Wednesday, 17 July 2013

Alessio Bets Max Bets Warren

Ned Pamphilon Productions 17.07.2013

A transcript of London Real: Brian Rose, Max Keiser, Allesio Rastani
Published 16 May 2013

A transcript; paraphrasing; highlighting interesting bits, pretty much word for word... I recommend the entire interview. Interviewer and host Brian Rose walks round a local park for a 10 min intro which is not essential, otherwise he does a good job: differing views on Bitcoin as an investment from Max and Alessio; some biographical background from Max plus outbursts; informing and entertaining all round.

Real London:
Max Keiser:
Trader Alessio Rastani on the BBC says Eurozone Market will crash:
Alessio Rastani on why Goldman Sachs Rules The World:
Alessio Rastani:


Rose: Alessio is famous for saying on the BBC Goldman Sachs rules the world.

Keiser: Seminal moment in TV history!

Rose: What is a bitcoin?

Keiser: There’s no limit to the credit you can borrow at almost zero % interest, if you are on the inside or on the right side of the interest apartheid wall...
.... early 1990’s, in Paris, reading Wired Magazine, I immersed myself in the internet; Netscape was going public 1994. Went to Los Angeles where people were ‘frightened’ of the internet, no one had e-mail, they laughed; it’s a fad. Then the film Blair Witch Project came along, $100K did $200million globally, entirely internet grass roots driven. Suddenly Hollywood was interested, though intellectual copyright was a problem against their core business model.
I created some virtual specialist technology for trading virtual currencies, virtual securities, a virtual trading platform, US patented: the Hollywood Stock Exchange eventually sold to Cantor Fitzgerald who moved to the WTC 6 months before 9/11...
.... Pirate My Film project: a story about a Morgan Stanley broker who, when the first WTC tower was hit, chose to stay and trade options on airlines rather than run for his life. The second WTC was hit, he’s dead and no one has collected the $5million profit sitting with Alex Brown Bank I used to work at Alex Brown, bought by Deutsche Bank. I met Buzzy Krongard who had worked at Alex Brown, later the CIA There was a lot of chatter between the CIA and Alex Brown leading up to 9/11 attacks, options skyrocketing, the volume exploding... a lot of information being passed around and people were trading on that information.

Rastani: Shorting the airlines?

Keiser: .... yeah, shorting the stock or buying puts (put options)... I was working on Wall Street when the Shuttle blew up (28.01.1986), Morton-Thiokol was the leading contractor on the solid rocket fuel booster, right afterwards the puts on that made a killing if you got in there quick enough; while Christa McAuliffe was fish food, we were in the brokerage firm making lots of money. The options exploded in value in the same way before 9/11. The official 9/11 report said Alex Brown is a reputable trusted firm so no need to investigate further, even though there was a lot of ‘information’ being passed around before hand... so back to my Pirate My Film project, a bit controversial material, using only Bitcoin based currency finance. Similarly for my Russia Today TV show, we have a couple of journalists out in war zone hot spots in the Middle East and elsewhere, if it is difficult to pay guys out in the field with cash, Bitcoin is a practical solution. So, back to Los Angeles, right now Bitcoin is pre-Netscape; it’s divisive, still coming together. I’m putting my money where my mouth is with a private equity fund in the UK making Bitcoin related investments and start-ups. A few years back I started Karma Bank which is tied to activism.
New business back in Silicon Valley e.g. Coinbase just closed at $5million; they do an exchange, a merchant processing store, they have what they call a ‘wallet’ where they store Bitcoins...

Rastani: I actually opened an account with Coinbase today.

Keiser: I started accumulating them in the $2-$3 range. I have a lot today I don’t know where they are because I lost the passwords. My Bitcoins were worth several $million, now they are back to a couple of $million. I store them offline as Paper Bitcoins kind of cold storage. I’m starting a 3-part exchange hedge fund in Malta: Bitcoin, gold and silver; $100K minimum high level product. The market capital for Bitcoin is about $1billion now, we have to get it up to $200-$300billion, half a $trillion. The liquidity is an issue.
The Bitcoin protocol: from Satoshi Nakamoto, mysterious individual or team developers, single key cryptology,, extraordinarily large numbers create secure online cryptological prime numbers, factorising integers to create large numbers, requires a lot of processing power to get those numbers. The insight was to distribute that processing to a network, reward the network by calling the solutions coins or money, distribute that money, use that money as a currency limited to 21,000,000 coins (11,000,000 coins currently; video: 24:50mins). You have a virtual scarce good. A triple accounting system adds robustness.
The exchanges are the weak spot to the whole Bitcoin system. To price a Bitcoin you require a market. Right now the exchanges are just matching buyers and sellers, they don’t make a market... at the stock exchange I can sell 50,000 shares, the price might not be great, but they guarantee a price, if there’s not enough volume to offset that trade, the specialist acts as a principle, not just as a broker, they go into their own inventory and put their own capital at risk to make that trade happen. Nothing like that exists in Bitcoin currently.
Another start-up called Coin Centre at seed round stage of financing, I believe they are trying to find a solution...
I’m involved in a new project called TradeFor:

Rose: Liquidity. Alessio only trades liquid instruments; SMP futures (Standard & Poor's 500).

Keiser: I follow Alessio’s work. He’s a technical, momentum, active trader... analysing the Bitcoin graph is a waste of time; insufficient history, like studying a 2 day foetus and saying he’ll make a great attorney.

Rastani: The interest in Bitcoin has been generated by the huge swings up and down; the attraction of hyperbolic returns.

Keiser: The huge price break outs are important to get people into it, trading is speculative and risky.

Rastani: The biggest Bitcoin problem is where is Bitcoin going to go? Whose pocket will it end up in? The imbalance of wealth... 300 million young people worldwide are out of work, the situation is bad in the US and EU... I warned people at a prestigious university in Holland, don’t think you are going to easily find a job, most companies are not hiring, a JOB right now stands for Just Over Broke. Young people are not being educated how to make themselves financially free.

Rose: There’s no FED on this Bitcoin currency, they can’t lower and raise rates, they can’t print money, is that a good thing? Is this the ‘new kids’ monetary system we just can’t control?

Keiser: Macro-economic dimension of Bitcoin, relates to jobs and global jobs... we need to look at what’s happening at the central banks, keeping interest rates near 0%, artificially low so it’s cheaper for speculators to speculate if the cost of borrowing is close to zero, but it doesn’t help savers being penalised e.g. through instruments such as lower mortgage rates in Britain, there’s a £70 billion saving due to Quantitative Easing (video: 34:00mins), but £210 billion is being lost due to artificially low rates; every £1 saved through keeping rates low and helping speculators, they lose £3 in real capital not coming into the economy. That capital in the economy would help to boost jobs. Lack of jobs is tied to central bank policy e.g. Apple outsourced labour to China they make $billions outside the USA, if they were to repatriate that money that would pay taxes, but they don’t. Instead they raise a bond through Wall Street using artificially low interest rates to raise $50billion to pay a dividend to buy back their own stock to reward the executives and shareholders; the jobs are in China, savers are getting screwed – an American company? What’s American about that? The margins on an İ-Pad are 500-600%, they could easily make İ-Pads in the US and create jobs.
Quantitative Easing is beneficial to those close to the source; to the people who get first crack at the money. The joblessness creates outrage: Occupy Wall Street; we saw crash JP Morgan buy silver. Apparently, Satoshi Nakamoto had objections to the banking system; Bitcoin was his answer to take it to another level. Corrupt central bankers, accountants and lawyers have created a vacuum into which come social protests, social campaigns and a new virtual currency which the establishment realise is something threatening.
Bart Chilton at the CFTC was presented with facts about manipulation of the silver market – he’d rather be a stripper, but for some reason he’s a regulator – box office futures contracts based on my virtual specialist technology. At the last minute the MPAA (Motion Picture Association of America) lobbied Chilton, put in a law for the Dodd–Frank Wall Street Reform and Consumer Protection Act not to outlaw box office futures contracts; the Hollywood industry is the only industry in the US protected by law where you can’t have futures contracts; every other industry gets fucked up the arse for trading futures contracts; food; finance; housing; because Bart Chilton is a corrupt mutha fucking arsehole. Bart Chilton says Bitcoin is a problem. Jamie Daimon needs to take his head out of Bart Chilton’s arsehole; let Bart speak for himself.

Rose: The regulators are collaborating with the bankers, FED... Bitcoin takes them all out of the equation?

Keiser: They are scared of Bitcoin because they can’t manipulate it; they can’t regulate it the way they are not regulating everything else. Bitcoin is a true supply and demand currency; they don’t want to true supply and demand. If there was true supply and demand in the interest rate and bond market, interest rates would be nearer 5-6%, not 1½ % on a 10 year bond; Paul Krugman writes an editorial in New York Times where he’s fellating Ben Bernanke in public... as an American, I cried. (around video: 40:00mins check Max’s outburst against Krugman and Bernanke)

Rastani: The Dow has reached all time highs. People are fed up with the ridiculous rates they are getting. People are suddenly worried they are missing out on the stock market highs. The biggest mistake right now is where ordinary investors, regular folks, are not driving the stock market up in their droves; I expect to see the stock market go higher in the medium term, by the end of this year.

Keiser: The stock exchange is at an all time high. So is margin debt, so is debt, it’s totally correlated. What % of capitalisation is QE on the balance of the Federal Reserve Bank? It’s 1 for 1. Just because the FED expanded its balance sheet to $3-4 trillion injected into speculators hands to put totally leveraged dollars into the market generated on companies that are not making exceptional profits... Krugman says the companies are making great profit. According to whom? According to their accountants; KPMG, Price Waterhouse Cooper, Deloitte, Touche, involved in every scandal in the last 5-10 years. Arthur Andersen is not with us anymore because they cooked Enron’s books. Who cooked WorldCom’s books? Who is cooking JP Morgan’s books? They are corrupt like the fund managers.

Rastani: Even if Bitcoin were to become an accepted form of currency, that whole corruption thing is going to infiltrate that too.

Rose: FinCEN came and warned we’ll be watching you. You (to Max) own $millions of Bitcoin. How do you sleep when that could go to zero overnight?

Keiser: It’s not the biggest portion of my portfolio; it’s offline; there’s no taxable events; there’s no gains. It just sprouted in the dark and there it is.

Rose: Can it be made illegal?

Keiser: If the US-UK get aggressive on Bitcoin, let’s go to China, India, Latin America. In Venezuela where inflation is raging, in Cyprus we have capital controls, Vietnam, we see Bitcoin. In India, China where they are managing gold importation, we see Bitcoin. It doesn’t interact at all with fiat currencies. It will take a slower rise for Bitcion to reach $100 billion market cap. Unlike Berkshire Hathaway ($160,000/share), who can print stock anytime, they closed the number of Bitcoins. I made a bet with Warren Buffet that Bitcoin will get to $200K per Bitcoin before Berkshire Hathaway does. I haven’t heard from Warren yet! Bitcoin is fungible to 8 decimal places. A Satoshi is 1/10,000th of a Bitcoin.

Rastani: Bitcoin enthusiasts say Bitcoin is not going to be subject to printing; monetary easing, we’ve seen fiat currency. I think that’s nonsense. There’s no reason why they can’t increase the supply. They think because Bitcoin is electronic, it’s not like printing money... but, that’s what the Fed does as well; it’s electronic too...

Rose: From what I understand the algorithm caps Bitcoin.

Rastani: The bottom line I’m making is this. Someone else can come out and say I’ve got a newer and better version of Bitcoin. My brand is better than the old brand. You’ve got to protect what you have; protect your assets. Risk management is the most important thing.

Rose: Alternatives, Litecoin ....

Keiser: I don’t see the increased supply of Bitcoin as a threat I’m really worried about. There are over 40 competing virtual crypto currencies in the mix. They haven’t captured anywhere near the market share. Bitcoin captures a huge amount of market share, it has the hashing power of 20,000 computers networked together, an enormous system; largest single computer distributing project in history, it’s bigger than SETI (Search for Extraterrestrial Intelligence) whereby people were giving their excess CPU bandwidth on their computers over to the project and this exceeds that. The comparison to mining is apt, because with gold it costs more money to go down deeper as it becomes scarce. Same with Bitcoin. As you get deeper into this 21,000,000 pool of Bitcoin, the computer power is increased, the installed negative costs of having all this happen is already behind us, so the hurdle to compete with this becomes higher and higher.

Rose: They are using technology to mine 25 coins every 10 mins. They’re getting them and now they have Bitcoin value.

Keiser: Once it has an entrenched position it’s gonna be hard to knock it off. They can come up with a Cola product, but are they going to knock Coca-Cola off as the No:1 product? It’s doubtful. Bitcoin is becoming defacto standard and now there’s venture capital money coming in that adds to that story...

Rastani: Coca-Cola isn’t the best example. Apple came out with the i-phone, then Samsung stepped ahead. Anything can be copied.

Keiser: Bitcoin is different. The ability to solve all these increasingly complicated numbers requires a computer distribution network, so it’s unique in that sense. It has intrinsic value because of the algorithms and comparison to mining. I wrote asking should there be a dollar peg to Bitcoin? That goes against the Bitcoin fundamentalist ethos.

Rastani: Gold is real, you can hold in your hand. Instead of putting your money into something electronic that doesn’t exist, why not buy an ounce of silver. Silver’s real money, gold is real money.

Keiser: That’s why I’m starting this fund: Bitcoin, gold and silver. To be prudent, spread it out.

Rastani: Bitcoin is a small part of your portfolio Max. People may have missed that listening to this. Diversify. Balance your portfolio. The riskier assets must be kept a lower % of your portfolio.

Rose: Someone Tweeted me: Bitcoin will survive as a viable currency because derivatives are not involved. I replied: I promise to pay you for your Bitcoin in 2 days time at an agreed price – that’s a derivative.

Keiser: You know the price of silver and gold because you get the price from the futures exchange. There is no cash price for gold. We only know the futures price of gold; the paper price. That’s the price. That’s a derivative. I’ll give you $40 for your silver right now, though the spot price is lower. Right now the real price of silver is higher than the future’s price. But, that’s not published and that’s part of the relationship with the macro-economy... Bitcoin is the cash price. The derivatives that come on top of Bitcoin would be the derivative’s price. What’s exciting is on the payment front, thousands of merchants are beginning to use Bitcoin.

Rastani: Until the liquidity is solved, no merchant wants to have anything to do with it.

Keiser: We have to get the price up. When it’s $100,000 per Bitcoin, $100 up or down is nothing. The Bitcoin Silk Road, drugs... HSBC caught laundering $8billion of drugs cartel money, they paid a fine, 60,000 dead Mexicans. There’s one even bigger: Wachovia Bank caught for laundering $400 billion, bought by Wells Fargo, biggest share holder Warren Buffet; he’s complicit in the laundering, the gun running, the murder; he’s a financial terrorist and I don’t use that word loosely. George Osborne is a financial terrorist; the heads of Bank of America, HSBC, Lloyds, Barclays, Royal Bank of Scotland, financial terrorism is allowed right here in London unchecked running amok in the city; it’s tyranny.
Bitcoin Silk Road is fly shit in the pepper. Every technology is supported by drugs and sex. Even the Bible starts out with a pornographic story about Adam and Eve. The VCR, the video tape, DVD, CD, it all starts with sex, porno and drugs. Rock ‘n’ Roll, it’s all about sex ‘n’ drugs, it’s always about a man and a women going to get.... the genesis of us all. Bitcoin is the same... (long rant, I recommend). About 1hour 02mins

Rastani: Max, you forgot to take your medication today!

Rose: Will you set up a Bitcoin exchange for us Max Keiser?

Keiser: There are 2 young guys forging ahead with an exchange in London. They do not seem to want to explore issues I bring up: market share, liquidity... they said to hell with you pops, we’re forging ahead regardless. I guess I’m consulting with them on some basis.
My project is, a gamification of Bitcoin; the coins are represented by coupons tied to giveaways from entertainment companies. We can make coupon liquidity based on a Bitcoin easier than we can on the actual Bitcoin. These coupons will trade on this exchange platform, people buying and selling coupons which will be up and down with the volatility, a derivative in a sense, like an index spread bet; a coupon tied to a product that has a certain lifespan. At the coupon’s expiration date, if you own the coupons you can cash them in. It goes back to my roots of Hollywood Stock Exchange where we created a game based on box office as the main economic component of that economy. Gaming is a way a lot of things become popular. That can add to the liquidity. People can buy Bitcoin and swap it for coupons. Now they are trading coupons tied to Bitcoin, and the volatility is a good thing because it means they could be making or losing, it’s tied into the volatility. Once they buy the coupon, the volatility is the game, the risk is limited to the amount swapped into the coupon...

Rastani: I’m gonna make a bet. Let’s have an interview this time next year. No one’s going to be talking about Bitcoin.

Keiser: It’s a bold bet!

Rastani: everyone’s talking about Bitcoin right now. As an investor this makes me nervous. If you want to use it as an exchange, fine, go ahead. But, as an investment, the best time to be interested in something is when no one else is interested.

Kesier: He’s a prudent money manager. So that’s his thought. My thought is taking the other side of that trade. The best way to find more about Bitcoin is at

Rastani: I opened today an account at, but I didn’t buy anything and I wouldn’t even buy one with your money Brian or yours Max!

Keiser: ... I started as a stand-up comic late 70’s in New York; Gerry Seinfeld was the MC at The Comic Strip, Robin Williams, Catch A Rising Star, Rodney Dangerfield... it was exciting. Larry David, Jay Leno’s top writer Jim Brogan, Steve Martin was in Los Angeles on the West Coast scene... my style was low voltage understated stuff working to support my comedy habit doing odd jobs, proof reader at a rubber stamp factory, worked with a stock broker at Paine Webber 1982... hit me with a ton of bricks, this is fantastic, ticker tape going across the wall, mesmerising, totally easy money from ‘83 to before the crash of ’87 unbelievably easy.
Most people were older, gone through 16 years of a bear market, Wall Street was a dump, guys working night jobs, taxi drivers, school teachers, you couldn’t make a living as a stock broker in 1982, the Dow Jones had not gone over a 1,000, now it is 15,000, a huge growth. Young guys like myself just took over, for 4 years it was a mountain of cash, we’d be getting calls from Porsche dealers, drug dealers, prostitutes, make $20K on your stock business and spend $30K that day on a party.
Then the crash of ’87 and it became very corporate. Early ‘90’s it was very Punk Rock... I was feral, doing CBGB’s, Max’s Kansas City, 24 hours in New York completely out there, a party for the daytime to match my party for the night time. So much drugs, the New York Times estimated 98% everyone on Wall Street was using cocaine, coke piled up on desks, after hours clubs, Save The Robots, East Village. Then the leverage buyout of hostile raids became corporate, corporation buying each other out, it wasn’t the same kind of action that you had... then banks got into it, corporate control.
I went to Paris, there for about 5 years, wrote a treatment for a screenplay, Harvey Weinstein bought it, I flew to Los Angeles, became so bored in Hollywood, there was nothing to trade, we need a Hollywood Stock Exchange and launched that. Been at Russia Today 3 years now.

Rose: RT is fully funded by an EGO which is fully funded by the Kremlin, right?

Rastani: Is it just Russian propaganda?

Keiser: All these networks are state funded; BBC, Al Jazeera, RT, Press TV, Fox News if you think about it, military comes on Fox News, it’s propaganda, a state function, CNN, CBS, CNBC... since I started at RT, Russia’s increased their gold buys substantially, so I’ve got my own message to the Kremlin: keep buying gold, it’s Maxaganda! It’s a game within a game within a game... it’s in the mind, it’s in the mind!

Rastani: It’s one thing we can agree with Max on, buying gold.

Keiser: The US dominate the international news agenda, they back it up with the Pentagon and a global spy network doing their bidding and pushing their agenda. Look at the corruption in the media space, the banking space, the brokering space, the accountants, really dirty like KPMG and the rest. This is all backed up by the world reserve currency, the US dollar. Talk to Paul Craig Roberts or Catherin Austin Fitz and what backs the dollar is the Pentagon, backed by the media.
The state of Qatar came out with Al Jazeera English sending the ball rolling on a global phenomena whereby every country has an English speaking 24 hours news channel. I was doing programmes for Al Jazeera during the Iraq war, got a lot of flack, went to Iceland covering the impending collapse, these corruption stories got out there through this English speaking channel, when they should have been on US TV, but they weren’t because there was a bias against Al Jazeera English. Now France 24 in English, CCTV in China... on YouTube Russia Today was No:1, over 600 million exceeding the reach of the BBC. Where ever I go people know me; they know if I’m in town things must be bad, that’s why I’m in London, to cover the collapse of the UK economy because I’m a war reporter and gotta be on the front line, this is the new Iceland, the new Greece, the country is in dire straits, the huge ponzi scheme from George Osborne destined to fail... where ever there’s trouble with a fiat currency I’m there!
I follow Alessio. Risk Management. That’s the key to making money: not to lose money.

Rastani: With wealth, make it, keep it.

Interview End

NPP notes:
The Bitcoin Collapse Continues:
Should you trust Bitcoin? It depends what you think it's for:

Financial Times: Ben Bernanke: Vows No Retreat On Easing Policy:
In testimony to US Congress on Wednesday, the Fed chairman Ben Bernanke told the House Financial Services Committee the US Federal Reserve would support a weak economy for the foreseeable future as he sought to calm fears that have rocked global financial markets in recent weeks.

Gerald Celente Trends In The News 18.07.2013:

"Read the Financial Times, read the Wall Street Journal, read The New York Times, nowhere will you find the words he also said at that hearing...
'I don't think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low. If we were to tighten policy, the economy would tank."
.... the headline should have been... 'If We Were To Tighten Policy The Economy Would Tank.'

If interests rates go up, the economy goes down. It's one big ponzi scheme for everyone to see, but no ones talking about it like that.... As American makes war, China makes business."

Gerald's phrase: Digital Money Not Worth The Paper It's Not printed On

Max Keiser London Real interview Published 16 May 2013:
"Quantitative Easing is beneficial to those close to the source; to the people who get first crack at the money. The joblessness creates outrage: Occupy Wall Street; we saw crash JP Morgan buy silver. Apparently, Satoshi Nakamoto had objections to the banking system; Bitcoin was his answer to take it to another level. Corrupt central bankers, accountants and lawyers have created a vacuum into which come social protests, social campaigns and a new virtual currency which the establishment realise is something threatening...
They are scared of Bitcoin because they can’t manipulate it; they can’t regulate it the way they are not regulating everything else. Bitcoin is a true supply and demand currency; they don’t want to true supply and demand. If there was true supply and demand in the interest rate and bond market, interest rates would be nearer 5-6%, not 1½ % on a 10 year bond; Paul Krugman writes an editorial in New York Times where he’s fellating Ben Bernanke in public... as an American, I cried."

The Guardian publishes a story:
Bitcoin now 'unit of account' in Germany:
Is this hailing in the cashless society?

What are bitcoins?

During the interview, Keiser sates:
"They are scared of Bitcoin because they can’t manipulate it; they can’t regulate it the way they are not regulating everything else. Bitcoin is a true supply and demand currency; they don’t want to true supply and demand. If there was true supply and demand in the interest rate and bond market, interest rates would be nearer 5-6%, not 1½ % on a 10 year bond; Paul Krugman writes an editorial in New York Times where he’s fellating Ben Bernanke in public... as an American, I cried. (around video: 40:00mins check Max’s outburst against Krugman and Bernanke)"
Here is an article on Paul Krugman: Death Panels Will Be Necessary:

30.04.2014 - Franz Hörmann and Michael Telllinger - The end of Money and Ubuntu:
Gold price rigging allows continuation of flawed policies:
Money As Debt - Full Length Documentary:

08.04.2015 - HSBC Fraud: Nicholas Wilson:
Mr. Ethical, Nicholas Wilson: "Peter Oborne is right. The MSM played its part in the HSBC cover up"
Banks and derivatives:

09.09.2015 - Ian R Crane - Economic Slavery - Your Children's Future Explained:
19.50 mins: " ....up to this point, income tax didn't exist... taxes were paid by corporations...."

15.12.2015 - Introduction to Austrian Economics, Lecture 1: Mises and the Austrian School:
Recipe for Disaster: The Formula That Killed Wall Street: Dr. David Li:
Ian R Crane in Dublin - The Final Meltdown:
The Fight Against USURY:

Ned Pamphilon