In this episode of the Keiser Report, Max and Stacy look at the accumulation of debt in the United States in memory of David Graeber, author of ‘Debt: The First 5,000 Years’.

Max also talks to Otavio ‘Tavi’ Costa, portfolio manager at Crescat Capital, about credit exhaustion among other things.

They point out that the US Federal Reserve and other major central banks have a problem of maturing debt that they have to either let expire and experience a contraction or they have to print some more money and keep buying it for themselves to avoid the contraction. That, however, looks like a giant Ponzi scheme.

“So, we know that the decision of these bankers will be to print more and keep monetizing their own debt,” says Max. He adds that quantitative easing is the wrong term because that suggests it’s a temporary measure. “But we know now it’s a permanent measure, it’s debt monetization, which again is something characteristic of a ‘banana republic.’ That is what America used to criticize South American countries for doing.”

According to Max, “Buying back your own debt – that’s the banana republic. And now here’s America and other central banks doing that exact same thing.”

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