On the Edge with Max Keiser – 29 May 2009

May 29th, 2009 by stacyherbert

With guest: Michael Hudson

Topics: Iraqi stock exchange; sovereign debt crises; currency volatility; a new class war; the rich will never pay taxes again; kleptocracy.

(For hi res single file, click here for Blip.tv)

Tags:   21 Comments

21 responses so far ↓

  • Paul Anderson
    May 29, 2009 at 5:08 pm

    I watched the show with my younger brother, we were both very
    impressed overall. I can only repeat what I said to my brother,
    the contradiction is that the focus of the crisis is in the Anglo American world, what Jim Willie calls the “Anglosphere” a neologism for sure, not Europe.
    I am not convinced that neo-liberalism was totally victorious in
    Europe, at its centre at least, France and Germany, basically the destruction of the real economy was held in check to some degree ,by collective bargaining.
    This is one of the fundamentals that make the euro stronger,
    another is that sub-prime fiasco was peripheral and not central to their housing markets.

    I find it hard to accept that the fundamentals will not come into play as much as do accept China’s investment in commodities,
    will strengthen their position as a world player.

    According to Aristotle, and Marx, gold is “a store of wealth” but it too has to be based on real wealth, and not funny money or fictitious capital.

    Europe is tripping up on the ‘Anglosphere’s’ mess.
    I think it was Peter Schiff that first put my thinking in that direction.
    According to the BBC, UK debt was double the average in Europe in 2006.

    It is a different ball game.

    Anyhow, I look forward to the rest of the series. Max is very amusing.
    Thanks to you both for all your efforts.

  • Ingvend Storrs
    May 29, 2009 at 5:17 pm

    Super interviews, Max. Very informative.

    Looks like a great market place for guillotine manufacturers in the next few years!

  • Danny
    May 29, 2009 at 5:30 pm

    Ar fheabhas! more props please!

  • bzmoore
    May 29, 2009 at 5:40 pm

    Drat’s I’m not first to comment.
    Anyway, Michael Hudson’s take on one of the purposes of the bailouts is a new take, to me at least.

    Oligarchs will never have to pay taxes again! Only People will.

    Now they are given loans to buy up toxic debt and on the books they have a huge loss which means they will never have to pay taxes for the next 50 years or so. Nice trick.

    This was done in the Oil business where an oil company drills a bunch of dry wells say for $50M. Another company takes them over; after all they drilled a bunch of dry wells. The second company pays $1 for the first company and never has to pay any taxes until they make over $50M.

    In the brilliance of the US Gov the Oligarchs are even paid by the Financial Terrorists (Bankers) to take over the bad debt and with $14B in bad dept they can crop any profit from the US and never pay a dime on present and future income in taxes.

    It’s like slavery for your grand children, they have already been bought. For the next 50 years of effort every citizen of the US will be taxed to pay this black hole. Brilliant move almost as good as the Dark ages where you paid the Church for your past and future sins for generations.

    Welcome to the dark ages American peasants.

  • bzmoore
    May 29, 2009 at 5:47 pm

    Sorry that should have been $14Trillion in debt, not billion.

  • markval
    May 29, 2009 at 5:48 pm

    Good show but it lacks visual support

  • Don
    May 29, 2009 at 6:03 pm

    Wait a minute! These piggies do not have to pay taxes, they steal wealth through taxes and usury, we get fascist cops to beat our heads in.

    Maybe I should just shut up, get along, pay “my” taxes and start drinking the Kool Aid and poppin the red pills. Preparing my sweet cheeks for some Abu Grab/ Gitmo action. Am I dreaming? Is all this shit real?

  • Max Power
    May 29, 2009 at 7:09 pm

    Canadian FOREX news:

    Loonie soars 8 cents in May, finance minister concerned

    http://www.cbc.ca/money/story/2009/05/29/dollar-loonie-soars.html

    The Canadian dollar jumped 1.90 cents to 91.60 cents US on Friday, a run-up of about eight cents since the beginning of May.

    The loonie was last above 91 cents in early October 2008.

    Finance Minister Jim Flaherty said the rapid rise is cause for concern and that Bank of Canada governor Mark Carney is monitoring the situation.

    [...]

    Volatility aside, dollar to stay at 80 cents by year-end: RBC

    http://www.cbc.ca/money/story/2009/04/07/rbc-c-dollar-prediction.html

    The Canadian dollar will go through some wild swings in 2009 before ending the year where it started — at 80 cents US, according to a report by RBC Economics released Tuesday.

    Craig Wright, RBC’s chief economist, said a conspiracy of lower global economic growth, soaring government deficits and essentially zero per cent interest rates will be enough to have investors running back to the U.S. dollar during 2009.

    That means the Canadian currency could fall as low as 76 cents during the year before recovering to the 80-cent level by 2010.

    “Over the near term, it’s going to be anything but stable,” Wright said in an interview from Calgary prior to speaking with a business audience.

    Canada’s problem is that worldwide investors still see the U.S. greenback as the safest currency bet among any of the global currencies in these difficult economic times, he said.

    Thus, it is not important that Canada’s deficit, in relative terms, is lower than the budgetary shortfalls in many other countries or that the Canadian economy will likely outgrow the United States in 2009.

    “It’s a bit odd. But [the U.S. dollar] is still a safe haven for investors,” Wright said.

    [...]

    Slumping dollar pumps up Canadian overseas investments

    http://www.cbc.ca/money/story/2009/04/08/foreign-investment-canada-2008.html

    Canada’s direct investment in foreign countries soared in 2008 by the largest amount in 27 years, according to new figures released by Statistics Canada Wednesday.

    The country’s statistical agency said Canadians’ holdings in other economies jumped 24 per cent in the January-to-December period last year, making these investments worth $637.3 billion.

    That represented a rise of $157.9 billion in additional value for Canadian direct holdings in other countries.

    Statistics Canada said the 2008 increase was the biggest one-year gain since 1981.

    Unlike stocks and bonds, direct investment are investments in which Canadians influence the decision-making process of the target company.

    [...]

  • Veritas
    May 29, 2009 at 7:19 pm

    Somebody should come up with a cleptocracy rating for countries, so I know which ones to avoid. USA would rate an FFF for tremendous failure. Hmm, I wonder, where would France stand in this respect?

  • Youri Carma
    May 29, 2009 at 7:41 pm

    Nice update for my financial vocabulary:
    - Dead cat bounce
    - Look back trade
    - Kiekeboe accounting

    Ol Dutch sayings:
    - You can’t pull a dead horse
    (You can’t convince and Ignorant populus)
    - Only after the calf drowned the well is drained
    (Only after WOIII people will be willing to start thinking for themselves again)

  • Giuseppe Bagodonutti
    May 29, 2009 at 8:43 pm

    Gold has busted the $950 barrier,
    with delusional confidence.
    Some speculators suggest it will hit $1100 at the end of Q2.
    $1200 by the end of 2009

    I’m starting to wonder that myself.
    But I still question the validity of the bears who say “it’s $150 over-valued”.
    The relationship between Gold and $US is subtle…
    So long as it remains THE reserve currency,
    there will be this control over gold…
    The Gnomes of Zurich said so

    Although Platinum and Palladium have been chugging along this week…

    The spike I’m waiting for is RHODIUM.
    that metal is so bizarre.
    It reached $10k/oz a while back.
    Now, trading about $100 above platinum…
    If that metal spikes up,
    you know the market is DRUNK…

    When Nickel hits $7, things will move in mining ‘en masse’.
    especially the mine owners (no need to actually mine the material)
    I have been seeing more CHINESE takeovers in Canada…
    or at least HOPES of Chinese takeovers (a lot of deals fall through , it seems)

    I’ve noticed the LME and COMEX are on a weird reciprocation move…
    almost like they are just moving the warehouses from one market to the next…
    especially aluminum…
    something is not right with that market…

    Other than that,
    Gold Miners are the dominant force this week on the TMX,
    and Natural Gas looks to be the next mover
    over Oil…

    Where are the fuckin rubber BATS????
    You mention Geithner, you should have rubber bats on strings,
    damnit !!!!

    On top of that,
    no damn MOJO BAG!!!!
    instead you have papers scattered across the desk,
    like the Italian Morning News broadcasts
    just showing headlines from history…
    You could have used the mojo bag to whip out your pirate props at least…

    CONCEPTUAL CONTINUITY!!!!

    that is critical when trying to create a new myth…

  • Joe
    May 29, 2009 at 10:47 pm

    Good job, Max. Excellent waterboarding demo, too!

    Apparently the torture was a lot worse than waterboarding, though. I heard stories of testicles and scalpels. There was also rape. Sorry to be a bummer, but me and truth, we’re like that [motion of putting two fingers together]

    The truth shall set you free.

    Never give up.

    Buy gold and silver. Buy, buy, buy.

    Take care!

  • Mother Earth
    May 30, 2009 at 1:18 am

    So Max got the mojo from the bag ;-) Much more relaxed flow this time, imho that sticks in minds better..Stacy has an excellent voice (and diction if I may say) for this (besides a more conotated grasp of the subject matter so to say..)..

    I don’t get that 12 trillion power elite story. Stashed abroad won’t do them any good if the USD goes down..It will only put people of off the fiat currencies..

    You now see states noticing their tax differences..
    http://www.nytimes.com/2009/05/30/business/30delaware.html?_r=2&partner=rss&emc=rss

    Rather than seeing a new (world) order form I expect there to be a lot of ‘underwater’ acts of mutual financial and physical destruction as the ‘power elite’ fights over the spoils of the evaporating free lunch..

    The US will not take their lost military funding lying down. It will be all or nothing. I think the US focusses so much on Iran and North Korea to ensure they have a nuclear angle/option in any upcoming conflict. China also remembers Pearl Harbour, an in itself wildly succesfull operation. One could also interpreted the hoarding of commodities as preparation for war. I think we need to wake up and realize what train we are on..

    @ M&S Place your bets for Gold! (shameless plug) I think I am reinventing a derivatives market.. http://www.milligrambank.com

  • cailean bochanan
    May 30, 2009 at 1:35 am

    The really interesting development in Britain is how the elite are following up their financial coup with a political one. The beauty of it is that without a constitution this can be done easily without an actual coup as would be required in the US. In fact, it can be done under the pretext of bringing more democracy. This is because the perfectly reasonable idea of reforming the House of Commons will have the actual effect of knobbling the executive, were it to be carried out without the compensatory and absolutely necessary elected presidential office. Without this missing piece, which no one apart from ourselves is going to demand, such being the instinctive consensus for oligarchy in this benighted country, the overall effect of Cameron’s plan will be a return to what Disraeli called the Venetian system(Sybil- or a Tale of Two Nations). Meantime Chinese soft power may ward of the corresponding US coup d’etat in which case who cares what the Brits do. But it is just fascinating watching the place go down.
    http://inthesenewtimes.com/2009/05/28/all-hail-the-british-revolution-all-power-to-the-oligarchy/

  • M
    May 30, 2009 at 3:02 am

    @Stacy, Max, good work. As said, you guys are HEROES!

  • Richard
    May 30, 2009 at 4:01 am

    @Max & Stacy: Excellent teamwork!!! “Welcome to the Cleptocracy” might be a better title to your program….actually Christopher Story called it a kakocracy ( rule by scoundrels ) some time ago….It was through his website that I first became aware ( June 2007 ) of the $1200 trillion notational value (amount ) of derivatives languishing throughout the global financial banking system….With $12-14 trillion offshored in banks now geared to return to access real hard assets (ie: bargain basement real estate, natural resources and commodities ) coupled with the reality that it also negates generational taxes for decades to come…won’t the combined number of municipalities and state governments realize that they too have been duped?? Maybe the state sovereignty movement ( backing 9th and 10th Amendment resolutions ) taking hold throughout the USA might actually be the last straw before a Jacobin style revolt is unleashed by the angry masses of Americans ( aka “the mob”)….As you prepare for next week’s program with Alex Jones, maybe this topic will meet your criteria and be aired…warm regards, Richard@lattitude30N

  • Jerm
    May 30, 2009 at 9:49 am

    This show is awesome! I wish I could receive press TV from my cable box but I will settle for the web broadcast. Thanks for posting.

  • Tony Danes
    May 30, 2009 at 11:55 am

    I liked Mr. Hudson very much. He explains the situation very well. I have a B A in Economics and try to keep up but some of these guys lose me. Thanks Max and thanks Mr Hudson fo further enlighting me.

  • bzmoore
    May 31, 2009 at 12:50 pm

    Richard brings up an interesting point. That is there is trillions of electronic money floating in cyberspace which might come back to earth and buy up the USA. Because so much of this fake wealth has been created (debt obligations etc) plus the fact that the US population still think a buck is worth something the credit might be used to purchase the whole shebang, utilities, factories, farms, mines. Anything of tangible value.

    This happened to Mexico during their IMF triggered currency crisis. In that case the banks called all loans and the middle class was disappeared. Who replaced them? All assets were taken over by 7 families who happened to have assets out side of Mexico beyond the reach of the IMF.

    So when all this cyber money lands back in the US the Lizards will buy up everything.

  • smallz
    Jun 1, 2009 at 10:44 am

    Stacy & Max,

    That was really good!

    Stacy as a “reporter in the field” is Dope.

    More waterboarding please.

  • Mark
    Jun 14, 2009 at 7:59 pm

    Good work Max. Enjoyed the show, Hudson is always worth listening to.