In the depths. Aura made in the shallows. Has changed american lives but pharmaceutical companies have a miraculous solution. Based drugs the people who are chronic pain and believe that their opioid prescription is working for them and the remedy be said to to the price that they pay closer dependency and addiction to opiates is the long term use that really isnt scientifically justified and ill study actually suggested that the long term effects may not just be absence of benefit but actually that they may be causing long term. Welcome to kaiser report Summer Solutions im max kaiser here with Stacy Herbert you know we look at the solutions we love take a deep dive into the issues weve been chatting about all year now today were going to be talking with faneuil would a more also known as n l w of the breakdown pod cast been following him on twitter for a long time listen to his pod cast you know the great thing about this whole new universe of media states is that people who might not get on media get on media and then they run to the top and suddenly theyre like wow these people are awesome and i would put a sale in that camp what do you think well thats the good thing about talking to heterodox thinkers because we dont have to just stick with the orthodox guys that are so boring on all the mainstream cable news channels we have the best guess so you know nothing i want to talk to you about one of the themes that weve presented here on reports Summer Solutions is that weve kind of were coming out of a few dark ages and that this could be an opportunity for a renaissance 2. 0 what we saw back in the previous round of sonce coming out of the dark ages and the black plague was that the plague did help bring in the renaissance in that it undermined the authority of the vatican nowadays we see in my opinion the equivalent of the Central Banks are like the vatican there is this like cabal of elites who only know all the secret information about our Financial System our Monetary System and our economics and theyre going to rescue or save everything but theres seems to be like with this pandemic and also with the increasing like collapse of the economy and markets. And then the bailouts and all that sort of stuff that theres an undermining of there of the already going on and that this is a moment now where we could have a rebirth i mean absolutely the only addition that i would say is that i dont think that thats just theres not just a single equivalent to the vatican in the sense that theres not just one authority thats being undermined i think theres multiple authorities being undermined you have on the one hand i think youre absolutely right to identify that the the the Central Banks have been exposed not as bad by definition or any way just as extremely limited in what they can do and they keep doing the same thing over and over again they ignore and this is the part where gets a little will fold ignore the the the rule that they have in issues like income inequality right by by virtue of their policies and people are reacting in really interesting ways i think its been very notable how over the course of the pandemic when youve seen the sort of money printer gober mean its not a bitcoin twitter thing that is on wall street baths its on you know i mean its everywhere right that idea of the fed put translated to the feds going to do whatever to keep the Zombie Companies alive has been manifest far beyond just the twitter sphere into a totally different realms and i think you have a lot of forces combining with that too to make people ask Big Questions and its very rare that you have a situation where people are allowed to ask Big Questions for any suspended piece period of time and there not be major changes that come out on the other side of that or i but on the topic of Central BanksCentral Banks are the basis upon which they monetization of the economy has occurred and it has sucked all the great talent out of the University System who moved to wall street to become kumquats and financial engineers and they didnt go into medicine really some of charlie. Affairs or social service or become clergymen they became wall street traders and with the fed we now historic play and as an example of an institution that is replicated in other countries around the world there is a natural Interest Rate of about 5 percent and the fed is their remit is to either raise or lower rates around that natural rate as a way to offer. Mitigating. Risk to the economy in case theres a slowdown or things that hyper inflated exciter but what weve seen is that theyve taken rates down to 0. And allow the can tell an air class to buy everything up which has given the rise to the multi 100000000000 air class thats a result of what i think we can describe as a heist this is a heist engineer by the fed and further along put further along by the concealing her class so this is this is pretty shocking disaster and a lot of ways and 1st so whats your comment on that which you do see it that way am i over my over you know dramatize ing something here and if i buy that but if that is the case that same structurally there is a very little that can be done at this point your thoughts well so theres 2 things in that question you asked one is can anything be done its come to that one second the 1st is whether there is whether this is a heist and i guess what i would say is a couple things 1st of all the feds remit isnt necessarily to keep Interest Rates around a specific level it is to keep the economy stable and more recently to also have low unemployment right the the problem is that the only tool they have is this Interest Rate tool or the increasingly exotic forms of q. E. 2 all right and because of that the only mechanism that they have to actually interact with the economy has to do with liquidity injections effectively you know and what happens because of that is that the only people who benefit are the people closest to that right and thats exactly what you talk about with the container class i think whats happening now is that people are realizing that the fed the fed may backstop the markets but the markets dont necessarily offer the average person anything anymore and in fact if anything they have made it more inaccessible to actually participate in the means of getting ahead right weve had a situation happen where the deal that is being handed to regular people is everything is going to be more expensive than it was for your parents but the. But the but the bargain is that will give you cheaper credit to buy it which is a terrible deal its an awful deal right we will let you get farther and farther into debt because the percentage rates are lower and lower and lower but youre going to have to take on more of that debt to participate in any meaningful way and this is where you have all of this inequality happening i think the interesting thing that may be happening right now and its way too early to be anything more than the most very basic level of optimistic about this is that there may be open space for a political conversation that isnt the same boring narratives of right and left that are presented to us right now but actually looks at this at Monetary Policy as a structural cause that can actually combine people across right and left and say this is something that we can wrap our heads around it doesnt fall into the same old narratives in is actually addressable and thats something that i think ive been thinking about a lot and frankly testing on my friends on both sides and i think theres more openness there and maybe thats one of the upshot of this moment that were living right right i mean we can kind of discuss further what the remit of the fed is right but cheer point the king here is a both left and right are now focusing on the institution as a whole and what role of plays and a lot of these big issues i think that is really important stacey so lets you know wrap some of those issues up into one overriding question and then some solutions to it you mentioned all the debt and thats been the bargain is like ok all your costs are going up Health Care Costs living costs education costs all that stuff is going up the basic fundamental needs of your life are those costs are going up some of the chinese importing goods ok theyre going down but that has been rising everywhere across all sectors so well right now in 2020 we see that the u. S. Debt to g. D. P. Is 136 percent i believe just in 2005 yes it was 100 it was only 61 percent so it doubled since 2005 but household that is also rising corporate debt is even rising even more paul krugman says its just debt we owe to ourself so is this debt an issue at all. Well i mean its certainly an issue for for the average american whos whos holding that debt and i think thats what makes again going back to whats potential in this moment i think that the average american who hears that thinks b. S. You know i mean like of course that cant be the case how is it that we live in a system where thats the case for the highest levels of government but not for for me right at in and out what where does the translation happen where all of a sudden debt becomes ok how big do you have to be for that to happen and when people begin to it they realize that theres basically no way to actually ever pay this debt back and so really were in this weird situation where its so strange to see that the solutions that are being presented you know you have on the one hand the m. M. T. Years were kind of pushing this narrative and in a strange way i find them the most arrogant about the place of the u. S. Dollar in the world there is such a an underlying assumption that nothing can change in terms of the global power system and any student of history knows that thats simply not the case right and how bet you know the thing thats crazed is that were living in a moment where the u. S. Really is rewriting the book every day about how far you can push Different Things and the problem is you have exactly basically 2 opinions within that are 2 ways to look at it the one is that well its you know we weve gotten away with it so far so were going to be able to keep getting away with it the 2nd is at some point thats no longer the case and maybe we shouldnt have the vision of a little less hubris about the things that make us look better this is an area of american exceptionalism that could be extremely dangerous the moment that it and i you know its theres a 1000000 different statistics a 1000000 different ways you can look at where that Tipping Point is right now we are still living in a world where its not like the rest of the world is presenting a really great alternative but you have for the 1st time these really key geostrategic competitions that are explicitly coming after after the. The way that the world is organized around the u. S. Dollar and basically the whole system the being able to get away with the way that weve structured things is predicated on a continuance of a system which doesnt necessarily serve a lot of folks including i think in this is the new heterodox thought that is starting to come into the conversation maybe it doesnt serve the interests of the u. S. Quite as the way that it used to write it is there a Tipping Point for american exceptionalism and are we at that Tipping Point i mean that the thats a very kind of. Question and Goldman Sachs on the topic of the dollar it come as come out and said it believes that the dollars days are numbered so in terms of the dollar being World Reserve currency Goldman Sachs saying that looks like the end is near how would this factor into things. I mean it has a it has a huge ramifications and you know i think that the debates around the dollar are really interesting and also extremely extremely important you have on the one hand the folks who are focused on the narrative strength of the dollar in some ways right that goldman article that you referred to that came out as part of the gold report was kind of trying to make sense of why a gold has had such a rise and in particular why its not just the standard folks who are kind of re upping their allocations of gold but is in fact institutions were getting more and more skeptical of treasuries and saying maybe part of what used to be the Government Debt role in our portfolio should in fact be this other thing because theres skepticism around the dollar you have folks on the other side who are really focused on the fundamentals and basically the kind of euro dollar and shadow Banking System and just how much of the dollar denominated debt in the world is outside the purview of the u. S. Those folks are more skeptical of things like the feds a belated actually influence the monetary supply they see the dollars strength as predicated not on any sort of narrative but on the fundamentals i can appreciate both points of view but i always worry when we underestimate narratives when it comes to markets markets are altamont lee machines that make sense of narratives and fundamentals and some confusing combination and at any given moment they can move very quickly between one or the other and in fact they are in some ways competition for narratives that when there are people always were going to have a benefit for the dollar to come down and some of those powers include some of the most powerful actors in the world right now so i think being dismissive of narrative shifts and a shift in the over chin window on whether the dollar can be or should be the worlds reserve currency would be a mistake right well very well said well were going to take a break and when we come back more with nothing on what im more of the breakdown pod cast dont go away. So what weve got to do is identify the threats that we have its crazy confrontation let it be an arms race is often very Dramatic Development only personally im going to resist i dont see how that strategy will be successful very critical time time to sit down and talk. Been a troubled 19 seventies a group of killers rampage through parts of Northern Ireland that was coordinated loyalist attacks protect a population of tens of forced to flee their homes and what was striking to put these attacks was a p. R. You see the Police Actually took part in the attacks so instead of preventing it they were active participants in the burning of full streets in belfast at that time more than a 100 innocent civilians were. You can see in years and we found out more i was surprised about the extent to which the collusion was involved in some of those cases the killers would later be named. I think it went to the very very top i think it is. The water where politicians you know on and give the go ahead. Welcome back to the kaiser report summer solution. With max and stacey and were talking to nathaniel what a more hes got the breakdown podcast i get it now he breaks stuff down im getting the benefit of his breakdown right now this guys on the money now in the previous segment the thing you know we were talking about narratives and markets and you know how to sometimes theyre insane sometimes they break when they break it can happen really quickly and you know markets are very efficient as you say theyre a machine if you will they take in all the information they have price discovery going on in the sea of price and you can kind of figure out what all the opinions are thats what theyre supposed to be doing thats the beauty of them but sometimes narratives take control and markets get way out of whack and in the case of the us dollar it might be the case where the narrative is taking the dollar in a place that is not reflective of reality and that when reality asserts itself were going to see a huge kind of move in the dollar versus some of these other currencies or not but i think its good to kind of point out that these 2 things dont always go together stays yet nothing i want to turn to a little bit like a about what were discussing in terms of narrative and one of the things that is really emerging is this conflict between the United States and china secretary of state pompei o called said that china he accused them of economic blitzkrieg but how much of it is really china and how much is actually the structure of the global fiats system whereby the dollar is the reserve currency yes it is an exorbitant privilege in some ways for some people but it does undermine our ability to manufacture and produce wealth so what do you think about that statement. Well so i mean i think that it is almost regardless of what you think about the conflict i think it is the defining economic conflicts of our times even if you dont view it as as inherently or by definition adversarial inherently in some ways it is going to inevitably be such an important conflict just based on the size of these economies i think its important to remember that the way that the the world has organized itself was not random we made a concerted push to bring china into the World Trade Organization and to basically aid the way that the world shifted to have such low priced manufacturing of things in china right there would be no matter what even if we hadnt done that certain sort of power dynamic that probably china would start to bristle against as they reasserted themselves in the world that comes from the exorbitant privilege of the u. S. Dollar at the center of the worlds reserve currency system but it wasnt like there was just some economic inevitability of manufacturing of always moving to china and supply chains we decided those were specific decisions and i think one of the things thats most noticeable about the time that were living through now is that you go back 10 years and the bit was the American Business class big corporates basically that were the most sort of the last defenders of china right they were the ones who were saying look you know like look at how many people its brought out of poverty this has been a great expe