Interview

Maybe you haven't heard of Max Keiser yet, but he's been predicting the events that are unfolding for a number of years now - the world economic crisis triggered by sub-prime debt, the collapse of the Icelandic economy and much more.

The former stockbroker turned radical activist, broadcaster and film-maker has learned from his days on the front line. After experiencing two financial crashes first hand, he wasn't hanging around for it to happen again.

Now living in Paris having fled his home town of New York after Bush's election, he was clear that the world was about to face "the mother of all financial crises" and that the US wasn't the place to be when it hit.

He's spent his time since exposing just how this "financial holocaust" was going to unfold and has now been picked up by the BBC, although perhaps a little too late. As the head of BBC World News said, "if Max had been on our screens a year ago, the current global financial crisis would not have been a surprise. It might not even have happened."

Welcome to the mind of The Oracle, the new show that Keiser will be fronting for BBC World News from today.

"When we started making these journalistic films - Rigged Markets, Money Geyser, Death of the Dollar, Peak Oil - my approach was that I'm going to pull back the curtain and show you how the tricks are done, how do they rig these markets," Keiser explains.

Since 2004, Keiser has also been prognosticating on his weekly radio show The Truth About Markets for London's Resonance 104.4 FM radio station. But his advice hasn't gone down well with people in power, particularly the Icelandic financial expert who was caught on film talking up the superhuman strength of Icelanders and their hyper-inflated economy.

"We interviewed one of Iceland's chief economists, who made a statement that the typical Icelander has the strength of three ordinary people. This was them drinking their own Kool Aid, smoking their own belly button lint, because, in order for people to believe in prices at the top, they have to adopt magical thinking," recalls Keiser.

"So, we went to visit this guy and we sat across the desk from him and we said: 'Look, your economy is going to collapse, your banks are going to collapse, your real estate market is going to collapse, probably in the next year' and he told us why that wasn't going to be. A year later, it all collapsed.

"The mainstream media colludes with the magic, misdirection, mischief and mayhem and money laundering. CNBC is the pretty lady standing next to the magician who misdirects the audience and it's going to continue to be that way because human nature never changes. This entire generation could get wiped out, but the next generation will not have learned a single thing."

Misdirection, mischief and mayhem are what our governments are doing before our eyes. Keiser insists that "the best example to show for where the lack of savings leaves you so helpless is the UK, more than any other country in the world.

"According to a study by PriceWaterhouseCoopers, had the UK saved even half of the tax revenue from the North Sea oil, then it would have one of the top five sovereign wealth funds in the world.

"Note that Norway has the second largest sovereign wealth fund in the world - $82,000 (£54,000) per person in Norway is saved on behalf of them. They had the same amount of oil as Britain, but Britain now just has massive debts.

"What Britain did was they used the oil money and funded housing speculation instead. They changed the tax code and they gave tax breaks to people who speculate on property. Now, you have no savings," he says.

"The government has no money, but more debt to issue in order to help itself. They are at the will of foreign creditors. If people are willing to keep buying UK gilts, they can continue to keep funding their debt, but they are at the mercy of the kindness of strangers.

"The UK housing bubble had all the earmarks of a mania, especially because of the way people talked about it. There was the housing ladder, which implies something that only goes up. This is a classic sign, the language starts to reflect a certain mania and there's certain cult-like behaviour.

"TV shows are dedicated to buy-to-let mortgages and speculating and location, location, location. So it becomes a self-feeding phenomenon or cult."

And the greatest trick being played right now is what Keiser describes as the "war on savers."

He explains: "Interest rates around the world are going to zero, including the UK, so anyone with savings is not getting any kind of return on those savings. The central banks are hoping that people speculate more with their money and lose, which puts them at the mercy of the state even more so than they are now in what I call this new gulag-casino state of neofeudalism."

So, does this mean that we've already left capitalism behind?

"The dialectic between capitalism and socialism or Marxism versus Adam Smith etc, that's not necessarily the dynamic we're talking about any more because there is another major thread in the evolution now which is the increased returns capital model that comes with the networking of all these systems.

"We've already seen how that's transformed the software industry, the music industry, how social networking changed politics in America. I'm hopeful that the economics of file swapping and peer-to-peer networking and these type of things gather speed, which would be an evolution of what we call capitalism and could be instrumental in replacing it.

"Barack Obama is a result of social networking in a lot of ways, which is a result of open-source technology. It's obviously not in the interest of larger corporations to have that in place because it's a huge challenge to them competitively, but it's a huge benefit to the population to have access to that and society could only benefit from it.

"Unlike the old days with what was called the tragedy of the commons, where everyone was trying to harvest from the same field and, over time, the field becomes unfarmable and worthless, in this digital age you've got the reverse of that. You've got the glory of the commons. The commons only gets richer with the more people who are out there working it and putting more into it."

But, for now, we are left dealing with the fall-out of the existing model.

"What is going to happen is there is going to be a simultaneous global depression and some are going to come out the other side better off than others. Asia is going to come out better, the US is going to look the worst and the UK is already looking quite bad. The pound is already crashing and it could crash a lot worse than the dollar," he says.

"The UK has got much more debt going into the problem and their real estate crisis is actually a lot worse. The fact that the dollar is a world reserve currency gives the US some cushion - not much, but some. The UK doesn't have that. They did back in the 1900s when the British sterling pound was the world reserve currency. There was some benefit to it, but that era has now passed."

So, what hope is there for us?

"The first thing the UK people have to do is sober up! They are drunk on instant gratification, cheap booze, cheap mortgages and they are still inebriated. A lot of them are going to wake up destitute on the street with really no hope but the first step is to recognise that what they called a lifestyle was not a lifestyle unless you consider to be drunk 24 hours a day on cheap credit a lifestyle.

"As we said on the Resonance show for years, we're just pointing out where things are going. We did have solutions for what people could do four years ago, but nobody wants to do anything when the time to do stuff is good. They wait too long and now it's too late."