why the financial world is going down the drain. max kaiser this is the kaiser report mervyn king governor of the bank of england says that we're facing the worst financial crisis in history had he been watching the show he would have known that this has been the case for many many months he also goes on to say that he does watch the kaiser report but he doesn't have enough financial literacy to understand what we're saying on the show we're making step aside bring in stacy urban who should be running the bank of england. i would bury the first day always running at even neglected to mention of course why we are in the worst financial catastrophe of all time and that's because of the central bank

of england and america and the rest of the world and the top one percent that they represent and you know there is this building or this global insurrection against banker occupation the ninety nine percent against the one percent so here's the one percent responding headline reads chicago board of trade taunts occupy chicago we are the one percent you know the occupy wall street spread to chicago and you see this photo here max this is from the chicago board of trade and they put up posters in size saying we are the one percent well go board of option stacy herbert of course is the site of listed options back in the one nine hundred seventy s. the beginning of derivatives as that term is understood today and these are kind of the ground zero of financial terrorists kabul school of economics is there this is where obama came from a milton friedman a neo liberal school and these fellows should not be so cocky because the

mob is beginning. to circle i can say maybe in those terms in other words it's not as if these people can simply disappear once they punch the clock and leave the chicago board of options exchange i mean they're living breathing human beings for how long well many people don't know this but murray on twitter that actually did the same thing she hung a poster outside of her site saying i am the one percent and here's an image from eight hundred i guess and this is a picture of her being led to the gate seen i have another picture here max this is the actual blade used to cut her head off soon after she put up her banner saying i am the one percent i've got a bit on that. i like to add that to my collection my robes piri and collection of reign of terror memorabilia prices for reign of terror merab memorabilia are skyrocketing all over the world people begin to remember some of the actions that

they can take yes and i'm not advocating that i'm just saying this is what happens in history well i've been saying you know that you need to have something in your back pocket to scare the bankers with if hank paulson can say we need a three trillion dollar bazooka to scare the banks into giving us more money then the ninety nine percent can say we've got to get in. so let's move on to herman cain wall street protests are un-american he says he's republican presidential candidate herman cain and he says that the wall street protesters are un-american and against capitalism and quote that protesters shouldn't rally against wall street bankers or brokers because they're the ones who create the jobs well herman cain is completely wrong on this point i mean the wall street is there an allocator capital area of herman cain in the current iteration of wall street which is a vast concentration of capital this is of course the complete opposite of what the

supposed to happen with the allocation that's equitable and creates jobs is destroying jobs exactly and that's you're saying at the top of the show that mervyn king is saying this is the worst financial catastrophe in the history of the universe and why it's because bankers have missed out kate at capital is that's their single job they're supposed to allocate capital into productive enterprise is right not into fraud and casinos and scams right and how do they do that they do that by using derivatives to steer the risk of capitalism into the public domain and they keep the reward derivatives in the options volatility formula is kind of like the splitting of the atom you know the split capitalism between risk and reward and created a financial nucular bomb in which they keep all of the reward and all the risk is

rotting in the rest of the of the society and he also says it's un-american if you want to look at what is american and what isn't just look up thomas jefferson or john adams what they said about bankers and wall street i mean they make us look tame right jefferson famously thought that bankers were the biggest threat to liberty you know back going back to one thousand nine hundred. i'm a member of the anti-globalization movement as it was called back then they have the battle in seattle and there was a huge outcry at the time against globalization now ten eleven years later you've gotten naomi klein's in the michael moore's and these people finally realize it's the bankers stupid and now one banker has gone to jail over the last three years and that's bernie madoff and everybody says that was a bad out all the rest of the system is fine and the financial system has collapsed by pure sheer coincidence nothing happened to cause it so we're going to turn to

this headline made off whistleblower tells king world news banks stealing from pensions now this is harry my koppel is he's the one that ten years before the made off fraud collapsed he was the one that wrote to the f.c.c. a ten fifteen page letter outlining exactly why bernie made off was a ponzi scheme and how it was operating well harry markopoulos is involved in this lawsuit against bank of new york mellon he's the one they gave all the evidence to the attorney general of new york and let's turn to this clip from king world news every day every time a state pension fund created a bank would steal approximately three tenths of one percent of every transaction every time a pension fund bought a currency the bank would mark a high price but today they would look better because currency trades at a twenty four hour clock what the bank of new york would do is look back twenty hours in

a fine all the state pension fund purchase transactions at the high of the day and every time a pension fund tried to sell a currency they would find the price of a lot of the day and they would pocket the difference and they did it not for just ten years but for decades every day for decades rather brings up three points as i count them number one that pension funds are abused this is where banks dump risk when they. make a bad bet and it's a losing bet they dump it in the pension account i myself have done this on wall street many times when i was working on wall street we did these look back trades is this year jim cramer moment and i've said this before you know you put on a big option trade volatility trade at the end of the day don't give an account number to the options dealer on the desk you know because they're in line for a big christmas bonus and then at the end of the day if it's a loser you dump it into a pension account or you give to a corporation for a tax loss if it's a winner you go into an account that you've already got a prearranged relationship with where there's a massive kickback and this is written most of the trading on wall street is like

this number two the scam itself of skimming pennies skimming small amounts of money on every single transaction it went completely unnoticed for years and years and years what did i say last week if you introduced a tobin tax which is exactly the amount of money we're talking about here nobody would notice it i got e-mails from people saying of course people would notice that it would destroy the banking industry if you care to do that tobin tax but here you have a perfect example they stole a certain percentage of every single transaction nobody notices for decades similar with a job and tax a small half a percent or one percent transaction fee that a single person would notice if you never told them so this is a centrally a tobin tax that bank of new york mellon has been imposing upon the bottom ninety nine percent but dare you suggest that we reverse that and take that back from the one percent and with a tobin tax they're like screeching that this is un-american this is

anti-capitalist well what is it when bank of new york mellon does that to the ninety nine percent of their customers it's fraud but they say it's fraud in the service of liquidity and market making the same thing goldman sachs's lloyd blankfein when he goes to congress he says we s. we commit fraud every day but we need it to keep markets open now the third point of course is that this revelation will go unheeded and nobody will act on it. they're part of a criminal syndicate this is why they go unpunished because they're not being they're not being prosecuted as a racket as an under rico to explain to the audience who the bank of new york mellon is here's the wiki pedia on them they have one point two trillion dollars in assets under management and twenty five point five trillion in assets under custody and administration there by being the largest deposit bank in the world is the oldest bank in corporation in the united states tracing its

origins today stablished one of the bank of new york at seven hundred eighty four by alexander hamilton right and those are passive accounts from old ladies sitting on fortunes and every single month they get their statement and they get out there magnifying glass and they try to figure out of the bank stole money from them this month but they're very good at doing it so they can pick it up and or other pension accounts or their teachers or their firemen remember all these public workers accounts they're being vilified because they want a living wage meanwhile their pensions are being destroyed by bank of new york and other banks and they're getting really gangbang from both directions well harry markopoulos points out in the interview that if you have a pension basically you have been defrauded by bank of new york mellon because everything passes through there that's the twenty five point five trillion asset it flows through there as the deposit back so. emphasise the point as far as the infrastructure goes on in management of the pension fund industry they because they are addicts keep chokepoint in that whole infrastructure and as gate keepers

they're bandits essentially because as the money goes through the system they stand there as a gatekeeper as a bandit and they steal every single transaction and now it's just big becoming revealed the attorney general have to be bought off or bribed or caught in a sex scandal so no prosecution and nothing will will come of this and now importantly there's the occupy wall street they're down well they're trying to get to new york stock exchange. right around the corner is the bank of new york mellon surrounded by police and here is the last clip from harry markopoulos i want to play if al qaeda had done this to americans seal team six will be dropping him but the banks did that and so maybe law enforcement needs to drop into those corporate boardroom and treat them like seal team six peter sama bin laden these bankers think they're above the law they're arrogant they're saying they're going to stand they say they're innocent yet they refused to set a trial date and they're stealing from tens of millions of americans and by the way they give new york mailers the tarp banks that we hold them out so they could pay

bonuses by stealing our pension money does we've been saying these are financial terrorists now finally other people are comparing them to other terrorists there's a strong case to be made that yes these are financial terrorists number two america has the death penalty already they're already killing dozens and hundreds of people in states like texas ok instead of focusing on killing poor black people why not go after the rich white guys on wall street you've already got the death penalty in place pull the frickin trigger you. so like he said you know seal team six those police protecting bank of new york mellon from the protesters their pension funds have been defrauded by the bank behind them that they're protecting why don't they take the bank drop it into the ocean somewhere put it on an airplane fly it over the atlantic and drop it in the ocean right there the cops in front of the bank trying to protect the bank from the protesters and behind their back the banks are ripping them off blind you stupid second cop it's safe here but thanks so much for

being on the kaiser report thank you mike don't go away much more coming away so stay right there. a very warm welcome to you this is your news today protesters on the. streets they are. ladies and gentlemen your chance to choose to set a good book for example the status of the human experiment is exploding with. business rap music or dixie knows the globe is literally trying to make sense of global economy and it's all came to us financial templates the research scrambling to maintain our confidence in markets and taking on the critics point to easing trade imbalances recession to keep emissions close to collapsing a subprime loan for close plants. to fail so we play banks again sealevel such

thing as the us crash and seven and smash the ceiling changelings it's like putting the children up in street the i.m.f. constructionism just programs increase the total economy. most. renewed the latest in science and technology from the realm plus. we've got the future covered. welcome back to the kaiser report i am max kaiser oh boy here it is this is the book i've been waiting for investing in troubled times by charles hughes smith big fans of charles used to bath water because a report thank you max just as you are here in europe that you describe as a neo feudal kleptocracy a five hundred million debt service tell us more well max as you've covered on the

show many times it seems that we have to ask who is the recipient of all the sacrifices being asked of the european people both the taxpayers in germany and elsewhere and those who are being. suffering under the austerity programs of greece that suffer and it seems that the answer is not the people of those countries but the banks which overextended massive quantities of debt to the sovereign states and to the individuals right well this is a point that's being made more and more people understand that the banks are at the heart of the problem i've got this occupy wall street campaign all over the world remember this called anti-globalization and now they figured out why you know behind these companies are the banks are going to focus on the banks and yet there is still nobody standing up in the political arena to say like the pechora commission of the one nine hundred thirty s. where they said you know what we've got to go in there start arresting some of these scoundrels what's your thought on that absolute agreement first we have to

establish as a society what is right and wrong and clearly the status quo would have us believe in sort of a jedi mind trick that looting as long as it's under the auspices of the status quo is is not a wrong it's like normal you mentioned looting and i mean really think of what's happened in london recently they had a looting spree from folks and david cameron the prime minister came out and very harsh terms castigated. those looters and yet he wouldn't be the prime minister unless it were for the looting of the bankers who paid for his election campaign so what it was why did the british people accept the fact that their prime minister is a looter in chief but should they just be giving banking licenses to the kids who are breaking into shops on the street and they can grow the economy by looting that way yeah you could ask perhaps the same question of ireland and greece how are those people accepting the idea that their. nations are being looted fundamentally

to save the banks and the owners of the banks and their political lackeys let's talk about the u.s. for a second you're right that the stealth coup d'etat of two thousand and eight to two thousand and ten so what's going on there. i think it's the culmination of this. buying of the political process by the by the financial sector that reached its apex in two thousand and eight and so lackeys of both parties across the entire political spectrum you know did whatever was necessary to save their financial masters sensually alright and so now we've got the the latest incarnation of the anti-globalization movement it's called occupy wall street and you've got naomi klein i think is finally figured this one out and she is joining the barricades so what do you make of the protests. i think it's. a useful. i think those people are

heroes to stand up in public their heroes but i think that we can also look at what everybody that's not there could do and this ties in to your campaign of buying silver in other words what kind of direct actions can everyone do from the safety of their home without get a risky risking arrest and so prying silver closing your accounts that major banks either reneging on your loans that you can never pay or paying them off i mean exiting yourself from being a supporter of the banking the finances are things i want to as to what about. mass default on mortgages across the country and it's on one designated day that would certainly put the kybosh on the banks and oh that's a great idea so occupy wall street should pick a day in the next couple of weeks and say that we demand that the country the united states of america everyone has got an underwater mortgage for sure or anyone else did strategically default on their mortgage do it today this would put the banks under and would force the government to create a new bank that was claimed that simply did deposits and made loans at

a reasonable price and they did exactly what happened during the s. and l. crisis. yeah and as a follow up if the citizenry could could demand that instead of five banks which control everything and are therefore too big to fail that by regulation there has to be at least two hundred fifty banks say or twelve hundred fifty a vast number of banks which are unable to amass the concentration of wealth to buy the political process but i think that's called competition. yeah it's a strange concept in some ideology called capitalism which we used to have you know what let me ask about that because michael moore's made a big thing about being anti-capitalist and yet we don't have a capitalist system is capitalism as means competition and they wouldn't have this problem to begin with where to see getting it wrong i think there is so-called classical capitalism that is we're basically told exists across the spectrum but and exist still in small ways like you can go out and become an independent contractor as a capitalist or you can be steve jobs and start

a computer company without any political pull. but but i think what most people miss is that spectrum of classical capitalism is a rather narrow band of the entire economy globally and certainly in the us and in the part that's controlled by those with immense concentrations of wealth and political power control like eighty to ninety percent and that's crony capitalism or cartel capitalism now my friend alex jones he's making a move to go down even deeper into the disease by going from occupy wall street to occupy the fed and he's targeting the dallas fed as part of the texas initiative is that in your mind the right direction absolutely and what's interesting max is how we see this movement gathering force either into the spectrum that we have. we have the same leftists realizing that the fed has got to be brought under the treasury

or and then from the right ron paul is like abolish the fed i mean either one is a move in the right direction so maybe we're getting some consensus right. the fence should be under the treasury that's a proposal by dennis to senate yes and which is part it's pretty much the exact idea of lot of the fed or what ron paul has been talking about what about this idea that dennis to senate says nationalize the fed put it under the treasury affectively making it transparent within the government's ability to do so but it is not a good idea oh absolutely i mean it's so as to whether we should have a fed is a secondary question but certainly if we have one then it should be under the treasury which is nominally under the elected government right so what would be the objection them and if he said to the fed look we're just going to put you on to the treasury department in your report to him geithner now ben bernanke and we're going to put a guy in tim geithner's office to make sure he knows not doing too many horrible things what could they say back as to why that's not a good idea why i think the jet i mind trick is we need an independent fed owned by

the banks to make the correct policy for the elected government right but greenspan kind of blew that concept independent fed by every single time there was a political problem in washington he lowered interest rates which created the bubble which created the enormous banking fraud which created this massive depression now you mentioned so over a moment ago and we did that crash j.p. morgan by silver campaign it caught huge attention all over the world crisis over that time was twenty six rocketed up to fifty dollars an ounce there's been a pullback down of the thirty range still in a bull market still looking good but walk us through how you how that works you're taking physical silver off the market so how does that crash the banks well actually you're you're probably more adept at that argument than i am in you've made it many times and better than i can but i think the the key the key function to me is silver amongst many other commodities is actually traded as

a commodity and the futures far exceed the actual physical product right so. if we the people go out and and physically own most of the physical product then that reduces the amount that's available for leverage and financialization right the banking crisis is due almost entirely to over leverage which is fueled by speculation and the cost of speculating is near zero because interest rates are near zero thanks to this corrupt yes and any time to make a mistake they dump it into a pension account somewhere and it's all however still stacked on top of something physical at the base of the ponzi scheme that's right now as you so if i take a hundred dollars of silver out of the ponzi scheme i am de capitalizing the ponzi scheme by probably close to a thousand dollars at this point yeah that's how bad the so incredibly leverage the system is so it would cause again the ponzi scheme to crash which sounds horrifying

unless you realize that it's a ponzi scheme banking cancer and you're trying to get rid of the cancer that's right so it's the leverage seems to be removed and you do that by taking the fundamental layer out of of the of this layer cake of fraud as it were now we've got to herman cain who's running for president he recently stated that the occupy wall street protesters are on american for it's bankers that create jobs your thoughts one wonders at the audacity of that statement the audacity of of cluelessness that's obvious campaign slogan. yeah if if if the bankers create so many jobs and they've been ascendant for at least the last decade then we should have zero unemployment. but actually what they're really good at is not creating jobs they're good at creating wealth off the backs of people who still have jobs yeah the parasites they're absolutely parasitic and you

know you can look at a mortgage as the equivalent of the physical gold that you know. you're making your payments or your student loan or whatever you're making a payment of one hundred dollars and they're leveraging that and turning that into a financial scheme that supports a thousand dollars of speculation so once you know there's on the banks then you're just giving your plasma to keep the zombie mobile even though they died years ago yeah that's right ok i'm talking to the want to know me charles use meth this is a book investing in troubled times i suggest you read this with alacrity one last question. your post imagining a middle class does not create one tell us what is a middle class what does create a middle class why is a middle class even necessary you've got about a minute left if you tell people they're their middle class then they tend to become passive and they say you know oh this is wonderful it's kind of like it's managing perception as opposed to their actual financial circumstance which is

another that i'm sure it's totally are your star wars and what is up with. yeah i didn't bring my lightsaber but yeah it's very much like a movie script that we're being told were middle class even as the middle class as defined by security and financial situation which is slowly improving over time is deteriorating well many people in america now believe that they are in the middle class when in fact when you compare their status to other the g. twenty nations there have derb airily out of poverty that's right and compared to what they used to earn thirty years ago or even twenty years ago then there are their income is declining right so the the folks in the banks and washington are hitting this middle class button and people believe it even though the truth is there their wealth income status is crashing and if they if they faced up to that if they accepted the reality then they'd have to become more politically active yeah i'm a serf i'm

a peasant yeah it was with pitchforks or the gates and absolutely it's all in star wars. all right well. thanks for being on the show that's all the time we have ok thank you very much max my pleasure all right that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert i will thank my guests charles two smith this is the book burn that your mind this is a jet i mind trick by the way 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 max kaiser say. i am. leisurely is.

just sleeping. to eat.

welcome back this is a quick check of the headlines this hour. with twenty five dead three hundred injured egypt's military rulers order and investigations of the dead riots in cairo as if the revolution in fierce clashes between christians and security forces. call says european leaders work against the clock to try to save me from economic disaster russia says it could help poultry your. zone economy by buying up dead but only up to brussels produces a clear strategy on how to exit the crisis. and onto wall street i'm sure it's increased the pressure on us pros has gathered pace to watch the u.s. and spread to other countries while demonstrators accuse police of the deployed time takes some time making found little bread.