And a military uprising in mali sweeps the president from power threatening to plunge the country people into chaos. As the roundup of the headlines here on r. G. P. International the kinds of reporters up next they will. Either this is max kaiser this is the kaiser report Summer Solutions thats right some are solutions now today were covering whether or not gold price moves are signaling an end to the u. S. Dollar with our guest superstar allister macleod of gold money dot com alister welcome thank you for asking me facts all right well alistair 1st of all i might want to say of course max and i are investors and gold money dot com because we love the company and you do a lot of Great Research so were having you on here to discuss some of your research and the solutions to the issues though when you look at gold and you look at the fact that its sort through 2000. 00 do you agree with what Goldman Sachs who is one of the biggest beneficiaries of the can tell you in effect all of the sort of money system they say that the u. S. Dollar is days are nearing an end and how they determine that in their reports is that. The gold price so do you see those 2. 00 as being related and are they a little bit too doing gloom and that the u. S. Dollar is ending soon the answer to that is yes they are related but i would put it slightly differently from the way Goldman Sachs describes it there was a day earlier in this year when everything changed it was rather like you know the tide stopped going out and started coming in all from how the part of you stopped coming in as a going out and that was the 23rd of march between more or less the beginning of the year and the 23rd of march markets sank the s. And p. Lost a 3rd of its value you had gold was just absolutely knocked down i mean certainly the open interest was not down there the price was a lot more resilient than you would have thought and so there were various things that really were hit i mean even a bit coy and sort of was pretty weak in those in the at that early time but then on the 23rd of march something happened and that was that the fed made a statement which basically set we will throw however much money it takes at resolving economic problems and at that moment the markets switched from being worried about deflation to suddenly thinking the outlook is inflation the s. And p. Took off and we are where we are now gold and silver took off the gold silver ratio collapsed from 120. 00 down to current 70 ought that current took off oil took off so there was that moment and i think we discussed this in an earlier. Cost with it will fit with the when go dipped in april because of delivery problems on cemex but apart from that oil also basically took off so did copper dock to copper which tells us that. You know the outlook was considerably improved after the fed. Ground said we will print whatever it takes and it was also the day when the dollars trade weighted talked and it hasnt really stopped falling since that so 25th of march i think is the date we should all put in our diaries that was when the world changed and it is so remarkable that any idea that for example gold is had a wonderful run today it is done nearly a 100 bucks. Thats the end of the run forget it its not things have changed so i do Goldman Sachs but i would be a bit more specific about actually what has happened right well that that was caught up caught on by the Financial Press the mainstream Financial Press the economist magazine out of front page cover story called free money basically the. Headline when Government Spending knows no limits right so now the cats out of the bag that governments are going to keep printing money ad infinitum to support these markets and as you point out the the switch happened as being a well run a deflationary world possibly being in an inflationary wall but that that seems to be hasnt really been completely caught on by the bond market yet right because the bond market still reflecting this deflation trade and what is it really going to wales are generally going to come on fouls are well the bond market is reflecting waste of money which is just being shoveled into Financial Assets and particularly u. S. Treasuries by the fed through quantz to be saying so thats why bond yields havent recovered it is potent for the fed to keep these bond yields less because if they fail to do that the Funding Crisis that the Us Government will find itself in will be completely intractable so it is. Absolutely key for the set to keep Interest Rates funding rates down to keep find actual Financial Assets bubbling if they fail to do that because theyve committed the dollar to doing that like they will print whatever it takes to keep Financial Markets running then if they fail so the dollar will fail as well and again weve discussed this because this is a dead ringer for what john wrote it exactly 300 years ago so let me pick up on that date of march 23rd because ive also kind of mentioned this on report rice said something happened i didnt specify that date of march 23rd but that the mindset the psychology of the Global Investor class all participants in the economy in fact changed just like that day in august of 1981 when basically the u. S. Went bankrupt right they failed to pay back in lent the gold they were due and it said pay them in dollars and we went we close we shut the gold window so you know at that moment nixon nobody really knew if this thing was going to survive the whole system because this was a shocking moment in World History it was the 1st time in thousands of years that we were on a global fia standard so i kind of feel like that the psychology snapped and changed where all across the world we all kind of adopted this m. M. T. And next stage of this off system is like i saw so many people saying why do we need to pay taxes anymore if we could just print the u. S. Government borrowed 3 trillion dollars in the 2nd quarter alone i think in june they borrowed as much as they had borrowed the entire existence of the United States so you know it is this is a psychological change of shift in the whole mindset of the entire part all the participants in the economy yes it is what youre describing i think is the reaction of government in particular that 19 government has actually no idea whats going on. Arm it only understands when something is actually sort of hits it in the face and thats what covert 19 did before then and lots of people in government will have forgotten internally we had the seizure in the repo market in september last year when it just ran up to 10 percent the other thing of course is that we had trade wars between america and china now that really did do for cross border trade if you remember things like indicators like. Shipping rates and some so forth just completely collapsed so we already had the makings of a downturn in the economy which actually matched very closely in terms of its character what happened in 1929 check this 929. 00 was the end of a long period of credit expansion back credit expansion 929. 00 toba was when Congress Passed the smoot hawley tariff act that was the month went from the previous attempt to high the market fell 35 percent literally by i think it was the 11th of november a possum ducked thats actually very similar to what happened to the s. And p. Between roughly and january and march you know last assert and now weve got the rally the rally is taking us higher than the subsequent rally in 1929930 took the dow but you can see the characteristics the underlying background whats happened to the market is just so similar and then we think ok what happened after the rally after the rally that was more or less when president hoover signed smoot hawley tariff act into law the market then went down and down and down and by roundabout june july 1982 the dow jones index had lost 89. The scent of the valley from his high so weve got in terms of whats going on in markets actually quite a similar situation what was it done as done is it get that bit and its brought forward a lot of the disaster that we would otherwise face perhaps in the into course it sort of made it hare and now this is very serious and of course thats the bit the governments cannot see they dont understand actually theres a far more deep and worse condition behind it because of that parallel ive just made between now and 929 so we are in really extraordinary times now the next thing that happened after the 929 crash and then we started sinking in 1970 to 932 with banks started going out of business now at the moment im writing an article on the g 7 the globally systemically important banks and they are some of them are in deep deep trouble and we can see this from the point of view of the relationship between their Balance Sheet assets and their market capitalization in the case of one bank which i wont name on this channel but its a major european back the current rate ratio is 118. 00 times i just think about that this is really extraordinary one euro is write off on the Balance Sheet creates 118 euros worth of pain to each shareholder this is gearing we have never seen before and that bank isnt the only one ther are a number of other banks in the euro said and the other thing thats happened of course is that the attack on hong kong this financial and verbal attack. Really from america to which china has not act. Sensibly that we must admit but what its done is its undermined the share prices of backslid Hong Kong Shanghai bank and standard shot back which operative backs and then if you go look at the chinese banks what we find that for chinese g 6 their share prices of all ringback plummeted after no National Rally from that march 23rd date which peaked on i think it was the 7th of july and since then it has just collapsed so we have banking and systemic problems in the making and nobody so far as i can see is paying any attention to it this is an exciting story but we pick up after the break alister you know you got me on the edge of my sea dont go away well be right back with Alice Macleod with the guys report dont go away. Ion no team no crowd. No shots no. Action. Going to wells track no arrests were. Points your thirst for action. An entire village in alaska has had to move if another country trying to wipe out an american town. We do everything in our power to protect the. Water the escaping the Climate Change caused the same threat right now alaska does seem some of the fastest coastal erosion in the world we lost about 35 feet. 35 feet of ground in just about 3 months while we were measuring. It is fast paced the river is 35. 00 closer to the power than love and it was the year of the war i think were a part of america 1st from. The world is driven by a dream shaped by phone personal those but. The dares thinks. We dare to ask. Welcome back to kaiser report summer solution. Of a cloud m. X. s they say out there lets get back into this story you know me ask you this so you make the comparison to the crash of 29 and then the early 1930 s. And then the rally and then the smoot hawley was passed and then we went back into a huge fall 85 percent top to bottom contraction in the dow jones and you make a comparison to whats happening now now of course during that depression of the 1930 s. That was a d. Place mary deep depression which is different than an inflationary depression which we saw during why mar republic back in the twentys so what we had to get to here is going to be a deflationary depression because if you say banks are failing that sounds like deflationary depression but you know what about the other side of the coin here where the money printing is attempted on this gargantuan scale and we go more like oh why one republic type deal alister ok what weve got to do is to separate out this problem into 2 components the 1st one is the problem the banks have open sleigh if i know that these banks have too much gearing the directors of these banks also fully aware of this gary and this is why if you look at the growth of back lending its actually started to tail off and if anything its beginning to contract. The problem they have is that they cant really Contract Bank lending without creating whites go bankruptcies but equally they cant go on just increasing bank lending so thats one problem thats the deflationary aspect that you were talking about the inflationary aspect is really when you come to the fed the fed is desperately trying to get money into the underlying economy to rescue production chains. Companies which employ lots of people to stop them going bankrupt and so on and so forth the problem they have is that the banks wont transmit the money so the only way they can do it is to do it via helicopter in money through their u. S. Treasury for example and following that route so we have got 2 elements in this weve got the deflationary arguments i we have got the inflationary adamant now the way it will be resolved in my opinion is that we will have a systemic crisis and the systemic crisis means that the fed and the u. S. Treasury and your case well end up basically taking control of the whole Banking System will be doing same in our country the euro zone will be staying the same that japan will be doing the same china will be doing the same even though theyre already there ready so what that then means is that the politicians and the planners can instruct the banks basically to transmit money into the economy and to distress borrowers into. It as a race raising Consumer Loan limits things like that whatever it takes remember that was what was said on the 23rd of march so they will prevail but in order for that to happen the banks will fail 1st the bit where buybacks are cautious because they are over leveraged and they are frightened of going bankrupt that is going to. Happen that its got to get out of the way and then the fed can do its best to try and get money into the underlying economy but thats not the only problem they have because if we have a banking crisis a systemic crisis such as i just described and believe you me its very hard to see how it will not happen then we have to ask ourself selves what happens to Financial Assets those lovely bones for zip 0 or less than 0 in the euro zone u. S. Treasuries which yields and i see the euro has just been rising point 6 something percent for the 10 yes whats going to happen to a less well foreigners are going to be looking at that Dollar Holdings and theyre going to be saying weve got a bit too much of this weve got problems back at home we need to reduce our dollars keep a bit of Dollar Dollar liquidity but we can liquidate fairly as we dont want to have anyone elses bombs it makes no sense at all so were going to repatriate our money. Then you will see that the dollar falls further and it begins to impact on this problem the fed has and that is how to keep Financial Assets maintained as high levels so they can finance u. S. Treasury debt. And the answer is that at some stage that game is going to fail and when that gain fails then the purchasing power of the dollar will go down with it so this situation which started on the 23rd of march well i think evolve into a banking crisis and then the through vogue and to a currency and market crisis and weve got that ahead of us and it will not necessarily take very long for the whole process to compete but whatever it takes of course is also war and weve had many wars from america in the past few decades whether its iraq afghanistan libya somalia yemen but theres a tiny countries the whole country will galvanize if we take on a nation like china a 1400000000 people with a massive military so weve everybodys noting this trade where were seeing smash and grab the United States is just smashing and grabbing things like tick tock bite dances the company that owns that because theyre better theyve produced a better product than what the American Companies have been able to wawa same thing so are we going to see possibly a hot war and wouldnt that of course enable the fed and treasury and everybody to do whatever they want because obviously in a time of war all everything is on the table thus a difficult one to answer i think. There is no doubt that when you get financial instability and when that Financial Stability but to committee leads to. People starving literally which could be the result of this crisis on that basis yes you get political disruption and very bad political disruption. One of the way in which you avoid it being a civil destruction is you attack firmus and whether thats going to happen or not i dont think at this stage we can really say but there is no doubts that the american. If you like langley the deep state. Its still pursuing those sorts of tactics and i just wonder whether you know how long would it be before they start to say right were going to take the going out because he is no longer allowed. If it again refuses i. M. F. Money then i think his days will be numbered as far as the u. S. In a deep state is concerned so weve still got that sort of behavior what my hope would be is that this crisis ghastly though it will be actually puts a lid on that sort of behavior would be other priorities and effectively what were talking about is the states going bankrupt when its money no longer buys anything the state is bankrupt now we cant help that it is more than a help i would mitt that some wise heads were to. Arise from somewhere and take control of the situation and with the publics blessing because at that stage the public will be very very much aware of the mistakes of previous administrations actually plot a course out of it i mean this is what germany did with no daycare hot after the 2nd world war i mean as economy minister he just took control of the whole thing and he told his military superiors the british and the americans. I dont weigh rationing what you dont weigh the rationing that was in 1948 in this country we still had