Sep 09

Today’s News 9th September 2017

  • A Nuclear North Korea Is Here To Stay

    Authored by Doug Bandow via The National Interest,

    North Korea staged its sixth nuclear test. It was probably a boosted atomic rather than hydrogen bomb, as claimed by Pyongyang, and there’s no evidence that the weapon has been miniaturized to fit on a missile. But the test was the North’s most powerful yet. And it follows steady North Korean progress in missile development.

    Despite matching Kim Jong-un bluster for bluster, President Donald Trump is doing no better than his cerebral predecessor in halting Pyongyang’s military developments. President George W. Bush had no more success, first targeting the Democratic People’s Republic of Korea as a member of the infamous “axis of evil,” before flip-flopping to negotiate with the current ruler’s father. At least Bill Clinton achieved a temporary freeze of the DPRK’s plutonium program with the Agreed Framework, which ultimately was undermined by both sides.

    Despite its relative poverty and isolation, North Korea has confounded the experts and made surprising advances in both nuclear and missile technology. While all projections are conjecture, Pyongyang may become a medium nuclear power with an effective deterrent against the United States.

    That doesn’t mean Kim Jong-un intends to wage war on America. Rather, he hopes to prevent Washington from attacking the DPRK. It’s an important distinction. Kim may be evil but, like his father and grandfather, there is no evidence that he is suicidal. They all appeared to prefer their virgins in this world rather than the next. Indeed, Kim may hope to extend the dynasty: his wife is thought to have given birth to their third child earlier this year.

    Unfortunately, negotiated denuclearization is dead. North Korea has invested too much and is too close to creating a nuclear deterrent. For the nationalistic, isolated and fearful—even paranoid—regime to stop now would be unthinkable.

    Moreover, Pyongyang faces greater threats today than ever before: the Republic of Korea has continued to race ahead economically, China and Russia are undependable friends if not frenemies, and the United States is far more aggressive internationally. Washington dismantled Serbia, imposed regime change on Afghanistan and Iraq, and took advantage of Libya’s voluntary denuclearization to oust the latter’s dictator. The North demonstrates that even paranoids have enemies.

    Despite the president’s insistence that “all options are on the table,” there is no politically viable military option. The United States could attempt to destroy nuclear facilities and missile sites as well as decapitate the highly centralized North Korean regime. However, Washington may not know the location of all the North’s nuclear operations, be equipped to reach those deeply buried, or be able to fully track the movements of Kim and his chief lieutenants. Moreover, any such strike likely would trigger full-scale war.

    Even if the U.S. government insisted that it planned no further action, the North would suspect that Washington intended regime change after taking out the DPRK’s best weapons and top leaders. Pyongyang is aware of America’s capabilities and if faced with U.S. military attack, then it would not likely allow Washington to build up its forces and strike at leisure. The Pentagon might hope to scare the North into restraint, but on such a faint hope tens or more likely hundreds of thousands of lives—American, South Korean and North Korean—would depend.

    Increased sanctions would hurt North Korea but probably not stop its nuclear and missile programs. Two decades ago famine killed at least a half million people, without changing Pyongyang’s course. Although the DPRK’s elite is enjoying a bit more of the good life, its members are unlikely to revolt if conditions worsen. And China is not yet ready to impose the sort of economic penalties that could cause a North Korean implosion. Using secondary sanctions against Chinese and Russian enterprises risks ending cooperation by those nations with Washington’s efforts.

    President Donald Trump should follow his earlier instinct for engagement. To start he should stop threatening war. Doing so reinforces the Kim dynasty’s case for building nukes and missiles. Also, the more the administration talks about the “many military options” possessed by a president few Americans or foreigners trust with the nuclear codes, the more it is likely to unsettle Washington’s allies.

    The United States also should talk to Pyongyang. There doesn’t have to be a Trump-Kim summit, just an open and regular communication channel for the practical, such as detained Americans, the recovery of the remains of U.S. military personnel, and nuclear weapons. To encourage substantive talks, Washington should freeze joint U.S.-ROK military exercises in return for suspending North Korean missile and nuclear tests. The further its programs develop, the less likely it is that Pyongyang will ever halt them. Moreover, the steady increase in regional tensions and rising panic in Washington makes foolish and reckless confrontation more likely.

    The president tweeted his threat to end trade with “any country doing business with North Korea,” no doubt aimed at China. If the administration wants support for tougher measures, it needs to negotiate with Beijing. The People’s Republic of China is not happy with its nominal client state, over which the PRC actually has limited influence. If the DPRK was inclined to listen to its large neighbor, it would have abandoned nuclear weapons and adopted economic reforms years ago.

    Moreover, the DPRK’s survival is a security issue for China, which wants neither a failed state nor a united U.S. ally hosting American military forces on its border. Relations with the North also are sensitive politically: both the Chinese Communist Party and People’s Liberation Army have long-standing ties to Pyongyang.

    Worse, attempts to threaten and browbeat China’s nationalistic leadership are likely to backfire. President Trump should consider how he would react to similar threats. In this case the PRC likely would find support and aid from Moscow, which has its own reasons for making life more difficult for the United States. In recent years Washington has turned Richard Nixon’s famous outreach to China on its head, pushing America’s two Cold War antagonists back together.

    In return for Chinese support, Washington should lower the peninsula’s rhetorical temperature, offer to talk with the North, and develop a comprehensive benefit package in return for denuclearization. The United States also should accommodate the PRC’s interests: For instance, offer to help care for refugees from a North Korean collapse, give Beijing a free hand intervening in the DPRK, and promise to remove U.S. forces in the event of reunification. Then press China to act.

    In case the North forges ahead, U.S. officials should consider how to deal with a nuclear North Korea. Bilateral communication would become even more necessary, like with the Soviet Union during the Cold War. Improving missile defense would take on greater urgency.

    Most important, Washington should reconsider outdated policies which endanger the United States. America should phase out its security treaty with and military deployment in South Korea. The ROK is capable of its own conventional defense; without the Cold War the peninsula looms much less important for U.S. security. If the North develops the ability to destroy American cities, Washington’s participation in another Korean War becomes more dangerous than any conceivable geopolitical stakes for the United States. The moment Pyongyang found itself to be losing it could target America’s homeland.

    Even Washington’s long-standing nuclear umbrella would become a problem. Although nonproliferation remains a worthy objective, in Northeast Asia it has had an effect akin to that of domestic gun control: ensuring that only the criminals have guns. China, Russia and North Korea now possess the world’s most fearsome weapons, while South Korea, Japan and others (Taiwan and Australia) do not. Instead, they rely on America. But if nuclear war arrived, would this or any other president sacrifice U.S. cities for a cause which did not pose an existential threat to America? Hopefully not.

    It is time to debate the unthinkable: acquiesce in, or even encourage, creation of countervailing South Korean and Japanese nuclear deterrents. Public opinion appears far more favorable to such a possibility in South Korea, but if the latter acted, Tokyo would be forced to consider a similar course. If Beijing saw such action as likely, it would have greater incentive to act against the North to preclude the threatened spread of nukes. More nuclear weapons would not be a good answer, but long ago Korea became the world of only second best solutions.

    The latest nuclear test provided no surprises. But it dramatically reminds us of the DPRK’s growing nuclear capabilities. There is no easy way to disarm North Korea. Washington must rethink assumptions and policies which have manifestly failed.

  • The Gentleman's Guide to Self-Defense: Bulletproof SHIRT

    See The Gentleman’s Guide to Self-Defense: Knife-Resistant Clothing.

    Everyone knows that guns are great for protecting yourself.

    But most people forget that all adversarial contests involve both offense and defense. If you've got a gun – but the bad guy gets off the first shot with his gun – you might still get killed.

    Moreover, while you might be a quicker draw and better shot than a single bad guy breaking into your house, you might get ambushed by terrorists, gang bangers or other bad guys … and got shot before you even have the time to draw, point and shoot.

    That's why military and law enforcement officers wear body armor.   If you're playing to win, you need defense as well as offense.

    But civilians – especially those of us who work in financial services, legal, accounting or other professional settings – can't walk around in bulky Kevlar vests.

    But that doesn't mean that we have to be defenseless …

    A new company called Bullet Blocker (a subdivision of MJ Safety Solutions) tailors a new generation of Kevlar into everyday clothing.  For example, t-shirts:

    BulletBlocker NIJ IIIA Bulletproof Gabriel BBL Ballistic Base Layer Compression Vest

    (The t-shirt,  called the Gabriel, is used by some undercover police officers. And Bullet Blocker's VP told us that American Secret Service agents have purchased the Gabriel.)

    Police magazine notes:

    [The Gabriel is] essentially a performance T-shirt with NIJ-certified IIIA ballistic panels added to it.

    ***

    As an added bonus, this design also gives the Gabriel a very low profile, making it ideal for undercover applications.

    ***

    I wore my Gabriel for a few days under my normal work T-shirt and it was almost invisible. Bullet Blocker's claims of heat dissipation and a more secure fit both rang true and I can certainly appreciate the benefits of the Gabriel design in any law enforcement setting.

    2-piece suits:

    BulletBlocker NIJ IIIA Bulletproof Classic Two Piece Suit

    Top coats:

    BulletBlocker NIJ IIIA Bulletproof TopcoatBulletBlocker NIJ IIIA Bulletproof Long Topcoat

    Vests:

    BulletBlocker NIJ IIIA Bulletproof Dress Vest

    Sports coats:

    BulletBlocker NIJ IIIA Bulletproof Sportscoat

    Leather jackets:

    BulletBlocker NIJ IIIA Bulletproof Women's Fitted Leather JacketBulletBlocker NIJ IIIA Bulletproof Lamb Leather JacketBulletBlocker NIJ IIIA Bulletproof Distressed Leather Jacket

    Every single clothing garment made by Bullet Blocker meets NIJ IIIA standards that will stop a 357 Magnum, 44 Magnum, 9mm, .45, hollow point ammunition and more.

    Threat level IIIA is the highest level of protection available in soft body armor, and provides the same anti-ballistic protective coverage area as traditional law enforcement body armor vests.

    And all of Bullet Blocker's clothing can be washed, as the Kevlar panels are removable.

    It's made of anti-bacterial, breathable material.  So it doesn't get funky right away like heavier materials do.

    What's even better, Bullet Blocker's experienced tailors can satisfy your special requirements. For example, they were requested to make a bulletproof lab coat:

    BulletBlocker NIJ IIIA Bulletproof Medical Lab Coat

    So they could certainly make you a bulletproof button down shirt, or anything else you might want.

    Bespoke and bulletproof!

    We tested the Gabriel for comfort.  While it's technically called a "compression vest", it's as comfortable as my normal well-made polo shirts made out of thick cotton.

    I hit the gym wearing the Gabriel and worked out like a maniac.  The Gabriel was amazingly cool and breathable for a bulletproof vest.

    Bullet Blocker also makes a line of bulletproof briefcases, bags and backpacks.

    So now even civilians working can protect ourselves while in professional or casual settings, and help shield ourselves from ambush by terrorists or thugs.

    And Bullet Blocker can help protect your kids against school shooters:

     

    I haven’t received a cent for writing this review. Bullet Blocker simply provided me a test sample of the Gabriel.

  • Maxine Waters: "They're Trying To Kill Me!"

    California Democrat Maxine Waters thinks white nationalists and the KKK are trying to kill her.

    At least she suggested as much during a House subcommittee hearing on terrorism and illicit financing when she asked what she and others could do about white nationalists and KKK members who threaten them on the Internet.

    “What can we do to deal with the KKK, the white nationalists, the extremists, the alt-right?” Waters, who serves as ranking member of the House Committee on Financial Services, asked during a Subcommittee on Terrorism and Illicit Finance hearing. ‘They’re on the internet, they’re Breitbart. If you look at the YouTube, you see how much they want to kill me and others. What can we do?’”

    “Extremists radicalized by foreign terror groups are not the only terrorists with the capacity to target and kill American citizens,” Waters said. “Indeed, domestic terror attacks have become more frequent in recent years.”

    The hearing was intended to discuss “lone-wolf” terrorist threats, with a focus on the financial aspects of terror plots, according to PJ Media.

    Seamus Hughes, deputy director for George Washington University’s Program on Extremism and former senior counterterrorism advisor for the Senate Homeland Security and Governmental Affairs Committee, told Waters that domestic terrorists are just as big a threat as foreign born terrorists.

    “You should be worried about the Orlando shooters, the Omar Mateens of the world as much as you are the James Fields and the Dylann Roofs of the world,” Hughes said.

    Waters responded by reeling off a long list of domestic attacks including the Ruby Ridge standoff in 1992, the Oklahoma City bombing in 1995, the US Holocaust Memorial Museum shooting in 2009, the Wisconsin Sikh temple shooting in 2012, the Los Angeles International Airport shooting in 2013, the Colorado Springs Planned Parenthood shooting in 2015, the Portland train attack this year and, of course, Charlottesville.

    “Extremists radicalized by foreign terror groups are not the only terrorists with the capacity to target and kill American citizens,” Waters said. “Indeed, domestic terror attacks have become more frequent in recent years.”

    Hughes, who testified at the hearing, described the creative ways in which domestic terror groups like an offshoot of the Aryan Nation finance their activities. The group robbed several armored vehicles in the 1980s and successfully laundered more than $4 million to be used in financing and arming white nationalist groups. Hughes explained how Army Private Isaac Aguigui murdered his pregnant wife in 2011, collected about $500,000 in insurance money and then purchased $30,000 worth of guns and ammunition for his militia group Forever Enduring Always Ready, a group that had planned to assassinate President Barack Obama.

    Watch the webcast of the hearing below

  • The Era Of Complacency Is Ending

    Authored by James Rickards via DailyReckoning.com,

    Physicists say a “subcritical” system that’s waiting to “go critical” is in a “phase transition.” A system that is subcritical actually appears stable, but it is capable of wild instability based on a small change in initial conditions.

    The critical state is when the process spins out of control, like a nuclear reactor melting down or a nuclear bomb exploding. The phase transition is just the passage from one state to another, as a system goes from subcritical to critical.

    The signs are everywhere that the stock market is in a subcritical state with the potential to go critical and meltdown at any moment. The signs as elevated price-to-earnings (P/E) ratios, complacency, and seasonality — crashes have a habit of happening around this time of year.

    The problem with a market meltdown is that it’s difficult to contain. It can spread rapidly. Likewise, there’s no guarantee that a stock market meltdown will be contained to stocks.

    Panic can quickly spread to bonds, emerging markets, and currencies in a general liquidity crisis as happened in 2008.

    For almost a year, one of the most profitable trading strategies has been to sell volatility. That’s about to change…

    Since the election of Donald Trump stocks have been a one-way bet. They almost always go up, and have hit record highs day after day. The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of “steady, low-risk income.”

    Nothing could be further from the truth.

    Yes, sellers of volatility have made steady profits the past year. But the strategy is extremely risky and you could lose all of your profits in a single bad day.

    Think of this strategy as betting your life’s savings on red at a roulette table. If the wheel comes up red, you double your money. But if you keep playing eventually the wheel will come up black and you’ll lose everything.

    That’s what it’s like to sell volatility. It feels good for a while, but eventually a black swan appears like the black number on the roulette wheel, and the sellers get wiped out. I focus on the shocks and unexpected events that others don’t see.

    The chart below shows a 20-year history of volatility spikes. You can observe long periods of relatively low volatility such as 2004 to 2007, and 2013 to mid-2015, but these are inevitably followed by volatility super-spikes.

    During these super-spikes the sellers of volatility are crushed, sometimes to the point of bankruptcy because they can’t cover their bets.

    The period from mid-2015 to late 2016 saw some brief volatility spikes associated with the Chinese devaluation (August and December 2015), Brexit (June 23, 2016) and the election of Donald Trump (Nov. 8, 2016). But, none of these spikes reached the super-spike levels of 2008 – 2012.

    In short, we have been on a volatility holiday. Volatility is historically low and has remained so for an unusually long period of time. The sellers of volatility have been collecting “steady income,” yet this is really just a winning streak at the volatility casino.

    The wheel of fortune is about to turn and luck is about to run out for the sellers.

    The Trap of Complacency

    Here are the key volatility drivers we have considered:

    The North Korean nuclear crisis is simply not going away. In fact, it seems to be getting worse. It appears North Korea has successfully tested a hydrogen bomb last weekend.

    This is a major development.

    An atomic weapon has to hit the target to destroy it. A hydrogen bomb just has to come close. This means than North Korea can pose an existential threat to U.S. cities even if its missile guidance systems are not quite perfected. Close is good enough.

    A hydrogen bomb also gives North Korea the ability to unleash an electromagnetic pulse (EMP). In this scenario, the hydrogen bomb does not even strike the earth; it is detonated near the edge of space. The resulting electromagnetic wave from the release of energy could knock out the entire U.S. power grid.

    Trump will not allow that to happen, and you can expect a U.S. attack, maybe early next year.

    Another ticking time bomb for a volatility spike is Washington, DC dysfunction, and the potential double train wreck coming on Sept. 29. That’s the day the U.S. Treasury is estimated to run out of cash. It’s also the last day of the U.S. fiscal year; (technically the last day is Sept. 30, but that’s a Saturday this year so Sept. 29 is the last business day).

    If these two legislative fixes are not done by Sept. 29, we’re facing both a government shutdown, and the potential for a default on the U.S. debt. Time is short and my estimate is that one or both of these pieces of legislation will not be completed in time. This will certainly trigger a volatility spike and produce huge profits for investors who make the right moves now.

    Even if the budget CR and debt ceiling get fixed under Trump’s new deal with Chuck Schumer and Nancy Pelosi, that simply postpones the day of reckoning until December 15. That’s only three months away and will be here before you know it. Markets tend to discount the future so a train wreck on December 15 will start to show up in market prices today.

    Congress has to pass two major pieces of legislation. One is a debt ceiling increase so the Treasury does not run out of money. The other is a continuing resolution so the government does not shut down.

    Both bills could be stymied by conservatives who want to tie the legislation to issues such as funding for Trump’s wall, sanctuary cities, funding for Planned Parenthood, funding to bailout Obamacare and other hot button issues.

    If the conservatives don’t get what they want, they won’t vote for the legislation. If conservatives do get what they want, moderates will bolt and not support the bills. Democrats are watching Republican infighting with glee and see no reason to help with their votes.

    If these two legislative fixes are not done by Sept. 29, we’re facing both a government shutdown, and the potential for a default on the U.S. debt. Time is short and my estimate is that one or both of these pieces of legislation will not be completed in time. This will certainly trigger a volatility spike and produce huge profits for investors who make the right moves now.

    Other sources of volatility include a planned “Day of Rage” on Nov. 4 when alt-left and antifa activists plan major demonstrations in U.S. cities from coast-to-coast. Antifa are neo-fascists posing as antifascists; hence the name “antifa.” Based on past antifa actions in UC Berkeley and Middlebury College violence cannot be ruled out. This could be unsettling to markets and be another source of volatility.

    Finally, another monster hurricane could be bearing down on U.S. shores, just after Hurricane Harvey devastated Houston and other parts of Texas and Louisiana.

    Hurricane Katrina struck at the very end of August in 2005 and Superstorm Sandy hit the Jersey Shore in October 2012. Both did enormous damage and unsettled markets for a time. Now we’re facing two major hurricanes almost at once.

    Other wild cards include domestic terror and cyber attacks.

    Finally, we are entering an historically volatile time of year. Many of the greatest stock market crashes of all time have occurred in September or October including the Black Thursday (Oct. 24, 1929) and Black Tuesday (Oct. 29, 1929) crashes that started the Great Depression, and the Black Monday (Oct. 19, 1987) crash, in which the stock market fell 22.61% in a single day. From today’s levels, a 22.61% drop would mean a loss of 4,900 Dow points in a single day.

    Don’t rule it out.

    None of these scenarios are far-fetched or even unlikely. The war with North Korea is coming. Washington, DC dysfunction is a fact of life and we’ve had several government shutdowns in recent years. Social unrest is spreading and in the headlines every day. Hurricanes and terror attacks happen with some frequency.

    It has been nine years since the last financial panic so a new one tomorrow should come as no surprise.

    In short, the catalysts for a volatility spike are all in place. We could even get a record super-spike in volatility if several of these catalysts converge.

    The “risk on / risk off” dynamic that has dominated most markets since 2013 is coming to an end. From now on it may just be “risk off” without much relief. The illusion of low volatility, ample liquidity, and ever rising stock prices is over.

    The safe havens will be the euro, cash, gold and low-debt emerging markets such as Russia. The areas to avoid are U.S. stocks, China, South Korea and heavily indebted emerging markets.

    It looks like a volatile and bumpy fall ahead.

  • U.S. Wants Shkreli Jailed After Offer Of Clinton Hair Bounty

    Martin Shkreli might not be able to sell that Wu Tang Clan album after Federal prosecutors late Thursday moved to revoke his bail, claiming that the former pharmaceutical company CEO and purported “most hated man in the world” repeatedly threatened and harassed former secretary of state Hillary Clinton on line.

    Specifically, the Feds were incensed by what Shkreli says was intended to be a humorous post on his Facebook page offering a $5,000 bounty to anyone who could “grab” some of Clinton’s hair for him during her upcoming book tour.

    "Shkreli's latest threat is concerning not only because it has required a significant expenditure of resources by the United States Secret Service, which is charged with protecting Secretary Clinton, but also because there is a significant risk that one of his many social media followers or others who learn of his offers through the media will take his statements seriously — as has happened previously — and act on them," prosecutors wrote in a legal motion.”

    US District Court Judge Kiyo Matsumoto, who presided over Shkreli’s trial which ended in him being convicted on three of eight counts of securities fraud-related offenses, ordered his legal team to file a response. She scheduled a Sept. 14 hearing for legal arguments on the issue.

    Here's the post in question:

    True to form, Shkreli trolled prosecutors in response published to his Facebook page: "Hillary Cliinton's presumptive agents are hard at work. It was just a prank, bro! But still, lock HER up. Spend your resources investigating her, not me!!"

    According to USA Today, prosecutors also said Shkreli had continued to harass journalist Lauren Duca.

    Shkreli had previously been banned from Twitter earlier this year, allegedly for harassing Duca, a freelance writer who had authored an opinion essay that criticized President-elect Trump. The day before his verdict, Shkreli wrote in a Facebook post: "trial's over tomorrow, b****. Then if I'm acquitted, I get to f*** Lauren Duca."

    Secret Service agents sought to question Shkreki about his post, but he declined to meet with them, prosecutors wrote.

    In what sounds to us like they’re reaching for justification, prosecutors cited a USA Today story recounting how a graduate student solved a complex mathematical proof after Shkreli offered a $40,000 scholarship to anyone who could.

    "Shkreli's own prior actions, and his influence over others who have previously acted in reliance on his statements, demonstrate why the government views his latest actions with concern," prosecutors concluded in their bail revocation motion.

    According to Bloomberg, Shkreli edited the Facebook post, saying it was "satire, meant for humor” after it was reported in the media.

    His lawyer, Benjamin Brafman, said that while Shkreli’s posts may have been “inappropriate,” his client didn’t intend to harm anybody.

    “We take the matter seriously and intend to address the issue responsibly,” Benjamin Brafman, a lawyer for Shkreli, said in an email Thursday night. “However inappropriate some of Mr Shkreli’s postings may have been, we do not believe that he intended harm and do not believe that he poses a danger to the community.”

    Is it really any surprise that federal prosecutors in Brooklyn, where Hillary Clinton’s presidential campaign was based and where Clinton friend (co-conspirator?) and former Attorney General Loretta Lynch once served as US attorney, are unwilling to let a joke about Clinton slide? Even if Shkreli remains free, the complaint is sure to cost him tens of thousands more in legal fees. Perhaps that's the ultimate goal.
     

  • Venezuela Is About To Ditch The Dollar In Major Blow To US: Here's Why It Matters

    Authored by Darius Shahtahmasebi via TheAntiMedia.org,

    Venezuelan President Nicolas Maduro said Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week, Reuters reports. According to the outlet, Maduro will look to use the weakest of two official foreign exchange regimes (essentially the way Venezuela will manage its currency in relation to other currencies and the foreign exchange market), along with a basket of currencies.

    According to Reuters, Maduro was referring to Venezuela’s current official exchange rate, known as DICOM, in which the dollar can be exchanged for 3,345 bolivars. At the strongest official rate, one dollar buys only 10 bolivars, which may be one of the reasons why Maduro wants to opt for some of the weaker exchange rates.

    “Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.

    Maduro hinted that the South American country would look to using the yuan instead, among other currencies.

    “If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

    Venezuela sits on the world’s largest oil reserves but has been undergoing a major crisis, with millions of people going hungry inside the country which has been plagued with rampant, increasing inflation. In that context, the recently established economic blockade by the Trump administration only adds to the suffering of ordinary Venezuelans rather than helping their plight.

    According to Reuters, a thousand dollars’ worth of local currency obtained when Maduro came to power in 2013 is now be worth little over one dollar.

    A theory advanced in William R. Clark’s book Petrodollar Warfare – and largely ignored by the mainstream media – essentially asserts that Washington-led interventions in the Middle East and beyond are fueled by the direct effect on the U.S. dollar that can result if oil-exporting countries opt to sell oil in alternative currencies. For example, in 2000, Iraq announced it would no longer use U.S. dollars to sell oil on the global market. It adopted the euro, instead.

    By February 2003, the Guardian reported that Iraq had netted a “handsome profit” after making this policy change. Despite this, the U.S. invaded not long after and immediately switched the sale of oil back to the U.S. dollar.

    In Libya, Muammar Gaddafi was punished for a similar proposal to create a unified African currency backed by gold, which would be used to buy and sell African oil. Though it sounds like a ludicrous reason to overthrow a sovereign government and plunge the country into a humanitarian crisis, Hillary Clinton’s leaked emails confirmed this was the main reason Gaddafi was overthrown. The French were especially concerned by Gaddafi’s proposal and, unsurprisingly, became one of the war’s main contributors. (It was a French Rafaele jet that struck Gaddafi’s motorcade, ultimately leading to his death).

    Iran has been using alternative currencies like the yuan for some time now and shares a lucrative gas field with Qatar, which may ultimately be days away from doing the same. Both countries have been vilified on the international stage, particularly under the Trump administration.

    Nuclear giants China and Russia have been slowly but surely abandoning the U.S. dollar, as well, and the U.S. establishment has a long history of painting these two countries as hostile adversaries.

    Now Venezuela may ultimately join the bandwagon, all the while cozying up to Russia, as well (unsurprisingly, Venezuela and Iran were identified in William R. Clark’s book as attracting particular geostrategic tensions with the United States). The CIA’s admission that it intends to interfere inside Venezuela to exact a change of government — combined with Trump’s recent threat of military intervention in Venezuela and Vice President Mike Pence’s warning that the U.S. will not “stand by” and watch Venezuela deteriorate — all start to make a lot more sense when viewed through this geopolitical lens.

    What initially sounded like a conspiracy theory seems to be a more plausible reality as countries that begin dropping the U.S. dollar and opting for alternative currencies continuously — and without exception — end up targeted for regime change.

    If the U.S. steps up its involvement in Venezuela, the reasons why should be clear to those who have been paying attention.

    *  *  *

    This moves comes just days after The BRICS Summit where Putin unveiled his "fair multipolar world," which culminated, as Pepe Escobar explained, in the following

    Meet the oil/yuan/gold triad

    It’s when President Putin starts talking that the BRICS reveal their true bombshell. Geopolitically and geo-economically, Putin’s emphasis is on a “fair multipolar world”, and “against protectionism and new barriers in global trade.” The message is straight to the point.

    The Syria game-changer – where Beijing silently but firmly supported Moscow – had to be evoked; “It was largely thanks to the efforts of Russia and other concerned countries that conditions have been created to improve the situation in Syria.”

    On the Korean peninsula, it’s clear how RC think in unison; “The situation is balancing on the brink of a large-scale conflict.”

    Putin’s judgment is as scathing as the – RC-proposed – possible solution is sound; “Putting pressure on Pyongyang to stop its nuclear missile program is misguided and futile. The region’s problems should only be settled through a direct dialogue of all the parties concerned without any preconditions.”

    Putin’s – and Xi’s – concept of multilateral order is clearly visible in the wide-ranging Xiamen Declaration, which proposes an “Afghan-led and Afghan-owned” peace and national reconciliation process, “including the Moscow Format of consultations” and the “Heart of Asia-Istanbul process”.

    That’s code for an all-Asian (and not Western) Afghan solution brokered by the Shanghai Cooperation Organization (SCO), led by RC, and of which Afghanistan is an observer and future full member.

    And then, Putin delivers the clincher;

    “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

    “To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

    Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.

    This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.

    Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.

    The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.

    RC – via the Russian Central Bank and the People’s Bank of China – have been developing ruble-yuan swaps for quite a while now.

    Once that moves beyond the BRICS to aspiring “BRICS Plus” members and then all across the Global South, Washington’s reaction is bound to be nuclear (hopefully, not literally).

    Washington’s strategic doctrine rules RC should not be allowed by any means to be preponderant along the Eurasian landmass. Yet what the BRICS have in store geo-economically does not concern only Eurasia – but the whole Global South.

    Sections of the War Party in Washington bent on instrumentalizing  India against China – or against RC – may be in for a rude awakening. As much as the BRICS may be currently facing varied waves of economic turmoil, the daring long-term road map, way beyond the Xiamen Declaration, is very much in place.

  • Here's Hartford's Risky Plan To Strongarm Concessions From Its Creditors

    After Hartford Mayor Luke Bronin had warned Thursday that the capital of the wealthiest state in the US could be broke in as little as two months, city officials scheduled a conference call with bondholders to begin restructuring talks, according to Bloomberg.

    As we noted earlier, Hartford’s financial troubles have been compounded by a broader crisis in the state government. But the city’s yearslong descent into insolvency has been hastened by corrupt and incompetent political leaders, fleeing middle-class residents – and now the hollowing out of the insurance industry that once provided a crucial tax buffer. Last year, insurance giant Aetna announced that it intended to move its headquarters to New York City, though it would leave thousands of employees to continue working in Hartford, the decision was still a financial – as well as a reputational – blow.

    According to Bloomberg, city officials, who’re being advised by law firm Greenberg Traurig, will try to convince creditors that restructuring is necessary to guarantee the city’s fiscal stability. Of course, to wrangle better terms from its creditors, it helps to have leverage. And in a recent column, the Hartford Courant’s Dan Haar reveals one “shocking” strategy reportedly being contemplated by city officials: Asking that the state withhold aid unless the city’s creditors agree to concessions.

    This would be tantamount to “strong-arming” creditors by removing the backstop of state funds, which could backfire on the city in several ways, Haar said.

    “And there’s much more friction: Bronin’s letter, co-signed by the city council president and treasurer, also contains a shocking new suggestion — that the state help the city strong-arm bondholders by making new money contingent on Wall Street givebacks. Bronin hired a New York law firm to renegotiate Hartford’s costly bond debt, and now it appears he is asking the state to help that effort.

     

    That could backfire on both the city and the state in much the same way that then-Attorney General Richard Blumenthal’s lawsuit against the Atlantic Coast Conference led to the blackballing of UConn. To this day, the university remains banished to a second-tier athletic league. No one likes to be strong-armed, and the last time I checked, Wall Street bond houses are not peopled by pushovers.”

    So, how might bond holders retaliate if Hartford mayor Luke Bronin embraces this aggressive strategy. Well, they could not show up to market next time Hartford tries to sell a batch of general obligation bonds. After both Moody’s and S&P cut the city’s credit rating to junk in June, they could interpret a rift with bondholders as another potential obstacle for the city.  

    “If the state took that posture with regard to full faith and credit general obligation debt, it could potentially jeopardize the evaluation of its own credit,” said Howard D. Sitzer, senior analyst at CreditSights in New York, which launched bond coverage of Hartford last month.

     

    Still, the suggested ploy to squeeze money from bond investors makes a broader point: There is more Hartford, and Connecticut, could and must do before a bankruptcy judge would accept a filing and bring all the parties to an unhappy table.”

    Of course, Hartford has a handful of options that could – if not solve its fiscal problems – at least help it kick the can down the road, the goal of every sane politician with aspirations of running for higher office. Bronin probably Harbors such ambitions. One such option would be a state takeover. In theory, this would bring fresh cost-cutting eyes to the picture. It could also force the police and municipal unions to offer more concessions.

    Another measure, suggested by Moody’s and others on Wall Street, is a more moderate restructuring. Yet another is “more aggressive cash management,” essentially delaying payments to vendors. Prioritizing pursuit of tax delinquents is also an option.

    The city could also cut back on payments to its retiree pension and health care funds.

    “As it happens, the city is fairly well funded in its pension. But Bronin said, “We are not interested in short-term fixes that make the future more difficult.”

    Whatever it decides, the city needs to act, because a Detroit-style bankruptcy, Haar says, would “add to the caravan of moving trucks exiting Connecticut” – a reference to the resident flight that has plagued the state in recent years, after lame-duck Democratic Gov. Dannel Malloy passed a series of controversial tax hikes to help shore up the state’s pension funds.

    However, Bronin probably knows that he can't depend on the state government for support. Connecticut is now the only state in the US that hasn't passed a budget for the current fiscal year – its government has been operating for two months under emergency measures imposed by Malloy that have delivered dramatic cuts to municipal services.

    If not Bronin’s best option, asking the state to predicate any bailout funds on investor concessions might be his only shot at securing a lasting fix.
     

  • Buchanan: "Why Trump Dumped The Do-Nothing Congress"

    Authored by Patrick Buchanan via Buchanan.org,

    Donald Trump is president today because he was seen as a doer not a talker. Among the most common compliments paid him in 2016 was, “At least he gets things done!”

    And it was exasperation with a dithering GOP Congress, which had failed to enact his or its own agenda, that caused Trump to pull the job of raising the debt ceiling away from Republican contractors Ryan & McConnell, and give it to Pelosi & Schumer.

    Hard to fault Trump. Over seven months, Congress showed itself incapable of repealing Obamacare, though the GOP promised this as its first priority in three successive elections.

    Returning to D.C. after five weeks vacation, with zero legislation enacted, Speaker Paul Ryan and Majority Leader Mitch McConnell were facing a deadline to raise the debt ceiling and fund the government.

    Failure to do so would crash the markets, imperil the U.S. bond rating, and make America look like a deadbeat republic.

    Families and businesses do this annually. Yet, every year, it seems, Congress goes up to the precipice of national default before authorizing the borrowing to pay the bills Congress itself has run up.

    To be sure, Trump only kicked this year’s debt crisis to mid-December.

    Before year’s end, he and Congress will also have to deal with an immigration crisis brought on by his cancellation of the Obama administration’s amnesty for the “Dreamers” now vulnerable to deportation.

    He will have to get Congress to fund his Wall, enact tax reform and finance the repair and renewal of our infrastructure, or have his first year declared a failure.

    We are likely looking at a Congressional pileup, pre-Christmas, from which Trump will have to call on Chuck Schumer and Nancy Pelosi, again, to extricate him and his party.

    The question that now arises: Has the president concluded that working with the GOP majorities alone cannot get him where he needs to go to make his a successful presidency?

    Having cut a deal with Democrats for help with the debt ceiling, will Trump seek a deal with Democrats on amnesty for the “Dreamers,” in return for funding for border security? Trump seemed to be signaling receptivity to the idea this week.

    Will he give up on free-trade Republicans to work with Democrats to protect U.S. jobs and businesses from predator traders like China?

    Will he cut a deal with Hill Democrats on which infrastructure projects should be funded first? Will he seek out compromise with Democrats on whose taxes should be cut and whose retained?

    We could be looking at a seismic shift in national politics, with Trump looking to centrist and bipartisan coalitions to achieve as much of his agenda as he can. He could collaborate with Federalist Society Republicans on justices and with economic-nationalist Democrats on tariffs.

    But the Congressional gridlock that exhausted the president’s patience may prove more serious than a passing phase. The Congress of the United States, whose powers were delineated in the late 18th century, may simply not be an institution suited to the 21st.

    A century ago, Congress ceded to the Federal Reserve its right “to coin money (and) regulate the value thereof.” It has yielded to the third branch, the Supreme Court, the power to invent new rights, as in Roe v. Wade. Its power to “regulate commerce with foreign nations” has been assumed by an executive branch that negotiates the trade treaties, leaving Congress to say yea or nay.

    Congress alone has the power to declare war. But recent wars have been launched by presidents over Congressional objection, some without consultation. We are close to a second major war in Korea, the first of which, begun in 1950, was never declared by the Congress, but declared by Harry Truman to be a “police action.”

    In the age of the internet and cable TV, the White House is seen as a locus of decision and action, while Capitol Hill takes months to move. Watching Congress, the word torpor invariably comes to mind, which one Webster’s Dictionary defines as “a state of mental and motor inactivity with partial or total insensibility.”

    Result: In a recent survey, 72 percent of Americans expressed high confidence in the military; 12 percent said the same of Congress.

    The members of Congress the TV cameras reward with air time are most often mavericks like John McCain, Lindsay Graham and Jeff Flake, who will defy a president the media largely detest.

    At the onset of the post-Cold War era, some contended that democracy was the inevitable future of mankind. But autocracy is holding its own. Russia, China, India, Turkey, Egypt come to mind.

    If democracy, as Freedom House contends, is in global retreat, one reason may be that, in our new age, legislatures, split into hostile blocs checkmating one another, cannot act with the dispatch impatient peoples now demand of their rulers.

    In the days of Henry Clay and Daniel Webster, Congress was a rival to even strong presidents. Those days are long gone.

  • North Korea Slams "Political Prostitute" Nikki Haley, Whose "Tongue Lashing" Will Cost US Dearly

    With North Korea expected to launch another ballistic missile as soon as September 9, a local holiday, a statement carried on North Korea’s state-run KCNA news service warned that Washington’s UN Ambassador Nikki Haley’s remarks that Pyongyang was “begging for war” would not be left unanswered and that the US will “pay dearly” for this provocation..

    On Friday, a news broadcast from the official state-run Korean Central News Agency described Haley as a “political prostitute” whose “hysteric fit” would have dire consequences for the United States.

    “Nikki should be careful with her tongue though she might be a blind fool,” said the statement on KCNA. “The US administration will have to pay a dear price for her tongue-lashing.”

    Amusing threats and flamboyant jingoism aside, the entire KCNA press release has to be read in its entirety if only for its pure geopolitical poetry:

    U.S. Ambassador to the United Nations Nikki Haley, a political prostitute, has kicked off a hysteric fit, exasperated by the DPRK’s nuclear weaponization that has reached its final phase.

     

    At an urgent UN Security Council meeting on Sept. 4 she hurt the dignity of the supreme leadership of the DPRK, stunning the world public. Her rubbish about “misuse of missile and nuclear weapon” and “begging for a war” is just a revelation of the ill-intended purpose to adopt a new toughest “sanctions resolution” with ease by describing the DPRK as a “provoker of war.”

     

    As far as Nikki Haley is concerned, she is just a beginner in politics and diplomacy as she came under public criticism for her string of rubbish over the ballistic rocket launch of the DPRK in March last.

     

    Not content with it, she fully revealed her bad blood toward the DPRK by slandering it over its non-existent “human rights issue” and crying out for taking a military option against it. She is crazily swishing her skirt, playing the flagship role in Trump administration’s hideous sanctions and pressure racket against the DPRK.

     

    She became a laughing stock of the world public for her reckless tongue-lashing devoid of any elementary conception of reason. It seems that she is still ignorant of what disaster would be entailed by her stupidity.

     

    So wretched is the plight of the U.S. which put forward such depraved woman and beginner diplomat as its representative in the UN arena.

     

    She talked as if the DPRK were inviting a war while the U.S. wanted peace, asserting that there is a limit to the patience of the U.S. But with no rhetoric can the U.S. cover up its true colors as chieftain of aggression and war and wrecker of peace.

     

    In actuality, the heavyweights of the U.S. are busy with arms selling.

    * * *

    The U.S. escalating nuclear threats and blackmails pushed the DPRK to have access to nukes, and the world acknowledges that the DPRK’s access to nukes is a reasonable option to protect its vital rights and sovereignty. Nothing will be more foolish than to think that the DPRK, a strong nuclear power, will remain passive toward that outrageous pressure aimed at crippling its “social system.”

     

    Nikki should be careful with her tongue though she might be a blind fool. The U.S. administration will have to pay a dear price for her tongue-lashing

    The United Nations Security Council held an emergency session over North Korea on Monday, during which Haley insisted that Pyongyang’s actions show it is “begging for war,” further calling for adoption of the harshest diplomatic measures against the North.

    “[Kim Jong-un’s] abusive use of missiles and his nuclear threats show that he is begging for war,” she adding that “enough is enough. War is never something the United States wants. We don’t want it now. But our country’s patience is not unlimited. We have kicked the can down the road long enough. There is no more road left.”

    While relations between the US and North Korea have been at rock bottom for months, there was an uproar over Pyongyang’s sixth and the biggest nuclear test to date, which was conducted on September 3. The bomb was also about three times more powerful than America’s atomic bomb that destroyed Japan’s Hiroshima in 1945.

    North Korean state television said on Sunday that, “The hydrogen bomb test was a perfect success,” adding that the device was capable of being loaded onto long-range missiles

    China, Russia and South Korea are among the countries that have voiced criticism of the North’s last nuclear test. Washington has also condemned Pyongyang, and US President Donald Trump has described North Korea as a “rogue nation,” which has become a “great threat and embarrassment” to China, North Korea’s main ally.

    North Korea is under mounting pressure over its missile and military nuclear programs and has been subjected to an array of sanctions by the United Nations. However, Pyongyang says it needs to continue and develop the programs as a deterrent against hostility by the United States and its regional allies, including South Korea and Japan. The nuclear and missile programs were in fact “an exercise of restraint and justified self-defense right” to counter “the ever-growing and decade-long US nuclear threat and hostile policy aimed at isolating my country,” Han said.

    The United States and its allies do not rule out a military option against North Korea, but Russia and China warn that no military solution is available for resolving the escalating crisis, warning the current standoff will only be resolved through dialogue.

    Tensions on the Korean Peninsula have heightened since Washington recently engineered tougher sanctions in the Security Council over the North’s testing of two intercontinental ballistic missiles (ICBM). On Monday, the South Korean military said the North was preparing for another missile launch, possibly an ICBM test, a few hours after Seoul conducted a live-fire ballistic missile exercise, simulating an attack on the North’s main nuclear site.

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