And were going to cover this capitalism without capital because in fact it is very undemocratic its the opposite of that and its absence of justice in it and because of that because of this propping up of an unjust system we have zombie economy and this is john authors agreeing with what you max kaiser has said many times on the show over the past 10 years especially capitalist without capital or ruling capitalism what does it mean that some of the decades big market winners are companies with no real net worth so the blue line at the top of this chart here is the outperformance of companies in the s. And p. 500 that actually have negative book value theres Something Like 40 percent of the s. And p. 500. 00 have negative book value if you sold off all their assets it wouldnt meet pay off all their debts i mean this is a fascinating trend the only way they are so. Staying is cash infusions or cash transfusions into the dead corpse of a zombie corporation and because they have a lobbying strength and because they control Interest Rates to 0 or under 0 negative rates theyre able to maintain a huge percentage of the s. And p. 500. 00 crowding out viable businesses this is a classic mis allocation that you would find if you were to study lets say the Austrian School of economics would predict this type of misallocation of capital when you dont give money any value the u. S. Dollar has a negative value therefore it has worth less than 0 and its resulted in this this fascinating marketplace where the Biggest Companies in the market are actually have no book value or tangible net sellable value at all well hes presented 3 options for what this can mean and 1st before he goes into those 3 options he uses a phrase that michael pentode used in the last interview we did here in kaiser port he says the fact that 40 percent of public stocks in the u. S. Have negative tangible value versus 15 percent 2 decades ago he says this seems not capitalist without capital or ruling capitalism it also sounds very scary the us stock market has pleasant least surprised many people by going on a decade long rally but the success of the negative Value Companies makes it sound as though that success is entirely built on sand so what can explain this he looks at Vinson Dillard of n. T. L. Incorporated and for his explanation but remember this is what michael pentode said about hes not a permit bear but he said this thing is entirely built on sand and as you know sand if youve ever seen what do you do and stuff like that it just theres also a great video out recently of a sand sliding down into a giant hole in saudi arabia. Of course this is all part of this sand allegory thats going on at the moment but one of the ideas the 1st one he offers is financialization this is down to financial engineers and private Equity Investors whove taken over Companies Sold their physical assets and leverage them to the hilt rather than vesa new assets that make something any new cash flow goes toward buying up shares and levering up still further the entire rally is a triumph of creative accounting thats one option well this is what i would also term the soviet ization of the American Economy remember the soviet union they would just target number of tractors produced or amount of grains harvested regardless of whether it was done in the profitable way or in an economically sensible way they just targeted that number we want x. Number of tractors we want x. Number of cars and well spend whatever it takes to get to that number and the economy collapsed and they kind of learned their lesson and they dont do that anymore in america though they didnt learn the lesson because they have the Federal Reserve bank which is the american version of the polar bureau and they target Interest Rates and they say we dont care how Many Companies go negative book value we dont care how much of a wealth and income gap we create we dont care how much of an environmental catastrophe we cause were going to target the stock price based on us targeting money the value of money at the pole of bureau at 0 percent and the result will be the same thats their 3rd option of Zombie Companies but regarding this private equity model it also fits into what youre saying there is like all the evidence before you you know shows that your their ideology except this just mass hollowing out giant hundreds 200 year Old Companies across America Sears you know all these Huge Companies that are just hollowed out loaded with debt by private equity thousands of jobs loss entire industry destroyed by private equity. And our ideology we have to accept this sort of hyper normalization that this is everythings fine everythings burning around us the actual fabric of your economy is collapsing due to these private equity model and were all saying is just fine because theyre making profit and profit is good and this is our ideology and you just focus on profit and Stefan Stephen schwarzman is making 2345000000000 a year off this thats a good thing right we need to celebrate billionaires and this is a good thing right well we talked about austrian economics lets talk about marxist economics of course he famously said karl marx the capitalist would sell them the rope to themselves to hang themselves right so they are following out their own economy principle in america because theyve hollowed out as about as much of the Global Economy if they possibly can the rest of the globe is going. As ation and the u. S. Dollars on its way out as World Reserve currency so the u. S. s to turn inward and hollow out its own economy to keep the plutocrats in the kleptocrats where they are the other option of why we have so many net negative book Value Companies is that the phenomenon is a side effect of the demand of capitalism material assets dont matter as much as they used to to believe that we dont even need to succumb to area excitement over the sharing economy and the era of the Internet Companies need far fewer physical assets to make a profit and with rates spectacularly low for a decade the economic moat once provided by factories Retail Branch networks or other big physical investments is no longer impregnable General Electric provides the most famous and painful example of this of course they went into financialization offering loans and stuff like that and they didnt need to make all these turbines and real things anymore and theyre now collapsing yes right so dematerialization is the beginning of financialization and all the s. And p. 500 relies on financialization Apple Computer relies on stock buybacks of accounting fraud. To keep the stock price higher in slave labor overseas as ricky gervaiss pointed out quite eloquently at the recent Golden Globe Awards but the materialization isnt going away so countries out there that are focused on the material is ation of the economy that is oil and that is labor wages in a commodity backed currency as well see in develop probably in 2020 some major economy will introduce a gold backed currency then well see how deep materialization and relying on Financial Engineering and 0 percent Interest Rates is not the way to build a future things swing in cycles we go up we go down we have Creative Destruction except for we dont have Creative Destruction anymore because that has been deemed. You know you know this is the reign of terror essentially part of the ideological war like we won a member of the cold war capitalism won it was the end of history and now we have a fundamentalist sort of view of like we only look at the prophet and we look at the stock price and if those arent going up then somebody has failed us capitalism has failed us we need to make it work we need to pretend its working we need to keep these stock prices up and so the 3rd option it reflects the rises Zombie Companies by these i Mean Companies that have been around for a long time and are no longer competitive but can keep staggering forward zombie like because it is so easy to obtain cheap financing this should be of concern because it suggests that capitalism is process of Creative Destruction isnt working Zombie Companies tend to be less productive than others so their survival mode well be part of the explanation for the low productivity that has bedeviled the west since the financial crisis right i mean ive said this that. Russia and america are like 2 ships passing in the night right russia is moving toward a more capitalist society and americas living toward a soviet union is like trump is khrushchev and putin is more like eisenhower is out there Building Infrastructure building bridges building in the. Anomie and these 2 countries are going in opposite directions in the us as our friend dmitri orloff wrote about brilliantly in his essay the collapse gap would both collapse for similar reasons soviet union collapsed 1st americas collapse is probably going to happen this year again its like beyond any nation beyond any individual in historical fact of this moment the history suggests that all empires are all powerful beings like the central bank the new york fed new york fed can has created moral hazard they have helped you know everybody wants to help their children out you want to make sure they dont make mistakes you want to help your friend out you dont like to see them suffering we saw that in 2008 we saw james cramer crying that the fed shouldnt be academic these people are suffering at bear stearns you have to save them and they feel bad theyre their friends a good cocktail parties together dinner parties theyre all friends and they save them but theyve destroyed them and they harm them in the long term and this is what the results are here in lets look at germany which is a huge capitalist country massive export economy and lets look what has happened to them because of negative Interest Rates good morning from germany where low Interest Rates are causing germans to see more and more money retail Bank Deposits have hit a fresh all time high of 2. 00 trillion euros despite banks starting to pass on cost of negative rates to their depositors 25 percent of deposits are subject to negative nominal Interest Rates despite them being punished and punished and youre going to be you know where you are destroying the village to save the village were destroying your savings to save capitalism theyre still saving more because they dont want to be subject to the whims of this ball of debt well this is why the dollar is on its last legs because. Surely everybody is going to realize the ultimate saving instruments are gold and bitcoin gold has already started the 3rd leg of its bull market so its breaking through 1600. 00 on us way to 22. 00 starting back around 2000 to 2003 at 2603000 because i mean is going to hit a new all time high this year because of negative Interest Rates and the germans are showing the way theyre saying that were not going to be fooled into spending because youre charging us to store our money at your bank were going to save more so apparently the academics were wrong the negative race didnt cause people to spend its actually panic saving people in germany and that happened all over the world itll kill the dollar and gold and big going to make new all time highs this year according to this order of profit and finally of course the fed is just focused on the stock prices and that is the mechanism of wealth delivery and distribution in the United States and just to put things into perspective the average u. S. Worker must now work 126 hours to buy one share of s. And p. 500. 00 thats a fresh record and the 1980 s. When you were working on wall street max it took less than 20 hours so its further and further out of reach as the as the command and control are. Pick winners over all the losers yes i see a break coming in our immediate future stay tuned unless you are coming after the break. You know world of big partisan movies. And conspirators its time to wait to dig deeper to hit the stories that made stream media refuses to tell more than ever we need to be smarter we need to stop slamming the door on the shouting. Asked each of them its time for Critical Thinking its time to fight for the middle for the truth the time is now for watching closely watching the hawks. And were going to fulfill the repeated promises oh politics to the people i promise to be you know weve all pots the rich and the. Rich the pretty rough. Cut. Pretty good. Now you want to 1st. Know. All. You are no offense but you no longer a young woman in fact you are one of the last living survivors of the nazi yeah lets ask im aware of their. Need for debt all your life. And you can never forget maybe you can no auschwitz was really like to be inhaled because he would never believe it wasnt a human can do to as our bidding course for 30 years and most of the birth of it it all seems so logical for by your side to make it right when i get out on the farm saw you im going to take my son to a herd next to you so he can listen and hope for the bless my heart hurts. Welcome back to the kaiser report im max keyser time out to go to town veg a turn welcome back. To be back on the show as always sir turn 1st tell us about un confiscate all your conference your Bitcoin Conference in Las Vegas Stacy and i will be there whats in the cards it is happening in las vegas because there is a poker tournament alongside the event for the celebrities like yourself max going know your own play and were trying to make it better than last year you were there at the titans you did an excellent fireside chat with trace mayor but weve got a couple of more really big key speakers and we have to keep fighting we have to keep promoting and educating about bitcoin while a few years ago we have to educate the general public as to what the importance of bitcoin and how it can help the world by bringing Financial Freedom now we have to have this fight while inside our own ecosystem so many people are just trying to promote their own currency that they have created instead of building on something great and out was dont worth of confiscate a ball in order to educate people within our own community as to why bitcoin is so important not just to the outside world uncuff a scandal that actually refers to major talking point when youre discussing bad coin it has this quality of being an confiscate a ball or virtually on confiscated ball that think this is a very important attribute of it and were talking about countries like argentina and others where big quite adoption is skyrocketing at the moment because this is a store of value that is on confiscated ball in this regard it is. Vastly superior to gold air thoughts tom absolutely ab this was the property that really got me interested in their quiet i wish the property of censorship resistant value transfer got me all hyped about bitcoin i actually heard about it from you it was watching the kaiser report back in late 2000 and tad early 20 s love and what i heard about bitcoin through the week you leaks use case away and wiki leaks have to use bitcoin for donations when they got cut off by these amassed the current pay pal and then we had the use case of so crowed and basically the use of bitcoin as a payment and that didnt interest me as much it was all about the on campus capability property that i witnessed 1st hand with the events of cyprus one of the european governments simply showed up and confiscated more than 50 percent of everybodys money in a bake accounts about 100000 euros and i said whoa this is scary what if this happens across many developed nations we know what happens in the developed world but what if this happens you know in the u. S. What if this happens in germany what if this happens and other was this happens in the u. K. And thats the property that really got me interested that we had the events of greece and that again set this point home youve got to have access to your own money in greece the banks were shut down for weeks they allowed you to insure 20 euros a day of your own money from the a. T. M. Machines and this is just ridiculous and this is the kind of thing that you cant stop people from using bitcoin and this ive got the skin ability property is so critical and gold cant do it anymore gold is heavy its hard to transport its hard to transact and the metal detectors have made gold confiscate a ball for a lot. 100 years and its about time we have to quote yeah you mentioned the big going community and how education within the community is necessary and i want to follow up on that point you know a big core aim is distributed its virtually distributed it always tends to seek being dissed distributed and. They are the community is constantly trying to concentrate it in other words there was a big Point Foundation a number of years ago that blew up then there is just the last week or so something called the Nakamoto Group its like a. Bit coin people are trying to create a central got a Central Authority about they quite emily blow up so why doesnt the Community Even understand big corn it seems like the worst. Worst educated about bitcoin are the people who claim to know