Today’s News 8th April 2018

  • "Events Today Could Lead To The Last War In The History Of Mankind", Veteran Putin General Warns

    The fallout from the Salisbury nerve agent attack reminds us of the assassination of Archduke Franz Ferdinand, which was the most immediate catalyst – of many parallel narrative and sequences of events – that ultimately resulted in World War I. We are not alone in this reasoning, as one high-level retired Russian general warns the Salisbury poisoning could lead to the “last war in the history of mankind.”

    Ret. Lieutenant-General Evgeny Buzhinsky — who served in the Russian Armed Forces for more than forty years — said relations between Russia and Washington could become “worse” than the climax of the Cold War and “end up in a very, very bad outcome” following the nerve gas attack in the United Kingdom.

    More than 150 Russian diplomats have been expelled from 25 countries — including 23 from the United Kingdom since western nations accused Russia of being the sole actor responsible for using deadly chemical weapons on Sergei Skripal and his daughter in their Salisbury home.

    Buzhinsky, who is now the senior vice president of the Russian Center for Policy Studies (PIR Center), told BBC Radio Today program:

    “Please, when you say the world, you mean EU and United States and some other countries … you see it’s a cold war, it’s worse than the Cold War because if the situation will develop in the way this (is) now, I’m afraid that it will end up in a very, very bad outcome.”

    Nicholas Robinson, a British presenter on the BBC’s Today program pressed Buzhinsky on what he meant by “worse than a cold war,” to which the Ret. Russian Lieutenant-General responded with this bombshell: today’s current situation is spiraling out of control and could develop into a “real war.”

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    The Daily Express shares a chilling transcript of Buzhinsky’s conversation on BBC:

    He said: “Worse than a cold war is a real war. It will be the last war in the history of the mankind.”

    “Not the Salisbury poisoning but all the actions.”

    “You see the pressure from the United States, that you say the pressure is going to continue, what are you going to achieve? You are going to achieve the regime change, it’s useless. You don’t know Russians. The more external pressure, the more the society is solidified around the President.”

    When asked how the dispute would lead to a real war, Mr Buzhinsky accused the UK of not wanting to discuss the Salisbury attack.

    “Let’s start discussing,” he said. “You don’t want to discuss. You say Russia should change its behaviour, it’s not the kind of talk or compromise we need.

    “Okay, you expelled diplomats. We expelled diplomats. You further expel, what is the next step? The breach of diplomatic relations.”

    “After that, I said it may lead to nowhere. Actually, you are cornering Russia. To corner, Russia is a very dangerous thing.”

    Mr Buzhinsky claimed it was “nonsense” Russia was behind the attack as President Vladimir Putin had no benefit out of the attack, which took place before the Russian Presidential election. The comments come after Mr Putin’s foreign minister accused Theresa May of “resorting to open lies”.

    He said: “I believe that our Western partners, I mean primarily the United Kingdom, the United States and some countries that blindly follow them, have cast away all decency, they are resorting to open lies, blatant misinformation.”

    Between cold, proxy and trade wars, as time moves on in the Trump era, it seems like the world has gone haywire.  While history tends not to repeat itself – but rather rhymes – the fatalistic opinion of a veteran Russian expert and observer such as Buzhinsky has to be taken seriously. We can only hope that his forecast for a “last war” is wrong.

  • Kelly Goes Nuclear In Oval Office, Threatens To Quit: Report

    White House Chief of Staff John Kelly threatened to quit in late March after a blow up with Trump in a meeting in the Oval Office, reports Axios.

    Kelly was reportedly heard muttering about quitting as he stormed back to his office after the March 28 argument – however sources say it wasn’t related to the firing of former Secretary of Veterans Affairs David Shulkin which happened the same day. 

    A senior administration official said that calling it a threat was “probably too strong, it was more venting frustration.” Kelly often says he doesn’t have to be there and didn’t seek the job originally. –Axios

     Details (via Axios):

    • Kelly packed up some personal belongings, though I’m told that wasn’t necessarily because he was walking out. 
    • He was fired up enough that colleagues got allies to call in to calm him down
    • At one point DHS Secretary Kirstjen Nielsen — perhaps the person in the administration he trusts most — came over to talk him off the ledge

    Meanwhile, President Trump has reportedly been sidestepping Kelly of late – telling one confidant that he’s “tired of being told no” by Kelly, and has instead opted to simply not include his Chief of Staff in various matters, according to CBS News, citing a person who was not authorized to publicly discuss private conversations and spoke on condition of anonymity. 

    When President Donald Trump made a congratulatory phone call to Russian leader Vladimir Putin, White House chief of staff John Kelly wasn’t on the line. When Mr. Trump tapped John Bolton to be his next national security adviser, Kelly wasn’t in the room.

    And when Mr. Trump spent a Mar-a-Lago weekend stewing over immigration and trade, Kelly wasn’t in sight.

    Kelly, once empowered to bring order to a turbulent West Wing, has receded from view, his clout diminished, his word less trusted by staff and his guidance less tolerated by an increasingly go-it-alone president. –CBS News

    Kelly had made it a practice for months to listen in on many of the president’s calls – particularly with world leaders. He also reportedly advocated against the hiring of John Bolton. 

    “It’s not tenable for Kelly to remain in this position so weakened,” said Chris Whipple, author of “Gatekeepers,” a history of modern White House chiefs of staff. “More than any of his predecessors, Donald Trump needs an empowered chief of staff to tell him what he does not want to hear. Trump wants to run the White House like the 26th floor of Trump Tower, and it’s simply not going to work.”

    In December we reported that President Trump had been calling White House aides to his private residence in the evening where he would give them new assignments – asking them not to tell Kelly.

    John has been successful at putting in place a stronger chain of command in the White House, requiring people to go through him to get to the Oval Office,” said Leon Panetta, a White House chief of staff under President Bill Clinton who worked with Mr. Kelly, a four-star Marine general, in the Department of Defense. “The problem has always been whether or not the president is going to accept better discipline in the way he operates. He’s been less successful at that.” –WSJ

    This is all just inevitable,” said one person close to Mr. Trump. “It’s not that Mr. Kelly is wrong—we all know he’s terribly competent.

    Meanwhile, frustrated friends of the President have also reportedly gotten around Kelly’s “do not call” list by calling Melania Trump in order to pass messages to her husband, according to two people familiar with the matter.

    “[S]ince she arrived in the White House from New York in the summer, the first lady has taken on a more central role as a political adviser to the president.”

     

    If I don’t want to wait 24 hours for a call from the president, getting to Melania is much easier,” one person said. –WSJ

    Melania Trump’s office issued a harsh rebuke to the Wall St. Journal, stating This is more fake news and these are more anonymous sources peddling things that just aren’t true. The First Lady is focused on her own work in the East Wing.” 

    Trump’s Twitter feed is still off limits to Kelly, who’s been rolling his eyes at questions over potential diplomatic quagmires such as the time he called North Korean leader Kim Jong Un “short and fat.” Asked about the incident, Kelly shrugged it off – saying “Believe it or not – I don’t follow the tweets,” adding that he has advised White House staff to do the same. “We develop policy in the normal traditional staff way.”

    As one White House official told the WSJ, despite what appears to be an equilibrium between Kelly and Trump, they may never see eye to eye. “Kelly is too much of a general, and Trump is too much Trump,” adding that Trump continues to hold Mr. Kelly in high regard – often praising him during public appearances. 

    Meanwhile in March, Kelly  was reportedly so furious over the way the press was covering Secretary of State Rex Tillerson’s Tuesday firing that he shouted at the television on Air Force One as the President and his staff took off for California, according to Politico.

    Accounts of Kelly’s involvement in Tillerson’s ouster have varied. While some reports describe Kelly only telling Tillerson to watch Trump’s twitter account “over the next few days,” others have said it was a much more direct conversation in which the Secretary of State was given a heads up. In that version, Tillerson implored Kelly to hold off on any decisions until he returned to the U.S. on Monday. 

    Tillerson, meanwhile, would only say that he received a “lunchtime call” from Trump during the President’s flight to California, and a separate call from Kelly – both after Trump’s tweet. 

    Kelly’s consternation over the press coverage came on the heels of former Trump staff secretary Rob Porter’s ouster in February after the Daily Mail published accounts from his two ex-wives accusing him of domestic abuse. Kelly took fire for not getting rid of Porter earler, after it emerged that the FBI had alerted the White House several times in 2017 that the allegations were holding up Porter’s security clearance.  When the allegations against Porter began to fly, Kelly put out a statement calling Porter a “man of true integrity and honor,” and “a trusted professional.” 

    With Trump playing musical chairs in the West Wing seemingly every other week, one has to wonder exactly how much longer Kelly will last.

  • Private Equity Firm Offers Cash-Strapped Connecticut $2BN For Government Buildings

    Given the precarious financial circumstances of Hartford, Conn. – not to mention the state as a whole – it’s hardly surprising that private investors sense an opportunity to buy up valuable state- and city-owned properties at a good price.

    And in the first of what we imagine could be a flood of offers, A Chicago-based private equity firm specializing in real-estate investment has sent letters to the city and to the state of Connecticut offering to spend $2 billion to purchase publicly owned office buildings, health-care facilities and trasit-related properties – and anything else the state and municipal governments might be willing to part with.

    However, there’s one catch: The firm is insisting that it secures a 7.25% annual yield on its investment by raising rents and leasing the properties back to their former owners, according to Bloomberg.

    For the record, that’s nearly double the 3.43% yield Connecticut pays on 20-year general obligation bonds sold in January. And a recent $550 million state bailout for the beleaguered capital city has inspired Moody’s Investors’ Service to boost its rating on Hartford’s GO bonds to A2 from Caa3 – the same level as the state, according to the Bond Buyer.

    Terms of the deal as it’s proposed may favor the buyer, according to Jim Costello, a senior vice president for property-research firm Real Capital Analytics Inc. Capitalization rates — net operating income as a share of the purchase price — are in the mid-6 percent range now for single-tenant sale-and-leaseback office deals, he said.

    “Obviously, the details of every deal are different, but buying in at 7.25 percent, the buyer is getting a better initial yield than the market on average,” Costello said.

    Capitol

    Still, the firm believes Connecticut might be interested in its offer, considering that the state and city could use the money to help balance out their badly underfunded pensions.

    As we’ve pointed out time and time again, the state is in the middle of a taxpayer exodus.

    Last year, the state experienced a net adjusted gross income drain of $2.7 billion as wealthy residents fled the state. The average adjusted gross income of those leaving Connecticut last year was $123,377 – the highest in the country.

    Oak Street has said it would take any buildings the state would be willing to part with.

    Oak Street closed fundraising for its fourth real-estate fund – the Oak Street Capital Real Estate Fund IV – in October, raising $1.25 billion over six months, according to Pensions & Investments. Several state pension funds invested in the Oak Street fund, including the Pennsylvania State Employees’ Retirement System and the Illinois Teachers Retirement System.

    The firm’s offer was assembled by a local politician from Westport – a wealthy Fairfield County suburb – who is a mangaing partner at K Property Group, which specializes in identifying properties with “untapped potential.”

    “I just want to see our state make a smart decision,” said Gregory Kraut, a managing partner of K Property Group who is also an elected member of Westport’s town government. “And with my real estate and financial background, I have some options for them.”

    Kraut, who put together the offer, said he’s acting as a concerned citizen and isn’t taking a commission or a fee from Oak Street. He suggested the state might use the money from real estate sales to reduce its unfunded pension obligations, and Hartford could reduce its debt load.

    The state also has the highest net tax supported debt per capita in the US. It also has fewer jobs than it had a decade ago as the post-crisis recovery has largely passed it by. And recently, two of its largest companies – General Electric and Aetna – announced they would soon move their headquarters out of the state.

    Conn

    Still, with the ruling Democrats in danger of losing the governorship after Gov. Dannel Malloy said he wouldn’t seek a third term, reestablishing the party as pro-business and pro-fiscal responsibility could be a major boon during the 2018 election cycle.

    Of course, as we’ve pointed out time and time again, while politicians might try and repair pension related shortfalls, the reality is the American pension system is probably already too far gone to salvage. It’s so bad, Congress recently had to step in, quietly forming a committee to use federal funds to bail out as many as 200 “multi-employer” pension plan. They did this because the Pension Benefit Guaranty Corporation (PBGC) – the pension equivalent to the Federal Deposit Insurance Corporation (FDIC) – is completely insolvent.

    Think about that: Not only are pension funds heading for insolvency, the backstop meant to bail them out in the event of insolvency is also itself insolvent.

    The upshot, is that regardless of whether the state rejects or accepts this offer, if you’re a young teacher or government employee hoping that your state-supported pension fund will be there for you in retirement, think again.

  • As Skripal-Gate Collapses, Will May's Government Be Next?

    Authored by Tom Luongo,

    The United Kingdom is headed for a break-up.  Not today or tomorrow, mind you but, sooner than anyone would like to handicap, especially in this age of coalition government at any cost.

    By responding to the alleged poisoning of former Russian double agent Sergei Skripal and his daughter Yulia with histrionics normally reserved for The View, Theresa May’s government has set the stage for its own collapse.

    Government’s fall when the people lose confidence in them.  May has bungled everything she has touched as Prime Minister, from Brexit talks and her relationship with Donald Trump to her response (or lack thereof) to the escalating level of domestic terrorism and her pathetic campaign during last year’s snap election.

    When I confront such obvious ineptitude it’s not hard to believe that wasn’t the plan to begin with.

    Since her initial meeting with Donald Trump after his election where it looked like the two would get along, May has become more and more belligerent to both him and his base.  While he continues to affirm our special relationship “The Gypsum Lady” as I like to call her makes mistake after mistake.

    The latest of which is pushing everyone east of the Dneiper River in Ukraine to denounce the Russians and President Vladimir Putin personally for this alleged poisoning in Salisbury a month ago.

    The result of which was the largest round of diplomatic expulsions in a century, if not ever.

    And now that the whole “Russia did it” narrative has been skewered by May’s own experts at Porton Downs, she stands alone along with her equally inept and embarrassing Foreign Secretary Boris Johnson and Defense Secretary Gavin Williamson.

    The calls for their jobs will only intensify here.

    Tinker, Tailor, Traitor, Spy

    The whole thing felt from the beginning like a bad Ian Fleming novel.  I said from the beginning this this was a classic false flag to gin up anti-Russian fervor while May’s negotiator betrayed Brexit and pushed to remove Russian businesses from doing business in London.

    I’m sorry but it’s not a stretch to think this whole thing was cooked up by MI-6.  In fact, that’s been my operating assumption for a month now.

    The problem was, until a few days ago, I didn’t have a good enough reason why.

    Putting diplomatic pressure on Russia on behalf of the U.S.’s crazed neoconservative Deep State just didn’t seem like a big enough reward.  Neither did cutting Russian businesses out of European banks to stop contractor and creditor payments associated with the Nordstream 2 pipeline.

    Those things felt like nice bonus objectives but not main goals.

    And it wasn’t until the lead scientists at Porton Downs left May, Johnson and Williamson out to hang on Monday that the full operation became clear. By stating that they could not confirm the origin of the Novichok nerve agent used in the attack on the Skripals the Porton Downs officials destroyed the credibility of The Gypsum Lady’s government.

    Therefore, this operation was always about undermining May’s government to the point of a no-confidence vote.  This would then be the ultimate betrayal of Brexit in order to preserve the U.K.’s position in the European Union, which is favored by the political and old-monied British elite.

    In short, this was a coup attempt.

    And don’t think for a second that this is not plausible. Remember it was Margaret Thatcher’s own most trusted people who betrayed her to get the U.K. into the European Union in the first place.  This was why they brought down The Iron Lady.

    So, here’s the scene:

    May and Johnson both get told by trusted advisors that there is incontrovertible proof of Russia’s hand in this.  They go with this information with confidence to parliament, the U.N., high-level meetings with foreign leaders and the press.

    They convince their allies to stand strong against the evil Russians who is everyone’s bid ‘baddie’ at this point.

    Trump has to go along with this nonsense even though he is obviously skeptical otherwise there will be an uproar in the U.S. press about him betraying our most trusted ally for his puppet-master Putin.

    To be honest, I don’t think these bozos, May and Johnson, were in on the plan.  I think they were being played all along and now will be the patsies.

    Just like May was played last year, calling for snap elections.  The minute she called them there were terror attacks all over London, marches against her over public safety.  A media campaign which puffed up Jeremy Corbyn, who they are now destroying for his rightful trepidation about this fairy tale MI-6 is spinning.

    The goal was to weaken May and get Labour back in charge.  Corbyn would then be cast aside and a Tony Blair clone installed as Prime Minister to scuttle Brexit and restore order to the galaxy, Europe.  Unfortunately, the DUP got enough of the vote to re-elect a very weakened May and things have limped along for nearly a year.

    Crisis on Infinite Empires

    The problem with this however, is like all plans of those desperate to cling to vestiges of former glory (and the U.K. is definitely the poster child for that), is the crisis of confidence it will engender.

    Make no mistake, Brexit was no mistake.

    It’s what the people of Britain wanted and they want it more now than in 2016.  So, they don’t dare call for a new referendum.  But, they are also looking at a third parliamentary vote in as many years.

    And that doesn’t scream confidence no matter how much markets would prefer the legal status quo.  Opposition to Brexit comes from the entrenched monied power, not from any adherence to globalist ideology.

    But, if Brexit is betrayed through this hackneyed farce of a spy thriller, it won’t sit well with the British people.  Scotland’s call for a second referendum will continue to grow and the Pound will fall alongside the competitiveness of British labor still trapped within a euro-zone that has done nothing but choke the life out of the economy.

    The Pound will begin to sink into irrelevancy as this unfolds.  It won’t happen overnight, but we will look back on these events and see them as the trigger points for the path of history.

    Between these things and the toxic levels of political correctness as it pertains to Muslim immigration, the insanity of London liberals and the de facto police state the U.K. has become and you have a recipe for political unrest that will not be pretty.

    Brexit was meant to be the peaceful revolution that put the nail in the coffin of the march to one world government.  It is about to be nullified.

    When it is the sun will finally set on what’s left of the British Empire.

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  • Surviving The Next Great Depression

    Authored by Tom Chtaham via Project Chesapeake,

    Numerous economists and investors are warning of another great financial crisis to come but few people want to listen to them. No crisis is ever exactly like the last one and the next great depression will be different from the last one. In the last depression those who had money were in a good financial position to ride it out but the next depression will see those with fiat money drowning in it as it becomes worthless.

    Very few Americans have any significant savings today. Most live on credit and those with savings have it stored in financial instruments that will be wiped out as the bankers collapse the system to hide the theft they have been involved in for decades. Those who think they will retire with their IRA, pensions or social security will suddenly find them all gone never to return leaving them with no means to care for themselves.

    The west line has moved to Asia. This means that North America is no longer the shipping center of the world. The consequences of this for Americans will be disastrous. This means our economy in the future will be smaller and slower and will result in a standard of living far below what it currently is.

    Those that own very few assets free and clear will become the new homeless as they become jobless and default on all of their credit obligations.

    All of the social safety nets that exist now to keep people fat and happy will fail leaving mobs of people to roam the streets to seek out what they need to survive.

    One only has to look at Venezuela today to see where this will all lead.

    The basic minimum wage in Venezuela today is $7 dollars a month. Not a day or a week but a month. Those that hold local currency see it devalue on a daily basis making things increasingly worse as time goes on. Had any of these people stored some of their wealth in gold they would have the ability to live a little easier as the economy collapses. One ounce of gold in the hands of a Venezuelan today would last them for years. This is a lesson we all need to heed.

    Simply storing some of your wealth in gold and silver is no cure all but it is part of a bigger strategy to insure you do not have to suffer as many will in the coming years due to their blind faith in their belief the government will care for them. Keep in mind that the government is actually controlled by the same people that will destroy your standard of living so why would they care about your suffering.

    Understanding what will likely happen and insuring you have a plan to deal with it is the only hope you will have of coming through the coming bad years in tact. Those who trust in government or only live for today will reap what they sow and it will be unpleasant at best if they survive at all. A simple strategy to insure you do not suffer does not have to be expensive or complicated. The best plans are simple and allow you to adapt to the changing times. If you invest in a simple, inexpensive plan and the world somehow goes on as normal, you will not be any worse for the investment but if things takes an unexpected turn and your plan becomes necessary, it will allow you to survive the crisis much better than the bulk of the population.

    The strategy I outlined in The American Dream Lost is a basic plan that will work for just about anyone but is mainly designed for those that have only a few thousand dollars to draw on in an emergency. That is to say it is designed for the majority of Americans that have little money. It is important to understand that a plan of this type is an insurance policy against bad times that can do great harm to you and your family and needs to be understood in that light.

    One of the worst problems people have is that when something bad begins to happen they attempt to continue living as they always have and ignore the future consequences until it is too late to do anything meaningful about it. If a person loses their job they continue to live as they always have using up their small savings in the hope that things will change for the better before they run out of money. Sometimes they win and sometimes they lose, it depends on how lucky they are. This type of mentality often leads people to the point where they run out of money and only then do they try to come up with a plan. The problem is, by then they have no resources left to enact a plan with. This is what you need to avoid.

    When your economic situation suddenly changes for the worse you need to immediately sit down and determine what the future is likely to look like. It is good to be optimistic but if the chances of finding a new job are not very good you need to decide how best to use what resources you have to maintain a decent living standard. You may have to make some very difficult choices but the option of doing nothing could be very harmful in the long run. For those that decide radical steps may be needed to continue caring for their family the following list is a good place to start.

    Buy a years supply of basic foods and supplies that store easily

    Buy some durable clothing for future use

    Buy an older vehicle for cash that can pull a trailer

    Buy a good used camper trailer for cash that can house your family

    Buy a weapon and ammo for protection and hunting purposes

    Buy a few rolls of silver coins to preserve wealth and act as an emergency fund

    What this gives you is the ability to continue caring for your family even in the worst of situations if everything is lost to creditors. They will have food, shelter, clothing, transportation, security and the ability to buy critical items that are needed at some future time. Convincing your family they have to move to a camper for a while would not be easy but the alternative of being homeless would make it an easy choice. The fact that thousands of people all across America are at this very moment living in tents near large population centers is proof enough it can happen.

    Depending on your shopping skills all of these things can be secured for under $5,000 dollars and much less if you have time to look for bargains. Your plan may be slightly different depending on the resources and skills you have. You may have access to a small piece of land you own somewhere that a cabin can be built on or you may have the skills to retrofit a van body truck or enclosed trailer for living in. In situations like this skills are worth as much as gold coins.

    When the next great depression hits it will be unlike anything we have lived through before. Nothing will be as it seems and only those that have the resources to adapt will come through it whole. Preparation is the key to adapting to future events and those without resources will reap a bitter harvest as they struggle to survive. No announcements will be made, no warnings will be given by the establishment, it will just suddenly happen out of the blue and everyone will say it was unpredictable. But those who prepared will know better.

  • India Builds Over 14,000 Bunkers In Preparation For War With Pakistan

    The Government of India is planning to construct 14,460 bunkers for civilians in five border districts in Jammu & Kashmir – Samba, Poonch, Jammu, Kathua, and Rajouri – which reside along Line of Control (LoC) and the international Indo-Pakistani border, reports The Times of India.

    The state-owned National Buildings Construction Corporation (NBCC) will build these bunkers in populated regions that rest within 3 kilometers (1.86 miles) from the de facto border between the two countries, which have experienced an increasing amount of incursions by the Pakistani Army.

    In February, Jammu and Kashmir Chief Minister Mehbooba Mufti announced during a State Assembly that 41 civilians had been killed in ceasefire violations along the LoC by Pakistan between 2015 and 2017. To safeguard civilians from Pakistani shelling across the border, NBCC will build 13,029 small bunkers and 1,431 more massive community bunkers. The Times of India said the construction program would cost around 4.157 billion rupees (US$63.8 million).

    Oneindia News: India builds bunkers along the LoC with Pakistan for villagers

    The chairman and managing director of NBCC, A K Mittal, told The Times of India that “pre-cast construction methodology” would be used for the bunkers.

    “Strategically located casting yards will be used to fabricate RCC components, which shall be transported by trailer/ tractors and the bunkers will be erected by cranes and labourers. We will plan in such a way that each bunker is completed in maximum 2-3 days,” he added.

    The Times of India provides insight into the specific locations where the individual and community bunkers will be built.

    “In Samba, 2,515 individual and eight community bunkers will be built. Similarly, in Jammu 1,200 individual and 120 community bunkers will be constructed. A maximum of 4,918 individual and 372 community bunkers will be built in Rajouri. In Kathua, 3,076 individual bunkers will be constructed. Poonch will get the maximum number of 688 community bunkers and will get another 1,320 individual bunkers.”

    In addition to building thousands of bunkers, The Times of India indicates NBCC has already started erecting border fencing along the India-Pakistan border.

    “It’s a prestigious and challenging project for us. We will meet the time line, which will be set by the J&K government. While we are building World Trade Centre in South Delhi we are also engaged in road and fencing works in Assam, Meghalaya, Mizoram and Tripura on Indo-Bangladesh border and in Gujarat on Pakistan border,” Mittal said.

    Despite the 2003 ceasefire agreement, violence has recently erupted between both countries on the LoC, which marked 2017 as the bloodiest year since the ceasefire agreement came into effect.

    Earlier this year, we reported on 40,000 Indians fleeing the Jammu and Kashmir region, as intense military shelling from the Pakistani military turned the region into a war zone.

    “Along the 786 km-long Line of Control (LoC) which divides the State of Jammu Kashmir between India and Pakistan, sporadic cross-border military gunfire between both countries is not that unusual. However, this weekend, in the region of Noushera, Rajouri and Akhnoor sectors of Jammu and Kashmir, more than 40,000 Indians have fled their homes and shops amid the fourth consecutive day of intense shelling from Pakistani military forces, the Economic Times reports.”

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    The sporadic cross-border military skirmishes between both countries have led to fears of another Indo-Pakistani war breaking out. According to government statistics, there were some 860 incidents of ceasefire violations by Pakistan military forces along the LoC in 2017, compared with 221 the prior year. As India prepares to build thousands of bunkers for its civilian population before the next conflict breaks out, Western media outlets have ignored this dire situation and would rather focus on unverified claims of a Russian nerve gas attack in the United Kingdom. Nevertheless, the LoC could very well be the epicenter of “World War III,” said the Daily Express.

  • Chris Hedges: "U.S. Citizens Are Living In An Inverted Totalitarian Country"

    Submitted by Erik Sandberg of NewsVoice

    Chris Hedges

    The mainstream media deflects attention from where power resides: corporations, not with the leaders of the free world. The arguments posed by Chris Hedges, that the U.S. is neither a democracy nor a republic but a totalitarian state that can now assassinate its citizens at will, are pertinent ones. Scary ones. Especially as consecutive governments seem equally as impotent to invoke any real change for the States. If the media won’t stand up to the marionettes who pull the strings of the conglomerates causing deep, indelible polarisation in the world abound; then so we must act. Together.

    Listen to the full interview in our weekly Newsvoice Think podcast.

    We were delighted to have Chris Hedges on an episode of the Newsvoice Think podcast as we seek to broadcast perspectives from all sides of the political spectrum. Right, left, red, blue and purple.

    In our interview with Chris, we discussed a range of topics facing the U.S. today as the Trump administration looks back at a year in power, and forward to the November ’18 midterms where Democrats will be looking to make gains. Chris was scathing of that party describing them as a “creature of Wall Street, which is choreographed and ceased to be a proper party a long time ago.”

    As a columnist with Truthdig, and a big advocate of independent media. Chris Hedges was the perfect interviewee for us to draw on the benefits of crowdsourced journalism and the challenges facing sites at the mercy of Facebook, Google and Twitter algorithms.

    Chris’s ire against the corporate interest of Facebook et al didn’t let up saying dissident voices were being shut down and that corporate oligarchs were only too happy to let them. The neutralisation of the media platforms that seek to provide independent opinion on U.S. current affairs is in full pelt.

    North Korea was the hot topic in 2017. Commentators said it was like a return to the days of the Cold War. But Hedges pointed that we need to remember what happened during the Korean War — how the North was flattened by U.S. bombs — and that as a result they, as a nation, suffer from an almost psychosis as a result. Trump, he said, is an imbecile and only deals in bombast, threats and rhetoric.

    Not surprisingly, Trump got it hard from Hedges. Describing his administration as a “kleptocracy” who will seek to attack immigrants and up the xenophobia stakes as it distracts and covers for the unadulterated theft of U.S. natural resources.

    As young people look to estimable journalists, activists and politicians in the States to help give them a voice, Hedges sees the democratic system as utterly futile. Encouraging mass civil disobedience instead, the ex-NY Times foreign correspondent states that railroads should be blocked and shutting down corporate buildings, for example, is the only way forward.

    The perennial argument between Republicans and Democrats is just that; is the U.S. a Republic or a Democracy? Hedges thinks neither. He told Newsvoice that the States is an inverted totalitarian country where the government regards the public as “irrelevant”.

    Unlike Ben Wizner from the ACLU who sees hope in delaying Net Neutrality, at least until a new administration is in power, Chris feels it is hopeless — that it is a dead duck, and as Net Neutrality slows down independent media platforms, the public will be at the behest of corporate social media sites such as Facebook who’ll increasingly deem what you do and don’t read or see.

    You can read more of Chris’ work at Truthdig where he has a weekly column every Monday.

  • Retail Real Estate Bubble Turns Manhattan Into A "Shopping Wasteland"

    The Fed loves to repeat how necessary and vital inflation is for economic prosperity, but in the case of midtown Manhattan’s “prime” retail real estate, it is doing nothing but helping cause once extremely prominent shopping areas become the very same “ghost towns” they turned into during the 2008 housing crisis.

    Mayor DeBlasio’s asinine solution to this issue created in part by faulty government policy: more government and more regulation.

    So much for the recovery.

    As if brick and mortar retail didn’t have enough problems to deal with being methodically decimated by the ever growing behemoth that is Amazon, store owners are now facing rent that is simply so high it makes it impossible for most to open retail stores and do business in once prominent areas of downtown Manhattan.

    On Saturday, the New York Post wrote an article confirming our writeup from late March suggesting that high prices are driving businesses out of town:

    If you want to see the future of storefront retailing, walk nine blocks along Broadway from 57th to 48th Street and count the stores.

    The total number comes to precisely one — a tiny shop to buy drones.

    That’s right: On a nine-block stretch of what’s arguably the world’s most famous avenue, steps south of the bustling Time Warner Center and the planned new Nordstrom department store, lies a shopping wasteland.

    It shouldn’t come as a surprise to anybody that Amazon and other online retailers have had a profoundly negative effect on traditional brick-and-mortar retailers. One look at the recent Chapter 11 retail bankruptcy filings and it becomes obvious why one year ago the CEO of Urban Outfitters said that “the retail bubble has now burst

    This is the narrative that has been playing out for the last couple of years as we have watched retail stocks like Sears, JCPenney and Macy’s get destroyed while online shopping names have performed extraordinarily well.

    But what may come as a surprise to some is the fact that the constant need to keep prices of real estate and rent rising, regardless of traditional supply and demand, is exacerbating things to a degree where some of the most sought after real estate in the world has now become deserted and barren. The article continued:

    The same crisis blights the rest of Manhattan. The people invested in storefront retailing — real-estate developers, landlords and retail companies themselves — tell us not to worry. It’s a “transitional” situation that will right itself over time. Authoritative-sounding surveys by real-estate and retail companies claim that Manhattan’s overall vacancy is only just 10 percent.

    But they are all wrong. Bricks-and-mortar retail is shrinking so swiftly and on such a wide scale, it’s going to require big changes in how we plan our new buildings and our cities — although nobody wants to admit it.

    And yet, it’s scary to think that one of the city’s great pleasures, window-shopping — which also ensures vibrant, crime-deterring sidewalk life — will become a thing of the past except at certain locations.

    At this rate, we face a future where streets will be mostly dark at sidewalk level for miles on end. Third Avenue in the East 60s, Broadway north of Lincoln Center, many blocks in the supposedly thriving Meatpacking District are halfway there already.

    What is “progressive” Mayor DeBlasio’s solution to the problem of rising rents as a result of government policy? More regulation and more government, of course! He wants to actually fine landlords who keep spaces empty until they fine tenants. Talk about the blind leading the blind:

    Few retailers can afford to pay more than $250 per square foot annually in rent — yet landlords persist in asking $400 a square foot and up to $2,000 a square foot in prime zones like Fifth Avenue and Times Square.

    Mayor de Blasio wants to fine landlords who keep spaces empty until they find tenants who’ll pay astronomical rents. But there’s no fair way to judge who’s actually guilty. Would he punish the owners of the small corner building at 1330 Third Ave. at East 76th Street, who slashed the “ask” from $420,000 a year in 2016 to $360,000 in April 2017 and still can’t find a tenant?

    In other words a socialist mayor wants to fine capitalist merchants as punishment for policies enacted by the Federal Reserve (whose direct debt and deficit monetization also has extensive socialist underpinnings).

    To be sure, none of this comes as a surprise to us – or our regular readers – because in late March owe recalled our own 2009 tour of Madison Avenue to discover that it also had turned into a ghost town. Just a week ago we told our readers that the ghost town that was New York’s “Golden Mile” was not surprising: after all the US economy had just been hit with the worst recession since the Great Depression, and only an emergency liquidity injection of trillions of dollars prevented a global financial collapse.

    What is more surprising is why nearly 9 years later, at a time of what is supposed to be a coordinated global recovery, a walk along Madison Avenue reveals the exact same picture.

    And aside from us and the New York Post, Starbucks CEO Howard Schultz also noticed the disturbing trend, stating at the company’s Annual General Meeting:

    Now, as a result of what we’re witnessing, we’re also seeing something else and that is, there is a proliferation around the country right now of empty storefronts. We took a walk in New York two weeks ago from 59th street to 79th on Madison Avenue, and we lost count of how many empty storefronts there were in ManhattanIt reminded me of the cataclysmic financial crisis in 2008. But what’s happening is very simple, the rent structures for the last 5 to 10 years, have been rising at historic rates and retailers do not have the amount of  customers they had during these last 5 to 10 years and could no longer economically survive.

    So they’re closing stores and as a result of this, I can promise you just like I predicted in 2014 that rents are coming down and landlords are going to have to get religion, or else their stores are going to stay empty. And we’re already beginning to see a different level of reception in terms of what we believe the cost of occupancy should be. And this is going to bode extremely well, specifically for us. We’re adding almost 700 new Starbucks stores a year. And so we are going to take full advantage of the economic reality of this situation. And as we go forward two, three, four, five years out even though labor is going up in terms of cost of labor, we believe rents are going down and the economic model of Starbucks is going to be enhanced as a result of this macro situation. And we’re just at the beginning of this trend.

    So the hilarious irony of Keynesian theory once again rears its ugly head as New York’s current retail apocalypse and prime real estate exodus has, in effect, caused some of the most traversed city streets to look like they did during the financial crisis of 2008 once again.

    Needless to say, this is the direct result of force-engineering a “recovery”, instead of letting the free-market recover on its own: you get a “recovery” that is anything but, and only works as long as the source of endless funding – the Fed – keeps pumping. Meanwhile, the Fed and its fawning media supporters have always been able to duck behind the outperforming stock market as a false indicator of the health of the economy as a “scorecard” for the recovery. But with the market now topping out and reaching levels of significant volatility, and the March jobs number handily missing expectations, how can the Fed justify that their policy continues to make sense when it is putting a good portion of Manhattan into the very same shackles and chains it was in during the crisis we are “recovering” from 10 years ago?

  • Inside El Chapo's Lair: Plastic Furniture, Ornate Weaponry And Cocaine Bananas

    By the time DEA agent Drew Hogan arrived in Mexico City in 2010, Mexican drug lord Joaquin “El Chapo” Guzman had already been on the run for nine years – having escaped from a prison in Southwest Mexico in early 2001 – reportedly hiding in a laundry basket.  

    After Hogan established his base of operation, he picked up the trail for the Sinaloa cartel chief by “looking at the details,” he said. 

    It was in the details – in the numbers,” Hogan told NBC‘s “Today” show on Wednesday while discussing his book “Hunting El Chapo.”

    The phone numbers don’t lie,” Hogan said. “And I was able to pair up with a crack team of Homeland Security investigative agents, and we began intercepting members of Chapo’s inner circle and starting to dismantle layers within his sophisticated communications structure until we got to the top, where I had his personal secretary’s device, who was standing right next to him, and I could ping that to establish a pattern of life to determine where he was at.”

    Hogan, his partner “Brady” and a team of 50 Mexican marines would stumble upon a safehouse used by El Chapo in February 2014, only to find the Cartel boss had already left the lair hidden behind six-inch thick steel doors.

    The DEA agent filmed the hideout on his mobile phone – revealing among other things: 

    • A black sack filled with hundreds of green bananas intended for smuggling cocaine into the United States. 
    • A jewel-encrusted semiautomatic pistol adorned with El Chapo’s initials
    • Lots of cocaine
    • A cache of weapons, including a tripod-mounted machine gun

    [insert: 4AE38DA500000578-5586785-image-a-66_1523036688323.jpg ]

    Hogan says he was shocked by the squalor of the place. “I was surprised, he really afforded himself no luxuries. Each safehouse was the same type of construction, very basic.” 

    “They had Walmart-style plastic tables and chairs, none of the trappings you would expect from a drug lord.”

     El Chapo was eventually tracked down to the beach resort of Mazatlán in late 2014. 

    For the first face-to-face meeting Hogan wore his very own black baseball cap, and ran up to the drug lord and yelling: ‘What’s up, Chapo?

    Hogan said from that moment he knew he was going to tell his story at some point, and chose to write about the exhaustive and enthralling hunt in a new book, called ‘Hunting El Chapo.’

    On Wednesday he spoke about the book for the first time publicly in an interview on the Today Show, and will give further details during Dateline on Sunday.

    He also shared a personal photo from those thrilling years of his life of the moment he caught El Chapo, in which the drug lord can be seen frowning with Hogan and another agent behind him and posing for the camera.

    The former DEA agent called that day he met El Chapo a ‘souvenir of the hunt,’ explaining he plucked it from another place where Chapo had been hiding out. –Daily Mail

    Within 16 months, however, El Chapo would escape from prison – tunneling below the shower in his cell at a Mexican maximum security prison. 

    [insert: 4AD2DB7C00000578-5578631-image-a-36_1522863896995.jpg ]

    “This tunnel that went underneath the prison was the same type of tunnels that went under the safe houses, the same tunnels that were at the US/ Mexico border,” said Hogan.

    Six months later, Chapo was captured again – with the aid of informants, satellite images and intercepted cell phone communications. The drug lord was extradited to the United States on January 19 of this year to stand trial on charges of running the largest drug-trafficking enterprise in the world – said to be responsible for hundreds of murders in North America. He is wanted in Chicago, San Diego, New York City, New Hampshire, Miami and Texas – and has pending indictments in seven different U.S. federal courts. 

    El Chapo is currently sitting in the maximum-security wing of the Metropolitan Correctional Center in New York. His trial is set to begin in September. 

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Today’s News 7th April 2018

  • Why A Dollar Collapse Is Inevitable

    Authored by Alasdair Macleod via GoldMoney.com,

    “Naturally, the smooth termination of the gold-exchange standard, the restoration of the gold standard, and supplemental and interim measures that might be called for, in particular with a view to organizing international credit on this new basis, will have to be deliberately agreed upon between countries, in particular those on which there devolves special responsibility by virtue of their economic and financial capabilities.”

    General Charles de Gaulle, February 1965

    We have been here before – twice.

    The first time was in the late 1920s, which led to the dollar’s devaluation in 1934. And the second was 1966-68, which led to the collapse of the Bretton Woods System.

    Even though gold is now officially excluded from the monetary system, it does not save the dollar from a third collapse and will still be its yardstick.

    This article explains why another collapse is due for the dollar. It describes the errors that led to the two previous episodes, and the lessons from them relevant to understanding the position today. And just because gold is no longer officially money, it will not stop the collapse of the dollar, measured in gold, again.

    General de Gaulle made himself very unpopular with the international monetary establishment by holding the press conference from which the opening quote was taken. Yet, his prophecy, that the gold exchange standard of Bretton Woods would end in tears unless its shortcomings were addressed by a return to a gold standard, turned out to be correct shortly after. What the establishment did not like was the bald implication that it was wrong, and that the correct thing to do was to reinstate the gold standard. Plus ça change, as he might say if he was still with us.

    Those of us who argue the case for a new gold standard, and not some sort of half-way house such as a gold exchange standard to address the obvious failings of the current monetary system, are in a similar position today. The first task is that which faced General de Gaulle and Jacques Rueff, his economic advisor, which is to explain the difference between the two.[i] It is now forty-seven years since all forms of monetary gold were banished by the monetary authorities, and today few people in finance understand its virtues.

    Furthermore, in the main, historians educated as Keynesians and monetarists do not understand the economic history of money, let alone the difference between a gold standard and a gold-exchange standard. These similar sounding monetary systems must be defined and the differences between them noted, for anyone to have the slimmest chance of understanding this vital subject, and its relevance to the situation today.

    Defining the role of gold

    To modern financial commentators, there is little or no significant difference between a gold standard and a gold exchange standard. Keynes’s famous quip, that the gold standard was a barbarous relic, was made in his Tract on Monetary Reform, published in 1923, before the gold exchange standard really got going, yet it is quoted as often as not indiscriminately in the context of the latter.

    Yet, they are as different as chalk and cheese. The gold exchange standard evolved in the 1920s as America and Britain went to the aid of European countries, struggling in the wake of the Great War. It allowed the expansion of national currencies under the guise of them being as good as gold. It was not. In modern terms, it was as different as paper gold futures are to the possession of physical gold today.

    A gold standard is commodity money, where gold is money, and monetary units are defined as a certain fixed fineness and weight of gold. The monetary authority is obliged by law to exchange without restriction gold against monetary units and vice-versa, and there are no restrictions on the ownership and movement of gold.

    Under a gold exchange standard, the only holder of monetary gold is the issuer of the domestic monetary unit as a substitute for gold. The monetary authority undertakes to maintain the relationship between the substitute and gold at a fixed rate. Only money substitutes (bank notes and token coins – gold being the money) circulate in the domestic economy. The monetary authority exchanges all imports of monetary gold and foreign currency into money substitutes for domestic circulation at the fixed gold exchange rate. The monetary authority holds any foreign exchange which is also convertible into gold on a gold exchange standard at a fixed parity, and treats it to all extents and purposes as if it is gold.

    The essential difference between a gold standard and a gold exchange standard is that with the latter, the monetary authority has added flexibility to expand the quantity of money substitutes in circulation without having to buy gold. A gold standard may start, for example, with 50% gold and 50% government bonds backing for money units, but all further issues of monetary units will require the monetary authority to purchase gold to fully cover them. This was the monetary regime in Britain and many other countries before the First World War.

    As stated above, gold exchange standards evolved after the First World War, in the early 1920s.[ii] It was the taking in of foreign currencies, also on gold exchange standards themselves, and booking them as if they were the equivalent of gold, that allowed central banks to expand the quantity of monetary units domestically. To understand how this operated in practice requires us to work through an example between two countries on gold exchange standards. We will take the entirely hypothetical example of two countries, America and Italy, both of which have monetary gold in their reserves and operate on a gold exchange standard.

    America lends Italy dollars by crediting its central bank’s account at the Fed with the dollars loaned. But while ownership has changed to Italy, dollars never leave America. And dollars, when drawn down by the Banca d’Italia are recycled into America’s banking system.

    The economic sacrifice to America of lending money to Italy is therefore zero. America has simply created a loan out of its own currency, and in the process increased the quantity of dollars in circulation. And because in practice Italy does not encash dollars for gold, America expects to preserve its gold reserves.

    Meanwhile, The Banca d’Italia has expanded its balance sheet by the inclusion of America’s dollar loan to it as a liability, and the dollars themselves as an asset regarded as the equivalent of gold. Because dollars are not permitted to circulate in Italy’s domestic economy, they can be used by Banca d’Italia, either to settle other foreign obligations, or as a gold substitute to back the issue of further lira. Meanwhile, the Banca d’Italia’s dollars are reinvested in US Treasuries, which give a yield. Banca d’Italia has little incentive to exchange its dollars for physical gold, because gold yields nothing and is costs to store.

    If Banca d’Italia uses dollars to discharge a foreign obligation with another country, that third party will also end up investing the dollars gained in US Treasuries, assuming it also prefers yielding assets to physical gold. Alternatively, if the dollars are used by the Banca d’Italia to back an increase in the quantity of lira or to subscribe for government debt, the effect in the domestic Italian economy is an inflation of prices.

    Therefore, the effect of a gold exchange standard is the opposite of a gold standard. A gold standard puts the requirements for the quantity of money in circulation entirely in the hands of the market, to which the central bank mechanically responds. A gold exchange standard allows a lending central bank to inflate its money supply through inward investment, and a borrowing central bank to inflate its money supply on the presumption the monetary substitutes borrowed to back it are monetary units of gold.

    The gold exchange standard in the 1920s

    After the First World War, both sterling and dollars were made available under the Dawes Plan of 1924, which provided non-domestic capital for Germany after her hyperinflation. France suffered a currency crisis in July 1926, which was successfully dealt with by the Poincaré government through raising taxes. The Bank of France was then enabled to borrow dollars and sterling and to issue francs and subscribe for government debt.

    To summarise, these loans bolstered the balance sheets of the Reichsbank and the Bank of France, which invested the sterling and dollars borrowed in gilts and Treasuries respectively. If instead France and Germany had taken gold under the gold exchange provisions, they would have had an asset with no yield, though France did opt increasingly for some gold towards the end of the decade and beyond – by December 1932 she had accumulated 3,257 tonnes. So, by lending their monetary units, the creditor nations achieved finance for their own governments, as well as providing capital for foreign central banks. It was seen to be a win-win for all the central banks involved.

    The accumulation of dollars in foreign hands from 1922 onwards accompanied and fuelled bank credit expansion in the US. This gave the roaring twenties an inflationary impetus, dramatically reflected in its stock market bubble. However, the increasing quantity of dollars in foreign ownership became an accident waiting to happen. There had been a mild thirteen-month recession from October 1926 to November 1927, after which the stock market boomed. The Fed was compelled to reverse earlier interest rate cuts and increased the discount rate from 3 ½% to 5% by July 1928.

    French investors began to repatriate capital en masse, and the Bank of France’s gold reserves rocketed from 711 tonnes in 1926 to 2,099 tonnes by 1930.[iii]The gold exchange standard had spectacularly failed, and redemption of dollars for gold, being deflationary, exacerbated the Wall Street Crash. It certainly rhymed with Robert Triffin’s dilemma: the export of dollars into foreign ownership was monetary magic, until it reversed at the first sign of trouble.

    The gold exchange standard of Bretton Woods

    In 1944, the monetary panjandrums of the day, led by Harry Dexter-White for the US and Lord Keynes for the UK, designed the post-war gold exchange standard of Bretton Woods. No doubt, Dexter-White fully understood the advantage to the US of forcing all countries to accept dollars with a yield, or gold with none. When American payments abroad exceeded receipts, the difference was generally reflected in dollars issued to foreign central banks, kept on deposit in New York, or invested in US Treasuries.

    Throughout the ‘fifties, America recorded a surplus on goods and services, which declined as European manufacturing recovered. But other factors, such as investment abroad and the Korean war resulted in an overall balance of payments deficit totalling $21.41bn, the equivalent of 19,024 tonnes of gold at $35 per ounce. However, US gold reserves declined only 4,457 tonnes between 1950 and 1960, which tells us that the balance was indeed invested in US bank deposits and US Government notes and bonds.

    The respective figures for the 1960s were total payment deficits of $32bn, the equivalent of 28,437 tonnes of gold, and an actual decline in gold reserves of 5,283 tonnes.

    The accelerating increase of foreign ownership of dollars over these two decades meant the world, ex-America, was awash with dollars by the mid-1960s. By the end of that decade, America’s gold reserves had declined from 20,279.3 tonnes in 1950, two-thirds of the world’s monetary gold, to 10,538.7 tonnes, 29% of the world’s monetary gold in 1970.

    The effect was to remove trade settlement disciplines on net importing nations, and to cause inflation in net exporting nations, the opposite of the disciplines of a pre-WW1 gold standard on global trade. It was this effect that was central to the second Triffin dilemma, whereby dollars became wildly over-valued in gold terms through their excessive issuance.

    In the mid-sixties, Washington became increasingly alarmed that foreigners weren’t playing by the assumed rule that they should take dollars and not redeem them for gold. By then, France and Germany between them had increased their gold holdings from 487.1 tonnes in 1948 to 7,089 tonnes at the time of de Gaulle’s press conference. General de Gaulle’s press conference, from which this article’s opening quote is taken, had touched some very raw nerves.

    It was clear that the dollar, with the overhang of foreign ownership, had become horribly overvalued, and so should have been devalued, perhaps to over $50 or $60 per ounce, for a gold peg to stick. A devaluation of this magnitude might have been sufficient at that time to stem the outflow of gold.

    Both Washington and American public opinion were set strongly against any devaluation. Instead, the London gold pool, designed to ensure the major central banks supported the Bretton Woods System, collapsed in 1968, when France withdrew from it. A dollar devaluation to $42.2222 shortly after was simply not enough, and in 1971 President Nixon suspended the Bretton Woods System, and the new regime of floating exchange rates that is still with us to this day began.

    The situation today

    Following the Nixon shock, official monetary policy towards gold was to ignore it, and to persuade other central banks and financial markets it was irrelevant to the modern monetary system. To this day, the Fed still books the gold note from the Treasury at $42.2222 per ounce, even though the price has risen to over $1300.

    We can simplistically value the dollar in terms of gold, which is certainly a valid, perhaps the most valid approach. But to merely conclude that the dollar has collapsed since 1971, while true, side-steps an analysis that points to the risk that even today’s value may still be too high. Furthermore, with the dollar acting as the world’s reserve currency, all other fiat currencies, which are priced with reference to it rather than gold, are to a greater or lesser extent in the same boat.

    Taking a cue from our analysis of the workings of cross-border monetary flows, which allows America to have its privilege of foreigners financing its deficits, we can estimate the approximate extent of the accumulated imbalances that could lead to the dollar’s collapse.

    We know that the US balance of payments deteriorated from 1992 onwards, though those figures did not include military spending abroad, which has been a significant and unrecorded addition to dollars both in cash circulation outside America, and also to estimates of the balance of payments.[vi] Official balance of payments figures are therefore understated and have been for at least a quarter of a century.

    More recently, from September 2008 the Fed began expanding its balance sheet by policies designed to increase commercial bank reserves, as a response to the financial crisis. That August, they were $10.5bn, increased to $67.5bn the following month, and peaked at $2,786.9bn in August 2014, since when there has been a modest decline. From our analysis of the run-ups to the two previous dollar crises, we know we should try to estimate how much of the increase was effectively funded from abroad. Treasury TIC Data gives us a fairly good steer to what extent this has happened. We find that between those dates, (August 2008 – August 4014) foreign ownership of dollars increased by $6,237.7bn, over twice as much as the increase in the Fed’s record of commercial bank reserves.

    This is Triffin at its most fast and furious. Since then, foreign ownership of dollars has increased a further $2,142.4bn to a record $18,694.1, even though bank reserves declined by $572bn.[viii] In other words, the accumulation of dollars in foreign hands now stands at over 95% of US GDP.

    Another way of looking at it is to assess the market values of US securities held by foreigners and relate that to GDP, though this information is less timely,. This is shown in the following chart.

    The build-up of foreign investment in America, in large measure the counterpart of dollar loans to foreigners, has been remarkable. At the time of the dot-com bubble, it had jumped to 35% of GDP, from less than 20% in the nineties and considerably less before. At over 90% of GDP in recent years, there can be no doubt that the next financial event, whether it be derived from a rise in interest rates or a general weakness in the dollar, can be expected to trigger a substantial flight out of the dollar.

    The pricing of financial assets, and today’s extraordinarily low interest rates indicate that a flight from the dollar is the last thing expected in financial markets. If they were still alive, de Gaulle and his economic advisor, Jacques Rueff, would be instructing the ECB, as successor to the Bank of France, to dump all dollars for gold immediately. And probably to dump all other foreign fiat currencies for gold as well. However, today, it is likely that other actors will blow the whistle on the dollar, such as the Chinese, and the Russians.

    For it is clear that when the over-valuation of the dollar is corrected, the downside of a dollar collapse is far greater than it was in the early-thirties or the early-seventies. All other fiat currencies take their value from the dollar, not gold. So, the destabilising forces on the dollar, the other unexpected side of Triffin’s dilemma, could take down the whole fiat complex as well.

  • The Average Commute In America Is 26 Minutes – How Does Your City Stack Up?

    The average person is awake for 15.5 hours per day, but once you subtract hours committed to work, eating, chores, personal care, and errands, there’s only so little much free time leftover.

    That’s why, as Visual Capitalist’s Jeff Desjardins notes, the amount of time spent commuting, either in a car or via transit, can be a massive difference maker towards a person’s quality of life.

    THE AVERAGE COMMUTE

    Throughout the United States, the average commute time works out to about 26 minutes one-way.

    However, as today’s infographic from TitleMax shows, the average commute varies considerably between individual states, and also between major cities as well.

    Courtesy of: Visual Capitalist

    In South Dakota, a state with fewer than one million people, congestion is not a problem for most. The state is home to the shortest average commute in the country at just 16.6 minutes one-way.

    Meanwhile, as you may imagine, New York is the polar opposite of South Dakota for getting to work. The Empire State has the longest average commute in the country, which is double the length at 33.6 minutes.

    COMMUTES BY CITY

    Every city is different, which means that data can have high amounts of variability within each state.

    New York again is a great example for this: NYC has the longest average commute in the nation at 34.7 minutes, but go upstate and Buffalo actually has the shortest average commute for all major cities at 20.3 minutes per trip.

    Here are the 10 shortest commutes in the country, for major cities:

    Many people living in places like Buffalo or San Diego are able to hop to their place of the work in 20 minutes or less, giving them a little extra flexibility with their free time in comparison to bigger cities in the country.

    Here are the 10 longest commutes in the country, for major cities:

    While it’s surprising to see that Los Angeles didn’t make it onto the list of cities with ultra-long commutes, the largest city in California does have the distinction of being the most congested city in the world.

    It’s there that citizens spend an unfortunate 104 hours each year stuck in traffic jams.

  • Oceania, 'Tis For Thee: The World Of "1984" Is Forming Now

    Authored by Jeremiah Johnson via SHTFplan.com,

    “Oceania” was a nation described in George Orwell’s “1984” as being comprised of Britain (called “Airstrip One,”) and the United States. There were two other superpowers, namely Eurasia and Eastasia. Other lands rich in resources were contested over, such as Africa and assumingly South America…lands never kept by any of three Super-states for any significant period. The “flux” in conquests was exactly what the MIC (Military Industrial Complex) of our time would have termed “necessary” to justify large expenditures: War as the focal purpose, rather than the exceptional event.

    We see a parallel in today’s world with huge defense budgets and troop deployments keeping the contracts on the move and siphoning off a considerable amount of national revenues to keep the patriotic war machines moving…irrespective of each nation. The psychology: keep the population agitated and on a continual war-footing, using a “threat” (either real, created, or imagined) to accomplish this.

    You are witnessing the final alignment of those spheres of influence that are almost identical to the novel that Orwell wrote. Look at the situation with the alleged Russian poisoning of an intelligence operative and his daughter in Britain. The United States showed “solidarity” with Great Britain by expelling 60 Russian diplomats and closed the Russian consulate in Seattle, Washington. Russia countered by ordering the expulsion of an equal amount of American embassy personnel.

    Yet the interesting fact is that the other nations who followed suit in the “humanitarian crusade” of the alleged Russian poisoning of former FSB agent Skripal and his daughter? The poisoning may have been done by the British, not the Russians. The U.S. State Department has made several statements to the tune that the Russians do not “see eye to eye with us or share our values of freedom and democracy.”

    Really, now…in the surveillance state that inexorably draws to its conclusion with the country losing its rights while being monitored in every activity…what “values” do we have anymore?

    I’m not characterizing the entire populace of the United States…but our government, that holds most of the “forms” that the country was founded upon without any true leadership, statesmanship, or representation of the American people. I’m characterizing much of the population…flitting from one reality show to the next dose of Hollywood propaganda and paradigm shift labeled as “movies” and only loyal to the country as long as the handouts (labeled “entitlements”) keep flowing.

    The formation of the Super-states…each with their spheres of influence in the novel…that formation is taking place now. Latvia, Lithuania, Estonia, Poland, and Romania have expelled Russian diplomats in-line with the U.S. actions. All those nations are heavily-invested in NATO militarily, with tremendous amounts received of American money, materials, and troops. Poland is purchasing U.S. missile and anti-missile systems. Romania already has a U.S. missile base.

    Ukraine expelled Russian diplomats. Ukraine is a vassal state of the United States and the IMF. Most of the European nations such as the Netherlands (The Hague is there, go figure), Germany, France, Britain, Spain…followed suit. The battle right now is to see who will align with the U.S.-British Western hegemony [Oceania] against Russia and her allies (such as Iran, Syria, etc.) [Eurasia] with China being the “top banana” in the Orient [Eastasia]. The English-speaking countries will head the U.S.-British conglomerate…also including Canada and Australia…the former having participated in the expulsion.

    It’s even deeper than the geographical and political distinctions paralleling “1984” when you examine it further. Little by little, as the U.S. becomes more repressive, more controlling, with a “nationalistic” bent driving the framework, the citizenry is becoming isolated. After World War I the United States pursued an isolationist policy, and the policy was reflected in the mindset of the citizens. This current isolation is one that is forced.

    Oh, we’re building a wall to keep out the illegal aliens? Possibly, but look how late in the game it is. Look at how illegal incursions have taken place without any true resistance for more than a century unchecked and unabated.  Why? To satisfy the U.S. corporations’ demands for cheap labor that could be off the books…and the government that turned a blind eye to it because of the taxable revenues made from the corporations. The taxes were paid, and kickbacks were undoubtedly delivered to government officials who managed to look the other way when faced with 100 illegal aliens working in the fields in front of their eyes. Everyone looked away, the corporations made profits, and everyone was happy.

    The main reason to build the wall will not be to prevent illegal aliens from coming into the U.S., but to appear to prevent illegal aliens from coming in. That will be the main reason…subtly swathed in the name of the sacred “interests of national security” phrase we’ve all come to know and love. All the construction will be subject, of course, to taxation, kickbacks, and contracts to keep the flow of taxpayer monies moving out of their pockets and savings accounts into the hands of the rich and powerful. There is also another reason…purposed and insidious they wish the wall.

    A wall will work in the opposite direction as well: to keep the taxpayer-serfs in.

    Slowly but surely, a forced isolation policy is being pursued, and more: the ones traveling will be pursuing a government agenda in their endeavors and it will be limited to those with capital and wealth. We’re seeing it already: the new laws (Don’t you just love that? New laws?) that restrict those with a certain amount owed in taxes, in child support, or whatever…keep them in the country. How about that? The firms and corporations, and their employees…with the “trusted traveler” status…basically a “get-out-of-jail-free” card. Trusted to keep paying the taxes and conform to the existing social, political, and religious order…to be a “nark” on behalf of the government.

    To be the “guy with the watch” in the movie “They Live,” selling out to the aliens.

    All your communications are monitored: every e-mail, every telephone call. Talk to your friends in Moscow from college, and you’ll come up on a watch list. Talk to anyone outside of the U.S. and it’s a guarantee that you’ll be recorded and monitored. The new “Cloud Act” that slid surreptitiously between the thighs of the Omnibus $1.3 trillion spending bill (really…$1.3 trillion, can you imagine all the kickbacks on that one?). The harmless-sounding Cloud Act…giving foreign nations the ability to carry out U.S. government directives “in cooperation,” or “in partnership” …to surveil and monitor U.S. citizens and bypass the U.S. Constitution.

    Marbury vs. Madison is extinct.  Go ahead and take them to court, protest, and write to your Congressman or Senator (accomplishing nothing except identifying and marginalizing yourself). Your suit, your protests, and your letters will go nowhere…and eventually they’ll break you…and you’ll go somewhere…in the middle of nowhere…indefinitely (synonymous with forever). The need for a chargeable offense to arrest you is gone, along with the 4th Amendment…now you just need to be a “suspicious person” and be placed “under investigation.”

    All of this is crafted to make the populations poorer, keep them monitored, and prevent them from interacting with one another as before. Limit their freedom of movement and therefore limit their freedom. This is happening in the other two “spheres of influence” as well. China has a Draconian police state where cameras and stoolies monitor and report every move of the people. China is the “model” (in the words of Kissinger and other globalist-Communists). The police in this country are becoming as the ones in China, with a capitalist agenda: To protect and serve the taxable, corporate entities, and oppress the common taxpayer.

    This is the end-state desired by the creators of the Global Governance. They follow Milton’s words to a tee: “It is better to rule in hell than to serve in heaven.” They will have three spheres, just as in the novel “1984,” and keep the flames of ethnic difference fanned just enough to make War not an eventuality, but a managed, controllable event. War translates into industrial output, use of supplies and materials, and largesse that ends up “boomeranging” and turning into raises and bonuses for politicians (look at Congress “voting” themselves raises and bonuses in the Omnibus bill while simultaneously increasing the “defense” budget).

    War enables favors, contracts, and immunity for oligarchs. A self-sustaining war machine that keeps the three spheres of influence at each other’s throats…while “managing” the people and tying them up in a never-ending loop of consumption, production, impoverishment, debt, and always directed by patriotic fervor.

    In the end, the world will not notice its enslavement, because the generations capable of creative thought and reason will have been replaced by a stultified, obedient mass of humanity only capable of acting in a manner predetermined by the rulers. The world of “1984” is forming today. The Gulags are just around the corner. They’ll have “occupants” as soon as the time is right. Not at gunpoint. The people will enter the camps of their own accord, enslaved with the baits of entitlements and material conveniences. The world of “1984” was written about years ago, but it is upon us, now, and before we know it, we will be in it.

  • AI Researchers Boycott South Korean University Over Plan To Build "Killer Robots"

    It looks like Tesla CEO Elon Musk and Russian President Vladimir Putin aren’t the only ones who’ve envisioned a nightmare scenario where “killer robots” stalk through neighborhoods murdering innocent Americans (or Russians).

    A group of artificial intelligence researchers from nearly 30 countries is boycotting one of South Korea’s most prestigious universities over concerns about a recent partnership with an “ethically dubious” arms manufacturer with the stated purpose to design and manufacture “autonomous weapons systems”.

    The Korea Advanced Institute of Science and Technology (KAIST) and its partner, the weapons manufacturer Hanwha Systems, one of South Korea’s largest arms dealers, are pushing back against the boycott, saying they have no intention of developing “killer robots” – even though the description of the project clearly states its goals, per the Guardian.

    “There are plenty of great things you can do with AI that save lives, including in a military context, but to openly declare the goal is to develop autonomous weapons and have a partner like this sparks huge concern,” said Toby Walsh, the organiser of the boycott and a professor at the University of New South Wales.

    “This is a very respected university partnering with a very ethically dubious partner that continues to violate international norms.”

    What’s worse, the scientists say, is Hanwha’s history of manufacturing and selling cluster munitions and other arms that are banned in more than 120 countries under an international treaty that South Korea, the US, Russia and China have not signed.

    Killer

    Walsh, an Australian professor, became aware of the project after reading a Korea Times article about the partnership. He said he promptly wrote the university asking for more information – but never received a response.

    Walsh was initially concerned when a Korea Times article described KAIST as “joining the global competition to develop autonomous arms” and promptly wrote to the university asking questions but did not receive a response.

    Participants in the boycott have promised not to visit KAIST or host or collaborate with any of its faculty “over fears it could accelerate the arms race to develop autonomous weapons.”

    KAIST opened the controversial research center on Feb. 20. At the time, university leaders said it would “provide a strong foundation for developing national defense technology.”

    The announcement of the initiative, which has since been deleted, said it would focus on “AI-based command and decision systems, composite navigation algorithms for mega-scale unmanned undersea vehicles, AI-based smart aircraft training systems, and AI-based smart object tracking and recognition technology.”

    However, for all their effort, it appears the boycotters are already too late to prevent the creation of killer robots, though the group is still agitating for governments to promise to ban the manufacture, use and distribution of these weapons.

    South Korea’s Dodaam Systems already manufactures a fully autonomous “combat robot”, a stationary turret, capable of detecting targets up to 3km away. Customers include the United Arab Emirates and Qatar and it has been tested on the highly militarised border with North Korea, but company executives told the BBC in 2015 there were “self-imposed restrictions” that required a human to deliver a lethal attack.

    The Taranis military drone built by the UK’s BAE Systems can technically operate entirely autonomously, according to Walsh, who said killer robots made everyone less safe, even in a dangerous neighbourhood.

    “Developing autonomous weapons would make the security situation on the Korean peninsula worse, not better,” he said.

    “If these weapons get made anywhere, eventually they would certainly turn up in North Korea and they would have no qualms about using them against the South.”

    The idea that governments should do more to prevent, or at least regulate, increasingly advanced smart weapons is gaining traction around the world. Last year, Elon Musk surprised his twitter followers by conjuring up an image of robots walking down streets murdering people. While Putin once jokingly mused “how long until the robots eat us?”

  • How To Recognize When Your Society Is Suffering A Dramatic Decline

    Authored by Brandon Smith via Alt-Market.com,

    When historians and analysts look at the factors surrounding the collapse of a society, they often focus on the larger events and indicators — the moments of infamy. However, I think it’s important to consider the reality that large scale societal decline is built upon a mixture of elements, prominent as well as small. Collapse is a process, not a singular event. It happens over time, not overnight. It is a spectrum of moments and terrible choices, set in motion in most cases by people in positions of power, but helped along by useful idiots among the masses. The decline of a nation or civilization requires the complicity of a host of saboteurs.

    So, instead of focusing on the top down approach, which is rather common, let’s start from the foundations of our culture to better understand why there is clear and definable destabilization.

    Declining Moral Compass

    There is always a conflict between personal gain and personal conscience — this is the nature of being human. But in a stable society, these two things tend to balance out. Not so during societal decline, as personal gain (and even personal comfort and gratification) tends to greatly outweigh the checks and balances of moral principles.

    People often mistake the term “morality” to be a religious creation, but this is not what I am necessarily referring to. The concepts of “good” and “evil” are archetypal — that is to say they are psychologically inherent in most human beings from the moment of birth. This is not a matter of faith, but a matter of fact, observed by those in the field of psychology and anthropology over the course of a century of study.  How we relate to these concepts can be affected by our environment and upbringing, but for the most part, our moral compass is psychologically ingrained. It is up to us to either follow it or not follow it.

    Watching how people handle this choice is a bit of hobby of mine, and I do take notes. You can learn a lot about the state of your environment by observing what people around you tend to do when faced with the conflict of personal gain versus personal conscience. It is saddening to admit that even though I live in rural America, where you are more likely to find self-reliance and cultural stability, I can still see a faltering nation bleeding through.

    I have seen supposedly good people act dishonestly in business agreements. I have seen local institutions scam hardworking citizens. I have seen a court system rife with bias and a “good old boy” attitude of favoritism. I have seen local companies pretend to be benevolent contributors to the community while at the same time running constant frauds and rackets. I have even seen a few people within the liberty movement itself put the movement at risk with their own avarice, gluttony, narcissism and sociopathy.

    Again, it is important to make a note of such people and institutions, for as the system continues its downward spiral it is these people that will present the greatest threat to the innocent.

    As Carl Jung notes in his book The Undiscovered Self, there is always a contingent of latent sociopaths and psychopaths within any culture; usually about 10% of the population. In normal times, they, at least most of them, are forced into moral acclimation by the rest of the populace. But in times of decline, they seem to leak out of the woodwork like a slimy fungus. During heightened collapse, they no longer have to pretend to be upstanding and they show their true colors.

    Most dangerous is when latent sociopaths or full blown sociopaths assume roles of leadership or power during the worst of times. With everyone distracted by their own plight, these people can become a cancer, infecting everything with their narcissistic pursuits and causing destruction in their wake.

    Disinterest In Rewarding Conscience

    During wider cultural collapse, it can become “fashionable” to see acts of principle as something to be scoffed at or ridiculed or to even see them as threats to the status quo. The concept of “going along to get along” takes precedence over doing what is right even when it is hard; this attitude is not relegated to the less honest people within society.

    As a system collapses, a fog of apathy can result. Good people can become passive, scrambling to their individual corner of the world and hoping evil times will simply pass them by. The phrase “I just want to put all this behind me” is spoken regularly; but as we ignore the trespasses of terrible men and women, we also enable them. How? Because by doing nothing we allow them to continue their criminality, and we subject future persons and generations to victimization.

    When doing the right thing is treated as laughable or “crazy” by what seems like a majority in the midst of widespread corruption, you are truly in the middle of a great decline.

    In Christian circles, the idea of “the remnant” is sometimes spoken of. In Christian terms, this usually represents a minority of true believers surviving a tumultuous and immoral era. I see “the remnant” not so much as a contingent of Christians alone, but as a contingent of people that continue to maintain their principles and conscience when faced with unprecedented adversity. In the worst of times, these people remain stalwart, even if they are ridiculed for it.

    Disinterest In Independent Effort

    It is said that in this world there are two kinds of people — leaders and followers.  I’m not so sure about that, but I can see why this philosophy is promoted; it helps evil people in power stay in power by encouraging passive acceptance.

    I would say that there are in fact two kinds of people in this world — people who want to control others and the people that just want to be left alone. In life sometimes we are both leaders and followers; we just have to be sure that when we lead we lead by example and not by force, and when we follow, we follow someone worth a damn.

    In any case, passivity is not a solution to determining our roles in society. In most situations, independent action is required by every person to make the world a better place. Yet, in an era of systemic crisis, it is usually independent effort that is the first thing to go out the window. Millions upon millions of people wait around for someone, anyone, to tell them what they should be doing and how they should be doing it. In this way, society finds itself in stasis, frozen in a position of inaction.  Poisonous collectivism wins through mass aggression, but also through mass passivity.

    In fact, when individualists do take action they can be admonished for it during times of societal breakdown, even if their actions have the potential to solve a problem. The idea that one man or woman (or a small group of people) could do anything about anything is sneered at as “fantasy” or “delusion.”  But mass movements of citizens working towards a practical goal are rare, and even more rare is when these movements are not controlled or manipulated to benefit the established order. It is not mass movements that change the world for the better, but individual people and small organizations of the dedicated, acting without permission and without administration.

    It is these individuals and small groups that, over time and through relentless effort, inspire a majority to do what is necessary and right. It is these people that inspire others to finally take leadership in their own lives.

    Individual Self-Isolation

    I write often on the plight of the individual and individual rights within society, and I continue to see the factor of the individual as the most important element in any culture. A culture based on protecting and nurturing individualism and voluntarism is the only culture, in my view, that will ever be successful at avoiding full spectrum collapse. That said, the downside to overt individualism is the danger of self isolation. That is to say, when true individuals only concern themselves with their personal circumstances and ignore the circumstances of the rest of the world, they eventually set themselves up to be crushed by that world.

    Organization on a voluntary basis is not only healthy but vital in the longevity of a society. The more people turn in on themselves and only care about their own general conditions, the easier it is for evil people to do evil things unnoticed. Also, self isolation in the wake of collapse sets individuals up for failure, as no one is capable of surviving without at least some help from a wider pool of knowledge and talents.

    In a system based on corruption, the establishment will encourage self isolation as a means to control the populace. Or, they will offer a false choice, between self isolation versus mindless collectivism. The truth is there is always a middle ground. Voluntary organization and individualism are not mutually exclusive. I call this the “difference between community and collectivism.” A community does not supplant the individual, while a collective requires the complete erasure of individual pursuits and thought.

    If you find yourself surrounded by people who refuse any organization, even practical and voluntary organization in the face of instability, then your society may be in the latter stages of a collapse.

    Disaster Denial

    Even as a crisis or collapse unfolds, if a society actually reels or reacts to it and takes note of the problem, there is hope for that society. If, however, that society willfully ignores the danger and denies it exists when presented with overwhelming evidence, then that society will likely suffer complete disintegration and will probably have to start all over from scratch — hopefully with a set of principles and ideals based on conscience and honor.

    The strength of a culture can be measured by its willingness to self reflect. Its survival can be determined by its willingness to accept its flaws when they arise and its willingness to repair the damage done. Self-aware societies are difficult to corrupt or control. Only in denial can people be easily manipulated and enslaved.

    If you cannot accept the reality of the abyss, you cannot move to avoid it or prepare yourself to survive the fall. I see this issue as perhaps the single most important element in the fight to save the portions of our society worth saving. Educating people on the blatant facts behind our own national decline can dissolve the wall of denial, and perhaps we will find when disaster strikes that there are far more awake and aware individuals ready to act than we originally thought.

  • Obama State Department Spent $9 Million With Soros To Meddle In Albanian Politics

    President Obama’s State Department and the U.S. Agency for International Development (USAID) spent nearly $9 million on an Albanian political reform campaign coordinated with billionaire George Soros, according to 32 pages of State Department documents obtained by Judicial Watch via a Freedom of Information Act lawsuit. 

    Working with Soros’ Open Society Foundation, USAID channeled the funds into a “Justice for All” campaign aimed at reforming the socialist government’s judicial system in 2016. 

    “The Obama admin spent at least $9 million in tax dollars in direct collusion with left-wing billionaire George Soros to back socialist gov in Albania,” wrote Judicial Watch President Tom Fitton in a statement. “The records also detail how the Soros operation helped the State Department review grant applications from other groups for taxpayer funding,” Fitton added. 

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    “George Soros is a billionaire and he shouldn’t be receiving taxpayer support to advance his radical left agenda to undermine freedom here at home and abroad,” said Fitton.

    A memo from April 2016 also reveals that the U.S. Embassy in Tirana “sponsored” a survey with the Open Society Foundation to determine whether Albanians had “knowledge, support and expectations on judicial reform.” The survey revealed that 91% of respondents believed in the need for judicial reform. A corresponding memo obtained by Judicial Watch dated February 2017 corroborates the arrangement.

    The State Department pushed back following the Judicial Watch publication – telling Fox News that the agency did not directly provide grants to Soros’s Open Society Foundation (OSF) in Albania. Instead, as the documents show, the US embassy in Tirana and the OSF “each provided funding to a local organization to conduct a public opinion poll on attitudes towards the Judicial Reform effort,” according to a February 2017 document. 

    Last year Senator Mike Lee (R-UT) and five other Senators called on Secretary of State Rex Tillerson to immediately investigate how US taxpayer funds ended up supporting Soros-backed, leftist political groups in several Eastern European countries including Macedonia and Albania.  According to the letter, potentially millions of taxpayer dollars are being funneled through USAID to Soros’ Open Society Foundations with the explicit goal of pushing his progressive agenda.

    Foundation Open society-Albania and its experts, with funding from USAID, have created the controversial Strategy Document for Albanian Judicial Reform,” the letter read. “Some leaders believe that these ‘reforms’ are ultimately aimed to give the Prime Minister and left-of-center government full control over the judiciary.”

    As the Daily Caller’s Andrew Kerr notes, Albanian opposition leaders to the ruling left-wing party took to calling the judicial reform effort a “Soros-sponsored reform.”

    USAID and Soros

    As Fox News pointed out at the time, USAID gave nearly $15 million to Soros’ Foundation Open Society – Macedonia, and other Soros-linked organizations in the region, in the last 4 years of Obama’s presidency alone.

    The USAID website shows that between 2012 and 2016, USAID gave almost $5 million in taxpayer cash to FOSM for “The Civil Society Project,” which “aims to empower Macedonian citizens to hold government accountable.” USAID’s website links to www.soros.org.mk, and says the project trained hundreds of young Macedonians “in youth activism and the use of new media instruments.”

    The State Department told lawmakers that in addition to that project, USAID has recently funded a new Civic Engagement Project which partners with four organizations, including FOSM. The cost is believed to be around $9.5 million.Fox News

    Similar efforts in Hungary were blasted in early 2017 by Prime Minister Viktor Orban, who expressed concern about Soros meddling in his country’s political fights, and warned about Soros’ “trans-border empire.” Hungarian Foreign Minister Péter Szijjártó told Fox News last month that they hoped that with a change in administration in Washington, the Soros-led push against their government would decrease.

    “I think it is no secret and everyone knows about the very close relationship between the Democrats and George Soros and his foundations. It is obvious that if Hillary Clinton had won then this pressure on us would be much stronger. With Donald Trump winning we have the hope that this pressure will be decreased on us,” he said.

    Widely cited as an example of Soros’ influence during the Obama administration was a 2011 email, published by WikiLeaks, in which Soros urged Hillary Clinton to take action in Albania over recent demonstrations in the capital of Tirana.  Among other things, Soros urged Clinton to “bring the full weight of the international community to bear on Prime Minister Berisha and opposition leader Edi Rama.”

    Dear Hillary,

     

    A serious situation has arisen in Albania which needs urgent attention at senior levels of the US government. You may know that an opposition demonstration in Tirana on Friday resulted in the deaths of three people and the destruction of property. There are serious concerns about further unrest connected to a counter-demonstration to be organized by the governing party on Wednesday and a follow-up event by the opposition two days later to memorialize the victims. The prospect of tens of thousands of people entering the streets in an already inflamed political environment bodes ill for the return, of public order and the country’s fragile democratic process.

    I believe two things need to be done urgently:

    1. Bring the full weight of the international community to bear on Prime Minister Berisha and opposition leader Edi Rama to forestall further public demonstrations and to tone down public pronouncements.

    2. Appoint a senior European official as a mediator.

    While I am concerned about the rhetoric being used by both sides, I am particularly worried about the actions of the Prime Minister. There is videotape of National Guard members firing on demonstrators from the roof of the Prime Ministry. The Prosecutor (appointed by the Democratic Party) has issued arrest warrants for the individuals in question. The Prime Minister had previously accused the opposition of intentionally murdering these activists as a provocation.

    After the tape came out deputies from his party accused the Prosecutor of planning a coup d’etat in collaboration with the opposition, a charge Mr. Berisha repeated today. No arrests have been made as of this writing. The demonstration resulted from opposition protests over the conduct of parliamentary elections in 2009. The political environment has deteriorated ever since and is now approaching levels of 1997, when similar issues caused the country to slide into anarchy and violence. There are signs that Edi Rama’s control of his own people is slipping, which may lead to further violence.

    The US and the EU must work in complete harmony over this, but given Albania’s European aspirations the EU must take the lead. That is why I suggest appointing a mediator such as Carl Bildt. Martti Ahtisaari or Miroslav Lajcak, all of whom have strong connections to the Balkans.

    My foundation in Tirana is monitoring the situation closely and can provide independent analysis of the crisis.

    Thank you, George Soros

    Not surprisingly, within a few days, A U.S. envoy was dispatched.

  • Syrian Showdown: Trump Versus The Generals

    Authored by Patrick Buchanan via Buchanan.org,

    With ISIS on the run in Syria, President Trump this week declared that he intends to make good on his promise to bring the troops home.

    “I want to get out. I want to bring our troops back home,” said the president. We’ve gotten “nothing out of the $7 trillion (spent) in the Middle East in the last 17 years. … So, it’s time.”

    Not so fast, Mr. President.

    For even as Trump was speaking he was being contradicted by his Centcom commander Gen. Joseph Votel.

    “A lot of good progress has been made” in Syria, Votel conceded, “but the hard part … is in front of us.”

    Moreover, added Votel, when we defeat ISIS, we must stabilize Syria and see to its reconstruction.

    Secretary of State Rex Tillerson had been even more specific:

    “It is crucial to our national defense to maintain a military and diplomatic presence in Syria, to help bring an end to that conflict, as they chart a course to achieve a new political future.”

    But has not Syria’s “political future” already been charted?

    Bashar Assad, backed by Iran and Russia, has won his seven-year civil war. He has retaken the rebel stronghold of Eastern Ghouta near Damascus. He now controls most of the country that we and the Kurds do not.

    According to The Washington Post, Defense Secretary James Mattis is also not on board with Trump and “has repeatedly said … that U.S. troops would be staying in Syria for the foreseeable future to guarantee stability and political resolution to the civil war.”

    Saudi Crown Prince Mohammad bin Salman, who fears a “Shiite corridor” from Tehran to Baghdad, Damascus and Beirut, also opposes Trump. “If you take those (U.S.) troops out from east Syria,” the prince told Time, “you will lose that checkpoint … American troops should stay (in Syria) at least for the mid-term, if not the long-term.”

    Bibi Netanyahu also wants us to stay in Syria.

    Wednesday, Trump acceded to his generals. He agreed to leave our troops in Syria until ISIS is finished. However, as the 2,000 U.S. troops there are not now engaging ISIS — many of our Kurd allies are going back north to defend border towns threatened by Turkey — this could take a while.

    Yet a showdown is coming. And, stated starkly, the divide is this:

    Trump sees al-Qaida and ISIS as the real enemy and is prepared to pull all U.S. forces out of Syria as soon as the caliphate is eradicated. And if Assad is in power then, backed by Russia and Iran, so be it.

    Trump does not see an Assad-ruled Syria, which has existed since the Nixon presidency, as a great threat to the United States. He is unwilling to spill more American blood to overturn the outcome of a war that Syria, Iran and Russia have already won. Nor is he prepared to foot the bill for the reconstruction of Syria, or for any long-term occupation of that quadrant of Syria that we and our allies now hold.

    Once ISIS is defeated, Trump wants out of the war and out of Syria.

    The Israelis, Saudis and most of our foreign policy elite, however, vehemently disagree. They want the U.S. to hold onto that slice of Syria east of the Euphrates that we now occupy, and to use the leverage of our troops on Syrian soil to effect the removal of President Assad and the expulsion of the Iranians.

    The War Party does not concede Syria is lost. It sees the real battle as dead ahead. It is eager to confront and, if need be, fight Syrians, Iranians and Shiite militias should they cross to the east bank of the Euphrates, as they did weeks ago, when U.S. artillery and air power slaughtered them in the hundreds, Russians included.

    If U.S. troops do remain in Syria, the probability is high that Trump, like Presidents Bush and Obama before him, will be ensnared indefinitely in the Forever War of the Middle East.

    President Erdogan of Turkey, who has seized Afrin from the Syrian Kurds, is threatening to move on Manbij, where Kurdish troops are backed by U.S. troops. If Erdogan does not back away from his threat, NATO allies could start shooting at one another.

    As the 2,000 U.S. troops in Syria are both uninvited and unwelcome, a triumphant Assad is likely soon to demand that we remove them from his country.

    Will we defy President Assad then, with the possibility U.S. planes and troops could be engaging Syrians, Russians, Iranians and Shiite militias, in a country where we have no right to be?

    Trump is being denounced as an isolationist. But what gains have we reaped from 17 years of Middle East wars – from Afghanistan to Iraq, Syria, Libya and Yemen – to justify all the blood shed and the treasure lost?

    And how has our great rival China suffered from not having fought in any of these wars?

  • Global Trade War Could Not Have Come At A Worse Time

    Despite all the propaganda that the world had reached utopian levels of ‘globally synchronous recovery’ growth last year, 2018 has seen that narrative collapse as China’s credit impulse dries up, The Fed continues on its path to ‘normalization’, and the world wakes up to Europe’s smoke and mirrors economic renaissance…

    And, as if that was not enough to spook even the most ardent bull, Bloomberg notes that rapidly accelerating trade ‘battles’ are focusing minds on that simmering threat to markets: the eventual easing of synchronized global growth.

    The U.S. version – which includes economic, credit and corporate indicators – is close to its 2007 peak.

    The trade war tensions have arrived at a risky time, with Morgan Stanley’s cycle gauge for the developed world nearing levels last seen before prior recessions.

  • Is The 'Ring Of Fire' Becoming More Active?

    Authored by Dominic Faulder and Erwida Maulia via The Nikkei Asian Review,

    Recent eruptions prompt calls for better building standards and evacuation plans in Southeast Asia…

    When Bali’s Mount Agung started rumbling last September, authorities on the Indonesian resort island — mindful of the destruction the 3,000-meter volcano had caused in 1963 — began warning residents to evacuate. Tremors of varying intensity continued until Nov. 21, when it finally began to erupt, forcing as many as 140,000 people to seek refuge. More than four months later, it still hasn’t stopped.

    On Jan. 23, Mount Kusatsu-Shirane, about 150km northwest of Tokyo, astounded the Japan Meteorological Agency when it suddenly erupted 2km from one of 50 areas around the country kept under constant video surveillance. Falling debris killed a member of the Ground Self-Defense Force who was skiing nearby and injured five others.

    At much the same time, Mount Mayon in the Philippines began spewing ash and lava, displacing more than 56,000 people.

    Then, in mid-February, Mount Sinabung in Sumatra, Indonesia, blew spectacularly, sending billowing pillars of steam and superheated ash over 7km into the air. People fled, and schoolchildren ran home wailing.

    Sinabung’s eruption was followed in late February by a magnitude-7.5 earthquake in Papua New Guinea, its worst in a century. Earlier in the month, a magnitude-6.4 quake rocked Taiwan’s Hualien County, tilting buildings and killing 17.

    Such seismic restiveness in Japan, the Philippines and Indonesia is a fact of life along the “ring of fire,” the horseshoe-shaped belt in the Pacific Ocean that is home to about three-quarters of the world’s most active volcanoes.

    Yet after what some experts call a relatively subdued 20th century for seismic activity, the 21st has seen an uptick in “great” earthquakes. And the first 18 years of this century has seen about 25 significant volcano eruptions globally, compared with some 65 in the entire 20th century.

    Whether or not seismic activity is kicking into higher gear, it has already taken a heavy toll in Asia this century, producing deadly earthquakes in Indonesia in 2004 and Japan in 2011, among other countries. This has taken place against a backdrop of rapid population and economic growth in Southeast Asia, where some countries have been slow to confront the threat of natural disasters. (See Asia seeks to improve its record on disaster preparedness)

    Professor Yoshiyuki Tatsumi of the Kobe Ocean-Bottom Exploration Center at Kobe University says the recent volcanic activity in Asia is “just the ring of fire being as it has always been in history.” The key, he told the Nikkei Asian Review, is to ensure that governments and scientists are prepared for eruptions before the signs are visible. “We have to be aware that we are living in a region where volcanic activity is almost always there.” 

    The recent surprise eruption in Japan is a salutary reminder of the unpredictability of these events. “We are now retrospectively investigating whether our sensors were picking up slight signs,” said professor Yasuo Ogawa from the Volcanic Fluid Research Center of the Tokyo Institute of Technology. “But the fact is that we were not able to predict it in advance this time.”

    The challenge is great in Indonesia, home to 127 volcanoes — more than half of which must be continuously monitored for activity. “The truth is that the chain of volcanoes in the Sunda Islands of Indonesia, from Sumatra through Java and Bali to Timor, constitutes the most dangerous of the world’s tectonic interfaces,” professor Anthony Reid wrote in October on New Mandala, an Australian National University website.

    Reid noted that Indonesia had a mild 20th century in seismic terms, and warned that things might be changing. “The 21st century has in its first decade already far exceeded the number of casualties from … the whole 20th century” in Indonesia, he said.

    The massive death toll largely comes down to one event. Triggered by a magnitude-9.2 earthquake off northern Sumatra, the third-largest in history, the Indian Ocean tsunami of 2004 was the most deadly ever recorded. Affecting 14 countries surrounding the Indian Ocean, it killed almost 240,000 people, over 70% of them in Indonesia’s Aceh Province.

    Schoolchildren watch a massive pillar of ash erupt from Indonesia’s Mount Sinabung on Feb. 19.   © AP

    Of the 300 volcanoes in the Philippines, 24 are “active,” or have recorded at least one eruption in the last 10,000 years, Renato Solidum, head of the Philippine Institute of Volcanology and Seismology (Phivolcs), told Nikkei. Phivolcs also monitors Mount Kanlaon in the central Philippines and Mount Bulusan, 70km away from Mount Mayon. Lower alert levels have been assigned to them, and neither is thought to pose an imminent threat.

    Mount Mayon, a stratovolcano with an iconic cone shape, is the most active volcano in the Philippines, having erupted some 60 times since the 17th century. Its recent belligerence triggered evacuations in 2009 and 2014. The latest alert level was downgraded in early March from 4 out of a possible 5 to 2, but a 6km exclusion zone remains in place.

    Volcanoes and earthquakes are seismic twins, born of the natural bumping and grinding of the world’s tectonic plates, a timeless process unrelated to global warming and climate change. Mankind’s mistreatment of the environment will not cause volcanoes to erupt, or the earth to move, but seismic events do have powerful impacts on the environment.

    Earthquakes collapse buildings, destroy infrastructure and ground aircraft. Those at sea can generate tsunamis when plate subductions displace vast amounts of seawater and send it racing to shore at the speed of a jumbo jet, slowing and rising as it arrives. Northern Japan’s magnitude-9.0 earthquake and subsequent tsunami in March 2011 killed nearly 16,000 people.

    The Indonesian archipelago is located amid four major tectonic plates — the Eurasian, Indo-Australian, Pacific and Philippine — making it the world’s most earthquake-prone region. A meeting point of two plates — called a megathrust segment — stretches between the Sunda Strait and the southern sea off Java, close to Jakarta.

    Because the segment has not experienced quakes in recent centuries, some worry that a powerful shift is on the way that could affect Jakarta.

    “We call it a seismic gap,” Danny Hilman Natawidjaja, an earthquake geologist at the Indonesian Institute of Sciences, told Nikkei. “That means the segment has potential for a major earthquake, as a very high amount of energy may have been accumulating.” Natawidjaja believes a magnitude-8.5 or larger earthquake to be quite possible, but there is no way of telling if this will happen. “It can be in the next several years or somewhere in the coming decades.”

    Further eruptions and earthquakes are a natural certainty, but predicting them is much harder than measuring their scale and impact after the event. The relative mildness of the 20th century contrasts with the incredible ferocity of volcanic activity in the preceding century.

    Global catastrophe

    The first time a volcano truly made news is well-known: at precisely 10:02 a.m. on Aug. 27, 1883, the “day the world exploded.” The eruption of Krakatoa in the Sunda Strait west of Java in what was then the Dutch East Indies, when Jakarta was called Batavia, was heard thousands of kilometers away in Australia. Through the advent of the submarine telegraph and newswire services, the disaster was also known about in real time in all the capitals of the modern world.

    News of the 1883 Krakatoa disaster traveled the globe in real time thanks to the advent of the submarine telegraph and newswire services.   © Getty Images

    In his book “Krakatoa,” British author Simon Winchester describes this apocalyptic occurrence in what is today Indonesia as the day “the modern phenomenon known as the global village was born.” Krakatoa was not only the world’s first shared news event, it was also the world’s last truly global environmental catastrophe wrought by Mother Nature.

    It affected climate and food production in all parts of the world as volcanic pollution of the upper atmosphere induced a worldwide wintering that lasted five years. The 1969 Hollywood film “Krakatoa: East of Java” wrongly placed the three collapsed volcanoes involved. Forming a natural memorial to these volcanoes today is Anak Krakatoa, or “child of Krakatoa,” which rose from the sea in 1928, evidence of lingering activity.

    Krakatoa was catastrophic. Many of the 35,000 killed at the time were victims of the tsunamis it generated. The population of the East Indies was then some 34 million, about 13% of today’s estimated 266 million — a clue to the possible impact of a future mega-event.

    Nobody alive today has any experience of an eruption of Krakatoa’s magnitude. The great blasts of Mount St. Helens in the U.S. in 1980 and Mount Pinatubo in the Philippines in 1991, which killed over 800 people, were smaller by comparison.

    Since 1982, experts have measured the power of volcanoes using the logarithmic volcanic explosivity index (VEI), which ranges from 0 to 8. A VEI 1 volcano, such as those found on Hawaii’s large southernmost island that are constantly venting lava flows, is benign compared with a VEI 6 like Krakatoa, which was 100,000 times more powerful. Pinatubo, the most serious eruption in the region in the past 50 years, also has a VEI 6 rating, but its eruption was considerably less potent than Krakatoa’s.

    For all its infamy, Krakatoa was not the worst eruption in its century and region. A few elderly people alive in 1883 might actually have recalled the even deadlier 1815 eruption of Mount Tambora on Sumbawa Island, which killed over 90,000 people in its immediate aftermath. Tambora was a VEI 7, with 10 times the explosivity of Krakatoa.

    It emitted a toxic cloud of ash that cooled and darkened the world for years, triggering famine, pestilence and civil disorder. There were food riots in Switzerland and freak winters in China’s Yunnan Province. The massive volcano, which sits in Indonesia’s West Nusa Tenggara Province, and its repercussions were blamed for a cholera epidemic that killed even more people five years later in Java. The most powerful eruption in recorded history, its effect was incomparably pervasive. Even the extraordinary hues in the skies and sunsets painted by one of Britain’s most celebrated artists, J.M.W. Turner, are attributed to it.

    The following year, 1816, was to be remembered in many lands as the year without summer. The extent of Tambora’s damage is better recorded in North America, Europe and China than in Southeast Asia because of more systematic records. Although Tambora was the largest eruption in thousands of years, scientists have been able to determine from evidence such as residues in the polar ice caps that Mount Samalas also wrought recent global havoc in 1257, sending record volumes of sulfur dioxide and other noxious gases into the atmosphere. Samalas belongs to the Mount Rinjani volcanic complex on the Indonesian island of Lombok.

    Like ‘opening an umbrella’ 

    Indonesia’s volcanoes are monitored by the Center for Volcanology and Geological Hazard Mitigation, or PVMBG. It advises on timely evacuations that locals sometimes grow weary of observing. When Mount Agung erupted in 1963, it went on for a year and left 1,500 dead while President Sukarno suppressed the news for political reasons. Casualties this time have so far been kept to zero.

    Citing recorded conditions of large volcanoes like Mount Agung and Mount Semeru in East Java, Surono, a former PVMBG chief, believes the chances of a second Tambora to be very small, and that there would be plenty of opportunity for advance warning in such an event. “There is no volcano erupting without giving out early signs,” Surono told Nikkei. “It’s like rain starting with drizzle — giving you a chance to open an umbrella.”

    In Japan, professor Tatsumi has found a new reason to be concerned, however. In a paper in February, he reported the existence of gigantic lava dome in a Japanese supervolcano, the Kikai caldera — a VEI 8 category potentially 10 times more powerful than Tambora. According to Tatsumi, pressure is building up inside the 32-cu.-km offshore lava dome that last erupted some 7,300 years ago.

    Tatsumi believes volcanologists actually have very little idea of what to expect from the world’s largest volcanoes, and others have remarked on how speedily they may prime themselves. “I would imagine there will be some signs like tremors, but mankind has not determined the mechanism of supervolcano eruptions, how they occur,” he said. “If it erupts, it can kill 90 million people in the worst-case scenario.” He predicts 50cm ash layers in Osaka and 20cm in Tokyo if the Kikai dome blows its top.

    There are a dozen or so VEI 8 supervolcanoes around the world that erupt full bore incredibly infrequently. The grandfather of them all is Yosemite in the U.S. state of Wyoming, but closer to home lurks Lake Toba in northern Sumatra and Lake Taupo on New Zealand’s North Island, both massive stretches of water. There is also the Aira caldera on the southern Japanese main island of Kyushu.

    Given the rarity of supervolcano eruptions, Tatsumi’s prediction for Kikai is not comforting: a 1% chance over the next 100 years. When the Great Hanshin-Awaji Earthquake devastated Kobe in 1995, killing over 6,400 people, the predicted likelihood for such an event was 1% in 30 years. “So, 1% in 100 years is actually a code word for ‘anytime soon,'” said Tatsumi. Others debate whether Yosemite, which could kill billions in a worst-case scenario, is due for a blast in 50,000 years — or already overdue by 20,000 years.

    Mount Merapi, Indonesia’s most active volcano, forced hundreds of thousands of people to evacuate their homes in 2010.   © Getty Images

    Still, it is clearly the much more frequent VEI 4-6 eruptions, with their proven capacity to disrupt normal life, that pose the greatest threat, particularly in a world that has become so dependent on aviation. When Mount Merapi in central Java, Indonesia’s most active volcano, erupted in late 2010, it killed over 350 people and forced the evacuation of some 410,000 others. Merapi is rated a VEI 4, compared with Mount Agung’s VEI 5 in 1963.

    The Philippines remains less preoccupied with volcanoes than the “Big One” — the unoriginal term the media have coined to describe a possible major earthquake affecting Metro Manila. The West Valley Fault runs through the capital of over 13 million souls.

    According to a 2004 study conducted by Phivolcs, Metro Manila Development Authority and the Japan International Cooperation Agency, the West Valley Fault could generate a magnitude-7.2 earthquake. The fault manifests itself every four to six centuries, and last caused grief in the 1600s. “Perhaps it can move in our lifetime,” said Solidum. “So better if we prepare.”

    Philippine President Rodrigo Duterte brought the issue up in his state of the nation address last July. Two weeks earlier, four people had perished in a magnitude-6.5 temblor in the central Philippines. “We were told that it is no longer a question of ‘if’ but a matter of ‘when’,” said Duterte. “We need to act decisively and fast because the threat is huge, real, and imminent.”

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Today’s News 6th April 2018

  • Trade Is A Matter Of Survival For China

    Authored by James Rickards via The Daily Reckoning,

    Many investors are familiar with the fact that President Franklin Roosevelt closed all of the banks in America and confiscated all of the privately-owned gold by executive order in the early days of his administration, which began in 1933.

    Presidents since then have seized assets from countries such as Iran, Syria, North Korea and Cuba and imposed sanctions on Russia and many other countries by executive order.

    Yet, relatively few are familiar with the statutory authority for these orders.

    The president does not need an act of Congress to support such extreme actions. The laws have already been passed and the president has standing authority to act like a dictator with regard to financial assets.

    The first such statue was the Trading With the Enemy Act of 1917, TWE. This was used to seize German assets in the U.S. during the First World War. It’s how the U.S. took control of Bayer Aspirin from the German firm Bayer AG.

    TWE was the authority FDR used to close the banks and seize the gold. It’s not clear whom FDR considered the “enemy” when he used TWE; probably private gold hoarders. But, in 1977, the Congress enacted an even more extreme version of TWE called the International Emergency Economic Powers Act of 1977, or IEEPA.

    This is the equivalent of a nuclear weapon when it comes to financial warfare.

    IEEPA allows the president to seize or freeze any asset or block any transaction if the president deems it to be necessary in the case of a national emergency.

    The problem is that “national emergency” can be defined broadly to include trade imbalances, lost jobs or any other economic adversity. President Trump may now use IEEPA to block a variety of Chinese deals in the U.S. in retaliation for Chinese theft of U.S. intellectual property.

    With the U.S. using its nuclear option in financial warfare, investors should hope that the Chinese don’t respond in kind.

    President Trump may not appreciate the extent to which China will go to protect its interests. Trade negotiations are not the art of the deal, as far as China is concerned. Their goal is national survival.

    China’s economy is not just about providing jobs, goods and services that people want and need.

    It is about regime survival for a Chinese Communist Party that faces an existential crisis if it fails to deliver. The overriding imperative of the Chinese leadership is to avoid societal unrest.

    But China is less stable and less powerful than it appears on the surface. Its apparent stability is more of a mask concealing internal divisions.

    And it is afraid that its hold on power is weaker than many in the West suspect.

    Remember Tiananmen Square?

    Rather than showing the power and unity of the Chinese government, Beijing took a different lesson from Tiananmen Square.

    As my colleague Kevin Massengill has pointed out, it revealed China’s political fragility.

    We all know about the massacre. But what is not widely known is that several army officers refused orders to crush protests throughout China.

    Seven retired generals, including a former defense minister, signed a letter opposing the use of force against the people of Beijing:

    “Due to the exigent circumstances, we as old soldiers, make the following request: Since the People’s Army belongs to the people, it cannot stand against the people, much less kill the people, and must not be permitted to fire on the people and cause bloodshed; to prevent the situation from escalating, the Army must not enter the city.”

    “I’d rather be beheaded than be a criminal in the eyes of history,” said one general commanding forces in the Beijing military district.

    They were not the only one who felt that way. As Kevin has noted, armored divisions of 10,000 soldiers allowed themselves to be stopped for days by crowds of students and ordinary citizens who brought them food and water while explaining why their cause was just.

    An estimated 3,500 PLA officers disobeyed orders to crush protests. Many Chinese army officers were reportedly executed. Others were demoted, or faced court martial and imprisonment.

    The Tiananmen Square Massacre, Kevin says, is an example of why and proves that the position of the Chinese Communist Party is more precarious than is widely understood, even now, almost 30 years later.

    Here’s something else not widely known about the protests…

    The Tiananmen Square protests and massacre of 1989 did not start out as a liberty movement, although that’s how they are remembered in the West. It started out as an anti-inflation protest, and that’s how the Communists remember it.

    And given China’s current economic problem, Beijing’s challenge is becoming more difficult every day. Consider what’s happening in China right now…

    Growth in GDP is conventionally defined as the sum of consumer spending, investment, government spending (excluding transfer payments) and net exports.

    Most large economies other than oil-producing nations get most of their growth from consumption, followed by investment, with relatively small contributions from government spending and net exports.

    A typical composition would show a 65% contribution from consumption plus a 15% contribution from investment. China is nearly the opposite, with about 35% from consumption and 45% from investment.

    That might be fine in a fast-growing emerging-market economy like China if the investment component were carefully designed to produce growth in the future as well as short-term jobs and inputs.

    But that’s not the case.

    Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused.

    What’s worse is that these white elephants are being financed with debt that can never be repaid. And no allowance has been made for the maintenance that will be needed to keep these white elephants in usable form if demand does rise in the future, which is doubtful.

    Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste. The Chinese landscape is littered with “ghost cities” that have resulted from China’s wasted investment and flawed development model.

    This wasted infrastructure spending is the beginning of the debt disaster that is coming soon. China is on the horns of a dilemma with no good way out.

    On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes. The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities.

    The Communist Chinese leadership knew that a day of reckoning would come. The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase).

    Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.

    Instead of these unpalatable extremes, the Chinese leadership is trying to steer a middle course with gradual financial reform and gradual limits on shadow banking. I’ve previously predicted that this gradual policy would not work because the credit situation is so extreme that even modest reform would slow the economy too fast for comfort.

    That’s exactly what has happened. China has already flip-flopped and is easing up on financial reform. That works in the short run but just makes the credit bubble worse in the long run. China may soon resort to a combination of a debt cleanup and a maxi-devaluation of their currency to export the resulting deflation to the rest of the world.

    It is probably the best way to avoid the social unrest that terrifies China.

    When that happens, possibly later this year in response to Trump’s trade war, the effects will not be confined to China. A shock yuan maxi-devaluation will be the shot heard round the world as it was in August and December 2015 (both times, U.S. stocks fell over 10% in a matter of weeks).

    I hope President Trump knows what he’s getting into.

  • March Payrolls Preview: Watch For Another Jump In Hourly Earnings

    The BLS will release the March Payrolls Report at 0830EDT on 6th April 2018: recent macroeconomic data raises hopes for another solid month of payrolls growth, while wage growth is expected to pick up before faster growth towards the end of the year.

    Job growth accelerated in the last three reports (to +242k compared to +182k in 2017, on average), and both ADP private payrolls and the majority of employment surveys remained strong or improved further in March.  Both initial and continuing jobless claims fell to new cycle lows in the weeks leading up to the March payroll reference period. Offsetting this will be a swing towards unfavorable weather will weigh on job growth, with a drag from unseasonably high snowfall of between 30k and 60k (relative to trend). Consensus expects around 185K new jobs added.

    While attention will once again be focused squarely on the avg hourly earnings number – where consensus expects a strong 0.3% M/M pick up and a 2.7% Y/Y increase reflecting favorable calendar effects (the survey week ended on the 17th – a lingering question is whether the unemployment rate, expected to drop to 4.0%, will actually dip to a 3-handle, which of course is painfully considering there are 95 million Americans not in the labor force, also known as “record slack”, and is the main reason why wages will not rise for a long, long time.

    Here is a snapshot of what to expect courtesy of RanSquawk

    • Nonfarm Payrolls: (Exp. 185k, Prev. 313k)
    • Unemployment Rate: (Exp. 4.0%, Prev. 4.1%)
    • Average Earnings Y/Y: (Exp. 2.7%, Prev. 2.6%)
    • Average Earnings M/M: (Exp. 0.3%, Prev. 0.1%)
    • Average Work Week Hours: (Exp. 34.5hrs, Prev. 34.5hrs)
    • Labour Force Participation: (Prev. 63.0%)

    PAYROLL TRENDS: Trend rates remain firm, particularly after last month’s largest gain in payrolls in 18 months. Payroll growth has averaged 190k/month over the last 12-months, 205k/month over the six-months, and 242k/month over the last three-months, and the consensus view expects 195k in February.

    PAYROLL GROWTH: ADP reported another solid increase in March (241k vs. expected 205k; previous also revised 11k higher to 246k). However, as is often the case, it’s worth taking this figure with a pinch of salt. “The ADP survey is not a great leading indicator for payrolls, not least because it is partly based on lagged changes in payrolls,” writes Capital Economics. “Nevertheless, to the extent it is useful, it points to a labour market still in exceptionally good health.”

    EARNINGS GROWTH: Average hourly earnings are expected to increase 0.2% M/M, taking the Y/Y growth rate up to 2.7% from 2.6% last month. Capital Economics note that the share of small firms reporting they plan to raise compensation currently sits at an 18-year high, suggesting that a firmer pick up in wages could be just around the corner. Further supporting earnings this month could be a calendar quirk. “The 15th of the month fell within the payrolls survey week in March, which is historically associated with some upside bias in the month-over month change in AHE relative to the prior month,” writes Morgan Stanley.

    BUSINESS SURVEYS: The employment components of the two ISM surveys were again consistent with strong job growth. The manufacturing survey saw the employment component rise to 57.3 from 54.5 and the non-manufacturing survey rose to 56.6 from 55.0.

    UNEMPLOYMENT CLAIMS: In the survey week – the week that includes the 12th March – initial jobless claims increased to 229K although those continuing to claim fell to 1.828mln and remained near multi-decade lows.

    OTHER FACTORS: This month weather could have impacted the sampling process this month. “The third of four Nor’easters hit during the March survey period (the week that includes the 12th of the month), dumping multiple feet of snow in New England,” writes RBC. “Therefore, we would take hour and labour force flows with a grain of salt.” That being said, the poor weather should not have impacted the headline payroll count numbers. Capital Economics note that February’s mammoth gain would have been even stronger were it not for the worst flu season in almost a decade and they expect to see some boost from the fading flu epidemic in March.

    MARKET REACTION: As is often the case, the market will first likely first move on the payrolls headline. A stronger than expected number should cause strength in the USD and rates to move lower, and vice-versa for a lower than expected figure. However, with earnings growth a prerequisite for further Fed rate hikes, focus should turn to the details of the report. If wage growth exceeds estimates it could see markets begin to price in more rate hikes this year, with markets currently only pricing in an approximately 30% chance of three further rate hikes in 2018.

    * * *

    Next, Goldman breaks out the factors arguing for a stronger, weaker or neutral report.

    • Jobless claims. Initial jobless claims fell to a new cycle low during the four weeks between the payroll reference periods (225k vs. 228k for February and 241k for January). Additionally, continuing claims resumed their downtrend, falling at their fastest pace between the survey periods in nearly a year (-50k).
    • Service-sector surveys.  Service-sector employment surveys improved on net in March, and our non-manufacturing employment tracker rose 0.9pt to 56.9, a 4½-year high. This improvement was also broad-based, with increases in five of the six business-survey measures we track in the sector. In particular, the ISM non-manufacturing employment component rebounded 1.6pt to 56.6. Additionally, the Conference Board labor market differential – the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get – rose to a new 16-year high (+1.0pt to +25.0). Service-sector job growth picked up to 187k in February and has increased 137k on average over the last six months.
    • ADP. The payroll processing firm ADP reported a 241k increase in March private payroll employment, 31k above consensus expectations and its fourth consecutive reading above 240k. While we expect a larger drag from winter weather in the BLS payrolls measure—reflecting differences in methodology—the continued strength in the ADP data is consistent with our view that the underlying pace of job growth has probably accelerated.
    • Job postings. The Conference Board’s Help Wanted Online (HWOL) report showed a 2.2% increase in online job postings (mom sa), retracting over half of its February decline (which itself followed four consecutive increases). However, we place limited weight on this indicator, in light of research by Fed economists that suggests the HWOL ad count has been depressed by higher prices for online job ads. The Conference Board is currently reviewing its methodology accordingly.

    Arguing for a weaker report:

    • Weather. NOAA weather-station data indicate that snowfall was unusually high in March (on a population-weighted basis), and this followed unseasonably mild weather in February. While most of the accumulation occurred outside of the survey  week, we nonetheless expect the incremental swing in snowfall to weigh on job growth, with an impact of between -30k to -60k relative to trend (see Exhibit 1, right axis is inverted). One mitigating factor here is that much of the survey-week snowfall occurred in New England and upstate New York, regions more accustomed to severe winter weather.
    • Retail employment. Despite weak retail sales results in the first two months of the year, retail payrolls rose 50k in February, a sharp acceleration from its prior 6-month trend (of +5k on average). We believe this strength reflected a favorable swing in the weather as opposed to an underlying pickup in labor demand. Accordingly, a flat or down March reading appears probable.

    Neutral factors:

    • Manufacturing-sector surveys. Headline manufacturing-sector surveys generally weakened in March, but the employment components were more mixed. Our manufacturing employment tracker edged down 0.2pt to 59.5, still an elevated level consistent with a solid pace of job gains in that sector. While the steel and aluminum tariffs announced by the Trump administration could potentially weigh on hiring in affected industries (due to increased uncertainty) 1, we note that the more recent escalation in trade tensions to a broader set of industries was announced after the March survey period. Manufacturing payroll employment rose 31k in February and has increased by 25k on average over the last six months.
    • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas rebounded 21k to 54k in March (SA by GS), a two-year high. On a year-over-year basis, announced job cuts increased 14k. However, these increases were concentrated in  the retail industry (35k layoffs, NSA) and likely reflected the announced Toys ‘R’ Us liquidation—which had not started as of the March reference period (this retailer currently employs 31,000 workers).

    Finally, some additional thoughts on the most important aspect of tomorrow’s report – hourly earnings – from Goldman.

    We estimate average hourly earnings increased 0.3% month over month, reflecting somewhat favorable calendar effects (the survey week ended on the 17th). We also note that last month’s month-over-month increase (+0.15%) was dragged down by a sharper-than-usual drop among supervisory employees, a relatively mean-reverting subset (in contrast, production and nonsupervisory average hourly earnings increased 0.27%). Additionally, to the extent that the increase in the February workweek (+0.1 to 34.5 hours) weighed on wage growth, this would suggest scope for mean-reversion in March (the workweek is now at a 2-year high). Taken together, we estimate a 0.3% month-over-month gain that pushes up the year-over-year rate a tenth to 2.7%.

    Whether this rise in earnings, together with the latest round of Trump’s trade war will be enough to unleash another market crash, we’ll find out shortly.

  • Grant's Almost Daily: Vehicle Vestible

    Submitted by Grant’s Interest Rate Observer

    Vehicle Vestibule

    It’s alive! Much like Frankenstein’s monster, the automobile market has been jolted back to life by an external shock, this one in the form of the hurricanes which pounded large swaths of the United States last summer. After sales ebbed to a seasonally adjusted annualized rate (SAAR) of 16.03 million in August of last year (the lowest reading since early 2014), the arrival of destructive storms such as Harvey and Irma coincided with an abrupt rebound in sales: Ward’s Automotive Group calculates an average 17.57 million SAAR in the following seven months through March. 

    For industry leading-used vehicle retailer CarMax, Inc., (KMX on the NYSE), the uptick in new car sales didn’t translate into much good news. CarMax reported fourth quarter earnings yesterday (covering December to February), featuring revenues and earnings per share that each came in well shy of the sell-side consensus, while same store sales declined by a meaty 8% year-over-year.  KMX shares enjoyed a bounce in response, although the company’s 5% decline since February 2017 lags the 13% gain from the S&P 500 over that period. 


    Still in the garage. KMX in white and the SPX in orange. Source: The Bloomberg

    Volume, not price, was the culprit. While Carmax’s gross profit per used vehicle inched higher to $2,147 amid a 2.5% year-over-year uptick in average selling price, used vehicle unit sales fell by 3.1% from their year-ago level.  The large drop in volumes coupled with sturdy unit profits suggests a conscious decision to hold the line on pricing by KMX management, even as industrywide incentive spending continues to increase. 

    Average incentive spending rose for a 35th straight month in February according to Autodata, reaching $3,695 per unit from $3,594 year-over-year.  For his part, CarMax CEO William Nash observed on the company’s conference call that “incentives have started to come down a bit.” Rising acquisition costs for used and wholesale vehicles were a bigger factor, with Nash noting that “the pricing environment . . . really hits us on two sides. It’s not only that acquisition prices went up on all inventory, but I also think there was pressure on the spread . . . between a late-model used car and a new car both because of our acquisition price going up and new car prices coming down in relative terms year-over-year.”

    Taking inventory of an auto market that we judged vulnerable to both credit mishaps and a retrenchment in the used car prices which underpin trade-in activity, Grant’s took a bearish view on CarMax on Feb. 24, 2017 (“Disabled vehicles”).  A Feb. 23, 2018 follow-up analysis (“Clunkers, Inc.”) focused on the price vs. volume conundrum facing KMX amid intensifying competitive pressures:

    Strong prices were a tonic for CarMax’s revenue growth in the sweet phase of the cycle. From Feb. 28, 2009 to Nov. 30, 2015, the company’s average CarMax selling price ticked up by 23.3%, or 3.2% per annum, to $20,094. Over the same six years and nine months, the CarMax top line swelled by 93.2%, or 10.2% per annum, to $3.5 billion.

    If yesterday’s results are any guide, CarMax’s decision to hold the line on pricing has taken a toll on activity. Meanwhile, the credit wheel keeps turning. CarMax’s auto finance unit reported a 21.9% year-over-year uptick in net income during the quarter as its provision for loan losses declined by 16.7% and average managed receivables jumped by 9.4%.  Those sunny trends stand in seeming contrast with a Monday report from Bloomberg headed “Subprime New-Car Buyers Suddenly Go Missing from U.S. Showrooms.” 

    Rising interest rates and new vehicle prices are squeezing shoppers with shaky credit and tight budgets out of the market. In the first two months of the year, sales were flat among the highest-rated borrowers, while deliveries to those with subprime scores slumped 9 percent, according to J.D. Power.

    As a corporate entity, CarMax is bullish on itself. On Feb. 28, 2017, the company announced a $4.55 billion share buyback, following a $2 billion repurchase authorization announced on Oct. 22, 2014. That’s no small part of KMX’s current $11.7 billion market capitalization.  Those who know the company best have taken a different tack. Since the early September hurricanes, KMX insiders have sold 462,107 shares on the open market, cashing proceeds of just over $34 million. The only open market purchase during that period was of 35 shares

  • Nuclear Blast Simulator Shows Whether You Would Survive An Attack

    Authored by The Organic Prepper

    Did you ever think about the places close to you that would be potential targets for a nuclear strike by an enemy? Chances are, the answer is yes. But how would a strike to that nearby target affect you? In the event of a nuclear strike, there are four things to consider. The numbers below are in the event of a 300 kiloton bomb:

    • The Fireball: Everything in this range would be disintegrated, It is nearly a one-mile radius and also called Ground Zero.
    • Radiation: A wave of deadly radiation would affect everything within 5.5 miles. This will cause lung injuries, severe burns, deafness, blindness, and internal bleeding. Anyone in this range who survives the immediate danger is likely to suffer from radiation poisoning in the upcoming weeks.
    • The Shockwave: A shockwave of incredible power would spread throughout a range of about 11.5 miles.  Also called the blast wave, this highly compressed air will travel at high velocities (up to 470 mph), destroying nearly every building in its path.
    • The Heat: Heat from a nuclear blast would travel almost 50 miles. This heat can ignite fires and cause first degree burns.

    You can plug any address into this website and see how far the effects of a nuclear strike would reach.

    Here’s what a 300 KT strike on the White House would look like, so that you can get an idea of the different danger zones.

    Prepper

    Where are nuclear strikes most likely to take place?

    It depends. There are all sorts of variables with regard to nuclear targets. While most of us would think that cities like New York, Washington DC, and Los Angeles would be more desirable because of high population density, the targets are more likely to be strategic militarily.

    This article from Business Insider states that cities aren’t the most likely targets anymore and that targeting has “shifted from cities to nuclear stockpiles and nuclear war-related infrastructure.” The map below shows the theoretical targets of an attack by Russia.

    Map

    However, if North Korea were to attack the United States, the goals would be different, at least based on a North Korean propaganda photo from 2013.

    In Hawaii, one of the closest targets to North Korea, the US military bases Pacific Command, which is in charge of all US military units in the region. San Diego is PACOM’s home port, where many of the US Navy ships that would respond to a North Korean attack base when not deployed.

    Barksdale Air Force Base in Louisiana holds the US Air Force’s Global Strike Command, the entity that would be responsible for firing back with the US’s Minuteman III intercontinental ballistic missiles.

    Washington D.C., of course, is the home of the US’s commander-in-chief, who must approve of nuclear orders. (source)

    The North Korean target map looks like this:

    Map

    What about radioactive fallout?

    If a nuclear strike occurs and you are outside the range of the issues above, the next risk is the radioactive fallout.

    The significant hazards come from particles scooped up from the ground and irradiated by the nuclear explosion. The radioactive particles that rise only a short distance (those in the “stem” of the familiar mushroom cloud) will fall back to earth within a matter of minutes, landing close to the center of the explosion. Such particles are unlikely to cause many deaths, because they will fall in areas where most people have already been killed. However, the radioactivity will complicate efforts at rescue or eventual reconstruction. The radioactive particles that rise higher will be carried some distance by the wind before returning to Earth, and hence the area and intensity of the fallout is strongly influenced by local weather conditions. Much of the material is simply blown downwind in a long plume.

    Rainfall also can have a significant influence on the ways in which radiation from smaller weapons is deposited, since rain will carry contaminated particles to the ground. The areas receiving such contaminated rainfall would become “hot spots,” with greater radiation intensity than their surroundings. (source)

    Radioactive fallout can cause myriad health problems. You can also be exposed to these particles when you eat plants, milk, or meat that has been contaminated by fallout.  The biggest risk is thyroid cancer, which is why those who live in a place where there is a risk of fallout should stock up Potassium Iodide pills. (Here’s how to take them to prevent cancer due to radioactive fallout.) A Stanford University study warns:

    Nuclear fallout poses health dangers, particularly in the form of cancer, to humans in the form of radiation. When radioactive chemicals break down they release a certain amount of radiation. When humans are exposed to this radiation there is a risk that it causes chemical changes in cells which can kill or makes cells abnormal. In damaging the DNA contained in cells, radiation can cause cancer and can also lead to birth defects in children due to the tampering with a person’s genetic makeup. (source)

    The other variable

    The last and scariest variable is this: how big is the bomb? On the map above, you can plug in different types of nuclear warheads for different results. If a Tsar bomb (the largest ever detonated in Russia) struck Washington, DC, it would demolish a substantially larger area and the death toll would reach 1,858,141 people, with injuries to nearly one and a half million more.

    Here’s what that would look like.

    Nukes

    As you can see, with a 50,000 KT bomb, the numbers are entirely different.

    • The Fireball: Everything in this 31-mile range would be disintegrated
    • Radiation: A wave of deadly radiation would affect everything within 44 miles. This will cause lung injuries, severe burns, deafness, blindness, and internal bleeding. Anyone in this range who survives the immediate danger is likely to suffer from radiation poisoning in the upcoming weeks.
    • The Shockwave: A shockwave of incredible power would spread throughout a range of about 345 miles. Also called the blast wave, this highly compressed air will travel at high velocities (up to 470 mph), destroying nearly every building in its path.
    • The Heat: Heat from a nuclear blast would travel 3200 miles. This heat can ignite fires and cause first degree burns.

    There is an enormous difference in the scale of nuclear weapons. This video gives you some idea of the scope.

  • Duterte: UN Human Rights Chief Is An "Empty-Headed Son Of A Whore"

    Philippines President Rodrigo Duterte lashed out at one of his favorite targets – the United Nations – earlier this week when he labeled the UN’s Human Rights chief a “son of a whore” with an empty skull.

    “Look, you have a big head but it’s empty. There is no gray matter between your ears. It’s hollow. It’s empty. It cannot even sustain a nutrient for your hair to grow because his hair here is gone,” Duterte said.

    RT reports that Duterte made the comments during a Tuesday speech after UN Human Rights Commissioner Zeid Ra’ad Al Hussein said last month that Duterte was in need of a “psychiatric evaluation”. He also criticized the Philippines strongman for insulting UN rapporteur Agnes Callamard with what Al Hussein described as “the foulest of language.”

    But the joke may be on Al Hussein, because Duterte said he’s already been to a psychiatrist, and the doctor gave him a clean bill of mental health – though he allegedly pointed out Duterte’s penchant for cursing.

    “Hey son of a whore, you commissioner, I need to go to a psychiatrist? The psychiatrist told me: “You are okay, mayor. You are just fond of cursing,” he said.

    Before winning the presidency in 2016, Duterte served as mayor of Davao, a city on the southernmost Philippines island of Mindanao.

    Rodrigo

    Duterte told his audience that he’d been advised to let the remark go, but had decided that he couldn’t resist seeking revenge.

    The target of Duterte’s scorn, the UN has been conducting an investigation into allegations of extrajudicial killings related to Duterte’s controversial war on drugs, something President Trump has sought to emulate by moving toward the death penalty for some drug-related crimes. Philippine police say they have killed roughly 4,100 suspects during the administration’s vicious crackdown on drug users and dealers. Aid groups estimate the number is as much as three times higher.

    In the past, Duterte caused global outrage when he said that he’d be happy to kill drug addicts the way Adolf Hitler murdered Jews.

    Duterte famously called former US President Barack Obama a “son of a bitch” and told him to “go to hell” after being criticized by the former president. He also threatened to “burn down the United Nations”, an idea which Elon Musk may be considering long and hard these days: after all insurance cash flow is still cash flow.

     

  • How Much Income You Need To Afford the Average Home In Every State

    The housing market has not only recovered its pre-recession levels, but some observers are actually starting to worry about yet another housing bubble. Housing prices are on the rise, thanks in large part to extremelytight inventory, so it’s worth asking:  are potential home buyers getting priced out of the market? The answer depends on where they live and how much money they make.

    HowMuch.net  collected average home prices for every state from Zillow which we then plugged into a mortgage calculator to figure out monthly payments. Remember, mortgage payments consist of both the principal and the interest for the loan. The interest rate we used varied from 4 to 5% in each state, depending on the market. The lower the interest rate, the lower the monthly payment. To keep things simple, we assumed buyers could contribute a 10% down payment. Another thing to keep in mind is that financial advisors commonly recommend the total cost of housing take up no more than 30% of gross income (the amount before taxes, retirement savings, etc.). Using this rule as our benchmark, we calculated the minimum salary required to afford the average home in each state.

    Source: HowMuch.net

    Top Five Places Where You Need the Highest Salaries to Afford the Average Home

    1. Hawaii: $153,520 for a house worth $610,000

    2. Washington, DC: $138,440 for a house worth $549,000

    3. California: $120,120 for a house worth $499,900

    4. Massachusetts: $101,320 for a house worth $419,900

    5. Colorado: $100,200 for a house worth $415,000

    Top Five Places Where You Need the Lowest Salaries to Afford the Average Home

    1. West Virginia: $38,320 for a house worth $149,500

    2. Ohio: $38,400 for a house worth $149,900

    3. Michigan: $40,800 for a house worth $160,000

    4. Arkansas: $41,040 for a house worth $161,000

    5. Missouri: $42,200 for a house worth $165,900

    Our map creates a quick snapshot of housing affordability across the United States. There are several pockets in which only the upper middle class and above can afford to own even the average home, most notably across the West and in the Northeast. There are only two states west of the Mississippi River where a worker with an annual salary under $40,000 can afford a mid-level home:  Missouri and Oklahoma. Colorado stands out as the only landlocked state requiring a significant amount of income ($100,200), thanks in large part to the housing market around Denver.

    Homes tend to be more affordable in the eastern half of the country, with a notable pocket of “green” (less expensive) states located in the upper Midwest. The North is generally more affordable than the South and the typical home is significantly easier to buy in places like Michigan or Ohio than in Louisiana or Arkansas.  Additionally, our map indicates that workers can more easily afford homes in the East than in the West, which is surprising given how much more land is available out West. It is important to note that there are certainly deep pockets of poverty in all of these places, which suggests that our map obscures the inequality behind averages.

    The best takeaway from our map is that housing remains affordable in large swaths of the country, even though there will always be places like California and New York where there is simply too much demand for the available inventory. Thankfully, that doesn’t mean that buying a home is suddenly out of reach for average Americans in Ohio or Mississippi, for example.

    Source: HowMuch.net

  • Body Of Missing CDC Researcher Found In River

    A body pulled from the Chattahoochee river is that of an Atlanta researcher for the Centers for Disease Control (CDC) who went missing in mid-February, Atlanta police reported on Thursday.

    a

    Timothy Cunningham, 25, was last seen February 12 after he left work midway through the day due to an illness, prompting his friends and family to sound the alarm. 

    Terrell Cunningham, 60, said his son’s supervisor told him that Commander Cunningham had reported for work but that he had left midday because he wasn’t feeling well. –NYT

    The family of Timothy J. Cunningham, 35, grew concerned after the Harvard-trained epidemiologist and US Navy officer wouldn’t answer texts or calls. Driving over 600 miles from Maryland to Atlanta, Cunningham’s parents gained access to his house where they found their son’s phone, wallet and driver’s license.

    Quoted by the NYT, his father said that Commander Cunningham had “a lot going on” personally and professionally, and his most recent conversation with his son had left him worried.

    The tone, and the numerous exchanges gave us reason to be concerned about Tim,” said Terrell Cunningham. “And I don’t know if it’s an instinct you have because it’s your child, but it was not a normal conversation and I was not comfortable.”

    Cunningham’s car was parked in the garage, while his dog – Mr. Bojangles, aka Bo, was left all by himself. 

    “Tim never leaves Bo unattended,” Terrell Cunningham told NBC News. “He just doesn’t do it.”

    None of this makes sense,” Timothy’s brother Anterio told Atlanta Fox affiliate WAGA-TV. “He wouldn’t just evaporate like this and leave his dog alone and have our mother wondering and worrying like this. He wouldn’t.”

    I feel like I’m in a horrible Black Mirror episode,” Cunningham’s sister Tiara told the New York Times. “I’m kind of lost without him, to be quite honest.”

    a

    Tiara was the last family member to speak with Timothy Cunningham before his disappearance – who said the last time they spoke her brother “sounded not like himself.” When she texted him a bit later, she didn’t get a response – nor did the rest of the Cunningham family.

    Atlanta police said Cunningham had been upset over not receiving a promotion – however the CDC later retracted that information, stating that he had in fact recently received one.

    a

    Cunningham – who was promoted to commander in the US Public Health Service last July, had worked on the government’s response to both Zika and Ebola outbreaks. With two degrees from Harvard’s School of Public Health, he had been named one of The Atlanta Business Chronicle’s “40 under 40” award winners.

  • John Kiriakou Delivers Petition For Assange To Ecuador’s D.C. Ambassador On Behalf Of Intel Veterans

    Submitted by Elizabeth Lea Vos of Disobedient Media

    Earlier today, CIA whistleblower and member of Veteran Intelligence Professionals for Sanity (VIPS) John Kiriakou personally delivered a letter to the Ecuadorian embassy in Washington, DC, which was addressed to Ecuadorian Ambassador, Francisco Jose Borja Cevallos.

    The document calls for the immediate restoration of communications for Wikileaks Editor-In-Chief Julian Assange.One week ago, Julian Assange’s internet, phone calls and access to visitors were totally cut off at the behest of Ecuadorian President, Lenin Moreno.

    A video of Kiriakou delivering the message to the Ecuadorian embassy in Washington is available here.

    Wikileaks supporters have rallied both online and on the ground in London to call for his human rights to be restored continually, ever since news emerged that Assange had been prevented from contact with the outside world.

    The Courage Foundation reported that a similar Spanish-language message calling on Ecuador’s Lenin Moreno to end the isolation of Julian Assange was also delivered to the Ecuadorian President today. That letter was signed by 338 intellectuals from 33 countries. The effort was coordinated by the Landless Workers’ Movement in Brazil.

    John Kiriakou’s personal support of this message was particularly noteworthy, in light of the fact that his former agency is now personally invested in arresting the Wikileaks co-founder. Kiriakou recently participated in the online vigil, #ReconnectAssange, during which he spoke to the unjust treatment Assange would likely face if extradited and prosecuted in the Eastern District Court of Virgina, saying: “[Assange] couldn’t possibly get a fair trial in the Eastern District of Virginia.”

    Those who wish to support Assange and Wikileaks can sign the petition calling for his right to free speech to be respected.

    A copy of the letter delivered by Kiriakou to Ambassador Francisco Jose Borja Cevallos, as well as the signatories supporting its contents, are provided below.

    Your Excellency:

    We, the undersigned applaud and commend the decision of the Government of Ecuador to grant asylum, to welcome as a citizen, and to grant diplomatic status to Wikileaks founder Julian Assange.

    In the case of Mr. Assange, Ecuador has been a role model for the international community for its views on transparency and press freedom. Every country should emulate Ecuador.

    I am reminded of August 1990 when Iraqi troops invaded Kuwait. US President George H. W. Bush was unsure of what the US response should be. He received a call from British Prime Minister Margaret Thatcher. “Now is not the time to go wobbly, George,” she told him. Well, now is not the time to go wobbly in our support of Wikileaks and Julian Assange.

    It is only because of Wikileaks that we know about war crimes and atrocities committed against Iraqi citizens by US troops. It is because of Wikileaks that we know about the surveillance industry, about warrantless wiretapping and a great deal more about NSA spying on American citizens. And with President Trump’s appointment of the notorious Gina Haspel as the new CIA director, we know that there is a danger that the CIA will keep its torture history secret by keeping it classified.

    It is Wikileaks that has kept, and will continue to keep, all Americans informed of what their government does in their name. It is Julian Assange who has led that fight. We ask the Government of Ecuador to keep up the fight for transparency and press freedom, to continue to be a world leader in honesty and accountability. We call on the Government of Ecuador to reconnect Julian Assange to the world.

    Respectfully,

    John Kiriakou, former CIA counterterrorism officer and former senior investigator, US Senate Foreign Relations Committee.”

    Signatories on the letter included:

    • Ray McGovern, former CIA analyst and presidential briefer
    • Bogdan Dzakovic, former team leader, Federal Air Marshals
    • Marshall Carter-Tripp, Foreign Service Officer (retired)
    • Ann Wright, Colonel, US Army Reserve and Foreign Service Officer (retired)
    • Robert Wing, Foreign Service Officer (retired)
    • Philip Giraldi, former CIA case officer
    • Todd E. Pierce, Major, Judge Advocate General (retired)
    • C. J. Laniewski, Lieutenant Colonel, US Army (retired)
    • Coleen Rowley, retired FBI special agent and former Minneapolis Division Legal Counsel
    • Elizabeth Murray, former Deputy National Intelligence Officer for the Near East, National Intelligence Council (retired)
    • Peter Van Buren, Foreign Service Officer (retired)
    • J. Kirk Wiebe, former senior intelligence analyst and whistleblower, NSA
    • Roger Waters, co-founder, Pink Floyd
    • Alex Cox, film director, writer, and producer
    • Ann Wright, Colonel, US Army Reserve and Foreign Service Officer (retired)
    • Larry Johnson, former CIA officer and former Foreign Service officer

  • All Russiagate Roads Lead To London: Evidence Emerges Of Mifsud’s Links To UK Intelligence

    Authored by Elizabeth Lea Vos Via Disobedient Media

    Over the last few months, Professor Joseph Mifsud has become a feather in the cap for those pushing the Trump-Russia narrative. He is characterized as a “Russian” intelligence asset in mainstream press, despite his declarations to the contrary. However, evidence has surfaced that suggests Mifsud was anything but a Russian spy, and may have actually worked for British intelligence. This new evidence culminates in the ground-breaking conclusion that the UK and its intelligence apparatus may be responsible for the invention of key pillars of the Trump-Russia scandal. If true, this would essentially turn the entire RussiaGate debacle on its head.

    To give an idea of the scope of this report, a few central points showing the UK connections with the central pillars of the Trump-Russia claims are included here, in the order of discussion in this article:

    1. Mifsud allegedly discussed that Russia has ‘dirt’ on Clinton in the form of ‘thousands of emails’ with George Papadopoulos in London in April 2016.
    2. The following month, Papadopoulos spoke with Alexander Downer, Australia’s ambassador to the UK, about the alleged Russian dirt on Clinton while they were drinking at a swanky Kensington bar, according to The Times. In late July 2016, Downer shared his tip with Australian intelligence officials who forwarded it to the FBI.
    3. Robert Goldstone, a key figure in the ‘Trump Tower’ part of the RussiaGate narrative, sent Donald Trump Jr. an email claiming Russia wanted to help the Trump campaign. He is a British music promoter.
    4. Christopher Steele, ex-MI6, who worked as an MI6 agent in Moscow until 1993 and ran the Russia desk at MI6 HQ in London between 2006 and 2009. He produced the totally unsubstantiated ‘Steele Dossier’ of Trump-Russia allegations, with funding from the Clinton campaign and the DNC.
    5. Robert Hannigan, the head of British spy agency GCHQ, flew to Washington DC to share ‘director-to-director’ level intelligence with then-CIA Chief John Brennan.

    Each of these strands of UK-tied elements of the Russiagate narrative can be substantially dismantled on close inspection. This untangling process leads to the surprising conclusion that UK intelligence services fabricated evidence of collusion in order to create the appearance of a Trump-Russia connection.

    This trend begins with Joseph Mifsud, a Maltese scholar with an eclectic academic history who Quartz described as an “enigma,” while legacy press has enthusiastically characterized him as a central personality in the Trump-Russia scandal. The New York Times described Mifsud as an “enthusiastic promoter of President Vladimir V. Putin of Russia”, citing his regular involvement in the annual meetings of the Valdai Discussion Club, a Russian-based think-tank, as well as three short articles he wrote in support of Russian policies.

    Mifsud strongly denied claims that he was associated with Russian intelligence, telling Italian newspaper Repubblica that he was a member of the European Council on Foreign Relations and the Clinton Foundation, adding that his political outlook was “left-leaning.” Last month, Slate reported Mifsud had ‘disappeared’, as did some of the other figures linking the UK to the Trump-Russia scandal. This aspect will be discussed in more detail below.

    To contextualize Mifsud’s eclectic academic career in terms of intelligence service, it is helpful to note that research undertaken by this author and Suzie Dawson as part of the Decipher You project has repeatedly shown the close ties – an outright merger in many cases – between the intelligence community and academia. This enmeshment also takes place with think-tanks, NGOs, and in the corporate sphere. In this light, Mifsud’s brand of ‘scholarship’ becomes far less mysterious.

    Mifsud’s alleged links to Russian intelligence are summarily debunked by his close working relationship with Claire Smith, a major figure in the upper echelons of British intelligence. A number of Twitter users recently observed that Joseph Mifsud had been photographed standing next to Claire Smith of the UK Joint Intelligence Committee at Mifsud’s LINK campus in RomeNewsmax and Buzzfeed later reported that the professor’s name and biography had been removed from the campus’ website, writing that the mysterious removal took place after Mifsud had served the institution for “years.”

    WikiLeaks Editor-in-Chief Julian Assange likewise noted the connection between Mifsud and Smith in a Twitterthread, additionally pointing out his connections with Saudi intelligence: “[Mifsud] and Claire Smith of the UK Joint Intelligence Committee and eight-year member of the UK Security Vetting panel both trained Italian security services at the Link University in Rome and appear to both be present in this [photo].”

    The photograph in question originated on Geodiplomatics.com, where it specified that Joseph Mifsud is indeed standing next to Claire Smith, who was attending a: “…Training program on International Security which was organised by Link Campus University and London Academy of Diplomacy.” The event is listed as taking place in October, 2012. This is highly significant for a number of reasons.

    Claire Smith Stands next to Joseph Mifsud at LINK Campus

    First, the training program Smith attended with high-ranking members of the Italian military was organized by the London Academy of Diplomacy, where Joseph Mifsud served as Director, as noted by The Washington Post. That Claire Smith was training military and law enforcement officials alongside Mifsud in 2012 during her tenure as a member of the UK Cabinet Office Security Vetting Appeals Panel, which oversees the vetting process for UK intelligence placement, strongly suggests that Mifsud has been incorrectly characterized as a Russian intelligence asset. It is extremely unlikely that Claire Smith’s role in vetting UK intelligence personnel would lead to her accidentally working with a Russian agent.

    The connection between Mifsud and Smith does not end at bumped elbows in a photograph. Mifsud’s LinkedIn profile lists the University of Stirling as a place of occupation in connection with his service as Director of the London Academy of Diplomacy (LAD), where Claire Smith served as a visiting professor from 2013-2014 according to her LinkedIn profile. This adds yet another verifiable connection between a man who is at the center of already-flimsy Trump-Russia allegations and a high-ranking British intelligence figure.

    Screenshot of Claire Smith's LinkedIN showing her service on the Security Vetting Appeals Panel while also occupied as a visiting Professor at Stirling University

    Claire Smith also hosted a seminar titled “Making Sense of Intelligence” at the University of Stirling. The event registration form describes her career, including her service as Deputy Chief of Assessments Staff in the Cabinet Office, as a member of the UK Joint Intelligence Committee and her completion of an eight-year term as a member of the UK Security Vetting and Appeals Panel.

    A particularly compelling factor indicating that Mifsud’s working relationship with Claire Smith suggests his direct connection with UK intelligence is Smith’s membership of the UK’s Joint Intelligence Committee (JIC), a supervisory body overseeing all UK intelligence agencies. The JIC is part of the Cabinet Office and reports directly to the Prime Minister. The Committee also sets the collection and analysis priorities for all of the agencies it supervises. Claire Smith also served as a member of the UK’s Cabinet Office.

    In summary, Mifsud’s appearance with Claire Smith at the LINK campus, in addition to her discussion on intelligence at yet another university where Mifsud was also employed, as well as her long-standing role in UK intelligence vetting and her position as a member of the UK Joint Intelligence Committee, would suggest that the roving scholar is not a Russian agent, but is actually a UK intelligence asset. The possibility that such a high-ranking member of this extremely powerful intelligence supervisory group was photographed standing next to a “Russian” asset unknowingly is patently absurd. This finding knocks the first pillar out from under the edifice of the Trump-Russia allegations. It provides an initial suggestion of the UK’s involvement in procuring the ‘evidence’ that fueled the debacle.

    Claire Smith is not the only British official associated with Mifsud. He was a speaker at an event by the Central European Initiative alongside former British diplomat Charles Crawford, whose postings included Moscow, Sarajevo, Belgrade and Warsaw. Crawford is listed as a visiting Professor with the same London Academy of Diplomacy (LAD) where Mifsud served as Director, associated with Stirling University. This adds more weight to the idea that Mifsud is a familiar figure among the upper echelons of the UK intelligence and foreign policy establishment.

    The final nail in the coffin of the theory that Mifsud is a Russian spy is this photograph of Mifsud standing next to Boris Johnson, the UK Foreign Secretary, as reported by The Guardian. The photograph, taken in October 2017 – nearly a full year after the US Presidential election and nine months after Mifsud’s name appeared in newspaper headlines worldwide as allegedly involved in Russian meddling in that election – is either highly embarrassing for the hapless Mr Johnson, or it’s not, because Joseph Mifsud is actually a valued and security-vetted asset to the United Kingdom.

    Boris Johnson pictured at the dinner with the ‘London professor’, Joseph Mifsud (left) and Prasenjit Kumar Singh.

    Another aspect of the RussiaGate claims tied to the UK includes the reported conversation between George Papadopoulos and Alexander Downer, Australia’s High Commissioner to the UK who was based in London. The pair reportedly spoke about the alleged Russian ‘dirt’ on Hillary Clinton while they were drinking at a swanky bar in London. According to Lifezette, Downer is closely tied with The Clinton Foundation via his role in securing $25 million in aid from his country to help the Clinton Foundation fight AIDS.

    He is also a member of the advisory board of London-based Hakluyt & Co, an opposition research and intelligence firm set up in 1995 by three former UK intelligence officials and described as “a retirement home for ex-MI6 [British foreign intelligence] officers, but it now also recruits from the worlds of management consultancy and banking”. Whereas opposition research group Fusion GPS has received all the media attention so far, Lifezette states that Hakluyt is “a second, even more powerful and mysterious opposition research and intelligence firm… with significant political and financial links to former Secretary of State Hillary Clinton and her 2016 campaign”.

    Yet another UK link to a central pillar of the Trump-Russia narrative is British music promoter Robert Goldstone, who was reported to have organized a meeting between Donald Trump Jr. and Russian nationals in June 2016. In the email chain setting up the Trump Tower meeting, both before and after the meeting, the only real ‘evidence’ of collusion with Russia come from Goldstone’s own emails; none-too-subtle heavy hints about ‘Russian help’ dropped by Goldstone but later – after the emails became public – walked back by him as “hyping the message and… using hot-button language to puff up the information I had been given.”

    Some have speculated that Goldstone was also involved with British or US intelligence efforts to concoct the RussiaGate narrative. As soon as his name emerged in the press, Goldstone – like Christopher Steele and Joseph Mifsud – went into ‘hiding’. Multiple press reports claimed he had done so out of fear for his safety, a claim also made about Christopher Steele when his name first became public. Indeed, the UK government issued a DA Notice(a press suppression advisory notice) to the British press to suppress the ex-spy Steele’s name. It is notable that, of all the people swept up into the ever-burgeoning RussiaGate investigation, it is only the UK-linked witnesses – Mifsud, Steele, Goldstone – who have felt the need to go into hiding when their role has been exposed.

    The New York Times summed up the contents of Christopher Steele’s dossier: “Mr. Steele produced a series of memos that alleged a broad conspiracy between the Trump campaign and the Russian government to influence the 2016 election on behalf of Mr. Trump. The memos also contained unsubstantiated accounts of encounters between Mr. Trump and Russian prostitutes, and real estate deals that were intended as bribes.”

    Press reports also relate that Steele was ordered by an English court to appear for a videotaped deposition in London as part of an ongoing civil litigation against Buzzfeed for publishing the unverified dossier, for which Steele was paid $168,000 by Glenn Simpson’s company Fusion GPS, who were in turn paid by Mark Elias of law firm Perkins Coie, lawyers to both the Hillary Clinton campaign and the DNC.

    In his thread on the role of UK intelligence interference in the 2016 US Presidential race, Assange also noted how Christopher Steele used another former UK ambassador to Moscow, Sir Andrew Wood, to funnel the dossier to Senator John McCain in a way that moved the handover out of London, to Canada. It’s often said that no one ever really leaves the UK security services  when they retire – many ‘former’ MI6 or MI5 officers’ private intelligence businesses are dependent on maintaining good contacts among their ex-colleagues – so it is interesting to note that Sir Andrew Wood says he was “instructed” — by former British spy Christopher Steele — to reach out to the senior Republican, whom Wood called “a good man,” about the unverified document.

    Lastly, Robert Hannigan, former head of British intelligence agency GCHQ, is another personality of note in the formation of the RussiaGate narrative and its surprisingly deep links to the UK. The Guardian noted that Hannigan announced he would step down from his leadership position with the agency just three days after the inauguration of President Trump, on 23 January 2017. Jane Mayer in her profile of Christopher Steele published in the New Yorkeralso noted that Hannigan had flown to Washington D.C. to personally brief the then-CIA Director John Brennan on alleged communications between the Trump campaign and Moscow. What is so curious about this briefing “deemed so sensitive it was handled at director-level” is why Hannigan was talking director-to-director to the CIA and not Mike Rogers at the NSA, GCHQ’s Five Eyes intelligence-sharing partner.

    Screenshot of GCHQ  Tweet announcing Hannigan's resignation on 23 Jan 2017

    The central supporting pillars of the RussiaGate allegations hinge on figures with close ties to British intelligence and UK nationals. Even establishment media like The Guardian reported that British spies from GCHQ were the first to alert US authorities to so-called Russian interference. Did the entire narrative originate with UK intelligence groups in an effort to create the appearance of Russian collusion with the Trump Presidential campaign, much as the Guccifer 2.0 persona was used in the US to discredit WikiLeaks’ publication of the DNC emails?

    If it was not Russia at the heart of a complex operation to topple the Clinton campaign in 2016, then was British Intelligence responsible for creating false narratives and mirage-like ‘evidence’ on which the Trump-Russia scandal could hinge?

    Put another way, if UK intelligence is responsible for manufacturing the Trump-Russia allegations, it suggests that the UK’s efforts formed an international arm running concurrently with domestic US ‘Deep State’ efforts to sabotage Trump’s presidential campaign and/or oust him once he had been elected.

    Is British intelligence involvement in RussiaGate, as outlined above, the international version of CrowdStrike and former FBI figures manufacturing the Guccifer 2.0 persona specifically to smear WikiLeaks via false allegations of a Russian hack of the DNC? Have we been looking in the wrong place – at the wrong country – to unearth the so-called ‘foreign meddling’ in the 2016 US election all along?

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Today’s News 5th April 2018

  • Frankfurt Is Winning The Battle For London's Bankers

    Since the UK voted to leave the EU, its biggest financial institutions have been observing the slow moving  Brexit negotiations with a degree of discomfort.

    Last month, as Statista’s Niall McCarthy notes, Theresa May warned that the UK’s financial companies could lose full passporting rights and single market access, leading to even higher anxiety, particularly in the City of London.

    The air of uncertainty had already prompted several companies to take action and prepare for post-Brexit life in new European hubs.

    In recent months, much has been written about the threat of financial relocations but which companies have actually followed through with the threat and announced they will shift staff abroad?

    Bloomberg has kept track of banks announcing plans to relocate staff and the following infographic provides an overview of the situation with London’s loss Frankfurt’s gain.

    Infographic: Frankfurt Is Winning The Battle For London's Bankers  | Statista

    You will find more infographics at Statista

    Goldman Sachs recently announced to its investment bankers and traders that their future may well lie in in Germany’s financial capital. The firm has already said it intends moving 1,000 of its 6,000 strong staff to Frankfurt.

    It’s just one of many organizations to announce a shift to other EU hubs with UBS planning to shift 1,500 of its workforce in the UK to Frankfurt and Paris. Depending on the outcome of talks on a future trade agreeement, these initial moves could just herald the start of London’s financial exodus.

     

  • The Three Most Important Aspects Of The Skripal Case… And Where They Might Be Pointing

    Authored by Rob Slane via TheBlogMire.com,

    I have now asked a total of 50 questions around the Skripal case, which you can find here and here. Having gone back through these questions, as far as I can see only three have been answered by the release of public information or events that have transpired. These are:

    • Are they (Sergei and Yulia Skripal) still alive?

    • If so, what is their current condition and what symptoms are they displaying?

    • Can the government confirm that its scientists at Porton Down have established that the substance that poisoned the Skripals and D.S. Bailey was actually produced or manufactured in Russia?

    On the first two points we are now told that Yulia Skripal’s condition has significantly improved to the point where she is said to be recovering well and talking. However, although this provides something of an answer to these questions, it also raises a number of others. Is she finally being allowed consular access? Is she being allowed to speak to her fiancé, her grandmother, or her cousin by telephone? Most importantly, how does her recovery comport with the claim that she was poisoned with a “military-grade nerve agent” with a toxicity around 5-8 times that of VX nerve agent?

    On the other point, we do now have a definitive answer from none other than the Chief Executive of the Defence Science and Technology Laboratory (DSTL) at Porton Down, Gary Aitkenhead: No, Porton Down was not able to identify the substance as being produced or manufactured in Russia.

    It is important that reasonable questions continue to be raised, as they not only help clarify the actual issues, but the answers — or lack thereof — are also a good barometer as to how the official narrative stacks up. As a keen observer of the case — especially since it took place just a few hundred yards from my home in Salisbury — I have to say that the official narrative of the British Government has not stood up to even the most cursory scrutiny from the outset. In fact, there are three crucial issues that serve to raise suspicions about it, and to my mind these issues are the most important aspects of the case so far:

    1. The absurd speed at which the British Government reacted to the incident

    2. The British Government’s ignoring of legal frameworks and protocols

    3. The large number of discrepancies between events and the official narrative

    Let’s just look at these in turn.

    1. The absurd speed at which the British Government reacted to the incident

    I remain astonished at the manner and the speed with which the British Government reacted to this incident. There was the speed with which the Foreign Secretary, Boris Johnson, first pointed the finger of culpability, less than 48 hours after the incident, and before any investigation or analysis of the substance had taken place. There was the speed with which Porton Down was apparently able to analyse and identify the substance, even though it is set to take the Organisation for the Prohibition of Chemical Weapons (OPCW) at least three weeks to carry out a similar identification. There was the speed with which the British Government officially accused the Russian Government of being behind the incident, and the 36-hour ultimatum given to it to prove its innocence without being given any of the evidence that apparently showed its culpability. There was the speed with which the British Government, armed with evidence that looked like it was put together by a rather dull 14-year-old on work experience, managed to convince a number of other countries to expel diplomats, including 60 from the United States.

    Why, if it was so sure of its claims, did the British Government feel the need to act so hastily and recklessly, rather than await the results of the investigation?

    2. The British Government’s ignoring of legal frameworks and protocols

    Not only has the British Government acted with lightning speed, it has also ridden roughshod over a number of international legal agreements and protocols.

    Firstly, there is the involvement of the OPCW. What ought to have happened is the British Government should have invited the OPCW in as part of the investigation immediately upon suspicion of the use of a nerve agent. However, according to the British Government’s own timeline, it wasn’t until March 14th– the day that Mrs May formally announced the culpability of the Russian State to Parliament – that she actually wrote to the OPCW to involve them in the case. This is, I understand, contrary to the obligations Britain has as a member of the OPCW, and signatory to the Chemical Weapons Convention (CWC).

    In addition, the British Government has refused to provide evidence to the Russian Government. Again, my understanding is that this is contrary to the protocols set out in the CWC.

    The British Government has also refused to grant the Russian Embassy in London consular access to two Russian nationals, Sergei and Yulia Skripal, which it is legally obliged to do under Articles 36 and 37 of the 1963 Vienna Convention and Article 35 (1) of the 1965 Consular Convention.

    Why, if it was so sure of its claims, did the British Government feel the need to ignore international agreements to which it is a signatory, and instead act in this opaque and frankly suspicious manner?

    3. The number of oddities and discrepancies in the official narrative

    The speed of apportioning blame and the ignoring of international legal agreements might not have looked nearly as suspicious had the narrative presented by the British Government and the facts on the ground been in harmony with one another. But they have not been.

    Instead, many of the actual events that have transpired over the weeks since the incident was first reported simply do not fit the overarching explanation given.

    Below are five of the most important:

    1. As mentioned above, the Chief Executive of Porton Down, Gary Aitkenhead has confirmed that the laboratory was unable to identify the origin of the substance used to poison the Skripals. This is in direct contradiction to the claims made by the Foreign Secretary, Boris Johnson, who said the following on the Andrew Marr Show on 18th March:

    “Obviously to the best of our knowledge this is a Russian-made nerve agent that falls within the category Novichok made only by Russia, and just to get back to the point about the international reaction which is so fascinating…”

    If it’s made only by Russia, as Mr Johnson claimed, then it must have originated in Russia. Right? Yet Mr Aitkenhead says they were unable to identify where it was made.

    Then in an interview with Deutsche Welle two days after his above comments, Mr Johnson was categorical about the source of the nerve agent as being Russian. Here’s the exchange:

    Interviewer: You argue that the source of this nerve agent, Novichok, is Russia. How did you manage to find it out so quickly? Does Britain possess samples of it?

    Johnson: “Let me be clear with you … When I look at the evidence, I mean the people from Porton Down, the laboratory …”

    Interviewer: “So they have the samples …

    Johnson: “They do. And they were absolutely categorical and I asked the guy myself, I said, ‘Are you sure?’ And he said there’s no doubt.”

    Who “the guy” is, perhaps we’ll never know. The cleaner perhaps? I suppose a politician of Mr Johnson’s calibre will happily try to weasel his way out of the implications of what he said. But to us lesser mortals, it does rather look like he was deliberately misleading, doesn’t it

    2. Much of the investigation initially concentrated on where the Skripals were poisoned. Amongst the suggestions made were the bench on which they collapsed, the Zizzi restaurant where they had eaten, Ms Skripal’s luggage or Mr Skripal’s car. Then, some 24 days after the incident, it was announced that a high concentration of the “military-grade nerve agent” had been found on the front door, and that this was the likely place of poisoning. Yet it is known that after leaving the house, Mr Skripal and his daughter drove into the City Centre, went to the Mill pub, and then to the restaurant where they ate a meal together. In other words, according to the door theory, the two of them were poisoned by a military grade nerve agent, which then took over three hours to have any effect. Odd, wouldn’t you say?

    3. Furthermore, it has been stated that the two of them became ill at the same time on the bench in the Maltings. Therefore, if they were poisoned at the front door, this would mean that not only did the two of them feel little or no effects for the three hours or so that followed, but it would also mean that a large 66-year-old man and an averagely built 33-year-old woman, of different height, weight and metabolism, somehow succumbed to the effects of poisoning at exactly the same time, some three hours or so later. Again, is that not very odd?

    4. The claim that they were poisoned by a military grade nerve agent, of a type said to be 5-8 times the toxicity of VX nerve agent, is itself surely open to question. Both Mr Skripal and his daughter not only survived, but Yulia Skripal is now said to be sitting up and talking just weeks later. Perhaps it is possible to survive a miniscule dose of such a nerve agent. The problem with this is that according to many earlier claims, there were significant traces of the substance in various parts of the City of Salisbury, which indicates that it cannot have been a very miniscule amount that they came into contact with at the door. Which means that we are being asked to believe that they were poisoned by “more than a miniscule amount” of this deadly poison, but both somehow survived, despite neither receiving an antidote (a fact now confirmed by Gary Aitkenhead). Does that not seem improbable?

    5. The official explanation – that this was planned and authorised at the highest level within the Russian Government – would lead one to believe that the action was carried out by top level agents of the FSB. Yet the mode of attack – nerve agent apparently smeared or sprayed on the door – has to be one of the least effective methods that could be used to assassinate anyone. For a start, it rains a lot in Salisbury, and it did indeed rain on the day of the poisoning. If the substance was left at the front door (assuming it was the outside), the attacker(s) could have had no guarantee that it would not be washed off before Mr Skripal touched it. Nor could they have had any guarantee that he, as opposed to his daughter or perhaps a delivery person etc, would come into contact with it. And of course there is the fact that Mr Skripal is still alive. Does any of this seem consistent with the narrative of a professional, Kremlin-authorised hit-job.

    Conclusion

    Where does this leave us?

    The official narrative would have us believe that the Russian Government authorised the killing of a has-been (former?) MI6 spy, who it had freed in 2010 and who presumably posed no threat to it, just a week before the Russian election and weeks before the World Cup, using a nerve agent with an exclusively Russian signature, in a way (on the door) that could not guarantee the intended target would touch it. This would be difficult enough to swallow by itself, but the British Government’s rush to judgement, disregard for law, and the many discrepancies in the actual events themselves make this scenario absurdly implausible.

    Another possibility – that the British Government or intelligence services were behind the incident – has been given great credibility by the British Government itself, in its absurdly quick reaction to the incident and its blatant ignoring of legal protocols. These actions were bound to fuel suspicions about the possibility of its own involvement, and I have to say that such suspicions are absolutely legitimate precisely because of the way it has behaved. However, it must be said that the oddities and discrepancies in the case don’t lend themselves very well to the idea of a carefully planned false flag. If British intelligence had planned a hit job on Mr Skripal using a military-grade nerve agent “of a type developed by Russia”, in order to then pin the blame on the Russian Government, I doubt very much that Mr Skripal and his daughter would still be alive, or that the explanation for where the poison was administered would be changing on a daily basis, or that the British Government’s evidence to other countries would have been as risible as it was (unless of course our intelligence agencies are as incompetent as such a scenario would require them to be, that is).

    My hunch – and it is just that – is that Mr Skripal himself was perhaps still working for British intelligence, and may have been in possession of a nerve agent. Somehow, this involvement went wrong, and he ended up accidently poisoning himself and his daughter on the bench in The Maltings. The Government then scrambled to concoct a story in order to cover up the real story of a Russian working for MI6 and handling nerve agents, and so quickly decided to point the finger at that most convenient scapegoat, the Russian Government.

    The reason that I’m attracted to this possibility is that it explains all three aspects I have described above, and which I think are the most important aspects of the case. The rush to judgement — which looked like panic-mode to me — could have been an attempt to divert attention away from the investigation looking at the possibility of Mr Skripal having military grade nerve agent in his possession. The ignoring of international legal protocols, at least for a time, could have been done to ensure that the case was not probed by any outside body, which may well have exposed discrepancies. And it could also explain many of the oddities mentioned above, such as traces of nerve agent apparently being found in various places in Salisbury, since these could have come about because Mr Skripal was in possession of some sort of nerve agent when he left his house that day.

    As I say, this is just a hunch and purely speculative. I am probably wrong. But unless the British Government is able to produce far better evidence than it has so far produced, to back up the claims it has made, I shall consider it a more credible possibility than the one they have sold to the British public.

  • Judge Throws Out 12-Year-Old Lawsuit Against Steve Cohen

    More than seven years ago, we reported on the wide-ranging financial conspiracy involving almost every single prominent US-based hedge fund and a Canadian firm called Fairfax Financial Holdings that they schemed to short – and then crush by spreading dubious research and shoddy accounting.

    Around the time that a Reuters report on recently declassified court document from 2008, which outlined details of the plot, including Cohen’s alleged role.

    Cohen

    Now, a New Jersey judge has put an end (for now, at least) to the 12-year-long legal saga by ruling that the lawsuit didn’t belong in his court. A state appeals court revived Fairfax’s claims last April after they were previously dismissed in 2011 and 2012. Judges have already thrown out claims against Dan Loeb’s Third Point and Jim Chanos’s Kynikos Associates LP, according to the New York Post.

    Billionaire Steven A. Cohen has won the dismissal of an $8 billion lawsuit accusing him and his former firm SAC Capital Advisors LP of conspiring with other hedge funds to spread false rumors about Fairfax Financial Holdings, hoping to “crush” or “kill” the insurer.

    In a decision last week, New Jersey Superior Court Judge Frank DeAngelis said the nearly 12-year-old case did not belong in that state’s courts because there was no evidence SAC expected or intended to cause injury there while “conspiring to drive down the share price of a Canadian company.”

    According to Reuters, Fairfax said it was victimized in a coordinated raid.

    Fairfax claimed it was victimized by a four-year “bear raid” by hedge funds that engineered bogus accounting claims and biased analyst research, and persuaded reporters to write negative stories about the Toronto-based insurance and investment management company.

    It said the funds did this to profit from short sales, or bets its stock price would fall. Fairfax claimed that hedge fund operatives ran the bear raid from New Jersey.

    Cohen, whose four-year ban from the securities industry ended in January, is also facing another lawsuit from a former female employee alleging a culture of harassment and “hostility toward  women” at Point72.

  • Brave New World Revisited And The Disease Of Over-Organization

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    When people talk of the freedom of writing, speaking or thinking I cannot choose but laugh. No such thing ever existed. No such thing now exists; but I hope it will exist. But it must be hundreds of years after you and I shall write and speak no more.

    – John Adams letter to Thomas Jefferson, July 15, 1817

    Brave New World Revisited is one of the few books I’ve read in my life that I continue to think about on a regular basis.

    In terms of understanding where humanity stands at present and what we need to do to get out of the mess we’ve created, it’s one of the more important pieces of non-fiction you can find.

    I recently felt the need to reread the book for some unknown reason, and I’m glad I did. The choices we make as a species about how we reorganize human affairs in the decades to come will determine the future of human freedom on this planet. Aldous Huxley’s Brave New World Revisited offers an abundance of wisdom for us to consider as we move forward.

    Huxley was deeply concerned with the importance of individual human freedom and the forces relentlessly trying to stifle it. Here’s a brief description of how Huxley viewed our species:

    In the course of evolution nature has gone to endless trouble to see that every individual is unlike every other individual. We reproduce our kind by bringing the father’s genes into contact with the mother’s. These hereditary factors may be combined in an al­most infinite number of ways. Physically and mentally, each one of us is unique. Any culture which, in the interests of efficiency or in the name of some political or religious dogma, seeks to standardize the human individual, commits an outrage against man’s biological nature…

    Biologically speaking, man is a moderately gregar­ious, not a completely social animal — a creature more like a wolf, let us say, or an elephant, than like a bee or an ant. In their original form human societies bore no resemblance to the hive or the ant heap; they were merely packs. Civilization is, among other things, the process by which primitive packs are transformed into an analogue, crude and mechanical, of the social in­sects’ organic communities. At the present time the pressures of over-population and technological change are accelerating this process. The termitary has come to seem a realizable and even, in some eyes, a desirable ideal. Needless to say, the ideal will never in fact be realized. A great gulf separates the social insect from the not too gregarious, big-brained mammal; and even though the mammal should do his best to imitate the insect, the gulf would remain. However hard they try, men cannot create a social organism, they can only create an organization. In the process of trying to create an organism they will merely create a totali­tarian despotism.

    It’s that very last line which is key, and forms the basis of most of Huxley’s most dystopian concerns. If you agree with his assessment (as I do), that human beings are “moderately gregarious” at a species level, and biologically unique at the individual level, any ethical conclusion about how human civilizations should be structured must promote and protect the value of human freedom at its core.

    While this may be obvious to many of you, Huxley accurately warns readers of the nontrivial numbers of dedicated ideologues and authoritarian types who disagree and actively work to turn the human being into a mere cog in a large machine of their particular fantasy. The best terms to describe such types and their worldview are: collectivists and collectivism. These sorts insist that the rights of the individual are subservient to the whole, with the whole typically being some artificial construct that happens to be most opportunistic or appealing at any given moment. Collectivism can emerge on the right or the left of the political spectrum — it knows no political party. The key calling card of the collectivist is that he or she wishes to force individuals into a structure of conformity that fits their particular worldview.

    As Mr. William Whyte has shown in his remarkable book, The Organization Man, a new Social Ethic is replacing our traditional ethical system — the system in which the individual is primary. The key words in this Social Ethic are “adjustment,” “adaptation,” “socially orientated behavior,” “belongingness,” “acquisition of social skills,” “team work,” “group living,” “group loyalty,” “group dynamics,” “group thinking,” “group creativ­ity.” Its basic assumption is that the social whole has greater worth and significance than its individual parts, that inborn biological differences should be sac­rificed to cultural uniformity, that the rights of the collectivity take precedence over what the eighteenth century called the Rights of Man…This ideal man is the man who displays “dynamic conformity” (delicious phrase!) and an intense loyalty to the group, an unflagging desire to subordinate himself, to belong. And the ideal man must have an ideal wife, highly gregarious, infinitely adaptable and not merely re­signed to the fact that her husband’s first loyalty is to the Corporation, but actively loyal on her own account.

    This isn’t to say we shouldn’t view ourselves as interconnected consciousness on a planetary level — I think we should. The key is this must emerge from an individual understanding of consciousness and not some topdown mandate from some collectivist control-freak dictator enforced via violence and coercion.

    But here’s where it starts to get really interesting. Since humans aren’t naturally collectivist animals like ants or bees, those who desire to turn us into such creatures must construct an artificial paradigm and then resort to intense and systematic propaganda to keep it going. This is precisely why Huxley devotes so much of his book to the mind-control techniques of his time and the ones he imagines will exist in the not too distant future.

    Here’s one passage that really stuck with me:

    In their propaganda today’s dictators rely for the most part on repetition, suppression and rationaliza­tion — the repetition of catchwords which they wish to be accepted as true, the suppression of facts which they wish to be ignored, the arousal and rationaliza­tion of passions which may be used in the interests of the Party or the State. As the art and science of manip­ulation come to be better understood, the dictators of the future will doubtless learn to combine these tech­niques with the non-stop distractions which, in the West, are now threatening to drown in a sea of irrele­vance the rational propaganda essential to the mainten­ance of individual liberty and the survival of demo­cratic institutions.

    Sound familiar?

    Russia, Russia, Russia.

    Stormy Daniels, Stormy Daniels, Stormy Daniels. 

    Huxley also spent a great deal of time discussing how completely filled with propaganda all of our human societies are, and that it’s not always totally insidious. After all, the use of persuasion and the innate susceptibility for humans beings to be persuaded is in fact part of our social makeup. He notes:

    Huxley notes:

    Suffice it to say that all the intellectual materials for a sound education in the proper use of language — an education on every level from the kindergarten to the postgraduate school — are now available. Such an education in the art of distinguishing between the proper and the improper use of symbols could be inaugurated immediately. In­deed it might have been inaugurated at any time during the last thirty or forty years. And yet children are nowhere taught, in any systematic way, to distinguish true from false, or meaningful from meaningless, state­ments. Why is this so? Because their elders, even in the democratic countries, do not want them to be given this kind of education. In this context the brief, sad history of the Institute for Propaganda Analysis is highly significant. The Institute was founded in 1937, when Nazi propaganda was at its noisiest and most effective, by Mr. Filene, the New England philanthro­pist. Under its auspices analyses of non-rational propa­ganda were made and several texts for the instruction of high school and university students were prepared. Then came the war — a total war on all the fronts, the mental no less than the physical. With all the Allied governments engaging in “psychological warfare,” an insistence upon the desirability of analyzing propa­ganda seemed a bit tactless. The Institute was closed in 1941. But even before the outbreak of hostilities, there were many persons to whom its activities seemed profoundly objectionable. Certain educators, for exam­ple, disapproved of the teaching of propaganda anal­ysis on the grounds that it would make adolescents unduly cynical. Nor was it welcomed by the military authorities, who were afraid that recruits might start to analyze the utterances of drill sergeants. And then there were the clergymen and the advertisers. The clergymen were against propaganda analysis as tend­ing to undermine belief and diminish churchgoing; the advertisers objected on the grounds that it might undermine brand loyalty and reduce sales.

    That’s simply fascinating and shows there’s a institutional bias against providing people with the tools needed in order to identify mind-control and propaganda. Dominant institutions may not agree on much, but they agree that people shouldn’t be critical thinkers. This is precisely why my wife and I are determined to teach our children to question everything they’re told, including by us (I’m quite certain I’ll live to regret writing that some day).

    Huxley’s observation reminds me of that classic George Carlin quote:

    There’s a reason for this, there’s a reason education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better. Don’t look for it. Be happy with what you’ve got… because the owners of this country don’t want that. I’m talking about the real owners now… the real owners. The big wealthy business interests that control things and make all the important decisions. Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the state houses, the city halls. They got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying. Lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests.

    Indeed it is.

    Going back to Huxley, it’s amazing how prescient he was about the future of the U.S. and indeed much of the Western world. He observed:

    At this point we find ourselves confronted by a very disquieting question: Do we really wish to act upon our knowledge? Does a majority of the population think it worth while to take a good deal of trouble, in order to halt and, if possible, reverse the current drift toward totalitarian control of everything? In the United States and America is the prophetic image of the rest of the urban-industrial world as it will be a few years from now — recent public opinion polls have revealed that an actual majority of young people in their teens, the voters of tomorrow, have no faith in democratic institutions, see no objection to the censor­ship of unpopular ideas, do not believe that govern­ment of the people by the people is possible and would be perfectly content, if they can continue to live in the style to which the boom has accustomed them, to be ruled, from above, by an oligarchy of assorted experts. That so many of the well-fed young television-watchers in the world’s most powerful democracy should be so completely indifferent to the idea of self-government, so blankly uninterested in freedom of thought and the right to dissent, is distressing, but not too surprising. “Free as a bird,” we say, and envy the winged creatures for their power of unrestricted movement in all the three dimensions. But, alas, we forget the dodo. Any bird that has learned how to grub up a good living without being compelled to use its wings will soon renounce the privilege of flight and remain forever grounded. Something analogous is true of human beings. If the bread is supplied regularly and copiously three times a day, many of them will be perfectly content to live by bread alone — or at least by bread and circuses alone.

    It’s important to recall that this was written in 1958. Huxley astutely noted that the youth of post WW2 America, too young to recall the horrors of the war, but old enough to appreciate the material benefits which followed total victory, had no real interest in self-government or freedom of thought. Fat on bread and expecting good times to continue indefinitely, the American public had very quickly become a people perfectly primed for those obsessed with turning humans into malleable cogs in a gigantic machine. This machine would eventually evolve into the imperial oligarchy we have today.

    Huxley also noted the following about the media environment:

    Mass commu­nication, in a word, is neither good nor bad; it is simply a force and, like any other force, it can be used either well or ill. Used in one way, the press, the radio and the cinema are indispensable to the survival of democracy. Used in another way, they are among the most powerful weapons in the dictator’s armory. In the field of mass communications as in almost every other field of enterprise, technological progress has hurt the Little Man and helped the Big Man. As lately as fifty years ago, every democratic country could boast of a great number of small journals and local newspapers. Thousands of country editors expressed thousands of independent opinions. Somewhere or other almost anybody could get almost anything printed. Today the press is still legally free; but most of the little papers have disappeared. The cost of wood-pulp, of modern printing machinery and of syndicated news is too high for the Little Man. In the totalitarian East there is political censorship, and the media of mass communication are controlled by the State. In the democratic West there is economic censorship and the media of mass communication are controlled by members of the Power Elite. Censorship by rising costs and the concentration of communication power in the hands of a few big concerns is less objectionable than State ownership and government propaganda; but certainly it is not something of which a Jeffersonian democrat could possibly approve.

    The advent of the internet and social media leveled this playing field considerably, a development which freaked out the establishment and resulted in hysterical calls to censor the web in the name of fighting “fake news.”

    Finally, while reading Brave New World Revisited can leave you with a sense of despair, I see many reasons for optimism. First, we should remember that the reason freedom and the individual human spirit is so difficult to eradicate in the long-term is precisely because the collectivist model goes against the actual nature of our species. This is why so much time and effort must be placed on propaganda and mind-control. Collectivists need to manipulate and brainwash us into accepting such unnatural and oppressive environments such as the type most of humanity live under to the present day.

    This means we can certainly change things and shift toward a different paradigm for human affairs. As most of you know by know, I believe this model must be rooted in the concept of decentralization. Huxley seems to agree:

    Take the right to vote. In principle, it is a great privilege. In practice, as recent history has repeatedly shown, the right to vote, by itself, is no guarantee of liberty. Therefore, if you wish to avoid dictatorship by referendum, break up modern society’s merely func­tional collectives into self-governing, voluntarily cooperating groups, capable of functioning outside the bureaucratic systems of Big Business and Big Govern­ment.

    Over-population and over-organization have pro­duced the modern metropolis, in which a fully human life of multiple personal relationships has become almost impossible. Therefore, if you wish to avoid the spiritual impoverishment of individuals and whole societies, leave the metropolis and revive the small country community, or alternately humanize the me­tropolis by creating within its network of mechanical organization the urban equivalents of small country communities, in which individuals can meet and co­operate as complete persons, not as the mere embodi­ments of specialized functions.

    Humanity finds itself at a significant crossroads. The forces of over-organization and centralization remain dominant, but are increasingly on the run as the economic and political paradigm created in their image begins to fracture. As Huxley noted, over-organization is a disease, yet the varied proponents of the status quo will argue for more control and more centralization as a cure to a problem of their own making. In contrast, what we need to do is move in precisely the opposite direction.

    It’s become clear to me that the gigantic, bureaucratic nation-state model of counties as varied as the U.S., China and Russia make little sense in their current forms if we care at all about human freedom. Huxley observed that freedom flourishes best at a far more local level of governance and I completely agree. When you attempt to make blanket, centralized political decisions for hundreds of millions, or even billions of people, everyone ends up unhappy and collectively powerless. Significant amounts of coercion and oppression are then needed to enforce such centralized decisions that typically end up benefiting only the handful of people who are able to game the system and get what they want.

    Huxley noted:

    Self-government is in inverse ratio to numbers. The larger the constituency, the less the value of any par­ticular vote. When he is merely one of millions, the individual elector feels himself to be impotent, a neg­ligible quantity. The candidates he has voted into office are far away, at the top of the pyramid of power. Theoretically they are the servants of the people; but in fact it is the servants who give orders and the peo­ple, far off at the base of the great pyramid, who must obey. Increasing population and advancing technology have resulted in an increase in the number and complexity of organizations, an increase in the amount of power concentrated in the hands of officials and a corre­sponding decrease in the amount of control exercised by electors, coupled with a decrease in the public’s regard for democratic procedures. Already weakened by the vast impersonal forces at work in the modern world, democratic institutions are now being under­mined from within by the politicians and their propa­gandists.

    For additional thoughts on this topic, see my 2017 four-part series: “Decentralize or Die.”

    Notes:

    This is the second post I’ve written on Brave New World Revisited. See the first one here: Brave New World Revisited…Key Excerpts and My Summary (2014)

    Read the entire book online here: Brave New World Revisited [1958] 

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  • "This Is The Breaking Point" – Manhattan Home Sales Plunge Most Since 2009

    For much of the past year, we’ve been carefully monitoring developments in the high-end of the world’s ritziest property markets – cities like New York, London and Hong Kong as well as tony suburbs like Greenwich, Conn. – for warning signs that America’s torrid post-crisis real-estate rally could be nearly exhausted.

    As US home prices have rocketed to within a hair’s breadth (1%) of their highs from 2006, we’ve pondered the question of whether this is a “market top” or a “breakout.” The high end, ultimately, could be the final piece of this puzzle.

    SNP

    After all, conventional wisdom would have you believe that real-estate values in dynamic urban centers like NYC could never fall – at least not meaningfully. The perception, as we pointed out back in February, is that world-class cities will never go out of style, and their already high-densities deeply limits supply.

    London

    But that logic leaves one crucial question unanswered: What happens when too many people pile into a supposedly “safe” asset?

    This is essentially the narrative that unfolded during the housing crisis, as millions of Americans assumed real-estate valuations could never retreat (beyond the occasional “gully”).

    But even the world’s trendiest markets have their breaking points.

    “Even with New York real estate prices, you do hit a point in which resistance sets in,” said Frederick Peters, CEO of brokerage Warburg Realty. “People are very anxious about overpaying.”

    To wit, one month after we reported that Manhattan apartment sales were

    For what it’s worth, analysts at UBS to Morgan Stanley have predicted that a correction is looming in the near future.

    We recently reported that, according to data collected by a private company, Manhattan apartment sales plunged to a six-year low in January.

    And now, Bloomberg is reporting that Manhattan home sales plunged the most since 2009 during the first quarter, according to a popular report compiled by Miller Samuel Inc. and Douglas Elliman Real Estate. The two firms tabulated that sales dropped 25% during the first quarter. 

    Meanwhile, Corcoran Group, which compiles its own report, recorded an 11% decrease. The drop was observed more or less evenly across the market, from the ultra-high end (which has been struggling for months) to studios and one-bedrooms.

    The drop in sales spanned from the highest reaches of the luxury market to workaday studios and one-bedrooms. Buyers, who have noticed that home prices are no longer climbing as sharply as they have been, are realizing they can afford to be picky. Rising borrowing costs and new federal limits on tax deductions for mortgage interest and state and local levies also are making homeownership more expensive, giving shoppers even more reasons to push back on a listing’s price — or walk away.

    While just a few years ago, bidding wars were the norm, “there’s nothing out there today that points to prices going up, and in many buyers’ minds, they point to being flat,” said Pamela Liebman, chief executive officer of brokerage Corcoran Group. “They’re now aggressive in the opposite way: putting in very low offers and seeing what concessions they can get from the sellers.”

    Any seller who wanted to close a deal during the first quarter had to lower their ask. Indeed, 52% of all sales closed during the period were for less than the most recent ask. In 38% of deals, buyers agreed to pay the asking price. But by then, it had already been dramatically reduced.

    Per Bloomberg, no deal is too small to preclude haggling.

    Peters said that these days, he gets dozens of emails a day announcing price reductions for listings. And buyers are haggling over all deals, no matter how small. In a recent sale of a two-bedroom home handled by his firm, a buyer who agreed to pay $1.5 million — after the seller cut the asking price — suddenly demanded an extra $100,000 discount before signing the contract. They agreed to meet halfway, Peters said.

    Buyers also are finding value in co-ops, which in Manhattan tend to be priced lower than condos. Resale co-ops were the only category to have an increase in sales in the quarter, rising 2 percent to 1,486 deals, according to Corcoran Group. Sales of previously owned condos, on the other hand, fell 12 percent as their owners clung to prices near their record highs, the brokerage said.

    The median price of all sales that closed in the quarter was $1.095 million, down 5.2 percent from a year earlier, brokerage Town Residential said in its own report. Three-bedroom apartments saw the biggest drop, with a decline of 7 percent to a median of $3.82 million, the firm said.

    Both new developments (of which there are many) and existing home sales have fallen.

    To be sure, if one insists on believing this is just the beginning of another gully, one could point to expectations that US GDP growth will be relatively subdued during the first quarter – as it often is.

    But even if we see a strong rebound in Q2, perhaps the most important factor that has been driving the high-end real-estate boom exists outside the US. Chinese buyers, who’ve helped fuel the speculative boom, are finding it increasingly difficult to move their wealth offshore as China has cracked down on capital flows and, specifically, foreign real-estate transactions involving wealthy Chinese.

    Manhattan

     

  • Yet Another California City Fighting Back Against Unlawful Sanctuary Policy

    Authored by Ann via ThePoliticalInsider.com,

    Huntington Beach is the latest city in California to join a growing backlash against the state’s sanctuary law.

    In a late-night vote Monday, the Huntington Beach City Council decided 6 to 1 to sue the state of California over SB 54, which protects illegal immigrants by limiting the cooperation between local police and ICE agents. Rep. Dana Rohrabacher (R-Calif.), who represents Huntington Beach, praised the decision to sue.

    “I am very proud of the USA. I would suggest that those who advocate for sanctuary states are betraying the American people.”

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    Citizens the state over are making it loud and clear that they refuse to sit idly by while California Gov. Jerry Brown unlawfully protects illegals in their state. Los Alamitos was the first city to take action, voting 4-1 on March 19 to pass a city ordinance exempting it from SB 54. That vote created a domino effect, and the cities of Aliso Viejo and Buena Park announced that they would also push for an exemption from the law.

    California citizens aren’t the only ones taking action, either – the Department of Justice is suing the state of California under the contention that SB 54, which essentially forbids local and state law enforcement from enforcing federal immigration law, is unconstitutional. Under the rule, law enforcement officers cannot be deputized as immigration agents, arrest someone for a civil immigration warrant alone, or participate in border patrol activities, among other actions.

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    It goes without saying that SB 54 is a threat to public safety. But liberals would rather protect illegals than their own citizens. No wonder Californians are fighting back.

  • CDC Finds "Nightmare Bacteria" Across United States

    The Centers for Disease Control and Prevention (CDC) published a new Vital Signs report that identified an alarming trend of antibiotic-resistant genes in “nightmare bacteria” across the United States, on April 03.

    The CDC warned that nationwide testing – conducted in 2017, uncovered 221 instances of unique resistance genes in “nightmare bacteria.” According to Fortune, of all the germ samples submitted to the CDC for lab testing, one in four had antibiotic-resistant gene characteristics.

    Is America losing the war against antibiotic-resistant bacteria?

    For some time, the CDC has warned Americans about the deadly, drug-resistant ‘superbugs,’ otherwise now called “nightmare bacteria,” which seems officials have upgraded the term to a much more dangerous name — reflecting the severity of today’s epidemic.

    “Nightmare bacteria” kills more than 23,000 Americans each year, and the report states about 11 percent of Americans who were screened had “no symptoms” before the bacteria aggressively spread.

    “While antibiotic resistance (AR) threats vary nationwide, AR has been found in every state. And unusual resistance germs, which are resistant to all or most antibiotics tested and are uncommon or carry special resistance genes, are constantly developing and spreading,” the CDC said in a report.

    Antibiotic-resistant bacteria can spread like wildfire

    “Essentially, we found nightmare bacteria in your backyard,” said Dr. Anne Schuchat, Acting Principal Deputy Director of CDC.

    “These verge on untreatable infections” where the only option may be supportive care — fluids and sometimes machines to maintain life to give the patient a chance to recover, Schuchat said.

    Schuchat states about 2 million Americans get infections from antibiotic-resistant bacteria each year, and around 23,000 people die from the deadly infections.

    Dr. Jay Butler, the chief medical officer for the state of Alaska and past president of the Association of State and Territorial Health Officials, said, “even in remote areas” the antibiotic-resistant bacteria threat is real, because those who are infected can unknowingly transport the deadly bacteria.

    “Rapid identification of the new or rare threats is the critical first step in CDC’s containment strategy to stop the spread of antibiotic resistance. When a germ with significant resistance is detected, facilities can quickly isolate patients and begin aggressive infection control and screening actions to discover, reduce, and stop transmission to others,” the CDC said.

    What can the Federal Government do? 

    • Monitoring resistance and sounding the alarm when threats emerge. CDC develops and provides new lab tests so health departments can quickly identify new threats.

    • Improving identification through CDC’s new AR Lab Network in all 50 states, 5 large cities, and Puerto Rico, including 7 regional labs and a national tuberculosis lab for specialty testing.

    • Supporting prevention experts and programs in every state, and providing data and recommendations for local prevention and response.

    • Testing innovative infection control and prevention strategies with health care and academic partners.

    State and Local Health Departments and Labs must can: 

    • Make sure all health care facilities know what state and local lab support is available and what isolates (pure samples of a germ) to send for testing. Develop a plan to respond rapidly to unusual genes and germs when they first appear.

    • Assess the quality and consistency of infection control in health care facilities across the state, especially in facilities with high-risk patients and long stays. Help improve practices.

    • Coordinate with affected health care facilities, the new AR Lab Network regional lab, and CDC for every case of unusual resistance. Investigations should include onsite infection control assessments to find spread. Consider colonization screenings. Continue until spread is controlled.

    • Provide timely lab results and recommendations to affected health care facilities and providers. If the patient came from or was transferred to another facility, alert that facility.

    “The efforts detailed in the Vital Signs report were made possible through new congressional funding in 2016 to combat antibiotic resistance,” Dr. Auwaerter said. “We urge Congress to sustain and to grow that investment so that further progress will prepare us to meet the future challenges of antibiotic resistance from a position of strength.”

    Antibiotic drugs are beneficial and have been around for decades. Here is the issue, antibiotic-resistant genes in bacteria are getting used to the drugs.  It is a problem the CDC and the federal government have known for a while, but it is an issue that is more widespread than previously thought.

    Mapping Out The Rise of Resistance:

  • Viewers Outraged By CNN's "Sexist" Coverage Of YouTube Shooter

    During the chaotic hours following yesterday’s shooting at YouTube headquarters, news organizations were begging law enforcement sources and interrogating witnesses for any clue or scrap of news about the shooter, their identity and their motive.

    CNN

    And as it so often does, this approach led to some incredibly – even offensively – inaccurate reporting. And nowhere were these violations more blatant than at CNN, which quickly started speculating that the attacker may have been involved in a “love triangle” or some other relationship following reports that the shooter was female, per the Hollywood Reporter.

    One personality, CNN’s crime and justice reporter Shimon Prokupecz, speculated on The Situation Room that the motivation for the shooting was “perhaps a love triangle.” Ongoing conversations centered on the possibility of the shooter reacting to a relationship gone bad.

    Predictably, CNN’s coverage provoked an outrage on Twitter.

     

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    As fate would have it, the shooting had nothing to do with a “love triangle” or “domestic violence” – the latter of which was widely reported by mainstream media organizations citing anonymous law enforcement sources. They also reported that one of the victims was believed to be the shooter’s boyfriend. Police said the shooter, who was later identified as Nasim Aghdam, had no personal relationship with anybody at YouTube headquarters.

    Instead, Aghdam, a prolific publisher of videos on the site, was seeking revenge on the company for censoring her.

  • Is Putin Winning The War Of Attrition With The U.S.?

    Authored by Tom Luongo,

    The news that President Donald Trump offered to hold a meeting with his counterpart in the Kremlin, Vladimir Putin, has the political world in an uproar.

    Furiously keyboards are chattering away as laptop bombardiers are worried that perpetual war for perpetual empire will end if Trump and Putin see eye to eye on anything.

    From the bowels of MI-6 to the think tanks that line K Street schemes are hatched to make it politically unacceptable for Trump to do what he apparently did, if TASS is to be believed.

    If true, the offer represents the biggest shift in U.S./Russian relations since Trump’s election and the subsequent hissy fit thrown by his political opposition in every corner of the political landscape.

    Because they know what’s happening even though you could never get them to admit it in public, the U.S. is vulnerable.

    We’re not vulnerable in any ultimate weapons sense. The U.S. can certainly lob enough nukes at Russia to wipe them out and vice versa.  No, we are vulnerable where our real power comes from: our dominance of the world’s capital markets backed up by both the political will to isolate anyone who doesn’t toe our line and/or the military might to put down any marginal challenges.

    Real Might, Real Power

    So, China finally launching an oil futures contract denominated in Yuan, the so-called petroyuan, and convertible to gold is a financial WMD which doesn’t dwarf Putin’s new hypersonic missiles today.  But, over time that weapon will grow in power and destructive capability.

    China is the world’s largest importer of oil.  That makes it the source of marginal demand for oil in the world.  Russia is the world’s second largest oil exporter, that makes them one of the suppliers of the marginal barrel of oil on the world market.

    While the Saudi Arabians export a lot more oil than Russia, they do so at a much higher all-in-sustaining-cost basis than Russia does (see volatility of the Saudi Budget relative to oil prices below).  At current oil prices Russia’s slowly growing economy is capable of meeting its social needs as measured by the government’s budget, which ran a very modest 1.5% of GDP in 2017 and should contract again this year.

    On the other hand the Saudis ran an 8.9% budget deficit in 2017 and has zero hope of closing that much further without higher oil prices. The Saudis are simply at the mercy of the oil price.

    Therefore, the Russians are, in my opinion, the producer of the marginal barrel of oil because of their greater economic diversity.

    Economically speaking, the marginal supplier and marginal buyer set the price.  No one else does.

    And when you are the marginal buyer you decide what currency you’ll pay in.  In the 1970’s when the U.S. was so “dependent on foreign oil” we were also the price setters.  This was the framework for the petrodollar deal.  Saudi Arabia got U.S. cover for its crimes against humanity and the U.S. got to export dollars around the world and build up confidence in our government bond markets.

    Today China is where the U.S. was and it’s position is getting stronger by the day.  And that’s why this petroyuan contract can and will succeed where others have failed in the past.

    At some point China will tell the Saudis they no longer are willing to subsidize the U.S. dollar and offer up only Yuan in payment.

    And guess what folks?  The Saudis will play ball.  So will the U.S.

    If they don’t China will continue to buy more and more oil from Russia who will be only too happy to accept Yuan in payment for services rendered.  The Saudis will see their power eroded over this.  The dollar will fall as a percentage of reserves.

    The Waiting Game

    And this brings me to Putin and his near infinite patience.  It is easy to have patience with your opponent when you know your opponent has no end-game strategy other than war.

    Putin understands that the U.S. is living on borrowed time.  That moves like this ‘petroyuan’ contract are the beginning of a new landscape.

    When Chinese banking giant ICBC bought a London Bullion Market Association vault, a seat on the fixing board and became one of thirteen market makers we all wondered what the end game was.  But, it should be plainly clear now.

    The LBMA is the means by which China can make good on its promise to back its Shanghai Oil Futures contract with gold, allaying the fears of institutional investors and traders of an exit strategy for their profits.

    China gets a way to deepen its yuan-denominated debt markets and expand the Yuan’s base via organic growth of demand for it as a trade settlement currency.  Investors are safe knowing they can hold yuan-denominated debt because it is convertible to gold as a hedge.

    The Russians get a willing partner with tremendous capital reserves to invest in Russia and benefit from the growth of their relationship.  Russia gets to diversify its reserves and lessen the impact of an exchange rate shock between the ruble and the U.S. dollar.

    Putin knew the Chinese were making the right moves to pull off what marginal players like Qaddafi in Libya and Saddam Hussein in Iraq could not do, defy the U.S.’s control over the pricing of oil.

    The petrodollar is the U.S.’s Achilles’ heel.  Trade matters despite Martin Armstrong’s downplaying of it.  It is the basis on which an economy can or cannot sustain a virtuous credit cycle in our absurd fractional reserve banking system.

    It is the M-zero of the international monetary system, as it were.  And if anything about central banking is to be believed, shrinking a particular currency’s portion of global M-zero means shrinking its multiplier through asset valuations, c.f. Exter’s Pyramid.

    Because of this the petrodollar is one of the main conduits that allow us to finance our current spending habits.  If the U.S. only ran a trade deficit, then Triffin’s Paradox would be in play and the current system would be sustainable for a lot longer than it is today.

    But with the fiscal and demographic nightmare unfolding in the U.S. and Europe all Russia has to do is deflect the worst of their aggressions while waiting for time to catch up with their profligacy.

    And that time is catching up with us rapidly.

    And that’s been Putin’s plan all along.  Simply win a hybrid war of attrition with the U.S. and Europe.  Trump, I think, understands this, though he’d never admit it in public and nor should he.

    The very fact that he’s willing to meet Putin now after a deadly clash between U.S. forces and Russian mercenaries in the oil fields near Deir Ezzor and Putin’s unveiling weapons that render moot much of the U.S.’s current defense spending means he knows it’s time to begin pulling the world back from the brink of catastrophe.

    That Trump made this offer despite the virulent protestations of the foreign policy wonks in his cabinet (many of whom he recently fired) and the chattering class in Congress and the Media speaks to how serious the situation truly is behind the scenes.

    So, while I don’t believe this petroyuan contract will change the world now, it is another bit of leverage China has in its trade and geopolitical negotiations with Trump over Iran, North Korea, Syria and China’s One Belt, One Road project.

    Putin’s very prudent means of getting Russia’s own house in order put her in the position to outlast the U.S. who will, over the next few years have to retreat or destroy the world.

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Today’s News 4th April 2018

  • Tech Giants Race To Create An Alternate Reality

    Submitted by Michael Scott for SafeHaven

    Virtual reality, augmented reality, immersive reality, mixed reality and finally merged reality … Welcome to the world of digital layering, awash with cutting-edge technologies that are mostly powered by rather dorky and clunky hardware, but fascinating nonetheless.

    The digital reality industry is exploding, and tech titans are in an arms race to cut themselves a niche in the sector, earn bragging rights for the snazziest devices that will drive future billion-dollar valuations.

    VR and AR have been creating the most buzz, though the average user might be hard-put to tell one from the other. That’s hardly surprising when the media, and sometimes the innovators themselves, tend to use the two terms interchangeably. But when it comes to alternate realities, either one will emerge to redefine existence, or the two leaders will merge to become an even bigger reality.

    Similar Digital Realities, Different Technologies

    VR and AR are two sides of the same coin though they have significantly different capabilities.

    VR is the grandfather of our alternate reality, with the first VR devices dating all the way back to the era of the head-mounted Telesphere Mask.

    Much earlier attempts at VR had been made in the form of 360-degree murals. And modern examples of VR devices include Oculus VR, Samsung GearVR and HTC Vive.

    AR has been slower off the blocks, mainly because the underlying technology requires more fine-tuning for things like motion controllers, depth sensors and cameras for a truly awesome user experience. Apple’s brand new ARKit, Microsoft’s HoloLens, Snap glasses, Google Cardboard and Magic Leap’s soon-to-come AR glasses all belong to the AR camp.

    VR is a totally immersive experience that completely shuts out the outside world by creating a virtual environment for the user to inhabit. VR experiences can be totally cool but lack a real-world feeling because they involve little or no sensory input from the user or their environment.

    AR, on the other hand, works by mapping the real world and then laying virtual objects on top of it. The real world becomes the backdrop of the AR environment that the user is able to control. AR, unlike VR, is like a half-complete painting that allows you to add your own details.

    Another significant difference is the hardware. VR mostly relies on those unmissable head-mounted-displays (HMD), while AR devices mostly use smartphone cameras as their portal.

    Inflection point for AR

    VR has found a ready market in the entertainment industry, though CAVE automatic virtual environments might be fun for big labs and academia where they can be used to display virtual content in room-sized screens.

    AR, on the other hand, has more potential for long-term commercial applications.

    A case in point is this AR app by IKEA that allows customers to ”virtually” move furniture around and see how it’s going to look in their sitting rooms.

    Similarly, Snapchat has come up with a comparable albeit more goofy idea of a dancing hotdog that can be placed into different camera views. It’s only a matter of time before other marketing teams jump into the AR bandwagon.

    Quite naturally, smartphone companies like Apple have been hyping up AR’s potential over VR. However, they can now back up their claims using this SuperData Report that says consumer AR is set to pull ahead of VR somewhere around 2021, mainly driven by mobile AR and games like Pokémon Go.

    Gartner has placed AR only behind VR in its 2017 Hype Cycle chart of emerging technologies. Remarkably, the two are ranked as the most advanced emerging technologies, implying that an investment in either sector might pay off in the long-run.

  • Lockheed To Build NASA A Supersonic Jet Without The Sonic Boom

    NASA has awarded Lockheed Martin’s Skunk Works a $247.5-million contract to design, build and flight test a low-boom X-plane that could lead to a new era of supersonic air travel in the next three to five years, according to a Lockheed Martin press release on Tuesday.

    The experimental aircraft is scheduled to take to the skies in 2021 with a top velocity of 1.5 times the speed of sound, or about 990 miles per hour (1,600 kilometers) at an altitude of 55,000 feet, Lockheed said. While the jet will only have room for a pilot, it will test design principles that soften the sonic boom.

    “It is super exciting to be back designing and flying X-planes at this scale,” said Jaiwon Shin, NASA’s associate administrator for aeronautics. “Our long tradition of solving the technical barriers of supersonic flight to benefit everyone continues.”

    Illustration of NASA’s Supersonic commercial travel is on the horizon. Lockheed Martin Skunk Works® has partnered with NASA for more than a decade to enable the next generation of commercial supersonic aircraft.Credit: NASA/Lockheed Martin

    The news comes less than two weeks after President Trump signed the federal budget deal, which funds the Low-Boom Flight Demonstrator (LBFD) program, according to Space.com. In the budget proposal, the Trump administration noted that the X-plane “would open a new market for U.S. companies to build faster commercial airliners, creating jobs and cutting cross-country flight times in half.”

    With the funding in place, Lockheed Martin will build the full-scale experimental aircraft, combining NASA’s Quiet Supersonic Technology (QueSST) into the airframe’s design. It has been over forty years since the Federal Aviation Administration (FAA) banned commercial supersonic travel over skies of the United States, and subsequently, other nations such as Europe followed suit.

    However, the X-plane is expected to reverse the decades-old ruling, by utilizing NASA’s QueSST technology that would dramatically reduce the noise from a sonic boom.

    “This piloted X-plane would be built specifically to fly technologies that reduce the loudness of a sonic boom to that of a gentle thump,” Jaiwon Shin, associate administrator of NASA’s Aeronautics Research Mission Directorate, said during a news conference today.

    The X-plane would start test trials over select cities across the United States in mid-2022 and NASA will “ask the people living and working in those communities to tell us what they heard, if anything”, Shin added.

    Low-Boom Flight Demonstration aircraft as outlined during the project’s preliminary design review in 2017. NASA has selected Lockheed Martin to build the new supersonic jet. Credit: NASA/Lockheed Martin

    NASA will then compile the data from the human subjects, and submit the “scientifically collected human response” data to the U.S. Federal Aviation Administration (FAA) and the International Civil Aviation Organization (ICAO), “so they can use the data to change the current rule that completely bans civil supersonic flights over land,” Shin said.

    “When the rule is changed, the door will open to an aviation industry ready to enter [a] new supersonic market in our country and around the world,” Shin said. “This X-plane is a critical step closer to that exciting future.”

    The maiden flight of the aircraft is scheduled for summer 2021. Shortly after that, NASA will conduct “Mach 1.4 flight tests at an altitude of 55,000 feet over 50-square-mile testing areas in the American Southwest,” said Popular Mechanics.

    At 940 mph, the X-plane is projected to “create a sound about as loud as a car door closing, 75 Perceived Level decibel (PLdB), instead of a sonic boom,” said Lockheed Martin. Compared to the Concorde, a retired British-French turbojet-powered supersonic passenger airliner, the X-plane would have a 31 percent reduction in noise when the aircraft breaks the speed of sound.

    Popular Mechanics indicates that the X-plane will be “affordable” using parts from preexisting American military aircraft.

    ”The supersonic plane is designed to be affordable by using parts taken from other jets, such as the canopy of a T-38, the landing gear of an F-16, and various components from the F/A-18. The engine is a GE 414-400, the same engine used on the Boeing F/A-18E/F Super Hornet. The contract awarded to Lockheed Martin to build the jet is worth $247.5 million.”

    “We’re honored to continue our partnership with NASA to enable a new generation of supersonic travel,” said Peter Iosifidis, Low-Boom Flight Demonstrator program manager, Lockheed Martin Skunk Works. “We look forward to applying the extensive work completed under QueSST to the design, build and flight test of the X-plane, providing NASA with a demonstrator to make supersonic commercial travel possible for passengers around the globe.”

    If everything goes as plan, NASA and Lockheed could usher in a new, quieter era of supersonic air travel, with commercial service available some time in the mid-2020s.

  • Why Nassim Taleb Thinks Leaders Make Poor Decisions

    Authored by Laurence Siegel of Advisor Perspectives

    Why do experts, CEOs, politicians, and other apparently highly capable people make such terrible decisions so often? Is because they’re ill-intentioned? Or because, despite appearances, they’re actually stupid? Nassim Nicholas Taleb, philosopher, businessman, perpetual troublemaker, and author of, among other works, the groundbreaking Fooled by Randomness, says it’s neither.

    It’s because these authorities face the wrong incentives.

    They are rewarded according to whether they look good to their superiors, not according to whether they are effective. They have no skin in the game.

    Seasoned readers of Taleb will be pleased to see the so-called “experts problem” pop up in living color in Skin in the Game: Hidden Asymmetries in Daily Life, Taleb’s latest collection of essays on risk, rationality, and randomness. According to Taleb, dentists, pilots, plumbers, structural engineers, and “scholars of Portuguese irregular verbs” are real experts; sociologists, policy analysts, “management theorist[s], publishing executive[s], and macroeconomist[s]” are not.

    The difference is that, when people from the first list are wrong about something, it’s obvious from the results and they suffer; they have skin in the game. Bad teeth, crashed planes, and leaky pipes are bad for business. People from the second list rationalize by substituting a different theory. They were not really wrong but just early, and, if they’re lucky, which is to say skillful at apple-polishing, earn promotion after promotion by not failing utterly. (Financial advisors can argue that the fiduciary standard is the most powerful tool for putting them in the first list.) Skin in the Game is full of insights like this, some recycled from his earlier work but many of them new. It is well worth the relatively quick read.

    Despite the many good qualities of Skin in the Game, Taleb’s work, including the present volume, is often infuriating. He is too sure of himself, too unkind to his enemies, too full of bluster and obscure humor. Acting on his belief that some kinds of experts are worthless, he has populated the book’s dust jacket with anonymous tweets instead of celebrity testimonials. Here’s the first tweet: “The problem with Taleb is not that he’s an ass— (spelled out in full on the jacket). He is an ass—. The problem with Taleb is that he is right.” I agree.

    Asymmetry, or why we are ruled by the most easily offended

    In chapter two of Skin in the Game, entitled “The Most Intolerant Wins,” Taleb asks why we seem to be governed by the most easily offended. You have to refrain from smoking in the non-smoking section, but you don’t have to smoke (that is, refrain from not smoking) in the smoking section, which, by the way, is much smaller. Few people really care whether you say Merry Christmas or Happy Holidays, but the latter has become de rigueur in some circles. Almost all soft drinks are kosher.

    The reason, Taleb explains, is that, for any given issue, there are a few people who care deeply about it and a great many people who do not. Those who care are spurred to action, even violent action in the case of religious or political passions. The rest of us, wishing to be left alone, rarely fight back with equal vigor. The results of this process include the increasing domination of Taleb’s beloved, multi-religious Lebanon by Muslims, for whom conversion to Islam is irreversible. Conversion away from Islam is at least theoretically punishable by death; Christians and Jews don’t much care if you leave the faith.

    In ancient Roman times, Taleb explains, Christians were the intolerant minority that pushed their views on the Roman majority. That’s how Christianity eventually became the official religion of the empire in 323 A.D. Times and players change but the principles of human nature remain the same.

    Almost all soft drinks are kosher because it’s relatively easy to make a drink kosher. So manufacturers put forth this small effort rather than have two kinds of each drink, one for observant Jews – a fraction of a percent of the total population – and one for everybody else.

    If this argument sounds familiar, it’s recycled in much more general form from Frédéric Bastiat, the great 19th century French economist. Bastiat wrote that, for any given government action, such as a tax levied to subsidize some activity, there are a few people who will benefit greatly by it and they will work day and night to see it enacted. The great many who stand to lose will typically only lose a few pennies and will put forth little or no effort to prevent it. Thus the number of rules, regulations, taxes, handouts, and special favors granted by government grows exponentially with very little acting to restrain the growth.

    These are just a few of the asymmetries of daily life to which Taleb’s subtitle refers. Once you understand the principle, you’ll see it in everything.

    Waiter, there’s a fly in my soup

    The New York deli called Lindy’s is famous for its clientele of Broadway actors and comedians, and for having food so bad that it has inspired a bevy of jokes including the one that starts with, “Waiter, there’s a fly in my soup.” But, Taleb tells us, it is also well-known among mathematicians and other scholars as the place where the Lindy effect was first observed. This is the idea that the age of an inanimate object is a good indicator of its future longevity:

    Broadway shows that lasted for, say, one hundred days, had a future life expectancy of a hundred more. For those that lasted two hundred days, two hundred more. The heuristic became known as the Lindy effect.

    Likewise, Judaism, 3,500 years old, will probably last another 3,500; Scientology will be lucky to get another 60. Shakespeare will last longer than Stephen King. Even living things that do not age on a particular schedule, like trees, tend to follow this rule. It could be because the old ones, having survived, are anti-fragile, a concept from Taleb’s earlier book by that title; they are not just robust, but gain further robustness from exposure to stresses. Or maybe, like Shakespeare, they’re just better.

    This principle is very powerful and Taleb applies it to many topics, with the Lindy theme running through the whole book. Academia, for example, sometimes resembles an athletic contest in which the hardest-working or most aggressive participants appear to win. It should not. “The winner is the one who finishes last,” said the philosopher Ludwig Wittgenstein; that is, the academic whose theories are least easily overturned, most enduring, had the best theories.

    Investors would do well to understand the application of the Lindy principle to their enterprise. Indexing as a concept is about 75 years old; value investing is even older. These great ideas are unlikely to be overturned any time soon. Instead, improvements around the edges are the best we can expect. The latest idea for earning alpha, whatever it is at the moment, will almost certainly turn out to be a flash in the pan, easily arbitraged away by the time it can be widely implemented.

    Why are there so many employees?

    To illustrate how the principle of skin in the game applies to labor contracting, Taleb compares the behavior of two private jet pilots. Bob is a freelance contract pilot who is sometimes useful to your little airline but is at other times too busy hauling Saudi princes to fancy resorts to do the work you need done. The result, an occasional stranded planeload of people, is disastrous for your business.

    The other, a pilot-employee – I’ll call him Bill – does more or less what you want, including working overtime in a pinch. Why the difference? Taleb writes,

    People you find in employment love the regularity of the payroll, with that special envelope on their desk the last day of the month, and without which they would act as a baby deprived of mother’s milk… [H]ad Bob been an employee rather than something that appeared to be cheaper, that contractor thing, then you wouldn’t be having so much trouble.

    Economics dictates that employment is just one of many ways to contract for labor, and a particularly inflexible one that requires you to pay the employee whether you can keep them busy or not. You’ve probably considered replacing employees with contractors in whatever business you operate or work. Yet there are a lot of employees! Taleb’s tale provides a clue to why: “Every organization wants a certain number of people associated with it to be deprived of a certain share of their freedom.” Employment is the only legal way to achieve that sort of dependent relationship.

    What’s the connection to skin in the game? We tend to think of freelancers and entrepreneurs, such as Bob the pilot-contractor, as risk takers, skin-in-the-game players. And they are. But, as Taleb reminds us, “skin in the game is not [about] incentives, but disincentives.” You don’t want the employee to do what is best for himself in the short run – that’s what contractors do – so you set up an alignment of interest between his long-run welfare and yours. As an employee with a family and a mortgage, and considerable costs if he has to get another job and relocate, he has skin in your game.

    That’s why we have so many employees.

     

    Two very different kinds of risk

    Since investing is applied philosophy, Taleb’s whole book is relevant to investors, but the most directly applicable part is Chapter 19, “The Logic of Risk Taking.” He draws the distinction, fundamental but rarely fully understood, between ensemble probability and time probability. (Like double-entry bookkeeping, this is one of those wonderful ideas that’s obvious once you’ve heard it; less so in advance.) Ensemble probability involves a risk faced by a population at a given point in time, such as that of a hundred people visiting a casino once, where each person can make a one-time, double-or-nothing bet involving his or her entire fortune. In that single visit, about half of them will be ruined. The other half, having doubled their money, will be perfectly fine.

    Time probability, in contrast, involves an ongoing risk faced by an individual over time. Consider someone visiting a casino 100 times in succession, also making a double-or-nothing bet involving his entire fortune. In 100 visits, that person will be ruined; usually ruin will occur after just a few visits. No one who behaves this way will ever be fine.

    With ensemble probability, then, as Taleb explains, “the ruin of one does not affect the ruin of others.” With time probability it’s the opposite: once you get a sufficiently bad outcome, the game is over and you cannot become un-ruined.

    This distinction is relevant to investing because the risks investors face involve time probability, not ensemble probability. In most aspects of life, we are accustomed to thinking about risk in the ensemble sense: a football team has a 2-in-3 chance of winning a game, a disease has a 10% mortality rate. So we are familiar with that kind of risk, and comfortable extending the concept to other aspects of life.

    But, in investing, the state of a person’s wealth at any point in time is contingent on her wealth at the previous point in time; returns are cumulative; investing exposes us to time risk, cumulative risk. We are not typically able to do the mental approximations needed to think about that – if the risk of getting in a car accident on the way to work is one in 10,000, what is the risk of driving to work 10,000 times? (It’s not 100%, nor is it insignificant; it’s 64%. You should go to work anyway.)

    Thus, we need to be very careful when relying on intuition to tell us about investment risk. Investing involves more risk than you think. We also need to be wary of extrapolating from the past (and avoid the temptation that comes from the fact that it’s so readily accessible). Paul Samuelson famously said that “we have only one sample of the past,” meaning that far more things could have happened than did happen; there’s only so much you can learn from studying history. But it’s just as important that we will get only one sample of the future! The return pattern that we will experience is just one of the infinitely many possible ones, and it will not be the one that we “expect” statistically; it will be something different, possibly very different.

    Are you an IYI? I hope not

    Consistent with his famously combative persona, Taleb takes pot shots – frequent and vigorous ones – at intellectuals, or, in his acronym, IYI. An intellectual yet idiot (IYI) is someone who is beloved by the public for his or her knowledgeable airs but who is actually full of baloney, having no practical sense. Taleb considers Steven Pinker, author of Enlightenment Now and a current darling, to be an example, and calls him a “journalistic professor,” not the psychologist and linguist that he obviously is. (I’m reviewing Pinker’s book, favorably, in an upcoming Advisor Perspectives.)

    When one gets past the gratuitous insult, however – Taleb doesn’t think much of journalists or professors – he has a point. When a real expert strays from his own field, he is susceptible to making the foolish mistakes of an amateur, except that an amateur is likely to be humbler.

     

    Taleb has not convinced me that Pinker is a wandering amateur; maybe it’s Taleb, not Pinker, who is wandering too far from the core of his knowledge. Intellectuals, whether or not IYI, must, when turning against their kind, be on guard against becoming AIYA: anti-intellectual yet ass­­­­—. (Pardon my French; Taleb inspires it.) At 16, I fit the description; I do not think Pinker does.

    Dedicated to the one I love?

    Book dedications are rarely interesting; they usually feature one’s parent, spouse, or teacher. But, in an odd twist that allows us to see (a little) into Nassim Taleb’s mind, he dedicates Skin in the Game to two well-known people whom I would have praised less lavishly. First, Ron Paul, “a Roman among Greeks”; second, Ralph Nader, “a Greco-Phoenician saint.”

    In a self-referential joke, Taleb’s comment about Ron Paul reverses the dedication of his earlier book, The Black Swan, to the great mathematician Benoit Mandelbrot, “a Greek among Romans.” It took me a bit of effort to find out, by searching through Taleb’s tweets, that he admires the Romans’ practicality:

    As I came to realize…[,] the Romans were no-B.S. Fat Tonys; they resented grand theories and favored prudent and progressive tinkering. Much of what they built, from constitution, to Roman law, to bridges, to low income housing, to their literature, to their imperial administration (still around in the structure of the Catholic church), has survived 2000 years.

    Paul, a doctor and former congressman from Texas, is an honorable man who often stands alone in objecting to his colleagues’ expedient political follies. I’m not sure (and Taleb doesn’t say) why that makes him a Roman, but maybe an encomium is deserved; I would not have singled him out.

    But Ralph Nader a saint? He certainly sacrificed personal income, and subjected himself to harassment, when making the case that U.S. auto companies were making dangerous cars; he had skin in that game. But Nader has a dark side. Despite having taken a poverty vow and very publicly living like a monk, he revealed a personal fortune of $3.8 million in his 2000 presidential election filing – not a large fortune but not monkish either. He has also founded nonprofit organizations that do research of dubious quality, and his latest crusade is a meaningless fight against share buybacks (an important mechanism for enabling investors to get cash flow out of their portfolios). Nader is an odd choice for sainthood.

    Skin in the game everywhere

    Like many authors who’ve discovered a principle that they believe applies in many aspects of life, Taleb isn’t shy about discussing every aspect he can identify. They include the role of looks in choosing a surgeon: don’t choose a dignified, handsome one – one who looks more like a butcher “had to have much to overcome in terms of perception.” Military interventionism? He’s against it, arguing that policy analysts who make war from comfortable offices don’t know what it’s really like on the ground and have no personal stake in the consequences. Religions, at least at first, demand extreme sacrifices from their adherents because their leaders know they can only hold the tribe together if its members can see that fellow members have sacrificed too: “The strength of a creed,” Taleb writes, “did not rest on ‘evidence’ of the powers of its gods, but evidence of the skin in the game on the part of its worshippers.”

    This campfire-style storytelling makes the book seem, in places, more like a collection of loosely related essays, as I referred to it at the outset, than a coherent book. This approach has an upside and a downside. It’s easy to read parts of the book without losing the train of thought, since many of the parts were written as magazine articles and stand well on their own. The downside is that, if you try to read the book as a coherent whole, you’ll find it too full of interruptions and asides.

    Conclusion

    Taleb’s writing is nothing if not lively. What other philosopher, let alone investment writer, creates characters like Fat Tony, a worldly-wise trader who cares little for book learning; Yevgenia Nikolayevna Krasnova, a neuroscientist with three philosopher ex-husbands who writes a runaway best-seller called A Story of Recursion; and Nero Tulip, a thinly disguised version of Taleb himself? Taleb entertains, educates, and infuriates all at once, a heady combination for readers who score high on curiosity but frustrating for those who are just in a hurry to gather information and get on with it. This is Sunday afternoon, not Monday morning, reading.

    Mercifully, Skin in the Game is also relatively short, unlike Taleb’s previous book, Antifragile. It can be consumed effectively by a casual reader and does not require sustained attention.

    Skin in the Game is not Taleb’s best book – that’s Fooled by Randomness – but it’s his most accessible. I highly recommend it.

    Laurence B. Siegel is the Gary P. Brinson Director of Research at the CFA Institute Research Foundation and an independent consultant. He may be reached at lbsiegel@uchicago.edu.

  • YouTube Shooter Identified As Nasim Aghdam

    As it turns out, Tuesday’s shooting at YouTube headquarters (which has so far resulted in zero deaths other than that of the shooter, who committed suicide) had nothing to do with domestic violence and everything to do with blowback to YouTube’s demonetization efforts – as many initially feared.

    The shooter was identified as Nasim Aghdam who slammed YouTube for purportedly censoring her after she claimed that they demonetized her channels, including an exercise one devoted to exercise videos and another devoted to veganism. Aghdam channeled her anger toward YouTube into a paranoid manifesto published online. She wrote in her purported manifesto: “Be aware! Dictatorship exists in all countries but with different tactics! They only care for personal and short-term profits and do anything to reach their goals even by fooling simple-minded people, hiding the truth, manipulating science and everything, putting public mental and physical health at risk, abusing non-human animals, polluting the environment, destroying family values, promoting materialism and sexual degeneration in the name of freedom and turning people into programmed robots!”

     

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    She identified herself as an Iranian activist as well as an animal rights activist. Shortly after she was identified, photos of her holding signs with anti-YouTube messages were found online and shared.

     

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    Along with her now-deleted Instagram…

     

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    …One now-deleted YouTube page bore anti-YouTube messages.

     

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    She recently published a video ranting about her treatment by YouTube, complaining that they’d deprived her of views. She said the practice was tantamount to censorship. She also maintained a website that remained live late Tuesday evening. It lists five channels for Aghdam.

    And driving that point home, she published a video debating whether the US or Iran did more to protect freedom of speech.

     

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    A Facebook artist page she created had more than 1,600 followers according to a cached version from archive.org. The Facebook page contains a trove of videos. They range in subject matter from lighthearted and comical to recipes for helping people eat vegan, as well as her exercise videos.

    Contrary to initial reports, ABC said Aghdam wasn’t in a relationship with anyone at the facility (so much for those initial suspicions).

    She did not have an ID badge, and was carrying a purse. Aghdam was apparently a prolific maker of YouTube videos, maintaining several accounts for videos of different subjects.

  • Netflix, Spotify, And Uber Are Making You Fat, New Survey Finds

    The corporate architects of America’s modern economy, otherwise known as “the gig economy,” have unleashed the sharing economy popularized by Uber and Airbnb, and the subscription economy pioneered by Netflix and Spotify. These oligarchic capitalists intend to transform participants in this system into temporary workers trapped in low wage/skill, part-time service-sector employment with no career prospects, insurmountable debt loads and no financial security.

    And lots of fat.

    It has now been nine years since America’s modern economy clawed out of the Great Recession through an unprecedented monetary injection from global Central Banks, leaving the current economic expansion or whatever you want to call it, poised to become the second longest on record this quarter.

    However, SocGen recently spoiled the party warning of late-cycle volatility bursts “in credit, dispersion and cross-asset volatility as the equity/bond correlation itself becomes more volatile.” We must also note that, residing on the upper end of the s-curve in terms of a late stage in the business cycle, there are some troubling developments in the labor market.

    According to a new national survey, the hectic lifestyle associated with the “gig economy” is making Americans overweight.

    “The Truth about Weight Loss” is a survey conducted by The Harris Poll on behalf of Zaluvida, a full-circle life science group, which surveyed 1,000 healthcare professionals and more than 1,000 adults living in the United States.

    The results from the Zaluvida Weight Loss Survey reveals “today’s modern lifestyle has made losing weight more difficult than ever before, and that U.S. adults who are trying to do so need a new approach that’s compatible with how we live today.”

    The Fast Company, an American business magazine, chimes in and suggests that “Uber and Netflix are making you fat.” The report shows 88% of Americans moved less in this economic cycle due to increased “screen time” and “on-demand services” on smartphones, such as meal delivery, ride-sharing services, or mobile shopping apps.

    Caught in a cycle of weight-loss failures and frustrations, many U.S. adults [millennials] stay out of the picture — especially women.

    According to the Zaluvida, this has depressing effects: 30 percent of adults in the U.S. said, “their weight keeps them from wanting to be photographed.” Another 40 percent of adults are trying to lose weight, but only 30 percent are confident they will be able to drop the excess fat.

    The Fast Company adds,

    “Healthcare professionals say options like Seamless and UberEats don’t necessarily offer the same nutritional value as healthy, home-cooked meals. In their defense, 29% of those surveyed say they use on-demand services to accommodate time-strapped schedules. Primary care physicians sympathize, with 77% agreeing it’s harder today than it was for previous generations to stay fit due to busy lifestyles.”

    Zaluvida claims that Americans who are participating in today’s modern economy need “a new approach to weight loss.”

    What the experts say:

    “These findings highlight that while the way we live has changed dramatically over the past 10 to 20 years, our approach to weight loss has not evolved sufficiently to address those changes,” said Dr. Frank Greenway, medical director and professor at Pennington Biomedical Research Center in Baton Rouge, Louisiana, in a press statement. “The results underscore that we need to take a step back and evaluate what weight-loss strategies can best set people up for success given the demands of their daily lives.”

    Key findings of the report:

    • Approximately eight in 10 healthcare professionals and 62% of U.S. adults believe losing weight is harder today than it was for previous generations because of the busy, modern lifestyle of Americans.
    • In fact, approximately seven in 10 healthcare professionals say it’s harder for Americans to lose weight now compared to just 10 years ago.
    • The vast majority believe Americans need to take a new approach to weight loss that fits with today’s modern lifestyle.

    And so, America’s obesity problem, which recently grew to never before seen proportions – please pardon the pun – continues to get worse as the sharing/subscription economy steamrolls all legacy commerce which in turn has an adverse impact on American biology, while further deteriorating already depressed American productivity. At what point does the modern economy – and the spiraling obesity it leads do- become a national security threat, and how can/will it be resolved?

  • YouTube Shooting Witness: "I Didn't Have a Gun on Me, But Wish I Did"

    A man who witnessed the shooting at YouTube’s San Bruno headquarters on Tuesday said he wished he had been carrying a gun when the shooting occurred.

    “I didn’t have a gun on me, but wish I did,” said the man, who was ordering food across from the company’s headquarters when the shooting began.  

    “I knew I had to be smart. You’ve got to be fast. You’ve got to think fast.”

    Police confirmed that the female shooter, who has not been named, was not a YouTube employee and didn’t know anyone at the company.  Witnesses say the shooting broke out at an employee party, which is thought to be how the woman may have gained access to the building.

    It didn’t take long before the YouTube shooting turned political. After journalist Jack Posobiec tweeted an official report from a local Bay Area news outlet listing the shooter as a “white, adult female wearing a dark top and head scarf,” blue-checked Twitter users performed quick mental gymnastics to arrive at the conclusion that conservatives are “spreading vile conspiracies that ANTIFA is behind the YouTube HQ shooting.” 

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    Apparently ABC7 was in on it too…

    Others made tasteless jokes:

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    Gamergate figure Briana Wu decided to use the shooting to promote her congressional campaign. 

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    And some simply wished that Trump voters were all dead, ideally murdered by drowning in molten gun metal.

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    Naturally, it didn’t take long before the NRA got the blame – including from “blue checked” Democrats such as New York State Assemblyman Jeffrey Dinowitz.

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    The formerly famous Alyssa Milano got in on the action;

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    And as we previously reported, prominent California politicians wasted no time turning this into a gun control issue before the shooter’s body was even cold.

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    And somehow it’s Russia’s propaganda that is the source of daily outrage.

  • Facebook: Trump Campaign Was Better At Facebook Than Clinton Team

    Despite a record $1.2 billion Hillary Clinton’s campaign spent before losing the 2016 election, the former Secretary of State – who has horrible twitter game – was also out-Facebooked by the Trump campaign according to an internal Facebook whitepaper, published days after the election. And that’s excluding the alleged “help” of Russia.

    “Both campaigns spent heavily on Facebook between June and November of 2016,” the whitepaper’s author wrote, citing internal revenue figures of $44 million spent by the Trump campaign vs $28 million for Clinton during the same period. “But Trump’s FB campaigns were more complex than Clinton’s and better leveraged Facebook’s ability to optimize for outcomes.

    The paper, first obtained by Bloomberg and “describes in granular detail the difference between Trump’s campaign, which was focused on finding new donors, and Clinton’s campaign, which concentrated on ensuring Clinton had broad appeal.

    The data scientist says 84 percent of Trump’s budget asked people on Facebook to take an action, like donating, compared with 56 percent of Clinton’s.

    In other words, Clinton’s team felt they needed to convince voters to start liking Hillary

    According to Bloombergthe Trump campaign ran 5.9 million different versions of ads during the campaign – immediately testing audience response in order to push the ones with the highest levels of engagement, according to the paper. 

    Clinton ran just 66,000 ads during the same period. 

    A former Facebook employee referred to the internal white paper in a memo to Rep. Adam Schiff (D-CA), who said that Schiff and other congressional investigators could use the document in order to “ask the right questions” about whether the Trump campaign coordinated with Russia. 

    For example, according to the paper, more than a quarter of Trump’s ad spending was tied to third-party data files on voters, and leveraged a Facebook tool that helped the campaign show ads to people who looked similar to the names on file. Clinton’s ads aimed for broader audiences, with only 4 percent of her Facebook spend on the lookalike tool. –Bloomberg

    “Did Russian operatives give the Trump campaign a list of names to include or exclude from advertising that was running on Facebook?” the former employee asked in the memo.

    The House Intel Committee closed down their investigation into Russia days later, which Rep. Schiff – who sat on it – says left “questions unanswered, leads unexplored, countless witnesses uncalled, subpoenas unissued.” 

    Meanwhile, Congress is looking into the use of third-party information on Facebook in the wake of the company’s data harvesting scandal uncovered in an exposé of GOP-linked political data firm Cambridge Analytica, which revealed that over 50 million users were compromised. 

    That said – Facebook knew early on – days after the election in fact, that Trump’s team simply “out-Facebooked” Clinton, and that her team was focused on trying to get America to just like her. And, as a result of that failure, and in order for Clinton’s team to deflect blame, the nation has been gripped by the most ridiculous wave of anti-Russian hysteria since the days of Joe McCarthy.

  • And The Country With The 'Most Expensive' Plate Of Food Is…

    When people in poor countries go hungry, it’s often because food is unaffordable.

    A report from the World Food Programme (WFP) analyzed the glaring gap in food costs around the world, finding that in many cases, people living in poor countries have to spend the bulk of their wages on basic nourishment. As Statista’s Niall McCarthy notes, the research measured the proportion of daily income that people spent on ingredients for a basic bean stew in different countries last year before retro-projecting the ratio on to a resident of New York State.

    Infographic: The Cost Of A Plate Of Food Around The World  | Statista

    You will find more infographics at Statista

    An average person living in New York State would spend about 0.6 percent of his or her daily income on ingredients for a 600 kilocalorie bean stew, approximately $1.20.

    In India, most people would find those ingredients readily affordable, with real costs coming to $9.25 or 4.25 percent of daily income. The situation is far more serious in other parts of the world, particularly in Africa.

    Someone living in South Sudan would have to work for a day and a half to afford a basic meal with the cost of the ingredients 155 percent of daily income.

    The real price of a plate of bean stew in South Sudan would be $321.70 and unsurprisingly, many of the country’s inhabitants are struggling to feed themselves.

  • Mueller Tells Trump's Lawyers President Not A Criminal Target But Remains Under Investigation

    After a busy news day in which Trump tripled-down on his feud with Amazon, met with the leaders of the Baltic states and threatened to scrap NAFTA and foreign aid to Central America if Mexico doesn’t stop a caravan of migrants from reaching the US border, the Washington Post has published the most notable update about the Mueller probe in recent history.

    Citing three people familiar with the investigation, the paper reports that Mueller told Trump’s legal team last month that the president isn’t a criminal target in the Russia probe at this point.

    Mueller

    However, Mueller also informed Trump’s lawyers that he is preparing a report about the president’s conduct while in office, and that report will include details about Trump’s purported obstruction of justice. Of course, the prosecutor didn’t hesitate to use this report as leverage to try and convince the Trump legal team to assent to an unrestricted interview between Trump and Mueller.

    Mueller has described Trump as a “subject” of the investigation – a term that has also been used to described his son-in-law Jared Kushner’s involvement.

    Some of Trump’s legal advisors have taken this as a positive sign, but others have warned that Trump’s status could easily be moved from “subject” to a criminal indictment.

    Mueller’s description of the president’s status has sparked friction within Trump’s inner circle as his advisers have debated his legal standing. The president and some of his allies seized on the special counsel’s words as an assurance that Trump’s risk of criminal jeopardy is low. Other advisers, however, noted that subjects of investigations can easily become indicted targets — and expressed concern that the special prosecutor was baiting Trump into an interview that could put the president in greater legal peril.

    Typically special counsel probes end with a private report to the attorney general or deputy attorney general (in this case, the latter). That report can then be made public at their discretion – but, according to WaPo, it appears as if Rod Rosenstein has already made up his mind that some record of the investigation must be released to the public.

    Mueller’s team has also told Trump’s legal team – which has endured an unprecedented shakeup in recent weeks – that the DOJ intends to issue the report in stages, with the first stage dealing with obstruction, and the next detailing what Trump knew about his campaign advisors contacts with Russian officials.

    Mueller’s investigators have indicated to the president’s legal team that they are considering writing reports on their findings in stages — with the first report focused on the obstruction issue, according to two people briefed on the discussions.

    Under special counsel regulations, Mueller is required to report his conclusions confidentially to Deputy Attorney General Rod J. Rosenstein, who has the authority to decide whether to release the information publicly.

    “They’ve said they want to write a report on this — to answer the public’s questions — and they need the president’s interview as the last step,” one person familiar with the discussions said of Mueller’s team.

    Trump’s attorneys expect the president would also face questions about what he knew about any contacts by his associates with Russians officials and emissaries in 2016, several White House advisers said. The president’s allies believe a second report detailing the special counsel’s findings on Russia’s interference would be issued later.

    The president has privately expressed relief at the description of his legal status, which has increased his determination to agree to a special counsel interview, the people said. He has repeatedly told allies that he is not a target of the probe and believes an interview will help him put the matter behind him, friends said.

    However, legal experts said Mueller’s description of Trump as a subject of a grand jury probe does not mean he is in the clear.

    Under Justice Department guidelines, a subject of an investigation is a person whose conduct falls within the scope of a grand jury’s investigation. A target is a person for which there is substantial evidence linking him or her to a crime.

    A subject could become a target with his or her own testimony, legal experts warn.

    “If I were the president, I would be very reluctant to think I’m off the hook,” said Keith Whittington, a professor of politics at Princeton University and impeachment expert.

    Trump has repeatedly said he’d be happy to sit down with Mueller, but his legal team has been working to limit the scope of his testimony to written answers or agreeing to exclude certain topics.

    It’s also widely believed that Trump’s legal team has been split on whether Trump should testify, with Dowd reportedly leaving because the president ignored his advice. Even if Trump refuses to meet with Mueller, it’s unlikely he’d decide to subpoena the president or pursue him further. Such an act would instigate a legal battle that could escalate to the Supreme Court, where Mueller risks an embarrassing defeat.

    So, why risk it? It’d be easier to put the president’s mind at ease while exerting some pressure on his legal team, hoping the mixture convinces them all that Trump – the “walking perjury trap,” according to one source – assents to the interview.

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Today’s News 3rd April 2018

  • Israel Announces Deal To Resettle African Migrants In Western Countries; Hours Later Netanyahu Walks Back

    Hours after Israel announced the planned resettlement of 16,250 African migrants to Canada, Italy and Germany – which Prime Minister Benjamin Netanyahu said was a “good agreement” which “protects the interests of the state of Israel,” – Netanyahu reversed course – “pausing” the deal struck with the U.N.

    The U.N. deal would have seen Israel absorb the other half of the country’s roughly 35,000 African migrants.

    In a Monday tweet, Netanyahu said he will review the agreement when he meets with the Minister of the Interior on Tuesday morning.

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    Most of the refugees came from Eritrea and Sudan – beginning their migration in 2005 after neighboring Egypt violently put down a refugee demonstration and “word spread of safety and job opportunities in Israel,” reports AP.

    While Israel’s border wall, completed in 2012, stopped the influx, the country has been divided on what to do about refugees who made it before its erection – with some Israelis arguing that Israel has a special responsibility to take in those in need. “Groups of Israeli doctors, academics, poets, Holocaust survivors, rabbis and pilots had also objected to the planned expulsion,” notes AP, while others, such as Netanyahu, believe the migrants threaten Israel’s “interests.”

    Tens of thousands crossed the porous desert border before Israel completed a barrier in 2012 that stopped the influx. But Israel has struggled with what to do with those already in the country, alternating between plans to deport them and offering them menial jobs in hotels and local municipalities.

    Thousands of the migrants concentrated in poor neighborhoods in south Tel Aviv, an area that has become known as “Little Africa.” Their presence has sparked tensions with working-class Jewish residents, who have complained of rising crime and pressed the government to take action. –AP

    Prior to Monday’s announced UN resettlement deal (which is now “paused,”), Israel threatened migrants with prison – placing them in a new-shuttered desert detention camp and offering them money and a one-way ticket back to Africa. When that failed, Israel announced plans to send them all to an unnamed African country believed to either be Uganda or Rwanda, on April 1.

    The plan was scrapped, according to Netanyahu, when the planned “third country” which he did not identify, could not handle the influx.

    “From the moment in the past few weeks that it became clear that the third country as an option doesn’t exist, we basically entered a trap where all of them would remain,” he said – describing Monday’s compromise with Canada, Italy and Germany as the best available option.

    The U.N. refugee agency said it signed a framework of common understanding “to promote solutions for thousands of Eritreans and Sudanese living in Israel.” The UNHCR said it will work to relocate about 16,000 Sudanese and Eritrean nationals and that others will receive “suitable legal status in Israel.” –AP

    A debate raged on Twitter following both the announced resettlement and Netanyahu’s rescinding of the deal he signed just hours before.  

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    It will be interesting to see what Netanyahu and the Interior Minister decide on in the coming days – perhaps only to un-decide hours later.

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  • France Risks War With Fellow NATO Member Turkey In Effort To Prop Up Syrian Rebels

    Authored by Darius Shahtahmasebi via TheAntiMedia.org,

    U.S. President Donald Trump’s recent surprise announcement that he plans to withdraw the United States military from Syria “very soon” and that he will let “the other people take care of it now” may be more telling of what’s to come than the mainstream media would have us believe.

    The indication that Trump may let the “other people take care of it now” might appear, on the face of it, to refer to regional players and prominent backers like Russia and Iran, which have helped guide the course of the Syrian conflict to an almost certain victory for the Syrian government.

    But what if Trump is actually opening the door for another Western imperial power to try its hand at taking on Syria for itself?

    According to Reuters, France is looking to increase its military presence in Syria to help the U.S.-backed coalition in its so-called fight against ISIS. France has warned that a planned Turkish assault on these U.S.-backed Kurdish forces in Manbij would be “unacceptable,” according to a presidential source.

    On Thursday of last week (incidentally, the same day as Donald Trump’s surprise announcement), French President Emmanuel Macron met with a Syrian Democratic Forces (SDF) delegation that included the YPG militia, which Turkey has expressly designated a terrorist entity. According to Reuters, a senior Kurdish official said Macron had promised to send more troops to the area as part of the U.S.-backed coalition’s efforts and, in essence, to present a buffer between the Kurds and Turkey.

    “France doesn’t foresee any new military operation on the ground in northern Syria outside of the international coalition,” Reuters’ source said.

    “(But) if the president felt that, in order to achieve our goals against Islamic State, we needed a moment to bolster our military intervention, then we should do it, but it would be within the existing framework,” the source said, without elaborating further, according to Reuters.

    Some local reports are alleging that France was even contemplating sending French special forces to the Syrian city of Manbij, where Turkey is currently gearing up for an invasion of its own.

    France has reportedly denied that it is planning a military build-up in Syria but has still offered to mediate between the Kurds and Turkey, an offer Ankara instantly rejected.

    Interestingly enough, no media reports on these issues ask the much-needed questions regarding France’s legal basis for sending troops into Syrian territory in the first place. Never mind that Turkey has warned sternly against the move, threatening that France could become a target for the Turkish military; it bears reminding that the territory doesn’t belong to France or Turkey, anyway. Any additional military presence should at the very least be initiated in accordance with international legal norms and principles.

    While much of the discourse in Syria has focused on what the Assad government is allegedly doing, no one has really bothered to question the extent of France’s involvement in Syria already to date. Last week, Turkish press agency Anadolu published a map purportedly showing French military positions in Syria, including five military bases in northeastern Syria where close to 70 French soldiers may be operating.

    Anadolu also reported in mid-March that France’s top military official had already warned that France had the means to intervene in Syria independently of the U.S. and its allies, specifically in relation to the Syrian government’s alleged use of chemical weapons.

    While it still remains to be seen, it seems more than possible that if the Trump administration decides to take a backseat in this next phase of the Syrian conflict, the driver’s seat may be passed on to France, instead, which is reportedly looking to take the reins and involve itself even further in the country despite having any legal basis to do so.

  • The American Revolution In Two Acts

    Authored by Jeff Thomas via InternationalMan.com,

    The American colonies were made up of people who could not accept the downward progression in Europe and said, “I’m leaving.” That took great courage, as they were leaving their few known comforts for unknown difficulties.

    However, once they had made the move and overcome the difficulties of settlement, they understood that their courage had been rewarded. Such people never look back and say, “Maybe we shouldn’t have left.”

    There can be little doubt that they taught their children and grandchildren the values of courage, determination, hard work, and self-reliance. And more and more immigrants were added to their numbers, each of whom was also courageous enough to abandon Europe for freedom and opportunity. They raised generations of people with a “pioneer spirit.”

    Not surprisingly, then, that when the American colonists were squeezed by King George for increases in tax, it wasn’t difficult for them to refuse. They chose to go it alone, rather than allow the British king to steal the fruits of their labours.

    Although the tax level at that time was a mere 2%, it was the principle that taxation is theft that angered them. Further, they had already proven to themselves that they had all the character qualities necessary to determine their own future.

    And so, in a sense, the American Revolution was Act II of the quest for freedom and, of the two challenges, it may have been the easier one to face.

    However, the America of the late eighteenth century is not the America of today – and the outcome will not be the same for Americans in the present era.

    It’s important to remember that only a very small percentage of people actually left Europe to find freedom. The great majority remained behind, complaining about the ever-increasing loss of freedoms, but doing nothing about it. Although their governments took more and more from them, the great majority simply tolerated it, saying, “What can you do?” They became the eventual victims of that oppression, as has happened throughout history.

    Those in America today are, in essence, a subjugated people, just as Europeans were prior to the American Revolution. They’re accustomed to the concept of the “nanny state”—one which taxes its people heavily and throws back a portion of what they’ve stolen in the form of “bread and circuses,” as in ancient Rome.

    Americans today complain continually, either that too much is being taken from them or that the state isn’t providing them with sufficient largesse. Some even complain of both at the same time.

    And yet, a very large percentage of Americans holds out “hope” that somehow, the process will reverse itself—that a new political candidate will appear—a “Freedom Fairy,” who will somehow stand in front of the runaway train, stop it, and reverse it.

    Historically, this never happens. What happens is that a small number decide to set sail and escape. Whether it’s the Roman commercial class, who walked away from their shops and travelled north to live amongst the barbarians, rather than accept Rome’s increasing domination, or the German Jews who locked up their shops and homes and boarded ships to the West, just prior to the lockdown of 1939, every burgeoning new “free” society has been created by the few who took courage and made an exit from a dying society.

    In every case, those who exited did so with fear in their hearts that they would fail. They left their larger possessions behind and travelled light, sewing coins and jewellery into their clothing, not knowing whether they would succeed.

    However, when they arrived at the new frontier, they met other like-minded people, each of whom had also shown courage and determination. They then created a new society that was, predictably, based upon the principles described above.

    Today, a similar exodus is occurring. It’s made of those who place their liberty and hope for a promising future above the comforts and freedoms that, one by one, are being taken from them by their governments.

    Of course, the details are not the same. They no longer travel by ship, but by jet. No one sews valuables into their clothes, as they’d never get through the metal detectors. Instead, they convert their assets to cash and purchase precious metals, to be stored in a country where there is diminished risk of confiscation by governments.

    As has happened throughout history, the exodus is being undertaken quietly. Those who emigrate do not wish to call attention to themselves, but then, neither do the governments of the countries they’re leaving. It’s never seen on the news, and the official numbers who leave are far below the number that actually departed.

    But the details of the exit are unimportant. What is important is that, when people meet the challenge to exit to find freedom and self-determination, they then build an extremely strong and free society. And there are many locations in the world where this is presently taking place.

    But what of those left behind? Surely, the present-day US is at a breaking point and may very well explode into civil disobedience—even revolution.

    Yes, this is quite so. And again, history shows us what happens in countries where the majority feel that they’re entitled to be looked after; that the rich must “pay a little more” to provide them with largesse. Good examples of this are the Russian Revolution and the French Revolution.

    Both of these are marked by a predominance of belief that “someone has to pay so that I can benefit.” In both revolutions, the aristocracy were violently removed and the rebels scrambled to grab as much of the spoils as possible. Disorder became prolonged and the new leaders that rose up were, if anything, more oppressive than those they replaced.

    Today, in visiting the US and talking with Americans, it’s palpable that most Americans now have a gut feeling that this will most certainly not end well. Most hope that there might be a peaceful transition of some sort. Some vainly hope that a “Freedom Fairy” will emerge.

    But, Americans, more than most people in the world, incorrectly believe that freedom only exists in their country and that, when it dies there, it will die everywhere. This is far from true, but it does mean that those who were born in the former “land of the free” are more fearful and discouraged than those elsewhere. The great majority doubt that it’s possible for them, individually, to choose freedom, rather than to go down with the ship. They, in effect, are exactly the same as the great majority in Europe in the eighteenth century.

    The American colonies were built upon the courage of a few who chose to leave the dominance and stagnation in Europe. The same is true today. The USA may be a sinking ship, but the concept of “America” is not. It’s a movable concept and it can exist anywhere that people have chosen future freedom over tentative comforts.

    *  *  *

    A “pioneer spirit” isn’t the only thing you need if you want to leave the sinking ship and pursue freedom. You’ll find details on what else you’ll need in Doug Casey’s special report, Getting Out of Dodge. Click here to download your free PDF copy.

  • Flying Above The Law: Chinese Gangs Used Drones To Smuggle $80 Million In iPhones Into China

    On March 29, the General Administration of Customs People’s Republic of China arrested 26 criminals who were part of a high stakes iPhone smuggling operation. The criminal ring used consumer drones to smuggle 500 million yuan ($79.8 million) worth of smartphones between Hong Kong and the mainland city of Shenzhen, the state-owned Legal Daily reported.

    Customs officials describe the smuggling operation as the “flying line,” where 26 criminals used drones to transport two 200-meter (660-feet) cables between Hong Kong and the mainland China to carry tens of millions of dollars in refurbished iPhones.

    A drone that was confiscated after authorities arrested suspects who used drones to smuggle smartphones from Hong Kong to Shenzhen, is pictured in Shenzhen, Guangdong province, China March 29, 2018. Liu Youzhi/Southern Metropolis Daily via REUTERS

    According to Reuters, the Legal Daily describes the latest bust as part of a much broader acceleration of illegal imports into mainland China, but, “it’s the first case found in China that drones were being used in cross-border smuggling crimes,” customs officials said.

    State-owned media reports are unclear about which drone model was used, but speculations from images point to a highly modified DJI Phantom 4 Pro. Interesting enough, DJI is headquartered in Shenzhen, generally considered China’s Silicon Valley.

    Under cover of darkness, Reuters reveals how the smuggling operation started around midnight and would continue into the early morning. Once the drones connected the cables between both buildings, the organized crime units were able to transport 15,000 smartphones across the international border per night.

    “The smugglers usually operated after midnight and only needed seconds to transport small bags holding more than 10 iPhones using the drones, the report quoted customs as saying. The gang could smuggle as many as 15,000 phones across the border in one night, it said.”

    A customs officer speaks at the crime scene after authorities arrested suspects who used drones to smuggle smartphones from Hong Kong to Shenzhen, in Shenzhen, Guangdong province, China March 29, 2018. Liu Youzhi/Southern Metropolis Daily via REUTERS

    CCTV News Shenzhen Special Zone News published an exclusive surveillance video of the criminal gangs in action.

    Here is social media’s response to the 200-meter “flying line” transporting 15,000 iPhones on a given night across international borders…

    One Twitter user said, “And trump thinks a wall will keep drugs out? “Gangs used drones and pulleys to smuggle $80 million in smartphones from Hong Kong, officials say” Washington Post April 2.”

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    “Eventually, all technology will be used to support crime. Criminals are now using drones to smuggle smartphones into China,” said another Twitter user.

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    Although using drones to smuggle high-value products like consumer electronics across the Hong Kong/China border appears to be a new technique, the deployment of ziplines has been around for ages.

    According to the South China Morning Post, government officials recently busted a criminal gang network, who used fishing line — shot over the international border with a crossbow to transport electronics into Shenzhen.

  • High School Counselor Arrested After Threatening To "Execute" White People

    Via TheCollegeFix.com,

    The in-school suspension coordinator/counselor at a Bridgeport, Connecticut high school has been arrested after threatening to “execute every white man he gets his hands on.”

    Warren Harding High School’s Carl Lemon was taken into custody Wednesday on charges of second-degree threat and breach of the peace.

    According to NBC-4 in New York, the police report states a teacher heard Lemon say “he couldn’t wait for the Panthers to give the OK and a revolution begins,” so he could carry out his threat. The teacher said Lemon had made “similar statements in the past.”

    During Lemon’s arrest, the school was put on lockdown for approximately ten minutes. Police noted the counselor was “pacing around his desk and repeatedly” and opening and closing a desk drawer which contained a kitchen knife.

    The Connecticut Post reports Lemon also had stomped on an American flag in a classroom exclaiming “This is what I think about it!” In addition, Harding’s principal discovered an anonymous student note in her school mailbox which said Lemon “talks about shooting whites a lot! He watches radical stuff during class. I am scared he will do something… he is crazy.”

    The official police report indicates the note also said Lemon “disrespects” students and that he doesn’t like the school’s principals and “will take them out.”

    More from the arrest report:

    I [Officer Angelo Collazo] could see Mr. Lemons [sic] looking into the draw [sic] and closing the draw over and over. Mr. Lemons appeared to be very frustrated, then began moving papers across his desk attempting to hid [sic] things on his desk.

    After a few minutes Mr. Lemons agreed to walk out of the building and be arrested. Mr. Lemon was allowed to walk out of the building without handcuffs on. Once outside, Mr. Lemons was handcuffed and transported to booking.

    I then returned to Mr. Lemon’s classroom and looked in the draw he opening and closing [sic]. I located a white plastic bag in the same draw. Inside the bag was a large kitchen knife in the bag. I removed the kitchen knife (black handle) from the bag and secured it.

    Officer Collazo adds that he collected “several random papers and journals” from Lemon’s desk and advised an assistant principal that she should remove Lemon’s computer so its hard drive could be reviewed.

  • White House: China's Overcapacity Is Causing Global Steel Crisis

    The White House has responded to China’s decision to impose tariffs on 128 different categories of US imports – primarily foodstuffs and industrial items. The tariffs, which went into effect Sunday but were previewed more than a week ago, are meant to be a response to the Trump administration’s Section 232 tariffs on steel and aluminum (not to be confused with the $60 billion in section 301 tariffs unveiled later).

    Steel

    In a statement posted on China’s Ministry of Finance website, China’s Customs Tariffs Commission confirmed reports from March 23, stating that additional duties on 128 kinds of products of US origin would be introduced from Monday “in order to safeguard China’s interests and balance the losses caused by the United States additional tariffs.”

    In response, a White House Deputy Press Secretary Lindsay Walters said the US tariffs were justified because China is creating a global steel glut with its oversupply.

    “China’s subsidization and continued overcapacity is the root cause of the steel crises. Instead of targeting fairly traded U.S. exports, China needs to stop its unfair trading practices which are harming U.S national security and distorting global markets,” Walters said in an emailed statement.

    Meanwhile, the Chinese are calling for another round of trade talks with the US after the US didn’t respond to China’s March 26 request for a dialogue on the steel and aluminum tariffs, per Bloomberg.

    Earlier Monday, White House Press Secretary Sarah Huckabee Sanders said the president is “doing exactly what he said he was going to do” to help reduce the US trade deficit with China.

    As a reminder, here’s the list of US imports upon which China has imposed tariffs of between 15% and 25%.

    Imports

     

  • Welcome To Xi Jinping's Orwellian Dystopia

    Authored Vicky Xiuzhong Xu and Bang Xia oby via ABC.net.au,

    Chinese authorities claim they have banned more than 7 million people deemed “untrustworthy” from boarding flights, and nearly 3 million others from riding on high-speed trains, according to a report by the country’s National Development and Reform Commission.

    The announcements offer a glimpse into Beijing’s ambitious attempt to create a Social Credit System (SCS) by 2020 — that is, a proposed national system designed to value and engineer better individual behaviour by establishing the scores of 1.4 billion citizens and “awarding the trustworthy” and “punishing the disobedient”.

    Liu Hu, a 43-year-old journalist who lives in China’s Chongqing municipality, told the ABC he was “dumbstruck” to find himself caught up in the system and banned by airlines when he tried to book a flight last year.

    PHOTO: Chinese journalist Liu Hu was “dumbstruck” to find himself caught up on the bad side of the country’s social credit system. (Supplied: Liu Hu)

    Mr Liu is on a “dishonest personnel” list — a pilot scheme of the SCS — because he lost a defamation lawsuit in 2015 and was asked by the court to pay a fine that is still outstanding according to the court record.

    “No one ever notified me,” Mr Liu, who claims he paid the fine, said.

    “It’s baffling how they just put me on the blacklist and kept me in the dark.”

    Like the other 7 million citizens deemed to be “dishonest” and mired in the blacklist, Mr Liu has also been banned from staying in a star-rated hotel, buying a house, taking a holiday, and even sending his nine-year-old daughter to a private school.

    And just last Monday, Chinese authorities announced they would also seek to freeze the assets of those deemed “dishonest people”.

    Bonus points for donating blood and volunteer work

    PHOTO: Surveillance software identifying customers’ patterns at a department store in Beijing. (Reuters: Thomas Peter)

    As the national system is still being fully realised, dozens of pilot social credit systems have already been tested by local governments at provincial and city levels.

    For example, Suzhou, a city in eastern China, uses a point system where every resident is rated on a scale between 0 and 200 points — every resident starts from the baseline of 100 points.

    One can earn bonus points for benevolent acts and lose points for disobeying laws, regulations, and social norms.

    According to a 2016 report by local police, the top-rated Suzhou citizen had 134 points for donating more than one litre of blood and doing more than 500 hours of volunteer work.

    In Xiamen, where the development of a local social credit system started as early as 2004, authorities reportedly automatically apply messages to the mobile phone lines of blacklisted citizens.

    “The person you’re calling is dishonest,” whoever calls a lowly-rated person will be told before the call is put through.

    Could China combine these projects to engineer society?

    If the Chinese Government manages to amalgamate the regional pilot projects and the immense amounts of data by 2020, it will be able to exert absolute social and political control and “pre-emptively shape how people behave,” Samantha Hoffman, an independent consultant on Chinese state security, said.

    “If you are aware that your behaviour will negatively or positively impact your score, and thus your life and the lives of those you associate with, then you will likely adjust your decision-making accordingly,” Ms Hoffman said.

    But the question remains if the Chinese authorities could really “pull it off”, Ms Wang said.

    “The Ministry of Public Security runs a number of databases, and then regional authorities also run their databases,” Ms Wang said.

    “It is difficult to know how these databases are related together and how they’re structured and how they are updated.

    “At the moment, I would say that they [are] updated to some extent but they’re not very well integrated, and the integration is going to be difficult.”

    PHOTO: Some CCTV cameras have facial recognition or infrared capabilities. (Supplied: Dahua Technologies)

    Hu Naihong, a finance professor at Shanghai University of Finance and Economics, who is helping to build the national social credit system, seems to agree.

    “The top-level design, the institutional framework, and the key documents are all in place, but there are still many problems to be solved,” the professor said in a 2017 meeting in Zhejiang.

    “The most serious problem being that all kinds of platforms are rigorously collecting [data], while having vague legal and conceptual basis and boundaries.”

    Many observers fear human rights could be increasingly violated via the social credit system, and — combined with a growing surveillance system and technologies such as facial recognition being rolled out across the country — the Chinese Government could have the ability to turn the system on its citizens.

    “China is characterised by a system of ‘rule by law’, rather than true rule of law,” Elsa B Kania, an expert in Chinese defence innovation and emerging technologies at the Centre for a New American Security, said.

    “That law [and extra-legal measures] can be used as a weapon to legitimise the targeting of those whom the CCP [Chinese Communist Party] perceives as a threat.

    “In such an environment, such a system could be abused to those same ends.”

    The question that remains to be answered in coming years, experts say, is where the line between “bettering society” and “controlling society” will be drawn.

    PHOTO: There are fears China could turn its mass surveillance technologies on its people. (Supplied: Guiyang Public Security Bureau)

    Read more here…

  • Employees Working With Corporations To Stop Corruption And Overreach Of Unions

    It should be of no surprise that companies are now starting to “weaponize” their own employees to try and keep the corruption and price gouging of unions out of their respective places of business.

    Unionization has not only resulted in the lack of free market price discovery for labor, but it is also been recently found to be extraordinarily corrupt. As we pointed out in a January 2018 article:

    …a new report from the U.S. Department of Labor (DOL), obtained by the Detroit Free Press, proves that the corruption inside of union offices around the country is far more rampant than you ever imagined.  As the Free Press notes, in the past two years alone, more than 300 union locations have discovered embezzlement of union funds totaling millions of dollars…and that’s just counting the people who got caught.

    Even though the UAW is the poster child of union corruption, cases reported by the DOL involved unions representing nurses, aerospace engineers, firefighters, teachers, film and TV artists, air traffic controllers, musicians, bus inspectors, bakery workers, roofers, postal workers, machinists, ironworkers, steelworkers, dairy workers, plasterers, train operators, plumbers, stagehands, engineers, electricians, heat insulators, missile range workers and bricklayers.  Meanwhile, the various cases involve embezzlement and fraud ranging from $1,051 up to nearly $6.5 million.

    So it was no surprise when today, on Bloomberg it was reported that U-Haul workers were lobbying for the Trump administration to tackle rules that would make it tougher for unions to organize:

    The men, along with dozens of other people working for U-Haul, the self-storage company, seem to have taken an outsized role in the debate over whether the Trump administration should revisit the rule. They’ve been doing this by flooding the National Labor Relations Board with very similar comments. While at least one employee said workers got together on their own, labor experts contend that the campaign has all the hallmarks of a company-influenced effort. U-Haul agreed, saying that while it didn’t compel workers to take part, it did provide the language for them to use.

    Over the past few months, the NLRB received at least 100 similarly worded submissions urging it to throw out the policy that shortens the time between when some employees decide to unionize and when a vote is held. More than 60—roughly one out of every 25 comments submitted so far—used names matching people who work at the self-storage and rental giant, according to a review of LinkedIn pages and recent company announcements. More than a dozen additional comments appear to come from people who worked for the company in the past. 

    U-Haul was profiled as a company that is encouraging its employees to stand up for the same free market price discovery that allows their business to function, and ultimately pay them. Imagine the shock!

    The article continues, noting that the practice has “seen a renaissance” in recent years:

    The volume and similarity of comments raise questions as to whether there was a coordinated effort, said Paul Secunda, who directs the labor and employment law program at Marquette University. “These U-Haul employee comments to the NLRB smack of employee mobilization by the company itself,” he said, though encouraging employees to comment on proposed rulemaking is perfectly legal. That companies urge employees to take part in campaigns for or against government regulations isn’t novel, but the tactic has enjoyed a renaissance of late. Employers and the business lobby have recently urged workers to fight various corporate
    taxes and support the recent tax legislation. Alexander Hertel-Fernandez, a political scientist at Columbia University who just wrote a book on the topic, recounted how a lobbyist bragged of helping a financial company get 100,000 letters opposing the fiduciary rule—the now-endangered conflict-of-interest regulation for financial advisers. Hertel-Fernandez said a telecommunications company interested in shaping a different debate established an internet portal for workers, providing letter templates they could tweak before sending.

    Unionizing, and the forced labor rules and regulations that accompany it by the government does little to help free market price discovery. Instead, it is yet one additional method for government to stick their nose not only into the economy, but also into the world of both private and public businesses. Free market price discovery in the labor market means that individuals should be compensated by their skill set, productivity and what they bring to the table as employees, not by what the government has pre-arranged in as a deal for them or by what unions can embezzle.

    It should come as no surprise that once these labor unions are granted power via regulation through the government that they can become extremely large, corrupt and powerful and often times associated with additional corruption and foul play outside of the workplace as we wrote about in January.

    Of course, the biggest and most highly publicized union embezzlement scheme of 2017 involves multiple Fiat Chrysler and UAW employees who stole millions of dollars intended for worker training…

    Jerome Durden, a former financial analyst in corporate accounting at Fiat Chrysler and former Controller of the UAW-Chrysler National Training Center, pleaded guilty in August 2017 after preparing and filing tax returns that concealed millions of dollars in prohibited payments directed to others in 2009-15. His sentencing is scheduled for Jan. 23.

    Alphons Iacobelli, former vice president at FCA, was charged in July 2017 with conspiracy and delivering more than $1.2 million in prohibited payments and things of value to the late General Holiefield, former vice president of the UAW, Holiefield’s wife and other UAW officials. His trial is scheduled for March 19.

    Monica Morgan, wife of Holiefield, was charged in July 2017 with tax evasion and conspiracy stemming from her family’s receipt of more than $1.2 million from the former vice president of FCA between 2009 and 2014. Her trial is scheduled for March 19.

    Virdell King, a former assistant director of the UAW-Chrysler National Training Center, pleaded guilty in August 2017 to receiving more than $40,000 in prohibited payments and things of value from the former vice president of FCA and “others acting in the interest of FCA.” Payments received between 2012 and 2015 included purchases of clothing, jewelry, luggage, golf equipment, concert tickets and theme park tickets. She is scheduled to be sentenced May 1.

    If not anything else, the employees of U-Haul are getting taught a lesson to not  “bite the hand that feeds them” and hopefully more companies moving forward will actively employ the same strategies to help keep free market price discovery in the labor market as ever present as they can, outside the confines of an already overly regulated economy and job market.

  • "I Can't Pay My Bills" – McDonald's Employees Furious As Company Renegs On Wage Hikes

    When the initiative was first announced, McDonald’s decision to raise its employees’ wages to $1 above minimum wage (albeit only at corporate-owned stores, a minority of the company’s total count) was hailed as a radical example of corporate accountability – a direct repudiation of the far-left notion that “quarterly capitalism” and employers accepting responsibility for their employees were mutually exclusive.

    As any steely eyed realist might’ve expected, McDonald’s widely lauded “wage hike” was little more than a publicity stunt. In the three years since McDonald’s announced the wage hike in 2015, the firm has essentially frozen employee wages, often leaving them just a few cents above minimum wage, as Bloomberg has discovered.

    McDonalds

    But the company doesn’t expect to experience any blowback from this decision: After all, McDonald’s never said it was pegging employees’ wages to $1 above minimum wage. The company, it appears, deliberately equivocated during its initial announced – and what’s worse, nobody in the media has called the company out.

    Until now, that is.

    In Milpitas, California, north of San Jose, where the local minimum wage rose to $12 an hour on Jan. 1, several workers’ February paychecks show they received $12.35 or $12.45. In Los Angeles, where the minimum wage for large employers has been $12 since July, some checks show hourly pay of $12.69 or less.

    Employees and members of the “Fight for $15” coalition – which had successfully pressured McDonald’s to assent to the wage hike (or so we had thought) – are understandably angry at the company, possibly having planned to receive higher wages in the near future, and based some major financial decisions on that.

    “They need to give us the dollar that they promised us,” said one of those employees, Fanny Velazquez, who’s worked for the corporation for a decade. “I can’t pay my rent or my bills.”

    The Service Employees International Union – most likely the initial anonymous source who brought the story to Bloomberg – blasted the company in an on-the-record statement. It’s also organizing workers to organize and exert whatever pressure they can.

    The Fight For $15, a 6-year-old effort by the Service Employees International Union to organize fast food workers and secure more stringent wage laws, seized on the paychecks as evidence that the McDonald’s 2015 announcement was a “publicity stunt.”

    “If McDonald’s wants to play semantics with its workers and continue to drive a race to the bottom instead of giving us real raises, it is going to continue losing workers to the growing number of employers who are leading the way to a better economy for all,” said Betty Douglas, a McDonald’s worker in St. Louis, in a statement on behalf of the Fight for $15.

    Fight For $15 criticized McDonald’s pay announcement from the start, because it didn’t apply to the majority of the chain’s stores, which are owned by franchisees, and didn’t meet the group’s signature demand of $15 hourly pay.

    The group plans to launch a hotline Monday that workers can call to report their wages, and will hold rallies in three cities on Tuesday to press its case that workers need a union in order to hold the company accountable.

    What’s worse than McDonald’s not following through with the wage hike, employees say, is that recent changes to McDonald’s menu – primarily the “Experience the Future” suite of customizable menu options – have made the job harder.

    Burger chains like McDonald’s are facing record-high turnover as workers depart for better jobs options in a tightening labor market. Last year, McDonald’s lagged behind peers like Wendy’s and Burger King in average drive-through times. Some employees complain that the chain’s “Experience of the Future,” a suite of changes to menus, technology and food delivery, has meant performing more tasks without commensurate staffing expansions or pay increases.

    “It’s going to get increasingly challenging to attract the talent you want into your business,” Easterbrook said earlier this year, “and then you’ve got to work really hard through training and development to retain them.”

    Of course, that McDonald’s did this shouldn’t come as a surprise to any long-time Zero Hedge readers. The company has been rapidly adopting kiosks in its dining rooms that allow customers to order without interacting with a cashier. Analysts believe these machines will eventually lead to the disappearance of hundreds of thousands of fast-food service jobs.

    As we’ve said before, McDonald’s employees, while you’re agitating for a $15 minimum wage, don’t forget to thank your corporate overlords when they fire you and your comrades and replace you with this guy…

    John5

     

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Today’s News 2nd April 2018

  • London Murder Rate Overtakes New York Amid Spike In Stabbings, Shootings

    London has surpassed New York City’s murder rate for the second month in a row, due mostly to a spike in knife crime and shootings which left 15 Londoners dead in February – nine of whom were age 30 or younger, and 22 dead in March vs. New York City’s 21, according to the Sunday Times.

    While both cities have around 8.5 million people, NYC’s murder rate has dropped by around 87% since the 1990’s, while London’s has grown approximately 40% in just three years – not including deaths from terrorist attacks. Experts have credited the NYPD’s zero-tolerance policing model driving down the homicide rate in NYC from around 2,000 deaths in 1990 to 230 last year. 

    London, however, is experiencing a spike in violent crime. 

    On Saturday a murder probe was launched after a 36-year-old woman was killed in what is believed to be the 30th incident of fatal knife crime in the capital this year

    The death came just hours after a man 23-year-old man died after being stabbed in the neck in Plumstead, south-east London on Thursday evening.

    Jacob Whittingham, charity head of programmes for Fight for Peace, told the paper: “What’s scary about London is the randomness of the crime. –standard.co.uk

    “With young people in London, you have no idea if and when you may be the victim of a violent crime — that’s why they feel the need to carry weapons.” 

    The latest victim was stabbed to death after leaving an Earlsfield bar in south West London early Saturday morning. Police responded to a call around 1:10 a.m. that a man had been found injured on Ellerton Road, only to find a 20-year-old man suffering from a stab wound. Despite efforts to save his life, the man was declared dead at the scene just before 2 a.m. 

    A 21-year-old man has been arrested on suspicion of his murder, and is currently in custody at a west London police station.

    Detective Chief Inspector Mark Cranwell said: “Sadly, another family has been left devastated with the tragic death of a young man from an act of violence. We are appealing to anyone who was in the area to come forward.”

    That said, London remains substantially safer overall in comparison to New York City – with fewer than half of the homicides NYC experienced in 2017. That said, according to the Telegraph, a person is nearly six times more likely to be burgled in London than in New York City, and 1.5 times as likely to fall victim to a robbery. 

    London also has nearly three times the number of reported rapes, however the Telegraph notes that differences in reporting methodology may account for the vastly higher number in London.

    London Metropolitan police commissioner, Cressida Dick, says that social media is partly to blame for the rise in knife violence, and battling gangs have sparked up longstanding “postcode wars,” so – you know, not migrants. 

    “London remains one of the safest cities in the world,” a spokesperson for the Metropolitan Police told The Independent. ”The Met is concerned at the increase in murders in London, and specialist detectives from the Met’s Homicide and Major Crime Command are investigating.

    “One murder is one to many, and we are working hard with our partners to understand the increase and what we can all do to prevent these tragedies from happening in the first place.”

    To combat the rising violence, Dick has announced a new task force of around 100 officers to help tackle violent crime in London. 

    Hopefully they’re more effective than these super troopers:

  • Socialism, Privacy, & Charity For The Powerful. Capitalism, Surveillance, & Rugged Individualism For The Powerless.

    Authored by Caitlin Johnstone via Steemit.com,

    The crowning achievement in hypocrisy must go to those staunch Republicans and Democrats of the Midwest and West who were given land by our government when they came here as immigrants from Europe. They were given education through the land grant colleges. They were provided with agricultural agents to keep them abreast of forming trends. They were granted low interest loans to aid in the mechanization of their farms, and now that they have succeeded in becoming successful, they are paid not to farm. And these are the same people that now say to black people, whose ancestors were brought to this country in chains and who were emancipated in 1863 without being given land to cultivate or bread to eat, that they must pull themselves up by their own bootstraps. What they truly advocate is socialism for the rich and capitalism for the poor.”

    ~ Martin Luther King, Jr

    “I gotta get rid of this stuff. Man, I don’t know what I’m gonna do with it. The more money you make, the more free shit they give you. It makes no sense.”

    ~ Adam Sandler, Funny People (2009)

    A GoFundMe for former FBI Deputy Director Andrew McCabe, who was fired two weeks ago by Attorney General Jeff Sessions, has raised over $400,000 in less than a day.

    Another way to say that would be that a former officer from the US intelligence community, who is married to a successful physician and will surely receive a book deal worth millions of dollars, just had a charity drive which in less than a day raised an amount of money it would take the average American years to earn.

    Meanwhile, an impoverished American recently died because his GoFundMe failed to raise enough money for his insulin and an FBI whistleblower was just arrested for trying to bring transparency to the Bureau’s secret domestic surveillance practices while banks receive massive bailouts, global fossil fuel subsidies total trillions of dollars, and Amazon paid zero federal taxes last year despite earning billions.

    Even leaving aside the reasons for McCabe’s firing and the shady dealings he was accused of, this is a very solid illustration of everything that is sick about the United States of America.

    In America you have socialism for the rich and capitalism for the poor.

    You have government secrecy for the powerful and surveillance for the powerless.

    You have charity for wealthy establishment lackeys and rugged individualism for ordinary human beings.

    Those at the top are uplifted even further, while those on the bottom are stomped through the floor.

    Julian Assange is currently under siege in the Ecuadorian embassy, deprived of mobility, sunlight and healthcare, and now internet, phone calls and visitors, all because he dared to bring some transparency to the powerful. Meanwhile the intelligence and defense agencies who serve as the armed goon squad of the wealthy and the powerful are able to kill, destroy and pillage from behind the opaque walls of near-total government secrecy in the name of “national security”. And instead of defending the single defenseless man who speaks truth to power, mainstream media reporters around the world are spitting on him in near-unanimity because he hurts power’s feelings.

    This is how we end up with John Bolton, people. This is the “kiss-up, kick-down” pathway to success that elevates bloodthirsty psychopaths like John Bolton, the worst of the worst, the ones willing to do the most killing on behalf of the powerful and the most stomping on the powerless to get to the top. This has become the unquestioned pathway in every sphere of public life. We have a situation now where the highest echelons of power are not the wisest among us, but the wiliest.

    The fourth estate is full of everyday people who at one point presumably believed they were there to bring truth to power, stomping on the silvery head of one who does, while sucking up to the very power that he regularly embarrasses with his leak drops.

    Speaking as an Australian, it sickens me to see my fellow Australians slip down this slope. Like many Australians, I was brought up to champion the underdog, cheer on the little Aussie battler, go into bat for the vulnerable and chop down tall poppies. My Australia wasn’t one that delighted in leaving one of our own to wither and die under siege in a “small camp” while making a parade of brown-nosing the establishment. It wasn’t a place where you used your gifts to help the powerful and hurt the vulnerable. It was the kind of place that created a man like Julian Assange, one that believed in constantly choosing the highest interest over self-interest. It wasn’t one where you used your gifts with the pen to turn a hero into someone everyone could feel okay about abandoning.

    To all who work in the media:

    …your selfish obsession with choosing your career over telling the truth when it counts, with choosing not to know rather than to dig and find out something you’d rather not know, with choosing getting along with your mates rather than standing up for what you know is right, that tiny little seemingly innocuous preference you have is what is driving our whole species towards extinction. That’s your copy of the mind virus that is killing us all. You are in a position of power and you are using it to kill us.

    When you choose to masturbate some old mens’ desire for a final war with Russia rather than present the case for peace, you are killing us all. When you choose to roundly condemn a man for bringing truth to power rather than helping him do so, you are killing us all. When you choose to help Andrew bloody McCabe instead of the poor and the powerless, you are killing us all. Every time you suck up to power to get ahead a little, you are killing us all.

    Do better, humans. Do the opposite of John Bolton, who kisses up to power and kicks down at the powerless.

    Punch up at the most powerful, and to the powerless, extend a helping hand. Lift up the Julian Assanges and pull down the John Boltons. Give privacy to the people, not to power. Give bailouts to human beings, not banks. Give subsidies to the poor, not to the plutocrats. Give money to people who need it, not to Andrew McCabe.

    *  *  *

    Thanks for reading, clear-eyed rebel. My daily articles are entirely reader-funded, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, bookmarking and getting on the mailing list for my website, checking out my podcast, throwing some money into my hat on Patreon or Paypal, or buying my new book Woke: A Field Guide for Utopia Preppers.

  • Keep Going. This Too Shall Pass.

    Authored by Doug “Uncola” Lynn via TheTollOnline.com,

    Like the weather when a storm approaches, or as the seasons turn, or waves pounding on a shoreline, any deviations are measured and compared by speed and intensity.  The same can be said for headlines:  Omnibus, discouraged Deplorables, rumors of war, prospects of peace, economic bubbles, fluctuating markets, and political intrigue.  Round and round it goes; when it ends, nobody knows. It’s a time of transition; and when traveling over mountaintops, through valleys, and on rough seas, no one has all of the answers.

    Even when looking at maps.

    The books, Generations (1992) and The Fourth Turning (1997), were written by the historians William Strauss and Neil Howe. These recent explorers identified recorded cycles of history and categorized them across multiple cultures and eras.  In both books, historical timelines were analyzed and populations were correlated to specific life-cycles labeled as generational typesStrauss and Howe additionally addressed the concept of time in the context of both circular and linear perspectives and defined what is called a “saeculum” as a “long human life” measuring roughly 80 to 90 years.  Every saeculum is comprised of four turnings, each lasting around 20 years.

    Just as there are four seasons consisting of springsummerfall and winter, there are also four phases of a human life represented in childhoodyoung adulthoodmiddle age and elderhoodAs each phase of human life represents approximately 20 years, so is each generational archetype identified within the historical cycles, or turnings, as follows.

    The generations experience each turning according their life stage; and the Seasons (i.e. order of Turnings # 1 -4) are identified by each generation as they reach middle-age.  Amazingly, history shows a consistent pattern in how the generations both cause and affect historical events.  The patterns develop based upon how each generation interacts with the other and documented consistencies are delineated by the authors.

    In America, since the end of the late sixteenth-century, there have been four full “cycles” (i.e. saeculums) as follows:

    1.) Colonial Cycle

    2.) Revolutionary Cycle

    3.) Civil War Cycle

    4.) World War Cycle

    In every Fourth-Turning, or Crisis period, within all of the above saeculums, American society experienced great upheavals and war.   Moreover, like progressively burgeoning tsunamis rising and crashing upon the sands of time, each consecutive American Fourth-Turning Crisis was more devastating than the last.

    America’s last crisis occurred during the years of 1929 through 1945; a turbulent transition period whereby the nation experienced a financial crash, a great depression and a world war.

    Now it’s our turn.  Time’s up.  According to Neil Howe, this current Fourth Turning began in September 2008 and is projected to last until around 2030.

    All we can do ride it out the best we can. Trying to individually affect a Fourth Turning would be like lassoing the wind or reversing an ocean’s tide.  It can’t be done.  With this in mind, it is best for us prepare and adapt by battening down our hatches and adjusting our sails.

    Whether we are climbing mountains, descending into valleys, or being tossed about on stormy seas, know that the Presidency of Donald J. Trump is a storm.  By accident or design, he has shaken the foundations of geopolitics in ways few could have forecasted less than two years ago.

    Although I am first and foremost a Better-than-Hillaryite, I was always cautiously optimistic about Trump. This does not make me a Trumpster, per se. I’ve called him the Oompah Loompah Man, a Reality TV Star, the Orange One, etc., and I’ve previously written about him as the manifestation of one of the following three possibilities:

    1.) The Real Thing

    2.) Serving the agenda of the global financial elite unwittingly

    3.) Controlled opposition as a Judas Goat or Trojan Horse

    Time reveals everything; and people are known by their actions, not by their words.  The same can be said for events.

    Much has transpired in American politics over the past year and a lot of it has been good for Trump voters. Yet, in his recent Omnibus signing speech, Trump acted like a man in a hurry, with more important things on his mind. Obviously, his signature on that steaming pile of shit pissed off a lot of former Deplorables, including one of his most avid advocates, Ann Coulter.

    What was Trump thinking?  He signed his name while sounding like Br’er’ Rabbit pleading not to be thrown into the brier-patch.  Trump wanted the military funded.  And now it appears he desires to build The Wall, as a priority of national security, using the defense budget.

    Did Br’er Rabbit Trump, outsmart the Establishment’s Tar-Baby?  Or do the globalists have photos of Stormy Daniels spanking him in his underwear?  Could it be the swamp is too muckedand the mountains too high for a lone, art-of-the-deal making6-level-chess playingbillionaire wizard and his staff?

    What’s going on?

    Transitions.

    Appearances are not always what they seem and Occam’s Razor, at times, loses its edge.  But, if past history is any guide, it may not be wise to underestimate Trump; even if paying for the $1.3 trillion Omnibus Bill will be like America’s children climbing Mt. Everest in bare feet.

    Multiple forces have been aligned against Trump from the moment he first rode down his escalator in 2015 to announce his candidacy for president.  And now, every day, he’s still here driving all of my sworn enemies batshit crazy, one Tweet at a time.

    The famous underworld attorney extraordinaire, Roy Cohn, in a 1984 interview claimed Trump was the closest thing to a genius he had ever met in his life.  Thirty-two years after that statement by Cohn, Trump became President of the United States while being outspent two to one, against a rabidly hostile media, in opposition to colluding officials in the United States’ FBI, DoJ, and State Department; plus, with zero support from all Democrats and a significant percentage of Republicans.

    Transitions, indeed. Tightrope walking is more like it.

    Today, Trump stands high up on the mountain in the middle of a political blizzard.  He is surrounded by the gale force winds of a phony Russian election hacking narrative, a sinister special council investigation, and allegations ranging from obstruction of justice to being spanked by porn star with a Forbes magazine.

    I couldn’t make that shit up if I tried.

    Now, according to a report in Politico (hardly a conservative publication), a majority of Americans believe the Deep State manipulates U.S. policies:

    The majority of the country believes a group of unelected government and military officials secretly manipulate national policy, according to a Monmouth Poll released Monday.

    Of the 803 adults polled, 27 percent said they believe the unelected group known as the deep state definitely exists. An additional 47 percent said it probably exists. Sixteen percent said it probably does not exist and 5 percent said they believe it definitely does not exist.

    Although most people may consider the Deep State as the “administrative state”, or the “establishment”, one wonders how many of the sheeple would have been half-awakened if not for Trump. I say “half-awakened” because most know nothing of the round table groups as referred to by the historian, Carroll Quigley, or the secret societies as referenced by former president John F. Kennedy.  This means the majority of Americans remain naïve, controlled, and at the whim of True Power.

    But what about Trump?

    Our president is either who he professes to be, or he is not. You either trust him, or you don’t. It could be he is playing the power game the best he can and prioritizing actualities that we can’t see for purposes we don’t know; or he’s puppet, or imbecilic sell-out leading us down to a dead-end on the primrose path.

    Call me quixotic, but I remain cautiously hopeful.  I remain so in spite of the warhawk John Bolton, Trump’s new war cabinet, and his latest hardliner stance with Russia.  Why?  Well, similar to the way I rejected solipsism in college for fear of being too lonely, I now refuse to despair over Trump’s personality swings because I enjoy the view.

    Is he controlled opposition? Or controlled demolition?

    Either way, I have nothing to lose and nowhere else I’d rather be at this time.  There’s not one damn thing I can do to prevent Russian bombs so I will , instead, wait patiently for the imminent Inspector General’s report; which is said to contain some pure TNT.

    What a panoramic scene that will be.

    Will the revelations of Michael Horwitz’s report turn the tide for Trump and make America great again? Hope springs eternal.  Or, it could be the global elite will trick Trump into cannonading the Cossacks in order to conclude any conversations on corruption in our country.  Who knows? The elite bankers could also crash the economy, like Kondratieff and Elliot Grand Supercycle waves, on history’s rocky shore; leaving Trump in a rumpled heap right next to the bleached white bones of Herbert Hoover.

    The winter of this Fourth Turning’s discontent will undoubtedly deliver war and economic turmoil; and not necessarily in that order.  But what will ensue?  Constitutional Law or tyranny?

    Time reveals all things; and, what happens after the release of the Inspector General’s report will be very telling.  Why? Because transitions are roads to revelations.

    So keep going, watch, and see.

    On the way, however, look for any false flags and know this:  Tyranny wants you controlled or dead; it is, in fact, right behind you, and up just ahead.  It also reallyreallyreally wants your guns.  If you don’t believe me, just look behind to see how fast we’ve traveled from Parkland, Florida to a full repeal of the Second Amendment.

    Winter is here.  A chill is in the air.

  • Alibaba And Ford Open China's First Car Vending Machine

    China’s Alibaba wasn’t the first company to create a car vending machine – that honor belongs to a Singaporean entrepreneur who transformed Singapore’s Autobahn building into what appears to be a giant PEZ dispenser stocked with luxury cars.

    But after months of planning, Alibaba’s T-Mall (in partnership with Ford) has opened the country’s first car vending machine in the city of Guangzhou. Plans are already in motion for a second vending machine to be opened in Beijing, and the company is already planning its third machine in Hangzhou.

    Vending Machine

    Customers can test drive the vending machine’s inventory – and if they have the cash on hand to put down a deposit, they can drive away in their new car (assuming they can convince their local Communist Party officials to issue them a license plate).

    Booking test drives and other tasks can be handled via the Tmall (also known as Taobao) mobile app. According to the company, customers can pick up their cars in 10 minutes, according to the Irish Times.

    The vending machine is “an important part of Alibaba’s new retail strategy:

    Gu Wanguo, general manager of vehicles at Tmall Auto, said the auto vending machine is an important step in Alibaba’s New Retail strategy. “By leveraging Alibaba’s data intelligence and technologies, the auto vending machine and super drive test services can enable auto brand owners and distributors better serve their customers.” Gu added.

    “Consumers can use the internet to access more accurate, convenient services and get a deeper understanding into particular vehicles. In the meantime, we are opening our car vending machine’s infrastructure to the entire industry to leverage and enable their distributors, in hopes of helping upgrade the automotive sector as a whole.”

    Sign up is done via mobile, and once they have chosen a vehicle, the buyer then takes a selfie to ensure they are the only person who can take the car from the machine, put down a deposit electronically and schedule a pick-up time, all from within the app. They then use that selfie to identify themselves and the car they have chosen is delivered to the ground floor of the car vending machine for their test drive to begin.

    If they don’t like the car they initially chose they can try another, up to a limit of two. If they decide to make the purchase after the test drive, they can visit any of Ford’s 4S showrooms to pay the remaining balance after paying the deposit on Tmall.

    Discounts and other incentives will also be provided to potential buyers based on consumer insights derived from user activity and history with the Alibaba group ecosystem.

    Alibaba published a video demonstrating how customers interact with the vending machine:

  • Florida Students Stage Walkout In Support Of Second Amendment

    Authored by Rick Moran via PJMedia,

    So maybe there could be some hope for the next generation after all.

    About 75 students at Rockledge High School in central Florida walked out of class in support of the Second Amendment on Friday. The students say they felt “silenced” last week when students walked out in support of gun control.

    Fox News:

    “I’m pro-Second Amendment,” Rockledge junior and protest organizer Anna Delaney told the station. “I wouldn’t mind deeper background checks, of course, but the Second Amendment will not be infringed upon.”

    Many Rockledge students walked out of class March 14 as part of the National School Walkout that was held in support of the Parkland school shooting victims and to protest gun violence and call for new gun control measures. They stood on the football field and formed a huge heart.

    About 75 students participated in Friday’s walkout at Rockledge, Florida Today reported. The protest lasted 20 minutes.

    They walked onto the schools track carrying the American flag and signs that said “guns don’t kill people, people kill people” and “I support the right to bear arms,” the paper reported. Some wore Trump “Make America Great Again” hats and camouflage clothing.

    “We were built on certain rights and that was one of the original rights, that we should have the right to bear arms,” sophomore Chloe Deaton told the group. She helped Delaney organize the walkout.

    Zachary Schneider, a junior, was quoted by the paper as saying, “It’s all over the news right now that all students hate guns. I wanted to show that not all students feel that way.”

    Rockledge principal Vickie Hickey said the school treated the Second Amendment walkout exactly like it treated the walkout that took place two weeks ago, the paper reported.

    She said both events were completely student-driven.

    Forgive me if I smell fear from school authorities who knew if they objected to the second protest, the wrath of God would descend upon them.

    Regardless, what I found interesting is that, apparently, the pro-Second Amendment kids didn’t know what the consequences would be and walked out anyway. Unlike the kids who walked out for gun control knowing that nothing would happen to them, the pro-gun crowd must have felt some trepidation given the attitude of their teachers and classmates.

    Bravo to them for standing up for a (currently) unpopular position.

  • "The Longer It Goes, The Worse It Gets" – Nearly 2 Weeks Later, Atlanta Still Reeling From Crippling Ransomware Attack

    It has been nearly two weeks since the City of Atlanta’s municipal government was hit with a crippling ransomware attack that wiped millions of government files and left the city’s police and first responders relying on paper record-keeping.

    So far, the city has made almost no progress in recovering its files. Police still don’t have access to vital databases and investigative files. The town’s auditor says the city’s books have been destroyed, aside from whatever’s left in the paper record. And top city officials are scrambling through a holiday weekend to piece together bits of city projects from personal computers and email addresses that weren’t affected by the hack. Almost every government department was affected by the hack – though fortunately 10 of the 18 machines in the city auditor’s office somehow avoided the hack.

    “Our data management teams are working diligently to restore normal operations and functionalities to these systems and hope to be back online in the very near future,” said Carlos Campos, a spokesman for the Atlanta PD. Campos said that some officers have returned to filing digital reports.

    City officials (with an assist from the FBI) are trying to work through the hack. But if they don’t find a way to recover at least some of the corrupted files soon, officials might be forced to pay the $51,000 ransom that the hackers are demanding (the FBI typically discourages the victims of these attacks from paying the fine).

    Atlanta

    The version of the ransomware virus affecting Atlanta (it’s a virus called SamSam) inserted cheeky messages into the corrupted files, with the corrupted documents displaying filenames like “imsorry” and “weapologize”.

    The city’s courts and its water department have been hobbled by the hack, Reuters said.

    In recent years, ransomware attacks have become exponentially more sophisticated. Whereas once they would target individual computers, hackers have in recent years staged global attacks like “WannaCry” and “Petya” a year ago. They’ve rendered hospitals incapable of accepting patients and forced first responders to operate without access to computers.

    And in another worrisome sign, city officials haven’t disclosed the extent to which the hackers affected the city’s backed-up files. Perhaps this is why city officials have refused to comment on whether they’re considering paying the ransom – though, according to Reuters, they haven’t paid it yet. 

    Mayor Keisha Lance Bottoms, who took office in January, has declined to say if the city paid the ransom ahead of a March 28 deadline mentioned in an extortion note whose image was released by a local television station.

    Municipal governments are particularly vulnerable to ransomware attacks because their computer networks typically comprise a patchwork of different systems with varying levels of security.

    Ironically, the city completed a cybersecurity audit in January, and was in the process of implementing its recommendations when the attackers struck.

    Mark Weatherford, a former senior DHS cyber official, told Reuters that hackers typically walk away when the ransom isn’t paid.

    He added that the situation could’ve been resolved quickly if the city just paid the ransom.

    “The longer it goes, the worse it gets,” he said.

    “This could turn out to be really bad if they never get their data back.”

    Atlanta has nearly half a million residents – but 6 million people live in the Atlanta metropolitan area.

     

  • Interventionistas Outraged Over Trump's Syria Withdrawal: "We Took The Oil. We’ve Got To Keep The Oil"

    Regime change advocates, neocon beltway hawks, and all the usual armchair warrior zero-skin-in-the-game think tank interventionistas are in continued meltdown mode after Trump confirmed plans to withdraw American forces – some 2000+ troops and personnel – from Syria. On Friday the president told senior White House aides that US forces will be exiting Syria after public comments made earlier.

    In statements carried by ReutersTrump said“Let the other people take care of it now. Very soon, very soon, we’re coming out. We’re going to get back to our country, where we belong, where we want to be.” As we noted last week, the timing of Trump’s dramatic Syria turn corresponded with news of an American soldier killed in Manbij in northern Syria (killed likely by an IED alongside a British coalition soldier overnight last Thursday).

    Perhaps to be expected, the weekend editorials and cable news pundit shows reacted in disbelief and horror – with charges of “chaos” at the Trump White House over Syria policy, and claims that “ISIS will come back” if America leaves. Nevermind the fact that Trump himself while on the campaign trail in 2016 stated in public speeches and in a tweet (and linking to a declassified intelligence memo) that US support to jihadists in Syria under President Obama is precisely what fueled the rise of ISIS in the first place

    Image source: AM Greatness.

    CNN, for example, painted a picture of mass revolt among the ranks of military officers and career State Department officials, asserting that, “Any decision by Trump to pull out of Syria would also go against the current military assessment, a fact that left some national security officials concerned about the impact of a withdrawal, another senior administration official told CNN.”

    No, there’s no “chaos” when it comes to Syria policy at the White House – Trump is doing exactly what he pledged to do while previously on the campaign trail, and he’s further continuing what he started when he nixed the CIA’s regime change program last summer.

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    But it’s funny and very telling how brazenly honest interventionistas and deep state bureaucrats suddenly become in their motives whenever Trump speaks truth on Syria. Consider prominent Washington Post columnist Josh Rogin, who the day after Trump’s announcement of leaving Syria lamented while quoting a pro-regime change activist“We took the oil. We’ve got to keep the oil.”

    That’s right, the mask of pseudo-humanitarian high-minded noble ideals comes off (the Josh Rogins of the world care nothing about actual Syrians), and we learn that it’s actually all about…

    Oil! Oil! Oil! Iran! Iran! Iran!

    https://twitter.com/joshrogin/status/979856522753789953

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    Map source: WINEP

    No more pretense and the slick language of R2P military intervention for the sake saving civilians in Syria… Rogin’s op-ed is aptly titled, In Syria, we ‘took the oil.’ Now Trump wants to give it to Iran. 

    Rogin, like other interventionistas, has no more cards to play, thus we find these straightforward admissions in his column:

    Perhaps he would back off his urge to cut and run if he knew that the United States and its partners control almost all of the oil. And if the United States leaves, that oil will likely fall into the hands of Iran…

    Control over oil is the only influence we have in Syria today…

    “We have this 30 percent slice of Syria, which is probably where 90 percent of the pre-war oil production took place,” said David Adesnik, director of research at the Foundation for Defense of Democracies. “This is leverage.”

    Astoundingly, these words are still being published 15 years after the myriad lies of the Iraq invasion …no shame, no regrets. And a host of other mainstream journalists in New York and DC greeted Rogin’s column as “refreshing” and respectable “essential reading” (as if it’s not the same pro-regime-change script which has dominated talking points for years).

    Meanwhile, a well-known Syrian-American Middle East analyst and actual expert on Syria effortlessly shreds Rogin’s supposed “realist” points with ease (Rogin likes to think of himself as a foreign policy ‘realist‘ …he’s no such thing):

    Whenever one thinks Syria analysis has hit bottom, nonsense like comes along to remind us otherwise. Josh Rogin’s piece makes a set of outrageous observations that has become a mainstay of Syria’s war coverage over the years. Let’s establish the facts first.

    Iran’s expansion that Josh Rogin wants to “counter” did not start with Syrian war but started in the aftermath of the ill-advised Iraq invasion that opened the pandora box which we are still dealing with today (Birth of ISIS is another). Interventionists have a short memory.

    Syria’s alliance with Iran did not start with the Syrian war. It was cemented after Damascus decided to side with Iran during its war with Saddam’s Iraq in early 80’s. At start of Syrian war, Tehran decided to pay back the favor and came to Assad’s aid when no one did.

    What Josh Rogin still can’t comprehend is that countering Iran is positively correlated with ending the Syrian war and not by adding more fuel to it. Iran’s influence grows when Damascus is threatened and not the other way around.

    Syria is not Saudi Arabia. Even before the war, it’s oil production was mere 150K barrels a day. This is a drop in the ocean when it comes the regional oil producers. Asking Trump to grab the oil shows total lack of understanding of scale or strategic importance.

    Indeed, by grabbing what little oil Syria has all you are doing is giving Iran and other allies of Syria more leverage. The more Syria can stand on its feet the less it needs those allies like Iran that you want to counter.

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    So it’s not only his conclusions, but every assumption of Rogin and his ilk concerning the Middle East is simply dead wrong. But at the very least these moments serve to remind us of what morally corrupt failures the Washington class of inverventionistas have been, and that it’s certainly not their own skin in the game when they argue for “taking action” whether in Syria or other parts of the world (the establishment political and pundit class is all too willing to send the sons of others to die in foreign quagmires with dubious aims).

    Finally, it should be noted that Josh Rogin published his piece the same day Master Sgt. Jonathan J. Dunbar died in Syria (identified by the Department of Defense on Saturday). Rogin is ultimately arguing that more Americans must stay in harm’s way for “control over oil… the only influence we have in Syria today.”

    * * *

    With that, we’ll leave off with the following excerpted wisdom from Nassim Nicholas Taleb’s Skin in the Game:

    “What you had historically is warmongers were warriors. And he who lives by the sword, dies by the sword… Now suddenly–and that’s only recent–we developed all these weapons and technologies and stuff like that, so you can have people cause wars and not be exposed. And not only that, but as was Bill Kristol… he’s a prime example.

    The people who caused the war in Iraq… absolutely no cost to them. Or a cost that’s very small, very tiny reputational cost… And then after they cause a war in Iraq–and of course we have a disaster–they will intervene again… in Libya and of course in Syria.

    What happens with these people is that given that there is no skin in the game, there’s no learning… In the real world, these people should be dead, because basically, if you cause a disaster… so many of them would be… pruned out that way instead of letting others die.”

  • Chinese Space Station Crashes Down To Watery Grave In South Pacific

    China’s nine-ton school bus-sized space station, Tiangong-1, has plummeted to a watery grave in the South Pacific ocean – and Michigan residents can come out of their bunkers. 

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    The two-module spacecraft – which means “Heavenly Palace,” lost contact with China’s space agency on March 21, 2016 after the completion of its extended mission – which included a six year service life that saw two manned missions to perform experiments for the larger multiple-module Tiangong station.

    as

    a

    Based on Two-Line Element set data from the Joint Operations Space Center (JSpOC), the last orbital adjustment made by the Tiangong-1 was in December, 2015.

    as

    Amateur satellite trackers claim the station has been orbiting uncontrolled since at least June, 2016 (aerospace.org), with the only confident predictions as to where it might hit falling between the 43rd parallels.

    a

    as

    The Tiangong-1 was the first space station built and launched by China – equipped with two sleep stations and a habitable volume of 15 cubic meters (529 sq ft.).

    as

    ***

    As we reported earlier, With China’s Tiangong-1 space station (translated as “Heavenly Palace”) full of highly toxic chemicals such as hydrazine, set to crash into the earth at a still unknown location some time today, Michigan isn’t taking any chances – activating emergency operations center to monitor its trajectory. 

    As a reminder, several weeks ago Aerospace.org predicted that while the list of possible crash sites includes locations in Northern China, South America, Southern Africa, Northern Spain and the United States, lower Michigan in particular is among the regions with the highest probability of a direct hit.

  • Julian Brigden Warns The Dollar Will Be "The Final Napalm Run" Into The Crash

    In recent weeks, the flattening yield curve have prompted investment strategists to declare that what looked to be the beginning of a secular bear market in bonds was, in reality, another false alarm. Indeed, all it took was a brief correction in equity markets for Bank of America’s Ritesh Samadhiya to puke all over the bank’s bullish economic consensus and declare that the greatest risk to asset markets is that nominal global growth slows a lot more than consensus believes.

    But during his latest interview with MacroVoices, Julian Brigden of Macro Intelligence Two Partners reminded readers why the bear case for both bonds and equities – a nightmare scenario that would hammer popular risk-parity funds that are, ironically, intended to weather periods of market turbulence based on the notion that stocks and bonds can’t sell off at the same time. 

    Brigden, who advised clients to close out of a short Treasury trade just before the 10-year bounced off 3%, said he believes the long term case for a bear market in bonds remains intact as the US government tries to inflate away its enormous debt pile.

    According to Brigden’s modeling, a break above the 3.25% level on the 10-year yield would slice through its 100-month moving average – something that hasn’t occurred since the mid-1980s.

    Treasury

    Brigden believes that a break above this level in nominal yields (while real yields remain anchored thanks to a runup in inflation) will lead to chaos in both bond and equity markets. Disinflation has kept yields tamped down for years. But as it returns and forces the Fed to hike interest rates more quickly – just as the ECB and other central banks are withdrawing their own stimulus – these inflated asset prices will plunge back to Earth.

    The Fed thought QE was the reason Treasury yields sank, Brigden said, but they were wrong…

    Treasury

    …The real reason, he said, was the combination of disinflation and foreign central banks pushing yield-seeking investors into US markets.

    What actually lowered Treasury yields through almost all the period of QE was falling inflation. It was disinflation. And I use that term because I’m not a big believer in deflation. Deflation is falling aggregate demand and falling prices. What we had was falling inflation. So it’s disinflation. And that’s really what lowered yields. What’s been interesting, though, is, since the end of 2015, inflation has actually been rising, relatively significantly in the US. It’s gone up a whole 2%. But yields (real yields) have fallen. Why? Because other central banks have come in. And they have – because of the nuances of their policies (particularly NIRP, and particularly regulatory requirements that require European investors to be fully invested and match assets with liabilities) – you’ve had this tsunami of cash that’s come out of Japan and Europe and suppressed our Treasury yields.

    And if you look on this slide here, you’ll see. Back then we had this incredible period of low inflation. Incredibly stable. Six years where inflation basically oscillated around 1.3. You had a Fed that thought they could run it a little hot because they believed in the Phillips curve (unlike this lot that don’t believe in the Phillips Curve) and you did. You heated the economy quickly with a bunch of spending. Well, you’ve overcooked the goose.

    And I’m not even showing in this slide the ‘70s. I’m not interested. But, in those five years, where inflation goes from 1.6 to the upper 3s, then back down again as they aggressively try to heat again, and it then breaks out again and goes up to almost 6.

    Treasury investors lost 36% of their money in real price terms. 36%. A third. And you never got it back. Never got it back. So I do think the analogy is relatively similar.

    Moving on to equities, Brigden says that faced with the threat of an overheating economy, the Fed is going to keep hiking until the market breaks – sending stocks spiraling lower. Brigden says we could be on the verge of a 20% correction.

    And while over  the next ten years, fine, I’m okay. When it comes to equities, I think, certainly, if we’re in an inflationary environment they’ll outperform fixed income. They’re in for a bit of a shock, I fear.

    I fear we’re on the cusp of a 20-percenter. It could be potentially worse. And I do feel, personally, that we’ve put the highs in. I’ve said either the market has to collapse under its own weight, for whatever reason (higher vol, trade talks, whatever), and then the Fed backs off.

    Or, faced with the inflation picture, the Fed is just going to keep hiking until they eventually crack the market. It won’t be intentional. It’s never intentional. But it’s what always happens. So I fear that the highs are in.

    And just as markets are breaking from the strain of Fed-induced tighter financial conditions, the Trump administration’s policies will result in dollars piling back into the US from foreign markets – a scenario that could undermine the currency’s long-term value and, ultimately, its status as a reserve currency.

    Before it begins the next leg of its secular downtrend, the greenback will be squeezed higher, triggering a punishing selloff across risk assets.

    But, when it happens – and we know this Erik – when the dollar rallies at the same time as you get risk-off, it turns things really vicious, really quickly. And, given this massive hole created by a low current account deficit, with the whole world depending on the hot money flows, in a world where you can click and bring that money home, it could be really vicious.

    I think – let’s be honest. Up until now we’ve had loose fiscal, relatively loose monetary. Right? It’s only changed in the last couple of months. And arguably even since Powell has come in. We’ve had central banks that have – and I think, big picture, they still want to – the expression we like to use is “run it hot.” They want to boil bond investors slowly. They want to run nominal GDP hot.

    This is how we eviscerate the value of the debt in what are aging and very indebted societies. So, yeah, loose fiscal, loose monetary is disastrous for a currency. Things are changing a little. As I said, I think the Fed will be forced, relatively, to become more hawkish. But, bigger picture, what I’m talking about is an episodic, final, nasty, destructive dollar rally. I think it’s a dollar rally that ends up resetting the system. I think after the dollar has rallied and destroyed a lot of things, more people will abandon it. You’ll see more use of the renminbi. We are in a cyclical, I think, decline of the dollar.

    You get bond pressure and rate pressure and equity problems, and then the dollar. And the dollar comes in and is just the final napalm run into the risk-off move, and then we’ll kick off again.

    Listen to the entire interview below:

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Today’s News 1st April 2018

  • Lockheed Martin Patents Nuclear Fusion-Powered Fighter Jet

    Lockheed Martin has secretly been developing a game-changing compact nuclear fusion reactor that could potentially fit into a fighter jet. The Maryland-based defense contractor recently obtained a patent associated with its design for a fully compact fusion reactor, after filing for the patent in 2014.

    If the latest patent from the defense company serves as a benchmark, nuclear fusion technology could revolutionize the aeronautic industry and eventually begin the quantum leap from fossil fuels to compact fusion reactors for the industry.

    According to CBS Washington, the prototype system would be the size of a normal shipping container but capable of producing enough energy to power 80,000 residential homes or a Nimitz-class aircraft carrier, sometime in the next year or so.

    The patent, tilted “Encapsulating Magnetic Fields for Plasma Confinement,” is dated Feb. 15, 2018. CBS indicates that Skunk Works, also known as Lockheed Martin’s Advanced Development Programs or its advanced R&D group, has reportedly been developing the compact fusion reactor since about 2014, with latest reports suggesting the technology could be ready for production by 2019.

    Nuclear fusion is the same process of what happens to hydrogen gas in the core of the Sun. Hydrogen gas gets squeezed into four hydrogen nuclei combine to form one helium atom; thus, nuclear fusion is created.

    Lockheed said, “Our concept will mimic that process within a compact magnetic container and release energy in a controlled fashion to produce power we can use.” Here is how Lockheed describes nuclear fusion power:

    Lockheed indicates that the compact size of the reactor has induced a technology revolution, which instead of taking “five years to design and build a concept, it takes only a few months.”

    “The compact size is the reason that we believe we will be able to create fusion technology quickly. The smaller the size of the device, the easier it is to build up momentum and develop it faster. Instead of taking five years to design and build a concept, it takes only a few months. If we undergo a few of these testing and refinement cycles, we will be able to develop a prototype within the same five year timespan.”

    As the technology advances, the size of the fusion reactor shrinks. Lockheed has dropped the bombshell and indicated the reactor could be ready to mount on “a truck, aircraft, ship, train, spacecraft, or submarine.” Across the board, Lockheed could revolutionize the transportation industry in the very near term.

    “Some embodiments may provide a fusion reactor that is compact enough to be mounted on or in a vehicle such as a truck, aircraft, ship, train, spacecraft, or submarine. Some embodiments may provide a fusion reactor that may be utilized in desalination plants or electrical power plants.”

    Patent FIG. 1 illustrates example applications for fusion reactors, according to certain embodiments.

    “As one example, one or more embodiments of fusion reactor 110 are utilized by aircraft 101 to supply heat to one or more engines (e.g., turbines) of aircraft 101. A specific example of utilizing one or more fusion reactors 110 in an aircraft is discussed in more detail below in reference to FIG. 2. In another example, one or more embodiments of fusion reactor 110 are utilized by ship 102 to supply electricity and propulsion power. While an aircraft carrier is illustrated for ship 102 in FIG. 1, any type of ship (e.g., a cargo ship, a cruise ship, etc.) may utilize one or more embodiments of fusion reactor 110. As another example, one or more embodiments of fusion reactor 110 may be mounted to a flat-bed truck 103 in order to provide decentralized power or for supplying power to remote areas in need of electricity. As another example, one or more embodiments of fusion reactor 110 may be utilized by an electrical power plant 104 in order to provide electricity to a power grid. While specific applications for fusion reactor 110 are illustrated in FIG. 1, the disclosure is not limited to the illustrated applications. For example, fusion reactor 110 may be utilized in other applications such as trains, desalination plants, spacecraft, submarines, and the like.”

    Patent FIG. 2 illustrates an example aircraft system utilizing fusion reactors, according to certain embodiments.

    “In general, fusion reactor 110 is a device that generates power by confining and controlling plasma that is used in a nuclear fusion process. Fusion reactor 110 generates a large amount of heat from the nuclear fusion process that may be converted into various forms of power. For example, the heat generated by fusion reactor 110 may be utilized to produce steam for driving a turbine and an electrical generator, thereby producing electricity. As another example, as discussed further below in reference to FIG. 2, the heat generated by fusion reactor 110 may be utilized directly by a turbine of a turbofan or fanjet engine of an aircraft instead of a combustor.”

    Patent FIGS. 3A illustrates an example fusion reactor, according to certain embodiments.

    Patent FIGS. 3B illustrates an example fusion reactor, according to certain embodiments.

     

     Lockheed’s potential applications of compact fusion:

    The Silicon Republic believes Skunk Works’ Compact Fusion Project could usher in an era of nuclear drones patrolling the skies:

    “Patents for the reactor were filed in 2014 by the company’s advanced research division, Skunk Works, with the aim of having its compact fusion reactor (CFR) ready by 2019. While it has obviously missed that deadline, the delay does not mean the technology is to be left behind. As Dr. Thomas McGuire, head of Skunk Works’ Compact Fusion Project, detailed in a 2014 report, the smaller reactor is more feasible than a large-scale one. If the system functions as expected, the CFR could take 11kg of fuel in the form of the hydrogen isotopes deuterium and tritium, and run the reactor for an entire year without needing to stop.

    Throughout that time, it would be consistently pumping out 100MW of power, enough to power up to 80,000 homes. When discussing how it could impact aircraft design, Lockheed Martin said that this amount of power would allow it to fly indefinitely and would only be hampered by the crew’s need for food and water on the ground. The likelier option is that this would translate extremely well into drone aircraft used to patrol the skies for years at a time, which, admittedly, sounds a little terrifying.”

    While a nuclear fusion powered fighter jet would certainly change the board game of geopolitics, factor in the hypersonics technologies and high energy weapons, and the high-tech weapons for the next global conflict have already been identified.

    To be sure, the global superpowers realize that the first to possess these technologies will not just revolutionize their civilian and military programs, but will also dictate the future path for civilizations on planet earth, as such the new arms race is on, just not in the same weapons that defined the first cold war.

  • The History Of US Trade Policy In One Annotated Chart

    As narrative-ending as it may be to nattering naybobs, President Trump is not the first, and will not be the last, to enforce major trade policies. As Goldman Sachs points out in this fully annotated chart, the US has a long history of trade interventionism, and – as the WSJ recently pointed out  – what Trump has done is merely respond to China’s own protectionist policies.

    Source: Goldman Sachs

    Incidentally, while it is far less discussed, we showed at the start of March  that there have been extensive tariffs levied against China under both Obama’s administration, and those prior, they just didn’t get nearly as much air time. As BofAML details in the table below, Presidents Obama, Bush, and Reagan have all imposed sizable tariffs on steel in the past:

    In this context, some have accused Trump of being all bark and no bite, and of being a flip-flopper on this – and other – issues. For those who remain unsure of where President Trump stands on trade, here are thirty years of his quotes on the topic:

    Source: Goldman Sachs

    On the heels of Wilbur Ross’ comments imploring investors to “act rationally, not hysterically,” Goldman notes that, all told, their strategists expect asset implications to be modest and largely contained to specific sectors/companies with exposure to targeted products.

    But as GS global economists Jari Stehn and Nicholas Fawcett explain, “the global macro costs become significant only when a trade war really heats up, with retaliation from all sides.”

    With that in mind, the key questions are:

    What is the risk that the situation escalates further, and what might retaliation look like? So far, numerous temporary exemptions from US metals tariffs have substantially diminished the prospect of retaliation and escalation from some of the US’ largest trading partners. And China’s response has been measured, with Washington and Beijing reportedly in the midst of talks to defuse the situation.

    For now, the questions remain: the US has yet to publish its official product list for Section 301-related tariffs on Chinese goods, and is still likely to announce restrictions on Chinese investment in the US—both of which the Chinese have yet to address, and detail just how they will retaliate.

  • What If All The Cheap Stuff Goes Away?

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Nothing stays the same in dynamic systems, and it’s inevitable that the current glut of low costs / cheap stuff will give way to scarcities that cannot be filled at current low prices.

    One of the books I just finished reading is The Fate of Rome: Climate, Disease, and the End of an Empire. The thesis of the book is fascinating to those of us interested in the rise and fall of empires: Rome expanded for many reasons, but one that is overlooked was the good fortune of an era of moderate weather from around 200 BC to 150 AD: rain was relatively plentiful/ regular and temperatures were relatively warm.

    Then one of Earth’s numerous periods of cooling–a mini ice age–replaced the moderate weather, pressuring agricultural production.

    Roman technology and security greatly expanded trade, opening routes to China, India and Africa that supplied much of Roman Europe with luxury goods. The Mediterranean acted as a cost-effective inland sea for transporting enormous quantities of grain, wine, etc. around the empire.

    These trade routes acted as vectors for diseases from afar that swept through the Roman world, decimating the empire’s hundreds of densely populated cities whose residents had little resistance to the unfamiliar microbes.

    Rome collapsed not just from civil strife and mismanagement, but from environmental and infectious disease pressures that did not exist in its heyday.

    Colder, drier weather stresses the populace by reducing their food intake, which leaves them more vulnerable to infectious diseases. This dynamic was also present in the 15th century during another mini ice age, when the bubonic plague (Black Death) killed approximately 40% of Europe’s population.

    Which brings us to the present: global weather has been conducive to record harvests of grains and other foodstuffs, and I wonder what will happen when this run of good fortune ends, something history tells us is inevitable. Despite the slow erosion of inflation, food is remarkably cheap in the developed world.

    What happens should immoderate weather strike major grain-growing regions of the world?

    Then there’s infectious diseases.  Global air travel and trade has expanded the spectrum of disease vectors to levels that give experts pause.  The potential for an infectious disease that can’t be mitigated to spread globally is another seriously under-appreciated threat to trade, tourism and cheap stuff in general.

    There are other factors that could spell the end of cheap stuff, not just food but manufactured goods:

    1. Fossil fuels could become much more costly. While I consider it highly likely that the price of oil in US dollars will fall to $40/barrel or lower in a global recession due to a sharp drop in demand (what I’ve long termed the head-fake), longer term, it’s inevitable that the cheap-to-access fossil fuels (other than coal) will become depleted and the cost of accessing, processing and transporting what’s left will rise.

    Since fossil fuels remain the backbone of industrial societies everywhere (yes, including Germany), a steady increase in fuel costs will push the cost of everything that uses energy (i.e. everything) higher.

    2. Trade restrictions/conflicts. Globalization and populism both target “unfair trade practices” in which “unfair” is in the eye of the beholder: imports hurt the domestic economy everywhere, and exports help the domestic economy everywhere.

    If trade is restricted for whatever reason, the costs of commoditized goods will likely increase, possibly by a lot.

    3. Global wages are rising. You’ve probably seen signs at Home Depot and fast-food chain outlets announcing “we’re hiring”: even though 100 million working-age people are “not in the work force” in the U.S., many of these individuals lack the skills and/or willingness to take jobs in the modern economy, which demand a lot of workers even in so-called low-skill fields such as fast food. To work in fast food, individuals must be able to handle high pressure and a fast pace; it’s not an easy job by any means.

    Many employers are reporting that they can’t find enough qualified candidates who pass drug tests, yet another fallout of the opioid epidemic. Many people are saddled with felony convictions for nonviolent drug offenses, rendering them ineligible for most corporate or government employment.

    Immigration restrictions and minimum wage laws will add to the rising cost of labor.

    Globally, the baby Boom generation is retiring, leaving worker shortages on the horizon even in China. (Note that workers tend to retire much earlier in Asia and Europe than in the U.S.: 60 or 62 is typically the mandatory retirement age in much of the global economy.)

    As Immanuel Wallerstein has observed (I’ve written about his work many times), there are systemic, secular pressures to raise wages and benefits everywhere: costs are rising, and people expect more government services such as education and income security, and as taxes increase, wages must rise to maintain the net earnings (purchasing power) of the workers.

    We in North America have become accustomed to cheap stuff; we consider it our birthright: cheap fuels, cheap manufactured goods, cheap food and cheap labor. Without even being aware of it, we feel entitled to “low prices always.” We may feel fuel, food and consumer goods are expensive now, but we are comparing prices to an extended period of extraordinarily low costs.

    Prices for energy could easily rise 50%, impacting the cost of everything; should harvests be crippled by bad weather, the cost of grains could easily double or triple from their current historic lows. Should trade be restricted and wages rise virtually everywhere, manufactured consumer goods could go up in price even as robots replace human labor: energy and raw materials will still be costly inputs even if all human labor is eliminated.

    Add in some stiff tariffs for unfair trade practices, and all the robots in the world won’t keep prices down.

    Nothing stays the same in dynamic systems, and it’s inevitable that the current glut of low costs / cheap stuff will give way to scarcities that cannot be filled at current low prices. Cheap stuff will go away, and everything will cost more. It seems highly likely that the next decade will not be like the last 10 years of abundance and cheap stuff.

    Courtesy of Incrementum AG, here is a chart of the commodity/S&P 500 ratio. Commodities are at historic lows in relation to stock market valuations. Stocks can decline, or commodities can rise, or both can occur in tandem. If history is any guide, this ratio will reverse and reach a peak within the next decade.

    *  *  *

    My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

  • "Unprecedented" $8 Billion Verdict Against JPMorgan Cut Drastically

    JP Morgan just won an important victory in its quest to have an unprecedented $8 billion jury verdict thrown out without its hordes of lawyers having to do one single thing.

    Back in September, Jamie Dimon’s bank was hit with an $8 billion jury verdict for, a judgment large enough to negatively impact the bank’s EPS and dent its Tier 1 ratio.  On the surface, that judgment might seem excessive. But the bank’s treatment of the Hopper family was so absurdly outrageous, getting stuck with the largest jury award of 2017 appeared justifiable to many in retrospect.

    JPM

    However, in what appears to be an attempt to stave off a laborious appeals process and exit quickly with their cash, the family of a former airline executive asked the judge to lower the punitive damages portion of the fine – what amounts to $6 billion of the $8 billion – to roughly $100 million.

    Lawyers for Stephen Hopper and Laura Wassmer asked a Dallas probate court to limit punitive damages to them and their father’s estate to about $70 million, down from a total of $6 billion awarded by the jury. Hopper and Wassmer also asked for $3.9 million for losses and attorneys’ fees.

    The widow, Jo Hopper, asked the court to lower her award to $14.4 million, according to a filing from her lawyers disclosed Friday.

    The final award could go even lower. JPMorgan is seeking to reverse the entire judgment.

    The legal saga started when Max Hopper, a former American Airlines executive, died suddenly in 2010. Hopper had no will when he passed, so his family hired JP Morgan to administer the estate.

    And so began an unbelievably infuriating process for Hopper’s family, as the bank repeatedly refused to release Hopper’s assets, taking years to perform basic due diligence that should’ve been completed in weeks. Because of the bank’s negligence, stock options belonging to the Hopper’s were allowed to expire worthless.

    JPMorgan was hired to administer the estate and the bank should have divided the assets and released them to Jo Hopper and her stepchildren, according to the lawsuit. Instead, her lawyers said in a statement, “the bank took years to release basic interests in art, home furnishings, jewelry, and notably, Mr. Hopper’s collection of 6,700 golf putters and 900 bottles of wine. Some of the interests in the assets were not released for more than five years.’’

    The plaintiffs alleged that bank representatives failed to meet financial deadlines for assets under their control, stock options were allowed to expire, and Mrs. Hopper’s wishes to sell stock were ignored. Stephen Hopper and Laura Wassmer also claimed that the bank cut them out of decisions and kept them uninformed in order to curry favor with their stepmother.

    Jo Hopper initially sued the bank, alleging breach of fiduciary duty. JPMorgan paid legal fees to defend this out of the estate account, depleting it by more than $3 million, the plaintiffs’ said in court filings.

    Initially, the Texas probate court had awarded punitive damage awards of $2 billion each to Jo Hooper, the Hopper estate, Stephen Hopper and Laura Wassmer.

    JPMorgan has denied any wrongdoing and said it acted in good faith. “Clearly the award far exceeds any possible interpretation of Texas tort reform statutes,’” said Andrew Gray, spokesman for the bank.

  • The Grand Illusion 2.0

    Via Angry Bear blog,

    Introductory note: this is a very long epistle. But I think my point needs to be made fully and at length. Before you go further, in fairness here is the TL:DR version:

    • Advocates of free trade and globalization were taken aback a week ago by the assumption by China’s President Xi Jinping of rule for life.

    • This was because it runs completely contrary to their theory that free trade leads to economic liberalization, which in turn leads to political liberalization.

    • This theory has been repeatedly and thoroughly repudiated throughout history, most catastrophically be World War I.

    • That’s because autocrats will use the gains of economic trade for their own ends, typically the pursuit of further political and military power.

    • Historically middle classes do not revolt against autocracy when they are prospering, but rather only after a period of rising expectations has been dashed by an economic downturn in which the autocratic elite unfairly forces all of the burden onto them.

    • But since these historical facts are nowhere to be found in the economic models, they are ignored as if they do not exist. We can only hope they do not once again lead to catastrophe.

    First, let me pose a thought experiment.  Country A and Country B propose to enter into Agreement X. We have no idea at all what Agreement X is, but we know that the result will be that both Country A and Country B will each be richer by $1 Trillion each and every year thereafter.

    Country A, being an egalitarian paradise, is going to share out the proceeds equally among its population of 250 million, with each person getting $4,000 per year.

    The dictator of Country B is going to do the same with 1/2 of its $1 Trillion gain, making his population very happy, but — because this is his personal aim — he is going to spend the other $500 Billion each and every year in building up its military so that it can challenge and eventually vanquish Country A, and then keep all of the gains of Agreement X to itself.

    Should Country A enter into Agreement X?

    *  *  *

    A week ago The Economist opined that “The West’s Bet on China has Failed,” stating that:

    Last week China stepped from autonomy into dictatorship. That was when Xi Jinping … let it be known that he will change China’s constitution so that he can rule as president for as long as he chooses …. This is not just a big change for China but also strong evidence that the West’s 25 year long bet on China has failed.

    After the collapse of the Soviet Union, the West welcomed [China] into the global economic order. Western leaders believed that by giving China a stake in institutions such as the World Trade Organization would bind it into the rules based system … They hoped that economic integration would encourage China to evolve into a market economy and that, as its people grew wealthier, its people would come to yearn for democratic reforms ….

    CNN’s Fareed Zakaria recoiled in horror, writing in the Washington Post that

    [W]hat’s happening in China … is huge and consequential. China is making the most significant change to its political system in 35 years.

    For decades, China seemed to be getting more institutionalized…. But that trend has now been turned on its head. If term limits are abolished, which is now almost certain, Xi Jinping could stay China’s president, general secretary of the Communist Party and chairman of the Central Military Commission for the rest of his life. And he is just 64.

    … The real danger is that China is eliminating perhaps the central restraint in a system that provides staggering amounts of power to the country’s leaders. What will that do, over time, to the ambitions and appetites of leaders? “Power tends to corrupt,” Lord Acton famously wrote in 1887, “and absolute power corrupts absolutely.” Perhaps China will avoid this tendency, but it has been widespread throughout history.

    If Zakaria felt blindsided, he should not have been. Because ten years ago, after he published “The Post-American World,” arguing that because the US had successfully spread the ideals of liberal democracy across the world, other countries were competing for economic, industrial, and  cultural – but not military – power, I confronted him at the former TPM Cafe.

    For the truth is, the West’s bet on China, so ruefully mourned by The Economist and Zakaria, was always likely to fail. That free trade leads to economic and political liberalism and to peace – championed by neoliberal economists and their political retinue – has been a fantasy for over 100 years, and for 100 years it has been a lie. They would have known if their theories and equations could account for the likes of Kaiser Wilhelm II. But since their equations and theories are blind to the pursuit of power, they dismiss it — at horrible cost to the world.

    In an interview with David Frum, Minxin Pei, who a decade ago dissented, predicting that China would not transition towards true economic and political freedom, said it well:

    [M]any people were too dazzled by the superficial changes, especially economic changes, to realize that the Communist Party’s objective is to stay in power, not to reform itself out of existence. Economic reform or, to be more exact, adopting some capitalist practices and embracing market in some areas, is only a means to a political end…

    W]hen China was forced to keep the door [to liberalization] more open, it was in a weaker position relative to the forces outside—the West in general and the U.S. in particular. But when the conservative forces inside China gain strength while the West appears to be in decline, those forces are far more likely and able to close the door again, as is happening right now. So, while the logic of irresistible liberalization appears to be reasonable on the surface, it overlooks the underlying reality of power.

    I set set forth the fuller historical context a decade ago in my response to Zakaria,which I am taking the liberty of reposting in full immediately below.

    *  *  *

    Over at TPM Cafe, this week Fareed Zakaria’s new book, “The Post American World” is being discussed. In it, Zakaria repeats the theory of globalization’s most toxic and unproven claim: that countries which participate in trade together do not make war upon one another. So if you want to prevent war, just participate in deep and interwoven trade with the other country and everything will be hunky-dory.

    It’s a lie.

    Zakaria claims that We’re Living in Scarily Peaceful Times”:

    The new and most dangerous twist to all this is that our great looming danger is Russia, China, and the rising oil dictatorships…. This is a worldview bereft of any historical perspective. Compared with any previous era, there is more economic integration and even comity among the world’s major powers. The imbalance between the West and the rest is large, not complete but large and in most areas increasing. The newly emerging states want to grow within the existing world order, which John Ikenberry has nicely described as “easy to join and hard to overturn.” The world is going our way, slowly and fitfully, with some detours. No great power has an alternative model of modern life that has any real attraction?

    This is essentially the same argument that Thomas Friedman made in The Lexus and the Olive Tree’ and reiterated even a short time ago in this liveblog:

    You know in Lexus I wrote that no two countries would fight a war so long as they both had McDonald’s. And I was really trying to give an example of how when a country gets a middle class big enough to sustain a McDonald’s network, they generally want to focus on economic development. That is a sort of tipping point, rather than fighting wars.

    This argument, repeated over and over on both necoconservative and neoliberal sites, and all over the corporate media, that free trade leads to middle classes leads to democracy leads to kumbayah, is pretty simple, and it is dangerously wrong. Or as Zakaria reviewer David Rieff summarizes:

    he reads too much into into two indisputable facts of the current moment — that there are fewer major wars taking place than in living memory and that there is a greater level of global economic integration than at any time in history.

    The truth is, the free trade zealots also have spent too much of their careers seduced by neoclassical economics’ favorite mythical beast, Homo economicus, the Rational Man; and not enough time reading history.

    For a start, contrary to the free trade zealots, this is not the first period in world history in which there has been relatively “free” trade, nor is it the first time in which there has been “globalization.” For example, as is pointed out in an article entitled European Social Security and Global Politics By Danny Pieters, European Institute for Social Security Conference

    Globalisation is not a new phenomena. During the second part of the nineteenth century there was a strong move toward the liberalisation of international transactioins, and international trade expanded rapidly until the beginning of World War I

    And just which country in Europe was undergoing the most rapid growth and industrialization during the perioed from 1870-1914? As this essay states, Germany

    embarked upon an extensive education program; it specialised in technical ares and so there was a greater push in that direction. It produced more and better scientists, and so Germany began her industrial advance. Also, the French threat, even if it was superficial, spurred the Germans in authority into action, and made them make Germany stronger and superior.

    German expansion was also helped by the expansion of the railway network, so that goods and mail could get from one place to another, and to more places, faster and more efficiently.

    Needless to say,much like the mercantilist expanding autocracies now fawned over by so many of the free trade zealots, during this time Germany was a monarchy, ruled by the Kaiser.

    Even worse, this isn’t just the first time that economies have experience “globalization”, it also isn’t the first time that this exact same argument has been made. In his 1910 best-seller, “The Great Illusion” Norman Angell wrote that:

    the universal assumption that a nation, in order to find outlets for expanding population and increasing industry, or simply to ensure the best conditions possible for its people, is necessarily pushed to territorial expansion and the exercise of political force against others…. It is assumed that a nation’s relative prosperity is broadly determined by its political power; that nations being competing units, advantage in the last resort goes to the possessor of preponderant military force, the weaker goes to the wall, as in the other forms of the struggle for life.

    The author challenges this whole doctrine. He attempts to show that it belongs to a stage of development out of which we have passed that the commerce and industry of a people no longer depend upon the expansion of its political frontiers; that a nation’s political and economic frontiers do not now necessarily coincide; that military power is socially and economically futile, and can have no relation to the prosperity of the people exercising it; that it is impossible for one nation to seize by force the wealth or trade of another — to enrich itself by subjugating, or imposing its will by force on another; that in short, war, even when victorious, can no longer achieve those aims for which people strive….

    There is quite simply no difference at all between the theses of Angell a century ago, and Friedman and Zakaria now.

    And what happened only 4 years after “The Great Illusion” was published? Well, another book that Zakaria and Friedman ought to read is Vera Brittain’s autobiography, “Testament of Youth”. Vera Brittain was a comfortable affuent middle class girl who was accepted to Oxford University shortly before World War I broke out. By the time it was over, her brother, Edward; her fiance Roland Leighton; and every other young man she had been close to, had been killed. Brittain’s book is a searing documentary about the utter destruction of an entire generation of British young men caused by the war.

    Just how many people were killed by World War I?  One source puts just the number of military deaths at 10 million. Including the wounded, in some European countries over half of the entire generation of young men were casualties.  Another sourcesays:

    the percentage of a country’s population directly afflicted. During the course of World War One, eleven percent (11%) of France’s entire population were killed or wounded! Eight percent (8%) of Great Britain’s population were killed or wounded, and nine percent (9%) of Germany’s pre-war population were killed or wounded! The United States, which did not enter the land war in strength until 1918, suffered one-third of one percent (0.37%) of its population killed or wounded.

    Simply put, World War I is a thorough and devastating refutation of the argument that free trade leads to peace and democracy. Quite the contrary, had Zakaria and Friedman bothered to actually study history, they might have found out that revolutions typically do not occur in eras of increasing plenty. Rather, they occur in times where rising expectations have been dashed:

    the “J-curve” theory says that when conditions improve for a relatively long period of time, — and this is followed by a short economic reversal — an intolerable gap occurs between the changes that the people expect (dashed line) and what they actually get (solid line). Davies predicts that this is when revolution will occur (arrow).

    Support for this theory was found in a 1972 study of 84 nations. Researchers found a clear relationship between indications of political instability and economic frustration. “Frustrated countries” are those that had poor economic conditions — low economic growth, insufficient food, few telephones and physicians — while being acquainted with the higher living standards of industrialized, urbanized countries.

    These studies show that frustration is more likely to develop from relative frustration — the gap between their expectations and the reality that does not live up to these expectations. People in poor countries isolated from the outside world do not realize how poor or frustrated they are. Their frustrations are accepted merely as part of living. In contrast, the people in poorer countries exposed to modern standards feel more “frustrated.” To top this off, deprived people who have experienced some recent progress are more frustrated than those who experienced poverty and oppression.

    In short, just as Germans were hardly big agitators for democracy during the time the German state was expanding, and autocracy was resulting in greater prosperity, so we should not expect that any autocratic states today that are profiting mightily from economic growth are suddenly going to turn democratic. To the contrary, just like the Kaiser’s Germany, it is much easier to direct aggression elsewhere.

    Democratic revolutions occur when previously rising expectations have been dashed, and the populace has no outlet for their anger and frustration. In democracies, governments can be changed (as in 1932); but in autocracies, the ruler’s cronies are protected from the privations, and with no alternative avenue of recourse, and seeing the manifest injustice of the benefits of the system, the populace revolts.

    For example, Taiwan’s democratic reforms were sparked by the violence of the “Kaohsiung Incident” of 1979. Similarly, democracy finally came to South Korea in 1987 when workers finally rebelled against artificially low wages:

    South Korea is hardly a model of a free economy. The hand of government planners in setting priorities and steering companies has been heavy. The low wages that helped fuel growth did not result from market forces. For 25 years, successive governments deliberately held down pay rates. They virtually barred strikes, jailed militant labor leaders, and decreed tough guidelines for wage increases. To block development of independent unions, companies created their own and installed leaders acceptable to the government. Says a Western diplomat in Seoul: ”Union leaders were practically appointed by the national security police.” With democratic winds sweeping South Korea this summer, workers were emboldened to push for higher pay, independent unions, and the right to strike,

    [2018 update: Even the American Revolution had elements of this paradigm, as England reined in the colonist’s rising fortunes following the French and Indian War by taxing them for the costs, expanding the territory of Quebec to include all of what is now the American northern Midwest, and prohibiting expansion beyond the Appalachians.]

    It is a disgrace that we see these same discredited theses, this same Great Illusion, embraced by corporate media pundits so often. That free trade inevitably leads to peace and democracy is a Big and Dangerous Lie, to which World War 1 is the most spectacular and unequivocal counter-evidence.

    There is no guarantee, alas, that we are not now on that same catastrophic path.

    *  *  *

    In 2015, I reiterated this point more succinctly:

    A more fundamental point is about human nature.  In any economic downturn, the powerful elites are going to try to deflect all of the suffering on the powerless masses.  In a representative democracy, eventually the majority will rebel at the ballot box and elect a party which promises to end their suffering.  [Update: It might be a left-wing party, like Syriza in Greece or FDR’s New Deal democrats in the US, or it might be from the right-wing like AfD in Germany or Donald Trump.  ]

    In an authoritarian state, however, no such safety valve exists.  That’s why revolutions don’t happen in an era of rising expectations.  They happen when rising expectations are dashed.  So long as China’s economy continues to expand stoutly, expect no meaningful turbulence.  But someday China will have a recession, and then, dear reader, is when world history will get interesting.

    So here we are a decade later, and the free-trade economists and their acolytes are gobsmacked by something that was not just predictable, but actually predicted,  because there is no place in their theories for actual human behavior as revealed in history. We can only hope that when the inevitable happens, China will not lash out as Kaiser Wilhelm did a century ago.

  • Warren Buffett Is Now America's No. 2 Real-Estate Broker

    Warren Buffett’s Berkshire Hathaway is swallowing up market share in a business that Buffett said he “hardly noticed” when the company first acquired it in 2000.

    In light of the paucity of deals Berkshire struck last year, Buffett devoted ample space in this year’s annual report to touting the success of Berkshire’s HomeServices of America, which Buffett lauded for its rapid, if long overlooked, expansion over the past decade…

    I have told you several times about HomeServices, our growing real estate brokerage operation. Berkshire backed into this business in 2000 when we acquired a majority interest in MidAmerican Energy (now named BerkshireHathaway Energy). MidAmerican’s activities were then largely in the electric utility field, and I originally paid littleattention to HomeServices.

    But, year-by-year, the company added brokers and, by the end of 2016, HomeServices was the second-largest brokerage operation in the country – still ranking, though, far behind the leader, Realogy. In 2017, however, HomeServices’ growth exploded.

    We acquired the industry’s third-largest operator, Long and Foster; number 12, Houlihan Lawrence; and Gloria Nilson. With those purchases we added 12,300 agents, raising our total to 40,950. HomeServices is now close toleading the country in home sales, having participated (including our three acquisitions pro-forma) in $127 billion of “sides” during 2017.

    To explain that term, there are two “sides” to every transaction; if we represent both buyer and seller, the dollar value of the transaction is counted twice.

    Despite its recent acquisitions, HomeServices is on track to do only about 3% of the country’s home- brokerage business in 2018. That leaves 97% to go. Given sensible prices, we will keep adding brokers in this mostfundamental of businesses.

    Unfortunately for Buffett, limited supply and inflated valuations are beginning to weigh on purchases, with pending sales down more than 4% year-over-year.

    Pending

    And mortgage applications tumbling as rates rise.

    One factor contributing to this trend could be the lackluster growth in wages when compared with home valuations.

    Wage

    The broker buyouts were some of the only deals he touted in his letter to shareholders. The deals increased HomeServices transaction volume by 34%.

    And given the $100 billion cash pile burning a hole in Buffett’s pocket, we wouldn’t be surprised to see HomeServices continue absorbing its competitors – the only reliable growth strategy in a market as fractious as the real-estate brokerage business, according to Bloomberg

    Buffett

    The firm is expected to have only 3% market share in 2018. That leaves ample room for growth.

  • US Power Grid Vulnerable To "Devastating" Attack, NERC Finds

    Just as tensions between the US and North Korea are finally beginning to cool (while animosity between the US and Russia intensifies), a recent industry report argues the US government isn’t doing nearly enough to safeguard the US electric grid from a potentially devastating attack.

    In its report, the North American Electric Reliability Corporation (NERC) revealed that much of the US electricity grid is vulnerable to attack – and neither the industry or the government are doing anything about it. NERC is the organization responsible for overseeing the US’s massive electric grid, which is subdivided into eight regional entities.

    Though the report didn’t include a “comprehensive” assessment of the myriad physical threats to the US’s energy infrastructure, worries that North Korean could execute a massive electromagnetic pulse (or EMP) attack have been intensifying as the prospect of a nuclear showdown with the restive communist state looms large (Kim Jong Un’s recent actions aside). The research was also inspired by a series of gun attacks on transformers, including a rifle attack on a transformer in Utah that occurred in September 2016, according to the Washington Free Beacon.

    EMP

    Many organizations, including recently the National Academy of Sciences, have warned of the catastrophic consequences should a malicious actor – be it a state or a terrorist organization – manage to take down the US energy grid.

    “There is widespread belief that bulk power critical assets are vulnerable to physical attack, that such an attack potentially could have catastrophic consequences, and that the risks of such attacks are growing,” according to the report. “But the exact nature of such potential attacks and the capability of perpetrators to successfully execute them are uncertain.”

    “Although the electric power sector seems to be moving in the overall direction of greater physical security for critical assets, many measures have yet to be implemented and the process of corporate realignment around physical security is still underway,” according to the report, which omitted a comprehensive overview of all the pressing threats due to national security concerns.

    “The September 2016 rifle attack on a 69 kV transformer substation in Utah—which reportedly left 13,000 rural customers without power for up to eight hours—showed that similar incidents could occur almost anywhere on the grid,” the report warns.

    To be sure, the Edison Electric Institute has highlighted the fact that it would be nearly impossible to completely secure the grid (the costs would be immeasurable). However, the US could be doing a lot more than it’s doing.

    Electric

    A massive attack on the US energy grid could leave large swaths of the country without power without weeks or months. The end result would resemble Puerto Rico following last year’s devastating hurricane season – but on a much larger and deadlier scale.

    In this scenario, hundreds of thousands – if not millions of Americans – could die.

    “While to date there have been only minor attacks on the power system in the United States, large-scale physical destruction of key parts of the power system by terrorists is a real danger,” the academy warned. “Some physical attacks could cause disruption in system operations that last for weeks or months.”

    But unfortunately for the US citizens whose security is predicated on a functioning power grid, the power industry and US government have failed to organize a cohesive response to these threats. Because of the industry’s utter lack of preparation, even crude attacks could have devastating consequences.

    And while this month’s volatility in equity markets was deeply unsettling for millions of Americans, imagine what would happen to markets if the entire Atlantic seaboard lost power in an instant.

  • US Marines Testing Drone-Killing Future Weapons And Combat Exoskeletons

    Nearly 200 US Marines gathered at Southern California’s Camp Pendleton to test out an array of the military’s most advanced new weaponry – including several devices to disable or destroy Unarmed Aerial Vehicles (UAVs), and combat exoskeleton designed by Lockheed Martin which allows soldiers to carry loads of up to 200 lbs. over long distances.

    US Marine Corps Lance Cpl. Briar Purty, an infantryman with 3rd Battalion, 4th Marine Regiment, 1st Marine Division tests Drone Killer Counter-UAS Technology during Urban Advanced Naval Technology Exercise 2018 (ANTX-18) at Marine Corps Base Camp Pendleton, Calif. on March 21, 2018. US Marine Corps Photo

    Other weapons include “bomb-bearing and swarm-capable drones” already deployed against Russian military bases in Syria in January.

    (DoD demonstration video, Oct. 2016)

    “103 Perdix micro-drones launched from three U.S. Navy F/A-18 Super Hornet fighter jets. It demonstrated advanced swarm behaviors such as collective decision-making, adaptive formation flying, and self-healing. “Due to the complex nature of combat, Perdix are not pre-programmed synchronized individuals, they are a collective organism, sharing one distributed brain for decision-making and adapting to each other like swarms in nature,” said Strategic Capabilities Office (SCO) Director William Roper. “Because every Perdix communicates and collaborates with every other Perdix, the swarm has no leader and can gracefully adapt to drones entering or exiting the team.” 

    LaWS Laser Weapon System which shoots 30kw photon beam capable of burning holes in UAVs and confusing enemy vessel navigation systems

    Captain Ben Brewster’s rifle company would fight and operate under a “protective bubble” created by layering offensive and defensive UAVs – both “organic to the company” and from the larger Marine air-ground task force which would include systems and equipment designed to kill or neutralize enemy drones – reports U.S. Naval Institute News.

    PHASR (Personnel Halting and Stimulation Response) rifle fires blinding green laser to dazzle the enemy. 
    s
    “Drone swarm” prototypes

    I’ve never had to deal with IEDs that can attack me…from quadcopters,” said Brewster, commander of Kilo Company, 3rd Battalion, 4th Marines.

    Three drones flitted overhead at the Range 131 Military Operations on Urbanized Terrain (MOUT) facility here, and an “enemy” drone – a bat-wing-shaped UAS – sliced through the air as Third Platoon moved among buildings around a town square.

    “Anyone of these could have a two-pound IED (improvised explosive device)” or act as a spotter or command-and-control for an enemy force, he said.

    “I need the ability for my Marines to be able to jam these drones,” he added. –USNI

    US Marines with 3rd Battalion, 4th Marine Regiment, 1st Marine Division test unmanned vehicle at Marine Corps Base Camp Pendleton, Calif. on March 21, 2018. US Marine Corps Photo

     

    And with the expected crowded urban skies, he noted, Marines will need systems to help sort friend from foe in the air, along with counter-UAS technology with directional jamming capabilities. “Trying to figure out that part is what we’re experimenting” during U5G, he added.

    Several naval warfare centers and military laboratories joined 48 companies for U5G, showcasing 79 technologies that included sensors that see through walls, facial recognition software, “smart” networked radio, micro drones and an enhanced thermal imager with displayed information, as well as vehicles, weapons and munitions.

    The Marine Corps Warfighting Laboratory and the Deputy Assistant Secretary of the Navy for Research, Development, Test and Evaluation are hosting U5G, the latest in a series of Advanced Naval Technology Exercises (ANTX) where military research and development organizations join with industry to demonstrate rapidly-emerging technologies and concepts. It follows on last year’s Ship-to-Shore Maneuver Exploration and Experimentation Advanced Naval Technology Exercise at Camp Pendleton that solicited and examined dozens of concepts like drones, mobile networks and unmanned boats to support Marines operating at sea and landing ashore. –USNI.org

     Read more here

  • "Huge Caravan" Of Central American Refugees Is Headed For The U.S. Border

    Over 1,500 Central Americans are on a crusade across Mexico in the hopes of being granted asylum at the U.S. border – a move which is set to pose an enormous challenge to the Trump administration’s much campaigned about immigration policies, while reminding Trump’s base that they still don’t have the wall they elected him to build 14 months into his presidency. 

    “We want to become one, supporting us shoulder to shoulder and show that together we can break down borders,” say the caravan’s organizers.

    Luc Forsyth for BuzzFeed News

    Setting out six days ago and marching under the slogan “Migrantes en la lucha” (“Migrants in the Fight”) during holy week, the caravan comprised mostly of Hondurans was organized roughly a month ago by the mysterious group Pueblo Sin Fronteras (People Without Borders) – which solicited donations via Facebook and encouraged volunteers to contact them. 

    ”Our mission is to provide shelter and safety to migrants and refugees in transit, accompany them in their journey, and together demand respect for our human rights,” reads the group’s mission statement.

    The Central American migrants, mostly Hondurans and Guatemalans, flee their countries because of insecurity and because they are threatened by gang members, also because of the economic and political situation in the region. –proceso.hn (translated)

    The crime rate is horrible, you can’t live there,” a migrant named “Karen” told BuzzFeed News on the side of a highway near the Southern Mexico town of Huixtla. “After the president [was sworn in] it got worse. There were deaths, mobs, robbed homes, adults and kids were beaten up.”

    “They want to reach the border and ask for asylum, the majority flee from gang violence, extortion and police abuses,” says one of the organizers named Garibo.

    a

    Before setting out on the journey, the migrants were organized into groups of 10 to 15 people, and a leader was designated for each group. Five groups were then banded together in what organizers call a sector. While there are organizers from Pueblos Sin Fronteras leading the way, much of the effort to get to the US border is in the hands of the migrants themselves. –BuzzFeed

    Migrants gathered for the march in the southern Mexico border town of Tapachula in advance of the march – where Pueblo Sin Fronteras conducted introductory workshops to help the Central Americans best navigate the United States once they arrive – including security drills in which male refugees are to form a wall around any threats to the women and children.

    Help along the way

    Despite a majority of the Hondurans being in Mexico illegally – which Mexican authorities have historically been stringent about, the caravan has not been stopped on its journey, and people from Mexican towns along the way have been helping the migrants. 

    The group is also planning to take “the Train of Death” in Arriaga in order to expedite the journey north, and several towns have provided buses to help the migrants along.

    a
    “La Bestia,” Train of Death (Luc Forsyth for BuzzFeed News)

    …children, women, and men, most of them from Honduras — have boldly crossed immigration checkpoints, military bases, and police in a desperate, sometimes chaotic march toward the United States. Despite their being in Mexico without authorization, no one has made any effort to stop them. –BuzzFeed

     

    Here the migrants are seen boarding covered hopper freight railcars.

    A video shows the migrants marching on the tracks and preparing to board the train in Arriaga.

    In the train boarding video, a DJI Mavic Pro drone worth $1,000 to $1,300 USD was spotted. The march is depicted as a grassroots effort, but perhaps, there is some big money behind the movement.

    BuzzFeed reporter Adolfo Flores has been embedded with the caravan, providing updates over Twitter:

    About 80% of them are from Honduras. Many said they are fleeing poverty, but also political unrest and violence that followed the swearing in of Honduran President Juan Orlando Hernández after a highly contested election last year. The group often breaks into chants of “out with JOH.” They also chant “we aren’t immigrants, we’re international workers” and “the people united will never be defeated.

    Still, there are no guarantees on the route or assurances that once they reach the US border they’ll be able to cross undetected or be allowed to stay under some type of protection like asylum.

    Alex Mensing, another organizer with Pueblos Sin Fronteras, made that point clear to the migrants before the group started out. He also stressed that everyone is responsible for their own food, water, and payment for vans or buses. Still, it’s far cheaper than being assaulted or falling into the hands of unscrupulous smugglers. –BuzzFeed

    Here they come! 

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Today’s News 31st March 2018

  • California Woman Refuses To Sell Home To Trump Supporters

    A Sacramento woman selling a house which has been in her family for half a century will sell to just about anyone – unless they’re a Trump supporter.

    The homeowner, who has declined to give her name, told CBS Sacramento “I told her [the realtor] that I didn’t want her to sell it to a Trump supporter.”

    The woman’s realtor, Elizabeth Weintraub, says that the “no Trump supporter” caveat is a first for her. “We can ask somebody how they voted, but they don’t have to tell us,” said Weintraub.

    But is it actually legal? Attorney Allen Sawyer thinks not: “That’s an unlawful contractual term that infringes the freedom of association and first amendment rights,” said Sawyer.

    According to the Fair Housing Act, political party affiliation doesn’t fall into one of the seven protected classes. They include race, religion, color, disability. National origin, sex and familial status. –CBS Sacramento

    “People have a right to believe what they want to believe and they shouldn’t be restricted from purchasing property based on that,” said Sawyer.

    Either way – the seller is clearly limiting the buying pool according to certified appraiser Ryan Lundquist – who notes that “39 percent of voters voted for Donald Trump in the Sacramento region. That’s an absolute fact.” 

    The homeowner doesn’t care: “When you’re talking about principals, morals, and ethics, it’s very very deep,” she said. 

     

  • The Death Of The Liberal World Order

    Authored Leonid Savin via Oriental Review,

    A few days ago the president of the Council on Foreign Relations, Richard Haass, published an article, titled “Liberal World Order, R.I.P.” In it, he states that the current threat to the liberal world order is coming not from rogue states, totalitarian regimes, religious fanatics, or obscurantist governments (special terms used by liberals when referring to other nations and countries that have not pursued the Western capitalist path of development), but from its primary architect — the United States of America.

    Haass writes: Liberalism is in retreat. Democracies are feeling the effects of growing populism. Parties of the political extremes have gained ground in Europe. The vote in the United Kingdom in favor of leaving the EU attested to the loss of elite influence. Even the US is experiencing unprecedented attacks from its own president on the country’s media, courts, and law-enforcement institutions. Authoritarian systems, including China, Russia, and Turkey, have become even more top-heavy. Countries such as Hungary and Poland seem uninterested in the fate of their young democracies…

    “We are seeing the emergence of regional orders. Attempts to build global frameworks are failing.”

    Richard Haas

    Haass has previously made alarmist statements, but this time he is employing his rhetoric to point to the global nature of this phenomenon. Although between the lines one can easily read, first of all, a certain degree of arrogance — the idea that only we liberals and globalists really know how to administer foreign policy — and second, the motifs of conspiracy.

    “Today’s other major powers, including the EU, Russia, China, India, and Japan, could be criticized for what they are doing, not doing, or both.”

    Probably this list could be expanded by adding a number of Latin American countries, plus Egypt, which signs arms deals with North Korea while denying any violation of UN sanctions, and the burgeoning Shiite axis of Iran-Iraq-Syria-Lebanon.

    But Haass is crestfallen over the fact that it is Washington itself that is changing the rules of the game and seems completely uninterested in what its allies, partners, and clients in various corners of the world will do.

    America’s decision to abandon the role it has played for more than seven decades thus marks a turning point. The liberal world order cannot survive on its own, because others lack either the interest or the means to sustain it. The result will be a world that is less free, less prosperous, and less peaceful, for Americans and others alike.”

    Richard Haass’s colleague at the CFR, Stewart Patrick, quite agrees with the claim that it is the US itself that is burying the liberal world order. However, it’s not doing it on its own, but alongside China. If the US had previously been hoping that the process of globalization would gradually transform China (and possibly destroy it, as happened to the Soviet Union earlier), then the Americans must have been quite surprised by how it has actually played out. That country modernized without being Westernized, an idea that had once been endorsed by the leader of the Islamic revolution in Iran, Ayatollah Khomeini.

    Now China is expanding its influence in Eurasia in its own way, and this is for the most part welcomed by its partner countries.

    But this has been a painful process for the US, as it is steadily and irrevocably undermining its hegemony.

    “Its long-term ambition is to dismantle the U.S. alliance system in Asia, replacing it with a more benign (from Beijing’s perspective) regional security order in which it enjoys pride of place, and ideally a sphere of influence commensurate with its power.

    China’s Belt and Road initiative is part and parcel of this effort, offering not only (much-needed) infrastructure investments in neighboring countries but also the promise of greater political influence in Southeast, South, and Central Asia. More aggressively, China continues to advance outrageous jurisdictional claims over almost the entirety of the South China Sea, where it continues its island-building activities, as well as engaging in provocative actions against Japan in the East China Sea,” writes Patrick.

    And as for the US:

    “The United States, for its part, is a weary titan, no longer willing to bear the burdens of global leadership, either economically or geopolitically.

    Trump treats alliances as a protection racket, and the world economy as an arena of zero-sum competition. The result is a fraying liberal international order without a champion willing to invest in the system itself.

    One can agree with both authors’ assessments of the changed behavior of one sector of the US establishment, but this is about more than just Donald Trump (who is so unpredictable that he has staffed his own team with a member of the very swamp he was preparing to drain) and North American populism. One needs to look much deeper.

    In his book, Nation of Devils:  Democratic Leadership and the Problem of Obedience, Stein Ringen, a Norwegian statesman with a history of service in international institutions, notes:

    “Today, American democratic exceptionalism is defined by a system that is dysfunctional in all the conditions that are needed for settlement and loyalty…

    Capitalism has collapsed into crisis in an orgy of deregulation. Money is transgressing into politics and undermining democracy itself.”

    And, quoting his colleague Archon Fung from the Harvard Kennedy School, “American politics is no longer characterized by the rule of the median voter, if it ever was. Instead, in contemporary America the median capitalist rules as both the Democratic and Republican parties adjust their policies to attract monied interests.” And finally Mr. Ringen adds, “American politicians are aware of having sunk into a murky bog of moral corruption but are trapped.”

    Stein Ringen

    Trump merely reflects the dysfunctionality and internal contradictions of American politics. He is the American Gorbachev, who kicked off perestroika at the wrong time. Although it must be conceded that if Hillary Clinton had become president, the US collapse would have been far more painful, particularly for the citizens of that country. We would have seen yet more calamitous reforms, a swelling influx of migrants, a further decline in the nation’s manufacturing base, and the incitement of new conflicts. Trump is trying to keep the body of US national policy somewhat alive through hospice care, but what’s really needed is a major restructuring, including far-reaching political reforms that would allow the country’s citizens to feel that they can actually play a role in its destiny.

    These developments have spread to many countries in Europe, a continent that, due to its transatlantic involvement, was already vulnerable and susceptible to the current geopolitical turbulence. The emergence of which, by the way, was largely a consequence of that very policy of neoliberalism.

    Stein Ringen continues on that score:

    “Global financial services exercise monopolistic power over national policies, unchecked by any semblance of global political power. Trust is haemorrhaging. The European Union, the greatest ever experiment in super-national democracy, is imploding …”

    It is interesting that panic has seized Western Europe and the US — the home of transatlanticism, although different versions of this recipe for liberalism have been employed in other regions — suffice it to recall the experience of Singapore or Brazil. But they don’t seem as panicked there as in the West. Probably this is because the Western model of neoliberalism does not provide any real freedom of commerce, speech, or political activity, but rather imposes a regime of submission within a clearly defined framework. Therefore, the destruction of the current system entails the loss of all those dividends previously enjoyed by the liberal political elites of the West that were obtained by speculating in the stock market, from the mechanisms of international foreign-exchange payments (the dollar system), and through the instruments of supranational organizations (the UN, WTO, and World Bank). And, of course, there are the fundamental differences in the cultural varieties of societies.

    In his book The Hidden God, Lucien Goldmann draws some interesting conclusions, suggesting that the foundations of Western culture have rationalistic and tragic origins, and that a society immersed in these concepts that have “abolish[ed] both God and the community … [soon sees] … the disappearance of any external norm which might guide the individual in his life and actions.” And because by its very nature liberalism must carry on, in its mechanical fashion, “liberating” the individual from any form of structure (social classes, the Church, family, society, and gender, ultimately liberating man from his very self), in the absence of any standards of deterrence, it is quite logical that the Western world was destined to eventually find itself in crisis. And the surge of populist movements, protectionist measures, and conservative policies of which Haass and other liberal globalists speak are nothing more than examples of those nations’ instinct for self-preservation. One need not concoct conspiracy theories about Russia or Putin interfering in the US election (which Donald Trump has also denied, noting only that support was seen for Hillary Clinton, and it is entirely true that a portion of her financial backing did come from Russia). The baseline political decisions being made in the West are in step with the current crisis that is evident on so many levels. It’s just that, like always, the Western elites need their ritual whipping boy(although it would be more accurate to call it a human sacrifice). This geopolitical shake-up began in the West as a result of the implicit nature of the very project of the West itself.

    But since alternative development scenarios exist, the current system is eroding away. And other political projects are starting to fill the resultant ideological void — in both form as well as content.

    Thus it’s fairly likely that the current crisis of liberalism will definitively bury the unipolar Western system of hegemony.

    And the budding movements of populism and regional protectionism can serve as the basis for a new, multipolar world order.

  • Visualizing The Relationship Between Money & Happiness

    Can money buy you happiness?

    It’s a longstanding question that, as Visual Capitalist’s Jeff Desjardins notes, has many different answers, depending on who you ask.

    Today’s chart approaches this fundamental question from a data-driven perspective, and it provides one potential solution: money does buy some happiness, but only to a limited extent.

    MONEY AND HAPPINESS

    First, a thinking exercise.

    Let’s say you have two hypothetical people: one of them is named Beff Jezos and he’s a billionaire, and the other is named Jill Smith and she has a more average net worth. Who do you think would be happiest if their wealth was instantly doubled?

    Beff might be happy that he’s got more in the bank, but materially his life is unlikely to change much – after all, he’s a billionaire. On the flipside, Jill also has more in the bank and is likely able to use those additional resources to provide better opportunities for her family, get out of debt, or improve her work-life balance.

    These resources translate to real changes for Jill, potentially increasing her level of satisfaction with life.

    Just like these hypotheticals, the data tells a similar story when we look at countries.

    THE DATA-DRIVEN APPROACH

    Today’s chart looks at the relationship between GDP per capita (PPP) and the self-reported levels of happiness of each country. Sources for data are the World Bank and the World Happiness Report 2017.

    Courtesy of: Visual Capitalist

    According to the numbers, the relationship between money and happiness is strong early on for countries. Then later, when material elements of Maslow’s hierarchy are met, the relationship gets harder to predict.

    In general, this means that as a country’s wealth increases from $10k to $20k per person, it will likely slide up the happiness scale as well. For a double from $30k to $60k, the relationship still holds – but it tends to have far more variance. This variance is where things get interesting.

    OUTLIER REGIONS

    Some of the most obvious outliers can be found in Latin America and the Middle East:

    In Latin America, people self-report that they are more satisfied than the trend between money and happiness would predict.

    Costa Rica stands out in particular here, with a GDP per capita of $15,400 and a 7.14 rating on the Cantril Ladder (which is a measure of happiness). Whether it’s the country’s rugged coastlines or the local culture that does the trick, Costa Rica has higher happiness ratings than the U.S., Belgium, or Germany – all countries with far higher levels of wealth.

    In the Middle East, the situation is mostly reversed. Countries like Saudi Arabia, Qatar, Iran, Iraq, Yemen, Turkey, and the U.A.E. are all on the other side of the trend line.

    OUTLIER COUNTRIES

    Within regions, there is even plenty of variance.

    We just mentioned the Middle East as a place where the wealth-happiness continuum doesn’t seem to hold up as well as it does in other places in the world.

    Interestingly, in Qatar, which is actually the wealthiest country in the world on a per capita basis ($127k), things are even more out of whack. Qatar only scores a 6.37 on the Cantril Ladder, making it a big exception even within the context of the already-outlying Middle East.

    Nearby Saudi Arabia, U.A.E., and Oman are all poorer than Qatar per capita, yet they are happier places. Oman rates a 6.85 on the satisfaction scale, with less than one-third the wealth per capita of Qatar.

    There are other outlier jurisdictions on the list as well: Thailand, Uzbekistan, and Pakistan are all significantly happier than the trend line (or their regional location) would project. Meanwhile, places like Hong Kong, Ireland, Singapore, and Luxembourg are less happy than wealth would predict.

  • What Happens When Your Money Is Worthless? Living With A Devalued Currency

    Authored by J.G.Martinez via Daisy Luther’s Organic Prepper blog,

    This is one of the most important and valued articles to help you prepare. I think it could be useful, based on our experience with the economic collapse and its effects on the currency. Let me tell you what life is really like when your country has a devalued currency that is nearly worthless.

    How do you buy things with devalued currency?

    These last few days I was asked by a fellow prepper overseas how our internal trading, with such a devalued currency, was going on. He asked if we used silver coins and bartering. I answered him that we use mostly US dollars and Euros for large transactions like vehicles, land, and housing, as far as I know. But the reason people are mostly selling is that they are desperate to get out of the country, and the wealth they have accumulated in previous years vanishes, with the bad deals they seem forced to accept.

    On the other hand, for day-to-day payments, bolivars are still used, but the prices go up (always UP by the way) depending on the black market dollar price. This is, though, a perfect evidence that this black market dollar is controlled by the government: look at the evolution price, and you will find it stable just before any important election, political campaigns and such.

    This is no surprise, those who benefit the most from this black market are those “companies” that aligned with the dollar river…and nowadays that stream is getting dry.

    Bad news for oil industry workers

    I received very bad news for those still working in the oil industry. So you can understand what is in store for the employees, I have to explain some background first.

    As part of our monthly payment, we received a savings incentive: the company retained the 12.5% of our salary in their accounts until the end of the month, and provided another 12.5% (it sounds like a lot but it is not). So, by the end of the month, we had in the corporative account an additional 25%.

    This was one of the main benefits for the oil state workers, and that helped to deal with the high performance demanded by the industry. This money, during better times, was kept there until the end of the year, for a new car, or starting a side business,  some fancy vacations, and stuff. However I never used it for traveling overseas, but invested in land, some prepping gear and equipment, assisting my parents and my wife’s family, and short family trips from time to time to the beach, or my folks’ place and such.

    We had something like your 704(k), that could be retrieved from the corporative accounts to our payroll bank account. This supposedly was for the retirement of the employees. The economy tanked so fast that this is worthless now.

    In one of the speeches a few days ago, the new “cryptocurrency” that is not such, the Petro, is going to substitute the national currency in the savings additions for the employees. My friends that still remain working there told that it was going to be an “option” at first.

    But we all know that this is just a way to IMPOSE the Petro on the people and inject it in the national economy despite the US sanctioning. Add to this the fact that most of the workers have NO idea about how to trade with it, nor how to exchange it for food as they use to do with the savings incentive. See my point?. They cut off the employees revenue and give them a worthless “crypto” that is useless.  How is going to buy food with that a 58-year-old secretary, for example, without other computer skills than using the social networks, the email and word processors? Even worse, they are FORCING the employees to accept a currency that is prohibited by the US financial authorities, they will be subject to the sanctioning automatically, completely unwilling to trade with that crypto.

    What concerns me the most, is that the presidential speech announced that everyone who wants to sell their properties will have to do it in cryptocurrency. (I have the audio file to prove it) This is nothing more than the imposition of the convertible Cuban peso. The hard currencies for the elites, the USDs and Euros, and the garbage currencies that they worked so hard to destroy, for the ignorant, starving masses.

    The dangers of alternative trade

    It is unlikely to see someone paying with silver coins, as far as I am aware. Bartering? Sure, but that is mostly in the rural communities. In the cities, bartering is not common. There are some brave initiatives to start paying employees with a dozen eggs a week, additional to the salary, as an incentive. I have seen it in the newspaper ads.

    This said, I have seen real bargains in collectible coins, some silver 1-ounce coins memorabilia of our independence, called “doblones” commonly found here, which means people have used them as wealth storage.

    The problem is that if you need to buy food with devaluated currency, perhaps you won´t get as much as you need. The currency will be valued by your seller. However, I am sure that if this becomes much more common, in the communities far away from the major cities some sort of local economy will soon be in place.

    Some nuts are trying to impose an alternative currency named “Elorza” (you may want to google search it) in a frontier town with the same name in the Apure state. This is, besides being illegal, is delusional. Years ago I bought a couple of doblones that were not cased; the following year I needed cash and wanted to sell them, at the silver spot price with a plus, but the buyers that contacted me did not want to pay the fair price, even though the silver was down about $2 under the original price I paid for. So I went to a jeweler and could sell them there.

    This means that they could be used as currency, but it depends on the culture of the society whether they will accept it or not. The total of those doblones is 20.000, so their value should increase every year. There are some other commemorative coins, but people are negotiating them in dollars because most of the people want to leave the country.

    There has been a place, in a major city, where you barter or exchange your goods for something else that you may need, but criminals made impossible to keep this kind of flea market in public places. I have received alarming reports from friends in the coastal fishing towns. The “colectivos” gang are now forcing the small fishermen to sell them their catch of the day at gunpoint. Ar-15s at the shoulder and all. Then they sell the fish to the people at 3 times the price they pay the fishermen.

    The national guard and police do not get involved. They just receive their fee: milk crates filled up with devalued bills. The source of this information is highly trusted, so I can write about this with confidence. It was a friend of mine, a former co-worker who was there and saw everything from his car. His parents live in this coastal city, called Cumana. He was going to buy but after that, he decided to go to a supermarket. The beach market where people used to buy fresh at lower prices is no longer secure.

    Other types of enterprise

    My father has been working over 25 years as a repairman for electrical farm equipment. Pumps, mill engines, alternators, generators, that kind of stuff. He has been lately charging his customers and receiving staples and supplies: corn flour, pasta, rice, even pork meat, poultry, cheese, eggs and such. When customers don’t have a way to pay, he has also made repairs and received as payment lots of old, worn, used spare parts that he  rebuilds whenever he finds some idle time. Once the parts are fully functional, he trades or sells them.

    He is a smart trader and always get an edge on his deals. What the customers see as junk he knows that someone else will need it once it is repaired, and he has a good network. Almost everyday someone knocks at his door looking for a spare part. He has adapted all kind of equipment, even upgrading with modern, efficient components, or simplifying some complex control systems. He often gets the parts he has removed as part of his payment, and sometimes the clients are so happy and satisfied with their equipment being up and working again that they just give the parts away to him. So he has always has a lot of spares in his small workshop at home, and a captive market for this. My brother has been learning from him, and he is slowly gaining the needed skills to keep the family business running.

    Suggestions for preparing for a time when your currency has no value

    I would suggest that small, close communities who are self-reliance oriented start working on a plan with some guidelines in the macro aspects of the economy.

    • Which coins would be accepted, based on their precious metal content?

    • What about electronic devices like thumbdrives, Sds, solar panels?

    • Think about everything that could have an intrinsic/bartering value.

    • YES, drinkable alcohol is one of the best currencies you could stockpile. Even better if you know how to produce it. I have known that our local beer factory in my former town is producing pumpkin and tapioca beer! Is that great or what?

    Accumulation of some cash is good, even if it is devalued currency. It saved my sorry backside to be able to leave at the best possible time. But without the needed knowledge, skills and intuition about where things were really going, it would have been much more difficult.

  • Easter Egg Costs Soar Near Record High

    With the long weekend upon us, whether you’re Christian or not, it seems the chocolatey-goodness of Easter appeals to almost all Americans (with 84% planning to celebrate this year), although only half of those celebrating are planning a church visit.

    Statista’s Felix Richter points out that the following infographic shows which holiday customs Americans are particularly fond of, what gifts they plan to give and what it is they consider most important about Easter.

    Infographic: Easter in the United States 2018 | Statista

    You will find more infographics at Statista

    However, the cost of Easter is soaring

    Egg prices in the U.S. have surged close to a record high, just in time for Easter when demand normally rises.

    As Bloomberg reports, the wholesale cost of a dozen eggs in the Midwest has more than doubled in the five weeks through March 23 to $2.71, U.S. Department of Agriculture data show, the highest since a bird-flu outbreak in August 2015.

    A large laying-hen flock bodes well for ample egg supplies ahead, meaning despite higher prices, omelettes can likely stay on the menu.

  • Judge Rules California Starbucks Must Have Cancer Warnings On Their Coffee

    In what is only the latest outrageous ruling by a California judge so far this year, Starbucks and a handful of other coffee chains lost a yearslong legal battle against a consumer advocacy group trying to force coffee companies to attach cancer warnings to their packaging, according to Reuters

    The Council for Education and Research on Toxics (CERT) sued 90 coffee retailers on the grounds they were in violation of a state law requiring companies to warn consumers about potentially cancerous chemicals in their products. Several defendants settled before the final decision and agreed to post the signage and pay millions in fines.

    Coffee

    A chemical called acrylamide, which is one of the byproducts of roasting coffee beans, is present in brewed coffee and is listed as a potential carcinogen. CERT’s lawsuit was filed back in 2010.

    Per Reuters, Los Angeles Superior Court Judge Elihu Berle ruled in a decision dated Wednesday that the defendants in the lawsuit had failed to prove that coffee isn’t a carcinogen.

    Of course, Starbucks’ lawyers aren’t the only ones having difficulty proving this.

    Research shows that coffee can lower the incidence of diabetes and liver disease – and even prolong life. The World Health Organization removed coffee from its “possible carcinogen” list in 2016.

    One professional researcher contacted by CBS said there’s not enough evidence, in his opinion, to warrant such a warning label on coffee. Coffee companies have said removing acrylamide from brewed coffee would make it implausibly expensive and difficult to prepare in stores.

    Others have said that if the potato chip industry was able to remove acrylamide from its product (which it did after being sued by CERT), Big Coffee could also accomplish it.

    But regardless of whether a warning is truly warranted, many California coffee shops already hang warnings advising customers about the dangers of acrylamide.

    But what’s worse for companies like Starbucks is that if the industry loses the inevitable appeal (companies have already said they’re “considering it”), the judge could impose a stiff civil penalty. By law, it could be as high as $2,500 per person exposed and per incident over the span of eight years. That could be an astronomical figure in California, the most populous state in the US, with 40 million residents.

    If the ruling does stand, coffee companies might decide it’s easier and cheaper to print warnings on all of their packaging – rather than producing separate packaging just for California.

    So once again, the impact of a California judge’s ruling will be felt across the entire country.

  • Xi Jinping And Kim Jong-Un: Make Korea United Again!

    Authored by Federico Pieraccini via The Strategic Culture Foundation,

    Kim Jong-un’s visit reveals much about the tactics that will be used in the negotiations between the Korean leader and the American president; it also consolidates a historical relationship between Pyongyang and Beijing.

    The recent meeting in Beijing between the two supreme leaders of DPRK and China has captured global attention. The summit remained secret throughout its duration, revealed by the Chinese leader only when the visit had ended and the Korean leader was on his way back home. Rumours of the encounter continued to be denied by the Chinese foreign minister right up to Tuesday. The denials had a lot to do with the fact that a positive outcome for the meeting, this being the first one, could not be guaranteed. The final statements, the relaxed atmosphere, the many images displaying mutual smiles and acknowledgement reveal that the two leaders of the Chinese and Korean Communist parties are on the same page. Despite wishful thinking from the US, which interpreted the lack of meetings in previous years as a change in Chinese attitudes towards North Korea, the meeting highlighted positive impressions by Xi Jinping about the developments on the peninsula as well as confirmed the strategic thinking of Kim Jong-un.

    Kim Jong-Un’s strategy deserves particular attention. The ability to deter aggression from the United States and South Korea existed well before Pyongyang’s development of a nuclear deterrent, thanks to the enormous number of artillery guns it has directed towards Seoul. A possible conflict would have caused millions of deaths, destroyed the American forces on the peninsula (the American bases would have been the first to be eliminated, really only being there to serve as a tripwire), and upset the alliance with Seoul, which would have borne an unacceptable toll. Kim Jong-un and his father had already secured a powerful enough deterrent to ward off aggression against their country. The strategy behind developing nuclear weapons becomes more clear following the just-concluded meeting with Xi Jinping.

    Kim Jong-un’s willingness to meet Donald Trump in bilateral talks, and the possibility that Pyongyang will give up its nuclear arsenal, stand out. The meeting with Xi Jinping in all likelihood focused on the demands to be made to Trump: the removal of the North American presence in the south of the country is something on which China and DPRK are in strong agreement. The desired outcome for Beijing and Pyongyang (but also for Moscow) would see Washington remove its forces from South Korea in exchange for opening up North Korea’s sites to international inspections. China and Russia would be happy to see the US threat to their nuclear deterrence removed (even if, with the latest hypersonic weapons revealed by Putin, the problem does not seem to arise). This would also bring great advantages to Seoul, which could embark on a rapprochement with the North, starting with a possible reunification of the peninsula; and under the economic and energetic aegis of Russia and China, the peninsula could be included in the One Belt One Road (OBOR), as well as as benefitting from Moscow’s gas.

    Of course this scenario clashes with the recent appointments of Mike Pompeo and John Bolton to the top of the American administration, confirmed by the threat of dissolving the Joint Comprehensive Plan of Action (JCPOA) reached with Iran, undoing a deal reached through the efforts of multiple countries. The consequences would be significant, with the United State coming across as an unreliable state in international relations.

    This aspect for Pyongyang, Beijing, Moscow and even Seoul counts up to a certain point. The extraordinary diplomatic message that Kim Jong-un and Xi Jinping have sent to allies and adversaries alike is that to allow for peace and the possibility of reunification for the Korean peninsula, Kim is apparently willing to renounce his nuclear weapons, his most important deterrent. But interestingly, North Korea has always been able to rely on its formidable conventional deterrent to guarantee its security anyway. For the survival of Kim and his circle, thousands upon thousands of artillery pieces aimed at Seoul are enough to keep any potential aggressor at bay. Another obvious consideration is that any use by Kim of his nuclear weapons against the United States or its allies would result in the total annihilation of the DPRK. So the question remains: if North Korea has always guaranteed its survival through its conventional deterrence, why has it developed a nuclear deterrent as well on top of this? The most logical answer is so as to bring the United States to the negotiating table.

    Pyongyang’s stroke of diplomatic and strategic genius lies in getting the United States to abandon the Korean peninsula in exchange for North Korea renouncing its nuclear arsenal. This hypothesis puts Kim Jong-un on the positive side of the negotiations, coming across as a reasonable and serious negotiating partner willing to find a way to guarantee peace on the whole peninsula. If Kim Jong-un is willing to give up what apparently, until yesterday, seemed impossible in the interests of reaching an agreement to ensure the survival of the two Koreas, then Pyongyang is presenting itself as Seoul’s guarantor of peace. The message Moon Jae-in could receive from the negotiations is that an “enemy” like North Korea is willing to give up its most significant weapon, while the Americans march in with the likes of Bolton and Pompeo, ready to slam their fists on the negotiating table by refusing to make any concessions.

    While Kim Jong-un has every intention of placing any blame for a failure of negotiations on the American side, and seems to have all the reasons ready in place to do so, the meeting between Kim Jong-un and Xi Jinping seems aimed at laying the groundwork to break the alliance between Seoul and Washington. We can already imagine the scene, with Pyongyang ready to renounce its nuclear weapons, Seoul ready to enter into dialogue about the reunification of the country, China and Russia happy with the denuclearization of the North, and above all, the elimination of the prospects of a terrible war on the peninsula. In this climate, Washington would be left completely isolated in refusing to entertain any prospect of abandoning the peninsula. Thanks to its less-than-perfect relations with its European allies, and its intention to annul the Iranian JCPOA, Washington would leave itself looking like it is neither able to keep its promises nor willing to pursue any credible diplomatic path.

    The reality is that an overall agreement between North Korea and the United States is practically impossible for one fundamental reason: the United States uses the excuse of having to protect South Korea to maintain a permanent presence on the peninsula for the purposes of containing China and Russia, both through missile defense and by maintaining a military presence near their borders. For this reason, while Moscow and Beijing have multiple reasons for seeking an agreement between Pyongyang and Washington, both are aware that the US has no intentions of abandoning its presence in South Korea. The meeting between Kim Jong-un and Trump is a well-designed trap prepared by Moscow, Beijing and Pyongyang, maybe over many months or even years. The most realistic objectives are to further isolate Washington in the region, to bring Beijing and Seoul closer together, and to drive a wedge between Seoul and Washington. Moscow would use the failure of these negotiations to earn more leverage with its European partners, all eager to see a solution to the Korean crisis. Furthermore, Moscow could increase its opportunity to enter the energy market in South Korea as a result of Seoul diversifying its energy sources. Beijing has every intention of avoiding a war on the peninsula, which would be disastrous in many respects, not only humanitarian but also in the possibility of Washington camping on China’s border as a result of destroying the DPRK.

    South Korea’s Moon Jae-in looks on anxiously, ready to reach an agreement with the North. The mastery of Sino-Korean diplomacy has created a win-win situation for Pyongyang, with Washington’s eventual failure in the negotiations having negative reverberations with her allies in region. This is probably the reason why many in the US administration greeted Trump’s decision to accept talks with Kim negatively.

    Accepting to engage in talks signals a preparedness to negotiate. But as we can anticipate, the unwillingness of the Americans to accede to North Korean demands to abandon the peninsula doom the talks. At the same time, Pyongyang’s offer to give up its nuclear weapons will leave Washington bearing responsibility for the failure of the talks if there is no commensurable response. For this reason, Trump has ingeniously decided to bring in two warmongers like Pompeo and Bolton, intending to scare Kim into a negotiating position more favorable to Washington, a strategy he intends to also pursue in relation to Iran.

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    The truth is that American diplomacy has no room for maneuver with Korea; and since war is unthinkable, it is not even a real threat. This leaves Trump with a lot of bluster and a bunch of snarling hawks in tow, but with Pyongyang and Beijing left holding the aces, as will become clear in the coming weeks when all the cards are laid on the negotiating table.

  • Einhorn Steamrolled: Greenlight Plunges 14% YTD Despite Tech Wreck

    For much of 2017, hedge funds – most of which again underperformed both their benchmark and the broader market – complained that they were not generating alpha for one reason: there was no volatility. Well, they got their wish in spades last month when after months of record low, single-digit VIX, equity vol exploded resulting in a 3.9% slide in the S&P 500 and as 10-year yields backing up.

    And so with volatility spiking, and what every commentator saying it was a “stockpicker’s market” hedge funds surely had a blockbuster month, right?

    Well, no, quite the opposite in fact: according to the Bloomberg Hedge Fund database, in February hedge funds posted an overall drop of 2.19%, wiping out all of January’s gains, and leaving them flat for the year. Yes, somehow the month that all hedge funds were waiting for lead to widescale losses and last month ended up being the worst month for hedge funds since January 2016, when they slumped 2.57%.

    Furthermore, as we noted two weeks ago, when looking at the breakdown of specific names at the top and bottom, one stood out: David Einhorn’s Greenlight was down 11.86% as of Feb. 28, making it the worst performing hedge fund in the entire HSBC Universe.

    We also flagged another problem: back on March 19 we noted that if the recent tech selloff accelerates, it would be a hedge fund bloodbath, because as we showed then, virtually every hedge fund is long tech names, with 4 of the 5 most widely owned names Amazon, Facebook, Google and Microsoft.

    We also hinted that such a tech wreck may actually be beneficial to Einhorn, who famously has a big tech-heavy “bubble basket” and which has – until recently – crushed his performance.

    Well, we were right about one thing: as of Friday, the HFRX Global Hedge Fund Index had dropped to the lowest level in 2018, down 1.2% YTD, and was back to levels last seen in October 2017.

    We were, however, wrong about the ongoing tech rout helping Greenlight, because according to Bloomberg, Einhorn’s main hedge fund fell another 1.9% in March, extending its loss this year to 14%.

    Superficially, this is not that bad – in fact, one can say that Greenlight beat his benchmark as it outperformed the S&P’s 2.5% March drop. That will hardly enthuse Greenlight’s long-suffering LPs who have been patiently waiting for Einhorn to have another home run, and which failed to happen despite last week’s tech bust. In other words, David will be sending another letter to his clients explaining why this all “must be frustrating to you.”

    Some more details from Bloomberg:

    Einhorn’s fund added to its losses despite a selloff in several technology companies at the end of March, including Amazon.com Inc. and Netflix Inc. The money manager has been shorting a group of technology stocks, including those companies, which he’s described as a “bubble basket,” though Friday’s letter didn’t list his current investment positions.

    In late February, Einhorn said on a conference call  for his Greenlight Capital Re, that his hedge fund was experiencing its worst underperformance ever, as it suffered a 12% decline in the first two months of the year.

    Greenlight has posted lackluster returns in recent years as markets, especially for growth stocks, have risen while the hedge fund has stuck to its value-investing strategy.

    Since then, unfortunately it has gone from bad to worse for the poker afficionado who remains dead last in the YTD HSBC rankings and who will soon face strong pressure from LPs to come up with a hail mary if the “bubble basket” was indeed a dud.

  • New Satellite Imagery Shows Shocking Yemen Devastation As Saudi Crown Prince Tours US

    Saudi Arabia and other oil rich Gulf Cooperation Council (GCC) allied states like the UAE have long managed to escape the scrutiny of media and international human rights bodies thanks to their deep pockets and security relationship with the West. Their collective oil, weapons, and infrastructure investment interdependency with Britain and the US have generally translated into Western governments, media, and human rights organizations toeing the party line on the gulf sheikhdoms, content to (with a few sporadic exceptions) uncritically present them as some kind of “reform-minded” terror-fighting benevolent monarchies looking out for democratic interests and championing human rights.

    This is currently being demonstrated more than ever during Saudi Crown Prince Mohammed bin Salman’s (MBS) extensive and ongoing tour of the United States after a visit to the UK earlier this month. The kingdom’s heir apparent landed in Washington nearly two weeks ago and met with Trump and other high US officials before embarking on a multi-city tour across the United States.

    Last Tuesday MBS met with Bill and Hillary Clinton, Kissinger, Senator Chuck Schumer, and UN Secretary General Antonio Guterres during a stop in New York City.  On Friday, he also met with the CEOs of Morgan Stanley and JPMorgan, James Gorman and Jamie Dimon.

    Jamie Dimon and MbS

    He is scheduled to stop in Seattle and then California over the weekend, where he plans to strengthen ties with tech companies while meeting with Northwest business leaders.

    Not unexpectedly, mainstream media and politicians have fawned over the 32-year old prince’s visit. Americans can even find a slick, nearly 100-page, ad-free magazine at their local supermarket newsstand which is entirely devoted to praising MBS and his “New Kingdom” (in the words of the magazine’s title), produced by the owner of the National Enquirer – American Media Inc.

    Image source: The Daily Beast

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    The magazine of course has conveniently left out news of Saudi Arabia’s vicious 3-year long scorched earth bombing campaign over Yemen, which has left millions of Yemeni civilians displaced since 2015, and according to conservative UN estimates from early this year, has killed over 5,000 civilian noncombatants. 

    However, yet more hard empirical proof has emerged demonstrating that MBS and his allies in the West are decimating entire cities and civilian infrastructure in already deeply impoverished Yemen in their fight against Houthi rebels. 

    France 24 recently produced a graphic, based on satellite imagery captured through the opening two years of the war, showing just how devastating the Saudi coalition aerial campaign has been in Yemen’s capital city of Sanaa – which had a population approaching 2 million people before the war, and is the country’s largest city. 

    According to France 24:

    Satellite radar data from the European Space Agency shows the extent of Sanaa’s destruction. The capital of Yemen, part of which is listed as a UNESCO World Heritage Site, is in the grip of the war that has ravaged the country for three years.

    Satellite image analysis shows the shocking extent of Sanaa destruction. Source: MASAE Analytics via France 24. 

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    The France 24 report continues:

    SAR satellite data from the European Space Agency (ESA), compiled and analyzed by Masae Analytics, a privately held company specializing in data collection and analysis, measures the extent of destruction in the capital between February-March 2015 and May 2017…

    “The extent of the destruction in Sanaa is quite considerable, since the whole city is affected, said Emmanuel de Dinechin, associate director of Masae Analytics, interviewed by France 24. There are visible areas on the map that were targeted from the beginnin, and which were pounded fairly frequently during the period of analysis.”

    The US itself has been an integral part of the coalition (also including Bahrain, Kuwait, UAE, Egypt, Sudan, and with the UK as a huge supplier of weapons) fighting Shia Houthi rebels, which overran the Yemen’s north in 2014.

    Saudi airstrikes on the impoverished country have involved the assistance of US intelligence and use of American military hardware. Cholera has also made a comeback amidst the appalling war-time conditions, and civilian infrastructure such as hospitals have been bombed by the Saudis.

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    The war in Yemen has been drastically under-reported in US media, which tends to focus almost exclusively on human rights in places like Russia or Syria, where President Bashar al-Assad is consistently portrayed as little more than a homicidal maniac bent on massacring his own civilian population.

    But as we reported last summer, the United Nations is in possession of a secret report which details a litany of horrific war crimes on the part of the coalition, including the bombing of dozens of schools, hospitals, and civilian infrastructure. 

    The leaked 41-page draft UN document, was summarized at the time by Foreign Policy:

    “The killing and maiming of children remained the most prevalent violation” of children’s rights in Yemen, according to the 41-page draft report obtained by Foreign Policy.

    The chief author of the confidential draft report, Virginia Gamba, the U.N. chief’s special representative for children abused in war time, informed top U.N. officials Monday, that she intends to recommend the Saudi-led coalition be added to a list a countries and entities that kill and maim children, according to a well-placed source.

    Early in the war the prestigious Columbia Journalism Review produced a short study which attempted to explain, according to its title, Why almost no one’s covering the war in Yemen. Other analysts have since criticized the media and political establishment’s tendency to exaggerate Iran’s presence in Yemen and further willingness to ignore or downplay the clear war crimes of US client regimes in the gulf: while Iran-aligned states and militias are framed as the region’s terrorizers, the Saudi-aligned coalition’s motives are constantly cast as praise-worthy and noble.

    Meanwhile, the Pentagon this week reiterated its official (Orwellian) line that the US military’s deep level of assistance to the Saudi bombing campaign is actually geared toward reducing civilian harm. As Al-Monitor reports: “Speaking to reporters at the Defense Department on the heels of a meeting with Saudi Arabia’s Crown Prince Mohammed bin Salman last week, Mattis said a contingent of US advisers deployed to help with intelligence sharing are engaged in a ‘dynamic’ role to help ensure a reduction in civilian harm.”

    But Al Monitor also notes that civilian deaths have continued unabated, while further quoting Mattis as saying, “This is the trigonometry level of warfare.”

    So the official Pentagon line on Yemen seems to be that as it directly assists the Saudis in dropping bombs on civilians, it is actually helping those very civilians. Interesting logic.

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Today’s News 30th March 2018

  • 20 More Questions That Journalists Should Be Asking About The Skripal Case

    Authored by Rob Slane via TheBlogMire.com,

    To my knowledge, none of the questions I wrote in my previous piece – 30 questions That Journalists Should be Asking About the Skripal Case – has been answered satisfactorily, at least not in the public domain.

    Yet despite the fact that these legitimate questions have not yet been answered, and many important facts surrounding the case are still unknown, the case has given rise to a serious international crisis, with the extraordinary expulsion of Russian diplomats across many EU countries and particularly the United States on March 26th.

    This is a moment to stop and pause.

    A man and his daughter were poisoned in the City of Salisbury on 4th March. Yet despite the fact that investigators do not yet appear to know how they were poisoned, when they were poisoned, or where they were poisoned, a number of Western nations have used the incident as a pretext for the co-ordinated expulsion of diplomats on a scale not witnessed even during the height of the Cold War. These are clearly very abnormal and very dangerous times.

    I pointed out in my previous piece that it is not my intention to advance some sort of conspiracy theory on this blog. It remains the case that I simply don’t have any holistic theory — “conspiracy” or otherwise — for who carried this out, and I continue to retain an open mind. But since the Government of my country has rushed to judgement without many of the facts of the case being established, and since this has led to the biggest deterioration in relations between nuclear-armed nations since the Cuban Missile Crisis, it seems to me that it is more important than ever to keep asking questions in the hope that answers will come.

    And so, for what it’s worth, here are 20 more important questions that I think that journalists ought to be asking regarding this case:

    1. Have the police yet identified any suspects in the case?

    2. If so, is there any evidence connecting them to the Russian Government?

    3. If not, how is it possible to determine culpability, as the British Government has done?

    4. In her statement to the House of Commons on 12th March 2018, the British Prime Minister, Theresa May stated the following:

    “It is now clear that Mr Skripal and his daughter were poisoned with a military-grade nerve agent of a type developed by Russia. This is part of a group of nerve agents known as ‘Novichok’. Based on the positive identification of this chemical agent by world-leading experts at the Defence Science and Technology Laboratory at Porton Down” [my emphasis added].

    In the judgement at the High Court on 22nd March on whether to allow blood samples to be taken from Sergei and Yulia Skripal for examination by the Organisation for the Prohibition of Chemical Weapons (OPCW), evidence submitted by Porton Down to the court (Section 17 i) stated the following:

    “Blood samples from Sergei Skripal and Yulia Skripal were analysed and the findings indicated exposure to a nerve agent or related compound. The samples tested positive for the presence of a Novichok class nerve agent or closely related agent” [my emphasis added].

    So the Prime Minister said that Porton Down had positively identified the substance as a Novichok nerve agent. The statement from Porton Down says that their tests indicated that it was a Novichok agent or closely related agent. Are these two statements saying exactly the same thing?

    5. Why were the phrases “related compound” and “closely related agent” added to the statement given by Porton Down, and is this an indication that the scientists were not 100% sure that the substance was a “Novichok” nerve agent?

    6. Why were these phrases left out of the Prime Minister’s statement to the House of Commons?

    7. Why did the Prime Minister choose to use the word “Novichok” in her speech, rather than the wordFoliant, which is the actual name of the programme initiated by the Soviet Union when attempting to develop a new class of chemical weapons in the 1970s and 1980s?

    8. When asked in an interview with Deutsche Welle how scientists at Porton Down had found out so quickly that the nerve agent was of the “Novichok” class of chemical weapons, the Foreign Secretary, Boris Johnson, was asked whether Porton Down possesses samples of it. Here is how he replied:

    “They do. And they were absolutely categorical and I asked the guy myself, I said, ‘Are you sure?’ And he said there’s no doubt” [My emphasis].

    If Mr Johnson’s statement is correct, and the Defence Science and Technology Laboratory (DSTL) at Porton Down has samples of “Novichok” in its possession, where did they come from?

    9. Were they produced at Porton Down?

    10. How long have they had them?

    11. Why has the DSTL not registered possession of these substances with the OPCW, which it is legally obliged to do under the Chemical Weapons Convention (CWC)?

    12. Does this admission by Mr Johnson not indicate that “Novichoks” can be made in any advanced chemical weapons facility, as indeed they were under the auspices of the OPCW in Iran in 2016?

    13. If so, how can the Government be sure that the substance used to poison Mr Skripal and his daughter was made in or produced by Russia?

    14. In her statement to the House of Commons on Wednesday 14th March, the British Prime Minister stated that there were only two plausible explanations for poisoning of Mr Skripal and his daughter:

    “Either this was a direct act by the Russian State against our country. Or conceivably, the Russian government could have lost control of a military-grade nerve agent and allowed it to get into the hands of others.”

    Other than the actual substance used, is there any hard evidence that led the Government to conclude these as being the only two plausible scenarios?

    15. On March 26th, a number of countries expelled Russian diplomats in an apparent response to the incident in Salisbury. Yet at this time, the OPCW had not yet investigated the case, nor analysed blood samples. Why was the clearly co-ordinated decision to expel diplomats taken before the OPCW’s investigation had concluded?

    16. Has this not put huge pressure on the OPCW to come up with “the right” conclusion?

    17. It is reckoned that the OPCW’s investigation into the substance used will take at least three weeks to complete, whereas it took Porton Down less than a week to analyse it. What accounts for this difference?

    18. Will the OPCW be using the samples of “Novichok” that Boris Johnson says are held at Porton Down to compare with the blood samples of Mr Skripal and his daughter?

    19. If not, on what basis will this comparison be made, since the first known synthesis of a “Novichok” was made by Iran in 2016?

    20. If the OPCW discovers that the substance is indeed a “Novichok”, will this be sufficient evidence with which to establish who carried out the attack on the Skripals or — given that other countries clearly have the capability to produce such substances — would more evidence be needed?

  • You Know The US Is Losing, We're Willing To Talk

    Authored by Tom Luongo,

    How do you know when a politician is lying?

    Their lips move and words come out.

    How do you know when the United States is at a disadvantage in a geopolitical quagmire?

    Our diplomats and Presidents want to ‘open up talks.’

    Multiple times in the past four years the U.S. has used negotiating ceasefires in Syria and Ukraine to rearm and regroup those we’re backing or get our opposition (the Syrian Arab Army, the Russians) to let their guard down and then attack within 24 hours.

    We’ve used the U.N. Security Council as a bludgeon to brazenly lie about on the ground facts in Syria to attempt to save our pet jihadists in places like Aleppo and now eastern Ghouta.

    And in each of these instances the Russian counterparts have documented the U.S.’s mendacity, patiently building up an international file of such incidents for future use.  As I’ve pointed out so many times, the Russians rightly feel we are “Not Agreement Capable” either from a short-term or long-term perspective.

    Winning Looks like Losing

    So, why do I think the U.S. is in a losing position right now, despite the pronouncements from President Trump and his most ardent supporters that he’s winning on everything?

    Because on the two most important issues of 2018, Korean denuclearization and strategic arms control, Trump is ready to sit down and talk.  And we have not been willing to do that on either of these issues at the Head of State level for most of this century, if not longer.

    I wrote recently that the Neoconservative cabal in D.C. is in its final push for war with Russia.  The catalyst, for me, was President Putin’s state of the union address on March 1st where he unveiled new weapons that conjured up images from the finale of Dr. Strangelove.

    I said, and still believe …

    The neocons are cornered.  All of their major pushes to destroy Russia and Iran and control central Asia are collapsing.  The EU is fast approaching a political crisis.  The U.K. is still a loyal subject but the White House has a cancer at its center, Donald Trump. The window has nearly closed on regime change in Russia.  In effect, it’s now or never.

    And the clock started the moment Putin unveiled these weapons.  It’s not that the military and intelligence services in the U.S. didn’t know about these systems.  They did.

    The embarrassing part is that for fifteen years (or more) the neocons, through their mouthpieces like John Bolton, have argued that war with Iran and Russia was the right course of action precisely because it was winnable at minimal cost to the U.S.

    They peddled the lie that the Russians couldn’t defend themselves against us while our military commanders, especially one James Mattis, argued otherwise and from a position of knowledge, not ideological fervor.

    In Korea it is the Koreans themselves that are pushing for reunification.  The election of President Moon Jae-in is a testament to that. And the rapidity with which the situation has gone from full throated U.S. push for war and regime change to, “Hey, let’s talk about this,” has been stunning.

    It means that some underlying fact has changed which precludes the U.S. from taking the neocon approach of further encirclement and destabilization of Russia and China.

    Trump is now willing, against the advice of his inner council, to talk with Vladimir Putin about arms control.  Why?  The Russians have weapons that we cannot and will not be able to counter for a decade, if not longer.

    We may have or will soon have weapon systems of parallel aggressive capabilities, but counter systems, like missile defense and electronic warfare, no.  In fact, the Russians are most likely ahead of us in both of those areas as well.

    So, now that the neocon push for war has been outed as the worst kind of malicious fever dream the only thing left to do is push this moment to its crisis point and trap Trump and Putin in a stand-off that most likely ends in tears.

    MOAR Escalation!

    Remember, not two weeks ago U.N. Ambassador Nikki Haley failed to advance a total ceasefire in eastern Ghouta to save our ISIS/Al-Qaeda pet Salafist head-choppers there before they were wiped out.  The resolution went nowhere because you can only go to that well so many times before it doesn’t work anymore.

    The hysteria surrounding the poisoning of former Russian double agent Sergei Skripal is being used cynically to force Europe back into the fold of the U.S.’s ambitions to destroy Russia.

    Every time Haley goes to the security council with another worthless ceasefire she is building the case for Russia’s removal from the U.N. Security Council. Or, at least, that’s the thinking.  But, if that happens, then the U.N. is finished.

    Meanwhile, as I pointed out earlier, the Russians keep making the case that it is the U.S. that negotiates in bad faith, treats allies like lepers and abuses its status to push for ends orthogonal to their interests.

    And that brings me to Germany and the Nordstream 2 pipeline, Russia’s next weapon in its war with the U.S.  U.S. lawmakers are apoplectic that this pipeline is getting built.  Just this morning Germany issued the permits to allow its construction over the most strenuous objections from the U.S.

    More sanctions are being threatened, assets frozen.  More pressure will be placed on Denmark to not issue the permit.  But Nordstream can be re-routed around Danish waters if need be for a small cost.  So, with Germany’s permit Nordstream 2 is, for all practical intents, a go.

    Lastly, China’s yuan-denominated oil futures contract (which is convertible to gold, FYI) began trading on Sunday evening and the initial volume was impressive to say the least.  With China becoming the world’s largest importer of oil and the need for an oil futures benchmark in something other than light sweet crude, the challenge posed by this contract to the pricing of oil to the current petrodollar system is real.

    And this will play into any and all trade negotiations between Trump and Jinping over the next year.  The goal of this contract is not only to remove unnecessary friction from oil pricing but also to put pressure on Saudi Arabia to un-peg the Riyal from the U.S. dollar and accept Yuan as payment for the significant amount of oil they sell China.

    You will know in the next few months just how much this new weapon is forcing change by how willing the U.S. is willing to cut deals on trade.

    We’re approaching the crescendo of Trump’s ‘Crazy Ivan’ ploy to exert maximum leverage in a number of areas including foreign policy and trade.  I believe the neoconservatives are worried he will not cut acceptable deals in the end, because they know his hand is poor.

    Therefore, the big bluff he’s trying to execute will be called.  This is why they are pushing for war so badly.  And this is why he’s willing to go along with them, they are handing him leverage that he understands.

    Unfortunately, Putin doesn’t bluff.  And for a bully like Trump, losing is not an option.  Lying our way into war is a time-honored U.S. Presidential tradition.  Is this time different?  The world hopes so.

    *  *  *

    Support analysis  like this and more by signing up for my Patreon here.  Gain access to exclusive commentary like the Gold Goats ‘n Guns Investment Newsletter or the private community I maintain on Slack and the Private Blog.  

  • A Majority Of Americans No Longer Trust Facebook

    When it comes to obeying laws protecting personal information, Americans have less faith in Facebook than other tech companies.

    That’s according to a Reuters/Ipsos poll. As Statista’s Niall McCarthy notes, Facebook has been engulfed in a storm of criticism after it emerged that political consultancy Cambridge Analytica harvested and exploited the personal information of 50 million of its users. The firm is trying to restore its badly tarnished image with CEO Mark Zuckerberg recently issuing a public apology. Judging by the findings of the poll, the social network certainly has serious work to do in order to restore confidence in its user base.

    Infographic: Facebook Trailing In Trust  | Statista

    You will find more infographics at Statista

    The research found that only 41 percent of Americans trust Facebook to obey U.S. privacy laws, far less than other tech companies known to gather user data.

    66 percent of respondents said they trust Amazon, 62 percent trust Google and 60 percent trust Microsoft. Apple and Yahoo! were also ahead of Facebook in the trust stakes. The evaporation of trust among its users wasn’t the only headache for Facebook in recent days.

    The U.S. Federal Trade Commission (FTC) said it is investigating the firm to determine if it had “failed” to protect the privacy of its users. According to former FTC officials, the social network could be penalized severely if it is found to have violated or failed to comply with the consent decree it agreed in 2011. Fines could amount to $40,000 per violation and theoretically, this could all add up to $2 trillion.

  • US Judge Allows 9/11 Lawsuits Against Saudi Arabia To Proceed

    Via Middle East Eye,

    A US judge in New York on Wednesday rejected Saudi Arabia’s request to dismiss lawsuits accusing it of helping in the 9/11 attacks.

    The cases are based on the Justice Against Sponsors of Terrorism Act (Jasta), a 2016 law that provides an exemption to the legal principle of sovereign immunity, allowing families of the victims to take foreign governments to court.

    The families point to the fact that the majority of the hijackers were Saudi citizens, and claim that Saudi officials and institutions “aided and abetted” the attackers in the years leading up to the 9/11 attacks, according to court documents.

    US District Judge George Daniels in Manhattan said the plaintiffs’ allegations “narrowly articulate a reasonable basis” for him to assert jurisdiction under Jasta.

    Still, Daniels dismissed claims against two Saudi banks and a Saudi construction company for allegedly providing material support to al-Qaeda and Osama bin Laden to carry out the attacks, saying he lacked jurisdiction.

    The Saudi government has long denied involvement in the attacks in which hijacked planes crashed into New York’s World Trade Center, the Pentagon outside Washington, DC and a Pennsylvania field. Almost 3,000 people died. 

    Riyadh and its Gulf allies had strongly opposed Jasta, which was initially vetoed by then-President Barack Obama. The US Senate overturned the veto by overwhelmingly adopting the legislation.

    Critics of the law say it is politically motivated and an infringement on the sovereignty of foreign nations.

    Wednesday’s ruling comes during Saudi Crown Prince Mohammed bin Salman’s visit to the US. President Donald Trump heaped praise on the Saudi royal during a meeting at the White House last week. 

    Jim Kreindler, a lawyer for about 850 victims’ families in the case against the Saudi government, said his clients are watching bin Salman’s visit to Washington carefully.

    He added that they are “aware of the many US-Saudi issues at play,” including the possible listing of Saudi state oil giant Aramco on the New York Stock Exchange, a potential nuclear deal and further arms sales.

    “It remains to be seen whether he is going to take a step in accepting Saudi accountability for 9/11,” Kreindler told MEE earlier this month.

    Kreindler told Reuters on Wednesday he is “delighted” that the judge dismissed Saudi Arabia’s motion.

    “We have been pressing to proceed with the case and conduct discovery from the Kingdom of Saudi Arabia, so that the full story can come to light, and expose the Saudi role in the 9/11 attacks,” he added.

  • In Nearly 70% Of US Counties, The Average Worker Can't Afford To Buy A Home

    Housing, as we’ve pointed out in the past, is perhaps the most reliable bellwether of widening economic inequality in the US. And in its latest quarterly report on housing affordability in the US, ATTOM discovered that median-priced homes aren’t affordable to average wage earners in an astounding 68% of US housing markets.

    In its report, the company calculated affordability by incorporating the amount of income needed to make monthly home payments – including mortgage payments, property tax payments and insurance – on a median-priced home, assuming a 3% down payment and a 28% maximum “front-end” debt-to-income ratio.

    That required income was then compared with the median home price.

    Attom

    The 304 counties where a median-priced home in the first quarter was not affordable for average wage earners included Los Angeles County, California; Maricopa County (Phoenix), Arizona; San Diego County, California; Orange County, California; and Miami-Dade County, Florida. Meanwhile, the 142 counties (32 percent of the 446 counties analyzed in the report) where a median-priced home in the first quarter was still affordable for average wage earners included Cook County (Chicago), Illinois; Harris County (Houston), Texas; Dallas County, Texas; Wayne County (Detroit), Michigan; and Philadelphia County, Pennsylvania.

    Attom

    Already, the “hottest” housing markets are seeing an exodus of working- and middle-class individuals who can no longer afford to pay the high rents – let along afford to set aside enough money for a down payment.

    Eight of the top 10 counties with the highest median home prices in Q1 2018 posted negative net migration in 2017: Kings County (Brooklyn), New York (25,484 net migration decrease); Santa Clara County (San Jose), California (5,559 net migration decrease); New York County (Manhattan), New York (3,762 net migration decrease); Orange County, California (3,750 net migration decrease); and San Mateo, Marin, Napa and Santa Cruz counties in Northern California.

    Furthermore, ATTOM’s data found that this problem is getting worse, not better, with 41% of housing markets less affordable than their historical average during the first quarter. That’s up from 35% the quarter before.

    Meanwhile, a staggering 73% of markets posted worsening affordability compared with a year ago, including Los Angeles, Cook County (home to Chicago), Maricopa County (Phoenix) and Kings County (Brooklyn).

    Three

    The counties where the average wage earner would need to spend the highest share of their income to buy a median-priced home are Baltimore, Bibb County (Macon, Georgia) and Wayne County (Detroit).

    Continuing with the trend of home prices rising more than twice as quickly as wages, home-price appreciation outpaced wage growth in 83% of housing markets.

    When Fed Chairman Jerome Powell warned last month that “valuations are still elevated across a range of asset classes” and that he fears “signs of rising non-financial leverage” it’s possible that he was still understating the problem.

  • Escobar: China Taking The Long Road To Solve The Petro-Yuan Puzzle

    Authored by Pepe Escobar via The Asia Times,

    A number of pieces have to fall into place before the petrodollar moves into second place

    Few geoeconomic game-changers are more spectacular than yuan-denominated future crude oil contracts – especially when set up by the largest importer of crude on the planet.

    And yet Beijing’s media strategy seems to have consisted in substantially play down the official launch of the petro-yuan at the Shanghai International Energy Exchange.

    Still, some euphoria was in order. Brent Crude soared to $71 a barrel for the first time since 2015. West Texas Intermediate (WTI) reached the highest level in three years at $66.55 a barrel; then retreated to $65.53.

    A series of petro-yuan “firsts” include the first time overseas investors are able to access a Chinese commodity market. Significantly, US dollars will be accepted as deposit and for settlement. In the near future, a basket of currencies will also be accepted as deposit.

    Does the launch of the petro-yuan represent the ultimate deathblow to the petrodollar – and the birth of a completely new set of rules? Not so fast. That may take years, and depends on many variables, the most important of which will be China’s capacity to bend, tweak and ultimately rule the global oil market.

    As the yuan progressively reaches full consolidation in trade settlement, the petro-yuan threat to the US dollar, inscribed in a complex, long-term process, will disseminate the Holy Grail: crude oil futures contracts priced in yuan fully convertible into gold.

    That means China’s vast array of trade partners will be able to convert yuan into gold without having to keep funds in Chinese assets or turn them into US dollars. Exporters facing the wrath of Washington, such as Russia, Iran or Venezuela, may then avoid US sanctions by trading oil in yuan convertible to gold. Iran and Venezuela, for instance, would have no problems redirecting tankers to China in order to sell directly in the Chinese market – if that’s what it takes.

    How to bypass the US dollar

    In the short- to medium-term the petro-yuan will surely boost the appeal of the Belt and Road Initiative (BRI), especially when it comes to the House of Saud.

    It’s still unclear in what capacity Beijing will be part of the Aramco IPO, but that will be a decisive step towards the fateful historic moment when Beijing will tell – or compel – Riyadh to start accepting payment for oil in yuan.

    Only then the petrodollar may be at serious risk – along with the US dollar as the global reserve currency.

    I have stressed before how, at the 2017 BRICS summit, Russian President Vladimir Putin went no holds barred supporting the petro-yuan, specifically challenging the “unfairness” of the US dollar’s unipolar dominance.

    How to bypass the US dollar, as well as the petrodollar, has been discussed at BRICS summits for years now. Russia is now China’s largest crude oil supplier (1.32 million barrels a day last month, up 17.8% from a year earlier.) Moscow and Beijing have been forcefully bypassing the US dollar in bilateral trade. In October last year, China launched a payment system in both currencies – the yuan and the ruble. And that will apply to Russian oil bought by China.

    Still, the whole petrodollar edifice lies on OPEC – and the House of Saud– pricing oil in US dollars; as everyone needs greenbacks to buy oil, everyone needs to buy (spiraling) US debt. Beijing is set to break the system – as long as it takes.

    The petro-yuan as it stands does not provide access to Chinese oil markets. It starts as a great deal especially for Chinese companies who need to buy oil but would rather avoid the oscillations of foreign exchange. Nothing changes for the rest of the US dollar-dominated commodity planet – at least for now.

    The game will really start to change when other nations realize they have found a real credible alternative to the petrodollar, and switching to the yuan en masse will certainly spark a US dollar crisis.

    What the petro-yuan may be able to provoke in the short term is an acceleration of the next crises in treasuries and bond markets, which will inevitably spill out in the form of a crisis in global currency markets.

    That pan-Eurasian resource basket

    The game-changing aspect, for now, mostly has to do with the exquisite timing. Beijing has crafted an ultra-long-term plan and yet chose to launch the petro-yuan smack in the middle of a period of sharp deterioration in trade relations with Washington.

    The answer to the geoeconomic riddle is bound to be The Golden Moment. Eventually gold will rise to a level where Beijing – by then totally in control over physical gold markets – feels ready to set a conversion rate.

    The – Arabian – ‘petro’ side of the petrodollar equation should have been replaced long ago by a priceless, captured pan-Eurasian resource basket. That was what Dick Cheney dreamed of – centering his dreams on the energy wealth of Central Asia and Russia.

    That did not happen. What we have instead is shrieking, manic Russophobia – more like a graphic indication of how precarious is the position of Western banking elites. On top of it, with the petro-yuan, China deploys the key weapon, incorporated into BRI, capable of accelerating the end of the unipolar moment.

    Yet this is just the initial step in an ultra-high-stakes game. One should keep one’s eyes firmly focused on the interpolations between trade connectivity and technological breakthroughs. The petrodollar may be in danger but is far from finished.

  • Facebook Hires "Third-Party" Fact-Checkers To Stamp Out "Fake News"

    As Facebook scrambles to avoid a potentially devastating fine from the Federal Trade Commission, the company announced more measures on Thursday seemingly designed to appease Democratic lawmakers like Senator Mark Warner who are insisting that strenuous regulations are the only way to ensure that Facebook does everything within its power to prevent state actors from “sowing discord” by planting disingenuous advertisements and posts on the company’s platform.

    Facebook

    According to the Verge, Facebook is now partnering with “third-party fact checkers” to investigate photos and videos published on the company’s platform – while also attempting to filter out fraudulent accounts.

    This, of course, is only “one part of [Facebook’s] strategy for holding purveyors of “fake news” to account.

    Here’s how it works:

    • We use signals, including feedback from people on Facebook, to predict potentially false stories for fact-checkers to review.
    • When fact-checkers rate a story as false, we significantly reduce its distribution in News Feed — dropping future views on average by more than 80%.
    • We notify people who’ve shared the story in the past and warn people who try to share it going forward.
    • For those who still come across the story in their News Feed, we show more information from fact-checkers in a Related Articles unit.
    • We use the information from fact-checkers to train our machine learning model, so that we can catch more potentially false news stories and do so faster.

    The company announced its plans on a conference call with journalists organized to keep them apprised of its efforts to combat tampering in the 2018 midterms. The contents of the call were later summarized in a blog post. The group of executives who spoke on the call included Alex Stamos, the company’s outgoing chief information security officer.

    Stamos illustrated how the company is developing new methods for rooting out people making accounts under fake identities. It’s also cracking down on faked metrics used to make content appear more popular than it actually is.

    “It’s important to match the right approach to each of these challenges” Stamos said on the call, according to the Verge, as Stamos explained how Facebook was applying different strategies based on each individual market’s needs.

    Samidh Chakrabarti, Facebook’s product manager for civic engagement who was also on the call, explained that Facebook is now proactively looking for foreign-based pages producing political content that the company believes to be inauthentic. If a user is found in violation, they will be manually removed from the platform. This applies to everything from suspicious advertisements to misleading memes.

    Now our work also includes a new investigative tool that we can deploy in the lead-up to elections. I’d love to tell you a little bit about how it works.

    Rather than wait for reports from our community, we now proactively look for potentially harmful types of election-related activity, such as Pages of foreign origin that are distributing inauthentic civic content. If we find any, we then send these suspicious accounts to be manually reviewed by our security team to see if they violate our Community Standards or our Terms of Service, said Chakrabarti.

    Facebook first piloted this tool in the Alabama special election, but has now deployed it to protect this year’s Italian election – and it will be used to “protect Facebook users” during this year’s midterms.

    The new rules build on the ad-transparency measures introduced by the company late last year, which purported to show Facebook users the name of the organization funding the content, as well as any other pertinent information.

    But those red flags were shown to entrench some people’s belief in false stories, leading Facebook to shift to showing Related Articles with perspectives from other reputable news outlets. As of yesterday, Facebook’s fact checking partners began reviewing suspicious photos and videos which can also spread false information. This could reduce the spread of false news image memes that live on Facebook and require no extra clicks to view, like doctored photos showing the Parkland school shooting survivors ripping up the constitution.

    The news comes on the heels of a revelation earlier today that the company is ending its partnership with “third party” data providers including TransUnion and Experian who supply advertisers with even more specific data gleaned from real-life activities and other parties that aren’t Facebook.

    But as CEO Mark Zuckerberg prepares to testify before two Congressional committees early next month, the company hasn’t said anything about its partnerships with third-party “affiliate marketers” who help hucksters sell dubious health supplements and other fraudulent products on Facebook’s platform.

  • The Cart In Front Of The Horse: Are Gold Miners Actually Leading The Spot Price?

    The Wall Street Journal published an article this morning that could be putting the cart a bit in front of the horse, suggesting that poor performance in gold miners could drag the spot price of the commodity lower, despite the fact that gold has outperformed the S&P 500 year to date by a factor of 1.4% to -2.6%.

    The Journal suggests that with bond yields on the rise, investors are going to be more likely to allocate capital to treasuries instead of gold, reporting:

    Higher interest rates tend to buoy Treasury yields and make gold less attractive by comparison. The dollar has also been rebounding, which has cooled some optimism for gold bugs, analysts said. A stronger dollar makes commodities denominated in the currency more expensive for overseas buyers.

    Gold miners have underperformed despite a strong fourth-quarter earnings season and upbeat 2018 projections. One reason is that some of the companies still aren’t generating as much cash as miners of other metals such as copper, analysts said.

    What’s the journal doesn’t mention is the major difference between gold miners in the spot price of gold: namely the fact that miners are companies with staff, management, administrative expenses and other variables that have nothing to do with whether or not the spot price of gold is usually bid or not. The assertion that miners are going to lead the price of gold lower versus looking at miners within a potential positive light due to the fact that they could actually be argued to be “underperforming“ the spot price of gold due to this price divergence may leave some of us scratching our heads.

    The article goes on to note that several miners have actually exceeded their targets for this year due to the spot price of gold but that a key metric in free cash flow relative to market value continues to lag:

    In 2017, gold prices had their best year since 2010, allowing many miners to repair their balance sheets. Barrick Gold, the world’s largest producer, said it paid down $1.5 billion in debt, exceeding its target, while Newmont Mining Corp. reported an 8% rise in production from a year earlier.

    But the companies still haven’t caught up in free cash flow relative to market value, a commonly-used metric for evaluating performance, according to Citigroup research.

    It isn’t unreasonable to think that gold may still lead the price of these miners going forward and that this divergence is simply an aberration that may actually signal a buying opportunity versus coming in in a decline in the price of spot gold.

    No macroeconomic data has come more into focus over the last couple of months than the CPI number, as inflation continues to be the key metric watched by “economists“ as the bull market reaches its peak and stock market volatility has been undoubtedly on the rise.

    Given that gold is not only a traditional hedge against volatility and “the system”, but also a hedge against inflation itself, it is more likely that the Wall Street Journal has the cart in front of the horse in this case.

  • Mexican Drug Kingpin Smuggled Enough Fentanyl To "Kill Millions" In NYC

    An alleged Mexican drug kingpin and five of his accomplices have just been indicted for smuggling enough fentanyl from Mexico into New York City “to kill millions,” officials announced Tuesday.

    An undercover investigation by the U.S. Drug Enforcement Administration, NYC Special Narcotics Prosecutor Unit, and local law enforcement agencies discovered that San José del Cabo resident Francisco Quiroz-Zamora, 41, known as “Gordo,” or “Fatso,” was the primary source of large fentanyl shipments to the New York City region.

    In the first half of 2017, an undercover narcotics officer posed as a drug trafficker and successfully negotiated two large shipments of Mexican fentanyl from Quiroz-Zamora.

    Quiroz-Zamora was arrested on November 27 when he arrived via Amtrak to the city’s Pennsylvania Station “to personally collect payment for drug deals he unwittingly negotiated with an undercover officer,” said NBC News.

    “This investigation provides the American public with an inside view of a day in the life of a Sinaloa Cartel drug trafficker; including international travel, money pick-ups, and clandestine meetings,” Drug Enforcement Administration (DEA) Special Agent in Charge James Hunt said in a statement.

    “Quiroz-Zamora oversaw the delivery of multi-kilogram loads of fentanyl to New York, powerful enough to kill millions. The Strike Force and the Office of the Special Narcotics Prosecutor acted quickly and efficiently to seize the toxic kilograms before hitting the streets and arresting all conspirators, including the Kingpin,” Hunt added.

    Quiroz-Zamora’s drug trafficking operations stemmed from San José del Cabo, a resort town plagued with cartel violence on the southern tip of Mexico’s Baja California peninsula.

    NBC indicates Quiroz-Zamora was “charged with operating as a major trafficker, first-degree sale or a controlled substance and second-degree conspiracy.”

    Further, Quiroz-Zamora’s accomplices (Carlos Ramirez, Jesus Perez-Cabral, Johnny Beltrez, David Rodriguez and Richard Rodriguez) were charged with “second-degree conspiracy, criminal possession of controlled substances in the first and third degrees, criminal facilitation in the second degree, and criminal possession of a firearm,’ said NBC.

    Authorities told NBC that it was Quiroz-Zamora who “allegedly orchestrated two sales of fentanyl” to uncover agents in the first half of 2017.

    This led to the arrest of Carlos Ramirez and the largest ever fentanyl seizure in New York City when DEA special agents seized 44 pounds of the potent synthetic opioid at the Umbrella Hotel in the Bronx.

    Despite the operational setback of running a high-stakes drug trafficking business, Quiroz-Zamora negotiated another deal with undercover drug traffickers, which resulted in a tense police raid last August on a Manhattan condo — down the street from Trump Tower. The raid resulted in the arrest of Perez-Cabral, Beltrez, and Rodriguez.

    “Agents conducted a search and recovered two large ziplock bags containing powder, 1,100 individual dose glassine envelopes stamped with the brand name ‘UBER,’ a loaded .25-caliber Beretta pistol and $12,000 in cash,” authorities said in a statement.

    The arrests and indictments of the Mexican drug kingpin and five of his high-level colleagues was the result of a “long-term” investigation by a group of governmental agencies, including the U.S. Drug Enforcement Administration, NYC Special Narcotics Prosecutor Unit, and the New York City Police Department.

    “Fentanyl has been ravaging my county of the Bronx, killing people and shattering communities,” Bronx District Attorney Darcel Clark said.

    “Tracing the source to its foreign origins and indicting the kingpin will help stem the flow of this high-profit poison to our city. I am pleased to work with our local, state and federal partners to target these major suppliers,” he added.

    “In New York City and across the nation, fentanyl is causing untold tragedy as it pushes the number of overdose deaths ever higher. This indictment demonstrates our collaborative approach and commitment to tracking those at the top of the lethal supply chain and putting them out of business permanently,” Special Narcotics Prosecutor Bridget G. Brennan said.

    Citywide, the drug was responsible for 44 percent of all overdose deaths. Across the river, New Jersey noticed a five-fold explosion in fentanyl overdose deaths in the last two years.

    Drug overdoses killed more Americans in 2016 than the Vietnam War.

    While authorities in New York City have thwarted a Fentanyl bomb from detonating across the boroughs, America’s opioid crisis is far from over as the drug overdose mayhem explodes across the homeland. Rome is burning.

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