Feb 21

Today’s News 21st February 2018

  • History Lessons From Years Under Islamism

    Authored by Majid Rafizadeh via The Gatestone Institute,

    In Iran, my generation, the first after Islamism came to power, is called the Burnt Generation (Persian: Nasl-e Sukhteh). Our generation earned this name for having to endure the brutality of the Islamist and theocratic regime from the time we were born, to adulthood.

    This brutality included the regime’s merciless efforts, such as mass executions, to establish its power, impose its barbaric and restrictive rules, and brainwash children and indoctrinate the younger generation with its extremist ideology through various methods including elementary schools, universities, state-controlled media outlets, imams and local mosques, and promoting chants such as “Death to America” and “Death to Israel”.

    Women and men were segregated. Teenagers were prevented from performing daily activities considered harmless by most of the world. Any kind of enjoyable social activities were barred, including listening to music, dancing, drinking, dating, women participating in a chess championship unless you were wearing a hijab or attending a football match or other sporting event if men were playing in it. If it made you smile, if it gave you hope, it was probably against the law, such as what could be worn, whom you were allowed to talk to, what you could listen to, and whether or not you pray or fast during Ramadan. Even the most personal and private issues became the business of the regime’s forces.

    The main purpose of these restrictions and the intense control of the people, especially youths, was for the regime to expand its Islamist agenda domestically and abroad. These laws were enforced with cruel and violent punishments such as public flogging along with the threat of even more dire consequences, including stoning, public hanging and amputations. My generation was raised in an atmosphere of terror. While the rest of the world became more modern and developed, we were left to grapple with following Islamist laws and restrictions that were impossible to obey.

    My generation in Iran should be seen as a lesson for the West. Almost every state (and non-state actors) underestimated the power that these Islamists could wield. Warning signs were overlooked. No one believed that such a massive change could occur and be enforced. Many underestimated the crimes that these Islamists were willing to commit to maintain their power once they came into control. To this day, they continue to prove that there are no limits to the cruelty and lack of humanity that they will engage in, such as conducting mass executions, executing children and pregnant women, stoning, amputations, public hanging, flogging, torture, and rape just to maintain this power.

    Jahangir Razmi’s Pulitzer Prize-winning photograph of the execution of Kurdish men and others by the Iranian Islamic regime in 1979.

     

    Many underestimated the smooth-talking strategy that these Islamists were using for decades to seize power. The radical group of Ayatollah Khomeini deceived many Iranians and the international community into believing that they were peaceful and divine people. Once they had power, the truth was revealed; by then it was too late to prevent the abuse that unfolded.

    My father’s generation in Iran lived in an environment in which the Islamist party of the country’s clergy cunningly depicted themselves as intending no harm, supportive of the people, and not interested in power. So, before the revolution, many Iranians did not think that Khomeini’s party would be committing the atrocities that they are committing now or that they would have such an unrelenting hunger for power.

    Instead, the country thought it was on a smooth path towards democracy, with no expectation of returning to a barbaric era. Even then-US President Jimmy Carter viewed Khomeini as a good religious holy man. According to recently declassified documents, the Carter administration even paved the way for Khomeini to return to Iran. Many internationally known scholars such as Michelle Foucault thought highly of the Islamic revolution. Foucault’s enthusiasm can be seen in his articles in European newspapers, written right before and after the revolution.

    They portrayed themselves as leaders of the people, as spiritual and peaceful. However, once the Islamists rose to the top, all hell broke loose. As soon as they had a stranglehold on the country, they shifted gears to become one of the most ruthless regimes in history. Once in power, their true face was revealed; at that point, there was no way to turn back.

    Thousands upon thousands of people were executed simply for voicing their opinion. Many also died for crimes they likely did not commit. The Islamic law (sharia) of the ruling Shiite party was imposed on everyone. Women were forced to wear a hijab and were stripped of their rights. They could no longer leave the country without the permission of their husbands. A women could not work in any occupation if her husband did not agree to it. Women’s testimony in court, under sharia, is worth half a man’s testimony. Women are banned from pursuing certain educational fields or occupations, such as being judges. Women are prohibited from entering sports stadiums or watching men’s sports. Women are entitled to receive half as much inheritance as their brothers or other male relatives.

    Many were shocked that this political party, which spoke about the religion of peace, would do such things. Iranians, however, did not just submit to these new laws; they rose up in protest. This uprising was met with torture, rape, and death. With the regime eager to wipe out anyone who dared to resist, the people had no choice but to surrender. Everyone’s daily activities were now under the scrutiny of the Islamists.

    In a four month period, some 30,000 political prisoners were hanged simply for suspected loyalties to anti-theocratic resistance groups, mainly the PMOI — incidents largely ignored by media outlets.

    These are only few examples of the Islamists’ atrocities that took hold of a once thriving and modernizing country. Information about their crimes against humanity would fill several books. As bad as you may think all this is, you must understand that the reality is far, far worse. The Islamist Republic of Iran, according to Human Rights Watch, became the world leader in executing children. The legal age for girls to marry was reduced to 9. Women needed the approval of their parents to marry, and girls could not object to their guardian’s decision in marrying them off.

    It may be hard to believe that such a murderous force could come into power so easily and fast. What is important to understand is that the Islamists and their followers work covertly in a society for decades to deceive the people and reach the top. Iran’s was a meticulously planned takeover that no one saw coming. The Islamists’ willingness to be patient to complete their control of the society cannot be underestimated.

    Despite openly reading about all this, many will still think it is impossible for something like this to happen in their country. What they fail to understand is that Iran is an example of exactly how successful this meticulous grab for power can be.

    Seeing these shrewd and calculating strategies, Islamists in other countries including the West are pursuing the same techniques on the path to seizing power. It is a quiet, subtle process, until the moment you wake up with no rights, a culture of fear, and no promise that you will live in freedom or even to see the next day.

    Now, those Islamists, whom almost everyone made light of, have not only been in power for almost four decades; they have expanded their expansionist ideology to other nations and taken first prize as being the world’s leading state sponsor of terrorism and among its leading executioners.

    This is a history lesson that Western and non-Islamist countries cannot afford to ignore. It is not just about history; it is about what can happen at any moment, in any country. It is about what is happening right now, beneath our noses — in East Asia, Canada, South America and Europe. The only defense is to recognize it and confront it at its roots, before it has the opportunity to woo your politicians. Once they worry more about their popularity with voters than about the future of the country you are electing them to run, you are done. Once there is control of the ballot box, there will be more and more control over every aspect of your life, destroying any future you had planned and leaving the country you once had loved in ruins.

  • India To Build Major Overseas Military Base Off Africa To Combat China

    India is preparing to construct a significant overseas military base on an island in Seychelles, an archipelago of 115 islands in the Indian Ocean, off East Africa to counter growing Chinese influence in the Indian Ocean.

    Last month, Seychelles and India signed a twenty-year agreement, permitting the Indian military to build an airbase and naval installations on Assumption Island, a small island in the Outer Islands of Seychelles north of Madagascar, said Seychelles News Agency.

    “This [agreement] reinforces our commitment to not only further deepen India-Seychelles relations, but to also take our partnership to another level,” Indian Foreign Secretary Subrahmanyam Jaishankar said in a statement.

    “The [mutual] co-operation is exemplified by the operationalization of the Coastal Surveillance Radar System [CSRS] in March 2016, and our commitment to augment the defense assets and capability of Seychelles,” he added.

    The agreement enhances India’s military capabilities and maritime surveillance of Seychelles’ Exclusive Economic Zone (EEZ) of 1.37 million square km. Assumption Island will serve as a strategic staging area for the Indian military, as the island chain resides between crucial global shipping lanes.

    This is key as in 2016 alone, “approximately 40 million barrels of oil per day — equivalent to just under half of the world’s total oil supply — traveled through Indian Ocean entry and exit points, including the Straits of Hormuz, Malacca, and Bab el-Mandeb,” said CNN.

    The EIA classifies the region as a significant chokepoint for maritime transit of oil. More specifically, the EIA calculates roughly 5.8 million barrels per day travels directly by Seychelles, which then ultimately flows to the West. This would indicate India does not just recognize Seychelles as a critical part of its global energy security, but perhaps, India’s push to control the island is a proxy of Washington.

    All estimates in million barrels per day. Includes crude oil and petroleum liquids. Based on 2016 data. Source: U.S. Energy Information Administration

    India has already provided Seychelles with military aircraft, helicopters, and naval boats. It has installed a coastal surveillance radar system on one of Seychelles’ islands to conduct intelligence gathering activities. Throughout the years, the waters around Seychelles have seen an abundance of Indian warships conducting anti-piracy patrols

    Senior Indian naval officials have stated that the development of military installations on Seychelles is to offset China’s maritime Silk Road strategy in the Indian Ocean.

    As CNN notes, India is attempting to better posture itself in the Indian Ocean despite its neighbor and long-standing rival China, who is already situated with military installations in the region.

    Under Chinese President Xi Jinping, China’s naval reach has grown considerably, expanding far beyond its immediate coastline into areas not previously considered within its sphere of influence.

    In July last year China established its first overseas military base in Djibouti, near the Bab el-Mandeb Strait, among the world’s busiest shipping lanes and one of three crucial Indian Ocean arteries.

    The strait, which is only 29 kilometers (18 miles) wide at its narrowest point, connects the Mediterranean Sea via the Suez Canal, and the Red Sea to the Gulf of Aden and the Indian Ocean beyond.

    The opening of the Djibouti base was followed several months later by the country’s controversial acquisition of the Hambantota port in Sri Lanka, just 22.2 kilometers (13.8 miles) by some estimates from the primary Indian Ocean sea lane that links the Malacca Straits to the Suez Canal.

    Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Sydney, described the Hambantota deal — which saw Sri Lanka grant China a 99-year lease on the port to service some of the billions in debt it owes to Beijing — as part of a “determined strategy by China to extend its influence across the Indian Ocean at the expense of India.”

    “That port then gives them not only a strategic access point into India’s sphere of influence through which China can deploy its naval forces, but it also gives China an advantageous position to export its goods into India’s economic sphere, so it’s achieved a number of strategic aims in that regard,” said Davis.

    Indian military officials said Seychelles and Assumption Island are a powerful combination in extending the reach of India’s naval operations, which it intends to rotate aircraft and ships throughout the region.

    “The development is a clear indicator that India’s geostrategic frontier is expanding in tandem with China’s growing strategic footprint in the Indo-Pacific,” Captain Gurpreet Khurana, of the Indian Navy’s National Maritime Foundation, said.

    As India fears encirclement by militarist China in the Indian ocean, it only leaves us to believe that these nuclear-armed neighbors could be headed for another military conflict. The last time this occurred it was the war of 1962, which India is making the needed preparations on Seychelles’ chain of islands that will ensure another defeat is not an option.

  • Brandon Smith: New Fed Chairman Will Trigger A Historic Stock Market Crash In 2018

    Authored by Brandon Smith via Alt-Market.com,

    Ever since the credit and equities crash of 2008, Americans have been bombarded relentlessly with the narrative that our economy is “in recovery”. For some people, simply hearing this ad nauseam is enough to stave off any concerns they may have for the economy. For some of us, however, it’s just not satisfactory. We need concrete data that actually supports the notion, and for years, we have seen none.

    In fact, we have heard from officials at the Federal Reserve that the exact opposite is true. They have admitted that the so-called recovery has been fiat driven, and that there is a danger that when the Fed finally stops artificially propping up the economy with constant stimulus and near zero interest rates, the whole farce might come tumbling down.

    For example, Richard Fisher, former head of the Dallas Federal Reserve, admitted a few years ago that the U.S. central bank has made its business the manipulation of the stock market to the upside:

    What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.

    It’s sort of what I call the “reverse Whimpy factor” — give me two hamburgers today for one tomorrow.

    I’m not surprised that almost every index you can look at … was down significantly.

    Fisher went on to hint at the impending danger (though his predicted drop is overly conservative in my view), saying: “I was warning my colleagues, don’t go wobbly if we have a 10-20% correction at some point…. Everybody you talk to … has been warning that these markets are heavily priced.”

    One might claim that this is simply one Fed member’s point of view. But it was recently revealed that in 2012, Jerome Powell made the same point in a Fed meeting, the minutes of which have only just now been released:

    “I have concerns about more purchases. As others have pointed out, the dealer community is now assuming close to a $4 trillion balance sheet and purchases through the first quarter of 2014. I admit that is a much stronger reaction than I anticipated, and I am uncomfortable with it for a couple of reasons.

    First, the question, why stop at $4 trillion? The market in most cases will cheer us for doing more. It will never be enough for the market. Our models will always tell us that we are helping the economy, and I will probably always feel that those benefits are overestimated. And we will be able to tell ourselves that market function is not impaired and that inflation expectations are under control. What is to stop us, other than much faster economic growth, which it is probably not in our power to produce?

    When it is time for us to sell, or even to stop buying, the response could be quite strong; there is every reason to expect a strong response. So there are a couple of ways to look at it. It is about $1.2 trillion in sales; you take 60 months, you get about $20 billion a month. That is a very doable thing, it sounds like, in a market where the norm by the middle of next year is $80 billion a month. Another way to look at it, though, is that it’s not so much the sale, the duration; it’s also unloading our short volatility position.”

    Keep in mind, that Jerome Powell is now the CHAIRMAN of the Federal Reserve. In 2012, he was well aware of the exact effects that the removal of stimulus (which includes low interest rates) would have on the false recovery in stock markets. He continues…

    “My third concern — and others have touched on it as well — is the problems of exiting from a near $4 trillion balance sheet. We’ve got a set of principles from June 2011 and have done some work since then, but it just seems to me that we seem to be way too confident that exit can be managed smoothly. Markets can be much more dynamic than we appear to think.

    When you turn and say to the market, “I’ve got $1.2 trillion of these things,” it’s not just $20 billion a month — it’s the sight of the whole thing coming. And I think there is a pretty good chance that you could have quite a dynamic response in the market.

    I think we are actually at a point of encouraging risk-taking, and that should give us pause.

    Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.”

    If Powell was fully conscious in 2012 of what would happen in markets due to the Fed’s balance sheet reductions, the question is, will he be honest about it now? My suspicion is that he will not, given that his very first interaction with the American public after becoming head of the Fed was to regurgitate the same nonsensical talking points that we heard from Janet Yellen for years.

    The mainstream media is desperately attempting to suggest that Powell may “surprise investors” with a change in rate hike policies and the reduction of the balance sheet, but so far the markets are not buying this.

    Powell’s first day as Chairman was greeted with the sharpest drop in U.S. equities in years. Yellen’s parting gift to investors in January was an $18 billion reduction in the Fed balance sheet, $6 billion more than the Fed originally claimed would occur. It is clear to me that just as stocks climbed in direct correlation to the Fed balance sheet, so too will they fall in direct correlation to the Fed balance sheet. Only a week after the balance sheet was cut more than expected, stocks fell by nearly 10%.

    So, the question now is, will Powell continue this trend of rate hikes and balance sheet reductions, being that he is recorded as knowing what the results will be? I believe that this is exactly what he will do. Why? Because the Fed’s goal is the deliberate controlled demolition not only of U.S. markets but also U.S. debt instruments and the dollar.

    If I am wrong, then Powell, knowing the threat, will reverse rate hike policies and stop dumping the balance sheet in an effort to prop up the system. If I am right, then we will see Powell continue these policies over the course of 2018 and allow the system to implode.

    How will this influence the price of gold? Well, in the near term we could see a measured decline or a stagnant metals market as we have seen so far this month. That said, when the real equities crisis kicks in, expect metals to skyrocket as investors rush to safety. The psychology of the markets will come into play far more than fundamentals for a time. One must account for willful ignorance and how long it can be maintained before facts take over.

    There are a few major issues that come into play in terms of interest rate hikes and the balance sheet, including the fact that corporate debt is now at levels far beyond that held just before the crash of 2008. We are also witnessing the highest consumer debt levels in history, while personal savings have plunged.

    Treasury yields are also spiking to 10 year highs, decoupling from stocks and suggesting that balance sheet reductions might be contributing to a flight from equities.

    Stock buybacks, fueled by low interest rates, have helped pump up stocks for years. However, most companies are prohibited from buybacks right before they report their earnings.  Not to mention, the amount of debt companies have accumulated is reducing their ability to purchase stocks. Without buybacks, we have seen what happens – complete market mayhem. If this is what takes place in a month of reduced buybacks, what will happen when interest rates are raised high enough to make borrowing capital from the Fed prohibitive (ie, too expensive)?

    What does all this translate into? The reality that there is NO MECHANISM within our economy that is buoyant enough to keep markets afloat when the Fed backs away. Nearly everyone is in massive debt, there is no one left to buy at the level needed except the Fed.

    We are only standing at the beginning of this apparent new trend in equities, but it will be interesting to see what the reaction will be within the system as the Fed continues hiking rates and reducing the balance sheet. Will the beginning of every month in 2018 be met with a brand new storm of selling and panic? It’s hard to say. However, the math certainly does not support a bull market through the rest of this year.

    In the meantime, it is likely that blind faith in positive returns will spark intermittent buying events in the short term, and unaware investors (and algorithms) will see this as vindication that buying will always be the answer. But, these buying events so far seem to be met with even more severe downturns. It will not take very many Fed meetings to discern whether or not the central bank will continue to back up stocks. To me, it appears that the decision to pull the plug has already been made.

  • Russian "Troll Farm" Indictment Shredded By Journalist Who First Profiled It In 2015

    Following Special Counsel Robert Mueller’s indictment of 13 Russian nationals and three entities behind a Russian “troll farm” said to have meddled in the 2016 U.S. election (admittedly, with zero impact), two people familiar with both the ads purchased by Russians on Facebook, and the “troll farm” in question have refuted Mueller’s narrative over the course of four days. Indeed, things don’t seem to be going well for the Russia investigation, which started out with serious claims of Collusion between the Trump campaign and the Kremlin, and has been reduced to CNN diving through the garbage of a Russian troll farm.

    About that troll farm…

    Adrian Chen, staff writer for The New Yorker – who first profiled the indicted Russian troll farm in 2015, sat down with MSNBC’s Chris Hayes, where he proceeded to deflate Mueller’s big scary indictment to nothing.

    “Tried to tamp down the troll farm panic on @chrislhayes show last night,” Adrian Chen tweeted. “It’s 90 people with a shaky grasp of English and a rudimentary understanding of U.S. politics shitposting on Facebook.

    Watch: 

    https://platform.twitter.com/widgets.js

    Chen then responded to a tweet saying the IRA has 300-400 individuals. “That was the entire Internet Research Agency,” Chen wrote.” The American department had ~90 people, according to the Russian journalists who did the most in-depth investigation.”

    Chen links to a Washington Post article which profiles Russian journalists who also investigated said troll farm.

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    A brief review:

    • The former director of the FBI has assembled a “dream team” of investigators for his Special Counsel probe and concluded that 13 Russians and 3 entities tried to meddle in the election after an entire year of investigation.
    • Those efforts had zero impact on the election
    • Facebook’s VP of ads is on record saying “I have seen all of the Russian ads and I can say very definitively that swaying the election was *NOT* the main goal
    • The same FB Exec noted that most of the ads were purchased after the election.
    • Suggesting that the real, underlying narrative is one of US media propaganda, he was then made to walk back his comments and apologize for his “uncleared thoughts” 
    • CNN is rooting around in the trash outside the troll farm.

    And for all of this, Obama and Congress slapped sanctions on Russia, evicted two diplomatic compounds, and launched several Congressional investigations over.

    But at least the US Military Industrial Complex is happy, while the stock of Boeing has never been higher.

  • Nancy Pelosi Caught Off Guard By Heckler: "How Much Are You Worth Nancy?"

    During a Tuesday stop-off in Phoenix to trash talk the “disastrous” GOP tax cuts at the Arizona Center for Economic Progress, House Minority Leader Nancy Pelosi was startled at a question over her net worth by an audience member who couldn’t stomach the top Democrat’s ivory-tower oratory over wealth inequality. 

    Pelosi has embarked on a 100-city taxpayer funded junket organized by Democrats to frame the Republican tax cuts as an assault on low income Americans.

    “It can’t possibly be a statement of values for us to talk about, as Martin Luther King said, … ‘God never intended for one group of people to live in superfluous inordinate wealth while others live in abject deadly poverty,’” Pelosi pontificated, hypocritically.

    “So these are kitchen table issues for most of America’s families. Most people are not in deadly poverty, but some are. But most people have to struggle to …”

    Pelosi’s needle skips as an audience member asked the richest woman in Congress:

    How much are you worth, Nancy?” 

    A flustered Pelosi shot back:

    “No, we’re not talking about that … In any event … I can out … I’m a mother of five, I can speak louder than anybody.” 

    Watch:

    Of note, the 77-year-old Pelosi is estimated to have a net worth of $100,643,521 according to OpenSecrets.org, making her the 6th richest member of the House in 2015.  We wonder if Pelosi’s San Francisco pizza parlor is included in the calculation?

    Pelosi, of course, wants to pay as little tax as possible

    And here we arrive at the heart of why wealthy ivory-tower Democrats are the penultimate hypocrites. While spending her career espousing higher taxes for the rest of us and denouncing income inequality, Pelosi has engaged in a series of complex tax schemes to avoid paying as much tax as possible

    As the Washington Free Beacon reports: 

    House Minority Leader Nancy Pelosi (D., Calif.), who often rails against income inequality and calls on the wealthy to pay its “fair share” in taxes, took pains in late December to try to preserve tax breaks for two of her multi-million-dollar homes one last time before the new tax law kicked in.

    Largely thanks to her husband Paul, a real-estate and venture-capital investor, Pelosi is the wealthiest woman in Congress with a net worth of more than $100 million and the seventh wealthiest member overall, according to the Center for Responsive Politics.

    Just days after President Trump signed the sweeping tax bill into law late last month, Pelosi and her husband tried to preserve $64,000 in property tax breaks, known as the state and local taxes (SALT) deductions, for her two California homes. The new tax law limits the deduction to $10,000 and went into effect Jan. 1.

    Seems like Nancy’s little propaganda junket is off to a bad start… 

  • Florida Teachers' Pension Fund Is Long AR-15 Gunmaker Stock

    On Tuesday afternoon, Bloomberg  was surprised to learn that as it was going through the 2,416 equity investments of the Florida state pension plan, which amount to over $37 billion in market cap, it found a surprising entry: 41,129 shares in American Outdoor Brands (valued at a meager $528,000, including $306,000 in unrealized profits) according to a Dec. 31 securities filing  listing the plan’s holdings. The company, formerly known as Smith & Wesson, is the market of the semiautomatic AR-15 assault rifle that was used in the Valentine’s Day shooting on the Marjory Stoneman Douglas High School in Parkland, Florida.

    In other words, as Bloomberg puts it, “as Florida teachers grieve over the mass shooting that left 17 students and colleagues dead last week, some of them may be surprised to learn they’ve been helping fund the firearms industry—including the company that made the gun used that bloody Wednesday.”

    In addition to American Outdoors, the filing showed that the Florida Retirement System Pension Plan also invested in gun company stock issued by Sturm & Ruger, Vista Outdoor and Olin Corp. All of these companies manufacture firearms or ammunition, including assault rifles.

    We expect that these holdings will be liquidated promptly in the aftermath of the highly politicized shooting, and that the anticipation of said liquidation is why AOBC tumbled 5% today.

    Students at the school who escaped have been calling for gun control measures on social media and in news interviews all day Tuesday, and were scheduled to attend a gun-safety reform rally Tuesday in Tallahassee, the state capital, hosted by the Florida Coalition to Prevent Gun Violence. The Florida State Board of Administration, or SBA, which manages the teachers’ pension fund, is also based there.

    “As fiduciaries, the SBA must act solely in the interest of the participants and beneficiaries,” John Kuczwanski, a spokesman for the agency, said in an emailed statement. “As primarily passive investors, we essentially own the entire market subject to any legal limitations.”

    True, but that does not matter: after the 2012 Sandy Hook Elementary School shooting in Connecticut, in which 26 elementary school students and teachers were gunned down, CalSTRS and the California Public Employees’ Retirement System sold off their stakes in both Sturm Ruger and Smith & Wesson.

    The same will take place over the coming days as the political scandal over the Parkland shooting peaks, and numerous pension systems seek to put pressure on gunmakers by dumping their stock.

    Tangentially, speaking of passive investors owning the “entire market”, one wonders when the “central bank” that is the Swiss National Hedge Fund Bank will decide that its ownership of tens of billions in FAANG stocks is starting to have a pronounced market impact.

    The good news for the Florida pension fund is that its sale of AOBC shares will hardly have an impact on its P&L, or the market; meanwhile its top holdings – like of most other pension funds – remain the 4 megatechs: AAPL, MSFT, AMZN and FB. And until the tidal wave of anti-monopolist/media resentment is unleashed, they have little to worry about.

  • The Military-Industrial Complex Is Winning The "Guns Vs. Butter" War In America

    Authored by Major Danny Sjursen via TimDispatch.com,

    Think of it as the chicken-or-the-egg question for the ages: Do very real threats to the United States inadvertently benefit the military-industrial complex or does the national security state, by its very nature, conjure up inflated threats to feed that defense machine? 

    Back in 2008, some of us placed our faith, naively enough, in the hands of mainstream Democrats — specifically, those of a young senator named Barack Obama.  He would reverse the war policies of George W. Bush, deescalate the unbridled Global War on Terror, and right the ship of state. How’d that turn out? 

    In retrospect, though couched in a far more sophisticated and peaceable rhetoric than Bush’s, his moves would prove largely cosmetic when it came to this country’s forever wars: a significant reduction in the use of conventional ground troops, but more drones, more commandos, and yet more acts of ill-advised regime changeDon’t get me wrong: as a veteran of two of Washington’s wars, I was glad when “no-drama” Obama decreased the number of boots on the ground in the Middle East.  It’s now obvious, however, that he left the basic infrastructure of eternal war firmly in place. 

    Enter The Donald.

    For all his half-baked tweets, insults, and boasts, as well as his refusal to read anything of substance on issues of war and peace, some of candidate Trump’s foreign policy ideas seemed far saner than those of just about any other politician around or the previous two presidents.  I mean, the Iraq War was dumb, and maybe it wasn’t the craziest idea for America’s allies to start thinking about defending themselves, and maybe Washington ought to put some time and diplomatic effort into avoiding a possibly catastrophic clash or set of clashes with Vladimir Putin’s Russia. 

    Unfortunately, the White House version of all this proved oh-so-familiar.  President Trump’s decision, for instance, to double down on a losing bet in Afghanistan in spite of his “instincts” (and on similar bets in Somalia, Syria, and elsewhere) and his recently published National Defense Strategy (NDS) leave little doubt that he’s surrendered to Secretary of Defense James Mattis and National Security Advisor H.R. McMaster, the mainstream interventionists in his administration.

    In truth, no one should be surprised.  A hyper-interventionist, highly militarized foreign policy has defined Washington since at least the days of President Harry Truman — the first in a long line of hawks to take the White House.  In this context, an ever-expanding national security state has always put special effort into meeting the imagined needs (or rather desires) of its various component parts.  The result: bloated budgets for which exaggerated threats, if not actual war, remain a necessity. 

    Without the threat of communism in the previous century and terrorism (as well as once again ascendant great powers) in this one, such bloated budgets would be hard to explain.  And then, how would the Army, Navy, Air Force, and Marines get all the weaponized toys they desired?  How would Congressional representatives in a post-industrial economy get all those attractive “defense” jobs for their districts and how would the weapons makers get the government cash they crave?

    The 2-2-1 Threat Picture

    With that in mind, let’s take a look at the newly released National Defense Strategy document.  It offers a striking sense of how, magically enough, the Pentagon’s vision of future global policy manages to provide something for each of its services and their corporate backers.

    Start with this: the NDS is to government documents what A Nightmare on Elm Street is to family films; it’s meant, that is, to scare the hell out of the casual reader.  It makes the claim, for instance, that the global “security environment” has become “more complex and volatile than any we have experienced in recent memory.”  In other words, be afraid, very afraid.  But is it true?  Is the world really more volatile now than it was when two nuclear superpowers with enough missiles to destroy the planet several times over faced off in a not-so-Cold War?

    Admittedly, the NDS does list and elaborate some awesome threats — and I think I know just where that list came from, too. When I went through the document, I realized that I had heard it all before.  Back in 2015, when I taught history at West Point, a prominent departmental alumni — a lieutenant general by the name of H.R. McMaster who, today, just happens to be President Trump’s national security advisor — used to drop by occasionally.  Back then, he commanded the Army Capabilities Integration Center, which was basically a future-planning outfit that, in its own words, “develops concepts, learns, and integrates capabilities to improve our Army.” 

    In 2015, McMaster gave us history instructors a memorable, impromptu sermon about the threats we’d face when we returned to the regular Army.  He referred, if memory serves, to what he labeled the two big threats, two medium threats, and one persistent threat that will continue to haunt our all-American world.  In translation: that’s China and Russia, Iran and North Korea, and last but not necessarily least Islamist terrorism. And honestly, if that isn’t a lineup that could get you anything you ever dreamed of in the way of weapons systems and the like, what is? 

    So can we be surprised that, in the age of McMaster and Mattis, the new NDS just happens to lay out the very same lineup of perils? 

    The Two Bigs: “Revisionist Powers”

    The document kicks off with a pivot of sorts: forget (but not forever!) the ongoing war on terror.  The U.S. military is on to even more fearsome things.  “Inter-state strategic competition [which, in Pentagonese, means China and Russia], not terrorism, is now the primary concern in U.S. national security,” the document insists.  Those two countries are — the Pentagon’s most recent phrase of eternal damnation — “revisionist powers” that “want to shape a world consistent with their authoritarian model.”  In other words, they have the staggering audacity to actually want to assert global influence (the very definition of evil in any power other than you-know-who).   

    This section of the NDS reads like a piece of grim nostalgia, a plunge back into the pugnacious language of the long-gone Cold War.  It’s meant to be scary reading.  It’s not that Russian irredentism or Chinese bellicosity in the South China Sea aren’t matters for concern — they are — but do they really add up to a new Cold War?

    Let’s begin, as the document does, with China, an East Asian menace “pursuing” that most terrifying of all goals, “military modernization” (as, of course, are we), and seeking as well “Indo-Pacific Regional hegemony” (as, of course, has… well, you know which other country).

    The National Defense Straregy isn’t, however, keen on nuance.  It prefers to style China unambiguously as a 10-foot-tall military behemoth.  After all, countering a resurgent China in the Taiwan Straits and the South China Sea ensures a prominent role for the Navy and its own air force of carrier-based naval aviators.  In fact, the military’s latest “AirSea Battle” doctrine hinges on a potential conflict in a place that bears a suspicious similarity to the Taiwan Straits (and thanks to the catchy name, the Air Force gets in on the action as well).  Consider all of this a formula for more blue-water ships, more advanced fighter planes, and maybe even some extra amphibious Marine Corps brigades.

    But what about the poor Army?  Well, that’s where that other revisionist power, Russia, comes in.  After all, Putin’s government is now seeking to “shatter” the North Atlantic Treaty Organization.  No point, naturally, in reminding anyone that Washington was the country that expanded what was, by definition, an anti-Russian military alliance right up to Russia’s borders, despite promises made as the Soviet Union was collapsing.  But this is no time to split hairs, so bottom line: the Russian threat ensures that the Army must send more combat troops to Europe.  It may even have to dust off all those old Abrams tanks in order to “deter” Vladimir Putin’s Russia.  Ka-ching!  (Consider this, by the way, a form of collusion with Russia that Robert Mueller isn’t investigating.) 

    If you look at the Pentagon’s 11 “defense objectives” included in the National Defense Strategy document, you get a sense of just how expansive the one great non-revisionist power on the planet actually is.  Yes, the first of those sounds reasonable enough: “defending the homeland from attack.” Skip down to number five, though — “Maintaining favorable regional balances of power in the Indo-Pacific, Europe, the Middle East, and the Western Hemisphere” — and you’re offered a vision of what an expansionist attitude really is.  Although the NDS claims this country is threatened by the rise of Russia or China in just two of these areas (the Indo-Pacific and Europe), it asserts the need for favorable “balances of power” just about everywhere! 

    By definition, that’s an urge for hegemony, not defense!  Imagine if China or Russia staked out such claims.  An unbiased look at that set of objectives should make anyone (other than a general or an admiral) wonder which is really the “rogue regime” on this planet.

    The Two Mediums: “Rogue States”

    Now, on to the next group of threats, Uncle Sam’s favorite bad boys, North Korea and Iran.  North Korea, we’re told, is a land of “outlaw actions” and “reckless rhetoric” (never to be compared to the statesmanlike “fire and fury” comments of President Donald Trump). And indeed, Kim Jong-Un’s brutal regime and the nuclear weapons program that goes with it are cause for concern — but they also turn out to be deeply useful if you want to provide plenty of incentive for the funding of the Air Force’s and the Navy’s trillion dollar nuclear “modernization” effort (that already looks like it may actually cost more like $1.7 trillion).  In other words, more nuclear subs, heavy bombers, and intercontinental ballistic missiles, not to speak of the immense cost of recent investments in such missile defense systems as Terminal High Altitude Area Defense (THAAD) and Ground-Based Midcourse Defense (GMD).

    In this way, “rogue states” couldn’t be more helpful.  Take Iran, which, according to the NDS, “remains the most significant challenge to Middle East stability.”  Hmmm.  It’s hard not to wonder why ISIS, Bashar al-Assad’s rump Syria, Saudi terror bombing in Yemen, even old-fashioned al-Qaeda (and its new-fashioned affiliates) don’t give Iran at least a run for its money when it comes to being the clearest-and-presentest danger to the region and to the United States.  (And that’s assuming that, in the Middle East, the U.S. hasn’t been the greatest danger to itself.  Exhibition one being the decision to invade Iraq in 2003.) 

    No matter.  Anti-Iranian hysteria sells fabulously in Washington, so who wouldn’t want to run with it?  In fact, the alleged Iranian threat to us is the gift that just keeps giving inside the Beltway.  Iran’s nuclear threat — though there’s no evidence that the Iranians have cheated on the nuclear deal President Obama signed with them in 2015 and that President Trump is so eager to abrogate — guarantees yet another windfall for all the services.  The Army’s air defense programs, for example, should get a long-needed shot in the arm; the Navy will clamor for more Aegis cruisers (with anti-ballistic systems on board); and the Air Force will certainly need yet more bombers for the potential preemptive strike against the nuclear threat that isn’t there.  Everyone wins (except perhaps the Iranian people)!

    One “Persistent Condition”: Terrorism

    And then, of course, there’s terrorism or, to be more exact, Islamist terrorism, that surefire funder of the twenty-first century.  It may no longer officially be the military’s top priority, but the National Defense Strategy assures us that it “remains a persistent condition” as long as terrorists “continue to murder the innocent.” The proper question, though, is: How big of a threat is it?  As it turns out, not very big, not for Americans anyway.  Any of us are so much more likely to choke to death or die in a bicycle or car accident than lose our lives at the hands of a foreign-born terrorist. 

    And here’s another relevant question: Is the U.S. military actually the correct tool with which to combat persistent terrorism?  The answer, it seems, is no.  Though U.S. Special Operations forces deployed to 75% of the world’s countries in 2017, the number of Islamist threat groups has only risen in certain areas like Africa thickest with those special operators.  It turns out that all the advising and assisting, all the training and coaching, has only made matters worse.  As for those overstretched forces, relentless deployments are evidently breaking them down as reports indicate that rates of mental distress and suicide are again on the rise among them.

    Still, here’s the positive part of the NDS’s continuing emphasis on “degrading” terrorist groups and “countering extremism”: it ensures a financial and manpower bonanza for U.S. Special Operations Command (SOCOM).  In the Obama years, that “elite” set of forces already experienced a leap in numbers to almost 70,000. (By the way, at what point in the escalation game do such troops stop being so “special”?)  Since SOCOM, a joint command that’s home to personnel from all the services, hadn’t yet been dealt into this NDS version of largesse, it’s lucky that terrorism and the war on it isn’t going anywhere anytime soon, which means that SOCOM will never want for funds or stop growing.

    Guns Versus Butter

    In 1953, Republican President Dwight Eisenhower, a West Point graduate and retired five-star general, gave a speech that couldn’t have been more unexpected from a career military man.  He reminded Americans that defense and social spending were always in conflict and that the “guns” versus “butter” tradeoff couldn’t be a more perilous one.  Speaking of the growth of the defense budget in that tense Cold War moment, he asserted that:

    “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed… This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”

    Those words still seem salient today.  As Americans experience acute income inequality, the rising cost of a college education, and ongoing deindustrialization in the heartland, the country’s runaway spending continues to rise precipitously.  The planned 2019 Pentagon budget is now expected to hit a staggering $716 billion — more than much of the rest of the world’s defense spending combined.

    The battle between “guns and butter” is still raging in the United States and, if the new NDS is any indicator, the guns are winning.

    *  *  *

    Major Danny Sjursen, a TomDispatch regular, is a U.S. Army officer and former history instructor at West Point. He served tours with reconnaissance units in Iraq and Afghanistan. He has written a memoir and critical analysis of the Iraq War, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of the Surge. He lives with his wife and four sons in Lawrence, Kansas.  Follow him on Twitter at @SkepticalVet and check out his new podcast Fortress on a Hill, co-hosted with fellow vet Chris “Henri” Henrikson.

    [Note: The views expressed in this article are those of the author, expressed in an unofficial capacity, and do not reflect the official policy or position of the Department of the Army, the Department of Defense, or the U.S. government.]

  • China's "New Silk Roads" Reach Latin America

    Authored by Pepe Escobar via The Asia Times,

    Beijing is turbo-charging its infrastructure connectivity across the region and the Caribbean…

    A sharp, geoeconomic shift took place last month in Santiago, Chile at the second ministerial meeting of a forum grouping China and the 33-member Community of Latin American and Caribbean States. 

    The Chinese Foreign Minister, Wang Yi, told his audience that the world’s second-largest economy and Latin America should join efforts to support free trade. This was about “opposing protectionism” and “working for an open world economy,” he said.

    After encouraging Latin American and Caribbean nations to participate in a major November expo in China, Wang delivered the clincher – Latin America should play a “meaningful” role in the ‘New Silk Roads’, known as the Belt and Road Initiative. The Chinese media duly highlighted the invitation.

    The Latin American stretch of the Belt and Road project may not turn out to be as ambitious as the Eurasia program. Yet the trend is now clear with Beijing turbo-charging its infrastructure connectivity drive across the region and the Caribbean, with more deals on the way.

    The strategic imperative is to build smooth connections across the continent, converging on its Pacific coastline – and forward through maritime supply lines to the Chinese seaboard. You could call it the Pacific Maritime Silk Road. 

    Last year, Chinese banks and institutions invested US$23 billion in Latin America – the biggest surge since 2010. And they are all in for the long haul.

    Predictably, fellow BRICS member Brazil is the largest recipient of Chinese foreign investment for the past 10 years at about $46.1 billion, plus more than $10 billion in acquisitions. Russia, Indian and South Africa are the other nations that make up the BRICS bloc.

    Costs plummeted

    Marcos Troyjo, the director of the BricLab at Columbia University, has broken down the numbers. Up to mid-2010, Brazil was very expensive. Then suddenly costs plummeted because of the exchange rate or devaluation of companies.

    Large Brazilian groups were badly damaged by the incredibly complex ‘Operation Car Wash’ corruption investigation. The infrastructure industry depended on state funds, which suddenly dried up and a wild privatization spree followed with Chinese, American and European groups taking advantage.     

    China is already the top trading partner of Brazil, Argentina, Chile and Peru. Others will inevitably follow. This is not only because China’s imports of commodities, such as iron ore, soy and corn tend to rise, but also because the Asia Infrastructure Investment Bank will increase lending. 

    China’s master plan for Latin American trade and investment follows what is dubbed the “1+3+6” framework, mapped out by President Xi Jinping in July 2014 at a summit in Brasilia. 

    The “1” refers to the cooperation plan itself, guiding specific projects and ranging from 2015 to 2019 as Beijing aims for $250 billion in direct investment and around $500 billion in trade.

    The “3” is about the key areas of cooperation – trade, investment and finance.

    And the “6” prioritizes cooperation in energy and resources, and infrastructure construction, as well as agriculture, manufacturing, scientific and technological innovation, alongside information technology.

    The top three Latin American powers, Brazil, Argentina and Mexico, who also happen to be G20 members, are all into major infrastructure expansion, which fits into Beijing’s plan.

    Of course, there will be serious snags along the way, such as the $50 billion Nicaragua Inter-Oceanic Canal, now competing with a surge in Panama-China relations after the country broke ties with Taiwan. And the game-changing, transcontinental, Atlantic-Pacific railway between Brazil and Peru is also a long way away. 

    But Foreign Minister Wang was been careful to explain how this proposed Latin Belt and Road program will benefit the Latin American region. “It has nothing to do with geopolitical competition,” he said. “It follows the principle of achieving shared growth through discussion and collaboration. It is nothing like a zero-sum game.”

    In the end, China’s geopolitical rewards will end up positively riling the Trump administration, which has taken its eye off the ball in its own backyard. Rex Tillerson, the Secretary of State, decided to hit the road a few days after the China-Latin America summit in Santiago with pit stops in Mexico, Argentina, Peru, Colombia, and Jamaica.

    He underlined the Monroe Doctrine a cornerstone of US policy in the region. “[It] clearly has been a success, because … what binds us together in this hemisphere are shared democratic values.”

    ‘Imperial powers’

    Tillerson then bashed China, saying Latin America “does not need new imperial powers.”  The Global Times stressed how Tillerson  “showed disdain” to China’s “constructive approach.” “China has no military bases in the region and has dispatched no troops to any of the Latin American countries,” it said.

    Tillerson most of all bashed Venezuela. He suggested sanctions aimed at “the regime” and not “the Venezuela people,” and claimed that President Nicolas  Maduro could face a military coup even though Washington was not gunning for a regime change.

    In fact, doubts persist on whether President Donald Trump will even show up at the next Summit of the Americas in April in Peru. The contrast is stark with President Xi, who has visited three times since 2012.

    Still, a rash of academic papers has shown how Brazil and Argentina have reoriented their foreign policy from a “pro-South” stance towards a pro-US neoliberal view. Yet, China keeps advancing – geoeconomically and geopolitically.

    And that appears to be a trend. Washington will need to invest in a much more sophisticated game if it is to compete economically against China. That would turn out to be the ideal trade and investment scenario which would profit Latin America the most.

    Public opinion seems to have made up its mind. Across Latin America, according to a Gallup poll, approval of US foreign policy has dropped from 49% in 2016 to 24% last year. Approval of President Trump stands at a dismal 16%.

    In sharp contrast, China’s investment through the Belt and Road Initiative has given President Xi a distinct advantage. 

  • FOMC Minutes Preview: "The Most Likely Surprise Is 4 Rate Hikes In 2018"

    The Dollar is suddenly rising and rate hike expectations are now at their highest of the cycle – 2.76 hikes in 2018 are priced in – (despite stocks still not being anywhere near back to pre-Powell-put-implied levels).

    But as Rafiki Capital Management’s Steven Englander notes, the most likely surprise in the Fed Minutes tomorrow is that they may be leaning to four hikes in 2018, but the biggest surprise would be growing support to aim for above two percent inflation temporarily to make up for previous misses to the downside.

    The three versus four hike debate is already in the open with several FOMC participants referring to the possibility of four hikes.

    About 70bps are now priced in, versus around 65bps just before the meeting. The FOMC meeting occurred before high AHE and inflation prints, but in recent meetings the Minutes’ discussion has become more confident that inflation is picking up.  I think the risk is much greater that they signal growing confidence on inflation moving towards target more quickly than any indication that two hikes might be more appropriate than three.  

    This would not mean a strong, overt signal of four hikes but it is likely they could convey ‘three, maybe four’ as their stance. 

    They are unlikely to go full hawkish in the Minutes as there have been only moderate hawkish signals since, and monetary policy was probably discussed in between tinkling champagne glasses at Fed Chair Yellen’s last meeting.

    The problem for the inflation doves is that even if they are ultimately proved right, there haven’t been any recent data releases that would support the view that inflation will persist below two percent. The characterization of the dovish stance in the December Minutes now reads too aggressive:

    ‘With core inflation readings having moved down this year and remaining well below 2 percent, some participants observed that there was a possibility that inflation might stay below the objective for longer than they currently expected. Several of them expressed concern that persistently weak inflation may have led to a decline in longer-term inflation expectations; they pointed to low market-based measures of inflation compensation, declines in some survey measures of inflation expectations, or evidence from statistical models suggesting that the underlying trend in inflation had fallen in recent years.”

    Many of the factors the doves cite had turned before the FOMC (and have continued to move in that direction) so the discussion of downside inflation risk will become more tentative, and of upside risk, more concrete. 

    The bigger issue is whether they want to temporarily aim for inflation above two percent.  That discussion is simmering but with the January 31 meeting having been Fed Chair Yellen’s last, I doubt that they wanted to stir that pot just yet, given that they are in no position to make a decision.

    Recent Fed Statements have referred to the ‘symmetric inflation goal’ and The Statement on Longer term Goals and Monetary Policy Strategy, released at the January meeting, also refers to  ‘symmetric’ targeting of two percent inflation. 

    To most of us a symmetric inflation target means that we are as grieved by missing 0.2 percentage point to to the downside as to the upside. If you wanted to make up for past misses, it would be more correct to refer to a price level target. However, the June 2017 Minutes said:

    It was also suggested that the symmetry of the Committee’s inflation goal might be underscored if inflation modestly exceeded 2 percent for a time, as such an outcome would follow a long period in which inflation had undershot the 2 percent longer-term objective.”

    which looks as if ‘symmetric’ could be seen as meaning making up for downside inflation misses with upside misses, at least in part. And some FOMC participants have used symmetric in a similar context.

    So far the Minutes have been coy about this possibility. The Minutes to the Dec. 2017 meeting stated:

    “…a few participants suggested that further study of potential alternative frameworks for the conduct of monetary policy such as price-level targeting or nominal GDP targeting could be useful.”

    I doubt there would be much change in this language until they have a good idea where they are headed and that is not the case now.  The mention in recent speeches has been casual, more discussed as a possible tweak, than pushed as a full-fledged policy alternative, so even it there are good arguments for it, I doubt that tomorrow’s Minutes is where it would be introduced as a full-fledged alternative. If I am wrong and the Minutes sound as if this target shift is under serious consideration, the USD would come under significant renewed pressure. 

    We would probably see some curve steepening as the shift is digested. 

    Bottom line: I go in with a hawkish lean, thinking that 75-80bps of 2018 hikes is closer to accurately pricing in the fed tilt and the current economic/inflation outlook.

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Feb 20

Today’s News 20th February 2018

  • Why Washington Struck Russian Contractors In Syria

    Submitted by Nauman Sadiq,

    On February 7, the US B-52 bombers and Apache helicopters struck a contingent of Syrian government troops and allied forces in Deir al-Zor that reportedly killed and wounded dozens of Russian military contractors working for the Russian private security firm, the Wagner group.

    In order to understand the reason why the US brazenly attacked the Russian contractors, we need to keep the backdrop of seven-year-long Syrian conflict in mind. Washington has failed to topple the government of Bashar al-Assad in Syria.

    After the Russian intervention in Syria in September 2015, the momentum of battle has shifted in favor of Syrian government and Washington’s proxies are on the receiving end in the conflict. Washington’s policy of nurturing militants against the Syrian government has given birth to the Islamic State and myriads of jihadist groups that have carried out audacious terror attacks in Europe during the last couple of years.

    Out of necessity, Washington had to make the Kurds the centerpiece of its policy in Syria. But on January 20, its NATO-ally Turkey mounted Operation Olive Branch against the Kurds in the northwestern Syrian canton of Afrin. In order to save its reputation as a global power, Washington could have confronted Turkey and pressured it to desist from invading Afrin. But it chose the easier path and vented its frustration on the Syrian government forces in Deir al-Zor which led to the casualties of scores of Russian military contractors hired by the Syrian government.

    Another reason why Washington struck Russian contractors working in Syria is that the US-backed and Kurdish-led Syrian Democratic Forces (SDF) – which is mainly comprised of Kurdish YPG militias – have reportedly handed over the control of some areas west of Euphrates River to Deir al-Zor Military Council (DMC), which is the Arab-led component of SDF, and have relocated several battalions of Kurdish YPG militias to Afrin and along Syria’s northern border with Turkey in order to defend the Kurdish-held areas against the onslaught of Turkish armed forces and allied Free Syria Army (FSA) militias.

    More significantly, an understanding between the Syrian government and the Kurdish leadership has recently been reached, according to which the government will deploy Syrian troops in the northwestern Kurdish enclave of Afrin in order to augment the defenses of the canton against the Turkish-led offensive.

    One of the main reasons why Washington bombed the pro-government forces, which included the Russian military contractors, on February 7 in Deir al-Zor was to preempt the likelihood of such an accord between the US-backed Kurdish forces and the Russia-backed Syrian government from materializing in the wake of Turkish-led Operation Olive Branch in Afrin on January 20.

    It’s worth noting here that the ethnic and sectarian conflict in Syria and Iraq is actually a three-way conflict between the Sunni Arabs, the Shi’a Arabs and the Kurds. Although after the declaration of war against a faction of Sunni Arab militants, the Islamic State, the US has also lent its support to the Shi’a-led government in Iraq, the Shi’a Arabs of Iraq are not the trustworthy allies of Washington because they are under the influence of Iran.

    Therefore, Washington was left with no other choice but to make the Kurds the centerpiece of its policy in Syria after a group of Sunni Arab jihadists overstepped their mandate in Syria and overran Mosul and Anbar in Iraq in early 2014, from where the United States had withdrawn its troops only a couple of years ago in December 2011.

    The so-called Syrian Democratic Forces (SDF) are nothing more than Kurdish militias with a token presence of mercenary Arab tribesmen in order to make them appear more representative and inclusive in outlook.

    Regarding the Kurdish factor in the Syrian civil war, it would be pertinent to mention here that unlike the pro-US Iraqi Kurds led by the Barzani family, the Syrian PYD/YPG Kurds as well as the Syrian government have been ideologically aligned because both are socialists and have traditionally been in the Russian sphere of influence.

    Moreover, as I have already described that the Syrian civil war is a three-way conflict between the Sunni Arab militants, the Shi’a-led government and the Syrian Kurds, and the net beneficiaries of this conflict have been the Syrian Kurds who have expanded their areas of control by aligning themselves first with the Syrian government against the Sunni Arab militants since the beginning of the Syrian civil war in August 2011 to August 2014, when the US policy in Syria was “regime change” and the CIA was indiscriminately training and arming the Sunni Arab militants against the Shi’a-led government in the border regions of Turkey and Jordan with the help of Washington’s regional allies: Turkey, Jordan, Saudi Arabia, Qatar and Kuwait, all of which belong to the Sunni denomination.

    In August 2014, however, the US declared a war against one faction of the Sunni Arab militants, the Islamic State, when the latter overran Mosul and Anbar in early 2014, and Washington made a volte-face on its previous “regime change” policy and started conducting air strikes against the Islamic State in Iraq and Syria. Thus, shifting the goalposts in Syria from the impossible objective of “regime change” to the realizable goal of defeating the Islamic State.

    After that reversal of policy by Washington, the Syrian Kurds took advantage of the opportunity and struck an alliance with the US against the Islamic State at Masoud Barzani’s bidding, thus further buttressing their position against the Sunni Arab militants as well as the Syrian government.

    More to the point, for the first three years of the Syrian civil war from August 2011 to August 2014, an informal pact existed between the Syrian government and the Syrian Kurds against the onslaught of the Sunni Arab militants until the Kurds broke off that arrangement to become the centerpiece of Washington’s policy in the region.

    In accordance with the aforementioned pact, the Syrian government informally acknowledged Kurdish autonomy; and in return, the Kurdish militias jointly defended the areas in northeastern Syria, specifically al-Hasakah, alongside the Syrian government troops against the advancing Sunni Arab militant groups, particularly the Islamic State.

    Finally, in order to understand Washington’s objective that why it dared to bomb pro-government forces in Deir al-Zor on February 7 that included private Russian military contractors, bear in mind that it would be a nightmare scenario for Washington in Syria if its only trust-worthy allies, the Syrian Kurds, broke off their arrangement with Washington and once again entered a mutually beneficial alliance with Russia-backed Syrian government – a scenario which is quite likely after Washington’s NATO-ally Turkey’s repeated invasions of Kurdish-held areas in Syria, first the invasion of Jarabulus and Azaz in northern Syria during the Operation Euphrates Shield that lasted from August 2016 to last March, and now the military intervention in the Kurdish enclave of Afrin on January 20.

    Washington’s primary objective of bombing the pro-government troops on February 7 – that led to dozens of Russian casualties – was to create divisions between the US-backed Kurds and Russia-backed Syrian government. Clearly, one can’t negotiate and reach a defensive accord with a party whose backers are bombing you at the same time. But Russia has sagaciously downplayed the brazen atrocity and moved on with its efforts to reconcile the divergent interests of competing forces in the Syrian proxy war.

    *  *  *

    Nauman Sadiq is an Islamabad-based attorney, columnist and geopolitical analyst focused on the politics of Af-Pak and Middle East regions, neocolonialism and petro-imperialism.

  • Anti-Immigrant AfD Now The Second Most Popular Party In Germany

    In a historic first, a poll published on Monday by German newspaper Bild put the anti-immigrant, Alternative for Germany (AfD) party at 16%, showing that they are currently the second most popular political organization in Germany and more popular than Germany’s Social Democrats (SPD), Merkel’s “Grand Coalition” allies. The poll, conducted by INSA put the AfD on 16%, just ahead of the SPD on 15.5%.

    The poll marks the lowest support ever achieved by the SPD, traditionally one of the two major parties of German politics.

    According to the poll Angela Merkel’s Christian Democrats are the most popular party in the country and would secure 32 percent of the vote were elections to be held tomorrow.

    Environmentalists can take heart from the poll too, as it confirms a trend of blooming support for the Green party. The Greens won 8.9 percent of the vote in September’s election but are now polling at 13 percent.

    https://platform.twitter.com/widgets.js

    The popularity of the right-wing AfD has been creeping up in recent weeks, with polls consistently putting them on 14% or above.

    They entered the Bundestag for the first time in September after winning 12.6% of the vote. The party was set up in 2013 and fought the election of that year on an anti-Euro platform, but failed to make it over the five percent hurdle needed to make it into parliament. Last year they ran a campaign fiercely critical of the government’s refugee policy, which had led to over a million people applying for asylum in Germany since 2015.

    According to The Local, the leadership of the AfD rejects the label of “far-right”, preferring to describe themselves as conservative. However, they remain highly controversial due to various statements by senior party members which have challenged a political consensus concerning how Germany treats its Nazi past.


    AfD federal chairman Jörg Meuthen

    Björn Höcke, the AfD leader in Thuringia, has lambasted Germany’s culture of remembrance of the Holocaust, labeling the Holocaust Memorial in central Berlin a “memorial of shame.”

    Party leader Alexander Gauland, meanwhile, said during election campaigning last year that Germany should be proud of the service of its soldiers in two world wars.

    On the other hand the popularity of the SPD has plummeted as they look set to join a third grand coalition with Merkel as a junior partner. Germany‘s oldest party – around the late 19th century – scored their worst post-war result in 2017 at 20.5% and have only seen their support crumble since then.

  • The Three Global Super-Powers & The End Of M.A.D.

    Authored by Eric Zuesse via The Strategic Culture Foundation,

    There are currently three global super-powers, three nations that lead the world: China, Russia, and US.

    After World War II, until recently, the US clearly dominated the world, not only culturally, with more influence over the world’s other cultures than any other single nation possessed, but also economically, with product-dominance throughout the world, and also militarily tied with the Soviet Union during the Cold War, and, then, after the Cold War, still possessing such military dominance, so that in 2006, America’s billionaires — as represented by the most-prestigious two agencies that represent their collective interests against the public, the Council on Foreign Relations and Harvard University — were actively promoting, broadly amongst foreign-policy academics, the idea that the US should seek to occupy a position of such extreme military superiority over Russia, so that since 2006 the concept of “Nuclear Primacy” is reflected, by America’s power-centers, as being the correct goal for America, going forward, replacing the prior nuclear-strategic paradigm (since the 1950s) of “Mutually Assured Destruction,” or “M.A.D.,” in which nuclear weapons were (and, by Russia, still are) seen as purely defensive strategic military assets between the two nuclear superpowers, weapons whose only actual purpose, for either country, is to ward off a WW III — no usefulness at all in an actual aggressive military context.

    Thus, M.A.D. became replaced in America by Nuclear Primacy, nuclear weapons that are put in place to serve not only to ward off a nuclear attack, but also, ultimately, to win a nuclear war against the other nuclear super-power, Russia — nukes as aggressive weapons, by which the US will (it has been expected, ever since 2006) soon be able to demand, and to receive, Russia’s capitulation, surrender, or else Russia will be destroyed by a US nuclear first-strike, while US casualties, from any presumably few Russian weapons that might make it through this ABM-BMD shield, will be kept to an “acceptably low” level, by virtue of that then-functioning ABM-BMD system, combined with increases in US nuclear striking-power. This nuclear-primacy paradigm aims for America (its billionaires) to take over the entire world, including ultimately the world’s largest land-mass: Russia. 

    But, now, twelve years later, America’s presumed early lead in such ‘defensive’ strategic weaponry has become, instead, ever more clearly, just a figment of America’s military-industrial complex’s (MIC’s) fervid marketing-campaign for the development and sale of such weapons, ever since US President Ronald Reagan’s promised “Star Wars” program during the 1980s got the effort, toward a winnable nuclear war, started, as an alleged ‘defensive’ measure — not yet overtly the end of M.A.D. 

    Soon after Reagan, the Soviet Union, and its communism, and its Warsaw Pact counter to America’s NATO military alliance, all simultaneously ended, in 1991, as a consequence of which, the US military-industrial complex (MIC), and especially the large US manufacturers of nuclear-weapons systems, the companies that dominate the MIC, were becoming stranded, because the market for their costliest wares was now in limbo. Though elimination of the Cold War wouldn’t have been an existential threat to these manufacturers, an end to the Cold War on the US side would have threatened the market-values of those US companies, which are controlled by US billionaires, who have lots of clout in Congress. Thus, though the Cold War ended in 1991 on the Russian side, it secretly continued on the US side (that is, amongst America’s super-wealthy, the people who control the US Government — the main market for the MIC); and America’s strategic switch, away from M.A.D. to Nuclear Primacy (so as to unshackle their market from the prior politically imposed demand to maintain a nuclear balance between the two sides), has been a significant part of this secret continuation, by America, of the Cold War, while Russia’s Government continued instead to think in terms of the M.A.D. paradigm. (Russia’s weapons-manufacturers are still owned by the Government — socialized — so, there’s no need to grow their ‘market value’.)

    In a strictly capitalist country, weapons-manufacturing is a major area of investment for billionaires, whose fortunes there rise to the extent that governments are buying their planes and bombs and missiles, especially those of the most sophisticated types, which are strategic weaponry, such as nuclear systems, which are the most profitable ones of all. Growth-at-all-costs has meant (and means) that the MIC is a cancer upon the entire world. (Eisenhower’s Farewell Address, on 17 January 1961, understated the problem.) Either the entire military will be a public entity, or else there will be (because of its privatized weapons-manufacturing) a tendency for the military to destroy everything else in order to continue to grow, like investors expect and demand — grow like cancer.

    A major source of America’s decline was US President George W. Bush, who came into office in 2001 when the Cold War could no longer excite the American public as being a threat (since the Soviet Union and its communism and its military alliance were now long gone), and a new demon thus needed to be brought before the American people, as warranting increased ‘defense’ expenditures. 9/11 came along just in time to fill this interim lack of a cause de guerre, to attack now Al Qaeda and other (as today’s US President famously tags it) “radical Islamic terrorists.”However, America’s spending on strategic weaponry requires instead focus against the other nuclear super-power as being the ‘enemy’, and this is what the end of M.A.D. and the start of Nuclear Primacy (which is manna from heaven for the ‘Defense’ contractors) have been all about: re-defining ‘the enemy’, from being a country with which peace must be maintained (M.A.D.), to becoming instead a country that should be outright conquered. And, amongst the lies which are necessary in order to sustain this switch (from M.A.D. to Nuclear Primacy), is the lie that ABMs have no aggressive function, but are ‘purely for defense’. This lie will enable the public to accept the spending of trillions of dollars of federal money on weapons whose sole real use will be conquering Russia — or, at least, the attempt to do so. 

    Nobody makes public the identities of the individuals, in the US and in its allied countries, who comprise the suddenly booming market for luxurious nuclear-proof deep-underground bunkers. But whomever these owners are, three things about them are obvious: they’ve got lots of money; they think that the prospect of a nuclear war is very real — worth their pre-paying for suitably luxurious long-term temporary accommodations deep underground; and they aren’t themselves one of the high government officials for whom the government’s taxpayers have already built such bunkers. (Or, perhaps, some of them do belong to the last of those three categories, but they’ve got so much extra money that they can easily afford to pay for more luxurious quarters than the taxpayers have already supplied them with.)

    Quite similar to Donald Trump, but far more overtly faith-based than the hyper-secular former Miss Universe Pageant owner, George W. Bush had a confidence like the Taliban and Al Qaeda do, that “God is on our side”, and so Bush acted as if he had no reason to test-out America’s ABM weapons before ordering and buying them (at the public taxpayer’s expense, and private billionaires’ profits, of course). Or, perhaps alternatively, Bush didn’t even care whether these weapons would work, but only whether the owners of the companies that would be manufacturing them would be satisfied with their profits, from the decisions that he was making, which so powerfully affected their profits. In any case, Bush’s focus on rushing forward with a US ABM system demonstrated his strong commitment to the replacement of M.A.D., by Nuclear Primacy. The whole idea of Nuclear Primacy rests upon there being an effective US ABM system installed so as to make the enemy’s retaliatory weapons ineffective. Bush pushed the ABM into production even before there was any indication that it would work. He did this even before the very concept of “Nuclear Primacy” was publicly introduced by the two chief agents for America’s aristocracy in 2006. What Harvard and the CFR promoted, was already the Government’s policy. While there were criticisms of Bush’s execution of the plan, there was no significant scholarly opposition against the Nuclear Primacy concept itself.

    All subject-areas of expertise (and this refers to scientists, not to scholars) despised the religious faith-based President George W. Bush, much like they despise the secular faith-based President Donald Trump. For example, everyone knows that Trump has great difficulty finding experts who are willing to serve in his Administration. Similarly, in the October 2004 “Poll of Academic Economists” by the Economist, 59% of them answered “no” when asked “If you had a chance to work in a policy job in Washington, would you take it?” And when queried “For whom would you rather work?” Bush or his then electoral opponent Senator John Kerry, 81% chose Kerry — notwithstanding that, as a predominantly conservative lot, the economists did like one thing about George W. Bush: “Outsourcing of jobs overseas,” which 86% of them rated to be either good or very good. (Of course, Trump claims to oppose that; so, in this regard, he’s even less acceptable to economists than Bush was.)

    Under Bush, experts were even trying, with no success, to inform this conservative faith-based President about areas in the federal budget where substantial funds were being simply wasted, but his blind faith caused him to ignore such scientific warnings, and enormous federal waste resulted. For example, the science reporter William Broad headlined in The New York Times on 24 September 2003, “Report Sees Risks in Push for Missile Defense”, and opened, “The Bush administration’s push to deploy a $22 billion missile defense system by this time next year could lead to unforeseen cost increases and technical failures that will have to be fixed before it can hope to stop enemy warheads, Congressional investigators said yesterday. The General Accounting Office, in a 40-page report, said the Pentagon was combining 10 crucial technologies into a missile defense system without knowing if they can handle the task [and subsequently the same thing happened in order to produce the scandalously overpriced and insanely multi-functional F-35 jets], often described as trying to hit a bullet with a bullet.” The article quoted a former Pentagon weapons testing chief, who said that to deploy such an anti-ballistic missile (ABM) system just a year hence as planned, would be to deploy “no more than a scarecrow, not a real defense” — in other words, a system that would almost certainly fail in any actual use — because so many parts of the system wouldn’t have been tested sufficiently to be designed functionally that soon. The prior (Bill Clinton) Administration, more attentive to such concerns, had established a schedule for testing the various parts of this complex system prior to any possible deployment. However, one of G.W. Bush’s first actions coming into office was to deploy an ABM system, even if it might not work, and to do the testing afterward. Bush, it seems, possessed the faith that if science were to fail to supply the system’s functionality, then God would certainly do so, for the benefit of “God’s People.” 

    Jackson Diehl of the Washington Post thus headlined on 26 April 2004, “Dubious Threat, Expensive Defense” and closed: “Bush would spend twice as much on missile defense as on customs and border protection,” yet gain only “a rudimentary and uncertain defense against an unlikely long-range missile attack.” Diehl opined that, despite the transformed defense needs after 9/11, “The president who never admits error will stay the course.” 

    Bush did stay the course: by the time of 14 February 2005, as The New York Times reported the next day, “The nation’s fledgling missile defense system suffered its third straight test failure.” Commented one scientist there, “It’s as if Henry Ford started up his automobile production line and began selling cars without ever taking one for a test drive.” But not quite: Bush had now taken his third ‘test drive’ — and all three failed. 

    On 4 April 2005, the AP reported, “Congress is weighing how much to invest in the fledgling ballistic missile defense system, which has suffered setbacks and whose cost could easily top the $150 billion partial price tag the Bush administration has estimated.” Some congressional proponents of the ABM system were even quoted as saying that it had to be deployed in order to prevent future terrorist attacks, such as had occurred on 9/11. Of course, that allegation is absurd — 9/11 couldn’t have been stopped by an anti-missile defense system. But members of Congress aren’s so stupid as not to know this. That allegation was probably just a marketing-ploy sponsored in back-rooms by corporations such as Lockheed Martin, who might reflect their satisfaction with the statement, by donating to the ‘appropriate’ PACS.

    Meanwhile, the Bush Administration and the Republican Congress were financially shortchanging many of the nation’s authentic anti-terrorist needs. This $150 billion+ could have gone a long way toward achieving real protection (and/or toward serving non-defense needs), if it had been scientifically allocated. 

    Were Al Qaeda to have been voting directly in the US Congress, the ABM system would have had an easier time passing unchanged, exactly as Bush wanted. Al Qaeda would have been fervent Republicans — they were just as religious, and just as faith-obsessed, though in a different ‘inerrant Scripture’. If Donald Trump has faith in any ‘inerrant Scripture’, nobody knows what it is. But, he seems to have lots of faith in himself, even if experts in the respective subject-fields don’t.

    By the present time, the failure of America’s entire ABM-BMD gamble — which was started under Reagan, begun being operationalized under G.W. Bush, and finally being installed by Barack Obama and now under Trump — is painfully clear. But success was never its actual goal: restoring the government’s growth in ‘defense’ spending (even while cutting now the government’s non-‘defense’ spending) is its real purpose. Those billionaires and centi-millionaires must be served, or else Congress-members will lose their seats to well-funded competitors in their own Party’s next primary. The system succeeds marvelously at doing what it’s intended to do: to serve the people who buy the Government — to serve the actual patrons of this ‘democracy’. Instead of being a democracy, it’s a government that’s bought and sold.

    While America thus spends itself into becoming increasingly a third-world country, China and Russia pursue different objectives. Specifically in the case of Russia, its military spending is one-tenth of America’s, but, because Russia cannot afford to allow billionaires’ demands for private profit to constitute the incentive-system that drives the Russian Government’s military decisions, Russia has gone militarily from strength to strength, while post-WW-II America (spending ten times as much) has gone from Vietnam to Afghanistan to Iraq to Libya to Syria, and yet America’s ‘news’-media have cheered all of these evil billionaires’ invasions of those countries we wrecked, as if companies such as General Dynamics owned companies such as the Washington Post, and thus (with all that propaganda) the American public continue to respect America’s military higher than any other US institution — despite such a long string of military failures by this country, despite spending ten times what Russia does on its military, and despite America’s military being the most corrupt part of the US federal Government.

    But, actually, America’s military spending is probably much higher than just ten times Russia’s, because America’s official figures — what SIPRI and others use, which is just the ‘Defense’ Department — excludes much of America’s military expenses, as a consequence of which, America’s official $617.1 billion FY 2019 expenditure for the Department of ‘Defense’ masks an actual annual military expense of $1,135.7 billion. That’s $1.36 trillion per year, to do things such as destroy Afghanistan, destroy Iraq, destroy Syria, destroy Libya, perpetrate coups such as in Ukraine, assist coups such as in Honduras, etc. But even that’s not the total ‘defense’ expenditure which taxpayers have bought for the billionaires, because, throughout its existence, the US CIA has been getting unrecorded off-the-books billions from the international narcotics trade, starting in 1948, when it perpetrated a coup in Thailand and installed there a brutal regime that helped establish the CIA’s off-the-books funding-system, as I had mentioned in a prior article, where I discussed US relations with Syria, in broader histrical context,

    starting in 1949, when the US CIA, under President Harry S. Truman, did its second coup d’etat, overthrowing a democratically elected progressive Government (the first having been Thailand 1948, where the CIA had installed an extremely barbaric dictator replacing the democratically elected government that had been headed by a staunch anti-fascist, and simultaneously set up the CIA’s off-the-books supplementary funding mechanism from the international narcotics-trade — a CIA practice which has continued till perhaps the present; and, furthermore, the infamous Nugan-Hand affair, which involved Thailand, definitely involved the CIA’s Michael Hand and William Colby; so, clearly, the CIA is funded off-the-books from the narcotics business, and America’s anti-narcotics laws thus are actually keeping narcotics-drug prices and resultant burglaries and CIA profits artificially high, funneling that illicit money into CIA coffers; and any method to defund the CIA down to its core intelligence-gathering function and to eliminate its coup-function, which is the function that took control in Thailand and Syria and then Iran and many more, would need to regulate — instead of to continue outlawing — drugs, which might be the main reason why it hasn’t yet been done: illegal drugs provide wealth to the CIA and other gang-lords, including some US Government officials).

    Another significant milestone in the development of the American elite’s plan to conquer Russia has been the overwhelming — more than 90% of the votes in both the US Senate and House — support for the imposition in 2012 of economic sanctions against Russia, to punish the Russian Government for the alleged 2009 murder of one alleged anti-corruption whistleblower in a Russian prison, Sergei Magnitsky — the Magnitsky Act was passed, and was the first set of economic sanctions against Russia. (The evidence that Magnitsky had been a ‘whistleblower’, and the evidence that he was ‘tortured’ in prison, and the evidence that he wasn’t instead the American Bill Browder’s tax-accountant who had helped Browder in a complex tax-evasion scheme that had defrauded the Russian Government of $232 million, are all themselves fraudulent, and even are easily verified as being fraudulent, but both the US Government, and the EU, ignored and continue to ignore all of it.) In order to have a ‘justification’ to attack Russia, an excuse is needed; and, since the ideological one — communism — ended in 1991, Russia needs to be at least a ‘dictatorship’; so, something such as the Magnitsky Act was necessary in order to get the military-industrial complex’s (MIC’s) PR ball rolling toward even-higher annual US ’defense’ spending. However, that excuse, being a ‘dictatorship’ (with elections that are at least as honest as America’s are), isn’t enough. Russia also needs to be officially declared to be an ‘aggressor’ — an aggressive dictatorship — such as to have grabbed portions of its adjoining country, Ukraine. So, America’s Obama regime secretly started in 2011 planning, and then in February 2014 it carried out, a coup against and overthrowing the democratically elected and Russia-friendly Government of Ukraine, and installed there a fascist regime to replace the one that had received 75% of the vote in the Crimean region of Ukraine, and 90% of the vote in the Donbass region of Ukraine, so that both regions refused to be ruled by the Obama-installed rabidly anti-Russian Ukrainian regime, and Russia helped both of those two separatist regions on its borders, and even protected and accepted Crimea’s referendum-vote of over 90% to rejoin Russia, of which Crimea had historically been a part until the Soviet dictator in 1954 arbitrarily transferred it to Ukraine. So, now, the US MIC has the excuses it wants, in order to place — and thus did place — its weapons and troops onto and near Russia’s borders, just a ten-minute missile flight-time to Moscow. 

    This plan is moving forward, but nobody can yet say whether, or even when, the US regime will invade. However, the US regime and its NATO allies now also have the excuses that Russia has been holding ‘aggressive’ military exercises near its borders ‘threatening’ NATO countries on its border that might invade Russia, and Western ‘news’media have alarmed their publics against Russia’s ‘aggressive’ moves after its having ‘stolen’ Crimea and ‘attacked’ Ukraine in Donbass. And then there is yet more Russian ‘aggression’ when Syria requested and received Russia’s military assistance against the US-backed jihadists who, since 2012, have poured, by the tens of thousands, from around the world, into Syria, to be led by the US-backed Al Qaeda there, to overthrow the Syrian Government, which is allied with Russia. So, that too (the Syrian war) could produce a war between the US and Russia; it could start over Syrian territory, where the US insists on regime-change, but claims only to be ‘fighting terrorists’ there. Of course, regardless of whether the invader of Syria (the US), or else the defender of Syria (Russia), wins, the loser in Syria, especially if it turns out to be the US invader (i.e., if Syria remains one country instead of breaking apart, and if Assad becomes re-elected as President there), could then use that superpower-defeat in Syria, as constituting an excuse to invade the winning superpower there.

    This would be WW III, starting in Syria, instead of in Ukraine. The US regime has set up those two scenarios. 

    1984 has come in the real world, but the declining and former leading superpower, America (“Oceania” in George Orwell’s uncannily prophetic description of the future that he prematurely set to occur in 1984), is apparently determined to stay ‘on top’, even if it’s the last thing that anybody does.

    Can it really be that if the world of the future won’t be led by America’s billionaires, then it won’t exist at all? Do they really demand “My way, or the highway” — really? Are America’s billionaires (despite any ‘humanitarian’ pretenses they individually so often hypocritically express, both in the fictionalized and in the real version) so stunningly united in their actual psychopathy (likewise in both versions — “Big Brother,” and today’s reality)? Thus far, it seems that they are. None of them — not a one of these people who have the financial resources to bring the world’s most pressing issue honestly to the American public — is speaking out against the others on it, and devoting major funds to exposing the others for their pumping lies against Russia, and to exposing the truths about such things as ABMs and the MIC. And collectively they’ve got the American public fooled into admiring the MIC (“the Military”) above all other US institutions. But whether America’s billionaires will carry their collective evil to the extreme, isn’t yet clear. They are the actual decision-makers regarding US Government policy, but they are playing their cards — as usual — privately and secretly, until their game (whatever it may turn out to be) will already be finished.

    Meanwhile, Russia and China each proceeds forward on its own priorities, which aren’t necessarily similar to those of the conquest-obsessed American Government.

  • The Flu Is Ravaging America This Year

    The U.S. has been gripped by its worst flu season in years.

    Experts have been surprised by the intensity of the current outbreak, which Statista’s Niall McCarthy notes, with the infection rate around eight percent, is as bad as the swine flu epidemic from 2009. During that season, 60.8 million people contracted the virus with 274,304 hospitalized and 12,469 dying.

    Even though that outbreak was bad with President Obama declaring it a national emergency, the 2014-2015 flu season was far more lethal. According to the Centers for Disease Control and Prevention (CDC), 710,000 people were hospitalized that season with 56,000 deaths recorded.

    Infographic: The Flu Is Ravaging The U.S. This Year  | Statista

    You will find more infographics at Statista

    The current situation is alarming with the hospitalization rate per 100,000 people already hitting 59.9 after 18 weeks, according to the CDC.

    It took 25 weeks for the hospitalization rate to reach that point during the deadly 2014-2015 season. During a mild year, an average of 12,000 Americans die due to the flu and judging by the current trend, 2017-18 is on course to surpass 2014-15 in lethality. More than 80 percent of flu deaths usually occur among the elderly and people with underlying health problems.

    This year, seemingly healthy individuals are being infected and hospitalized at higher rates than the historical average. The CDC has reported that 63 children have already died during the current season.

  • Paul Craig Roberts Sums Up The Result Of Mueller's Investigation: "Nothing!"

    Authored by Paul Craig Roberts,

    Robert Mueller discredited himself and his orchestrated Russiagate investigation last week (Friday, February 16, 2018) with his charges that 13 Russians and 3 Russian companies plotted to use social media to influence the 2016 election. Their intent, Mueller says, was to “sow discord in the US political system.”

    What pathetic results to come from a 9 month investigation!

    Note that the hyped Russian hacking of Hillary’s emails that we have heard about every day is nowhere to be found in Mueller’s charges. In its place there is “use of social media to sow discord.” I mean, really! Even if the charge were correct, considering the massive discord present in the last presidential election, with the Democrats calling Trump voters racist, sexist, homophobic white trash deplorables, how much discord could a measly 13 Russians add via social media?

    Note also that the Trump/Putin conspiracy is also not present in Mueller’s charges. Mueller’s charges say that the Russians’ plan to sow discord began in 2014, before there was any notion that Trump would run for president in 2017. The link of the plot to Putin is reduced to the allegation that the plot was financed by a St. Petersburg restaurateur whose connection to Putin is that his business once catered official dinners between Russian officials and foreign dignitaries.

    Finally, note that Mueller’s release of his charges in the face of dead news weekend means that Mueller knows that he has nothing to justify the massive propaganda onslaught against Trump for conspiring with Putin with which the presstitutes have regaled us. If the charges amounted to anything, they would have been released on Monday morning, and the presstitutes would have been handed by the FBI and CIA the news stories to file with their papers.

    How did the 13 Russians go about sowing discord? Are you ready for this?

    They held political rallies posing as Americans and they paid one person (unidentified) to build a cage aboard a flatbed pickup truck and another person to wear a costume portraying Hillary in prison clothes.

    How much money was lavished on this plot.

    A monthly budget of $1.2 million, a sum far too small to be seen in the $2.65 billion spent by Hillary and Trump and the $6.8 billion spent by all candidates for federal elective offices in the last election.

    Mueller claims to have emails from some of the 13 Russians. If the emails are authentic, they sound like a few kids pretending to friends that they are doing big things. One of the emails brags that the FBI got after them so they got busy covering up their tracks.

    House Speaker Paul Ryan has fallen for Mueller’s ruse.

    Remember what William Binney, the person who designed the NSA spy program, said: If any such Russiagate plot existed, NSA would have the evidence. No investigation would be necessary.

    One can conclude that Mueller and Rosenstein are fighting for their lives now that it is known that their spy requests for FISA court approval were based on deception. Mueller has produced this silly indictment of individuals who are not the Russian government in the hope that it will keep the attention off the FBI’s deception of the FISA court.

    As a special prosecutor Mueller has demonstrated the same lack of integrity that he demonstrated as FBI director.

  • Munich Conference: "For The First Time In Decades We Are Facing Threat Of Nuclear Conflict"

    Over the past fifty years, the Munich Security Conference (MSC) has traditionally reflected the current state of world military affairs. Each February, more than 450 senior decision-makers from around the globe descend into Munich, Germany, to discuss current and future security challenges.

    And while there have been times in recent years when the MSC demonstrated signs of hope and optimism, none of that was evident this year. This year’s motto “To the Brink – and Back?”- which seems to be an accurate portrayal of the current geopolitical situations in most regions. After several days of senior decision-makers bickering back and forth, the negativity in the atmosphere only means one thing: A global conflict between nuclear superpowers is lingering.

    “I was hoping when I opened this conference on Friday that, in concluding the conference, I would be able to say we can delete the question mark. In other words: ‘We are back from the brink,’” former German diplomat Wolfgang Ischinger said in closing remarks of the MSC. “I’m actually not sure we can say that,” he added.

    The dangers of nuclear proliferation and talk of a “dire” global security situation dominated the security conference: from the ongoing war in eastern Ukraine, to U.S. allegations of Russia’s election-meddling, to territorial disputes between ex-Soviet republics, and even discussions about the escalating tensions between Israel and Iran: geopolitical doom and gloom was not short in all conversations during the meeting.

    And, in the latest escalation, Bloomberg reports that the most fiery subject of the conference were the tensions surrounding Russia and the U.S over nuclear arms controls.

    Addressing a conference hall in Munich packed with dignitaries, UN Secretary-General Antonio Guterres warned of the risks emanating from North Korea’s nuclear activities, which have ratcheted up tensions between Pyongyang and Washington.

    “For the first time since the end of the Cold War, we are now facing a nuclear threat, a threat of a nuclear conflict,” Guterres told the gathering in the southern Bavarian city.

    Conference Chairman Wolfgang Ischinger opened the event by warning that the world has moved too close to a “major interstate conflict” and faces a “dire reality.”

    “We have too many unresolved crises, instabilities, and conflicts,” Ischinger warned.

    Russian Foreign Minister Sergei Lavrov fired a shot at President Trump’s new 74-page nuclear doctrine calling for a modernization of America’s nuclear arsenal.

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    U.S. National Security Adviser H.R. McMaster shot back at Lavrov’s statements defending the U.S. nuclear posture, which calls for more low-yield atomic bombs and outlines explicitly Russia and China are the primary sources of security concern for the Pentagon.

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    “We will not allow Russia any of the power to hold the populations of Europe hostage,” he declared Saturday in Munich, appearing on stage minutes after Russian Foreign Minister Sergei Lavrov sounded the alarm on the U.S. military-industrial complex expansion since the collapse of Communism.

    While the two countries have fulfilled the terms of another landmark nuclear weapons reduction treaty, New START, that accord expires in 2021 and there’s political pressure on President Donald Trump to let it expire because of the alleged Russian non-compliance with the INF treaty. Moscow in turn accuses Washington of itself breaking the intermediate-range pact.  So far, no formal negotiations are taking place on either issue.

    And as the world devolves to another potential nuclear arms race, Javier Solana, NATO’s former secretary-general, and Sigmar Gabriel, Germany’s acting foreign minister, expressed alarm: “The most likely theater for nuclear conflicts would once again be here, in the center of Europe,” Gabriel told the conference.

    Meanwhile Graham Allison, a Pentagon adviser under former U.S. President Ronald Reagan when the two superpowers were negotiating arms control, said he’s skeptical momentum will be found to revive START and the INF.

    Arms control was developed primarily to prevent the “insane” possibility that Russia and the U.S. would annihilate each other due to miscalculation or accident, despite not even wanting to go to war, said Allison, now a professor of government at Harvard University. “Those risks remain today.”

    Needless to say, a return to the nuclear arms race is the worst possible outcome:”according to Sergei Karaganov, a former Kremlin foreign policy adviser, the situation could get “much more dangerous” than during the Cuban missile crisis in 1962, when the world was on the brink of nuclear war.”

    Under New START, which followed from the 1991 START treaty and was signed in 2010, the Russian and U.S. arsenals are restricted to no more than 1,550 deployed strategic warheads on no more than 700 deployed strategic missiles and bombers.

    And, if that long-range missile pact isn’t prolonged and the INF collapses, “you have a situation where there are no limits on Russian and American nuclear forces,” said Steven Pifer, a former top State Department official and arms control expert, quoted by Bloomberg. In addition, Russia and the U.S. would stop exchanging data on each other’s nuclear arsenals and permitting regular inspections. “It would be less predictable, less secure, less stable,” Pifer said.

    Russia would then likely respond to any U.S. move to station land-based intermediate-range missiles in Europe by deploying similar missiles to target “all the bases where these weapons will be,” said Igor Korotchenko, director of the Center for Analysis of World Arms Trade in Moscow.

    “And the U.S. can’t stay safe over the ocean – we’ll create the same risk for the U.S. as they do for us in Europe,” he said.

    In short: a full blown nuclear arms race coupled with Cold War 2.0.

    * * *

    Some experts,  such as Thomas Graham, ex-White House adviser under George W. Bush, remain optimistic, and believe Russia and the U.S. will blink when faced with the prospect of stepping into a void without the security of arms control.

    Russia has proposed a 5-year extension to New START, to 2026, though it’s tying that to fixing complaints about the way the U.S. has complied with the treaty, the Interfax news service reported Feb. 16.

    Others are not: “The chances are diminishing every day,’’ said Konstantin Kosachyov, head of the foreign affairs committee of the Russian upper house of parliament.

    Ian Bremmer, the founder of the Eurasia Group told Handelsblatt that, “We’re in trouble, because, you know, pretty much every geopolitical conflict out there is escalating, none of them are getting fixed, and no one has any solutions. This was not a good meeting.”

  • "Their Objective Is To Create Fear…"

    Authored by Jeff Thomas via InternationalMan.com,

    The Social Justice trend has appeared in recent years, and has rapidly gained momentum.

    It appeared first on college campuses, where students accused a professor or, indeed, another student, of making a statement or using a word that was deemed socially unacceptable. The premise by the accuser was that a campus must be a safe space, where people should not be exposed to comments that may possibly make anyone feel demeaned or uncomfortable.

    The accusers have earned the name “snowflakes,” as they tend to melt down at the slightest provocation. However, the Social Justice trend has given snowflakes considerable power, a power that’s often used recklessly.

    Importantly, whether the offensive comment is correct or incorrect is not an issue. The “offense” is that the speaker has stated something that should not ever be mentioned, as it might upset the listener in some way. The “justice” that takes place is that one or more people file a formal complaint with a person or body that holds power over the speaker and demand that he be punished for his “wrongdoing.”

    This has led to teachers and professors being warned, suspended, or fired from their positions, based merely on the existence of a complaint. In addition, “offending” students have been warned, suspended, or expelled, again, without what might be regarded as due process.

    A related form of Social Justice is the vigilantism seeking to destroy those who are prominent. Former Miss Americas demanded that the entire board of the Miss America Pageant be dismissed for making disparaging remarks about pageant contestants. Several have been forced to resign in disgrace.

    And, of course, we’re seeing the rise of complaints against actors, politicians, and other prominent individuals regarding alleged sexual denigration of women, even if it’s merely verbal. In each case, witnesses are “bravely coming forward,” en masse, although they often were silent for decades (if, indeed, the individual incidents ever occurred at all).

    Whether a given individual has actually committed a crime or not seems immaterial in the new Social Justice trend. The focus is on vehement condemnation of an individual, usually by a host of others. Importantly, regardless of what process is used to prosecute (or persecute) those accused, a general assumption of the Social Justice trend is that, once someone is accused, he’s guilty and punishment must take place.

    But, in fact, this trend is not new. Rabid groups of accusers appear throughout history, generally during times of existing social tension.

    The Salem Witch Trials: 1692-1693

    In 1692, several young girls claimed to be possessed by witches and group hysteria ensued. Some 150 men, women and children were ultimately accused and nineteen were hanged. Governor William Phips ordered that an end be put to the show trials in 1693. In the process, his wife was accused of being a witch.

    The Nazi Sondergerichte: 1933-1945

    In Nazi Germany, kangaroo courts were held for those deemed to have committed “political crimes,” resulting in 12,000 deaths. Germans were encouraged to report on each other. (If your neighbor annoyed you, a good recompense was to report him as being disloyal.) The persecution only ended when Nazi Germany was defeated.

    The Great Soviet Purge: 1936-1938

    Joseph Stalin ran many successful purges against clergymen, wealthy peasants, and oppositionists, but the foremost of them was the Great Purge, which included anyone with a perceived stain on his record. Denunciation was encouraged. The purge was highly successful and, although the show trials ended in 1938, the threat of accusation remained until the fall of the Soviet Union in 1991.

    The Red Scare – McCarthyism: 1947-1956

    US Senator McCarthy accused countless people in Hollywood of being communists. Thousands lost their jobs. McCarthyism ended when he accused the Protestant Church as being a communist support group. He also attacked the US Army as having communists within it. The Army lashed back, exposing McCarthy as cruel, manipulative, and reckless and the public fervor against communists subsided.

    The Spanish Inquisition: 1478-1834

    The Spanish Inquisition lasted for over 350 years. It was originally conceived by King Ferdinand II as a way to expose and punish heretics and suppress religious dissent.

    It was preceded by the French Inquisition and spread to other countries in Europe. At its height, it investigated, prosecuted, and sometimes burned alive some 150,000 people. The last execution was in 1826 – for teaching deist principles (deism, not Christianity, was the predominant religious belief of America’s founding fathers).

    Crimes committed included blasphemy, witchcraft, immorality, and behavior unbecoming to a woman. (A woman’s role was seen as being limited to raising a family.) False denunciations were frequent and defendants were only rarely acquitted. The auto-da-fé, or public punishment, including groups of people being burned alive, provided an effective demonstration and satisfied the public’s desire for spectacle.

    The inquisition finally ended when King Ferdinand VII and others came to regard the church’s power as being a threat to the government’s power and abolished it.

    Others that used the Social Justice approach to great effect were China, Hungary, Romania, Czechoslovakia, Egypt (as recently as 2014), and Turkey (as recently as 2016).

    And there are many more examples, far too numerous to mention.

    In 1970, Monty Python did a series of sketches in which Michael Palin plays a cleric, saying, “Nobody expects the Spanish Inquisition.”

    And, of course, this is true. The Spanish Inquisition, the Salem witch trials, the McCarthy hearings, and the present Social Justice trend, are so over-the-top that their very existence is clearly absurd.

    However, historically, whether it be a political leader like Stalin or Hitler, or a religious organisation, like the Catholic Church, or the present-day, self-styled “Social Justice Warriors,” such campaigns begin through the desire for power over others. What they have in common is that anyone can be targeted, group accusations carry greater weight than individual accusations, and the punishment invariably exceeds the level of the offense, if, indeed, there is any unlawful offense at all.

    The objective is to create fear. The initiative begins with finger-pointing and mild punishment, such as the loss of a job. But it evolves into a circus that often grows to include more serious punishment, sometimes including execution.

    Vigilantism grows out of troubled periods when frustrations and resentment run high. Because it’s emotionally driven, not logic-driven, it almost invariably morphs into irrational victimisation… and is always destructive in nature.

    *  *  *

    Fortunately, there are practical ways to escape the fallout of dangerous groupthink. Doug Casey has turned it into an art form. Find out more in Doug’s special report, Getting Out of Dodge.

  • Chinese Official Tackled By US Secret Service Agent In Nuclear Football Scuffle

    A Chinese security official was tackled by a US Secret Service agent in an incident involving the U.S. “nuclear football” during President Donald Trump’s visit to Beijing last year, according to a Sunday report by Axios.

    The “football” or “president’s emergency satchel” is an 45-lb aluminum-framed Zero Halliburton briefcase inside a black leather “jacket,” in which a plastic card with the nuclear launch codes called the “nuclear biscuit” can be found. It also contains the procedures for the Emergency Broadcast System, a “black book” with a “menu” of pre-planned strike options, and a book of classified bunkers where the President can be sheltered. The football is always carried by a military aide who is required to remain nearby the President at all times.

    Five people familiar with the matter described what went down to Axios’s Jonathan Swan:

    • When the U.S. military aide carrying the nuclear football entered the Great Hall, Chinese security officials blocked his entry.
    • A U.S. official hurried into the adjoining room and told Kelly what was happening. Kelly rushed over and told the U.S. officials to keep walking — “We’re moving in,” he said — and the Americans all started moving.
    • Then there was a commotion. A Chinese security official grabbed Kelly, and Kelly shoved the man’s hand off of his body. Then a U.S. Secret Service agent grabbed the Chinese security official and tackled him to the ground.

    The whole incident was reportedly over in a flash, and U.S. officials were told to keep quiet about it (good job guys). 

    Trump’s team reportedly conducted a routine security briefing with the Chinese prior to their visit to Beijing, so there was either a breakdown in communications on the Chinese end, or the scuffle was intentional.

    At no point did the Chinese take possession of the nuclear football, nor even touch the briefcase – and the head of the Chinese security detail is said to have apologized to the Americans following the incident.

  • Florida's 'Teacher Of The Year' Bluntly Explains Why School Violence Is Out Of Control

    Authored by Daisy Luther via The Organic Prepper blog,

    Kelly Guthrie Raley has been teaching for 20 years and currently educates kids at Eustis Middle School in Lake County, Florida. Just last month she was named the 2017-2018 Teacher of the Year.

    The day after the horrific shooting that took place at Marjorie Stoneman Douglas High School in Parkland, Florida, she posted a rant on Facebook that has since gone viral. In the post, she talked about parental responsibility, compassion, and respect…and more than 823,000 people have “liked” the post and agreed with it, while more than 649,000 have shared it with others.

    Here’s what Mrs. Raley had to say.

    Okay, I’ll be the bad guy and say what no one else is brave enough to say, but wants to say. I’ll take all the criticism and attacks from everyone because you know what? I’m a TEACHER. I live this life daily. And I wouldn’t do anything else! But I also know daily I could end up in an active shooter situation.

    Until we, as a country, are willing to get serious and talk about mental health issues, lack of available care for the mental health issues, lack of discipline in the home, horrendous lack of parental support when the schools are trying to control horrible behavior at school (oh no! Not MY KID. What did YOU do to cause my kid to react that way?), lack of moral values, and yes, I’ll say it-violent video games that take away all sensitivity to ANY compassion for others’ lives, as well as reality TV that makes it commonplace for people to constantly scream up in each others’ faces and not value any other person but themselves, we will have a gun problem in school. Our kids don’t understand the permanency of death anymore!!!

    I grew up with guns. Everyone knows that. But you know what? My parents NEVER supported any bad behavior from me. I was terrified of doing something bad at school, as I would have not had a life until I corrected the problem and straightened my ass out. My parents invaded my life. They knew where I was ALL the time. They made me have a curfew. They made me wake them up when I got home. They made me respect their rules. They had full control of their house, and at any time could and would go through every inch of my bedroom, backpack, pockets, anything! Parents: it’s time to STEP UP! Be the parent that actually gives a crap! Be the annoying mom that pries and knows what your kid is doing. STOP being their friend. They have enough “friends” at school. Be their parent. Being the “cool mom” means not a damn thing when either your kid is dead or your kid kills other people because they were allowed to have their space and privacy in YOUR HOME. I’ll say it again. My home was filled with guns growing up. For God’s sake, my daddy was an 82nd Airborne Ranger who lost half his face serving our country. But you know what? I never dreamed of shooting anyone with his guns. I never dreamed of taking one! I was taught respect for human life, compassion, rules, common decency, and most of all, I was taught that until I moved out, my life and bedroom wasn’t mine…it was theirs. And they were going to know what was happening because they loved me and wanted the best for me.

    There. Say that I’m a horrible person. I didn’t bring up gun control, and I will refuse to debate it with anyone. This post wasn’t about gun control. This was me, loving the crap out of people and wanting the best for them. This was about my school babies and knowing that God created each one for greatness, and just wanting them to reach their futures. It’s about 20 years ago this year I started my teaching career. Violence was not this bad 20 years ago. Lack of compassion wasn’t this bad 20 years ago. And God knows 20 years ago that I wasn’t afraid daily to call a parent because I KNEW that 9 out of 10 would cuss me out, tell me to go to Hell, call the news on me, call the school board on me, or post all over FaceBook about me because I called to let them know what their child chose to do at school…because they are a NORMAL kid!!!!!

    Those 17 lives mattered. When are we going to take our own responsibility seriously?

    What do you think?

    I would have loved for my children to have been in Mrs. Raley’s class because not only is it obvious that she really cares, but also that she has an abundance of common sense, something that has been notably absent in our politically correct school systems.

    I raised my kids in much the same way Mrs. Raley refers to having grown up: with rules, curfews, and consequences for their actions. My girls weren’t totally sheltered – they saw violence on television and in movies – but we discussed it. I taught them empathy for other human beings and all creatures. They too, have had access to guns, and know how to use them, but I’ve never once been worried that they’d use them on another human being for any other reason than self-defense in a life-or-death situation.

    Like every other parent, I now worry every time my daughters walk out to door to attend their college classes. Because, honestly, it can happen anywhere.

    But I sincerely agree with Mrs. Raley.

    Guns aren’t the problem. The current culture is the problem.

Digest powered by RSS Digest

Feb 19

Today’s News 19th February 2018

  • The US Is Executing A Global War Plan

    Authored by Finian Cunningham via The Strategic Culture Foundation,

    Washington is moving inevitably on a global war plan. That’s the grim conclusion one has to draw from three unfolding war scenarios.

    Ultimately, it’s about American imperialism trying to assert hegemony over the international order for the benefit of US capitalism. Russia and China are prime targets for this global assault.

    The three unfolding war scenarios are seen in Syria, North Korea and Ukraine.

    These are not disparate, disassociated conflicts. They are inter-related expressions of the American war plans. War plans which involve the moving of strategic military power into position.

    Last week’s massacre of over 100 Syrian government forces by American warplanes near Deir ez-Zor was an audacious overt assault by the US on the Syrian state. The US, along with other NATO allies, have been up to now waging a seven-year proxy war for regime change against Russia’s ally, President Assad. The massacre last week was certainly not the first time that US forces, illegally present in Syria, have attacked the Syrian army. But it seems clearer than ever now that American forces are operating on the overt agenda for regime change. US troops are transparently acting like an occupation army, challenging Russia and its legally mandated support for the Syrian state.

    Heightening international concerns are multiple reports that Russian military contractors were among the casualties in the US-led air strike near Deir ez-Zor last week.

    Regarding North Korea, Washington is brazenly sabotaging diplomatic efforts underway between the respective Korean leaderships in Pyongyang and Seoul. While this inter-Korean dialogue has been picking up positive momentum, the US has all the while been positioning nuclear-capable B-52 and B-2 bombers in the region, along with at least three aircraft carriers. The B-2s are also reportedly armed with 14-tonne bunker-buster bombs – the largest non-nuclear warhead in the American arsenal, designed to destroy North Korean underground missile silos and “decapitate” the Pyongyang leadership of Kim Jong-un.

    American vice-president Mike Pence, while attending the Winter Olympics in South Korea, opening last week, delivered a blunt war message. He said that the recent detente between North Korea and US ally South Korea will come to an end as “soon as the Olympic flame is extinguished” – when the games close later this month. This US policy of belligerence completely upends Russia and China’s efforts to facilitate inter-Korean peace diplomacy.

    Meanwhile, the situation in Eastern Ukraine looks decidedly grim for an imminent US-led invasion of the breakaway Donbas region. Pentagon military inspectors have in the past week reportedly arrived along the Contact Zone that separates the US-backed Kiev regime forces and the pro-Russian separatists of the Donetsk and Lugansk People’s Republics. Donetsk’s military commander Eduard Basurin warned that the arrival of Pentagon and other NATO military advisors from Britain and Canada indicate that US-armed Kiev forces are readying for a renewed assault on the Donbas ethnic Russian population.

    Even the normally complacent observers of the Organization for Security and Cooperation in Europe (OSCE), charged with monitoring a nominal ceasefire along the Contact Zone, have lately begun reporting serious advancement of heavy weapons by the Kiev forces – in violation of the 2015 Minsk Peace Accord.

    If the US-led Kiev forces proceed with the anticipated offensive next month in Donbas there are real fears for extreme civilian casualties. Such “ethnic cleansing” of Russian people by Kiev regime forces that openly espouse Neo-Nazi ideology would mostly likely precipitate a large-scale intervention by Moscow as a matter of humanitarian defense. Perhaps that is what the US planners are wagering on, which can then be portrayed by the dutiful Western news media as “another Russian aggression”.

    US-based political analyst Randy Martin says: “It is undeniable that Washington is on a war footing in three global scenarios. Preparation for war is in fact war.”

    He added:

    “You have to also consider the latest Nuclear Posture Review published by the Pentagon earlier this month. The Pentagon is openly declaring that it views Russia and China as targets, and that it is willing to use nuclear force to contest conventional wars and what the Pentagon deems to be asymmetric aggression.

    Martin says that it is not clear at this stage what Washington wants exactly.

    “It is of course all about seeking global domination which is long-consistent with American imperialism as expressed for example in the Wolfowitz Doctrine following the end of the Cold War,” says the analyst.

    But what does Washington want specifically from Russia and China is the question. It is evidently using the threat of war and aggression as a lever.

    But it is not clear what would placate Washington.

    Perhaps regime change in Russia where President Putin is ousted by a deferential pro-Western figure.

    Perhaps Russia and China giving up their plans of Eurasian economic integration and abandoning their plans to drop the American dollar in trade relations.

    One thing, however, seems abundantly clear. The US is embarking on a global war plan, as can be discerned from the grave developments unfolding in Syria, the Korean Peninsula and Ukraine. Each scenario can be understood as a pressure point on Moscow or China to in some way acquiesce to American ambitions for global dominance.

    To be sure, Washington is being reckless and criminal in its conduct, violating the UN Charter and countless other international laws. It is brazenly acting like a rogue regime without the slightest hint of shame.

    Still, Russia and China are hardly likely to capitulate. Simply because the US ambition of unipolar hegemony is impossible to achieve. The post-Second World Order, which Washington was able to dominate for nearly seven decades, is becoming obsolete as the international order naturally transforms into a multipolar configuration.

    When Washington accuses Moscow and Beijing of “trying to alter the international order to their advantage” what the American rulers are tacitly admitting is their anxiety that the days of US hegemony are on the wane. Russia and China are not doing anything illegitimate. It is simply a fact of historical evolution.

    So, ultimately, Washington’s war plans are futile in what they are trying to achieve by criminal coercion. Those plans cannot reverse history. But, demonically, those plans could obliterate the future of the planet.

    The world is again on a precipice as it was before on the eve of the First and Second World Wars. Capitalism, imperialism and fascism are again center stage.

    As analyst Randy Martin puts it:

    “The American rulers are coming out of the closet to show their true naked nature of wanting to wage war on the world. Their supremacist, militarist ideology is, incontrovertibly, fascism in action.”

  • Peter Thiel's Move To LA Is Inspiring A "Conservative Renaissance" In The City

    Peter Thiel isn’t the only conservative to flee the Bay Area over its increasingly systematic repression of ideas and values that are incompatible with the community’s commitment to identity politics, multiculturalism and other liberal economic and social values.

    Per the Wall Street Journal, other conservatives in the tech community have said they plan to leave the area because of the proliferation of groupthink and homogeneity, which they feel are making it a worse place to live and work.

    Tom McInerney, an angel investors who moved to Los Angeles a decade ago – and is now being followed their by Thiel – said Trump’s election proved how out of touch the Bay Area is.

    “I think the politics of San Francisco have gotten a little bit crazy,” said Tom McInerney, an angel investor who moved a decade ago to Los Angeles from the Bay Area.

    “The Trump election was super polarizing and it definitely illustrated – and Peter [Thiel] said this – how out of touch Silicon Valley was,” said Mr. McInerney, who describes himself as fiscally conservative, but socially liberal.

    Even some people who wouldn’t describe themselves as committed conservatives are finding the atmosphere in the Bay Area hostile. Tim Ferriss, the tech investor and best-selling author of the “4 Hour Workweek,” moved to Austin, Texas, in December, after living in the Bay Area for 17 years for reasons similar to Thiel’s.

    Thiel, who backed Trump’s presidential campaign but describes himself as a libertarian, will move into the home he already owns in Hollywood and shift Thiel Capital and Thiel Foundation into new headquarters in the City of Angels, as we pointed out last week. It’s also been rumored that Thiel is considering quitting the board of Facebook – a company that represents one of Thiel’s most lucrative investments, though he also reportedly made a killing on the long-vol trade recently.

    And as the Guardian adds, Thiel’s decision to leave for LA is rallying the city’s small community of conservatives, who are increasingly seeking to market LA as a hospitable home for conservative media brands.

    The Guardian even went so far to declare Thiel’s move the inspiration for a “conservative renaissance” in LA.

    Indeed, Thiel is reportedly working to start his own media company – a company that he will eventually build to rival Fox.

    Thiel

    Thiel’s decision to move to LA comes at a time when conservatives in the Bay Area are feeling increasingly squeezed by what they perceive to be liberal groupthink. Google’s decision to fire James Damore for publishing a memo arguing against the company’s decision to pursue diversity in hiring was a watershed moment for both Thiel and the small but vibrant conservative contingent within tech.

    “Silicon Valley is a one-party state,” said Thiel at Stanford University last month. “That’s when you get in trouble politically in our society, when you’re all in one side.”

    The firing of James Damore by Google in August last year amplified conservative fears that Silicon Valley companies had become ideological echo chambers intolerant to their viewpoints.

    Thiel’s decision to support Trump was unpopular among many of his progressive peers in the technology industry, with some calling for him to be dumped from the Facebook board. Although the social network’s CEO Mark Zuckerberg disagreed, the Journal reports that Thiel – one of Facebook’s earliest investors – has discussed resigning.

    “Silicon Valley has become less tolerant and that’s very troubling,” said Garrett Johnson, co-founder of conservative think tank Lincoln Network. “There’s a trend of monoculture and closed-mindedness.”

    Unsurprisingly, few in Silicon Valley are sad to see him leave, with one community “activist” quoted by the Guardian jokingly questioning why Thiel hasn’t retreated all the way to his soon-to-be adopted home of New Zealand.

    Maciej Cegłowski, a prominent San Francisco web developer and leader of the grass-roots activist group Tech Solidarity, agreed, but expressed surprise that “in his search for safety” Thiel wasn’t fleeing to his adoptive home of New Zealand.

    “They were so eager to make him a citizen, and he’s already got a bunker there,” he said.

    “Overall, I believe him leaving the Bay Area is a win. More young blood for the rest of us,” he added, in reference to Thiel’s alleged interest in injecting himself with young people’s blood.

    But as anybody who has traveled to LA can attest, there’s plenty of young blood to go around…

  • Kim Dotcom: "Let Me Assure You, The DNC Hack Wasn’t Even A Hack"

    Kim Dotcom has once again chimed in on the DNC hack, following a Sunday morning tweet from President Trump clarifying his previous comments on Russian meddling in the 2016 election. 

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    In response, Dotcom tweeted “Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why,” adding “Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!” alluding of course to Trump’s “400 pound genius” comment. 

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    Dotcom’s assertion is backed up by an analysis done last year by a researcher who goes by the name Forensicator, who determined that the DNC files were copied at 22.6 MB/s – a speed virtually impossible to achieve from halfway around the world, much less over a local network – yet a speed typical of file transfers to a memory stick.

    The local transfer theory of course blows the Russian hacking narrative out of the water, lending credibility to the theory that the DNC “hack” was in fact an inside job, potentially implicating late DNC IT staffer, Seth Rich.

    John Podesta’s email was allegely successfully “hacked” (he fell victim to a phishing scam) in March 2016, while the DNC reported suspicious activity (the suspected Seth Rich file transfer) in late April, 2016 according to the Washington Post.

    On May 18, 2017, Dotcom proposed that if Congress includes the Seth Rich investigation in their Russia probe, he would provide written testimony with evidence that Seth Rich was WikiLeaks’ source.

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    On May 19 2017 Dotcom tweeted “I knew Seth Rich. I was involved”

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    Three days later, Dotcom again released a guarded statement saying “I KNOW THAT SETH RICH WAS INVOLVED IN THE DNC LEAK,” adding:

    “I have consulted with my lawyers. I accept that my full statement should be provided to the authorities and I am prepared to do that so that there can be a full investigation. My lawyers will speak with the authorities regarding the proper process.

    If my evidence is required to be given in the United States I would be prepared to do so if appropriate arrangements are made. I would need a guarantee from Special Counsel Mueller, on behalf of the United States, of safe passage from New Zealand to the United States and back. In the coming days we will be communicating with the appropriate authorities to make the necessary arrangements. In the meantime, I will make no further comment.”

    Dotcom knew.

    While one could simply write off Dotcom’s claims as an attention seeking stunt, he made several comments and a series of tweets hinting at the upcoming email releases prior to both the WikiLeaks dumps as well as the publication of the hacked DNC emails to a website known as “DCLeaks.” 

    In a May 14, 2015 Bloomberg article entitled “Kim Dotcom: Julian Assange Will Be Hillary Clinton’s Worst Nightmare In 2016“: “I have to say it’s probably more Julian,” who threatens Hillary, Dotcom said. “But I’m aware of some of the things that are going to be roadblocks for her.”

    Two days later, Dotcom tweeted this: 

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    Around two months later, Kim asks a provocative question

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    Two weeks after that, Dotcom then tweeted “Mishandling classified info is a crime. When Hillary’s emails eventually pop up on the internet who’s going to jail?” 

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    It should thus be fairly obvious to anyone that Dotcom was somehow involved, and therefore any evidence he claims to have, should be taken seriously as part of Mueller’s investigation. Instead, as Dotcom tweeted, “Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied.

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  • Only 73% OF Americans Are "Likely To Adhere To The Law"

    Many factors influence how effectively a government is able to uphold the rule of law and some of them include access to courts, lack of corruption, effective policing and institutional competence.

    While some governments are able to combine these efficiently, resulting in strong adherence to the law, Statista’s Niall McCarthy notes that others tend to struggle.

    Research from The World Justice Project measured rule of law adherence in 113 countries around the world, focusing on eight factors: constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice, and criminal justice.

    Infographic: Where People Are Most & Least Likely To Adhere To The Law  | Statista

    You will find more infographics at Statista

    Since 2016, 34 percent of countries saw their rule of law decline, 20 percent improved and 37 percent stayed the same.

    Western Europe dominates the top of the ranking with Scandinavia first in the world for adherence to the law. Denmark and Norway were top with a score of 0.89, followed by Finland and Sweden with 0.87 and 0.86 respectively.

    Outside Europe, New Zealand, Canada and Australia also made the top-10 while the U.S. came 19th with a score of 0.73.

    Venezuela is rock bottom of the ranking with a score of 0.29. The bottom-five is rounded off by Cambodia, Afghanistan, Egypt and Cameroon. Since 2016, The Philippines was the biggest mover, falling 19 places to 88th.

    The biggest improvers were Burkina Faso, Kazakhstan and Sri Lanka with each nation moving up nine positions since the last edition of the index was published.

  • China Threatens To Retaliate If US Imposes Metal Tariffs

    It’s not like anyone expected otherwise.

    Just hours after the Trump administration received a green light from the Commerce Department to impose steep tariffs on aluminium and steel imports on national security grounds across the board, but especially on China and Russian, China threatened with immediately retaliation in the latest escalation of the growing trade war between the two superpowers.

    In an unexpected announcement on Friday, commerce secretary Wilbur Ross recommended a possible global tariff of at least 24% on imports of steel and 7.7% on aluminum after investigations into trade in both metals determined that import surges seen in recent years “threaten to impair [US] national security.”

    Responding to the unprecedented Commerce recommendation which many interpreted as the first official salvo in global trade wars, Wang Hejun – chief of the trade remedy and investigation bureau at China’s Ministry of Commerce – said imposing tariffs on such grounds was reckless.

    Quoted by the FT,  he said that “The spectrum of national security is very broad and without a clear definition it could easily be abused,” and added that “if the final decision from the US hurts China’s interests, we will certainly take necessary measures to protect our legitimate rights.”

    For now the threat of “nuclear” trade war seems to be contained: analysts say Beijing is wary of escalating any trade disputes for fear of damaging its export-dependent economy, and so will focus any retaliation on specific sectors — most likely particular agricultural goods such as soybeans, for which China is the US’ largest export market. Earlier this month, Beijing launched an anti-dumping investigation into US exports of sorghum, an animal feed.

    For the moment I think China will just put out harsher rhetoric,” said Bo Zhuang, an economist at consultancy Trusted Sources. “Agricultural sector retaliation is more likely since (China’s) food price inflation is low. The next possible step will be going on further with a soybean and corn investigation.”

    Still, expectations of only a “cold” trade war may soon be dashed, as Friday’s action shows that trade hardliners in the Trump administration are eager to take action against China “after months of internal debate” according to the FT.

    One option presented by the commerce department on Friday was a targeted tax on steel and aluminium imports from China and other countries like Brazil and Vietnam. A third option would impose quotas to reduce metals imports from all countries to far below the level of 2017.

    But the recommendations illustrate how Mr Trump’s desire to hit China, which the US steel industry blames for a collapse in metal prices in recent years, may result in collateral damage for US allies and invite retaliation.

    Meanwhile, as China plans its response, European officials in Brussels are already drafting their retaliatory measures aimed at politically sensitive US products like Kentucky bourbon and Wisconsin dairy products, which will be implemented if Trump opts for a global quota or tariff system.

    As a reminder, Trump has until April to decide whether to adopt any of the recommendations, Ross said. The long-awaited results of the “Section 232” investigations into aluminium and steel imports caused shares in major US producers to rise sharply on Wall Street on Friday, while companies in the materials sector slumped.

    In what appeared to be a jusitification of imminent trade wars, Trump said he was convinced that imposing tariffs would “create a lot of jobs” during a meeting with members of Congress, and dismissed warnings that such measures in the past had hurt more than they had helped by causing higher costs for many companies.

    “I want to keep prices down but I also want to make sure that we have a steel industry and an aluminium industry and we do need that for national defence,” Mr Trump said. “If we ever have a conflict we don’t want to be buying steel [from] a country we are fighting.”

    In its report, the commerce department stated that Canada is the top supplier of both metals to the US, suggesting the NAFTA member may – ironically – suffer the most from any new protectionist measures. The northern US neighbour has long been treated as part of the US defense industrial base along with countries like the UK and Australia. But whether Canada or any other allies would be exempted from the proposed tariffs remains unclear, according to the FT.

    As for China, it was “only” the fourth-largest supplier of aluminum to the US in 2017, and accounted for less than 10% of imports; it was also the 11th-largest steel supplier over the same period, with a roughly 2% share of US imports.

    The US commerce department argued that the rapid rise in China’s production of steel and aluminium in recent years — it now produces more than half of global output of both metals — has depressed international prices.

    While the threat of a sharp escalation in trade tensions remains low for now, in commentary from SMBC Nikko Securities, the bank said that the proposal to restrict steel imports “could lead to a chain of higher tariffs imposed by other nations” resulting in dramatic imbalances in global commodity trade and prices.

    While the brokerage expects direct impact on Japanese steel industry to be limited, it admits it is difficult to gauge the effect on international markets given details yet to be decided, and adds that the risk is that other countries shipping steel to U.S. begin selling cheaply on Japan’s export markets; in effect a sharp escalation to trade wars in which countries not targeted by the US scramble to take away market share from dominant trade partners.

  • "Now, The Reckoning Comes" – The Media-Created Russia-Collusion Story Collapses

    Authored by Lee Smith via TheFederalist.com,

    The press has played an active role in the Trump-Russia collusion story since its inception. It helped birth it…

    Half the country wants to know why the press won’t cover the growing scandal now implicating the Federal Bureau of Investigation and Department of Justice, and threatening to reach the State Department, Central Intelligence Agency, and perhaps even the Obama White House.

    After all, the release last week of a less-redacted version of Sens. Charles Grassley and Lindsey Graham’s January 4 letter showed that the FBI secured a Foreign Intelligence Surveillance Act warrant to search the communications of a Trump campaign adviser based on a piece of opposition research paid for by the Clinton campaign and the Democratic National Committee. The Fourth Amendment rights of an American citizen were violated to allow one political party to spy on another.

    If the press did its job and reported the facts, the argument goes, then it wouldn’t just be Republicans and Trump supporters demanding accountability and justice. Americans across the political spectrum would understand the nature and extent of the abuses and crimes touching not just on one political party and its presidential candidate but the rights of every American.

    That’s all true, but irrelevant. The reasons the press won’t cover the story are suggested in the Graham-Grassley letter itself.

    Steele Was a Media Informant

    The letter details how Christopher Steele, the former British spy who allegedly authored the documents claiming ties between the Trump campaign and Russia, told the FBI he wasn’t talking to the press about his investigation. In a British court, however, Steele acknowledged briefing several media organizations on the material in his dossier.

    According to the British court documents, Steele briefed the New York Times, Washington Post, Yahoo! News, The New Yorker, and CNN. In October, he talked to Mother Jones reporter David Corn by Skype. It was Corn’s October 31 article anonymously sourced to Steele that alerted the FBI their informant was speaking to the press. Grassley and Graham referred Steele to the Department of Justice for a criminal investigation because he lied to the FBI.

    The list of media outfits and journalists made aware of Steele’s investigations is extensive. Reuters reported that it, too, was briefed on the dossier, and while it refrained from reporting on it before the election, its national security reporter Mark Hosenball became an advocate of the dossier’s findings after November 2016.

    BBC’s Paul Wood wrote in January 2017 that he was briefed on the dossier a week before the election. Newsweek’s Kurt Eichenwald likely saw Steele’s work around the same time, because he published an article days before the election based on a “Western intelligence” source (i.e., Steele) who cited names and data points that could only come from the DNC- and Clinton-funded opposition research.

    A line from the Grassley-Graham letter points to an even larger circle of media outfits that appear to have been in contact with either Steele or Fusion GPS, the Washington DC firm that contracted him for the opposition research the Clinton campaign and Democratic National Committee commissioned. “During the summer of 2016,” the Grassley-Graham letter reads, “reports of some of the dossier allegations began circulating among reporters and people involved in Russian issues.”

    Planting the Carter Page Story

    Indeed, it looks like Steele and Fusion GPS founder Glenn Simpson may have persuaded a number of major foreign policy and national security writers in Washington and New York that Trump and his team were in league with Russian President Vladimir Putin. Those journalists include New Yorker editor David Remnick, Atlantic editor Jeffrey Goldberg, former New Republic editor Franklin Foer, and Washington Post columnist Anne Applebaum.

    A Foer story published in Slate on July 4, 2016 appears to be central. Titled “Putin’s Puppet,” Foer’s piece argues the Trump campaign was overly Russia-friendly. Foer discusses Trump’s team, including campaign convention manager Paul Manafort, who worked with former Ukrainian president Victor Yanukovich, a Putin ally; and Carter Page, who, Foer wrote, “advised the state-controlled natural gas giant Gazprom and helped it attract Western investors.”

    That’s how Page described himself in a March 2016 Bloomberg interview. But as Julia Ioffe reported in a September 23, 2016 Politico article, Page was a mid-level executive at Merrill Lynch in Moscow who played no role in any of the big deals he boasted about. As Ioffe shows, almost no one in Moscow remembered Page. Until Trump read his name off a piece of paper handed to him during a March interview with the Washington Post, almost no one in the Washington foreign policy world had heard of Page either.

    So what got Foer interested in Page? Were Steele and Simpson already briefing reporters on their opposition research into the Trump campaign? (Another Foer story for Slate, an October 31, 2016 article about the Trump organization’s computer servers “pinging” a Russian bank, was reportedly “pushed” to him by Fusion GPS.) Page and Manafort are the protagonists of the Steele dossier, the former one of the latter’s intermediaries with Russian officials and associates of Putin. Page’s July 7 speech in Moscow attracted wide U.S. media coverage, but Foer’s article published several days earlier.

    The Slate article, then, looks like the predicate for allegations against Page made in the dossier after his July Russia trip. For instance, according to Steele’s investigations, Page was offered a 19 percent stake in Rosneft, one of the world’s energy giants, in exchange for help repealing sanctions related to Russia’s 2014 incursion into Ukraine.

    Building an Echo Chamber of Opposition Research

    Many have noted the absurdity that the FISA warrant on Page was chiefly based, according to a House intelligence committee memo, on the dossier and Michael Isikoff’s September 23, 2016 news story also based on the dossier. But much of the Russiagate campaign was conducted in this circular manner. Steele and Simpson built an echo chamber with their opposition research, parts of the law enforcement and intelligence communities, and the press all reinforcing one another. Plant an item in the open air and watch it grow—like Page’s role in the Trump campaign.

    Why else was Foer or anyone so interested in Page? Why was Page’s Moscow speech so closely watched and widely covered? According to the Washington Post, Page “chided” American policymakers for an “often-hypocritical focus on democratization, inequality, corruption and regime change” in its dealings with Russia, China, and Central Asia.

    As peculiar as it may have sounded for a graduate of the Naval Academy to cast a skeptical eye on American exceptionalism, Page’s speech could hardly have struck the policy establishment as shocking, or even novel. They’d been hearing versions of it for the last eight years from the president of the United States.

    In President Obama’s first speech before the United Nations General Assembly (UNGA), on September 23, 2009, he insisted that no country, least of all America, has the right to tell other countries how to organize their political lives. “Democracy cannot be imposed on any nation from the outside,” said Obama. “Each society must search for its own path, and no path is perfect. Each country will pursue a path rooted in the culture of its people and in its past traditions.”

    Obama sounded even more wary of American leadership on his way out of office eight years later. In his 2016 UNGA speech, the 2009 Nobel laureate said: “I do not think that America can — or should — impose our system of government on other countries.” Obama was addressing not just foreign nations but perhaps more pointedly his domestic political rivals.

    In 2008 Obama campaigned against the Iraq War and the Republican policymakers who toppled Saddam Hussein to remake Iraq as a democracy. All during his presidency, Obama rebuffed critics who petitioned the administration to send arms or troops to advance U.S. interests and values abroad, most notably in Ukraine and Syria.

    In 2016, it was Trump who ran against the Republican foreign policy establishment—which is why hundreds of GOP policymakers and foreign policy intellectuals signed two letters distancing themselves from the party’s candidate. The thin Republican bench of foreign policy experts available to Trump is a big reason why he named the virtually unknown Page to his team. So why was it any surprise that Page sounded like the Republican candidate, who sounded like the Democratic president?

    Why Didn’t the Left Like Obama’s Ideas from a Republican?

    On the Right, many national security and foreign policy writers like me heard and were worried by the clear echoes of Obama’s policies in the Trump campaign’s proposals. Did those writing from the left side of the political spectrum not see the continuities?

    Writing in the Washington Post July 21, 2016, Applebaum explained how a “Trump presidency could destabilize Europe.” The issue, she explained, was Trump’s positive attitude toward Putin. “The extent of the Trump-Russia business connection has already been laid out, by Franklin Foer at Slate,” wrote Applebaum. She named Page and his “long-standing connections to Russian companies.”

    Even more suggestive to Applebaum is that just a few days before her article was published, “Trump’s campaign team helped alter the Republican party platform to remove support for Ukraine” from the Republican National Committee’s platform. Maybe, she hinted, that was because of Trump aide Manafort’s ties to Yanukovich.

    Did those talking points come from Steele’s opposition research? Manafort’s relationship with Yanukovich had been widely reported in the U.S. press long before he signed on with the Trump campaign. In fact, in 2007 Glenn Simpson was one of the first to write about their shady dealings while he was still working at the Wall Street Journal. The corrupt nature of the Manafort-Yanukovich relationship is an important part of the dossier. So is the claim that in exchange for Russia releasing the DNC emails, “the TRUMP team had agreed to sideline Russian intervention in Ukraine as a campaign issue.”

    The reality, however, is that the Trump campaign team never removed support for Ukraine from the party platform. In a March 18, 2017 Washington Examiner article, Byron York interviewed the convention delegate who pushed for tougher language on Russia, and got it.

    “In the end, the platform, already fairly strong on the Russia-Ukraine issue,” wrote York, “was strengthened, not weakened.” Maybe Applebaum just picked it up from her own paper’s mis-reporting.

    For Applebaum, it was hard to understand why Trump would express skepticism about the North Atlantic Treaty Organization, except to appease Putin. She referred to a recent interview in which Trump “cast doubt on the fundamental basis of transatlantic stability, NATO’s Article 5 guarantee: If Russia invades, he said, he’d have to think first before defending U.S. allies.”

    The Echoes Pick Up

    In an article published the very same day in the Atlantic, Jeffrey Goldberg made many of the very same observations. Titled “It’s Official: Hillary Clinton is Running Against Vladimir Putin,” the article opens: “The Republican nominee for president, Donald J. Trump, has chosen this week to unmask himself as a de facto agent of Russian President Vladimir Putin.” What was the evidence? Well, for one, Page’s business interests.

    Trump’s expressed admiration for Putin and other “equivocating, mercenary statements,” wrote Goldberg, are “unprecedented in the history of Republican foreign policymaking.” However, insofar as Trump’s fundamental aim was to find some common ground with Putin, it’s a goal that, for better or worse, has been a 25-year U.S. policy constant, across party lines. Starting with George W.H. Bush, every American commander-in-chief since the end of the Cold War sought to “reset” relations with Russia.

    But Trump, according to Goldberg, was different. “Trump’s understanding of America’s role in the world aligns with Russia’s geostrategic interests.” Here Goldberg rang the same bells as Applebaum—the Trump campaign “watered down” the RNC’s platform on Ukraine; the GOP nominee “questioned whether the U.S., under his leadership, would keep its [NATO] commitments,” including Article 5. Thus, Goldberg concluded: “Donald Trump, should he be elected president, would bring an end to the postwar international order.”

    That last bit sounds very bad. Coincidentally, it’s similar to a claim made in the very first paragraph of the Steele dossier — the “Russian regime,” claims one of Steele’s unnamed sources, has been cultivating Trump to “encourage splits and divisions in the western alliance.”

    The West won the Cold War because the United States kept it unified. David Remnick saw it up close. Assigned to the Washington Post’s Moscow bureau in 1988, Remnick witnessed the end of the Soviet Union, which he documented in his award-winning book, “Lenin’s Tomb.” So it’s hardly surprising that in his August 3, 2016 New Yorker article, “Trump and Putin: A Love Story,” Remnick sounded alarms concerning the Republican presidential candidate’s manifest affection for the Russian president.

    Citing the “original reporting” of Foer’s seminal Slate article, the New Yorker editor contended “that one reason for Trump’s attitude has to do with his business ambitions.” As Remnick elaborated, “one of Trump’s foreign-policy advisers, has longstanding ties to Gazprom, a pillar of Russia’s energy industry.” Who could that be? Right—Carter Page. With Applebaum and Goldberg, Remnick was worried about Trump’s lack of support for Ukraine and the fact that Trump “has declared NATO ‘obsolete’ and has suggested that he might do away with Article 5.”

    Where Did All These Echoes Come From?

    This brings us to the fundamental question: Is it possible that these top national security and foreign policy journalists were focused on something else during Obama’s two terms in office, something that had nothing to do with foreign policy or national security? It seems we must even entertain the possibility they slept for eight years because nearly everything that frightened them about the prospects of a Trump presidency had already transpired under Obama.

    The Trump team wanted to stop short of having the RNC platform promise lethal support to Ukraine—which was in keeping with official U.S. policy. Obama didn’t want to arm the Ukrainians. He ignored numerous congressional efforts to get him to change his mind. “There has been a strong bipartisan well of support for quite some time for providing lethal support,” said California Rep. Adam Schiff. But Obama refused.

    As for the western alliance or international order or however you want to put it, it was under the Obama administration that Russia set up shop on NATO’s southern border. With the Syrian conflict, Moscow re-established its foothold in the Middle East after 40 years of American policy designed to keep it from meddling in U.S. spheres of influence. Under Obama, Russia’s enhanced regional position threatened three U.S. allies: Israel, Jordan, and NATO member Turkey.

    In 2012, Moscow’s Syrian client brought down a Turkish air force reconnaissance plane. According to a 2013 Wall Street Journal article, “Turkish Prime Minister Recep Tayyip Erdogan raised alarms in the U.S. by suggesting that Turkey might invoke NATO’s Article V.” However, according to the Journal, “neither the U.S. nor NATO was interested in rushing to Article V… NATO was so wary of getting pulled into Syria that top alliance officials balked at even contingency planning for an intervention force to protect Syrian civilians. ‘For better or worse, [Syrian president Bashar al- Assad] feels he can count on NATO not to intervene right now,’ a senior Western official said.”

    Whatever one thinks of Obama’s foreign policy, it is hardly arguable that he—wisely, cautiously, in the most educated and creative ways, or unwisely, stupidly, cravenly, the choice of adjectives is yours—ceded American interests and those of key allies in Europe and the Middle East in an effort to avoid conflict with Russia.

    When Russia occupied Crimea and the eastern portion of Ukraine, there was little pushback from the White House. The Obama administration blinked even when Putin’s escalation of forces in Syria sent millions more refugees fleeing abroad, including Europe.

    Was Anyone Paying Attention When This Happened?

    Surely it couldn’t have escaped Applebaum’s notice that Obama’s posture toward Russia made Europe vulnerable. She’s a specialist in Europe and Russia—she’s written books on both. Her husband is the former foreign minister of Poland. So how, after eight years of Obama’s appeasement of a Russia that threatened to withhold natural gas supplies from the continent, did the Trump team pose a unique threat to European stability?

    What about Goldberg? Is it possible that he’d never bothered to research the foreign policy priorities of a president he interviewed five times between 2008 and 2016? In the last interview, from March 2016, Obama told him he was “very proud” of the moment in 2013 when he declined to attack Assad for deploying chemical weapons. As Obama put it, that’s when he broke with the “Washington playbook.” He chose diplomacy instead. He made a deal with Russia over Assad’s conventional arsenal—which Syria continued to use against civilians throughout Obama’s term.

    Again, regardless of how you feel about Obama’s decisions, the fact is that he struck an agreement with Moscow that ensured the continued reign of its Syrian ally, who gassed little children. Yet only four months later, Goldberg worried that a Trump presidency would “liberate dictators, first and foremost his ally Vladimir Putin, to advance their own interests.”

    Remnick wrote a 2010 biography of Obama, but did he, too, pay no attention to the policies of the man he interviewed frequently over nearly a decade? How is this possible? Did some of America’s top journalists really sleepwalk through Obama’s two terms in office, only to wake in 2016 and find Donald Trump and his campaign becoming dangerously cozy with a historical American adversary?

    All’s Fair in War and Politics

    Of course not. They enlisted their bylines in a political campaign on behalf of the Democratic candidate for president and rehearsed the talking points Steele later documented. But weren’t the authors of these articles, big-name journalists, embarrassed to be seen reading from a single script and publishing the same article with similar titles within the space of two weeks? Weren’t they worried it would look like they were taking opposition research, from the same source?

    No, not really. In a sense, these stories weren’t actually meant to be read. They existed for the purpose of validating the ensuing social media messaging. The stories were written around the headlines, which were written for Twitter: “Putin’s Puppet”; “It’s Official: Hillary Clinton is Running Against Vladimir Putin”; “Trump and Putin: A Love Story”; “The Kremlin’s Candidate.” The stories were vessels built only to launch thousands of 140-character salvos to then sink into the memory hole.

    Since everyone took Clinton’s victory for granted, journalists assumed extravagant claims alleging an American presidential candidate’s illicit ties to an adversarial power would fade just as the fireworks punctuating Hillary’s acceptance speech would vanish in the cool November evening. And the sooner the stories were forgotten the better, since they frankly sounded kooky, conspiratorial, as if the heirs to the Algonquin round table sported tin-foil hats while tossing back martinis and trading saucy limericks.

    Yes, the Trump-Russia collusion media campaign really was delusional and deranged; it really was a conspiracy theory. So after the unexpected happened, after Trump won the election, the Russiagate campaign morphed into something more urgent, something twisted and delirious.

    Quick, Pin Our Garbage Story on Someone

    When CNN broke the story – co-written by Evan Perez, a former colleague and friend of Fusion GPS principals—that the Obama administration’s intelligence chiefs had briefed Trump on the existence of the dossier, it not only cleared the way for BuzzFeed to publish the document, it also signaled the press that the intelligence community was on side. This completed the echo chamber, binding one American institution chartered to steal and keep secrets to another embodying our right to free speech. We know which ethic prevailed.

    Now Russiagate was no longer part of a political campaign directed at Trump, it was a disinformation operation pointed at the American public, as the pre-election media offensive resonated more fully with the dossier now in the open. You see, said the press: everything we published about Trump and Putin is really true—there’s a document proving it. What the press corps neglected to add is that they’d been reporting talking points from the same opposition research since before the election, and were now showcasing “evidence” to prove it was all true.

    The reason the media will not report on the scandal now unfolding before the country, how the Obama administration and Clinton campaign used the resources of the federal government to spy on the party out of power, is not because the press is partisan. No, it is because the press has played an active role in the Trump-Russia collusion story since its inception. It helped birth it.

    To report how the dossier was made and marketed, and how it was used to violate the privacy rights of an American citizen – Page – would require admitting complicity in manufacturing Russiagate. Against conventional Washington wisdom, the cover-up in this case is not worse than the crime: Both weigh equally in a scandal signaling that the institution where American citizens are supposed to discuss and debate the choices about how we live with each other has been turned against a large part of the public to delegitimize their political choices.

    This Isn’t the 27-Year-Olds’ Fault

    I’ve argued over the last year that the phony collusion narrative is a symptom of the structural problems with the press. The rise of the Internet, then social media, and gross corporate mismanagement damaged traditional media institutions. As newspapers and magazines around the country went bankrupt when ownership couldn’t figure out how to make money off the new digital advertising model, an entire generation of journalistic experience, expertise, and ethics was lost. It was replaced, as one Obama White House official famously explained, by 27-year-olds who “literally know nothing.”

    But the first vehicles of the Russiagate campaign were not bloggers or recent J-school grads lacking wisdom or guidance to wave off a piece of patent nonsense. They were journalists at the top of their profession – editors-in-chief, columnists, specialists in precisely the subjects that the dossier alleges to treat: foreign policy and national security. They didn’t get fooled. They volunteered their reputations to perpetrate a hoax on the American public.

    That’s why, after a year of thousands of furious allegations, all of which concerning Trump are unsubstantiated, the press will not report the real scandal, in which it plays a leading role. When the reckoning comes, Russiagate is likely to be seen not as a symptom of the collapse of the American press, but as one of the causes for it.

  • Waymo's "Uber-Killer" Robo-Taxi Set For Arizona Rollout

    Waymo, a unit of Alphabet, is set to launch a ride-sharing service similar to Uber, but with no human driver behind the wheel. Officials in Arizona granted Waymo a permit to operate as a transportation network company (TNC) across the state on Janurary 24, following the company’s initial application on Janurary 12, Bloomberg  reported.

    The imminent release of a robotic fleet of fully autonomous Chrysler Pacifica minivans could be flooding the highways of Arizona, causing major headaches for Uber.

    Since April of last year, Waymo has been experimenting with its self-driving fleet on the human guinea pigs of Phoenix, offering residents 24/7 access to the free ridesharing service. TNC status is a significant step for Waymo, because it now authorizes the company to start charging its passengers.

    Waymo’s vehicles in the Phoenix area have driven more than 4 million miles on public roads. In November, the company said a portion of its cars in the Phoenix area were operating in fully autonomous mode, what’s known in industry parlance as level four autonomy.

    “A fully self-driving fleet can offer new and improved forms of sharing,” Waymo said at the time, adding that in coming months it would invite members of the public to ride in the fully autonomous vehicles, beginning with those already in the early rider program.

    “As we continue to test drive our fleet of vehicles in greater Phoenix, we’re taking all the steps necessary to launch our commercial service this year,” a Waymo spokesman said in an emailed statement.

    As Quartz notes, driverless cars are widely believed to be the “silver bullet” that will make ride-hailing profitable by eliminating the main cost: wages paid to human drivers.

    In the fourth quarter of 2017, Uber paid about $8 billion to drivers in earnings and bonuses, or about 72% of its gross revenue for the quarter. As a result, Uber lost $4.5 billion last year on $7.5BN in net revenue ($37BN gross revenue).

     

    Waymo has yet to discuss driving rates for the Phoenix area, let alone provide plans to operate across other cities in the United States.

    The threat from Google could prove existential to Uber: none other than former Uber CEO and co-founder Travis Kalanick said that the evolutionary process of ridesharing will ultimately transition to fully autonomous vehicles.

    “The minute it was clear that Google was getting into the ride-sharing space, we realized we needed to make sure there was an alternative, because if there is not, we will be out of business,” Kalanick told Bloomberg in 2016.

    As has been widely publicized, the fierce competition between Waymo and Uber to be the first to launch driverless ridesharing grew so intense, that Waymo sued Uber for stealing its trade secrets. On February 9, court found Uber guilty, ruling it would have to pay Waymo hundreds of millions of dollars for trade secrets theft, along with promising not to use the technology in any of its autonomous vehicles.

    Quartz describes the fierce competition between Waymo and Uber to launch driverless ridesharing vehicles across the United States:

    Arizona granted the TNC permit a week and a half before Waymo commenced its trade secrets trial against Uber in San Francisco, alleging Uber stole Waymo’s knowledge on how to build self-driving cars. The two companies reached a settlement on Feb. 9, five days into the trial, which includes Uber paying Waymo a 0.34% equity stake and agreeing not to incorporate Waymo’s confidential information into its software or hardware. But nothing prevents Waymo from competing in the ride-hailing arena.  

    Uber’s worst nightmare is almost here.

    While Saudi Arabia’s Council of Economic and Development Affairs (CEDA)’s Public Investment Fund (PIF) might have top-ticked the top in Uber’s valuation back in 2016, Waymo’s imminent rollout of its driverless cars for commercial use in Arizona could prick Uber’s valuation and send it into a sharp contraction.

    In its rush to preserve market share, Uber will now be forced to roll out driverless vehicles of its own. This could trigger Uber to unleash a tech-induced surge of driver unemployment leading into the Presidential elections of 2020.

    Two days ago, we reported a big rollout of burger-flipping robots in California is set to hit 50 locations by 2019; next it could be the part-time driver’s turn. And so, as millennials praise the tech leaders in Silicon Valley, they do not realize that AI-controlled robots are coming for their jobs.

  • A Key Inflation Indicator To Watch, Part 1

    Authored by Daniel Nevins via FFWiley.com,

    “Inflation is always and everywhere a monetary phenomenon.”
    —Milton Friedman

    Have you ever questioned Milton Friedman’s famous claim about inflation?

    Ever heard anyone else question it?

    Unless you read obscure stuff written for the academic community, you’re probably not used to Friedman’s quote being challenged. And that’s despite a lousy forecasting record by economists who bought into his Monetarist methods.

    Consider the following:

    • When Friedman’s strict Monetarism fizzled in the 1980s, it was doomed partly by his own forecasts. Instead of the disinflation the decade delivered, he expected inflation to reach 1970s levels, publicizing that prediction in 1983 and then again in 1984, 1985 and 1986. Of course, years earlier he foresaw the 1970s jump in inflation, but the errant forecasts that came later left him wide open to a “clock twice a day” dismissal.

    • Monetarists suffered an even harsher blow in 2012, when the Conference Board finally threw in the towel on Friedman’s favorite indicator, removing M2 from its Leading Economic Index (LEI). Generally speaking, forecasters who put M2 in their models are like bachelors who put “live with mom” in their dating profiles—they haven’t been successful.

    • The many economists who expected quantitative easing (QE) to wreak havoc on inflation are, of course, on the defensive. Nine years after QE began, core inflation remains below the Fed’s 2% target, defying their Monetarist beliefs.

    When it comes to explaining inflation, Monetarism hasn’t exactly nailed it. Then again, neither has Keynesianism, whose Phillips Curve confounds those who rely on it. You can toss inflation onto the bonfire of major events that mainstream theories fail to explain.

    But I’ll argue there might be a better way.

    In three articles, I’ll try to convince you that we can develop a better theory by interpreting Friedman’s research differently than he did. Maybe you’ll like the theory, or maybe you won’t, but I promise this: the indicator that falls from it has a better record predicting major inflation trends than any other serious indicator I’ve studied. It’s not the only way to think about inflation, but it’s realistic and practical, and I’m interested in the reader reaction.

    They Said, Hey Sugar…

    Let’s get started with a walk on the wild side – we’ll walk with the renegades in economics who acknowledge the true role commercial banks play in the monetary system, that of creating money from nothing in the process of making loans. By our choice of company, we’re rejecting mainstream economics, including Monetarism and Keynesianism, which call for banks to be mere conduits in the money creation process. I discussed this topic last year in “Learning from the 1980s,” and I’ll summarize the key points below:

    1. When Friedman and his coauthor Anna Schwartz published their famous research showing a strong correlation between money growth and GDP growth, they and their followers failed to appreciate the importance of money-creating bank loans.

    2. Instead of allowing that bank lending might explain the historical correlation to GDP, they assumed that the intrinsic characteristics of money—liquidity, stability, and value as a medium of exchange—explained their results, leading them to embrace measures such as M1 and M2.

    3. But in fact, their seminal research had little to do with M1 and M2, because that data didn’t exist over the full period they studied. Instead, they used a measure that was almost exactly equal to the amount of money banks create when they make loans and buy securities.

    4. Loan and behold, when the various measures diverged in the 1980s, M1 and M2 lost their correlations to GDP, whereas the original measure studied by Friedman and Schwartz did not.

    Confusing?

    I’ll say it again in one sentence:

    The money measures economists discuss and follow (M1 and M2, primarily) are empirically inferior to the measure they ignore (bank-created money), even though the measure they ignore is responsible for getting them interested in “money” in the first place.

    For anyone my age, think Gilda Radner’s creations Emily Litella and Roseanne Roseannadanna, the spoof newscasters who argued passionately about topics that didn’t match the topics given. After being told of the mistake, Litella would end her rant with a simple “nevermind,” whereas Roseannadanna would just keep on talking. The economics profession is more Roseannadanna than Litella (you’ll never hear a “nevermind”), but my recommendation is to forget what you’ve been told about the monetary aggregates and focus instead on bank-created money.

    Do Stop Believing

    So I’ve channeled iconic characters from both economics and Saturday Night Live, but I haven’t yet drilled down to the inflation rate. In fact, I’ll use this article to expand on the empirical result noted above, which, to my knowledge, isn’t widely known. Once you see how the alternative approach to money works, and how it differs from mainstream economics, I can break out inflation in the next article. But we’ll also need some terminology.

    In the past, I used the name “MDuh” for bank-created money, “Duh” referring to the result that the best indicator is the measure Friedman and Schwartz studied, not the measures they popularized. For this article, though, I’ll use “M63,” referring to the year they published their work. We should credit the original monetary maestros for their extensive research, notwithstanding my alternative interpretation, and “M63” should check that box. (Not only that, but “MDuh,” like a Journey song, sounded catchy at first but wore me down after repeated use.)

    To choose M63 components, I ask a single question: Is a potential component initiated by a private entity with the legal authority to create money, meaning either a commercial bank or a similar deposit-taking institution? If the answer is yes, I include the component in M63. Otherwise, I don’t. By using only that criterion, I’m estimating the amount of new money banks pump into the economy when they make loans and buy securities. Not surprisingly, M63 correlates almost perfectly with net bank lending—the correlation between 1959 and 2016 was 0.97.

    So, M63 growth and net bank lending both correlate with GDP growth, but why?

    I would say it’s because banks are the only institutions that create money from nothing when they make loans, meaning their loans inject purchasing power directly into the economy. For loans that aren’t made by banks, purchasing power flows from one party to another without increasing the total (lenders that don’t hold bank charters have to give up their own purchasing power when they deliver loan proceeds). But for bank loans, net purchasing power increases, because banks can make loans without requiring prior saving. Apart from a small allocation of bank capital, banks conjure loan proceeds from thin air—that’s the crux of what their charters allow them to do.

    In other words, bank loans are additive to the amount of spending that’s already occurring, and therefore, flow directly into GDP. They might boost real growth or inflation, or both, depending on a variety of factors including how the loan money is spent. But it’s important to remember that the money–GDP correlation is merely a byproduct of a lending–GDP correlation. Bank lending, not money, is the driving force.

    Round, Round, Get Around

    In pictures, we can compare the traditional, mainstream view to the alternative approach by sketching a “circular flow” between spending and income. Here’s an example I’ve simplified from charts that appear in my recently published book, Economics for Independent Thinkers, which covers the topic in more detail:

    inflation 1

    The upper panel shows that the people on the left—both consumers and businesses—are spending, and because a dollar spent equals a dollar earned, the exact amount that’s spent flows back to consumers and businesses to be spent once again. So money cycles from spending to income and back to spending in a circular flow, and that’s exactly how money works in mainstream theory.

    The problem, though, is that mainstream theory assumes the role played by banks to be mostly irrelevant, whereas banks have a giant effect on the circular flow in the real world. In the real world, banks create deposits or cashier’s checks or some other form of money purchasing power to deliver loan proceeds. And by creating money from nothing, they increase spending above and beyond the amount of income that feeds in from the bottom of the loop. The circular flow expands, as in the lower panel.

    Even more importantly, these bank loan effects cumulative over time. If we say the chart above is the current time period or period 1, then the next chart (below) shows that period 1’s new bank credit (or at least a portion of it) is now part of the circular flow, and then it gets joined by period 2’s new bank credit. And then periods 1 and 2 join period 3’s new bank credit and the flow gets fatter and fatter.

    inflation 2

    Pictures Telling Stories

    If every picture tells a story, the pictures above tell a story of economists building a discipline (mainstream macro) on a false premise so significant it can’t be corrected without starting over. Core theories in every mainstream school rely on the foundational assumption that money is independent of bank lending, all forms of lending believed equivalent and banks believed to be mere intermediaries. Mainstream macro restricts the circular flow to the picture in the first chart’s upper panel—it doesn’t allow private banks to expand the flow endogenously as in the other diagrams.

    Of course, some mainstreamers claim to have improved their theories, and almost all of them would rather you didn’t listen to troublemakers like me. According to a typical defense, economists have now figured out how to stuff a hypothetical financial economy into a mainstream, real-economy wrapper, making my criticisms invalid. Anyone who says otherwise just isn’t in-the-know, as the story goes.

    I shouldn’t have to write this, but those claims are as hollow as they are self-serving. Every paper I’ve read that purports to fix mainstream theory either still ignores the realities of bank lending or blends in other wildly unrealistic assumptions. (To pick a few notable examples, see Ben Bernanke’s financial accelerator model, similar papers on the same topic or Paul Krugman’s work on the financial economy.) Again, mainstreamers wove false assumptions into the theoretical fabric, and you can’t fix that without shredding the fabric and starting over. And once you’re committed to starting over, as I am, you might borrow from more realistic theories that sit well outside the mainstream.

    Too much information?

    I digress because certain economists respond predictably to my way of thinking, and it seems a good idea to address the most common response before moving to the next step. If you’re willing to entertain that those economists might be blowing smoke, and I might be onto something, stick with the series for another article.

    In Part 2, I’ll extend the charts above to consider other flows relevant to inflation. We’ll need to paint the whole picture before I can present the logic behind my suggested inflation predictor, which, again, has an excellent historical record. Its historical performance might even lead you to question whether inflation really is “always and everywhere” a monetary phenomenon.

  • "Automatic-Bidding" Is Fueling Bubbles In The Hottest Housing Markets

    It has been a year-and-a-half since US home prices surpassed their previous peak from July 2006, and they’ve only continued to move higher since. Earlier this week, we reported that home prices in two-thirds of US cities climbed to record highs during the fourth quarter, according to data from the National Association of Realtors.

    This advance has continued even as prices in the ultra-high end of the market – where homes go for $10 million or more – have climbed to such elevated levels that buyers are beginning to disappear.

    And today, at a time when investors are worried that rising 10-year yields and the affects of the Trump tax plan could trigger a shakeout in the housing market, the Wall Street Journal highlighted a practice that is being widely embraced in some of the US’s hottest housing markets, like Seattle and San Francisco.

    Essentially, these clauses are attached to offers, and stipulate that the buyer will increase his or her offer by a given incremental amount if the seller can prove that a higher, verifiable bid has been made.

    Typically, this tactic is employed for homes in the middle-level of the market – because if a buyer is bidding on an ultra-high end home, the increments would be so large they would warrant review by a human.

    escalators

    And as one professor pointed out, some buyers see it as a way to have their cake and eat it to: That is, a way to ensure that the price they would pay should they win the bid is the lowest possible in their price range.

    However, there are obvious concerns that, in our view, make this a terrible tactic.

    “A buyer can think of an escalation clause as a ‘have your cake and eat it, too’ clause,” says David Reiss, a Brooklyn Law School professor who specializes in real estate. “But in real estate, as with cake, it is hard to have it all.”

    One concern is that the buyer is tipping his hand to the seller by using an escalation clause, Prof. Reiss says.

    By indicating the maximum amount he will pay for the house, a buyer is revealing important information—that he’s willing to pay more. For example: Seller lists the house for $1 million. The buyer bids $950,000 with an escalation up to $975,000. The seller can counteroffer at $975,000, knowing that the buyer can both afford it at that price and is willing to pay it.

    “Sellers get more money than they ever thought they would have,” says Carrie DeBuys, a real-estate agent with Realogics Sotheby’s Realty in Seattle. In her market, it isn’t uncommon for a seller to receive “10, 15 or 20 offers on a property.”

    On the flip side, an escalation clause may not be in the seller’s best interest, explains Prof. Reiss.

    Say a house is listed for $1 million, and there are three bidders. Buyer A offers $950,000. Buyer B offers $975,000 with an escalation clause that could go up to $1 million in $5,000 increments. Buyer C offers $980,000. In this scenario, the seller would get $985,000 from Buyer B after the initial offer escalates over Buyer C’s offer. But, had the seller not relied on the escalation clause and instead asked the bidders for their best and final offer, he might have sold the house for $1 million. “We know that the buyer was willing and able to go up that high,” Mr. Reiss says. “Thus, the seller is likely getting $15,000 less in the escalation-clause scenario.”

    Since a seller would know that an escalation clause has been attached to an offer, they could easily orchestrate “verifiable” bids by coaxing a third party to make a dummy offer, knowing with certainty that it will not be filled. Automating the process of price discovery is, as every flash crash and blowup in equity, bond or currency markets has demonstrated, fraught with risk that many of the parties involved don’t fully understand.

    Whether the use of these clauses has had a material impact on prices would be difficult to confirm. Already, mortgage applications are tumbling as mortgage rates spike to their highest levels in more than four years. The real question is, how long after demand evaporates will sellers be able to abuse these “escalation clauses” to ensure they sell at the highest price possible.

    Mortgage

     

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Feb 18

Today’s News 18th February 2018

  • Escalation In Syria – How Far Can The Russians Be Pushed?

    Authored by The Saker,

    Events in Syria have recently clearly taken a turn for the worse and there is an increasing amount of evidence that the Russian task force in Syria is being targeted by a systematic campaign of “harassing attacks”.

    First, there was the (relatively successful) drone and mortar attack on the Russian Aerospace base in Khmeimin.

    Then there was the shooting down of a Russian SU-25 over the city of Maasran in the Idlib province.

    Now we hear of Russian casualties in the US raid on a Syrian column (along with widely exaggerated claims of “hundreds” of killed Russians).

    In the first case, Russian officials did openly voice their strong suspicion that the attack was if not planned and executed by the USA, then at least coordinated with the US forces in the vicinity. In the case of the downing of the SU-25, no overt accusations have been made, but many experts have stated that the altitude at which the SU-25 was hit strongly suggests a rather modern MANPAD of a type not typically seen in Syria (the not so subtle hint being here that these were US Stingers sent to the Kurds by the USA). As for the latest attack on the Syrian column, what is under discussion is not who did it but rather what kind of Russian personnel was involved, Russian military or private contractors (the latter is a much more likely explanation since the Syrian column had no air-cover whatsoever).

    Taken separately, none of these incidents mean very much but taken together they might be indicative of a new US strategy in Syria: to punish the Russians as much as possible short of an overt US attack on Russian forces.

    To me this hypothesis seems plausible for the following reasons:

    First, the USA and Israel are still reeling in humiliation and impotent rage over their defeat in Syria: Assad is still in power, Daesh is more or less defeated, the Russians were successful not only their military operations against Daesh but also in their campaign to bring as many “good terrorists” to the negotiating table as possible. With the completion of a successful conference on Syria in Russia and the general agreement of all parties to begin working on a new constitution, there was a real danger of peace breaking out, something the AngloZionist are absolutely determined to oppose (check out this apparently hacked document which, if genuine, clearly states the US policy not to allow the Russian to get anything done).

    Second, both Trump and Netanyahu have promised to bring in lots of “victories” to prove how manly and strong they are (as compared to the sissies which preceded them). Starting an overt war against Russian would definitely be a “proof of manhood”, but a much too dangerous one. Killing Russians “on the margins”, so to speak, either with plausible deniability or, alternatively, killing Russians private contractors is much safer and thus far more tempting option.

    Third, there are presidential elections coming up in Russia and the US Americans are still desperately holding on to their sophomoric notion that if they create trouble for Putin (sanctions or body bags from Syria) they can somehow negatively impact his popularity in Russia (in reality they achieve the opposite effect, but they are too dull and ignorant to realize that).

    Last but not least, since the AngloZionist have long lost the ability to actually getting anything done, their logical fall-back position is not let anybody else succeed either. This is the main purpose of the entire US deployment in northern Syria: to create trouble for Turkey, Iran, Syria and, of course, Russia.

    The bottom line is this: since the US Americans have declared that they will (illegally) stay in Syria until the situation “stabilizes” they now must do everything their power to destabilize Syria. Yes, there is a kind of a perverse logic to all that…

    For Russia, all this bad news could be summed up in the following manner: while Russia did defeat Daesh in Syria she is still far from having defeated the AngloZionists in the Middle-East.

    The good news is, however, that Russia does have options to deal with this situation.

    Step one: encouraging the Turks

    There is a counter-intuitive but in many ways an ideal solution for Russia to counter the US invasion of Syria: involve the Turks.

    How? Not by attacking the US forces directly, but by attacking the Kurdish militias the US Americans are currently “hiding” behind (at least politically). Think of it, while the US (or Israel) will have no second thoughts whatsoever before striking Syrian or Iranian forces, actually striking Turkish forces would carry an immense political risk: following the US-backed coup attempt against Erdogan and, just to add insult to injury, the US backing for the creation of a “mini-Kurdistsan” both in Iraq and in Syria, US-Turkish relations are at an all-time low and it would not take much to push the Turks over the edge with potentially cataclysmic consequences for the US, EU, NATO, CENTCOM, Israel and all the AngloZionist interests in the region. Truly, there is no overstating the strategic importance of Turkey for Europe, the Mediterranean and the Middle-East, and the US Americans know that. From this flows a very real if little understood consequence: the Turkish armed forces in Syria basically enjoy what I would call a “political immunity” from any US attacks, that is to say that (almost) no matter what the Turks do, the US would (almost) never consider actually openly using force against them simply because the consequence of, say, a USAF strike on a Turkish army column would be too serious to contemplate.

    In fact, I believe that the US-Turkish relationship is so bad and so one-sided that I see a Turkish attack on a Kurdish (or “good terrorist”) column/position with embedded US Special Forces far more likely than a US attack on a Turkish army column. This might sound counter-intuitive, but let’s say the Turks did attack a Kurdish (or “good terrorist”) column/position with US personnel and that US servicemen would die as the result. What would/could the US do? Retaliate in kind? No way! Not only is the notion of the US attacking a fellow NATO country member is quite unthinkable, it would most likely be followed by a Turkish demand that the US/NATO completely withdraw from Turkey’s territory and airspace. In theory, the US could ask the Israelis to do their dirty job for them, but the Israelis are not stupid (even if they are crazy) and they won’t have much interest in starting a shooting war with Turkey over what is a US-created problem in a “mini-Kurdistan”, lest any hallowed “Jewish blood” be shed for some basically worthless goyim.

    No, if the Turks actually killed US servicemen there would be protests and a flurry of “consultations” and other symbolic actions, but beyond that, the US would take the losses and do nothing about it. As for Erdogan, his popularity at home would only soar even higher. What all this means in practical terms is that if there is one actor which can seriously disrupt the US operations in northern Syria, or even force the US to withdraw, it is Turkey. That kind of capability also gives Turkey a lot of bargaining power with Russia and Iran which I am sure Erdogan will carefully use to his own benefit. So far Erdogan has only threatened to deliver an “Ottoman slap” to the USA and Secretary of State Tillerson is traveling to Ankara to try to avert a disaster, but the Turkish instance that the USA chose either the Turkish or the Kurdish side in the conflict very severely limits the chances of any real breakthrough (the Israel lobby being 100% behind the Kurds). One should never say never, but I submit that it would take something of a miracle at this point to really salvage the US-Turkish relationship. Russia can try to capitalize on this dynamic.

    The main weakness of this entire concept is, of course, that the USA is still powerful enough, including inside Turkey, and it would be very dangerous for Erdogan to try to openly confront and defy Uncle Sam. So far, Erdogan has been acting boldly and in overt defiance of the USA, but he also understands the risks of going too far and for him to even consider taking such risks there have to be prospects of major benefits from him. Here the Russians have two basic options: either to promise the Turks something very inciting or to somehow further deteriorate the current relationship between the US and Turkey. The good news here is that Russian efforts to drive a wedge between the US and Turkey are be greatly assisted by the US support for Israel, Kurds, and Gulenists.

    The other obvious risk is that any anti-Kurdish operation can turn into yet another partition of Syria, this time by the Turks. However, the reality is that the Turks can’t really stay for too long in Syria, especially not if Russia and Iran oppose this. There is also the issue of international law which is much easier for the USA to ignore than for the Turks.

    For all these reasons using the Turks to put pressure on the USA has its limitations. Still, if the Turks continue to insist that the USA stop supporting the Kurds, or if they continue putting military pressure on the Kurdish militias, then the entire US concept of a US-backed “mini-Kurdistan” collapses and, with it, the entire US partition plan for Syria.

    So far, the Iraqis have quickly dealt with the US-sponsored “mini-Kurdistan” in Iraq and the Turks are now taking the necessary steps to deal with the US-sponsored “mini-Kurdistan” in Syria at which point *their* problem will be solved. The Turks are not interested in helping Assad or, for that matter, Putin and they don’t care what happens to Syria as long as *their* Kurdish problem is under control. This means that the Syrians, Russians, and Iranians should not place too much hope on the Turks turning against the USA unless, of course, the correct circumstances are created. Only the future will tell whether the Russians and the Iranians will be able to help to create such circumstances.

    Step two: saturating Syria with mobile modern short/middle range air defenses

    Right now nobody knows what kind of air-defense systems the Russians have been delivering to the Syrians over the past couple of years, but that is clearly the way to go for the Russians: delivering as many modern and mobile air defense systems to the Syrians.

    While this would be expensive, the best solution here would be to deliver as many Pantsir-S1 mobile Gun/SAM systems and 9K333 Verba MANPADs as possible to the Syrians and the Iranians. The combination of these two systems would immensely complicate any kind of air operations for the US Americans and Israelis, especially since there would be no practical way of reliably predicting the location from which they could operate. And since both the USA and Israel are operating in the Syrian skies in total violation of international law while the Syrian armed forces would be protecting their own sovereign airspace, such a delivery of air-defense systems by Russia to Syria would be impeccably legal.

    Best of all, it would be absolutely impossible for the AngloZionist to know who actually shot at them since these weapon systems are mobile and easy to conceal. Just like in Korea, Vietnam or Lebanon, Russian crews could even be sent to operate the Syrian air defense systems and there would be no way for anybody to prove that “the Russians did it” when US and Israeli aircraft would start falling out of the skies. The Russians would enjoy what the CIA calls “plausible deniability”. The US Americans and Israelis would, of course, turn against the weaker party, the Syrians, but that other than feeling good that would not really make a difference on the ground as the Syrians skies would not become safer for US or Israelis air forces.

    The other option for the Russians would be to offer upgrades (software and missile) to the existing Syrian air defense systems, especially their road-mobile 2K12 Kub and 9K37 Buk systems. Such upgrades, especially if combined with enough deployed Pantsirs and Verbas would be a nightmare for both the US Americans and the Israelis. The Turks would not care much since they are already basically flying with the full approval of the Russians anyway, and neither would the Iranians who, as far as I know, have no air operations in Syria.

    One objection to this plan would be that two can play this game and that there is nothing preventing the USA from sending even more advanced MANPADs to their “good terrorist” allies, but that argument entirely misses the point: if both sides do the same thing, the side which is most dependent on air operations (the USA) stands to lose much more than the side which has the advantage on the ground (the Russians). Furthermore, by sending MANPADs to Syria, the USA is alienating a putative ally, Turkey, whereas if Russia sends MANPADs and other SAMs to Syria the only one who will be complaining will be the Israelis. When that happens, the Russians will have a simple and truthful reply: we did not start this game, your US allies did, you can go and thank them for this mess.

    The main problem in Syria is the fact that the US and the Israelis are currently operating in the Syrian skies with total impunity. If this changes, this will be a slow and gradual process. First, there would be a few isolated losses (like the Israeli F-16 recently), then we would see that the location of US and/or Israeli airstrikes would gradually shift from urban centers and central command posts to smaller, more isolated targets (such as vehicle columns). This would indicate an awareness that the most lucrative targets are already too well defended. Eventually, the number of air sorties would be gradually replaced by cruise and ballistic missiles strikes. Underlying it all would be a shift from offensive air operations to force protection which, in turn, would give the Syrians, Iranians, and Hezbollah a much easier environment to operate in. But the necessary first step for any of that to happen would be to dramatically increase the capability of Syrian air defenses.

    Hezbollah has, for decades, very successfully operated under a total Israelis air supremacy and their experience of this kind of operations would be invaluable to the Syrians until they sufficiently built up their air defense capabilities.

    Conclusion: is counter-escalation really the only option?

    Frankly, I am starting to believe that the Empire has decided to attempt upon a partial “reconquista” of Syria, even Macron is making some noises about striking the Syrians to “punish” them for their use of (non-existing) chemical weapons. At the very least, the USA wants to make the Russians pay as high a price as possible for their role in Syria. Further US goals in Syria include:

    • The imposition of a de-facto partition of Syria by taking under control the Syrian territory east of the Euphrates river (we could call that “plan C version 3.0”)

    • The theft of the gas fields located in northeastern Syria

    • The creation of a US-controlled staging area from which Kurdish, good terrorist and bad terrorist operations can be planned and executed

    • The sabotaging of any Russian-backed peace negotiations

    • The support for Israeli operations against Iranian and Hezbollah forces in Lebanon and Syria

    • Engaging in regular attacks against Syrian forces attempting to liberate their country from foreign invaders

    • Presenting the invasion and occupation of Syria as one of the “victories” promised by Trump to the MIC and the Israel lobby

    So far the Russian response to this developing strategy has been a rather a passive one and the current escalation strongly suggests that a new approach might be needed. The shooting down of the Israeli F-16 is a good first step, but much more needs to be done to dramatically increase the costs the Empire will have to pay for is policies towards Syria. The increase in the number of Russian commentators and analysts demanding a stronger reaction to the current provocations might be a sign that something is in the making.

  • "Sudden Stratospheric Warming Event" Fractures The Polar Vortex In Two

    This split of the polar vortex will shift the upper atmospheric pattern such that the coldest airmass is located in western North America as well as over parts of Europe. This will allow for a ridge of high pressure to amplify in the eastern US, bringing unseasonably warm conditions next week,” said Ed Vallee, Long-Range Meteorologist and President of Vallee Wx Consulting.

    The Weather Channel describes the atmosphetic impact for the Northern Hemisphere, as this unique weather event splits the polar vortex into two smaller vortices: one over western Canada and another over Europe.

    •  A split of the polar vortex occurred this week due to warming in the stratosphere
    • This is likely to result in cold temperatures in Europe
    • Although a disruption of the polar vortex is sometimes associated with cold weather in the eastern U.S., that is not always guaranteed

    Further, from the Weather Channel:

    “Across the Arctic, where the polar vortex typically stays locked, the stratosphere has warmed. This typically kicks into motion a polar vortex disruption like we are seeing. The stratosphere is a layer of the upper atmosphere above which most of our weather occurs – known as the troposphere – and where most of the polar vortex resides.” (Shown Below: The polar vortex has split into smaller vortices, one over Europe, and the other over northwestern North America.)

    The one vortex over Western Europe and much of Eurasia will send the region into a dangerous deep freeze for the second half of February into early March. A disruption of the polar vortex has sent March 18 U.K. natural gas contracts soaring on the session, advancing +3.6% to 51.540.

    During the same timeframe, the vortex over western Canada could bring spring-like conditions for the Eastern U.S. in the second half of February through early March. Temperatures for the next few weeks could be 20 to 25 degrees Fahrenheit above average for this time of year. Highs in the 70s Fahrenheit are possible from Washington, D.C. to New York City, which would be a significant change from the arctic conditions experienced earlier in the winter season. In the Western U.S, it is an entirely different story, particularly in the Northern Rockies, which could see measurable snowfall and frigid arctic air for the next two weeks.

    A disruption of the polar vortex has sent US March 18 natural gas contracts crashing -22% in February to December 2017 lows. A breach below 2.50 would indicate a deeper correction, as much as -15% to 2.172 area where the .764-fib resides (measured from the March 2016 low to December 2016 high).

    “Models are indicating very impressive early Spring warmth across the eastern U.S. next week… the West/Rockies will have some cold air to deal with, however,” said Michael Ventrice, a Meteorological Scientist for the Weather Company.

    What’s all this talk about a Sudden Stratospheric Warming (SSW)? 

    Mashable explains that the primary polar vortex exists in the stratosphere, which is the layer of the atmosphere where most of the weather occurs. An SSW event refers to a rapid warming of the stratosphere at high latitudes, up to 122 degrees Fahrenheit in a matter of days, some six to nine miles above the earth’s surface. Mashable said, “an SSW event, took place in early-to-mid February, and this has caused the splitting of the stratospheric polar vortex.”

    “Someone once asked why they call them “sudden” stratospheric warmings,” said Anthony Masiello, a private weather forecaster.

    Mashable further explains how the SSW broke apart the polar vortex into two and what it means for the weather in your region:

    Sudden stratospheric warming events occur when large atmospheric waves send energy upward, into the stratosphere, setting in motion a complex process that results in the temporary breakdown of the polar vortex. This February’s stratospheric warming event was particularly extreme, possibly setting records for how sharply temperatures spiked in the upper atmosphere.

    The polar vortex split isn’t the only factor favoring a cold snap in Europe, warmup in the Eastern U.S., and cool down in the West. There’s also a cycle of atmospheric pressure over the North Atlantic Ocean, known as the North Atlantic Oscillation (NAO), that can increase the odds of colder and snowier weather in some of these areas.

    Computer models are projecting the NAO will become strongly negative during the next few weeks in response to the polar vortex split and stratospheric warming event, and this also favors cold and snow in Western Europe. (It also ups the odds of similar weather in the eastern U.S., but that may not happen right away.)

    “A significant PV [polar vortex] disruption is often followed by widespread cold temperatures across northern Eurasia and the Eastern US. However the cold is more certain across northern Eurasia following these type of PV disruptions,” meteorologist Judah Cohen, who specializes in seasonal weather forecasting and tracking the polar vortex for AER, a Verisk Analytics company, wrote on his blog.

    The negative mode of the NAO typically features an area of strong high pressure over Greenland, which blocks the progression of weather systems moving in from the southwest, and causes the jet stream to plunge southward over Europe, allowing cold air to flow in from the Arctic and Scandinavia. Sudden stratospheric warming events tend to cause the NAO to switch into negative mode shortly after they occur.

    The rest of February should feature a colder than average Western U.S., coupled with a milder than average East Coast. However, the negative NAO phase could bring a return of winter weather to the East in early March, depending where exactly that Greenland block sets up. There’s often a delay between when the polar vortex is disrupted, and when the cold air arrives in parts of the U.S., if at all.

    Snow lovers will be watching upcoming forecasts anxiously because the deeper into March we go, the less likely widespread snows along the East Coast become.”

    In summary: the polar vortex has split, here’s what that means for us:

  • Facebook VP: "The Majority Of Russian Ad Spend Happened AFTER The Election"

    Facebook VP of advertising, Rob Goldman, tossed a hand grenade in the Russian meddling narrative in a string of tweets responding to Mueller’s indictment of 13 Russian nationals running a “bot farm” which, according to Mueller (via Deputy AG Rod Rosenstein), was unsuccessful at influencing the 2016 election. 

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    Notably, Goldman points out that the majority of advertising purchased by Russians on Facebook occurred after the election – and was designed to “sow discord and divide Americans”, something which Americans have been quite adept at doing on their own ever since the Fed decided to unleash a record class, wealth, income divide by keeping capital markets artificially afloat at any cost.

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    President Trump fired off Goldman’s comment in a Saturday morning tweet:

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    Subversion

    If we are to accept Mueller’s findings that Russian disinformation campaign was focused on elevating an outside candidate to win the White House, no matter who it was (Mueller notes they supported both Sanders and Trump, while using “any opportunity to criticize Hillary and the rest”), then the logical conclusion is that while there was no collusion with the Trump campaign, the ultimate goal would be to weaken America by creating a divide in the long-standing establishment power structure. 

    To that end, this 1985 interview with ex-KGB agent Yuri Bezmenov, who defected to the West in 1970, is a must-watch. in it, Bezmenov very clearly outlines that the KGB’s primary goal is not covert intelligence; it’s a long-term campaign of ideological subversion, or “active measures.” 

    The entire interview is over two hours long, and both condensed and extended versions can be found below. In summary,the KGB, for decades, has had a goal of altering the average American’s perception of reality in order to confuse and divide the US population, while reducing men of fighting age to feminized soy boys.

    man-children

     

    There are four basic stages: 

    1) Demoralization: This will take 15-20 years (which would bring us to around 2000-2005), which is enough time to educate a generation of students and indoctrinate them into a Marxist-Leninist ideology as “useful idiots.” The result of this stage of subversion is that the “useful idiots” will be “contaminated” through ideological and irreversible brainwashing. According to Bezmenov, the demoralized person is unable to assess fact-based information. You can shower him with documents, facts and other solid evidence, and he will refuse to believe it until kicked in his “fat bottom” by troops.”

    Bezmenov said (in 1985), that the demoralization campaign had been active for 25 years. 

    2) Destablization: Once the population has been programmed and “contaminated,” the subverter does not care about your ideas, the patterns of your consumption, whether you eat junk food and get fat and flabby. It doesn’t matter anymore. This time, and it only takes from two to five years to destabilize a nation, what matters is essentials, economy, foreign relations, defense systems.

    3) Crisis: Once destabilization has occurred, “It may take only six weeks to bring a country to the verge of crisis. You see it in Central America now.”

    4) Normalization:And after crisis, with a violent change in power, structure, and economy, you have the period of so-called normalization will last indefinitely. Normalization is a cynical expression borrowed from Soviet propaganda”

    ***

    If Bezmenov was correct about the KGB’s “recipe” for subverting the United States, one need look no further than a generation of pussy-hat wearing, hypersensitive, multi-gendered, ultra politically-correct Social Justice Warrior mentality that’s infiltrated the West – most recently characterized by Justin Trudeau’s recent “peoplekind” admonishment of a young and inquisitive student. 

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    The tools of subversion are identity politics and the destruction of culture, often conducted under the guise of “equality” and humanitarianism. Has the forced integration of scores of migrants across Europe strengthened or weakened nations with open-border policies? Are Poland and Hungary stronger or weaker for resisting said invasion? 

    Indeed, it can be said that Europe has been demoralized through social-justice identity politics, which has paved the way for the active and ongoing destabilization of Europe’s long-knit social and economic fabric. 

    Next will be crisis brought on by the powder-keg created by “cultural enrichment” and no-go zones, after which Europe will surely be forced to normalize under a brave new regime in which the ongoing threat of civil war will keep Europe weak for decades.

    One has to consider who destabilized North Africa despite Ghadaffi offering to hold migrants at bay for a mere £4bn-per-year. Who then welcomed migrants which were the byproduct of said destabilization? And what will be the end result when we roll the clock forward five, ten, fifteen years? 

    One could make the argument that we are now shifting from demoralization and destabilization, to crisis

    Watch Bezmenov’s interview below:

    Short version:

    Long version:

  • 'Ring Of Fire' Quake-Cluster Prompts Scientists To Warn Of "Large Rupture Sooner Than Later"

    Earlier in the week we reported on scientists’ warnings over the “strained” magma chamber within Yellowstone’s supervolcano.

    And now, perhaps even more concerning, The Daily Express reports that scientists in California have analyzed 101 major earthquakes around the Pacific Ring of Fire, a horseshoe-shaped geological disaster zone, between 1990 and 2016.

    They believe a cluster of tremors around the area could indicate a “big one” is due to hit.

    Earthquakes have already struck in Japan, Tawain, Guam and Indonesia in the past few weeks.

    Thorne Lay, professor of Earth and planetary sciences at UC Santa Cruz, said: “Based on the clustering of earthquakes in space and time, the area that has just slipped is actually more likely to have another failure.

    He added that “the surrounding areas have been pushed towards failure in many cases, giving rise to aftershocks and the possibility of an adjacent large rupture sooner rather than later.

    The Express notes that the study comes after the Ring of Fire was hit by earthquakes in the first two weeks of February.

    More than 180 people were injured and 17 killed when a 6.4 magnitude quake struck Taiwan’s coast on February 6.

    A series of tremors on reaching magnitudes as high as 5.7 shook the US territory of Guam.

    Three earthquakes have hit Japan since February 11, with the largest measuring at 4.8 on the Richter scale.

    Additionally, numerous volcano eruptions, hit the Pacific Rim in January.

    Scientists have. of course, reassured the public saying that the activity is normal for the Ring of Fire.

    Toshiyasu Nagao, head of Tokyo-based Tokai UNiversity’s Earthquake Prediction Research Centre, told Japan Times:

    The Pacific Rim is in a period of activity. In terms of volcanic history, however the current activity is still regarded as normal.

    As we concluded previously, is this time to panic? Maybe, maybe not. But it’s interesting that the Ring of Fire is waking up and  coinciding with news that a pole reversal is near, Yellowstone is ‘strained’, and the sun is approaching its solar minimum which could cause a mini ice age.

  • America's Forever Wars: Guantanamo Bay "Prepared" For New Inmates, Says US Admiral

    On Thursday, Kurt Walter Tidd, a high ranking United States Navy admiral, currently serving as the Commander of the United States Southern Command, told lawmakers on Capitol Hill that the Guantanamo Bay Naval Base is now “prepared” to receive an influx of new detainees.

    “We have 41 detainees who are there right now. We are prepared to receive more should they be directed to us,” Admiral Kurt Tidd, told lawmakers.

    As of today we have not been given a warning order that new detainees might be heading in our direction, but our responsibility will be to integrate them in effectively,” he added.

    During President Donald Trump’s State of the Union speech last month, Trump said he had signed an executive order directing Secretary of Defense James Mattis to “re-examine our military detention policy and to keep open the detention facilities at Guantánamo Bay.”

    “I am asking Congress to ensure that in the fight against ISIS and al Qaeda we continue to have all necessary power to detain terrorists wherever we chase them down, wherever we find them. And In many cases for them it will now be Guantánamo bay,” Trump said during his speech.

    The executive order is a significant reversal of his predecessor Barack Obama’s administration.

    AFP notes that Guantanamo Bay has not received any new inmates since 2008, but that could be changing under the Trump administration, as he plans on expanding the forever war on terrorism.

    US military officials have been openly discussing the fate of Islamic State group detainees, mainly foreign fighters, held by US-backed militias in northern Syria. Guantanamo has not received any new inmates since 2008 but on the campaign trail, Trump vowed to load the facility with “bad dudes,” and said it would be “fine” if US terror suspects were sent there for trial. During his State of the Union speech in January, Trump said IS captives would in “many cases” end up in Guantanamo. 

    Earlier last month, we reported on the Arizona National Guard unit deploying to Cuba to support operations in Guantanamo Bay. Despite the rumors of the prison closing, it appears that the Trump administration is preparing for a ramp-up period. The soldiers won’t have contact with the detainees and they are expected to serve a nine-month rotation which started at the beginning of January.

    These soldiers leaving for Guantanamo Bay in the coming days in support of Operation Enduring Freedom.

    “There was some discussion some time back about actually shutting it down. Right now that’s not what’s going to happen so it’s still very important for us service members to be prepared to go and continue that mission,” said Arizona Army National Guard Command Sergeant Major Fidel Zamora. 

    That’s exactly what nearly 50 Arizona Army National Guard soldiers will soon be doing.

    “Part of that is being able to inform and advise the Joint Task Force Commander there on military police tasks and procedures and part of that is just making sure that the staff runs effectively on a day to day basis,” said Colonel Rich Baldwin, the Land Component Commander of the Arizona Army National Guard.

    This mission is so sensitive we were asked not to show the faces of these soldiers and their families.

    “We don’t want to telegraph to the world who is going, who’s there and who’s performing this mission because they all have families that are still back here while they’re overseas doing this mission,” Colonel Baldwin said.

    Last November, Trump said, “Would love to send the NYC terrorist to Guantanamo but statistically that process takes much longer than going through the Federal system…”

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    After more than 15-years of America’s never-ending wars on terror, the one thing that President Trump has failed to mention is an exit strategy.

    Nevertheless, America’s war spending has not just bankrupted this once great nation to the tune of trillions, it has depleted the inner core of the American economy. The one question we ask: With the Trump administration rapidly preparing for an influx of new prisoners at Guantanamo Bay, who will those new prisoners be?

  • China Steps Into The Middle East Maelstrom

    Submitted by James Dorsey,

    The Middle East has a knack for sucking external powers into its conflicts. China’s ventures into the region have shown how difficult it is to maintain its principle of non-interference in the internal affairs of other states.

    China’s abandonment of non-interference is manifested by its (largely ineffective) efforts to mediate conflicts in South Sudan, Syria and Afghanistan as well as between Israel and Palestine and even between Saudi Arabia and Iran. It is even more evident in China’s trashing of its vow not to establish foreign military bases, which became apparent when it established a naval base in Djibouti and when reports surfaced that it intends to use Pakistan’s deep sea port of Gwadar as a military facility.

    This contradiction between China’s policy on the ground and its long-standing non-interventionist foreign policy principles means that Beijing often struggles to meet the expectations of Middle Eastern states. It also means that China risks tying itself up in political knots in countries such as Pakistan, which is home to the crown jewel of its Belt and Road Initiative — the China–Pakistan Economic Corridor (CPEC).

    Middle Eastern autocrats have tried to embrace the Chinese model of economic liberalism coupled with tight political control. They see China’s declared principle of non-interference in the affairs of others for what it is: support for authoritarian rule. The principle of this policy is in effect the same as the decades-old US policy of opting for stability over democracy in the Middle East.

    It is now a risky policy for the United States and China to engage in given the region’s post-Arab Spring history with brutal and often violent transitions. If anything, instead of having been ‘stabilised’ by US and Chinese policies, the region is still at the beginning of a transition process that could take up to a quarter of a century to resolve.

    There is no guarantee that autocrats will emerge as the winners.

    China currently appears to have the upper hand against the United States for influence across the greater Middle East, but Chinese policies threaten to make that advantage short-term at best.

    Belt and Road Initiative-related projects funded by China have proven to be a double-edged sword. Concerns are mounting in countries like Pakistan that massive Chinese investment could prove to be a debt trap similar to Sri Lanka’s experience.

    Chinese back-peddling on several Pakistani infrastructure projects suggests that China is tweaking its approach to the US$50 billion China–Pakistan Economic Corridor. The Chinese rethink was sparked by political volatility caused by Pakistan’s self-serving politics and continued political violence — particularly in the Balochistan province, which is at the heart of CPEC.

    China decided to redevelop its criteria for the funding of CPEC’s infrastructure projects in November 2017. This move seemingly amounted to an effort to enhance the Pakistani military’s stake in the country’s economy at a time when they were flexing their muscles in response to political volatility. The decision suggests that China is not averse to shaping the political environment of key countries in its own authoritarian mould.

    Similarly, China has been willing to manipulate Pakistan against its adversaries for its own gain. China continues to shield Masoud Azhar (who is believed to have close ties to Pakistani intelligence agencies and military forces) from UN designation as a global terrorist. China does so while Pakistan cracks down on militants in response to a US suspension of aid and a UN Security Council monitoring visit.

    Pakistan’s use of militants in its dispute with India over Kashmir serves China’s interest in keeping India off balance — a goal which Beijing sees as worthy despite the fact that Chinese personnel and assets have been the targets of a low-level insurgency in Balochistan. Saudi Arabia is also considering the use of Balochistan as a launching pad to destabilise Iran. By stirring ethnic unrest in Iran, Saudi Arabia will inevitably suck China into the Saudi–Iranian rivalry and sharpen its competition with the United States. Washington backs the Indian-supported port of Chabahar in Iran — a mere 70 kilometres from Gwadar.

    China is discovering that it will prove impossible to avoid the pitfalls of the greater Middle East. This is despite the fact that US President Donald Trump and Saudi Arabia’s powerful Crown Prince Mohammad bin Salman seem singularly focussed on countering Iran and Islamic militants.

    As it navigates the region’s numerous landmines, China is likely to find itself at odds with both the United States and Saudi Arabia. It will at least have a common interest in pursuing political stability at the expense of political change — however much this may violate its stated commitment to non-interference.

    *  *  *

    Dr James M Dorsey is a senior fellow at the S. Rajaratnam School of International Studies.

  • CIA Argues The Public Can't See Classified Information It Has Already Leaked To Favored Reporters

    Authored by Will Racke via The Daily Caller,

    Intelligence officials can selectively release classified information to trusted journalists while withholding the same information from other citizens who request it through open records laws, CIA lawyers argued Wednesday.

    In a motion filed in New York federal court, the CIA claimed that limited disclosures to reporters do not waive national security exemptions to Freedom of Information Act (FOIA) requests. Intelligence and law enforcement agencies frequently deny records requests on the basis of protecting sensitive national security information, one of nine exemptions written into the federal FOIA law.

    The case stems from lawsuit against the CIA by New York-based independent journalist Adam Johnson, who had used FOIA to obtain emails between the agency’s public information office and selected reporters from the Wall Street Journal, the Washington Post and The New York Times. The emails the CIA provided to Johnson were redacted, leading him to question why he was not allowed to see the same information that had been given to uncleared reporters.

    Johnson challenged the redaction in court, arguing that the CIA, once it has selectively disclosed information to uncleared reporters, cannot claim the same information is protected by a FOIA exemption.

    The judge in the case appeared to find Johnson’ argument compelling. In a court order last month, Chief Judge Colleen McMahon of the Southern District of New York said FOIA laws do not authorize limited disclosure, to favored journalists or otherwise.

    In this case, CIA voluntarily disclosed to outsiders information that it had a perfect right to keep private,” she wrote.

    “There is absolutely no statutory provision that authorizes limited disclosure of otherwise classified information to anyone, including ‘trusted reporters,’ for any purpose, including the protection of CIA sources and methods that might otherwise be outed.

    McMahon also said it didn’t matter if the journalists in question published the information they received, only if the CIA waived its right to deny the information.

    The fact that the reporters might not have printed what was disclosed to them has no logical or legal impact on the waiver analysis, because the only fact relevant to waiver analysis is: Did the CIA do something that worked a waiver of a right it otherwise had?” she wrote, asking CIA lawyers to come up with a stronger defense for non-disclosure.

    The CIA’s response on Wednesday centered on the contention that the information disclosed to favored reporters had not actually entered the public domain. As such, the limited disclosure did not constitute a waiver of the FOIA exemption, government lawyers said.

    “The Court’s supposition that a limited disclosure of information to three journalists necessarily equates to a disclosure to the public at large is legally and factually mistaken,” the CIA motion stated. “The record demonstrates beyond dispute that the classified and statutorily protected information withheld from the emails has not entered the public domain.”

    Selective disclosure of classified information to uncleared reporters is a fairly common practice recognized by Congress, which requires briefings by the CIA on such disclosures, according to Steven Aftergood, the director of the Federation of American Scientists’ Project on Government Secrecy. Johnson’s case, if decided in favor of the CIA, could end up ratifying the practice via the courts, Aftergood says.

    Johnson has until March 1 to reply to the government’s motion, which asks for a summary judgement in favor of the CIA.

    Another ‘win’ for The Deep State looms…

  • Eric Peters: "Toxic" Risk Parity Funds Could Trigger The Next Market Blowup

    On this week’s MacroVoices podcast, host Erik Townsend interviews Zero Hedge regular contributor, Eric Peters, CIO of One River Asset Management who – having correctly predicted the recent record VIX spike (See “Why Eric Peters Is Betting All On A Volatility Eruption” from Jan 7)- discusses the latest explosion of volatility, and its implications for markets as the global economy exits what has become one of the longest business cycles in history and heads toward the next recession.

    The discussion begins with what has been the most talked-about topic of the past month: the blowup of short-volatility products that had earned retail traders millions of dollars in profits during the expansion.

    While pundits on CNBC have given investors the all-clear to buy the dip and get back in, believing that all the fiscal stimulus from the Trump tax plan will almost certainly drive asset prices higher again, Peters is much more circumspect: As growth slows and inflation creeps higher, Peters believes markets will anticipate the recession by dumping stocks and bonds lower before the next recession even begins.

    And risk parity, which has been a reliable strategy for years, will quickly turn toxic, helping establish a negative feedback loop that will continue to drive bonds and stocks lower…

    The problem with products like XIV, which make it possible for retail investors to place extremely risky bets on volatility in a manner that makes them extremely exposed to their own ignorance…

    Peters

    But what, specifically, triggered this blowup, Townsend asked? Was it, as we suggested earlier this month, an intentionally malicious attempt by traders spoofing the VIX complex to manipulate the VIX and trigger the cascading selloff amplified by the product’s explicitly high convexity?

    Peters believes there are several fundamental factors that contributed to the selloff, but the poor design of products like the XIV greatly contributed to the selloff.

    There’s no question that, in an economy and in a financial system where there’s the level of debt that we have and the sensitivity to interest rates, rising rates are kind of a pre-condition to equity market disruptions and selloffs. I think that the level of volatility selling and its integration into risk models across virtually every type of investment strategy are contributors.

    And, having gone through such a long period with very, very little movement, I’d say that many people’s trading books were robust for relatively small moves. But once you’ve passed a certain move – and I think in this case it was probably the S&P down 3-ish% that triggered a whole series of different adjustments that people needed to make to their books and their option books – that then amplified the move in volatility and led to this blowup in the VIX product. But you have to remember that these VIX products were extremely ill-designed. And they were very vulnerable to this. They’re a rare thing that you see in our industry, which is they had a predefined stop loss. And markets are pretty good at finding stop losses and triggering them.

    I started my career in the commodity pits, and I witnessed firsthand how the commodity pit is built around finding stop losses on the top side of the bottom side of markets. So I think the market did a great job of finding the stops – and in this case finding the weakest ones, which were in the VIX complex – and hitting them.

    But I don’t think that that really explains why this move happened. Why did we get the first leg down, and why are markets starting to move with very little news flow? And, again, that’s something that’s difficult to explain for a lot of people that are trying to do it.

    To be sure, there’s plenty of evidence to suggest that XIV and other short-volatility products behaved exactly as they were supposed to during this month’s volocaust. So, what does Peters mean when he says these products are poorly designed?

    Specifically, he’s referring to the fact that the larger these products become, the easier it becomes for sophisticated investors to suss out where the stops are, and bet against the fun accordingly…

    Number one, I think they were very likely inappropriate for a lot of people that bought them. They’re classic late-cycle type products that, in many respects, are designed to try to create returns in a world where it’s difficult to find returns. And late cycle you tend to see these things pop up that provide enhanced levels of carry, or some type of return that looks safe and is a lot less so.

    They were likely inappropriate for people. But I assume that people had a sense for that. I think the design flaw, specifically, is to have a large retail product that has the ability to fall to zero in a day, provided there are a number of conditions met. But, principally, the front month VIX future has to go up 100% for it to lose 100% of its value – means that product, by design, the bigger it gets, the more likely it is that as the VIX moves up in a rapid way the market is able to anticipate that there is a very, very large fire.

    And they know exactly where to stop losses. And the market will tend to suck itself up, or the VIX market will tend to suck itself up to that level, because it knows that it has a forest fire at that level.

    One of the most befuddling phenomenons to emerge this year across markets is the unraveling correlation between the US dollar and Treasury yields. Typically, they move in lockstep. But recently the dollar has been sinking while yields have continued to climb?

    So, how does Peters square this? He believes markets are anticipating that the US economy is heading for a debt-induced recession, which will only be exacerbated by the Trump tax bill and deficit-expanding budget agreements. Because of this, investors are reasoning that interest rates can’t rise too much before causing serious harm to parts of the US’s economy – which explains the dollar’s move.

    For rates, political factors like rising wealth inequality across the developed world are creating a loss of confidence in the US economy and the belief that politicians will continue to implement what Peters calls “de-globalization” policies…

    The rates, it’s a tricky – and I say it’s tricky because we can all recognize that we have extremely low nominal interest rates relative to history. And we’re not far above 5,000-year lows. We still have major central banks in the world with severely negative interest rates. And there’s still an awful lot of bonds that are trading at negative interest rates globally.

    So interest rates, just generally speaking, are very low. Debt is extremely high. And inflation has remained low. So we’re somewhat caught in a dynamic where it’s extremely difficult for rates to go up very high without raising a significant burden on economies. The only way to alleviate that burden is to create more inflation.

    But I think, as everyone looks at the world as they see it today, they go, well, it’s going to be difficult for inflation to go up very far. Consequently rates can’t go up very far, because if they do they’ll, essentially, bankrupt economies. And obviously they won’t bankrupt the whole economy.

    They’ll pressure it enough that the economy will tip into a significant recession. People’s mental model is, roughly speaking, that. And so they look at it, and they go, well, rates are very low, but they can’t really go much higher without sinking economies and recession – consequently, they’re going to be around the same unless inflation moves up substantially.

    That last part I think is what’s necessary. And, ironically, it’s what the major economies in the world are really seeking to deliver right now. They’re not looking to deliver a 1970s-type inflation.

    We’ve reached that tipping point within society where income inequality has become sufficiently large that we’re seeing political shifts, whether it’s here in the US, in the UK, in Germany – certainly in those three places – where there’s clear pushback by the mid-skill worker against low wages, low wage growth.

    As these things happen, as political winds shift, we’re seeing some of the natural consequences. Which is, let’s call it de-globalization. I don’t think it’s going to be a radical de-globalization. But it’s pretty clear that we’re seeing policies in these various countries that, on balance, are going to lead to less globalization.

    Those factors, combined with already very low unemployment, should lead to higher levels of inflation. I think we’re starting to see that right now. And that’s the thing that’s going to allow interest rates to move higher.

    Peters says he envisions a correction happening before a recession begins because the Fed is already signaling that it can’t afford to be there to rescue markets without introducing even more risk into the financial system. This shift in the Fed’s stance from actively interventionist to passive – which is necessary for the central bank to position itself to react to the next crisis – is one factor that could contribute to a marked drop in equity valuations. The government’s carefree spending will push inflation higher in an economy where low unemployment and high debt levels will create a natural constraint on growth…and equity markets will internalize this in the form of a correction that could arrive months before the next recession begins.

    The Fed will continue to welcome this volatility, Peters says, for fear that markets will end the business cycle with P/E on the S&P 500 above 25, setting them up for a massive, destabilizing correction…

    But the Fed is anticipating this “nightmare scenario,” and its shift in communication reflects that.

    I think that your insight is absolutely correct in that the world that I’m framing is one where monetary policy and its ability to interact with financial markets and the economy is going to look awfully different from what we’ve grown accustomed to. And that’s going to create a really interesting market.

    Incidentally, I think that you’re seeing clear confirmation of this in the way the Fed is speaking. So, unlike 10% correction out of the blue that I’ve seen over many years, this time around we haven’t seen a Fed member come out and say we’re going to be really supportive of the Markets.

    In fact, every single Fed governor who’s spoken in – there have probably been five in the past couple of weeks. And then there was Yellen a couple of Fridays ago on her way out. They all said that it is rather capable of dealing with the decline in equity markets and asset prices, and you should do just fine, and we’re not really worried.

    I think that what they are in the process of doing is they are beginning to shift the way they communicate with the markets and they’re signaling that they’re no longer going be there the way that they have been.

    And there are a few reasons for that. I think number one is because they recognize that, at 4.1% unemployment, and a trillion-and- a-half- dollar tax cut, and a 300-billion- dollar budget boost, and a 90-billion- dollar hurricane recovery spend, and then something that amplifies it with infrastructure spending – they’re looking at this and saying, there’s just literally no way this is not going to lead to higher levels of inflation.

    This growth-constrained scenario that Peters envisions, will create major problems for risk parity funds as the new economic environment causes stocks and bonds to plunge, creating a scenario for risk parity funds where deleveraging leads to a vicious feedback loop.

    RiskParity

    The eventual blowup could make their horrific performance during this month’s selloff look tame by comparison…

    There’s a short answer and a long answer to that. Maybe I’ll try for a medium answer. The biggest problem in the investment industry today, the portfolio construct that investors have come to rely on, which is a brilliant construct really pioneered by Ray Dalio – he naturally has done incredibly well from this, and it’s been a fantastic strategy – this risk parity strategy.

    And, while there’s certainly more complexity to it that just being long equities and leveraged funds, let’s just view it as that strategy for a moment. It’s essentially what the dominant portfolio has become at all the major investors, pensions, endowments, etc. in the industry. And the beauty of that portfolio has been that you’ve been able to own risk assets and then you’ve been able to own a hedge, which is a leveraged bond portfolio, and that hedge has actually paid you a positive return.

    The problem is when equity valuations become very high and interest rates get very low it’s difficult for that strategy to continue to perform very well. All else being equal. Now, however, if you add modest inflation into the formula, that portfolio actually becomes pretty toxic.

    That’s the environment I think we’re entering into. And that’s why, ultimately, I see some of these shocks like this most recent market shock as just being trail markers on this path to a much more difficult investment environment.

    In summary, while Peters doesn’t envision a return to 1970s-style inflation, given the structural shifts in the US economy, combined with anti-globalist policies instituted by politicians across the West, markets are looking extremely precarious, and investors who are optimistic about the growth prospects of the Trump administration’s fiscal policies should keep this in mind.

    Listen to the whole interview below:

  • "He Has Her Blood On His Hands" – Father Of Florida Shooting Victim Viciously Attacked Online For Supporting Trump

    Authored by Alex Thomas via SHTFplan.com,

    Leftist social media users have spent the day viciously attacking the father of one of the victims of the horrific Florida school mass shooting over the fact that he wore a Trump 2020 t-shirt during an interview with a local news outlet.

    That’s right, in the new America it is apparently perfectly acceptable to attack and even blame the parent of a teenager who was murdered, all because his political beliefs do not line up with the leftist orthodoxy.

    Both Andrew Pollack and his wife were interviewed outside of Broward Health North hospital, hoping to hear from their daughter hours after the attack that left 17 dead and over a dozen injured. During the interview, Pollack committed the thought crime of wearing a t-shirt for his preferred presidential candidate, a fact that apparently gave leftists on twitter the cover to viciously attack him.

    The attacks ranged from actually blaming Pollack himself for his own daughters death, to disgustingly claiming that they did not feel sorry for him simply because he supports Trump and presumably the NRA. Keep in mind that the anti-gun left has spent BILLIONS of dollars to push their agenda while at the same time pretending that the NRA is this all powerful group that cannot be stopped.

    One user even went as far as to claim that Trump, the NRA, and all Republicans themselves were actually RESPONSIBLE for the attack itself.

    Make no mistake, the following tweets are representative of a large portion of the new left which openly hates all their political opposition to the point where they simply do not care if someone’s daughter was literally just murdered.

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    Additionally, the social media giants themselves (Facebook, Twitter, etc) seemingly support the vicious attacks on Pollack as they have allowed them to continue unimpeded while at the same time censoring dozens of conservatives for a variety of fake reasons.

    As I noted above, this is the new America folks, where all it takes is wearing a Trump shirt to be attacked and even blamed for your own daughters murder.

    *  *  *

    ZH: One could interject that these vicious attacks are not from real left-leaning Americans, they are all Russian bots, aiming to divide our nation even further?

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Feb 17

Today’s News 17th February 2018

  • Falsehoods And Lies: Inciting War Is A War Crime

    Via The Strategic Culture Foundation,

    The torrent of reckless false accusations against Russia made by the US and its NATO allies is hitting warp speed.

    This week saw more baseless allegations of Russian cyber attacks on American elections and British industries.

    There were also crass claims by US officials that Russia was behind so-called sonic attacks on American diplomats in Cuba.

    Then a Dutch foreign minister was forced to resign after he finally admitted telling lies for the past two years over alleged Russian plans for regional aggression.

    Elsewhere, US Secretary of State Rex Tillerson claimed this week during a tour of the Middle East that “the primary goal” of his nation’s involvement in Syria is “to defeat” Islamic State (Daesh) terrorism.

    This is patently false given that the US forces illegally occupying parts of Syria are launching lethal attacks on Syrian armed forces who are actually fighting Islamic State and their myriad terrorist affiliates.

    Meanwhile, US ambassador to the United Nations Nikki Haley accused Russia of blocking peace efforts in Syria – another audacious falsehood to add to her thick compendium of calumny.

    Perhaps the most barefaced falsehood transpired this week when French President Emmanuel Macron candidly admitted that his government did not have any proof of chemical weapons being used in Syria.

    “Today, our agencies, our armed forces have not established that chemical weapons, as set out in treaties, have been used against the civilian population,” said Macron to media in Paris.

    His admission follows that of US Defense Secretary James Mattis who also fessed up earlier this month to having no evidence of chemical weapons being deployed in Syria.

    “We have other reports from the battlefield from people who claim it’s been used,” said Mattis to reporters at the Pentagon. “We do not have evidence of it.”

    Yet, only a few weeks ago, the French and US government were condemning Syrian President Assad for alleged use of chemical weapons by his forces. France’s Foreign Minister Jean-Yves Le Drian and US Secretary of State Rex Tillerson also accused Russia of bearing responsibility because of its alliance with Damascus.

    But now we are told that the French and US governments do not, in fact, have any evidence concerning chemical weapons in Syria.

    This is in spite of US President Donald Trump unleashing over 50 Tomahawk cruise missiles on the Arab country last April in purported reprisal for the “Syrian regime” dropping chemical munitions on the town of Khan Sheikhoun in Idlib Province on April 4 2o17.

    Macron went on to make the absurd declaration this week that “if” chemical weapons were found to be used then he would order military strikes on Syria.

    Both Syria and Russia have categorically and repeatedly rejected claims of using chemical weapons, pointing out that Syria’s stockpile was eliminated back in 2014 under a UN-brokered deal.

    When Mattis said “we have reports from the battlefield” he was referring to groups like the CIA covertly-sponsored terrorist outfit Al Nusra Front and their media outlet, the so-called White Helmets.

    Western news media footage over the past two weeks seemingly depicting Syrian and Russian air strikes on civilian areas is sourced from the White Helmets. This group is embedded with Al Nusra.

    The same warped narrative claiming Syrian and Russian violations during the liberation of Aleppo from the terrorists at the end of 2016 is being played out again in East Ghouta and Idlib. And again the Western news media are amplifying the dubious propaganda from the likes of the White Helmets as if it is independent, verified information.

    This week in Paris Abdulrahman Almawwas, the so-called vice president of the White Helmets, which also go by the name of Syria Civil Defense, told the Reuters news agency that France and other NATO powers must intervene in Syria.

    “It’s time to take real action and not just talk about red lines,” said Almawwas, who was clearly disappointed after hearing Macron’s admission of no evidence for chemical weapons.

    Tellingly, the White Helmets’ envoy was hosted by senior French government officials while in Paris, including Macron’s chief diplomatic advisor, according to Reuters.

    He also went on to complain – unwittingly – that the White Helmets have received less funding from foreign governments this year compared with last year.

    Reuters reported: “Almawwas said the group’s financing for 2018 from foreign governments [sic] had dropped to $12 million from $18 million a year earlier.”

    According to the White Helmets’ own website, the foreign governments whom they receive financing from include: the United States, Britain, France, Netherlands, Germany, Denmark and Canada, among others.

    In other words, this so-called humanitarian relief organization is a NATO-sponsored entity, which evidently operates freely in areas of Syria controlled by Al Nusra and other internationally proscribed terror groups.

    And this is the same “source” which has been used by the NATO governments and Western news media to disseminate claims about Syrian state forces using chemical weapons against civilians – claims which senior US and French officials are now belatedly negating.

    What we have here is demonstrable peddling of falsehoods and lies by Western governments and their news media.

    Not just with regard to the war in Syria, but on a range of other international incendiary issues, as noted above.

    Accusing Russia of aggression, nuclear threats, sabotaging elections, targeting civilian infrastructure which could  “kill thousands and thousands” (British Defense Minister Gavin Williamson last month), or any number of other wild allegations, is symptomatic of sociopathic lying by Western governments.

    The reckless falsehoods and lies espoused by the US and its European allies are made possible because of the reprehensible servility of Western media not holding to account the wild claims that they willfully disseminate.

    This relentless propagation of lies is an appalling incitement to tensions, conflict and war.

    Engaging in war fever is not only irresponsible. It is in fact a war crime, according to Nuremberg legal standards.

  • Assange Hits Back At The Intercept – Claims "Obsessive And Obscenity-Laden" Campaign Against Him

    Julian Assange hit back at The Intercept over a February 14 article claiming he backed Donald Trump’s presidential campaign in leaked group chats from a disgruntled former WikiLeaks associate who set up the chat room. 

    [I]n the fall of 2015, Trump was polling at less than 30 percent among Republican voters, neck-and-neck with neurosurgeon Ben Carson, and Assange spoke freely about why WikiLeaks wanted Clinton and the Democrats to lose the election.

    We believe it would be much better for GOP to win,” he typed into a private Twitter direct message group to an assortment of WikiLeaks’ most loyal supporters on Twitter. “Dems+Media+liberals woudl then form a block to reign in their worst qualities,” he wrote. “With Hillary in charge, GOP will be pushing for her worst qualities., dems+media+neoliberals will be mute.” He paused for two minutes before adding, “She’s a bright, well connected, sadistic sociopath.” –The Intercept

    In a series of rebuttals over Twitter, Assange notes that The Intercept’s Micah Lee failed to do basic fact checking, such as noting that the WikiLeaks account has a rotating staff (i.e. anyone could have written the controversial messages), and used “messages from late Oct 2016 when I infamously had no internet access.”

     

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    Assange also notes Lee’s long-standing grudge against the WikiLeaks co-founder, which he called “obsessive” and “obscenity laden.” 

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  • America: A Military Nation

    Authored by Jacob Hornberger via The Future of Freedom Foundation,

    Americans like to think of their country as different from those run by military regimes. They are only fooling themselves. Ever since the federal government was converted into a national-security state after World War II (without a constitutional amendment authorizing the conversion), it has been the Pentagon, the CIA, and the NSA that have run the government, just like in countries governed by military dictatorships.

    Oh sure, the façade is maintained – the façade that is ingrained in all of us in civics or government classes in high school and college: that the federal government is composed of three co-equal, independent branches that are in charge of the government.

    But just a façade. It’s fake. It’s a lie.

    It’s true that the federal government used to consist of three branches. But that quaint notion disintegrated when the federal government was converted to what is known as a “national-security state” after World War II. Even though it was done without a constitutional amendment, that conversion effectively added a fourth branch of government to the federal government — the national-security branch, which consists of the NSA, the CIA, and the Pentagon.

    The addition of that fourth branch fundamentally altered the original three-branch concept, especially because the fourth branch quickly became the most powerful branch. The reason is because ultimately government is force, and the fourth branch is where the most force was concentrated within the new, altered governmental structure.

    As law professor Michael Glennon has pointed out in his book National Security and Double Government, the result is a federal government in which the military, the CIA, and the NSA are in charge. They are the ones actually calling the shots. But they permit the other three branches to maintain the façade that they are in charge, including periodically going along with decisions in the other three branches to keep Americans thinking that everything is the same as it always has been.

    Consider the Pentagon’s and the CIA’s torture center, prison, and kangaroo tribunal system at Guantanamo Bay, Cuba. They set that up with the aim of establishing a place to hold people and do whatever they wanted to them, without any judicial interference. Guantanamo was a dream-come-true for the military and the CIA. Like most conservatives, they had long lamented those “constitutional technicalities” that let people go free. If only America stopped coddling criminals, we could finally establish order and stability in our land. Guantanamo was going to be their showcase, their model for the United States and the world for dealing with criminals.

    That model, as we now know, entailed kidnappings, bounties, torture, indefinite detention, no criminal defense attorneys, denial of speedy trial, kangaroo military tribunals, use of hearsay evidence, use of evidence acquired through torture, denial of due process of law, and other violations of long-established criminal-justice procedures that stretch back to Magna Carta in 1215.

    Contrary to what the Pentagon and the CIA and their acolytes within the mainstream press have long maintained, terrorism is a criminal offense, not an act of war. If you don’t believe me, go look up the U.S. Code. That’s where all federal crimes are listed. You’ll see that terrorism is in fact a federal criminal offense.

    Alternatively, go into any federal courtroom in the land where a federal criminal prosecution for terrorism is being held. Ask the judge why he’s hold such a trial. He will tell you that it’s because terrorism is a federal criminal offense.

    The Pentagon-CIA torture-prison-tribunal center in Cuba didn’t change that fact. It simply meant that the CIA and the Pentagon were now getting into the law-enforcement business, which would enable them to punish people they were certain were guilty of terrorism.

    Now, let’s turn to President Obama, the president who vowed to shut down this Pentagon-CIA model torture-prison-military tribunal facility. He made that vow at the very start of his presidency, if not before.

    Obama was a two-term president. That meant 8 years in office. When Obama left office, he still had not fulfilled his vow. The Pentagon-CIA torture, indefinite detention, and kangaroo center at Guantanamo was still open. It still is.

    The reaction of Obama supporters and the mainstream press? “Oh, poor President Obama. He meant well. He really wanted to shut down Guantanamo. He just wasn’t able to pull it off before his 8-year term ended.”

    What?

    Hey, this guy was commander-in-chief. No, not of the American people but of the federal government’s military and para-military forces. That means that he is supposedly the head honcho. As such, he gives the orders to everyone below him. In a military structure, the superior officer gives the orders and the subordinate officers obey and carry out the orders.

    That means that all that President Obama, as commander in chief, had to do was issue an order to his military subordinates: “Close it down. Now!”

    But that’s not what happened. The Pentagon and the CIA obviously would not let Obama issue that order. And he understood that if he did, it was a virtual certainty that they wouldn’t have obeyed it.

    Then what?

    Some Obama supporters say it was all Congress’s fault because Congress passed a law that forbade the president from bringing any Gitmo prisoners to the continental United States.

    But Obama is president. He could have vetoed that law. And even if the veto was overridden, he didn’t have to bring any prisoners to the United States. As commander-in-chief of the military and the CIA, he could have simply said, “Close it down and release them all.”

    After all, that’s how our regular constitutional system — the one whose principles the CIA and the Pentagon rejected — works. Government officials have to charge a person with a crime and try him within a reasonable period of time or they are required to release him.

    The real question is: Why was Congress so intent on keeping Gitmo open, over the president’s objections? After all, keeping a U.S. kidnapping-detention-torture-kangaroo tribunal center in place in a foreign country, over the president’s vehement objections, is not the type of thing that we would ordinarily expect from the elected representatives of the American people.

    There is only one explanation that makes sense: That the national-security establishment told Congress that it wanted Gitmo to be kept open. We know that the CIA has assets in the mainstream press. We know they have assets in state and local governments, including police departments. It would stand to reason they would have assets in Congress, ones that they can call upon whenever necessary to protect the interests of the Pentagon, CIA, and NSA.

    And there is also the matter of military bases, programs, and projects in the district of every member of Congress. Congressmen knew what would happen to them if they bucked the Pentagon and the CIA on Guantanamo. All that the Pentagon would have to do is announce a closure of major military bases or other facilities in that Congressman’s district. Immediately, the press would denounce him as an “ineffective congressman,” one who was incapable of bringing home the political bacon to his district.

    What about the Supreme Court? Early on, they rejected the Pentagon’s arguments that they had no jurisdiction over Guantanamo. The Court held it did and said that the federal courts would entertain habeas corpus cases brought by Gitmo prisoners. The Pentagon acceded to the ruling but it was all part of the façade.

    After all, given that there is no constitutional authorization for the federal government to have a bifurcated judicial system — one run by the federal courts and the other run by the military — the Court should have ordered an immediate closure of the facility and a termination of the kangaroo judicial system that the Pentagon and the CIA established.

    Instead, unwilling to cross any red lines when it came to the national-security branch of the government, the Supreme Court has left Gitmo standing. That’s why dozens of prisoners have been held there for more than 10 years without trial and without the hope of a trial, much less a fair one.

    Look at the people who surround President Trump: U.S. “Defense” Secretary: A general. National Security Council advisor: A general. Trump’s chief of staff: a general.

    Think about those flyovers and all other glorification of the military and U.S. sporting events and in U.S. airports and churches and most everywhere else. Think about how so many Americans profusely thank the troops for protecting our rights and freedoms by killing people abroad who aren’t threatening our rights and freedoms. Think about how Trump wants to have “patriotic” military parades, which would undoubtedly feature the latest missiles, rifles, tanks, and planes.

    Remember President Trump before the election? He was criticizing the Pentagon’s forever wars in Afghanistan and the Middle East. He was criticizing NATO and the UN. He was fighting a political war against the CIA. He was all for making friends with Russia.

    Today? Trump is expanding the Pentagon’s forever wars. He let the CIA continue its decades-long secrets in the JFK assassination. He’s extolling NATO. And he’s imposing sanctions on Russia. Trump has been absorbed into the national-security establishment blob.

    Consider Egypt or, for that matter, Chile under Pinochet. In Egypt, the military-intelligence establishment runs the government. Same for Chile under Pinochet. America’s system is not much different, at least not in principle. The only difference is that in Egypt, the military-intelligence role is overt, just like it was in Chile. Here in the United States, the role is more disguised, with the legislative, executive, and judicial branches being permitted to have a fig leaf of ostensible control.

    Welcome to America, one of the world’s premier military nations.

  • "Highly Unusual" Enriched Uranium Particle Detected Over Alaska

    Scientists found a “highly unusual” particle containing enriched uranium-235 during a routine sampling of the air above the Aleutian Islands in August 2016. The source of the material, typically used in nuclear fuel and bombs, remains unclear – while the particle itself is unique in that it’s the first of its kind to be detected in 20 years of plane-based observations. 

    While uranium normally occurs in the ground as the moderately radioactive isotope U-238 – and typically not floating in the air, it must be refined using various methods – typically centrifuges, in order to produce U-235. Particles containing 3-4% U-235 are considered “low enriched” for civilian reactors, while anything north of 90% is considered “weapons grade.” 

    During 20 years of aircraft sampling of millions of particles in the global atmosphere, we have rarely encountered a particle with a similarly high content of 238U [uranium-238] and never a particle with enriched 235U [uranium-235],” reads an abstract from the study. 

    The mystery particle – the bulk of which consisted of “material consistent with combustion of heavy fuel oil” and a “very small amount of enriched uranium” was discovered at an altitude of 7km (4.3 miles) – lower than Mount Everest.

    Researchers involved in the joint project between NOAA ESRL Chemical Sciences Division, the Norwegian Institute for Air Research, and UC Irvine say they were making no special attempts to sample radioactive material during the routine flight to sample the atmosphere.

    “One of the main motivations of this paper is to see if somebody who knows more about uranium than any of us would understand the source of the particle,” scientist Dan Murphy from NOAA told Gizmodo reporter Ryan F. Mandelbaum. After all, “aerosol particles containing uranium enriched in uranium-235 are definitely not from a natural source,” he writes in the paper, published recently in the Journal of Environmental Radioactivity.

    They were not intending to look for radioactive elements. “The purpose of the field campaign was to obtain some of the first global cross-sections of the concentration of trace gases and of dust, smoke, and other particles in the remote troposphere over the Pacific and Atlantic Oceans,” according to the paper. –Gizmodo

    The precise origin of the radioactive particle remains a mystery, however the abstract suggests it could have originated “from a variety of areas across Asia,” and researchers are noting its existence “in case it indicates a novel source where enriched uranium was dispersed.” 

    “It’s not a significant amount of radioactive debris by itself,” said Dan Murphy of NOAA. “But it’s the implication that there’s some very small source of uranium that we don’t understand.

    But where the particle came from is a mystery. It’s pretty clear it came from recently made reactor-grade uranium, the authors write (aka, not from Fukushima or Chernobyl). Perhaps from burnt fuel contaminated with uranium, they thought. They tried to trace it to a source using the direction of the wind—but their best estimate pointed vaguely to Asia. Higher probability areas include some parts of China, including its border with North Korea, and parts of Japan. –Gizmodo

    The NOAA scientists are hoping that other experts in the field will chime in with an answer. “We’re hoping that someone in a field that’s not intimately associated with atmospheric chemistry can say ‘a-ha!’ and give us a call.”

  • Mueller Indicts 13 Russians For Interfering In US Election

    Shortly after noon on Friday, U.S. Special Counsel Robert Mueller announced an indictment of 13 Russian nationals and three Russian entities, accusing them of interfering in the 2016 presidential election and operating fake social media accounts.

    In the indictment announced on Friday – the first criminal case to accuse Russians of seeking to influence the outcome of the U.S. election and support Donald Trump – Mueller describes a sweeping, years-long, multimillion-dollar conspiracy by hundreds of Russians aimed at criticizing Hillary Clinton and supporting Senator Bernie Sanders and Trump. He charged 13 Russian nationals and three Russian entities and accused them of defrauding the U.S. government by interfering with the political process.

    Mueller charges “defendants knowingly and intentionally conspired with each other (and with persons known and unknown to  the Grand Jury) to defraud the United States by impairing, obstructing, and defeating the lawful functions of the government through fraud and deceit for the purpose of interfering with the U.S. political and electoral processes, including the presidential election of 2016.”

    The indictment adds that the Russians “were instructed to post content that focused on ‘politics in the USA’ and to ‘use any opportunity to criticize Hillary and the rest (except Sanders and Trump—we support them)’.”

    It gets better: the defendants reportedly worked day and night shifts to pump out messages, controlling pages targeting a range of issues, including immigration, Black Lives Matter, and they amassed hundreds of thousands of followers. They set up and used servers inside the U.S. to mask the Russian origin of the accounts.

    Ultimately, and this is the punchline, the goal was to disparage Hillary Clinton and to assist the election of Donald Trump.

    In other words, anyone who was disparaging Clinton, may have “unwittingly” been a collaborator of the 13 Russian “specialists” who cost Hillary the election.

    The Russian organization named in the indictment – the Internet Research Agency – and the defendants began working in 2014 so one year before the Trump candidacy was even announced – to interfere in U.S. elections, according to the indictment in Washington. They used false personas and social media while also staging political rallies and communicating with “unwitting individuals” associated with the Trump campaign, it said.

    The Russians “had a strategic goal to sow discord in the U.S. political system,” according to the indictment in Washington.

    The Russians also reportedly bought advertisements on U.S. social media, created numerous Twitter accounts designed to appear as if they were U.S. groups or people, according to the indictment. One fake account, @TEN_GOP account, attracted more than 100,000 online followers.

    The Russians tracked the metrics of their effort in reports and budgeted for their efforts. Some, as described below, traveled to the U.S. to gather intelligence for the surreptitious campaign. They used stolen U.S. identities, including fake driver’s licenses, and contacted news media outlets to promote their activities.

    The full list of named defendants in addition to the Internet Research Agency, as well as Concord Management and Consulting and Concord Catering, include:

    • MIKHAIL IVANOVICH BYSTROV,
    • MIKHAIL LEONIDOVICH BURCHIK,
    • ALEKSANDRA YURYEVNA KRYLOVA,
    • ANNA VLADISLAVOVNA BOGACHEVA,
    • SERGEY PAVLOVICH POLOZOV,
    • MARIA ANATOLYEVNA BOVDA,
    • ROBERT SERGEYEVICH BOVDA,
    • DZHEYKHUN NASIMI OGLY ASLANOV,
    • VADIM VLADIMIROVICH PODKOPAEV,
    • GLEB IGOREVICH VASILCHENKO,
    • IRINA VIKTOROVNA KAVERZINA,
    • VLADIMIR VENKOV
    • YEVGENIY VIKTOROVICH PRIGOZHIN

    Mueller’s office said that none of the defendants was in custody.

    So how is Trump involved? Well, he isn’t, as it now seems that collusion narrative is dead, and instead Russian involvement was unilateral. Instead, according to the indictment, the Russian operations were unsolicited and pro bono, and included “supporting Trump… and disparaging Hillary Clinton,’ staging political rallies, buying political advertising while posing as grassroots U.S. groups. Oh, and communicating “with unwitting individuals associated with the Trump Campaign and with other political activists to seek to coordinate political activities.

    Defendant ORGANIZATION had a strategic goal to sow discord in the U.S. political system, including the 2016 U.S. presidential election. Defendants posted derogatory information about a number of candidates, and by early to mid-2016, Defendants’ operations included supporting the presidential campaign of then-candidate Donald J. Trump (“Trump Campaign”) and disparaging Hillary Clinton. Defendants made various expenditures to carry out those activities, including buying political advertisements on social media in the names of U.S. persons and entities. Defendants also staged political rallies inside the United States, and while posing as U.S. grassroots entities and U.S. persons, and without revealing their Russian identities and ORGANIZATION affiliation, solicited and compensated real U.S. persons to promote or disparage candidates. Some Defendants, posing as U.S. persons and without revealing their Russian association, communicated with unwitting individuals associated with the Trump Campaign and with other political activists to seek to coordinate political activities.

    Furthermore, the dastardly Russians created fake accounts to pretend they are Americans:

    Defendants, posing as U.S. persons and creating false U.S. personas, operated social media pages and groups designed to attract U.S. audiences. These groups and pages, which addressed divisive U.S. political and social issues, falsely claimed to be controlled by U.S. activists when, in fact, they were controlled by Defendants. Defendants also used the stolen identities of real U.S. persons to post on ORGANIZATION-controlled social media accounts. Over time, these social media accounts became Defendants’ means to reach significant numbers of Americans for purposes of interfering with the U.S. political system, including the presidential election of 2016

    Mueller also alleges a combination of traditional and modern espionage…

    Certain Defendants traveled to the United States under false pretenses for the purpose of collecting intelligence to inform Defendants’ operations. Defendants also procured and used computer infrastructure, based partly in the United States, to hide the Russian origin of their activities and to avoid detection by U.S. regulators and law enforcement.

    Mueller also charges that two of the defendants received US visas and from approximately June 4, 2014 through June 26, 2014, KRYLOVA and BOGACHEVA “traveled in and around the United States, including stops in Nevada, California, New Mexico, Colorado, Illinois, Michigan, Louisiana, Texas, and New York to gather intelligence, After the trip, KRYLOVA and BURCHIK exchanged an intelligence report regarding the trip.”

    * * *

    The indictment points to a broader conspiracy beyond the pages of the indictment, saying the grand jury has heard about other people with whom the Russians allegedly conspired in their efforts.

    Stocks are not happy.

    Stocks

     

    Rosenstein is expected to hold a briefing at 1:30pm ET. Watch it live below:

    Read the indictment below (link):

  • Playboy Model Details 9 Month Covert Affair With Trump: New Yorker

    In a bombshell New Yorker report from Ronan Farrow, who was the first reporter to expose Democratic donor Harvey Weinstein for his decades-long history of sexual assault, Karen McDougal, a former Playboy Model who first met President Trump in 2006 during a pool party at the Playboy mansion, shared details about her alleged relationship with the president, and his relationship with National Enquirer owner David Pecker (and holding company American Media Inc), a longtime “personal friend” who once reportedly paid her $150,000 for the exclusive rights to her story, only to let it never see the light of day.

    In the world of tabloid journalism, this process is called “catch and kill“. Though McDougal’s story was first reported in 2016 by the Wall Street Journal, Farrow’s account is the first time she’s shared her story – which she “corroborated with an eight-page handwritten account taken at the time of the affair” – in full detail.

    McDougal

    The two first met after a taping of Trump’s show, the Apprentice, at the Playboy mansion. Trump was reportedly “all over her” and one of the show’s producers even remarked “you could be his next wife.” According to the New Yorker, McDougal kept handwritten notes about the affair, which she said began in 2006, after the taping of “The Apprentice” episode.

    Over a period of nine months, Trump ferried her to meet him both in LA and around the country, taking care not to leave a paper trail. During their meetings, McDougal said she would first be led to meet Trump by Keith Schiller, his former bodyguard.

    Pecker’s relationship with Trump is an advantageous one for him, because Pecker is likely one of the few people who knows where “all the bodies are buried” for the most powerful man in the world. Trump has denied the affair.

    McDougal, in her first on-the-record comments about A.M.I.’s handling of her story, declined to discuss the details of her relationship with Trump, for fear of violating the agreement she reached with the company. She did say, however, that she regretted signing the contract. “It took my rights away,” McDougal told me. “At this point I feel I can’t talk about anything without getting into trouble, because I don’t know what I’m allowed to talk about. I’m afraid to even mention his name.”

    A White House spokesperson said in a statement that Trump denies having had an affair with McDougal:

    “This is an old story that is just more fake news. The President says he never had a relationship with McDougal.”

    American Media said that an amendment to McDougal’s contract—signed after Trump won the election—allowed her to “respond to legitimate press inquiries” regarding the affair. The company said that it did not print the story because it did not find it credible.

    Six former A.M.I. employees told me that Pecker routinely makes catch-and-kill arrangements like the one reached with McDougal. “We had stories and we bought them knowing full well they were never going to run,” Jerry George, a former A.M.I. senior editor who worked at the company for more than twenty-five years, told me. George said that Pecker protected Trump. “Pecker really considered him a friend,” George told me. “We never printed a word about Trump without his approval.” Maxine Page, who worked at A.M.I. on and off from 2002 to 2012, including as an executive editor at one of the company’s Web sites, said that Pecker also used the unpublished stories as “leverage” over some celebrities in order to pressure them to pose for his magazines or feed him stories. Several former employees said that these celebrities included Arnold Schwarzenegger, as reported by the Los Angeles Times, and Tiger Woods. (Schwarzenegger, through an attorney, denied this claim. Woods did not respond to requests for comment.) “Even though they’re just tabloids, just rags, it’s still a cause of concern,” Page said. “In theory, you would think that Trump has all the power in that relationship, but in fact Pecker has the power – he has the power to run these stories. He knows where the bodies are buried.”

    While there’s no evidence Pecker has ever used his leverage over Trump, several of his former employees said he would often use “killed” stories as leverage to get celebrities like Tiger Woods to feed him stories.

    During their relationship, McDougal noted that Trump would always order the same meal (steak and potatoes with no alcohol) and that he often would send her press clippings about himself or his children. McDougal’s account shared some amusing similarities with an account of an affair with Trump offered by former adult film actress Stormy Daniels. For instance, both Daniels and McDougal said Trump watched Discovery Channel’s “Shark Week” programming with them. Daniels famously revealed that Trump told her he hates sharks.

    After their first sexual encounter, McDougal said Trump offered to pay her – to which she declined.

    As the pool party at the Playboy Mansion came to an end, Trump asked for McDougal’s telephone number. For McDougal, who grew up in a small town in Michigan and worked as a preschool teacher before beginning her modelling career, such advances were not unusual. John Crawford, McDougal’s friend, who also helped broker her deal with A.M.I., said that Trump was “another powerful guy hitting on her, a gal who’s paid to be at work.” Trump and McDougal began talking frequently on the phone, and soon had what McDougal described as their first date: dinner in a private bungalow at the Beverly Hills Hotel. McDougal wrote that Trump impressed her. “I was so nervous! I was into his intelligence + charm. Such a polite man,” she wrote. “We talked for a couple hours – then, it was “ON”! We got naked + had sex.” As McDougal was getting dressed to leave, Trump did something that surprised her. “He offered me money,” she wrote. “I looked at him (+ felt sad) + said, ‘No thanks – I’m not ‘that girl.’ I slept w/you because I like you – NOT for money’ – He told me ‘you are special.’

    The New Yorker also described the elaborate system that was created to conceal Trump’s alleged affair:

    Afterward, McDougal wrote, she “went to see him every time he was in LA (which was a lot).” Trump, she said, always stayed in the same bungalow at the Beverly Hills Hotel and ordered the same meal—steak and mashed potatoes—and never drank. McDougal’s account is consistent with other descriptions of Trump’s behavior. Last month, In Touch Weekly published an interview conducted in 2011 with Stephanie Clifford in which she revealed that during a relationship with Trump she met him for dinner at a bungalow at the Beverly Hills Hotel, where Trump insisted they watch “Shark Week” on the Discovery Channel. Summer Zervos, a former contestant on “The Apprentice,” alleged that Trump assaulted her at a private dinner meeting, in December of 2007, at a bungalow at the Beverly Hills Hotel. Trump, Zervos has claimed, kissed her, groped her breast, and suggested that they lie down to “watch some telly-telly.” After Zervos rebuffed Trump’s advances, she said that he “began thrusting his genitals” against her. (Zervos recently sued Trump for defamation after he denied her account.) All three women say that they were escorted to a bungalow at the hotel by a Trump bodyguard, whom two of the women have identified as Keith Schiller. After Trump was elected, Schiller was appointed director of Oval Office Operations and deputy assistant to the President. Last September, John Kelly, acting as the new chief of staff, removed Schiller from the White House posts. (Schiller did not respond to a request for comment.)

    Over the course of the affair, Trump flew McDougal to public events across the country but hid the fact that he paid for her travel. “No paper trails for him,” she wrote. “In fact, every time I flew to meet him, I booked/paid for flight + hotel + he reimbursed me.” In July, 2006, McDougal joined Trump at the American Century Celebrity Golf Championship, at the Edgewood Resort, on Lake Tahoe. At a party there, she and Trump sat in a booth with the New Orleans Saints quarterback Drew Brees, and Trump told her that Brees had recognized her, remarking, “Baby, you’re popular.” (Brees, through a spokesman, denied meeting Trump or McDougal at the event.) At another California golf event, Trump told McDougal that Tiger Woods had asked who she was. Trump, she recalled, warned her “to stay away from that one, LOL.”

    Trump promised to buy McDougal a condo – which he never did – and also introduced her to members of his family.

    McDougal, who had earlier kept quiet for fear of reprisal, said she ended the affair in April 2007 because she felt “tremendously guilty” (though Trump had revealed to her that he and his wife Melania maintained separate bedrooms).

    McDougal ended the relationship in April, 2007, after nine months. According to Crawford, the breakup was prompted in part by McDougal’s feelings of guilt. “She couldn’t look at herself in the mirror anymore,” Crawford said. “And she was concerned about what her mother thought of her.” The decision was reinforced by a series of comments Trump made that McDougal found disrespectful, according to several of her friends. When she raised her concern about her mother’s disapproval to Trump, he replied, “What, that old hag?” (McDougal, hurt, pointed out that Trump and her mother were close in age.) On the night of the Miss Universe pageant McDougal attended, McDougal and a friend rode with Trump in his limousine and the friend mentioned a relationship she had had with an African-American man. According to multiple sources, Trump remarked that the friend liked “the big black dick” and began commenting on her attractiveness and breast size. The interactions angered the friend and deeply offended McDougal.

    Speaking carefully for fear of legal reprisal, McDougal responded to questions about whether she felt guilty about the affair, as her friends suggested, by saying that she had found God in the last several years and regretted parts of her past. “This is a new me,” she told me. “If I could go back and do a lot of things differently, I definitely would.”

    Trump also hooked up with McDougal at the Lake Tahoe golf tournament in 2006 where he also met Daniels. While McDougal said she voluntarily sold her story to the Enquirer, she insists that the way the deal was done was “exploitative.”

    She sold the story during the 2016 presidential election, after a friend suggested it, and brokered the transaction – though she was fearful of going public for fear that Trump’s supporters might harass her. McDougal says she is a Republican. She signed her agreement with the Enquirer on Aug. 5, 2016, about a month before the infamous “Access Hollywood” tape broke, and while Daniels was also trying to negotiate selling her story to “Good Morning America” and Slate.

  • Trump Is Disposable, He's The Doorman – "The Deep State Runs The Show"

    Authored by Jeff Thomas via InternationalMan.com,

    Picture this: A tribal leader from a distant country visits the US. He’s brought to a large apartment building in New York City. When he gets out of the car, he looks up at the great building and is quite impressed. A uniformed doorman exits the foyer and comes out on the sidewalk. The tribesman sees the gold braiding and brass buttons of his coat and immediately decides that this is a very important person. Again he looks up at the building and says to the doorman, “This is a very great home you have. You must be very important indeed.”

    Of course, if we were present, we might chuckle at the tribesman’s naiveté. The owners of such a great building would never greet people at the entrance. They leave such trivial tasks to hired servants, whilst they run the real business without ever needing any direct contact with visitors as they enter the building. And, in addition, doormen come and go – they are, after all, disposable. The owners – those who control what happens in the building – retain their positions over the long term… and may remain anonymous, if they so choose.

    We find this simple concept easy enough to understand, and yet we chronically have difficulty in understanding that, in most countries, the president, or prime minister, is not by any means the man who makes the big decisions in the running of the country.

    We assume that, because we were allowed to vote for our leader, he must actually be our leader. But, as Mark Twain has at times been credited as saying, “If voting made any difference, they wouldn’t let us do it.”

    Similarly, the man whose family took over the financing of Europe, Meyer Rothschild, said, “Permit me to issue and control the money of a nation and I care not who makes its laws.” His family has been calling the shots for centuries, but like the owners of the apartment building, they keep a low profile.

    Remarkably, most people will nod their heads at the above quotes, yet somehow still imagine their elected leader to be in charge.

    Most anyone will accept that the voting system in their country has been corrupted in one way or another and it’s even more likely that they’ll acknowledge that the central banks control the flow of money. Yet, they persist in believing that, even if elections are financed by the big banks, the military industrial complex, Big Pharma, etc., somehow, those who are elected remain loyal to the voters, not to those who paid for their election.

    And, they imagine these elected members to be running the show.

    Further, whilst they often acknowledge that the political party that they oppose is bought and paid for, they prefer to think that the one they favour is not.

    At this point, both the EU and the US are run by the Deep State. In Europe it’s a bit more obvious, as the EU is a visible, unelected body that holds sway over all of the most significant developments in Europe.

    In the US, it’s a bit less obvious, but it’s generally understood that the CIA, FBI and other similar organisations run independently of the president. (He has the power to fire a Director, but does not have the power to eliminate these organisations or change their agenda.)

    The US is run as a corporatist body – joint rule by big business and the state.

    The elected members are, like doormen, temporary. They are, of course, highly visible, which they’re intended to be, as they’re meant to distract the public eye away from those who are truly in charge.

    And, like doormen, they’re disposable. They can be unelected at four-year intervals and the agenda continues as planned. They are, in fact, largely irrelevant to the direction that the country takes.

    The president in particular falls into this category. There have been quite a few presidents, such as the present one, who rose to that post with little or no previous experience in elected office. Their election is a result of popularity. If they do a better job of creating campaign-promises than their opponents, they emerge as the winners, even if they have no political ties, associations with other legislators, or previous experience in the job.

    And yet, we somehow assume that those who really pull the strings would spend hundreds of millions of dollars on elections, then tolerate a newly-elected outsider to wash away their investment by actually taking charge.

    To be sure, there have been presidents who have bucked the Deep State, but they tend to change their tune rather quickly and get back into line. Those who have refused have sometimes found themselves on the business end of a bullet, although, more recently, the preferred tactic has been to invent accusations of corruption and indecency, then to produce questionable witnesses to discredit the leader. (A leader who has been forced out in disgrace is just as gone as one that’s been assassinated.)

    But, almost invariably, the “leader” sees that it’s in his interest to cave in to the Deep State, as, perennially, they hold the real power. Campaign promises are tossed into the dustbin and it’s back to the previous, ongoing agenda. This we’ve witnessed time after time.

    Does this mean that the president is only a mouthpiece for the Deep State? Well, no, it’s actually advantageous for him to express his own opinions, ruffle the public’s feathers and push his pet projects. It adds to the distraction that he’s in charge. However, the larger issues – particularly the flow of tax dollars into the pockets of corporations, continue exactly as planned, regardless of who’s in office.  Bankers continue to receive absurdly large bailouts when they’ve grossly mismanaged their banks. The military industrial complex continues to enjoy perpetual warfare, so that they can supply armaments to the government for unnecessary conflicts. Big Pharma enjoys legislation that forces people to be vaccinated against their will and accept outrageously high prices for medications that are generally inexpensive to produce.

    But, yes, as long as a president remains the spokesman to explain why such policies are not only tolerable, but essential, he may be allowed to occupy the oval office until the voters tire of him.

    But, if this is true, why do people so quickly and so readily accept the “leader” to actually be unilaterally responsible for every facet of every governmental policy and action?

    Well actually, nothing could be easier. It’s human nature to want to put a face to our praise and/or criticism. We can’t muster the same focus if we’re advised that we’re being ruled by a faceless group. We tend to respond more readily and more intensely to a single individual – a face we can conjure up immediately. “People desire certainty,” Doug Casey once observed to me, when discussing a related subject, and that’s exactly so. If we’re uncertain during troubled times, we’ll instantly jump at the opportunity to put a single face to the problem, to blame one individual for whatever is troubling us.

    This is evidenced by the presentation of photos of Lee Harvey Oswald and Osama bin Laden, mere hours after major events, as the certain culprits. They were immediately accepted, without any question, by a people desperately seeking certainty.

    Therefore, as soon as one leader is out and another takes his place, we’re able to immediately transfer our devotion or hatred to the replacement.

    The concept of providing a single face to the public is one that was understood by George Orwell, who created the character of “Big Brother,” who would be on the video screens incessantly, as the face of the government.

    But, in stating all of the above, it may seem that I’ve portrayed the doorman as insignificant and this is not the case. He does play quite an important role.

    He’s absolutely essential, as he, more than any other legislator, creates a suitable distraction from those who really run the show. He’s in front of the microphone, does interviews, is filmed almost on a daily basis, and is constantly credited by the media as being either the saviour or the devil, depending upon which media outlet is providing the portrayal.

    And the shakier an economy, and the greater the problems of a country, the more essential it is that the “leader” be visible. After all, when things go badly awry, someone has to serve as the fall guy.

    When this occurs, he is, of course, disposable. He leaves in disgrace or is voted out and a new puppet is voted in whose loyalty is again to the Deep State, not to the voters. And, most importantly, the real agenda continues, as planned, regardless of whatever new campaign promises got him elected.

    (This is not at all new. In 1933, Franklin Roosevelt introduced the Emergency Banking Act the day after his inauguration speech, in which he had assured the country that he would not mess with the currency.)

    Campaign promises are dumped wholesale; the demeanour of the new leader may change dramatically, and the new leader’s very principles may suddenly evaporate after election day. However, the ongoing agenda does not. Regardless of who’s elected, or what party he professes to represent, we witness a continuation of the previous directions taken by those who truly hold the power.

    What’s important to recognize is that, no matter how large the apartment building may be, no matter how impressive the presentation of the doorman may be, he is just that. He is only the front man, and he is disposable.

    The Deep State runs the show. Their presence is permanent and their agenda is both ongoing and impervious to the whims of the voting public.

    *  *  *

    The Deep State’s quiet control on the US financial system has pushed it to the brink. Find out how to protect yourself in our Guide to Surviving and Thriving During an Economic Collapse. Click here to download your free PDF copy now.

  • Deutsche: "Nobody Can Understand What's Going On With The Dollar… The Answer Is Simple"

    Earlier this week, the bizarre, unexplainable, ongoing plunge in the dollar and US bond prices in the aftermath of the stronger than expected CPI print which also sent equities surging, prompted at least one trader at Citi to explode: “Wake Up Folks, It’s Not Risk Positive

    Then again, maybe it is not all that unexplainable.

    As Deutsche’s FX strategist, George Saravelos, writes, he has been getting numerous inquiries as to how can it be that US yields are rising sharply, yet the dollar is so weak at the same time?

    He believes the answer is simple: the dollar is not going down despite higher yields but because of them. Higher yields mean lower bond prices and US bonds are lower because investors don’t want to buy them, or as he puts it “this is an  entirely different regime to previous years.”

    Below we repost his simple explanation, while highlighting that maybe…

    … just maybe, the bottom for the dollar is now in?

    From Deutsche Bank:

    Blame the dollar on yields

    We are well into 2018 and our feedback from recently attending the TradeTech FX conference in Miami is that the market is still struggling to understand or embrace dollar weakness. How can it be that US yields are rising sharply, yet the dollar is so weak at the same time? The answer is simple: the dollar is not going down despite higher yields but because of them. Higher yields mean lower bond prices and US bonds are lower because investors don’t want to buy them. This is an entirely different regime to previous years.

    Dollar weakness ultimately goes back to two major problems for the greenback this year. First, US asset valuations are extremely stretched. As we argued in our 2018 FX outlook a combined measure of P/E ratios for equities and term premia for bonds is at its highest levels since the 1960s. Simply put, US bond and equity prices cannot continue going up at the same time. This correlation breakdown is structurally bearish for the dollar because it inhibits sustained inflows into US bond and equity markets.

    The second dollar problem is that irrespective of asset valuations the US twin deficit (the sum of the current account and fiscal balance) is set to deteriorate dramatically in coming years. Not only does the additional fiscal stimulus recently agreed by Congress push the fair value of bonds even lower via higher issuance and inflation risk premia effects, but the current account that also needs to be financed will widen via import multiplier effects. When an economy is stimulated at full employment the only way to absorb domestic demand is higher imports.  Under conservative assumptions the US twin deficit is set to deteriorate by well over 3% of GDP over the next two years.

    The mirror image to all of this is that the flow picture into both Europe and Japan has been improving dramatically anyway. We have previously written about the positive flow dynamics in Europe as the flow distortions caused by extremely unconventional ECB policy are starting to adjust. But the Japanese basic balance has also shot up to a 4% surplus in recent years helped by a big improvement in the services balance (Chinese tourists) and a collapse of Japanese inflows into the US: treasuries simply do not provide enough duration compensation any more. To conclude, embrace dollar weakness, it has more to run.

  • Peter Thiel "Makes A Killing" With Massive Vol-Spike Bet

    While Thiel is best known for venture investments like those in Facebook and PayPal,  Bloomberg writes that it was his macro strategy that positioned him to make a killing on last week’s spike in market volatility.

    Outspoken Silicon Valley billionaire Peter Thiel was along for the ride in the world’s great short-volatility trade with a $404 million bet as recently as the end of 2014.

    But in the latest filings from Thiel Macro, it appears Thiel changed his mind in the latter half of last year and reversed his position into a massive bet on volatility jumping…

    While he maintained a small $6.5mm VXX Put position (short-volatility bet), he added a massive $244mm SVXY Put position (long-volatility bet).

    If you’re wondering why Thiel’s sudden change of heart, perhaps this will explain it.

    The following, recorded secretly from EqDerivatives Conference in May 2017, exposes Chris Cole of Artemis and Mike Green of Thiel Macro arguing with XIV-creator Nick Cherney, specifically about the Termination Event in XIV.

    The action starts in the Q&A session after the anti-short-volatility keynote by Cole and Green (move forward to around 37-38mins on for a heated argument!!!!)

    https://platform.twitter.com/widgets.js

    Cherney insults them for being (correctly) anti-XIV… and Cole and Green pretty much eviscerate his logic, XIV, and the entire short-vol trade, and explain to him why his own product is doomed to fail.

    It seems they were right… and Thiel Macro made a killing!!

    As Bloomberg reports, the options, which entitle the holder to sell the underlying shares at a set price in the future, increase in value when those underlying shares decline. Thiel Macro still held the put options on 1.9 million shares of the ETF as of Dec. 31, according to the filing. The face value of those shares was $244 million.

    After closing at $121.67 a share on Feb. 1, the ETF collapsed in the ensuing days, hitting a low of $9.58 a week later. The shares covered by Thiel’s put options lost about $213 million of market value during that week.

    It is unknown at what strike these options were bought, but no matter, if Thiel held onto the options, his gains would equal some portion of the $213 million decline.

    For a sense of context, at-the-money SVXY Puts from mid Q4 exploded in price from around $9 to $108 in the last two weeks… a 1000% gain!!!

    Of course, we await another article akin to The Guardian’s from last week, “Making millions from chaos: the fund cashing in on the stock market collapse” villifying those who dared not be all-in, levered long to the US stock market.

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Feb 16

Today’s News 16th February 2018

  • Solar Storm Will Strike Earth Tonight, "Weak Power Grid Fluctuations" Possible

    Authored by Mac Slavo via SHTFplan.com,

    The NOAA Space Weather Prediction Center forecasts an aurora could light up the sky above areas in the United State including Michigan and Maine.  A solar storm, which occurred Monday, is expected to strike Earth tonight.

    On Monday, the sun spit out a slew of charged particles in a moderate solar flare. These particles are now making their way towards Earth. The planet’s magnetic field will block most of the particles, but some will make it into Earth’s atmosphere. The particles collect at the north and south poles and interact with atmospheric gases to create the aurora borealis or the Northern Lights. And some say this show could be quite spectacular.

    Solar flares have been known to cause power grid failures, but it looks like we’ll only get the light show this time. Although a grid failure is possible, it is unlikely.

    According to Seeker, the forecast calls for a high probability of a G-1 or “minor” storm, which could strengthen to a G-2 or “moderate” storm depending on how the stream of particles hit the Earth. Geomagnetic storms are ranked on a scale, with G at the bottom, R in the middle, and S as the most severe. Forecasts now say the particles will give our planet a glancing blow.

    Although this storm has been categorized as “G-1,” which means it is minor, it could still cause some havoc down on Earth. Solar flares and particle ejections are associated with sunspots — dark areas on the sun’s surface — that host intense magnetic activity. As the magnetic fields in a sunspot cross, NASA stated, this can cause a sudden energy explosion, also known as a solar flare. This sends radiation out into space, and that radiation can be hurled toward the Earth.

    G1-level storms, such as Monday’s, may affect migratory animals, and can cause “weak power grid fluctuations.”

    The barrage of particles may even have a minor impact on satellites.  A gird failure would almost immediately fling the United States into a state of panic, and it’s always good to be prepared just in case. But it doesn’t look like there will be any serious damage to the power grid because of this storm as of right now.

  • Visualizing The The Rising Speed Of Technological Adoption

    Technological progress is not the only thing rising at an exponential rate.

    Visual Capitalists’s Jeff Desjrdins points out that the rate at which newly commercialized technologies get adopted by consumers is also getting faster, too.

    In the modern world, through increased connectivity, instant communication, and established infrastructure systems, new ideas and products can spread at speeds never seen before – and this enables a new product to get in the hands of consumers in the blink of an eye.

    VISUALIZING TECHNOLOGICAL ADOPTION

    Today’s dynamic chart comes to us from Our World in Data, and it allows you to compare the adoption rates of new technologies over the period of more than a century.

    In addition to the technologies you’ll find embedded on the initial chart above, you can also use the “Add technology” tab of the chart (bottom left) to list up to 40 tech data series on the chart in total. This allows you to gauge adoption rates for everything from color televisions to washing machines, while giving you an idea of the trajectory of many common technologies today.

    A BLAST FROM THE PAST

    To get the full impact of the chart, it’s worth removing more modern technologies like smartphones, social media, tablets, cellular phones, and the internet from the list.

    Here’s a look at adoption rates for the household appliances and products today that we would consider pretty essential, over a period of more than 120 years:

    The telephone was invented in 1876, but it wasn’t until a century later that landlines reached a saturation point in households.

    For this to happen, massive amounts of infrastructure had to be built and network effects also needed to accumulate to make the product worthwhile for consumers. Further, the telephone suffered from the “last-mile problem”, in which the logistics get tougher and more expensive as end-users get hooked up to a network.

    As a result, it wasn’t until the 1960s that 80% of U.S. households had landlines in them.

    NEW ADOPTION SPEEDS

    Now, here’s a chart with many older technologies removed – keep in mind that the x axis has changed to a much shorter timespan (~65 years):

    Microwaves, cell phones, smartphones, social media, tablets, and other inventions from the modern era all show fast-rising adoption rates. Standing out most on the chart is the tablet computer, which went from nearly 0% to 50% adoption in five years or so.

    Why do newer technologies get adopted so quickly? It seems partly because modern tech needs less infrastructure in contrast with the water pipes, cable lines, electricity grids, and telephone wires that had to be installed throughout the 20th century.

    However, it also says something else about today’s consumers – which is that they are connected, fast-acting, and not afraid to adopt the new technologies that can quickly impact their lives for the better.

  • The World Embraces Debt At Exactly The Wrong Time

    Authored by John Rubino via DollarCollapse.com,

    Self-destruction usually happens in stages.

    At first there’s a binge in which the thrill outweighs the sense of transgression. This is usually followed by remorse, acknowledgement of risks, and an attempt to reform.

    But straight-and-narrow is exhausting, and because of this is frequently just temporary, eventually giving way to a kind of capitulation in which the addict drops even the pretense of self-control.

    2018 is apparently the year in which the world enters this final stage of its addiction to debt. Wherever you look, leverage is soaring as governments, corporations and individuals just give up and embrace the idea that borrowing is no longer a necessary evil, but simply necessary. Some recent examples:

    China January new loans surge to record 2.9 trillion yuan, blow past forecasts

    (Reuters) – China’s banks extended a record 2.9 trillion yuan ($458.3 billion) in new yuan loans in January, blowing past expectations and nearly five times the previous month as policymakers aim to sustain solid economic growth while reining in debt risks.

    Net new loans surpassed the previous record of 2.51 trillion yuan in January 2016, which is likely to support growth not only in China but may underpin liquidity globally as major Western central banks begin to withdraw stimulus.

    Corporate loans surged to 1.78 trillion yuan from 243.2 billion yuan in December, while household loans rose to 901.6 billion yuan in January from 329.4 billion yuan in December, according to Reuters calculations based on the central bank data.

    Outstanding yuan loans grew 13.2 percent in January from a year earlier, also faster than an expected 12.5 percent rise and compared with an increase of 12.7 percent in December.

    ———————–

    Total US household debt soars to record above $13 trillion

    (CNBC) – Total household debt rose by $193 billion to an all-time high of $13.15 trillion at year-end 2017 from the previous quarter, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data report released Tuesday.

    Mortgage debt balances rose the most in the December quarter rising by $139 billion to $8.88 trillion from the previous quarter. Credit card debt had the second largest increase of $26 billion to a total of $834 billion.

    ———————–

    Trump’s budget balloons deficits, cuts social safety net

    (Chicago Tribune) – President Donald Trump unveiled a $4.4 trillion budget plan Monday that envisions steep cuts to America’s social safety net but mounting spending on the military, formally retreating from last year’s promises to balance the federal budget.

    The president’s spending outline for the first time acknowledges that the Republican tax overhaul passed last year would add billions to the deficit and not “pay for itself” as Trump and his Republican allies asserted.

    Trump’s plan sees a 2019 deficit of $984 billion, though White House Budget Director Mick Mulvaney admits $1.2 trillion is more plausible after last week’s congressional budget pact and $90 billion worth of disaster aid is tacked on. That would be more than double the 2019 deficit the administration promised last year.

    source: tradingeconomics.com

    So far, the financial markets are responding pretty much according to script:

    US bonds sell off on inflation scare

    (CNBC) – U.S. government debt yields hit session highs Wednesday after the government reported inflation in January rose more than expected.

    The yield on the benchmark 10-year Treasury note jumped to 2.882 percent as of 10:03 a.m. ET. It hit a four-year high of 2.902 percent on Monday. The yield on the 30-year bond was last seen higher at 3.146 percent. Bond yields move inversely to their prices.

    Schwab’s Kathy Jones argued that the latest reading could mean that the yield on the benchmark 10-year note could test 3 percent in the next few months.

    ———————–

    Gold Gains $20 On Stock Market Volatility, Weakening U.S. Dollar

    (Kitco) – Gold prices are posting sharp gains of around $20 an ounce in late-morning action Wednesday. A volatile day in the U.S. stock market is helping to boost safe-haven gold. U.S. stock indexes were poised to open the U.S. day session modestly up, but then dropped sharply in the immediate aftermath of a hotter-than-expected U.S. consumer inflation report. Since then the stock indexes have bounced back above unchanged. Meantime, the U.S. dollar index has lost good early gains to trade lower on the day, and that is also helping out the precious metals market bulls. April gold was last up $21.10 at $1,351.40.

    Does the end of this process have a name? Yes, a really scary one: “crack-up boom.”

    From Investopedia:

    What is a ‘Crack-Up Boom’

    A crack-up boom is the crash of the credit and monetary system due to continual credit expansion and price increases that cannot be sustained long-term. Often, banks will attempt to prevent a crack-up boom by halting credit expansion, which ends up backfiring and yielding the same results that the boom would have caused. Both scenarios result in an economic depression when the bubble finally bursts and the economic system crashes.

    How Does It Happen?

    When the economy is down, one way to give it a temporary revival is to feed extra money into the system – AKA economic stimulus. Providing people with credit makes them feel richer and more inclined to spend their money, which in turn feeds more money into the system. When people spend money, they tend to want to continue this trend and continue to buy, despite the fact that their extra cash isn’t coming from actual savings. The problem comes when the government continuously pours more and more money into the system and the actual economy beneath the false expansion cannot keep up.

    Feeding money into the economy is a quick way to give it a short-term boost, but this practice isn’t sustainable over the long term. If credit expansion continues without limit, prices continue to rise until they reach the point at which the entire system collapses because it can no longer sustain itself. People can no longer afford the high prices, so credit must expand even more to accommodate these prices, which pushes them even higher.

    What Type of Economy Can Be Hit by a Crack-Up Boom?

    A crack-up boom is something that can only happen in an economy that relies on paper money rather than the gold standard, or electronic systems of monetary transaction rather than physical. In a gold standard economy, interest rates cap out at around 3 to 6%, since credit is based on actual saved money, instead of being adjustable depending on the circumstances. However, in a system that revolves around paper money, more cash can be printed at any time and introduced into the system. This affects the value of each dollar and affects the prices of market commodities. When the government introduces into the economy money that doesn’t really exist (in the form of false credit) it’s only a matter of time before the economy is damaged, even if the original intention was to boost it.

     

  • Chinese New Year Will See Billions Of Digital Cash Gifts

    As the world’s biggest migration begins, over a billion people are expected to celebrate Chinese New Year tomorrow.

    Many have been preparing for the celebrations for days and, as Statista’s Niall McCarthy notes, a key aspect of the holiday involves people cleaning their homes, a tradition called “sweeping the dust” which symbolizes the removal of misfortune and the welcoming of something new.

    When all of the cleaning is finally complete, homes are decorated with posters and red lanterns before revellers enjoy spectacular fireworks and firecrackers.

    Technology is playing an increasingly important role in the world’s biggest party with red envelopes or hóngbāo central to the festivities.

    In China and other Southeast Asian societies, a red envelope is a monetary gift exchanged during holidays or special occasions.

    Over the past couple of the years, the tradition has gone digital with Tencent and Alibaba both offering virtual red envelopes.

    Infographic: Chinese New Year Will See Billions Of Digital Cash Gifts | Statista

    You will find more infographics at Statista

    The digital version has caught on and last year, the number exchanged on WeChat was an impressive 46.6 billion – the equivalent of 33 envelopes full of cash for every person in China.

    That’s a huge increase on 2016 when the red envelope count came to 8 billion.

  • The Genius Of Trump's Food Stamp Proposal: You're Not Supposed To Like Being On Welfare

    Authored by Dan Calabrese

    Incentives.

    If I was on food stamps, I wouldn’t like this either… I think that’s the point.

    If you can’t afford to buy your own food and you need the government to provide it for you, then you get it on the government’s terms.

    That’s usually what happens when someone else is supplying your needs.

    Don’t like it? Take every available action to get off food stamps and achieve independence, at which point you can buy whatever you want at the grocery store with your own money that you earned.

    Until then, enjoy your Harvest Box:

    Under the USDA America’s Harvest Box proposal, all Supplemental Nutrition Assistance Program (SNAP) participating households receiving $90 per month or more in benefits will receive a package of nutritious, 100-percent U.S. grown and produced food. Approximately 16.4 million households, or about 81 percent of SNAP households would be impacted by this proposal.

    The amount of food received per household would be scaled to the overall size of the household’s SNAP allotment, ultimately representing about half of their benefits. SNAP participants would receive domestically-sourced and produced food in lieu of a portion of their SNAP benefits.

    USDA would utilize a model similar to that currently used to distribute USDA Foods to other nutrition assistance programs to provide staple, shelf-stable foods (such as shelf-stable milk, juice, grains, ready-eatcereals, pasta, peanut butter, beans, canned meat, poultry or fish, and canned fruits and vegetables) to SNAP households at approximately half the retail cost.

    This proposal creates a new approach to nutrition assistance that combines retail-based SNAP benefits with delivery of USDA America’s Harvest Boxes supporting the President’s leadership on Buy American. This proposal is cost-effective, enhances the integrity of SNAP, and provides for states’ flexibility in administration of the program.

    The remainder of the household’s benefits will still be provided via the current Electronic Benefit Transfer card.

    The Department of Agriculture estimates the change would save taxpayers $129 billion over 10 years by switching to defined packages that would presumably have a predictable, consistent cost. I’m guessing it would actually save a lot more than that precisely because people would hate being restricted to the Harvest Boxes, and at least a significant percentage of them would respond to the added incentive to improve their situations.

    And of course, I’m sure part of the idea here is that people can’t trade or sell their food stamps or find some clever way to use them to get booze, cigarettes, drugs, etc.

    Yes, the government would be picking out your food for you. Yes, that would be frustrating and no fun.

    The point of food stamps is not to treat you to gourmet meals. It’s to prevent you from starving to death while you get out of the trouble you’ve gotten yourself in, whether that takes the form of unemployment, underemployment or some other type of financial mess. We want you to have food. We want you to live. But if you want the kind of food you prefer, that’s going to require you to earn your own money and buy it.

    That is not an unreasonable proposition. You’re not supposed to like dependence on the government. You’re supposed to want to get off it as quickly as you can. If you get stuck with the Harvest Box and you still don’t make the changes necessary to improve your life, well . . . at least you’re saving the rest of us some money.

  • Brandon Smith: Central Banks Will Let The Next Crash Happen

    Authored by Brandon Smith via Alt-Market.com,

    If you have been following the public commentary from central banks around the world the past few months, you know that there has been a considerable change in tone compared to the last several years.

    For example, officials at the European Central Bank are hinting at a taper of stimulus measures by September of this year and some EU economists are expecting a rate hike by December. The Bank of England has already started its own rate hike program and has warned of more hikes to come in the near term. The Bank of Canada is continuing with interest rate hikes and signaled more to come over the course of this year. The Bank of Japan has been cutting bond purchases, launching rumors that governor Haruhiko Kuroda will oversee the long overdue taper of Japan’s seemingly endless stimulus measures, which have now amounted to an official balance sheet of around $5 trillion.

    This global trend of “fiscal tightening” is yet another piece of evidence indicating that central banks are NOT governed independently from one another, but that they act in concert with each other based on the same marching orders. That said, none of the trend reversals in other central banks compares to the vast shift in policy direction shown by the Federal Reserve.

    First came the taper of QE, which almost no one thought would happen. Then came the interest rate hikes, which most analysts both mainstream and alternative said were impossible, and now the Fed is also unwinding its balance sheet of around $4 trillion, and it is unwinding faster than anyone expected.

    Now, mainstream economists will say a number of things on this issue — they will point out that many investors simply do not believe the Fed will follow through with this tightening program. They will also say that even if the Fed does continue cutting off the easy money to banks and corporations, there is no doubt that the central bank will intervene in markets once again if the effects are negative.  I would say that this is rather delusional thinking based on a dangerous assumption; the assumption that the Fed wants to save markets.

    When mainstream economists argue that the Federal Reserve could conceivably keep low interest rates and stimulus going for decades if necessary, they often use the example of the Bank of Japan as some kind of qualifier. Of course, what they fail to mention is that yes, the BOJ has spent decades increasing its balance sheet which now sits at around $4.7 trillion (U.S.), but the Fed exploded its balance sheet to around $4.5 trillion in only eight years. That is to say, the Fed inflated a bubble as large if not larger than the Bank of Japan in less than half the time.

    Frankly, the comparison is idiotic. And clearly according to their own admissions, the Fed is not going to be continuing stimulus measures anyway. People cling to this fantasy because they WANT to believe that the easy money party will never end.  They are sorely mistaken.

    I have been battling this delusion for quite some time.  When I predicted that the Fed would taper QE, I received a predominantly negative reaction. The same thing occurred when I predicted the Fed would begin hiking interest rates. Now, I’m finding it rather difficult to break through the narrative that the Fed will intervene before the next crash takes place.

    There is something so intoxicating about the notion that central banks will stop at nothing to prop up stock markets and bond markets. It generates an almost crazed cult-like fervor in the investment world; a psychedelic high that makes financial participants think they can fly. Of course, what has really happened is that these people have jumped off the roof of their overpriced condo; they think they are flying but they are really falling like a brick weighted down with stupidity.

    Former Fed chairman Janet Yellen upon exiting her position stated:

    “If stock prices or asset prices more generally were to fall, what would that mean for the economy as a whole?”

    “I think our overall judgment is that, if there were to be a decline in asset valuations, it would not damage unduly the core of our financial system.”

    Yellen also said when asked about high stock prices:

    “Well, I don’t want to say too high. But I do want to say high. Price/earnings ratios are near the high end of their historical ranges…”

    “Now, is that a bubble or is too high? And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.”

    Since the middle of last year, the Fed has been calling the stock market overpriced and “vulnerable.” This rhetoric has only become bolder over the past several months. Dallas Fed president Robert Kaplan dismissed concerns over the affect rate hikes might have on markets and hinted at the potential for MORE than the three hikes planned for 2018. The Dow fell 666 points that same day.

    New York Fed’s Bill Dudley shrugged off concerns over recent volatility, saying that an equity rout like the one that occurred in recent days “has virtually no consequence for the economic outlook.”

    Jerome Powell, the new Fed chairman, has said while taking the chair position that he will continue with the current Fed policy of rate hikes and balance sheet reductions,  and reiterated his support for more rate hikes this past week (while the mainstream media hyperfocused on his lip service promise to watch stock behavior closely).  This indicates once again that it does not matter who is at the wheel of the Fed, its course has already been set, and the Chairman is simply there to act as the ship’s parrot mascot. The Fed is expected to raise interest rates yet again in March.

    Now, all the evidence including the Fed’s surprise balance sheet reduction of $18 billion in January shows that at least for now, the central bank no longer cares about stocks and bonds.

    In the meantime, 10 year Treasury Yields are spiking to the ever present danger level of 3% after a hotter than expected inflation report, and the dollar index is plunging.  Showing us perhaps the first signs of a potential stagflationary crisis. 

    Bottom line – markets are not long for this world if yields pass 3% and the falling dollar provides yet another excuse for faster interest rate hikes.  More rate hikes means eventually cheap loans will become expensive loans.

    My question is, if the Fed is not going to feed cheap fiat into banks and corporations to fuel stock buybacks, then WHO is going to buy equities now?

    What about corporations? Nope, not going to happen. With corporate debt skyrocketing to levels far beyond that seen just before the 2008 crash, there is no chance that they will be able to sustain stock buybacks without aid from the Fed.

    What about retail investors? I doubt it.  Retail investors are the primary pillar boosting stocks at this stage in the game, but as we saw during the panic last week, it is unlikely that retail investors will maintain hands strong enough to refrain from selling at the first sign of trouble. They do tend to hastily jump back into markets to buy every dip because for many years this simplistic strategy has worked, but if the Fed continues to back away from stimulus and we seen a few more incidences like the 1,000+ point drops of recent days, investor conditioning will be broken, and blind faith will be replaced by doubt.

    What about the American consumer?  Will consumer profits boost companies and give them and they stock shares a solid foundation? I can barely write that question without laughing out loud. There was a time (it seems like so long ago) when company innovation and solid business strategies actually meant something when it comes to equities. Those days are over. Now, everything is based on the assumption of central bank intervention, and as I already noted, central banks are pulling the plug on life support.

    Beyond that, U.S. consumers are now buried in historic levels of personal debt.

    What about the Trump administration’s latest $1.5 trillion infrastructure plan? Will this act as a kind of indirect stimulus program picking up where the Fed left off? Unlikely.

    Perhaps if such a plan had been implemented eight years ago in place of the useless bank bailouts and TARP, it might have made a difference. Though, a similar strategy did not work out very well for Herbert Hoover. In fact, many of the Hoover-era infrastructure projects were not paid off for decades after initial construction. Hoover was also a one term Republican president that oversaw the beginning of the Great Depression.

    The system is too far into debt and too far gone for infrastructure spending to make any difference in the economic outcome. Add to that the fact that Treasury yields are liable to continue their upward trajectory due to the increased deficit spending, putting more pressure on stocks.

    Interestingly, Trump’s budget director has even admitted that the plan will lead to even faster increases in interest rates, and Fed officials have been using this as a partial rationale for why they plan to continue cutting off stimulus measures.

    I think anyone with any sense can see the narrative that is building here. The Federal Reserve is going to let markets crumble in 2018. They are going to continue raising interest rates and reducing their balance sheet faster than originally expected. They will not step in when equities crash. And, they don’t really need to. Trump continues to set himself up as the perfect scapegoat for a bubble implosion that had to happen eventually anyway. Now, the central banks can sufficiently avoid any blame.

    *  *  *

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  • Mueller Flips Third Witness In Russia Probe

    Just hours after NBC News reported that former White House Chief Strategist Steve Bannon met with Special Counsel Robert Mueller and his team multiple times to answer questions for “20 hours” this past week, CNN dropped the first serious bombshell in the investigation.

    According to CNN, Mueller is about to flip Paul Manafort’s former No. 2 man, Rick Gates – though it’s unclear what Gates’ role will be, or what evidence Mueller has on him.

    Gates

    Rick Gates

    The effort is under seal, so the details aren’t available, but a few days ago it was reported that Gates was working with a new lawyer who, speculation had it, would be more amenable to striking a plea deal.

    Former Trump campaign adviser Rick Gates is finalizing a plea deal with special counsel Robert Mueller’s office, indicating he’s poised to cooperate in the investigation, according to sources familiar with the case.

    Gates has already spoken to Mueller’s team about his case and has been in plea negotiations for about a month. He’s had what criminal lawyers call a “Queen for a Day” interview, in which a defendant answers any questions from the prosecutors’ team, including about his own case and other potential criminal activity he witnessed.

    Gates’ cooperation could be another building block for Mueller in a possible case against President Donald Trump or key members of his team.

    Once a plea deal is in place, Gates would become the third known cooperator in Mueller’s sprawling probe into Russian interference in the 2016 presidential election. It would also increase the pressure to cooperate on Gates’ co-defendant Paul Manafort, Trump’s former campaign chairman, who has pleaded not guilty to Mueller’s indictment and is preparing for a trial on alleged financial crimes unrelated to the campaign. Gates pleaded not guilty on October 30 alongside Manafort.

    “Nobody (who’s charged) goes in to provide incriminating information to the government unless it’s part of plea negotiations,” said a criminal defense attorney who represents a witness in the case. In a Queen for a Day interview, a defendant can typically admit to crimes with little additional consequences, unless he or she lies.

     

    After the interview, there’s a very small chance a defendant could turn back toward fighting the charges, according to several lawyers who specialize in federal criminal cases.

    Gates probably didn’t work close enough with Trump to have direct knowledge of misdeeds, but Gates could be valuable in pressuring Manafort to roll on his former boss. Gates’ deal will likely be announced in the coming days, and could also coincide with the filing of new, tax related charges that could increase the amount of prison time he could face. Right now, he’s facing up to 10 years.

    The White House sees little sign that Gates’ cooperation could pose any risk to the President. “There’d be no anxiety here” if Gates cooperated with Mueller in exchange for a plea deal, one White House official said.

    It’s still unclear what Gates, who outlasted Manafort in the campaign and later worked on the Trump inaugural efforts, could share that would be of value to the Russian collusion investigators, outside the Manafort case. The value of what a defendant says factors into the plea negotiation as both sides finalize the deal.

    After an interview, prosecutors typically investigate the information a defendant provides. They then negotiate the defendant’s ultimate charges or potential sentence.

    Gates’ plea deal could be announced in the next few days, given that he’s asked a judge for an extension until Wednesday to discuss his in-flux legal representation.

    At the same time, investigators with the special counsel’s office are preparing to file new charges against him, according to people familiar with the probe. The additional charges are tax-related, these people say, which could increase the fines and prison time Gates faces in court. More charges are also being prepared against Manafort related to his work before he joined the Trump campaign, according to another source familiar with the case.

    The threat of new charges could be used in the negotiation to pressure Gates into cooperating and pleading. With his current set of eight charges, Gates could face 10 or more years in prison if found guilty.

    The options in a criminal case are “either trial or plea,” said Brian Stolarz, a white collar lawyer who specializes in federal cases.

    “You have to have the heart, the stomach and the wallet to proceed with the trial.”

    Gates’ decision to cooperate shouldn’t come as a surprise to the White House; developments in his case would suggest that his lawyers haven’t been preparing for a trial, CNN said.

    Several developments of the past months have pointed to Gates pursuing a different path than a trial – from Gates’ lack of focus in court on fighting the charges to his financial situation at home.

    His court case since then has barely focused on trial preparations, which Judge Amy Berman Jackson noted in court on Wednesday as she urged the lawyers to set a trial date.

    Gates’ legal team quibbled over his bail terms and house arrest for more than two months after his indictment. Recently, they’ve been focused on a question of who will represent him in court. The three trial lawyers who took on Gates’ case shortly after his indictment asked to part ways with their client on February 1. The legal team drama culminated in two long sealed hearings in front of the judge last week and on Wednesday. The two-and-a-half hours spent on that topic suggest the lawyers’ situation with Gates is more complicated than a typical attorney changeover.

    Interestingly, one reason Gates may be cooperating is because he’s received little support from GOP donors who were supposed to help with legal fees…

    Working separately from Gates’ trial lawyers is the well-known Washington defense attorney Thomas Green. Green, who has known Mueller personally for years, is negotiating Gates’ plea deal, according to people familiar with the case. He has visited the special counsel’s office multiple times in the last several weeks. Green appeared with Gates yesterday in court, but is not handling his trial situation.

    The judge has already acknowledged that Gates could not show he had $5 million in assets to secure his bail. His financial situation is further hampered by assets he would have to forfeit to the government if found guilty of money laundering charges. A complex criminal case such as this could cost a defendant more than a million dollars in legal fees, especially if he were to go to trial, according to several people familiar with the legal industry.

    The stress has taken a toll on Gates’ young family, who have urged him to do what is necessary to conclude these proceedings, a source said. Gates lives in Richmond, Virginia, with his wife and four children.

    Gates traveled with Trump, so he could’ve been privy to some misdeeds, but it’s unlikely. Mueller has already flipped George Papadopoulos – a former adviser of questionable influence during the campaign who reportedly offered to set up a meeting between the Trump campaign and a representative of the Russian government – and former National Security Adviser Michael Flynn.

    Now we await more details about what Mueller had on Gates…

  • Home Prices Hit Record Highs In Two-Thirds Of US Cities As Manhattan Rents Collapse

    Even as sellers in high-end markets like Manhattan, London  and Greenwich, Conn. are being forced to pull their inventory from the market because of a paucity of offers (this despite the “wealth effect” that one might’ve expected to arise from rallies in stocks and bitcoin), home prices in two-thirds of US cities climbed to record highs during the fourth quarter as developers’ preoccupation with luxury housing has left buyers in mid-priced markets battling it out for a record-low supply of listings…

    Prices for single-family homes climbed 5.3% from a year earlier nationally, reaching a peak in 64% of metropolitan areas, according to the National Association of Realtors. Of the 177 regions in the group’s survey, 15% had double-digit price growth, up from 11% in the third quarter.

    Home

    Meanwhile, Bloomberg claims the steadily improving job market has helped drive prices higher (we imagine the flood of money-creation by central banks also had something to do with it).

    Here’s Bloomberg:

    Home values have grown steadily as the improving job market drives demand for a scarcity of properties on the market. While prices jumped 48 percent since 2011, incomes have climbed only 15 percent, putting purchases out of reach for many would-be buyers.

    The consistent price gains “have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation,” Lawrence Yun, the Realtors group’s chief economist, said in a statement. “However, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”

    Sales of previously owned homes, including single-family houses and condos, increased 4.3% to a seasonally adjusted rate of 5.62 million in the fourth quarter, the Realtors said. At the end of December, only 1.48 million existing homes were available for sale, 10.3% less than a year earlier.

    Predictably, the most expensive markets were in densely populated coastal areas where job growth and wealth creation since the financial crisis have largely clustered…

    The most expensive markets were San Jose, California, where the median price was $1.27 million, followed by San Francisco, the Irvine, California, area, Honolulu and San Diego.

    The San Jose area had a 26 percent increase in prices, the biggest of any region, followed by Reno, Nevada, and the Putnam/Dutchess County area, north of New York City. The biggest decline was in Glens Falls, New York, where prices dropped almost 12 percent. Cumberland, Maryland, and Elmira, New York, followed.

    In a demonstration of the extent to which the correlation between the most expensive urban markets and the rest of the country (a trend that will no doubt be exacerbated by the Trump tax plan, which caps SALT deductions) landlords in Manhattan, one of the country’s most expensive rental markets, were forced to slash rents to their lowest levels in 2014 as a massive flood of new supply swamped the market.

     

  • China's Rapid Military Modernization Is "Remarkable," Set To Challenge West On Several Fronts

    China’s rapid military modernization is “remarkable,” and is no longer merely “catching up” with the West, reports the International Institute for Strategic Studies in their annual report on global military capabilities. 

    China’s emerging weapons developments and broader defence-technological progress mean that it has become a global defence innovator” says Dr. John Chipman, Director-General and Chief Executive of the London-based think tank. 

    Of note, Chipman points out that China’s Chengdu J-20 low-observable combat aircraft is set to challenge America’s “monopoly on operational stealthy combat aircraft.” As we reported yesterday, the J-20 is rumored to have already been deployed to the South China Sea along with several of China’s Su-35s, to take part in a joint combat patrol over the region, according to the Chinese Ministry of Defense whose release did not mention the J-20.

    a

    A spokesman for the People’s Liberation Army (PLO), Shen Jinke, said that the J-20 would “help the air force better shoulder the sacred mission of safeguarding national sovereignty, security and territorial integrity,” adding that the air force was in the middle of a modernization program in order to fight enemies on all fronts.

    a

    The IISS report also notes that China’s expanding array of advanced guided-weapons projects, such as the PL-15 extended range air-to-air missile which could enter service this year. “This weapon appears to be equipped with an active electronically scanned array radar, indicating that China has joined the few nations able to integrate this capability on an air-to-air missile,” reports Chipman.

    a

    Also of concern is China’s ambitions at sea, as Beijing continues its ever-expanding fleet. 

    Since 2000, China has built more submarines, destroyers, frigates and corvettes than Japan, South Korea and India combined. To put this further into perspective, the total tonnage of new warships and auxiliaries launched by China in the last four years alone is significantly greater than the total tonnage of the French navy. –IISS

    Moreover, China’s navy is deploying further from home, including Europe, while their base in the Eastern African country of Djibouti will enable more naval deployments. 

    China’s military computing technology is also rapidly growing, as vast resources have been sunk into “extremely high-performance computing and quantum communications,” which, along with their weapons advancements and overall defense capabilities mean the country is no longer merely “catching up” with Western progress. 

    All of these developments have meant a rising defense budget, which has been pegged to GDP growth at 6-7% since 2016:

    a

    While China’s rapid military advances are significant, all is not lost for the West, which will need to remain agile and adaptable:

    Western governments still have it in their power to maintain an edge. Their military forces will need to be agile and adaptable, better at working with partners inside and outside government, and able to make flexible use of technological developments. Some governments in the West will look to ‘leap-ahead’ technologies to augment and deliver military power.

    Chipman concludes that Western states need to plan for responses to persistent competition, and stresses the importance of “anticipating and detecting ambiguous as well as proximate threats.”  This means more than just better defense and better weapons; societies need to be made more psychologically resilient, “and resistant to attempts to erode their cohesion and will in peacetime as well as war.”

    Translation; Despite our current military superiority, the West needs to solve the man-child epidemic, solidify alliances, and prepare to show the enemy our war faces at a moment’s notice – lest we lose what our ancestors so bravely fought for. 

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Feb 15

Today’s News 15th February 2018

  • Paul Craig Robert Asks "Do Financial Markets Still Exist?"

    Authored by Paul Craig Roberts,

    For many decades the Federal Reserve has rigged the bond market by its purchases. And for about a century, central banks have set interest rates (mainly to stabilize their currency’s exchange rate) with collateral effects on securities prices. It appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines driven by fundamentals, and to push prices back up in keeping with a decade of money creation.

    No one should find this a surprising suggestion.  The Bank of Japan has a long tradition of propping up the Japanese equity market with large purchases of equities. The European Central Bank purchases corporate as well as government bonds.  In 1989 Fed governor Robert Heller said that as the Fed already rigs the bond market with purchases, the Fed can also rig the stock market to stop price declines. That is the reason the Plunge Protection Team (PPT) was created in 1987.

    Looking at the chart of futures activity on the E-mini S&P 500, we see an uptick in activity on February 2 when the market dropped, with higher increases in future activity last Monday and Tuesday placing Tuesday’s futures activity at about four times the daily average of the previous month.  Futures activity last Wednesday and Thursday remained above the average daily activity of the previous month, and Friday’s activity was about three times the previous month’s daily average. The result of this futures activity was to send the market up, because the futures activity was purchases, not sales.

    Who would be purchasing S&P equity futures when the market is collapsing from under them?

    The most likely answer we can come up with is that the Fed is acting for the PPT. The Fed can actually stop a market decline without purchasing a single futures contract. All that has to happen is that a trader recognized as operating for the Fed or PPT enters a futures bid just below the current price. The traders see the bid as the Fed establishing a floor below which it will not let the market fall.  Expecting continuing declines to make the bid effective, they front-run the bid, and the hedge funds algorithms pick it up, and up goes the market.

    Is there another explanation for the shift in the market from decline to rise?  Are retail investors purchasing dips?  Not according to this report in Bloomberg that last week a record $23.6 billion was removed from the world’s largest ETF, the SPDR S& 500 index fund. Here we see retail investors abandoning the market.

    If central banks can produce zero interest rates simultaneously with a massive increase in indebtedness, why can’t they keep equity prices far above the values supported by fundamentals?

    As central banks have learned that they can rig financial asset prices to the delight of everyone in the market, in what sense does capitalism, free markets, and price discovery exist? Have we entered a new kind of economic system?

  • US Missile Defense Agency Wants Laser-Drones & Hypersonic-Weapons In Biggest-Ever Budget Boost

    The U.S. Missile Defense Agency (MDA) has requested the largest-ever budget increase of $9.9 billion in funding for the 2019 fiscal year, citing growing intercontinental-range ballistic missile (ICBM) threats from North Korea and ballistic missile threats from Iran.

    In fact, the request for the 2019 fiscal year is the single most significant request from the Agency since 1985, when President Reagan first established the Strategic Defense Initiative.

    MDA fully supports President Trump’s National Defense Strategy of increased deficit spending, which allows the nation to: “Compete, Deter, and Win,” in the next world war.

    The agency also wants to spend $269 million on laser drones to shoot North Korean ICBMs out of the sky, along with upgrading the nation’s defense systems against hypersonic threats.

    The increase in MDA funding will allow the continued developments and deployments of integrated, layered missile defense systems to combat against missiles threats on the homeland.

    MDA highlights their ten easy steps to intercepting a missile headed for the continental United States:

    An ICBM can travel at extremely high speeds—at times more than 15,000 mph, or almost 20 times the speed of sound. Kinetic energy interceptors can travel fast enough to create closing speeds exceeding 25,000 mph. The speeds, trajectories, and points of launch that must be considered always change. In missile defense, everything is about precision. The BMDS must not only work in terms of milliseconds, but the missiles and warheads the system is targeting have bull’s-eyes measured in centimeters.

    “Recent escalation of the threat from North Korea has demonstrated an advanced and accelerated capability,” the Agency’s Budget Estimates report notes. “North Korea is committed to developing a long-range, nuclear-armed missile that is capable of posing a direct threat to the United States.”

    “Iran is fielding increased numbers of theater ballistic missiles, improving its existing inventory, and is developing technical capabilities to produce an ICBM, and this effort is benefiting from its ballistic missile and space launch vehicle programs,” the Agency’s report wrote. Iran’s ballistic missile program has not tested any missile capable of striking intercontinental ranges, but its rockets can strike as far as southeastern Europe which is concerning to NATO forces.

    To combat the threats of North Korea and Iran, the MDA states the United States must continue developing new defense capabilities to tackle the future of risks. That means increasing investments in advanced technologies that bring upgraded capacities to the warfighter.

    • Technology Maturation Initiatives (PE 0604115C):  MDA requests $148.8 million to build on the foundational successes in Weapons Technology and Discrimination Sensor Technology. MDA will integrate an advanced sensor into the tactically proven Multispectral Targeting System and MQ-9 combination to address precision track and discrimination performance of this technology with the goal of eventually migrating to a space sensor layer. MDA’s plan is to continue the design to begin fabrication of a UAV-borne laser to address boost phase missile defense risks. Scalable, efficient, and compact high-energy lasers can be game –changing capabilities within missile defense architectures.

    • Hypersonic Defense (PE 0604181C): MDA is requesting $120.4 million in FY 2019. MDA will execute a rigorous systems engineering process, identify and mature full kill chain technology, provide analysis and assessment of target of opportunity events, and execute near term sensor and command and control capability upgrades to address defense from hypersonic threats. This effort will execute the Defense Science Board’s recommendations to develop and deliver a set of material solutions to address and defeat hypersonic threats informed by a set of near-term technology demonstrations. An integrated set of enhancements will provide incremental capability measured by progress and knowledge points in the following areas: establishment of systems engineering needs and requirements to identify alternative material solutions; execution of a series of sensor technology

    The Hill outlines where the MDA plans on spending the remainder of its budget on modernizing the nuclear arsenal and missile defense systems across the United States.

    That would buy 43 Aegis interceptors for $1.7 billion, four Ground-based Midcourse Defense (GMD) interceptors and 10 silos for $2.1 billion, 82 Terminal High Altitude Area Defense interceptors for $1.1 billion and 240 Patriot Advanced Capability Missile Segment Enhancement interceptors for $1.1 billion.

    The Pentagon also says the budget would allow it to develop an additional missile field in Alaska for the GMD and puts it on track to have a total of 64 deployed and operational GMD interceptors by 2023, 20 more than it has now.

    The GMD is the system in Alaska and California that would defend against a long-range missile attack such as from North Korea. The system’s most recent test last year was successful, though critics have said it is too costly and has a spotty testing record.

    And lastly, we will leave you with David Stockman, the former Director of the Office of Management and Budget under President Ronald Reagan, who warned that the out of control spending at the United States military will contribute to the coming economic problems in America.

    The fact that the US military is “conducting seven wars that we don’t need to have,” said Stockman, is why there are the troubles with the military readiness that warmongering politicians are using to justify further war spending increases.

  • Is John Brennan The Mastermind Behind Russiagate?

    Authored by Mike Whitney via Unz.com,

    The report (“The Dossier”) that claims that Donald Trump colluded with Russia, was paid for by the DNC and Hillary Clinton campaign.

    The company that claims that Russia hacked DNC computer servers, was paid by the DNC and Hillary Clinton campaign.

    The FBI’s counterintelligence probe into Trump’s alleged connections to Russia was launched on the basis of information gathered from a report that was paid for by the DNC and Hillary Clinton campaign.

    The surveillance of a Trump campaign member (Carter Page) was approved by a FISA court on the basis of information from a report that was paid for by the DNC and Hillary Clinton campaign.

    The Intelligence Community Analysis or ICA was (largely or partially) based on information from a report that was paid for by the DNC and Hillary Clinton campaign. (more on this below)

    The information that was leaked to the media alleging Russia hacking or collusion can be traced back to claims that were made in a report that was paid for by the DNC and Hillary Clinton campaign.

    The entire Russia-gate investigation rests on the “unverified and salacious” information from a dossier that was paid for by the DNC and Hillary Clinton Campaign. Here’s how Stephen Cohen sums it up in a recent article at The Nation:

    “Steele’s dossier… was the foundational document of the Russiagate narrative…from the time its installments began to be leaked to the American media in the summer of 2016, to the US “Intelligence Community Assessment” of January 2017….the dossier and subsequent ICA report remain the underlying sources for proponents of the Russiagate narrative of “Trump-Putin collision.” (“Russia gate or Intel-gate?”, The Nation)

    There’s just one problem with Cohen’s statement, we don’t really know the extent to which the dossier was used in the creation of the Intelligence Community Assessment. (The ICA was the IC’s flagship analysis that was supposed to provide ironclad proof of Russian meddling in the 2016 elections.) According to some reports, the contribution was significant. Check out this excerpt from an article at Business Insider:

    “Intelligence officials purposefully omitted the dossier from the public intelligence report they released in January about Russia’s election interference because they didn’t want to reveal which details they had corroborated, according to CNN.” (“Mueller reportedly interviewed the author of the Trump-Russia dossier — here’s what it alleges, and how it aligned with reality”, Business Insider)

    Bottom line: Despite the denials of former-CIA Director John Brennan, the dossier may have been used in the ICA.

    In the last two weeks, documents have been released that have exposed the weak underpinnings of the Russia investigation while at the same time revealing serious abuses by senior-level officials at the DOJ and FBI. The so called Nunes memo was the first to point out these abuses, but it was the 8-page “criminal referral” authored by Senate Judiciary Committee Chairman Chuck Grassley and Senator Lindsey Graham that gave credence to the claims. Here’s a blurb from the document:

    “It appears the FBI relied on admittedly uncorroborated information, funded by and obtained for Secretary Clinton’s presidential campaign, in order to conduct surveillance of an associate of the opposing presidential candidate. It did so based on Mr. Steele’s personal credibility and presumably having faith in his process of obtaining the information. But there is substantial evidence suggesting that Mr. Steele materially misled the FBI about a key aspect of his dossier efforts, one which bears on his credibility.”

    There it is. The FBI made a “concerted effort to conceal information from the court” in order to get a warrant to spy on a member of a rival political campaign. So –at the very least– there was an effort, on the part of the FBI and high-ranking officials at the Department of Justice, to improperly spy on members of the Trump team. And there’s more. The FBI failed to mention that the dossier was paid for by the Hillary campaign and the DNC, or that the dossier’s author Christopher Steele had seeded articles in the media that were being used to support the dossier’s credibility (before the FISA court), or that, according to the FBI’s own analysts, the dossier was “only minimally corroborated”, or that Steele was a ferocious partisan who harbored a strong animus towards Trump. All of these were omitted in the FISA application which is why the FBI was able to deceive the judge. It’s worth noting that intentionally deceiving a federal judge is a felony.

    Most disturbing is the fact that Steele reportedly received information from friends of Hillary Clinton. (supposedly, Sidney Blumenthal and others) Here’s one suggestive tidbit that appeared in the Graham-Grassley” referral:

    “…Mr. Steele’s memorandum states that his company “received this report from REDACTED US State Department,” that the report was the second in a series, and that the report was information that came from a foreign sub-source who “is in touch with REDACTED, a contact of REDACTED, a friend of the Clintons, who passed it to REDACTED.”

    It is troubling enough that the Clinton campaign funded Mr. Steele’s work, but that these Clinton associates were contemporaneously feeding Mr. Steele allegations raises additional concerns about his credibility.” (Lifted from The Federalist)

    What are we to make of this? Was Steele shaping the dossier’s narrative to the specifications of his employers? Was he being coached by members of the Hillary team? How did that impact the contents of the dossier and the subsequent Russia investigation?

    These are just a few of the questions Steele will undoubtedly be asked if he ever faces prosecution for lying to the FBI. But, so far, we know very little about man except that he was a former M16 agent who was paid $160,000 for composing the dubious set of reports that make up the dossier. We don’t even know if Steele’s alleged contacts or intermediaries in Russia actually exist or not. Some analysts think the whole thing is a fabrication based on the fact that he hasn’t worked the Russia-scene since the FSB (The Russian state-security organization that replaced the KGB) was completely overhauled. Besides, it would be extremely dangerous for a Russian to provide an M16 agent with sensitive intelligence. And what would the contact get in return? According to most accounts, Steele’s sources weren’t even paid, so there was little incentive for them to put themselves at risk? All of this casts more doubt on the contents of the dossier.

    What is known about Steele is that he has a very active imagination and knows how to command a six-figure payoff for his unique services. We also know that the FBI continued to use him long after they knew he couldn’t be trusted which suggests that he served some other purpose, like providing the agency with plausible deniability, a ‘get out of jail free’ card if they ever got caught surveilling US citizens without probable cause.

    But that brings us to the strange case of Carter Page, a bit-player whose role in the Trump campaign was trivial at best. Page was what most people would call a “small fish”, an insignificant foreign policy advisor who had minimal impact on the campaign. Congressional investigators, like Nunes, must be wondering why the FBI and DOJ devoted so much attention to someone like Page instead of going after the “big fish” like Bannon, Flynn, Kushner, Ivanka and Trump Jr., all of whom might have been able to provide damaging information on the real target, Donald Trump. Wasn’t that the idea? So why waste time on Page? It doesn’t make any sense, unless, of course, the others were already being surveilled by other agencies? Is that it, did the NSA and the CIA have a hand in the surveillance too?

    It’s a moot point, isn’t it? Because now that there’s evidence that senior-level officials at the DOJ and the FBI were involved in improperly obtaining warrants to spy on members of the opposite party, the investigation is going to go wherever it goes. Whatever restrictions existed before, will now be lifted. For example, this popped up in Saturday’s The Hill:

    “House Intelligence Committee lawmakers are in the dark about an investigation into wrongdoing at the State Department announced by Chairman Devin Nunes (R-Calif.) on Friday. …Nunes told Fox News on Friday that, “we are in the middle of what I call phase two of our investigation. That investigation is ongoing and we continue work toward finding answers and asking the right questions to try to get to the bottom of what exactly the State Department was up to in terms of this Russia investigation.”…

    Since then, GOP lawmakers have been quietly buzzing about allegations that an Obama-era State Department official passed along information from allies of former Secretary of State Hillary Clinton that may have been used by the FBI to launch an investigation into whether the Trump campaign had improper contacts with Russia.

    “I’m pretty troubled by what I read in the documents with respect to the role the State Department played in the fall of 2016, including information that was used in a court proceeding. I am troubled by it,” Gowdy told Fox News on Tuesday.” (“Lawmakers in dark about ‘phase two’ of Nunes investigation”, The Hill)

    So the State Department is next in line followed by the NSA and, finally, the Russia-gate point of origin, John Brennan’s CIA. Here’s more background on that from Stephen Cohen’s illuminating article at The Nation:

    “….when, and by whom, was this Intel operation against Trump started?

    In testimony to the House Intelligence Committee in May 2017, John Brennan, formerly Obama’s head of the CIA, strongly suggested that he and his agency were the first, as The Washington Post put it at the time, “in triggering an FBI probe.” Certainly both the Post and The New York Times interpreted his remarks in this way. Equally certain, Brennan played a central role in promoting the Russiagate narrative thereafter, briefing members of Congress privately and giving President Obama himself a top-secret envelope in early August 2016 that almost certainly contained Steele’s dossier. Early on, Brennan presumably would have shared his “suspicions” and initiatives with James Clapper, director of national intelligence. FBI Director Comey… may have joined them actively somewhat later….

    When did Brennan begin his “investigation” of Trump? His House testimony leaves this somewhat unclear, but, according to a subsequent Guardian article, by late 2015 or early 2016 he was receiving, or soliciting, reports from foreign intelligence agencies regarding “suspicious ‘interactions’ between figures connected to Trump and known or suspected Russian agents.”

    In short, if these reports and Brennan’s own testimony are to be believed, he, not the FBI, was the instigator and godfather of Russiagate.” (“Russiagate or Intelgate?”, Stephen Cohen, The Nation)

    Regular readers of this column know that we have always believed that the Russiagate psyops originated with Brennan. Just as the CIA launched its disinformation campaigns against Saddam Hussein and Muammar Gadhafi, so too, Russia has emerged as Washington’s foremost rival requiring a massive propaganda campaign to persuade the public that America faces a serious external threat. In any event, the demonizing of Russia had already begun by the time Hillary and Co. decided to hop on the bandwagon by blaming Moscow for hacking John Podesta’s emails. The allegations were never persuasive, but they did provide Brennan with some cover for the massive Information Operation (IO) that began with him.

    According to the Washington Times:

    “It was then-CIA Director John O. Brennan, a close confidant of Mr. Obama’s, who provided the information — what he termed the “basis” — for the FBI to start the counterintelligence investigation last summer….Mr. Brennan told the House Intelligence Committee on May 23 that the intelligence community was picking up tidbits on Trump associates making contacts with Russians.”

    It all started with Brennan. After Putin blocked Brennan’s operations in both Ukraine and Syria, Brennan had every reason to retaliate and to use the tools at his disposal to demonize Putin and try to isolate Russia. The “election meddling” charges (promoted by the Hillary people) fit perfectly with Brennan’s overall strategy to manipulate perceptions and prepare the country for an eventual confrontation. It provided him the opportunity to kill two birds with one stone, to deliver a withering blow to Putin and Trump at the very same time. The temptation must have been irresistible.

    But now the plan has backfired and the investigations are gaining pace. Trump’s allies in the House smell the blood in the water and they want answers. Did the CIA surveil members of the Trump campaign on the basis of information they gathered in the dossier? Who saw the information? Was the information passed along to members of the press and other government agencies? Was the White House involved? What role did Obama play? What about the Intelligence Community Assessment? Was it based on the contents of the Steele report? Will the “hand-picked” analysts who worked on the report vouch for its conclusions in or were they coached about what to write? How did Brennan persuade the reluctant Comey into opening a counterintelligence investigation on members in the Trump campaign when he knew it would be perceived as a partisan attempt to sabotage the elections by giving Hillary an edge?

    Soon the investigative crosshairs will settle on Brennan. He’d better have the right answers.

  • The World's Largest Migration Is About To Begin

    This Friday, China is going to celebrate its new year, kicking off one of the planet’s great migrations.

    Also known as Spring Festival or Lunar New Year, Statista’s Niall McCarthy notes that this the event sees hundreds of millions of people leave their cities in order to visit their families in more rural parts of the country. In fact, practically all of China takes holiday at once, making the new year the biggest human event on earth.

    Infographic: The World's Largest Migration Is About To Begin  | Statista

    You will find more infographics at Statista

    This year, the number traveling to welcome the Year of the Dog will be approximately 385 million, marking a 12 percent increase on 2017 according to China News. 

    Comparing China’s largest annual migration with North America’s is a good way to gauge its sheer size.

    Thanksgiving 2017 saw 50.9 million travelers negotiate long tailbacks on the interstate and overcrowded airports. Even though Thanksgiving is a major travel event, China’s new year is still seven times bigger, with its massive population making a big difference of course.

    Known as “chunyun”, the annual new year migration in China also easily surpasses the world’s biggest pilgrimages in scale with Arba’een and the Hajj not even coming close.

  • Williams: "It's The Long-Term Insolvency Of The US Government That Markets Don't Like"

    Authored by Mac Slavo via SHTFplan.com,

    Economist John Williams sat down with USA Watchdog‘s Greg Hunter to discuss the dire state of the dollar and United States economy.  The monetary path the US is on is out of control, and the unwillingness of government officials to reduce the deficit and stop spending money will cause major problems in the very near future.

    Years of socialist policies and reckless spending will eventually end in a complete collapse. Williams is not the only economist to sound the alarm either. As the tax cuts are always positive (people keeping more of their money is always good for the economy) the unwillingness to decrease the size and scope of the government with an expanded deficit will be the downfall of a once great nation.

    The interview with Williams begins with him declaring the drop in the stock market to be the fault of the federal reserve. “Did the Fed trigger this most recent round of selling?” asks Hunter.

    “It looks like it. If you recall, the story was, bond yields are rising. Rising bond yields means someone’s selling bonds. The Fed wasn’t actually selling bonds, they just were not rolling over the bonds that they normally would…I think you’re gonna see the dollar selling off very rapidly and gold rallying as a flight to safe haven.”

    Then the discussion of the tax cuts comes up, as Hunter asks Williams to deliver his take on the lower taxes.

    The tax cuts are generally positive. Anytime you cut taxes that is generally a plus for the economy. The problem is the average guy is still not making ends meet. Anything that increases the disposable income is a plus. This does not necessarily go to the guys at the lower end of the income scale, at the moment, but generally there should be a little economic pick up here from it. The problem is what happens to the budget deficit. We just went through a round of the government shutdown and a package that supposedly lays things out for the next two years, but it widens the deficit.

    The deficit is beyond control…We have $100 trillion in unfunded liabilities. That means you need $100 trillion in hand right now to cover the federal obligations going forward…

    Printing money to meet obligations is what happened in the Weimar Republic in Germany. This happened in Zimbabwe. This kind of thing eventually gives you a hyperinflation. . . . Ongoing budget deficit and debasing of the dollar will give you global selling pressures in the currency markets. . . . We haven’t seen much selling in the dollar, but that is going to change. You are going to see flight from the dollar and flight from the markets as well.”

    Hunter then said that the government must make massive and deep cuts to salvage the economy, but no one in Washington wants to make the difficult decision.

    “It’s the long-term insolvency of the US government that the markets don’t like.”

    Then Hunter asked if Williams thinks there’s a “pretty severe hit” to the economy coming because of the expanding deficit, which will expand the national debt by $10 trillion. Because there are no plans to cut the deficit, Williams simply responds, “right.”

  • North Korea Defector: Kim Fears US Preventative Strike, Is Buying Time To Complete Nuclear Program

    On Wednesday, The Wilson Center hosted a discussion on U.S. national security and the Korean Peninsula, which included the perspective of Ri Jonh-ho, a former senior ranking official of the Kim Jong-un regime, a professor of St Petersburg University, and a renowned author on issues related to North Korea at a conference hosted jointly with the Institute for Corean-American Studies (ICAS).

    According to Yonhap News Agency, Ri said that North Korean leader Kim Jong-un has been communicating with officials in South Korea out of the fear the United States will launch a pre-emptive strike on his country.


    North Korean defector Ri Jong-ho (R) and interpreter at a forum in Washington

    Kim Jong-un is afraid that the U.S. will launch a preventative strike, and he is trying to buy time to complete his nuclear and missile programs,” said Ri, who served for three decades in Office 39 of the North’s ruling Workers’ Party. The office is responsible for raising funds for the ruling elite of North Korea.

    https://platform.twitter.com/widgets.js

    Last year, CNN reported that Ri Jong-ho raised somewhere in the neighborhood of “$50 million and $100 million during his career.

    Life was good. Ri helped bring in somewhere between $50 million and $100 million for North Korean elites, and was handsomely rewarded with luxuries most North Koreans couldn’t dream of in years past: a car, a color TV and some extra cash on the side, once rarities in the communist state but more commonplace now in the capital, Pyongyang.

    Yonhap details Ri Jong-ho perspective of the current situation in North Korea, and surprisingly praises Trump’s recent adversarial efforts, saying the issue of human rights abuses is a powerful “weapon” against Kim and “the most effective means to resolve the North Korean standoff.”

    “Kim Jong-un is struggling under the strongest-yet sanctions and military and diplomatic pressure, so he is trying to improve the situation by putting on a false front,” Ri said.

    Allegations that sanctions are having no impact on the regime are untrue because the measures of the past year are the toughest in 25 years, and Kim is trying to “create a hole” in that sanctions regime, he added

    Ri defected to South Korea in 2014 while running the Dalian, China, branch of a North Korean trading company. In 2016, he resettled in the U.S. state of Virginia.

    “Depending on the circumstances, North Korea could hold South Koreans hostage and continue its threatening provocations,” he claimed.

    Citing Pyongyang’s track record of extracting money from Seoul in return for progress in inter-Korean ties, Ri also alleged that the two sides struck a similar underhand deal this time.

    He praised U.S. President Donald Trump’s recent efforts to highlight human rights abuses by the Pyongyang regime, saying the issue is a powerful “weapon” against Kim and the most effective means to resolve the North Korean standoff.

    Earlier in the day, U.S. Navy Adm. Harry Harris – the senior officer overseeing military operations in the Pacific –  warned lawmakers on Capitol Hill that Kim’s goal is to reunify the Korean Peninsula under his rule. “I do think that he is after reunification under a single communist system,” Harris told the House Armed Services Committee.

    “So he’s after what his grandfather failed to do and his father failed to do and he’s on a path to achieve what he feels is his natural place.”

    https://platform.twitter.com/widgets.js

    Of course, the odds of that ever happening are zero, which is why – with nothing left to lose – Kim just could become increasingly more irrational one the NKorean nuclear program is complete.

    Meanwhile, in preparation for the worst, three days before the Winter Olympics in South Korea, the South Korean press reported that the Chinese government had deployed 300,000 troops and multiple mobile strike groups to the North Korean border.

    According to South Korea’s Chosun Ilbo news, “China is preparing for a potential war on the Korean Peninsula by reinforcing missile defenses near the border with North Korea” citing a report from Radio Free Asia. “Military units in Yanbian were relocated from Heilongjiang Province, thus adding 300,000 troops along the border.” The reason for the increased missile presence is that Chinese troops in the border area could be swept away if the North tore down the banks of the reservoirs or they were destroyed by missiles or air strikes, the source added.   

    For now the world appears to have forgotten the red-knuckled military tension involving the nuclear-capable rogue state. However, when the Olympics end on February 25, and when the mask of fake diplomacy falls, it is virtually certain that the geopolitical tensions will resume right where they left off, most likely with another ICBM launch.

  • New Data Shows Yellowstone Supervolcano "Strained" – Magma Chamber Under Immense Pressure

    Authored by Mac Slavo via SHTFplan.com,

    According to a group of seismologists who are monitoring the potentially catastrophic supervolcano, Yellowstone is “under strain.” This new report has reignited fears that the caldera could erupt at any moment.

    Experts were alerted to the volcano’s strain after noticing deformation. This process, where subsurface rocks subtly change shapes, is occurring beneath the surface of Yellowstone right now. Researchers state deformation occurs when there is a change in the amount of pressure in the magma chamber and experts are keeping an eye on the development.

    Seismologists from UNAVCO, a non-profit university-governed consortium, are using “Global Positioning System (GPS), borehole tiltmeters, and borehole strainmeters” to measure minute changes in deformation at Yellowstone. In an article for the Billings Gazette, David Mencin and Glen Mattioli, geodesists with UNAVCO, say “the strain signal is larger than would be expected if the crust under Yellowstone were completely solid.”

    “What that means, at least in their eyes, is that there’s lava flowing that’s allowing pressure to build in the chamber,” says Joe Joseph of The Daily Sheeple.  “I don’t know if this is good or bad!”

    These independent observations agree with other instruments at Yellowstone, like seismometers, that indicate a zone of semi-molten rock starting about 3 miles beneath the surface. The term “semi-molten” is used because the entire zone contains only between 5 and 15 percent liquid rock that occupies small pockets of space between the solid rock.

    But the scientists want to assure the public that these observations are no cause for alarm. “Of course, they’re always gonna say that,” says Joseph. “It’s about 700,000 years ago they say when it erupted and it’s long overdue. So here we are, Yellowstone, yet again, thrust into the news because of some of this new data coming out…,” Joseph said.

    If the Yellowstone volcano nestled mostly in  Wyoming were to erupt, an estimated 87,000 people would be killed immediately and two-thirds of the USA would instantly be made uninhabitable.  The large spew of ash into the atmosphere would block out sunlight and directly affect life beneath it creating a “nuclear winter.”

    Is this a cause for alarm? Maybe, maybe not. But it’s interesting this new Yellowstone information is coinciding with news that a pole reversal is near, the Ring of Fire is waking up, and the sun is approaching its solar minimum which could cause a mini ice age.

  • Trump Surprises Democrats, Supports 25 Cent Federal Gas Tax Hike

    President Trump surprised a group of lawmakers during a Wednesday meeting at the White House by repeatedly mentioning a 25-cent-per-gallon increase on federal gasoline and diesel tax in order to help pay for upgrading America’s crumbling infrastructure by addressing a serious shortfall in the Highway Trust Fund, which will become insolvent by 2021.

    The tax increase was first pitched by the U.S. Chamber of Commerce in January, while the White House had originally been lukewarm towards the idea.

    The federal gasoline and diesel tax has been at 18.4 and 24.4-cents-per-gallon respectively since 1993, with no adjustments for inflation. It currently generates approximately $35 billion per year, while the federal government spends around $50 billion annually on transportation projects.

    Senator Tom Carper (D-DE), the top Democrat on the Senate Environment and Public Works Committee, seemed pleasantly surprised at Trump’s repeated mention of the tax as a solution to pay for upgrading American roads, bridges and other public works. 

    While there are a number of issues on which President Trump and I disagree, today, we agreed that things worth having are worth paying for,” Carper said in a statement. “The president even offered to help provide the leadership necessary so that we could do something that has proven difficult in the past.”

    Rep. Peter DeFazio (D-OR) – the top Democrat on the House Transportation and Infrastructure Committee was also present at the meeting, in which he says President Trump told lawmakers he would be willing to increase federal spending beyond the White House’s $200 billion, 10-year proposal.

    “The president made a living building things, and he realizes that to build things takes money, takes investment,” DeFazio said.

    GOP Support?

    Rep. Bill Shuster (R-PA), chairman of the House Transportation and Infrastructure Committee, is encouraging his GOP colleagues to support the increased gas tax as a way to keep the Highway Trust Fund solvent beyond 2021. The fund finances road, bridge and transit projects. 

    “He understands that we’ve got to figure out the funding levels and where the money’s coming from, make sure it’s not smoke and mirrors,” Shuster said of the president.

    The Highway Trust Fund has been flirting with bankruptcy for the better part of a decade, while the Senate passed a bill in 2015  to boost highway spending without a solution to fund it. Lawmakers eventually passed a 6-year transportation measure which keep the trust fund solvent for another three years. 

    Republican leaders have already rejected the idea, however, along with various other entities tied to billionaire industrialists Charles and David Koch. 

    “Our organizations worked hard over the past year to support your efforts and the efforts of tax-cutters in Congress to provide American families much-needed and long-overdue tax relief,” reads a letter from executives of the Koch-affiliated Freedom Partners Chamber of Commerce and Americans for Prosperity. “But increasing the gas tax would effectively undermine recent tax cuts by clawing back hundreds of billions of dollars — roughly 25 percent of the total benefit from tax reform.”

    “The American people are just beginning to feel the benefits of the recently passed tax cuts bill,” said Brent Gardner of Americans for Prosperity in a Wednesday statement. “Instead of undermining the relief taxpayers just received, the president and Congress should focus on smarter spending and breaking through the regulatory gridlock that delays projects and drives up costs.”

    Republican Senator Chuck Grassley (R-IA) doesn’t think the gas tax has any chance of even coming up for a vote in the Senate. “He’ll never get it by McConnell,” said Grassley, referring to Senate Majority Leader Mitch McConnell.

    Sen. John Barrasso (R-WY), Chairman of the Senate Environment and Public Works Committee opposes the gas tax hike on the grounds that collected funds wouldn’t all go towards repairing and restoring infrastructure. 

    “Today was the first of many conversations about the president’s infrastructure plan and how to fund it,” Barrasso said in a statement. “Ultimately, the final decision will be made by Congress as a whole.”

    Industry Support

    Several groups including the American Trucking Associations and the U.S. Chamber of Commerce support the gas tax as the easiest and most efficient way to generate money for projects. 

    “We support the president’s big and bold vision for strengthening American infrastructure,” Chris Spear, president and chief executive officer of the American Trucking Associations, said in a statement. “Because it is a user fee, the fuel tax is the most conservative, cost-effective and viable solution to making that vision a reality.”

    One has to wonder – considering that Congress is unlikely to pass the proposed hike – if President Trump is simply buying a little political capital with Congressional Democrats. 

  • Terrified Of Bitcoin – Banks Forced To Innovate For First Time In 40 Years

    Authored by Simon Black via SovereignMan.com,

    Yesterday morning, several banks in Australia started rolling out a new payment system they’re calling NPP, or “New Payments Platform.”

    Until now, sending a domestic funds transfer in Australia from one bank to another could take several days. It was slow and cumbersome.

    With NPP, payments are nearly instantaneous.

    And rather than funds transfers being restricted to the banks’ normal business hours, payments via NPP can be scheduled and sent 24/7.

    You can also send money via NPP to mobile phones and email addresses. So it’s a pretty robust system.

    Across the world in the United States, the domestic banking system has been working on something similar.

    Domestic bank transfers in the Land of the Free typically transact through an electronic network known as ACH… another slow and cumbersome platform that often takes 2-5 days to transfer funds.

    It’s pretty ridiculous that it takes more than a few minutes to transfer money. It’s 2018! It’s not like these guys have to load satchels full of cash onto horse-drawn wagons and cart them across the country.

    (And even if they did, I suspect the money would reach its destination faster than with ACH…)

    Starting late last year, though, US banks very slowly began to roll out something called the Real-time Payment system (RTP), which is similar to what Australian banks launched yesterday.

    [That said, the banks themselves acknowledge that it could take several years to fully adopt RTP and integrate the new service with their existing online banking platforms.]

    And beyond the US and Australia, there are other examples of banking systems around the world joining the 21st century and making major leaps forward in their payment system technologies.

    It seems pretty clear they’re all playing catch-up with cryptocurrency.

    The rapid rise of Bitcoin and other cryptocurrencies proved to the banking system that it’s possible to conduct real-time [or near-real-time] transactions, and not have to wait 2-5 days for a payment to clear.

    Combined with other new technologies like Peer-to-Peer lending platforms, fundraising websites, etc., consumers are now able to perform nearly every financial transaction imaginable– deposits, loans, transfers, etc.– WITHOUT using a bank.

    And it’s only getting better for consumers… which means it’s only getting worse for banks.

    All of these threats from competing technologies have finally compelled the banks to innovate– literally for the FIRST TIME IN DECADES.

    I’m serious.

    When the CEO of the company launching RTP in the US announced the platform, he admitted that the “RTP system will be the first new payments system in the U.S. in more than 40 years.”

    That’s utterly pathetic. The Internet has been around for 25 years. Even PayPal is nearly 20 years old.

    Yet despite the enormous advances in technology over the past several decades, the last major innovation in bank payments was back when Saturday Night Fever was the #1 movie in America.

    Banks have been sitting on their laurels for decades, enjoying their monopoly over our savings without the slightest incentive to improve.

    Cryptocurrency has proven to be a major punch in the gut. The entire banking system keeled over in astonishment over Bitcoin’s rise, and they’ve been forced to come up with an answer.

    And to be fair, the banks have reclaimed the advantage for now.

    NPP, RTP, and all the other new protocols are faster and more efficient than most cryptocurrencies.

    Bitcoin, for example, can only handle around 3-7 transactions per second. Ethereum Classic maxes at around 15 transactions per second. Litecoin isn’t much better.

    By comparison, there were 25 BILLION funds transfers in 2016 using the ACH network in the US.

    Based on the typical holiday schedule and the banks’ 8-hour working days, that’s an average “throughput” of roughly 3500 transactions per second.

    So, now that banks have finally figured out how to conduct thousands of transactions per second in real-time, they clearly have superiority.

    But that superiority is unlikely to last.

    It takes banks decades to innovate. They have enormous bureaucratic hurdles to overcome. They have endless committees to appease, including the Federal Reserve’s “Faster Payments Task Force.”

    And most importantly, given that most banks are still using absurdly antiquated software, any new systems they develop have to be carefully designed for backwards compatibility.

    Cryptofinance and other financial technology companies have no such limitations.

    As my colleague Tama mentioned in the podcast we released yesterday, the cryptocurrency space sort of exists in ‘dog years’.

    Things move so quickly that one year in crypto is like 7 years for any other industry.

    Right now there is almost a unified push across the crypto sector to solve the ‘scalability’ problem, i.e. to securely transact a near limitless number of transactions in real time.

    Those solutions will almost undoubtedly come from technologies that you haven’t heard very much about yet.

    Hashgraph and Radix, for example, are two such ventures working on extremely elegant payment solutions that break the mold of previous cryptos.

    Rather than build upon standard cryptocurrency concepts like blockchain, Proof of Work, and Proof of Stake, both Hashgraph and Radix have created their own algorithms from scratch.

    This is the bleeding edge of the bleeding edge of a massively disruptive sector that has existed for less than a decade.

    And there are literally dozens of other companies and technologies aiming for similar heights.

    Some of them will undoubtedly succeed. And still other ventures that won’t even be conceived for years will have yet more disruptive power in the future.

    The banks don’t stand a chance. The future of finance absolutely belongs to crypto.

    *  *  *

    And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

Digest powered by RSS Digest

Feb 14

Today’s News 14th February 2018

  • Apple Shipped More Watches Than Switzerland In Q4 2017

    Despite the fact that the Apple Watch is consistently playing second (or third) fiddle to the iPhone in terms of public attention, the evidence suggesting that Apple has yet another hit product on its hands is piling up.

    According to estimates by market research firm Canalys, the Apple Watch had its best quarter ever in Q4 2017. Driven by the release of the Series 3 model including (optional) LTE support, Apple shipped 8 million watches between October and December, bringing its total for the year to more than 18 million units.

    As Statista’s chart illustrates, that puts Apple ahead of the entire Swiss watch industry (think Rolex, Swatch etc.) for the quarter, supporting the company’s claims that the Apple Watch became the top-selling watch in the world some time in 2017.

    Infographic: Apple Shipped More Watches Than Switzerland in Q4 2017 | Statista You will find more infographics at Statista

    For all of 2017, BI reports that the Swiss exported more watches than Apple shipped, and the Chinese still make far more watches than anyone. But as the data indicates, Apple is rapidly gaining ground.

  • The Brutal Truth About Violence When The SHTF

    Selco interviewed by Daisy Luther via The Organic Prepper blog,

    Are you prepared for the extreme violence that is likely to come your way if the SHTF? No matter what your plan is, it’s entirely probable that at some point, you’ll be the victim of violence or have to perpetrate violence to survive. As always, Selco is our go-to guy on SHTF reality checks and this thought-provoking interview will shake you to your core.

    If you don’t know Selco, he’s from Bosnia and he lived through a year in a city that was blockaded with no utilities, no deliveries of supplies, and no services. In his interviews, he shares what the scenarios the rest of us theorize about were REALLY like.  He mentioned to me recently that most folks aren’t prepared for the violence that is part and parcel of a collapse, which brings us to today’s interview.

    How prevalent was violence when the SHTF in Bosnia?

    It was wartime and chaos, from all conflicts in those years in the Balkan region Bosnian conflict was most brutal because of multiple reasons, historical, political and other.

    To simplify the explanation why violence was common and very brutal, you need to picture a situation where you are “bombarded” with huge amount of information (propaganda) which instills in you very strong feelings of fear and hate.

    Out of fear and hate, violence grows easy and fast, and over the very short period of time you see how people around you (including you) do things that you could not imagine before.

    I can say that violence was almost an everyday thing in the whole spectrum of different activities because it was a fight for survival.

    Again, whenever (and wherever) you put people in a region without enough resources, you can expect violence.

    We were living a normal life, and then suddenly we were thrown in a way of living where if you could not “negotiate” something with someone, you solve the problem by launching a rocket from an RPG through the window of his living room.

    Hate stripped down the layers of humanity and suddenly it was “normal” to level an apartment building with people inside with shells from a tank or form private prisons with imprisoned civilians for slave work or sex slaves.

    Nothing that I saw or read before could have prepared me for the level of violence and blindness to it, for the lives of kids, elders, civilians, and the innocent.

    Again, the thing that is important for readers is that we were a modern society one day, and then in few weeks it turned into carnage.

    Do not make the mistake of saying “it cannot happen here” because I made that mistake too.

    Do not underestimate power of propaganda, fear, hate, and the lowest human instincts, no matter how modern and good your society is right now and how deeply you believe that “it can not happen here”.

    You’ve mentioned warlords and gangs in several of your articles. Were they responsible for the majority of the violence or was it hungry families?

    Fighting of the armies through the whole period of war brings violence in terms of constant shelling from a distance from different kind of weapons.

    For example a few multiple rocket launchers (VBR) could bring in 30 seconds the destruction in an area of 3-4 apartment buildings, and being there in that moment and surviving it gives you a completely new view on life.

    Snipers were a constant threat and over time you simply grow a way of living that you constant scan area in front of you where your next steps gonna be. Are you gonna be visible and from where? Etc.

    Most brutal violence was actually lawlessness and complete lack of order between different factions and militias, so in some periods there were militias or gangs who simply ruled the cities or part of the city where they were absolutely masters of everything in terms of deciding of taking someone’s life.

    In lawlessness, you as one person could be really small and not interesting, or join some bigger group of people to be stronger, some family or militia or gang.

    An example of a gang would be group of people of some 300 or 500 people who “officially” were a unit or militia and operate for some faction, but in reality they operate mostly for themselves.

    That included owning part of the black market, having prison (for forced labor or ransom), attacking people and houses for resources, smuggling people from dangerous areas.

    Violence from those kinds of group was the most immediate violence, the most visible in terms of SHTF talking.

    If those people came on your door you could obey, fight, or negotiate, but mostly you could not not ask for help from any kind of authority, because there was no real authority.

    In any society, no matter where you are living, there are a great number of people who are waiting for the SHTF to go out and do violent things. Small time criminals or simply violent persons who are not openly violent because system is there to punish them for that. It is like that.

    Some gang leaders that I knew were actually completely sick people with a strange type of charisma that makes people follow them, weird situations that can happen only in a real collapse.

    They are people who just waited for their time to rise.

    Those kinds of people together with criminal organization that are already there in any city in the world will be the backbone of SHTF gangs.

    Who were the most likely victims?

    A very simple answer would be that the most likely victims were people who had interesting things without enough defense.

    But it was not always that simple.

    For example one of the first houses that got raided in my neighborhood, right at the beginning of collapse while there was still some kind of order, was a rich family’s home.

    They had a nice house with bars on the windows, a pretty good setup for defense, and they had enough people inside so they could give pretty good resistance to the mob.

    But they got raided simply because they were known that they are rich, so they were attacked with enough force to be overwhelmed.

    It was not only about how much manpower you had and how well-organized defense of your home was, it was also about how juicy a target you were.

    If you are faced with 150 angry people attacking your home because they are sure you have good stuff inside your chances are low, no matter how good and tough you are.

    People who were alone were a pretty easy target and old people without support of family or friends.

    It was not always about killing someone or violence. For example, if you were alone and without resources but you had something else valuable like some kind of skill or knowledge you could easily be “recruited” for some faction or group, not by your will of course.

    What were some ways to prevent yourself from becoming a victim of violence? How do you recommend that people prepare themselves for the possibility of violence?

    It can be done in steps, or in layers.

    Do not be interesting (or attract attention) when the SHTF.

    This means a lot of things, for this article I can give a few examples with shortened explanations because it is a huge topic:

    • Do not look like a prepper (before or after SHTF). There is no sense in announcing that you are prepping for EMP, civil collapse, apocalypse, or whatever. With that you are risking the probability that when the SHTF, people will remember that you have interesting things in your home
    • Your home should look ordinary. For example, if you are living in the city on a street where all houses look similar, there is not  much sense in making your home look like a fortress. You’ll just attract attention.
    • Your defense should be based on more subtle means. Some examples are having means to reinforce doors and windows quickly when you need it, or to reinforce them from inside. Make changes in your yard to funnel possible attackers where you want them to be (trees, fence, bush…). You can make your home look abandoned or already looted.

    Think about what survival is!

    Survival is about staying alive, it is not about being comfortable at the expense of losing your life.

    I have seen many times people lose their lives simply because they were too attached to their belongings (house, car, land, goods…) so they simply did not want to leave something and run in a particular moment.

    Everything can be earned and bought again except life.

    Forget about statements like “I will defend it with my life” or “over my dead body” or similar because the real SHTF is usually not heroic or noble. It is hard and brutal. When you are gone you are gone and there might be nobody to take care of your family just because you have been stubborn or trusted in movies when it came to violence.

    To rephrase it: Be ready to leave your home in a split second if that means you and your family will survive, no matter how many good things you have stored there.

    Be mentally ready for violence

    In a way, it is impossible to be ready for violence, especially widespread violence when the SHTF, but you can minimize shock when that happens with some things.

    If you are not familiar with what violence is, you can try to get yourself close” to it today (in normal times). It can be done, for example, by doing some voluntary work for example in a local hospital, ER or similar… or simply by working with homeless people.

    Sounds maybe strange but activities like this can get you a bit of a feeling of what it is all about, not to mention that you can learn some practical and useful skills for SHTF.

    Have means and skills  (physically) to defend – or to do violence

    No matter how old or young you are, your gender or religion I assure you that you are capable of doing violence. It is only a matter of the situation and how far you are going to be pushed.

    It is not just “some people are capable of violence.” Everybody is capable. Not everybody enjoys doing it or is willing to do it so easily.

    In today (normal times) you can learn some violence skills and you should do it, again no matter if you are a woman or old or young.

    You should own a weapon and know how to use it. You should practice with it, or have at least some basic knowledge about hand-to-hand combat.

    The worst case scenario is to have a weapon that you try for the first time when SHTF.

    Be familiar with your means for defense, let your family members know what they need to do in case of attack of your home, have plan, and go through it.

    Only through practice will you minimize chances for mistakes.

    Use common sense

    I know lot of survivalists almost dream about how they are going to use weapons against bad guys when SHTF, and that they will be something like super heroes from movies, saving innocents and killing villains.

    Truth is that in a real collapse, a lot of things are kind of blurred and you are not sure who the bad guys are. Good guys turn out to be lunatic gang members who want to bring food to their kids.

    There are no super heroes when SHTF, and if some of them show up they end up dead quickly.

    There is only you and your skills and mindset and what you prepared.

    Use  violence as a last resort because of the simple fact that by using violence you are risking of getting killed or hurt. Remember when SHTF there is maybe no doctor or hospital to take care of your wound.

    It is a time when even a small cut can eventually kill you through infection and lack of proper care.

    I’m a single mom with a household full of girls. In an SHTF situation, what would our best strategies be to remain safe?

    Just like I have mentioned before, strategy is always same for any part of survival, and shooting from the rifle is pretty similar no matter are you man or woman.

    Being single mom with household full of girls on first look make you as a ideal target in some situations, but we are talking here in prepper terms so there is no reason not to be perfectly well prepared as a single mom with girls.

    But yes I admit it is not perfect situation, even if you are prepared well, some things are sure, you need to connect with other people even more.

    House with couple of girls will always look like easy prey for some people.

    It is like that.

    Were people in the city safer than people in the country? Can you tell us more about rural living during this time?

    In my case definitely no.

    In the essence it always come to the resources and people.

    City meant more people less resources, country (rural) meant less people more resources, and because that level of violence simply was lower. That was most important reason.

    There are few more reasons why it was much better in the country.

    People in the country (rural settings) were much more “connected to ground”  they were more tough if you like, they grew their own food, had cattle, lived more simple life prior SHTF and when everything collapsed they had less problems getting use to it.

    Yes they also did not have electricity and phones, running water or connection to other places but they adapted easier to the new life because they had more useful skills then people in the city.

    Life was harder for them too than prior to the collapse, but they had means to get resources: land, woods, river…

    Another thing is that people in small rural communities “in the country” were more connected to each other, people knew their neighborhood and some things were easier to organize, like community security watch, help in case of diseases and similar.

    What types of weapons did people have for self-defense?

    It was different political system prior the collapse where it was not so usual to own a weapon legally. And to own one illegally could mean a lot of troubles.

    Right prior to SHTF, it became possible to buy different weapons on the black market but still, a majority of people did not own weapons.

    When it all collapsed, it was possible to get a weapon through trade.

    Because of the military doctrine here prior to the collapse, we used “East Bloc” weapons. A favorite was AK-47 in all different kind of editions, or older weapons like M-48 rifle, SKS rifle, 22 and similar.

    People used what they had, so in one period you would be lucky if you had any kind of pistol and knife.

    Later through the different channels weapon become more available so people had them more. A lot of that was actually junk that some warlords somehow “imported”.

    Weapons 50-60 years old without proper ammunition, or not in operating condition. A lot of people simply did not have a clue how to use any kind of weapon so a lot of accidental deaths happened.

    I remember people storming abandoned army barracks that was mostly looted, but they found in one building a lot of RPGs while other part of the same building was burning.

    Two guys were trying to figure out a single-use RPG, and while they were messing with it clearly not knowing how that thing worked, they accidentally armed it and launched a rocket that flew through the crowd, not hurting anyone and exploding in wall 100 meters from where they stood.

    They were smiling, clearly happy because they thought they figured out how that thing worked.

    What weapons do you suggest to have for SHTF?

    It is a never-ending discussion and a favorite prepper topic, and I must say that whole discussion is overrated.

    I have used them in a real situation, and tried and tested lot of different kind of weapons and what works for me may simply not work for you.

    For example, here for me good choice is AK-47 rifle, maybe for you wherever you are it is very bad choice.

    Good advice is : you need to have a weapon that most people have around you because of multiple reasons: spare parts, repairing, ammunition availability, possibility that you can pick that rifle from other people and you know how to use it.

    What caliber and similar is a matter of discussion again. I am talking from the point of owning a rifle.

    Another thing is that you need to know how that weapon works. Luckily, most of my readers live in an area where gun laws are great comparing to region where I am.

    You have much more choices when it comes to owning a weapon and practicing with it. Use that.

    And do not forget that using weapon in a real life situation is not like shooting at beer bottles with your friends after a barbecue.

    In real life you might be in a situation to use a weapon while you are tired, dirty, and hungry and while someone is screaming next to you.

    It is going to be maybe when you are not ready to do that, maybe in pitch dark, maybe after you have been awake for 48 hours.

    At least think about that.

    When should you use violence?

    Contrary to some popular beliefs in the prepper community, the point is to use violence only as a last solution.

    The reason is as I mentioned already, the risk that you can be hurt or killed too, but also once you do violence you change your own rules, or push it more forward, and it is easy to get lost in violence.

    There are consequences to that, and you are not going to be the same person ever again.

    Violence is a tool, not a toy. You need to know how to use it as best as possible, but also to avoid using it when it is not necessary.

    It is a good idea to set up a clear set of rules (mentally too) when you are gonna use violence and to try to stick to it.

    For example you will use weapon if someone tries to break your home and attack you, and you need to be ready to do that without hesitation.

    What else should we know about post-collapse violence?

    Think with your head and research.

    One thing that is absolutely important when it comes to understanding how violent it is going to be and what can you expect in your own case of SHTF, is to understand how much media can influence people in making their decisions about violence.

    In my case, the media built up situation where people feared so much from other people that they actually hated them. They hated them so much that they actually strip them down from humanity.

    In a real-life example, it works in a way that people killed other people, including kids and women, because they hated them so much because media told them.

    It may look ridiculous and not possible to you, and you might again think “that can not happen here” but please trust your own resources, look for independent information, not mainstream media, in order to get the right information about what is really happening in the beginning of collapse.

    Do not be pulled into “popular opinion” just because the “man from TV” (whoever he might be) told you so.

    It is easier today. Because of the internet, you have much more choices for correct information than in my time. But still be careful, you might find yourself rioting together with 500 people just because you trusted some media.

    *  *  *

    More from Selco 

    More information about Selco

    Selco survived the Balkan war of the 90s in a city under siege, without electricity, running water, or food distribution.

    In his online works, he gives an inside view of the reality of survival under the harshest conditions. He reviews what works and what doesn’t, tells you the hard lessons he learned, and shares how he prepares today.

    He never stopped learning about survival and preparedness since the war. Regardless what happens, chances are you will never experience extreme situations like Selco did. But you have the chance to learn from him and how he faced death for months.

    Real survival is not romantic or idealistic. It is brutal, hard and unfair. Let Selco take you into that world.

    Read more of Selco’s articles here: https://shtfschool.com/blog/

    And take advantage of a deep and profound insight into his knowledge and advice by signing up for the outstanding and unrivaled online course. More details here: https://shtfschool.com/survival-boot-camp/

  • Tiny Canadian Bank Unveils Digital Vault For Bitcoins

    VersaBank, a tech-based, all-digital Canadian chartered bank, is developing a n ultra high-tech “Blockchain-based digital safety deposit box” for cryptocurrencies and other digital assets.

    Last week, the firm announced the hiring of Gurpreet Sahota as Chief Architect of Cyber Security, a former Principal Architect of Cyber Security at BlackBerry Limited, to supervise a team of engineers in developing a novel Blockchain-based digital safety deposit box, known as the VersaVault. The service will be available by June and will serve as a means to store cryptocurrencies, according to the company’s latest press release.

    VersaBank describes the VersaVault as the “world’s first blockchain-based safety deposit box,” which will soon be available on a global scale.

    Your digital assets are just as valuable as any family jewelry, property deed or stock certificate, but protecting them isn’t nearly as simple. No storage device or commercial cloud service is completely safe, and most blockchain-based secure storage is only for crypto-currency… and offered by companies you’ve never heard of, in places you don’t know. VersaVault is the solution your digital wealth has been waiting for: the impenetrable security and absolute privacy of blockchain encryption, created and managed by a chartered bank in one of the world’s most trusted financial markets. Like a safety deposit box, only you have access to what’s inside, and like a safety deposit box, it’s been built by an institution you can trust to be there for the long run.

    It is common that physical assets such as precious metals be stored in Switzerland, Hong Kong, and even Singapore, but when it comes to digital assets, could the country of choice soon be Canada? President and CEO David Taylor sure hopes so, and has positioned the bank to become a global leader in digital asset security from the perspective of safety.

    Last month, Coincheck, a Japanese cryptocurrency exchange, told financial authorities that it had lost 500 million NEM cryptocurrency coin, which at January 26 exchange rate amounted to roughly $400 million. By far, this was the most significant crypto theft in history.

    “We’re using what banks are all about — safety and security — only what we’re doing now is saying that physical box in the basement is getting obsolete,” Taylor said in an interview at Bloomberg’s Toronto office. “Most people’s really valuable assets are contained in some sort of digital format, whether it be a deed or a contract or a cryptocurrency.”

    Our differentiator in this market is to be secure and super private,” added Taylor, 65. “The bank wouldn’t have any kind of back door to open up the vault, we’re just providing the facility that folks could put their digital keys in.”

    Taylor said large financial institutions are showing interest in storing their digital assets in VersaVault since the company’s latest press release. He told Bloomberg that pricing has yet to be released, but he did indicate that it will be expensive.

    Bloomberg notes that VersaBank is an early mover in the digital asset security space. However, VersaBank is not alone in the space with firms in Asia, Canada, and the United States, who have also made claims to digital asset secuity services.

    South Korea’s Shinhan Bank said in November it planned to start a bitcoin vault by mid-year. Outside banking, Palo Alto, California-based Xapo Inc. has offered clients secure storage for Bitcoin for about four years, while Goldmoney Inc., a Toronto-based firm that lets clients buy, sell and store precious metals in vaults in seven countries, started offering Bitcoin storage in September.

    Bloomberg explains  that Taylor’s decision to incorporate Blockchain technology into the bank will enable it to rapidly grow in size in a short period of time.

    VersaBank, with a market value of about C$158 million ($126 million), 80 employees and C$1.73 billion in assets, has outperformed Canada’s big banks, with shares soaring 24 percent this year versus the 2.9 percent decline of the eight-company S&P/TSX Commercial Banks Index. Last year VersaBank rose 19 percent compared to the 11 percent gain of the banks index. Taylor is now eyeing a bit more growth while staying the course.  

    “I’m happy to be a niche player, but can probably double the size we are in assets,” he said. “I think C$3 billion is kind of a nice number.”

    It remains to be seen just how much safer a “blockchain-based” crypt will be compared to traditional air-gapped hard drives. Until then, we are confident that the world’s cryptobillionaires will stick to more conventional options, such as this “secret” Swiss bunker where the ultra rich hide their bitcoins.

  • Army Major Slams Trump's Toy-Soldier Fantasy

    Authored by Army Major Danny Sjursen via TruthDig.com,

    When fascism comes to America, it will be wrapped in the flag and carrying a cross.
    —Provenance unknown; sometimes erroneously attributed to author Sinclair Lewis

    You’ve got to give it to the guy. He sure has a set on him. President Trump is impenetrable and far from subtle.

    On Tuesday, Americans were treated to the news that Trump has ordered the Pentagon to plan a “big” military parade. We should hardly be surprised. Our president—he of bone spurs and other Vietnam draft deferments—loves martial displays. We’ve already watched him gleefully sword dance with Saudi Arabian princes and marvel at a triumphant Bastille Day parade in Paris. He really liked the French procession.

    In fact, according to a Pentagon spokesman, “The marching orders were: I want a parade like the one in France.”

    The man possesses the military maturity of a sophomore from his alma mater, a New York military boarding school in the Hudson Valley, but he sure knows what he wants.

    In the coming days, you’ll no doubt be treated to dozens of columns about Trump’s latest request, or, more accurately, his latest order. Expect much discussion of the logistical difficulties inherent in such a cavalcade and speculation about the parade’s monetary cost. But the crisis is deeper still.

    The parade is just a symptom. It centers on persistent American militarism and our pariah status in the eyes of the world.

    The Trump administration, like the two that proceeded it, possesses not even the semblance of a coherent foreign policy. Who needs strategy when you’ve got pomp, and who better to usher in the show than America’s first reality-TV president?

    Make no mistake: This is spectacle, not strategy, pageantry, not prudence. In that sense, nothing better defines our unique militarist moment.

    Everything is in play in the martial culture wars waged among Americans. The National Football League is a battleground. Soldiers a-marching and jets a-flying used to be saved for Memorial Day or Veterans Day. Now, it’s a regular Sunday spectacle. Presidents, politicians and “patriots” nearly faint with pride and adulation—a new, compulsory, American ritual. The few African-American players with the audacity to kneel in protest during the national anthem are pilloried, attacked from the very pinnacle of government. It’s a war, in our heads and in our hearts. Militarism is winning.

    *  *  *

    Trump didn’t invent the misappropriation of military members for partisan political gain. Oh, no. That’s a well-worn trick of the trade. Heck, George W. Bush landed a plane on a damn aircraft carrier. Even Barack Obama was hardly above speeches and photo-ops with the troops. Still, you have to admit that only Trump could elevate this sort of spectacle into an art form, albeit a gaudy one.

    Like so much else in Trump’s governing style, this is pure distraction. He’ll entertain the sentimental masses with shiny, low-hanging patriotic fruit while whisking Paul Ryan’s agenda (with a sprinkle of Stephen Miller nativism) through Congress. After all, there’s lots from which to distract in contemporary America. From militarized police patrolling the streets of black and brown neighborhoods to record income inequality, to sporting the highest per capita incarceration rate in the world, in a nation where black men are imprisoned at five times the rate of whites. Take your pick.

    Zooming out a bit, how do you think America’s upcoming martial parade will play in the rest of the world, especially the Greater Middle East, Uncle Sam’s favorite playground of late?

    Let’s take an imaginary tour. I’m not sure the people of Yemen—starving and disease ridden under United States-backed Saudi terror bombing—will find much to celebrate in the U.S. military. The Kurds, America’s erstwhile allies in Syria, might resent Trump’s decision to abandon them to the machinations of Turkey, their sworn enemy. Palestinians won’t be impressed either, seeing as this administration broke with the rest of the world and 70 years of precedent to unilaterally sign away their capital, Jerusalem, to Israel.

    Afghans can’t be bothered with U.S. victory parades. After all, their capital city is suffering under regular bombing attacks, and a record number of provinces are now controlled by the Taliban. This after a 17-year string of U.S. military “victories.”

    The Nigerians, South Sudanese, Somalis and Yemenis suffering under what experts call the catastrophic “four famines” are liable to ask whether the U.S. military couldn’t provide a bit less terror-chasing and a bit more humanitarian assistance before they and their families starve to death. And, finally, imagine the shock of millions of Mideast refugees blocked from entering the U.S. when they find out the American military is celebrating “victory” in the very wars (think Iraq, 2003) that destabilized their region.

    *  *  *

    The truth is that most Americans, especially those in Trump’s peculiar coalition—war hawks, tax-cut-hungry CEOs, struggling Rust Belt white males and (strangely, considering their support for a thrice-married New Yorker) evangelical Christians—couldn’t care less about any other countries.

    This is now the “America First,” “Make America Great Again” Republican Party, remember? No one in the president’s iron alliance of (40 percent of) Americans is going to worry about how the image of a U.S. military parade plays on the “Arab street.” Self-awareness is not a common American virtue, more’s the pity.

    Anyway, the parade will come and go. America’s military will obediently spin its logistical wheels to give the president what he wants—a spectacle to match that of his favorite nemesis doppelganger in North Korea. Half the country will cheer our passing American “heroes.” The other half will grumble about Trumpian narcissism. When it’s all over, most everyone will ignore the creeping militarism that infects American society.

    This veteran, for one, will pass on watching Trump’s carnival display. It’s a sad day indeed when one pines for the unrest of the late 1960s, when hundreds of thousands of peace activists, frustrated veterans and even Gold Star mothers regularly descended on Washington to protest an immoral and failing war.

    Now, that would be a parade worth watching.

  • China Rolls Out J-20 Stealth Fighter, Navy Calls "Serious Threat" To US Assets

    As tensions mount over the South China Sea shipping corridor which handles $5 trillion in annual trade, China has finally rolled out its Chengdu J-20 stealth fighter jet which some have compared to the United States’ F-22 Raptor.  

    The new jet is rumored to have already been deployed to the South China Sea along with several of China’s Su-35s, to take part in a joint combat patrol over the region, according to the Chinese Ministry of Defense whose release did not mention the J-20.

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    The fourth-generation medium and long-range fighter jet made it’s maiden flight in 2011 and was first shown to the public at a November, 2016 air show in Zhuhai, Guangdong Province. 

    A spokesman for the People’s Liberation Army (PLO), Shen Jinke, said that the J-20 would “help the air force better shoulder the sacred mission of safeguarding national sovereignty, security and territorial integrity,” adding that the air force was in the middle of a modernization program in order to fight enemies on all fronts.

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    While the jet’s combat service was announced on Friday, the J-20 was officially entered military service last September – and conducted nine days of drills along with older J-16 and J-10C fighters last month, according to the air force. 

    The J-20 was designed for stealth and manoeuvrability and is powered by two jet engines, giving it extra power as well as the ability to survive engine failure, according to the Washington-based Centre for Strategic and International Studies.

    The US Naval Institute said the aircraft was likely to be a serious threat to US aircraft, ships and bases, because the PLA might be able to put more of them into the sky. –scmp.com

    Senior analyst at the Australia Strategic Policy Institute, Malcom Davis, told Business Insider that the J-20 is a “fundamentally different sort of aircraft than the F-35”

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    Davis characterized the J-20 as “high-speed, long-range, not quite as stealthy (as US fifth-gen aircraft), but [the Chinese] clearly don’t see that as important.” According to Davis, the J-20 is “not a fighter, but an interceptor and a strike aircraft” that doesn’t seek to contend with US jets in air-to-air battles.

    Instead, “the Chinese are recognizing they can attack critical airborne support systems like AWACS (airborne early warning and control systems) and refueling planes so they can’t do their job,” Davis said. “If you can force the tankers back, then the F-35s and other platforms aren’t sufficient because they can’t reach their target.

    Retired US Air Force Lt. Gen. David Deptula agrees. In a November assessment for Defense & Aerospace ReportDavis said “The J-20, in particular, is different than the F-22 in the context that, if you take a look and analyze the design, it may have some significant low-observable capabilities on the front end, but not all aspects — nor is it built as a dogfighter,” adding “But quite frankly, the biggest concern is its design to carry long-range weapons.

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    A senior scientist at Lockheed told Business Insider that China made serious missteps in their attempt to integrate stealth into the J-20.

    “It’s apparent from looking at many pictures of the aircraft that the designers don’t fully understand all the concepts of LO design,” said the scientist.

  • FBI Scandal Unraveling: Susan Rice Email From Inauguration Day Is "Disturbing"

    Authored by Mac Slavo via SHTFplan.com,

    As if rational-minded humans needed any other evidence that the “Russian collusion” narrative was fabricated, a disturbing email from Susan Rice has surfaced, adding fuel to that fire. Rice was Barack Obama’s ambassador to the United Nations and is most known for her lying in the aftermath of the Benghazi scandal.

    Rice has been neck deep in several scandals, including the “unmasking” ordeal that unfolded shortly after Donald Trump beat Hillary Clinton in the 2016 election. Senator Lindsey Graham has now described one of Rice’s newly discovered emails as “disturbing,” flinging her head first into the invented Russian collusion scandal.

    The recently revealed Inauguration Day email from Susan Rice detailed former President Barack Obama’s guidance at a high-level meeting about how law enforcement should investigate Russian interference in the 2016 election.

    According to Fox News, the email first surfaced Monday, when Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and Graham, R-S.C., sent the Obama national security adviser a letter, pressing for answers about the email by next week.

    “She’s sending herself an email talking about a conversation on January 5 with the president, reassuring herself, and I guess the president, that this would be done by the book,” Graham said Monday night on Fox News’ The Story with Martha MacCallum.

    “I think that’s odd and disturbing because we know the investigation regarding the Trump campaign was anything but by the book.”

    Rice’s email, which she sent to herself on January 20, 2017, seemed to document a January 5, 2017, meeting in the Oval Office with Obama, then-Vice President Joe Biden, former FBI Director James Comey, then-Deputy Attorney General Sally Yates, and herself.

    In writing to Rice, Grassley and Graham said, “It strikes us odd that, among your activities in the final moments on the final day of the Obama administration, you would feel the need to send yourself such an unusual email purporting to document a conversation involving President Obama and his interactions with the FBI regarding the Trump/Russia investigation.”

     The two senators also noted that while Rice said that Obama instructed Comey to proceed ‘by the book,’ the Republicans claim that ‘substantial questions have arisen about whether officials at the FBI, as well as the Justice Department and the State Department, actually did proceed “by the book.”‘

    This major scandal and subsequent mainstream media coverup is slowly unraveling, and it seems there are few high-powered Democrats that aren’t caught up in the corruption.

  • "All Public Pollsters Should Be Shot" Says Former Obama Campaign Manager

    Former Obama campaign manager Jim Messina has violent opinions about public pollsters – telling MSNBC’s Joe Scarborough “Joe, you know how I feel about public polls… I think all public pollsters should be shot.

    a

    The former White House senior staffer who ran President Obama’s 2012 campaign was discussing the value of polling so far out from the election when he made the comment – telling Scarborough that he is more interested in how amped up voters are vs. generic polls.

    What you care more about is passionate intensity. When I ran President Obama s campaign, the number I looked at everyday was intensity. Are my voters more motivated than Republican voters? Don t go generic. It s going to jump all over the place.

    Pre-election polling from a variety of forecasters put Hillary Clinton’s chance of beating Donald Trump anywhere from 70% to as high as 99% – pegging her as the overwhelming favorite to win several states such as Wisconsin and Pennsylvania that ended up voting for Trump. 

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    The fact that so many forecasts were off-target was particularly notable given the increasingly wide variety of methodologies being tested and reported via the mainstream media and other channels. The traditional telephone polls of recent decades are now joined by increasing numbers of high profile, online probability and nonprobability sample surveys, as well as prediction markets, all of which showed similar errors. –Pew

    Some have suggested that the overly-optimistic (totally wrong) polls gave Democratic voters a false sense of security, leading to lower turnout. 

    The Pew Research center had some thoughts on what may have actually happened.

    Nonresponse bias: Poor white Trump voters didn’t pick up the phone and participate in surveys. “The problem is if you get what pollsters call nonresponse bias, people are less likely to take your call or stay on the phone with you,” explained Claudia Deane, Vice President of research at Pew. 

    “Shy Trumper” effect: Fearing judgement from others, closeted Trump supporters told pollsters they were going to vote for Clinton, when in fact they voted for Trump. 

    Likely voter error: People who tell pollsters over the phone that they’ll turn out to vote, when in fact they don’t. “You might get 70 or 80% of the people on the phone telling you they’re going to vote because maybe that day they do plan to vote,” when in reality maybe 50 – 55% of people actually go to the polls.

    Perhaps pollsters will figure it out before the next election. If not, they risk being shot by President Obama’s campaign manager – or perhaps someone inspired by him to take matters into their own hands.

  • USDJPY Plunges To Lowest Since Nov 2016 After Weakest Japanese GDP In 2 Years

    USDJPY tumbled to 107.01 – the lowest since Trump’s election in Nov 2016 – after a disappointing GDP print signaled the beginning of the end of the ‘global synchronous recovery’…

    As Goldman Sachs writes, Japanese real GDP growth slowed sharply to +0.5% qoq annualized, representing a sharp slowdown from July-September (+2.2%) and coming in below the market forecast (+1.0%).

    This is the weakest Japanese GDP growth since Q4 2015…

    The GDP deflator turned negative qoq annualized (-0.8%, 0.0% yoy), resulting in a sharp slowdown in nominal GDP at -0.1%, from +2.6% in July-September.

    Private demand remains solid, despite a sharp fallback of external demand and private inventories: The breakdown of real GDP shows private inventories and external demand, which substantially boosted July-September real GDP, made a negative contribution to October-December GDP. Despite this, however, private demand remains solid.

    The reaction was swift, with USDJPY legging lower, stalling briefly at Sept 2017 lows, before tumbling to 107.01…

     

    Yen is the strongest since November 14th 2016 against the dollar…

     

    Of course, the perfectly correlated price action of US equity futures to USDJPY has decoupled amid this collapse…

    Perhaps because the machines are too busy working overtime preparing for tomorrow’s – likely to be historic – VIX options expiration.

    As DataTrekResearch’s Nicholas Colas notes, tomorrow could prove volatile as monthly VIX contracts will expire.

    The VIX tends to experience wider intraday moves during monthly expirations than days when contracts don’t mature.

    The Cboe Volatility Index tends to have bigger swings on days its contracts mature, with intraday moves of 13 percent on average on the past 12 monthly expirations. That compares with a mean daily fluctuation of 10 percent in the year through January. Of course, that was before this month, when a record VIX surge on Feb. 5 sent its average intraday move for February to almost 60 percent.

  • James Montier: This Is A "Greater Fool Bubble" And I'm Getting Out

    Last August, we were delighted to point out the latest quirk of this incredibly manipulated and centrally-planned “market”: in “Record Number Of Fund Managers Say “Stocks Are Overvalued” As They Rush To Buy Nasdaq”, we noted a paradox whereby on one hand a record number, or 46%, of Wall Street fund manager respondents to the BofA monthly survey said stocks are “overvalued”…

    even as virtually all remained fully invested in equities.

    Today, half a year later, the same paradoxical observation forms the basis for the latest note by Jeremy Grantham’s colleague, GMO’s James Montier, titled “The advent of a cynical bubble“, in which he uses the exact same survey and makes the exact same observations to reach our conclusion:

    A recent Bank of America ML survey showed the highest level of those citing “excessive valuation” ever. Yet despite this, the same survey showed fund managers to still be overweight in equities.

    To Montier this combination was not paradoxical per se,as much as exposing a the existence of that strangest of creatures: “the fully-invested bear.”

    The most common rationale for such a cognitively dissonant stance is “the fear of missing out on the upside”(aka FOMO – fear of missing out). As I think Seth Klarman pointed out long ago, this isn’t really fear at all, but rather greed.

    How does one explain the existence of this particular “greedy bear”? To Montier the cognitive dissonance noted above is a function of the Fed-reflated bubble the US finds itself in: the near rational – or cynical – bubble, also known as the greater fool bubble. Here’s Montier:

    I am not a great fan of this nomenclature as it suggests a veneer of respectability that I find undeserved. To me  these are really better described as greater fool markets. They are cynical bubbles in that those buying the asset in question don’t really believe they are buying at fair price (or intrinsic value), but rather are buying because they want to sell to someone else at an even higher price before the bubble bursts. Chuck Prince, the former CEO of Citibank, aptly demonstrated the typical cynical bubble mentality when in July of 2007 he uttered those fateful words, “As long as the music is playing, you’ve got to get up and dance. We are still dancing.”

    If the presence of the proposed buyer of last resort rings a bell, it’s because that’s precisely the market environment the Fed has created: there is no longer any risk not because fundamentals are strong or the economy is improving, but because the Fed will always step in and rescue the market when things turn south. Montier agrees:

    I would suggest that this is exactly the sort of market we are observing at the current juncture. Fund managers for the most part all agree that the US market is expensive but still they choose to own equities – a cynical career-risk-driven position if ever there was one. I have been amazed by the number of meetings I’ve had recently where investors have said they simply “have to own US equities.”

    While such a bubble can make speculators extremely wealthy if only for a period of time – because putting money into what everyone knows is a ridiculous valuation is not investing, it’s speculation, and as Montier admits “that the US equity market is obscenely overvalued can hardly be news to anyone” – it only works as long as there is at least one more greater fool to sell to.

    Indeed, Montier concedes that “cynical bubbles are based on a belief that one can get out before everyone else. Obviously, this is simply impossible. Like a game of musical chairs played at a child’s birthday party, when the chairs are increasingly rare, the competition for them gets fiercer. Crowded exits don’t end well – inevitably some are crushed in the stampede.”

    Which brings us to Montier’s conclusion, one shared with the movie war games in which the only winning move is “not to play” any longer. As the GMO strategist, who admits he can’t time bubbles, admits, “perhaps you are skilled at picking the managers with great timing ability, and perhaps those managers do have great timing ability, in which case, good luck.”

    As for me, I prefer to leave the party early, in the knowledge that I can walk away with ease.

    Monitor’s conclusion: an aptly appropriate excerpt from JM Keynes himself:

    It is the nature of organized investment markets, under the influence of purchasers largely ignorant of what they are buying and speculators who are more concerned with forecasting the next shift of market sentiment than with a reasonable estimate of future yield of capital – assets, that, when disillusion falls upon an over-optimistic and over-bought market, it should fall with sudden and catastrophic force.

    We saw an example of this “sudden and catastrophic force” last week. We will see it again soon, once the “greater fools” realize there are no more left and the cynical bubble finally bursts.

    Source: GMO

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Feb 13

Today’s News 13th February 2018

  • It's Officially Now Illegal To Accuse Poland Of Complicity In Nazi War Crimes

    Authored by Geneviève Zubrzycki via TheConversation.com,

    On Jan. 26, the eve of International Holocaust Remembrance Day, the Polish parliament voted in favor of a bill making it illegal to accuse Poland of complicity in Nazi crimes.

    ‘Anti-Semitism is treatable’ – a banner at a Warsaw demonstration.

    This caused immediate outrage around the world and nowhere more so than in a country that has been, until now, a close ally of Poland: Israel. Prime Minister Benjamin Netanyahu described the bill as “distortion of the truth, the rewriting of history and the denial of the Holocaust.

    And yet, 10 days later, Poland’s president, Andrzej Duda, signed the bill into law retorting that “the historic truth is that there was no systematic institutionalized participation among Poles [in the Holocaust].”

    What is happening? Why, over 70 years since the end of the Second World War, is this argument taking place?

    I am a sociologist who has studied controversies around the memory of the Holocaust in Poland. For me, this dispute is more than a crisis in Polish-Jewish relations. It is, above all, a crisis in Poland’s national identity.

    The memory of World War II in Poland

    This is not the first time the Poles have legislated against what they see as defamation of Poland’s record in World War II, but it is certainly the most wide-reaching. Under this new law, the punishment for people claiming that “the Polish Nation or the Republic of Poland is responsible or co-responsible for Nazi crimes committed by the Third Reich” carries a possible prison sentence of up to three years.

    The timing of the vote was no accident. The government used the occasion of International Holocaust Remembrance Day as a platform to denounce the misnomer “Polish death camps” that some – including former President Barack Obama – have used to refer to Nazi concentration camps in occupied Poland.

    The Polish government, along with other Polish organizations, has been fighting the use of that expression in foreign media for several years, and with considerable success. Most American newspapers and other major media outlets have updated their stylebooks to stop those words being used.

    Nevertheless, given the growing controversy, the German minister of foreign affairs took it upon himself to declare that the Germans bore the entire responsibility for the extermination camps. But then he added that “the actions of individual collaborators do not alter that fact.”

    And therein lies the rub.

    Many Poles find it difficult to accept they could have played a role in the Holocaust. That is because, unlike many other nations, the Polish state did not collaborate with the Nazis. Considered an inferior race by the Nazis, Poles were targeted for cultural extermination to facilitate German expansion to the East. Polish elites were systematically murdered. Tens of thousands of Poles were imprisoned in concentration camps or were forced into slave labor.

    The Old Town burns during the Warsaw Uprising, August 1944. Museum of Warsaw

    Poland’s losses in World War II were enormous: Approximately 6 million Polish citizens were killed in the war, over half of whom were Jewish. Warsaw was left in ruins, and its 1944 uprising alone cost the lives of about 150,000 citizens.

    The dominant Polish narrative of World War II is, therefore, about victimhood, which fits squarely into its broader national mythology of martyrdom.

    Adam Mickiewicz (1798-1855) Unknown

    Repeatedly invaded by its powerful neighbors, the Polish state disappeared from the European map for over a century – from 1795 to 1918. Poland’s national bard, the 19th century poet Adam Mickiewicz, described his country as a “Christ among nations.” In this telling Poles are a chosen people, innocent sufferers at the hands of evil oppressors.

    “Revelations” of crimes committed against Jews by Poles tarnish this narrative and shake Polish national identity to its core.

    Narrative shock

    The fact is, however, as historians have shown, crimes committed against Jews by Poles were much more prevalent and widespread than most people realized.

    Perhaps the most controversial and impactful research is that of the Polish-born Princeton University professor, Jan T. Gross.

    In his 2000 book “Neighbors,” Gross recounts in painful detail the violent murders of Jews by their ethnically Polish neighbors in the small town of Jedwabne on July 10, 1941.

    The book marked a watershed in the public debate about Polish-Jewish relations.

    On July 10, 2001, roughly a year after the publication of Gross’ book, the Polish government acknowledged the murders and erected a monument at the site where several hundred Jews were forcibly brought to a barn and burned alive. Although the monument’s inscription fails to explicitly indicate that it was ethnic Poles and not Germans who committed the crime, the official apology by then-President Aleksander Kwaśniewski was unequivocal. “Here in Jedwabne,” he said, “citizens of the Republic of Poland died at the hands of other citizens of the Republic of Poland.”

    The Jedwabne memorial. Genevieve Zubrzycki, Author provided

    Such was the shock the story of Jedwabne caused that it is possible to distinguish between Poland “before and after” the appearance of Gross’ book. As leading Catholic journalist Agnieszka Magdziak Miszewska put it: “Facing up to the painful truth of Jedwabne is … the most serious test that we Poles have had to confront in the last decade.”

    Law and Justice’s politics of history

    It is that test, arguably, that the ruling Law and Justice party is failing.

    In the battle over Polish collective memory, the party has been promoting the stories of the Poles who rescued Jews – and who are honored by Israel as the “Righteous Among Nations” – by creating museums and monuments in their name.

    Through the new “Holocaust Law,” the government is, in effect, trying to repress knowledge of crimes committed against Jews by Poles. The defense of the law, however, goes one step further. In a remarkable case of what I would describe as manipulating the message, Prime Minister Mateusz Morawiecki issued a video statement claiming that it is the Poles who are the guardians of historical truth and fighters against hatred.

    And yet, the same politicians remain silent when their supporters express anti-Semitic and anti-refugee views. On Feb. 5, for example, demonstrators impatient for President Duda to sign the Holocaust law gathered in front of the Presidential Palace chanting anti-Semitic slogans and demanding that he “remove [his] yarmulke and sign the law!”

    The president did sign the law, but he also sent it to the country’s constitutional court for examination.

    Those Poles opposed to the law – and there are many, judging by the number of organizations and public figures denouncing it and the number of petitions circulating – hope that it will be deemed unconstitutional because it represses freedom of speech and could significantly curtail academic research.

    Regardless of the ultimate outcome, however, the government’s politics of history will continue to be waged on many other fronts. What is at stake, in my view, is nothing less than the definition of Polish national identity. This is why, for all the international outrage, the controversy about the Holocaust law is hottest inside Poland, among Poles who are now debating what it means to be Polish and where Poland is going.

  • Dutch Finance Minister Admits He Lied About Putin's Plans For A "Greater Russia"

    In a shocking admission, Dutch Foreign Minister Halbe Zijlstra said he lied when he claimed to have heard President Vladimir Putin describing an ambition to unify Russia, Ukraine, Belarus, the Baltic states and Kazakhstan into a single super-state to rival the influence of the former Soviet Union.

    Zijlstra claimed at a party conference in 2016 that he had overheard Putin outlining the grand plan for a “Greater Russia” in 2006 during a gathering of businessmen. At the time, Zijlstra was working at Shell, RT reports.

    Dutch

    In the original retelling of the story, Zijlstra said he had been in a back room of a dacha (country house) when he heard Putin define “Great Russia” as “Russia, Belarus, Ukraine and the Baltic states,” adding that “Kazakhstan was nice to have.”

    The story was questioned by the newspaper Volkskrant, however, which quickly discovered that Zijlstra had not even attended the 2006 business meeting in Russia, despite being part of the Shell delegation. When confronted about this, the minister acknowledged that he had lied, and said he was simply trying to protect a source.

    “I made the decision that this is an important geopolitical story with serious implications,” he said.

    I put myself in the story to make sure that the revelations weren’t about the person who was actually there. Because that could have had implications for him or his company.”

    Zijlstra insisted he was told as much from a source whom he refused to name. The newspaper itself says the source was Jeroen van der Veer, who was the CEO of Shell at the time.

    The revelation comes at an awkward time for the foreign minister. Zijlstra, who took office in October 2017, is set to visit Moscow this week to meet with his Russian counterpart, Sergey Lavrov. Geert Wilders’ opposition right-wing Party for Freedom has called for a parliamentary debate about Zijlstra’s integrity before he leaves. Zijlstra told Volkskrant that he informed Prime Minister Mark Rutte about his conduct several weeks ago.

    “Greater Russia” is an amorphous term usually used to describe the historic core of the Russian state, roughly corresponding to the territory of medieval Russia in the 16th century – the beginning of the reign of Ivan the Terrible, who was the first of Russia’s great expansionist rulers. The word “greater” is meant as a description of spiritual significance rather than physical size. The same term was applied to the core territories of some other countries, like Greater Armenia, Greater Walachia or Greater Poland.

  • Free Speech And Social Engineering In The "Land Of The Free"

    Authored by Mac Slavo via SHTFplan.com,

    A disturbing trend has been going on for quite some time now, and that’s the destruction of free speech.  Many college campuses even have safe spaces now, where certain speech is banned so college students can snuggle blankets.

    Free speech is now the topic of several debates and they all revolve around social engineering/social tyranny. Take this article from The Week, for example.

    On many college campuses, groups of left-leaning students insist that free speech should be conditional on speakers adhering to explicit standards of diversity and avoiding the infliction of emotional harm on the members of marginalized groups through the spreading of “hate.”

    From the opposite ideological direction, President Trump believes that the government should “take a strong look” at libel laws to keep news organizations from subjecting his own administration to negative coverage.

    Finally, from the center-left come calls to use anti-discrimination law to punish organizations that oppose the legitimacy of same-sex marriage and accommodations for transgender people. If that happens — either by passing new laws that explicitly add to existing anti-discrimination statutes or by courts treating the members of these groups as protected classes covered by existing law — the result will almost certainly be a significant constriction of speech, as those holding more conservative views will face sanction for expressing them in public. –The Week

    The article asks the question: Is America Having Second Thoughts About Free Speech?  But Joe Joseph with The Daily Sheeple answers the question perfectly.

    “NO! America’s NOT having second thoughts about free speech. But the social engineers are cramming it down our throat like this is what we want.  But really, nobody wants it! It’s unfreakin’ believeable!”

    Joseph’s take reflects all those who are individual minded.  Even offensive speech is only offensive to the emotionally weak. “I can’t believe that we’re even having this conversation in the land of the FREE!!!! What the heck is going on…. are we in the “Twilight Zone”? When did we go from a nation of bad ass mo fo’s to a nation of pansies?” says the caption on Joseph’s latest news shot video.

    “How about we do this…how about these media organizations actually follow through with what their code of ethics say. How about they actually do what they say they’re gonna do! How about you practice the rules you’re taught day one in journalism school!” says Joseph about the media.

    He goes on to say laws dictating what speech is acceptable, and what type of speech is not acceptable, are not designed to fix the problem.  They are designed to divide the people and amplify the problems.

    There should never be a question of whether or not humans have free speech. It’s a natural right to think and say whatever you want.  Words don’t do physical damage, and until someone is hurt or their property is damaged, no crime has been committed.

  • Pentagon Sending Heavily Armed Marine Units To East Asia To "Counter China Threat"

    According to a recent report by the Wall Street Journal, the Pentagon is considering plans to transfer heavily armed, versatile Marine Corps Expeditionary Units (MEU) to East-Asia, citing the rapidly expanding Chinese influence in the region.

    After 16-years of military embarrassments in the Middle East, the Pentagon appears to have realized that its misfortunes in the area have transformed into nothing more than Vietnam 2.0; alternatively it is merely provoking Asian superpowers into a new race for military dominance in the region.

    Washington’s drive for regional militarization (and constant wars feeding the MIC) appears is shifting away from the Middle East and onto China and Russia’s playground. President Trump’s newly issued National Defense Strategy report highlights “our [Pentagon] competitive military advantage has been eroding” throughout the world, as it has now become a national security threat. Further, the report labels, the South China Sea and the Korean Peninsula, as areas of an “increasingly complex security environments,” which the Pentagon will start transferring military assets to the region, to combat the threat because it is jeopardizing the American empire.

    “Today, we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding. We are facing increased global disorder, characterized by decline in the long-standing rules-based international order—creating a security environment more complex and volatile than any we have experienced in recent memory. Inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security.”

    “China is a strategic competitor using predatory economics to intimidate its neighbors while militarizing features in the South China Sea. Russia has violated the borders of nearby nations and pursues veto power over the economic, diplomatic, and security decisions of its neighbors. As well, North Korea’s outlaw actions and reckless rhetoric continue despite United Nation’s censure and sanctions.”

    The Wall Street Journal says the Pentagon intends to boost its military appearance in the East Pacific with the deployment of Marine Expeditionary Units. A Marine expeditionary unit (MEU, pronounced “Mew”), is a group of 2,200 marines who are part of the quick reaction force and are usually deployed to a region for an upcoming or immediate crisis. A unit deploys about 2,200 marines who operate amphibious assault ships, aircraft, helicopters, tanks, heavy weapons, and other military assets. Each MEU is equipped with:

    Officials said these shifts are “major muscle movements,” as the Pentagon transfers military equipment and personnel redeployments, and are aimed at “a global resetting of forces” rather than a “buildup for war.”

    “We have enduring interests here, and we have an enduring commitment and we have an enduring presence here,” Gen. Joe Dunford, chairman of the Pentagon’s Joint Chiefs of Staff, who spoke about America’s reshuffling of armed forces during an eight-day visit through Asia last week.

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    MEUs deploy in seven-month rotations on Tarawa-class amphibious assault ships operated by the United States Navy; they may stay offshore for the entire time of deployment or come ashore for small periods of time to conduct training exercises. General Robert Neller said MEUs sent to Asia would jump right into military patrols and joint activities with allies.

    “We have to be present and engaged to compete,” Gen. Neller said. The new defense strategy “will shape our future naval presence, especially in the Indo-Pacific region.”

    WSJ says MEUs have recently been deployed to various theaters in the Middle East but will be soon departing from their native ports on the West Coast of the United States to Asia.

    MEUs based on the West Coast have traveled from the U.S. to the Middle East for wars in Iraq, Afghanistan and most recently, Syria, all in the area of responsibility of U.S. Central Command. MEUs, designed to be a quick reaction force, were among the first units to arrive near northern Iraq in 2016 to set up for a campaign to free the city of Mosul from Islamic State.

    Pentagon officials said they hope their new strategy on East Asia will persuade Pacific nations to stand with the U.S. “I believe the [National Defense Strategy] and other guidance requires us to adopt a more global posture and this will shape our future naval presence, especially in the Indo-Pacific region,” said Gen. Neller.

    Kelly Magsamen, a former Pentagon and State Department policy official, said the new military strategy, when more fully implemented, will require careful diplomacy and a robust economic approach: “Follow through on strategy is essential, but so is close communication and coordination with our allies and friends,” said Ms. Magsamen, now vice president national security and international policy at the Center for American Progress.

    In keeping with the Pentagon’s party line, the WSJ warns that depleting military resources in the Middle East could enable Russia and China to “bolster their presence” in the region.

    Some officials argue that withdrawing resources from the Middle East could allow Russia and China to bolster their presence there. Russia backs Syria’s ruler and both countries are seeking to expand their influence elsewhere in the region.

    https://platform.twitter.com/widgets.js

    Take Guam, an American territory in Micronesia in the Western Pacific, which has about 3,831 American soldiers on the island stationed at Anderson air force base. Last month, we reported, the B-1B Lancer bombers, the B-2 Spirit stealth bombers, and the B-52H Stratofortress bombers are now ‘temporarily’ stationed at Andersen Air Force Base. Nevertheless, the show of force wound down this month, when the B-1Bs return to Ellsworth Air Force Base in South Dakota.

    Curiously, the Pentagon’s military build-up in Asia comes as Pyongyang and Seoul are making some progress towards engaging in dialogue over North Korea’s reckless nuclear and rocket programs. Further, the United States is becoming increasingly worried about Beijing’s drive to militarize the heavily disputed artificially-created islands it controls in the South China Sea.

    America’s legacy of failed wars in the Middle East is quietly being swept under the carpet. The Pentagon is now vocally repositioning itself for the next boogeyman being Russia, China, and North Korea, as highlighted in the 2018 National Defense Strategy. It is likely that the Trump administration with the Pentagon will condition the American people through psychological operations, about how America’s competitive military advantage is eroding, and the need to transfer military assets to the Asia Pacific is critical for America’s survival. This alarming trend will continue for at least President Trump’s first term, and if he gets elected again, it will definitely persist until the next World War starts.

    Meanwhile, Beijing is preparing for the next global conflict with a new era of modernization of the country’s armed forces, the largest in the world, including AI-Enabled Nuclear Submarines, fifth-generation fighters, and hypersonic weapons.

  • A President Held Hostage?

    Authored by Justin Raimondo via Antiwar.com,

    They’ve got him surrounded…

    As Vice President Mike Pence made a fool both of himself, and the country he is supposed to be representing, at the Olympic Games by refusing to stand for the athletes of any nation other than the US, back at home the Washington Post was reporting on a President Trump who appears to have nothing in common either with Pence or with the White House staff. The piece, entitled “Trump’s favorite general: Can Mattis check an impulsive president and still retain his trust?” tells a story that pits a President inclined to challenge the War Party against a Praetorian Guard determined to nullify his electoral mandate to keep out of foreign wars and put “America first”:

    “Although Trump has given the military broad latitude on the battlefield, he also has raised pointed questions about the wisdom of the wars being fought by the United States. Last year, after a delegation of Iraqi leaders visited him in the Oval Office, Trump jokingly referred to them as ‘the most accomplished group of thieves he’d ever met,’ according to one former U.S. official.”

    Truer words were never spoken, but of course this leak is designed to embarrass Trump and put him at odds with those very thieves. Mattis was presumably horrified by this truism, since the General is an even bigger thief, having successfully manipulated Congress into appropriating 15.5 percent more money for the military than Trump asked. The Post piece goes on to detail the President’s many heresies:

    He has repeatedly pressed Mattis and McMaster in stark terms to explain why US troops are in Somalia. ‘Can’t we just pull out?’ he has asked, according to US officials.

    “Last summer, Trump was weighing plans to send more soldiers to Afghanistan and was contemplating the military’s request for more-aggressive measures to target Islamic State affiliates in North Africa. In a meeting with his top national security aides, the president grew frustrated. ‘You guys want me to send troops everywhere,’ Trump said, according to officials in the Situation Room meeting. ‘What’s the justification?’”

    Oh, the shocked silence in that room must have lasted for what seemed like forever. Then Mattis came up with the same old bullshit:

    “‘Sir, we’re doing it to prevent a bomb from going off in Times Square,’ Mattis replied.”

    Trump didn’t fall for it: “The response angered Trump, who insisted that Mattis could make the same argument about almost any country on the planet.” And the President wasn’t alone in his skepticism: “Attorney General Jeff Sessions echoed Trump’s concerns, asking whether winning was even possible in a place such as Afghanistan or Somalia.”

    Here’s the scary part, which concludes the piece:

    “It was Mattis who made the argument that would, for the moment at least, sway Trump to embrace the status quo – which has held for the past two presidents.

    “‘Unfortunately, sir, you have no choice,’ Mattis told Trump, according to officials. ‘You will be a wartime president.’”

    Really? Why is that? And which war is Mattis specifically referring to? Afghanistan? We’re largely out of Iraq. Syria – the latest addition to our interventionist folly? We aren’t told, but in my view it’s not any foreign war Mattis is referring to, but – perhaps unconsciously – he’s referencing the war at home, i.e. the one being conducted by his own government against the President of the United States.

    We read about it every day in the media: the Russia-gate hoax is still being flogged, despite growing evidence of its utter falsity. Robert Mueller is still on the prowl, looking for a pretext to take Trump down. The media, a longtime adjunct of the national security bureaucracy, is openly working in tandem with the intelligence services to take out Trump – and if you want to know why, just re-read the reporting on Trump’s reluctance to go along with the War Party’s murderous agenda.

    So once they take him down, who will be Trump’s replacement? It’ll be Mike Pence, of course, the same person doing everything in his power to destroy the possibility of peace on the Korean peninsula – quite against Trump’s expressed hope that “we can make a deal” with North Korea.

    The War Party cannot tolerate a President who questions the most basic premises of the American Empire: “You guys want me to send troops everywhere!” Of course they do. However, Trump was elected to carry out a very different mandate: to start putting America first. He railed against regime change. And now the regime-changers want to carry out a change of regime against him.

    Just look at the reporting by James Risen in The Intercept: the FBI/CIA/NSA cabal paid a Russian operative $100,000 as a down payment on a total of a million to get compromising material on Trump. Isn’t this kind of thing only supposed to happen in places like Tadjikistan? Oh, it was all done under the pretext of getting back our stolen cyber-war tools, but really – how valuable are they if the Russians already have them? Sure, we could find out what was stolen – we still don’t know – but the long involved process described by Risen is really about getting rid of Trump. That’s all they really care about right now, and they’ll stop at nothing – including, I believe, assassination – to pull it off.

    There’s too much money riding on the continued existence and expansion of our worldwide empire to let Trump ruin their scam. Too many careers are based on it, too much prestige is at stake, too many “allies” are dependent on the largesse it affords them. They’re boxing him in, despite his noninterventionist instincts, and they’re compiling “dossiers,” and they’re mobilizing all their forces for the final assault on the Oval Office. In an important sense, Trump is being held hostage: they have limited his policy options in every important sphere of the national security/foreign policy realm, The “swamp” Trump talks about is an international miasma, and swamp creatures of diverse nationalities are crawling out of the muck, their claws aimed straight for the presidential throat.

    The War Party plays for keeps. The question is: does Donald Trump? We shall see.

  • Prison Chaplain Fired By Muslim Boss, Says Inmates Converting To Islam For Protection

    A London prison chaplain claims he was fired from his job of 20 years by his Muslim boss, Mohammed Yusuf Ahmed, after he was accused of “extreme” Christian views that were deemed “too radical.”

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    Paul Song (left), Mohammed Yusuf Ahmed

    Paul Song, 48, now says that the “Christian faith is not equal” in South London’s Brixton prison, and that “some people have been forced to convert with violence,” adding “How do I know? Because three or four people came up to me to tell me. This is a very sensitive issue.” 

    One inmate who served time in Brixton in 2015 has come even come forward and offered a signed a statement declaring that prisoners were forced to convert to Islam.

    “There seems to be a very troubling lack of transparency and due process around the decision to expel this chaplaincy volunteer,” says Ian Acheson, who led an independent review of Islamist extremism within prisons which found significant concerns over “the operation of some prison chaplaincies in the London area and the risks of radicalization.”

    “That sort of arbitrary action is only defensible in the case of very serious allegations. So it is baffling why he has been told that he is free to operate in any other prison, just not Brixton.”

    Acheson added: “I made a number of recommendations after repeated concerns were raised about bullying and favoritism from imams in the field. In the light of these revelations, I would urge the new ministerial team to assure itself that the dismissal of this chaplain was fair and proportionate.”

     

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    Song, a former police officer in his native South Korea, says that his firing last August came on the heels of a false accusation from a Muslim inmate, who claims the chaplain referred to him as a “terrorist.” 

    Mr Song said his position at HMP Brixton came under scrutiny after Mohammed Yusuf Ahmed became managing chaplain in 2015. 

    He told the Sunday Express: ‘I never said those things. I would never make those comments. I have worked in the prisons for many years with many faiths and there were no complaints.  –Daily Mail

    Song claims his boss, Mr. Ahmed, said that he was set on changing the “Christian domination” within HMP Brixton, according to the Sunday Times. The Ministry of Justice said there was “no evidence or intelligence to support this.”

     

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    HMP Brixton

    We find this strange, as a 2016 report by the UK’s Ministry of Justice shows that while Muslims make up just one in 20 Britons, the religion accounts for one in seven inmates. One of those, the Daily Mail reports, is the case of Levi Bellfield, a convicted child rapist and murderer who converted to Islam for protection while in prison:

    At least that’s what Rahim — a man who will be familiar to most by his real name, Levi Bellfield — hoped would happen when he converted to the Muslim faith not long after being sentenced to life for the murder and rape of schoolgirl Milly Dowler.

    ‘He found out a paedophile had been slashed in Wakefield and thought he would be next: he was a marked man after he was convicted,’ revealed his sister Ann-Marie Bellfield. ‘He said they were good boys and would look after him … he got friendly with Islamic guys and didn’t have a problem.

    “These gangs use their faith as a cover for violence and intimidation, threatening non-Muslims and pressuring them to convert to Islam,” said Steve Gillan, general secretary of the Prison Officers Association. “I have got many prisoners who are so fearful of Muslims that they feel they need to form alliances with them for protection,’ one prison governor recently revealed.

    Former prison officer Joe Chapman who is now a prison law consultant thinks that so-called “convenience conversions” are on the rise. 

    ‘This job takes me to 40 or 50 prisons over the year, throughout the country,’ he said. ‘It has become obvious to me that it’s a growing problem.

    About half a dozen of my clients have directly reported problems with being forced to convert — those who weren’t Muslim when they came in, and those who were and have been forced to look at more radical ideas about their faith.’

    Meanwhile, Song’s treatment comes as the latest HM Chief Inspector of Prisons report on Brixton, published in March last year, stated that some Christian classes had been dropped because the prison had been “unable to recruit a full-time Anglican chaplain since 2015,” reports The Times

    The report said that there were eight Christian leaders, including a full time Catholic with the rest part time – as well as four Muslims, two of whom were full time. 

    Several prisoners wrote affidavits on Song’s behalf, describing how he helped them turn away from a life of crime. 

    To call this Christian who has served without a blemish for almost 20 years an extremist defies belief,” says Andrea Williams, CEO of the Christian Legal Center which has been advising for Song. 

    Perhaps Song can look to London’s Mayor, Sadiq Kahn for help – or maybe Song is just living in the wrong country to be a Christian prison chaplain these days. 

  • The Dollar – From Bohemia To Bust

    Authored by Egon von Greyerz via Gold Switzerland,

    Virtually no investor studies history and the few who do always think it is different today. The most important lesson is that people never learn. If they did, they wouldn’t be invested in a stock market that on any criteria is now at a bubble extreme. And they wouldn’t be invested in a global debt market which has grown exponentially in recent decades and which will become worthless in the next few years as debtors default. Nor would anyone hold paper money which is down 97-99% in the last 100 years and which is guaranteed to soon fall the final bit to take the value to zero.

    The history of money clearly illustrates that “Plus ça change, plus c’est la même chose” (the more it changes, the more it is the same thing). The most constant factor in the history of money is the cycle of boom and bust or euphoria and despair. Cycles are part of nature just like the change of seasons.

    But throughout history, mankind has always believed that they know better than previous generations and can eliminate the cycle of boom and bust. This is what the British prime minister Gordon Brown proudly declared before the economy collapsed in 2007. And the Nobel Prize winner in Economics, Paul Krugman, also believes that eternal prosperity can be generated by creating endless debt and printing unlimited money.

    But history has time and time again turned hubristic know-it-alls into humbled has-beens.

    FOR 6,000 YEARS GOLD HAS OUTLIVED ALL CURRENCIES

    Whenever mankind has deviated from sound money, the consequences have without fail been catastrophic. The only money which has survived since it first came into use around 6,000 years ago is gold. All other money has been destroyed by greed and economic mismanagement. I believe I have quoted Voltaire for over 20 years and will continue to do so: “Paper Money Eventually Returns to its Intrinsic Value – ZERO”. Whether we go back 100 years, 300 years or 2,000 years, those superb 9 words is the most exact and scientific definition of economic history. This is the most important lesson that any student of Economics should learn. Armed with that knowledge, anyone can forecast the likely outcome of an economic cycle and especially the current one.

    TULIP BULBS AND BITCOINS WILL NEVER PRESERVE WEALTH

    So why are investors not taking heed and protecting themselves against risks that on a global scale have never been greater. The first reason is greed. Whether it is stocks, tulip bulbs or bitcoins, people never learn. Greed takes over and numbs any rational thinking. And that is why most investors will ride the bubble markets until they are virtually worthless.

    Experience and a long professional life is a great advantage when it comes to understanding risk. Nothing beats personally experiencing major market crashes of 50% or more like in 1973, 1987, 2000 and 2007. This certainly makes you more aware of risk and therefore also the necessity to preserve wealth.

    STOCKS ALWAYS GO UP!

    Looking back at say the Dow since 1971, it is up 29x or 2,800 percent. So why worry because “stocks always go up”. Yes, it is absolutely true that in the last 47 odd years since Nixon took away the gold backing of the dollar, asset markets have boomed. But most of these gains have been illusory and due to credit expansion, money printing and currency debasement.

    So investors are still certain that stocks will continue to grow over time. But they don’t realise what will happen to their investments when the punchbowl is taken away and interest rates increase substantially. Because that is what we will see in the next few years. Stocks have been going up only because of credit expansion and artificially low interest rates. These two factors are unlikely to be in play in coming years. Yes, central banks will panic and print unlimited amounts of money but the market will soon realise that this money is worthless and therefore will have no effect.

    What investors don’t realise is that it can take a very long time for stocks to climb back up that high wall of worry after a big fall. In 1929 the Dow peaked at 481 and then fell 90% over less than three years to bottom at 40 in 1932. But what few investors realise is that it took 26 years before the Dow was back to the 1929 high.

    THE DOW TOOK 26 YEARS TO GET BACK TO 1929 PEAK

    The almost 1,000 points drop in the Dow last Monday was a foretaste of things to come. We might not see the end of the multi decade bull market quite yet but risk is today colossal. Once the bear market starts, the Dow will experience days of several thousand points decline.

    The 1929 crash was 90% but since the current bubble is so much greater by any measure, the coming fall of US stock markets is likely to be at least 95%.

    NIKKEI STILL 40% BELOW 1989 PEAK

    A more recent example of a stock market not recovering is the Nikkei which topped at 39,000 in 1989. Today, 29 years later the Nikkei is still 40% below that level after having been down as much as 80% from the high. In spite of massive money printing with debt well over Yen 1 quadrillion and zero or negative interest rates for most of the last 29 years, the Japanese stock market is still in the doldrums. The most likely outcome for Japan is that the economy will collapse with stocks going down 95% or more with the value of debt going to zero followed by the Yen which will also go to zero.

    THE DOLLAR HAS BEEN FALLING FOR HALF A CENTURY

    Looking at the dollar since 1971, it has lost 78% against the Swiss franc and 56% against the DMark/Euro.

    If we measure against real money – gold – the dollar has lost 98% in the last 100 years. Most of that fall took place after Nixon’s fatal decision in 1971.

    PAPER MONEY – FROM 100 TO ZERO IN ONE CENTURY

    It is clear that the dollar will lose the additional 3% against gold to make it reach ZERO intrinsic value. But we must remember that this means the dollar will fall 100% from current level. And that fall is virtually guaranteed. It is only a question of how long it will take. The biggest part of the dollar decline could happen very rapidly, within 3 to 7 years. At the same time US debt will go to zero and interest rates will reach infinity.

    THE DOLLAR – FROM BOHEMIA TO OBSCURITY

    Interestingly, the word dollar came from the Czech Kingdom of Bohemia where silver coins were minted in the early 1500s.

    The area was called Joachimsthal (Joachim’s valley) and the money Joachimsthaler shortened to Thaler or Daler (Dollar). This word for money was used in many countries in the world. It came to America as the Spanish American Peso which became the Spanish dollar. In 1785 it was adopted in the US as the official currency – the American dollar. When the US dollar collapses in coming years, it will be interesting to see how long it will take for the dollar to totally disappear just as the Denarius did when the Roman Empire collapsed.

    THE DENARIUS – FROM SILVER TO DUST

    The silver coin Denarius was first minted in 211 BC.

    As the finances of the Roman Empire deteriorated, the Denarius was gradually debased. During the 100 year period, 180 to 280 AD the silver content of the Denarius went from 87% to 0%. This is exactly what is happening to the currency system today with all major currencies down 97-99% measured in nature’s money – Gold. But we still have the final 1-3% to come which will be extremely painful for the world.

    WORLD ECONOMY – FROM EUPHORIA TO DYSPHORIA

    We are now in the final phase of manic euphoria. Within the next 6 to 18 months the euphoria will turn into dysphoria as 100 years of economic mismanagement and manipulation come to an end. It will not only severely affect financial markets and the world economy but also the fabric of society in most countries. I have talked about this many times and it certainly is a depressing scenario. The world is likely to experience very high unemployment, no or little money for most people, disease, famine, no social security, no pension, little medical care, social unrest, wars etc.

    No one, absolutely no one, can prepare fully for this or avoid it. We will all suffer. As I have stressed many times, the circle of family and friends is the best protection and more important than anything else. For the few who are privileged to have savings, it is still not too late to acquire some physical gold and silver. As the financial system crashes, precious metals will resume their role as money. Not only will gold and silver become extremely valuable and desired, but more importantly, it will maintain purchasing power as it has for 6,000 years.

    Investors must not be influenced by short term fluctuations in the gold and silver price. Without warning gold will one day start moving up 100s of dollars and silver 10s of dollars over a very short period. Gold and silver must be acquired today at current low prices. When the real move starts, it will be impossible to get hold of physical gold and silver at any price.

  • Comey: FBI Agents (Including Peter Strzok) Didn't Think Flynn Lied

    FBI investigators who interviewed Michael Flynn last January – one of which was anti-Trumper Peter Strzokthought Flynn was telling the truth about his conversations with Russian ambassador Sergey Kislyak, and that any inaccuracies in his answers were unintentional – according to accounts of a closed-door March 2017 briefing given to lawmakers by former FBI Director James Comey.

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    According to two sources familiar with the meetings, Comey told lawmakers that the FBI agents who interviewed Flynn did not believe that Flynn had lied to them, or that any inaccuracies in his answers were intentional. As a result, some of those in attendance came away with the impression that Flynn would not be charged with a crime pertaining to the January 24 interview. –Washington Examiner

    This new revelation from the closed-door briefing held nearly a year ago (apparently leaks which benefit conservatives take much longer), complicates an already murky case considering that Flynn pleaded guilty nine months later to one count of making a false statement to the FBI.

    To briefly review; Flynn and Russian Ambassador Sergey Kislyak had a phone conversation in late December, 2016. On its face, there was absolutely nothing wrong with an incoming National Security Advisor having a conversation with a Russian government official. Following the conversation, which was surveilled by the Obama administration and then leaked to the press

    The first thing to remember is that it appears Flynn did nothing wrong in having those talks. As the incoming national security adviser, it was entirely reasonable that he discuss policy with representatives of other governments and Flynn was getting calls from all around the world. –Washington Examiner

    What happened next is strange; on January 12, WaPo columnist and deep-state news conduit David Ignatius reported that Flynn and Kislyak had talked – implying some type of malfeasance. Days later, on January 15, Vice President-elect Mike Pence denied that Flynn had discussed sanctions with the Russian ambassador. The on January 24, Obama holdover and acting Attorney General Sally Yates sent two FBI agents to interview Flynn without a lawyer present.  

    Two days later, on January 26, Yates and a colleague visited the White House to tell White House counsel Don McGahn that Flynn may have violated the obscure logan act, and in fact discussed sanctions with Kislyak – possibly subjecting Flynn to blackmail.

    Yates then explained to McGahn her theory that Flynn might be vulnerable to blackmail. The idea was that Flynn had discussed sanctions with Kislyak, which of course the Russians knew. And then if Flynn lied to Pence, and Pence made a public statement based on what Flynn had told him, then the Russians might be able to blackmail Flynn because they, the Russians, knew Flynn had not told the vice president the truth. –Washington Examiner

    Meanwhile, on January 23, the Washington Post reported that they had “not found any evidence of wrongdoing or illicit ties to the Russian government,” after having reviewed the leaked conversation

    Even stranger is the fact that Flynn’s sentencing has been delayed at the request of Special Counsel Robert Mueller, with an agreement to revisit the matter no later than May 1, 2018. 

    Due to the status of the Special Counsel s investigation, the parties do not believe that this matter is ready to be scheduled for a sentencing hearing at this time, the document, signed by Mueller and Flynn attorneys Robert Kelner and Stephen Anthony, said. 

    Some have speculated that Mueller’s request indicates Flynn is cooperating with his investigation. Others, such as former federal prosecutor Joe diGenova, think that “It may very well be that the guilty plea cannot stand” after D.C. Judge Rudolph Contreras – who also sits on the FISA court – recused himself days after he was assigned Flynn’s case.

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    Judge Rudolph Contreras

    Others yet have speculated that the FBI conducted an illegal interview of Flynn by not announcing that he was actually under investigation, and did not have an attorney present (which Byron York notes Flynn should have known to do). 

    On January 27, 2017, Flynn resigned. 

    So – if FBI agent Peter Strzok didn’t think Flynn had lied, and the Washington Post – which reviewed a conversation (leaked by the Obama administration) concluded that Flynn did nothing wrong, then why did Flynn apparently lie to Mike Pence? 

    Is it possible that Flynn told Pence the truth and Pence lied due to the optics of the ongoing Trump-Russia “witch hunt” that was kicking into high gear? 

    Whatever the case, the Flynn story is now murkier than ever…

  • Ron Paul Warns 'E-Verify' Threatens Us All

    Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

    In addition to funding for a border wall and other border security measures, immigration hardliners are sure to push to include mandatory E-Verify in any immigration legislation considered by Congress.

    E-Verify is a (currently) voluntary program where businesses check job applicants’ Social Security numbers and other Information — potentially including “biometric” identifiers like fingerprints — against information stored in a federal database to determine if the job applicants are legally in the United States.

    Imagine how much time would be diverted from serving consumers and growing the economy if every US business had to comply with E-Verify. Also, collecting the relevant information and operating the mandatory E-Verify system will prove costly to taxpayers.

    Millions of Americans could be denied jobs because E-Verify mistakenly identifies them as illegal immigrants. These Americans would be forced to go through a costly and time-consuming process to force the government to correct its mistake. It is doubtful employers could afford to keep jobs open while potential hires went through this process.

    A federal database with Social Security numbers and other identifying information is an identify thief’s dream. Given the federal government’s poor track record for protecting personal information, is there any doubt mandatory E-Verify would put millions of Americans at risk for identity theft?

    Some supporters of E-Verify deny the program poses any threat to civil liberties, as it will only be used to verify citizenship or legal residency. They even claim a system forcing individuals to have their identities certified by the government is not a national ID system. These individuals are ignoring the history of government programs sold as only affecting a particular group or being used for a limited purpose being expanded beyond initial targets. For example, Americans were promised that only the wealthiest Americans would ever pay income taxes. And some of the PATRIOT Act’s worst provisions that we were told would only be used against terrorists are routinely used to investigate drug crimes.

    E-Verify almost certainly will be used for purposes unrelated to immigration. One potential use of E-Verify is to limit the job prospects of anyone whose lifestyle displeases the government. This could include those accused of failing to pay their fair share in taxes, those who homeschool or do not vaccinate their children, or those who own firearms.

    Unscrupulous government officials could use E-Verify against those who practice antiwar, anti-tax, anti-surveillance, and anti-Federal Reserve activism. Those who consider this unlikely should remember the long history of the IRS targeting the political enemies of those in power and the use of anti-terrorism laws to harass antiwar activists. They should also consider the current moves to outlaw certain types of “politically incorrect” speech, such as disputing the alleged “consensus” regarding climate change.

    Claiming that mandatory E-Verify is necessary to stop illegal immigration does not make it constitutional. Furthermore, having to ask the federal government for permission before obtaining a job is a characteristic of authoritarian societies, not free ones. History shows that mandatory E-Verify’s use will expand beyond immigration enforcement and could be used as a tool of political repression. All those who value liberty should oppose mandatory E-Verify.

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Feb 12

Today’s News 12th February 2018

  • Intel's New "Smart Glasses" Shoot Laser Beam Directly Into Your Retina

    For anyone who wanted a pair of Google glasses but didn’t want to look like a lazy Borg cosplay, Intel may have just what you need. Just one catch; you have to be OK with a laser firing photons directly into your retina. 

    Consummate techie and Executive Editor at The VergeDeiter Bohn, took Intel’s Vaunt smart glasses for a test drive – which he says are “virtually indistinguishable from regular glasses,” and are the “first pair of smart eyeglasses I’ve tried that doesn’t look ridiculous.”

    The smart glasses – which weigh less than 50 grams – work by projecting a very low-powered laser (a VCSEL), which shines a “red, monochrome image somewhere in the neighborhood of 400 x 150 pixels” on to a holographic reflector on the right lens of the glasses – which is then reflected directly into your eyeball and onto your retina.

    Intel swears it’s safe. 

     “It is a class one laser. It’s such low power that we don’t [need it certified],” he says, “and in the case of [Vaunt], it is so low-power that it’s at the very bottom end of a class one laser.” –Mark Eastwood, Director of Industrial Design, Intel NDG group

    We use a holographic grading embedded into the lens to reflect the correct wavelengths back to your eye. The image is called retinal projection, so the image is actually ‘painted’ into the back of your retina,” says Jerry Bautista, the team lead for wearable devices at Intel’s NDG. Due to the fact that the glasses project images directly onto the retina, the projected image is in focus on both prescription and non-prescription lenses. 

    In addition to the micro-electro-mechanical (MEMS, or “Pico”) projector, the glasses also pack hardware and software for Bluetooth communication with your phone, as well as an accelerometer and a compass. Future models may even include a microphone for use with virtual assistants such as Alexa and Siri.

    And of this, along with batteries, are contained within a remarkably compact chassis. 

    Requiring a custom fitting to each user, the glasses project a stream of information on what Bohn says looks like a screen, delivering a wide variety of information:

    At its core, Vaunt is simply a system for displaying a small heads-up style display in your peripheral vision. It can show you simple messages like directions or notifications. It works over Bluetooth with either an Android phone or an iPhone much in the same way your smartwatch does, taking commands from an app that runs in the background to control it.

    When looking down, the Vaunt glasses project a “rectangle of red text and icons down in the lower right of your visual field,” however, when the wearer is not glancing down in that direction, the display shuts off – as it was designed to be “nonintrusive,” according to Bohn. 

    ”We didn’t want the notification to appear directly in your line of sight,” says Eastwood. “We have it about 15 degrees below your relaxed line of sight. … An LED display that’s always in your peripheral vision is too invasive. … this little flickering light. The beauty of this system is that if you choose not to look at it, it disappears. It is truly gone.” –The Verge

     

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    Bohn says he adapted to the glasses very quickly – writing that it became “natural within less than an hour to glance over at it to make it appear, or ignore it and focus on the person I was speaking with.” 

    Or, as it turns out, not focus on the person you’re speaking with:

    So I’m talking to you right now and you feel like you mean so much,” says Ronen Soffer, general manager for software products at NDG, “but I’m actually playing a trivia game right now.” (He wasn’t actually doing that, to be clear.) But after a day of playing around with the Vaunt prototypes, I completely believe that sort of thing is not just possible soon, but probably inevitable. Intel is thinking about those implications, too. Soffer wryly jokes: “You can ignore people more efficiently that way.”

    While it was unclear how users might interact with the Vaunt glasses, some have suggested that voice recognition, head gestures or both could activate it – or one could “trust the AI to show you what you need to know in the moment,” perhaps things such as nearby gas stations if you’ve failed to notice that your fuel light has been on for the last 12 miles. 

    Imagine walking down the street, looking at a shop or a restaurant, and instantly checking out Yelp reviews. Or perhaps the system could be used to project player stats in real time while at a sporting event. Whatever the case, Intel’s Brian Soffer says the company’s AI might just know exactly what you need to see. 

    “Listen, sometimes a better way to succeed is to make the problem smaller,” says Soffer. Intel’s AI for figuring out what to show you is “focused on certain types of moments, and we’ve been developing this technology for five or six years now to focus on those wearable, out-and-about moments.”

    Developing the platform

    Intel will be launching an “early access program” later this year so that developers can begin to tinker with the Vaunt system – developing apps for both phones and the glasses themselves. 

    The Verge‘s Bohn speculates that apps may directly stream content to the Vaunt glasses from the cloud, presumably to minimize on-board processing requirements – similar to how a Google Cast-enabled TV works as an endpoint for streaming video. When asked if this was the plan, Intel said “we’ll talk about that at a later date,” adding that “it really is built as an open platform … built from the ground up to be a mobile platform that accesses the internet. And a wearable device gets really powerful when it changes the way you access the internet.”

    While it’s unclear if Intel will bring the Vaunt glasses to market or find a partner to bring them to retail, The Verge notes that Intel is reportedly looking to sell a majority stake in its augmented reality business, according to Bloomberg

    Intel has a reputation for showing off ideas that never turn into real products. It comes up with a cool concept, proves out the technology, then hopes to convince others to take that idea and turn it into a real product. CEO Brian Krzanich comes on a CES stage, talks about a charging bowl (or hey, smart eyeglasses!), and then we wait to see if they’ll come to market. Often (maybe even usually), they don’t.

    I think the intention with Vaunt is a little different from Intel’s usual playbook. For one thing, Bloomberg’s report confirms that Intel is looking for partners with “strong sales channels … rather than financial backers.” For another, Bautista and I spoke a bit about how the sales channels for eyeglasses work now back in December.

    ”There’s something on the order of 2.5 billion people that require corrective lenses,” he says. “They get their glasses from somewhere. Sixty percent of them come from eye care providers. … We would say these glasses belong in those kinds of channels. People are going to buy them like they buy their glasses today.” The Verge

    While the Vaunt glasses are lighter, better looking, and possibly have a longer battery life than other smart glasses such as Magic Leap or HoloLens, they also project less information to the user. That said, as Bohn notes, the Vaunt is the “first pair of smart eyeglasses I’ve tried that doesn’t look ridiculous.” 

    Now let’s see what developers can do to make them rock and roll. Someday we’ll be telling our grandchildren about the days before laser beams were projected into our retinas. Hopefully we won’t be blind in one eye. 

  • 'Russiagate' Delusion Dies – Who Is 'Bill' Priestap?

    Via TheConservativeTreehouse.com,

    The game is over. The jig is up. Victory is certain… the trench was ignited… the enemy funneled themselves into the valley… all bait was taken… everything from here on out is simply mopping up the details.  All suspicions confirmed.

    Why has Devin Nunes been so confident?  Why did all GOP HPSCI members happily allow the Democrats to create a 10-page narrative?  All questions are answered.

    Fughettaboudit.

    House Permanent Select Committee on Intelligence member Chris Stewart appeared on Fox News with Judge Jeanine Pirro, and didn’t want to “make news” or spill the beans, but the unstated, between-the-lines, discussion was as subtle as a brick through a window.  Judge Jeannie has been on the cusp of this for a few weeks.

    Listen carefully around 2:30, Judge Jeanine hits the bulls-eye; and listen to how Chris Stewart talks about not wanting to make news and is unsure what he can say on this…

    …Bill Priestap is cooperating.

    When you understand how central E.W. “Bill” Priestap was to the entire 2016/2017 ‘Russian Conspiracy Operation‘, the absence of his name, amid all others, created a curiosity.  I wrote a twitter thread about him last year and wrote about him extensively, because it seemed unfathomable his name has not been a part of any of the recent story-lines.

    E.W. “Bill” Priestap is the head of the FBI Counterintelligence operation.  He was FBI Agent Peter Strozk’s direct boss.  If anyone in congress really wanted to know if the FBI paid for the Christopher Steele Dossier, Bill Priestap is the guy who would know everything about everything.

    FBI Asst. Director in charge of Counterintelligence Bill Priestap was the immediate supervisor of FBI Counterintelligence Deputy Peter Strzok.

    Bill Priestap is #1. Before getting demoted Peter Strzok was #2.

    The investigation into candidate Donald Trump was a counterintelligence operation. That operation began in July 2016. Bill Priestap would have been in charge of that, along with all other, FBI counterintelligence operations.

    FBI Deputy Peter Strzok was specifically in charge of the Trump counterintel op. However, Strzok would be reporting to Bill Priestap on every detail and couldn’t (according to structure anyway) make a move without Priestap approval.

    On March 20th 2017 congressional testimony, James Comey was asked why the FBI Director did not inform congressional oversight about the counterintelligence operation that began in July 2016.

    FBI Director Comey said he did not tell congressional oversight he was investigating presidential candidate Donald Trump because the Director of Counterintelligence suggested he not do so. *Very important detail.*

    I cannot emphasize this enough. *VERY* important detail. Again, notice how Comey doesn’t use Priestap’s actual name, but refers to his position and title. Again, watch [Prompted]

    FBI Director James Comey was caught entirely off guard by that first three minutes of that questioning. He simply didn’t anticipate it.

    Oversight protocol requires the FBI Director to tell the congressional intelligence “Gang of Eight” of any counterintelligence operations. The Go8 has oversight into these ops at the highest level of classification.  In July 2016 the time the operation began, oversight was the responsibility of this group, the Gang of Eight:

    Obviously, based on what we have learned since March 2017, and what has surfaced recently, we can all see why the FBI would want to keep it hidden that they were running a counterintelligence operation against a presidential candidate.   After all, as FBI Agent Peter Strzok said it in his text messages, it was an “insurance policy”.

    REMINDER – FBI Agent Strzok to FBI Attorney Page:

    “I want to believe the path you threw out for consideration in Andy’s office that there’s no way he gets elected – but I’m afraid we can’t take that risk. It’s like an insurance policy in the unlikely event you die before you’re 40.”

    So there we have FBI Director James Comey telling congress on March 20th, 2017, that the reason he didn’t inform the statutory oversight “Gang of Eight” was because Bill Priestap (Director of Counterintelligence) recommended he didn’t do it.

    Apparently, according to Comey, Bill Priestap carries a great deal of influence if he could get his boss to NOT perform a statutory obligation simply by recommending he doesn’t do it.

    Then again, Comey’s blame-casting there is really called creating a “fall guy”.  FBI Director James Comey was ducking responsibility in March 2017 by blaming FBI Director of Counterintelligence Bill Priestap for not informing congress of the operation that began in July 2016. (9 months prior).

    At that moment, that very specific moment during that March 20th hearing, anyone who watches these hearings closely could see FBI Director James Comey was attempting to create his own exit from being ensnared in the consequences from the wiretapping and surveillance operation of candidate Trump, President-elect Trump, and eventually President Donald Trump.

    In essence, Bill Priestap was James Comey’s fall guy.  We knew it at the time that Bill Priestap would likely see this the same way.  The guy would have too much to lose by allowing James Comey to set him up.

    Immediately there was motive for Bill Priestap to flip and become the primary source to reveal the hidden machinations.  Why should he take the fall for the operation when there were multiple people around the upper-levels of leadership who carried out the operation.

    Our suspicions were continually confirmed because there was NO MENTION of Bill Priestap in any future revelations of the scheme team, despite his centrality to all of it.

    Bill Priestap would have needed to authorize Peter Strzok to engage with Christopher Steele over the “Russian Dosssier”; Bill Priestap would have needed to approve of the underlying investigative process used for both FISA applications (June 2016, and Oct 21st 2016). Bill Priestap would be the person to approve of arranging, paying, or reimbursing, Christopher Steele for the Russian Dossier used in their counterintelligence operation and subsequent FISA application.

    Without Bill Priestap involved, approvals, etc. the entire Russian/Trump Counterintelligence operation just doesn’t happen. Heck, James Comey’s own March 20th testimony in that regard is concrete evidence of Priestap’s importance.

    Everyone around Bill Priestap, above and below, were caught inside the investigative net.

    Above him: James Comey, Andrew McCabe and James Baker. 

    Below him: Peter Strzok, Lisa Page, Jim Rybicki, Trisha Beth Anderson and Mike Kortan. 

    Parallel to Priestap in main justice his peer John P Carlin resigned, Sally Yates fired, Mary McCord quit, Bruce Ohr was busted twice, and most recently Dave Laufman resigned.  All of them caught in the investigative net…. Only Bill Priestap remained, quietly invisible – still in position.

    The reason was obvious.

    Likely Bill Priestap made the decision after James Comey’s testimony on March 20th, 2017, when he realized what was coming.  Priestap is well-off financially; he has too much to lose.  He and his wife, Sabina Menschel, live a comfortable life in a $3.8 million DC home; she comes from a family of money.

    While ideologically Bill and Sabina are aligned with Clinton support, and their circle of family and friends likely lean toward more liberal friends; no-one in his position would willingly allow themselves to be the scape-goat for the unlawful action that was happening around them.

    Bill Priestap had too much to lose… and for what?

    With all of that in mind, there is essentially no-way the participating members inside the small group can escape their accountability with Mr. Bill Priestap cooperating with the investigative authorities.

    Now it all makes sense.  Devin Nunes interviewed Bill Priestap and Jim Rybicki prior to putting the memo process into place.  Rybicki quit, Priestap went back to work.

    (page 5 pdf)

    Bill Priestap remains the Asst. FBI Director in charge of counterintelligence operations.

    It’s over.

    I don’t want to see this guy, or his family, compromised.  This is probably the last I am ever going to write about him unless it’s in the media bloodstream. I can’t fathom the gauntlet of hatred and threats he is likely to face from the media and his former political social network if they recognize what’s going on.  BP is Deep-Throat x infinity… nuf said.

    The rest of this entire enterprise is just joyfully dragging out the timing of the investigative releases in order to inflict maximum political pain upon the party of those who will attempt to excuse the inexcusable.

    Then comes the OIG Horowitz report.

    Then the grand jury empaneled (if not already); and while Democrats attempt to win seats in the 2018 election, arrests and indictments will hit daily headlines.

    Oh, lordy…

  • L.L. Bean Eliminates Lifetime Return Policy After Abuses

    Freeport, Maine bootmaker L.L. Bean is getting rid of its no-questions-asked lifetime return policy, thanks to growing abuse of the generous program, says the company.

    All returns must now be made within one-year of purchase, executives announced on Friday, adding that the policy, which has been in effect for over a century, was never meant to be used as an unlimited replacement scheme. 

    “Increasingly, a small, but growing number of customers has been interpreting our guarantee well beyond its original intent,” said L.L. Bean chairman Shawn Gorman in Friday a letter. “Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.”

    Gorman says the policy should only affect a small percentage of returns, and that if a customer finds a product to be defective after one year, the company will make efforts to reach a “fair solution,” he said.

    “We stand behind all our products and are confident that they will perform as designed,” states the new return policy on the L.L. bean website. “After one year, we will consider any items for return that are defective due to materials or craftsmanship.”

    That said, customers who are known for “past habitual abuse” of the return policy can take their broken boots and pound sand, as they will not be allowed to return or exchange products even within one year of purchase, according to the site. 

    To protect all our customers and make sure that we handle every return or exchange with reasonable fairness, we cannot accept a return or exchange (even within one year of purchase) in certain situations, including:

    • Products damaged by misuse, abuse, improper care or negligence, or accidents (including pet damage)

    • Products showing excessive wear and tear

    • Products lost or damaged due to fire, flood, or natural disaster

    • Products with a missing label or label that has been defaced

    • Products returned for personal reasons unrelated to product performance or satisfaction

    • Products that have been soiled or contaminated, until they have been properly cleaned

    • Returns on ammunition, either in our stores or through the mail

    On rare occasions, past habitual abuse of our Returns Agreement

    Slate author Justin Peters is exactly the type of person responsible for the crackdown. In a Friday article, Peters brags about having ripped off L.L. Bean for the past six years – often bringing his mother along for what she called his “scam.” 

    “I needed new shoes, and so I went to L.L. Bean to buy a new pair of the same ones that had served me well for a year. Imagine my surprise and delight when the sales associate told me of the store’s generous return policy and invited me to exchange my old shoes for new ones, free of charge. What’s more, I also got a $10 gift card because of an in-store promotion of some sort. Not only did I get free shoes, I also got free money. Six years later, I still count this as one of the greatest days of my life.

    I haven’t spent a dollar on closed-toe shoes since then. Every year, around Christmas, I would drive to the L.L. Bean store in the Old Orchard Mall in Skokie, Illinois, near where I grew up, to exchange my old shoes for new ones.  Over the years, it became a cherished family outing. My mother, who is amused by my sense of thrift, insists on accompanying me on what she refers to as my “scam.” “You’d better not tell anyone about your scam,” she routinely warned me. “If too many people catch on, they’ll stop doing it.”

    I feel no guilt about taking L.L. Bean up on its offer. If they didn’t want people to take the swap, they shouldn’t have offered it!”  –Justin Peters

    Thanks Justin, good to know you’ll abuse an honor-based policy at the drop of a hat instead of paying for yourself like a responsible adult. 

    You too Meagan:

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  • "Make Sports, Not War"

    Authored by Eric Margolis via LewRockwell.com,

    Considering that a nuclear conflict over North Korea appeared imminent in recent weeks, the winter Olympics at Pyeongchang, South Korea, is a most welcome distraction – and might even deter a major war on the peninsula.

    The highlight of the games was the arrival of Kim Yo-jong, the younger sister of North Korea’s ruler, Kim Jong-un. This was the first time a member of North Korea’s ruling Kim dynasty had come to South Korea. Her handshake with South Korea’s president, Moon Jae-in was a historic and welcome moment.

    So too the planned joint marches by North and South Korean athletes under a new reunification flag.  For all Koreans, this was a deeply emotional and inspiring ceremony.

    But not for US Vice President Mike Pence, who was sent by Trump to give the Olympics the evil eye.  He even refused to stand for the joint marchers in a surly act that spoke volumes about his role.  Whether he meets President Moon or Kim Yo-jong remains to be seen. Even a cup of tea between Pence and Kim could end all the crazy talk about nuclear war. Does anyone in Washington know that North Korea lies between China and Russia?

    All this drama is happening as the Trump White House is advocating giving North Korea a `bloody nose.’  Meaning a massive bombing campaign that could very likely include nuclear weapons.  Trump, who received a reported five exemptions from military service because of a little bone spur in his foot, revels in military affairs and thinks a ‘bloody nose’ will warn Kim Jong-un to be good. Trump is planning a big military parade at which he will take the salute.

    This writer went through US Army basic and advanced infantry training with a broken bone in my foot, and has no sympathy with the president’s militaristic pretensions.

    South Korea’s able president Moon is moving heaven and earth to prevent a war in which his nation would be the main victim. 

    Some 2-3 million Korean civilians died in the 1950-53 Korean War.  All North Korea and much of South Korea were bombed flat by US air power.  Now, as tensions surge, US heavy bombers and nuclear weapons ring North Korea, ready to flatten the north and make the rubble bounce.

    North Korea’s thousands of heavy guns dug into mountains just north of the DMZ (I’ve seen them) could flatten all of South Korea’s capitol, Seoul, north of the Han River, killing millions, not counting nukes and poison gas.  South Korea, the world’s eleventh industrial power, would again pay the terrible price for a new war on the peninsula.

    One of VP Pence’s main missions is to whip up support among rightwing South Koreans who bitterly oppose any peace deal between the two Koreas and support attacking the north.  Many on South Korea’s hard right are evangelical Christians.  It’s no coincidence that Mike Pence, an ardent fundamentalist Protestant, was sent to show the flag and rally opposition to any détente with North Korea.  Whatever happened to ‘turn the other cheek?’

    Washington does not want a lessening of tensions between the two Koreas.  And much less, talk of potential reunification.  If the two Koreas came to peace, what justification would the US have for keeping powerful air, land and naval forces in strategic South Korea, often called ‘America’s unsinkable aircraft carrier.’  Japan is no more favorable to a united Korea.

    South Korean President Moon has been calling for a new, positive era in north-south relations. He has been adamant in opposing any chance of war on the peninsula.  But Washington has simply ignored Moon or brushed aside his objections to threats of war against North Korea.  The North Koreans routinely accused the south of being ‘American puppets.’  Pyongyang is the only ‘legitimate, truly independent Korean government,’ charges the north.

    Interestingly, in the event of war, South Korea’s 655,000-man active armed forces and 4 million-man reserves come under the command of a four-star US general.  US nuclear weapons can be moved through South Korean bases.  The so-called joint US-South Korea joint command is mere window dressing.

    It’s hard to say how close the US was to attacking North Korea.  Trump certainly backed himself into a corner by all his foolish threats to unleash ‘fire and fury’ on North Korea. 

    The Olympics delayed the rush to war against North Korea. But once they are over, the war drums will resume beating.

    President Trump is probably thinking about a dandy parade after a short, devastating attack on North Korea – provided, of course, that the troublesome northerners don’t manage to retaliate by landing a few nuclear warheads on Japan and Washington.

  • Treasury Yields Jump After Trump Budget Director Admits Interest Rates May "Spike" On Soaring Deficit

    In a bizarre warning coming from president Trump’s own budget director, one that could accelerate the sharp market selloff which so infurated Trump last week he tweeted about it on several occasions, lashing out against those who sell stocks on “good news” claiming it is a “big mistake“, Mick Mulvaney warned that the U.S. will post a larger budget deficit this year and could see a “spike” in interest rates as a result.


    White House budget director Mick Mulvaney.

    Of course, traders have already experienced the spike, or at least a part of it: it’s one of the key catalysts that moved the 10Y from 2.60% to 2.90% since payrolls Friday (coupled with the inflationary impulse from the jump in hourly wages).

    Earlier in the day, Mulvaney spoke on “Fox News Sunday,” a day before the White House is expected to release 2019 spending proposals – and after weeks in which financial markets have been spooked by prospects for rising inflation tied to higher deficits and lower taxes.

    “This is not a fiscal stimulus; it’s not a sugar high,” Mulvaney said on of the president’s economic program, including the $1.5 trillion tax cut passed in late 2017. “If we can keep the economy humming and generate more money for you and me and for everybody else, then government takes in more money and that’s how we hope to be able to keep the debt under control,” Mulvaney said.

    In a separate interview on CBS News’s “Face the Nation,” Mulvaney said rising budget deficits are “a very dangerous idea, but it’s the world we live in.”

    As Bloomberg notes, his comment echoed Trump’s Feb. 9 tweet that Republicans “were forced to increase spending on things we do not like or want” to secure Democratic votes for the sharp buildup in military spending wanted by the White House and the Pentagon.

    “What they said was they would not give us a single additional dollar for defense unless we gave them dollars for social programs,” he said. “They held the Defense Department hostage, and we had to pay that ransom.”

    Shockingly, Mulvaney also acknowledged he would “probably not” have voted for the deal when he served in the House of Representatives and was known as a fiscal hawk. “Keep in mind I’m not Congressman Mick Mulvaney anymore,” he said. “My job as the director of the Office of Management Budget is to try to get the President’s agenda passed.”   

    * * *

    The next set of numbers – and potential catalyst for further rate upside – will be unveiled on Monday, when Mulvaney’s OMB will updating the 2018 budget released last year and its 2019 request, due Monday, in response to the two-year budget deal the president signed into law on Friday morning. That agreement, which ended an hours-long partial government shutdown, will boost government spending by another $300 billion, which will have to be directly funded with more debt. Mulvaney said that in his previous job as a fiscally-conservative congressman representing South Carolina, he would “probably not” have voted for the bill.

    The additional spending could increase the deficit to about $1.2 trillion in 2019, and there’s a risk that interest rates “will spike” as a result, Mulvaney said.

    And while Mulvaney said that lower deficits are possible over time based on sustained economic growth, in an even more bizarre development, the WaPo reported that Trump’s Budget to be unveiled tomorrow won’t project a balance in 10 years, and instead Trump’s request will abandon the long-held Republican goal of eliminating deficit in budget projections, even over a decade.

    In other words, those concerned that yields may spike further tomorrow – and slam stocks – have good reason: the OMB may unveil the first republican non-balancing budget. Actually, one look at the 30Y Treasury shows that the selling has already begun.

  • JPMorgan Publishes The "Bitcoin Bible"

    Five months after Jamie Dimon’s infamous outburst, in which the JPM CEO called Bitcoin a fraud, and threatened any JPMorgan trader caught trading cryptocurrencies with immediate termination “for being stupid”, which was followed by JPM’s head quant alleging bitcoin was a pyramid scheme, the largest US bank has released what can only be called the “Bitcoin Bible“: 71 pages of excruciating detail on everything from the technology of cryptocurrencies, to their applications and challenges. 

    While there is too much in the report – which was published on the same day that the NY Fed admitted that in “A Dystopian World, Bitcoin Would Dominate Payment Methods” which of course is the whole point behind cryptos which as a contingency plan to the collapse of fiat currencies – to be summarized in one post, and instead we will focus on the key points over the next few days, below we republish the Executive Summary from the report, highlighting the key sections.

    Executive Summary

    Introduction

    • J.P. Morgan researchers from across a wide range of expertise analyze various aspects of Cryptocurrency (CC) to gain insight on this market and its potential evolution in this report. CCs’ extremely rapid growth, and then fall, both in terms of number of CCs and prices and their challenge to the current financial infrastructure, are forcing all market participants to closely monitor and understand this new market.
    • Cryptocurrencies are virtual currencies that are created, stored and governed electronically by an open,  decentralized, cryptography system. CCs can be used to exchange money, to buy certain goods/services or as an investment. There are over 1,500 cryptocurrencies with a market cap of some $400bn as of February 8, 2018, with Bitcoin being the largest representing a third of the market according to CoinMarketCap.
    • Launched in early 2009, Bitcoin (BTC) is the dominant cryptocurrency with a market cap of $140 billion (representing one-third of the CC market) and nearly 17 million BTC units in circulation (capped at 21 million). Bitcoin was the first major cryptocurrency and has spawned many competing CCs and technologies, many of which still fall back to Bitcoin as a support currency. Bitcoin itself has split into two cryptocurrencies, Bitcoin and Bitcoin Cash, to improve liquidity.

    Technology

    • Cryptocurrencies are the face of the innovative maelstrom around the Blockchain technology that is bringing both massive price volatility and a constant trial-and-error of new product try-outs and failures.
    • CCs are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat. The underlying technology for CCs could have the greatest application in areas where current payments systems are slow, such as across borders, as payment, reward tokens or funding systems for other Blockchain innovations and the Internet of Things, as well as parts of the underground economy.

    Applications

    • There are over 1,500 CCs with a market cap of $400bn. Transactions in the three largest CCs average $550bn per month and come mostly from individuals. Ownership is highly concentrated. The opportunity set around direct CC trading appears relatively limited for banks, while the two Bitcoin futures recently launched are seeing only $140mn in daily trading.
    • Blockchain saw its first expression through Bitcoin – the first CC – but is more likely to ultimately see its greatest application outside of CCs across other financial and non-financial transactions, even as Blockchain itself looks set to evolve fast as the market learns about what works best.
    • There is the potential for increased usage of Blockchain in cross-border payments, settlement/clearing/collateral management as well as the broader world of TMT, Transportation and Healthcare but only where any cost efficiencies offset regulatory, technical and security hurdles.
    • Hedge funds have been moving into this market making up most of the 175 CC funds but AUM remains only a few billion dollars. Asset managers are experiencing limited success in bringing products to market and have not been able to launch CC funds or ETFs without support from the SEC or major distributors.
    • While about half of the early CC transactions happened in the underground economy, the share of this is declining,  with investing and speculation now taking a much larger share.

    Challenges

    • It will be extremely hard for CCs to displace and compete with government-issued currencies, as dollars to euros and yuan are virtual natural monopolies in their regions and will not easily give up their seigniorage profits.
    • CCs are experiencing heightened volatility and will face challenges from both technology (such as rising mining costs and hacking) and regulators who are concerned about anti-money laundering and investor protection, as CC payments are irreversible and there is no recourse.
    • Security concerns have mounted in Bitcoin exchanges as hackers have infiltrated a number of CC exchanges generating large losses, while regulators are challenging anonymity.

    Below are some of the JPM team’s observations on what the future could bring for cryptos, with highlights, however the most notable admission is JPM stating that cryptocurrencies “could potentially have a role in diversifying one’s global bond and equity portfolio“, a far cry from Jamie Dimon’s emotional appeal that all cryptos are a giant fraud.

    In the early stages of innovation, usually set off by new technology — in this case Blockchain — the market experiments with many different approaches to see what shape and form will stick and end up offering the most economic value-added. We would note that it is not pre-ordained that cryptocurrencies will succeed as there are valid concerns about what economic value they really contribute. But in a time of rapid innovation, many new products will are often-and-errored. We believe the potential disruption from Blockchain cannot be ignored.

    The excitement of innovation typically also leads to price booms and then crashes among the early movers, before more realistic prices emerge among the eventual survivors. Much of this is what we see today with exponential price gains and losses, growth and diversity among cryptocurrencies. Given the amount of speculation in these markets, technical signals can be very useful in gauging market direction and they have been sending the right signals in recent months. Fundamentals are a lot less informative here, although it can be useful to look at the cost of mining CCs, even as one must also account for the elasticity of supply.

    Cryptocurrencies are both a new technology — Blockchain — and a new currency (many new ones). The new shape and form of the CC market in the future will likely ultimately depend on what economic value they are perceived to add. We would expect the marketplace and regulators to ultimately weed out what are perceived the negative, less useful characteristics of CCs and retain the positive elements that add economic value.

    As discussed more in detail below, the Blockchain technology driving CCs offers transparency to transactions and allows them to be virtual and peer-to-peer. Distributed ledger technology has the potential to offer regulators greater degrees of transparency, higher levels of resiliency and shorter settlement times, reducing counterparty and market risk.

    Allen similarly discusses various efforts under way with, for example, a number of payment processing firms increasingly partnering with technology firms/Blockchain providers to offer an alternative settlement engine to various payment participants. We expect various Blockchain-based ecosystems to coexist and compete with each other (similar to Payments networks in the current environment), with success predicating on technology capabilities (such as API features), number of participants on the network and ease of adoption. Given the hurdles, CCs are more likely to be used as ancillary payment methods rather than gaining traction as a primary source of exchange.

    While seeing a potential for the deployment of the underlying Blockchain technology in payments, we do not see cryptocurrencies competing with central bank-issued money for lawful transactions. We note that CCs have not attained the relative stability of value to make them useful as money for everyday transactions. The current set of government-issued fiat currencies — such as the dollar and the euro — provide efficient media of exchange, stores of value and units of account. Some of the early buyers of CC were clearly dismayed by ballooning balance sheets of the major central banks in the aftermath of the global financial crisis (GFC), but the lack of any meaningful inflation since, in both developed markets (DM) and emerging markets (EM), has surely reduced concerns about fiat (legal tender issued by a central bank) money.

    In addition, we find that local legal tender money tends to be a natural monopoly with only extreme hyperinflation leading people to seek out a monetary alternative. To add, we do not find that CCs are currently meeting the standards of what constitutes money as the huge volatility of CC has made use of it as a unit of account impractical. Finally, given the huge returns from running a central bank (seigniorage), governments will be quite possessive of their legal tender role and will likely put up a fight if CCs were to gain broader traction domestically.

    Some EMs, such as Venezuela and Russia, appear to be considering issuing CCs as a way to improve international funding and evade US sanctions. Aziz is quite dubious about whether any of this will work as CCs face regulatory headwinds and are neither better than fiat money in establishing policy credibility nor in providing liquidity during crises.

    Several central banks, as discussed in Feroli, are investigating whether they should issue CCs in their own currency, but are very far from actually doing so, as any increased efficiency in payments technology does not appear to be that obvious. In addition, the issuance of crypto dollars, for example, would give non-banks access to the Fed balance sheet, and thus could endanger the economically and socially important financial intermediation function of commercial banks.

    In market economies, commercial banks manage the largest part of what we call money through their deposit
    base that they in turn lend out to the economy, after holding back a fraction as reserves at the central bank. If cryptocurrencies were seen as superior to bank deposits, prompting a wholesale shift into cryptocurrencies, then a much larger share of savings would go to the central bank’s assets (government debt) and less to commercial banks loans, thus potentially dramatically increasing private credit risk premia and reducing the flow of credit to the private sector. Fractional reserve banking was a tremendous innovation that surely contributed greatly to global growth over the last two centuries, and we would expect that central banks would think twice before disturbing this source of capital to the private sector.

    We examine the potential role of CCs in terms of offering diversification in a global portfolio, given both their high returns over the past several years and their low correlation with the major asset classes, offsetting some of the cost of high volatility. If past returns, volatilities and correlations persist, CCs could potentially have a role in diversifying one’s global bond and equity portfolio. But in our view, that is a big if given the astronomic returns and volatilities of the past few years. If CCs survive the next few years and remain part of the global market, then they will likely have exited their current speculative phase and would then have more normal returns, volatilities (both much lower) and correlations (more like that of other zero-return assets such as gold and JPY). Based on its historical performance, CCs can be 10 times more volatile than core assets like stocks, or than portfolio hedges, like commodities. Liquidity is also well below most other potential hedges. Extraordinary returns can be generated in the price discovery phase, only to be followed by several years of mean-reversion toward the eventual, long-term average level. In the current market conditions, we do not believe that an allocation to Cryptocurrencies as insurance should be a portfolio’s main or only hedge. Note that even though CCs have improved risk-adjusted returns over the past several years, they have not prevented portfolio drawdown during periods of acute market stress, like the equity flash crashes of August 2015 and February 2018.

    Below we highlight some of the key charts from the JPM “cryptobible”:

    What a typical bitcoin transaction flow looks like:

    Cryptocorrelation with other asset classes: virtually nil, i.e., a perfect diversifier.

    Cryptocurrency liquidity in the context of all other major asset classes.

    Current state of cryptocurrency regulation around the globe.

    Market liquidity: average bid/ask spread to buy 10 BTC:

    Cryptocurrency concentration of hodlers:

    Monthly trading volumes by market cap:

    Speed and cost per transaction:

    Bitcoin ETFs pending approval:

    Bitcoin mining cost-curves, i.e, where should you mine for bitcoin:

  • Rand Paul Accuses GOP Critics Of "Hypocrisy" For Agreeing To Bipartisan Budget Deal

    After Rand Paul’s “principled stand’ against a budget bill that would add nearly $300 billion to the deficit over two years forced his colleagues in the House and Senate to stay up all night Thursday, just to pass an essentially unchanged bill that could’ve easily passed 12 hours earlier if it weren’t for the Kentucky Senator’s dedication to libertarian principles compulsive need for media attention, it seemed like his colleagues were rushing to be the first to issue an insulting quote about Paul to any reporter who’d listen.

    One of Paul’s colleagues said he sympathized with a neighbor of Paul’s who famously tackled the senator while he was mowing his lawn, cracking a few of his ribs. Another dryly noted that “there aren’t a lot of books written about the great political points of history” – a jab at Paul, who voted for the White House’s $4.5 trillion budget resolution and then supported Trump’s deficit-expanding tax package.

    Already one of the most ubiquitous guests on the so-called Sunday Shows, Paul took to Face the Nation this weekend to explain and defend his decision to hold up the vote and trigger another government shutdown – even if it only lasted a few hours.

    During his interview with Major Garrett, Paul said Republicans need to reconcile their commitment to limit government spending and cut down on the deficit with their tendency to overspend on the military. Paul added that the US has accomplished about all it possible can in Afghanistan, and that now is the time to bring our troops home. The US is actively at war in about seven countries, Paul said. Yet none of those interventions were authorized by Congress.

    MAJOR GARRETT: And now we have deficits projected to be a trillion dollars again and yet they’re growing non-recessionary economy or are you troubled by that?

    SENATOR RAND PAUL: Yeah, I’m very worried and I think one of the questions the Republicans I think are not willing to ask themselves is can you be fiscally conservative and be for unlimited military spending. There’s sort of this question, “Is the military budget too small or maybe is our mission too large around the world?” And because Republicans are unwilling to confront that they want more, more, more for military spending. And so to get that they have to give the Democrats what they want which is more and more and more for domestic spending and the compromise while some are happy with bipartisanship. Well if the bipartisanship is exploding the deficit I’m not so sure that’s the kind of bipartisanship we need.

    MAJOR GARRETT: From your point of view, Senator, on the defense side of the equation is the spending and the mission, are they reckless?

    SENATOR RAND PAUL: I think the mission is- is beyond what we need to be we’re actively in war in about seven countries. And yet the Congress hasn’t voted on declaring or authorizing the use of military force in over 15 years now. So I’ve been one that’s been bugging the Senate and Congress to say how can we be at war without ever voting on it don’t the American people through their representatives get a chance to say when we go to war. I think the Afghan war is long past its mission. I think we killed and captured and disrupted the people who attacked us on 9/11 long ago. And I think now it’s a nation building exercise. We’re spending 50 billion dollars a year. And if the president really is serious about infrastructure, a lot of that money could be spent at home. Instead of building bridges and schools and roads in Afghanistan or in Pakistan. I think we could do that at home and the interesting thing is I think the president’s instincts lean that way but –

    But when confronted about inconsistencies in his own voting record – such as his decision to support both the budget agreement and the Trump tax plan – Paul insisted he could “only control how I vote”.

    MAJOR GARRETT: And that’s sort of the way, Senator, because you know where the votes are. You know the votes are there for tax cuts. You know they’re not there for spending cuts. So, isn’t there any part of your voting pattern that is irresponsible?

    SENATOR RAND PAUL: I don’t think so because you know I can only control how I vote. So I voted for the tax cuts and I voted for spending cuts. The people who voted for tax cuts and spending increases. I think there is some hypocrisy there and it shows they’re not serious about the debt. But all throughout my career I’ve always voted for spending cuts and I’m happy to offset cuts in taxes with cuts in spending. So no I think that I’ve had a consistent position in being very concerned about the debt and I want to shrink the size of government. So, the reason I’m for tax cuts is I to return more of the money to the people who own that who- who actually deserve to have their money returned to them. But it also shrinks the size of government by cutting taxes or should if you cut spending at the same time.

    This, of course, begs the question: Was Paul in some sort of fugue state when he voted for the Trump tax bill last year?

    If so, he might want to get that checked out.

  • Just One Number Matters In This Coming Week

    Stock may have suffered through one of their most volatile weeks in years triggered by the unexpectedly large (if miscalculated) spike in January wages, the highest since 2009, resulting in the biggest volquake in history, and come this Wednesday it may be time for round 2, because at 8:30am on Valentine’s Day, the U.S. inflation report – far more closely watched than the payrolls release – will hold the key to the next phase.

    Indeed, as Deutsche Bank notes:

    “it’s hard to remember a data point as eagerly anticipated as next Wednesday’s January CPI report in the US. With rates, equities and vol selling off aggressively and markets on edge, the strong January average hourly earnings print this time last week has caused havoc in the market over the last few days.”

    Why is the fate of the market suddenly in the hands of the otherwise trivial CPI number? Because, as we showed every day last week, every single time the 10-year Treasury approached or surpassed the four-year high of 2.85% last week, equities investors panicked and yanked bids amid fears the specter of higher inflation would accelerate the pace of Fed rate hikes, crushing the nearly 10 year artificial bull market in stocks bought with nearly $20 trillion in central bank liquidity. This is shown in the BBG chart below.

    And with average hourly earnings reportedly breaking out, there is suddenly a threat that core CPI may surprise to the upside, and not just modestly, but materially enough for the Fed – which is already expecting to hike rates 3 times in 2018 – to precipitate its tightening intentions, and if nothing else, certainly not intervene during the current market correction.

    “What’s happening now is just price discovery between bonds and equities — how far can the bond market push yields up before the equity market cracks?” T. Rowe Price’s Stephen Bartolini told Bloomberg . “The big fear in risk markets is that we get a big CPI print and it validates the narrative that inflation is coming back and the Fed is going to have to move faster.

    While the re-emergence of wage growth – long considered the missing link in an economic recovery that’s driven the jobless rate to near record lows – took the market by surprise, what is more curious is that at least on paper, the Fed’s intentions had been widely priced in: just before the stocks meltdown, traders were allegedly in sync with FOMC projections of three rate increases in 2018. However, the recent spike in longer-yields was the result of the bipartisan Senate plan, which would boost spending by an addition $300 billion, an increasing Treasury issuance even further, and beyond the $1 trillion projected this year.

    Stocks have not taken that well.

    That said, bond bulls remain: “The Treasury market is pricing in the most bearish scenarios that were on the docket for 2018, and still 10-year yields remain stubbornly below 3 percent,” BMO Capital Markets strategists Ian Lyngen and Aaron Kohli wrote in a Feb. 9 note. To the BMO due there’s a greater risk of yields declining over the next several months than rising.

    However, skeptics will be silenced promptly on Wednesday should the CPI/Core print higher than the expected, in which case a 3% on the 10Y becomes virtually certain, and unless stocks find some pressure outlet to relieve concerns of rising inflation – ideally a statement by some central banker – the next sharp move lower in stocks will immediately follow. As Bloomberg notes, at least some speculators expect such an outcome: Block trades in puts on 10-year Treasury futures Friday pointed toward demand for protection against yields rising to that level by March 23.

    So with that in mind, and with everyone’s eyes on Wednesday’s CPI report, here is what else to look for in the coming week:

    • Feb. 12: Monthly budget statement
    • Feb. 13: NFIB small business optimism; revisions to producer price index
    • Feb. 14: CPI; MBA mortgage applications; retail sales; real average weekly and hourly earnings; business inventories
    • Feb. 15: Empire manufacturing; initial jobless claims and continuing claims; PPI; Philadelphia Fed business outlook; industrial production; capacity utilization; Bloomberg consumer comfort; NAHB housing market index; Treasury International Capital flows
    • Feb. 16: Import and export price indexes; housing starts; building permits; University of Michigan survey data

    And summarized courtesy of Barclays:

    * * *

    Below is Deutsche Bank’s take:

    It’s hard to remember a data point as eagerly anticipated as next Wednesday’s January CPI report in the US. With rates, equities and vol selling off aggressively and markets on edge, the strong January average hourly earnings print this time last week has caused havoc in the market over the last few days.

    Current market expectations are for a +0.4% mom headline reading and +0.2% mom core reading, which translate into +2.0% and +1.7% yoy readings (both a decline of one-tenth from December). Meanwhile the other potentially big event next week is in Washington with President Trump expected to release a $1.5tn infrastructure plan (which will kick off the process for producing legislation) and also his 2019 budget blueprint.

    There is other important data out in the US next week too with the January PPI report on Thursday another significant inflation reading, while Wednesday will also see January retail sales released. January industrial production (Thursday), January housing starts and building permits (Friday) and the preliminary February University of Michigan consumer sentiment survey (Friday) will also be released. In Europe we’ll get final January CPI revisions in the UK (Monday) and Germany (Tuesday) while second readings of Q4 GDP will be out in Germany and the Euro area on Wednesday. Late on Tuesday we’ll also get Japan’s Q4 GDP print.

    It’s also looking like a busy week for ECB speakers with Weidmann (Wednesday), Mersch (Wednesday and Thursday), Praet (Thursday) and Coeure (Friday) all scheduled to speak. The Fed’s Mester will speak on Tuesday.

    Finally it’s worth noting that Chinese New Year kicks off on Thursday, with mainland markets subsequently shut until February 21st.

    What to look out for next week?

    • Monday: With data fairly thin on Monday all eyes will instead be on the White House with President Trump expected to release a $1.5tn infrastructure plan, along with his 2019 budget blueprint. Away from that the only data of note is  the January monthly budget statement in the US. Heineken will report earnings.
    • Tuesday: A busier day for data with the January CPI/PPI/RPI report in the UK the main focus. In the US the January NFIB small business optimism print will be released while in Japan the preliminary Q4 GDP print will be out in the late evening. Away from data the Fed’s Mester is due to speak in the afternoon on monetary policy and the economic outlook. Pepsico will release earnings.
    • Wednesday: Front and centre on Wednesday is the January CPI report in the US, while January retail sales will also be released alongside. December business inventories is the other data release due in the US while in Europe we’ll get Q4 GDP in Germany (second estimate) and the final January CPI revisions, along with Q4 GDP for the Euro area (second estimate). Away from data the Bundesbank’s Weidmann is due to speak in the morning, followed by the ECB’s Mersch. German Chancellor Merkel is also due to speak at a CDU event. CISCO, and Credit Agricole will report earnings.
    • Thursday: Another busy day for data with January PPI, January industrial production, February empire manufacturing, February Philly Fed PMI, February NAHB housing market index and the latest weekly initial jobless claims readings all due in the US. In Europe Q4 employment data in France and the December trade balance for the Euro area are due. The ECB’s Mersch and Praet are also slated to speak at an event in Paris. It’s with noting that New Year celebrations in China will also begin on Thursday, with mainland markets subsequently shut until the 21st. Nestle will report earnings.
    • Friday: The end of the week will see January retail sales data released in the UK, along with the January import price index, January housing starts and building permits and the preliminary February University of Michigan consumer sentiment reading in the US. The ECB’s Coeure will also speak in the morning. Coca-Cola, and Kraft Heinz will all report earnings.

    * * *

    Finally, here is Goldman with its breakdown of key US events together with consensus forecasts:

    The key economic releases next week are CPI and retail sales on Wednesday and Industrial production on Thursday. There is one speaking engagement from a Fed official this week, on Tuesday.

    Monday, February 12

    • 02:00 PM Monthly budget statement, January (consensus -$51.0bn, last -$23.2bn).

    Tuesday, February 13

    • 08:00 AM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will speak at a breakfast event hosted by the Dayton Area Chamber of Commerce. Audience and media Q&A are expected.

    Wednesday, February 14

    • 8:30 AM CPI (mom), January (GS +0.38%, consensus +0.3%, last +0.20%): Core CPI (mom), January (GS +0.22%, consensus +0.2%, last +0.24%); CPI (yoy), January (GS +1.98%, consensus +1.9%, last +2.1%); Core CPI (yoy), January (GS +1.71%, consensus +1.7%, last +1.8%): We estimate a 0.22% increase in January core CPI (mom sa), which would lower the year-over-year rate to +1.7%. Our forecast reflects a boost from January seasonality, and likely continued strength in shelter inflation. On the negative side, we expect a small drag from telephone hardware methodological changes. We estimate a 0.38% increase in headline CPI, reflecting firm consumer energy and food prices in January.
    • 08:30 AM Retail sales, January (GS +0.2%, consensus +0.2%, last +0.4%); Retail sales ex-auto, January (GS +0.4%, consensus +0.5%, last +0.4%); Retail sales ex-auto & gas, January (GS +0.3%, consensus +0.4%, last +0.4%); Core retail sales, January (GS +0.3%, consensus +0.4%, last +0.3%): We estimate core retail sales (ex-autos, gasoline, and building materials) rose at a 0.3% pace in January. While the growth pace likely remains solid—reflecting a boost from strong service sector data and the January stock market rally— we anticipate some correction in the nonstore retailers category after a strong holiday shopping season. Given the further rise in (sa) gasoline prices and the decline in auto SAAR, we estimate 0.4% and 0.2% respective increases in the ex-auto and headline measures.
    • 10:00 AM Business inventories (consensus +0.3%, last +0.4%)

    Thursday, February 15

    • 08:30 AM PPI final demand, January (GS +0.2%, consensus +0.4%, last -0.1%); PPI ex-food and energy, January (GS +0.1%, consensus +0.2%, last -0.1%); PPI ex-food, energy, and trade, January (GS +0.1%, consensus +0.2%, last +0.1%): We estimate a 0.2% increase in headline PPI in January, reflecting a slight uptick in gasoline prices. We expect a smaller 0.1% increase in in the PPI ex-food, energy, and trade services category. In the December report, the producer price index was weaker than expected, reflecting softness in both core measures as well as in food and energy prices.
    • 08:30 AM Philadelphia Fed manufacturing index, February (GS +21.3, consensus +20.6, last +22.2): We estimate the Philadelphia Fed manufacturing index edged down in February. It is possible the decline in January partially reflected the Bomb Cyclone storms. Commentary from industrials remains encouraging, and we expect the index to remain at expansionary levels.
    • 08:30 AM Empire manufacturing survey, February (consensus +17.9, last +17.7)
    • 08:30 AM Initial jobless claims, week ended February 10 (GS 230k, consensus 228k, last 221k); Continuing jobless claims, week ended February 3 (consensus 1,928k, last 1,923k): We estimate initial jobless claims ticked up by 9k to 230k in the week ended February 10. Continuing claims – the number of persons receiving benefits through standard programs – declined in the previous week and may continue their general downward trend since early January.
    • 09:15 AM Industrial production, January (GS +0.5%, consensus +0.2%, last +0.9%); Manufacturing production, January (GS +0.4%, consensus +0.3%, last +0.1%); Capacity utilization, January (consensus 78.0%, last 77.9%): We estimate industrial production rose +0.5% in January, as the utilities category likely rose further and manufacturing rebounded from last month’s soft report. We expect manufacturing production rose +0.4%, reflecting strength in non-auto manufacturing.
    • 01:00 PM NAHB homebuilder sentiment, February (consensus 72, last 72)

    Friday, February 16

    • 08:30 AM Housing starts, January (GS +4.0%, consensus +3.3%, last -8.2%); We estimate housing starts rebounded 4.0% in January, reflecting a catch-up with the recently more resilient single-family permits, partially offset by unseasonably cold weather.
    • 08:30 AM Import price index, January (consensus +0.6%, last +0.1%)
    • 10:00 AM University of Michigan consumer sentiment, February preliminary (GS 94.8, consensus 95.5, last 95.7): We estimate the University of Michigan consumer sentiment index edged down 0.9pt to 94.8 in the preliminary estimate for February. We note the possibility of the recent stock market selloff over the last week to weigh on surveys conducted last week. The report’s measure of 5- to 10-year inflation expectations was 2.5% in January, near the middle of its 12-month range.

    Source: Barclays, DB, Goldman

  • Stock & Bond Investors Are Now Paying The Price For The Fed's Dangerous Experiment

    Authored by Vitaliy Katsenelson via ContrarianEdge.com,

    The Federal Reserve’s changing of the guard — the end of the Janet Yellen’s tenure and the beginning of the Jerome Powell era — has me remembering what it was like to grow up in the former Soviet Union.

    Back then, our local grocery store had two types of sugar: The cheap one was priced at 96 kopecks (Russian cents) a kilo and the expensive one at 104 kopecks. I vividly remember these prices because they didn’t change for a decade. The prices were not set by sugar supply and demand but were determined by a well-meaning bureaucrat (who may even have been an economist) a thousand miles away.

    If all Russian housewives (and house-husbands) had decided to go on an apple pie diet and started baking pies for breakfast, lunch, and dinner, sugar demand would have increased but the prices still would have been 96 and 104 kopecks. As a result, we would have had a shortage of sugar — a common occurrence in the Soviet era.

    In a capitalist economy, the invisible hand serves a very important but underappreciated role: It is a signaling mechanism that helps balance supply and demand. High demand leads to higher prices, telegraphing suppliers that they’ll make more money if they produce extra goods. Additional supply lowers prices, bringing them to a new equilibrium. This is how prices are set for millions of goods globally on a daily basis in free-market economies.

    In the command-and-control economy of the Soviet Union, the prices of goods often had little to do with supply and demand but were instead typically used as a political tool. This in part is why the Soviet economy failed — to make good decisions you need good data, and if price carries no data, it is hard to make good business decisions.

    When I left Soviet Russia in 1991, I thought I would never see a command-and-control economy again. I was wrong.

    Over the past decade the global economy has started to resemble one, as well-meaning economists running central banks have been setting the price for the most important commodity in the world: money.

    Interest rates are the price of money, and the daily decisions of billions of people and their corporations and governments should determine them. Like the price of sugar in Soviet Russia, interest rates today have little to do with supply and demand (and thus have zero signaling value).

    For instance, if the Federal Reserve hadn’t bought more than $2 trillion of U.S. debt by late 2014, when U.S. government debt crossed the $17 trillion mark, interest rates might have started to go up and our budget deficit would have increased and forced politicians to cut government spending. But the opposite has happened: As our debt pile has grown, the government’s cost of borrowing has declined.

    The consequences of well-meaning (but not all-knowing) economists setting the cost of money are widespread, from the inflation of asset prices to encouraging companies to spend on projects they shouldn’t.

    But we really don’t know the second-, third-, and fourth derivatives of the consequences that command-control interest rates will bring. We know that most likely every market participant was forced to take on more risk in recent years, but we don’t know how much more because we don’t know the price of money.

    Quantitative easing: These two seemingly harmless words have mutated the DNA of the global economy. Interest rates heavily influence currency exchange rates. Anticipation of QE by the European Union caused the price of the Swiss franc to jump 15% in one day in January 2015, and the Swiss economy has been crippled ever since.

    Americans have a healthy distrust of their politicians. We expect our politicians to be corrupt. We don’t worship our leaders (only the dead ones). The U.S. Constitution is full of checks and balances to make sure that when (often not if) the opium of power goes to a politician’s head, the damage he or she can do to society is limited.

    Unfortunately, we don’t share the same distrust for economists and central bankers. It’s hard to say exactly why. Maybe we are in awe of their Ph.D.s. Or maybe it’s because they sound really smart and at the same time make us feel dumber than a toaster when they use big terms like “aggregate demand.” For whatever reason, we think they possess foresight and the powers of Marvel superheroes.

    Warren Buffett — the Oracle of Omaha himself — admitted that he doesn’t know how the QE experiment will end. And if you think well-meaning economists running central banks know, you may have another thing coming.

    Alan Greenspan — the ex-pope of the Federal Reserve — in a 2013 interview with the Wall Street Journal said that he “always considered [himself] more of a mathematician than a psychologist.” But after the 2008-09 financial crisis and the criticism he received for contributing to the housing bubble, Greenspan went back and studied herd behavior, with some surprising results. “I was actually flabbergasted,” he admitted. “It upended my view of how the world works.”

    Just as the well-meaning economists of the Soviet Union didn’t know the correct price of sugar, nor do the good-intentioned economists of our global central banks know where interest rates should be. Even more important, they can’t predict the consequences of their actions.

    *  *  *
    Vitaliy Katsenelson is the CIO at Investment Management Associates, which is anything but your average investment firm. (Seriously, take a look.) He wrote two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. 

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