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tv   Headline News  RT  July 11, 2013 2:00pm-3:01pm EDT

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use the access to your office to. live from r.t. at ten pm moscow time the american public throws its support behind edward snowden with a poll showing most citizens approve of his whistleblowing activity and we made an entrepreneur who's helping internet users a void the government snooping that snowden's uncovered. also had learning from us washington is set to deliver for fighter jets to the egyptian military as president obama refuses to call the overthrow of the muslim brotherhood a coup prompting the gyptian is to criticize u.s. involvement in their country's affairs. british lawmakers warn the toppling the assad regime in syria could have disastrous consequences in a report highlighting the threat of radical militants getting hold of chemical weapons. and a high profile corruption case draws to a close here in moscow as a court hands down
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a guilty verdict against russian lawyers said good magnitsky accused of helping a company to evade seventeen million dollars in tax. for a good evening to you this is our teens and i shall cover no one here with you this hour we start with a developing story that we brought you from the last reports that a cube about a plane from moscow has changed its course earlier on today has stirred up speculation therefore none expectedly i guess that the fugitive whistleblower edward snowden could be on board aeroflot flight s u one fifty is reportedly avoiding u.s. airspace a change will to land in cuban about five hours from now. across this story for us as a side alexy it's no surprise i guess that the media is abuzz with this because this plane has changed course tell us about it well hopefully we can now see the map
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which would give us more idea as to exactly what is happening now usually the su one fifty flight from moscow to havana. flies will just see this route in a couple of seconds a year or so passes the atlantic over europe partly passing the greenland the u.s. territory and then lands in havana now we're getting reports we'll see what happening at the moment the plane is taking a route directly across the atlantic right now ok you look at the map here you think well that's the obvious way to go because it looks more straightforward but of course it's a globe this is actually the more straightforward route than this one well in the first place this route as far as i know is deemed more risky because flying above ocean is always more risky and arafat in fact has been has been flying this route with the red dotted line for for many years now it's really hard to understand why exactly he decided to change the world now but we'll know that for sure when the plane lands in havana at about midnight g.m.t. in about five hours from now so just spelling out if it goes this way that way it's
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avoiding u.s. airspace it's in international airspace and above international waters where is the boundary where america can say you're out of space or favs it go well according to international law the the airspace stretches twelve kilometers from the mainland so obviously if the plane goes by this route it will avoid the u.s. airspace but keeping in mind what happened in europe when the bolivian president was flying from moscow and several countries denied airspace he had to have or across europe and find some place to land to refuel his plane that just happened basically we could go keeping in mind that there is mounting speculation that edward snowden may be on board this plane flying now from moscow to all of us just a couple of weeks ago all those journalists packed on the last flight through sheremetyevo an aeroflot flight there was an empty seat those journalists going oh no he's not here on a flight for twelve i was going nowhere for no reason that kind of thing happening again of course well certainly i mean when twenty fourth of july everyone was
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expecting snowden to board that flight you can see in the pictures here. people are filling his empty seat in the air force plane he didn't arrive to on board eventually and the plane took off with the journalists on board basically they just had a three day holiday in havana doing absolutely nothing because that wasn't on board ever since has been the sheremetyevo and it's a mystery where he's going what's the latest rumble on this though what we think the guy is on it all is it sort of fizzling out the story now while several countries are considering several latin american countries are considering giving him political asylum and as long as this whole thing continues and there's no definite yes or no coming from these countries snowden may in fact use havana as a certain transit point while waiting for the decision on the political asylum so no information on where he is right now in sheremetyevo war on board the plane it's all a mystery all right let's talk about the rather unusual track of this plane tonight cruciate navy ation expertise could join us now on the line from levi there kristie
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we're going to hear it hello good evening ok. chris one question to you brooke correct me if i'm wrong but taking a direct flight across the atlantic as we just explained is it more risky than flying across europe and passing greenland and the u.s. territory. you know. yeah i suppose you could argue that it's. more risky to take the route that this aircraft is taking because it's not following that great circle route that you mentioned before but having said that you know the west bound transatlantic flights take particular tracks that are predicated determined by the weather conditions or time having checked the weather conditions the prevailing situation at the moment or that strikes it has to be sad that it's likely that mr snowden isn't on board that airplane it just happens to
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be at the north atlantic tracks have been moved south because of the weather conditions that happen to be prevailing over greenland and parts of iceland at the moment that's not stopping the the air twitter going oppose the corsica chris as you'd expect to me who makes the decisions i mean obviously every flight has got a number of different flight path corridors it can follow is it down to the pilot to make the decision or is that the pilot told by international traffic control or the various regional traffic controllers who makes that call. well if you think about the north atlantic particularly the two control authority it's really for the vast expanse of their space. is an organization called or a radio control of thora he called shall wake. here in the here in the u.k. and that's a conglomeration of two names. effectively it's run by the irish and the british on
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this side of the european side of the atlantic and over on the other side of them it canada the united states who control the northern part of the transport the transatlantic. air traffic pattern if you will but the that the tracks that aircraft follow between each part of the the world so i eat north america and europe. you know they're very much dependent upon weather conditions at the time and those tracks are formulated based on the weather conditions every twelve hours so. how often however does that how different how often does this happen that the plane changes its established ruled as with as it's happening right now. it happens and you know it could be a week before the transatlantic system changes it could be a matter of just hours before the system changes so aircraft are required to follow
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the most expeditious route from point a to point b. . you know just happens to be at the moment that those are suddenly tracks across the north atlantic airspace all right chris we know you're not a betting man i'm going to put you on the spot again what she definitive on this is there but snowden on the plane or is he not on that plane well that's anybody's guess that you know i would suspect that the transit area that mr snowden. is purportedly in is probably the most watched the most the belt. area of any airports anywhere in the world and so it's probably unlikely goodies managed to leave and get on a plane but who knows where in flight one fifty kearney one of the most watched flights of the moment chris shakes aviation expert thanks ever so much for your time next or jet ski thank you very much as well too and i mean time u.s.
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government efforts to convince the public that intelligence leaker edward snowden is a spy i am going to criminal appear to be failing a recent poll found that most americans approve of the whistleblowers actions law about a third viewed negatively snowden faces espionage charges in the united states of course for exposing the extent of his government's secret surveillance network those revelations implicated not only officials but also the country's biggest telecom an internet companies too but one small internet providers and a really big reputation for resisting pressure from the national security agency and shielding its users data i spoke to the founder of x. mission pete ashdown. we have had situations where people inside the attorney general's office of slandered my business and said that we're supporting criminals we absolutely do not support criminals we just ask for a proper warrant and that seems to be too much to ask most of the time or the other issue is that we saw with the n.s.a. . exposure that google and microsoft and apple and others who are supposedly
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cooperating. they're probably charging for that privilege so they're making a financial decision to open their networks for inspection by the n.s.a. and it's not worth it to me to do that i don't want to live in a surveillance society and i'd rather stick by what our constitution says that we're protected by we surely i guess begins and johnson got less to lose that big business is they've got less to fade away yeah absolutely and but it's funny because i've got more to lose i mean i couldn't fight a protracted court battle but i'm willing to do it i'm willing to go to jail to protect my customers from being wholesale the monitor i find it surprising that a company with the resources of google. isn't more circumspect about the information they're giving away and what they're selling it begs the question how long this has been going all that doesn't it of course a lot of viewers may be familiar with that i think it's just come out now with regard to snowden and his revelations instead of what you think of him i think he's
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a hero and i think he's doing the right thing i think it's shameful that he's being treated like a criminal for standing up and reporting what i believe are our own illegal acts by our government people shouldn't be treated under the espionage act is the obama administration has done so many times to people standing up and believing that what is going on is wrong otherwise we have no recourse to turn our government around. why do you find more reaction to have a you know example and should leaks it out there we've got a timeline for you documenting the events as well as the impact of these revelations. this is r t live from moscow thanks for being with us not just stuff just coming up now in fact twelve minutes past ten at night i'm kevin i mean now the u.s. has decided to go ahead with the delivery of four fighter jets to egypt despite
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president obama's order to review military aid to cairo it comes as a time of deep divisions in a country where emotions are running high after the overthrow of president mohamed morsi last week but let's take a closer look surely at america's role in the country twenty eleven when hosni mubarak was still in office egypt received one point three billion dollars worth of military aid much smaller two hundred fifty million dollars economic support package as well mubarak was then ousted and in twenty twelve mohamed morsi became the new president his muslim brotherhood movement at the approval of the u.s. government which continued to provide the same amount of aid that aid situation remains largely unchanged despite the political turmoil still gripping egypt to this day and the lack of a legitimate government now if america's plans remain unchanged this support is going to set to continue next year but none of that cash is improve the lives of ordinary citizens in egypt as r.t.l. true reports now. the supporters of ousted leader mohamed morsy remain steadfast they're continuing their sit in another city in the capital they held
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a symbolic funeral for the dozens killed in violent clashes on monday morning between security forces and members of the sit in they marched from their mosque where this ongoing protest is happening to the presidential palace where they had a kind of standoff with republican guards this comes at a time when there's been an arrest warrant issued for the supreme leader of the missing brotherhood mohamed of the for inciting violence on monday they feel is that this arrest will scupper any plans for the missing brotherhood's participation in this time here in egypt on monday the interim president for his part issued a roadmap to egypt in the form of a constitutional declaration it said that there would be a new constitution and fundamentally in presidential elections within the six months this was rejected by the most brotherhood and its political party the freedom and justice party we agree with them all the way through went for the election when it was a little bit is that list or whatever and then the military would come back in one
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year and say will you just repeat everything again start i love that was the start of this what we are trying to say all the time is not about morsi and so it was about the values meanwhile the u.s. have responded in a manner which it doesn't necessarily reflect what commentators are saying here which was this is a military coup if this is labeled as a coup this would affect u.s. assistance to egypt the latest reports are that the u.s. are sending four x. sixteen fighter jets to egypt in the next few days this is part of a larger package of twenty fighter planes which eight of which were already delivered in january the spokesperson for the white house for his part said that they would it was not in the interests of america to reconsider its package of assistance to egypt although president obama has. promise to you look into the aids and the plan for american support of egypt in the future. well true reporting for
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us well while i disagree on who should lead the most seem to share the same view on the us role in the country as a new survey showed in may american research has found that nearly eighty percent of egyptians do not approve of the u.s. role in the country that we sixteen percent holding the opposite view now when asked about president obama's foreign policy almost two thirds gave negative says egyptian perceptions of a bomb are steadily worse and since he took office indeed back in two thousand and nine the majority of respondents also disapprove of america's military and financial aid to egypt saying it is an addiction that harms the country well to discuss the situation in egypt let's talk live to col shero a commentator and middle east blogger karl even to you the overthrow of morsi has been called a coup but you know it clearly had massive popular support so is that really strictly the term that should be used here yes absolutely we have to look not only our. presence on the street but we have to look at the procedure and the army was.
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driven around there is still. rather going to stick with the president this is not either why this is so i think that needs to be made very clear the muslim brotherhood keeps saying resist the army they're calling for a vote they keep saying the caviar there is peaceful revolt but we live in a real world every time this revolt happens there's bloodshed. yeah absolutely i mean unfortunate this is the kind of situation where damage three had any answer reaction to the popular uprising have contrived to create but let's remember what their interest of the military here is it's not the continuation of the democratic revolution the main interest of being in and effectively carrying out this fool is to stop this threat of a genuine popular uprising and in my book that would include the people actually taking power and resorting to a democratic process what's we saw over there is not exact opposite of that which
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is casting their results of democratic elections. what would you say with the failings looking back now all the more seized in power we've talked a lot about the economy and what went wrong there what he didn't do but it wasn't just that was it. no it was a host of failures i mean i don't want to give the impression that i'm a supporter of the muslim brotherhood i'm hugely critical because of their role that they brought to fruition into politics and also if they're not of competency and administering the country and managing you know the transition towards democracy if i think the economy and this it danny and language that they've used consistently there is a huge cost of problems and lack of an ability for president morsi to kind of step up one hundred percent a diet egyptian population the people that are presenting to him that people that voted for him on the other count as well so i think there are huge failings none of which justify it i mean it's record against him and religion of course a cape to all what went wrong for morsi was in it yes absolutely i think that
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alienated people like you know christians or secularists even mustn't people who don't feel that there is a severe road into what it takes in this crisis minor so again i was part of the family but that end of the day the muslim brotherhood was elected with people who knowing who they were and not only they won the presidential elections would that have of course people from other political affiliations but they also want to parliamentary election and people tend to forget those out of which were constant and the parliament was also another and disbanded so there's a host of grievances and i think that reflect on that period in which an transition when there wasn't a single started you know was really in control by having said that the ship should have given the chance to presentation towards a more democratic future and carry out the process and for the muslim brotherhood
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to be kind of kicked out of office by resorting to the democratic process not to go and military means what should the muslim brotherhood do now the interim government saying they'll be new elections a new parliament early next year morsi the muslim brotherhood saying not we do anything to do with it should they be more pragmatic though and get in on it while they still can. that's a tactical decision that at the end of the day it would be for them to judge based on their stew ation but all of this we have to look at is my parts bating in that process they would be this demise in this sort of goo i den of the day which is something that we've seen already western governments in america and europe we have lectured us for a long time about the merits of democracy also in her and the board so you can't judge a demise that is the muslim brotherhood and i think form of boycotting broker you might be the fact to control it but that would be done down the road in the realm of the day is because nobody can say conclusively there will be some kind of these
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that are meant to bring back the muslim brotherhoods back into kind of power in one ship or down another or another because the military doesn't want to be in the front drawing leading the country so it would seek to kind of covered south and bring some sort of civilian distance you to find three of their cause shero a middle east north africa a blogger a commentator write a thank you after the break it's now twenty minutes past ten at night moscow time look back and forth and occasions of chemical weapons use in syria coming up.
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do we speak your language i mean some of the will or not at the end. we'll use programs and documentaries in spanish what matters to you breaking news a little turn it into angles stories. so you hear. the spanish find out more visit actuality. again the fall of the assad regime in syria could have catastrophic consequences due to the threat of chemical weapons stockpiles ending up in the hands of radical
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militants that's the conclusion of senior british lawmakers in an intelligence and security committee report which appears to be that in stark contrast with the government's pro-rebel stuns that warning comes shortly too after russia said it had solid evidence that rebel groups in syria used chemical weapons in a deadly attack on the city of aleppo back in march those samples are now been handed over to the united nations washington said it's skeptical over russia's findings which contradicts the white house's earlier claims that government forces were behind chemical attacks those. allegations were used to justify a decision to arm the syrian rebels but u.s. lawmakers are holding back on the promised weapon supplies fearing they could end up in the wrong hands and it will come pay no richard becker told me that moscow's findings should be enough for washington to reconsider its pledge of lethal support so it should be an eye opener for everyone who has any doubts about what's going on the this latest report from russia only guy or the use of chemical weapons by the
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opposition the intervention powers you love it's going to forward with the training of the forces of the opposition the syrian opposition are even now pouring in flowers that policy is really disarray because there is a great deal about position inside the united states and there is you know you get inside the congress there is a great concern about where this will lead to and whether it out it will lead to a regional war or something even wider if the united states goes forward with its plans to achieve its objective which is over it's really the government's year will use a brief tonight devastating floods in china's sichuan province claimed at least thirty one lives today to wrenshaw rains have triggered landslides in the worst flooding in half a century it's destroyed homes and left dozens of villages cut off from power supplies according to the latest reports now over a million people in sichuan have been affected by this tragedy dozens more have
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died since the weekend in several regions over seventy are reported missing. more bad news from afghanistan there are twin car bombings claimed the lives of five people today the first blast killed three civilians followed by a second blast that left two police officers dead as they rushed to the same no groups claimed that they did it but similar attacks have been launched by taliban fighters violence is spiraling in the water or nation just now two weeks after just eight weeks rather after nato security handover to local forces. here in moscow the late lawyer sergei magnitsky has been found guilty in a high profile tax evasion case the court also handed down a guilty verdict against his former boss william broder head of the hermitage capital fund which is represented by militant magnitsky. reports. let's go court has ruled that the auditor sergei magnitsky who died in custody in two thousand and nine is guilty of tax evasion similar luring a ruling has been brought against his former boss william browder a u.k.
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citizen who refused to attend court session who was also sentenced to nine years in prison in absentia now according to court documents and two witness testimonials that both magnitsky and browder have constructed an elaborate scheme off tax evasion by essentially employing so-called dead souls people who were either disabled and couldn't work or people who were even before were dead by centrally putting them on the list of people who supposedly were working for browder thereby investing more than seventeen million dollars now the case has started a lot of attention because prior to his arrest and subsequent death but used to claim that he has uncovered an elaborate corruption scheme which involved some high ranking russian officials and human rights activists in russia and abroad claimed that this was partly the reason for my new skis demise in the prisons the case has gained enough not to breach of russia's borders even bringing to the to a diplomatic route between and between moscow and washington because u.s. officials have adopted a so-called magnitsky act which prohibited some sixty russian officials from entry
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to the united states and using their banking system mosco hasn't turned retaliated with their own list of american citizens who are banned from entering russia because of their alleged crimes against russian citizens or violation of human rights. triggers and with a bit of a wage of the united states that's a prime interest of much program on how to international. mission to teach.
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could you take three. four three. three. three. three. hold freberg video for your media project free media. good afternoon welcome to prime interest i'm bob english here in washington d.c. here are the stories we're telling today to taper or not to taper that is
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a question being asked at the federal reserve so do we stop printing eighty five billion dollars per month or not and guess what today we learned that half the voting members want to end not even taper by year end we'll talk with jim rickards about this and the big trouble in china in a bit. and the first non-bank institutions to be named too big to fail was announced today actually the term is syfy guess who they are a i g. and b. who both required massive bailouts during the financial crisis will do about this with our two producer rachel later in the show finally seems a new living wage law here in d.c. has wal-mart threatening to tear down their wal mart plans boring will break down minimum wage later in the show so without further ado here's what's in your prime interest. or. are.
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there are twelve members on the federal open market committee and they vote on monetary policy eight times per year the last meeting was. june nineteenth and it caused quite a stir that's because we learned the committee was more bent on winding down q e so-called tapering well the minutes of that meeting were released today and they said half the members thought q q.e. should end and this is by year end this is the most distant one of these meetings we've seen in years earlier today i spoke with james rickards he's the author of currency wars and i asked him if we're seeing mutiny at the fed it's not so much mutiny of sort of the logical conclusion of market manipulation when you manipulate markets this much for this long you have ventured paint yourself into a corner with no good ways out so i think with the split among the members of the
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f.m.c. represents is that they're both looking at different strategies each of which has some cost and some benefits and they really are no good choices i mean just to kind of be a little bit more explicit you know the debate is you know tapering or reducing asset purchases versus not tapering and continuing asset purchases at the current level maybe even increase in them a little bit so those are the two camps now in favor of taper tapering you have a couple things there's genuine concern on the f o m c germiston a particular that this low rate policy to lower rates for so long is actually increasing systemic risk banks are doing carry trays they're doing asset swabs the doing all kinds of off balance sheet transactions to try to make money because it's hard to make money in a zero interest rate environment but as a result they're creating systemic risk and perhaps setting us up for another financial collapse so that's one concern on the other hand if you do taper where you're going to find is that it's very deflationary it's counter to
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a lot of what the fed's trying to accomplish the fed actually wants more inflation because they're worried about deflation and they want to cheaper dollars because they want to import some inflation in the form of higher import prices so the problem is but if you keep easing and keep asset purchases and actually try to get more inflation get the cheaper dollar you may be creating bubbles and you may be creating systemic risk so that tapering crowd is worried about. the risk of bubbles popping and off balance sheet games by banks the non tapering crowd is worried about deflation of the stronger dollar the answer is there is no good choice you're going to take significant risk either way this is what happens when you manipulate the way in the market guard the way you're trying to guard the way to pay yourself in a corner so it's not surprising to see the split there are no good choices for the fed right now and would you care to handicap the odds of the fed actually tapering or ending by the end of this year would they simply have to restart if we had a market crash. well certainly if we had a market crash on the exam thing there's now these any doubt about the fact that
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they'd have to start asset purchases again but i would suggest that if they taper they will have to start as increase asset purchases again sooner than later remember this is been the history of the last five years the fed has had thirteen separate policies in five years going back to two thousand and eight when you have thirteen separate policies that's the same as no policy in other words you have no no idea what you're what you're doing this is what's called stop go actually that name comes from the late fifty's early sixty's the tour of government the u.k. was trying to use monetary policy to fine tune the u.k. economy and economists came up with a name of stop go this is the fed's version of stop to remember they launched q.e. one and then they stopped it they had to come back we q.e. two then they stopped it in june two thousand and eleven then they had to come back the q e three in september two thousand and twelve and then three months later they increased q e three so-called q e three part two when they went from forty billion to eighty five billion so the fed has never gotten it right. my estimate is they
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will not taper in september by the us the temper is the key date the reason for that is they're almost certainly want to do it when they have a press conference scheduled such a momentous event if they do taper they're going to want to press congress associated with that so the chairman can explain it well there are only two press conference board meetings where from seed means between now and the time bernanke he leaves one of the september one of the summer they will. a lame duck by december so it's going to be september or never and if they do taper i think will be a huge mistake at least in terms of their goals and the have to increase asset purchases probably in the first quarter of two thousand and fourteen when that becomes apparent if they don't taper then you know we might see the markets rally and sort of go from there because they say they have no good choices but if they do taper i think they'll be increasing purchases again sooner than later well let's talk about the rest of the world we see no mix we see you know they want to double the monetary base in two years mario draghi is talking about possibly negative
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deposit rates and then we have this hilsenrath article that came out a couple months ago it says a dozen central bankers meet in basel about six times per year is it possible we have global currency cooperation. well. certainly i mean they have a big meeting in basel six to ten times a year since the one nine hundred thirty s. so it was a graph is right but there's nothing new about that and that is the major central banks membership changes a little bit because they obviously now they've added china and some other players but you know bernanke has a theory on this you know my my book currency wars went through the history of currency wars and says we're in a currency war today which we are which is basically cheapening our currency to gain trading advantage against your trading partners and also to import inflation from them and export your deflation abroad so that's what the currency wars are all about now bernanke has this theory he says if japan the u.k. europe and the united states all ease at the same time that's not
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a currency war because if you're all easing in theory the comparative advantage in the terms of trade and of course rates shouldn't change very much because everyone's printing a lot of money and so you get the benefit of the stimulus without the costs of the currency war and that's a good thing so bernanke actually said this is this is not beggar thy neighbor this is enrich the neighbor of course that's complete nonsense because they may be true among the four major financial centers but what about the rest. the world what about the emerging markets china taiwan korea indonesia thailand brazil switzerland you go around the world if the u.k. u.s. japan and europe are easing their currencies are getting stronger their exports are getting hurt so it's a currency war assisted stead of all against all the sort of the g four against the g sixteen or or the rest of the world so very little doubt that the do coordinate policy we've seen that time and again nothing unusual about it we saw it after the fukushima earthquake tidal wave nuclear power plant disaster in japan in two thousand and eleven when christine lagarde who is the french finance minister at
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the time led a coordinated g seven intervention to assist to strengthen start to weaken the yen actually so now this does go on all the time one of the problems that was europe is not exactly on board the clearly the u.k. japan the u.s. are in this easing mode although the may have changed up a little bit with taper talk but europe is as not playing a ball so far so it's just a mess well let's talk about the future of the global currency situation currently the u.s. dollar is the rebirth reserve currency of the world but there's been talk of reverting to s.t.r. as we're trying to you know has a part could we even see gold play a part in it. gold's a bit of a stretch i think the international monetary system will collapse sometime in the next you know three to four years that's really not meant to be a provocative statement the international monetary system has collapsed three times in the past hundred years it collapsed in one thousand nine hundred eighteen it collapsed again in one nine hundred thirty nine and collapsed again between one
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nine hundred seventy one and one nine hundred seventy three so these things do happen when it collapses it doesn't mean the end of the world or you know everyone's living in caves with candles or whatever what it means is that the major trading a financial powers have to sit down at the table and reform the system they have to decide what the new rules of the game are so that's happened in number of times and there are models for that so to me the interesting questions to look through their process. yes ok what will the future of the international monetary system be and who has the seat at the table think of it as a game of texas hold'em you know we're all going to sit around the table with our pile of chips but the chips may very well be in gold that doesn't mean you automatically go to a gold standard but gold is the kind of the ultimate base money the u.s. has eight thousand tons the seventeen members of the european monetary system together have ten thousand tonnes china is the weak player they officially have a thousand tons i'm certain they have more than that on officially they're not transparent about what they they really lie about their gold holdings but they probably have at least two thousand maybe as much as three or four thousand tons
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but their power chips is still small relative to the size of their economy so that's one of the reasons china is acquiring gold as quickly as they can so i don't necessarily think we go back to a gold standard right away unless things really become catastrophic way but gold will determine your kind of seat at the table if you will play a role in the new international monetary system so would we see a lot of people talk about a gold standard and they automatically think maybe we have gold backing a few currency such as the u.s. dollar but i think in the in the long run we might see gold use as i don't know an international settlement to us is that kind of where you're going with this argument. the problem with the way i think it goes stands it's entirely possible there's not a central bank in the world today that actually wants a gold standard but then they may have no choice if you have a kind of a. an instantaneous catastrophic loss of confidence in paper money a major countries may have to go back to
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a gold standard not because they want to but because they have to to restore confidence russia is a very interesting case you know go back to two thousand and nine as they talk about my book we did a war game scenario for the pentagon the pentagon was interested financial were fair and one of the scenarios we played out was that russia would acquire a lot of gold and would partner with china which was also acquiring gold and long. sure new gold backed currency well guess what we did that in two thousand and nine since two thousand and nine russia has increased its gold reserves fifty percent they've gone from approximately six hundred tons to a little over nine hundred tons of fifty fifty percent increase in the last four years and that and they're continuing to do that the russian central bank buys a little bit of gold every month and we know china's acquiring gold so they these countries or russia and china in particular are positioning themselves for a collapse of the dollar based system getting as much gold as they can and that's the rush is there they've sort of close the gap they only have one eighth as much gold as the united states but their economy is only one eighth the size so relative
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to the economy they have the right amount of gold china is not there yet china has to has to keep buying well there has been a lot of trouble in china recently they had an incredible expansion in lending and then they had a pullback there was a liquidity crisis and i'd like to read something for you right now it's a quote and it says china's state council said it would cut off credit to force consolidation in industries plagued by overcapacity as it seeks to end the economies dependence on express extravagant investment funded by cheap debt so does this seem like a major policy change you know getting rid of the magical ten percent g.d.p. every year. well they talk a good again let's see if they follow through this is sort of tapering with a blunt instrument if you want to put it that way but china has exactly the same problem as the united states you have a credit expansion you had over leverage now they want to kind of rein that in the u.s. had a collapse in two thousand and nine but the problem still aren't solved a lot of those bad assets are still in the bank balance sheets the banks are still
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under capitalized and all we've done really is replace private leverage with public leverage now is the. we'll be back with more from my interview with author of currency wars james rickards and coming up harry and breaks down all the controversy about minimum wage then rachel and i will do a little over too big to fill it up will be next. you know how sometimes you see a story and it seems so for like sleep you think you understand it and then you glimpse something else and you hear or see some other part of it and realize that everything you thought you knew you don't know i'm charged welcome to the big picture. from. the first.
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he gave. it to. i'm no use to the tundra to freedom i am my dear. oh. in second grade i ran away from the boarding school with two of my friends will be around to the tundra. family's home tundra is just in the ghettos of crack and i don't know how people can live there to get in there no t.v.'s in the tent how could i send my child to boarding
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school i won't be able to sleep at night after that. they enter a life without knowledge of how to do basic things they don't get out of the school . to see a. cool . little little. little. little. little.
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there is more of my interview with james records we discussed the developing problems in china and the chinese economy after two thousand and nine. they continue to grow their economy to eight nine ten percent but they did it with investment they didn't do it with consumption and most of that investment was forced landing on state orders communist party orders via banks controlled by the communist party and the vested majority that money since the really about two thousand and three has been ways to i've been to china number of times recently i mean they've got these monumental train stations that are bigger than the pyramids with hundred twenty eight escalators a half mile across the floor or a marble floor from door to door they don't need that they can't pay for it it is not about empty buildings it's about empty cities entire cities and not just one
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but seven or eight in one place and you know dozens of those projects all over china so they wasted an enormous amount of wealth it's a lot of it's leveraged a lot of us with borrowed money the loans cannot be repaid so now china is trying to rein in it but what they're going to discover is that when they do that they risk collapsing the economy because if you really start shutting down still mills and shutting down copper imports and shutting down construction projects the we're going to have massive unemployment that china is actually pretty close to to full employment and take into account the size of the labor force but that's going to go the other way my guess is china will blink they understand subproblem they will start down this road but they'll discover very quickly the pushback from the state owned enterprises the chinese princelings the oligarchy and other financial powers in china are going to push them in the opposite direction it's a slightly more it's a larger version of what the fed's going through the fed may want to taper to avoid
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asset bubbles and systemic risk but they're going to find that they have to keep printing money because the alternative starts so you know you're looking into the abyss at some point that's very interesting and let's continue to talk about the foreign investment in china in the collapse scenario now there's actually two chinese currency users of mainland one and then there's a hong kong one and that's you one and they actually are different master netting agreement. without getting too long here is it possible we're going to see a bait and switch whereas all these foreign investments in china in a bankruptcy scenario they're going to get zero cents on the dollar stores that you want markets concern a lot of people say well we're trading you on or on long you want a sure you want and you look at it they're actually not trading the currency because china does not have an open capital account with their trading or derivatives with banks and that means you have counterparty risk and you've got settlement risk in clearance risk and all kinds of contractual restore going to the currency itself so you've got to take all that into account to really understand what you're doing. that was james rickard senior managing director at tangent
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capital and the author of currency wars. there is a growing battle of the nation's capital between big business and big labor wal-mart is coming to town but not if they have to pay the living wage law d.c. city council passed a bill that would require retailers with sales over a billion dollars a year to pay their employees know what less than twelve fifty an hour that's four dollars and twenty five cents over at the city's are already imposed minimum wage wal-mart has threatened to not open their doors if scientists. d.c. mayor vincent c. gray has the power to veto the bill and was recently quoted saying i strongly urge the council to consider whether this legislation was actually promote
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a strong economic development in the district and expand job opportunities for district residents by the city is debating this issue let's take a closer walk into minimum wage laws and their overall economic effects the definition of a memo on wages the minimum amount of compensation an employee must receive for performing ray. the calls for a minimum wage are absolutely noble they're intended to protect employees from exploitation and boost the economy by putting more money in the hands of low income families president obama made the case in his state of the union address. this single step would raise the incomes of millions of working families it could mean the difference between groceries or the food bank branch or a bitch scraping by we're finally getting a. but business is close for comfort with customers with more money in the past. so he worries the minimum wage workers get paid more they spend more and the
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economy grows right well it's a little bit more complicated than this yes raising the minimum wage will increase paychecks for some but not everyone benefits the only way to grow an economy is by increasing production and productivity a government mandate on wages cannot be the economy wages are prices if the price of labor and price controls are hazardous by forcing a price floor on wages this creates inefficiencies in the economy and again the only way to grow an economy is to increase efficiency and production and he has what puts it best when he said raising wages by government is the worst way and the wrong way real wages come out of production not of government to create. their unintended consequences of minimum wage laws that further hurt those they are intended to protect for example if the minimum wage is eight dollars an hour but the worker can only produce seven dollars an hour worth of labor then that worker
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simply will find himself unemployed making it worse off than when he was before the way to control another issue is that these costs will have to be incurred somehow and if they're shifted to product prices this hurts the consumer and the employee raising prices will result in less production being sold and a decrease in production would lead to higher unemployment along with this empirical studies have found other negative effects of minimum wage increases these include burn not limited to encouraging employers to worker training increasing job turnover discouraging part time work and reducing school attendance increasing inflationary pressures and encouraging employers to hire illegal aliens these are some of the unintended consequences of minimum wage laws while mark claims that the city's living wage laws would clearly inject unforeseen costs into the equation create a. an even playing field and challenge the fiscal health of our planned d.c. stores now wal-mart doesn't necessarily have the best or poor among human rights
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advocates however in this case the economics puts people first. well welcome to the daily dool again this is rachel courtesy is our producer and thank you for worrying purpled my favorite color i'm glad i see you're wearing it as well yes let's get to our first story in fact we only have one story today we talked about g.e. being named cities systemic lee important financial institutions in other words too big to fail this means they come under greater regulatory scrutiny and have to submit a living will and this means if they get into trouble they get taken out well there are more of these cities coming sound scary let's take out the financial requirement from this rachel and brought in the field who would you like to be
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named too big to fail and possibly forced to break up well i think that's an interesting question before we go on i just want to say that being called too big to fail and having to produce these living wills doesn't necessarily make. that being said as long as we have that coffee out there i do want to say that i would say a lot of these information technology companies like for instance definitely tech something like google you know not only do they have control over google docs so anytime i'm writing something they're trying to have tons of information about us but that's kind of their thing i mean they're a tech incubator and i was talking about this in an interview yesterday what they are what they're allowed to do with all that revenue that they're getting is they're basically a big venture capital firm and they serve a lot of good by giving us products for virtually for free sure and i think that the big question here is that we're against the solution would be instead of having a too big to fail google in a sense because you know i don't have to have a google e-mail address right i could have a hotmail e-mail address i could have my own e-mail rachel and. there's something
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that in the end that's i think what distinguishes it a lot from a lot of these too big to fail institutions were even if i don't have money in bank of america even if i don't get my personal insurance from a.i.g. that doesn't mean that it won't have an effect on me ok what we're good we're getting into wiretapping here and that has a lot of other consequences what's your number two choice i would say a company like months into a certainly a large majority of the world's seed production comes from months and so i mean we're finding that often that you know exports have monsanto products in them accidentally so we might be interesting to see what would happen and they certainly have a lot of control over the market and there are a lot of court cases that of of unfortunately brought up a lot of mail for you since on their part. i'm going to ask you question what about apple what about apple i think that apple is another one of those where you ultimately have a choice in the way you don't with something like perhaps not santo or a lot of these financial i mean first of all you're making a very expensive choice when you choose to buy an apple product you're deciding that you want to pay extra money because you think it looks like or you like the way that it right i mean so you go with this well what i'm saying is i'm not sure
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that i do think apple is too big to fail at least from a consumer standpoint i do think that from a manufacturing standpoint apple is absolutely cornered the market in terms of having a lot of these really expensive court of the market but google is a big competitor. it wasn't making hardware in the same way they are the samsung and google glass could be the i phone killer i mean it's going to take over the market in a new way that we haven't seen before and it's only going to be a little bit of time before we see them transition into mobile intel other kinds of hardware i think that's what it sure is an interesting thought experiment apple is trying to get into mobile payments where you swipe your phone and you pay for something so maybe yeah i've seen people do this already i mean you can you can do this already with this bump thing right you press this little bump and it's on your phone i mean at a certain point where we're starting to get into the site by future where it's not going to be in your phone anymore soon it's going to be in your arm or it's going to be in your waiting for the rain like that you know where i was going with apple is ok if they're into mobile payments maybe they are a non-bank financial companies maybe the federal reserve could under when they regulated them just throwing that out there yeah i mean i think that it's as soon
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that would be for the right but that it isn't is it is an option i think it's in writing about these non depository institutions be one clue to that that it certainly opens the field i mean for google as well what about pay pal what about people could be too big to fail. to lead up to two hundred area and to go go all of these different things where people are being able to kind of put money that goes in somewhere else could eventually be considered this is well that i don't think something like pay pal or kickstarter for instance are at this point too big to fail over rachel this has been a fantastic door thank you for joining me and if you want to weigh in on today's show be sure to like us on facebook at facebook dot com slash prime interest and don't forget you to follow rachel on twitter at curious underscore rachel you can follow me on english rachel thank you so much for joining me.
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it was an apocalyptic day here a prime into. discord at the fed could it be turns out bernanke is had germany at the fed is a waning and jim rickards painted a picture of the four horsemen journey into china their day of reckoning is not and wal-mart actually refusing to build more megaplex outposts we never thought we'd see the day but we did expect to see a living will from the likes of b.i.g. we'll just have to wait and see when it's executed thanks for watching and be sure to come back tomorrow from everyone here at prime interest have a great night. what
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defines a country's success. faceless figures of economic growth. or a factual standard of living. news today violence is flared up. these are the images being from the streets of canada. today.
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i. don't speak. with.
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very little of. life they are to new central eleven pm a russian a russian plane rather bound for cuba takes the power of d. to avoiding u.s. airspace buggie a media frenzy tonight over whether whistle blow on the run edward snowden could be on board will be towards an aviation expert about what's really beyond the change of course coming right up. also headlining washington set to live a full fight suggests to the egyptian military as president obama refuses to call the overthrow of the muslim brotherhood a coup gyptian is to criticize u.s. involvement in the country's affairs. british lawmakers warn the toppling the assad regime in syria could have to zoster its consequences in a report highlighting the threat of radical militants getting a hold of chemical weapons. how to hide.

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