Today’s News 19th December 2016

  • Trump Can't Stop It: "The People Who Have Been Orchestrating The Collapse Have Not Halted Their Agendas"

    Submitted by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces (Airborne)) via SHTFPlan.com,

    There are some very somber, pragmatic articles circulating as of late that present a true snapshot of the difficulties the U.S. faces after eight years of Obama.  One of these articles is a well-written, thought-provoking piece by Susan Duclos of All News Pipeline, entitled We are Facing the Most Important Battle of All at the Most Dangerous Moment in History The piece shows what we’re up against and cautions all of us not to rely on the “magic fix” of Trump’s victory to side rail our preparations and vigilance.  Here is an excerpt from that excellent article:

    We at ANP are noting a lot of optimism from investors with stocks soaring,  to economic confidence reaching new highs, to small business owners, to household spending and even prepping has hit a “multi-year low,” all the articles I am reading are crediting the election of Donald Trump as reason for all this optimism, but as much as I hate to rain on everyone’s parade… now is the most dangerous time in history, not a time to assume just because one man was elected, all the wrongs will be made right, the failing economy will automatically just magically fix itself.”

    Susan deserves special thanks, as well as Stefan Stanford; their coverage of developments has been spot-on and unwavering in their attempts to present objective and factual reporting, while warning readers akin to modern Paul Reveres that the battle is not over by any means.  In reality, it is not even close to being over.  I recommend reading the article’s section toward the beginning under “THE ECONOMY IS COLLAPSING” paragraph introduction for statistics on where we stand economically at this moment in time.

    There was a piece released by Michael Snyder of the Economic Collapse Blog on December 8th entitled It is Like a Nuclear Bomb Went Off in the Prepping Community, another timely piece that warns of the complacency settling in now that most conservatives believe that Trump will be the vaccine for the country’s illnesses.  Here is an excerpt from that article:

    Not since the election of Ronald Reagan has the mood on the right shifted in such a positive direction so suddenly.  But now that everyone is feeling so good about things, very few people still seem interested in prepping for hard times ahead.  In fact, it is like a nuclear bomb went off in the prepping community.

     

    As the publisher of The Economic Collapse Blog, I am in contact with a lot of people that serve the prepping community.  And I can tell you that sales of emergency food and supplies have been crashing since Donald Trump’s surprise election victory.  Firms that help people relocate outside of the United States have seen business really dry up, and I know of one high profile individual that has actually decided to move back to the country after Trump’s victory. 

     

    It is almost as if the apocalypse has been canceled and the future history of the U.S. has been rewritten with a much happier ending.  Personally, I am quite alarmed that so many people are suddenly letting their guard down, but it is difficult to convince people to be vigilant when things seem to be going so well. 

    Mike’s sentiments are completely accurate and I agree with them wholeheartedly.  The people who have been orchestrating the collapses of national governments (Ukraine, Libya, and Egypt, for example) and have been funding the “fundamental transformations” of other areas, (such as Syria and Yemen) have not halted their agendas.  And, why would they?  There are hundreds of billions of dollars at stake that have already been invested in the planned collapse of all the nations of the world and the absorption into one global governance split (as written in earlier articles) into three areas to promote “homogeneity” and management along lines of ethnic, cultural, and genotypical similarities.

    It appears as if the U.S. may take a little bit longer than expected, now.  “May” is still the deciding word.  Remember: the 9-11 attack was what enabled Bush Jr. to propel the U.S. toward a police state.  The John Warner Defense Act was signed in 2006, and the Patriot Act did not originate under Obama, but under Bush.  You can see the “Overton Window” principle and the resultant paradigm shifts as you observe each successive election and term of office…the “back and forth” from (supposedly) Conservative to Liberal administrations.  Reagan (8 years) and Bush Sr. (4 years, when the decline began), followed by Clinton (8 years) and then Bush Jr. (8 years) and then Obama (8 years) …and here’s Trump for at least 4 years.

    The Republican administrations gave a few “small pushes” toward globalism, while the Democrats gave “huge pushes” that moved the line of what the public could tolerate further along the path… alternatingly scaling back with the Republican administration that followed.

    The globalists need the illusion of the two-party system to enable a “reprieve” in the minds of the people with the rise of a Bush or a Trump…but the reprieve is merely an illusion.

    If these Marxist traitors forced their agenda on the people all at once, there would have been a revolution in its inception.  They alternate: destroy the society and the culture to the max under a Democrat administration, and then “scale back” a bit under a Republican administration while still nipping away at the edges with an “Act” here, or a “piece of legislation” there.

    The proof to this pudding is that Trump will not completely clean house and redo the existing political, economic, and social order when he takes office.  Already he has reneged on campaign pledges to repeal Obamacare and build a complete physical barrier between Mexico and the U.S.  He is not going to deport the illegal aliens.  He is going to emplace several people in his cabinet who are known to be either in the pockets of the corporations (such as Mnuchin), or have stances that diametrically oppose his own campaign pledges (such as his selection for White House Chief of Staff who supports amnesty for illegal aliens).

    It may take them a little longer, but Trump will not be able to undo the current course toward the collapse of the United States and the relinquishing of national sovereignty in favor of global governance.  He may be (wittingly or unwittingly) helping it along.  I believe the former will be the case.  Remember Bush Jr.’s departure from the White House?  He gave Obama a manila file folder, marked “From 43 to 44,” in reference to their sequential order as presidents.  Wonder what was in it, don’t you?

    Wonder what Obama will be handing “Number 45” before (and if) he departs?  There should be no doubt in anyone’s mind that there is an agenda that Trump will follow that is larger than his own.  The global manipulators behind the scenes have handed the American people their “champion” and a slight reprieve to avoid a revolution that would have been far from bloodless.  We’re still in a mess overall, and Trump will either knuckle under to their demands in the manner of the aforementioned pattern of their choosing, or they’ll remove him from office.  Meanwhile it is important not to lose focus, to stay aware, and continue to prepare for the eventual collapse, regardless of what the majority does or doesn’t do in denial of the true situation.

  • AG Lynch Admits She "Regrets" Tarmac Meeting With Bill Clinton

    As yet another member of President Obama's administration desperately attempts to define their own legacy (with words other than "failed", "rigged", or "favoritism"), Attorney General Loretta Lynch put on her gentlest, quietest voice for an 'exit' interview with CNN's Jake Tapper, admitting she "regretted sitting down" with Bill Clinton because "it gave people concern" and wants to be remembered for ensuring justice to "all Americans."

    As The Hill reports, Lynch said Sunday that the fallout from her tarmac meeting with former President Bill Clinton was "painful" for her.

     

    "I do regret sitting down and having a conversation with him, because it did give people concern. And as I said, my greatest concern has always been making sure that people understand that the Department of Justice works in a way that is independent and looks at everybody equally," Lynch said on CNN's "State of the Union."

     

    "And when you do something that gives people a reason to think differently, that's a problem. It was a problem for me. It was painful for me, and so I felt it was important to clarify it as quickly and as clearly and as cleanly as possible."

    The Clinton campaign has cited Comey's decision to send a letter to Congress just days before the election about newly discovered emails as one of the reasons she lost.

    "But certainly if Bill Clinton hadn't gotten on the tarmac that time and gone to you, things might have been different," said host Jake Tapper. "You would have had more say. You would have been able to control Comey more … It might have changed the letter that he gave at the end there."

     

    Lynch replied: "I don't think it would have changed his view of what he had to say or not say to Congress."

    So to be clear, Lynch regrets the meeting only because she was caught and it caused controversy… not because it was clearly a bad judgment call!

    But, as Lynch went on to explains, she wants her legacy at DOJ to be one of inclusion

    Once again, defining the narrative is key – "inclusion" – which appears to defined by her and the DoJ as easing and deciminalizing any law-breaking activity that appears to bias against poor or minorities (whether or not they actually broke the law or not). As a reminder, The New York Post noted earlier this year that even a senior Justice Department official predicts the decriminalization-cum-deincarceration movement will backfire in higher crime nationwide. “In five years the crime rate is going to be crazy again,” he said.

    The official, who oversees probation of felons paroled from federal prisons and who requested anonymity, worries the new department policy will be abused.

     

    “I don’t see liberal judges even attempting to make people pay or spending the time making an accurate determination of a person being ‘indigent,’ ” he said. “It’s another way of not holding people accountable for their actions.”

     

    The Justice guidance defines “indigent” as anybody who might be “eligible for public benefits,” but not actually receiving them. “Jurisdictions may benefit from creating statutory presumptions of indigency for certain classes of defendants,” the source said.

     

    The administration claims cops and courts conspire to exploit poor blacks to generate city revenue in some kind of shakedown. But data show blacks fail to pay their fines at far greater rates than whites, so why not target whites if cash extortion is the objective?

     

    Many of the cities with the highest fines, such as Philadelphia, are run by Democrats; and the Justice Department is no piker when it comes to levying fines.

     

    “US attorneys always want fines and restitution amounts in the millions from people who have little chance of ever paying it back,” the department official said.

     

    Liberals are actually to blame for the trend they’re trying to reform. Court fines and fees help pay for all the new costs liberals have added to the system, such as drug counseling and home electronic monitoring. They’ve also pushed judges to assess more fines in lieu of incarceration, especially for drug offenders.

     

    Yet now they claim the whole court fine and bail system is racist.

     

    Former federal civil rights attorney Hans Bader, now with the Competitive Enterprise Institute, describes the latest reforms as a “massive assault on the criminal justice system.”

    It’s a slippery slope to clemency for criminals, large and small.

  • Damaging The Deep State: Trump, Russia, And China

    Submitted by Alasdair Macleod via GoldMoney.com,

    Even before he takes office, President-elect Trump is turning the world upside down.

    It has become clear his attitude towards Russia and China is very different from that of his predecessors. Amazingly, he is already wresting power from the deep state, causing it great resentment, which under Obama, Clinton and the Bushes, ran geopolitical policy. From January, barring accidents the world will not be the same, the establishment up-ended.

    This short article builds on information available to date and speculates how America’s relations with Russia and China are likely to evolve, and the implications for NATO and Europe. It attempts to cut through the disinformation and noise (from all sides) to assess how Trump will change super-power relations.

    Russia

    President-elect Trump has signalled his respect for President Putin as a leader, and Putin, who has been careful to not comment on the US presidential election, has indicated his respect for Trump. Furthermore, Trump, who admittedly said lots of contradictory statements to get elected, clearly wishes to reduce America’s funding commitment to NATO and to reduce American involvement in the Middle East. These objectives will obviously find favour with Putin, and could form the basis of a relationship reset between Russia and the West.

    The American deep state was responsible for moving missiles within range of Moscow, under cover of targeting Tehran, in this year’s escalation of a new cold war. It follows the covert destabilisation by the US of Ukraine over the last decade and American backing for various terrorist groups in Syria, following Syria’s refusal to permit pipelines from the Gulf to cross her territory five years ago. Since the fall of the USSR, NATO has moved its eastern border to within 300 miles of Moscow. Elements in the CIA, working to their own agenda, are still trying to demonise Russia without any evidence, as the Washington Post story about Russian intervention in the election demonstrates.

    The Trump team dismissed this attempt to blacken the Russians as disinformation, from the same sources that came up with the fiction of Saddam Hussain’s weapons of mass destruction. The timing of accusations over Russian involvement probably has much to do with influencing the electoral college’s votes, a last stand against Trump’s election, in which case the intervention is politically outrageous. But this is a side-show, and doubtless Trump will deal appropriately with those involved when he is in office.

    Rather like super-tankers that need seven miles to stop, regional powers are also finding it hard to adjust to these new realities, but adjust they surely will. European governments and NATO members will have had background briefings, but the normal channels for this, the CIA, the US Military advisers and American diplomats are not on Trump’s page, so confusion still reigns. But one thing is becoming clear: Trump will not be diverted from a general policy of détente and de-escalation of military presence in both Europe and the Middle East.

    The process of détente is reasonably predictable. A summit with Russia to agree strategic arms limitations (called SALT3 perhaps?) is a proven path to follow. It should be a step-by-step process scheduled over five or ten years, with pre-agreed conditions designed to satisfy concerns in the Baltic States and Poland that Russia might attempt border-creep. For their part the Russians must agree Ukraine’s independence (excepting the Crimea, Donetsk and Luhansk, which should be formally ceded to Russia). Ukraine and Belorussia will be independent buffer states between Russia and the European Union. Under a SALT3 both NATO and Russia will agree to a phased withdraw of all military hardware other than limited ground troops and their associated equipment.

    In the Middle East, America will concede that Syria remains in the Russian sphere of influence, and will withdraw all support for rebel organisations. This is no more than reality. China, doubtless, will help in the physical reconstruction of Syria in due course. Agreement will be sought as to the means of destroying Daesh. Beyond that, a reduced American presence in the region will continue to ensure security for Israel and the Gulf states. Already, the British have announced they will step up their presence in the region, which should also contribute to regional stability.

    Iran should be persuaded by Russia to take a more constructive approach to peace with Sunni states, such as Saudi Arabia, and towards Israel. This could be difficult, but should be possible, given Iran has become considerably more moderate since the days of Ahmadinejad, particularly if the right tone from America is forthcoming. Iran’s days of hiding from western sanctions behind Russia will be over, and should be replaced with an emphasis on trade. And Saudi Arabia can no longer afford to wage wars, such as that in the Yemen, contributing to a less belligerent outcome.

    All this is practical, possible and predictable. Behind the change in geopolitical reality for the Middle East is the fact that Peak Oil is being pushed further into the future. Not only are large new oil fields still being discovered (such as the Kashagan Field in the north of the Caspian Sea), but modern technology is bringing other forms of ecologically-friendly energy supplies on stream and higher prices will unlock shale oil supplies. The strategic importance of the Middle East has therefore declined, particularly since insignificant quantities of oil from the region go to America. And with that decline goes less need for geostrategic intervention by the US.

    For the first time since the Six Day War in 1967 there is a realistic possibility of stability in the area, assuming the super-powers take a constructive approach to détente, and are willing to jointly police the region.

    Regional implications of détente with Russia

    The benefits of regional peace to the Middle East will, hopefully, materialise. Turkey is important, and will need to be considered as well. The coup attempt earlier this year, which was likely supported if not actually instigated by the US, has resulted in Erdogan tightening his grip on all opposition to his rule. However, Erdogan may have become Russia’s puppet, because the Russians appear to have tipped him off ahead of the coup and ensured its failure. If this is indeed the case, not only does he owe his power to Russia, but Russia can take it away. Under Russian influence, we can expect Turkey to continue to lean away from her impractical and unrealistic hopes of joining the EU, and instead pursue her more recent ambitions for membership of the Shanghai Cooperation Organisation. That would offer Turkey the best long-term future.

    With Turkey’s future direction appearing to be decided, far more important is the effect of a reset with Russia on Europe and the European Union. As NATO members, European nations have gone along with Russian sanctions, which have been detrimental particularly to Germany’s economy. Their removal will give Germany a new long-term trade market of considerable potential, reducing her dependence on trade with other EU states, particularly France, Spain and Italy. The possibility of a new Hanseatic League, about which I wrote last March, is now on the cardsi. I was very surprised that it hadn’t been considered by the British Government and discussed with the Germans as a Plan B in the event of a vote for Brexit. However, the prospect of détente with Russia leads to a new Hanseatic League now becoming a realistic possibility.

    Briefly, the trade route to Russia, both by sea through the Baltic and overland by rail and road, offers enormous trading potential for Germany, Britain, Holland, and Scandinavia. To this we can add Poland, Czech Republic, Slovakia, Austria, Hungary, and to a lesser extent, Romania, Bulgaria and Serbia. Furthermore, a northern trade route will link into China’s One Belt One Road project, further enhancing its importance. In short, the long-term future of France, Spain, Italy and Greece will be challenged by the rehabilitation of Russian trade, and potentially become one of relative isolation. An overriding reason why Russia will become so important is because of her partnership with China in the Shanghai Cooperation Organisation. Russia is, with sub-Saharan Africa, the source of natural resources for China’s planned industrialisation of all Asia. And as a resource-rich country, Russia will benefit from the continuing rise in raw material and energy prices. Détente with America and NATO will improve her economic outlook considerably, but she needs European commercial technologies and manufacturing techniques to help rebuild her own middle class’s wealth.

    The underlying reasons a SALT3 will work for Russia are all there, and Trump is likely to take the view that Western Europe should not be his responsibility. There is little US trade with Russia, so trade negotiations for America are not in this mix, simplifying matters considerably. The trade bun-fight will be mainly confined to negotiations with China.

    We can be sure that there will be a summit between President Xi and President Trump early next year, because Henry Kissinger, who is trusted by the Chinese, and despite his great age has been sent by Trump to arrange it. Reports in the press that Kissinger’s visit last week was just to calm things down after Trump’s telephone call with the Taiwanese leader are wide of the mark. Trump is simply establishing his negotiating position from the outset.

    Trump is of the opinion that businessmen, not diplomats, should control trade negotiations. While diplomats might view this approach as naïve, the fact is Trump will be setting the agenda. Consequently, he is likely to be dismissive of past agreements, and impatient with the snail’s pace common in diplomatic trade negotiations. He will most likely wish to handle trade negotiations with China himself.

    In order that trade negotiations progress without misunderstandings he has nominated Iowa Governor Terry Branstad for the post of Ambassador to China. Branstad has known President Xi through previous visits, and should be an effective communications channel. That’s the soft part of the deal. The hard part is Trump’s rhetoric, and his willingness to talk to Taiwan, which has established his opening gambit. His objective will be to get China to stop manufacturing copies of American goods, hacking into commercial websites to steal trade and technological secrets, and abusing intellectual property. It is likely China will agree to tighten up on this behaviour, in which case a new trade agreement can be reached.

    While diplomats might find Trump’s style damaging to their careful construction of trade relations over time, there is little doubt his approach has merit. Success with China, even if it is limited in scope, is likely to be the outcome. It could alter not only the way trade agreements with China are set in the future, but could override the whole WTO process for other international trade relationships as well. And here again, we see the EU with its antiquated and obstructive approach to trade being most challenged.

    At the end of the day, Trump’s language is one the Chinese will understand, and in return for backing off over Taiwan, they are likely to concede America’s beef over intellectual property abuses, hacking and commercial espionage. China’s focus is moving away from that sort of business anyway, towards higher-level services and improved infrastructure for its rapidly-growing middle classes, and she plans to spread the benefits of her industrialisation throughout Asia.

    Furthermore, there are likely to be echoes from Trump’s big-bang on trade. Removing diplomats from the act of setting the trade agenda, disconnects trade from geopolitical considerations generally, allowing Japan, for instance, to join the Asian Infrastructure Investment Bank. It is even conceivable that the US itself might apply to join it at a future date, in which case, you heard it here first.

    Trump’s trade negotiations with China, if successful, could have far-reaching effects. They could, of course, go badly wrong, but the Chinese are realists and will almost certainly adapt to the new reality. It is in their interests to strike a deal with Trump, swiftly giving him concessions that established diplomatic practice would be unlikely to yield.

    Political and economic consequences for America

    In the first half of 2017, Trump is likely to achieve both détente with Russia and a new, better trade deal with China. If so, his pre-election stance, that the American establishment was failing the people, will have been amply proven. Trump will likely be riding high in the opinion polls.

    However, you cannot demolish the status quo without consequences. While much good will be achieved if Trump’s approach to Russia and China succeeds, the EU will be undermined both politically and financially. The European Union is already threatening to break up following Brexit, and Trump’s détente with Russia could give Germany a realistic opportunity to cast off from the European Project. The financial cost of a European break-up will be a difficult pill for Germany to swallow, and renewed trade links with Britain and Russia is her best shot at recovery. The future for the euro, whatever happens, is being challenged, more so if Germany decides to replace it with a new Deutschemark. If Germany replaces the euro, the Eurozone’s banking system and currency will be increasingly vulnerable to collapse. And if the Eurozone has a banking crisis, it will inevitably infect the global banking system, undermining America’s banks as well.

    If we make the optimistic assumption that somehow the Eurozone and its currency manage to stagger on, there is a further problem for America. Industrial raw material prices have been rising strongly throughout 2016, measured in dollars, despite the dollar’s strength against other currencies. Trump’s stated ambition, to cause US infrastructure investment to rise significantly, coincides with China’s thirteenth five-year plan for building new Silk Roads and associated projects. Consequently, both America and China will be aggressively bidding against each other for raw materials in 2017.

    Price rises in raw materials and energy will become a major factor driving the rate of price inflation sharply higher on America’s Main Street. Yet the ability of the Fed to raise interest rates in their traditional attempts to limit price inflation will be checked by the height of the nominal rate that will trigger widespread debt liquidation. Debt, as the cliché goes, is the gorilla in the room.

    Trump’s basic problem is that he understands business, but not necessarily economics. He obviously thinks that trade deficits arise from unfair trade practices. It’s a common mistake, but they don’t. They arise from unfunded government spending and the expansion of bank credit. His fundamental belief, that fair terms of trade will make America great again is therefore badly flawed.

    It is also difficult to see where he stands on monetary policy, if at all. In business, he has personally benefited from the expansion of bank credit, but does he understand the eventual price consequences of unlimited expansion of bank credit? Very few businessmen do, in which case we can only hope he will be well advised.

    Past US presidents, from Herbert Hoover onwards, have been generally poorly advised on basic economic theory, thinking the state is well equipped to fix things that go wrong. The evidence for this error is found in the unremitting accumulation of public sector debt since the Wall Street Crash in 1929, confirmed when Roosevelt devalued the dollar against gold in 1934, and reconfirmed when Nixon temporarily abandoned all gold convertibility in 1971. That Trump might be better advised must remain a pipe-dream, unless contradicted by events.

    Therefore, my broad expectations for 2017, the first year of the Trump presidency, is success in foreign and trade policy will be offset by rising price inflation and falling asset prices as interest rates rise (see my article dated 1st December, Credit cycles and gold), terminating in a credit-crunch from higher nominal interest rates. Good on the geopolitics, bad on the economy.

     

  • China To Hand Over Seized US Drone "Under These Conditions"

    On Saturday morning, the Pentagon was eager to announce that China would return a U.S. Navy underwater drone after its military scooped up the submersible in the South China Sea late this week and sparked a row that drew in President-elect Donald Trump. As previously reported, Pentagon spokesman Peter Cook said that “through direct engagement with Chinese authorities, we have secured an understanding that the Chinese will return the UUV to the United States.”

    In retrospect, the Pentagon may have declared victory too soon. According to the South China Morning Post, China’s handover of the drone will come “with conditions“, adding that “Beijing is expected to demand the United States scale down its ­surveillance in the South China Sea when it hands back a seized US underwater drone.” Beijing would also “seek an expansion in the code for unplanned military encounters in the disputed waters to cover drones like the one seized by a Chinese warship off the Philippine coast near Subic Bay on Thursday.”

    Zhang Zhexin, a professor from the Shanghai Institutes for International Studies, said he ­expected it would take about 10 days for the drone to be returned. The demand for US concessions stems from the fact that “China is worried that there will be more action from the US during its power transition period,” Zhexin said. “Beijing will possibly talk to the US about expanding the code for unplanned encounters at sea to include unmanned underwater vehicles.”

    Currently the code includes a set of standard operational procedures ­designed to minimize the risks of unintended maritime encounters, but it does not have a procedure to deal with underwater drones.

    China is concerned that despite the US insistence that the drone was used for purely peaceful purposes. its deployment had ulterior motives. Zhang Huang, a professor from the PLA National Defence University, said the unmanned underwater vehicle could be used to gather data on Chinese naval actions, and the navigation details of Chinese submarines, People’s Daily reported.

    Zhang Baohui, a China security specialist at Hong Kong’s ­Lingnan University, said the drone could be used to collect data on factors such as currents and salinity, as well as special ­sonar signals from Chinese nuclear submarines. “Both uses have military applications. The first could be used to track possible routes by Chinese submarines,” he said.

    “The second could be used to detect and trace Chinese nuclear submarines.

    “The drone is part of the US’ anti-submarine ­warfare.”

    Meanwhile, Bloomberg reports that after Trump lashed out at China over the weekend, saying it stole an underwater drone from the U.S. Navy in an “unprecedented act”, Beijing’s official response was muted, although there was far more “passion” in the local nationalist tabloid press, such as the Global Times which mocked Trump’s demeanor as “lagging far behind the White House spokespersons.”

    “China has so far practiced restraint at Trump’s provocations as he’s yet to enter the White House,” the Global Times said. “But this attitude won’t last too long after he officially becomes the U.S. president, were he still to treat China in the manner he tweeted today.”

    And yet despite the occasional press outburst, Beijing is holding its fire at least until after he takes office next month. Until then, it looks set to continue the stance of “strategic composure” articulated after Trump questioned the U.S.’s policy of diplomatically recognizing Beijing instead of Taiwan.

    However, just like Obama is contemplating his options on how to retaliate to “Russian hacking” if at all, China is likewise planning its next move:

    Beijing will “strike back firmly” if Trump as president openly challenges China’s core interests like Taiwan, Tibet, the South China Sea and the East China Sea, said Shi Yinhong, director of the Center on American Studies at Renmin University in Beijing and an adviser to China’s State Council, the cabinet. Options include recalling the ambassador, stopping international cooperation, fighting a trade war — even severing diplomatic ties.

     

    “So far, China has adopted a cautious, measured approach of wait and see,” Shi said. “The government is still closely observing what Trump is up to and in the process of forming a clear view on his possible policy. This approach will likely continue into his presidency for the first couple of months.”

     While some policy makers in Beijing initially hoped that Trump would bring a more pragmatic approach, that view is quickly fading. Indeed, if anything, with every incremental tweet, Trump promises that it is only a matter of time before a far more serious diplomatic scandal erupts.

    Trump’s reaction to the drone incident raises questions about whether that’s the case. He deleted his first tweet after writing “unpresidented” rather than “unprecedented.” Later, after tensions appeared to have been diffused, Trump sent another tweet: “We should tell China that we don’t want the drone they stole back.- let them keep it!”

    Others, like Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra, disagreed and said that “such a response would deprive the U.S. of the ability to assess what information China sought to obtain while analyzing the drone after it was seized”

    He added that “It just shows that Trump hasn’t thought out his policy before he tweets it,” Davis said. “The risk is that he is going to confront China to the point where it is destabilizing.” 

    Indeed, if anything, the drone incident has shown how quickly tensions between the nations could escalate, particularly as China challenges U.S. naval supremacy in Asia, and what makes the situation especially volatile is that suddenly both the actions of China and the US are likewise unpredictable:

    “Under Trump, China-U.S. conflicts in the South China Sea are likely to ratchet up or even deepen, with unpredictable incidents like the Bowditch episode to occur from time to time,” Li Jie, a senior researcher at the Chinese Naval Research Institute in Beijing. One could say the same about China, whose drone confiscation was seen as a substantial escalation in the festering diplomatic conflict between the two nations.

    The overseas edition of The People’s Daily, the Communist Party’s flagship newspaper, said on its social media WeChat account Saturday night that China’s capture of the drone was legal because it was conducting “military operations in sensitive waters” and rules about drone activities are ambiguous.  “This is a gray area,” the article said. “If the U.S. military can send the drone over, China can certainly seize it.”

    Actually, as shown previously, the drone was snatched in a zone in the South China Sea that was in close proximity to the Philippines and not even inside the confines of the nine-dash line.

     

    As Bloomberg concludes, “while the motive for the seizure remains unclear, it’s a concern no matter whether it was ordered from Beijing or the act of a rogue captain, according to Michael Mazza, research fellow in foreign and defense policy studies at the American Enterprise Institute. “To me all of these various explanations are troubling,” he said. “If we do learn it was one ship acting on its own that’s not cause for a sigh of relief.”

    One thing, however, is certain: should China indeed issue conditions which have to be met prior to the return of the US underwater drone, there will be many more, and far angrier tweets from Trump, the response to which from China will be critical, and may finally force the euphoric market to pay attention.  Keep a close eye on what Beijing says in the coming days, and certainly keep a very close eye on Trump’s twitter feed. That’s where the action in the final trading week of the year will be.

  • The Hacking Evidence Against Russia Is Extremely Weak

    Last week, German security officials said that Russia hacked secret German communications and provided them to Wikileaks (English translation).

    But now, German officials say that the communications were likely leaked from an insider within the German parliament, the Bundestag (English translation).

    Similarly, when a treasure trove of secret NSA tools were revealed, Russian hackers were initially blamed.

    But it turns out that it was probably a leak by an NSA insider.

    So claims that Russia is behind any specific hacking incident need to be taken with a grain of salt …

    A group of high-level former American intelligence officials – including the man who designed the NSA’s global surveillance system (Bill Binney), a 27-year CIA officials who personally delivered the daily briefing to both Democratic and Republican presidents (Ray McGovern) , and others – say that the Democratic Party emails were not hacked, but were actually leaked by insiders.

    A former British intelligence analyst and British Ambassador to Uzbekistan (Craig Murray) alleges that he personally met the leaker, and that it was an American working for the NSA.

    But whether or not these American and British intelligence officials are right that the Democratic emails were leaked by insiders as opposed to hacked by Ruskies, the fact remains that the evidence for Russian hacking is very weak.

    Initially, the main allegation for Russia hacking Democratic emails to throw the election for trump is that Wikileaks released Democratic – but not Republican – emails.

    However, the RNC says that their cybersecurity stopped attempts to hack into their computers. If true, then it may be that the Dems were simply more careless than the GOP. Indeed, John Podesta fell for a basic phishing scam.

    Moreover, it’s famously difficult to attribute the source of hacks.

    A leading IT think tank – the Institute for Critical Infrastructure Technology – points out:

    Malicious actors can easily position their breach to be attributed to Russia.  It’s common knowledge among even script kiddies that all one needs to do is compromise a system geolocated in Russia (ideally in a government office) and use it as a beachhead for attack so that indicators of compromise lead back to Russia. For additional operational security, use publically available whitepapers and reports to determine the tool, techniques, and procedures of a well-known nation-state sponsored advanced persistent threat (APT), access Deep Web forums such as Alphabay to acquire a malware variant or exploit kit utilized in prolific attacks, and then employ the malware in new campaigns that will inevitably be attributed to foreign intelligence operations. Want to add another layer? Compromise a Chinese system, leap-frog onto a hacked Russian machine, and then run the attack from China to Russia to any country on the globe. Want to increase geopolitical tensions, distract the global news cycle, or cause a subtle, but exploitable shift in national positions? Hack a machine in North Korea and use it to hack the aforementioned machine in China, before compromising the Russian system and launching global attacks. This process is so common and simple that’s its virtually “Script Kiddie 101” among malicious cyber upstarts.

     

    ***

     

    Incident Response techniques and processes are not comprehensive or holistic enough to definitively attribute an incident to a specific threat actor from the multitude of script kiddies, hacktivists, lone-wolf threat actors, cyber-criminals, cyber-jihadists, hail-mary threats, and nation-state sponsored advanced persistent threats (APTs), who all possess the means, motive, and opportunity, to attack minimally secured, high profile targets.

     

    ***

     

    Attribution might be reliable if the target is well-protected, if the target operates in a niche field, or if the malware involved in the incident is unique because one or more of those characteristics can be deterministic of the sophistication and resources of the threat actor. Attribution is less exact in the case of the DNC breach because the mail servers compromised were not well-secured; the organization of a few hundred personnel did not practice proper cyber-hygiene; the DNC has a global reputation and is a valuable target to script kiddies, hacktivists, lone-wolf cyber-threat actors, cyber-criminals, cyber-jihadists, hail-mary threats, and nation-state sponsored advanced persistent threats (APTs); and because the malware discovered on DNC systems were well-known, publicly disclosed, and variants could be purchased on Deep Web markets and forums.

     

    ***

     

    Both APT28 and APT29 are well-known sophisticated threat actors that have been extensively profiled by cybersecurity firms such as FireEye. As a result, their profiles, operational behavior, tools, and malware could all be easily emulated by even an unsophisticated adversary in a campaign against an insecure target such as the DNC, that did not prioritize cybersecurity, cyber-hygiene, or system cyber resiliency. For instance, the cyber-criminal group Patchwork Elephant, known for adopting malware from other campaigns, could easily have also conducted the DNC/ RNC attacks by emulating APT28 and APT29.

    James Carden – a former Advisor to the US-Russia Presidential Commission at the US State Department – writes:

    Evidence of a connection between the Russian government and the hackers that are believed to have stolen the DNC/John Podesta e-mails remains illusory. Cyber-security expert Jeffrey Carr has observed that “there is ZERO technical evidence to connect those Russian-speaking hackers to the GRU, FSB, SVR, or any other Russian government department.” The very real possibility that non-state actors carried out the hack of the DNC has been conspicuously absent from the mainstream narrative of “Russian interference.”

    Craig Murray notes:

    Despite himself being a former extremely competent KGB chief, Vladimir Putin [is alleged to have] put Inspector Clouseau in charge of Russian security and left him to get on with it. The Russian Bear has been the symbol of the country since the 16th century. So we have to believe that the Russian security services set up top secret hacking groups identifying themselves as “Cozy Bear” and “Fancy Bear”. Whereas no doubt the NSA fronts its hacking operations by a group brilliantly disguised as “The Flaming Bald Eagles”, GCHQ doubtless hides behind “Three Lions on a Keyboard” and the French use “Marianne Snoops”.

     

    What is more, the Russian disguised hackers work Moscow hours and are directly traceable to Moscow IP addresses. This is plain and obvious nonsense. If crowdstrike [the consulting firm hired by the Democratic National Committee] were tracing me just now they would think I am in Denmark. Yesterday it was the Netherlands. I use Tunnel Bear, one of scores of easily available VPN’s and believe me, the Russian FSB have much better resources. We are also supposed to believe that Russia’s hidden hacking operation uses the name of the famous founder of the Communist Cheka, Felix Dzerzhinsky, as a marker and an identify of “Guccifer2” (get the references – Russian oligarchs and their Gucci bling and Lucifer) – to post pointless and vainglorious boasts about its hacking operations, and in doing so accidentally leave bits of Russian language script to be found.

     

    The Keystone Cops portrayal of one of the world’s most clinically efficient intelligence services is of a piece with the anti-Russian racism which has permeated the Democratic Party rhetoric for quite some time. Frankly nobody in what is vaguely their right mind would believe this narrative.

    It is not that “Cozy Bear”, “Fancy Bear” and “Guccifer2” do not exist. It is that they are not agents of the Russian government and not the source of the DNC documents. Guccifer2 is understood in London to be the fairly well known amusing bearded Serbian who turns up at parties around Camden under the (assumed) name of Gavrilo Princip.

     

    Of course there were hacking and phishing attacks on the DNC. Such attacks happen every day to pretty well all of us. There were over 1,050 attacks on my own server two days ago, and many of them often appear to originate in Russia – though more appear to originate in the USA. I attach a cloudfare threat map. It happens to be from a while ago as I don’t have a more up to date one to hand from my technical people. Of course in many cases the computers attacking have been activated as proxies by computers in another country entirely. Crowdstrike apparently expect us to believe that Putin’s security services have not heard of this or of the idea of disguising which time zone you operate from.

     


     

    One Day’s Attempts to Hack My Own Server – Happens Every Single Day

     

    Pretty well all of us get phishing emails pretty routinely. Last year my bank phoned me up to check if I was really trying to buy a car with my credit card in St Petersburg. I don’t know what the DNC paid “Crowdstrike” for their narrative but they got a very poor return for their effort indeed. That the New York Times promotes it as any kind of evidence is a truly damning indictment of the mainstream media.

    Andrew Cockburn asks some hard-hitting questions:

    1/ The DNC hackers inserted the name of the founder of Russian intelligence, in Russian, in the metadata of the hacked documents.  Why would the G.R.U., Russian military intelligence do that?

     

    2/ If the hackers were indeed part of Russian intelligence, why did they use a free Russian email account, or, in the hack of the state election systems, a Russian-owned server?  Does Russian intelligence normally display such poor tradecraft?

     

    3/ Why would Russian intelligence, for the purposes of hacking the election systems of Arizona and Illinois, book space on a Russian-owned server and then use only English, as documents furnished by Vladimir Fomenko, proprietor of Kings Servers, the company that owned the server in question, clearly indicate?

     

    4/ Numerous reports ascribe the hacks to hacking groups known as APT 28 or “Fancy Bear” and APT 29 or “Cozy Bear.” But these groups had already been accused of  nefarious actions on behalf of Russian intelligence prior to the hacks under discussion.  Why would the Kremlin and its intelligence agencies select well-known groups to conduct a regime-change operation on the most powerful country on earth?

     

    5/ It has been reported in the New York Times, without attribution, that U.S. intelligence has identified specific G.R.U. officials who directed the hacking. Is this true, and if so, please provide details (Witness should be sworn)

     

    6/ The joint statement issued by the DNI and DHS on October 7 2016 confirmed that US intelligence had no evidence of official Russian involvement in the leak of hacked documents to Wikileaks, etc, saying only that the leaks were “consistent with the methods and motivations of Russian-directed efforts.”  Has the US acquired any evidence whatsoever since that time regarding Russian involvement in the leaks?

    So while Russia may have hacked the Democratic emails and then delivered them to Wikileaks, the evidence is extremely weak.

  • Canada Sees 5x Surge In American Refugee Applications… To 28

    Leading up to the 2016 Presidential election, dozens of overconfident celebrities and political figures promised to flee to Canada if Trump emerged victorious (we noted them all here: “These Are The Celebrities Who Vowed To Leave America If Trump Wins“).  Unfortunately, none of them have announced plans to follow through on those promises despite news from Canada’s immigration officials that applications for political refugee status from Americans was up 5x YoY in November.

    That said, this may be one of those times when a YoY% change does not really do the absolute number justice, because that 5-fold increase in refugee applicants translates into… 28 people filing asylum applications in November 2016. 

    Moreover, as HeatStreet points out, none of them are likely to actually be granted asylum with only 2 requests being approved for Americans since 2010.  Apparently the Canadian government doesn’t recognize the various “triggers” that have set off these disaffected Hillary supporters as valid reasons for refugee status.

    Of the 28 who applied, it’s possible none will be approved to relocate to America’s northern neighbor. The CBC found only two successful claims for asylum out of hundreds of cases filed from the U.S. since 2010. There was no successful claim out of the 170 filed in 2015.

     

    If you aren’t fleeing an unjust war, or fleeing actual threat of death, Canada is likely to decline your request. If you’re not applying as a refugee, the Canadian legal immigration process can take about a decade to navigate.

    Triggered

    While most celebrities who threatened to leave the U.S. have since said they were “just joking,” CBC News couldn’t officially confirm whether any of the 28 applications filed in November came from disaffected Hollywood snowflakes.  When asked about the applications, Nicholas Dorion, a spokesman for the Canada Border Services Agency, simply said that “refugee claims are protected under the Privacy Act” which prohibits the disclosure of any details of applicants.

    Meanwhile,  applicants have a sympathizer in Jamie Liew, a University of Ottawa professor and immigration lawyer, who told CBC News that it’s not surprising that so many disaffected Hillary snowflakes were triggered by the election given the “concerning language, including hate; exclusion; deportation” that surfaced during the campaigning cycle. 

    “I don’t think it’s surprising at all,” she said.

     

    “The rhetoric coming from the (U.S. political) discussion… was filled with a lot of concerning language, including hate; exclusion; deportation… I could see why people would be concerned for their own safety, their own lives, and evaluate whether they could live (there).

     

    Liew has been involved in a handful of American refugee claims over the years. Such cases can involve victims of domestic violence, or soldiers escaping wars like in Iraq and Afghanistan. She recalled one case related to death threats against a same-sex couple.

     

    “It really doesn’t matter what country a refugee comes from. That is not the central issue in determining if someone is a refugee,” Liew said.

     

    “A country could be democratic. A country could be espousing … human rights. What really matters is how people are being treated on the ground, and protected by the state that they’re in.”

     

    That said, Americans don’t have much success when claiming refugee status in Canada: “Obviously if you’re coming from a war-torn state that is obviously an easier case to be made. But that does not make it impossible for someone from the United States to make a claim for refugee protection.”

     

    Only a minuscule share of American refugee claimants get approved in Canada.

    While we wish these 28 applicants the best of luck in their process, we remain immensely disappointed that Lena Dunham has decided to stay in the U.S. and would like to remind her one last time that travel arrangements are still set to the extent she wants to follow through on her pledge to move to Vancouver.

  • Coup Or No Coup: What To Watch For As The Electoral College Votes On Monday

    With even Harvard’s Larry Lessig admitting that his efforts to flip the Electoral College against Trump have failed miserably (see “Harvard Professor Admits His Efforts To Turn Electoral College Against Trump Have Failed Miserably“), it’s a near certainty that Trump will, in fact, be elected President when the Electoral College casts their votes tomorrow. 

    That said, there could always be surprises and, as such, The Hill has published a list of five things you should keep an eye on as electors get set to cast their ballots.  First, here is how the 538 electors should cast their ballots if they all strictly follow the will of the voters in their respective states. 

    EC 1

     

    That said, we know that at least one Texas elector, Chris Suprun,  has vowed to go rogue tomorrow and anxious eyes will be waiting to see if anyone decides to join him.  As The Hill points out, there hasn’t been an election since 1836 in which more than 1 elector changed his vote, so even 2 defectors would make history.

    There’s no evidence of a widespread number of Republican defections—just one Republican elector from Texas has gone public with plans to break from Trump.

     

    But there hasn’t been an election in which more than one elector jumped ship for reasons other than the death of a candidate since 1836, according to the nonprofit FairVote. So a defection by even one more Republican elector would make history.

    The next thing to watch is whether any Democrat electors will cast protest votes.  A small group of Democratic electors had vowed to join Larry Lessig’s coup attempt by throwing their support behind an alternative Republican candidate.  While this now seems like a remote possibility, it is something to watch for.

    Democratic electors are the ones beating the drums for the revolt, yet they’re largely powerless to change the outcome.

     

    A handful of electors are already planning on uniting around a Republican alternative as a protest, but it’s still unclear how many are willing to join the protest.

     

    In theory, a unified front of the 232 Democrats could join with 38 Republicans to elect an alternative president. But in practice, the anti-Trump electors will be lucky if more than a dozen Democrats break.

    Electoral College Map

     

    With 29 states and the District of Columbia binding their electors by law, it will also be interesting to see if anyone in those states choose to defect, and if so, what penalties will be levied upon them.

    The country’s presidential electors are chosen through different methods across the country—some are elected directly while others are picked by the candidates themselves or by the state party.

     

    Bucking their jurisdiction’s votes could also have consequences for faithless electors. 29 states and the District of Columbia bind their electors by law, mostly with small fines as retribution for going rogue. No faithless electors have ever been punished, so political junkies will be watching to see if that changes.

    Finally, when all the voting is said and done, all eyes will be watching how the candidates and their respective parties react.  Will Trump launch a massive tweet storm blasting “faithless electors” and/or will Democrats finally tone down the “Russian hacking” rhetoric and calls to scrap the Electoral College system?  Somehow we suspect that finally admitting they ran a failed candidate that was doomed to lose from the start is not a viable alternative for the talking heads of the leftist media…so we’re somewhat less than hopeful.

  • Palladium, Platinum, Gold, Silver, Copper, Bonds and the Dollar Market Correlations (Video)

    By EconMatters


    We go over some viewer questions in this video regarding trading theory, and then go over a question regarding market correlations of assets in the metals market. Blame the programmers for overly simplistic market correlations, they are just being lazy! But know the nuances of each specific market because you are giving away too much edge to just lump everything into general trade baskets.

    © EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle   

  • Ukraine Nationalizes Its Largest Bank, Which Holds 36% Of All Domestic Deposits

    It was just a few short days ago, on Wednesday of last week, that Ukraine’s largest lender, PrivatBank, said that reports it will be nationalized were “attempts to create panic and destabilize the political situation in the country.

    Local media, quoted by Reuters, speculated that Privatbank, which is part-owned by one of Ukraine’s richest men, billionaire Ihor Kolomoisky, could be privatized if it does not meet a year-end deadline for Ukraine banks to reach a capital ratio requirement agreed under an International Monetary Fund bailout program. However, what made Privatbank unique, is that with some $6 billion in private deposits – or 36.5% of Ukrainian banks’ total – it puts America’s own TBTF banks to shame: the bank is an absolute giant which controls nearly half of the local banking sector.

    On Wednesady, the bank’s deputy chairman reaffirmed that there was nothing to worry about and said its customers had received phone calls and messages telling them the bank would be taken under state control due to a failure to meet the required capitalization level. “Exploiting the ignorance of citizens about nationalization, they stir up panic,” Oleg Gorokhovsky said, without saying who was behind the reports.

    Separately, the bank stated that “the information attack on Ukraine’s largest bank, Privatbank linked to the ‘pseudo-nationalisation’ of the bank is primarily directed at clients of the bank and is an attempt to destabilize the political situation in the country.” It added that the reports of its imminent nationalization were politically motivated.

    * * *

    Fast forward four days, when late on Sunday night, the “attempts to create panic and destabilize the political situation” in Ukraine turned out to be true after all, and whether politically motivated or otherwise, the Ukrainian government announced hours ago that it would nationalize the suddenly very ironically named PrivatBank, unleashing one of the biggest shake-ups of the banking system since the country plunged into political and economic turmoil two years ago.

    In a statement late on Sunday, the government made no mention of the size of the potential burden to the state budget, but said it would ensure a stable transition and the smooth functioning of the bank.

    According to Reuters, The Finance Ministry would take over PrivatBank, with Finance Minister Oleksandr Danylyuk adding that depositors’ money was safe and secured by the state, and that the bank was functioning normally. It was not immediately clear if Ukraine had $6 billion in liquid funds to distribute to PrivatBank depositors should there be a run on the bank tomorrow, as some expect.

    “The private shareholders of PrivatBank proposed to the government that it become the bank’s owner in the interests of its clients,” the government said in a statement.

    “The transition period begins on 19 December. The state will ensure a smooth transition and the stable functioning of the bank.”

    The unprecedented bailout could fuel instability in Ukraine, where opposition parties have repeatedly called for snap elections to unseat the pro-Western leadership that took power after the 2014 Maidan protests. As Reuters notes, the opposition has harnessed the anger of depositors from banks that were previously shut down in a sweeping cleanup of the financial system, mobilizing rallies and demanding the central bank chief’s resignation.

    The nationalization announcement came just days before parliament was to vote on next year’s budget, which must stick to a shortfall of 3 percent of economic output, as agreed with Ukraine’s international backers.

    There was no official statement from PrivatBank. Oleg Gorokhovsky, PrivatBank’s deputy chairman, wrote on Facebook that the bank had seen increased withdrawals in recent days of 2 billion hryvnia ($76 million) daily against previous peaks of around 1.5 billion hryvnia ($57 million). “Of course, the bank needed a capital increase and to improve the collateral for loans,” he said.

    The plan was to do this over a period to 2018. However, Gorokhovsky said after the outbreak of violence in the east and against the backdrop of a sinking economy, the bank experienced what he described as a series of “information attacks” that led to an outflow of funds from individuals and corporate clients.

    “The decision on a voluntary and peaceful transfer of the bank to state ownership was made at a time when we realized that we could not survive the (latest) information attack,” he wrote.

    In other words, while the real reason for the nationalization, it appears the owners were eager to dump what remains of the bank into the lap of Ukraine’s taxpayers, most of whom also happen to be the bank’s depositors.

    Incidentally, recapitalizing PrivatBank and other large lenders and reducing their lending to shareholders was one of the tasks mandated by a $17.5 billion IMF aid-for-reforms program.

    Meanwhile, the political future of former PrivatBank owner, Kolomoisky, remains unclear: his control of strategic industries, including energy and media holdings, has put him at the center of ongoing power battles among the political elite since street protests ousted Moscow-backed Viktor Yanukovich and the pro-Russian rebellion erupted in the east.

    PrivatBank’s nationalization is the culmination of the banking sector cleanup, which has closed dozens of lenders that were seen as little more than personal piggy banks for their owners. Should there be a major run on the bank in the coming days, Ukraine may once again emerge as a centra of financial and economic instability in the region, despite the IMF’s implicit backing

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