tv Prime Interest RT September 3, 2013 9:29am-10:01am EDT
including a death sentence in some of them and yet russia gets all the attention if people really wanted to effectively boycott any country with any laws even hinting against homosexuality they would have to hit them where it hurts and stop getting natural resources imported from countries like russia saudi arabia venezuela and iran and so on and so on that is a vastly more difficult proposition than pouring american made vodka onto the sidewalk but that's just my opinion. to come. to come. to come.
welcome to the because the report on max keiser america still celebrates labor day despite the fact that all their wealth creating jobs were a long ago shipped to china but as it was these wells creating jobs and the rising wages of the middle class of the built america into a wealthy nation we ask is china's rise on stoppable a pew research poll earlier this year asked this question and a clear majority of brits german spanners committee and french poll australians and south koreans believe that china will indeed topple america as the world's leading superpower some actually believe this has already happened forty four percent of americans they china as the most of our full autonomy right now only thirty nine percent of americans thought the u.s. was the number want to come on to me oh my god stacey this is shocking the tell me more you know on wall street of course and many financial analysts and bloggers will say oh china is a disaster zone there's
a financial bubble there that's going to happen a concious and growing at over eight percent as it normally would but i thought those polls were interesting when they're act asking common people normal people who actually have to work for a living and the huge percentage in america think china is number one it's wealth creation that creates a great nation a superpower so the fact that the wealth creating jobs are either in germany or in china that suggests that this is a nation on the rise where is america has exported those wealth creating jobs and all they have is part time jobs serving burgers or at wal-mart selling this stuff the wealth creating jobs in china created so you. you have that but also you have in detroit which was the number one location for
wealth creating jobs the number one for g.d.p. per capita only forty fifty years ago before the u.s. decided once they went off the gold standard to send the jobs overseas you have this tweet in detroit roughly seventy eight thousand city structures have been abandoned so this is approximately one third of choice one hundred forty square miles are either vacant or derelict and you have this abandoned buildings in detroit and it reminded me of the ghost cities in china for two different reasons yeah well two different does studies our games in ism gone mad time in a style where the is building up properties with nobody living in them but you get the reports of g.d.p. growth versus the ghost cities of detroit which are people that have abandoned the city because of the industrial heartland has been destroyed as jobs have gone to china but you're right there is
a parallel here between these two go cities they're both the result of economic central planning in china the communist state centrally planned their economy to create ghost cities of new nouveau go cities their new go go cities in america old money go cities based on central planning remember detroit went bust because america's central planners decided not to let america compete they decided to let wall street rule the roost and to let monetary authorities decide what the price of money should be and that created this enormous wealth chasm we haven't seen such a chasm since the gilded age well i also think you know we're going to get into whether or not those go cities are just centrally planned or actually millions and millions and tens of millions of chinese who have jobs we're bringing them in income they have high savings rate where did they put all their savings. but the other thing i look at it and it seems like it happened so sudden that the entire nation of the united states sent all of their wealth producing jobs to china so
rapidly it was like a windfall it was like a lottery winner that china became suddenly everybody had these amazing wealth producing jobs so they didn't know what to spend the money on and they also didn't have an advanced banking system like that the hundreds of years of banking system across europe and then into america where you had hundreds of years of a banking system as stable banking system relatively stable where people had a place to put their savings and capital markets where china everything was thrust upon them so suddenly sent over as a free gift from the american worker but you know used to be were countries with compete with each other particularly during the period of mercantile ism where you had this grand global game and there was a gold standard at that time and countries and according to david ricardo you have a competitive advantage but we don't have the countries competing with each other anymore you have in every single developed country now an entrenched oligarch bully
or kleptocracy that is gaming the global system through global banks like the bank of international settlement of course which is the central bank of central banks and they get unlimited funds and zero percent interest rate and they get to acquire all the income producing assets they get to fire everybody or reduce wages down toward slave wages and they pay taxes wherever the taxes are the least you know many people have asked about those cities and i know you're going to talk to dan collins in the second half about you know what is the how did that happen and what are those about but of course why all our american jobs went to china is a few reasons and one of them is american workers they say we're just too passkey they wanted too much income they didn't want to work hard enough they they only wanted to work eight hour days they didn't want their little children to have to work down in the factory flu. or either and the other thing was the what americans will call the eco nazis you know they were all upset about lake erie and when everything turned into a polluted wasteland
a toxic dump so that problem however didn't go away it was just sent to that also went there with our jobs chinese researchers say eight to twenty percent of the country's arable lands may now be contaminated with heavy metals that's twenty five to sixty million acres and a loss of even five percent could be disastrous according to the article in the wall street journal taking china below the red line of two hundred ninety six million acres of arable land that are currently needed according to the government to feed the one point three five billion people in that nation imagine the toxic sludge that's choking growth in china which will definitely swart their ambitions because that same toxic sludge is forming the economic growth ambitions of all developed countries and all undeveloped countries because all of the carrying capacity of planet earth for industrialization peaked about thirty five years ago and now every single year you're saying
a few key metrics that are obviously going to completely shut down industrialization and globalization one would be rising sea levels another one would be climate change or global warming but getting back to china for a second in the job story here you have a great example with apple computer what has a hundred forty billion dollars in cash on their balance sheet that they parked off shore they don't want to bring it back to america because they might have to pay tax on it if they have the money in america they could have hired enough people in america and pay them fine wages to build their products in america and those people one of them had the money to buy apple products but instead they outsourced the manufacturing to china they pay slave wages to china they support the people's bank republican people's bank of china which is involved in all kinds of carry trades and international arbitrage schemes that debase all the currencies around the world and living standards as as well. you end up with a situation where steve jobs will say to the american people i would never hire or build a factory in america and i paraphrase but essentially he said because americans are
too stupid all of the c.e.o.'s not just them every single one in america all of them all the commentators allowed on american television say there's a skills shortage which is a load of crock but you know there are thousands of protests every year in china people demanding mostly better environmental protection and this is another interesting story well we have the toxic waste in the heavy metals in the soil there well we have secret gardens secret gardens provide safe food for chinese officials the owner of the new century breeding farm in beijing surnamed son who provided chicken eggs for the olympics said that since water supply livestock feed in air quality at his farm past government tests a decade ago he has been supplying products to central government officials so he has two hundred hectare farm and it's surrounded by guards two metre high walls and these are very prestigious farms and they actually have like files vegetables
individual files like they have their own health certificates making sure that the food that goes to the elite is actually organic high quality stuff that they don't get any of the stuff that's been contaminated by whatever the pollutants that all the u.s. corporations that are there talks of fighting the environment that they don't have to eat that food it's a rarity for billionaires and the price of an actual chicken or a real egg or a cut of real beef will be one hundred thousand two hundred thousand three hundred thousand dollars a day doesn't make any difference because they can print up all the money they want to zero percent interest rates and the slave labor that lives outside of the billionaires to rary is footing the bill and these things will be considered incredible luxuries i think going back you know twenty years when somebody could get on a jet. fly all over the world get a meal at an expensive restaurant all on a worker's salary will be consider the utopian moment of
apotheosis for a certain class of people that now unfortunately will never be achieved again well the ultimate in these god like creatures of the elite is this final headline here chinese officials caught drinking human breast milk so this is another scandal that puts. a local in chinese officials drinking human breast milk yes well apparently they charge the chinese officials are very young and there they come officials at the age of two months or you've got some very sick octogenarians about it's only that there's a bunch of privately old chinese man suckling on some new bio and chinese omission is that's exactly what it is to young nursing mothers they pay five thousand yuan which is eight hundred or fifteen dollars that. i favor more than that for some chinese ingenue breast milk believe me you are i say it's never going to go thanks being on the kaiser report thank you max stay tuned for the second half a whole lot more.
a girl. sues that no one is asking with the guests that you deserve answers from it's all on politicking only on our t.v. . welcome back to the chasm report imax guys are time now to turn to dan collins author of the china money report newsletter at the china money report dot com dan counts welcome back to the kaiser report max thanks good to be back all right dan before we get it to the economy tell us about the response and repercussions in
china in regards to the edward snowden revelations yeah the snowden revelations i don't think were a surprise to the average people here that the u.s. government was spying not only on its competitors but its allies and its own citizens i don't think there's any surprise there but there was a lot of surprise i have heard in beijing about the depth and the extent of the collaboration between u.s. intelligence services and the u.s. tech companies some of the relevant revelations that chemo war were about the n.s.a.'s x. keyscore system its n.s.a.'s widest reaching surveillance platform they have seven hundred servers globally it was discovered there was an active server incheon changing actually only it only mainland china be a server. and that as most likely probably not still in commission so this was a big win for china that this information came out the big loser however is going
to be the u.s. tech companies that heard from beijing that there's been a directive to. get rid of all u.s. telecom gear as fast as possible in place of chinese domestic equipment and if the domestic equipment wasn't available to go to the european system so the big losers in all of this are going to be us texas terms they're going to lose billions and billions of dollars in the world's largest telecom market this is kind of funny as a dam because for years we were told that the technology coming in from asia to america had backdoor technology that allowed spying to occur you're saying is that all the spying was done by the u.s. with a server right there in china. yeah absolutely that way it was until these are revelations came out i don't know the status of their systems today but yeah that was the case as in many cases the the hacking and surveillance is being is coming from the us
towards china and other countries as opposed to the other way around which is mostly covered in the media so again this would be anti-competitive because they've got us tech companies spying on asian tech companies and i'm thinking about the spat between samsung and apple over patents and other intellectual property so here you have proof that american companies are gays and corporate espionage on asian counterparts and also dan i would imagine that the next time america case is china of currency manipulation that's not going to go over well either at this point dan . no unfortunately we've in the u.s. we've lost the high ground on everything in from economics to in politics we've lost we've lost the argument in many ways so i think there's going to be a re readjustment of. values it but we're going both ways all right speaking of readjustments danny you live in shanghai but you've spent the summer and the you
asked tell us about some of your observations during the trip how does the infrastructure of the general economy compare in the u.s. to what you observe in china recently from detroit area lived in china fifteen years when i come back here obviously it's a shock to me i mean many of the cities i go here are more more similar to second world conditions if you go to some of the newer areas in the us they're ok but you go to california you go to the rust belt areas many of these infrastructure their roads bridges these are. decades or if not one hundred years old you know we're really living off our infrastructure built by our parents our grandparents we built hardly anything new to last thirty forty fifty years. so this is it's always. shocking for me to come back from china i joke with my american friends that when i go back to china i'm going back to first world conditions and they don't really get that but dan in the first half i was speaking with stacy herbert and we were
talking about china versus the u.s. and centrally planned economies and i was making the point that there's two cents for planned economies and they're both basically to fail stacey i think thanks perhaps that the chinese economy is set to become number one in the world and what are your thoughts i'm a big good daughter of centrally planned economies whether that's in china or the united states reality though is china is although it has massive problems as well it is much more capitalistic in many ways now than united states it's much more real economy driven whereas the united states has been taken over by the financial system. you know in china they're number one in most markets number one in on line retail this year two thousand and eight china had no high speed rail by two thousand and ten they passed europe by two thousand and twelve they have more high speed rail than the rest of the world combined so they have access real economy power projection to get things done. you know jobs wages are increasing there's no
debt and credit market like united states has you know i come over here everything's on debt everything's on credit you pay anything in cash or with from a debit card or shock you're not financing it so in china everything's you know half the homes have been paid cash up front it's very still capitalistic economy compared to the us now where where we have forty seven million people on food stamps we have sixty five percent of working age men that have a job and a quarter of those make ten dollars an hour or less. i mean the real statistics of american production are really at depression levels you know we actually produce seven million cars this year we produce thirteen million cars in the year two thousand. this is the united states you know we're selling levels again but a lot of the more half of those cars are imported so real economy project you know power in the united states is almost gone it's become me financial debt driven
economy yeah i want to focus on that for a second danny mention the u.s. has become a finance still and debt driven economy versus a china which is more manufacturing and so the response in two thousand and eight to the global crisis america got more financial eyes they have bailed out the banks the banks have gotten even bigger than they were when they were too big to fail to begin with you got financialization now reaching into every market imaginable you know people complain that there's a huge student loan debt market bubble ready to burst i just read that they are now creating loans for preschoolers so that parents can go out and get themselves into hock to finance their child's preschool education in anticipation of their college education so that's primarily how these two countries are separated economically if i'm reading it correctly dan is that the u.s. still relies on over financialization a caters to wall street and china is out there making stuff yeah absolutely china
has not. continued with aggressive quantitative easing the last year or two like the united states has they've shut that off cities are imposing limits you can't buy more than one house so they're trying to rationalize and rebalance the economy and take the hard medication now where the united states is just going deeper and deeper into financialization and all that printed money found its way into the stock market but we've done nothing to address the real problems like the tax system which was just ranked ninety four thought of one hundred texas and globally just behind zimbabwe so we've we've done nothing to rebalance the real economy to fix the structural problems that exist china has their own problems but they're much easier problems of six when you have four trillion dollars in currency reserves you have everyone has a job. in education levels are increasing the positive aspects of chinese society are really in a renaissance the things i look at you look at space exploration nasa has a budget seventeen times larger than chinese space agencies budget yet china
launched twice as many space missions last year as nasa did this goes in industry after industry can see this is the deploy overall decay of the real economy and united states in favor of financialization had to go and what about the state of the chinese worker so in america we see tens of millions on food stamps most new jobs are part time in retail or restaurant so i would take it that it's not a c. manufacturing jobs in real jobs correct yeah absolutely you know i'm on the board of a few companies here we've increased wages two hundred percent in the last three to four years you still have trouble finding workers. the average chinese manufacturing workers now making five six seven hundred eight hundred u.s. dollars a month obviously still very very low but these are up from levels of one hundred or two hundred dollars a month you know only five six years ago so it's really good times for the average chinese worker in china and these are all full time jobs are really part time jobs
are unheard of in china we don't have them yeah just as a point of interest in time and there is no quote unquote social safety net there's no social security there's no pension schemes per se for this reason chinese people tend to be very aggressive savers correct. yeah absolutely chinese i think on average obviously number one savings in the world they save around forty percent of their take home so yeah they're number one in savings there's almost zero social net in china you know if you don't work you don't eat basically so that's why they're so hard working is that everyone's got to pay for themselves or pay for their family right now a lot of talk about ghost cities so what are go cities in china what's it all about is it a form of savings by the middle class to some suggest as we you know to pick up on what we're just saying that there is no safety net and people are out there savings and part of the savings is housing is that correct and oh yeah i think well go
cities we need to separate from the action to a chinese real estate market so those cities are really areas where the government has missed allocated resources and there's different areas or new parts so called new parts of the city that the government wants to develop they'll go ahead and authorize all this development and developers are go out there and build up apartments schools hospitals everything within six months you'll have an entire new city there and that's where the get the reputation these go cities. no a lot of these will be you know with the urbanization still going on in china a lot of these cities get filled up in a year or two years it's not a matter of there are empty homes but they're getting filled up and they're actually owned by somebody without a loan so there are areas in particular some really bad high profile problems with a few ghost goal cities or ghost areas but in general the real estate market here is very very strong property prices are up again double digit this year property
transactions are up thirty percent so i mentioned before half of the homes have been paid cash up front and in general now in china they put in rules to stop you from buying more than one home and if you want to if you're from shanghai you want in your you want to buy a home in shanghai you have to be from shanghai so there is a lot of strictures not just to stop people from all over speculating in homes so i don't really see it as a bubble as yet most people in chinese in particular plan to buy homes and owned them for decades and decades and give them to their children as opposed to the flipping and using homes as a is a speculative martin vehicle like like found in united states ok so i guess the the idea here is that what people are used to is that a developer will build five or ten homes and and they are looking to expand their residential property portfolio and then they go out and they market the silence but in china they build entire cities on the same concept and then they fill up the
entire cities ok now let's talk about the environment in china they've had some environmental disasters and they're starting to cost as much as the economy is producing. this is a hard ceiling for economic growth in china they found heavy metals of the soil covering large swathes of the arable land so this is the detritus of industrialization now biting them in the veritable pork bon what are they going to do about it. yeah the environment i believe is china's number one. overarching problem right now and it's going to be one of their toughest problems to fix the air in the major cities is almost a limb of all you mention about soil contamination they found thirty forty percent of crop land in some provinces are contaminated with heavy metals we have cancer villages stretching a thousand kilometers through several provinces the absolute disaster the only way
to really deal with i guess us get say on the positive side is the government and people realize it some of the largest protests the last several years have been over the environment you get tens of thousands of people out on the streets over this so the government thinks it least aware of the problem now they. know they need to start the cleanup is going to be a lot of economic activity behind that the problem is with as you mentioned the industrialization of china the whole world to shut down factories and they're all in china now and china in my opinion as i try and mention several years ago they need to let the remain become a chinese living standards come up let the rest of the world start producing for their own economies and even export even to china so-called you know stop the industrialization of china really where it is more focused higher value added products which is happening as so as a part of a so-called rebalancing of the chinese economy that's really where they need to go on the environment it's absolutely the number one problem now in china all right dan counts out of time thanks so much for being on the kaiser report thanks very
much. and that's all the time we have for this edition of the kaiser report with me max kaiser and stacy herbert i'd like to thank our guests then colons of the china money report if you'd like to get in touch tweet us at kaiser report until next time backscatter saying. good lumber tour. was able to build the most sophisticated robot fortunately doesn't give a darn about anything tim's mission to teach me the creation of why i should care about humans. this is why you should care only. react to situations i have read reports. like. no i will leave the state
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