tv Keiser Report RT April 17, 2021 3:30pm-4:00pm EDT
it's been decades since the fall of spain's fascist regime but old wounds still haven't healed. me from a dog. to me on the bus at us as mean older than us and i think ultimately you know cells of newborn babies were torn from their mothers and given away and forced adoption that only was the 5th or that of my own role as a fellow mentor to this day mothers still search for grown children while adults look in hope for their birth parents.
brace brace brace i am max kaiser this is the kaiser report man thanks a lot going to weird that way i like to call this a blizzard dream we don't know whether there's inflation deflation hyper inflation hyper deflation many of our guests say it's inflation and it's heading for hyperinflation others say is deflation is going to head to hyper deflation or deflation and heading to hyperinflation so we saw a similar one in our early days of crisis report during the last financial crisis and i think it's the same sort of thing today and one of these days one of these boom bust cycles will collapse the whole system that's my opinion whether or not
it's this we don't know serena look at the information everybody knows that house prices are soaring out of control in america across america it's amusing to watch your house price theoretically go up to $345000.00 every day used car prices as well for your set on a recent episode here that consumers are willing to pay the increase they he as a former auto dealer in that sector like he's never seen anything like this nor have any of his contacts and that's the most important thing according to the central bank and inflation is whether or not consumers are willing to pay those increases and prices right they don't step away there is that they keep on demanding the product even though it's going up in price and stock markets of course continue to hit a new all time high so that's the inflation side then we have the deflation side of the derivatives that there are unknown quantities out there let me explain everything. go ahead. 2008 global financial crisis
had a global credit freeze global economy suffered cardiac or. asked actively died. in response that's called deflation when when you have an event where bonds for example become worthless and they you would call that deflation and in response the central banks flooded the system with money see out money. and they lowered interest rates at 0 and this is caused a lot of bubbles and because we live in a finance lies world where everything is traded everything's commodified and commodity sized and traded on exchange those bubbles can appear everywhere including food and energy occasionally so a lot of that bubble is in food prices and that goes up and people say ah well conflation but it would be a bubble in food within the context of
a secular deflationary collapse there is and i can say that with some confidence is that we have not seen any bubble in wages. right everything is subject to a bubble except wages because there's there is no actual all inflation as defined by an accelerated economic activity or business cycle that would precipitate things like rising interest rates rising wages etc now we have structure all collapse we have lots of money printing to faster than the system can collapse for every trillion dollars and bonds that are a threat of collapsing the central banks will inject 5 trillion worth of money and they just rates are near 0 and those who can the speculators and those are now the a ruling elites of the world are the speculator kens they can create bubbles it
could be used cars this week it could be. food next week it could be islands somewhere in the pacific the week after that those are bubbles within a secular collapse and ultimately when the everything bubble collapses then we have the realisation that the economy died in 2008 we just haven't buried it yet right and that we inflation story is entered into in the j.p. morgan report recently where they're predicting 3 percent inflation for the next 10 years they're outside their peer group say j.p. morgan goldman sachs thinks it's not going to hit 2 percent at all over the next 10 years but they're j.p. morgan's predicting it's going to run higher and it's obviously not because of wages wages are not going up but their income is going up the ordinary americans income has gone up dramatically in the past year because of all the stimulus all of
and hands on employment benefits all of that has caused their wages to go up americans unleashing pent up savings could drive up inflation and rattle parts of the market j.p. morgan's chief strategist says. aaron ward said in an online presentation this week that j.p. morgan estimates americans have built up extra savings worth around 8 percent of u.s. g.d.p. during the coded $1000.00 pandemic when their spending options have been limited ward a former top economic adviser to the u.k. finance ministry said she thought most of this would be unleashed on a spending spree when combined with joe biden's $1.00 trillion dollar stimulus bill worth around 9 percent of g.d.p. that is likely to push inflation higher she said as you point out that's not those aren't wages that's income so income through transfer payments yes or money fronting yeah because the economy died in 2008 and it's being kept animated like you and adam made a corpse with electric shocks with money printing and this is causing bubbles so
used car prices are in a bubble not because wages are growing and that there's inflation of there's g.d.p. growth and there's any hope of paying down the national debt those hopes have been dashed to stop we're going to happen but we do have these bubbles within the collapsing global economy and the acceleration of backlash. crash is increasing which is now contributing to political tensions you know you've got this new cold war situation bubbling that's because the economy died in 2008 so it just dawned on me when you said the transfer payments it could just be a situation whereby you know and you talk about the geopolitical tensions and we've talked about this he said it is trap and that the conflict emerges when a rise in power overtakes a declining power you know that happens to europe in the past as well so you know we could just becoming becoming more french like more and more people you know this massive deflation across europe as well there's a deflationary problem there but. because wages aren't rising wages don't go out
but there's huge transfer payments from the government it seems like markets except that in some way the j.p. morgan does point out that the opening the 1st quarter it's to 2021 it's been the worst bond market since the eighty's so they they're suggesting best the bond market thinking there's going to be pricing and huge inflation so. right while the bond signals on the 30 year bond clearly shows a downward trend it's currently 2 percent yield on the 30 year and there is room for it to go 2.25 percent 25 basis points so we'll see about that in the next 9 months if us is becoming more like french than this which psychologically in america you work to take time off and in france you take time off and work is something that just allows you to take more time off right it's a completely different psychology and we've lived there for many years we know how that goes in the u.s. you get 2 weeks vacation and many americans don't take the full 2 weeks in france
you get 8 or 9 weeks vacation and that can be stretched out to 12 or 13 or 14 weeks of vacation and that's the psychology is that work is an necessary evil to take time off well again the psychology changes and that's the thing that central banks in particular worry about and investors so we have as we mentioned like you have chance for payments that were huge last year and whether or not you know a bitin administration will be able to roll that back. it's unlikely right once you're getting all that free money who wants to take a 20 percent cut in their pay you know their income essentially and michael berry the famous hedge fund manager who is the subject of the movie the big shorts who shorted the housing market when the subprime mortgage market collapse and present global financial crisis well member he said that we're in the beginning or the end of that why march stage like the end is the last year of hyperinflation so he's
saying you know went for 9 or 10 years and you saw a lot of inflation a lot of booming stock markets and booming property markets as as the investors the psychology was changing over those 10 years getting ready for more and more inflation until it collapses their whole faith in it and vester support more money into stocks in the last 5 months than the previous 12 years combined and raw numbers $569000000000.00 has flowed into global equity funds since november compared with 4 injured $52000000000.00 going back to the beginning of the 20092020 bull market again obviously there's somebody i haven't cited selling it to these investors but a lot of people are flush with a lot of cash but it's also that psychology that michael berry talks about of the why mark you know if you can control this inflation if you can do something if it gets too hot you know brant bernanke it argued they could just stop it in a few minutes by raising interest rates but whether or not they could do a paul volcker sort of situation as happened in 1980 when he ratcheted up interest
rates to near 20 percent will say no they can't and stocks are clearly in a bubble and as a result of all this money printing transfer payments and ease of access through apps like robin hood and others you've got folks who are getting money from the government and going right into stock market speculation and buying options and going on margin and the margin pool has never been higher not even before the crash of 1929 did you see as much margin on a percent basis then you do right now is the highest. based margin few old stock market ever in history and again that is a function of a bubble within a collapsing system when those bubble star bursting pop pop pop pop then you have. a recipe for a global conflict sadly because there will be no way for one country just survive without taking the resources of another country well we see that in this final headline here from bloomberg and terms of you know great depression sort of times
and blizzard dreams of of negative rates of negative oil prices and and crazy stock signals price signals and stuff like that well we've always had a beggar thy neighbor everybody every nation of course tries to survive the best they can and that includes the weapon of beggaring by neighbor and if you have the u.s. dollar as a reserve currency if you get to print it then you can export inflation or important place in whichever one you choose the global middle class shrank last year for the 1st time since the 1990 s. with about 150000000 people slipping down the economic ladder so this is a new study out shows that 150000000 people tumbled out of the middle class. the rise of the bubbles like the stock market are masking the fact that the global middle class are shrinking it's neo feudalism as we have called it before is this
barbell economy where it's extreme concentration of liberal wealth at the very tippy top and everyone else is essentially hand to mouth and one paycheck away or one transfer payment away from being homeless and there's absolutely nothing in the middle and that's by design by the way because all the darks love the oligarchs and you know yeah it's interesting that the lockdown of the economy is really exposing that layer of the can't tell in effect i mean we do have a real economy that manufacture stuff and creates wealth but the financial eyes economy has grown bigger and bigger and starting to swamp that real economy and you really see it that's the high end exaggeration of that cantillon effect when all there is as essentially money printing for most of the world outside of you know china. yeah the financialization component of the economy of earth 30 years now as grown every single year and i think it's it's well over 70 percent now if you make all the correct adjustments anyway i'm going to take a break and come back much more coming your way.
either. show. warships with drone bugs. i agree let's start with. the. best. welcome back to the kaiser report i'm max foster let's go to oust rick lot of call money dot com i'm an investor in the company out there welcome back nice to be back max let's talk about inflation deflation hyper inflation hyper deflation what's the current thinking well i think the best thing needs durians divine inflation and deep nation inflation is simple it is an increase the request of money in
circulation deflation is not so simple because it's something that very rarely happens and overall it hasn't happened in our lifetimes. what you would look out for the fashion would be a contract action in the constant money the effect on prices is it is an effect but the real deflation would be a contraction in the total quantity of money we haven't seen that now and i know a lot of people talk about deflation but what they're really talking about is they see prices maybe fully. but that hasn't happened either i mean the prices were forwarding in the 1st month or so of 2020 before the fed stepped in in march march 19th cut they fed funds rate from one half down to 0 and then the following monday announced 120000000000 monthly q.e. and a few other bits and pieces so that was that was if you like for the deflationists
the last deflationary time now having said that the us the majority of the money that is created is actually create it by the commercial banks not the fed it's important to understand that why are the banks creating money well in the last year they haven't created that much they have created roughly 4 percent look at the figures and i can see that bank credit up until the end of march. we're standing at 15.247 trillion a year ago it was at 14.6940 trillion so what are they being doing with it there are 3 things they can do they can either pass it crisis they can lend it to consumers or they can lend it to business now the only bus figure for business lending and to an extent also consumer lending will take the loans in leasing total that actually decreased from 10 trillion 681000000000. it decreased
from that to 10 trillion 329000000000 us vulnerable 3 percent. so what were they doing the balance the answer basically is that they were investing in securities in other words they were puffing up the markets so we have an inflation of prices and not on fixed interest secured these markets we now also have inflation if you like or the effect of it inflation. for the dollar in commodities and also of course krypto asses and to a lesser extent goten so so we are in inflationary times it's as simple as that it is possible that the commercial banks will reduce the bank credit but actually if you look at the much money there is in the system i mean this is just it just crazy total bank credit is standing at ever $15.00 trillion and one the narrow money
supply is 18.4 trillion this you know as a small money in the system then there is bank credit. it's just an extraordinary situation so. it is inflationary and how it affects prices depends really on how that is translated if you like into the 2nd is it aimed at the consumer is a good good example because the. expansion of consumer spending all the sleep drives up prices other things being equal what you have is a government which has drawn down on its general account to helicopter money into every bank account of everybody who has less than $100000.00 they've also increased the amount of welfare payments for the unemployed and so on and what this does is it just pushes money 1st into savings and then as the lockdown.
ceases that is likely to dribble back into spending but again it's not going to be satisfied by an increase in production so you can see that again and prices will drive what will be a trip driven up so i think it's the it's the vital. helicoptering money which is probably the greatest effects on rising prices translating monetary inflation into price inflation out there if there's inflation what happens to the price of bonds not the elf but what happens to the price of bonds during inflation quite simply they fall which my follow up question would be i'm looking at the 30 year treasury bond has done nothing but go up so there's not there's something wrong with this picture well let me ask you
this. it seems that in 2008 we had this huge credit phrase the global economy came to a screeching halt it was a massive effort by central planners the central bankers to refloat the economy with a massive injection of money efi out money and that's the how money a sloshing around the system in the form of bubbles we seem in commodities we see bubbles in the stock market we see bubbles across the spectrum and this leads some to conclude that we have some inflation but the overall the arc of history from 2008 to today and going back even further is this fall in yield a rise in bond prices which is the classic view of deflation number one and number 2 if you've got this inflation how come there's no
wage inflation right so there's too can be caters that's how may that the big picture is deflation and within that we've got bubbles from all the money that you rightly point out there's a huge there's trillions and trillions of dollars and because interest rates are at 0 percent and because there's no accountability and there's no enforcement of the financial regulations that bubble of cash is moving about and it creates distortions and it creates bubbles but that's not necessarily the predominant theme one could call inflation ouster well it goes back to what i was saying about where is the bank credit it is not going into the economy it is not going into industry it is going into norms it's interest securities and extent that securities as far as the banks say the loss of course is u.s. treasury now i haven't been following the steps yet. but i.
a yield on the 10 year treasury has actually risen quite steeply in recent months is a little bit off the top but we're talking about something which in february the yield was just under want the sentence now or what 1.66 percent that's a reasonable rise in europe which basically means a reason for if you like a 10 year treasury now not only that but you have to bear in mind for ownership dollars that is standing approximately $28.00 trillion dollars which compares with the g.d.p. of roughly 2021 trillion dollars so the foreigners are they owed an awful lot of dollars and guess where they are say are in u.s. treasuries they are in cash i think about 6 and a half trillion of that is sitting in bank bonuses and short term instruments such as u.s. t. bills on top of that you have got investments portfolio investments in the stock
market now they are important because the 1st people who will feel sensitive to a fall in the purchasing power of the currency are foreign owners off it and they will demand a higher return in order to stay with that currency so we are likely to see increasing market pressure on the fed which means that they will be fighting to keep the short overnight rates close to 0 bond now this is important because either the fed responds by raising rates or the dollar tax i mean it's really a binary choice is the simplest that that's true you know you've got the u.s. dollar wild reserve currency but if there was. again when you started and you said you need that now have a definition for inflation and a definition for deflation and ask you know and different minds can can really mean different things clearly when you. got an economy where the employment
participation rate in the us is that some of the lowest numbers we've seen in decades where the g.d.p. is suffering as a result of small to medium enterprises are going out of business the the central banks are are printing all this money to try to stimulate the economy because and they say you know they're fighting deflation now the result is with then a crashing economy let me add let me put it say this way because we've had this conversation a few times is there another something maybe we need to consider here it's not really inflation or deflation it what it what what if this is just a massive power grab by the central banks who know that their policies are not working as as indicated and but as it is making the oligarchs at the top of all the countries they may trillions of dollars is this not alister a pretty that's why
a little creative thinking here is that almost you could call it neo feudalism i think that's actually quite a good description because i mean you know all of us all serfs in this environment i mean the policy makers and the policy planners in the central banks. you know they are going on a course which basically funds the government hand in riches the banks why does it enrich the banks because there is a transfer a wealth transfer from money printing from you me everybody else into the banks and into the government and we lose sight no this is never ever admitted by the policy planners in state wealthy do is they say we're creating a wealth effect because what they do is q.e. and the q he is targeted pension funds and insurance funds. pension funds insurance funds sell government debt treasuries to the fed and. the fed gives them cash
through the banking system which puffs up say banks reserves i mean that's just a balance sheet effect and the pension funds and the insurance funds are encouraged to invest in riskier assets and so you get money going into court protests and you get money going into. entered into the stock market into into restocks and that is the bubble right on one hand they have the central banks are saying we are creating a wealth effect but on the other hand they're taking it away from us or inflation and the people who are suffering of the low paid the people who conjure spawned to this situation of the purchasing power of their wages and their pensions and their savings being taken away from them they can't respond but as you rightly say the people who really benefits all the people who are in the system the rich the people who have set up these enormous companies you know the bill gates this well and so
on so forth so that is why you've got this divide actually happening and it's extraordinary that this is an act of terrorism ever to a 2nd segment out there or getting somewhere finally after years doug thanks for being on this kaiser report thanks thanks very much for having me ok that's going to finish this stuff has a report with me max kaiser say sarah thank our guest alice macleod until next time by our. today the industry prefers to spend millions of euros in you know the. daily conditions will be sniffy all about making money making profits in some of the corporations international markets import export do you imagine the number of
currently diseases that are in every community then it is not due to new viruses all new microbes that's not true so it is due to environment. and say you know that moment all discipline of this sort of muscles are really just accumulate could only come in the day you see them to be so in the list that. they pledge to see the sky if the so food industry is successful it will create more jobs it will create more value added it will create more growth so i don't see why we shouldn't also fight for the interests of the industry not accept that we have regulation we want regulation i was in just belief we don't behave any aspinall to last time. the world is driven by shaped by the curse of those great.
military thinks. we dare to ask. there is no freedom of speech even though in the european parliament anymore an m.e.p. claims he was silenced during a heated exchange in the european parliament for daring to question the transparency of the global chemical weapons watchdog over its investigation of an attack in syria we speak to him. was not. sure that they're going to.