Apr 18

Today’s News 18th April 2017

  • Asia's Richest Man Is "Aggressively Adding Direct Exposure To Gold"

    Authored by Mac Slavo via SHTFplan.com,

    The world is awash in crisis with wars looming, economies crashing and revolutions brewing. Doomsday bunkers sales are soaring and individuals from coast to coast are getting ready for whatever tomorrow may bring. Moreover, even governments like China and Russia are preparing, having gone so far as to create their own exchange mechanism to trade directly with gold in the event of a global currency crisis or financial meltdown.

    But it’s not just governments who have taken notice of the problems facing the globe. According to Gold Mining Chairman Amir Adnani and Sprott U.S. Holdings CEO Rick Rule, some of the biggest billionaire investors on the planet are actively seeking out precious metals like gold as wealth protection insurance amid the uncertainty of the current geo-political climate.

    In a recent interview with SGT Report, Adnani explains that several super wealthy individuals with whom he works very closely, including mainland China’s biggest billionaire investor and the richest man in all of Asia Li Ka-shing, have a renewed and urgent interest in diversifying their assets into both, gold mining firms and the physical asset itself:

    This individual’s net worth is about $35 billion… For the first time in a number of years of working with his team when it comes to investments in commodities that they believe were important to the strategic growth of China… for the first time they are looking for gold related investments.

     

    The comment from the person heading this initiative for Li Ka-shing is very interesting… His right had man said to me ‘He’s not just looking for investing in gold mines… he literally wants to find more ways to take physical gold back to Hong Kong and have that exposure.’

     

    This is the largest individual investor in mainland China and I tell you over the last few years of having worked with him on the energy side, this is the first time I have seen him so aggressively looking for gold related opportunities.

    In the full interview, insiders Amir Adnani and Rick Rule share their experiences working with others large investors, current strategies and expectations of what’s to come:


    (Watch at Youtube)

    The reason for why these high net worth individuals are rapidly moving into gold related assets, notes Adnani, is that they are not necessarily all that concerned with the current price and how high it may go in the future, but rather, because precious metals are backed with thousands of years of evidence that they are the asset of last resort during crisis:

    That’s one… the second one… we’re very fortunate at Gold Mining… one of the board members of our company who has been a founder of the company since day one is a Brazilian billionaire by the name of Mario Garnero…

     

    When I look at the level of interest that his organization has in terms of wanting that direct exposure to gold… I talked to them about why they are looking at this…

     

    They’re focused on one factor that we seldom think about… We’re so fixated on price of gold… what they’re focused on… what the super wealthy are focused on… what the billionaires are focused on… is the fact that gold plays that hedge in your portfolio… that’s it’s the insurance in the portfolio…

     

    It may not necessarily be as critical to think whether it’s $1200 an ounce or $1300… we fixate so much on the price… and we forget that irrespective of what it’s trading at on any given day it’s meant to be an insurance policy… it’s meant to be protection of wealth and preservation of wealth…

     

    It’s a great reminder when you look at the first trading day after Brexit… I remember looking at my own portoflio.. and looking at the market… and everything is red… the Dow is down over 500 points… the only thing up are gold stocks…

    But while insurance and wealth preservation are the key motivating factor for the super wealthy, another billionaire, Sprott U.S. Holdings CEO Rick Rule, says that even a tiny boost in investor demand could drive prices to new highs from here as investors stampede into hard asset stocks and physical holdings as the current bull market gains steam:

    Let me give you a startling statistic that tells you what an awakening might do… physical precious metals, certificated precious metals, and precious metals equities occupy about one-third of one percent of the savings and investment assets of the United States.

     

    The corresponding number at the top of the last bull market.. real bull market in 1981… was 8%…

     

    One third of 1% now… 8% at the top.

     

    I’m not suggesting to you that gold and precious metals related investments will ever get back to 8% but I would suggest to you that they will, in this bull market, approach the three decade median, which was 1.5%.

     

    If that occurred, you would see a more than four-fold increase in demand for precious metals and precious metals related equities… I think that could be reasonably dramatic.

     

    I am not one of these doom and gloom guys who says that gold is going win the war against the U.S. dollar.

     

    But if gold lost the war a little less badly… in other words, if gold and gold equities market shares got up to 1.5% of the investment savings matrix of the United States, that would represent a four-fold increase in demand.

    The world is primed for a serious, potentially devastating collapse of life as we know it. That may come with war, economic collapse, or both simultaneously. What we know from history is that those who prepared ahead of time and understood the ramifications of such events were positioned to not only survive, but thrive.

    The high net worth individuals who are moving into gold related assets see the writing on the wall, and they are positioning themselves now to ensure their wealth will be preserved.

    We strongly encourage you to do the same.

     

  • Gold-Silver Divergence, Report 17 April, 2017

    This was a holiday-shorted week, due to Good Friday, and we are posting this Monday evening due to today being a holiday in much of the world.

    Gold and silver went up the dollar went down, +$33 and +$0.53 -64mg gold and -.05g silver. The prices of the metals in dollar terms are readily available, and the price of the dollar in terms of honest money can be easily calculated. The point of this Report is to look into the market to understand the fundamentals of supply and demand. This can’t necessarily tell you what the price will do tomorrow. However, it tells you where the price should be, if physical metal were to clear based on supply and demand.

    Of course, two factors make this very interesting. One is that the speculators use leverage, and they can move the price around. At least for a while. The other is that the fundamentals change. There is no guarantee that the prices of the metals will reach the fundamental price of a given day. Think of the fundamentals as gravity, not the strongest force in the system but inexorable, tugging every day.

    This week, the fundamentals of both metals moved, though not together. We will take a look at that below, but first, the price and ratio charts.

    The Prices of Gold and Silver
    The Prices of Gold and Silver

    Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It didn’t move much this week.

    The Ratio of the Gold Price to the Silver Price
    The Ratio of the Gold Price to the Silver Price

    For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

    Here is the gold graph.

    The Gold Basis and Cobasis and the Dollar Price
    The Gold Basis and Cobasis and the Dollar Price

    The scarcity (i.e. the cobasis, the red line) is in a gentle rising trend for about six months. This week, the cobasis was down slightly. Not a surprise given the (relatively) big price move of +$33. Nor does it appear to break the trend.

    Our calculated fundamental price of gold is at $1,301, just above the market price.

    Now let’s look at silver.

    The Silver Basis and Cobasis and the Dollar Price
    The Silver Basis and Cobasis and the Dollar Price

    In silver, it’s much harder to say that there is an uptrend in the cobasis. Our indicator of scarcity is at the same level it was in October. Back then, the price of silver was $17.60 and on Thursday it was just about 90 cents higher.

    The fundamental price back then was just under $15. Now it’s just under $16.50. This happens to be down about 40 cents this week.

    With the fundamental of gold rising, and that of silver falling, it’s not surprising that the fundamental gold-silver ratio is up to a bit over 79.

    © 2017 Monetary Metals

  • What's Your Plan B?

    Authored by Charles Hugh-Smith via OfTwoMinds blog,

    Although Plan B includes a wide spectrum of options, these three basic categories define three different purposes for having an alternative residence lined up.

    We all have a Plan A–continue living just like we’re living now.

    Some of us have a Plan B in case Plan A doesn’t work out, and the reasons for a Plan B break out into three general categories:

    1. Preppers who foresee the potential for a breakdown in Plan A due to a systemic “perfect storm” of events that could overwhelm the status quo’s ability to supply healthcare, food and transportation fuels for the nation’s heavily urbanized populace.

     

    2. People who understand their employment is precarious and contingent, and they might have to move to another locale if they lose their job and can’t find another equivalent one quickly.

     

    3. Those who tire of the stresses of maintaining Plan A and who long for a less stressful, less complex, cheaper and more fulfilling way of living.

    The Fragility and Vulnerability of Highly Optimized Supply Chains

    Many people are unaware of the fragility of the supply chains that truck in food, fuel and all the other commodities of industrialized comfort to cities. As a general rule, there are only a few days of food and fuel in a typical city, and any disruption quickly empties existing stocks. (Those interested in learning more might start with the book When Trucks Stop Running: Energy and the Future of Transportation.)

    Most residents may not realize that the government’s emergency services are actually quite limited, and that a relatively small number of casualties/injured people (for example, a few thousand) in an urban area would overwhelm services designed to handle a relative handful of the millions of residents.

    Authorities can call up the National Guard to maintain order, but the government isn’t set up to provide food and fuel to millions of people stranded by a natural disaster or a "Black Swan" (unexpected disruption).

    To reduce costs, supply chains and other essential systems have been stripped of redundancies–any break in the optimized flow has the potential to cripple the entire system. Since these highly optimized systems work so well most of the time, we don’t really understand the vulnerabilities that lurk just below the surface of "just in time" deliveries and other efficiencies.

    This inherent fragility has long fueled interest in rural "bug-out" retreats, a topic I recently addressed in Having A 'Retreat' Property Comes With Real Challenges.

    Where Do We Go When the Economy Falters?

    For the past eight years, US politicians and Federal Reserve authorities have attempted to repeal the classic business cycle of growth, stagnation, recession and renewed growth. It may appear they’ve succeeded, but the era’s slow growth has been sustained by unprecedented expansions of debt in the government, corporate and private sectors.

    This extraordinary expansion of debt has been enabled by a decline in interest rates. Most observers with a sense of history view these extremes of debt expansion and near-zero interest rates as unsustainable and destabilizing:

    (Source)

    In other words, extending the expansion cycle by extreme policy measures cannot actually repeal the business cycle; rather, these policy extremes increase the likelihood that the eventual recession will be deeper and/or longer than it would have been absent the policy extremes.

    Thus we can anticipate a recession of some sort, in which mal-investments and unpayable debts are liquidated and written off, and credit expansion (and the consumption that depends on it) slows or even reverses, as it did in the 2008-09 recession.

    Employers must lay off employees when sales and profits fall, and as incomes fall, sales fall further, creating a feedback loop of mutually reinforcing declines in household income and spending.

    When the music finally stops, many laid-off employees won’t be able to find a chair (i.e. another job). Without a job, most people can’t afford to remain in high-cost urban centers for long.

    When the 2000 recession gutted employment in the San Francisco Bay Area, 100,000 people moved away.

    Recent immigrants to wealthy metro areas have the option of returning home to the village or town they’d left to seek work in the city. Many immigrants from south of the border have invested their earnings in building new homes in their villages of origin. When the economy north of the Rio Grande falters, they can return to the home they built when their incomes were high.

    In China, many of the urban workers laid off in slow periods return to their villages, where there is a source of food (farms) and a roof over their head (the family home).

    Today’s "rootless Cosmopolitans" (urban dwelling Americans) typically lack a village they can return to in hard times. So a common Plan B is to seek an equivalent low-cost place to retreat to in recessions.

    Where Do We Go When We Burn Out?

    There’s a simple phrase that embodies the exhaustion and dissatisfaction we experience when we feel like we’re on a treadmill going nowhere that’s speeding up: Burn-out.

    As Historian Fernand Braudel (and others) observed, cities have always had a higher cost of living than the countryside—and offered higher pay scales. Cities aggregate capital, talent and power, and while this dynamism serves to raise many out of poverty, it can also exacerbate wealth and income inequality.

    The globalization of labor and capital combined with the aforementioned policy extremes has deepened the divide between "haves" and "have-nots" in many urban regions. Those who bought their homes in desirable metro areas for $150,000 are much wealthier now that these modest homes fetch $750,000 or more. Young people with conventional jobs will never be able to afford these home prices, and so the time-honored source of middle-class security–home ownership– is out of reach.

    Many of those who dove in and bought a home are stretching to pay crushing mortgages, soaring taxes and higher costs for healthcare and childcare. They are burning out, and their Plan B is a permanent move to a less burdensome and more fulfilling life elsewhere.

    Three Different Purposes, Three Different Durations of Residence

    Although Plan B includes a wide spectrum of options, these three basic categories define three different purposes for having an alternative residence lined up, and these purposes define three different durations of Plan B occupancy.

    While the serious prepper with a "bug-out" Plan B might be planning for the long haul, others will view their "bug-out" Plan B preparations as a temporary arrangement–a place to go in the event of a natural disaster such as an earthquake or hurricane, or localized social unrest.

    Such a temporary home-away-from-home could be as simple as an RV parked in the parents' driveway, a spare room in a relative’s house or more elaborately, a storage shed turned into a "tiny house."

    Those planning for the eventuality of a much lower income due to recession will have a much different Plan B, as they need dirt-cheap housing for an extended occupancy that might last from a few months to as long as a few years.

    The recession Plan B must include planning for childcare/schooling, healthcare, employment/earning a living—all the day-to-day components of Plan A.

    The recession Plan B also has to account for the possibility that the return to the Plan A lifestyle will no longer be an option due to health issues, the decline of the sector of employment, or permanent declines in household income.

    The burn-out Plan B is intended to be permanent. Plan A is being replaced by a Plan B that must provide the essentials of home, work and community–what I call fully functional residence.

  • After 'Modest' 250% S&P Returns, Corporate Pension Funding Levels Roughly Same As 2008

    We spend a lot of time writing about public pensions because the aggregate underfunding levels, $3 – $5 trillion on the low end, are simply staggering and at some point they will be realized for the ponzi schemes that they are and the systemic risk they represent to the global financial system.  Until then we’ll just keep shouting into the abyss.

    And while we don’t spend as much time on corporate pensions, for some companies their underfunded defined benefit obligations will almost certainly result in their demise at some point in the future.  As a recent study from Pensions & Investments points out, the top 100 corporate pensions were underfunded by over $250 billion at the end of 2016.  Moreover, despite a 250% S&P rally from the 2009 lows, corporate pensions have only managed to improve their funded status from 79.1% in 2008 to 84.5% today. 

    The aggregate funding deficit for P&I’s universe rose to $258 billion as of Dec. 31, up 5.3% from a deficit of $245 billion the previous year.

     

    The average funding ratio of the 100 largest U.S. corporate defined benefit plans continued to slide in 2016, dropping to 84.5% from 85.1% at the end of 2015 and 85.7% at the end of 2014, Pensions & Investments’ annual analysis of corporate SEC filings shows.

     

    “The big story on DB plan funding is how little it’s recovered from the big downturn in the recession,” said Alan Glickstein, Dallas-based senior retirement consultant at Willis Towers Watson PLC.

     

    The average funding ratio for P&I’s universe was 108.6% at the end of 2007, which plunged to 79.1% at the end of 2008 at the peak of the financial crisis.

    Meanwhile, the bottom 10 corporate pension funds alone, as ranked by funded percentage, were underfunded by nearly $70 billion. 

    Pension

     

    And while a $250 billion funding shortfall is significant, at least investors can take some solace in the fact that corporate pensions, unlike their public counterparts, are using somewhat reasonable discount rates to calculate the present value of their future funding obligations.  According to P&I, the average corporate pension used a discount rate of 4.39% in 2016…

    The average discount rate used to calculate plan liabilities began to decline in 2008, dropping to 4.05% in 2012 from 6.45% in 2008. The average discount rate used by the plans in P&I’s universe was 4.39% in both 2015 and 2016.

    compared to 7.5% for several public pensions like CalPERS in California.

    But, it’s no big deal…if public pensions lower their discount rates to force them inline with private corporate assumptions it would only increase net underfundings by $3.5 trillion…no biggie….taxpayers can definitely absorb that.

    Pension

  • Taxation Is Theft

    It’s a double-whammy for the U.S. taxpayer. Bloomberg notes that not only are many Americans writing yet another check to Uncle Sam this tax season, they’re also paying more to have someone handle their returns. The Labor Department’s consumer-price index for tax return preparation rose 2.4 percent, the third-biggest monthly gain ever, to a record in March.

    Such trends show why firms like Intuit Inc., the maker of TurboTax, and H&R Block Inc., have spent millions of dollars lobbying Congress to limit efforts to simplify the tax-filing process.

    But it gets worse, as Andrew Napolitano writes via The Mises Institute; with a tax code that exceeds 72,000 pages in length and consumes more than six billion person hours per year to determine taxpayers’ taxable income, with an IRS that has become a feared law unto itself, and with a government that continues to extract more wealth from every taxpaying American every year, is it any wonder that April 15th is a day of dread in America?

    Social Security taxes and income taxes have dogged us all since their institution during the last century, and few politicians have been willing to address these ploys for what they are: theft.

    During the 2012 election, then-Texas Gov. Rick Perry caused a firestorm among big-government types during the Republican presidential primaries last year when he called Social Security a Ponzi scheme. He was right. It’s been a scam from its inception, and it’s still a scam today.

    When Social Security was established in 1935, it was intended to provide minimal financial assistance to those too old to work. It was also intended to cause voters to become dependent on Franklin Delano Roosevelt’s Democrats. FDR copied the idea from a system established in Italy by Mussolini. The plan was to have certain workers and their employers make small contributions to a fund that would be held in trust for the workers by the government. At the time, the average life expectancy of Americans was 61 years of age, but Social Security didn’t kick in until age 65. Thus, the system was geared to take money from the average American worker that he would never see returned.

    Over time, life expectancy grew and surpassed 65, the so-called trust fund was raided and spent, and the system was paying out more money than it was taking in – just like a Ponzi scheme. FDR called Social Security an insurance policy. In reality, it has become forced savings. However, the custodian of the funds – Congress – has stolen the savings and spent it. And the value of the savings has been diminished by inflation.

    Today, the best one can hope to receive from Social Security is dollars with the buying power of 75 cents for every dollar contributed. That makes Social Security worse than a Ponzi scheme. You can get out of a Ponzi investment. You can’t get out of Social Security. Who would stay with a bank that returned only 75 percent of one’s savings?

    The Constitution doesn’t permit the feds to steal your money. But steal, the feds do.

    Also in 2012, during a Republican presidential debate, a young man asked the moderator to pose the following question to the candidates: “If I earn a dollar, how much of it am I entitled to keep?” The question was passed to one of the candidates, who punted, and then the moderator changed the topic. Only Congressman Ron Paul gave a serious post-debate answer to the young man’s question: “All of it.”

    Every official foundational government document – from the Declaration of Independence to the U.S. Constitution to the oaths that everyone who works for the government takes – indicates that the government exists to work for us. The Declaration even proclaims that the government receives all of its powers from the consent of the governed. If you believe all this, as I do, then just as we don’t have the power to take our neighbor’s property and distribute it against his will, we lack the ability to give that power to the government. Stated differently, just as you lack the moral and legal ability to take my property, you cannot authorize the government to do so.

    Here’s an example you’ve heard before. You’re sitting at home at night, and there’s a knock at the door. You open the door, and a guy with a gun pointed at you says: “Give me your money. I want to give it away to the less fortunate.” You think he’s dangerous and crazy, so you call the police. Then you find out he is the police, there to collect your taxes.

    The framers of the Constitution understood this. For 150 years, the federal government was run by user fees and sales of government land and assessments to the states for services rendered. It rejected the Hamiltonian view that the feds could take whatever they wanted, and it followed the Jeffersonian first principle that the only moral commercial exchanges are those that are fully voluntary.

    This worked well until the progressives took over the government in the first decade of the 20th century. They persuaded enough Americans to cause their state legislatures to ratify the Sixteenth Amendment, which was designed to tax the rich and redistribute wealth. They promised the American public that the income tax would never exceed 3 percent of income and would only apply to the top 3 percent of earners. How wrong – or deceptive – they were.

    Yet, the imposition of a federal income tax is more than just taking from those who work and earn and giving to those who don’t. And it is more than just a spigot to fill the federal trough. At its base, it is a terrifying presumption. It presumes that we don’t really own our property. It accepts the Marxist notion that the state owns all the property and the state permits us to keep and use whatever it needs us to have so we won’t riot in the streets. And then it steals and uses whatever it can politically get away with. Do you believe this?

    There are only three ways to acquire wealth in a free society. The inheritance model occurs when someone gives you wealth. The economic model occurs when you trade a skill, a talent, an asset, knowledge, sweat, energy or creativity to a willing buyer. And the mafia model occurs when a guy with a gun says: “Give me your money or else.”

    Which model does the government use? Why do we put up with this?

  • Russia Warns U.S. Not To Act Unilaterally Against North Korea

    In response to the US vice president, Russia’s foreign minister Sergey Lavrov said that Mike Pence’s statement on the US running out of “strategic patience”
    towards Pyongyang does not contribute to resolving the crisis. The top Russian diplomat also voiced hope there will be no repeat of the US strike on Syria in North Korea.

    On Monday, speaking from the DMZ, Mike Pence said the world has witnessed the “strength and resolve of Trump in actions taken in Syria and Afghanistan,” and threatened North Korea “not to test” this resolve or “or the strength of the armed forces of the United States.”

    Lavrov responded by saying “I hope that there won’t be any unilateral actions like we recently saw in Syria and that the US will follow the policies Trump repeatedly declared during his election campaign.” He also warned the US not to take any military actions, stressing that the “risky nuclear and missile endeavors of Pyongyang” violating UNSC resolutions could not be used as an excuse for violating international law and the UN Charter “in the same fashion” as in Syria.

    The period of US policy before the current escalation could be hardly described as an “era of strategic patience,” Lavrov added.

    “I cannot call the Obama administration’s period an ‘era of strategic patience,’ as the US has been quite harshly limiting North Korea’s capabilities to develop economy sectors related to nuclear or energy areas,” Lavrov said, referring to past US initiatives, many of them backed by the UN Security Council.

    Also addressing the matter, Kremlin spokesman Dmitry Peskov said that harsh statements do not contribute to peace and stability in the region, while commenting on South Korean President Hwang Kyo-ahn’s promise to “implement intensive punitive measures” on Pyongyang in case of any “provocations.”

    “Our position is well known and consistent. We call on all sides to avoid any actions which might be perceived as a provocation. And we stand for the continuation of coordinated international efforts in existing formats to resolve the North Korean problem,” Peskov said.

    Meanwhile tensions on the Korean Peninsula remain high: after Pyongyang conducted a missile test amid joint US-South Korea drills in March, and with at least one and as many as 3 US aircraft carrier groups headed toward the Peninsula, today North Korea’s UN ambassador said the US has “created a dangerous situation in which the thermonuclear war may break out at any moment on the peninsula and pose a serious threat to the world’s peace and security, to say nothing of those of northeast Asia.” Separately, North Korea told the BBC that the country would be “conducting more missile tests on a weekly, monthly and yearly basis,” in effect assuring a provocation.

    Judging by the market’s response on Monday, a global thermonuclear war would be just the catalyst to pust the S&P back over its all time high of 2,400.

  • Some Americans May Get Stranded On The 'Mexican Side' Of Trump's 'Beautiful' Border Wall

    While happy campaign rhetoric made it sound like building a 2,000 foot wall along the U.S. southern border would be a walk in the park, in reality, much like repealing and replacing Obamacare and/or passing meaningful tax reform, various regulatory and other hurdles could tie up the project for years.

    One such issue that threatens the viability of Trump’s ‘beautiful’ border wall stems from the fact that most of the southern border of Texas is owned by private individuals which means the U.S. government will have to take 100s landowners to court to exert its power of eminent domain.  Moreover, as NBC points out, some folks live so close to the Rio Grand River that they may end up on the ‘Mexican side’ of the wall.  Of course, these landowner fights could provide all the leverage needed for liberal lawyers to hold up the border wall construction forever, or at least until Trump gets voted out of office.

    When the U.S. government built the fence, it had to take hundreds of landowners to court to use its power of eminent domain. That’s because unlike in other southern border states, most Texas border land is privately owned, and tough terrain and water use agreements with Mexico meant some fence was built a mile or more north of the river.

     

    With court fights also expected over Trump’s wall, the Texas Civil Rights Project has begun signing up landowners and identifying people who might be affected.

     

    Under the U.S. Constitution, the government must prove it wants to seize land for public use and must offer a landowner “just compensation.” While challenging the wall’s “public use” would be difficult, those who believe they’re not getting the full value of their land could take the case to court, setting up trials that could take years.

     

    Even if they don’t win, lawyers hope to tie up the wall in court long enough that politics could effectively stop it, either in Congress or after another election.

    “That’s a fight that we’ve been ready to fight,” said Efren Olivares, a lawyer with the Texas Civil Rights Project.

    Border Wall

     

    Of course, when it comes to conservatives in Texas, almost nothing draws more ire from voters than the idea of stripping them of their private property rights through the assertion of eminent domain.  Moreover, in this specific instance, those voters will find unlikely support from any number of liberal organizations who will be all too willing to fund their legal costs to fight Trump and his wall.

    In San Benito, Eloisa Tamez spent seven years trying to stop the government from running the fence through her property, which had been in her family since the 1700s. The government eventually won, but only after agreeing to pay about $56,000, many times what it initially offered. She uses a gate to access the part of her property that’s on the other side of the fence.

     

    Now, she’s preparing for the possibility of another court battle.

     

    “I probably have one more decade to live, and I had one decade of torture,” said Tamez, 82. “I think if they start that business again, I don’t know how much fight I’ll have left in me, but I’m going to fight it until the end.”

    Something tells us that yet another Trump initiative just got demoted from a ‘near certainty’ to a ‘maybe’…right along with healthcare and tax reform.

  • US Restaurant Industry Suffers Worst Collapse Since 2009

    What tentative hope had emerged for a rebound for the U.S. restaurant industry at the start of the year, was doused last month when in its February Restaurant Industry Snapshot, TDn2K found that “Restaurant Sales and Traffic Tumble in February” and reported that same-store sales fell -3.7% in February, with traffic declining -5.0% . It did however leave a possibility that things may turn around as a result of the prompt disbursement of withheld tax refunds in the month, which it suggested may have adversely affected sales and traffic.

    Alas, that did not happen, and restaurant struggles continued in March as sales and traffic again declined year-over-year: same-store sales were down 1.1% while traffic dropped 3.4%. March results were disappointing for an industry desperately trying to reverse performance trends; with sales now negative in 11 out of the last 12 months, the longest stretch since the financial crisis. There was a modest improvement sequentially, however, and while still negative, sales improved by 2.5% points compared to February as traffic rose marginally by 1.6%.

    Source: TDn2K

    Explaining the sequential “improvement”, Victor Fernandez, executive director of insights and knowledge for TDn2K, said “March sales were expected to be somewhat better than February due in part to the catch-up of tax refunds that were initially delayed in February. In addition, the industry likely benefited from the shift in the Easter holiday, which fell in March in 2016. For the largest segments (quick service and casual dining), this holiday represents a potential loss of sales.”

    However, it was not enough: “The fact that sales were still negative in March given these tailwinds highlights the challenge chains have faced since the recession. Factors like restaurant oversupply and additional competition for dining occasions continue to take their toll on chain traffic.

    As TDn2K further adds, with a same-store sales decline of 1.6%, the first quarter of 2017 was the fifth consecutive quarter of negative results. The last time the industry experienced a similar period was in 2009 and the first half of 2010, as the economy began recovery following the recession. Only this time the move is in the opposite direction. 

    Furthermore, the first quarter of 2017 followed a very disappointing 2.4 percent sales drop in the fourth quarter of 2016, highlighting the difficult operating environment currently facing many operators.

    Worse, same-store traffic dropped even more, or -3.6% in Q1, consistent with the average -3.4% quarterly declines experienced since the beginning of 2016.

    The growth rate in check average continues to trend down slowly. For the first quarter of 2017, the average check was up 1.9%, somewhat lower than the average 2.3%growth reported for 2016. This is likely the result of brands relying more on promotions and conservative menu price increases in response to continual declines in traffic. It confirms that restaurants don’t have even the most modest pricing power to offset volume declines.

    On the other side of the spectrum, as has been the case in recent quarters, segments with the highest and lowest average check experienced better results. The strongest performance in the first quarter came from upscale casual, followed by fine dining and quick service. It is important to mention that fine dining and upscale casual are among the segments most negatively impacted by the shift in Easter.

    Meanwhile, the worst segments in the first quarter were family dining and fast casual. Family dining concepts were also among the most negatively affected by the Easter shift.

    A separate report from the National Restaurant Association found that its proprietary Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 98.8 in February – up 0.2 percent from a level of 98.6 in January, however this was the fifth consecutive month in which the Current Situation Index contracted (below 100), as  operators continued to report dampened same-store sales and customer traffic levels.

    Furthermore, the NRA found that restaurant operators overall continued to report soft same-store sales in February, with results that were similar to January’s levels. 33% of restaurant operators reported a same-store sales increase between February 2016 and February 2017, while 51% reported a sales decline, a deterioration from January. Restaurant operators also reported dampened customer traffic levels in February.

    Only 27% of restaurant operators reported an increase in customer traffic between February 2016 and February 2017, while 57% reported a decline in customer traffic. In January, 26  percent of operators reported higher customer traffic levels, while 54% said their traffic declined.

    One notable finding in the TDn2k report was that despite waiters and bartenders being the fastest growing job category under the Obama “recovery”, restaurant operators list finding enough qualified employees to keep restaurants fully staffed as a primary concern. This is mainly due to skyrocketing restaurant churn rates as current restaurant workers believe they can find better options elsewhere, only to return disappointed. Turnover for restaurant hourly employees as well as managers increased again during February according to TDn2K’s People Report. These rates are currently higher than they have been in over ten years and rising.

    Making matters worse for restaurants, some are finding that only by  offering higher compensation can they retain workers. So even if wages have been increasing slowly in recent years, this is expected to change soon as the labor market continues to tighten. In fact, according to a recent survey by People Report, about 80% of restaurant companies reported having to offer additional financial incentives to attract candidates in tough recruiting markets. In most almost all cases, those incentives take the form of higher base pay. Who would have though that there is a shortage of line cooks and waiters in the US.

    While many continue to seek answers in the pernicious tailspin in the US restaurant industry within the supply side – pricing, competition, layout – the reality is that the key variable may remain with demand.  As some have speculated, it could simply be the reluctance or inability to eat out when money is being inflated elsewhere, to cover higher cost-of-living increases in other areas, such as rent or healthcare, even as wages for large parts of the population remain frozen.

    To be sure, restaurant spending is a thermometer for discretionary spending, which varies with how well consumers are doing, and it’s the first to react as Wolf Richter correctly points out. When consumers hit their limits, the first things they cut are discretionary items, such as eating out.

    As such, the worst tailspin in the US restaurant industry since 2009 remains the biggest flashing red alert suggesting that when it comes to that invincible dynamo behind the US economy, the American consumer, things have not been this bad in a long time.

  • U.S. Propaganda Is Embarrassingly Bad (And Why It Matters)

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    When you want to see what U.S. deep state propagandists are up to, all you have to do is take a glance at what meme corporate media happens to be pushing any given week. It’s been almost a decade since I started observing and analyzing the corporate press on a daily basis, and I can now say unequivocally that the quality of American imperial propaganda has gone completely down the crapper.

    The believability of some of the stuff being pushed these days defies all logic and is easily dispelled with an ounce of critical thought, yet there it is, in our face on a daily basis almost taunting the intelligence of the U.S. population. Indeed, it appears the current strategy is no more sophisticated that proclaiming any and all dissent as being the result of “Russia operations.” This is done to prevent any actual debate on subjects of grave national importance since the U.S. government knows its claims don’t hold up to any real scrutiny. Why look into the veracity of a deep state claim when we can just dismiss alternative viewpoints as “Russian operations.”

    To see what I mean, take a look at some excerpts from a recent article published by ABC NewsBehind #SyriaHoax and the Russian Propaganda Onslaught:

    As Syrian president Bashar al-Assad called videos of last week’s chemical attack a “fabrication,” a piece of propaganda promoted by a Russian cyber operation and bearing the hashtag #SyriaHoax has gained traction in the United States, analysts tell ABC News.

     

    Following the chemical weapons attack that killed dozens of civilians on Tuesday, Al-Masdar News, a pro-Assad website based in Beirut, published claims that “something is not adding up in [the] Idlib chemical weapons attack.” Its author cited “holes” in the accounts provided by the “Al-Qaeda affiliated” White Helmets leading to the conclusion that “this is another false chemical attack allegation made against the government.”

     

    That hoax story was promoted by a network of Russian social media accounts and ultimately picked up by popular alt-right personalities in the United States, including Mike Cernovich, one of the leading voices in the debunked ‘Pizzagate’ conspiracy theory. Cernovich popularized its new hashtag — #SyriaHoax — and sent it soaring through cyberspace. According to Trends24, within hours of the retaliatory missile strike President Donald Trump launched on Thursday night, #SyriaHoax was the No. 1 trending Twitter topic in the United States.

    There are a few things I want to highlight when it comes to these first three paragraphs. First, anyone paying the slightest amount of attention to what’s happening in the world would have immediately and independently questioned why Assad would launch a chemical attack guaranteed to lead to widespread international condemnation at the very moment he was most secure in his own position. No “Russian operation” needed to recognize Assad’s total lack of motive. Indeed, two of America’s more respectable former Congressmen, Ron Paul and Dennis Kucinich both questioned the ridiculous deep state Syria narrative.

    Moreover, the reason corporate media needs to call #SyriaHoax a Russian operation is because it became the No. 1 trending topic in America. The public can’t be allowed to think this train of thought represents actual grassroots thinking (which it does), because that would imply that trust in the status quo is evaporating rapidly and uncontrollably (it is).

    Now here’s the very next paragraph of the article.

    J.M. Berger of The International Centre for Counter-Terrorism at The Hague, who studies propaganda and social media analytical techniques, said #SyriaHoax is “a clear example of a Russian influence campaign” designed to undermine the credibility of the U.S. government.

    This is pure comedy. As if the U.S. government needs Russia to “undermine its credibility.” It does a perfectly good job of doing that all on its own. Was Russia responsible for bailing out Wall Street and funneling trillions to financial criminals, thus propelling the nation into a new Gilded Age where a handful of oligarchs steal everything with impunity while the rest of the country drowns? Didn’t think so.

    It’s all very reminiscent to how the pathetic Democratic establishment responded to Hillary Clinton’s loss. Rather than admitting she was a horrible candidate who ran a delusional campaign, theyers merely deflected criticism to Russia, James Comey, Bernie Bros, etc. It’s been a very embarrassing public strategy, and the deep state is now resorting to the exact same strategy through its corporate media parrots. All dissent is a Russian operation. Anything bad that happens to America has nothing to do with our corrupt, clownish leadership, but is Putin’s fault. This is where all of this is going, and it’s further evidence that the American empire has entered a much more pronounced and dangerous period of decline.

    From a personal perspective, I know for a fact that the corporate media has a very specific narrative to falsely categorize anyone who questions the status quo as a Russian operative, because it happened to me via The Washington Post. As I noted in the piece, Liberty Blitzkrieg Included on Washington Post Highlighted Hit List of “Russian Propaganda” Websites:

    Let’s take Liberty Blitzkrieg for example. Despite the fact that my site is mentioned on “the list,” nobody from PropOrNot bothered to contact me while doing their “research.” They could’ve asked very simple questions about how the site is run, who owns it, and who makes decisions about editorial content. Furthermore, I doubt they did any such research with regard to any of the mentioned sites before slandering them.

     

    Since they failed to do any real work, let me answer several of these questions. I, Michael Krieger, am the 100% owner of Liberty Blitzkrieg. I am the only person who makes decisions on what to publish and when. I have absolutely no connections, financial or otherwise, to the Russian government, Russian interests, or the interests of any other government or government related group. Moreover, there is simply nobody on planet earth who has any influence on what I write or what I publish. I left a very successful and financially lucrative job to do what I do now because my passions and ethical grounding pushed me in this direction. If I was interested in making enormous sums of money, I could’ve easily stayed on Wall Street.

     

    Moreover, I rarely write about Russia, with the exception of trying to prevent insane neocons and neoliberals in our government from actively seeking a military confrontation, because I — like most normal human beings — would prefer not to contribute to the manifestation of World War 3. Likewise, I try to prevent war breaking out in all circumstances where I think it can and should be avoided. I intentionally almost never use RT as a source, and I’ve never quoted anything from Sputnik. Unlike The Washington Post, I try to be extremely diligent about not publishing fake news, but I am a very strong critic of U.S. government policy, because much of U.S. government policy is certifiably insane and unethical. You can disagree with my opinion on that all you’d like, but I challenge anyone to find anything that could reasonably be considered pro-Russia propaganda on my website. If Liberty Blitzkrieg really is a Russian propaganda site, this should be easy to do since I’ve published thousands of articles over the years.

    I have yet to receive an apology from The Washington Post for the lies it shamelessly promoted, but I digress.

    Perhaps most importantly, the U.S. deep state is increasingly losing the very people it depends on to sustain even the slightest degree of public credibility. I’m one example. Born in the belly of the financial beast of New York City, I was raised privileged, went to the right schools, graduated from a top university and launched my Wall Street career at the age of 22. Ten years later, I was earning a stupid amount of money for adding absolutely nothing to society, but the response from the powers that be to the financial crisis was so grotesque and unethical I could no longer in good faith continue my career. This isn’t the sort of thing that’s supposed to happen. People like me are supposed to stay loyal to the system for life due to the rewards the system bestows upon us. The fact that someone like me became opposed to a system that was so personally lucrative should be seen as a red flag for those in power. If it happened to me, it’s happened to countless others.

    Due to my upbringing and career on Wall Street, many of my close friends are from a socioeconomic class that should be deeply loyal to the power structure. The big secret is that they aren’t. Sure, many of them are forced to work in jobs and industries they despise due to familiar obligations and responsibilities, but don’t mistake this for faith or trust in the status quo. The vast majority of people I know fully understand that the U.S. system is a corrupt cesspool of shifty operators and rent-seeking scamsters. While they may need to play the game to survive and protect their families, they have no loyalty to or trust in the current paradigm and that will ultimately be very important. Multiple people told me that The Washington Post’s slandering of my website was a huge wakeup call for them, which highlighted just how dishonest the corporate press has become.

    My theory is that the U.S. has entered a more dangerous period of late-stage imperial collapse. Donald Trump was elected by many to reverse this course, but with his recent pivot away from domestic concerns to focus on war, he’ll likely preside over a dramatic and chaotic period of decline. When this happens, all sorts of people will come out of the woodwork, and you’ll see very quickly how little support the deep state actually has amongst the populace. This period will be frightening to witness, but it’s also a necessary evil.

    We must harness the opportunity and replace the corrupt, warmongering, Wall Street controlled dead-end culture and economy with a new paradigm after the old one crashes and burns, which it undoubtably will.

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