- Washington's Struggle: Remaining Relevant
Submitted by Federico Pieraccini via Strategic-Culture.org,
The most important event of the past 70 years is the change in the international order, from a US unipolar domination to a new multipolar reality. The fundamental question lies in understanding how this transition is taking place, its consequences and root causes
The transition in the international order, from a pre-WWI multipolar world to a post-WWII bipolar world, cost humanity a world war involving millions of deaths. The next stage, distinct from the conflicts between the USSR and the US, ended with the fall of the Berlin Wall in 1989, but without the tragedy of direct confrontation. This fundamental historical difference has its own intrinsic logic governing the relationship of forces between powers. The USSR was a country in decline, unable to continue its role on the international stage as the premier anti-hegemonic power.
The transition from a bipolar to a unipolar reality could have had nuclear consequences, but an agreement between the powers avoided this danger. The upshot was an unconditional surrender of the USSR, with catastrophic consequences in economic and cultural terms for the superpower to come to terms with, but at least without the explosion of a large-scale conflict.
With the end of the bipolar model, however, began what some historians declared to be the «end of history»: the transition from a multipolar world, to a bipolar world, to end in a unipolar world. From the point of view of Washington, the story ended with only one global power remaining, thereby granting the United States the power to decide matters for the whole world.
The scenario in which we live today, in terms of international law and the balance of forces, is almost unprecedented in history if looked at in the present context. It is true that the current transition from a unipolar to a multipolar reality is something similar to what has been seen in previous decades, with the transition from British hegemony in the late-nineteenth century to a multipolar situation in the period preceding the two world wars. Nevertheless, resorting to this historical analogy is difficult, given the relative absence of international rules compared to a century ago. Therefore it is difficult to use the earlier transition period to make assumptions about future trends.
The causes of change
The attitude of the US over the last 25 years has been focused completely on the achievement of global hegemony. The dream of having control over every event, in every corner of the world, has ironically led to accelerating the end of America’s unipolar moment. Of course the deep meaning of the word "control" can be expanded upon, examining the merits of the cultural, economic and military impositions that result from a constant quest for global domination.
The US has chosen an impassable road that is full of contradictions to justify their rise as a global power. In two decades we have witnessed the dismantling of all the key principles of the balance of power between Russia and the United States, necessitating the change in international relations from unipolar to multipolar. Similarly, the ratio of economic and military power between China and the United States has significantly worsened, culminating in the dangerous dispute over the South China Sea. The abandonment of the Kissinger doctrine governing relations with Beijing, and the failure of the Clinton reset with Moscow, have pushed two global powers, Russia and China, to forge an alliance that allows for a world where there are more powers on the international stage and not just Washington as the central focus of global relations.
The failure of the foreign doctrine of the United States was a direct consequence of the arrogance and the utopia of being able to dominate the planet, seeking to extend indefinitely the unipolar moment and forging a worldwide system culturally and economically based on the will of Washington, reinforced by a power and military posture without precedent.
Consequences
Had Washington thought more carefully about the consequences of their actions, and thereby employed a more considered strategic vision, it would certainly have opted for different choices. As a demonstration of this, we note Washington’s attitude in the Middle East, the deciding ground for prospects of continued US global hegemony.
Much of Washington’s remaining capacity to influence global decisions is attributable to the dollar and the trading of goods such as oil in that currency. With the appearance of a world with more regional or global powers, it is easy to guess that the rise of the Iranian Republic has consequences for the whole of the Middle East region. The odds are evident that Tehran, culturally, economically and militarily, will be the first regional power. Washington has realized this and has decided to reach an agreement with the Islamic Republic in order to remain relevant in the region and not to be cut off from future agreements. Washington also seeks, in doing so, to counterbalance the situation with her most influential regional allies, Saudi Arabia and Qatar.
It is a strategy that in the Middle East has had a negative impact in the immediate present for Riyadh, Doha, and in some ways even Ankara, who have all opted for an autonomous and interventionist approach in the region without much consultation with Washington. Nevertheless, the choice to include Iran as a dialogue partner for the Middle East balance has allowed Washington to conserve the illusion that in the future it will maintain an important role in regional decisions. This is a decision that has created many problems with historic allies, but Washington hopes, with a view to the future, to have made an appropriate choice. This also explains why so many of the neoconservatives and liberals (the promoters of a prolonged unipolar doctrine, the cause of so many failures ) are clearly opposed to this agreement.
Washington and its establishment have opted for a cultural and economic confrontation with Moscow, possibly militarily with Beijing in the South China Sea, in the process impelling the emergence of a multipolar world in which more powers have the ability, by joining together, to resist the will of the greater global power. In fact, it is easier to frame the international balance in a multipolar model that is slowly becoming bipolar.
We consider that Russia and China (and to a lesser extent Iran) do not possess the military capability to successfully oppose American power in a conventional conflict on a grand scale. For this reason, it is easy to understand that shaping a multipolar international order perhaps remains quite optimistic at this time. It is similarly optimistic to maintain a unipolar world order that remains anchored in the illusions of the American elite.
Reality rather shows us a bipolar world, where the alternative pole to the US is represented by the union and alliances (cultural, economic and military) of Beijing, Moscow and Tehran. And their partnership has resulted in a change in the pattern of international relations. The cause of this union is to be found in the will of the US elites to prolong their unipolar moment. Instead of opting for an agreement with another global power (probably China) and seal the international stage in a realistic model with two poles, facing no real opposition, Washington has exacerbated the differences by pushing countries like Russia, China, Iran and India closer and closer together, forging what currently might be termed a temporary bipolar model of world order.
The certainty is that the future will turn fully into a multipolar model, and this obliges Washington to struggle in every way possible to remain relevant. To date, apart from nuclear agreements, every choice has been counterproductive and wrong. Will Washington’s elites ever learn, or will they eventually become irrelevant?
- Bullion Banks "pass the parcel" on El Salvador’s Gold Reserves
Submitted by Ronan Manly, BullionStar.com
Eighteen months ago I wrote a short synopsis of a gold sales transaction by the central bank of El Salvador wherein it had sold 80% (about 5.5 tonnes) of its official gold reserves. The title of the post was “El Salvador’s gold reserves, the BIS, and the bullion banks“. If you thought, why the focus on the Banco Central de Reserva de El Salvador (BCR), it’s not a major player on the world gold market, you’d be correct, it’s not in its own right that important.
However, the point of the article was not to profile the gold transactions of a relatively obscure central bank in Central America, but to introduce the topic of central bank gold lending to LBMA bullion banks, and the use of short-term ‘gold deposits‘ offered by these bullion banks. The reason being is this is a very under-analysed topic and one which I will be devoting more time to in the future. Gold loans by central banks to bullion banks are one of the most opaque areas of the global gold market. The fact that I’m using the central bank of El Salvador as the example is immaterial, it’s just convenient since the BCR happens to report the details of its gold lending operations, unlike most central banks.
A Quick Recap
At the end of September 2014, the BCR claimed to hold 223,113 ozs of gold (6.94 tonnes), of which 189,646 ozs (5.9 tonnes) was held in the form of “deposits of physical gold” with the Bank for International Settlements (BIS), and 33,467 ozs (1.04 tonnes) which was held as “time deposits” of gold (up to 31 days) with 2 commercial bullion banks, namelyBarclays Bank and the Bank of Nova Scotia.
The following table and all similar tables below are taken from the BCR’s ‘Statement of Assets backing the Liquidity Reserve’, or ‘Estado de Los Activos Que Respaldan la Reserva de Liquidez’, which it publishes every 3 months.
BCR gold position as of 30 September 2014
In November 2014, the BCR executed a small sale of 5007 ozs of its gold from its quantity held with the BIS, leaving a holding of 218,106 ozs (6.784 tonnes) as of 31 December 2014, comprising 184,639 ozs held in “deposits of physical gold” with the BIS, and 33,467 ozs of “time deposits” (of between 2 and 14 days duration) with 2 bullion banks, namely BNP Paribas and the Bank of Nova Scotia. Notice that as of the end of 2014, BNP Paribas was now holding one of the time deposits of gold, and that Barclays was not listed.
BCR gold position as of 31 December 2014
Notice also in the above table the tiny residual time deposit gold holding attributed to Standard Chartered Bank Plc. Rewind for a moment to 30 June 2014. At the end of June 2014, the BCR’s gold deposits were placed with 3 LBMA bullion banks, namely, Barclays, Bank of Nova Scotia, and Standard Chartered.
This is the way short-term gold deposit transactions work. A central bank places the short-term gold deposit with one of a small number of bullion banks, most likely at the Bank of England, and when the deposit expires after e.g. 1 month, the central bank places the deposit again, but not necessarily with the same bullion bank. The deposit rates on offer (by the bullion banks) and the placements by the central banks are communicated over a combination of Bloomberg terminals, or by phone and then the transactions are settled by Swift messages. More about the actual mechanics of this process in a future article.
BCR gold position as of 30 June 2014
BCR sold its gold at the BIS, put the rest on deposit
In March 2015, the BCR sold 174,000 ozs (5.412 tonnes ) of gold, which left El Salvador with 44,000 ozs. When I wrote about this transaction 18 months ago I had speculated that:
“Since the Salvadoreans had 189,646 ozs on deposit with the BIS and needed to sell 179,000 ozs, the gold sold was most definitely sold to the BIS or to another party with the BIS acting as agent.
It would not make sense to sell some or all of the time deposits that are out with the bullion banks such as Barclays and Scotia, since a large chunk of the BCR gold at the BIS would have to be sold also. It would be far easier to just deal with one set of transactions at the BIS.
The above would leave the time deposits of 33,467 ozs (and accrued interest) out with the bullion banks, rolling over each month as usual. The other roughly 11,000 ozs that the BCR held with the BIS could be left with the BIS,or else this too could be put out on deposit with the bullion banks.”
This speculation turns out to have been correct. By 31 March 2015, the BCR held 10,639 ozs of gold “deposits of physical gold” with the BIS, and the same 33,467 ozs of “time deposits“, but this time split evenly between BNP Paribas and Barclays. The entire 174,000 ozs of gold sold came from the “deposits of physical gold” that El Salvador held with the BIS.
BCR gold position as of 30 March 2015
By 30 June 2015, the central bank of El Salvador had moved its remaining 10,639 ozs of “deposits of physical gold” from the BIS, and placed it into “time deposits” with bullion banks, with the entire 44,106 ozs being evenly split across Bank of Nova Scotia, BNP Parias and Standard Chartered, each holding 14,702 ozs.
BCR gold position as of 30 June 2015
Over the 12 months from end of June 2014 to 30 June 2015, a combination of at least 4 LBMA bullion banks, namely,Barclays, Bank of Nova Scotia, Standard Chartered and BNP Paribas were holding short-term gold deposits on behalf of the central bank of El Salvador. I say at least 4 banks, because there could have been more. The snapshots every 3 months only reveal which banks held gold deposits on those dates, not the full list of deposits that could have been placed and matured over each 3 month period.
These time deposits are essentially obligations by the bullion bank in question to repay the central bank that amount of gold. The original gold which was first deposited into the LBMA system could have been sold, lent or otherwise encumbered. It has become a credit in the LBMA unallocated gold system. Ultimately it needs to be paid back to the central bank by whichever bullion bank holds the deposit when the central bank decides that it no longer wants to roll its short-term deposits. This is why the anology of pass the parcel is a suitable one.
Looking at the more recent 3 monthly snapshots from September 2015 to June 2016, the same 4 LBMA bullion bank names were still holding the BCR’s gold deposits, namely Bank of Nova Scotia, Barclays, Standard Chartered and BNP Paribas.
As of 30 September 2015 – Bank of Nova Scotia, Barclays and BNP Paribas, evenly split between the 3 of them.
BCR gold position as of 30 September 2015
On 31 December 2015 – Bank of Nova Scotia, BNP Paribas, and Standard Chartered, evenly split between the 3 of them.
BCR gold position as of 30 December 2015
On 30 March 2016 – Bank of Nova Scotia and BNP Paribas, evenly split between the 2 of them.
BCR gold position as of 30 March 2016
On 30 June 2016, the BCR gold deposits were held by Bank of Nova Scotia and BNP Paribas, evenly spilt between the 2. The 30 June 2016 file on the BCR website doesn’t open correctly so this data was taken from the Google cache of the file.
IMF Reporting standards
Finally, let’s take a quick look at what monetary gold and gold deposits actually are, as defined by the International Monetary Fund (IMF).
“Monetary gold is gold owned by the authorities and held as a reserve asset. Monetary Gold is a reserve asset for which there is no outstanding financial liability”, IMF Balance of Payments Manual (BPM)
In April 2006, Hidetoshi Takeda, of the IMF Statistics Department published a short opinion paper on the ‘Treatment of Gold Swaps and Gold Deposits (loans)‘ on behalf of the Reserve Assets Technical Expert Group (RESTEG) of the IMF Committee on Balance of Payments (BoP) Statistics. The paper was called “Issues Paper (RESTEG) #11“. In the Issues paper, Takeda states:
“monetary authority make gold deposits ‘to have their bullion physically deposited with a bullion bank, which may use the gold for trading purpose in world gold markets‘”
“‘The ownership of the gold effectively remains with the monetary authorities, which earn interest on the deposits, and the gold is returned to the monetary authorities on maturity of the deposits'”
” Balance of Payments Manual, fifth Edition (BPM5) is silent on the treatment of gold deposits/loans. However, the Guidelines states that, “To qualify as reserve assets, gold deposits must be available upon demand to the monetary authorities”
You can see from the above that once the gold balance that is represented by the gold deposit is under the control of a bullion bank as a unallocated balance, then it becomes an asset of the bullion bank and can be used in subsequent bullion bank transactions, such as being lent again, or used to support its trading book, etc.
The big question is whether the gold as represented by the gold deposit is available on demand by the central bank which lent it. For ‘available on demand’ think using an ATM or walking into your local bank and withdrawing some cash from your account. It’s as simple as that.
Takeda said:
“Regarding the statistical treatment of gold deposits/loans, keeping the status quo is suggested. That is, if the deposited/loaned gold is available upon demand to the monetary authorities, it can be included in reserve assets as monetary gold. However, if the gold is not available upon demand, it should be removed from reserve assets“
Takeda’s paper also covers the topic of “Double counting of gold from outright sales of gold acquired through gold swaps or gold deposits/loans” where he says logically:
“double counting of gold can occur when a bullion bank sells outright gold acquired through gold deposits/loans from… monetary authorities”
If the gold sold is not removed from the central bank’s balance sheet, it could:
“pose a problem when international statistical standards allow swapped/deposited gold to remain in the reserve assets of the gold provider.”
Given that nothing has changed in the IMF’s reporting standards since 2006, i.e. the IMF did not take on board Takeda’s recommendations on gold loan accounting treatment, and given that all central banks still report gold as one line item of “gold and gold receivables”, then you can see how these gold deposits that are being continually rolled over by central banks using a small number of LBMA bullion banks based in London a) are being double counted if the gold involved has been sold, b) only represent claims by a central bank on a bullion bank, and c) allow bullion banks to increase their unallocated balances which can then be used in myriad leveraged and hypothecated ‘gold’ trading transactions
If you think 4 LBMA bullion banks passing a parcel of central bank gold claims around between them is excessive, wait until you see 28 bullion banks doing the same thing! Coming soon in a future article.
This article originally appeared on BullionStar.com – Bullion Banks pass the parcel on El Salvador’s gold reserves
- Michael Moore: "Trump's Election Will Be The Biggest Fuck You Ever Recorded In Human History"
Some fascinating comments from the overtly liberal, Hillary-supporting Michael Moore, who in a recently leaked speech comes perilously close in a speech explaining why on November 8, what is left of middle America will look to cast its vote for Donald Trump for one reason:
Americans might be penniless, they might be homeless, they might be fucked over and fucked up it doesn’t matter, because it’s equalized on that day – a millionaire has the same number of votes as the person without a job: one. And there’s more of the former middle class than there are in the millionaire class. So on November 8 the dispossessed will walk into the voting booth, be handed a ballot, close the curtain, and take that lever or felt pen or touchscreen and put a big fucking X in the box by the name of the man who has threatened to upend and overturn the very system that has ruined their lives: Donald J Trump.
He concludes:
Yes, on November 8, you Joe Blow, Steve Blow, Bob Blow, Billy Blow, all the Blows get to go and blow up the whole goddamn system because it’s your right. Trump’s election is going to be the biggest fuck ever recorded in human history and it will feel good.
* * *
His full remarks below:
I know a lot of people in Michigan that are planning to vote for Trump and they don’t necessarily agree with him. They’re not racist or redneck, they’re actually pretty decent people and so after talking to a number of them I wanted to write this.
Donald Trump came to the Detroit Economic Club and stood there in front of Ford Motor executives and said “if you close these factories as you’re planning to do in Detroit and build them in Mexico, I’m going to put a 35% tariff on those cars when you send them back and nobody’s going to buy them.” It was an amazing thing to see. No politician, Republican or Democrat, had ever said anything like that to these executives, and it was music to the ears of people in Michigan and Ohio and Pennsylvania and Wisconsin – the “Brexit” states.
You live here in Ohio, you know what I’m talking about. Whether Trump means it or not, is kind of irrelevant because he’s saying the things to people who are hurting, and that’s why every beaten-down, nameless, forgotten working stiff who used to be part of what was called the middle class loves Trump. He is the human Molotov Cocktail that they’ve been waiting for; the human hand grande that they can legally throw into the system that stole their lives from them. And on November 8, although they lost their jobs, although they’ve been foreclose on by the bank, next came the divorce and now the wife and kids are gone, the car’s been repoed, they haven’t had a real vacation in years, they’re stuck with the shitty Obamacare bronze plan where you can’t even get a fucking percocet, they’ve essentially lost everything they had except one thing – the one thing that doesn’t cost them a cent and is guaranteed to them by the American constitution: the right to vote.
They might be penniless, they might be homeless, they might be fucked over and fucked up it doesn’t matter, because it’s equalized on that day – a millionaire has the same number of votes as the person without a job: one. And there’s more of the former middle class than there are in the millionaire class. So on November 8 the dispossessed will walk into the voting booth, be handed a ballot, close the curtain, and take that lever or felt pen or touchscreen and put a big fucking X in the box by the name of the man who has threatened to upend and overturn the very system that has ruined their lives: Donald J Trump.
They see that the elite who ruined their lives hate Trump. Corporate America hates Trump. Wall Street hates Trump. The career politicians hate Trump. The media hates Trump, after they loved him and created him, and now hate. Thank you media: the enemy of my enemy is who I’m voting for on November 8.
Yes, on November 8, you Joe Blow, Steve Blow, Bob Blow, Billy Blow, all the Blows get to go and blow up the whole goddamn system because it’s your right. Trump’s election is going to be the biggest fuck ever recorded in human history and it will feel good.
* * *
- Deutsche Bank Considering Alternatives To Paying Cash Bonus
It has been at least a few weeks since Deutsche Bank appeared in the flashing red breaking news sections of newswires, with news that was – mostly – negative. And while the stock has since rebounded materially, wiping out all losses since the DOJ’s $14 billion RMBS settlement leak, it appears that not everything is back to normal for the largest German lender. Because in what may be the worst news yet for DB’s employees, moments ago Bloomberg reported that the German Bank is exploring “alternatives to paying bonuses in cash” as Chief Executive Officer John Cryan seeks to boost capital buffers.
According to Bloomberg, DB executives have discussed options including giving some bankers shares in the non-core unit instead of cash bonuses. Another idea under review is replacing the cash component with more Deutsche Bank stock.
The supervisory board may discuss the topic of variable pay at a meeting on Wednesday though no final decisions are expected, the people said, the day before it reports third-quarter earnings. The measures, if pursued in the coming months, would mostly impact the investment bank, the people said. The Frankfurt-based lender is still considering other alternatives, they said.
As Bloomberg adds, any bonus-related decision will depend on the size and timing of Deutsche Bank’s settlement with the U.S. Department of Justice over a probe into the the sale of faulty real-estate securities. Last year, Deutsche Bank awarded staff 2.4 billion euros ($2.6 billion) of bonuses for 2015, 1.45 billion euros of which was for the combined investment banking and trading unit. Of the 2.4 billion euros, 49 percent was deferred stock and cash while the remainder was paid out immediately. It appears that DB wants to take the 49% number and make it bigger.
The idea echoes a similar move by Credit Suisse Group AG at the height of the financial crisis, when the Swiss firm used its most illiquid loans and bonds to pay employees’ year-end bonuses.
The report is comparable to a similar announcement made exactly one year ago, when DB announced it may slash bonuses by as much as one third. Since then, however, DB’s aggressive cost cutting initative has made life for the bank’s employees progressively more miserable. Since taking over in 2015, Cryan has suspended the dividend, reduced bonuses, cut risky assets, frozen new hiring and announced plans to shed some 9,000 jobs. The CEO has already said Deutsche Bank may fail to be profitable this year after posting the first annual loss since 2008 last year. Now, DB bankers may end up getting “paid” in some of the billions in impaired tanker loans, carried quietly on the bank’s book, if not CDS or interest rate swaps. Those DB certainly has a lot of.
Should DB be successful with this significant shift in compensation strategy without leading to an exodus of workers, it will likely be attempted at other banks as the core problems facing Deutsche Bank, namely declining profitability, have now become systemic across the entire banking sector. Which is bad news for investment bankers everywhere.
- How Half Of America Lost Its F**king Mind
Authored by David Wong, originally posted at Cracked.com,
I'm going to explain the Donald Trump phenomenon in three movies. And then some text.
There's this universal shorthand that epic adventure movies use to tell the good guys from the bad. The good guys are simple folk from the countryside …
Lionsgate Films… while the bad guys are decadent assholes who live in the city and wear stupid clothes:
Lionsgate FilmsIn Star Wars, Luke is a farm boy …
LucasFilm… while the bad guys live in a shiny space station:
LucasFilmIn Braveheart, the main character (Dennis Braveheart) is a simple farmer …
Paramount Pictures… and the dastardly Prince Shithead lives in a luxurious castle and wears fancy, foppish clothes:
Paramount PicturesThe theme expresses itself in several ways — primitive vs. advanced, tough vs. delicate, masculine vs. feminine, poor vs. rich, pure vs. decadent, traditional vs. weird. All of it is code for rural vs. urban. That tense divide between the two doesn't exist because of these movies, obviously. These movies used it as shorthand because the divide already existed.
We country folk are programmed to hate the prissy elites.
* * *
That brings us to Trump…Here are six reasons for the rise of Trump that no one is taking about
1. It's Not About Red And Blue States — It's About The Country Vs. The City
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I was born and raised in Trump country. My family are Trump people. If I hadn't moved away and gotten this ridiculous job, I'd be voting for him. I know I would.
See, political types talk about "red states" and "blue states" (where red = Republican/conservative and blue = Democrat/progressive), but forget about states. If you want to understand the Trump phenomenon, dig up the much more detailed county map. Here's how the nation voted county by county in the 2012 election — again, red is Republican:
Holy cockslaps, that makes it look like Obama's blue party is some kind of fringe political faction that struggles to get 20 percent of the vote. The blue parts, however, are more densely populated — they're the cities. In the upper left, you see the blue Seattle/Tacoma area, lower down is San Francisco and then L.A. The blue around the dick-shaped Lake Michigan is made of cities like Minneapolis, Milwaukee, and Chicago. In the northeast is, of course, New York and Boston, leading down into Philadelphia, which leads into a blue band which connects a bunch of southern cities like Charlotte and Atlanta.
Blue islands in an ocean of red. The cities are less than 4 percent of the land mass, but 62 percent of the population and easily 99 percent of the popular culture. Our movies, shows, songs, and news all radiate out from those blue islands.
And if you live in the red, that fucking sucks.
See, I'm from a "blue" state — Illinois — but the state isn't blue. Freaking Chicago is blue. I'm from a tiny town in one of the blood-red areas:
As a kid, visiting Chicago was like, well, Katniss visiting the capital. Or like Zoey visiting the city of the future in this ridiculous book. "Their ways are strange."
And the whole goddamned world revolves around them.
Every TV show is about LA or New York, maybe with some Chicago or Baltimore thrown in. When they did make a show about us, we were jokes — either wide-eyed, naive fluffballs (Parks And Recreation, and before that, Newhart) or filthy murderous mutants (True Detective, and before that, Deliverance). You could feel the arrogance from hundreds of miles away.
Warner Brothers Pictures"Nothing that happens outside the city matters!" they say at their cocktail parties, blissfully unaware of where their food is grown. Hey, remember when Hurricane Katrina hit New Orleans? Kind of weird that a big hurricane hundreds of miles across managed to snipe one specific city and avoid everything else. To watch the news (or the multiple movies and TV shows about it), you'd barely hear about how the storm utterly steamrolled rural Mississippi, killing 238 people and doing an astounding $125 billion in damage.
Mark Wolfe / FEMA No sports team = no fucks given.But who cares about those people, right? What's newsworthy about a bunch of toothless hillbillies crying over a flattened trailer? New Orleans is culturally important. It matters.
To those ignored, suffering people, Donald Trump is a brick chucked through the window of the elites. "Are you assholes listening now?"
2. City People Are From A Different Goddamned Planet
"But isn't this really about race? Aren't Trump supporters just a bunch of racists? Don't they hate cities because that's where the brown people live?"
Look, we're going to get actual Nazis in the comment section of this article. Not "calling them Nazis for argument points" Nazis, but actual "Swastikas in their avatars, rooted against Indiana Jones" Nazis. Those people exist.
But what I can say, from personal experience, is that the racism of my youth was always one step removed. I never saw a family member, friend, or classmate be mean to the actual black people we had in town. We worked with them, played video games with them, waved to them when they passed. What I did hear was several million comments about how if you ever ventured into the city, winding up in the "wrong neighborhood" meant you'd get dragged from your car, raped, and burned alive. Looking back, I think the idea was that the local minorities were fine … as long as they acted exactly like us.
If you'd asked me at the time, I'd have said the fear and hatred wasn't of people with brown skin, but of that specific tribe they have in Chicago — you know, the guys with the weird slang, music and clothes, the dope fiends who murder everyone they see. It was all part of the bizarro nature of the cities, as perceived from afar — a combination of hyper-aggressive savages and frivolous white elites. Their ways are strange. And it wasn't like pop culture was trying to talk me out of it:
It's not just perception, either — the stats back up the fact that these are parallel universes. People living in the countryside are twice as likely to own a gun and will probably get married younger. People in the urban "blue" areas talk faster and walk faster. They are more likely to be drug abusers but less likely to be alcoholics. The blues are less likely to own land and, most importantly, they're less likely to be Evangelical Christians.
In the small towns, this often gets expressed as "They don't share our values!" and my progressive friends love to scoff at that. "What, like illiteracy and homophobia?!?!"
Nope. Everything.
3.Trends Always Start In The Cities — And Not All Of Them Are Good
The cities are always living in the future. I remember when our little town got our first Chinese restaurant and, 20 years later, its first fancy coffee shop. All of this stuff had turned up in movies (set in L.A., of course) decades earlier. I remember watching '80s movies and mocking the "Valley Girl" stereotypes — young girls from, like, California who would, like, say, "like" in between every third word. Twenty years later, you can hear me doing the same in every Cracked podcast. The cancer started in L.A. and spread to the rest of America.
Well, the perception back then was that those city folks were all turning atheist, abandoning church for their bisexual sex parties. That, we were told, was literally a sign of the Apocalypse. Not just due to the spiritual consequences (which were dire), but the devastation that would come to the culture. I couldn't imagine any rebuttal. In that place, at that time, the church was everything. Don't take my word for it — listen to the experts:
Church was where you made friends, met girls, networked for jobs, got social support. The poor could get food and clothes there, couples could get advice on their marriages, addicts could try to get clean. But now we're seeing a startling decline in Christianity among the general population, the godless disease having spread alongside Valley Girl talk. So according to Fox News, what's the result of those decadent, atheist, amoral snobs in the cities having turned their noses up at God?
Drew Angerer/Getty Images, Scott Olson
The fabric has broken down, they say, just as predicted. And what rural Americans see on the news today is a sneak peek at their tomorrow.
The savages are coming.
Blacks riot, Muslims set bombs, gays spread AIDS, Mexican cartels behead children, atheists tear down Christmas trees. Meanwhile, those liberal Lena Dunhams in their $5,000-a-month apartments sip wine and say, "But those white Christians are the real problem!" Terror victims scream in the street next to their own severed limbs, and the response from the elites is to cry about how men should be allowed to use women's restrooms and how it's cruel to keep chickens in cages.
SMadness. Their heads are so far up their asses that they can't tell up from down. Basic, obvious truths that have gone unquestioned for thousands of years now get laughed at and shouted down — the fact that hard work is better than dependence on government, that children do better with both parents in the picture, that peace is better than rioting, that a strict moral code is better than blithe hedonism, that humans tend to value things they've earned more than what they get for free, that not getting exploded by a bomb is better than getting exploded by a bomb.
Or as they say out in the country, "Don't piss on my leg and tell me it's raining."
The foundation upon which America was undeniably built — family, faith, and hard work — had been deemed unfashionable and small-minded. Those snooty elites up in their ivory tower laughed as they kicked away that foundation, and then wrote 10,000-word thinkpieces blaming the builders for the ensuing collapse.
4. The Rural Areas Have Been Beaten To Shit
Don't message me saying all those things I listed are wrong. I know they're wrong. Or rather, I think they're wrong, because I now live in a blue county and work for a blue industry. I know the Good Old Days of the past were built on slavery and segregation, I know that entire categories of humanity experienced religion only as a boot on their neck. I know that those "traditional families" involved millions of women trapped in kitchens and bad marriages. I know gays lived in fear and abortions were back-alley affairs.
I know the changes were for the best.
Try telling that to anybody who lives in Trump country.
They're getting the shit kicked out of them. I know, I was there. Step outside of the city, and the suicide rate among young people fucking doubles. The recession pounded rural communities, but all the recovery went to the cities. The rate of new businesses opening in rural areas has utterly collapsed.
See, rural jobs used to be based around one big local business — a factory, a coal mine, etc. When it dies, the town dies. Where I grew up, it was an oil refinery closing that did us in. I was raised in the hollowed-out shell of what the town had once been. The roof of our high school leaked when it rained. Cities can make up for the loss of manufacturing jobs with service jobs — small towns cannot. That model doesn't work below a certain population density.
If you don't live in one of these small towns, you can't understand the hopelessness. The vast majority of possible careers involve moving to the city, and around every city is now a hundred-foot wall called "Cost of Living." Let's say you're a smart kid making $8 an hour at Walgreen's and aspire to greater things. Fine, get ready to move yourself and your new baby into a 700-square-foot apartment for $1,200 a month, and to then pay double what you're paying now for utilities, groceries, and babysitters. Unless, of course, you're planning to move to one of "those" neighborhoods (hope you like being set on fire!).
In a city, you can plausibly aspire to start a band, or become an actor, or get a medical degree. You can actually have dreams. In a small town, there may be no venues for performing arts aside from country music bars and churches. There may only be two doctors in town — aspiring to that job means waiting for one of them to retire or die. You open the classifieds and all of the job listings will be for fast food or convenience stores. The "downtown" is just the corpses of mom and pop stores left shattered in Walmart's blast crater, the "suburbs" are trailer parks. There are parts of these towns that look post-apocalyptic.
I'm telling you, the hopelessness eats you alive.
And if you dare complain, some liberal elite will pull out their iPad and type up a rant about your racist white privilege. Already, someone has replied to this with a comment saying, "You should try living in a ghetto as a minority!" Exactly. To them, it seems like the plight of poor minorities is only used as a club to bat away white cries for help. Meanwhile, the rate of rural white suicides and overdoses skyrockets. Shit, at least politicians act like they care about the inner cities.
5. Everyone Lashes Out When They Don't Have A Voice
It really does feel like the worst of both worlds: all the ravages of poverty, but none of the sympathy. "Blacks burn police cars, and those liberal elites say it's not their fault because they're poor. My son gets jailed and fired over a baggie of meth, and those same elites make jokes about his missing teeth!" You're everyone's punching bag, one of society's last remaining safe comedy targets.
They take it hard. These are people who come from a long line of folks who took pride in looking after themselves. Where I'm from, you weren't a real man unless you could repair a car, patch a roof, hunt your own meat, and defend your home from an intruder. It was a source of shame to be dependent on anyone — especially the government. You mowed your own lawn and fixed your own pipes when they leaked, you hauled your own firewood in your own pickup truck. (Mine was a 1994 Ford Ranger! The current owner says it still runs!)
Not like those hipsters in their tiny apartments, or "those people" in their public housing projects, waiting for the landlord any time something breaks, knowing if things get too bad they can just pick up and move. When you don't own anything, it's all somebody else's problem. "They probably don't pay taxes, either! Just treating America itself as a subsidized apartment they can trash!"
The rural folk with the Trump signs in their yards say their way of life is dying, and you smirk and say what they really mean is that blacks and gays are finally getting equal rights and they hate it. But I'm telling you, they say their way of life is dying because their way of life is dying. It's not their imagination. No movie about the future portrays it as being full of traditional families, hunters, and coal mines. Well, except for Hunger Games, and that was depicted as an apocalypse.
So yes, they vote for the guy promising to put things back the way they were, the guy who'd be a wake-up call to the blue islands. They voted for the brick through the window.
6. Assholes Are Heroes
"But Trump is objectively a piece of shit!" you say. "He insults people, he objectifies women, and cheats whenever possible! And he's not an everyman; he's a smarmy, arrogant billionaire!"
Wait, are you talking about Donald Trump, or this guy:
You've never rooted for somebody like that? Someone powerful who gives your enemies the insults they deserve? Somebody with big fun appetites who screws up just enough to make them relatable? Like Dr. House or Walter White? Or any of the several million renegade cop characters who can break all the rules because they get shit done? Who only get shit done because they don't care about the rules?
"But those are fictional characters!" Okay, what about all those millionaire left-leaning talk show hosts? You think they keep their insults classy? Tune into any bit about Chris Christie and start counting down the seconds until the fat joke. Google David Letterman's sex scandals. But it's okay, because they're on our side, and everybody wants an asshole on their team — a spiked bat to smash their enemies with. That's all Trump is. The howls of elite outrage are like the sounds of bombs landing on the enemy's fortress. The louder the better.
Already some of you have gotten angry, feeling this gut-level revulsion at any attempt to excuse or even understand these people. After all, they're hardly people, right? Aren't they just a mass of ignorant, rageful, crude, cursing, spitting subhumans?
Gee, I hope not. I have to hug a bunch of them at Thanksgiving. And when I do, it will be with the knowledge that if I hadn't moved away, I'd be on the other side of the fence, leaving nasty comments on this article the alternate universe version of me wrote.
It feels good to dismiss people, to mock them, to write them off as deplorables. But you might as well take time to try to understand them, because I'm telling you, they'll still be around long after Trump is gone.
- Russia Unveils First Images Of Nuclear Missile Capable Of Reaching US Soil
Submitted by Alexander Mercouris via TheDuran.com,
Russia reveals photos of a new highly advanced liquid fuelled heavy ICBM capable of evading anti-missile defences and hitting US territory with 10 tonne nuclear payload.
The Makeyev Design Bureau – the designer of Russia’s heavy liquid fuelled Intercontinental Ballistic Missiles (“ICBMs”) – ie. of missiles capable of reaching US territory from Russian territory, has published the first picture of Russia’s new heavy Sarmat ICBM which is due to enter service shortly, probably in 2018.
The picture is accompanied by a short statement which reads
“In accordance with the Decree of the Russian Government ‘On the State Defence Order for 2010 and the planning period 2012-2013,’ the Makeyev Rocket Design Bureau was instructed to start design and development work on the Sarmat. In June 2011, the Bureau and the Russian Ministry of Defense signed a state contract for the Sarmat’s development. The prospective strategic missile system is being developed in order to assuredly and effectively fulfil objectives of nuclear deterrent by Russia’s strategic forces.”
The Sarmat is the planned replacement of the R-36 family of Russian ICBMs, which entered service with the Soviet armed forces in the 1960s. The R-36 family culminated in a series of missiles known in the USSR and Russia as the R-36M, which entered service in the 1970s. With a throw weight of 8,800 kg these were the heaviest and most powerful ICBMs built up to now. Here is a video of one being launched:
The specifications of the Sarmat have not been disclosed and are classified. However it is believed to be a significantly smaller and lighter missile than the R-36 family, but to have a larger throw weight of up to 10,000 kg.
Advances in the chemical industry and in the design of rocket engines since the 1960s have made it possible to build smaller and lighter rockets having the same or greater capability as the heavier rockets designed in the 1960s.
The Sarmat has been specifically designed to defeat the US’s Anti Ballistic Missile systems, which are being deployed in eastern Europe.
Its range of countermeasures is classified and not known. However it is believed the Sarmat is capable of manoeuvres during its flight trajectory to confuse incoming missiles, that it is able to launch decoys – also to confuse incoming interceptor missiles – and that at least one of the warheads being designed for it is a hypersonic warhead, which rumours say was tested successfully in April, and which is believed to be impervious to interception by incoming missiles.
A little mentioned fact about the military strategic balance between the US and Russia, is that Russia has been steadily upgrading its strategic deterrent with new advanced missiles, which are entirely different to those of the 1960s, which formed the basis of the Soviet strategic deterrent.
These include the Topol and Yars light road mobile solid fuel ICBMs, and the very advanced solid fuelled Bulava ICBM, which is sea launched from Russia’s advanced Borei strategic nuclear missile submarines. (Below)
Topol ICBM
Yars ICBM
Bulava ICBM
Borei-class Strategic Nuclear Submarine
By contrast the US strategic deterrent still relies on missile systems such as the ground-based Minuteman III and the sea launched Trident II, which have their origins in the 1960s and early 1970s.
With the Sarmat missile, which is supposed to enter service in 2018, the Russians will add another powerful modern advanced system to their strategic armoury.
- German Ammunition Sales Skyrocket Tenfold In First Half Of 2016
While the rest of the world is devolving into proxy, or even outright warfare, one nation is profiting handsomely. Germany’s ammunition exports skyrocketed in the first half of 2016, a leaked report has revealed according to Germany’s Deutsche Welle. And ironically Turkey, a country whose political relationship with Germany has deteriorated sharply over the past year – if only for popular consumption – and is currently suppressing its political opposition, has moved up the list of the country’s best customers.
As DW reports, the German government has allowed the country’s gun-makers to sell even more ammunition around the world in the first half of 2016, according to an arms export report leaked to the DPA news agency and due to be discussed in a cabinet meeting on Wednesday. The sales of small arms themselves have fallen slightly, from 12.4 million euros ($13.5 million) to 11.6 million euros, but the approved ammunition sales rose from 27 million euros to 283.8 million euros.
This broke down into 275 million euros worth of sales to EU, NATO, and NATO-allied countries (Australia, New Zealand, Japan, and Switzerland) as well as some 5.4 million euros to Iraq. The three biggest single customers were France, Poland, and Iraq, where Germany is supporting the Kurdish fighters in their battle against “Islamic State.”
Think of it as a razor-razorblade model, just far more deadly.
Sebastian Schulte, defence analyst and Germany correspondent for military magazine “Jane’s Defense Weekly,” said the increase in ammunition was not particularly surprising, given the intensification of the battles in Syria and northern Iraq. “The coalition is at the gates of Mosul, they’re going through a lot of ammunition, and Germany has decided to support the coalition – notably the Kurds,” he told DW. “You can go through several barrels of ammo for a machine gun in a day. That is quite normal.”
Not only that, Germany is probably also sending a lot of ammunition to Turkey, he speculates: “And as you know, Turkey is also highly involved both in Syria and in anti-IS operations.” As Schulte explained, Germany’s assault rifle ammunition is designed to be used in several different guns across NATO armies – though not in older guns like the Soviet-designed Kalashnikov or the 1960s era German machine gun, the G3.
What Schulte did not comment on is that it almost appears that German’s interests are alligned with those of the US, to perpetuate a state of warfare in Syria and Iraq. After all, while weapons purchases ultimately plateau, the need for ammunition if virtually infinite.
* * *
The arms export report also revealed that Turkey has become a better weapons customer in the last few years: moving up from 25th place to 8th place since the beginning of the refugee crisis. Two-thirds of these sales came in plane parts, unmanned drones, and other military equipment. South Korea is also buying more from Germany, thanks to escalating tension with its northern neighbor, and has bought 205 million euros worth of military equipment, including military ships, submarine and helicopter parts, missiles and missile defense systems.
But few are as good or steady clients of Germany as the biggest sponsor state of terrorism around the globe, Saudi Arabia which remains Germany’s third-biggest buyer, increasing its purchases from 179 million euros in the first half of 2015 to 484 million euros, while the United Arab Emirates almost doubled its purchases from Germany from 46 million euros to 85 million euros.
In top spot, somewhat surprisingly, and the best individual customer in the first half of 2016, was Algeria buying 1.04 billion euros of German military equipment, closely followed by the US, who bought 914 million euros’ worth.
Meanwhile, Germany’s faux pacifism has once again been exposed. Vice Chancellor Sigmar Gabriel, who as economy minister is responsible for Germany’s arms sales, has promised to reduce Germany’s exports of small arms, which are by far the biggest cause of deaths in conflicts around the round the world.
Alas, it was easier said than done. At the start of July, it was revealed that the value of Germany’s total arms sales had doubled from 2014 to 2015 (from 3.97 billion euros to 7.86 billion euros) – something that the Social Democratic Party leader blamed on a few major individual sales that had been agreed before his tenure. But Germany’s anti-arms activists would not accept this excuse, saying that the German government always has the power to cancel deals.
Tuesday’s report appears to show Gabriel breaking his promise again, angering the Left party’s arms export spokesman Jan van Aken: “We need clear legal bans, and first and foremost an immediate ban on small arms exports,” he told DPA. The Green party’s Agnieszka Brugger was equally outraged by the latest figures, tweeting: “The government is throwing its own strict export guidelines in the garbage bin. No sense of responsibility!”
Yes, well, while outraged and disguasted German pacificst tweet, the German weapons industry is set to enjoy another blockbuster year thanks to what has been an unprecedented outbreak of conflict and near-war around the globe. Which should help least answer the first and foremost question any time a conflict breaks out anywhere: qui bono. And since demand for weapons and ammo transcends such trivial limitations and FX exchange rates, once German arms makers have hooked enough foreign “clients”, even a spike in the Euro – should the ECB eventually taper its QE – would not result in a notable loss in future revenue.
- Mozambique Bonds Crash On Plans To Restructure After Government Admits Nation In "Debt Distress"
With over-subscribed new issuance the new normal in this 'reach for any yield' world, perhaps the rapid demise of Mozambique will remind some greater fools that 'high' yields are high for a reason.
As we warned 4 months ago, Mozambique has a broad swath of problems within its governing councils. Back in December of 2005, Management Systems International based out of Washington issued a report titled CORRUPTION ASSESSMENT: MOZAMBIQUE which said point blank: "The scale and scope of corruption in Mozambique are cause for alarm".
Mozambique's head of state Joaquim Chissano left office in February 2005 after 15 years. His replacement, Armando Guebza, that same year opened Mozambique's coastline to international companies seeking to search for resources. Between 2005 and 2006 three firms were able to capture rights to explore the coast, Anadarko, Italy's Eni, and Petronas. Some 75 trillion cubic feet of natural gas was discovered and this set of a a blitz into Mozambique as international banks, corporations, and organizations flooded the area. This opened a breeding ground for corruption and unregulated financing, specifically the controversial Tuna Bond that was supposed to be used to support regional fishing and was instead used for military expenditures and to purchase some 40 boats that remain anchored to this day.
Since then, the New Metical has crashed hyperinflation-like to record lows against the dollar…
In June, The IMF blamed "undisclosed loans" for Mozambique's sudden surge to 86% Debt/GDP ratio.
"Mozambique's economic growth will likely slow to 4.5 percent in 2016 from 6.6 percent the previous year due to rapidly rising inflation and growing government debt, the International Monetary Fund said on Friday. The leader of a Fund team that visited the southern African country, Michel Lazare, said the discovery of more than $1 billion of previously undisclosed government debt would increase pressure on the economy."
Which seemed to spark dip-buying in the bonds…until today (as Bloomberg reports)
Mozambique is in “debt distress,” according to the International Monetary Fund’s criteria, and plans to start talks with creditors in coming days.
The southern African nation has appointed Lazard Freres SAS and White & Case to “engage in a constructive dialogue with creditors,” it said in a presentation to investors dated Oct. 25 and posted on the Finance Ministry’s website. The government aims to achieve ‘debt sustainability’ with the agreement of creditors before starting talks about an International Monetary Fund loan, it said.
The yield on Mozambique’s $727 million of Eurobonds due 2023 jumped 554 basis points to 20.78 percent by 5:22 p.m. in Maputo, the highest on record.
The country’s debt ratio will reach 112.6 percent of GDP this year after $1.4 billion in previously undisclosed loans were uncovered in April, the IMF said in a report posted to its website today. Government already this year restructured over $800 million in loans it received for a fleet of tuna fishing vessels, repackaging the debt as a $727 million of Eurobonds.
Any new restructuring will be complicated by the existence of about $1.2 billion in loans Credit Suisse and VTB secretly made to other Mozambican state-owned companies and then resold to other investors. It is unclear how holders of the loans would be treated compared with bondholders. As WSJ reports,
Several creditors who financed the borrowings to the state-owned businesses said they are considering litigation. They spoke on condition of anonymity because they weren't authorized to talk to the press.
In their crosshairs isn’t just Mozambique, but also Credit Suisse and VTB, the two banks that arranged the loans and are currently being investigated by authorities in the U.K. and Switzerland over their conduct.
Both banks deny wrongdoing, as does the Mozambican government, which blames its troubles on the delays in bringing its vast gas reserves online because of low global energy prices.
Mozambique full investor presentation…
- Russia Is Quietly Winning The Middle East (And Nobody Is Talking About It)
Submitted by James Holbrooks via TheAntiMedia.org,
As fighting resumes in Aleppo following a brief ceasefire – and as Russia’s largest naval fleet to sail since the Cold War steams down the English Channel on its way to the western coast of Syria – it’s important, in times when most of the focus is being drawn to one point, to step back and look at the whole board.
Yes, what’s happening in Aleppo is a tragedy. Civilians, women, and children are being blasted out of existence as two superpowers back opposing sides in a proxy war for regional dominance. Yes, as the Russian fleet nears the Mediterranean Sea, tensions will undoubtedly escalate for a number of nations with ties to the Syrian conflict.
But President Vladimir Putin’s moves regarding Aleppo are far from his only ones worth noting of late.
Take Turkey, for instance. Last week, Underground Reporter posited the idea that Turkey, due to its deteriorating relations with the United States and its strengthening cooperation with Russia, has, in effect, become the military wild card in the Middle East. Cited as evidence of deepening Russian-Turkish ties was the fact that the two countries have just signed a deal to build a pipeline from Turkey to Ukraine, which would then supply natural gas to Europe.
Turkey, which is north of Syria, shares much of its southern and all of its eastern border with the Mediterranean Sea. A good portion of Syria’s western border also runs into the Mediterranean, and it’s in those waters where Russian vessels, already hovering there, await the arrival of the aircraft carrier-led fleet now pushing through the English Channel.
All this fits nicely into a narrative that only focuses on what’s happening in Aleppo. But one need only glance at a map to see, using nothing but the eyes and common sense, just how much more is actually taking place right now.
In mid-October, it was reported that, for the first time ever, Russia and Egypt would conduct joint military drills. This followed news that Russia will sell attack helicopters to the North African nation and invest billions in Egyptian infrastructure. These items, along with the fact that Egypt is eager to be re-granted Russian tourism rights for its citizens after recent bad blood between the countries, lead one to the logical conclusion that Egypt has every incentive to cooperate with Russia going forward.
Egypt, in case you’re not looking at that map, is directly across the Mediterranean Sea from Turkey.
This means when the Russian fleet reaches the Mediterranean — whether the intent is to park in those waters and bombard Aleppo, as some believe, or merely to project Russian might to the world, as others suggest — it will be flanked by friendlies on three sides. Turkey to the north, Syrian to the east, and Egypt to the south.
This is not a bad position to be in if you’re looking to build a natural gas pipeline from Turkey to Ukraine. Turkey, incidentally, shares its northern border with the Black Sea, which in turn shares its southern border with Ukraine. And the Black Sea, as those who’ve followed the Ukrainian situation in recent years well know, is swarming with Russian warships.
So, in the bigger picture — assuming Turkey will eventually fully embrace the Russian sphere and that Egypt, as it’s highly incentivized to do, embraces its new role as a Russian satellite — Putin has protected himself quite deftly from those in the West who’ll inevitably, no matter what the fleet does once it arrives, accuse Putin of aggression.
Turkey and Egypt are both formerly staunch U.S. allies, after all, and there’s been no official severing of ties, or even hints of such, with those nations. So Putin, thanks largely to the West’s own hegemonic maneuvering, has a lot of room to operate in terms of deals and cooperation — both militarily and economically.
In any case, the facts present a narrative — albeit a theoretical one — that isn’t being discussed. Putin, as we speak, may be implementing the first phases of an effort to secure a nice straight shot from Turkey to Ukraine for the long-desired Turkish Stream pipeline.
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