As warren buffet called it use weapons of mass financial destruction so there instead of just trying to be a conduit from the central bank to main street they are saying that we are going to abuse our role as intermediary to coerce you to. Reward us with huge rewards of cash that well then pocket and not circulate in the economy and this is a problem thats gotten worse and worse we saw it in the 2008 crisis where hank paulson went to washington and got the tarp money and we didnt get it the 1st day he instructed his minions on wall street to crash the stock market the next day they did it again abusing their role as Market Makers to weaponize that role. All and then the next day Congress Gave them the 750000000000 which became now 16 or 17 trillion. And so the ability of bankers who have weaponized intermediary Market Making products to cold worse government and to have the media on their side to bankrupt the economy has led to now a situation of extraordinary duress so what hes saying and in fact im going to go into it in this quote here about what theyre actually were intended why they cause the panic because they hold 161000000000. 00 of longer dated treasury securities so they have 161000000000 that theyve been buying and they were hoping to dump on to a bigger chump and this the bigger chump was the fed the fed keeps on putting off introducing more q. E. For theyve been demanding it since last december member when the stock market had that turmoil that theyve been demanding more q. E. And drone policy of saying no no it doesnt announce new more q. E. Hes not buying more securities the feds not buying more securities so what happened is according to wall street primary dealers are funding their hoard of 161000000000. 00 treasury securities in the repo market these funding needs were putting pressures on the repo market the fed already said in its minutes for the july meeting before repo rates totally blew out in mid september but primary dealers could have sold a large part of those securities if they had wanted to prices were high and yields were low a sign that there was heavy demand but the dealers were holding out for even higher prices and even lower yields and any heavy selling could have pushed up those heels and steep in the yield curve very unpalatable for folks clamoring for rate cuts so these dealers are sitting on a pile of. Treasury notes and bonds whose prices they want to rise and therefore their yields have to fall massive q. E. Where the fed buys these type of treasury securities would have accomplished less so its a reverse Armed Robbery so to play and if an armed robber goes into a liquor store and they put a gun to the cashier said and says give me all your money here the bankers go to the fed with theyre armed with exploding Financial Derivatives and they say take all my money. I want to stuff all my money into your Cash Register the socialists are reversed Armed Robbery and. The effect is not to create liquidity or to be a market maker you just have a. You know its its a gang warfare theyre just gangs indeed they are theyre playing with our Financial System to extract a few pennies and profits on that on the 161000000000. 00 and you know pennies per every single dollar of the 161000000000. 00 in longer term securities so the fed drone pow announced theyre going to buy treasury bills so t. Bills are securities with maturities of one year or less such as a 3 month t. Bill they do not have a coupon and stead there purchased at a discount from face value and are redeemed at face value the difference is the yield for the investor dealers however have not been hoarding t. Bills as of october 2nd they were holding less than 7000000000. 00 and t. Bills at the very low end of the 3 year range so these crybabies were hoping for real q we would long term know it some bonds and all they got was a plan focused on acquiring t. Bills on top of the new plan from a new few months ago to replace longer term treasury securities and all Mortgage Backed securities on the feds Balance Sheet with a mix that includes t. Bills right in the course of the only way they can effectively do this is through collusion now j. J. P. Morgan is investigated now for rico for colluding manipulating precious metal markets and weve talked about it for 10 years hes demonstrated how they collude they theyre back theyre involved in rico in a functioning economy this wouldnt be possible we just describe because there would be a another bank would offer the liquidity and they could. Game the system like they are doing now unless theyre all colluding so theyre in chat rooms or anonymous chat rooms and private chat rooms the various brokers of different banks and they collude they say were going to youre going to take it to the fed were going to jam the fed or whatever and they extract wealth through racketeering this is a racketeering crime it would be great if the Justice Department followed up on the j. P. Morgan investigation and apply the same rico statute to other to this rico situation if in fact wall street is correct it smells like it is correct that would be another example of racketeering on wall street no less a crime than any theo racketeering crime or any other example of racketeering its in and its anti Economic Health the problem in this situation is that d most ordinary people think well i want Interest Rates to go lower but what they dont realize this is an ongoing private equity style heise their extracting all the equity for the past 4050 years of Interest Rates that declining for the last 37 years down the been extracting equity the whole way down and by the way these games that theyre playing of driving Interest Rates down and down and down will so security be there for you status of the Social Security trust fund in fiscal 2019 so this is also from wall street and you can connect it to these low Interest Rates because the old age and Survivors Insurance own a trust fund which does not include the disability Insurance Trust fund close the fiscal year 21000 at the end of september with a balance of 2. 8 trillion according to figures released by the Social Security administration this balance was up by 3000000000 from september last year. It was down by 16000000000 from september 27th teen so this is the chart of showing you the trust fund balance and as you see its topping out despite the fact that there are more millennial xin there were a bit boomers for example so there is a huge surgeons into the into the jobs market of millennial as they are a vast pool of people contributing to Social Security and these are being paid out 63000000 people are drawing sick Social Security and 8000000 are drawing disability benefits but because of low Interest Rates their income on their Interest Income is down from Something Like 128000000000 just in 2009 and its down sharply now and every single one percent decline in Interest Rates they lose 28000000000. 00 and Interest Income to the Social Security plan so you know this is this fight that everybodys been having over when Social Security goes bankrupt as it were. That low Interest Rates are causing a lot of duress theyre right this is where the paul krugman comment that that doesnt matter because this money we owe ourselves breaks down just look at the Social Security pot of money thats going now to bankrupt is because of this mentality that it doesnt matter we can just go into debt forever but way to go to debt forever is by constantly lowering Interest Rates to support was a effectively a ponzi scheme and in the case of say Social Security they realized that interest of pay recipients that is going to lead to a day when there is no more money to pay Social Security so krugman is wrong is patently wrong and he makes a Statement Like that you have to wonder why he would be so obviously making such an obviously wrong statement and its quite troubling well that the balance the trust some balance rose by 24 percent between 2009 and 21000 but in. Trust income fell by 28 percent from 108000000000. 00 in 2009 to 78000000000 and 2019 so the average the average interest being paid is 2. 73 percent down from 4. 8 percent in 2009 they would have to start to operate more as a hedge fund to buy and sell bonds which then youre relying on the same people on wall street that bankrupted enron worldcom week work etc and its a losing proposition that they can well they dont buy marketable securities so theyre held to maturity so that they have to buy low prices all right well were going to take a break when we come back much more coming your way. Thinking of getting a new phone the ones we got in here shows no problem was he didnt know what to do he was trapped in this tiny little wired how much we dont need a crate with him the wall. Reaching out into the wall when is freedom anywhere near and thousands of breeding dogs are caged in the interview lane conditions on puppy farm i mean 67 years you know theyve been locked up in a cage outside you see no protection from the weather the heat you know the courtier the rain the snow the founder nothing they have no protection. To get well you. Know its ok. Across the us cruel puppy mills are supported by dog shows and pet stores most of the puppies that are coming from these large Scale Factory farming kind of operations are being sold in stores even joined a Group Businesses are involved like ogling mom santa there has been a shocking amount of organized opposition to adverts to increase the standards of care for dogs bred in commercial breeding facilities most of that opposition is coming from huge agricultural groups and industries that have nothing to do with jobs dont buy dog on a. Visit this is a sticker from the water bottle phone in the stomach of a fish the brand is part of the Cocacola Company which sells millions of bottles of soda every day the idea was that lets tell consumers there are the bad was there the litter bugs are throwing this away industry should be blamed for all this waste the company has long promised to reuse the plastic. As it sits do cookouts lose its feet so. That seems cool sets for their plastic a 6 day coffee on my end only stay on your own hands at a special projects funded he tells the defense im. On im your best bet is the end of it for the city but for now the mountains of waste only grow higher. Elaine. Welcome back to the kaiser report or own most at the im off the coast write a tally and think any you know we should do a t. V. Show us do it in fact in italy on the a mouthy cust the michael pentel max kaiser it could be cooking cooking the books in their mouth because like me we could cook the books just like in all the famous different ways bankers like heres the way jamie dimon cooked his books heres the way lord blankfein cooked the books at Goldman Sachs and like a all of celebrity book cookers we could have them right there anyway welcome back thank you michael pence of pet o. Port dot com hes a money manager hes a guy who spent on the show many times and hes got some very interesting insights into all kinds of things let me talk a little bit about your one of your recent newsletters michael its called gold its all about real rates not the dollar with just me well a lot of people think well because gold is a real and honest currency that just competes with the dollar so if the dollar is up gold is down and if gold is off dollars down but its more complicated that then that the primary factor that determines the price of gold is the level of real Interest Rates so Interest Rates in a nominal sense can be rising but as long as inflation is rising faster real rates are going down gold is in a bull market and if nominal normal rates are crashing like theyve been i mean the 10 year note was 3 percent a year ago now its 1. 7 percent ok thats crashing nominal yields yet it might surprise even the fed you know that couper c. P. I. Is up 2. 4 percent year over year thats higher when i went to school and of the new math but the new math might not agree with this but the old math will tell you 2. 4 is higher than 1. 7 so real rates are falling and that is the reason why gold has been in a primary. Bull market while the dollar has also increased against a basket of other flawed horrific terms so these 2 trading in tandem both by the up dollar and gold its quite highly its been happening and it could happen in the future i even think it could be the case that the dollar starts to fall against other currencies not get wiped out but starts to lose its way against the euro and the yen why did we talk about this just 10 gentilly in the last segment were back in q we max what is this what number is the q e 5 which would be aesthetically 4000000000. 00 a month we were at 85. 00 or 80 in the peak of q. E. Ok so if the fed cant raise rates they went to 2 and a half percent on the fed funds rate now theyre on their way back to 0 most likely were back into q e that Interest Rate differential between us and europe and japan that margin is narrowing and why then would the Dollar Strength of any longer right fair enough lets talk about another country or china the likes of kyle bass famous guy in the Money Management space hes been shrinking for more than a decade now that its all about to come tumbling down there where do you fall in the China Economic apocalypse scale is it all fine im fine your thoughts worst china these days i think this is the 36000. 00 foot view is that when you increase your debt from 2 trillion dollars in the year 2000 to 40. 00 trillion dollars today and that is state directed debt then you have built a massive unproductive pile of debt dung which is about to implode debt don as i said i felt that dung yes yes debt on debt down is about 38 trillion dollars max in less than 20 years from china. National communist party telling state owned enterprises what to build so you have massive oversupplied massive over investment in infrastructure massive bubble in fixed assets in china their currency is teetering on the collapse like oh well krugman at the New York Times says thats no problem because its just money you owe yourself and grow really money we owe ourselves well if you cant pay yourself ok so we owe our lets just talk about the Banking System do you know how how many treasuries have been sequestered in our Banking System because they have a 0 risk weighting its an all time record high trillions upon trillions if you told the banks call up jamie diamond and tell him you know youre a u. S. Citizen right and j. P. Morgans a domestic bank. Since is a debt we owe ourselves were not going to pay you anymore on your treasuries see if thats a problem why do you see say such a blatant false. Maybe because hes a keynesian liberal i dont know i mean i dont want to offend anybody but i dont know most of them thats all good one of the ideas i dont learn there is that the only reason that you can ignore that that is if you keep jacking rates lower through this quantitative easing a manipulation Interest Rates lower which is almost a definition of a ponzi scheme and it would be great unless things like Social Security are not going to go completely bankrupt theyre going to go bankrupt and all the all those programs and all that its all going to go bankrupt that thats thats a problem in the future for the next generation a problem now max we you know japan peaked in 1909 thats 30 years 3 last decades and we just had we just had our last decade here the United States were going to have decade after decade where thats our hope max so we can have one or 2 percent g. D. P. Growth clinging to the hopes that Interest Rates could always go down and bail us out you know it normally takes 500. 00 basis points of a minute at minimum to get the. Conned me out of the malays and we only have 175 left and theres nothing in europe the e. C. B. Is 0 they went back into q. E. Also by the way to pay what i actually had never what japan ever got out of q. E. Well here chomp on television talking about it running out of ammunition make it impossibly applying that to the social banks yes. Yes exactly. So meanwhile you know stocks are near all time highs unemployment is 50 or 60 year lows right so you know the top line looks good i mean people are like so so i mean how do you avoid appearing as a cassandra as a doomsayer now and this will euphoric well because beauty full top because i manage money for a living so i wouldnt have any clients i just bought gold in short of the stock market always ok i have to make money for my clients continuously and thats what i try to do and i have a track record that you know anybody can vet if they would like ok did the job and so youre saying so you but heres the thing heres the thing this i have gone on record saying this this charade can last and still one of 2 things happens either we have a recession which blows up the junk bond market or the fed is finally successful at engendering inflation. Either one of thos