A listen to what he told the House Financial Services committee on wednesday it appears that uncertainties around trade tensions and concerns about the strength of the Global Economy continue to weigh on the u. S. Economic outlook. Fed watchers took that expression of concern as a clear and long anticipated signal in fed speak that the u. S. Central bank will cut Interest Rates when the board of governors meets later this month u. S. Stock markets rose on reports of powles testimony with the s. And p. An expert king 500. 00 index breaking 3000. 00 during its delivery before falling back in other markets gold jumped by as much as 15. 00 an ounce in london while in the oil sector both brant and rose by 3 percent in early trading on wednesday. We are now fortunate to be joining for a deep dive into this market moving development and its meaning for the Global Economy by peter c. E. O. Of Euro Pacific Capital and Richard WolffeProfessor Emeritus of economics at the university of massachusetts amherst 1st lets just get each of your to your takes on the news why did this happen what does it mean moving forward peter schiff well start with you youve had a lot to say on Interest Rates. Well i think the main reason the fed is cutting rates is try to keep the air from coming out of the stock market bubble you know the other reason is theyre trying to keep this socalled expansion going there theyre going to fail i think were headed for a recession regardless of what the fed does with rates the only thing the feds going to succeed in doing is reviving inflation the fed claims inflation is too low and they want to make sure that the rate goes up well thats going to be their only success but unfortunately thats also going to be their biggest failure. And professor wolf whats your take on how this happened and the fact of the near certain cut in u. S. Interest rates. Well i think peter schiff is quite right i think that this is not going to have a basic impact on whats coming our capitalist Economic System as a downturn every 4 to 7 years that means were overdue from the less busy bottom around 2008 and 9. 00 very overdue and i think the reason the Interest Rate was cut was to try a desperate try by the bush should scuse me by the trumpet ministration to postpone this recession so it does not undercut his chances for reelection in 2020 its an attempt to keep on kind of Artificial Life support the stock boy acted and anough of the economy boosted by cheap Interest Rates so that the crash will be postponed but the tragedy is the more you postpone it the greater the risk that it will be serious and what richard. Could just go into that what makes it by putting it off how does that make the eventual recession worse. Well theres a number of things that have happened over the last several years by historical standards the Interest Rates are already low that not as low as they were but still lower than they have did you have boosted the a commonly youve pumped up the money supply in record amounts thats waiting to create a real series of problems the reason they started raising the rates this last year was to try to cope with those problems before they hit to reverse course now means that youre letting that overhang build up and therefore the risk that that money could stop playing in the stock market and go into the regular economy producing this inflation but up big and bad one that becomes more dangerous the longer you wait and becomes even more dangerous if you now cut the rates very interesting and peter you asked on twitter today are any House Democrats smart enough to ask chairman powell if he agrees with President Trump that the current u. S. Economy is the strongest on history in history now why would they have been smart to ask that question in your view and did day. Well i didnt hear the question asked that it is certainly a good political opportunity because it seems like the whole hearing is basically democrats and republicans trying to score points by getting powell to either endorser reject the policies of the democrats or policies of the president but the easiest way to get trump would be to put powell on the spot and ask him if he agrees with the president who tweets every day that we have the strongest economy in history which isnt even close to being true but clearly powell doesnt believe that the economy is the strongest in history because if he did hed be raising rates not cutting them right there was another point you made it seems like if this is the best economy ever why do you need to cut the rates. Doesnt seem to make much sense its not yes look this isnt even a good economy he its a bubble pal doesnt seem to understand that he thinks the economy is doing ok its not the Economy Today is in worse shape than it was before it collapsed in 2008 the fed inflated a much bigger bubble this time than it did last time and yes the longer we succeed in kicking the can down the road the greater the imbalances grow as a result of this volatile and the more painful it is when the air comes out and thats whats going to happen and whats going to be so much worse about the coming recession is that is going to be inflationary were going to have stagflation except its going to be a recession not just stagnation and the inflation rate is going to be far higher than it was the last time we had stagflation which was in the 1970 s. Yes some very interesting points of agreement developing between the 2 of you professor wolf back to you the u. S. President has been transgressing the protocols and norms surrounding the previously sacrosanct ideal of independence for the fed for better or worse lets just listen to one recent example of the criticism he should have never raise the rates to the level that are raised i say were not going to have pushed around by political he said you know basically suggested a so im not going to try to prove how tough he is because hes not going to get pushed around is a guy nobody ever heard of a before and now i made him and he wants to show how tough he is ok let me show have coffee is used and he said hes not doing a good job. Chairman powell said today when asked directly that by law he serves a fixed 4 year term and he said he will not resign if President Trump attempts to fire him but present trump seems to have gone the policy outcome he wants even if mr powell is still there to mr powell show how tough he is today or did he show weakness. I think he showed basically we have this i think yes he says something he says about independence everybody says that but the bottom line is when the president tried to jawbone him and and insult him into cutting rates it didnt work when the president then went on a tear against china and all the other interferences in Global Markets that this administration has undertaken causing on certainty and the pulling back of investments and all of that he actually brought the World Economy into a worse situation in order to use that to get mr powell to lower rates or at least to give him the excuse its a stunning example not so much of interference in the fed all president s do a little more or less of that what is stunning is the degree to which the republicans and mr truong will challenge undermine threaten the whole World Economy to get their little way in this next election which for them is make or break thats the extraordinary theater thats unfolding in front of us and peter same question centrally what is the state of Federal Reserve independence after today and does it matter. Well i think its always been a pretense at least it was created to be independent but its actually acted as an arm of government and you know to the extent that we can no longer maintain that pretense that is a very dangerous position to be any dont but i agree with trub that the fed is doing a bad job but because they did rate keep raising rates rates are still much too low the fed needs to. Raise Interest Rates the fed needs to allow this expansion to come to an end because its unhealthy its a bubble the fed has to let the stock market go down let the Real Estate Market go down let the bond market go down and force the Us Government to cut spending thats what needs to happen but by keeping Interest Rates artificially low they support increased Government Spending they support these asset bubbles better undermining the real economy and that are laying the foundation for the next economic crisis which will be much worse than the last one and for which there will be no bailouts and peter we have to ask you about this because the issue of the Gold Standard came up today with a critical question from a member of congress from mr powell about reputed fed board candidate Judy Sheltons pro Gold Standard or Gold Standard curious position mr powell seemed to agree with a lot of the members argument and critique of the Gold Standard position even as he distance himself from any personal critique of michelle to and what do you make of this question surfacing now and the chairmans response. You know well of course the chairman is response is typical if we were on a Gold Standard hed be out of a job but of course the u. S. Economy fared much better under a Gold Standard we had a much stronger economy with a much more rapid rising Living Standard than what weve had with the Federal Reserve micromanaging the economy so we should go back to the Gold Standard and you know the reason that the world that left the Gold Standard maybe chairman powell doesnt understand this the world was on the Gold Standard we took them off because we brought the world out of the Dollar Standard we convinced the world to hold dollars instead of gold but because the dollar was not only backed by gold but redeemable in goal we defaulted on that promise in 1971 we took the world off the Gold Standard but this coming Dollar Collapse is going to bring the world back onto the Gold Standard because when they reject the dollar they will embrace gold and gold will once again serve as the primary reserve asset for currencies around the world great and preferred. Wolf just quickly there was a nother point for economists here alexander culture of cortez in the hearing talked about the phillips curve which basically expresses the assumption that the lowest certain level any decrease unemployment will correlate to a direct increase in inflation and mr powell remarkably seem to agree with her critique so quickly whats whats going on there when we see this convergence between left and right on the phillips curve. Well we now know that there are many other variables besides what the level of interest is and so forth of the level of unemployment and prices so that a line that draws a connection between the 2 ignores all the other factors i think what our xandra it. Was getting at though was a much more profound could take peter fish shift is right the problems of the American Economy are very deep the inequality that exists here that has to be addressed thats not even being dealt with its as if we tweak an Interest Rate we can solve the accumulated problems thats not be all that does is postpone them and thats only to get mr trump reelected which would be a disaster also economically given what hes done that is the serious problem is advantage for us its just bestially when you realize that all of the problems that we have the serious structural problems are the result of the fed keep to get your straits too low and so lowering them again doesnt solve the problem it just makes all the underlying problems worse and fascinating discussion Richard Wolffe and peter schiff thank you both for your time. Thank you. And prices for iron ore the main ingredient in the production of steel have risen by nearly 70 percent in the 1st half of this year the issue of rising prices has disproportionately affected china the worlds number one producer and consumer of steel output of steel in china rose 10 percent in the 1st half of 2019 year over year. Year last week there were concerns that beijing would make moves to normalize the market caused the iron ore to fall more than 6 percent but the material has since rallied the commodities spike in prices been due to supply issues from the 2 of the biggest Iron Ore Mining hubs in australia whether in fire have caused a slowdown in production and brazils volly s a one of the top exporters of the or had to cut output to do due to a deadly dam collapse in january that killed at least 248. 00 people a judge in brazil on one say said bali will be responsible for paying compensation for all damages caused by the dam collapse so far no specific dollar amount has been specified. Time now for a quick break but hang here because when we return in mexico almost cabinet has seen a shake up as a key economic figures call it quits more carlson of the center for International Policy joins us from mexico city to break down the latest move and how its shaken the nation as we go to break here are the numbers at the close. Join me every thursday on the alex simon short and ill be speaking to guest of the world of politics sport im showbusiness ill see you then. You will not obey the voice of the lord your god will be careful to do all these commandments and the statutes which i command you this day in all these curses shall come upon you and overtake you. And then the white people the stolen property and the point must be returned to the people if they get rid of whites only problems will go away. Within the. Presence of the fleet. Wide for. Every single day. People being tortured to death expression the elderly people in a. Mania somebody if somebodys. Not been the white horse will find themselves affected by a crash and we often point to one of my means and dreams oh its all sweats and a lot of. What are you going to have for dinner today we dont have a need to be asking for a nice. Feelings towards civil war in south africa. Brother. Was there any chong not be in the code of europe and to get to. Eat. While come back the ban on u. S. Companies selling tap to Chinese Telecom giant why. Away have officially been relaxed the move announced by u. S. Commerce secretary wilbur ross follows the truce in the us china trade fight negotiated during the g 20 summit and osaka japan in june mr ross said tuesday that licenses to sell products to wall way will be issued to u. S. Company that the sales do not affect u. S. National security the commerce secretary added that the u. S. Was not ready to remove weiwei from the countries and city list saying within those confines we will try to make sure that we dont just transfer revenue from the u. S. To foreign firms while we itself remains on the entity list and the announcement does not change the scope of items requiring licenses from the Commerce Department nor the presumption of denial the relaxation of the band stands to benefit u. S. Semiconductor manufacturers and others in the smartphone and Electronics Supply chain. And more good news for chinese tech manufacturers hoping to make inroads in the United States shenzhen based d. J. I technologies the worlds biggest manufacturer of drones announced tuesday that high security tag on 2 of their new drone models has gained approval from the Us Department of the interior d j i Vice President for north America Mario rebel was very positive about the news in the statement writing the department of interior report validates g j is efforts to build software and Hardware Solutions that meet the evolving Data Security needs of its customers the approval for d. J. Eyes high security drones known as the government edition is a big win after the department of Homeland Security sounded alarms over the possibility of john manufacturers storing user data. And checking in on mexico president under as Manuel Lopez Obrador reece has received a harsh Resignation Letter from his former finance minister a letter source Letter Service to news reports on monday marking a dramatic setback for the left leaning leader as the parting may. Mr Carlos Manuel a must see us was previously considered a member of almost inner circle joining. Me to discuss this Dramatic Development is Laura Carlson director of the Americas Program at the center for international International Policy now laura this is a remarkable Resignation Letter suggesting that Economic Policy making processes are not based on evidence and alleging conflicts of interest and the imposition of. Without knowledge of Public Finances responsible posts so laura can you put this in perspective how bad is this now and what is the longer term significance of this resignation. Its bad but its probably temporary thats the short version youre absolutely right its a very strong Resignation Letter he talks about extremisms avoiding extremisms from the left and the right and complaints about the imposition as you mentioned of officials without a knowledge of Public Finance so essentially hes complaining about cronyism and. Decision making process that doesnt take full account of the possible consequences of those decisions so this is a letter that lays out president and there is Manuel Lopez Obrador to criticism from exactly from a flank in which he is particularly weak and that is from International Finance and from the Global Markets we can see what happened immediately there was a response from the Global Markets stocks went down the currency lost and were beginning to see that come back up so these effects are probably still temporary what the long term effect is this is what people are really watching is ringback whether or not the government will be able to pick back up stride in terms of making the kinds of changes it wants and at the same time call me in the speculative markets. Be able to get over this major event in the history. The finance minister was really considered kind of the peace within the government that. Created confidence. In the architects of the neoliberal system despite the fact that the government itself was dedicated explicitly to dismantle the neo liberal system in mexico and in fact he was carrying out a policy that looked a lot like neo liberalism and thats probably where some of the conflict came we have to take into account that you know the International Finance markets are not just a cause in fact you know the type of response to these kinds of events theyre run by the most powerful capitalist sanitys in the entire world and theyve been trying to punish the center left government. Door for a long time by reducing ratings by speculation and keeping the factor of uncertainty among investors so there have been a heyday now with this but the long term perspective is that there were probably be a return to the ability right and laura as you point out. The door letters a progressive has largely been here to orthodox liberal policies so in the later is the social why this harsh response. Is the outgoing minister responding to certain policies he thought were misguided or busy is he alleging outweigh corruption. I think there was a power struggle going on there because there were 2 events really that took place right before this resignation which was a surprise to almost everyone i havent seen anyone in the columns or in the news come out and say that they knew that this was going to take place at least when it did one of them was that the president signed it. Gave greater powers to the Inspector General what would be the equivalent within the finance ministry as kind of a watchdog i think that was a sign that he was checking the power of the finance minister the other was that within congress right now the president ial party maturity many members had come out to criticize the fact that theres a tremendous amount of the budget thats gone unspent that there was extreme tightness coming from the finance Ministry Even within. The program of the federal government and they were asking them to loosen up on some of that spending because it was affecting social programs it was the effect in the prospects for growth of the country so there was pressure coming in from these different sides but i suspect that the fundamental problem was power issue between the president directly and the finance minister and probably as well this very strict neo liberal it here and of the finance minister it seems very interesting that its essential the difficulty that his having in implementing his essential you know acceptance of the neoliberal policy agenda but i have a feeling we will you know this will this controversy will not end with his resignation will be revisiting his policies and trying to figure out which direction home go very insightful interview with Laura Carlson director of Americas Program at the center for International Policy thanks for your time. And paris based frash fashion brand weve aton has drawn the official ire of the government of mexico the mexican culture minister sent a letter to the fashion house expressing indignation over the apparent resemblance between one chair and the dolls by roger edges collection which sells from leave it on for 18200. 00 and designs on a similar item created by mexican artist in the state of head aagot. Home office seem to acknowledge the source of their inspiration but did not did not address whether the sources of their ideas would be compensated they wrote we are currently in a relationship with artisans. In the state of had all gone mexico with the perspective of collaborating together to produce this collection last month minister alexandra frausto wrote a similar critical letter to venezuelan designer carolina over her use of indigenous patterns in a collection now the persistent problem has moved legislators from the National Regeneration movement or more than a party founded by the mexican president to look into a legislative remedy to protect Indigenous Culture and ensure fair compensation and thats it for this time you can catch boom bust on direct t. V. Channel 321 dish Network Channel 280 or stream 247 on pluto t. V. The free t. V. Channel to 79 or has always had its up at youtube dot com slash boom bust are to see you next time. Live. Leg. Live. Live. Live. Live. Oh. Please. Live. Live. Live. And very well welcome to you youre watching us inside. During the Great Depression which im old enough to remember there was most of my family were unemployed. It wasnt it was bed you know much worse objectively than day but there was an expectation of the things were going to get better. There was a real sense of hopefulness there isnt today todays america was shaped by the 10 principles of concentration of wealth and power. Reduced democracy attack solo doubt engineer elections manufacture consent and other principles according to know on. One set of rules for the rich opposite. Thats what happens when you put her into the. Narrow sector of will switch will is dedicated to increasing power for chills just as youd expect one of the most influential intellectuals of our time speaks about the modern civilization of america. When it comes to north stream saying great clarity that the position of all americans and government is Crystal Clear it is a business project it is not the political approach and we understand that the americans would like to sell their natural gas instead but it is among the mug up on the federal republic of germany Crystal Clear that we stick to the plan and to let the drama and European Industry go ahead with this boat. Just up to you know the movements. But in your circles modesty. You know. When you look for that would lose a little when youre married you do more when you. Look. Quite a good sort of. In the you. Know most interesting. City. That. A u. S. Federal charge condemns the justice departments unsubstantiated claims that a russian indict. Was bankrolled by the kremlin saying they could sway. A u. S. Official to fans the much mr powers guided missiles to saudi arabia putting up part of a want to effort to export human rights. The u. K. On boston washington resigns