A settlement in gold and then that was stopped in 71. 00 then you had c. I. Currencies or franc the other feet of currencies and thats how you end up with a global ponzi scheme and you had as nomi prins writes in her excellent book collusion about how the Central Banks then were no longer competing with each other in a mercantile a system but became their coconspirators in a global monitor a system where each bank was simply passing the hot potato around the world and there was never any moment when Interest Rates are not being cut over the past 40 years 45 years thats never happened in one country may have raised a bit but another country would have dropped by considerably more the net result is now the goal of the globe is their debt to g. D. P. For planet earth is approaching 350 percent well some say that the u. S. Dollars back backed by oil so it always has been backed by something hard. Liquid oil the other thing that were seeing however is as Michael Hudson dr Michael Hudson an economist who used to work at chase manhattan and when he wrote his ph d. He told us that you know he he told his bank and he told his professors that actually unlike what you say banks dont actually lend to businesses they lend for mortgages so our entire economy our time Financial System everything is backed by mortgages so were going to get to that because this is. Remember when during the french revolution we had the currency backed by a property of the confiscated Catholic Church properties so what do we have there but hyperinflation as people demanded the prices keep on going up right well here we have denmark which denmark by the way is one of. The most household indebted of all o. E. C. D. Nations so their debt to income is 280 percent but denmarks 3rd largest bank is now paying people to take out a mortgage what this means is that if you buy a house for 1000000. 00 and pay off your mortgage in full in 10 years you would pay the bank back only 995000. 00 no mortgage payments would be due between the purchase and payoff date so effectively a borrower only has to repay principal with a small discount guaranteeing that the bank loses money on the loan and thats a negative point 5 percent right and again whats amazing and ironic about this is that the bank doing this is dons bank and thats not this is actually. A bank i do have a report from don scott bank that im going to get to but this is from bank its the 3rd largest bank. Bank is the largest bank in denmark right and you know referring back to that film we did about iceland and i think those 2008 about the ponzi scheme their bank was the one who initially put out this report suggesting that iceland was a ponzi scheme about to implode now in denmark as youre pointing out here theyre using the exact same technique using the hyper leveraged mortgage Real Property assets as collateral to create this enormous ponzi scheme so the negative Interest Rates are a reflection of a ponzi scheme not as Economic Policy and you know you might end up having 0. Mortgage in the bank paying you half a percent a year or percent a year but lets keep in mind that the value of the property is self if it drops 50607080 percent thats not a good deal again lets go back to the fact that we have this system that is unique post 971. 00 all fiats but at the end of the day do they have to back it by something whether its the military whether its the oil whether its property and in revolutionary france when they had property that asset not backed by property but basically the arena terra followed because people like it went totally mad with the whole thing collapsed here you have the same thing. And its also similar to 1933 when the u. S. Started confiscating gold because we were in the midst of a global Great Depression were having the same sort of currency wars it was beggar thy neighbor policies here its confiscating wealth because how is the bank paying these. Speculators essentially to buy overpriced housing overpriced essentially especially because of their incomes which are not rising so how are they doing at but transferring it from savers to these speculators and heres the quote from the chief economist speaking of iceland of course we spoke to the chief economist at coutts thing bank and he had an explanation for why iceland this tiny Little Nation of what like 300000 people was buying up all of europe major income producing assets because he said they were 3 times as mighty that the workers were 3 times more productive than any other european worker or even the the dutch or the germans or the finns or anything right so here is that theyre economists from a bank which is offering this mortgage is another chapter in the history of the mortgage he says a few months ago we would have said that this would not be possible but we have been surprised time and time again and this opens up a new opportunity for homeowners in practical terms the negative rates will act as a subsidy to the repayment and the repayment portion will become smaller and smaller as the debt is reduced he said yes i hardly understand it either in fact i said it cant happen but we have figured out how to make a negative rate mortgage. Ok right so as you point out similar to the gold confiscation of the thirtys this is another wild confiscation scheme in switzerland and i think its u. B. S. If you have a large sum of cash at the bank they charge you a negative 3 quarters of one percent to story or cash at the bank its a negative Interest Rate so the bank is taking money out of your account every year to tune of almost one percent they dont pay you to have your money at the bank they take money away now with a negative it mortgage that money is going to a mortgage buyer so theyre confiscating wealth from savers and theyre giving it to property speculators because the banks of almas made their bones in Property Lending their Balance Sheets arsed are heavy with property and if they were forced to mark to market the value of that property they would all have to declare insolvency so to clip keep their fee stream going they are engaged in guaranteed property loss mortgages your property will lose catastrophic only with these mortgages because its a 3000. 00 near bubble at the same time your savings are being confiscated by negative Interest Rates at the bank so ok switzerland and denmark are 2 Different Countries so theyre not doing it in conjunction but as this plague of this ponzi scheme becomes bigger all banks will coordinate because theyre all colluding as nellie prince writes in collusion well in terms of beggar thy neighbor this is the problem globally now is under beggar thy neighbor some countries actually produce the manufactured and created things like most countries did and they have their own economy and they were competing with each other now its one giant global ponzi scheme where all these contracts all these fat currencies all these derivatives reference each other and nobody knows where it ends so theyre all engaged in this. This crazy i mean here is the chief economist we dont know how we did it what is this working. Here you know also you look at the fact that globally is a global feed our currency system backed by the u. S. Dollar and you see the advantage to that versus europe because europe cant print like the United States can so here they have to in europe they do have to resort to wealth confiscation so the negative Interest Rates in europe are driven by the e. C. B. 1st who drives those sovereign bonds negative and then forces that Pension Funds to transfer their wealth to these negative yielding bonds but back to the bank this is a report from november 28th 2018 and here what is what they said danish households are resistant despite record levels of debt they are accused danish households have one of the highest gross debt levels in the world however that is only one side of the equation explains banks private economists luis from hans and he says standing at 280 percent of net disposable income no other o. E. C. D. Has more indebted households in denmark however that is only one side of the equation as high debt loads are balanced by large assets he says you know the property like this is collateral to leverage a system enormous ponzi scheme denmark is the new iceland ok thats almost a certainty at this point where all the new iceland Canada Australia new Zealand Mohali kong all of these nations have its all theyre all relying just as the revolutionary french did on a basically an os and now this is what we have is a global ah sing out of infinite regress all right well much more coming your way after the break not go away. Good move from the streets of this twosome it will. Lie down for sunday and the syria. Rolls going to say what a business with a must do to it look. This is the folks who. Got to show us a lot of trouble ill bust out all because i am. On. The case in africa i know and that could be a bios busy to look at them out on the funniest diplo its close to home from the show such as the moon somos the. Moon new too and you must. Move. To. Join me every thursday on the alex simon show and ill be speaking to guest of the world of politics Small Business im show business ill see you then. What do you do if we came here where did you work before you came here when you live well death row in many us States Capital punishment is still practiced convicted prisoners can spend years waiting for execution but most of the time the victims families they are very much in favor the Death Penalty there are some people that because of what they did have given up the right to live among us some even proven innocent off 2 years on death row and how many more exonerations is it going to take before we as a society realize that this is not working and we actually. Do something about. His community there are people who believe that its ok to sell fraction food on my table its really hard there are no jobs and you see that ive got kids that ask and as a parent. I can come up with logical arguments theres a lot of conflict within the game between the cost of a conflict i would say over most romani and most of them money has made. Us want to know the to the casino each other is Good Business the state of california alone makes 6000000000. 00 a year of the prison complex just to get some point in your life where. You dont care anymore nobody cares about you so you dont care about anything. Welcome back to the kaiser report im nice keyser time now to turn to Karl Denninger market hyphen ticker dot or car welcome back thank you max all right as all is well and things get into an area that nobody seems to really understand we talked Karl Denninger seems to think it all out and give us his latest on the news happening around the world karl we are 15 trillion dollars in negative yielding bonds in europe this is recently been climbing at a rate of one trillion per week is this any way normal what should people understand is happening karl. Forced inflation i mean what is inflation its the destruction of purchasing power right me notes thats a definition over so what is what is a negative. Force inflationary instrument if you bought it youre guaranteed insulation in your moto the negative you. Right now. Is it part and parcel of what could be called an enormous bubble in the bond market now as people focus on the yield part but if you look at the price part of the bomb the bomb price trading at multi 100 year highs its even trading a multi 1000 year highs and that same sipping the most overextended bubble busy in any Financial Market are already thank well course i mean the reason you buy a negative you early on is obviously not return your principle because youre not going to get it all back you buy it because you think the price will go even higher in that you can sell it to some other soccer but that means the same to you its going to go even more negative just simply kind of delve into this inflation and deflation if you have a sovereign bond with a negative coupe on that as a say negative Interest Rate you are in fact destroying capital which on one hand you could say is deflation but. How do you help walk us through the the definitions of these 2 words as they relate in this instance the reality of how monetary process actually works as opposed to what the joy impose of the world was like you believe in the lead guards and everybody else. Is said if a government is issuing more insolvent. Then their g. D. P. Is expanding in minimal terms so for example if you have a 3 percent g. D. P. Expansion and you have a super census. You are in a one percent sysco inflation rate its just because d. You are issuing more debt and more money into the system. Then your economy is growing so in real terms you consume the person who is using those funds is losing money every year. If you dont have negative Interest Rates on those government bonds what youre essentially doing is creating deep excess space for the government to run that cisco deficit is just part of the same scam of running deficits in excess of g. D. P. Expansion begin with wish nobody in any civilized nation should allow to happen to be an instant revolt when it occurs because its test on a scale of that differential for everybody economy but you know if you thats a tool or to read degree you know you would happen in greece right they ran huge fiscal deficits in excess of g. D. P. Its ultimately people who up their hands and said ok enough of this. In everything all came down crashing around here is sort of try to prevent people from having that reaction do the e. C. P. A. And then a j z g b and then these other nations are going to this other mechanism for a look until it doesnt just like it did in greece in italy and then in spain all right very good now count me out economist an economic historian dr Michael Hudson if there had ever been negative rate seen in history he said not to his knowledge and hes gone all the way back to the bronze age and never found it so its quite an Unusual Development what does the future look like if the entire world go negative in this way carl you know i dont know that anybody knows. If you asked me this 10 years ago i was said this isnt going to be able to happen because you will sell them. But obviously thats not the case we have busy all these trillions of dollars worth of them and people are buying them. But again i think the real answer is that busy were seeing uses in the longer dated instruments and the reason that theyre being bought is because theyre not really bought or used as trading it is trading vehicles so you buy a negative yield in 10 year bond and essentially what youre doing is betting on the come to yield on the next one is issued will be more negative and therefore busy is a the price of the one that you bought will go up and you consult make a profit its it thats like any other bubble you know if i if i buy a piece of course real estate not because i want to build cars in that building but because i think that the price will go from 5000000. 00 to 7000000. 00 and im expecting make absolute dollar capital gain on the transaction and thats the entire motivation for doing it. You know thats sustainable right up until the 1st handful of people buy the 5000000 dollar building and find out that when they go so theyll get 3 all right so theres kind of 2 dimensions to this theres the vertical Fried Chicken look at Interest Rates and then theres the horizontal frog which would be a Maturity Date and on that score weve got a proliferation of 100. 00 arab ons austrian 100 year bond soren 80 percent the past year. You know the question is has time lost value or is the future really looking that bleak that far out carl yeah i think that the reason for extending maturities like debt is that it allows debt you know buy it today and expect do you want to be more negative tomorrow to go on for a longer period of time elist lets face it the gap between the actual cash value of the bond and the discounted cash flow value narrows as time of maturity gets closer right i mean thats thats just where bonds work. Saw the usual 100 year bond or a lot of time for that game to play out the the. The problem with doing it from a sawyer or your view is just if those yields ever go positive goes up dramatically and so you know somebodys got an obligation interest through a period of time and while i can try to buy them back. At what price right lets talk more philosophically for a moment here still on the surface the g. D. P. And stocks are look you know relatively fine how much of this is about fear of a major paradigm in power shift the decline of u. S. Power and perhaps also the end of the current global currency grid a so i guess the question is underneath what on the surface looks to be one set of reality the g. D. P. Numbers the stock market underneath there seems to be brewing a potential paradigm shift and by that were talking about. The whole fi out currency grid because everything youre talking about right now wouldnt be possible all in the us we had a Global Economy that worked on currencies whose value is based on reference to other fee currencies so you had this you have a system of infinite regress where the euro is valued based on the dollar value based on the yen based on the pound theres no actual underlying you know for example a Gold Standard so but are we are we coming to spend a 37 year bull market in bonds weve had neil liberalism sense reagan and thatcher are we at a an Inflection Point on the verge of a major shift a major paradigm shift i know bit of a philosophical question when you think oh oh. Who are headed more for a major sort of collapse in sort