Thinkable of course this is the german eels and this is the u. S. 10 year yield and as you see since basically the European Union finally began quantitative easing in earnest they got into negative territory but i tell you whats remarkable is that you know we made a film like 10 years ago about the collapse of iceland we went to iceland about 6 months 9 months before it collapsed and predicted that it would collapse because it was a serious ponzi scheme where the banks were lending. To speculate and the result of that speculation in the Housing Market would be used as collateral at the bank to create more lending so it became a huge ponzi scheme force a collapse now people talk about these negative Interest Rates they think its the result of some policy by someone in doing some economic benolt benefit but they dont understand is that is the biggest bubble in history the sovereign bond bubble is by far the biggest ponzi scheme bubble its ever been created in the history of the world and when you talk about these sovereign bonds trading in negative rates that means the price of the bond is a 3000 year highs thats stented this bubble is and how does it get there its because the banks are lending against the ponzi value of the bonds to leverage more buying of those ponzi extended bonds and of course like iceland this will result in a 98 percent coops never in the history of the world in 1971 did the human race ever engage in all fiats currency commerce trading Settlement System i weve always had gold backed currencies or other some other hard assets thats why nations went bankrupt all the time thats why many wars happened is because france would go bankrupt they would have no gold left or Something Like that so now we have just an infinite regress of ever referring to another contract or another fiats currency printed by something backed by we dont know what except for perhaps the mightiest army that is never stopped and threatened the earth and thats what we have now so thats why they could go. They think they believe they could do this but i mean its a good point that up until 971 there was always at least one currency in the world that had a gold backing you know the brentwood agreement that was after world war 2 set the american us dollar up as a currency that ultimately had a settlement in gold and then that was stopped in 71. 00 then you had c. I. Currencies or franc the other feet of currencies and thats how you end up with a global ponzi scheme and you had as nomi prins writes in her excellent book collusion about how the Central Banks then were no longer competing with each other in a mercantile a system but became their coconspirators in a global monitor a system where each bank was simply passing the hot potato around the world and there was never any moment when Interest Rates are not being cut over the past 40 years 45 years us never happened one country may have raised a bit but another country would have dropped by considerably more the net result is now the goal of the globe is their debt to g. D. P. For planet earth is approaching 350 percent well some say that the us dollars back backed by oil so it always has been backed by something hard. It was liquid oil the other thing that were seeing however is as Michael Hudson dr Michael Hudson an economist who used to work at chase manhattan and when he wrote his ph d. He told us that you know he he told his bank and he told his professors that actually unlike what you say banks dont actually lend to businesses they lend for mortgages so our entire economy our top Financial System everything is backed by mortgages so were going to get to that because this is. Remember when during the french revolution we had the currency backed by a property of the confiscated Catholic Church properties so what do we have there but hyperinflation as people demanded the prices keep on going up right well here we have denmark which denmark by the way is one of. The most household indebted of all o. E. C. D. Nations so their debt to income is 280 percent but denmarks 3rd largest bank is now paying people to take out a mortgage what this means is that if you buy a house for 1000000. 00 and pay off your mortgage in full in 10 years you would pay the bank back only 995000. 00 no mortgage payments would be due between the purchase and payoff date so effectively a borrower only has to repay principal with a small discount guaranteeing that the bank loses money on the loan and thats a negative point 5 percent right and again whats amazing and ironic about this is that the bank doing this is dons bank and thats this is actually. A bank i do have a report from don scott bank that im going to get to but this is from the bank as the 3rd largest bank. Bank is the largest bank in denmark right and you know referring back to that film we did about iceland and i think those 2008 about the ponzi scheme their bank was the one who initially put out this report suggesting that iceland was a ponzi scheme about to implode now in denmark as youre pointing out here theyre using the exact same technique using the hyper leveraged mortgage to Real Property assets as as collateral to create this enormous ponzi scheme so the negative Interest Rates are a reflection of a ponzi scheme not as they can amik policy and you know you might end up having 0. Mortgage in the bank paying you half a percent a year or percent a year but lets keep in mind that the value of the property is self if it drops 50607080 percent thats not a good deal again lets go back to the fact that we have this system that is unique post 971. 00 all fiats but at the end of the day did they have to back it by something whether its the military whether its the oil whether its property and in revolutionary france when they had property that asset not backed by property but basically the arena terra followed because people like it went totally mad once the whole thing collapsed here you have the same thing. And its also similar to 1933 when the u. S. Started confiscating gold because we were in the midst of a global Great Depression were having the same sort of currency wars it was beggar thy neighbor policies here its confiscating wealth because how is the bank paying these. Speculators essentially to buy overpriced housing overpriced essentially especially because of their incomes which are not rising so how are they doing at but transferring it from savers to these speculators and heres the quote from the chief economist speaking of iceland of course we spoke to the chief economist at coutts thing bank and he had an explanation for why iceland this tiny Little Nation of what like 300000 people was buying up all of europe major income producing assets because he said they were 3 times as mighty that the workers were 3 times more productive than any other european worker or even the the dutch or the germans or the finns or anything right so here is that theyre economists from a bank which is offering this mortgage is another chapter in the history of the mortgage he says a few months ago we would have said that this would not be possible but we have been surprised time and time again and this opens up a new opportunity for homeowners in practical terms the negative rates will act as a subsidy to the repayment and the repayment portion will become smaller and smaller as the debt is reduced he said yes i hardly understand it either in fact i said it cant happen but we have figured out how to make a negative rate mortgage. Ok ray so as you point out similar to the gold confiscation of the thirtys this is another wealth confiscation scheme in switzerland and i think its u. B. S. If you have a large sum of cash at the bank they charge you a negative 3 quarters of one percent to story or cash at the bank its a negative Interest Rate so the bank is taking money out of your account every year to tune of almost one percent they dont pay you to have your money at the bank they take money away now with a negative it mortgage that money is going to a mortgage buyer so theyre confiscating wealth from savers and theyre giving it to property speculators because the banks of almas made their bones in Property Lending their Balance Sheets arsed are heavy with property and if they were forced to mark to market the value of that property they would all have to declare insolvency so that clip keep their fee stream going they are engaged in guaranteed property loss mortgages yer property will lose catastrophic only with these mortgages because its a 3000. 00 near bubble at the same time your savings are being confiscated by negative Interest Rates at the bank so ok switzerland and denmark are 2 Different Countries so theyre not doing it in conjunction but as this plague of this ponzi scheme becomes bigger all banks will coordinate because theyre all colluding as no he prince writes in collusion well in terms of beggar thy neighbor this is the problem globally now is under beggar thy neighbor some countries actually produce the manufactured and created things like most countries did and they had their own economy and they were competing with each other now its one giant global ponzi scheme where all these contracts all these fat currencies all these derivatives reference each other and nobody knows where it ends so theyre all engaged in this. This crazy i mean here is the chief economist we dont know how we did it but if its working. Here you know also you look at the fact that globally its a global fee our currency system backed by the u. S. Dollar and you see the advantage to that versus europe because europe cant print like the United States can so here they have to in europe they do have to resort to wealth confiscation so the negative Interest Rates in europe are driven by the e. C. B. 1st who drives those sovereign bonds negative and then forces that Pension Funds to transfer their wealth to these negative yielding bonds but back to the bank this is a report from november 28th 2018 and here what is what they said danish households are resistant despite record levels of debt they are accused danish households have one of the highest gross debt levels in the world however that is only one side of the equation explains banks private economists luis from hans and he says standing at 280 percent of net disposable income no other o. E. C. D. Has more indebted households in denmark however that is only one side of the equation as high debt loads are balanced by large assets he says you know the property like this is collateral to leverage a system enormous ponzi scheme denmark is the new iceland ok thats almost a certainty at this point where all the new iceland Canada Australia new Zealand Mohali kong all of these nations have here its all theyre all relying just as the revolutionary french did on a basically an os and now this is what we have is a global ah sing out of infinite regress all right well much more coming your way after the break dont go away. With gold make this manufacture consent to the public will. When the ruling classes. Project themselves. When the final merry go round is only the one percent of. The time we can all middle the room signals. Going into the memory only and. How why a paradise with some around turned into a round the experimentation field for agricultural chemicals we know that these chemicals have consequences they are major irritants theres no question otherwise why would the Chemical Company workers themselves be geared up that suited up locals attempt to combat the on regulated experiments that often in day you have many of these people who have one foot into the biotech pharma and the other foot in the government regulatory bodies this kind of collusion is reprehensible while the battle goes on the chemicals continue to poison hawaii and its people so one has to ask the question whether there is a form of Environmental Research going on in hawaii whether these Companies Feel they can get away with this because the people have less political power. Cash cow and hes drawing our farms are among his darned theres cherishing peach dard. Whose 1st words were at allow a c. Or a challenging post youve got 2 years to live. I have no doubt that what happened was criminal. Offense concentrated market is a 1000000000. 00 industry these companies how does huge financial motivation to solve these problems there are numerous talking showing that doctors who are keen to cast factory concentrates really in fits of its own that patients wont give them doctors the wrong place to play golf our Current System why that would keep me from secure those years. And people still dont know which question or so of our it being our to live where so many have. Welcome back to the kaiser report a nice keyser time now to turn to Karl Denninger market hyphen ticker dot or car welcome back to max all right as all is well and things get into an area that nobody seems to really understand we talked Karl Denninger seems to figure it all out and give us is latest on the news happening around the world karl we are 15 trillion dollars in negative yielding bonds in europe this is recently been climbing at a rate of one trillion per week is this anyway normal what should people understand is happening carro. Forced inflation i mean what is inflation its the destruction of purchasing power right me nuts thats the definition of it so what is what is a negative yielding bond its a forced inflationary instrument if you buy it youre guaranteed insulation in the amount of the negative if you were right now. Is it part and parcel of what could be called an enormous bubble in the bond market now as people focus on the yield part but if you look at the price part of a bomb the bomb price trading at multi 100 year highs its even trading a multi 1000 year highs and that same sipping the most overextended bubble in any Financial Market are already thank well course i mean the reason you buy a negative you only on yours is obviously not refer to your principle because youre not going to get it all back you buy it because you think the price will go even higher in that you can sell it to some other soccer but that means the same to you its going to go even more negative just simply kind of delve into this inflation and deflation if you have a sovereign bond with a negative cope on that is a say negative Interest Rate you are in fact destroying capital which on one hand you could say is deflation but so how do you help walk us through the the definitions of these 2 words as they relate in this instance is the reality of how monetary process actually works as opposed to what the joy impose of the world was like you believe in the look guards and everybody else druggy. Is said if a government is issuing more insolvent. Then their g. D. P. Is expanding in nominal terms so for example if you have a 3 percent g. D. P. Expansion and you have a 4 percent sissel deficit you are running a one percent cisco inflation rate its just because date you are issuing more debt and more money into the system then your economy is growing so in real terms you consume the person who is using those funds is losing money every year if you then have negative Interest Rates on those government bonds what youre essentially doing is creating deep excess space for the government to run that cisco deficit. Its just part of the same scam of running deficits in excess of g. D. P. Expansion begin with wish nobody in any civilized nation should allow to happen to be an instant revolt when it occurs because its just on a scale of that differential from everybody in the economy but you know if you get a tool or to read degree you know you would happen to greece right they ran huge fiscal deficits in excess of g. D. P. Its ultimately people who work their hands and said ok enough of this. In everything all came down crashing around here its sort of trying to prevent people from having that reaction do the e. C. P. A. And then a j z g b and then these other nations are going to this other mechanism theyre all work until it doesnt just like it did in greece in italy and then in spain all right very good now come out way out economist an economic historian dr Michael Hudson if there had ever been negative rate seen in history he said not to his knowledge and hes gone all the way back to the bronze age and never found it so its quite an Unusual Development what does the future look like if the entire world go negative and thats why karl you know i dont hold anybody knows. If you asked me this 10 years ago i was said this isnt going to be able to happen because what well sell them. But obviously thats not the case we have busy all these trillions of dollars worth of them and people are buying them. But again i think the real answer is that were seeing uses in the longer dated instruments and the reason that theyre being bought is because theyre not really bought or used as trading it is trading vehicles so you body a negative yield in 10 year bond and essentially what youre doing is betting on the come to yield on the next one is issued will be more negative and therefore busy is a the price of the one that you bought will go up and you consult make a profit its it thats like any other bubble you know i if i buy look piece of course real estate not because i want to build cars in that building but because i think that the price will go from 5000000. 00 to 7000000. 00 and im expecting make a few 1000000. 00 capital gain on the transaction and thats the entire motivation for doing it. You know thats sustainable right up until the 1st handful of people buy the 5000000. 00 building and find out that when they go so they only get 3 all right so theres kind of 2 dimensions to this theres the vertical frot what you can look at Interest Rates and then theres the horizontal fraud which would be a Maturity Date and on that score weve got a proliferation of 100 year bonds austrian 100 year bond store and 80 percent the past year. You know the question is has time lost value or is the future really looking that bleak that far out carl yeah i think that the reason for extending maturities like debt is that it allows day. You know buy it today and expect do you want to be more negative tomorrow to go on for a longer period of time elist lets face it the gap between the actual cash value of a bond and the discounted cash flow value narrows as time of maturity gets closer right i mean thats thats just where bonds work. Saw the usual 100 year bond or a lot of time for that game to play out the the. The problem with doing it from the sawer or your view is just if those yields ever go positive goes up dramatically and so you know somebodys got an obligation interest through a period of time i can try to buy them back. At what price right lets talk more philosophically for a moment or so on the surface the g. D. P. And stocks are look you know relatively fine how much of this is about fear of a major paradigm in power shift the decline of u. S. Power and perhaps also the end of the current global fear currency grid a so i guess the question is underneath what on the surface looks to be one set of reality the g. D. P. Numbers the stock market underneath there seems to be brewing a potential paradigm shift and by that were talking about. The whole fee out currency grid because everything youre talking about right now wouldnt be possible all in the us we had a Global Economy that worked on fear at currencies whose value is based on reference to other fee currencies so you had this you have a system of infinite regress where the euro is valued based on the dollar value based on the yen based on the pound theres no actual underlying you know for example a Gold Standard so but are we are we coming to spend a 37 year bull market in bonds weve had neil liberalism for sense reagan and thatcher are we at a an Inflection Point on the verge of a major shift a major paradigm shift i know bit of a philosophical question when you think oh oh. I think were headed more for a major sort of collapse in sorts in net we started out with this that essentially after world war 2. America was pretty much the only manufacturing power left in the world we blew all the rest of them up and so we had a tremendous advantage not so much because we were better named by else but because were the only ones that still had any factories left. So as of now got rebuilt. We had a lot of oppression to the 1960 s. By the Federal Reserve did its part of why they thought they could get away with it over the last 30 years or so is that they did it 150 s. They forgot that when they got away with the 1950 s. The reason they got away with it was. Everybody else was blown up its so as weve gone forward over asians lobbied governments to do things they give them advantages that they could neither wise have in you know it seems weve seen a some both ends of the curve in the labor curve on the low end you have to lean 1000000 plus Illegal Immigrants in this country who are here specifically because they can be abused by employers. And that lowers their costs ok on the other hand you have the national beholders who it certainly appears the governments logical atlee argued that this was a diversity operation when in fact what it really was was suppressing wages for people with a lot of skill and a lot of ability so you have a sleaze on both ends of the bell curve of human capital. Accrues to the top 100 to one percent and the government does this and goes along with it because it wants to be able to spend in deficit and the only way to do that is just lost all sides are wise if you have to pay Computer Programmer 150000. 00 a year because thats what the market demands for that skill instead of 40000. 00 you get instant wage push inflation and reach the law and the side can ignore it and so we have to prevent that from happening so what are we going to do were going to bring in a bunch of indians on each one b. Visas that makes 30000 dollars a year to live 6 in an apartment and so this is been going on all over the developed world we claim that theres a chinese miracle there is no chinese miracle we just offshore the pollution to china and oxide. You know employs children threatened someone else to put nets up around their buildings because people get so just fawning over the working conditions they try to commit suicide i mean its so point just grates ok and massive what we see now is it almost are getting to the point where they are literally putting out negative Interest Rate on as a way to try to extend the global one more target play well you know you can do it for a while but i have a soul we just will stop working and i think were getting to the end of that right now to get back to this inflation point were talking about inflation the existence of inflation which is everywhere except wages right south this is the miracle of the 21st century is that financial engineers have engineered away wages in their economic models and thats part of a part of the problem we have about 30 seconds left on your thoughts on gold Central Banks have begun buying gold and greatest amount sense we are on the Gold Standard weve got about 30 seconds where you think. Well theyre doing an awfully good job its rushing you know price signals but if you look if you want to play a bubble you dont want to be a goal go play ball you want to play common stocks thats what the data says i just dont know busy what it crashes and where it goes i dont know if youre going to see gold go up in price all right fair enough well were going to have you on for a 2nd segment to pick your brain some more i were there at the Karl Denninger headquarters i like all the screens in the background very reassuring thanks for being on the kaiser report. Thank you all thats going to do it for this edition of the kaiser report with me max kaiser and stacey ehrman want to thank our guest carl denham juror of market hyphen dot org if you want to catch us on twitter as kaiser reports and i stand by. We came here where did you work before you came here when you live well death row in many us States Capital punishment is still practiced convicted prisoners can spend years waiting for execution but most of the time the victims families they are very much in favor the Death Penalty there are some people because of what they did they have given up the right to live among us somebody even proven innocent after years on death row and how many more exonerations is it going to take before we as a society realize that this is not working and we actually do something about. Seemed wrong. Just dont call. Me. Yet to shape out this day as a kid and indeed from an equal betrayal. When so many find themselves worlds apart. She says to look for common ground. To Trump Administration urges congress to permanently reauthorize a suspended must serve valence program prompting it i cried from rights group. Its a season there really. Are Supreme Court ordered its release earlier this week. 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