Fri Jan 4, 2013 12:46PM GMT
A prominent economist tells Press TV that the United States so-called fiscal cliff is more like a ‘bottomless pit of debt’ that the country is diving into. He also added that the United States risks collapsing of dollar in 2013.
US President Barack Obama has signed into law a bill backed by the Senate that averted the so-called fiscal cliff, the White House says. Obama signed the ‘American Taxpayer Relief Act of 2012’ on Wednesday, the White House said in a statement. On January 1, the House of Representatives voted 257 to 167, approving the bill, which consists of raising taxes on the wealthiest Americans, while exempting others who earn less than $450,000 a year. It will also put off 109 billion dollars in budget cuts for two months.
Press TV has conducted an interview with Max Keiser, a journalist and broadcaster in London, to further talk over the issue. The video also offers the opinions of two additional guests: Eric Draitser, founder of stopimperialism.com in New York, and Rollin Amore who is an economist and political commentator in Washington. What follows is an approximate transcript of the interview.
Press TV Lots of names have come out about this deal. Reuters came out and said a dud on deficit front. Then we have this David Buik; he is a senior strategist at Cantor Index, ‘A fudged deal’, as he called it, and that there is going to be more deficit problems to come. What would you call this deal?
Keiser I think they need better metaphors than fiscal cliff. It is more like a bottomless pit; it is a bottomless pit of debt [in which] the debt numbers keep rising because there is not fiscal responsibility and I noticed that Obama’s big supporters in Hollywood and the hedge fund industries got huge tax breaks, tax subsidies.
So if you are a friend of Obama, he gives you a big wet kiss and some free tax abatements. If you are not a friend of Obama, then go stand in the food line and or a soup kitchen and pound sand because he is not interested.
Press TV Max Keiser, let’s talk about this spending. I mean it is really not that complicated when you think about this in some respects that pretty much isn’t this because of Obama’s spending?
I mean he is known to be the biggest US president in terms of the biggest spender when trillion dollars again for the year adding to the debt. And what is going to have Obama use as a platform ordered for him to justify the spending which seems like that is not something he is going to budge on?
Keiser Obama spends for every tax dollar that is raised in America. Obama spends about one dollar forty cents and that number keeps rising and the country is diving into this bottomless pit of debt and of course the one thing that they won’t cut, the biggest expense, is the Pentagon and this is going to be a big problem now because China and Japan look like they are going to go on a war footing and of course America is allied with Japan but China is the country that is financing America’s debt.
In other words, when America takes on more debt than they are able to collect taxes, the difference is paid for and financed by China. So as long as China finances America, then America can continue to pretend as if they can spend more than they take in by an incredible percentage one of the worst ever in the G20 countries and the history of G20 countries.
But as soon as Japan and China start to get more actively involved in a hot war, not a currency war but a shooting war which looks like it is coming now 2013, then we are going to see currency collapse. The US dollar will collapse because China won’t finance it anymore and that is the risk that we are talking about, the risk that Obama does not tell his population and that is unconscionable; that is a lack of leadership.
As an American, it is embarrassing to have a president who is such a coward, who won’t talk to his people honestly about the true risks of his profligacy and his lack of leadership and who is really working for, vested interests of Wall Street, the entertainment industry and the military contractors.
I say to this guy, grow a pair, talk to the people like human beings and do not be so quick to bomb people with drones instead of having a coherent foreign policy. Grow up!
Press TV This was interesting how this was presented to the media. I mean the White House gave no particular figures for how much it would bring down the deficit, stating only that, somehow, ‘with a strengthening economy’, that it would. Why wouldn’t they release figures, and of course more importantly does US’s economic data support a flourishing economy to come?
Keiser We have already talked about the reason why because the media in America is corporate owned and it is pretty much taking their direction from the White House.
Certainly an outlet like Fox News takes its marching orders directly from the Pentagon and the White House. Fox News is a state-run media outlet in all but name and this is a funny figure that they came up with that the tax’s rates are going to go up for people making over 400 or 450 thousand dollars.
Of course because of the money printing necessary to keep the debts intact going forward, a lot of people will start to make 300, 400, 500 thousand dollars a year, it is called inflation but of course a cup of coffee will cost 100 thousand dollars and education will cost several million dollars because that is what happens in hyperinflationary economy like the US is heading into because they are letting the debts expand exponentially and the Federal Reserve Bank have a remit now as all the G7 nations have signed on to this idea that they can simply print billions.
And in the case of Japan, they are going to print one quadrillion in fresh Yen, according to the new leader in Japan, to force inflation into the economy which means that the purchasing power for all these countries and all of these populations crashes and we see proof positive in the price of gold and silver which of course are the only real true honest money out there but they are the barometer by which you can judge the failure of these policies around the world and as they continue to move up, it is a clear indication that the Obama administration’s economic policies are failure as are all the G7 countries.
Press TV One of the most alarming stats, when we look at all the different ones, is that before the fiscal cliff, it was said that every US household owes about 140 thousand dollars to the national debt and that is rising.
Explain that for us and how, some say by some accounts, this is going to be passed on to the next generation, these debts that each household owes?
Keiser The way that America and these other countries can bring up debts that are hundreds of percentage points greater than their gross domestic product is by keeping interest rates near zero percent.
The central banks like the Federal Reserve or the ECB or the Bank of Japan or Bank of England have all coordinated their activities; they collude which is anti-competitive to keep interest rates near zero percent and at the same time, they have off-balance-sheet accounts, what they call the shadow banking system which is now around the world.
If you count it all up, it is worth 69 trillion dollars. So the value is greater that the entire world’s GDP and this debt is orbiting, if you will, the planet and waiting to fall in a most spectacular wave of hyperinflation, the second that interest rate starts to go up and what will start the interest rates going up is when one country, it could be China, it could be Japan, says they are not going to play this game of financial chicken anymore and they are going to default on their bonds.
That means the interest rates go higher which will set off a chain reaction of global fiat currency collapse and this is what people in America know very very well. That is why the very rich in America are buying assets like fine art, like gold and silver, like diamonds, precious metals because they know that ultimately the hyperinflation is coming, the currency collapse is coming because of the catastrophe that they engineered and they will be ruling the world, so to speak.
We are going to go back to this really an economic system; you would have to go back to feudalism to find something similar, the incredible disparity between the top and everybody else in the economy. It is neo-feudalism and it is being engineered by people around the world and we see the results today.
Poverty is skyrocketing; food stamp use is skyrocketing but take a look at JP Morgan for example that only they are involved in shadow banking with the Federal Reserve Bank in Washington and in Wall Street but they are also the biggest purveyor of food stamps in America.
So people in America are having their purchasing power completely decimated by JP Morgan’s loans and shadow banking and money printing have to go to JP Morgan and they get their food stamps processed.
So Jamie Dimon and JP Morgan is really a brilliant financial architective evil where people end up always paying Jamie at the end of the day, Jamie always gets paid.