Mentioned that in the last episode and he was so prescient about this pandemic situation when he predicted sort of a pandemic basically that negative rates were signaling that he predicted that last june or july he says i think we have just witnessed the end of the petrodollar system non us countries will soon see a new unit of account medium of exchange and store of value a new Bretton Woods that will not be decided in america or by americans right well all the key players necessary for that are involved right now saudi arabia russia states so the petro dollar of course was established in the early 1907 days with america and saudi arabia when america defaulted on its sovereign debt remember Richard Nixon defaulted on the dollar default on the treasury market and we went on the petro Dollar Standard because america had to close the gold window could no longer fulfill its obligations to. Its creditors this was the beginning of the petrodollar era and the beginning of all things everywhere are being priced in dollars oil is being priced in dollars all commodities are priced in dollars they gave america the us empire of debt it gave america the World Reserve currency it gave america whats called seniority which which is basically they get a cut over every transaction ever done anywhere in the world every coil trans if japan wants to buy oil that the buy dollars 1st and then buy oil for example so they have to give america a commission they get a cut thats a huge source of revenue for america now with saudi arabia and the u. S. Have been at loggerheads down for a couple of years that relationship has been strained and saudi arabia is i think youre correct they threw a hissy fit they said were going to just walk the price down by 10 bucks for oil because our cost production is not even 3. 00 a barrel and so i think they thought everyone would just step in line but then russia said whoa whoa whoa whoa whoa whoa hold on a 2nd they looked at the numbers and they said wait a bit in our cost of production is actually higher its like 7. 00 but america has 50. 00 or so and we have no debt the saudi kingdom has a huge amount of debt and we have a lot of gold we could actually participate in this global geo Political Oil poker game very very we got 3 aces here and now i think roy is correct i think the u. S. Dollar loses its status as the unit of account in World Reserve currency Something Else is coming it wont be u. S. Dollar it could be another countrys currency or another consortium of countries developing some other currency backed by somebody elses oil or gold etc i just make clear that in russia the breakeven point is about 15. 50 because there is an 8. 50 cent tax on every single barrel so you have a cost of production its about 7. 00 but they add in the cost of the tax just like in the United States about 50. 00 is the break even and that includes the tax of about just under 7 dollars obviously since we went on the u. S. Dollar standard and we were on tother. From gold then we could control everything because we could print as much debt as we want and nobody really knows how much debt we have and thats why we have the repo market situation thats why we keep on having boom and bust thats why we have especially at the boss like radical bust because people are when a sort of crisis hits whether its the subprime mortgage meltdown or now the fracking sector meltdown like people are uncertain how much debt is actually there because nobody knows and now going back to whats happening in the geo Political Oil space lattimer putin dumps saudi arabias crown Prince Mohammed bin solomon to start a war on americas shale industry thats bloomberg take i responded with the red queen was at war with shell long before this headline oh right i should mention that as part of the social distancing that were practicing in the pandemic weve built a studio in an actual tree house slash studio and you might hear a couple of birds tweeting in the background because were living with the birds in a tree house to practice good social distancing during the pandemic hearing them as a good sign because this is a sign that spring is here and perhaps we dont know but then perhaps the couvade 19 coronavirus could disappear. Yeah so with the shell industry in the u. S. Like i pointed out recently you know theres no reason why russia should subsidize american shale industry if there were russias been saying now for 20 years you know lets be friends lets do business lets Grow Together and about america needed a scapegoat for the hillary loss in 2016 and everything thats gone wrong with the u. S. They like to blame on russia and now theyre at a very tough spot because russia is not going to be lobby to help them bail out americas shale industry ok fine i mean thats russias position i think its a smart position and the u. S. As you point out the shell industry has been a negative cash flow negative Energy Industry since its inception. Shell ministries never made money summer made profit doesnt even make revenue but let alone profit the amount of debt required for shell is all was the interest on the debts always been greater than any any of the any of the cash thats come out of these things and it takes more energy in for a shell rake than energy comes out its energy negative we cover that extensively on our show of course we then get blamed for a russian gay and d. N. I. Report says you know that because guys report talked about the shale industry but the markets are telling us that we were right as we see with this headline here crash an energy junk bonds s. And our g. 2027 bond dropped by almost 50 percent following oil price rads that looks like the bond market which are supposed to be the smartest investors of all that they decided that well you know what kaiser report was right all of this time you know a lot of people criticize a big point that is too volatile but look at the o. L. Junk bond market for the shale the strain its incredibly volatile its going to go the way of enron remember enron was worth 80000000000. 01 day and then it went to a big fat goose egg the next day worth 0 the shell american shell industry junk bond markets going to 0 because this was a farce this is the shell american shale hoax it was and its just going to 0 thats all of us do it now going to bail it out print tons of money probably thats just going to make the dollar worth even less than it is right now World Markets and jack the price of gold up oh who owns a lot of gold home russia also put this into context mohamed bin solomon has overthrew an uncle or cousin hes got like 5000 uncles and cousins who are princes and so hes got to keep that economy stable because hes got 5000 people and his family wanting to overthrow him and replace them just as he had overthrown somebody else i think hes in the process of executing 4 of his cousins around close at the moment in now its so he has a situation thats precarious there and he has a Huge Population that needs to be fed so youve got that situation and lots of debt. In russia youve got loads of 4 x. Reserves loads of National WealthResearch Loads of gold and loads of resources and you know saudi arabia relies on 87 percent of their imports are our exports sorry are our oil and about 53 percent and russia is oil and Energy Related so theyre a little bit my more diverse it should probably be more diverse but in terms of the u. S. And all of this debt like we could we could have thrown it we didnt get a free ride ok we got a lot of free stuff. But at the cost of manufacturing and you know instead of building boondoggles like this fracking which never made sense we could you know we have loads of episodes you can go look at the past episodes where we go extensively into why it makes sense but instead of wasting half a trillion dollars that investors are lost and fracking we could have built you know infrastructure we could have built high speed rail we could have. Spent on you know electric power grids everywhere we could have done Something Else that would be useful in the long run and then stiff everybody else with the bill you know mostly china and japan that own all our bonds so we could have done Something Else with it it just seems a little bit ridiculous that we didnt write let me explain. America is run by and glorifies salesman. And europe and the rest of the world tends to respect bureaucrats Civil Servants theres a big difference so the key to sales is developing urgency to get someone to believe that theres an urgent reason for them to act for them to buy what youre selling in the case of how did america get wrapped up in the biggest boondoggle in American History the half a trillion or trillion dollar shale fracking boondoggle is because the sail from a wall street bank was so compelling and the pitch goes like this i can sell you a 1000000000 dollars of the shell projects right now by by by simply giving in the following pitch stacy write a crisis America Needs to be Energy Independent because of the terrorists. Now thats all i need to say and youre going to start writing checks and by the way were going to sell bonds that pay 12 percent 13 percent 14 percent youre going to make a killing right in that stupid sale technique unfortunately the joke well there is some value of course i think in for National Security for any nation to have Energy Security any nation to Food Security and then as well it has no Food Security they import everything puerto rico imports everything that leaves you totally vulnerable to a global debt market so anybody should consider that but they havent been honest and a lot of people have thrown money into it how they said this is like a war bond this is a National Security bond this is an Energy Independence bond you know you might lose everything but were going to be number one no no no. Its Energy Independence was the sale and the but Energy Independence could have come from the same amount of money by Building Renewables sure the money that went into junk bonds for fracking could have built a Sustainable Renewable Energy infrastructure in america of solar wind hydro well i did because the pitch for energy Renewable Energy is not exciting to a wall to a drunk wall street broker hangout of harrys bar in wall street its not exciting to hear about Renewable Energy it doesnt get them and it closer to having exciting times at night guaranteed by the fracking salesman well that sector is seemingly dead now and finally i want to turn to you with the saudi aramco of course because you talk about bankers and that was sold to the Public Markets just recently oil price melt down saudi aramco has lost almost 500000000000. 00 in market cap from its all time high in december nobody knows the oil sector better than the saudis they were dumping at the right time of course this is very volatile now up and down but 500000000000. 00 is. A little bit more than not the loss is cumulative in. By the way right well imagine. Short of his life. Its a. Good. Picture anyway. Back. In the president ial candidates. Of the u. S. And the world. Every week. Student. Was money. Exclusively. Time after time corporations repeat the same mantra sustainability its very important celery transitions to sustainable prize board sustainability stay number man or a more equitable and sustainable well. They claim their production is completely harmless. Lovely. It into something Companies Want us to feel good about buying their products while the damage is being done far away theres a 2nd eldest going to any minute im a new mother. And you missed me doing the nieman im stunned. Understood superman in. A fairly super cool porsche look at all the little tractor there was a News New York at the sauna trick to stop what is sure it was for the chiquita ash look you feel and i mean the streets full well for the 2 of them or not only do this movie for bush but i will push for socalled bush are going to kill us no sure the answer is. Yes. Welcome back to the kaiser report imax keyser time now to go to matt firesign author of plan a poncy welcome back mitch great to be here matt thanks for having already ive got an interesting introduction for you here today the whole idea of plan a ponzi of course goes back to 1987 crash and the beginning of the Federal Reserve put under Alan Greenspan the idea that the central bank as an act of a central bank was always going to come to the rescue because ultimately this was one big enormous ponzi scheme now this past week or so weve had the death of machs on the sea though a famous actor and his famous scene was playing chess with death in the movie the 7th seal i would like to possibly suggest that right now the policy of bailing everybody out from the central bank is similar its like playing. Chess from the movie the deer hunter where its russian roulette essentially and eventually of course the end is the same complete obliteration mitch is this russian roulette basically gone wrong with the constant bailing out of Central Banks around the world as part of this planet ponzi that youve been documenting for so many years mitch you can never see her on the back you know and all that happens is the enormous amount. Of increased exponentially so now the Federal Reserve is a panic desperation move coming in and they cut Interest Rates by 50 basis points back followed suit by cutting rates their bank of japan buying all equities Central Banks think they can make the coronavirus the. The way by buying equities spending more money this is a fallacy itll never work the problem that we have that we need to identify the fly shock and demand shock simultaneously the same time coronavirus was the trigger it was. In the tinderbox that the Central Banks around the world have homes with liquidity aka petrol high through object hero and now its gone up in flames so were seeing a hold back in stocks right now i think weve got a long way to fall towards the bottom its not a good big you lie good bye. I think valuations were way too high weve discussed before buyouts like word and credit will be the one wall works weve already seen Corporate Bond market hes off a bit but i think things are going to get much worse theres always gone be d a tide goes out were going to see. The precipitous decline in oil prices its going to accentuate the collapse of the ponzi. Shell oil that. I think weve got a lot of components here look at heart it is a big one and i think the lack of liquidity in the markets might get involved those are going to make the decline even larger and more losses even larger which will cause bankruptcies in a cascade bankruptcy i mean it really is not a lot them martial law they go or trillion dollars in debt they were never going to repay before this now the country is closed for business and as we know their g. D. P. For the past 18 years has been. The worst in the world. So but their debt is the highest in euro problematic many different. View now weve got to see. How we get out of the problem you know like the bad. Larry summers and the same people that created this mess bankers want to tell you d its all. Coronavirus but its absolutely not. Moral hazard caused by the global Central Banks in a place reckless lending practices to Companies Organizations and. Entities were not were not were alone thats why were seeing were lowering Interest Rates again and this ratio of the middle class weve seen wealth inequality and shatter new record right lets talk about this idea the difference between a demand shock and a supply shock so everyone is familiar now to say wall street bankers with a demand shock and lowering Interest Rates and flooding the market with more cash cures a demand shock theres no absence of people looking to get on debt and expand their credit cards and expand their debts on their balance chain if we just make money available for a as far as this global ponzi scheme they will always be people lining up to take the free money but this is this is different now this is as you point out a supply shock when the supply lines from china are cut and stuff is not apple store you cant print that you cant you cant solve a problem by printing money because it doesnt matter the goods are simply not there mitch they think that they can buy all the 3 d. Printers and create stuff i think is absolutely ridiculous what they think i mean with the supply and when you think about it this was the whole idea behind the obama youre where they are. So they outsourced 98 percent of the inner chemical components antibiotics to cheaper production in china so we are we are actually relying on china to buy the necessary men that we need and we can cut off any time production around the world shut down and everybody throw my. Beholden to china thats not a good position because the politicians in washington strom and westminster strom were too busy with other matters that were not relevant not helping needed by the aisle to line their own pockets rather than ensuring that the people they represented which they did represent would be