- Paul Craig Roberts Warns "A CIA-led Coup Against American Democracy Is Unfolding Before Our Eyes"
This article by Moon of Alabama is not conspiracy theory: Read it carefully. Check out the links.
The below theses are thus far only a general outlay…
- There is an "elite" coup attempt underway against the U.S. President-elect Trump.
- The coup is orchestrated by the camp of Hillary Clinton in association with the CIA and neoconservative powers in Congress.
- The plan is to use the CIA's "Russia made Trump the winner" nonsense to swing the electoral college against him. The case would then be bumped up to Congress. Major neocon and warmonger parts of the Republicans could then move the presidency to Clinton or, if that fails, put Trump's vice president-elect Mike Pence onto the throne. The regular bipartisan war business, which a Trump presidency threatens to interrupt, could continue.
- Should the coup succeed violent insurrections in the United States are likely to ensue with unpredictable consequences.
No general plan has been published. The scheme though is pretty obvious by now. However, the following contains some speculation.
The priority aim is to deny Trump the presidency. He is too independent and a danger for several power centers within the ruling U.S. power circles. The selection of Tillerson as new Secretary of State only reinforces this (Prediction: Bolton will not get the Deputy position.) Tillerson is for profitable stability, not for regime change adventures.
The institutional Trump enemies are:
- The CIA which has become the Central Assassination Agency under the Bush and Obama administrations. Huge parts of its budgets depend on a continuation of the war on Syria and the drone assassination campaigns in Afghanistan, Pakistan and elsewhere. Trump's more isolationist policies would likely end these campaigns and the related budget troughs.
- The weapons industry which could lose its enormous sales to its major customers in the Persian Gulf should a President Trump reduce U.S. interference in the Middle East and elsewhere.
- The neoconservatives and Likudniks who want the U.S. as Israel's weapon to strong arm the Middle East to the Zionists' benefit.
- The general war hawks, military and "humanitarian interventionists" to whom any reduction of the U.S. role as primary power in the world is anathema to their believes.
The article is a documented and accurate description of a coup that is underway. The extraordinary lies that are being perpetrated by the media and by members of the US government have as their obvious purpose the prevention of a Donald Trump presidency. There is no other reason for the extraordinary blatant lies for which there is not a shred of evidence. Indeed, there is massive real evidence to the contrary. Yet the coup proceeds and gathers steam.
President Eisenhower warned us more than a half century ago of the danger that the military/security complex presents to US democracy.
In the decades since Eisenhower’s warning, the military/security complex has become more powerful than the American people and is demonstrating its power by overturning a presidential election.
Will the coup succeed?
In my opinion, former and present members of the US government and the media would not dare to so obviously and openly participate in a coup against democracy and an elected president unless they expect the coup to succeed.
It is an easy matter for the ruling interests to bribe electors to vote differently than their states. The cost of the bribes is miniscule compared to the wealth and income streams that a trillion dollar annual budget provides to the military/security complex. The fake news of a Putin/Trump election-stealing plot generated by unsupported allegations of present and former members of US intelligence, the lame-duck President Obama, and the presstitute media provide the cover for electors to break with precedent “in order to save America from a Russian stooge.”
The CIA-controlled European media, the politicians in Washington’s European vassal states, NATO officials, and the brainwashed European peoples will support the coup against Trump.
The only ones speaking against the coup are the voters who elected Trump—all of whom are alleged to have been deceived by Russian fake news— the Russian government, and the 200 websites falsely described by the Washington Post and the secret organization PropOrNot as Russian agents.
In other words, those objecting to the coup are the ones described by the coup leaders as those who made the coup necessary.
I do not know that the coup will succeed, but looking at the commitment so many high level people have made to the coup, I conclude that those bringing the coup expect it to succeed.
Therefore, we should take very seriously the expectation of success that those who control levers of power are demonstrating.?
- How Trump's Tax Changes Will Impact You?
“Reduce taxes across-the-board, especially for working and middle-income Americans” – that was Trump’s campaign pledge. And now he is about to move into the White House and is backed by Republican majorities in both House and Senate, he has a real shot at fulfilling that pledge to the letter. So, what are the specifics of his plan, and how would it affect you?
As HowMuch.net details, first and foremost, Trump’s income tax reform is a simplification: he wants to cut down the number of tax bands from seven to three. But simplifying is not necessarily the same as reducing taxes. As this graph demonstrates, some taxpayers would definitely benefit from Trump’s tax reform – especially those at the higher end of the income scale. There are others, however, who would see their tax rates go up. Especially those on lower incomes.
The current income tax bands range from 10% and 15% at the lower end of the scale over 25%, 28%, 33% and 35% in the middle to the top band of 40%. Under the Trump plan, only three tax bands would remain: 12%, 25% and 33%.
This would be good news for everyone currently in the top two brackets (35% and 40%). These taxpayers would see their effective rate drop down to 33%, by 2 and 7 percentage points respectively. Conversely, the simplification would bad news for the taxpayers in the lowest bracket (10%). These would see their effective tax rate go up by 2 percentage points, to 12%.
But even in the middle, where many would stay in the same bands as before (25% and 33%), there would be losers as well as winners. Most people in the 15% bracket would drop down to a 12% rate. But a tiny sliver of top earners in this bracket (earning between $37,500 and $37,650) would have the misfortune of seeing their effective tax rate go up by 10 percentage points, to 25%.
A similar thing would happen to the old 28% bracket: taxpayers with incomes between $91,150 and $112,500 would drop three percentage points to 25%, while those between $112,500 and $190,150 would see their tax rate go up 5 percentage points to 33%.
All income amounts quoted here apply to single filers (left side of the graph); but the graph also shows the changes for joint filers (on the right). The calculation is pretty easy – double the amounts for the single filers.
The graph does not take into account other aspects of the Trump tax plan not directly related to the changes to income tax bands, such as the increase of standard deductions and a cap on itemized deductions, although of course these would also have an impact on net incomes.
- Trump Responds To Michelle Obama's Claim That He Is The "End Of Hope" For America
Michelle Obama appeared on Oprah yesterday and continued to ignore the unspoken, but widely acknowledged and obeyed, tradition of not bashing incoming administrations. When asked whether Obama was successful at bringing “hope” to America, rather answer the question, the first lady decided to attack Trump by saying that “now we’re feeling what not having hope feels like.”
Is this Michelle’s idea of “going high” when other “go low?” Notice she didn’t bother to offer any supporting evidence of how exactly Obama brought “hope” to Americans….could that be because there isn’t any?
Oprah: “Your husband’s administration, everything, the election was all about hope. Do you think that this administration acheived that?“
Michelle: “Yes. I do. Because we feel the difference now. See, now we’re feeling what not having hope feels like.“
Perhaps these 9 charts we posted back in September accurately depict the “hope” that Michelle spoke of (see “Harvard Crushes The “Obama Recovery” Farce With 9 Simple Charts“):
Or maybe these charts that we posted back in June better reflect Obama’s “Hope & Change” mantra…unfortunately, while the data scores big on the “Change” factor, it’s somewhat lacking on the “Hope” component (see “These Are The 9 Zero Hedge Charts Showing “Obama’s Recovery” That Angered The Washington Post“):
Or perhaps this 16% decline in Black homeownership rates since 2004, which we discussed just yesterday, is more what Michelle had in mind (see “Obama “Housing Recovery” Crushes “Blacks, Young Adults” As Homeownership Rates Crash“):
Of course, never one to back down when attacked, Trump told a group of supporters at a rally in Mobile, Alabama that he assumed Michelle was “talking about the past, not the future.”
“Michelle Obama said yesterday that there’s no hope. But I assume she was talking about the past, not the future because I”m telling you we have tremendous hope and we have tremendous promise and we have tremendous potential.”
- Bitter In Aleppo Defeat, US And EU Seek To Further Demonize Russia
As Russian forces help liberate the Syrian city of Aleppo this week from a four-year terrorist siege, Washington and Europe step up threats of cyber war and economic aggression with sanctions. That’s no coincidence. It is the response of accomplices bitter in defeat.
Perverse isn’t it? Instead of celebrating with the people of Syria over the liberation of Aleppo from terrorists; instead of sending massive humanitarian aid to the tens of thousands of civilians freed after being held under siege for four years by terrorist gangs; instead of commending Russia for its decisive role in restoring peace to Syria’s second biggest city, the US and European Union turn reality on its head and further demonize Moscow.
The perverse behavior by Washington and its European satraps is simply a case of sour grapes. Very sour grapes.
They have been proven spectacularly wrong about Syria. The liberation of Aleppo this week exposes the Western governments and media in their unrelenting falsehoods and systematic complicity in the Syrian war. This was never a pro-democracy uprising. It was a Western-backed criminal regime-change operation that was unleashed in March 2011, and which is now staring at ignominious defeat.
The blood of up to half a million people and many more maimed is on the hands of American and European governments.
It is no coincidence that Barack Obama this week invoked his putative presidential authority to double down on US intelligence claims that Russia hacked into the American elections to get Donald Trump into the White House. The stakes were raised to new unwieldy heights with White House claims that Russian President Vladimir Putin personally sanctioned the alleged hacking of Hillary Clinton’s emails. And Obama is now recklessly warning that his country will respond with cyber-warfare «at a place and time of our choosing».
Meanwhile, European Union leaders this week decreed that economic and diplomatic sanctions on Russia would be extended for another six months. The official reason for the measures was the ongoing conflict in Ukraine, but it is obvious that the dramatic developments in Syria were the real motivating factor behind the EU’s decision to further penalize Russia.
Addressing the EU summit, German Chancellor Angela Merkel deplored atrocities allegedly committed in the northern city of Aleppo by Syrian state forces and their Russian and Iranian allies. European Council President Donald Tusk lamented that the EU was not «indifferent to the suffering of civilians in Aleppo».
But where is the evidence either from Obama on alleged Russian cyberattacks to subvert the American presidential election or from the EU on alleged Russian (and Syrian) atrocities in Aleppo. There is, glaringly, no evidence. Yet on the back of breathless assertions, Washington is threatening to «retaliate», and European leaders are slapping more damaging sanctions on Russia. This is an insane policy of unjustified aggression.
It is especially insane considering that present and former members of US intelligence agencies do not support the White House’s assertions about Russian cyberattacks. Indeed respected former US intelligence experts have cogently argued that Washington’s claims of Russian hacking are completely spurious. Moreover, two polls reported by the Washington Times and Washington Post this week also show that the majority of American people do not believe that Russia interfered in the US election.
As for the American and European claims about «massacres» in Aleppo, amplified by the dutiful mainstream media all week, there is neither evidence nor testimonies from the tens of thousands of civilians pouring out of the former terror enclaves. The reckless claims are merely propaganda rumors put out by terrorist apologists and recycled by Western media. Perversely unreported in the Western media are the real stories of civilians having lived under horror imposed by the Western-backed so-called «rebels». Largely unreported by the Western media is the dominant mood of celebration and relief among civilians for having been liberated by the combined efforts of the Syrian army and its Russian, Iranian and Lebanese allies.
Where are the «moderate rebels» now that the veil of secrecy has finally been lifted from eastern Aleppo? Where are the so-called neutral rescuers belonging to the White Helmets, who only a few weeks ago Western media were championing for a Nobel peace prize? They are all piling on to the same buses with the jihadi terrorists to be evacuated to nearby Idlib city as part of a surrender deal. In other words, the West has been all along backing terrorists, and now their terrorist proxies are seen by the whole world as being routed from Aleppo after four years of holding the eastern side of the city hostage.
Liberated civilians tell of a reign of terror, how their family members were threatened by the Western-backed jihadis with execution if any of them dared to escape from the captive terror enclaves. Buildings recovered by the Syrian army have shown humanitarian aid, medicines and food stockpiled by the terrorists which they used to extort the civilian population. None of this is broadcast by the Western news media of course. Instead, they indulged in gory fantasies about the Syrian army committing summary executions and other atrocities against women and children. Stories, it should be noted, which have since petered out because there is no evidence to back them up.
CNN’s self-important journalist Christiane Amanpour this week gave a platform to an alleged doctor, Hamza al-Khatib, who made unsubstantiated claims that children were being massacred in a basement by Syrian forces. Amanpour expressed horror as if the allegation was fact. The same «fact» was then reiterated by US ambassador to the UN Samantha Power. Turns out that Hamza al-Khatib is not even a doctor, according the Aleppo University records, where he once studied.
CNN's alleged doctor Hamza Al Khatib with head-chopping jihadi friends
In the past, he has been photographed in the company of the jihadi terrorists who were were responsible for the beheading of a 12-year-old Palestinian refugee boy Abdullah Issa near Aleppo. Reliable sources dispute that Hamza al-Khatib is even residing in east Aleppo where he claims to be. It is believed he is hiding out in neighboring Turkey, from where he gives interviews to gullible hacks like Amanpour. (Notice his smirk in the linked interview video when Amanpour naively asks how he remains safe in Aleppo.)
Western lies and fake narratives about Syria were torn asunder this week. Sanctimonious Washington and European lackeys are exposed in their responsibility for fueling the war in Syria by giving cover to terrorist gangs as supposed «moderate rebels».
Western governments, UN diplomats and media organizations are shown to be complicit in a state-sponsored terrorist conspiracy against the Syrian nation.
Russia has played a vital and truly heroic role in saving Syria from a Western-imposed charnel house.
And so, with the bitter taste of defeat over the historic battle for Aleppo, Washington and Europe are lashing out irrationally to further demonize Russia. Cyber war threats and economic aggression through sanctions are the Western response to bitter defeat
- Russia is a 3rd World Country – 13 SECRET FACTS EXPOSED
Since publishing exclusively on Zero Hedge our expose on Russia in order to ‘counterbalance’ the propaganda out there from the deep state, we’ve learned that there is a deep FACT VOID about this mysterious culture and place called RUSSIA and requires a series of articles. This is a topic not being covered elsewhere! And as we explain in our best-selling FX book – the world isn’t
Anyone who has ever been to Russia, that is – outside of a 5 star hotel in Moscow which isn’t any different than a 5 star hotel anywhere else – you don’t need to read an article like this to agree, that Russia is a 3rd world country, or debate about how big their missiles are. Being a 3rd world country isn’t a bad thing. And of all the third world, Russia is the fastest growing. Remember, Russia was born in 1990, and is a capitalist market economy. Russia has grown by huge leaps and bounds in the past 25 years. But they lack the cultural background to make the switch to a fully market economy. What does that mean – in other words? There is a mentality that was programmed into their brains, during the Soviet Union, that still lives in Russia and with that mentality, having anything but the Soviet system is difficult or impossible. The new generation of iphones and consumerism, albeit vulgar, will have better chances at adapting to a global market economy which is what Russia hopes to be. The communist hardliners are dead and dying, and not being replaced. In a system where everyone saved and money sometimes didn’t exist (such as during Perestroika, where workers were paid with tickets, not money – which could be bartered with neighbors for example if one family didn’t drink alcohol, vodka tickets could be traded for more meat, making Russians develop a natural talent for trading in dark pools).
If everything in and of the state is basically and profoundly corrupt (which naturally prompts the question if there is any political state in the world that is not corrupt and thus Third World?).
If nothing really works but there is always ‘a way’.
If you have to pay the authorities when entering or leaving the country. If you have to do both you’re actually in a Fourth World country!
If the price of taxis are either totally negotiable or strictly determined by government regulations — amounting to the same.
If there’s always a taxi and a willing driver to be found.
If there are no ways of proving whether you’ve been drinking and/or speeding behind the wheel.
If the government doesn’t care whether you’ve been drinking and/or speeding.
If road patrols routinely consist of heavily armed military.
If the paint on the bathroom walls have been allowed to stain the shower tiles as well. In this particular respect, Italy, Spain and France would easily qualify as ‘Third World countries’. The Greeks and the peoples of the Balkan countries, on the other hand, don’t do this. I guess they admire the Germans and have to some degree been influenced by them.
If painting the doors also on the inside is considered an unnecessary expense.
Before claiming yourself a self-professed “Russian Expert” you should either be 1) from Russia or 2) speak Russian language fluently, and have lived there for a number of years or 3) have extensively studied all things Russian. If you are none of these, and want to have a quick education on the subject, here’s a few places to start:
A History of Russia: New, Revised Edition – This is a MUST READ for any Russophile, student of Russia, or someone who wants to do business in Russia. Probably, the reason this is one book written objectively that offers fresh perspectives is for the simple reason that it was written by a Russian intelligentsia in the United States, while at Yale University:
Vernadsky took a novel approach to Russian history, presenting it as a continuous succession of empires, starting from the Scythian, Sarmatian, Hunnic, and Gothic; Vernadsky attempted to determine the laws of their expansion and collapse. His views emphasized the importance of Eurasian nomadic cultures for the cultural and economic progress of Russia, thus anticipating some of the ideas advanced by Lev Gumilev.
Vernadsky became the leading American exponent of depicting Russia as much Asian and European, if not more so. He pointed out many strong cultural differences between Russia and Europe, and praised the success of Russian development along an independent path that revealed his own unique character. Vernadsky was a geographical determinist like his Yale colleague Ellsworth Huntington. They assumed that the characteristics of a land defined the character of the people and indeed of their government as well. For that reason Vernadsky was able to identify the roots of Russian culture in an ancient period long before the Slavic groups arrived. He thereby undercut the standard claim that modern Russia emerged from Kievan Rus. He emphasized the importance of the Mongol period (1238-1471), as the horde united the vast Eurasian plain under a single ruler. This gave tsarist Russia a strong centralized government as well as the deep distrust of Europe. Vernadsky was annoyed that Peter the Great tried to Westernize Russia, thereby distorting its natural character. He said Peter only succeeded in polarizing Russia into a Western oriented elite that stood in profound conflict with the Eurasian peasants. Indeed, Vernadsky argued that this polarization was one of the main weaknesses of the tsarist regime, making it incapable of dealing with the revolutionary movements of the early twentieth century. He celebrated the collapse of the European style parliamentary regime in the October Revolution of 1917 that brought the Bolsheviks to power. Vernadsky was not a liberal, nor was he a Communist sympathizer, but he did admire the Bolsheviks for rebuilding a strong Russia on non-European lines.
Unnatural Deaths in the U.S.S.R.: 1928-1954 – This is a historical chronicle about the ‘real’ deaths during this time period:
Who was worse, Hitler or Stalin? In the second half of the twentieth century, Americans were taught to see both Nazi Germany and the Soviet Union as the greatest of evils. Hitler was worse, because his regime propagated the unprecedented horror of the Holocaust, the attempt to eradicate an entire people on racial grounds. Yet Stalin was also worse, because his regime killed far, far more people, tens of millions it was often claimed, in the endless wastes of the Gulag. For decades, and even today, this confidence about the difference between the two regimes—quality versus quantity—has set the ground rules for the politics of memory. Even historians of the Holocaust generally take for granted that Stalin killed more people than Hitler, thus placing themselves under greater pressure to stress the special character of the Holocaust, since this is what made the Nazi regime worse than the Stalinist one.
This is just a good start. If you really want to know any culture – the only way is to go there, live there, do business there. But for those with a short attention span, that enjoy throwing objects at their TV when the reporters tell them something they don’t like, here we go:
SECRET FACTS – RUSSIA IS A 3RD WORLD COUNTRY
1. 80% or more of the Russian economy is unknown. This is because it all happens ‘under the table’ to avoid taxes. This will change probably, but as of now, workers are paid ‘white’ and ‘black’ salaries. You can read about this here. Auditors and government workers are bribed, wined and dined, when they inspect the books. It’s a system everyone likes, that just ‘works’ – but it is impractical to make economic forecasts for such a system. This system is also on the highest levels, as oligarchs wealth is often owned by dead people. Of course, this practice isn’t heavily documented, because the whole idea of this under the table system is to not leave any paper trail! Businesses even keep a full set of ‘white books’ and ‘real books’ like the mob used to do. Yes – this is business in Russia!
2. Bankruptcy doesn’t exist. There is no concept of bankruptcy. There are even banks that offer really high interest loans (there are no usury laws) that will hire strong men to ‘scare’ you into paying, which might include breaking a leg, burning down your shed or in extreme cases, maybe holding a relative in their ‘office’ – yes this goes on and it’s not done by the MAFIA it’s done by the BANKS!
3. Russian healthcare system is ‘not to Western standards’ although it is ‘developing.’ 25% of males die before they are 55 years old, mostly due to alcohol.
4. The primary currency used is physical rubles, that means PAPER. When local people believe the Ruble will depreciate in value, they will exchange their paper Rubles for physical US Dollars or Euros and literally – keep them under the mattress.
5. You have never seen roads in such poor conditions. Around the Kremlin, and in rich areas of Moscow, roads are OK. Outside of this area, harsh Russian winter wreacks havoc on roads that were never built to European or US standards, as they would be in Chicago or Boston. See this road in Volgograd:
This is why invading Russia has historically been impossible. Of course, not all roads are like this – but many are.
6. Only in Russia meme – Just google “Only in Russia” or checkout this article.
(Letters say “We watch you! – You must be 18+ to use this game)
7. Russia is not a pleasant country to live in. The weather in winter is worse than in Canada, Wisconsin, Maine, or your average US northern city. Only Alaska is comparable to Russian climate.
8. Putin is not a dictator – he is just VERY popular. But anyway, 3rd world countries usually have a “Putin” or “Castro” which is almost more than a President – a cultural leader. Putin meets this criteria. People keep photos of Putin on their walls. They sell them, along with small busts of his head at every Metro station. Russian people are simply crazy for Putin. To understand this better here’s a WAPO article on the topic.
9. In Russia there is not such a thing as ‘consumer rights’. Grocery stores sell spoiled food. There’s no ‘return policy.’
10. Corruption is just considered part of government life (see example here). Finding a government official that was not corrupt, would be unusual. For example, in a small town the government decides to ‘renovate’ streets and parks, so they assess a special tax to residents (normally, there is no real estate tax in Russia). But 90% of the collected money goes into the pocket of the officials, and little is left to clean up the streets.
11. The average pension in Russia is $148 USD. The average Russian pension is paid IN CASH by Government official on a monthly basis, at the property of the pensioner.
12. 24% of the entire population HAS A BANK ACCOUNT. In the USA about 95% of eligible persons (excluding children, illegal immigrants) have bank accounts.
13. If using the income disparity guage of what is third world, experts say in this report from CNBC that RUSSIA IS THE MOST UNEQUAL country in the WORLD – even MORE than the Arabs. What happened after the collapse of USSR, the Russian Elite allowed the seizure or ‘privatization’ of state assets by individuals who became ‘Oligarchs’ which are the US equivalent of “Robber Barons” that literally inherited state owned assets because they were really, really, really, really, really, really lucky. But the practical fact is that an Oligarch class is needed for any Capitalist society to flourish.
Russia has grown by huge amounts. They have produced some of the world’s leading thinkers, scientists, artists, writers, composers, and other talent. Now, the global Russian oligarch class challenges mainstream Western business. But keep it all in perspective, Russia has a long way to go. In the meantime, don’t worry about Russian hackers breaking into your home office. They have problems of their own to solve.
Don’t believe us – read some of these books and articles:
- Harvard Professor Admits His Efforts To Turn Electoral College Against Trump Have Failed Miserably
A few days ago we wrote about the Harvard Professor, Larry Lessig, who was offering free legal services to any Republican elector willing to consider switching their vote from Trump to any other candidate when the electoral college meets on December 19th (see “Harvard Professor Says He’s Rallied Nearly Enough GOP Electors To Block Trump“). At the time, Lessig said he was in active discussions with 20 electors, all of whom he claimed had vowed to switch their votes.
That said, in an interview to be aired tomorrow on “Aaron Klein Investigative Radio,” the disaffected, leftist, sore loser admits that his efforts to disrupt the 2016 presidential election have been a colossal failure and will likely result in only a handful of electors switching their votes. Per Breitbart:
“But I think that we are not going to see more than a handful who actually vote against Donald Trump unless that number climbs above 40. Because I think there are many people who think it is just not worth it given especially the pretty explicit threats that have been made against the electors who exercise their constitutional prerogative.”
Of course, with Trump earning 306 electoral college votes on November 8th, Lessig needed to pool a group of at least 37 electors to push the election to Congress. But with Congress controlled by Republicans, Klein asked the “triggered” Lessig whether his efforts were an exercise in futility as Trump would almost certainly be elected anyway. Apparently anything that would keep hope alive for just a little longer was worth the effort to Lessig who said “in the House there are a lot of things that could happen.”
“You know, in the House there are a lot of things that could happen. You know, people could judge the fact that he was the first president to be denied the nomination of the Electoral College for reasons like this. There was a vice president in 1836 who was denied. But he would be the first president as a kind of fatal blow. And in that House, the Republicans might consider, ‘Well, is there another candidate?’ It would have to be among the top three vote-getters of the Electoral College. But is there another candidate who we should nominate instead? And that’s why people have been talking about alternatives like [Republican Ohio Gov. John] Kasich. Or it could be anybody who gets the votes of the Electoral College that are in the top three. And such a move might actually for the nation be incredibly important to get beyond the horrendous political partisan divide that we now find ourselves in. That might be a good reason for them to act like that.”
For once, Hillary actually said it best: “some people are sore losers…”
- Former Fed Advisor: State Pensions Time Bomb Spells Disaster For The US
Underfunded government pensions to the tune of $1.3 trillion, with a gap that just can’t be filled, is the ticking time bomb facing the US economy which faces dramatic cuts in public services – and potentially riots reminiscent of Athens six years ago – according to former Federal Reserve advisor, and President of Money Strong, Danielle DiMartino Booth.
As she picks apart the danger signs with the US on the precipice of recession, it’s the impending pensions crisis that keeps her awake at night, sharing the gloomy sentiment laid out in an extensive March 2016 Citi report titled “The coming pensions crisis.”
With few people taking part in what little recovery the US has had, and given how stretched pensions are, checks are going to have to be written from Washington sooner than you think, DiMartino Booth told Real Vision TV in an interview. “The Baby Boomers are no longer an actuarial theory,” she said. “They’re a reality. The checks are being written.”
A Bulldozer Couldn’t Fill the State Pensions Gap
The $1.3 trillion pensions deficit just takes into account state and municipal obligations, and with promised returns of 8% and funds compounding at 3% for decades it will take nothing short of an economic miracle to recover. “The average state pension in the last fiscal year returned something south of 1%. You cannot fill that gap with a bulldozer, impossible,” DiMartino Booth said. “Anyone who knows their compounding tables knows you don’t make that up. You don’t get that back unless you get some miracle.”
The last time we saw significant market weakness, the baby boomers pretty much accepted that they would be retiring at 70 instead of 65, she added. “Well, guess what? They’re turning 71. And the physiological decision to stay in the workforce won’t work for much longer. And that means that these pensions are going to come under tremendous amounts of pressure.
“And the idea that we can escape what’s to come, given demographically what we’re staring at is naive at best. And it’s reckless at worst,” DiMartino Booth said. “And when you throw private equity and all of the dry powder that they have — that they’re sitting on — still waiting to deploy on pensions’ behalf, at really egregious valuations, yeah, it’s hard to sleep at night.”
Pension Fund Underfunding is Ground Zero
The interview with Real Vision was held in Dallas, which DiMartino Booth said is Ground Zero for the pensions crisis, where returns for the $2.27 billion Police and Fire Pension System have suffered due to risky investments in real estate made over a decade ago. Huge withdrawals are now taking place, amid concerns over the future viability of the pension scheme, which commentators say could be flat broke in a little over ten years.
“We’re seeing this surge of people trying to retire early and take the money. Because they see it’s not going to be there. And if that dynamic and that belief spreads– forget all the other problems,” DiMartino Booth said. “The pension fund — underfunding is Ground Zero.”
The gravity of the situation with the lack of returns is magnified by the fact that the underperformance has been going on for between ten and 15 years. Calpers, the California Public Employees’ Retirement System is a case in point, amid reports that it returned just 0.6% last year compared with its long term target of 7.5%. With the legal language tightly written on pensions like this across the country, such that states and municipalities won’t be able to break free of their obligations, DiMartino Booth thinks the endgame will evoke memories of the Winter of Discontent in London in 1979 and more recently the riots in Athens as key public services are cut.
Angry Country, Angry World – The Wealth Effect is Dead
“This is where the smile comes off my face. We are an angry country. We’re an angry world. The wealth effect is dead. The inequality divide is unlike anything we’ve seen since the years that preceded the Great Depression,” she told Real Vision TV. “Where’s the money going to come from? And the answer is, for now, they cut services. I’ve just written about the Winter of Discontent and the rubbish piled up in central London streets in 1979, as Thatcher was coming in. I worry about the ambulance not getting there in time. I worry about firefighters being cut to the bone and policemen.”
The seriousness of the issue might not have hit home yet in Denver, where the state budget for tulips had to be cut recently to top up the pension fund, she said, but what happens when you are not talking about flowers anymore and when you are talking about a very populous state like Illinois?
“If the actuaries are going to force the checks to be written and reduce the rate of returned assumptions to anything remotely related to reality, then we won’t be laughing anymore looking in the rear view mirror at the riots in the streets of Athens a few years back,” DiMartino Booth warned.
Visit Real Vision TV to watch this exclusive full interview, free to all. Real Vision TV is a video-on-demand channel for finance, offering over 500 videos from 200 of the world’s sharpest investment minds. Think of it as what CNBC could have been if it actually focused on quality of content.
- Toward A New World Order, Part III
A new world order is coming of age and the transition is painful to accept for a Western middle class with a deep-seated sense of entitlement.
We showed how the West feels threatened globally in Toward a New World Order and followed up explaining how this translate into domestic politics in Toward a New World Order Part II. We will now continue this series by showing how gross economic mismanagement have created the new political class that we described in part two.
As we stated back then, a large and increasing part of the electorate, swayed by neither the political correct socialist/feminist/cultural relativist dogma presented by the left, nor the lip service paid to free markets by a corrupted right, have taken hold in western democracies. They form a directionless blob of potential voters which until recently have drifted aimlessly along the political spectrum. Now they have made up their mind and it is proving pundits clueless as to what is going on. The “worker” making millions on Wall Street or by helping Google refine their search engine is not the same “worker” we find in flyover America. The young billionaire making apps to entertain confused millennials and snowflakes is not the same capitalist as the shale oil investor we might encounter in North Dakota. Political classes traditionally defined are useless as a tool to understand the world today. What is important to note though is that a growing minority of people with little to lose from the status quo is about to, or in many places have already become a small majority.
When people have nothing to lose and foresee a future of continued hardship they become desperate and are willing to change for the sake of change itself. When the current leadership provide nothing but more of the same hopelessness, they will move politically toward to candidates with views counter to that held by the establishment.
Before we move on, let us examine the upcoming election in France to show what we mean. In the traditional way of viewing national politics in France, it will be impossible for Le Pen and her Front National to win. Why? Because the left will hold their nose and vote for right-wing Republican Fillon in the second round to strategically avoid Le Pen. While some undoubtedly will follow the traditional recipe of left-right politics, it is far from certain that enough will do so to avoid a Le Pen victory. On the contrary, as we showed in part II, this line of thinking is outdated and a better representation is shown in the chart below.
Using our methodology, we come up with a far more likely scenario on how the French voters will vote come May. With the center right representing everything the middle class loath, they will not migrate from the center-left to help Fillon to victory. Le Pen’s vote base is not disillusioned UMP voters, but blue-collar workers that used to support the socialists and militant French unions. We do not draw this conclusion from some unique insight into French politics, but from observing a tendency across the whole of western society as a larger and larger share of the population have lost hope for the future. One of the most primal driving forces in humans is the belief in a brighter future. Dirt poor in Africa or pampered by the European welfare state, it does not matter. What matters for the positive development of the human spirit is an expectation that next year will be better than the current one. If that belief is taken from them, they will most certainly force real change on the system as they feel there is little to lose.
So what went wrong? There are many answers to this question and we have tried to address several on them on these pages earlier, such as excessive debt levels, monetary policy gone awry and demographics. We would also add to the list that we have seen a general tendency toward destructive policies as a result from people losing purpose in life; in this regard, it is no coincidence that environmentalism appeared as a new form of religion on the “godless” continent.
In That 70s Show (part I, II, III and IV) we spelled out how things changed after Nixon took the US dollar off gold and gave the Americans the ability to exchange nothing for something. Obviously, this created an irresistible incentive to consume more than the Americans could produce, which in turn artificially changed relative prices. A new productive structure emerged because of the new set of prices, but unless the dollar issuance continued, and even accelerateed, it would not be possible to sustain the ensuing capital allocation.
In other words, this road have taken us all down a very unpleasant path as every time the central bank, and/or the commercial banking system (including global dollar claims dubbed Eurodollars) is forced to retrench a recession must necessarily set in as the nothing-for-something-transaction have to be undone. However, as long as the global community accept dollar claims as money good the banking system can always gear up in time of crisis to avert the worst of inbuilt consequences stemming from past folly.
What made 2008/09 so special is the fact that the global dollar community had in fact reached peak debt. In other words, further dollar claims were no longer considered money good and the global banking system could no longer reflate the balance sheet, as this would have been unacceptable to their counterparties. A different way of looking at this is through the capital structure. At peak debt the current structure can no longer be funded as the pool of real savings is gradually depleted by the incessant something-for-nothing-transactions. We, as participants in a global economy, have essentially been consuming our seed corn.
In the 1970s the US economy employed about 50 per cent of its workforce in private sector service occupations. However, as the nothing-for-something system got under way the share of service sector employment rose almost constantly to reach more than 70 per cent today. This transformation can be characterized as a move away from tradable sector toward non-tradable, and was inevitable since the US manufacturing sector essentially had to compete against foreign products that cost the American system nothing to procure.
Service sector jobs have, or at least used to have, less scope for productivity improvements and hence real wage increases. Furthermore, goods producing sectors were clearly affected as they could no longer compete successfully against foreign producers. As a consequence, investments fell, thus dragging down productivity even more. Wages in tradable sectors naturally stagnated as a result. Amazingly, the real wage level in the 1970s for middle class workers is the same as today (using the BLS headline CPI index as deflator). Service sector wages must follow that of the goods producing sector and stagnated too.
Why did this not create a political movement toward National Socialism decades ago? Simply because artificial dollar claims were still considered money good worldwide. An increasingly creative financial system, in no doubt cheered on by corrupt politicians, thus took the best and brightest and told them to create ever more dollar liabilities to satisfy world demand. The masses could thus leverage their balance sheet with ease as banks needed collateral to sell abroad. Until 2008 that is. From that point on it all came crashing down as dollar claims were suddenly deemed unsafe. Banks could no longer expand their balance sheet at will and therefore the households and business couldn’t either.
The real pain from a four-decade long boom was suddenly felt as the system moved away from its exponentially rising growth trend toward one allowed by a broken Eurodollar system. (Some of the charts below came to be with great inspiration by the excellent work of Alhambra Investment Partner economists Jeffery Snider).
We could go on, but you get the picture. The recession of 2008 triggered a structural change in the global economy, and we are confident that the mechanism behind it is the breakdown of the Eurodollar system that came about at peak debt.
Before we end, we would like to highlight one more thing. As the American worker had to compete with zero cost foreign competitors, manufacturing businesses in the US were forced to either move abroad, shut down or invest in automation. This pressured workers even more and help explain why industrial output continued to rise even though the number of employees in the sector fell in successive waves. It is also noteworthy that this positive trend ended with the collapse of the Eurodollar.
Bottom line, the new world order that made itself felt in 2016 will be even more pronounced in 2017 with elections in the Netherlands (Geert Wilders could end up kingmaker or even prime minister), France (we predict a Le Pen victory) and Germany (where AfD will surprise everyone).
Next time we will look at the investment implications from all this.
- Paul Krugman Loses It: Hints At Trump 9/11-Style Attack False Flag
Some establishment types took the election of Donald Trump – and the implicit rejection of their omnipotence – a lot harder than others. Perhaps the arch-Keynesian himself, New York Times' Paul Krugman, is the best example, lashing out this morning at the ignorance of Trump voters once again (well they must be ignorant, right?) along with his co-conspirators Noah Smith and Brad DeLong, exclaiming:
"A fact-constrained candidate wouldn’t have been able to promise such people what they want; Trump, of course, had no problem."
And falling back to playing the race card also…
"California is an affluent state, a heavy net contributor to the federal budget; it went 2-1 Clinton. West Virginia is poor and a huge net recipient of federal aid; it went 2 1/2-1 Trump.
I don’t think any kind of economic analysis can explain this. It has to be about culture and, as always, race."
But, it was a tweet that the great "debt doesn't matter" guru blurted out this morning that has many questioning his sanity (or paranoia)…
Thought: There was (rightly) a cloud of illegitimacy over Bush, dispelled (wrongly) by 9/11. Creates some interesting incentives for Trump
— Paul Krugman (@paulkrugman) December 16, 2016
We are shocked that Twitter followers have not demanded Krugman be banned, blocked, and shamed for such conspiracy theory hate-speak.
Reading between the lines of the so-called economist's comment, he appears to be suggesting that president-elect Donald Trump has an "incentive" to stage a 9/11-style terrorist attack in order to legitimize his presidency ("like Bush did"?)
Hell, we nearly had a seizure upon reading this, though not of course as bad a Kurt Eichenwald's…
* * *
Now, does Krugman's tweet seem like real news worthy of the great New York Times' columnist or "fake news"? Is this the kind of suggestive propaganda that The CIA is hoping maintains a groundswell of "well, if he is not hitler… he must be worse" thoughts among those so easily led? Still, coming from a man who has prognosticated alien invasions as a global economic growth engine, we are not sure if he is mental situation is improving or deteriorating.
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