Transcript: Thom Hartmann asks Max Keiser, Ireland is in meltdown...what happened? 10 Nov '10
Thom Hartmann: Greetings my friends, patriots, lovers of democracy, truth and justice, believers in peace, freedom and the American way. Maybe the European way, I don’t know.
The Ango-Irish Bank has been completely taken over by the government of Ireland. The Allied Irish Bank is now 90% owned by the bank of, by the government of Ireland. Ireland’s bonds are now trading at over 7 and ½, well 7.49 I believe it was this morning, percent, which means that Ireland is having to pay a fortune on their debt and it looks like their debt load right now is running at something at or close to 100% of GDP. So all of, none of this is good. Russia, Norway and Chile, their sovereign wealth funds which are heavily invested in Irish bonds, have all put their Irish bonds on the do not buy list, or at least Russia and Norway have, Chile has put it on a watch list. And at the same time you’ve got Matt Taibbi running around saying this is all Goldman Sachs manipulating the market, making a fortune. It seems like it’s a little more complex than that.
Max Keiser is with us. Max Keiser is the former investment, what are you, broker and options trader, excuse me. Host of The Keiser Report on RT Television, film maker and broadcaster. Max, welcome back to the program.
Max Keiser: Yeah, hi Thom.
Thom Hartmann: Great to have you with us. It’s, tell me if I have any kind of correct handle on this at all. It seems that when you’ve got the banksters crashing the world economy and skimming all this money off the top that a lot of people get thrown out of work. People get thrown out of work or their pay crashes, tax collections go down and in a state that has a strong social network like Ireland, as tax collections go down, you know revenue for the state goes down and so the debt to income ratio goes up. Am I anything close to this? Or what’s your take on what’s going on here?
Max Keiser: Well first of all, just a minor correction. When you talk about the banks skimming money off the top, you need a bit of a clarification there.
Thom Hartmann: Sure.
Max Keiser: The banks make bets on people going bankrupt and get paid out, 30 to 1. So not only do they sell fraudulent mortgages, they make bets that those fraudulent mortgages will go belly up and then they get paid out 30 to 1 on those bad bets. Now in the case of Greece, yeah the country is going bankrupt. They will shortly be rescued by the IMF.
Thom Hartmann: I’m talking about Ireland here.
Max Keiser: I’m sorry, Ireland, yeah Ireland.
Thom Hartmann: I see the same thing with Greece. I mean Greece’s bonds are selling at 11% aren’t they?
Max Keiser: Yeah. Ireland, it’s been going back and forth, which one is going to fall first. And it looks like Ireland will be the first to fall. IMF is swooping in to basically pick up the pieces. The country is effectively bankrupt.
Thom Hartmann: Now when the IMF did this with Argentina, I was in Argentina in 2002 as I recall, right after that happened, about a year after that happened. And in middle class neighborhoods, I was staying with some friends who are you know, they were the people who had invited me down to do a speaking gig there and they ran this organization. And it was a fairly upper middle class family, you know. Living in a neighborhood of homes that in the U.S. would be, you know, McMansion kind of houses. And I’d say half the, in the front yards of that suburban neighborhood, at least half of those houses had furniture or TV sets on the lawn, out in front other house with for sale signs on them. People were selling their furniture to make their mortgage payments and things. That’s how bad it was because the IMF came in and did this whole structural austerity thing. Is that?
Max Keiser: Yeah. Well remember it’s IMF working with Citibank. Citibank got the Argentinean government to get the government to assume all Citibank’s bad loans. So Citibank moves all of its bad loans onto the government’s balance sheet. Then the government imposed austerity measures on behalf of Citibank. Similar thing going on in Europe, similar thing going on in America. This quantitative easing is basically the banks moving their bad debt onto the government's balance sheet, then the government doing the heavy lifting of the banks, they’re going and imposing austerity measures on the American people. So it’s the same routine all over the world.
Thom Hartmann: So basically all over the world we’re being scammed by the banksters?
Max Keiser: All over the world there is right now a process of wealth confiscation going on, coordinated with the banks and the central banks, working together, to confiscate wealth. Just like we saw in Argentina, and we saw it in Iceland. Iceland is a brilliant example. The company went completely bankrupt, their Krona collapsed, because banks ran up the country’s debt to 10 times GDP until the debt bubble burst and they made billions. They walked away with billions, they moved offshore, they moved to England, and the country was left to fend for itself. Same thing is happening in Ireland. Zahn, Fitzpatrick and these other bankers, they’ve stolen billions. Now they’re going to leave this shell that they left behind to collapse. Same thing in Greece, same thing in the United States.
Now the United States is a special situation, because the US dollar is the world reserve currency, that’s why right now guys like Robert Zoellick are saying that we need to look at a global currency now backed by gold possibly, because the exit strategy for the US dollar is to roll over all of these American debts into a new global currency which will protect America somewhat but it does mean that America loses it’s sovereignty.
Thom Hartmann: Well we’ve already done that largely by signing the GATT agreements and joining the WTO.
Max Keiser: Well I mean I’m talking about genuine loss of sovereignty. I mean that there is no constitution anymore, there’s the global constitution which supercedes the American constitution. This is on the…
Thom Hartmann: Given that the principal power given in the constitution is to the house of representatives to initiate all borrowing, spending and activities that derive therefrom.
Max Keiser: Yeah. All of the amazing ignoring of the rule of law, that all of these banks have demonstrated in the foreclosure crisis. Banks like JP Morgan and Goldman Sachs broke the law five different ways during this foreclosure crisis, with no respect for the law whatsoever. So why should any of these guys respect the constitution. They have no respect for it. They’re simply trying to create a new global currency, and the US dollar will lose its status as world reserve currency. Now the, why this is important for Americans is because the US has been able to write checks that it never had the cash, since Bretton Woods and Bretton Woods 2 which has kept the price of stuff like gas and food artificially cheap. But once you go off this world reserve currency status, the price of food and gas doubles and triples immediately and the US standard of living drops substantially so that there’s very little between the standard of living in between let’s say Mexico and the US.
Thom Hartmann: So, we’re talking with Max Keiser, MaxKeiser.com his website. K-E-I-S-E-R. And also he does the Keiser Report on RT, a great, at RT.com, a great TV show. Max, what’s, what’s the solution? It seems to me like what we should be doing is nationalizing and breaking up these big bank the way that the UK did with Black Rock [Northern Rock - ed.], the way that Sweden did with their banks in ’89, and reimposing Glass-Steagall. Or even what Reagan did with the S & Ls in this country in ’86. I mean he threw these guys out, put people in jail.
Max Keiser: Yeah, the Reagan example is a great example. The savings and loan crisis, he had Bill Black, who was the regulator at the time, effectively nationalized the S & Ls…
Thom Hartmann: Yeah and Bill Seidman.
Max Keiser: put more than a thousand bankers in jail. They put all those bad debts, they ring fenced them all and they spent 10 and 15 years working their way through that debt problem. But they were able to contain the problem. The solution, if you want to look back over the past 30, 40 years. There is only one solution and that solution was the solution when the country faced a similar problem in the 1970s, when Paul Volcker decided he had two choices. He was the fed chairman at the time, before Greenspan. He had two choices, either raise rates aggressively right now, sharply right now and take our medicine over a two year or a three year period of time…
Thom Hartmann: Right which killed Carter’s presidency.
Max Keiser: It set the stage for the, when we came on the other end of it. It set the stage for the longest economic and monetary expansion in America’s history and one of the most powerful bull markets in history. So Paul Volcker is the father of the Reaganomics and the Reagan bull market. But he took, he made the choice. Raise rates, sharply, quickly, take our medicine over a two or three year period, and then move on. Or take the decision of try to magically believe that we’re going to see these problems go away on their own. The Keynesian model.
Thom Hartmann: Right.
Max Keiser: Which is not working.
Thom Hartmann: And inflate our way out of it. Okay, Max Keiser, MaxKeiser.com. Thanks Max.
Max Keiser: All right, bye now.
Thom Hartmann: Good talking with you.
Transcribed by Suzanne Roberts, Portland Psychology Clinic.