describe any discuss things i know for sure but
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i can say that all we had his daughter. years old few proving we had some kids came running up to us and said their mums had donated i brought them to our house their mother died after an hour of clinging to life the children have nobody else but us . disaster visited every house in the town people reject anything the military claims about victory and say war crimes must be prosecuted under the geneva convention towns like qana want more than just compassion people who suffered at the hands of terrorist groups and drug traffickers are now facing the misery inflicted by warfare about that yesterday without gonzalo watch or. r.t. . and while president ford saw all and may be hailing the ongoing french military campaign in west africa as a success that small that can be said about his politics back home. reports now from paris. well president on land is welcomed as
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a liberator in mali after france's military operation against the islamists occupation back at home crowds are also gathered but with a starkly different mood where people are fired up over the continued decline of europe's second largest economy despite the president's promises to create at least one hundred thousand new jobs the nation is shedding them at an alarming rate last november about a thousand every day the worst figures in years the country's unemployment is approaching a shocking eleven percent with more than three million jobless the french daily lives and claims that the exact situation could be even worse if official statistics included youngsters never registered for the unemployment program or those who left it and those stuck with part time work the paper says the rate would then triple but there are certain. people expected to have a strong president and that they understand that
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a law and doesn't have enough experience for competence to improve things is to weak as we see it from the fans who are so you know believes the strategic mistake was to rectify the e.u. so-called three percent treaty force in france to reduce its budget deficit down from four point five percent by hike in taxes and cutting spending. but while harsh criticism expected from the opposition disapprovals also been growing from like minded left wingers or companies well i think the president especially of a country like france one of six e.u. founders should be strong enough to say stop to others and say hey i have my nation behind me and they elected me to make changes instead he surrendered because he's more worried about the country's debt and the ratings agencies make. in a short video french communists put together some of our lawns major presidential campaign vows none of which they say came true. look what that's going to be oh the value added tax increase. i think it's an appropriate and unjustified and
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unreasonable and too hasty. well that's to remind the president do you remember you promised to review the european treaty you didn't do that your german bring said a three percent deficit isn't real but now only say it's possible etc etc you can't do what you promised meanwhile recent polls show a little rise in the fringes of movie breaking into four percent january to december through two percent and the lawyers see salon's to office in may. every week that is a new subject to discuss in the french media and to draw people's attention from the real problems like gay monitor deprived you are now molly this strategy may work but not for long. after a long and wonder french election last year some analysts described his victory as a victory against his predecessor side because he brought the long now be seen
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anything of the past that actions in the. months of a long presidency have been anything but sunny and even his one staunch supporters predict even harder times lie ahead for the leader of the country's municipal elections in two thousand and fourteen have historically held great significance and will show whether the voters can forget and forgive. me for not seeing from paris. i mean up a little later in the program for you dissolving the ministry the artistic director of moscow's world famous ballet heads to germany for special treatment after saying he knows who's behind the violent acid attack on him two weeks ago that story and plenty of others just ahead after the break. the polygraph tests now are guilty until proven innocent a cia veteran points the finger at his former employees saying the agency's compulsory polygraph tests are beyond the law and simply ineffective the details on that for you just ahead.
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secretary of state hillary clinton recently testified to congress in regards to the attack on the us consulate was killed an american ambassador in benghazi libya during the testimony couldn't rather calmly said you know things like that the revolutions that sprang up during the arab spring like in libya where the events in bali have created instability and safe havens for terrorists and she made it clear that there is no doubt that the algerian terrorists had weapons from libya so the u.s. secretary has basically admitted that the actions of the usa and nato have caused mass instability that has allowed the seeds of terrorism to grow when the justification for most of the actions in the muslim world is to stop evil dictators who harbor terrorists or spread chatting to mock recy if libya would have been left
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alone algerian terrorists wouldn't be getting any weapons from it now this is like an exterminator accidently or maybe on purpose actually feeding the roaches in your basements that there are ten times more of them and then saying that he has to keep working because he's the only one who can get rid of the roaches people like hillary clinton who support funding brutal jihad is rebel groups to overthrow governments to somehow bring about stability and democracy are either dismally stupid or consciously running a very brutal con game but that's just my opinion. the news continues here in r.t. israel is reportedly considering building a buffer zone with a high tech security fence and on its border with syria it's designed to prevent threats from radicals if the assad regime is overthrown to jamal wakim a spokesman to learn he believes that televisa motivation has nothing to do with
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security. or merely to you does know. at the time of the to. certain see there were no attacks against israel by the insurgents not by the regime itself so this is a mere pretext israel wants to take advantage of. weakening regime in syria to improve its strategic position specially in defense of its claim to the golan heights imposing a buffer zone will make israel in the future to. negotiate over withdrawing from this buffer of their own zone rather than withdrawing from the golan this is an attempt to annex more territories and it's at the same time and at them to threaten . damascus itself if israel expands its domain by another seventeen kilometers this will make it reach close very close to damascus it's trying to
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destabilize the regime and it knows very well that the collapse of the regime will lead to a probable division of syria which runs in the interest of israel. in kuwait an opposition activist has reportedly been sentenced to five years in prison for criticizing the country's unelected ruler on twitter it's the third time a person has been convicted on such charges in the country in the last two months speaking out against the enemy out of kuwait is considered a state security charge just international recently hit hard at the monarchy for increasing restrictions on freedom of expression and assembly protests have been raging against the government and its crackdown on dissent since two thousand and eleven tension flared even more on the december parliament told by the opposition one former m.p. claims the country's democracy has been disfigured. we refute claims that the national assembly represents the people of kuwait around
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seventy percent of the people boycotted the election and the assembly itself was elected thanks to an unconstitutional decree by the government which wanted a parliament which could control its lawmakers have failed to address widespread allegations of corruption democracy in kuwait has taken a twisted for it is the only democracy which is seeing an increase of corruption we will continue to hold peaceful marches peaceful rallies and we will continue to gather and protest. and now to another monarchy that has its own problems with the opposition and that is bahrain and the regime protesters there once again clash with police in various parts of the country if used tear gas against the crowds which were wholly bombs. being cracking down on probe reform demonstrators for two years arresting thousands including prominent activists the government claims is taking steps to address the brutality of the security forces but opposition campaign is daily assaults continue unabated. the number dead from
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a suicide bomb attack on a group of al qaeda fighters has risen to nineteen more than forty others were wounded incident took place as men gather to collect their son a result sought an office in a town north of baghdad the blast comes. a day after several suicide attackers targeted the provincial police headquarters in kirkuk killing at least fifteen people and wounding dozens. a skeleton found under a car park in the city of leicester in the u.k. it's been confirmed as that of king richard the third the monarch was the last english king to be killed in battle back in fourteen eighty five but his grave was lost in the sixteenth century after the demolition of the church he was buried next to remains will be reinterred in leicester cathedral for the details of the burial ceremony yet to be released explosions were referred to the artistic director of moscow's bolshoi ballet is travelling to germany for specialist treatment after a violent acid attack against him just over two weeks ago doctors there will be trying to help save said again eyesight artesian in english to reports from the
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moscow hospital where he was taken immediately after the attempt. it is doing rather well surprisingly well actually he did thank the doctors for doing everything in their power to pull him out of a very difficult situation that he found himself in. third degree burns and those are very severe to his face and he said he's full of hope for a full recovery and he is full of willpower and he actually looked very enthusiastic and upbeat about the whole situation of course considering his circumstances actually he did appear to be quiet his road to recovery did speak about. who is who has been supposedly behind the attack he did say that he knows exactly who it was on this particular day today did not want to talk about the investigation at all so as not to interfere with the investigation he did however mention. he did to receive threats before but he also mentioned and this is
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important according to. he didn't mention that he's continuing to work with everybody who has been left in charge. he said that nothing in the boise theater is changing the performances and everything about the theater will be carrying on as before. with john kerry being sworn in as the new u.s. secretary of state last week the white house may have been hoping for some favorable coverage of its diplomatic efforts to revive nations that you have to pay to play a role in the foreign service of. capitol hill but he's going to check on all. representing the united states in western europe and a small chance of serving in say central asia or sub-saharan africa donors and advisers involved in the diplomatic selection process the competition this year has been so tight that those who have raised less than a million dollars are for the most part unlikely to be considered this monday was
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john kerry's first working day as secretary of state these are challenging times for u.s. foreign service u.s. embassies have come under attack in a number of muslim countries just within the last year the u.s. ambassador to libya was killed in september. shortly after the u.s. helped carry out regime change there is a sense of denial in washington that this rage against the americans in the muslim world has something to do with washington's policies in those countries the u.s. has been very much invested in the middle east and north africa and from what we heard during john kerry's confirmation hearing at the moment the administration is reluctant to get involved militarily in syria and is also trying to play down the drums of war with iran but that may change very quickly because the u.s. still continues to threaten war with iran it's unclear what john kerry's role will be as a secretary of state in supporting or stopping the war he likes to present himself
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as this war politician but he is the same politician who voted to authorize the iraq invasion with no evidence at hand that iraq possessed weapons of mass destruction so john kerry has a mixed record to and certainly big challenges that the u.k. is reportedly preparing to test on a brand new drug which could handle the breakthrough in the art of unmanned wolf in the aircraft is designed to be undetectable by radar and could even select targets but so is on the surface reports now from london. it can fly faster than the speed of sound it can deploy its own weapons and it can go deep into enemy territory now this is the nearly british super drone as it's known in the trenches has been under development for many many years now costing hundreds of millions of pounds already but it's thought that that's where the legionary niecy project is going to be taking is needed voyage over the next couple of weeks that's what's expected now
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military chiefs has said that the trant it will pave the way for a whole new generation of these new drones and it's being billed as the future of the air force but experts have warned that this could open the doors to a whole new type of warfare there's concerns about robo warfare where machines that are able to launch their own attacks could attack humans and of course a lot of control the sea that always surrounds the use of drones as well is still there and with the here and now because the controversy surrounding drone warfare has been highlighted recently when the u.n. launched an investigation in to civilian deaths caused by the drones now assisting the u.n. in their research is a team from goldsmiths university of london and i'm joined by one of that team now professor. and i think you very much for joining us this new technology a lot of talk about a lot of excitement but a huge number of unanswered questions that go along with these developments you're
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taking part in this investigation now we haven't even really got questions answered eight of the legality of these attacks and yet we're seeing technology sort of leapfrogging over the law at this point i think that what. we are seeing a de facto legislation by practice. of warfare actually creating the law for the problem of the law for war because it always legs behind the technologies are full of course the chronology moves much. aster than the laws of war and if technology changed the way in which we conduct our wars when we speaking about drone warfare we're not really speaking about area bomb being we're speaking about targeted attacks and especially the kind of a new type of attack that we've been seeing in the last decade that is called the extra troops juridical assassination these really are based on kill ists and they are compiled by somebody either authorized by the people with the
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reason or transparency and we do not know how that process is undertaken and of course this is really what your investigations hinge on is gathering that all important data is that absolutely in the forensic architecture project at goldsmiths what we look at is the nature of war in an urban area and the most strong attacks are launched on inhabited areas areas with a lot of civilians with civilians and militant. entangled in the numbers are very difficult to establish because both israel and the united states would consider every man over a certain age sometimes sixteen sometimes eighteen is a militant by definition we know it is not true the details of that investigation the results expected or the end of the year at tabor thank you for joining us today to talk about britain's steep terrain and of course all the other answer questions that go along with that. thousands of people in america are forced to undergo polygraph testing every year in the name of national security that's
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a minute expose ringing the alarm over u.s. federal agencies exceeding their legal and ethical limits to determine who can be trusted or to report not has more for us on this. for more than three decades john sullivan worked as a polygraph examiner for america's central intelligence agency today the retired cia employee is offering some strong opinions about the nation's lie detector policy too many honest people are too many people who should be passing their tests aren't and i and there's no there's no accountability for that. last year more than seventy three thousand americans were reportedly required to undergo polygraph tests in order to get or keep jobs with the federal government according to an investigation by mcclatchy newspapers a growing number of u.s. agencies are asking employees and applicants intimate questions that extend way
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beyond the realm of national security probing matters such as sexual conduct financial matters and past personal relationships a woman was pressured to talk about her experience being molested as a child and when the polar bear for said that he refused to go on with the interrogation he alleges that he was pressured to go back and continue and tara gating or a decade ago the national academies an organization advising washington on scientific matters urged the feds to stop using polygraphs as a screening technique scientists found that polygraphs aren't reliable enough to prevent innocent people from failing and deceptive candidates from passing i think it's important to understand that the polygraph is not just. for screening it's an interrogation tool. there's a question that they trip that leads to an indication of deception
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the drilling down and all questions that they get asked may well be quite true over the past ten years. at least fifteen federal agencies including the n.s.a. and f.b.i. have reportedly continued or expanded their polygraph screenings with nearly five million people having access to classified information washington maintains that polygraph testing is the most effective way from preventing secrets from being leaked lisa ribicoff is an independent polygraph examiner and investigator who uses the polygraph program designed by homeland security she contends that it's ninety eight percent accurate i do think that there are some questions pertaining to some emotional aspects and personal situations should not be included but i do understand why they're included on the basis of that the government needs to see how exactly what their breaking point is what are they willing to discuss what are they not willing to discuss however applicants who are denied
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a coveted position after failing a polygraph are prohibited from accessing the records of their interrogation and are often barred from contesting the results were filing complaints in federal court in two thousand and four the cia veteran who conducted lie detector interrogations for thirty one years failed his own screening there was absolutely no question in my mind that the test was wrong. was a terrible test sullivan lost his security clearance and was denied a job with a federal contracting agency he claims his examiner falsified the results possible retribution for sullivan book detailing america's polygraph system subs a come in for a polygraph test now are guilty until proven innocent and i think that's. a corruption and an abuse of the process the obama administration is now promising to draft a new national polygraph policy that would prevent agencies from pushing legal or
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ethical boundaries during screenings but at the moment the program has no oversight or accountability meaning tens of thousands of u.s. citizens will continue getting personally probes in the name of new. security green up we're not party new york. time now for the business update with natasha natasha is it true that the forthcoming winter olympic games in sochi here in russia twenty fourteen they're going to be become the most expensive games ever well that's if you trust the official estimates of a fifty billion dollars price tag i'll tell you all about why and what that actually means in the business both after a short break right thanks very much. speak your language as i think you might be will not be in. the program says documentaries in spanish what matters to you. is it will turn
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a deaf angle stories. i'll teach spanish to find out more visit actuality. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize everything you thought you knew you don't know i'm charged as a big picture. it's
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thirty minutes past the hour you're watching business on r t welcome russia's president vladimir putin is flying to soar to this week to mark the one year to go free anniversary of these sochi olympic games but the sochi games killer ready claim the first place in terms of cost it's setting a world record as the most expensive olympics in history according to the state commission overseeing the preparations for the games its price tag will read fifty billion dollars that's more than ten times higher them out of the last two and one pigs games in vancouver canada our correspondent andrew farmer has all the details of the story. well with a year to go the work continues and so does the rising cost sochi will be the most expensive olympics in history with the final price tag thought to be around fifty
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billion dollars that is ten billion more than the summer games in beijing and ten times the amount of the last winter games in vancouver so begs the question why is it so expensive and the answer is quite simple pretty much everything has had to be built from scratch i'm standing in the krasnaya polyana region which will host the sliding in skiing events that wasn't much here before the olympics came along and they've had to build the bobsled track for example the ski rams prepare the slopes and create the hotels and the cafes and it's a similar story down at the coast where there is the olympic park around half a dozen venues there they will host the skating and the ice hockey and on top of that you've got the impression just something like five hundred kilometers of road and railings that had to be laid when we talk in general terms like these she can probably see why the price starts to mount so another question is well is it all worth it financially the answer is simply probably not it's pretty rare that we lympics the generate a profit vancouver for example is generated something like
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a billion dollars since it's hosted the olympics and it's thought the figure for saatchi could be around maximum two billion dollars so what is the point of all this well socially sort she will benefit afterwards they've got all these facilities to enjoy after lympics leaves secondly you could argue well is there not a better place to invest this money in russia are there not more areas in need will probably yes but the russian government will say this this is a chance to improve russia's image around the world this is all about prestigious and thought she represented the opportunity to host the olympics they went for it they won it and now they want to put on the best possible lympics whatever the price andrew farmer for r.t. saatchi. and let's. quickly run through the markets to see where we stand today on wall street stocks are retreating from last week's five year highs the dow is now losing more than three quarters of a percent so far investors once again worry about europe namely spain which is in
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the midst of a corruption scandal the domestic data is not helping either the commerce department said factory orders in december came in weaker than forecasted now on the european bourses we're also seeing the inevitable correction following several weeks of extremely robust growth one of the biggest losers in europe as a dutch infrastructure company or oil m. tech and v. is drop forty eight percent on monday after it said it would have to write off one hundred thirty six million dollars on the project in poland on the currency market let's see what's going on there the euro is definitely under pressure to the u.s. dollar on all the bad news from europe and the ruble as you seeing on your screens weakened against the dollar and crude prices dropped on monday it was gaining to the euro and following a ten week rally the russian equities lost value on monday the my six and the
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r.t.s. finished the day with about three quarters of a percent and almost one percent respectively both goes stock exchange the main plot form for trading equities and russia is trying to revive the country's capital markets by setting a personal example it will offer it shares to the public next week. sibley within the country yes my six plans to raise about five hundred million dollars the announced price range values exchanges between four and five billion dollars in total its largest shareholder of russia's subdural bank its stake is just under twenty five percent of correspondent to tell the political explains why the stop. decided to stick to a domestic offering. just planning to float shares exclusively on its own platform to boost their appeal of moscow as
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a financial center how to courage more russian companies to go public at home that goes in line with the government's battery arctic intensions president putin of recently said that russia's a massive privatization should be the domestic capital markets and not to overheat foreign bourses this year russia plans to offer investors massive stakes in three state companies including ten to twenty five percent of russia's second largest bank creative be seven to fourteen percent of the diamond producers are grosser and up to fifty percent of the shipping giant flawed analysts say an exclusive domestic placement could hurt the months for the russian multi-billion dollar offerings there is a lack of long term investors in russia last year most co boards had just over one million clients registered that's compared to over ninety million individual
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investors in the u.s. and china the moscow exchange is indeed taking steps to become more attractive to investors it introduced a central securities deposit and shortened time to settle trades so far however these reforms have not been enough to convince russian companies to forsake london and least soul in moscow last year for example all major russian companies that completed public offerings chose to do it in london while three of them issued shares in london exclusively. and that's the latest from the business team up next on archie after a very short break sophie shevardnadze speaks with laurence kotlikoff an economist professor at boston university about the roots and the repercussions of the global financial crisis.
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there are twelve cities in the united states in which half of the people live. with this is a problem that. there
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were. people really focused on this problem you certainly should be able to. write. thank. you.
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laurence kotlikoff economics professor at boston university it's a pleasure to have you with us today it's great to be with you and great to be in russia so you're the one who states that america is broke and is even in a worse state that greece and ireland how so what exactly do you mean by that well we have congress look at all the bills the government has to pay in and in the u.s. case we have enormous bills that have been kept off the books that are not official debts but they're very real for example paying me my social social security benefits my old age pension that's a real obligation. it's not part of official government debt. but it's you know
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very important because there are seventy eight million baby boomers who are going to get these social security payments. and in addition medical payments from the government if you look at all those payments they're about three trillion dollars a year so we have these huge bills nobody has thought about paying for them and congress and the presidents over the years are just focused on official debt and basically have not told the public about these big bills he said the amount of the fiscal gap in the united states is in your estimation two hundred twenty two trillion dollars that's right two hundred twenty two trillion and this is like an astonishing number it's like three times the world's g.d.p. it is this is more than what the world makes twenty times higher than the official debt in the hands of the public which is eleven trillion so if you add all these
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spending obligations into the distant future and you compare them with all the taxes and you include in the spending all the interest payments and principal payments on the debt and the official debt you have two hundred twenty two trillion in present value now this is twelve percent of g.d.p. on an ongoing basis in other words we need to get twelve percent more of g.d.p. . either in tax increases or spending cuts in order to have the fiscal gap the zero we're doing far too little too late it's. like operating on a person with cancer and you say well there's a big tumor here we're just going to take a little bit out today and we'll come back and in five years and we'll take out some more but maybe in five years the patient is dead. because of the tumor got bigger so this is why we are in worse shape than greece and greece it's about
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ten percent of g.d.p. . they need on an ongoing basis we need twelve percent it only it's about five percent germany it's about five percent so when you look at it from this perspective it's a whole different story then when you look just at the official debt because these governments are making choices word choices about what to call official obligations or what to call an official so are they intentionally hiding. as they have been spending in our country six decades running a massive ponzi scheme taking from young people giving to old people and then telling the young people don't worry you'll get yours when you're old promising pensions promising healthcare benefits and you know this is happening in all countries even russia has a pension system but it doesn't seem to be in as bad as shape as ours in terms of paying for its benefits in the future but i mean this number
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two hundred twenty two trillion i mean who pays what exactly is this where is this money going who is spending it i mean certainly not the average american what is it like the one percent of the super rich in military me what is where is it going is it where's that all the spending. well you have again very big you've got a lot of old people now they're getting very high benefits about thirty thousand dollars per person it's scheduled to go up to about forty thousand when i retire which will be about fifteen years. so you can see that. we're just very generous to the old people in our country what do you suggest like cut spending raise taxes that will be suicidal to any american president well we have to be adults who are running the country we have to act like adults because our main responsibility as adults is to make sure our kids have a good future so we have to reduce the birth rate of the benefits to the elderly.
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and that requires. cutting the growth you know being much more careful about how much we spend on health care because it's the health care benefits have been growing at twice the growth rate of per capita g.d.p. for forty years. these are the government health care benefits for the so it can't continue because it's going to kill the country so we have a huge problem it's being hidden it's not being described and discussed disclosed and we're in very bad shape you just mentioned that you need to take care of the future generations clash of generations is the term used to describe what future awaits for american children paying up the deaths of their fathers but the united states when you look at it really has lived on death ever since world war two and increasingly so in the past thirty years and they have somehow managed stop to collapse you know and. they have no problem getting new debts why do you think that
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the new generation won't be able to manage it well over time the official debt will become bigger and bigger as this year of g.d.p. and at some point the chinese and other people will stop. lending us money and our interest rates will go up dramatically will have a bond market collapse and at that point. the deficit will get even bigger the debt the official debt will accumulate even more rapidly and our government is also printing a lot of money to pay for these bills so inflation can also take all very quickly so i see the problems and they may not be in thirty years they may be in five years or two years that the chinese and other people start to understand how bad the situation is and then we'll be in the situation of greece where people won't lend us money. and then we will have to make big cuts and everybody will be injured.
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so if you mention china and i know that china and japan are they top the list of america's lenders in ways or one trillion stats should they just get used to the idea they're not getting their money back and when they can't just come out and say hey i want part of the american g.d.p. . if i were anybody whether i was chinese or japanese or russian i would not be buying thirty year us government treasury bonds that are yielding three and a half percent or something right now because the prospects for us to print we have printed so much money since two thousand and seven it's really unbelievable we have the federal reserve has tripled what's called the base money the money that basic money supply it's called the monetary base it's actually gone from about eight hundred billion dollars to about three trillion dollars now and so. almost more
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than tripled so we have a basis in place for a more than tripling of the price level right now we have created the the foundation for hyperinflation already and the baby boomers have yet to retire. so right now. twelve percent of all the federal spending is based is being financed paid for by just printing new dollars. that's what's going on so we're acting very much like a developing country in terms of our actual finances and i've been. concerned about this and writing about it and speaking about it for since the late eighty's. but and other economists have as well and paul and also some politicians but it's getting worse it's not like anybody is actually. looking carefully at these numbers the politicians are looking at the official dead numbers and not
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really discussing the magnitude of what's coming a lot of people who think like you who are critical of the current american financial system have come out in the street and they occupy wall street movement and they voiced their concerns and their protests do you think a movement like this is actually capable or able to solve real issues or is it just a red herring well occupy wall street was concerned about inequality and they were concerned about what wall street was actually doing and i think we need to radically change our financial system because we have two big problems and this is true in every country including russia. the traditional banking system the model is one of very high leverage banks more a lot of money promise to repay and then there's opacity they may take the money and they do something with it but they don't tell you what they're doing with it so people get very concerned at some points about whether the banks actually can repay
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and then you can have runs on the bank just overnight so it's a very unstable situation when you promise people things and then you don't share what you're doing with their money and then and that's what happened in lehman brothers and bear stearns and. merrill lynch and all these companies that one on one under one after the other everybody started worrying because they couldn't see the assets so. what we need to do is. get rid of this faith based banking we need to have. no leverage and we have to have transparency the government has to disclose what the assets are the government has to do verification and disclosure we should have a government agency verify that somebody has mortgage is actually. a reasonable mortgage that that person has a job that person has an income that person's house which is collateral to the mortgage actually has this value so we should not have any liar loans and then we
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should also have all the. banks be become what are called mutual funds which gesture sell shares. to these funds so that they've taken all the money on an equity basis they don't borrow money they just sell shares of stock the money comes in and then they buy these disclosed assets the mortgages for example and then if you have equity based finance and if the mortgages don't work out somebody doesn't repay the shareholders take a loss but the financial intermediary which is a mutual fund never fails and never goes bankrupt so you have a banking system that can never fail if it's made out of equity financed mutual funds who are buying transparent fully disclosed assets that's what we need. and that's what they know the protesters
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a wall street didn't know what they wanted but this is really what they need what they wanted now what we need is also protesters among the young about their fiscal treatment that's a different thing that's the thing that fiscal cliff and the possibility of america defaulting that we hear a lot around it's a symptomatic agony or is it maybe artificial political crisis here young people don't fully understand how bad they're being treated in the in the debates in the entire camp. pain not a thing not one of these two candidates talked about the magnitude of the problems president obama said that our search and security system our basic government pension system has a small problem that needs to be tweaked is what he said well if you actually look at the system at the trustees report the thing is thirty one percent under financed so it's not a small problem according even to the actuaries it's a huge problem. so you know he's on
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a different planet from the reality. romney. felt that we could just lower taxes and get more revenue so he was equally. you know crazy on this. and unfortunately we have children whose futures are at stake here and they're also under a lot of pressure on in other ways because they're competing with a lot of people all over the world and they're also competing with these new start smart machines that are taking people's jobs away so in our country when you go to a grocery store or a drug store. the checkout person is a machine there's nobody working there it's just a machine these days there's actually maybe one person to help you use the machine . and so that's replaced lots of jobs so we have young people. who are are having
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trouble finding jobs even college graduates are having trouble for laurence kotlikoff thank you very much for a very interesting insight you gave us on the ongoing financial crisis and it's great to have you with us again my pleasure thank you. lynn. live.
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