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Sure this is the kaiser report as we ponder the future and look into 2020 what fascinating stories will come our way you know ive often said on the show that you cant have capitalism without capital corsicana ive kept it all with positive Interest Rates encouraging people to save and this next story this next whole show this next entire segment is going to be dedicated to this very notion and i present to you stacy you know that shape there used to be use in ancient greece for democratic purposes i think they would flip it around and if you if your name was on it you got to be on the jury the same with the magic 8 ball sort of concept thats sort of the shape of the do like a digital version of shakespeare oh york i knew him well this is i want us close 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 as a negative value therefore has the 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 report 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 u. S. 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 its 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 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 you 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 its 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 now going. As ation and the u. S. Dollars on its way out as World Reserve currency so the u. S. Has 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 demon 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 and 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 thing 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 more 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 inst historical fact of this moment the history suggests that all empires or 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 they go to 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 story about 120022003 at 2603000 because i mean is it 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 in the hop and all over the world will 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 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 much more coming after the break. To. Welcome back to the kaiser report im max keyser time out to go to turn the vet 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 celebrities like yourself max though i know you dont play and were trying to make it better than last year you were there at the titans you did an excellent fireside chat with ptrace 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 confiscated 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 compass capability property that i witnessed firsthand with the events of cyprus when the european government simply showed up and confiscated more than 50 percent of everybodys money in a bake accounts above 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 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 big cooling is distributed its virtually distributed it always tends to seek being dissed distributed and. The all the community is constantly trying to concentrate it in other words there was a big Coin 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 you know bit coin people are trying to create a central a Central Authority about big point and it immediately blew up so why doesnt the Community Even understand big point it seems like the worst. Who worst educated about big coin are the people who claim to know something about tickling town ill hurt you max out with your look its a combination of 2 things its a combination of people wanting to follow a leader and its a combination of people wanting to be leaders to have people follow down and this is a very dangerous combination and did go and has shargel with this since the early days even back when there werent that Many Developers on bitcoin and gavin and reese and was the problem gallup are after so toshi to you know how bitcoin cold grow and one of the 1st things you did was you know take a meeting where. You know with the Government Agencies and you were asked to explain big corn to them so she mediately disappeared after that with that hard like her trying to forge bitcoin with bitcoin axia back in you know that 20162015 days trying to you know create censorship and bitcoin trying to blacklist a certain aspects and this is the fight and this is why did clear remains resilient the amount of advice looking at the bitcoin code to make sure that no one sneaks anything in there that you know years down the line turns out to be critical and prevents it from having this kind of the centralization. I always laugh when i see our companies talking about how theyre going to build a decentralized platform its a giant catch 22 if you are building a decentralized platform by default it will never be decentralized because youre starting a sentence where you are building it the reason why because it is what it is is because it connoted has got to roll it out they are not expecting it to really work and it work and it grew in the wild and when bitcoin did for its 1st 2 years it is just not. Replicate opal and doubts what makes it so unique and everyone that tries to tell to tell the ecosystem want to do and are failing and they end up looking really really bad and up for work you know they end up creating their own money they end up the david basically the way i see it is its this capitalistic model versus the socialist communist model like you think you have the answer and if people dont follow you you have to force them to follow you and unfortunately too many people still believe in da kind of model you have to do what i say because i know better and i will force it to logically or socially and i mentioned that there are in fact of alpers on both going and they work very slowly and methodically and with a great deal of care to bring improvements to the protocol and then those improvements go through a rigorous scrutiny and they are adopted accordingly one such. Adoption was a segue it when. People who know bitcoin know that there was something called the block war the block size war going back a few years segue it was entered this thanks to you and others like. Us part of that group samson mouth of course and the vortex and others and i see that segue what is now a 66 percent adoption which is high a bit max or the largest exchanges in the world now has segway and it looks like that was a huge hit but you know this is should be celebrated in the community and yet its still seen with skeptical eyes by many in the Community Tom you know that its very strange oh wow now when i 1st heard of side work and cycle it was being built out. Everyone was under the impression that it was great for everyone and then all of a sudden just before the launch all of these campaigns started that they didnt want it and it didnt make sense to me at all so i would makes transactions faster it makes them cheaper i understand why the miners may not be very happy about it but. But thats 5 miners job is to mine Bitcoin Transactions will will still give them payments in the future and some good was critical would fix a bug and that was preventing 2nd Layer Solutions from really taking off because these blah blah cheesy to scale. Require blocking canal scale with 2nd Layer Solutions and the fight was very very strange i dont think Something Like that is going to happen again but it was absolutely critical we can now scale we can now have a 1000000 transactions a 2nd with like me and thats going to take big quinn to the next level and the good thing years while lightning is really being built out on the backend because because it is not currently in its hike cycle i havent really been using lightning myself too much because the traditional bitcoin payments are cheap and fast and there isnt shy and need for lighting right now but bill but thats a good thing because all of these people coding like in quality can make a more user friendly can make a more efficient can make a more stable so one real adoption comes in a year or 2 the 2nd layer solution will be ready and you can have almost infinite number of payments a 2nd i cant wait im really optimistic about the future of bitcoin when people finally realize how important it is that our Global Financial system imagine the miners there of course send segue. It was entered a list. Has gone straight up you know or over 100. 00 quintillion transactions per 2nd miners are making lots of money theyre adding more capacity all the time so clearly it was an impediment to miners miners and never made more money then they are right now so that argument was it was a nonstarter and it turned out to be a false argument now you mentioned the prospects for a big coin and youre very excited by it what about the price because you run the channel you do Technical Analysis on big coin price youve had some great calls in the past what are we looking at here in the short term to medium term on the back going price down im still with you for slightly lower lows im looking for a price of pick quite to pull back below 6000 before the big quite a humvee which is going to take place in may thats when the new supply of big point gets cut me off and thats usually one bit coy starts to rise soon enough that out i still think theres going to be a little bit more will kobach but by the end of by towards the end of 2020 some time this year i will turn im told looking for a new all time highs either in 2020 water or 2022 im patient i can wait well get there im not concerned so i turned days thats going to do it for this edition thanks for being on the kaiser report thank you max and thats it for this edition of the cause report with me Max Kaiser Stacy ever like to thank our guest turn vais you can learn more about the conference by visiting on confiscated bowl dot com if youd like to get in touch with us on twitter its kaiser report the next time by. See if the us leaves the source people but is no good to the slums you force me to do the Postal Service to do so. But. You see in the. Last word nobody. Really believes. You. And you know that you dont. Know what. The. U. S. Secretary of state my pompei all outlines americas strategy of deterrence saying the killing of the iranian general. Was part of an overall lauzon french doctors and hospital workers who resigned from administrative duties claiming the government is failing to provide proper funding for the health sector. Thats the one place but it was a b. No strike for several months it was an Emergency Services unions have been sounding the fleet nothing has been the problem. And the media machinations that declassified u. K. Government