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Guns and Butter - August 22, 2012 at 1:00pm

Guns and Butter, for August 22, 2012 - 1:00pm

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Guns and Butter

"Countdown To Currency Collapse" with Max Keiser. Escalating financial fraud; pump and dump scams; Wall Street banks; auditing fraud; absence of regulation; default or hyperinflation?; currency collapse; the trigger; Japan; China; bank holidays; social cohesion index; City of London; financial repression; confiscation of wealth; derivatives; interest rates; precious metals; the next nine months.

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The people who push gold and

The people who push gold and silver seem to be oblivious to the human costs of gold and silver mining. As miners in South Africa are crushed and shot, as peasants in Mexico are shot for their gold containing lands, as the wilderness of Alaska is mined with poisons for gold, with salmon runs contaminated by arsenic, Max Keiser calls for more gold ownership. This is just wrong. The world should not be crucified on a cross of gold!

can we get this guy to come

can we get this guy to come to speak in the bay area?

TRANSCRIPT - For a transcript

TRANSCRIPT - For a transcript of this (and other broadcasts), see

Outstanding show, and one

Outstanding show, and one realizes that Bonnie is being sarcastic when she refers to "the media" -- as only about three shows qualify as that today in America: Bonnie's outstanding show, and possibly Amy Goodman's "Democracy Now!" (although I get annoyed at Amy's frequent Larry King-type non-questioning).

Unfortunately, I agree with everything Max stated --- as usual, he's exactly and most knowledgeably on target.

FYI: Arther Anderson technically went out of business, but essentially they simply changed their name to ACCENTURE, then went on to help manipulate elections in Berlusconi's Italy, in France for Sarcozy and Sweden for Carl Bildt and, of course, in America during the Bush years.

(Oops! Forgot to mention those on-air segments from Glen Ford and Bruce Dixon.)

Somehow, Keiser believes that

Somehow, Keiser believes that the New Deal did solve the '30s crisis by jailing criminal speculative bankers and by writing off debts. In reality, US government indebtedness GREW by a LOT during the New Deal. No prominent bankers, e.g from the ranks of the Morgan banks or the Rockefeller ones, were jailed, in fact they occupied the top posts in the New Deal machine. And the crisis was solved not by the New Deal but by World War II. I'm amazed that Faulkner let Keiser get away with not even mentioning the war!!
My take: Keiser's analysis is based entirely upon the pseudo-science of "economics" which fails to examine the foundations of the economic system and instead focuses upon their visible surface manifestations, i.e. the financial system, the market,..... He fails to see that the current system's operation is based more than anything else upon people's continued desire to continue things as they are, since they believe in the money fetish and cannot see any other way to organize society's productive activities, i.e. those activities which have to do with producing our survival needs. The-powers-that-be thus have a lot of leeway to manipulate appearances so as to make it LOOK like everything is being taken care of. And the opposition too confines itself to suggestions on how to make these appearances look better, e.g. the "left" believes that further stimulus and more government intervention can restore "economic growth."
There are limits to this. To begin with, the planet has physical limits which cannot be faked around, limits which are being manifested via the ecological and resources/energy crises. And also, the real economic system, the foundations, has limits. Capital accumulation is a global process, but the results are realized by national groupings of capitalists, whose interests and abilities to counteract the crisis are increasingly at odds with one another. This is a process which together with the ecological and resources crises is relentlessly driving the global economy towards currency/trade wars and their inevitable outgrowth, real global war. But the timeline for such outcomes is highly unpredictable. I fear that Keiser's prediction, when it (likely) fails to be borne out, will be yet one more thing to be pointed to by eternal optimists as they will argue that "everything's gonna be alright."

As far as "modern money theory": it's total fantasy with disastrous consequences were it ever applied. See and select the article by Jack Straw (near the top, if not still there) about Occupy and money fetish, has a full section on MMT.

Thanks for your feedback,

Thanks for your feedback, Jeff Strahl. Although, I wish you could have pointed out some basic ways in which MMT is "fantasy with disastrous consequences," especially given MMT simply describes how monetary systems function now, particularly with regard to the sectoral balance model, a mathematical identity, which shows the federal budget (i.e., domestic public sector) of a sovereign currency issuer, such as the U.S., doesn't have to balance like a household budget. But I will check your link to try and understand further your perspective.

(Note: Basically, the sectoral balance model takes a given money supply, such as the U.S. dollar, and divides it into its primary three sectors: domestic private, domestic public, and foreign. This is basic accounting: All three sectors cannot be in a surplus position simultaneously. That's a mathematical/accounting fact. So, for the domestic public sector to be in a surplus position at least one of the other three sectors will have to be in a deficit position. And, since the U.S. usually runs a trade deficit, this means the foreign sector is in a surplus position and the domestic public (i.e. government) sector must, therefore, be at a deficit position. But that doesn’t mean the U.S. is in debt. The notion that the U.S. borrows dollars from China, or any nation, is a myth because the U.S. is a sovereign currency issuer. What China does, for example, like anyone with currency reserves, is buy bonds to gain higher interest, rather than sit on it.)

So, when people say things like "US government indebtedness" or "US debt," we have to ask: Who does the U.S. owe money to? It's one thing to say individual Americans have debt, but that doesn't necessitate the U.S., as a nation, is in debt just because we see a current account deficit (i.e. the domestic public sector is in a deficit position).

(Again, KPFA will block this message if we get too in-depth here. But hopefully they'll post this soon. I could say more, but should probably leave it there for now.)

I think it's a very good point Keiser's analysis only considers "visible surface manifestations," but I beg to differ regarding MMT. Keiser, though, kicks ass in flagging those “manifestations” and financial issues of the day. His Guns and Butter interview on Banker Fascism is a particularly excellent broadcast.

I look forward to reading from your link, Jeff Strahl.

When Bonnie mentions the

When Bonnie mentions the notion of "buying U.S. debt," it seems she, either, disagrees with or doesn't sufficiently understand the concept of sovereign currency as explained by Modern Money Theory (MMT), which Guns and Butter has covered before.

If the U.S. can issue dollars, how can the U.S. run out of dollars? Conservatives argue "printing money" would simply create inflation/hyperinflation. Yet, the U.S. did just that when it "printed money" to "bail out" (or give away to) the banks. Did we see hyperinflation (or even inflation)? No. MMT shows inflation cannot occur when the economy is operating under capacity, as it is now.

The notion that the U.S. is a "debtor nation" is contradicted by MMTers, such as Dr. Randall Wray and others. (Please see link above, as a start.)

(The moniker MMT, by the way is something of a misnomer as Dr. Stephanie Kelton has explained because MMT accurately describes the way monetary (money supply) systems function, so it's not theoretical, and because it's not necessarily modern because many of the concepts have been around since at least the days of Abba Lerner, for example, almost a century ago. But now those concepts have been brought together and begun to be known as MMT.)

I like Max Keiser and agree with sebaygo! and scr00plz. But I don't think he's approaching the monetary system from a perspective of currency sovereignty. It would be good to see a debate between Max Keiser and Dr. Michael Hudson or Dr. Stephanie Kelton or Dr. Randall Wray or others from

Also, it seems people need to understand the sectoral balance model clarified by MMT. The federal budget doesn't have to balance like a household budget or like the budgets of individual U.S. states.

Also, the U.S. doesn't "borrow" dollars (or money) from China or Japan or anyone. It's my understanding nations, such as China, simply buy U.S. bonds to gain higher interest than simply holding it themselves.

There's so much to discuss here, but I know this is only intended for surface commentary. But, ultimately, Dr. Michael Hudson's analysis is the most salient. What really backs the dollar is its military.

Peace and thanks to Guns and Butter (one of the best radio shows ever) and to Max Keiser.

Excellent interview! Max

Excellent interview!
Max offers information and viewpoints that are almost totally absent from other media outlets, whether "mainstream" or "alternative". Other great guests that are virtually blacklisted from US media, even "progressive" media (many of whom Bonnie has interviewed on G&B) before are Prof. Michael Hudson, Prof. W.K. Black, Dr. Webster Tarpley, Dr. Paul Craig Roberts and Gerald Celente

I love to hear interviews with folks like these. Thank you Bonnie for having the courage to interview individuals that are "controversial" (in the eyes of traditional US liberal/conservative mainstream discourse).

Also related to finance/econ: Prof. Steve Keen's book "Debunking Economics" is a must read. I would love to see Bonnie interview him regarding his critique of neoclassical economic theory (or ideology rather) and it's so-called liberal adherents (Paul Krugman, Robert Reich, Ben Bernanke, and the vast majority of Econ. professors in the English-speaking world and beyond.

(Also Prof. Hudson's new book might be a great opportunity for another interview with him).
Thanks again Bonnie for G&B.

Max makes entertaining the

Max makes entertaining the news that 95 percent of the population would ordinarily tune out. He's a bit over the top from time to time, but ALWAYS well-informed and usually spot on. I have been a fan of the "Keiser Report" and "Truth About Markets" that he does with his partner, Stacy Herbert, for over two years. Also, the weekly program "On the Edge" that he does for Iran's PressTV shouldn't be missed

Thank you for interviewing

Thank you for interviewing Max Keiser. This was a fascinating interview. I've kept track of him for quite some time now, but I like to hear him converse with new people. I'm continually surprised at how correct he has been over the course of time. People would do well to pay attention. If nothing else do your own research and decide for yourself. P.S. Much love to Berkeley!

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