10 year yield and as you see since basically the European Union finally began quantitative easing in earnest theyve gone 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 collapsed now people talk about these negative Interest Rates they think its the result of some policy by someone in doing some economic bennett 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 settlements 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 ever stopped and threaten the earth and thats what we have now so thats why they could go. They think they believe they could do this all right 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 referring to 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 45 years 45 years us never happened in 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 u. S. Dollars bank backed by oil so it always has been backed by something hard. Liquid oil the other thing that were seeing however is as Michael Hudson dr Michael Hudson economists 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 time 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 don sc bank and thats this is actually just bank i do have a report from don scott bank that im going to get to but this is from bank its 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 and now in denmark as youre pointing out here theyre using the exact same technique using the hyper leveraged mortgage Real Property assets as collateral to create this enormous ponzi scheme so the negative Interest Rates are a reflection of a ponzi scheme not as a canonic policy and yeah 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 the properties of a job 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 do they have to back it by something whether its the military whether its oil whether its property and in revolutionary france when they had property that asset not backed by property but basically the reign of terror 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 impact. 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 right so as you point out similar to the gold confiscation of the thirtys this is another wild 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 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 all was 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 your 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 of 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 is a global feed 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 hear what is what they said danish households are resilient 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 in an almost 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 its all theyre all relying just as the revolutionary french did on a basically an awesome 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 go it. Alone else seem wrong. Why dont we just dont hold. Any world yet to seep out just to come back to. And in detroit equals betrayal. When something find themselves worlds apart we choose to look for common ground. What do you do before you came here where did you work before you came here when as you live well death row im 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 have given up the right to live among us some are even proven innocent of 2 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. Dan am. Not you know if anyone. Welcome back to the kaiser report im nice keyser time now to turn to Karl Denninger of market hyphen ticker dot or car welcome back thank you max all right as all is well and things get into an area that nobody seems to really understand we talk to Karl Denninger who seems to figure it all out and give us his latest on the news happening around the world karl were 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 karl. Forced inflation i mean or what is inflation its the destruction of purchasing power right me notes thats the definition of it so what is what is a negative yielding bog so forced inflationary instrument if you bought it youre guaranteed insulation in the amount of the negative you. Were right now. Is it part and parcel of what could be called an enormous bubble in the bond market no less 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 car already thank well course i mean the reason you buy a negative you only bought used is obviously not returned 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 coupe on that as 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 the reality of how monetary process actually works as opposed to what the joy impose of the world was like you believe in the lead guards and everybody else. Is said if a government is issuing more in sorrow. 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 super census. Youre wanting a one percent sysco inflation rate its just because d. You are issuing more debt and more money into the system then your economy is growing so in real terms you can still hurt the person who is using those funds is losing money every year. If you dont have negative Interest Rates on those government bonds what youre socially doing is creating deep excess space for the government to run that cisco deficit is just part of a sane 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 test on a scale of that differential for everybody in the economy but you know if you get it to larger or degree you know you would happen in greece right they ran huge fiscal deficits in excess of g. D. P. Its ultimately people who up their hands and said ok enough of this. In everything all came down crashing on their ears so to try 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 for a look 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 in this way carl you know i dont know that anybody knows. If you asked me this 10 years ago i was said this isnt going to be able to happen because you will solve them. But obviously thats not the case we have busy all these trillions of dollars worth of them and people are buying them. 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 theyre used as trading it is trading vehicles so youve got a negative yield in 10 year bond and essentially what youre doing is betting on the come down 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 if 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 absolute dollar 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 Fried Chicken 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 australian 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 and 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. So as i usual 100 year bond are a lot of time for that game to play out the the. Doing it from a saw or 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